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SECURITIES AND EXCHANGE COMMISSION

FORM 20-F


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

|OR  
|----
|[X] 
|    
|    
|OR  
|[  ]
|    
|    

Commission file number 0-29962


Novogen Limited


ACN 063 259 754
(Exact name of Registrant as specified in its charter)Not Applicable
(Translation of Registrants name into English)New South Wales, Australia
(Jurisdiction of incorporation or organization)140 Wicks Road, North Ryde, New South Wales 2113, Australia
(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act.None
Securities registered or to be registered pursuant to Section 12(g) of the Act.Ordinary Shares*
American Depositary Shares, each representing five Ordinary Shares




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



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Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act.

Not Applicable


The number of outstanding Ordinary Shares of the issuer as at September 1, 2003
was 95,611,785.


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


Yes        [X]                No        [  ]


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


Item 17        [  ]                Item 18 [X]




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TABLE OF CONTENTS

|                                                                                          |  |  |    | 
|----------------------------------------------------------------------------------------- |  |  | -- | 
|Forward Looking Statements                                                                |  |  | 3  | 
|PART 1                                                                                    |  |  |    | 
|ITEM 1. Identity of Directors, Senior Management and Advisors                             |  |  | 4  | 
|ITEM 2. Offer Statistics and Expected Timetable                                           |  |  | 4  | 
|ITEM 3. Key Information                                                                   |  |  | 4  | 
|ITEM 4. Information on the Company                                                        |  |  | 16 | 
|ITEM 5. Operating and Financial Review and Prospects                                      |  |  | 31 | 
|ITEM 6. Directors, Senior Management and Employees                                        |  |  | 39 | 
|ITEM 7. Major Shareholders and Related Party Transactions                                 |  |  | 48 | 
|ITEM 8. Financial Information                                                             |  |  | 49 | 
|ITEM 9. Offer and Listing Details                                                         |  |  | 50 | 
|ITEM 10. Additional Information                                                           |  |  | 52 | 
|ITEM 11. Quantitative and Qualitative Disclosures about Market Risk                       |  |  | 55 | 
|ITEM 12. Description of Securities other than Equity Securities                           |  |  | 55 | 
|PART 2                                                                                    |  |  |    | 
|ITEM 13. Defaults, Dividend Arrearages and Delinquencies                                  |  |  | 56 | 
|ITEM 14. Material Modifications to the Rights of Security Holders
and the Use of Proceeds |  |  | 56 | 
|ITEM 15. Controls and Procedures                                                          |  |  | 56 | 
|ITEM 16. Reserved                                                                         |  |  | 56 | 
|PART 3                                                                                    |  |  |    | 
|ITEM 17. Financial Statements  Not Applicable                                            |  |  | 57 | 
|ITEM 18. Financial Statements                                                             |  |  | 57 | 
|ITEM 19. Exhibits                                                                         |  |  | 57 | 

2



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FORWARD-LOOKING STATEMENTS

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



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

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

3



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PART 1

Item 1. Identity of Directors, Senior Management and Advisors

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

Item 2. Offer Statistics and Expected Timetable

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

Item 3. Key Information

Selected Financial Data

The selected financial data at June 2003 and 2002 and for the years ended June
30 2003, 2002 and 2001, have been derived from the Consolidated Financial
Statements of Novogen Limited (Company or Group) included in this Annual
Report and should be read in conjunction with and are qualified in their
entirety by reference to those statements and the notes thereto. The selected
financial data at June 30, 2001, 2000 and 1999 and for the years ended June 30,
2000 and 1999 have been derived from Consolidated Financial Statements of the
Company not included in this Annual Report. The Consolidated Financial
Statements in this Annual Report have been prepared in accordance with
accounting principles generally accepted in Australia (Australian GAAP) which
varies in certain respects from accounting principles generally accepted in the
United States (US GAAP). A reconciliation of the major differences between
Australian GAAP and US GAAP is included in Note 29 to the Consolidated
Financial Statements. The Consolidated Financial Statements have been audited
in accordance with generally accepted auditing standards in the United States
by the Companys independent public accountants.

The Companys fiscal year ends on June 30. As used throughout this Annual
Report, the word fiscal followed by a year refers to the 12 month period
ending on June 30 of that year. For example, the term fiscal 2003 refers to
the 12 months ended June 30, 2003. Except as otherwise indicated, all dollar
amounts referred to in this Annual Report are at the consolidated level and
exclude inter-company accounts.

4



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##### 



Summary of Consolidated Statement of Financial Performance
(Australian GAAP)

|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|--------------------------------------------------------------------------- |  | -------- | ---------- | -------- |  | -------- | ---------- | -------- |  | -------- | ---------- | --------- |  |  | ---------- | - |  |  | ---------- | - |  |  | ------ | -
|                                                                            |  | 1999     |            | 2000     |  | 2001     |            | 2002     |  | 2003     |            | 2003     
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |          
|                                                                            |  | (A$000) |            | (A$000) |  | (A$000) |            | (A$000) |  | (A$000) |            | (US$000)
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |          
|Sales Revenue                                                               |  |          | 19,690     |          |  |          | 23,407     |          |  |          | 26,663     |           |  |  | 19,582     |   |  |  | 19,630     |   |  |  | 13,178 |  
|Other Revenue                                                               |  |          | 3,168      |          |  |          | 6,814      |          |  |          | 10,809     |           |  |  | 10,132     |   |  |  | 13,420     |   |  |  | 9,009  |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Total Revenue                                                               |  |          | 22,858     |          |  |          | 30,221     |          |  |          | 37,472     |           |  |  | 29,714     |   |  |  | 33,050     |   |  |  | 22,187 |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Loss from Operations                                                    |  |          | (17,406    | )        |  |          | (13,679    | )        |  |          | (21,764    | )         |  |  | (14,654    | ) |  |  | (10,454    | ) |  |  | (7,018 | )
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Loss                                                                    |  |          | (17,406    | )        |  |          | (13,679    | )        |  |          | (21,764    | )         |  |  | (14,673    | ) |  |  | (10,666    | ) |  |  | (7,160 | )
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net Loss from
Operations per share
(Cents per share)                        |  |          | (30.4      | )        |  |          | (17.1      | )        |  |          | (25.4      | )         |  |  | (15.4      | ) |  |  | (10.9      | ) |  |  | (7.3   | )
|Weighted average
number of Ordinary
shares used to calculate
Loss per share |  |          | 57,205,124 |          |  |          | 79,769,553 |          |  |          | 85,646,585 |           |  |  | 95,187,449 |   |  |  | 95,472,984 |   |  |  |        |  
|Number of outstanding
Ordinary Shares at year
end                           |  |          | 79,685,518 |          |  |          | 84,836,262 |          |  |          | 95,069,775 |           |  |  | 95,412,714 |   |  |  | 95,611,785 |   |  |  |        |  
|Adjusted to accord with
US GAAP                                             |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Sales Revenue                                                               |  |          | 19,690     |          |  |          | 22,519     |          |  |          | 25,415     |           |  |  | 17,644     |   |  |  | 18,502     |   |  |  | 12,420 |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Total Revenue                                                               |  |          | 22,867     |          |  |          | 29,333     |          |  |          | 36,224     |           |  |  | 27,776     |   |  |  | 31,922     |   |  |  | 21,429 |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net (loss)                                                                  |  |          | (17,860    | )        |  |          | (13,672    | )        |  |          | (21,813    | )         |  |  | (15,149    | ) |  |  | (10,259    | ) |  |  | (6,887 | )
|                                                                            |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  
|Net (loss) from                                                             |  |          | (31.0      | )        |  |          | (17.1      | )        |  |          | (25.4      | )         |  |  | (15.9      | ) |  |  | (10.7      | ) |  |  | (7.2   | )
|operations per share
(Cents per share)                                      |  |          |            |          |  |          |            |          |  |          |            |           |  |  |            |   |  |  |            |   |  |  |        |  

No dividends have been declared by the Company in the financial years included
in this Annual Report.

Note sales revenue reported under US GAAP has been adjusted to reflect the
impact of certain promotional expenditures in accordance with EITF Issue
00-14-Accounting for Certain Sales Incentives. Prior year financial statements
have been reclassified where appropriate.Certain trade promotion expenditures
are charged to marketing and selling expenses under Australian GAAP. These
expenses are for co-operative advertising whereby the Company pays for the
retailers promotion of the Companys products. This would typically take the
form of instore price promotions. The payment of co-operative advertising is
usually made in the form of an agreed amount taken off invoice.Under US GAAP
these amounts are treated as a discount to sales hence reducing the reported
sales figures. See Note 30 to the Consolidated Financial Statements for the
reconciliation to US GAAP.

5



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Summary of Consolidated Statement of Financial Position at June 30, 2003
(Australian GAAP)

|                                |  |          |        |          |  |          |         |          |  |          |         |           |  |  |         |  |  |  |         |  |  |  |        | 
|------------------------------- |  | -------- | ------ | -------- |  | -------- | ------- | -------- |  | -------- | ------- | --------- |  |  | ------- |  |  |  | ------- |  |  |  | ------ | 
|                                |  | 1999     |        | 2000     |  | 2001     |         | 2002     |  | 2003     |         | 2003     
|                                |  |          |        |          |  |          |         |          |  |          |         |          
|                                |  | (A$000) |        | (A$000) |  | (A$000) |         | (A$000) |  | (A$000) |         | (US$000)
|                                |  |          |        |          |  |          |         |          |  |          |         |          
|Cash and Cash                   |  |          |        |          |  |          |         |          |  |          |         |           |  |  |         |  |  |  |         |  |  |  |        | 
|Equivalents                     |  |          | 29,981 |          |  |          | 28,820  |          |  |          | 31,129  |           |  |  | 39,937  |  |  |  | 31,026  |  |  |  | 20,828 | 
|Total Assets                    |  |          | 56,796 |          |  |          | 65,081  |          |  |          | 61,206  |           |  |  | 61,900  |  |  |  | 50,812  |  |  |  | 34,110 | 
|Net Assets                      |  |          | 48,275 |          |  |          | 52,724  |          |  |          | 51,906  |           |  |  | 54,045  |  |  |  | 42,397  |  |  |  | 28,461 | 
|Capital Stock                   |  |          | 82,148 |          |  |          | 100,276 |          |  |          | 121,222 |           |  |  | 137,249 |  |  |  | 138,206 |  |  |  | 92,778 | 
|Adjusted to accord with
US GAAP |  |          |        |          |  |          |         |          |  |          |         |           |  |  |         |  |  |  |         |  |  |  |        | 
|Total Assets                    |  |          | 56,473 |          |  |          | 64,728  |          |  |          | 60,949  |           |  |  | 61,676  |  |  |  | 50,812  |  |  |  | 34,110 | 
|Shareholders Equity             |  |          | 47,952 |          |  |          | 52,408  |          |  |          | 50,974  |           |  |  | 51,852  |  |  |  | 41,069  |  |  |  | 27,570 | 

The Company publishes its Consolidated Financial Statements expressed in
Australian dollars. In this Annual Report, references to US dollars or US$
are to the currency of the United States of America (US) and references to
Australian dollars or A$ are to the currency of Australia. For the
convenience of the reader, this Annual Report contains translations of certain
Australian dollar amounts into US dollars at specified rates. These
translations should not be construed as representations that the Australian
dollar amounts actually represent such US dollar amounts or could be converted
into US dollars at the rate indicated. Unless otherwise stated, the
translations of Australian dollars into US dollars have been made at the rate
of US$0.6713 = A$1.00, the noon market buying rate in New York City for cable
transfers in Australian Dollars as certified for customs purposes by the
Federal Reserve Bank of New York (the noon buying rate) on June 30, 2003.

The noon buying rate on November 28, 2003 was US$0.7236 = A$1.00

6



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Exchange Rates for the six months to October 2003
A$ versus US$

|          |  |      |        |     |  |   |        | 
|--------- |  | ---- | ------ | --- |  | - | ------ | 
|Month     |  | High |        | Low
|June      |  | $    | 0.6723 |     |  | $ | 0.6564 | 
|July      |  | $    | 0.6823 |     |  | $ | 0.6454 | 
|August    |  | $    | 0.6593 |     |  | $ | 0.6390 | 
|September |  | $    | 0.6810 |     |  | $ | 0.6395 | 
|October   |  | $    | 0.7077 |     |  | $ | 0.6814 | 
|November  |  | $    | 0.7238 |     |  | $ | 0.6986 | 

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

|              |  |         |        | 
|------------- |  | ------- | ------ | 
|Fiscal Year   |  | Average
|Ended June 30 |  | Rate   
|1999          |  | $       | 0.6246 | 
|2000          |  | $       | 0.6237 | 
|2001          |  | $       | 0.5320 | 
|2002          |  | $       | 0.5236 | 
|2003          |  | $       | 0.5836 | 

7



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Risk factors

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

Unproven Technologies

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

There can be no assurance that the Company and its marketing partners will be
able to commercialize successfully or achieve market acceptance of any of the
Companys technologies or products, or that the Companys competitors will not
develop competing technologies that are less expensive or otherwise superior to
those of the Company. The failure to develop and market successfully new
products would have a material adverse effect on the Companys business,
financial condition and results of operations.

Failure of Phenolic Drug Development

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

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

8



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Future Capital Needs and Uncertainty of Additional Financing

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

Supply of Raw Material

An important risk concerns the supply of raw material (red clover) used to
produce Promensil, Trinovin and Rimostil. Numerous environmental factors
(drought, disease, storms, etc.) can affect crop quality and quantity.
Although the Company has attempted to address this risk by sourcing clover from
regions of geographic diversity within Australia, and from areas of
historically reliable water supply, there can be no assurance of a continual
supply of sufficient quantity and quality of red clover. Interruptions in
supply or material increases in the cost of supply could have a material
adverse effect on the Companys business, financial condition and results of
operations.

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

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

Dependence on Patents, Trade Secrets and Proprietary Rights

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

9



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##### 



commercialize its products could have a material adverse
effect on the Companys business, financial condition and results of
operations.

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

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

Potential Adverse Effect of Competition and Technological Change

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

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

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

10



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##### 



Effects of International Sales

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

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

The Companys consolidated financial statements are presented in Australian
dollars. In fiscal 2003, the Companys revenue was generated approximately 44%
in US dollars and approximately 32% in Australian dollars with the balance of
revenue in Pounds Sterling, Euros and Canadian dollars. During that year, the
Companys expenses were generated approximately 39% in US dollars and 21% in
Pounds Sterling, Euros and Canadian dollars. Substantially all of the balance
of expenses was in Australian dollars. Fluctuations in the rates of exchange
between US dollar and other foreign currencies may negatively impact the
Companys financial condition and results of operations. In addition, to the
extent revenues and expenses are denominated in different currencies, the
Company may suffer a loss upon the conversion of the revenue-denominated
currency to pay expenditures. As the Company expands its presence into the US
and other international markets, the Company expects the percentage of both its
revenues and expenditures denominated in non-Australian dollars to increase,
with particular emphasis on US dollars. For the foreseeable future, the
Company expects its expenditures to be predominantly denominated in Australian
dollars, resulting primarily from the Companys R & D and manufacturing
activities in Australia, and expects capital expenditures to be denominated in
Australian dollars.

Dependence Upon Key Personnel

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

Limited Manufacturing Experience

The Company currently relies on its own extraction facility to produce
commercial quantities of isoflavones used in the manufacture of Promensil,
Trinovin and Rimostil. The facility is expected to be sufficient to meet
anticipated increases in demand

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during fiscal 2003 and beyond. To the extent
the Company relies on others, the Company will lose a degree of control over
the manufacturing process and will be dependent on such third parties to
satisfy performance and quality standards and dedicate sufficient production
capacity to meet demand and delivery times. There can be no assurance that
third party manufacturers will devote the resources necessary to meet demand
for the Companys products. Failure or delay in supplying isoflavones would
adversely affect the Companys ability to deliver products on a timely and
competitive basis.

In addition, the manufacture of the Companys products are subject to periodic
inspection by regulatory authorities and certain marketing partners, and the
Companys manufacture of its products for human use is subject to regulation
and inspection by regulatory authorities for compliance with Current Good
Manufacturing Practice (cGMP). There can be no assurance that these
authorities will not, during the course of an inspection of existing or future
facilities, identify what they consider to be deficiencies in cGMP or other
requirements and request, or seek, remedial action. Failure to comply with
such regulations or delay in attaining compliance may adversely affect the
Companys manufacturing activities and could result in, among other actions,
warning letters, injunctions, civil penalties, refusal to grant approvals or
clearances of future or pending product submissions, fines, recalls or seizure
of products, total or partial suspensions of production and criminal
prosecution.

Limited Marketing Capacity; Dependence on Others

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

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

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Effect of Government Regulation

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

The Company currently has no products approved by the FDA. No assurance can be
made that the Company will be able to file any New Drug Application (NDA) or
that any such filings will result in FDA approval. Furthermore, the Company
cannot predict with any degree of certainty when it might be in a position to
file any NDA or the length of time involved between the filing of an NDA and
obtaining FDA approval, if at all. The cost to the Company of conducting human
clinical trials for any potential product can vary dramatically based on a
number of factors, including the order and timing of clinical indications
pursued and the extent of development and financial support, if any, from
corporate partners. The Company may have difficulty obtaining sufficient
patient populations, clinicians or support to conduct its clinical trials as
planned and may have to expend substantial additional funds to obtain access to
such resources, or delay or modify its plans significantly.

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

FDA and other governmental approvals that may be granted will be subject to
continual review, and later discovery of previously unknown problems may result
in withdrawal of products from marketing. For example, the Company has been
notified by the Therapeutic Goods Administration (TGA) that it is reviewing the
current listing status of its dietary supplements products in Australia. These
products are currently listed as AUSTL listed complementary medicine.
Following the completion of this review, these products could retain this
status or be delisted in Australia. The Company believes that its products
qualify for their current listing status as AUSTL listed complementary
medicine. However, no assurance can be given that the TGA will ultimately reach
this conclusion. In the event of an adverse determination by the TGA, the
Company will consider what further options are available to it. Moreover, if
and when such approval is obtained, the marketing and manufacture of the
Companys products would remain subject to extensive regulatory requirements
administered by the FDA and other regulatory bodies. Failure to comply with
these regulatory requirements could, among other things, result in fines,
suspensions or withdrawal of regulatory approvals, operating restrictions and
criminal prosecution.

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Product Failure

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

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

Product Liability Exposure and Potential Unavailability of Insurance

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

Enforceability of Civil Liabilities under the Federal Securities Laws

The Company is a public company limited by shares and is registered and
operates under the Corporations Act 2001. All of the Companys directors and
officers named in this Annual Report reside outside the US. Substantially all
or a substantial portion of the assets of those persons are located outside the
US. As a result, it may not be possible to effect service on such persons in
the US or to enforce, in foreign courts, judgments against such persons
obtained in US courts and predicated on the civil liability provisions of the
federal securities laws of the US. Furthermore, substantially all of the
directly owned assets of the Company are outside the US, and, as such, any
judgment obtained in the US against the Company may not be collectible within
the US. There is doubt as to the enforceability in the Commonwealth of
Australia, in original actions or in actions for enforcement of judgments of US
courts, of civil liabilities predicated solely upon federal or state securities
laws of the US, especially in the case of enforcement of judgments of US courts
where the defendant has not been properly served in Australia.

The trading price of the shares of our common stock and ADRs is highly
volatile, your investment could decline in value and we may incur significant
costs from class action litigation.

The trading price of our common stock and our ADRs is highly volatile in
response to various factors, many of which are beyond our control including:



| |  |  | Announcements of technological innovations by us and our competitors;                       
| | - |  | --------------------------------------------------------------------------------------------
|
| |  |  | New products introduced of announced by us or our 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;

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| |  |  | 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 our securities;                                                             
|
| |  |  | Additional sales by us of our shares.                                                                       

In addition, equity markets in general and the market for biotechnology and
life sciences companies in particular, have experiences substantial price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of the companies traded in those markets. In addition,
changes in economic conditions in Australia, the United States, Europe or
globally, could impact on our ability to grow profitably. Adverse economic
changes are outside our control and may result in material adverse impacts on
our business or our results of operations. These broad market and industry
factors may materially affect the market price of our shares and ADRs
regardless of our development and operating performance. In the past, following
periods of volatility in the market price of a companys securities, securities
class action litigation has often been instituted against that company. Such
litigation, if instituted against us could cause us to incur substantial costs
and divert managements attention and recources.

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Item 4  Information on the Company

History and development of the Company.

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

Nature of the Business

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

Recent Financing Activities

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

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

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

Marshall Edwards, Inc.

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

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During May 2002, MEI, raised US$10.1 million in a private placement to
European, American and Australian investors and institutions at US$4.00 each
with an attaching warrant exercisable prior to November 30, 2003 at US$4.00 per
share. Shares of MEI are listed on the London Stock Exchanges Alternative
Investment Market (AIM). During fiscal 2003, 9,000 warrants were exercised at
US$4.00 per share raising US$36,000. Novogen now owns 95.1% of MEI.

During April 2003, Glycotex, Inc., a US subsidiary of Novogen Inc., established
to provide a commercial vehicle for Novogens glucan technology, raised
$A500,000 in an initial private placement from Australian and international
investors and institutions. Novogen now owns 97.6% of Glycotex Inc.

The shares were issued at A$10.00 each with attaching warrants to purchase a
further two shares at an exercise price of A$10.00 per share. The attaching
warrants are exercisable prior to 5 November, 2004. Novogen also issued to
these investors a convertible security enabling investors to convert each share
of Glycotex Inc. common stock to two Novogen shares at an equivalent Novogen
share price of A$5.00 per share. If 50% of the holders exercise the conversion
feature, then Novogen can require that the other Glycotex shareholders convert
their shares to Novogen shares.

During September 2003, MEI filed a registration statement with the Securities
and Exchange Commission to make a public offering of two million common stock
units. The units consist of one share of common stock and one warrant to be
offered in the price range of US$4.50 and US$6.50. The registration statement
has not yet become effective. MEI has also applied to have its common stock and
the warrants being issued as part of the Unit quoted on the Nasdaq National
Market.

During November 2003, MEI received US$10,056,000 following the exercise of
2,514,000 warrants, at US$4.00 per share, which were issued as part of the AIM
listing in May 2002.

Capital expenditures

The Company made no major investments of a capital nature during fiscal 2003.
Future facilities will be developed as demand increases, however, current plant
capacity both at the isoflavones extraction plant at Wyong NSW and at the pilot
plant at North Ryde NSW are sufficient to meet demand for the short to medium
term.

Business overview

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

Promensil, Trinovin and Rimostil are dietary supplements that deliver
standardized levels of all four isoflavones  daidzein, genistein, formononetin
and biochanin.

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Promensil, Trinovin and Rimostil are listed with the
appropriate regulatory bodies in the countries in which they are sold.

In fiscal 2003, the Company earned total revenues of A$33.1 million versus
A$29.7 million in fiscal year 2002, an increase of 11%. Total revenues
increased due to unrealised currency gains reflecting the stronger Australian
dollar and increased royalty receipts. Included in total revenues were sales of
the consumer health products totalling A$19.6 million. Sales were maintained
at the same level as last year despite the reduction in advertising and
marketing spend, the disorientation left in the market for menopause products
(especially in the United States) following the negative publicity surrounding
the long term use of HRT and the impact of exchange rates. Sales have shown
strong growth in all markets except the US and the Netherlands, which were 17%
and 16% respectively below the corresponding period last year. Sales grew
strongly in Australia, the UK and Canada which were 19%, 45% and 27%
respectively above the same corresponding period last year. The strengthening
of the Australian dollar versus major trading partners negatively impacted
sales levels by 6% compared to last year.

The following table is an analysis of revenue from sales and other sources
during the past three fiscal years by categories of activity and by
geographical market. Other revenue consists principally of foreign currency
gains, interest income, grants received and royalty receipts. See Note 2 to
the Consolidated Financial Statements.

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Category of Activity

Dietary Supplements

|              |  |                    |        |          |  |          |        |  |  |  |        | 
|------------- |  | ------------------ | ------ | -------- |  | -------- | ------ |  |  |  | ------ | 
|              |  | Year Ended June 30
|              |  |                   
|              |  | 2001               |        | 2002     |  | 2003    
|              |  | (A$000)           |        | (A$000) |  | (A$000)
|Sales Revenue |  |                    | 26,663 |          |  |          | 19,582 |  |  |  | 19,630 | 
|Other Revenue |  |                    | 10,809 |          |  |          | 10,132 |  |  |  | 13,420 | 
|              |  |                    |        |          |  |          |        |  |  |  |        | 
|Total Revenue |  |                    | 37,472 |          |  |          | 29,714 |  |  |  | 33,050 | 
|              |  |                    |        |          |  |          |        |  |  |  |        | 

Geographical Markets

|              |  |                    |        |          |  |          |        |  |  |  |        | 
|------------- |  | ------------------ | ------ | -------- |  | -------- | ------ |  |  |  | ------ | 
|              |  | Year Ended June 30
|              |  |                   
|              |  | 2001               |        | 2002     |  | 2003    
|              |  | (A$000)           |        | (A$000) |  | (A$000)
|Sales Revenue |  |                    |        |          |  |          |        |  |  |  |        | 
|Australia     |  |                    | 5,921  |          |  |          | 5,224  |  |  |  | 6,228  | 
|UK & Europe   |  |                    | 2,039  |          |  |          | 2,274  |  |  |  | 2,744  | 
|US & Canada   |  |                    | 18,703 |          |  |          | 12,084 |  |  |  | 10,658 | 
|              |  |                    |        |          |  |          |        |  |  |  |        | 
|              |  |                    | 26,663 |          |  |          | 19,582 |  |  |  | 19,630 | 
|              |  |                    |        |          |  |          |        |  |  |  |        | 
|Other Revenue |  |                    |        |          |  |          |        |  |  |  |        | 
|Australia     |  |                    | 10,809 |          |  |          | 4,806  |  |  |  | 4,696  | 
|UK & Europe   |  |                    | 0      |          |  |          | 123    |  |  |  | 716    | 
|US & Canada   |  |                    | 0      |          |  |          | 5203   |  |  |  | 8008   | 
|              |  |                    |        |          |  |          |        |  |  |  |        | 
|Total Revenue |  |                    | 37,472 |          |  |          | 29,714 |  |  |  | 33,050 | 
|              |  |                    |        |          |  |          |        |  |  |  |        | 

Clinical Development

The Companys product emphasis is toward the development and marketing of human
therapeutics, with a particular focus on therapeutics based on phenolic drug
technology. While initial sales revenue has been generated from dietary
supplements, the Company has devoted, and expects to continue to devote,
significant R&D resources to the development of novel pharmaceuticals based on
phenolic hormones.

During fiscal 2000, Novogens anti-cancer drug candidate phenoxodiol (NV-06)
was approved for human clinical trailing, and in June 2000 Novogen completed a
Phase Ia Clinical Trial. This was a significant milestone for the Company,
moving the drug candidate from the clinic to into man studies. In fiscal year
2001, the Company

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announced that phenoxodiol (NV-06) had entered into further
Phase I/II clinical trials with two trials commencing at major Australian
hospitals. These trials are currently underway and are testing primarily for
safety (looking for drug toxicity) and some efficacy data may also be gathered.

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

Major advances were made during fiscal 2003 on the Groups clinical development
program.

The Groups lead anti-cancer drug, phenoxodiol, continued its clinical
development program through its 95.1% owned subsidiary company Marshall
Edwards, Inc. Marshall Edwards, Inc commenced operation in May 2002. Prior to
that time the development of phenoxodiol was conducted by Novogen. Since that
time, all of phenoxodiols clinical development has been undertaken by MEI.
Phenoxodiol is currently being evaluated in phase II clinical trials for the
treatment of prostate cancer, ovarian cancer and squamous cell carcinomas
(SCC).

Phenoxodiol and Ovarian Cancer

A phase II clinical study is being conducted by Yale University School of
Medicine. The study is fully enrolled, using 40 patients with advanced,
metastatic ovarian cancer that has become unresponsive to at least 2 standard
chemotherapies (the average number of different drug regimes used previously in
these patients is 5 per patient). Phenoxodiol is being administered as a
monotherapy by bolus intravenous injection on two consecutive days per week in
rising dosages (1, 3, 10 and 20 mg/kg/24-hr) to four groups, each of ten women,
over treatment cycles of 12 weeks. No drug-associated toxicity has been
encountered to date, and tumor response is being assessed on the basis of tumor
mass, levels of the tumor marker (CA125) in the blood, survival over 12 months,
and quality of life.

This clinical trial is based on laboratory studies at Yale University School of
Medicine that showed phenoxodiol to be the most effective drug at killing
ovarian cancer cells, including those that are resistant to all standard
anti-cancer drugs.

Following analysis of the data from the current Phase II study, a decision will
be made concerning the next stage.

Cisplatin is a standard drug used in the treatment of ovarian cancer, but
patients tumors commonly become resistant to this drug after some months. A
combination of phenoxodiol and cisplatin proved highly effective in stopping
human ovarian cancer growth in animals with doses of phenoxodiol and cisplatin
that alone were ineffective. This raises the prospect of obtaining an enhanced
clinical response of
phenoxodiol by combining it with standard chemotherapies, and the opportunity
to conduct a combinational drug trial in ovarian cancer patients is under
review currently.

A recent pre-clinical study also extended these findings by showing that
phenoxodiol proved effective at restoring ovarian cancer cells sensitivity to
standard anti-cancer drugs such as cisplatin.

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Phenoxodiol and Prostate Cancer

A study is currently being conducted at two Australian hospitals testing the
effect of oral phenoxodiol therapy in patients with late-stage prostate cancer
that has become unresponsive to hormonal therapy. The phenoxodiol is being
administered three times per day on a daily basis over treatment cycles of 12
weeks. There will be 24 patients in this trial, with patients being allocated
to 7 different dose levels (from 0.72 to 9.0 mg per 24-hr). The study
currently has 14 patients enrolled.

Phenoxodiol and Cutaneous Squamous Cell Carcinomas

The potential for phenoxodiol in the treatment of cutaneous squamous cell
carcinomas (SCC) arose from the observation that in patients being treated for
other forms of cancer who coincidentally had aggressive, malignant SCC of the
skin, the SCC tumors showed objective responses within several weeks. A phase
II trial is current at an Australian hospital in patients with malignant SCC of
the skin. Phenoxodiol is being administered orally, three times daily for a
period of 3 months. There will be 30 patients enrolled and they will be each
allocated to a treatment regime of one 50 mg dose taken 3 times per day.

NV-04

During the year the Company announced the successful completion of the first
human study for its cardiovascular drug program. The trial demonstrated
outstanding potency of the drug and reproducibility in arterial dilation by
enhancing the biochemical activities within the blood vessel wall. All patients
who participated in the trial responded favourably in that intra-arterial
administration of the drug led to significant increase in blood flow.

NV-07a

The Company announced that it had discovered a new mode of action for the skin
repair compound NV-07a which is expected to have significant implications for
the protection of human skin from sunlight induced damage.

The newly identified mode of action protects skin cells from damage to their
DNA, a process which otherwise continues to occur over a period of days even
after sun exposure has ceased. Human chemicals known to protect skin cells from
the protracted DNA damage occurring after UV exposure were present in
significantly higher levels in the skin of people treated with NV-07a after UV
exposure than in their untreated skin.

Source and Availability of Raw Materials

Isoflavones

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

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

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

Phenolic Compounds

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

Marketing Channels

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

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

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

Patent Protection

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

The second area of IP is the proprietary technology that allows the method of
extraction of all four principal estrogenic isoflavones found in the human
diet. This technology has allowed the development of Promensil and Trinovin,
which are

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supplement products that deliver standardized levels of all four isoflavones 
daidzein, genistein, formononetin and biochanin.

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

The Company pursues an aggressive patent prosecution strategy, based on PCT
patent applications in major global territories. All current patent
applications are filed in the name of either Novogen Inc., Novogens
wholly-owned US subsidiary, or Novogen Research Pty Ltd, one of Novogens
wholly-owned Australian subsidiaries.

Intellectual Property Development

During fiscal 2003 a number of key patents were granted over the Companys
intellectual property.

NV-07a

In September 2002, the United States Patent Office granted a patent to Novogen
for NV-07a covering protection of the skin from sun induced immunosuppression
and UV-induced damage. The patent protection confirms the companys exclusive
position in this after-sun skin care technology.

In January 2003 the Australian Patent Office also granted the same patent for
NV-07a.

Isoflavones to Treat Menopause and PMS

In May 2003 the US Patent Office granted Novogen a patent over the use of its
isoflavone technology in the treatment of the symptoms of menopause and
pre-menstrual syndrome (PMS). The patent applies to the isoflavones, genistein,
daidzein, formononetin and boichanin, all of which are used commonly in health
supplements such as tablets, capsules, drinks and foodstuffs for the
alleviation of the adverse symptoms of menopause and PMS.

The granting of this patent will add value to the product marketing and
strengthens potential for possible further licensing transactions.

Soy Hypocotyl

In January 2003 the US Patent Office granted Novogen a patent for human dietary
supplements comprising soy material made from ground soy hypocotyl containing
at least one isoflavone. This patent extends the cover for soy to include soy
hypocotyls which are approved for food and do not need to have the isoflavones
chemically extracted. Soy hypocotyls thus are a source of isoflavones for food
products which might have health claims attached. The use of these alternative
isoflavone sources derived from soy has been licensed from Novogen to the US
company DuPont Protein Technologies and its subsequent joint venture with Bunge
now called Solae LLC.

The following is a list of all patents and patent applications held by the
Company.

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

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

24



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Licensing Arrangements

In 1997 the Company granted an exclusive license for the use of soy under three
Novogen patent applications to Protein Technologies, Inc. (PTI), a
wholly-owned subsidiary of Dupont Inc. Under the license agreement, PTI paid to
the Company a license fee of approximately A$9 million and agreed to pay the
Company royalties from the sales made by PTI of products derived under the
license. In fiscal year ended June 30, 2002, PTI paid A$1.9 million in
royalties to the Company. In fiscal 2003 the Company received a further A$2.3
million in royalty payments under this license agreement. See Item 5.
Operating and Financial Review and Prospects  Operating Results  Fiscal 2003
v. Fiscal 2002. Contemporaneous with the license agreement, PTIs then parent
Ralston-Purina Inc. invested A$6.7 million into the Companies Ordinary Shares
which was followed in December 1998 by an additional investment of A$3.6
million.

Trademark Protection

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

Australian Government

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

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

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

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

The Companys products and manufacturing facilities also are regulated by
various Australian federal and state instrumentalities. The Companys
manufacturing facilities hold the appropriate licenses concerning hazardous
chemical use and the manufacture of health products.

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

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

It is also a legislative requirement that data submitted for evaluation must
satisfactorily establish the quality, safety and efficacy of the product for
the purposes for which it is to be used, where relevant. The approval process
for new drugs requires the submission of comprehensive pre-clinical and
clinical data regarding safety and efficacy. The Australian Guidelines for the
Registration of Drugs (the Guidelines) describe the information to be
provided in an application for registration of new drugs.

US Government Regulations

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

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

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

Pre-clinical Studies and Good Laboratory Practice

The initial testing of a pharmaceutical product before it may be marketed in
the US is called pre-clinical testing. Pre-clinical tests include formulation
development, laboratory evaluation of product, chemistry and other end points
and animal studies to assess the potential safety and efficacy of the product
as formulated. Many pre-

26



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clinical studies are regulated by the FDA under a series of regulations called
the GLP Regulations. Violations of GLP regulations can, in some cases, lead to
invalidation of the studies, requiring them to be replicated. The results of
pre-clinical trials are submitted to the FDA as part of the IND and are
reviewed by the FDA prior to authorizing the sponsor to conduct clinical trials
in human subjects.

Investigation of New Drug Application

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

Clinical Trials

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

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

These can be further classified into Phase IIa trials, which study dose ranging
and schedule optimization from the perspective of efficacy, and Phase IIb
trials, which study (in parallel or individually) one dose and one schedule
(the frequency of dose administration) to determine length of therapy and
safety versus efficacy. When a product is found to have an acceptable safety
profile in Phase II evaluation, Phase III clinical trials are undertaken to
evaluate clinical efficacy and to further test for safety within an expanded
target patient population at geographically dispersed multiple clinical study
sites. The FDA may order the temporary or permanent discontinuation of a
clinical trial at any time for any reason. There can be no assurance that
Phase I, Phase II or Phase III testing will be completed successfully within
any specified time period, if at all, with respect to any of the Companys
products.

27



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New Drug Application and Approval

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

Post-Marketing Approval Requirements

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

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

Manufacturing Regulations

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

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Organizational Structure

Corporate Structure

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

Name of Entity

|                                 |  |                          |  |  |      | 
|-------------------------------- |  | ------------------------ |  |  | ---- | 
|Ownership %                      |  | Country of Incorporation
|                                 |  |                         
|Novogen Laboratories Pty Ltd     |  | Australia                |  |  | 100  | 
|Novogen Research Pty Ltd         |  | Australia                |  |  | 100  | 
|Phytosearch Pty Ltd              |  | Australia                |  |  | 100  | 
|Phytogen Pty Ltd                 |  | Australia                |  |  | 100  | 
|Central Coast Properties Pty Ltd |  | Australia                |  |  | 100  | 
|Novogen Inc                      |  | USA                      |  |  | 100  | 
|Glycotex Inc                     |  | USA                      |  |  | 97.6 | 
|Novogen Limited                  |  | UK                       |  |  | 100  | 
|Novogen BV                       |  | Netherlands              |  |  | 100  | 
|Novogen New Zealand Limited      |  | New Zealand              |  |  | 100  | 
|Novogen Canada Limited           |  | Canada                   |  |  | 100  | 
|Marshall Edwards Inc             |  | USA                      |  |  | 95.1 | 
|Marshall Edwards Pty
Limited     |  | Australia                |  |  | 95.1 | 

Property, Plants and Equipment

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

The Company owns the land and buildings at Wyong and the site covers an area of
approximately 3.37 hectares. The equipment used in the extraction process,
pilot plant and laboratories under lease has an amortized lease value of A$1.8
million. The equipment owned by the Company and used in the manufacturing and
other processes has a written down book value of A$3.2 million. The
manufacturing capacity is adequate to produce the forecast isoflavone extract
requirements for at least the next two years.

The pilot plant used for the manufacture of the phenoxodiol clinical trial
material is located in leased premises at North Ryde in Sydney. These premises
are also used as Novogens corporate head office. The Company has provided
mortgages over the freehold land and buildings as security over the leasing
facilities. The terms of the mortgages preclude the assets being sold or being
used as further security without the permission of the mortgage holder.

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Assets under lease are also pledged as security for the lease liability. The
book value of assets pledged as security at June 30, 2003 was A$8.2 million.

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Item 5. Operating and Financial Review and Prospects

Application of Critical Accounting Policies

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

Revenue Recognition

We recognize revenue from product sales when goods have been dispatched to a
customer pursuant to a sales order and invoice and the associated risks have
passed to the customer. Royalty revenue from license agreements is recognised
when earned.

Allowance for doubtful debts

We maintain an accounts receivable allowance for an estimated amount of losses
that may result from the customers inability to pay for the product purchased
as well as for anticipated sales returns. If the financial condition of our
customers were to deteriorate resulting in an impairment of their ability to
make payments, additional allowances may be required.

Inventory Adjustments

Inventories are measured at the lower of cost or net realizable value. We
review the components of inventory on a regular basis for excess, obsolete and
impaired inventory based on estimated future usage and sales. The likelihood of
any material inventory write-downs is dependent on rapid changes in customer
demand or new product introductions by competitors.

Operating Results  Fiscal 2003 v Fiscal 2002

Revenue

The Companys total revenue increased by A$3.3 million or 11% to A$33.1 million
in fiscal 2003 from A$29.7 million in fiscal 2002. The increase was primarily
as a result of foreign exchange gains resulting from the strengthening of the
Australian dollar verses our major trading parties, particularly the US.

The Companys sales of consumer healthcare products, including Promensil,
Trinovin and Rimostil, increased marginally to A$19.6 million in fiscal 2003
from A$19.5 million in fiscal 2002. Sales were maintained at the level as last
year despite the reduction in advertising and marketing spend, the
disorientation left in the market for menopause products (especially in the
United States) following the negative publicity surrounding the long term use
of HRT and the impact of exchange rates. Sales have shown strong growth in all
markets except the US and the Netherlands, which were 17% and 16% respectively
below the corresponding period last year. Sales grew strongly in Australia, the
UK and Canada which were 19%, 45% and 27% respectively above the same
corresponding period last year.

As sales revenues are denominated in Australian dollars, the Companys sales
revenue is affected by fluctuations in the value of the Australian dollar
relative to the

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currencies of other countries in which the Company sells its products,
primarily the US dollar and the UK pound. In fiscal 2003, the value of the
Australian dollar increased in value relative to the US dollar (see Item 3.
Key Information  Selected Financial Data  Exchange Rates). The strengthening
of the Australian dollar versus major trading partners negatively impacted
sales levels by 6% compared to last year.

Other Revenue

Other Revenue includes unrealized foreign exchange gains, revenue received from
non-operating activities, such as interest received on Company loans made to
persons and corporations, research grants received from the Australian
government, royalties received under the Companys license agreement with PTI
(Solae) and proceeds from the sale of Company assets. The Companys other
revenue increased by A$3.3 million or 32% from A$10.1 million in fiscal 2002 to
A$13.4 million in fiscal 2003, primarily as a result of an increase of A$3.4
million in foreign exchange gains, and an increase of A$0.5 million in
royalties received from PTI pursuant to a license agreement between the Company
and PTI. See Item 4. Information on the Company- Business Overview  License
Agreements. These gains were partially offset by a reduction of A$0.7 million
in research grants received from the Australian Government following the
completion of one grant project. In fiscal 2003, the Companys Other Revenue
amounted to 40% of the Companys Total Revenue, which is an increase from
fiscal 2002 where Other Revenue amounted to 34% of the Companys Total Revenue.

Costs and Expenses

The Companys Costs and Expenses is comprised of Cost of Goods Sold, Research
and Development, Selling and Promotions, and General and Administrative
Expenses. The Companys Total Costs and Expenses (including interest expense)
decreased A$0.6 million, or 1% in fiscal 2003 to A$43.7 million from A$44.3
million in fiscal 2002, primarily due to the decrease in the Companys Selling
and Promotions Expenses offset by an increase in general and administrative
expenses. The Companys Selling and Promotions Expenses decreased A$2.5
million, or 16% in fiscal 2003 to A$12.7 million from A$15.2 million in fiscal
2002, primarily as a result of the Companys efforts to conserve cash
resources. Of this A$2.5 million decrease in Selling and Promotions Expenses,
A$1.8 million represents a decrease in spending on advertising and promotions.
Cost of goods sold decreased as a percentage to sales from 39% in fiscal 2002
to 37% in fiscal 2003 due to the larger production volumes being produced.

General and Administrative Expenses increased by A$2.1 million or 16% in fiscal
2003 to A$15.0 million from A$12.9 million in fiscal 2002, primarily due to
unrealized foreign exchange losses on inter company payables. The offsetting
unrealized foreign exchange gains are reported separately under Other Revenues.
Unrealised foreign exchange losses reported in General and Administrative
expenses inceased by A$3.6 million in fiscal 2003. These losses were partially
offset by reduction in the provision for inventory loss verses fiscal 2002.

Net Loss

The Companys Net Loss decreased
by A$4.1 million, or 29%, in fiscal 2003 to
A$10.5 million from A$14.6 million in fiscal 2002, as a result of the Companys
continuing strategy of conserving cash by managing expenses and improving
margins.

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Operating Results  Fiscal 2002 v Fiscal 2001

Revenue

The Companys Total Revenue decreased by A$7.8 million or 21% to A$29.7 million
in fiscal 2002 from A$37.5 in fiscal 2001 primarily as a result of a decrease
in sales of the Companys consumer health products in the US and Australia. The
Companys sales of consumer health products decreased A$7.1 million or 27% to
A$19.6 million in fiscal 2002 from A$26.7 million in fiscal 2001, which
management believes is primarily attributable to the decrease in advertising
and promotional spending in the major markets, discussed below in Operating
Expenses, competition and the general slowdown in economic activity in the US.

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

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

Other Revenue

Other Revenue includes revenue received from non-operating activities, such as
interest received on Company loans made to persons and corporations, research
grants received from the Australian government, royalties received under the
Companys license agreement with PTI and proceeds from the sale of Company
assets. The Companys other revenue decreased A$0.7 million or 6% from A$10.8
million in fiscal 2001 to A$10.1 million in fiscal 2002. Included in the other
revenue for 2002 was A$1.9 million in royalties received from PTI pursuant to a
license agreement between the Company and PTI. See Item 4. Information on the
Company- Business Overview  License Agreements. In fiscal 2002 the Companys
Other Revenue amounted to 34.1% of the Companys Total Revenue, which is an
increase from fiscal 2001 where Other Revenue amounted to 28.8% of the
Companys Total Revenue.

Costs and Expenses

The Companys Costs and Expenses is comprised of Cost of Goods Sold, Research
and Development, Selling and Promotions, and General and Administrative
Expenses. The Companys Total Costs and Expenses (including interest expense)
decreased A$14.9 million, or 25.1% in fiscal 2002 to A$44.3 million from
A$59.2 million in fiscal 2001, primarily due to the decrease in the Companys
Selling and Promotions Expenses. The Companys Selling and Promotions Expenses
decreased A$9.4 million, or 38% in fiscal 2002 to A$15.2 million from A$24.6
million in fiscal 2001, primarily as a result of the Companys efforts to
conserve cash resources. Of this A$9.4 million decrease in Selling and
Promotions Expenses, A$8.2 million represents a decrease in spending on
advertising and promotions. Cost of goods

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sold increased as a percentage to sales from 32% in fiscal 2001 to 39% in
fiscal 2002 due to the smaller production volumes being produced inline with
the reduction in sales demand. The provision for the diminution in inventory
value increased in fiscal 2002 by A$0.8 million to A$1.7 million due to lower
isoflavone levels in some of the varieties of stored red clover raw materials
which may be uneconomic to process through the production plant.

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

General and Administrative Expenses decreased by A$3.8 million or 22.6% in
fiscal 2002 to A$12.9 million from A$16.6 million in fiscal 2001, primarily due
to the absence of the non-recurring expenses of A$2.1 million incurred in
fiscal 2001 associated with the unsuccessful capital raising by MEI and the
Clarkel Pty Limited settlement costs.

Net Loss

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

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Liquidity and cash resources

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

At the end of fiscal 2003 the Company had cash resources of A$31.0 million
versus A$39.9 million at the end of fiscal 2002.

During fiscal 2003 the Company undertook no major cash raising activities.
However, during fiscal 2003, the company raised $1.0 million by Novogen options
converting into shares contributing A$0.4 million, 9000 Marshall Edwards, Inc
warrants being converted into shares contributing A$0.1 million and the
Glycotex Inc raising contributing A$0.5 million.

The Company invests its cash and cash equivalents in interest bearing
facilities with various maturity dates. At the end of fiscal 2003, deposits
amounting to A$18.6 million had a weighted average interest rate of 4.67% and
cash deposits of A$12.4 million had a weighted average interest rate of 1.38%.

At the end of fiscal 2003, the Company had outstanding interest bearing
liabilities in the form of lease liabilities of A$2.3 million. These leases
have an average lease term of 4 years. The average interest rate implicit in
the leases is 8.42% (2002:8.39%).

The Company has arranged finance lease facilities of A$4.0 million of which,
A$0.8 million was unused at the end of fiscal 2003.

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

During fiscal 2003 the Company had net cash outflows from operating activities
of A$5.8million. Included in this amount are cash receipts of A$1.2 million
interest received from investing cash balances, A$0.6 million from the proceeds
of Government grants being primarily the START Grants for research and
development and A$2.3 million royalty received from PTI pursuant to a license
agreement between the Company and PTI. See Item 4. Information on the Company-
Business Overview  License Agreements.

It is the opinion of the Company that the current level of working capital is
sufficient to meet present requirements. The Companys subsidiary, Marshall
Edwards, Inc. filed a registration statement with the Securities and Exchange
Commission to make a public offering of two million common stock units. The
units consist of one share of common stock and one warrant to be offered in the
price range of US$4.50 and US$6.50. The registration statement has not yet
become effective. MEI has also applied to have its common stock and the
warrants being issued as part of the Unit quoted on the Nasdaq National Market.

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Table of Contractual Obligations

|                                   |  |       |       |                  |  |           |       |           |  |                        |       |  |  |  |    |  |  |  |   | 
|---------------------------------- |  | ----- | ----- | ---------------- |  | --------- | ----- | --------- |  | ---------------------- | ----- |  |  |  | -- |  |  |  | - | 
|                                   |  |       |       |                  |  |           |       |           |  | Payments due by period |       |  |  | 
|In $000s                          |  | Total |       | Less than 1 year |  | 1-3 years |       | 4-5 years |  | After 5 years         
|                                   |  |       |       |                  |  |           |       |           |  |                       
|Operating Leases                   |  |       | 810   |                  |  |           | 432   |           |  |                        | 378   |  |  |  |   |  |  |  |  | 
|Finance Leases                     |  |       | 2,457 |                  |  |           | 776   |           |  |                        | 1,666 |  |  |  | 15 |  |  |  |   | 
|Other Expenditure Committments     |  |       | 2,519 |                  |  |           | 2,373 |           |  |                        | 146   |  |  |  |    |  |  |  |   | 
|                                   |  |       |       |                  |  |           |       |           |  |                        |       |  |  |  |    |  |  |  |   | 
|Total Contractual Cash Obligations |  |       | 5,786 |                  |  |           | 3,581 |           |  |                        | 2,190 |  |  |  | 15 |  |  |  |  | 
|                                   |  |       |       |                  |  |           |       |           |  |                        |       |  |  |  |    |  |  |  |   | 

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

Research and Development

Major advances were made during the year on the Companys clinical development
program.

Phenoxodiol

The Groups lead anti-cancer drug, phenoxodiol, continued its clinical
development program through its 95.1% owned subsidiary company Marshall
Edwards, Inc. Phenoxodiol is currently being evaluated in phase II clinical
trials for the treatment of prostate cancer, ovarian cancer and squamous cell
carcinomas (SCC).

Phenoxodiol and Ovarian Cancer

A phase II clinical study is being conducted by Yale University School of
Medicine. The study is fully enrolled, using 40 patients with advanced,
metastatic ovarian cancer that has become unresponsive to at least 2 standard
chemotherapies (the average number of different drug regimes used previously in
these patients is 5 per patient). Phenoxodiol is being administered as a
monotherapy by bolus intravenous injection on two consecutive days per week in
rising dosages (1, 3, 10 and 20 mg/kg/24-hr) to four groups, each of ten women,
over treatment cycles of 12 weeks. No drug-associated toxicity has been
encountered to date, and tumour response is being assessed on the basis of
tumor mass, levels of the tumor marker (CA125) in the blood, survival over 12
months, and quality of life.

This clinical trial is based on laboratory studies at Yale University School of
Medicine that showed phenoxodiol to be the most effective drug at killing
ovarian cancer cells, including those that are resistant to all standard
anti-cancer drugs.

Following analysis of the data from the current Phase II study, a decision will
be made concerning the next stage.

Cisplatin is a standard drug used in the treatment of ovarian cancer, but
patients tumors commonly become resistant to this drug after some months. A
combination of phenoxodiol and cisplatin proved highly effective in stopping
human ovarian cancer growth in animals with doses of phenoxodiol and cisplatin
that alone were ineffective. This raises the prospect of obtaining an enhanced
clinical response of phenoxodiol by combining it with standard chemotherapies,
and the opportunity to conduct a combinational drug trial in ovarian cancer
patients is under review currently.

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A recent pre-clinical study also extended these findings by showing that
phenoxodiol proved effective at restoring ovarian cancer cells sensitivity to
standard anti-cancer drugs such as cisplatin.

Phenoxodiol and Prostate Cancer

A study is current at two Australian hospitals testing the effect of oral
phenoxodiol therapy in patients with late-stage prostate cancer that has become
unresponsive to hormonal therapy. The phenoxodiol is being administered three
times per day on a daily basis over treatment cycles of 12 weeks. There will
be 24 patients in this trial, with patients being allocated to 7 different dose
levels (from 0.72 to 9.0 mg per 24-hr). The study currently has 14 patients
enrolled.

Phenoxodiol and Cutaneous Squamous Cell Carcinomas

The potential for phenoxodiol in the treatment of cutaneous squamous cell
carcinomas (SCC) arose from the observation that in patients being treated for
other forms of cancer who coincidentally had aggressive, malignant SCC of the
skin, the SCC tumors showed objective responses within several weeks. A phase
II trial is current at an Australian hospital in patients with malignant SCC of
the skin. Phenoxodiol is being administered orally, three times daily for a
period of 3 months. There will be 30 patients enrolled and they will be each
allocated to a treatment regime of one 50 mg dose taken 3 times per day.

NV-04

During the year the Company announced the successful completion of the first
human study for its cardiovascular drug program. The trial demonstrated
outstanding potency of the drug and reproducibility in arterial dilation by
enhancing the biochemical activities within the blood vessel wall. All patients
who participated in the trial responded favourably in that intra-arterial
administration of the drug led to significant increase in blood flow.

NV-07a

The Company announced that it had discovered a new mode of action for the skin
repair compound NV-07a which is expected to have significant implications for
the protection of human skin from sunlight induced damage.

The newly identified mode of action protects skin cells from damage to their
DNA, a process which otherwise continues to occur over a period of days even
after sun exposure has ceased. Human chemicals known to protect skin cells from
the protracted DNA damage occurring after UV exposure were present in
significantly higher levels in the skin of people treated with NV-07a after UV
exposure than in their untreated skin.

The Company increased its gross R&D expenditure during fiscal 2003 to A$8.3
million from A$7.9 million in fiscal 2002.

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

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

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

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

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Item 6. Directors, Senior Management and Employees.

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

Mr P A Johnston (Non-executive Chairman)
Mr C Naughton (Managing Director)
Dr G E Kelly (Executive Director)
Mr P B Simpson
Prof P J Nestel AO
Prof L C Read (appointed September 11, 2003)

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

Information on Directors

Philip A JohnstonNon-Executive Chairman
Dip Eng (Production)

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

Christopher NaughtonManaging Director
BEc, LLB

Managing Director since March 1997, Mr Naughton joined Novogen in 1996 as
Commercial Director. Mr Naughton has degrees in Economics from the Australian
National University and in Law from the University of New South Wales. He has
completed the Program for Management Development at the Harvard Business
School, and is an Attorney in New South Wales. After working in merchant
banking, he has spent the last 18 years in the pharmaceutical industry,
including appointments as a Director of Wellcome Australia Limited and in
worldwide business development with The Wellcome Foundation Limited in the UK.

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

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

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Peter B SimpsonNon-Executive Director
MPharm, PhC, MPS

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

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

Professor Nestel is currently Senior Principal Research Fellow and Head of the
Cardiovascular Nutrition Laboratory at the Baker Medical Research Institute,
Victoria. Professor Nestel is also a Consultant Physician at the Alfred
Hospital, Melbourne.He is president of the International Life Sciences
Institute (Australiasia) and is a member of the board of directors of ILSI
South East Asia; He was formerly Clinical Professor in Medicine, The Flinders
University of South Australia. Professor Nestel has been and remains a member
of many national and international committees research and policy on
cardiovascular disease. He has published over 370 scientific and medical papers
and he is a Fellow of the Australian Academy of Technological Sciences and
Engineering and Fellow of the American Heart Association. Professor Nestel is
an Officer of the Order of Australia.

Professor Leanna C ReadNon-Executive Director

BagSc(Hons), PhD, FTSE

Professor Read is founder and Managing Director of TGR BioSciences Pty Ltd an
early stage biotech company that discovers novel bioactives by high-throughput
screening. She has 15 years of experience in leading and managing
commercially-related Research organisations, including the CRC for Tissue
Growth and Repair, and the Child Health research Institute. Professor Read
holds a professional appointment at Flinders University and has published over
90 scientific papers. Board appointments currently include the Prime Ministers
Science and Engineering Council and the Australian Proteome Analysis facility
Inc. Professor Read was a member of the Industry Research and Development Board
for six years until 2002 and chaired its Biological Committee. She is a Fellow
of the Australian Academy of Technological Sciences and Engineering and has
been awarded the inaugural Biotechnology Industry Service Award.

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Executive Officers profiles

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

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

Warren Lancaster  Vice President Commercial and Corporate Development
BSc, MBA

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

Ronald Lea Erratt  Company Secretary
FNIA

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

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

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

Craig Kearney  General Manager Consumer Business
BMS Waikato.

Craig Kearney joined Novogen in December 2001 as the General Manager of the
Consumer Business. He has a Bachelor of Management Studies from Waikato
University in New Zealand and has subsequently completed managerial development
programmes at London School of Business and Duke University in USA. He has
worked 18 years in the Over The Counter (OTC) consumer pharmaceutical category
including 10 years for Wellcome New Zealand and Wellcome Australia, 6 years for
Parke Davis/Warner Lambert Australia and prior to Novogen he worked for Pfizer
Australia. He held senior sales, marketing and business management roles for
all three companies.

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Compensation

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

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

Compensation of Directors of Novogen Limited July 1, 2002  June 30, 2003

|            |  |                   |         |                      |  |           |        |          |  |        |         |         |  |                |   |                 |  |           |         |       |  |  |        |  |  |  |       |   |  |  |        |  |  |  |           | 
|----------- |  | ----------------- | ------- | -------------------- |  | --------- | ------ | -------- |  | ------ | ------- | ------- |  | -------------- | - | --------------- |  | --------- | ------- | ----- |  |  | ------ |  |  |  | ----- | - |  |  | ------ |  |  |  | --------- | 
|            |  | Annual Emoluments |         | Long term Emoluments |  |           |        |         
|            |  |                   |         |                      |  |           |        |         
|            |  |                   |         |                      |  |           |        |          |  |        |         |         |  | Termination &  |   | Options Granted |  |           |         |       |  |  |        | 
|            |  |                   |         |                      |  | Committee |        |          |  |        |         | Similar |  |                |   | Super-          |  |           |         |      
|            |  | Base Fee          |         | Fee                  |  | Other     |        | Payments |  |        |         |         |  | Amortised Cost |   | Remuneration    |  | annuation |         | Total
|            |  | A$                |         | A$                   |  | A$        |        | A$       |  | Number |         | A$      |  | %              |   | A$              |  | A$       
|            |  |                   |         |                      |  |           |        |          |  |        |         |         |  |                |   |                 |  |          
|PA Johnston |  |                   | 53,724  |                      |  |           | 16,000 |          |  |        |        |         |  |                |  |                 |  |           | 3,128   |       |  |  | 891    |  |  |  | 1.16  | % |  |  | 6,276  |  |  |  | 76,891    | 
|C Naughton  |  |                   | 400,621 |                      |  |           |       |          |  |        | 42,513  |         |  |                |  |                 |  |           | 700,000 |       |  |  | 31,749 |  |  |  | 6.21  | % |  |  | 36,056 |  |  |  | 510,939   | 
|GE Kelly    |  |                   | 278,952 |                      |  |           |       |          |  |        | 63,010  |         |  |                |  |                 |  |           |        |       |  |  |       |  |  |  | 0.00  | % |  |  | 25,106 |  |  |  | 367,068   | 
|PJ Nestel   |  |                   | 30,000  |                      |  |           | 12,000 |          |  |        |        |         |  |                |  |                 |  |           | 20,000  |       |  |  | 5,100  |  |  |  | 10.83 | % |  |  |       |  |  |  | 47,100    | 
|PB Simpson  |  |                   | 26,364  |                      |  |           | 14,000 |          |  |        |        |         |  |                |  |                 |  |           | 3,128   |       |  |  | 891    |  |  |  | 1.98  | % |  |  | 3,634  |  |  |  | 44,889    | 
|            |  |                   |         |                      |  |           |        |          |  |        |         |         |  |                |   |                 |  |           |         |       |  |  |        |  |  |  |       |   |  |  |        |  |  |  |           | 
|            |  |                   | 789,661 |                      |  |           | 42,000 |          |  |        | 105,523 |         |  |                |  |                 |  |           | 726,256 |       |  |  | 38,631 |  |  |  |       |   |  |  | 71,072 |  |  |  | 1,046,887 | 
|            |  |                   |         |                      |  |           |        |          |  |        |         |         |  |                |   |                 |  |           |         |       |  |  |        |  |  |  |       |   |  |  |        |  |  |  |           | 

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

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

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Compensation of the Executive Officers of the Company and the consolidated
entity July 1, 2002  June 30, 2003.

|                   |  |                   |         |                      |  |          |         |        |  |               |   |                 |  |           |         |       |  |  |        |  |  |  |        |  |  |  |           | 
|------------------ |  | ----------------- | ------- | -------------------- |  | -------- | ------- | ------ |  | ------------- | - | --------------- |  | --------- | ------- | ----- |  |  | ------ |  |  |  | ------ |  |  |  | --------- | 
|                   |  | Annual Emoluments |         | Long term Emoluments |  |          |         |       
|                   |  |                   |         |                      |  |          |         |       
|                   |  |                   |         |                      |  |          |         |        |  | Termination & |   | Options Granted |  |           |         |       |  |  |        | 
|                   |  |                   |         |                      |  | Similar  |         |        |  | Super-        |   |                 |  |          
|                   |  | Base Fee          |         | Other                |  | Payments |         |        |  |               |   | Amortised Cost  |  | annuation |         | Total
|                   |  | A$                |         | A$                   |  | A$       |         | Number |  | A$            |   | A$              |  | A$       
|                   |  |                   |         |                      |  |          |         |        |  |               |   |                 |  |          
|WJ Lancaster (USA) |  |                   | 229,866 |                      |  |          | 6,167   |        |  |               |  |                 |  |           | 90,196  |       |  |  | 14,164 |  |  |  | 23,824 |  |  |  | 274,021   | 
|AJ Husband         |  |                   | 211,388 |                      |  |          | 50,813  |        |  |               |  |                 |  |           | 122,284 |       |  |  | 21,180 |  |  |  | 19,025 |  |  |  | 302,406   | 
|DR Seaton          |  |                   | 222,372 |                      |  |          | 27,173  |        |  |               |  |                 |  |           | 96,988  |       |  |  | 13,847 |  |  |  | 20,013 |  |  |  | 283,405   | 
|CD Kearney         |  |                   | 141,234 |                      |  |          | 32,279  |        |  |               |  |                 |  |           | 23,812  |       |  |  | 2,697  |  |  |  | 12,711 |  |  |  | 188,921   | 
|RL Erratt          |  |                   | 137,471 |                      |  |          | 35,708  |        |  |               |  |                 |  |           | 90,936  |       |  |  | 14,462 |  |  |  | 12,372 |  |  |  | 200,013   | 
|                   |  |                   |         |                      |  |          |         |        |  |               |   |                 |  |           |         |       |  |  |        |  |  |  |        |  |  |  |           | 
|                   |  |                   | 942,331 |                      |  |          | 152,140 |        |  |               |  |                 |  |           | 424,216 |       |  |  | 66,350 |  |  |  | 87,945 |  |  |  | 1,248,766 | 
|                   |  |                   |         |                      |  |          |         |        |  |               |   |                 |  |           |         |       |  |  |        |  |  |  |        |  |  |  |           | 

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

Arrangements and Relationships

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

Pension Benefits

The Company has paid A$604,000 during fiscal 2003 for employee superannuation
benefits and pension benefits.

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Board Practices

Novogen Board of Directors

|             |  |                    |  |            |      |              |  |             
|------------ |  | ------------------ |  | ---------- | ---- | ------------ |  | ------------
|             |  |                    |  | Year First |      | Current Term
|Name         |  | Position Held      |  | Appointed  |      | Expires     
|             |  |                    |  |            |      |             
|P A Johnston |  | Chairman           |  |            | 1997 |              |  | October-2003
|C Naughton   |  | Managing Director  |  |            | 1997 |              |  |            
|G E Kelly    |  | Executive Director |  |            | 1994 |              |  | October-2005
|P B Simpson  |  | Director           |  |            | 1994 |              |  | October-2006
|P J Nestel   |  | Director           |  |            | 2001 |              |  | October-2006
|L C Read     |  | Director           |  |            | 2003 |              |  | October-2006

Term of Directors

The term for each director (excluding the Managing Director) is three years at
which time that director retires from office and offers himself/herself for
re-election at the next annual general meeting. The term of office of the
directors of Novogen are staggered, such that in any given year at least
one-third (or the nearest lower whole number) of the directors (excluding the
Managing Director) must retire and stand for re-election at each years annual
general meeting.

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

Ms Leanna Read was appointed to the board on September 11, 2003.

The Board has the power to appoint any person to be a director either to fill a
casual vacancy or as an additional director (up to a maximum of 10). Any
director so appointed may hold office only until the next annual general
meeting when he or she shall be eligible for election.

Board of Directors

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

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

44



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

Audit Committee

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

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

Corporate Governance and Remuneration Committee

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

Capital Projects Committee

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

Executive Directors Employment Contracts

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

The agreements, each dated June 25, 2003, are similar in terms, other than as
to the description of the position held (Executive Director in the case of Dr.
Graham Kelly and Managing Director in the case of Mr. Christopher Naughton),
the responsibilities attached to that position, remuneration and the term of
the agreement.

Dr Kellys agreement provides for an initial term of appointment of three
years. Mr Naughtons agreement provides for an initial term of five years.
After the expiration of the term either party may give to the other not less
than six months notice of termination.

The agreements may be terminated by the Company immediately in the event of
matters such as serious breach of faith, serious neglect or default of duties,
fundamental breach of agreement, or commission of criminal offence or
dishonesty. The agreements are terminated automatically on the death or total or permanent
disability of the employee.

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

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

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

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

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

Employees

The Company employed 61 people at June 30, 2003 (June 30, 2002 : 57 people).

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Share Ownership

Directors holdings of shares and options in the Company

The table below shows the number of ordinary shares and options to purchase
ordinary shares held directly or indirectly by the Directors of the Company as
of November 28, 2003.

|             |  |              |           |   |  |             |     |        |  |          |        |         |  |  |      |  |  |              |   | 
|------------ |  | ------------ | --------- | - |  | ----------- | --- | ------ |  | -------- | ------ | ------- |  |  | ---- |  |  | ------------ | - | 
|             |  | Ordinary     |           |   |  |             |     |        |  |          |        | Options |  |  |      | 
|             |  | Shares Fully |           |   |  |             |     | Number |  | Exercise |        | Expiry 
|             |  | Paid         |           | % |  | Outstanding |     | Price  |  | Date    
|G E Kelly    |  |              | 8,579,119 |   |  |             | 8.9 |        |  |          |       |         |  |  |     |  |  |              |  | 
|C Naughton   |  |              | 758,511   |   |  |             | 0.3 |        |  |          |       |         |  |  |     |  |  |              |  | 
|P A Johnston |  |              | 43,594    |   |  |             |    |        |  |          | 3,128  |         |  |  | 4.01 |  |  | Oct 27 2005 
|P B Simpson  |  |              | 500       |   |  |             |    |        |  |          | 3,128  |         |  |  | 4.01 |  |  | Oct 27 2005 
|P J Nestel   |  |              | 12,000    |   |  |             |    |        |  |          | 20,000 |         |  |  | 3.58 |  |  | July 20 2005

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

Employee Share Option Plan

The Employee Share Option Plan provides for the issue of options to eligible
employees being either an employee or Director of the Company or an associated
company. Each option entitles its holder to acquire one fully paid ordinary
share and is exercisable at a price equal to the average price of such shares
at the close of trading on the Australian Stock Exchange for the five days
prior to the date of issue. Options are not transferable. The option lapses
if the employee ceases to be an employee during the vesting period. There are
currently 41 employees eligible for this scheme.

47



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Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

The names of the substantial shareholders disclosed to the Company are as
follows at August 18, 2003:

Bende Holdings Pty Ltd - holding 6,635,538 Ordinary Shares representing 6.94%
of the outstanding Ordinary Shares. Bende Holdings Pty Ltd is a company
controlled by G E Kelly.

Oppenheimer Funds Inc  holding 13,462,783 Ordinary Shares representing 14.1%
of the outstanding Ordinary Shares.

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

At December 1, 2003 there were 5,690,806 ADRs outstanding, representing
28,454,030 Ordinary Shares (or 29.5% of the then outstanding Ordinary Shares).
At December 1, 2003 there were 44 registered holders of Novogen ADRs.

48



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Item 8. Financial Information

Consolidated financial statements are included in Item 18  Financial
Statements on pages 59 through 108.

Export Sales

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

Legal Proceedings

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

Dividends

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

49



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Item 9. Offer and Listing Details

Trading Markets

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

American Depositary Receipts

Novogens Ordinary Shares trade in the US in the form of ADRs. Novogen has
entered into a Deposit Agreement with the Bank of New York under which the Bank
of New York, acting as depositary, issues the ADRs

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

50



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NOVOGEN LIMITED SHARE PRICE HISTORY

|               |  |                         |      |               |  |      |      |     |  |  |       |  |  |  |       | 
|-------------- |  | ----------------------- | ---- | ------------- |  | ---- | ---- | --- |  |  | ----- |  |  |  | ----- | 
|Period         |  | Per Ordinary Share (A$) |      | Per ADR (US$)
|Year Ended     |  | High                    |      | Low           |  | High |      | Low
|June 1999      |  |                         | 3.25 |               |  |      | 2.15 |     |  |  | 11.10 |  |  |  | 7.01  | 
|June 2000      |  |                         | 5.00 |               |  |      | 2.42 |     |  |  | 18.00 |  |  |  | 8.00  | 
|June 2001      |  |                         | 4.62 |               |  |      | 2.02 |     |  |  | 14.25 |  |  |  | 5.35  | 
|June 2002      |  |                         | 3.34 |               |  |      | 0.83 |     |  |  | 10.50 |  |  |  | 1.98  | 
|June 2003      |  |                         | 5.59 |               |  |      | 1.18 |     |  |  | 19.59 |  |  |  | 3.15  | 
|Quarter Ended  |  |                         |      |               |  |      |      |     |  |  |       |  |  |  |       | 
|September 2000 |  |                         | 4.62 |               |  |      | 3.57 |     |  |  | 14.25 |  |  |  | 9.65  | 
|December 2000  |  |                         | 4.19 |               |  |      | 2.86 |     |  |  | 11.63 |  |  |  | 7.75  | 
|March 2001     |  |                         | 3.90 |               |  |      | 2.65 |     |  |  | 12.00 |  |  |  | 6.88  | 
|June 2001      |  |                         | 2.97 |               |  |      | 2.02 |     |  |  | 10.50 |  |  |  | 5.35  | 
|September 2001 |  |                         | 2.31 |               |  |      | 0.83 |     |  |  | 4.95  |  |  |  | 3.35  | 
|December 2001  |  |                         | 3.21 |               |  |      | 1.03 |     |  |  | 8.42  |  |  |  | 2.50  | 
|March 2002     |  |                         | 3.16 |               |  |      | 2.42 |     |  |  | 8.45  |  |  |  | 6.50  | 
|June 2002      |  |                         | 3.34 |               |  |      | 1.80 |     |  |  | 9.37  |  |  |  | 4.25  | 
|September 2002 |  |                         | 2.18 |               |  |      | 1.18 |     |  |  | 6.34  |  |  |  | 4.25  | 
|December 2002  |  |                         | 3.36 |               |  |      | 1.76 |     |  |  | 9.77  |  |  |  | 4.83  | 
|March 2003     |  |                         | 3.89 |               |  |      | 2.48 |     |  |  | 11.55 |  |  |  | 7.23  | 
|June 2003      |  |                         | 5.59 |               |  |      | 3.05 |     |  |  | 19.59 |  |  |  | 9.36  | 
|September 2003 |  |                         | 5.53 |               |  |      | 4.00 |     |  |  | 19.10 |  |  |  | 12.30 | 
|Month Ended    |  |                         |      |               |  |      |      |     |  |  |       |  |  |  |       | 
|June 2003      |  |                         | 5.59 |               |  |      | 4.18 |     |  |  | 19.59 |  |  |  | 13.60 | 
|July 2003      |  |                         | 5.18 |               |  |      | 4.00 |     |  |  | 17.75 |  |  |  | 12.30 | 
|August 2003    |  |                         | 4.98 |               |  |      | 4.47 |     |  |  | 16.91 |  |  |  | 14.01 | 
|September 2003 |  |                         | 5.53 |               |  |      | 4.66 |     |  |  | 19.10 |  |  |  | 15.33 | 
|October 2003   |  |                         | 6.50 |               |  |      | 5.33 |     |  |  | 23.70 |  |  |  | 17.63 | 
|November 2003  |  |                         | 8.10 |               |  |      | 6.40 |     |  |  | 29.49 |  |  |  | 22.40 | 

51



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Item 10. Additional Information

Memorandum and Articles of Association

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

Material Contracts

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

Exchange Controls

Australia has largely abolished exchange controls on investment transactions.
The Australian dollar is freely convertible into US dollars. In addition,
(other than certain restrictions imposed under Australian law in relation to
dealings with the assets of a number of persons connected with terrorism) there
are currently no specific rules or limitations regarding the export from
Australia of profits, dividends, capital, or similar funds belonging to foreign
investors, except that certain payments to non-residents must be reported to
the Australian Cash Transaction Reports Agency, which monitors such
transactions. However, the Reserve Bank of Australia does retain a discretion
to prevent foreign exchange dealings in certain circumstances under the
Australian Banking (Foreign Exchange) Regulations 1959.

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

Under the Foreign Takeovers Act, as currently in effect, any foreign person,
together with associates, is prohibited from acquiring 15% or more of the
outstanding shares of Novogen (or else the Treasurer may make an order
requiring the acquirer to dispose of those shares within a specified period of
time). In addition, if a foreign person acquires shares in Novogen and as a
result the total holdings of all foreign persons and their associates exceeds
40% in aggregate without the approval of the Australian Treasurer, then the
Treasurer may make an order requiring the acquirer to dispose of those shares
within a specified time. The same rule applies if the total holdings of all
foreign persons and their associates already exceeds 40% and a foreign person
(or its associate) acquires any further shares, including in the course of
trading in the secondary market of the ADRs.

Under the current Australian foreign investment policy, it is unlikely that the
Treasurer would make such an order in relation to an acquisition that
contravenes the Foreign Takeovers Act where the level of foreign ownership
exceeds 40% in the ordinary course of trading, unless the Treasurer is
satisfied that the acquisition is contrary to the national interest. The
Foreign Takeovers Act allows foreign persons to seek prior approval of
acquisitions of Novogen shares which could otherwise result in the Treasurer
making an order requiring the foreign person to dispose of the shares.

If a foreign person holds more than 15% of the shares of Novogen or if the
level of aggregate foreign ownership of Novogen exceeds 40% at any time,
Novogen would be considered a foreign person under the Foreign Takeovers Act.
In such event, Novogen would be required to obtain the approval of the
Treasurer for Novogen, together with its associates, to acquire: (i) more than
15% of an Australian company

52



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or business with assets totaling over A$50 million; or (ii) any direct or
indirect ownership interest in Australian urban land.

The percentage of foreign ownership of Novogen would also be included in
determining the foreign ownership of any Australian company or business in
which it may choose to invest. Novogen has no current plans for any such
acquisitions and the Company only owns commercial property which falls within
the exceptions to the prohibition on acquiring Australian urban land. The
Companys Constitution does not contain any additional limitations on a
non-residents right to hold or vote the Companys securities.

No stamp duty will be payable in Australia on the transfer of ADRs provided
that any instrument by which the ADRs are transferred is executed outside
Australia.

Taxation

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

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

Distributions

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

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

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Dispositions

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

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

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

Estate and Gift Tax

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

Documents on Display

The Company is subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the Exchange Act) that are applicable to a foreign
private issuer. Under the Exchange Act, the Company is required to file
periodic reports and other information with the Securities and Exchange
Commission (the Commission). These materials, including this Annual Report
and the exhibits thereto, may be inspected without charge and copied at
established rates at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., 20549, and at the
Commissions regional offices located at Suite 1400, Northwest Atrium Center,
500 West Madison Street, Chicago, Illinois, 60661-2551 and 233 Broadway, New
York, New York 10279. For more information on the public reference rooms, call
the Commission at 1-800-SEC-0330.

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Item 11. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

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

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

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

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

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

Foreign Currency Risk

The Company conducts a portion of its business in various foreign currencies,
primarily in the US and the UK. As of June 30, 2003 the Company had not
established a foreign currency hedging program. The Company has mitigated and
will continue to mitigate a portion of its currency exposure through
decentralized sales, marketing and support operations in which all costs are
local currency based. Net foreign currency losses in fiscal year 2003 were
A$516,000 compared with net foreign currency losses of A$482,000 in fiscal year
2002.

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

Item 12. Description of Securities Other than Equity Securities

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

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PART 2

Item 13. Defaults, Dividend Arrearages and Delinquencies

This item is not applicable.

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

This item is not applicable.

Item 15. Controls and Procedures

An evaluation of the effectiveness of the design and operation of the Companys
disclosure controls and procedures as of June 30, 2003 was carried out under
the supervision and with the participation of the Companys management,
including the Chief Executive Officer and the Chief Financial Officer. Based on
that evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that the Companys disclosure controls and procedures have been
designed to provide, and are effective in providing, reasonable assurance that
the information required to be disclosed by the Company in reports filed under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported with in the time periods specified in the SECs rules and forms. A
controls system, no matter how well designed and operated cannot provide
absolute assurance that all control issues and instances of fraud, if any,
within the company have been detected. Subsequent to the date of the most
recent evaluation of the internal controls, there were no significant changes
in the Companys internal controls or in other factors that could significantly
affect the internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Item 16. Reserved

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PART 3

Item 17. Not Applicable

Item 18. Financial Statements

The financial statements filed as part of this Annual Report are included on
pages 59 through 108 hereof.

Item 19. Exhibits



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

|            |  |                                                                                                                                                                                      
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                                                                                                  
|1.1         |  | Constitution of Novogen Limited (formerly known as the
Memorandum of Association and Articles of Association). (1)                                                                   
|            |  |                                                                                                                                                                                      
|2.1         |  | Deposit Agreement, dated as of February 23, 1998, among
Novogen Limited, the Bank of New York, as Depositary, and
owners and holders from time to time of ADRs issued
thereunder. (2)
|            |  |                                                                                                                                                                                      
|4.1         |  | Employment contract between the Company and Mr C Naughton (3)                                                                                                                        
|            |  |                                                                                                                                                                                      
|4.2         |  | Employment Contract between the Company and Professor Alan
Husband (3)                                                                                                               
|            |  |                                                                                                                                                                                      
|4.3         |  | Employment Contract between the Company and Dr G E Kelly (3)                                                                                                                         
|            |  |                                                                                                                                                                                      
|4.4         |  | Lease between Kendall Glen Pty Limited (Lessor) and Novogen
Laboratories Pty Ltd for the Companys corporate headquarters
at 140 Wicks Road, North Ryde, New South Wales. (3)        
|            |  |                                                                                                                                                                                      
|8.1         |  | Company Subsidiaries                                                                                                                                                                 
|            |  |                                                                                                                                                                                      
|12.1        |  | Certifications                                                                                                                                                                       
|            |  |                                                                                                                                                                                      
|13.1        |  | Section 906 Certification by the Chief Executive Officer and Chief Financial Officer (4)                                                                                             



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

57



---



##### 





|(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) |  | Attached as Exhibit 13.1                                                                                                                                       

58



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##### 



Report of Independent Auditors

To the Shareholders and Board of Directors of Novogen Limited

We have audited the accompanying consolidated statements of financial position
of Novogen Limited and its subsidiaries (the Group) as of 30 June 2003 and 2002
and the related consolidated statements of financial performance, cash flows
and changes in contributed equity for each of the three years in the period
ended 30 June 2003. These financial statements are the responsibility of the
Groups management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Novogen Limited at 30 June 2003 and 2002 and the consolidated results of their
operations and their cash flows for each of the three years in the period ended
30 June 2003, in conformity with accounting principles generally accepted in
Australia.

Accounting principles generally accepted in Australia vary in certain respects
from accounting principles generally accepted in the United States. The
application of the accounting principles generally accepted in the United
States would have affected the determination of consolidated net loss for each
of the three years in the period ended 30 June 2003 and the determination of
the consolidated shareholders equity at 30 June 2003 and 2002 to the extent
summarised in note 30 to the consolidated financial statements.

/s/ Ernst & Young

Sydney, Australia
August 27 , 2003

59



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##### 



Novogen Limited, Consolidated Financial Statements

STATEMENT OF FINANCIAL PERFORMANCE

Year ended June 30 2003


|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|--------------------------------------------------- |  | ----- | - | ------ |  | ------------ | ------- | ------ |  | ------- | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                    |  |       |   |        |  | Consolidated
|                                                    |  |       |   |        |  |             
|                                                    |  |       |   |        |  | 2001         |         | 2002   |  | 2003    |         | 2003
|                                                    |  | Notes |   | A$'000 |  | A$'000       |         | A$'000 |  | US$000
|Revenue                                             |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Sales Revenue                                       |  |       |   |        |  |              | 26,663  |        |  |         | 19,582  |      |  |  | 19,630  |   |  |  | 13,178  |  
|Other Revenue                                       |  |       | 2 |        |  |              | 10,809  |        |  |         | 10,132  |      |  |  | 13,420  |   |  |  | 9,009   |  
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Total Revenue                                       |  |       |   |        |  |              | 37,472  |        |  |         | 29,714  |      |  |  | 33,050  |   |  |  | 22,187  |  
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Costs and Expenses                                  |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Cost of Goods Sold                                  |  |       |   |        |  |              | (8,653  | )      |  |         | (7,583  | )    |  |  | (7,200  | ) |  |  | (4,833  | )
|Research & Development                              |  |       |   |        |  |              | (8,419  | )      |  |         | (7,853  | )    |  |  | (8,252  | ) |  |  | (5,540  | )
|Selling and Promotions                              |  |       |   |        |  |              | (24,627 | )      |  |         | (15,207 | )    |  |  | (12,713 | ) |  |  | (8,534  | )
|Shipping and Handling                               |  |       |   |        |  |              | (533    | )      |  |         | (480    | )    |  |  | (468    | ) |  |  | (314    | )
|General and Administrative                          |  |       |   |        |  |              | (16,628 | )      |  |         | (12,874 | )    |  |  | (14,958 | ) |  |  | (10,041 | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Total Costs and Expenses                            |  |       |   |        |  |              | (58,860 | )      |  |         | (43,997 | )    |  |  | (43,591 | ) |  |  | (29,262 | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Interest Expense                                    |  |       |   |        |  |              | (346    | )      |  |         | (345    | )    |  |  | (132    | ) |  |  | (89     | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Operating Loss Before Abnormal Items
and Income Tax |  |       | 2 |        |  |              | (21,734 | )      |  |         | (14,628 | )    |  |  | (10,673 | ) |  |  | (7,164  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Income Tax Expense                                  |  |       | 3 |        |  |              | (30     | )      |  |         | (45     | )    |  |  | 7       |   |  |  | 5       |  
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net Loss                                            |  |       |   |        |  |              | (21,764 | )      |  |         | (14,673 | )    |  |  | (10,666 | ) |  |  | (7,159  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net Loss Attributable to Outside Equity Interests   |  |       |   |        |  |              |        |        |  |         | (19     | )    |  |  | (212    | ) |  |  | (142    | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net Loss Attributable to Members of Novogen         |  |       |   |        |  |              | (21,764 | )      |  |         | (14,654 | )    |  |  | (10,454 | ) |  |  | (7,017  | )
|                                                    |  |       |   |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Basic Loss per share (cents per share)              |  |       |   |        |  |              | (25.4   | )      |  |         | (15.4   | )    |  |  | (10.9   | ) |  |  | (7.3    | )

60



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##### 



STATEMENT OF FINANCIAL POSITION
As at 30 June 2003

|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|-------------------------------------- |  | ----- | -- | ------ |  | ------------ | ------- | ------- |  | ---- | ------- | - |  |  | ------- | -
|                                       |  |       |    |        |  | Consolidated
|                                       |  |       |    |        |  |             
|                                       |  |       |    |        |  | 2002         |         | 2003    |  | 2003
|                                       |  | Notes |    | A$000 |  | A$000       |         | US$000
|CURRENT ASSETS                         |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Cash                                   |  |       | 4  |        |  |              | 39,937  |         |  |      | 31,026  |   |  |  | 20,828  |  
|Receivables                            |  |       | 5  |        |  |              | 4,505   |         |  |      | 4,438   |   |  |  | 2,979   |  
|Inventories                            |  |       | 6  |        |  |              | 6,907   |         |  |      | 6,399   |   |  |  | 4,296   |  
|Other                                  |  |       | 7  |        |  |              | 517     |         |  |      | 588     |   |  |  | 395     |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Total Current Assets                   |  |       |    |        |  |              | 51,866  |         |  |      | 42,451  |   |  |  | 28,498  |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|NON-CURRENT ASSETS                     |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Inventories                            |  |       | 6  |        |  |              | 597     |         |  |      | 78      |   |  |  | 52      |  
|Property, plant and equipment          |  |       | 8  |        |  |              | 9,213   |         |  |      | 8,283   |   |  |  | 5,560   |  
|Intangibles                            |  |       | 9  |        |  |              | 224     |         |  |      |        |   |  |  |        |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Total Non-Current Assets               |  |       |    |        |  |              | 10,034  |         |  |      | 8,361   |   |  |  | 5,612   |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|TOTAL ASSETS                           |  |       |    |        |  |              | 61,900  |         |  |      | 50,812  |   |  |  | 34,110  |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|CURRENT LIABILITIES                    |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Payables                               |  |       | 10 |        |  |              | 4,280   |         |  |      | 5,656   |   |  |  | 3,797   |  
|Interest bearing liabilities           |  |       | 11 |        |  |              | 845     |         |  |      | 679     |   |  |  | 456     |  
|Provisions                             |  |       | 12 |        |  |              | 279     |         |  |      | 271     |   |  |  | 182     |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Total Current Liabilities              |  |       |    |        |  |              | 5,404   |         |  |      | 6,606   |   |  |  | 4,435   |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|NON-CURRENT LIABILITIES                |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Interest bearing liabilities           |  |       | 11 |        |  |              | 2,287   |         |  |      | 1,608   |   |  |  | 1,079   |  
|Provisions                             |  |       | 12 |        |  |              | 164     |         |  |      | 201     |   |  |  | 135     |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Total Non-Current Liabilities          |  |       |    |        |  |              | 2,451   |         |  |      | 1,809   |   |  |  | 1,214   |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|TOTAL LIABILITIES                      |  |       |    |        |  |              | 7,855   |         |  |      | 8,415   |   |  |  | 5,649   |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|NET ASSETS                             |  |       |    |        |  |              | 54,045  |         |  |      | 42,397  |   |  |  | 28,461  |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|EQUITY                                 |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Parent Equity Interest                 |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Contributed equity                     |  |       | 14 |        |  |              | 137,249 |         |  |      | 138,206 |   |  |  | 92,778  |  
|Reserves                               |  |       | 15 |        |  |              |        |         |  |      | (1,956  | ) |  |  | (1,313  | )
|Accumulated losses                     |  |       | 15 |        |  |              | (83,970 | )       |  |      | (94,424 | ) |  |  | (63,387 | )
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|Total parent equity interest in equity |  |       |    |        |  |              | 53,279  |         |  |      | 41,826  |   |  |  | 28,078  |  
|Total outside equity interest          |  |       | 16 |        |  |              | 766     |         |  |      | 571     |   |  |  | 383     |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  
|TOTAL EQUITY                           |  |       |    |        |  |              | 54,045  |         |  |      | 42,397  |   |  |  | 28,461  |  
|                                       |  |       |    |        |  |              |         |         |  |      |         |   |  |  |         |  

61



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##### 



STATEMENT OF CHANGES IN CONTRIBUTED EQUITY

|                                        |  |                      |            |        |  |  |         | 
|--------------------------------------- |  | -------------------- | ---------- | ------ |  |  | ------- | 
|                                        |  | Number of Fully      |            | Amount
|Issued Share Capital                    |  | Paid Ordinary Shares |            | A$000
|                                        |  |                      |            |       
|Balance June 30, 1999                   |  |                      | 79,685,518 |        |  |  | 82,148  | 
|                                        |  |                      |            |        |  |  |         | 
|Options converted into shares           |  |                      | 132,744    |        |  |  | 154     | 
|Share issue- June 30, 2000              |  |                      | 5,018,000  |        |  |  | 17,974  | 
|                                        |  |                      |            |        |  |  |         | 
|Balance June 30, 2000                   |  |                      | 84,836,262 |        |  |  | 100,276 | 
|                                        |  |                      |            |        |  |  |         | 
|Options converted into shares           |  |                      | 38,513     |        |  |  | 46      | 
|Share issue  -  May 23,2001             |  |                      | 10,195,000 |        |  |  | 20,900  | 
|                                        |  |                      |            |        |  |  |         | 
|Balance June 30, 2001                   |  |                      | 95,069,775 |        |  |  | 121,222 | 
|                                        |  |                      |            |        |  |  |         | 
|Options converted into shares           |  |                      | 342,939    |        |  |  | 617     | 
|Subsidiary Share issue  -  May 22, 2002 |  |                      | n/a        |        |  |  | 15,410  | 
|                                        |  |                      |            |        |  |  |         | 
|Balance June 30, 2002                   |  |                      | 95,412,714 |        |  |  | 137,249 | 
|                                        |  |                      |            |        |  |  |         | 
|Options converted into shares           |  |                      | 199,071    |        |  |  | 421     | 
|Subsidiary Share issue  -  May 5, 2003  |  |                      | n/a        |        |  |  | 536     | 
|                                        |  |                      |            |        |  |  |         | 
|Balance June 30, 2003                   |  |                      | 95,611,785 |        |  |  | 138,206 | 
|                                        |  |                      |            |        |  |  |         | 

62



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##### 



STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2003

|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|----------------------------------------------- |  | ----- | -- | ------ |  | ------------ | ------- | ------ |  | ------- | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                |  |       |    |        |  | Consolidated
|                                                |  |       |    |        |  |             
|                                                |  |       |    |        |  | 2001         |         | 2002   |  | 2003    |         | 2003
|                                                |  | Notes |    | A$000 |  | A$000       |         | A$000 |  | US$000
|Cash flows from operating activities            |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Receipts from customers                         |  |       |    |        |  |              | 27,200  |        |  |         | 18,350  |      |  |  | 19,324  |   |  |  | 12,972  |  
|Payments to suppliers and employees             |  |       |    |        |  |              | (46,947 | )      |  |         | (28,811 | )    |  |  | (29,275 | ) |  |  | (19,652 | )
|Interest received                               |  |       |    |        |  |              | 987     |        |  |         | 1,114   |      |  |  | 1,177   |   |  |  | 790     |  
|Interest paid                                   |  |       |    |        |  |              | (358    | )      |  |         | (345    | )    |  |  | (132    | ) |  |  | (89     | )
|Grants received                                 |  |       |    |        |  |              | 1,746   |        |  |         | 1,295   |      |  |  | 632     |   |  |  | 424     |  
|Income tax paid                                 |  |       |    |        |  |              | (30     | )      |  |         | (45     | )    |  |  | 7       |   |  |  | 5       |  
|Royalties Received                              |  |       |    |        |  |              |        |        |  |         | 1,878   |      |  |  | 2,324   |   |  |  | 1,560   |  
|Goods and services tax paid to the ATO          |  |       |    |        |  |              | (40     | )      |  |         | (115    | )    |  |  | 96      |   |  |  | 64      |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net cash flows used in operating activities     |  |       | 22 |        |  |              | (17,442 | )      |  |         | (6,679  | )    |  |  | (5,847  | ) |  |  | (3,926  | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Cash flows from investing activities            |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Acquisition of property, plant and equipment    |  |       |    |        |  |              | (956    | )      |  |         | (144    | )    |  |  | (758    | ) |  |  | (509    | )
|Proceeds from sale of plant and equipment       |  |       |    |        |  |              | 169     |        |  |         | 40      |      |  |  | 35      |   |  |  | 23      |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net cash flows used in investing activities     |  |       |    |        |  |              | (787    | )      |  |         | (104    | )    |  |  | (723    | ) |  |  | (486    | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Cash flows from financing activities            |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Proceeds from the issue of ordinary shares      |  |       |    |        |  |              | 20,946  |        |  |         | 617     |      |  |  | 421     |   |  |  | 283     |  
|Proceeds from the issue of subsidiary shares    |  |       |    |        |  |              |        |        |  |         | 18,127  |      |  |  | 553     |   |  |  | 371     |  
|Payment of share issue costs                    |  |       |    |        |  |              |        |        |  |         | (1,932  | )    |  |  |        |   |  |  |        |  
|Proceeds from borrowings                        |  |       |    |        |  |              | 846     |        |  |         | 2,418   |      |  |  |        |   |  |  |        |  
|Repayment of borrowings                         |  |       |    |        |  |              | (1,298  | )      |  |         | (3,157  | )    |  |  | (844    | ) |  |  | (567    | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net cash flows from financing activities        |  |       |    |        |  |              | 20,494  |        |  |         | 16,073  |      |  |  | 130     |   |  |  | 87      |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Net increase/(decrease) in cash held            |  |       |    |        |  |              | 2,265   |        |  |         | 9,290   |      |  |  | (6,440  | ) |  |  | (4,323  | )
|Cash at the beginning of year                   |  |       |    |        |  |              | 28,820  |        |  |         | 31,129  |      |  |  | 39,937  |   |  |  | 26,810  |  
|Effect of exchange rate changes on opening cash |  |       |    |        |  |              | 44      |        |  |         | (482    | )    |  |  | (2,471  | ) |  |  | (1,659  | )
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  
|Cash at end of year                             |  |       |    |        |  |              | 31,129  |        |  |         | 39,937  |      |  |  | 31,026  |   |  |  | 20,828  |  
|                                                |  |       |    |        |  |              |         |        |  |         |         |      |  |  |         |   |  |  |         |  

63



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##### 



NOVOGEN LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance
with the historical cost convention. These general purpose consolidated
financial statements have been prepared in accordance with the
requirements of the Corporations Act 2001 which includes applicable
Accounting Standards. Other mandatory professional reporting requirements
(Urgent Issues Group Consensus Views) have also been complied with.
Comparative information is changed where appropriate to enhance
comparability.

The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates

Changes in Accounting Policy

The accounting policies adopted are consistent with those of the previous
year except for the accounting policy with respect to employee benefits.

The consolidated entity has adopted the revised Accounting Standard AASB
1028 Employee Benefits, which has resulted in a change in the
accounting policy for the measurement of employee benefit liabilities.
Previously the consolidated entity measured the provision for employee
benefits based on remuneration rates at the date of recognition of the
liability. In accordance with the requirements of the revised Standard,
the provision for employee benefits is now measured based on the
remuneration rates expected to be paid when the liability is settled. The
change has no significant effect on the provision.

The consolidated entity has adopted the revised Accounting Standard AASB
1044 Provisions, Contingent Liabilities and Contingent Assets. The
change has no significant effect.

Principles of Consolidation

The consolidated financial statements are those of the consolidated
entity, comprising of Novogen Limited and all entities controlled by
Novogen Limited from time to time during the year and at balance date.
Novogen Limited and its controlled entities together are referred to in
this financial report as the economic entity or Group. The effects of
all transactions between entities in the economic entity are eliminated
in full.

The financial statements of controlled entities are prepared for the same
reporting period as the parent entity, using consistent accounting
policies. Adjustments are made to bring into line any dissimilar
accounting policies which may exist.

Subsidiary acquisitions are accounted for using the purchase method of
accounting.

64



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##### 



Inventories

Inventories are measured at the lower of cost and net realisable value.
Amounts shown in the income statement reflects the actual cost of
production for the reporting period.

Costs incurred in bringing each product to its present location and
condition are accounted for as follows:

Raw Materialpurchase cost on a first-in, first-out basis; and

Finished Goods and Work-in-Progress cost of direct material, and a
proportion of manufacturing overheads.

Recoverable Amount of Non-Current Assets

Non-current assets are measured at cost, provided that their carrying
value does not exceed their recoverable amount. Where the carrying
amount of an individual non-current asset is greater than its
recoverable amount, the asset is written down to its recoverable
amount. In determining recoverable amounts of non-current assets
the expected net cash flows have not been discounted to their
present values.

Research and development

Costs incurred on research and development projects are expensed as
incurred, unless future recoverability is assured beyond a reasonable
doubt, to exceed those costs. Where research and development costs are
deferred such costs are amortised over future periods on a basis related
to expected benefits. Unamortised costs are reviewed at each reporting
date to determine the amount (if any) that is no longer recoverable and
any amount identified is written off. To date, due to the uncertainty of
the development program all research and development costs have been
expensed.

Advertising expenses

Costs incurred on Advertising expenditure is expensed as incurred. The
company incurred $16,351,000 in fiscal 2001 , $8,020,000 in fiscal 2002
and $6,100,000 in fiscal 2003.

Intangible Assets

(i)  Patents and Trademarks

Costs incurred in respect to registering and defending patents and
trademarks are expensed as incurred unless future recoverability is
assured beyond a reasonable doubt.

(ii)  Goodwill

Goodwill has been fully amortised in the year to June 2003 in accordance
with AASB 1013. Unamortised goodwill was reviewed by Directors at the
reporting date. In their opinion no future benefits were considered
probable and therefore goodwill was recognised in the profit and loss
account as an expense.

65



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##### 



Property, Plant & Equipment

Cost and Valuation

All property, plant and equipment are brought to account at cost.

Depreciation

Depreciation is calculated on a straight-line basis to write off the
depreciable amount of each item of property, plant and equipment
(excluding land) over its expected useful life to the economic entity.
Estimates of remaining useful lives are made on a regular basis for all
assets, with annual reassessments for major items.

Major depreciation periods are:

|                       |  |                |  |               
|---------------------- |  | -------------- |  | --------------
|                       |  | 2002           |  | 2003          
|                       |  |                |  |               
|Buildings              |  | 20 years       |  | 20 years      
|Plant and equipment    |  | 3-10 years     |  | 3-10 years    
|Leasehold Improvements |  | the lease term |  | the lease term

Leases

Leases are classified at their inception as either operating or finance
leases based on the economic substance of the agreement so as to reflect
the risks and benefits incidental to ownership.

Operating Leases

The minimum lease payments of operating leases, where the lessor
effectively retains substantially all of the risks and benefits of
ownership of the leased item, are recognised as an expense on a straight
line basis.

Contingent rentals are recognised as an expense in the financial year in
which they are incurred.

Finance Leases

Leases which effectively transfer substantially all of the risks and
benefits incidental to ownership of the leased item to the Group are
capitalised at the present value of the minimum lease payments and
disclosed as property, plant and equipment under lease. A lease liability
of equal value is also recognised. Capitalised lease assets are
depreciated over the shorter of the estimated useful life of the assets
and the lease term.

Minimum lease payments are allocated between interest expense and
reduction of the lease liability with the interest expense calculated
using the interest rate implicit in the lease and charged directly to the
Statement of Financial Performance.

The cost of improvements to or on leasehold property is capitalised,
disclosed as leasehold improvements, and amortised over the unexpired
period of the lease or the estimated useful lives of the improvements,
whichever is the shorter.

66



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Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met:

Sale of Goods

Goods have been dispatched to a customer pursuant to a sales order and
invoice and the associated risks have passed to the carrier or customer.
The company estimates returns and allowances against the revenues and
records the estimated returns and allowances in the same period in which
the revenue is recorded. These estimates are based upon historic
analysis, customer agreements and/or currently known factors that arise
in the normal course of business.

Advertising and Promotion

The company expenses advertising and promotional costs as incurred and
these costs are included as selling, general and administrative expenses.
Cooperative advertising expenses are classified as a reduction of
revenue.

Interest

Control of a right to receive consideration for the investment in assets
has been attained.

Grant Income

Control of a right to receive grant funds has been attained, evidenced by
confirmation from the relevant government or other body.

Payments received under the Australian Government START Grants are
recognised as revenue when received. The payments are made by the
Australian Government for expenses already incurred when agreed
milestones are achieved. The only circumstances where funds received by
Novogen are contingently returnable are if Novogen is in breach of the
START grant contract or if it fails to implement its agreed
commercialization plan included as part of the contract. The risk of this
happening is considered to be minimal as it is within Novogens control.

Royalties

Royalty revenue is recognised on an accrual basis in accordance with the
substance of the relevant agreement.

Trade and Other Receivables

Trade receivables are recognised and carried at original invoice value
less a provision for any un-collectable debts. Debts, which are known to
be un-collectable, are written off. A provision for doubtful debts is
recognised when collection of the full nominal amount is no longer
probable.

Receivables from related parties are recognised and carried at the
nominal amount due.

All trade debtors are recognised at the amount receivable as they are
predominantly due for settlement no more than 30 days from the date of
recognition.

67



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##### 



Foreign Currency Translation

Translation of Foreign Currency Transactions

Foreign currency transactions are converted into Australian currency at
the rate of exchange at the date of the transaction. At balance date
amounts payable and receivable in foreign currencies are translated to
Australian currency at rates of exchange current at balance date.
Resulting exchange differences are brought to account in determining the
profit or loss for the financial year.

Translation of Financial Reports of Overseas Operations

All foreign controlled entities (with the exception of the Marshall
Edwards Group (which includes Marshall Edwards, Inc. and Marshall Edwards
Pty Ltd) and Glycotex, Inc.) are deemed to be fully integrated with the
Company as they are not financially or operationally independent of
Novogen Limited. The financial reports of overseas operations are,
therefore, translated using the temporal method, with resulting losses or
gains taken to the profit and loss account.

The Marshall Edwards Group (which includes Marshall Edwards, Inc. and
Marshall Edwards Pty Ltd) and Glycotex, Inc. are elf sustaining as they
are financially and operationally independent of Novogen Limited. The
financial reports of these companies are translated using the current
rate method, and any exchange differences are taken directly to the
foreign currency translation reserve.

Trade and Other Payables

Liabilities for trade creditors and other amounts are carried at cost
which is the fair value of the consideration to be paid in the future for
goods and services received, whether or not billed to the consolidated
entity.

Payables to related parties are carried at the principal amount.

Cash and Cash Equivalents

Cash on hand and in banks and short term deposits are stated at the lower
of cost and net realisable value. For the purposes of the statement of
cash flows, cash includes deposits at call readily convertible into cash
within two working days and which are used in the cash management
function on a day-to-day basis net of outstanding bank overdrafts.

Loans and Borrowings

Finance lease liability is determined in accordance with the requirements
of AASB 1008  Leases.

Employee Entitlements

Wages and Salaries, Annual Leave

Liabilities for wages, salaries and annual leave are recognised, and are
measured as the amount unpaid at the reporting date at expected future
pay rates in respect of employees services up to that date. The value
of the employee share option scheme described in Note 14 is not being
charged as an expense.

Long Service Leave

The amounts expected to be paid to employees for their pro rata
entitlement to long service leave, including on-costs, are accrued
annually at expected future

68



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##### 



pay rates having regard to experience of employee departures and period
of service. These entitlements are measured at the present value of the
estimated future cash outflow to be made in respect of services provided
by employees up to the reporting date. In determining the present value
of future cash outflows, the interest rate attaching to government
guaranteed securities, which have terms to maturity approximating the
terms of the related liability are used.

Share Option Plans

The value of share option plans described in Note 14 is not charged as an
employee entitlement expense.

Earnings per Share

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

Diluted EPS is calculated as net profit attributable to members, adjusted
for:



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

divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares adjusted for any bonus element.

Contributed Equity

Ordinary share capital is recognised at the fair value of consideration
received by the Company. Any transaction costs arising on the issue of
ordinary shares are recognised directly in equity as a reduction in the
share proceeds received.

Taxes

Income tax

Tax effect accounting is applied using the liability method whereby
income tax is regarded as an expense and is calculated on the accounting
profit after allowing for permanent differences. To the extent timing
differences occur between the time items are recognised in the financial
statements and when items are taken into account in determining taxable
income, the net related tax benefit or liability, calculated at current
rates, is disclosed as a future income tax benefit or a provision for
deferred income tax.

The future income tax benefit relating to tax losses and timing
differences is not carried forward as an asset unless the benefit is
virtually certain of being realised.

Goods and Services Tax (GST) and overseas equivalents

Revenues, expenses, and assets are recognised net of the amount of GST
except:

69



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##### 



-     where the GST incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST is
recognised as part of the expense item as applicable; and

-     Receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to the taxation
authority is included as part of receivables or payables in the Statement
of Financial Position.

Cash flows are included in the Statement of Cash Flows on a gross basis
and the GST component of cash flows arising from investing and financing
activities which is recoverable or payable to the taxation authority are
classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST
recoverable from or payable to the taxation authority.

Comparatives

Where necessary, comparatives have been reclassified and repositioned for
consistency with current year disclosures as a result of the first time
application of revised accounting standards.

Note 2. Profit/(Loss) from Ordinary Activities

|                                        |  |              |        |        |  |        |        |  |  |  |        | 
|--------------------------------------- |  | ------------ | ------ | ------ |  | ------ | ------ |  |  |  | ------ | 
|                                        |  | Consolidated
|                                        |  |             
|                                        |  | 2001         |        | 2002   |  | 2003  
|                                        |  | A$000       |        | A$000 |  | A$000
|(a) Revenues from operating activities  |  |              |        |        |  |        |        |  |  |  |        | 
|Revenue from the sale of goods          |  |              | 26,663 |        |  |        | 19,582 |  |  |  | 19,630 | 
|                                        |  |              |        |        |  |        |        |  |  |  |        | 
|                                        |  |              | 26,663 |        |  |        | 19,582 |  |  |  | 19,630 | 
|                                        |  |              |        |        |  |        |        |  |  |  |        | 
|(b) Other Revenues                      |  |              |        |        |  |        |        |  |  |  |        | 
|Interest  -  other persons/corporations |  |              | 1,057  |        |  |        | 1,203  |  |  |  | 1,266  | 
|Grants received                         |  |              | 1,746  |        |  |        | 1,295  |  |  |  | 632    | 
|Royalties received                      |  |              |       |        |  |        | 1,879  |  |  |  | 2,362  | 
|Revenue from sale of assets             |  |              | 169    |        |  |        | 40     |  |  |  | 35     | 
|Currency gains -  (refer to 2(d))       |  |              | 7,240  |        |  |        | 5,426  |  |  |  | 8,794  | 
|Other                                   |  |              | 597    |        |  |        | 289    |  |  |  | 331    | 
|                                        |  |              |        |        |  |        |        |  |  |  |        | 
|                                        |  |              | 10,809 |        |  |        | 10,132 |  |  |  | 13,420 | 
|                                        |  |              |        |        |  |        |        |  |  |  |        | 
|                                        |  |              |        |        |  |        |        |  |  |  |        | 
|Total revenues                          |  |              | 37,472 |        |  |        | 29,714 |  |  |  | 33,050 | 
|                                        |  |              |        |        |  |        |        |  |  |  |        | 

70



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|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- |  | ------------ | --- | ----- |  | ----- | --- |  |  | ----- | --- | 
|                                                                                                                                                                                 |                                   |  | Consolidated
|                                                                                                                                                                                 |                                   |  |             
|                                                                                                                                                                                 |                                   |  | 2001         |     | 2002  |  | 2003 
|                                                                                                                                                                                 |                                   |  | $000        |     | $000 |  | $000
|(c) Expenses                                                                                                                                                                     |                                   |  |              |     |       |  |       |     |  |  |       |    
|Depreciation of non-current assets                                                                                                                                               |                                   |  |              |     |       |  |       |     |  |  |       |    
|                                                                                                                                                                                 | Plant and equipment               |  |              | 951 |       |  |       | 659 |  |  |       | 861 | 
|                                                                                                                                                                                 | Buildings                         |  |              | 290 |       |  |       | 290 |  |  |       | 290 | 
|                                                                                                                                                                                 | Leasehold improvements            |  |              | 71  |       |  |       | 96  |  |  |       | 66  | 
|Amortisation of non-current assets                                                                                                                                               |                                   |  |              |     |       |  |       |     |  |  |       |    
|                                                                                                                                                                                 | Plant and equipment under lease   |  |              | 952 |       |  |       | 775 |  |  |       | 447 | 
|                                                                                                                                                                                 | Goodwill                          |  |              | 33  |       |  |       | 33  |  |  |       | 224 | 
|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |    
|Total depreciation and amortisation expenses                                                                                                                                     |                                   |  | 2,297        |     |       |  | 1,853 |     |  |  | 1,888 |    
|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |    
|Bad and doubtful debts  trade                                                                                                                                                   |                                   |  | 146          |     |       |  | 661   |     |  |  | 52    |    
|Inventory
          write offs (including provision for diminution in value 2003:6; 2002:1402;
          2001:943)                                                               |                                   |  | 407          |     |       |  | 2,561 |     |  |  | 617   |    
|Provision for employee entitlements                                                                                                                                              |                                   |  | 39           |     |       |  | 26    |     |  |  | 44    |    
|Rental expense relating to operating leases                                                                                                                                      |                                   |  | 738          |     |       |  | 693   |     |  |  | 677   |    
|Borrowing costs expensed                                                                                                                                                         |                                   |  |              |     |       |  |       |     |  |  |       |    
|                                                                                                                                                                                 | Interest expense on finance lease |  |              | 346 |       |  |       | 345 |  |  |       | 132 | 
|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |    
|Total borrowing costs expensed                                                                                                                                                   |                                   |  | 346          |     |       |  | 345   |     |  |  | 132   |    
|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |    
|(d) Losses/(Gains)                                                                                                                                                               |                                   |  |              |     |       |  |       |     |  |  |       |    
|Net loss/(gain) on disposal of property,
plant and equipment                                                                                                                     |                                   |  | (112         | )   |       |  | 494   |     |  |  | (12   | )  
|Foreign currency losses  (refer to 2(b))                                                                                                                                        |                                   |  | 7,196        |     |       |  | 5,908 |     |  |  | 9,310 |    
|(e) Significant Items                                                                                                                                                            |                                   |  |              |     |       |  |       |     |  |  |       |    
|Profit from ordinary activities before income
tax expense includes the following expenses
disclosure of which is relevant in explaining
the financial performance of the entity: |                                   |  |              |     |       |  |       |     |  |  |       |    
|Litigation Settlement                                                                                                                                                            |                                   |  | 750          |     |       |  |      |     |  |  |      |    
|Marshall Edwards, Inc. prospectus costs                                                                                                                                          |                                   |  | 1,358        |     |       |  |      |     |  |  |      |    
|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |    
|                                                                                                                                                                                 |                                   |  | 2,108        |     |       |  |      |     |  |  |      |    
|                                                                                                                                                                                 |                                   |  |              |     |       |  |       |     |  |  |       |    

71



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Note 3. Income Tax

|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ----- |  | ----- | ------ | - |  |  | ------ | -
|                                                                                                                                                                                                |  | Consolidated
|                                                                                                                                                                                                |  |             
|                                                                                                                                                                                                |  | 2001         |        | 2002  |  | 2003 
|                                                                                                                                                                                                |  | $000        |        | $000 |  | $000
|(a) The prima facie tax, using tax rates
applicable in the country of operation, on profit
and extraordinary items differs from the income tax
provided in the financial statements as follows: |  |              |        |       |  |       |        |   |  |  |        |  
|Prima facie tax on loss from ordinary activities                                                                                                                                                |  |              | (7,390 | )     |  |       | (4,388 | ) |  |  | (3,202 | )
|Tax effect of permanent differences:                                                                                                                                                            |  |              |        |       |  |       |        |   |  |  |        |  
|Non deductible depreciation and
amortisation                                                                                                                                                    |  |              | 11     |       |  |       | 10     |   |  |  | 67     |  
|Non deductible expenses                                                                                                                                                                         |  |              | 1,113  |       |  |       | 213    |   |  |  | 67     |  
|Research and development allowance                                                                                                                                                              |  |              | (102   | )     |  |       | 207    |   |  |  | (261   | )
|Sundry items                                                                                                                                                                                    |  |              | (40    | )     |  |       | 62     |   |  |  | 89     |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|Income Tax adjusted for permanent
differences                                                                                                                                                   |  |              | (6,408 | )     |  |       | (3,896 | ) |  |  | (3,240 | )
|Australian income taxes                                                                                                                                                                         |  |              |        |       |  |       | 1      |   |  |  |       |  
|United States state income taxes                                                                                                                                                                |  |              |       |       |  |       | 3      |   |  |  |       |  
|New Zealand income tax                                                                                                                                                                          |  |              | 27     |       |  |       | 41     |   |  |  | (7     | )
|Canadian Provincial taxes                                                                                                                                                                       |  |              | 3      |       |  |       |       |   |  |  |       |  
|Current year tax losses not brought to account                                                                                                                                                  |  |              | 6,408  |       |  |       | 3,896  |   |  |  | 3,240  |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|Income tax expense attributable to operating loss                                                                                                                                               |  |              | 30     |       |  |       | 45     |   |  |  | (7     | )
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|(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                                                                                                                                                                  |  |              | 20,843 |       |  |       | 17,758 |   |  |  | 20,861 |  
|(ii) timing differences                                                                                                                                                                         |  |              | (836   | )     |  |       | 1,838  |   |  |  | 1,698  |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  
|                                                                                                                                                                                                |  |              | 20,007 |       |  |       | 19,596 |   |  |  | 22,559 |  
|                                                                                                                                                                                                |  |              |        |       |  |       |        |   |  |  |        |  

72



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This future income tax benefit will only be obtained if:



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

(c)  The balance of the franking account at the end of the financial year for the economic entity and the
parent entity is Nil (2002: Nil; 2001: Nil).

(d)  Pretax loss for the year ended June 30, 2003 was taxed in the following jurisdictions:

|         |  |              |         |       |  |       |         |   |  |  |         |  
|-------- |  | ------------ | ------- | ----- |  | ----- | ------- | - |  |  | ------- | -
|         |  | Consolidated
|         |  |             
|         |  | 2001         |         | 2002  |  | 2003 
|         |  | $000        |         | $000 |  | $000
|Domestic |  |              | (2,496  | )     |  |       | (9,477  | ) |  |  | (14,317 | )
|Foreign  |  |              | (19,238 | )     |  |       | (5,151  | ) |  |  | 3,644   |  
|         |  |              |         |       |  |       |         |   |  |  |         |  
|         |  |              | (21,734 | )     |  |       | (14,628 | ) |  |  | (10,673 | )
|         |  |              |         |       |  |       |         |   |  |  |         |  

Tax effected carry forward losses amounting to $8,716 may be carried forward indefinitely and tax losses of
$12,145 expire over the period 2007 through 2023.

Tax Consolidation

Effective 1 July 2002, for the purposes of income taxation, Novogen Limited and its 100% owned subsidiaries
have formed a tax consolidated group. The head entity of the tax consolidated group is Novogen Limited.
Novogen Limited has not formally notified the Australian Tax Office of its adoption of the tax consolidation
regime.

73



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Note 4. Cash

|                         |  |              |        |           |  |  |        | 
|------------------------ |  | ------------ | ------ | --------- |  |  | ------ | 
|                         |  | CONSOLIDATED
|                         |  |             
|                         |  | 2002$000    |        | 2003$000
|Cash at bank and on hand |  |              | 17,674 |           |  |  | 12,387 | 
|Deposits at call         |  |              | 22,263 |           |  |  | 18,639 | 
|                         |  |              |        |           |  |  |        | 
|                         |  |              | 39,937 |           |  |  | 31,026 | 
|                         |  |              |        |           |  |  |        | 

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

74



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##### 



Note 5. Receivables

|                             |  |              |       |       |  |  |       |  
|---------------------------- |  | ------------ | ----- | ----- |  |  | ----- | -
|                             |  | CONSOLIDATED
|                             |  |             
|                             |  | 2002         |       | 2003 
|                             |  | $000        |       | $000
|Current                      |  |              |       |       |  |  |       |  
|Trade debtors                |  |              | 4,644 |       |  |  | 4,517 |  
|Provision for doubtful debts |  |              | (783  | )     |  |  | (350  | )
|                             |  |              |       |       |  |  |       |  
|                             |  |              | 3,861 |       |  |  | 4,167 |  
|Other debtors                |  |              | 644   |       |  |  | 271   |  
|                             |  |              |       |       |  |  |       |  
|                             |  |              | 4,505 |       |  |  | 4,438 |  
|                             |  |              |       |       |  |  |       |  

|                                 |  |              |      |       |  |       |      |   |  |  |      |  
|-------------------------------- |  | ------------ | ---- | ----- |  | ----- | ---- | - |  |  | ---- | -
|                                 |  | Consolidated
|                                 |  |             
|                                 |  | 2001         |      | 2002  |  | 2003 
|                                 |  | $000        |      | $000 |  | $000
|Provision for doubtful accounts: |  |              |      |       |  |       |      |   |  |  |      |  
|Beginning Balance                |  |              | (67  | )     |  |       | (204 | ) |  |  | (783 | )
|Provisions charged to income     |  |              | (146 | )     |  |       | (579 | ) |  |  |     |  
|Amounts charged net of recovery  |  |              | 9    |       |  |       |     |   |  |  | 433  |  
|                                 |  |              |      |       |  |       |      |   |  |  |      |  
|Ending Balance                   |  |              | (204 | )     |  |       | (783 | ) |  |  | (350 | )
|                                 |  |              |      |       |  |       |      |   |  |  |      |  

(a) Australian dollar equivalents

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

|                      |  |  |       |  |  |  |       | 
|--------------------- |  |  | ----- |  |  |  | ----- | 
|United States dollars |  |  | 2,675 |  |  |  | 2,033 | 
|Great British pounds  |  |  | 373   |  |  |  | 592   | 
|Euros                 |  |  | 166   |  |  |  | 131   | 
|Canadian dollars      |  |  | 279   |  |  |  | 218   | 
|New Zealand dollars   |  |  |      |  |  |  |      | 

(b) Terms and conditions

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

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

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

75



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##### 



Note 6. Inventories

|                                  |  |              |        |       |  |  |       |  
|--------------------------------- |  | ------------ | ------ | ----- |  |  | ----- | -
|                                  |  | Consolidated
|                                  |  |             
|                                  |  | 2002         |        | 2003 
|                                  |  | $000        |        | $000
|Current                           |  |              |        |       |  |  |       |  
|Raw materials - at cost           |  |              | 398    |       |  |  | 479   |  
|Work in progress - at cost        |  |              | 4,674  |       |  |  | 3,652 |  
|Finished goods - at cost          |  |              | 1,976  |       |  |  | 2,228 |  
|Provision for diminution in value |  |              | (153   | )     |  |  |      |  
|                                  |  |              |        |       |  |  |       |  
|                                  |  |              | 6,895  |       |  |  | 6,359 |  
|Other inventory - at cost         |  |              | 12     |       |  |  | 40    |  
|                                  |  |              |        |       |  |  |       |  
|                                  |  |              | 6,907  |       |  |  | 6,399 |  
|                                  |  |              |        |       |  |  |       |  
|Non - Current                     |  |              |        |       |  |  |       |  
|Other inventory - at cost         |  |              | 235    |       |  |  | 53    |  
|Raw materials - at cost           |  |              | 1,889  |       |  |  | 979   |  
|Work in progress - at cost        |  |              |       |       |  |  |      |  
|Provision for diminution in value |  |              | (1,527 | )     |  |  | (954  | )
|                                  |  |              |        |       |  |  |       |  
|                                  |  |              | 597    |       |  |  | 78    |  
|                                  |  |              |        |       |  |  |       |  

|                                  |  |              |      |       |  |       |        |   |  |  |        |  
|--------------------------------- |  | ------------ | ---- | ----- |  | ----- | ------ | - |  |  | ------ | -
|                                  |  | Consolidated
|                                  |  |             
|                                  |  | 2001         |      | 2002  |  | 2003 
|                                  |  | $000        |      | $000 |  | $000
|Provision for diminution in value |  |              |      |       |  |       |        |   |  |  |        |  
|Beginning balance                 |  |              | (471 | )     |  |       | (878   | ) |  |  | (1,680 | )
|                                  |  |              |      |       |  |       |        |   |  |  |        |  
|Provisions charged to income      |  |              | (943 | )     |  |       | (1,402 | ) |  |  | (6     | )
|Amounts charged net of recovery   |  |              | 536  |       |  |       | 600    |   |  |  | 732    |  
|                                  |  |              |      |       |  |       |        |   |  |  |        |  
|Ending balance                    |  |              | (878 | )     |  |       | (1,680 | ) |  |  | (954   | )
|                                  |  |              |      |       |  |       |        |   |  |  |        |  

Note 7. Other Current Assets

|            |  |              |     |       |  |  |     | 
|----------- |  | ------------ | --- | ----- |  |  | --- | 
|            |  | Consolidated
|            |  |             
|            |  | 2002         |     | 2003 
|            |  | $000        |     | $000
|Prepayments |  |              | 517 |       |  |  | 588 | 
|            |  |              |     |       |  |  |     | 

76



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##### 



Note 8. Property Plant & Equipment

|                                             |  |              |        |       |  |  |        |  
|-------------------------------------------- |  | ------------ | ------ | ----- |  |  | ------ | -
|                                             |  | Consolidated
|                                             |  |             
|                                             |  | 2002         |        | 2003 
|                                             |  | $000        |        | $000
|Land at cost                                 |  |              | 1,545  |       |  |  | 1,545  |  
|                                             |  |              |        |       |  |  |        |  
|Buildings at cost                            |  |              | 3,459  |       |  |  | 3,459  |  
|Accumulated depreciation                     |  |              | (1,424 | )     |  |  | (1,714 | )
|                                             |  |              |        |       |  |  |        |  
|                                             |  |              | 2,035  |       |  |  | 1,745  |  
|                                             |  |              |        |       |  |  |        |  
|Total Land and Buildings                     |  |              | 3,580  |       |  |  | 3,290  |  
|                                             |  |              |        |       |  |  |        |  
|Plant and equipment under lease - at cost    |  |              | 6,446  |       |  |  | 3,199  |  
|Accumulated amortisation                     |  |              | (3,448 | )     |  |  | (1,453 | )
|                                             |  |              |        |       |  |  |        |  
|                                             |  |              | 2,998  |       |  |  | 1,746  |  
|                                             |  |              |        |       |  |  |        |  
|Plant and equipment - at cost                |  |              | 4,971  |       |  |  | 8,814  |  
|Accumulated depreciation                     |  |              | (2,440 | )     |  |  | (5,619 | )
|                                             |  |              |        |       |  |  |        |  
|                                             |  |              | 2,531  |       |  |  | 3,195  |  
|                                             |  |              |        |       |  |  |        |  
|Leasehold improvements - at cost             |  |              | 329    |       |  |  | 343    |  
|Accumulated depreciation                     |  |              | (225   | )     |  |  | (291   | )
|                                             |  |              |        |       |  |  |        |  
|                                             |  |              | 104    |       |  |  | 52     |  
|                                             |  |              |        |       |  |  |        |  
|Total Property Plant and Equipment - at cost |  |              | 16,750 |       |  |  | 17,360 |  
|Accumulated amortisation and depreciation    |  |              | (7,537 | )     |  |  | (9,077 | )
|                                             |  |              |        |       |  |  |        |  
|Total Property Plant and Equipment           |  |              | 9,213  |       |  |  | 8,283  |  
|                                             |  |              |        |       |  |  |        |  

a) Assets pledged as security

Included in the balances of freehold land and buildings are assets over which mortgages have been
granted as security over leasing facilities. The terms of the mortgages preclude the assets being sold
or being used as further security without permission.

Assets under lease are pledged as security for the associated lease liabilities.

The book value of assets pledged as security are:

|                              |  |  |       |  |  |  |       | 
|----------------------------- |  |  | ----- |  |  |  | ----- | 
|Freehold Land                 |  |  | 1,545 |  |  |  | 1,545 | 
|Freehold Buildings            |  |  | 2,035 |  |  |  | 1,745 | 
|Plant & Equipment under Lease |  |  | 2,998 |  |  |  | 1,746 | 
|Plant & Equipment at cost     |  |  | 2,550 |  |  |  | 3,164 | 

77



---



##### 



b) Reconciliations

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

|                                |  |              |       |  
|------------------------------- |  | ------------ | ----- | -
|                                |  | Consolidated
|                                |  |             
|                                |  | 2003        
|                                |  | $000       
|Freehold Land                   |  |              |       |  
|Carrying amount at beginning    |  |              | 1,545 |  
|                                |  |              |       |  
|                                |  |              | 1,545 |  
|                                |  |              |       |  
|Buildings on Freehold Land      |  |              |       |  
|Carrying amount at beginning    |  |              | 2,035 |  
|Additions                       |  |              |      |  
|Depreciation Expense            |  |              | (290  | )
|                                |  |              |       |  
|                                |  |              | 1,745 |  
|                                |  |              |       |  
|Plant and Equipment under Lease |  |              |       |  
|Carrying amount at beginning    |  |              | 2,998 |  
|Additions                       |  |              |      |  
|Disposals *                     |  |              | (805  | )
|Depreciation Expense            |  |              | (447  | )
|                                |  |              |       |  
|                                |  |              | 1,746 |  
|                                |  |              |       |  
|Plant and Equipment             |  |              |       |  
|Carrying amount at beginning    |  |              | 2,531 |  
|Additions *                     |  |              | 1,548 |  
|Disposals                       |  |              | (23   | )
|Depreciation Expense            |  |              | (861  | )
|                                |  |              |       |  
|                                |  |              | 3,195 |  
|                                |  |              |       |  
|Leasehold Improvements          |  |              |       |  
|Carrying amount at beginning    |  |              | 104   |  
|Additions                       |  |              | 14    |  
|Depreciation Expense            |  |              | (66   | )
|                                |  |              |       |  
|                                |  |              | 52    |  
|                                |  |              |       |  



|* |  | Certain plant and equipment under
lease were purchased during 2003 and the net book value of the assets
was transferred to plant and equipment.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

78



---



##### 



Note 9. Intangibles

|                         |  |              |      |       |  |  |   | 
|------------------------ |  | ------------ | ---- | ----- |  |  | - | 
|                         |  | Consolidated
|                         |  |             
|                         |  | 2002         |      | 2003 
|                         |  | $000        |      | $000
|Goodwill                 |  |              | 492  |       |  |  |  | 
|Accumulated amortisation |  |              | (268 | )     |  |  |  | 
|                         |  |              |      |       |  |  |   | 
|                         |  |              | 224  |       |  |  |  | 
|                         |  |              |      |       |  |  |   | 

Goodwill was written off during the year

Note 10. Payables

|                                                                                               |                         |  |              |       |       |  |       |     | 
|---------------------------------------------------------------------------------------------- | ----------------------- |  | ------------ | ----- | ----- |  | ----- | --- | 
|                                                                                               |                         |  | Consolidated
|                                                                                               |                         |  |             
|                                                                                               |                         |  | 2002         |       | 2003 
|                                                                                               |                         |  | $000        |       | $000
|Current                                                                                        |                         |  |              |       |       |  |       |    
|Trade creditors                                                                                |                         |  | 2,425        |       |       |  | 2,571 |    
|Accrued Trade creditors                                                                        |                         |  | 1,771        |       |       |  | 1,842 |    
|Accrued Clinical Trial Payments                                                                |                         |  | 84           |       |       |  | 1,243 |    
|                                                                                               |                         |  |              |       |       |  |       |    
|                                                                                               |                         |  | 4,280        |       |       |  | 5,656 |    
|                                                                                               |                         |  |              |       |       |  |       |    
|Australian dollar equivalents of amounts payable
in foreign currencies not effectively hedged: |                         |  |              |       |       |  |       |    
|                                                                                               | - United States dollars |  |              | 1,467 |       |  |       | 972 | 
|                                                                                               | - Great British pounds  |  |              | 49    |       |  |       | 127 | 
|                                                                                               | - Euro                  |  |              | 194   |       |  |       | 56  | 
|                                                                                               | - Canadian dollars      |  |              | 177   |       |  |       | 147 | 
|                                                                                               | - New Zealand dollars   |  |              | 51    |       |  |       | 7   | 

Terms and Conditions relating to the above creditors.

- Trade creditors are non-interest bearing and normally settled on 30 day terms.

- Other creditors are non-interest bearing and normally settled on 30 day terms.

79



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##### 



Note 11. Interest Bearing Liabilities

|                                         |  |              |       |       |  |  |       | 
|---------------------------------------- |  | ------------ | ----- | ----- |  |  | ----- | 
|                                         |  | Consolidated
|                                         |  |             
|                                         |  | 2002         |       | 2003 
|                                         |  | $000        |       | $000
|Current                                  |  |              |       |       |  |  |       | 
|Lease Liabilities (secured) (Note 24b)   |  |              | 845   |       |  |  | 679   | 
|                                         |  |              |       |       |  |  |       | 
|Non - Current                            |  |              |       |       |  |  |       | 
|Lease Liabilities (secured) (Note 24b)   |  |              | 2,287 |       |  |  | 1,608 | 
|                                         |  |              |       |       |  |  |       | 
|Secured Lease Liability - Finance Leases |  |              | 3,132 |       |  |  | 2,287 | 
|                                         |  |              |       |       |  |  |       | 

Terms and Conditions relating to the above financial instruments.

- Finance leases have an average lease term of 4 years with the option to purchase the asset at the completion of the lease term for the residual value. The average interest rate
implicit in the leases is 8.42% (2002: 8.39%). Lease liabilities are secured by a fixed and floating charge over the assets of the Closed Group. Terms and Conditions relating to the
above borrowings - see note 23.

Note 12. Provisions

|                      |  |              |     |       |  |  |     | 
|--------------------- |  | ------------ | --- | ----- |  |  | --- | 
|                      |  | Consolidated
|                      |  |             
|                      |  | 2002         |     | 2003 
|                      |  | $000        |     | $000
|Current               |  |              |     |       |  |  |     | 
|Employee Entitlements |  |              | 279 |       |  |  | 271 | 
|                      |  |              |     |       |  |  |     | 
|Non - Current         |  |              |     |       |  |  |     | 
|Employee Entitlements |  |              | 164 |       |  |  | 201 | 
|                      |  |              |     |       |  |  |     | 
|                      |  |              | 443 |       |  |  | 472 | 
|                      |  |              |     |       |  |  |     | 

80



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##### 



Note 13. Financing Arrangements

|                                                                                   |  |              |       |       |  |  |       | 
|---------------------------------------------------------------------------------- |  | ------------ | ----- | ----- |  |  | ----- | 
|                                                                                   |  | Consolidated
|                                                                                   |  |             
|                                                                                   |  | 2002         |       | 2003 
|                                                                                   |  | $000        |       | $000
|(a) Financing arrangements                                                         |  |              |       |       |  |  |       | 
|Unrestricted access was available at balance date
to the following lines of credit |  |              |       |       |  |  |       | 
|Total facilities                                                                   |  |              |       |       |  |  |       | 
|Lease facilities                                                                   |  |              | 4,000 |       |  |  | 4,000 | 
|                                                                                   |  |              |       |       |  |  |       | 
|                                                                                   |  |              | 4,000 |       |  |  | 4,000 | 
|                                                                                   |  |              |       |       |  |  |       | 
|Used at balance date                                                               |  |              |       |       |  |  |       | 
|Lease facilities                                                                   |  |              | 3,722 |       |  |  | 3,155 | 
|                                                                                   |  |              |       |       |  |  |       | 
|                                                                                   |  |              | 3,722 |       |  |  | 3,155 | 
|                                                                                   |  |              |       |       |  |  |       | 
|Unused at balance date                                                             |  |              | 278   |       |  |  | 845   | 
|                                                                                   |  |              |       |       |  |  |       | 
|Lease facilities                                                                   |  |              | 278   |       |  |  | 845   | 
|                                                                                   |  |              |       |       |  |  |       | 

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

(c)  Novogen Limited has entered into a Cross Deed of Covenant where it has guaranteed the bank facilities of wholly owened controlled entities, Novogen Research Pty Ltd, Novogen
Laboratories Pty Ltd and Central Coast Properties Pty Ltd, should any
of these companies be unable to meet the repayments of these facilities. The maximum amount potential future
payments is $4,000,000.

Note 14. Contributed Equity

|                                              |  |              |         |       |  |  |         | 
|--------------------------------------------- |  | ------------ | ------- | ----- |  |  | ------- | 
|                                              |  | Consolidated
|                                              |  | 2002         |         | 2003 
|                                              |  | $000        |         | $000
|Novogen Limited                               |  |              |         |       |  |  |         | 
|95,611,785 (2002: 95,412,714) ordinary shares |  |              | 121,839 |       |  |  | 122,260 | 
|Marshall Edwards Inc *                        |  |              |         |       |  |  |         | 
|52,032,000 (2002: 52,023,000) ordinary shares |  |              | 15,410  |       |  |  | 15,458  | 
|Glycotex Inc *                                |  |              |         |       |  |  |         | 
|2,050,000 (2002: 2,000,000) ordinary shares   |  |              |        |       |  |  | 488     | 
|                                              |  |              |         |       |  |  |         | 
|                                              |  |              | 137,249 |       |  |  | 138,206 | 
|                                              |  |              |         |       |  |  |         | 

Terms and conditions of contributed equity

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

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

81



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##### 



(a)  During April 2003, Glycotex Inc., raised $500,000 in an initial private
placement from Australian and international investors and institutions.
Novogen now owns 97.6% of Glycotex Inc.

The shares were issued at $10.00 each with attaching warrants to purchase a
further two shares at an exercise price of $10.00 per share. The attaching
warrants are exercisable prior to 5 November, 2004. Novogen also issued to
these investors a convertible security enabling investors to convert their
investment in Glycotex Inc. to Novogen shares at an equivalent Novogen share
price of $5.00 per share. These ordinary shares have the right to receive
dividends as declared and, in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion
to the number of and amounts paid up on shares held. If 50% of the holders
exercise the conversion feature, then Novogen can require that the other
Glycotex shareholders convert their shares to Novogen shares.

(b)  Marshall Edwards Inc a subsidiary of Novogen Limited issued 49,500,000
ordinary shares in April 2001 for a total issue price of US$1.00 and a
further 2,523,000 ordinary shares in May 2002 to parties outside the economic
entity. Each of the 2,523,000 shares was issued with an attaching warrant to
purchase an additional share for an exercise price of US$4.00. These ordinary shares have
the right to receive dividends from Marshall Edwards Inc as
declared and, in the event of winding up the company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of
and amounts paid up on shares held.

*   The consolidated
entity accounts for the difference between the carrying value per
share of the
parent entitys investments in subsidiary shares and the
proceeds from sales of new shares by subsidiaries as capital
transactions.

(c)  Movements in issued and paid up ordinary share capital of Novogen Limited
are

|                                          |  |           |            |       |  |       |      |  |  |  |         | 
|----------------------------------------- |  | --------- | ---------- | ----- |  | ----- | ---- |  |  |  | ------- | 
|                                          |  |           |            |       |  | Issue |      |  |  | 
|                                          |  | Number of |            | Price |  |       |      | 
|                                          |  | Shares    |            | $     |  | $000
|On issue 1 July 2002                      |  |           | 95,412,714 |       |  |       |      |  |  |  | 121,839 | 
|Options converted to shares               |  |           | 30,026     |       |  |       | 1.53 |  |  |  | 46      | 
|Options converted to shares               |  |           | 51,734     |       |  |       | 2.00 |  |  |  | 103     | 
|Options converted to shares               |  |           | 101,595    |       |  |       | 2.23 |  |  |  | 227     | 
|Options converted to shares               |  |           | 15,716     |       |  |       | 2.84 |  |  |  | 45      | 
|Total options exercised during the period |  |           | 199,071    |       |  |       |      |  |  |  | 421     | 
|On issue 30 June 2003                     |  |           | 95,611,785 |       |  |       |      |  |  |  | 122,260 | 

as follows:

(d)  Movements in issued and paid up ordinary share capital of Marshall
Edwards, Inc. are as follows:

|                                           |  |           |            |       |  |       |      |  |  |  |        |  
|------------------------------------------ |  | --------- | ---------- | ----- |  | ----- | ---- |  |  |  | ------ | -
|                                           |  |           |            |       |  | Issue |      |  |  | 
|                                           |  | Number of |            | Price |  |       |      | 
|                                           |  | Shares    |            | $     |  | $000
|On issue 1 July 2002                       |  |           | 52,023,000 |       |  |       |      |  |  |  | 15,410 |  
|Warrants converted to shares               |  |           | 9,000      |       |  |       | 5.89 |  |  |  | 53     |  
|less Outside Equity Interest               |  |           |            |       |  |       |      |  |  |  | (5     | )
|                                           |  |           |            |       |  |       |      |  |  |  |        |  
|Total warrants exercised during the period |  |           | 9,000      |       |  |       |      |  |  |  | 48     |  
|On issue 30 June 2003                      |  |           | 52,032,000 |       |  |       |      |  |  |  | 15,458 |  
|                                           |  |           |            |       |  |       |      |  |  |  |        |  

82



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##### 



(e)  Movements in issued and paid up ordinary share capital of Glycotex, Inc.
are as follows:

|                                          |  |           |           |       |  |       |       |  |  |  |     |  
|----------------------------------------- |  | --------- | --------- | ----- |  | ----- | ----- |  |  |  | --- | -
|                                          |  |           |           |       |  | Issue |       |  |  | 
|                                          |  | Number of |           | Price |  |       |       | 
|                                          |  | Shares    |           | $     |  | $000
|On issue 1 July 2002                      |  |           | 2,000,000 |       |  |       |       |  |  |  | 0   |  
|New shares issued                         |  |           | 50,000    |       |  |       | 10.00 |  |  |  | 500 |  
|less Outside Equity Interest              |  |           |           |       |  |       |       |  |  |  | (12 | )
|                                          |  |           |           |       |  |       |       |  |  |  |     |  
|Total new shares issued during the period |  |           | 50,000    |       |  |       |       |  |  |  | 488 |  
|On issue 30 June 2003                     |  |           | 2,050,000 |       |  |       |       |  |  |  | 488 |  
|                                          |  |           |           |       |  |       |       |  |  |  |     |  

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

|          |       |          |        |        |  |          |          |        |  |          |         |            |  |            |         |           |  |    |         |           |  |          |           |         |         |  |        |         |  |  |         |           | 
|--------- | ----- | -------- | ------ | ------ |  | -------- | -------- | ------ |  | -------- | ------- | ---------- |  | ---------- | ------- | --------- |  | -- | ------- | --------- |  | -------- | --------- | ------- | ------- |  | ------ | ------- |  |  | ------- | --------- | 
|          |       |          |        |        |  |          |          |        |  |          |         |            |  |            |         |           |  |    |         |           |  |          | Converted |         | Options |  |        |         | 
|Calendar  |       |          |        |        |  |          |          |        |  |          |         |            |  | On issue   |         | Issued    |  | to |         | forfeited |  | On issue
|Year      |       | Exercise |        | Expiry |  | Original |          | 1 July |  | During   |         | fully paid |  | during the |         | 30 June  
|Granted   |       | Price    |        | Date   |  | issue    |          | 2002   |  | The year |         | shares     |  | year       |         | 2003     
|1998 (i)  |       | $        | 2.23   |        |  |          | 25/03/03 |        |  |          | 180,728 |            |  |            | 94,732  |           |  |    |        |           |  |          | 85,911    |         |         |  | 8,812  |         |  |  |        |          
|1998(ii)  |       | $        | 2.23   |        |  |          | 25/03/03 |        |  |          | 15,684  |            |  |            | 15,684  |           |  |    |        |           |  |          | 15,684    |         |         |  |       |         |  |  |        |          
|1998(iii) |       | $        | 2.91   |        |  |          | 24/09/03 |        |  |          | 700,000 |            |  |            | 700,000 |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 700,000 |          
|1999 (i)  |       | $        | 2.84   |        |  |          | 26/03/04 |        |  |          | 217,000 |            |  |            | 99,508  |           |  |    |        |           |  |          | 15,716    |         |         |  | 4,356  |         |  |  | 79,436  |          
|1999(ii)  |       | $        | 2.84   |        |  |          | 26/03/04 |        |  |          | 38,572  |            |  |            | 38,572  |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 38,572  |          
|1999(ii)  |       | $        | 2.00   |        |  |          | 22/12/03 |        |  |          | 104,734 |            |  |            | 51,734  |           |  |    |        |           |  |          | 51,734    |         |         |  |       |         |  |  |        |          
|1999(v)   |       | $        | 2.9460 |        |  |          | 23/06/04 |        |  |          | 20,000  |            |  |            | 20,000  |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 20,000  |          
|1999(v)   |       | $        | 2.7725 |        |  |          | 23/06/04 |        |  |          | 85,000  |            |  |            | 85,000  |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 85,000  |          
|2000(i)   |       | $        | 4.00   |        |  |          | 13/03/05 |        |  |          | 221,028 |            |  |            | 137,364 |           |  |    |        |           |  |          |          |         |         |  | 11,884 |         |  |  | 125,480 |          
|2000(ii)  |       | $        | 4.00   |        |  |          | 13/03/05 |        |  |          | 27,360  |            |  |            | 27,360  |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 27,360  |          
|2000(v)   |       | $        | 3.5819 |        |  |          | 20/07/05 |        |  |          | 50,180  |            |  |            | 50,180  |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 50,180  |          
|2000(i)   |       | $        | 4.00   |        |  |          | 30/11/05 |        |  |          | 238,220 |            |  |            | 175,636 |           |  |    |        |           |  |          |          |         |         |  | 16,088 |         |  |  | 159,548 |          
|2000(ii)  |       | $        | 4.00   |        |  |          | 30/11/05 |        |  |          | 7,248   |            |  |            | 7,248   |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 7,248   |          
|2000(iv)  |       | $        | 4.01   |        |  |          | 27/10/05 |        |  |          | 9,384   |            |  |            | 6,256   |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 6,256   |          
|2001(i)   |       | $        | 1.53   |        |  |          | 10/08/06 |        |  |          | 695,528 |            |  |            | 596,448 |           |  |    |        |           |  |          | 30,026    |         |         |  | 66,617 |         |  |  | 499,805 |          
|2001(ii)  |       | $        | 2.05   |        |  |          | 13/07/06 |        |  |          | 101,950 |            |  |            | 101,950 |           |  |    |        |           |  |          |          |         |         |  |       |         |  |  | 101,950 |          
|2002(i)   |       | $        | 2.10   |        |  |          | 30/11/07 |        |  |          | 526,332 |            |  |            |        |           |  |    | 526,332 |           |  |          |          |         |         |  | 22,416 |         |  |  | 503,916 |          
|2002(ii)  |       | $        | 2.10   |        |  |          | 30/11/07 |        |  |          | 37,200  |            |  |            |        |           |  |    | 37,200  |           |  |          |          |         |         |  |       |         |  |  | 37,200  |          
|          | Total |          |        |        |  |          |          |        |  |          |         | 3,276,148  |  |            |         | 2,207,663 |  |    |         | 563,532   |  |          |           | 199,071 |         |  |        | 130,173 |  |  |         | 2,441,951 | 
|          |       |          |        |        |  |          |          |        |  |          |         |            |  |            |         |           |  |    |         |           |  |          |           |         |         |  |        |         |  |  |         |          



| | (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. Options vest upon achievement of
certain share price performance hurdles.
|
| | (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 30 June, 2003 was $5.36.

83



---



##### 





| |  | (g) Capital shares reserved for future issuance are 2,541,951, being 367,510
for
consultant options, 2,074,441 for employee options and 100,000 for the
conversion of Glycotex shares.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Share Option Plans

Employee Share Option Plan

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

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

Consultant Options

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

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

ADR Program

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

84



---



##### 



Note 15. Reserves and Retained Profits/(Accumulated Losses)

|                                     |  |              |         |                 |  |       |         |       |  |  |         |   |  |  |         |  
|------------------------------------ |  | ------------ | ------- | --------------- |  | ----- | ------- | ----- |  |  | ------- | - |  |  | ------- | -
|                                     |  |              |         |                
|                                     |  | Consolidated |         | Novogen Limited
|                                     |  | 2003         |         | 2002            |  | 2003  |         | 2002 
|                                     |  | $000        |         | $000           |  | $000 |         | $000
|Balance at the beginning of the year |  |              | (83,970 | )               |  |       | (69,316 | )     |  |  | (19,852 | ) |  |  | (19,220 | )
|                                     |  |              |         |                 |  |       |         |       |  |  |         |   |  |  |         |  
|Accumulated losses                   |  |              | (10,454 | )               |  |       | (14,654 | )     |  |  | (78,234 | ) |  |  | (632    | )
|                                     |  |              |         |                 |  |       |         |       |  |  |         |   |  |  |         |  
|Balance at the end of the year       |  |              | (94,424 | )               |  |       | (83,970 | )     |  |  | (98,086 | ) |  |  | (19,852 | )
|                                     |  |              |         |                 |  |       |         |       |  |  |         |   |  |  |         |  

|                                                                                                                                                                                                                 |  |              |        |                 |  |       |   |       |  |  |   |  |  |  |   | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------ | --------------- |  | ----- | - | ----- |  |  | - |  |  |  | - | 
|                                                                                                                                                                                                                 |  |              |        |                
|                                                                                                                                                                                                                 |  | Consolidated |        | Novogen Limited | 
|                                                                                                                                                                                                                 |  | 2003         |        | 2002            |  | 2003  |   | 2002 
|(a) Foreign currency translation                                                                                                                                                                                 |  | $000        |        | $000           |  | $000 |   | $000
|(i) Nature and purpose of reserve
The 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 reserve
Balance at beginning of year                                                                                                                                                           |  |              |       |                 |  |       |  |       |  |  |  |  |  |  |  | 
|Gain (loss) on translation of overseas controlled
entities net of loss on hedge                                                                                                                                  |  |              | (1,956 | )               |  |       |  |       |  |  |  |  |  |  |  | 
|                                                                                                                                                                                                                 |  |              |        |                 |  |       |   |       |  |  |   |  |  |  |   | 
|Balance at end of year                                                                                                                                                                                           |  |              | (1,956 | )               |  |       |  |       |  |  |  |  |  |  |  | 
|                                                                                                                                                                                                                 |  |              |        |                 |  |       |   |       |  |  |   |  |  |  |   | 

Note 16. Outside Equity Interest

|                                                                 |                         |  |              |     |       |  |     |      |  
|---------------------------------------------------------------- | ----------------------- |  | ------------ | --- | ----- |  | --- | ---- | -
|                                                                 |                         |  | Consolidated
|                                                                 |                         |  |             
|                                                                 |                         |  | 2002         |     | 2003 
|                                                                 |                         |  | $000        |     | $000
|Reconciliation of outside equity interest in controlled entities |                         |  |              |     |       |  |     |     
|Opening Balance                                                  |                         |  |             |     |       |  | 766 |     
|Additions to outside equity interest by way of share issue       |                         |  |              |     |       |  |     |     
|                                                                 | - Marshall Edwards Inc. |  |              | 785 |       |  |     | 5    |  
|                                                                 | - Glycotex Inc.         |  |              |     |       |  |     | 12   |  
|Add Share of operating losses of controlled entities             |                         |  |              |     |       |  |     |     
|                                                                 | - Marshall Edwards Inc. |  |              | (19 | )     |  |     | (211 | )
|                                                                 | - Glycotex Inc.         |  |              |     |       |  |     | (1   | )
|                                                                 |                         |  |              |     |       |  |     |     
|Closing Balance                                                  |                         |  | 766          |     |       |  | 571 |     
|                                                                 |                         |  |              |     |       |  |     |     

85



---



##### 



Note 17. Segment Information

Segment accounting policies

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

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

86



---



##### 



SEGMENT INFORMATION - PRIMARY SEGMENT



|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|--------------------------------------------------------------------- |  | ----------- | ------- | ------------- |  | ------ | ------- | ----- |  | ----- | ------- | ----- |  | ----- | ------ | ----- |  | ----- | ------ | - |  |  | ------- | - |  |  | ----- | - |  |  | ------ | - |  |  | ------ | -
|                                                                      |  | Australasia |         | North America |  | Europe
|                                                                      |  | 2003        |         | 2002          |  | 2001   |         | 2003  |  | 2002  |         | 2001  |  | 2003  |        | 2002  |  | 2001 
|                                                                      |  | $000       |         | $000         |  | $000  |         | $000 |  | $000 |         | $000 |  | $000 |        | $000 |  | $000
|Geographical Segments                                                 |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Revenue                                                               |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Sales to customers
outside the
consolidated entity                    |  |             | 6,228   |               |  |        | 5,224   |       |  |       | 5,921   |       |  |       | 10,658 |       |  |       | 12,084 |   |  |  | 18,703  |   |  |  | 2,744 |   |  |  | 2,274  |   |  |  | 2,039  |  
|Other revenues from
customers outside
the consolidated
entity         |  |             | 3,430   |               |  |        | 3,603   |       |  |       | 9,752   |       |  |       | 8,008  |       |  |       | 5,203  |   |  |  |        |   |  |  | 716   |   |  |  | 123    |   |  |  |       |  
|Intersegment Revenues                                                 |  |             | 6,457   |               |  |        | 4,571   |       |  |       | 13,539  |       |  |       | 71     |       |  |       | 258    |   |  |  | 399     |   |  |  |      |   |  |  |       |   |  |  |       |  
|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Total segment revenue                                                 |  |             | 16,115  |               |  |        | 13,398  |       |  |       | 29,212  |       |  |       | 18,737 |       |  |       | 17,545 |   |  |  | 19,102  |   |  |  | 3,460 |   |  |  | 2,397  |   |  |  | 2,039  |  
|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Unallocated revenue                                                   |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Total Consolidated Revenue                                            |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Results                                                               |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Segment result                                                        |  |             | (11,539 | )             |  |        | (11,946 | )     |  |       | (19,374 | )     |  |       | 3,146  |       |  |       | (3,431 | ) |  |  | (17,353 | ) |  |  | (376  | ) |  |  | (1,269 | ) |  |  | (1,866 | )
|                                                                      |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Unallocated expenses                                                  |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Consolidated entity
profit from ordinary
activities before
income tax |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Income tax expense                                                    |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  
|Net Loss                                                              |  |             |         |               |  |        |         |       |  |       |         |       |  |       |        |       |  |       |        |   |  |  |         |   |  |  |       |   |  |  |        |   |  |  |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|--------------------------------------------------------------------- |  | ----------- | ------ | ------------ |  | ----- | ------ | ----- |  | ----- | ------- | ----- |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                                      |  | Elimination |        | Consolidated
|                                                                      |  | 2003        |        | 2002         |  | 2001  |        | 2003  |  | 2002  |         | 2001 
|                                                                      |  | $000       |        | $000        |  | $000 |        | $000 |  | $000 |         | $000
|Geographical Segments                                                 |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Revenue                                                               |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Sales to customers
outside the
consolidated entity                    |  |             |       |              |  |       |       |       |  |       |        |       |  |  | 19,630  |   |  |  | 19,582  |   |  |  | 26,663  |  
|Other revenues from
customers outside
the consolidated
entity         |  |             |       |              |  |       |       |       |  |       |        |       |  |  | 12,154  |   |  |  | 8,929   |   |  |  | 9,752   |  
|Intersegment Revenues                                                 |  |             | (6,528 | )            |  |       | (4,829 | )     |  |       | (13,938 | )     |  |  |        |   |  |  |        |   |  |  |        |  
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Total segment revenue                                                 |  |             | (6,528 | )            |  |       | (4,829 | )     |  |       | (13,938 | )     |  |  | 31,784  |   |  |  | 28,511  |   |  |  | 36,415  |  
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Unallocated revenue                                                   |  |             |        |              |  |       |        |       |  |       |         |       |  |  | 1,266   |   |  |  | 1,203   |   |  |  | 1,057   |  
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Total Consolidated Revenue                                            |  |             |        |              |  |       |        |       |  |       |         |       |  |  | 33,050  |   |  |  | 29,714  |   |  |  | 37,472  |  
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Results                                                               |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Segment result                                                        |  |             | (1,772 | )            |  |       | 2,363  |       |  |       | 17,216  |       |  |  | (10,541 | ) |  |  | (14,283 | ) |  |  | (21,377 | )
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Unallocated expenses                                                  |  |             |        |              |  |       |        |       |  |       |         |       |  |  | (132    | ) |  |  | (345    | ) |  |  | (357    | )
|Consolidated entity
profit from ordinary
activities before
income tax |  |             |        |              |  |       |        |       |  |       |         |       |  |  | (10,673 | ) |  |  | (14,628 | ) |  |  | (21,734 | )
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Income tax expense                                                    |  |             |        |              |  |       |        |       |  |       |         |       |  |  | 7       |   |  |  | (45     | ) |  |  | (30     | )
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  
|Net Loss                                                              |  |             |        |              |  |       |        |       |  |       |         |       |  |  | (10,666 | ) |  |  | (14,673 | ) |  |  | (21,764 | )
|                                                                      |  |             |        |              |  |       |        |       |  |       |         |       |  |  |         |   |  |  |         |   |  |  |         |  

87



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##### 





|                                                                                            |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|------------------------------------------------------------------------------------------- |  | ----------- | ------ | ------------- |  | ------ | ------ | ----- |  | ----- | ------- | ----- |  | ----- | ------ | ----- |  | ----- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ----- |  |  |  | ----- | 
|                                                                                            |  | Australasia |        | North America |  | Europe
|                                                                                            |  | 2003        |        | 2002          |  | 2001   |        | 2003  |  | 2002  |         | 2001  |  | 2003  |        | 2002  |  | 2001 
|                                                                                            |  | $000       |        | $000         |  | $000  |        | $000 |  | $000 |         | $000 |  | $000 |        | $000 |  | $000
|Geographical Segments                                                                       |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|Assets                                                                                      |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|                                                                                            |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|Segment assets                                                                              |  |             | 87,912 |               |  |        | 98,466 |       |  |       | 127,972 |       |  |       | 19,436 |       |  |       | 22,913 |  |  |  | 13,510 |  |  |  | 1,947  |  |  |  | 1,477 |  |  |  | 1,542 | 
|                                                                                            |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|Liabilities                                                                                 |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|Segment Liabilities                                                                         |  |             | 12,187 |               |  |        | 11,082 |       |  |       | 12,994  |       |  |       | 47,505 |       |  |       | 52,699 |  |  |  | 56,058 |  |  |  | 10,067 |  |  |  | 9,221 |  |  |  | 8,017 | 
|Other segment information                                                                   |  |             |        |               |  |        |        |       |  |       |         |       |  |       |        |       |  |       |        |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |       | 
|Acquisition of
property plant and
equipment,
intangible assets
and other non
current assets |  |             | 1,502  |               |  |        | 236    |       |  |       | 1,496   |       |  |       | 54     |       |  |       | 26     |  |  |  | 56     |  |  |  | 6      |  |  |  | 15    |  |  |  | 13    | 
|Depreciation                                                                                |  |             | 1,156  |               |  |        | 907    |       |  |       | 1,187   |       |  |       | 49     |       |  |       | 125    |  |  |  | 116    |  |  |  | 12     |  |  |  | 13    |  |  |  | 9     | 
|Amortisation                                                                                |  |             | 447    |               |  |        | 775    |       |  |       | 952     |       |  |       |       |       |  |       |       |  |  |  |       |  |  |  |       |  |  |  |      |  |  |  |      | 
|Non cash expenses
other than
depreciation and
amortisation                                  |  |             | (572   | )             |  |        | 827    |       |  |       | 273     |       |  |       | (634   | )     |  |       | 615    |  |  |  | 309    |  |  |  | 78     |  |  |  | 2     |  |  |  | 2     | 
|Long Lived Assets                                                                           |  |             | 8,200  |               |  |        | 9,624  |       |  |       | 11,605  |       |  |       | 70     |       |  |       | 65     |  |  |  | 164    |  |  |  | 13     |  |  |  | 19    |  |  |  | 17    | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                                            |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|------------------------------------------------------------------------------------------- |  | ----------- | ------- | ------------ |  | ----- | ------- | ----- |  | ----- | ------- | ----- |  |  | ------ | - |  |  | ------ |  |  |  | ------ | 
|                                                                                            |  | Elimination |         | Consolidated
|                                                                                            |  | 2003        |         | 2002         |  | 2001  |         | 2003  |  | 2002  |         | 2001 
|                                                                                            |  | $000       |         | $000        |  | $000 |         | $000 |  | $000 |         | $000
|Geographical Segments                                                                       |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|Assets                                                                                      |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|                                                                                            |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|Segment assets                                                                              |  |             | (58,483 | )            |  |       | (60,956 | )     |  |       | (81,818 | )     |  |  | 50,812 |   |  |  | 61,900 |  |  |  | 61,206 | 
|                                                                                            |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|Liabilities                                                                                 |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|Segment Liabilities                                                                         |  |             | (61,344 | )            |  |       | (65,147 | )     |  |       | (67,769 | )     |  |  | 8,415  |   |  |  | 7,855  |  |  |  | 9,300  | 
|Other segment information                                                                   |  |             |         |              |  |       |         |       |  |       |         |       |  |  |        |   |  |  |        |  |  |  |        | 
|Acquisition of
property plant and
equipment,
intangible assets
and other non
current assets |  |             |        |              |  |       |        |       |  |       |        |       |  |  | 1,562  |   |  |  | 277    |  |  |  | 1,565  | 
|Depreciation                                                                                |  |             |        |              |  |       |        |       |  |       |        |       |  |  | 1,217  |   |  |  | 1,045  |  |  |  | 1,312  | 
|Amortisation                                                                                |  |             | 224     |              |  |       | 33      |       |  |       | 33      |       |  |  | 671    |   |  |  | 808    |  |  |  | 985    | 
|Non cash expenses
other than
depreciation and
amortisation                                  |  |             | (3      | )            |  |       | 35      |       |  |       |        |       |  |  | (1,131 | ) |  |  | 1,479  |  |  |  | 584    | 
|Long Lived Assets                                                                           |  |             |        |              |  |       | (495    | )     |  |       | (495    | )     |  |  | 8,283  |   |  |  | 9,213  |  |  |  | 11,291 | 

Note:

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

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

88



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##### 



Note 18. Remuneration of Directors

|                                                                                                                                                                                                                                                   |  |              |           |      |  |  |         | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | ---- |  |  | ------- | 
|                                                                                                                                                                                                                                                   |  | Consolidated
|                                                                                                                                                                                                                                                   |  | 2003         |           | 2002
|                                                                                                                                                                                                                                                   |  | $            |           | $   
|Income paid or payable, or otherwise
made available in respect of the
financial year, to all Directors of
each entity in the consolidated entity
and in connection with the management
of affairs of the parent entity or its
controlled entities. |  |              | 1,099,747 |      |  |  | 951,728 | 
|                                                                                                                                                                                                                                                   |  |              |           |      |  |  |         | 

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

|          |  |  |   |  |  |   |         |  |  |                 |   |      |  |  |   | 
|--------- |  |  | - |  |  | - | ------- |  |  | --------------- | - | ---- |  |  | - | 
|          |  |  |   |  |  |   |         |  |  | Novogen Limited
|          |  |  |   |  |  |   |         |  |  | 2003            |   | 2002
|$  10,000 |  |  |  |  |  | $ | 19,999  |  |  |                 |  |      |  |  | 1 | 
|$  30,000 |  |  |  |  |  | $ | 39,999  |  |  |                 |  |      |  |  | 1 | 
|$  40,000 |  |  |  |  |  | $ | 49,999  |  |  |                 | 2 |      |  |  | 1 | 
|$  70,000 |  |  |  |  |  | $ | 79,999  |  |  |                 | 1 |      |  |  | 1 | 
|$320,000  |  |  |  |  |  | $ | 329,999 |  |  |                 |  |      |  |  | 1 | 
|$360,000  |  |  |  |  |  | $ | 369,999 |  |  |                 | 1 |      |  |  |  | 
|$450,000  |  |  |  |  |  | $ | 459,999 |  |  |                 |  |      |  |  | 1 | 
|$510,000  |  |  |  |  |  | $ | 519,999 |  |  |                 | 1 |      |  |  |  | 

89



---



##### 



Note 19. Remuneration of Executives

|                                                                                                                                                                                                                                                                                                                                              |  |              |           |      |  |  |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | ---- |  |  | --------- | 
|                                                                                                                                                                                                                                                                                                                                              |  | Consolidated
|                                                                                                                                                                                                                                                                                                                                              |  | 2003         |           | 2002
|                                                                                                                                                                                                                                                                                                                                              |  | $            |           | $   
|Remuneration received, or due and
receivable, by Executive Officers of
the consolidated entity whose
remuneration is $100,000 or more from
entities in the consolidated entity
or a related parties, in connection
with the management of the affairs of
the entities in the consolidated
entity whether as an Executive
Officer or otherwise |  |              | 2,813,243 |      |  |  | 2,361,897 | 
|                                                                                                                                                                                                                                                                                                                                              |  |              |           |      |  |  |           | 

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

|         |  |  |   |  |  |   |         |  |  |              |   |      |  |  |   | 
|-------- |  |  | - |  |  | - | ------- |  |  | ------------ | - | ---- |  |  | - | 
|         |  |  |   |  |  |   |         |  |  | Consolidated
|         |  |  |   |  |  |   |         |  |  | 2003         |   | 2002
|$100,000 |  |  | - |  |  | $ | 119,000 |  |  |              | 2 |      |  |  | 3 | 
|$120,000 |  |  | - |  |  | $ | 129,999 |  |  |              | 1 |      |  |  |  | 
|$130,000 |  |  | - |  |  | $ | 139,999 |  |  |              | 1 |      |  |  | 1 | 
|$140,000 |  |  | - |  |  | $ | 149,999 |  |  |              | 1 |      |  |  | 1 | 
|$150,000 |  |  | - |  |  | $ | 159,999 |  |  |              | 1 |      |  |  | 1 | 
|$160,000 |  |  | - |  |  | $ | 169,999 |  |  |              |  |      |  |  | 1 | 
|$170,000 |  |  | - |  |  | $ | 179,999 |  |  |              |  |      |  |  | 1 | 
|$180,000 |  |  | - |  |  | $ | 189,999 |  |  |              | 2 |      |  |  |  | 
|$200,000 |  |  | - |  |  | $ | 209,999 |  |  |              | 1 |      |  |  |  | 
|$240,000 |  |  | - |  |  | $ | 249,999 |  |  |              |  |      |  |  | 1 | 
|$250,000 |  |  | - |  |  | $ | 259,999 |  |  |              |  |      |  |  | 1 | 
|$280,000 |  |  | - |  |  | $ | 289,999 |  |  |              | 1 |      |  |  |  | 
|$300,000 |  |  | - |  |  | $ | 309,999 |  |  |              | 1 |      |  |  |  | 
|$320,000 |  |  | - |  |  | $ | 329,999 |  |  |              |  |      |  |  | 1 | 
|$360,000 |  |  | - |  |  | $ | 369,999 |  |  |              | 1 |      |  |  |  | 
|$450,000 |  |  | - |  |  | $ | 459,999 |  |  |              |  |      |  |  | 1 | 
|$510,000 |  |  | - |  |  | $ | 519,999 |  |  |              | 1 |      |  |  |  | 

Executive Officers are defined as those involved in the management of the
affairs of Novogen Limited and the consolidated entity.

90



---



##### 



Note 20. Related Party Disclosures

Directors

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

Philip A Johnston
Christopher Naughton
Graham E Kelly
Paul Nestel AO
Peter B Simpson

Equity Interests of Directors

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

|             |  |                            |           |         |  |        |           |        |  |  |         |  |  |  |         | 
|------------ |  | -------------------------- | --------- | ------- |  | ------ | --------- | ------ |  |  | ------- |  |  |  | ------- | 
|             |  |                            |           |        
|             |  | Ordinary Shares Fully Paid |           | Options
|             |  | 2003                       |           | 2002    |  | 2003   |           | 2002  
|             |  | Number                     |           | Number  |  | Number |           | Number
|P A Johnston |  |                            | 43,594    |         |  |        | 43,594    |        |  |  | 3,128   |  |  |  | 3,128   | 
|C Naughton   |  |                            | 318,511   |         |  |        | 318,511   |        |  |  | 700,000 |  |  |  | 700,000 | 
|G E Kelly    |  |                            | 8,736,519 |         |  |        | 9,131,256 |        |  |  |        |  |  |  |        | 
|P J Nestel   |  |                            | 14,000    |         |  |        | 16,000    |        |  |  | 20,000  |  |  |  | 20,000  | 
|P B Simpson  |  |                            | 500       |         |  |        | 500       |        |  |  | 3,128   |  |  |  | 3,128   | 
|             |  |                            |           |         |  |        |           |        |  |  |         |  |  |  |         | 
|             |  |                            | 9,113,124 |         |  |        | 9,509,861 |        |  |  | 726,256 |  |  |  | 726,256 | 
|             |  |                            |           |         |  |        |           |        |  |  |         |  |  |  |         | 

Movements in Directors Equity Holdings

During the year Directors and Director Related Entities disposed of
396,737 shares.

All equity dealings with Directors have been entered into with terms and
conditions no more favourable than those that the entity would have
adopted if dealing at arms length.

Other Transactions With Directors and Director-Related Entities

Sale of redundant red clover hay stock was made to Mr P. Johnston
totalling $7,019.98 (2002: $6,341; 2001: NIL). The net carrying value of
this inventory was nil.

Ultimate Parent

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

91



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##### 



Note 21. Remuneration of Auditors

|                                                                                                                                                             |  |              |         |      |  |  |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ------- | ---- |  |  | ------- | 
|                                                                                                                                                             |  | Consolidated
|                                                                                                                                                             |  |             
|                                                                                                                                                             |  | 2002         |         | 2003
|                                                                                                                                                             |  | $            |         | $   
|a) Amounts received or due and receivable by
Ernst & Young Australia for:                                                                                    |  |              |         |      |  |  |         | 
|(a) an audit or review of the financial report of the
entity and any other entity in the consolidated
entity;                                                |  |              | 80,500  |      |  |  | 129,500 | 
|(b) other services in relation to the entity and any
other entity in the consolidated entity                                                                 |  |              | 65,677  |      |  |  | 58,027  | 
|                                                                                                                                                             |  |              |         |      |  |  |         | 
|                                                                                                                                                             |  |              | 146,177 |      |  |  | 187,527 | 
|Amounts received or due and receivable by a
related practice of Ernst & Young Australia for: other services in relation to any entity in the
economic group. |  |              | 225,819 |      |  |  | 30,970  | 
|Amounts received or due and receivable by auditors
of other subsidiaries in the economic entity for
an audit/review, which are not already disclosed.        |  |              | 42,942  |      |  |  | 28,308  | 
|                                                                                                                                                             |  |              |         |      |  |  |         | 
|                                                                                                                                                             |  |              | 414,938 |      |  |  | 246,805 | 
|                                                                                                                                                             |  |              |         |      |  |  |         | 

92



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##### 



22. Statement of Cash Flows

|                                                                                                    |  |              |         |        |  |        |         |   |  |  |         |  
|--------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ------ |  | ------ | ------- | - |  |  | ------- | -
|                                                                                                    |  | Consolidated
|                                                                                                    |  |             
|                                                                                                    |  | 2001         |         | 2002   |  | 2003  
|                                                                                                    |  | A$000       |         | A$000 |  | A$000
|(a) Reconciliation of Operating Loss after Income
Tax to Net Cashflows from Operationing Activities |  |              |         |        |  |        |         |   |  |  |         |  
|Operating loss after income tax                                                                     |  |              | (21,764 | )      |  |        | (14,673 | ) |  |  | (10,666 | )
|Depreciation and amortisation                                                                       |  |              | 2,297   |        |  |        | 1,853   |   |  |  | 1,888   |  
|(Profit)/loss on sale of fixed assets                                                               |  |              | (112    | )      |  |        | 494     |   |  |  | (12     | )
|Changes in assets and liabilities:                                                                  |  |              |         |        |  |        |         |   |  |  |         |  
|(increase)/decrease in trade debtors                                                                |  |              | 400     |        |  |        | 67      |   |  |  | 127     |  
|(increase)/decrease in prepayments                                                                  |  |              | 127     |        |  |        | 638     |   |  |  | (71     | )
|(increase)/decrease in other debtors                                                                |  |              | (173    | )      |  |        | (33     | ) |  |  | 373     |  
|(increase)/decrease in inventories                                                                  |  |              | 3,824   |        |  |        | 3,950   |   |  |  | 1,753   |  
|increase/(decrease) in accounts payable                                                             |  |              | (2,583  | )      |  |        | (868    | ) |  |  | 1,376   |  
|increase/(decrease) in provisions                                                                   |  |              | 586     |        |  |        | 1,411   |   |  |  | (1,130  | )
|exchange rate change on opening cash                                                                |  |              | (44     | )      |  |        | 482     |   |  |  | 515     |  
|                                                                                                    |  |              |         |        |  |        |         |   |  |  |         |  
|Net cash (outflow) from operating
activities                                                        |  |              | (17,442 | )      |  |        | (6,679  | ) |  |  | (5,847  | )
|                                                                                                    |  |              |         |        |  |        |         |   |  |  |         |  

b) Finance Leases

No plant and equipment was acquired during the year by means of finance leases
(2002: $133,000; 2001: $608,000).

93



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##### 



Note 23. Earnings per Share

|                                                                                                          |  |              |         |       |  |  |         |  
|--------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | ----- |  |  | ------- | -
|                                                                                                          |  | Consolidated
|                                                                                                          |  |             
|                                                                                                          |  | 2002         |         | 2003 
|                                                                                                          |  | $000        |         | $000
|The following reflects the income and share data used in
calculating basic and diluted earnings per share |  |              |         |       |  |  |         |  
|Net loss                                                                                                  |  |              | (14,673 | )     |  |  | (10,666 | )
|Adjustments:                                                                                              |  |              |         |       |  |  |         |  
|Net loss attibutable to outside equity interests                                                          |  |              | (19     | )     |  |  | (212    | )
|                                                                                                          |  |              |         |       |  |  |         |  
|Earnings used in calculating basic and diluted earnings per
share                                         |  |              | (14,654 | )     |  |  | (10,454 | )
|                                                                                                          |  |              |         |       |  |  |         |  

|                                                                                                    |  |           |            |           |  |  |            |  
|--------------------------------------------------------------------------------------------------- |  | --------- | ---------- | --------- |  |  | ---------- | -
|                                                                                                    |  | Number of |            | Number of
|                                                                                                    |  | Shares    |            | Shares   
|Weighted average number of ordinary shares used in
calculating basic and diluted earnings per share |  |           | 95,187,449 |           |  |  | 95,472,984 |  
|                                                                                                    |  |           |            |           |  |  |            |  
|Basic and Diluted loss per share - (cents)                                                          |  |           | (15.4      | )         |  |  | (10.9      | )

Diluted earnings per share:

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

Conversions, call subscriptions or issues after 30 June 2003

There have been 4,343 conversions to, calls of, or subscriptions for ordinary shares or issues of
potential ordinary shares since the reporting date and before the completion of this financial report.

94



---



##### 



Note 24. Financial Instruments



| | (a) |  | Interest Rate Risk Exposures                                                                                                                                              
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The economic entitys exposure to interest rate risk and the effective
weighted average interest rate for each class of financial assets and
liabilities is set out below.



|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|---------------------------------- |  | ---- | -- | ----- |  | ------------- | ------ | -------------- |  | ----------------- | ------ | ----- |  | ----- | ------ | ---- |  |  | ------ |  |  |  | ------ | - |  |  | ------ | -
|                                   |  |      |    |       |  | Floating      |        | Fixed          |  | Fixed            
|                                   |  |      |    |       |  | Interest Rate |        | 1 year or less |  | Over 1 to 5 years
|                                   |  |      |    |       |  | 2002          |        | 2003           |  | 2002              |        | 2003  |  | 2002  |        | 2003
|                                   |  | Note |    | $000 |  | $000         |        | $000          |  | $000             |        | $000 |  | $000
|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |      
|Financial assets                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|Cash                               |  |      | 4  |       |  |               | 17,500 |                |  |                   | 11,246 |       |  |       |       |      |  |  |       |  |  |  |       |   |  |  |       |  
|Deposits                           |  |      | 4  |       |  |               | 1,718  |                |  |                   | 1,245  |       |  |       | 20,543 |      |  |  | 17,394 |  |  |  |       |   |  |  |       |  
|Receivables                        |  |      | 5  |       |  |               |       |                |  |                   |       |       |  |       |       |      |  |  |       |  |  |  |       |   |  |  |       |  
|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|                                   |  |      |    |       |  |               | 19,218 |                |  |                   | 12,491 |       |  |       | 20,543 |      |  |  | 17,394 |  |  |  |       |   |  |  |       |  
|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|Financial liabilities              |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|Payables                           |  |      | 10 |       |  |               |       |                |  |                   |       |       |  |       |       |      |  |  |       |  |  |  |       |   |  |  |       |  
|Interest bearing liabilities       |  |      | 11 |       |  |               |       |                |  |                   |       |       |  |       | 845    |      |  |  | 679    |  |  |  | 2,287  |   |  |  | 1,608  |  
|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|                                   |  |      |    |       |  |               |       |                |  |                   |       |       |  |       | 845    |      |  |  | 679    |  |  |  | 2,287  |   |  |  | 1,608  |  
|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  
|Net financial assets/(liabilities) |  |      |    |       |  |               | 19,218 |                |  |                   | 12,491 |       |  |       | 19,698 |      |  |  | 16,715 |  |  |  | (2,287 | ) |  |  | (1,608 | )
|                                   |  |      |    |       |  |               |        |                |  |                   |        |       |  |       |        |      |  |  |        |  |  |  |        |   |  |  |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|---------------------------------- |  | ------------ | ----- | ----- |  | ------------ | ----- | ----- |  | ----------- | ------ | ---- |  |  | ------ |  |  |  | ---- | - |  |  | ---- | -
|                                   |  | Non-interest |       |       |  | Weighted    
|                                   |  | bearing      |       | Total |  | Average Rate
|                                   |  | 2002         |       | 2003  |  | 2002         |       | 2003  |  | of Interest
|                                   |  | $000        |       | $000 |  | $000        |       | $000 |  | 2002        |        | 2003
|                                   |  |              |       |       |  |              |       |       |  |             |        |     
|Financial assets                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|Cash                               |  |              | 176   |       |  |              | 1,141 |       |  |             | 17,676 |      |  |  | 12,387 |  |  |  | 1.80 | % |  |  | 1.38 | %
|Deposits                           |  |              |      |       |  |              |      |       |  |             | 22,261 |      |  |  | 18,639 |  |  |  | 4.79 | % |  |  | 4.67 | %
|Receivables                        |  |              | 4,505 |       |  |              | 4,438 |       |  |             | 4,505  |      |  |  | 4,438  |  |  |  | N/A  |   |  |  | N/A  |  
|                                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|                                   |  |              | 4,681 |       |  |              | 5,579 |       |  |             | 44,442 |      |  |  | 35,464 |  |  |  |      |   |  |  |      |  
|                                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|Financial liabilities              |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|Payables                           |  |              | 4,280 |       |  |              | 5,656 |       |  |             | 4,280  |      |  |  | 5,656  |  |  |  | N/A  |   |  |  | N/A  |  
|Interest bearing liabilities       |  |              |      |       |  |              |      |       |  |             | 3,132  |      |  |  | 2,287  |  |  |  | 8.39 | % |  |  | 8.42 | %
|                                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|                                   |  |              | 4,280 |       |  |              | 5,656 |       |  |             | 7,412  |      |  |  | 7,943  |  |  |  |      |   |  |  |      |  
|                                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  
|Net financial assets/(liabilities) |  |              | 401   |       |  |              | (77   | )     |  |             | 37,030 |      |  |  | 27,521 |  |  |  |      |   |  |  |      |  
|                                   |  |              |       |       |  |              |       |       |  |             |        |      |  |  |        |  |  |  |      |   |  |  |      |  



| | (b) |  | Net fair value of financial
assets and liabilities

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

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

| |  |  | The company has three individual debtors with balances representing
greater than 10% of total receivables balances. Two of these trade
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------

95



---



##### 





| |  |  | receivables have arisen in the USA and one has arisen in the UK. The
total of
these three receivables are $1,521,000. These balances are unsecured.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

Note 25. Expenditure Commitments

|                                                                                                                            |  |              |       |       |  |  |       |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----- | ----- |  |  | ----- | -
|                                                                                                                            |  | Consolidated
|                                                                                                                            |  |             
|                                                                                                                            |  | 2002         |       | 2003 
|                                                                                                                            |  | $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                                                                                                       |  |              | 444   |       |  |  | 432   |  
|Later than 1 year but not later than 2 years                                                                                |  |              | 443   |       |  |  | 354   |  
|Later than 2 year but not later than 3 years                                                                                |  |              | 352   |       |  |  | 24    |  
|Later than 3 year but not later than 4 years                                                                                |  |              | 17    |       |  |  |      |  
|Later than 4 year but not later than 5 years                                                                                |  |              |      |       |  |  |      |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 1,256 |       |  |  | 810   |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|(b) Finance leases **                                                                                                       |  |              |       |       |  |  |       |  
|Commitments in relation to finance leases
are payable as follows:                                                           |  |              |       |       |  |  |       |  
|Not later than 1 year                                                                                                       |  |              | 976   |       |  |  | 776   |  
|Later than 1 year but not later than 2 years                                                                                |  |              | 776   |       |  |  | 899   |  
|Later than 2 year but not later than 3 years                                                                                |  |              | 899   |       |  |  | 767   |  
|Later than 3 year but not later than 4 years                                                                                |  |              | 767   |       |  |  | 15    |  
|Later than 4 year but not later than 5 years                                                                                |  |              | 15    |       |  |  |      |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Minimum lease payments                                                                                                      |  |              | 3,433 |       |  |  | 2,457 |  
|Less: Future finance charges                                                                                                |  |              | (301  | )     |  |  | (170  | )
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 3,132 |       |  |  | 2,287 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|Representing lease liabilities:                                                                                             |  |              |       |       |  |  |       |  
|Current - (note 11)                                                                                                         |  |              | 845   |       |  |  | 679   |  
|Non-current
- (note 11)                                                                                                     |  |              | 2,287 |       |  |  | 1,608 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 3,132 |       |  |  | 2,287 |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|(c) Other Expenditure Committments                                                                                          |  |              |       |       |  |  |       |  
|Research and development contracts for
service to be rendered:                                                              |  |              |       |       |  |  |       |  
|Not later than one year                                                                                                     |  |              | 1,441 |       |  |  | 2,373 |  
|Later than 1 year but not later than 2 years                                                                                |  |              | 43    |       |  |  | 146   |  
|                                                                                                                            |  |              |       |       |  |  |       |  
|                                                                                                                            |  |              | 1,484 |       |  |  | 2,519 |  
|                                                                                                                            |  |              |       |       |  |  |       |  

96



---



##### 



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

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

There are currently no renewal options
contained in these leases.

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

Note 26. CONTINGENT LIABILITIES

Parent Entity Guarantees



|(a) |  | The parent company has unconditionally guaranteed Novogen BVs
obligations under an agreement with a sales broker dated 10 March 1999,
for the performance of commercial services in Netherlands. There is no
limit on the amount guaranteed.                                                                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The parent company has unconditionally guaranteed financial support for
Novogen Limited (UK) should it be unable to meet its financial
obligations. There is no limit on the amount guaranteed.                                                                                                                                                                                                                        
|   
|(c) |  | 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. There is no limit on the amount guaranteed.                                                                                                                                   
|   
|(d) |  | 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.

Note 27. SUBSEQUENT EVENTS

Apart from the following there have been no significant events occurring after
balance date which have had a material impact on the business.

During December 2003, MEI completed an
initial public offering of 2,392,000 common stock units.  The units
consist of one share of common stock and one warrant and were priced
at US $7.50. MEI has also applied to have its common stock and the
warrants being issued as part of the Unit quoted on the Nasdaq
National Market.

97



---



##### 



During November 2003, MEI received US$10,056,000 following the exercise of
2,514,000 warrants which were issued as part of the AIM listing in May 2002.

Following exercise of the warrants,
and the MEI public offering Novogen holds 86.94% of MEIs common stock,
excluding the possible exercise of
the warrants forming part of the public offering.

The Company has been notified by the Therapeutic Goods Administration (TGA)
that it is reviewing the current listing status of its dietary supplements
products in Australia. These products are currently listed as AUSTL listed
complementary medicine. Following the completion of this review, these products
could retain this status or be delisted in Australia. The Company believes that
its products qualify for their current listing status as AUSTL listed
complementary medicine. However, no assurance can be given that the TGA will
ultimately reach this conclusion. In the event of an adverse determination by
the TGA, the Company will consider what further options are available to it.

Note 28. PENSION PLANS

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

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

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

|                     |  |        |     |        |  |        |     |  |  |  |     | 
|-------------------- |  | ------ | --- | ------ |  | ------ | --- |  |  |  | --- | 
|                     |  | 2001   |     | 2002   |  | 2003  
|                     |  | A$000 |     | A$000 |  | A$000
|                     |  |        |     |        |  |       
|Contribution expense |  |        | 330 |        |  |        | 325 |  |  |  | 604 | 

Note 29. DIVIDENDS

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

98



---



##### 



Note 30. DIFFERENCES BETWEEN AUSTRALIAN GAAP AND US GAAP

Australian GAAP varies in certain respects from accounting principles generally
accepted in the United States (US GAAP). The differences relate principally to
the following items and the adjustments necessary to reconcile the consolidated
net loss for the years ended June 30, 2001, 2002 and 2003 in accordance with US
GAAP are shown below.

The US GAAP capitioned statements of operations for the years ended June 30,
2001, 2002 and 2003  are as follows:

|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|---------------------------------- |  | ------- | ------- | ------ |  | ------ | ------- | -------- |  |  | ------- | - |  |  | ------- | -
|                                   |  | US GAAP
|                                   |  |        
|                                   |  | 2001    |         | 2002   |  | 2003   |         | 2003    
|                                   |  | A$000  |         | A$000 |  | A$000 |         | US$000
|Operating Revenue                  |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Sales Revenue                      |  |         | 25,415  |        |  |        | 17,644  |          |  |  | 18,502  |   |  |  | 12,420  |  
|Other Operating Revenue            |  |         | 2,343   |        |  |        | 3,463   |          |  |  | 3,325   |   |  |  | 2,232   |  
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Total Operating Revenue            |  |         | 27,758  |        |  |        | 21,107  |          |  |  | 21,827  |   |  |  | 14,652  |  
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Costs and Expenses                 |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Cost of Goods Sold                 |  |         | (8,653  | )      |  |        | (7,583  | )        |  |  | (7,200  | ) |  |  | (4,833  | )
|Research & Development             |  |         | (8,419  | )      |  |        | (7,853  | )        |  |  | (8,252  | ) |  |  | (5,540  | )
|Selling and Promotions             |  |         | (23,379 | )      |  |        | (13,744 | )        |  |  | (11,585 | ) |  |  | (7,777  | )
|Shipping and Handling              |  |         | (533    | )      |  |        | (480    | )        |  |  | (468    | ) |  |  | (314    | )
|Bad & Doubtful Debts Expense       |  |         | (146    | )      |  |        | (661    | )        |  |  | (52     | ) |  |  | (35     | )
|General and Administrative         |  |         | (9,278  | )      |  |        | (5,791  | )        |  |  | (5,378  | ) |  |  | (3,610  | )
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Total Costs and Expenses           |  |         | (50,408 | )      |  |        | (36,112 | )        |  |  | (32,935 | ) |  |  | (22,109 | )
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Loss from operations               |  |         | (22,650 | )      |  |        | (15,005 | )        |  |  | (11,108 | ) |  |  | (7,457  | )
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Other Income (Expense)             |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Interest Expense                   |  |         | (346    | )      |  |        | (345    | )        |  |  | (132    | ) |  |  | (89     | )
|Exchange Gains/(Losses)            |  |         | 44      |        |  |        | (482    | )        |  |  | (516    | ) |  |  | (346    | )
|Other                              |  |         | 1,169   |        |  |        | 709     |          |  |  | 1,278   |   |  |  | 858     |  
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Total Other Income (Expense)       |  |         | 867     |        |  |        | (118    | )        |  |  | 630     |   |  |  | 423     |  
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Loss
          Before Income Tax   |  |         | (21,783 | )      |  |        | (15,123 | )        |  |  | (10,478 | ) |  |  | (7,034  | )
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Income tax                         |  |         | (30     | )      |  |        | (45     | )        |  |  | 7       |   |  |  | 5       |  
|Minority Interest                  |  |         | 0       |        |  |        | 19      |          |  |  | 212     |   |  |  | 142     |  
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Net loss                           |  |         | (21,813 | )      |  |        | (15,149 | )        |  |  | (10,259 | ) |  |  | (6,887  | )
|                                   |  |         |         |        |  |        |         |          |  |  |         |   |  |  |         |  
|Loss per share - basic and diluted |  |         | (25.4   | )      |  |        | (15.9   | )        |  |  | (10.7   | ) |  |  | (7.2    | )

99



---



##### 



|                                                                                                                                                     |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- |  | --- | ------------------ | ---------- | ------ | --- | ------ | ---------- | - | --- | - | ---------- | -
|                                                                                                                                                     |  |      |     |  |     | Year ended 30 June
|                                                                                                                                                     |  |      |     |  |     |                   
|                                                                                                                                                     |  |      |     |  |     | 2001               |            | 2002   |     | 2003  
|                                                                                                                                                     |  |      |     |  |     | A$000             |            | A$000 |     | A$000
|                                                                                                                                                     |  |      |     |  |     |                    |            |        |     |       
|Consolidated
          Net Loss                                                                                                                      |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|Net
          loss reported under Australian GAAP                                                                                                    |  |      |     |  |     |                    | (21,764    | )      |     |        | (14,673    | ) |     |   | (10,666    | )
|Adjustments
          required to accord with US GAAP:                                                                                               |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|Amortization
          of goodwill                                                                                                                   |  |      | (i) |  |     |                    | 33         |        |     |        | 33         |   |     |   |           |  
|Goodwill
          written off                                                                                                                       |  |      |     |  |     |                    |           |        |     |        |           |   |     |   | 224        |  
|Stock
          based compensation cost                                                                                                              |  | (ii) |     |  | (82 | )                  |            |        | (53 | )      |            |   | (29 | )
|Minority
          interest in net losses of subsidiaries                                                                                            |  | (vi) |     |  |    |                    |            |        | 19  |        |            |   | 212 |  
|Adjustment
          for sales returns                                                                                                               |  |      | (v) |  |     |                    |           |        |     |        | (475       | ) |     |   |           |  
|                                                                                                                                                     |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|Net
          loss under US GAAP                                                                                                                     |  |      |     |  |     |                    | (21,813    | )      |     |        | (15,149    | ) |     |   | (10,259    | )
|                                                                                                                                                     |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|Basic
          and diluted (loss) per share according to US GAAP (cents)                                                                            |  |      |     |  |     |                    | (0.25      | )      |     |        | (0.16      | ) |     |   | (0.11      | )
|Weighted
          average number of ordinary shares outstanding during the year used in
          calculation of basic and diluted (loss) per share |  |      |     |  |     |                    | 85,646,585 |        |     |        | 95,187,449 |   |     |   | 95,472,984 |  
|Comprehensive
          Income                                                                                                                       |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|Net
          loss according to US GAAP                                                                                                              |  |      |     |  |     |                    | (21,813    | )      |     |        | (15,149    | ) |     |   | (10,259    | )
|Other
          comprehensive income resulting from foreign currency translation                                                                     |  |      |     |  |     |                    |           |        |     |        |           |   |     |   | (1,956     | )
|                                                                                                                                                     |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  
|Total
          comprehensive income                                                                                                                 |  |      |     |  |     |                    | (21,813    | )      |     |        | (15,149    | ) |     |   | (12,215    | )
|                                                                                                                                                     |  |      |     |  |     |                    |            |        |     |        |            |   |     |   |            |  

In 2001, 2002 and 2003, exercise of the options issued by the Company would have
been anti-dilutive and, therefore, was not considered in the computation of
diluted earnings per share. Details of options are set out in note 14.
Outstanding options at the
end of the financial years are, 2,025,076 in 2001, 2,207,663 in 2002 and
2,441,951 in 2003.

100



---



##### 



The following is a reconciliation of the adjustments necessary to reconcile
shareholders equity in accordance with Australian GAAP to the amounts
determined under US GAAP as at June 30, 2002 and 2003:

|                                                        |  |      |     |  |      |            |        |        |      |   |        | 
|------------------------------------------------------- |  | ---- | --- |  | ---- | ---------- | ------ | ------ | ---- | - | ------ | 
|                                                        |  |      |     |  |      | At 30 June
|                                                        |  |      |     |  |      |           
|                                                        |  |      |     |  |      | 2002       |        | 2003  
|                                                        |  |      |     |  |      | A$000     |        | A$000
|                                                        |  |      |     |  |      |            |        |       
|Shareholders Equity                                    |  |      |     |  |      |            |        |        |      |   |        | 
|Shareholders equity reported using
Australian GAAP     |  |      |     |  |      |            | 54,045 |        |      |   | 42,397 | 
|Cumulative adjustments required to accord
with US GAAP: |  |      |     |  |      |            |        |        |      |   |        | 
|Reversal of recognition of goodwill                     |  |      | (i) |  |      |            | (492   | )      |      |   |       | 
|Amortization of goodwill                                |  |      | (i) |  |      |            | 268    |        |      |   |       | 
|Stock based compensation cost                           |  | (ii) |     |  | (728 | )          |        |        | (757 | )
|Minority interest equity                                |  | (vi) |     |  | (766 | )          |        |        | (571 | )
|Adjustment for sales returns                            |  |      | (v) |  |      |            | (475   | )      |      |   |       | 
|                                                        |  |      |     |  |      |            |        |        |      |   |        | 
|Shareholders equity according to US GAAP               |  |      |     |  |      |            | 51,852 |        |      |   | 41,069 | 
|                                                        |  |      |     |  |      |            |        |        |      |   |        | 

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

(i)  Goodwill, Patents and Trademarks

Novogen Limited (Novogen formerly Norvet Limited) was incorporated on March
18, 1994. An Australian prospectus was issued in August 1994 for a proposed
public issue of 13 million shares and options by Novogen. At that time,
Novogen was a cash-less
shell that had not carried on any business except to enter into an underwriting
agreement for the offering and agreements to acquire Norvet Research Pty Ltd.

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(Research) and Norvet Laboratories Pty Ltd (Laboratories). The agreements
indicated that Novogen would purchase all of the issued shares of Research in
exchange for an issue of new Novogen equity that was valued at A$7.0 million
and that Novogen would acquire all of the issued shares of Laboratories in
exchange for a cash payment of A$400,000 from the IPO proceeds. Novogen
successfully completed the public offering and listed on the Australian Stock
Exchange on September 1, 1994. Concurrent with the closing of the IPO, the
transfers of Research and Laboratories into Novogen were completed.

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

Goodwill has been fully written off in
2003 based on the
Directors assessment that no future benefits were considered probable from this
intangible asset.

(ii)  Stock Based Compensation

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

(a)  For US GAAP purposes, in respect of the options issued to executive
officers and employees, as permitted by SFAS 123, Novogen follows the
provisions of Accounting Principles Board Opinion No. 25 (APB 25) Accounting
for Stock Issued to Employees and related interpretations in accounting for
compensation expense related to the issuance of stock options. No stock-based
compensation cost is included in the determination of net loss, as reported, as
none of the options granted to employees are compensatory as measured under
ABP25 and related interpretations. Under APB 25, compensation cost for stock
options is measured as the excess, if any, of the quoted market price of the
Companys stock at the grant date over the exercise price, multiplied by the
number of options issued. The total compensation cost is amortized over the
service (vesting) period. Had compensation cost related to issues of options to
executive officers and other employees been recorded at fair value on the date
of grant in accordance with SFAS 123 Accounting for Stock Based Compensation
(SFAS 123), Novogens net loss and loss per share amounts (calculated in
accordance with US GAAP) would have been reduced to the pro forma amounts
indicated below:

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|                                           |                                                         |  |        |         |        |  |        |         |   |  |  |         |  
|------------------------------------------ | ------------------------------------------------------- |  | ------ | ------- | ------ |  | ------ | ------- | - |  |  | ------- | -
|                                           |                                                         |  | 2001   |         | 2002   |  | 2003  
|                                           |                                                         |  | A$000 |         | A$000 |  | A$000
|                                           |                                                         |  |        |         |        |  |       
|Net loss after income tax (US GAAP)        |                                                         |  |        |         |        |  |        |         |   |  |  |        
|                                           | - As reported                                           |  |        | (21,813 | )      |  |        | (15,149 | ) |  |  | (10,259 | )
|                                           | - Stock-based employee
compensation  fair value
method |  |        | (217    | )      |  |        | (271    | ) |  |  | (411    | )
|                                           | - Pro forma                                             |  |        | (22,030 | )      |  |        | (15,420 | ) |  |  | (10,670 | )
|Basic and diluted loss per share (US GAAP) |                                                         |  |        |         |        |  |        |         |   |  |  |        
|                                           | - As reported                                           |  |        | (0.25   | )      |  |        | (0.16   | ) |  |  | (0.11   | )
|                                           | - Pro forma                                             |  |        | (0.26   | )      |  |        | (0.16   | ) |  |  | (0.12   | )

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

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

Consultant Options

|                                                               |  |         |         |          |  |          |        |          |  |         |         |          |  |  |        |  |  |          |         |  |  |  |        | 
|-------------------------------------------------------------- |  | ------- | ------- | -------- |  | -------- | ------ | -------- |  | ------- | ------- | -------- |  |  | ------ |  |  | -------- | ------- |  |  |  | ------ | 
|                                                               |  | 2001    |         | 2002     |  | 2003    
|                                                               |  |         |         |          |  |         
|                                                               |  |         |         |          |  | Weighted |        |          |  |         |         | Weighted |  |  |        |  |  | Weighted
|                                                               |  |         |         |          |  | average  |        |          |  |         |         | average  |  |  |        |  |  | average 
|                                                               |  |         |         |          |  | exercise |        |          |  |         |         | exercise |  |  |        |  |  | exercise
|                                                               |  | Options |         | price A$ |  | Options  |        | price A$ |  | Options |         | price A$
|                                                               |  |         |         |          |  |          |        |          |  |         |         |         
|Outstanding at the
beginning of the year                       |  |         | 326,350 |          |  |          | A$2.28 |          |  |         | 348,778 |          |  |  | A$2.28 |  |  |          | 397,728 |  |  |  | A$2.28 | 
|Granted                                                        |  |         | 57,428  |          |  |          | A$3.63 |          |  |         | 101,950 |          |  |  | A$2.05 |  |  |          | 37,200  |  |  |  | A$2.10 | 
|Exercised                                                      |  |         | 35,000  |          |  |          | A$1.00 |          |  |         | 53,000  |          |  |  | A$2.00 |  |  |          | 67,418  |  |  |  | A$2.05 | 
|Outstanding at the
end of the year                             |  |         | 348,778 |          |  |          | A$2.28 |          |  |         | 397,728 |          |  |  | $2.69  |  |  |          | 367,510 |  |  |  | $2.75  | 
|Exercisable at the
end of the year                             |  |         | 58,860  |          |  |          | A$2.90 |          |  |         | 265,207 |          |  |  | A$2.83 |  |  |          | 316,222 |  |  |  | A$2.77 | 
|Weighted average
fair value of
options granted
during the year |  |         | A$1.43  |          |  |          |        |          |  |         | A$0.52  |          |  |  |        |  |  |          | A$0.78  |  |  |  |        | 

Employee Options

|                                                               |  |         |           |          |  |          |        |          |  |         |           |          |  |  |        |  |  |          |           |  |  |  |        |  |  |  |  | 
|-------------------------------------------------------------- |  | ------- | --------- | -------- |  | -------- | ------ | -------- |  | ------- | --------- | -------- |  |  | ------ |  |  | -------- | --------- |  |  |  | ------ |  |  |  |  | 
|                                                               |  | 2001    |           | 2002     |  | 2003     |        |          |  |        
|                                                               |  |         |           |          |  |          |        |          |  |        
|                                                               |  |         |           |          |  | Weighted |        |          |  |         |           | Weighted |  |  |        |  |  | Weighted |           |  |  | 
|                                                               |  |         |           |          |  | average  |        |          |  |         |           | average  |  |  |        |  |  | average  |           |  |  | 
|                                                               |  |         |           |          |  | exercise |        |          |  |         |           | exercise |  |  |        |  |  | exercise |           |  |  | 
|                                                               |  | Options |           | price A$ |  | Options  |        | price A$ |  | Options |           | price A$ |  |  |        | 
|                                                               |  |         |           |          |  |          |        |          |  |         |           |          |  |  |        | 
|Outstanding at the
beginning of the
year                       |  |         | 1,502,467 |          |  |          | A$3.02 |          |  |         | 1,676,298 |          |  |  | A$3.02 |  |  |          | 1,809,935 |  |  |  | A$3.01 | 
|Granted                                                        |  |         | 247,604   |          |  |          | A$4.00 |          |  |         | 695,528   |          |  |  | A$1.53 |  |  |          | 526,332   |  |  |  | A$2.10 | 
|Exercised                                                      |  |         | 3,513     |          |  |          | A$1.93 |          |  |         | 289,939   |          |  |  | A$1.77 |  |  |          | 131,653   |  |  |  | A$2.14 | 
|Expired                                                        |  |         | 70,260    |          |  |          | A$3.32 |          |  |         | 271,952   |          |  |  | A$2.83 |  |  |          | 130,173   |  |  |  | A$2.25 | 
|Outstanding at the
end of the year                             |  |         | 1,676,298 |          |  |          | A$2.99 |          |  |         | 1,809,935 |          |  |  | A$2.61 |  |  |          | 2,074,441 |  |  |  | A$2.02 | 
|Exercisable at the
end of the year                             |  |         | 732,917   |          |  |          | A$2.27 |          |  |         | 585,321   |          |  |  | A$3.01 |  |  |          | 1,069,757 |  |  |  | A$2.94 | 
|Weighted average
fair value of
options granted
during the year |  |         | A$0.92    |          |  |          |        |          |  |         | A$0.39    |          |  |  |        |  |  |          | A$0.78    |  |  |  |        | 

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The fair value of these options was estimated at the date of the grant using
the Black-Scholes option pricing model with the following weighted average
assumptions for 2001, 2002 and 2003 respectively. Risk free interest rate 6.17%
and 5.09% and 5.71%. Dividend yields of 0% in each of the three years,
volatility factors of 0.216 in 2001, 0.273 in 2002 and 0.362 in 2003, and a
weighted average life of 4 years.

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

(iii)  Cash Flow Statement

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

|                                                |  |        |        |        |  |        |        |   |  |  |        |  
|----------------------------------------------- |  | ------ | ------ | ------ |  | ------ | ------ | - |  |  | ------ | -
|                                                |  | 2001   |        | 2002   |  | 2003  
|                                                |  | A$000 |        | A$000 |  | A$000
|                                                |  |        |        |        |  |       
|Cash and cash equivalents under
Australian GAAP |  |        | 31,129 |        |  |        | 39,937 |   |  |  | 31,026 |  
|Restricted cash (note 13)                       |  |        | (2,500 | )      |  |        | (2,500 | ) |  |  | (2,500 | )
|                                                |  |        |        |        |  |        |        |   |  |  |        |  
|Cash and cash equivalents under US GAAP         |  |        | 28,629 |        |  |        | 37,437 |   |  |  | 28,526 |  
|                                                |  |        |        |        |  |        |        |   |  |  |        |  

(iv)  Income Tax

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

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

The components of the US GAAP net deferred tax asset at June 30, 2002 and 2003,
are as follows:

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|                                                         |                        |                 |         |        |        |        |         |      |        | 
|-------------------------------------------------------- | ---------------------- | --------------- | ------- | ------ | ------ | ------ | ------- | ---- | ------ | 
|                                                         |                        |                 |         | 2002   |        | 2003  
|                                                         |                        |                 |         | A$000 |        | A$000
|                                                         |                        |                 |         |        |        |       
|Deferred tax asset (at Australian statutory rate of 30%) |                        |                 |         |        |        |        |         |     
|                                                         | Depreciation           |                 |         | 649    |        |        |         | 771  |       
|                                                         | Provisions Accruals    |                 |         | 674    |        |        |         | 851  |       
|                                                         | Exchange Losses        |                 |         | 1,661  |        |        |         | 166  |       
|                                                         | Other                  |                 |         | 731    |        |        |         | 629  |       
|                                                         | Losses carried forward |  Australian    |         |        | 1,789  |        |         |      | 6,229  | 
|                                                         |                        |  United States |         |        | 13,154 |        |         |      | 10,428 | 
|                                                         |                        |  other         |         |        | 2,815  |        |         |      | 4,204  | 
|                                                         |                        |                 |         |        |        |        |         |      |       
|Total deferred tax assets                                |                        |                 | 21,473  |        |        |        | 23,278  |     
|Deferred tax liability                                   |                        |                 |         |        |        |        |         |     
|                                                         | Exchange Gains         |                 |         |       |        |        |         |     |       
|                                                         | Other                  |                 |         | (1,934 | )      |        |         | (718 | )     
|                                                         | Prepayments            |                 |         | (6     | )      |        |         | (1   | )     
|                                                         |                        |                 |         |        |        |        |         |     
|Total Deferred Tax Liability                             |                        |                 | (1,940  | )      |        |        | (719    | )   
|                                                         |                        |                 |         |        |        |        |         |     
|Net deferred tax asset                                   |                        |                 | 19,533  |        |        |        | 22,559  |     
|                                                         |                        |                 |         |        |        |        |         |     
|Valuation Allowance                                      |                        |                 | (19,533 | )      |        |        | (22,559 | )   
|Net Recorded Deferred Taxes                              |                        |                 |        |        |        |        |        |     
|                                                         |                        |                 |         |        |        |        |         |     

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

|                                          |  |        |        |        |  |        |      |   |  |  |        |  
|----------------------------------------- |  | ------ | ------ | ------ |  | ------ | ---- | - |  |  | ------ | -
|                                          |  | 2001   |        | 2002   |  | 2003  
|                                          |  |        |        |        |  |       
|Components of Income Tax Expense          |  | A$000 |        | A$000 |  | A$000
|                                          |  |        |        |        |  |       
|Current
          Expense                 |  |        | 30     |        |  |        | 45   |   |  |  | (7     | )
|Deferred
          Expense                |  |        | 8,261  |        |  |        | (474 | ) |  |  | 3,026  |  
|Movement
          in Valuation Allowance |  |        | (8,261 | )      |  |        | 474  |   |  |  | (3,026 | )
|                                          |  |        |        |        |  |        |      |   |  |  |        |  
|Income
          Tax Expense              |  |        | 30     |        |  |        | 45   |   |  |  | (7     | )
|                                          |  |        |        |        |  |        |      |   |  |  |        |  

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(v)  Revenue

|                                             |  |          |        |          |  |          |        |   |  |  |        |  
|-------------------------------------------- |  | -------- | ------ | -------- |  | -------- | ------ | - |  |  | ------ | -
|                                             |  | 2001     |        | 2002     |  | 2003    
|                                             |  | (A$000) |        | (A$000) |  | (A$000)
|Sales Revenue reported
using Australian GAAP |  |          | 26,663 |          |  |          | 19,582 |   |  |  | 19,630 |  
|Trade Promotions                             |  |          | (1,248 | )        |  |          | (1,463 | ) |  |  | (1,128 | )
|Adjustment for sales returns                 |  |          |       |          |  |          | (475   | ) |  |  |       |  
|                                             |  |          |        |          |  |          |        |   |  |  |        |  
|Sales Revenue reported
using US GAAP         |  |          | 25,415 |          |  |          | 17,644 |   |  |  | 18,502 |  
|                                             |  |          |        |          |  |          |        |   |  |  |        |  

Trade Promotions

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

Sales Returns

Historically, the company did not sell its products
  with rights of return, however during 2002 as a result of disappointing sales
  of one product the company accepted returns totalling A$2.1 million. Under
  US GAAP, SFAS 48, Revenue Recognition When Right of Return Exists,
  requires that an allowance be recorded for an implied right of return, regardless
  of whether that right exists on a contractual basis. Accordingly, an adjustment
  for estimated sales returns was recorded under US GAAP in 2002. The Company
  has granted rights of return to specific customers in 2003. Consequently AUD369,000,
  has been included in the Australian accounts, in 2003 to recognise the estimated amount
  of sales returns expected at year end based on managements assessment of additional
  returns expected in 2004.

(vi)  Minority interests

Under Australian GAAP, equity in consolidated subsidiaries
  issued outside the economic entity is referred to as Outside Equity Interests
  and is included as a component of equity but excluded from the determination
  of net loss. Under U.S. GAAP, Outside Equity Interests are referred to as Minority
  Interests and are separately classified between the liabilities and equity
  sections of the Statement of Financial Position. Net loss, in the statement
  of operations, is presented net of the minoritys share of the subsidiarys net loss.

Refer Note 16 for subsidiaries full detail of minority interest equity.

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(vii) Recent Accounting Pronouncements

In December 2002, the Financial
Accounting Standards Board (the FASB)  issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure. SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition to SFAS No. 123s fair value method of accounting for stock-based
employee compensation. SFAS No. 148 also amends the disclosure provisions in
SFAS No. 123 and Accounting Principles Board Opinion No. 28, Interim Financial
Reporting, to require disclosure in the summary of significant accounting
policies of the effects of an entitys accounting policy with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. The Company adopted the
disclosure provisions in 2003. The
adoption of SFAS No. 148 did not have a significant impact on the Companys
consolidated results of operations or financial position.

In January 2003, the FASB issued FIN
No. 46, Consolidation of Variable Interest Entities. The
primary objective of FIN No. 46 is to provide guidance on the
identification of, and financial reporting for, entities over which
control is achieved through means other than voting rights; such
entities are known as variable interest entities.  FIN No. 46
requires variable interest entities to be consolidated by the primary
beneficiary of the variable interest entities and expands disclosure
requirements for variable interest entities that are consolidated as
well as those within which an enterprise holds a significant variable
interest. FIN No. 46 is effective immediately for all variable
interest entities created after January 31, 2003, and is effective no
later than the beginning of the first interim or annual reporting
period beginning after June 15, 2003 for all variable interest
entities created prior to February 1, 2003. The Company is currently
in the process of evaluating any effect the adoption of FIN No. 46
will have on our consolidated financial position, results of
operations and cash flows.

Accounting pronouncement issued by the
FASB or
other authoritative accounting standards groups with future effective dates are
either not applicable or not significant to the consolidated financial
statements.

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SIGNATURES

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

NOVOGEN LIMITED

/s/ CHRISTOPHER NAUGHTON




Mr Christopher Naughton
Managing Director

Date: December 23, 2003

109