SECURITIES AND EXCHANGE COMMISSION

FORM 20-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2005

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from            to           

Novogen Limited

ACN 063 259 754

(Exact name of Registrant as specified in its charter)

(Translation of Registrant’s name into English)

(Jurisdiction of incorporation or organization)

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

*

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes       o                     No       þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes       o                     No       þ

The number of outstanding Ordinary Shares of the issuer as at June 30, 2005 was 97,045,662.

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       þ                     No       o

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

Item 17      o                    Item 18     þ

If this is an annual report, indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes       o                     No       þ

 

 

TABLE OF CONTENTS

Forward Looking Statements					1
PART I
ITEM 1.		Identity of Directors, Senior Management and Advisors			2
ITEM 2.		Offer Statistics and Expected Timetable			2
ITEM 3.		Key Information			2
ITEM 4.		Information on the Company			16
ITEM 5.		Operating and Financial Review and Prospects			33
ITEM 6.		Directors, Senior Management and Employees			41
ITEM 7.		Major Shareholders and Related Party Transactions			52
ITEM 8.		Financial Information			53
ITEM 9.		Offer and Listing Details			54
ITEM 10.		Additional Information			56
ITEM 11.		Quantitative and Qualitative Disclosures about Market Risk			60
ITEM 12.		Description of Securities other than Equity Securities			61
PART II
ITEM 13.		Defaults, Dividend Arrearages and Delinquencies			62
ITEM 14.		Material Modifications to the Rights of Security Holders and the Use of Proceeds			62
ITEM 15.		Controls and Procedures			62
ITEM 16.		Reserved			64
ITEM 16A.		Audit Committee Financial Expert			64
ITEM 16B		Code of Ethics			64
ITEM 16C		Principal Accountant Fees and Services			64
ITEM 16D		Exemptions from the Listing Standards for Audit Committees			66
ITEM 16E		Purchases of Equity Securities by the Issuer and Affiliated Purchases			66

iii

PART III
ITEM 17.		Financial Statements — Not Applicable			67
ITEM 18.		Financial Statements			67
ITEM 19.		Exhibits			67

iv

FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 20-F includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Security Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this Annual Report, including statements regarding the future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe”, “may”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “should”, “plan”, “expect”, and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those described in “Risk Factors” and elsewhere in this Form 20-F, including, among other things:

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

These risks are not exhaustive. Other sections of the Annual Report on Form 20-F may include additional factors which could adversely impact the Company’s business and financial performance. Moreover, the Company operates in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can the Company assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward looking statements as predictions of future events. The Company cannot assure you that the events and circumstances reflected in the forward looking statements will be achieved or occur. Although the Company believes that the expectations reflected in the forward looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements.

PART I

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 2005 and 2004 and for the years ended June 30 2005, 2004 and 2003, 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, 2003, 2002 and 2001 and for the years ended June 30, 2002 and 2001 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 U.S. 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 registered 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 2005” refers to the 12 months ended June 30, 2005. Except as otherwise indicated, all dollar amounts referred to in this Annual Report are at the consolidated level and exclude inter-company amounts.

Summary of Consolidated Statement of Financial Performance
(Australian GAAP)

		2001				2002				2003				2004				2005				2005
		(A$’000)				(A$’000)				(A$’000)				(A$’000)				(A$’000)				(US$’000)
Sales Revenue			26,663				19,582				19,630				12,720				13,404				10,211
Other Revenue from ordinary activities			3,569				4,706				4,626				3,726				4,274				3,256
Total Revenue from ordinary activities			30,232				24,288				24,256				16,446				17,678				13,467
Net Loss			(21,764	)			(14,673	)			(10,666	)			(12,579	)			(12,281	)			(9,356	)
Net Loss Attributable to Members of Novogen			(21,764	)			(14,654	)			(10,454	)			(10,935	)			(11,129	)			(8,478	)
Basic and diluted earnings per share (cents per share)			(25.4	)			(15.4	)			(10.9	)			(11.4	)			(11.5	)			(8.8	)
Weighted average number of Ordinary shares used to calculate earnings per share			85,646,585				95,187,449				95,472,984				96,306,286				96,839,570
Number of outstanding Ordinary Shares at year end			95,069,775				95,412,714				95,611,785				96,723,543				97,045,662
Adjusted to accord with US GAAP
Sales Revenue			25,415				17,644				18,977				11,774				12,928				9,848
Total Revenue			28,984				21,107				22,302				14,188				15,883				12,099
Net (loss)			(21,813	)			(15,149	)			(10,259	)			(11,410	)			(11,214	)			(8,543	)
Net (loss) from operations per share (Cents per share)			(25.4	)			(15.9	)			(10.7	)			(11.8	)			(11.6	)			(8.8	)

Note: Sales revenue reported under U.S. 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’s 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 U.S. GAAP these amounts are treated as a discount to sales hence reducing the reported sales figures. See Note 29 to the Consolidated Financial Statements for the reconciliation to U.S. GAAP.

Summary of Consolidated Statement of Financial Position at June 30, 2005
(Australian GAAP)

		2001				2002				2003				2004				2005				2005
		(A$’000)				(A$’000)				(A$’000)				(A$’000)				(A$’000)				(US$’000)
Cash and Cash Equivalents			31,129				39,937				31,026				58,431				47,260				36,003
Total Assets			61,206				61,900				50,812				77,413				67,485				51,410
Net Assets			51,906				54,045				42,397				69,211				60,492				46,083
Capital Stock			121,222				137,249				138,206				170,276				176,235				134,256
Adjusted to accord with US GAAP
Total Assets			60,949				61,676				50,812				77,413				67,485				51,410
Shareholders Equity			50,974				51,852				41,069				65,759				57,725				43,975

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

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 U.S. dollars at specified rates. These translations should not be construed as representations that the Australian dollar amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise stated, the translations of Australian dollars into U.S. dollars have been made at the rate of US$0.7618 = 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, 2005.

The noon buying rate on September 30, 2005 was US$0.7643 = A$1.00

Exchange Rates for the six months to October 2005
A$ versus US$

Month		High				Low
June		$	0.7792			$	0.7498
July		$	0.7661			$	0.7403
August		$	0.7739			$	0.7469
September		$	0.7731			$	0.7537
October		$	0.7630			$	0.7468
November		$	0.7451			$	0.7267

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

Fiscal Year				Average
Ended June 30				Rate
	2001			$0.5320
	2002			$0.5236
	2003			$0.5836
	2004			$0.7109
	2005			$0.7529

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.

The Company’s isoflavonoid technology is relatively new and unproven. If the company is unable to develop its product candidates or successfully achieve market acceptance of its technology, the Company’s financial position could be seriously impaired.

The Company’s isoflavonoid technology is 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.

If the data from the Company’s clinical trial program does not demonstrate the safety and efficacy of the phenolic drug candidates to the FDA’s and other regulatory authorities’ satisfaction, the Company will not receive approval to market its drug candidates in the U.S. or other jurisdictions.

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 being developed by Marshall Edwards, Inc., a subsidiary of Novogen whose shares are traded on the Nasdaq National Market, NV-04, the Company’s cardiovascular drug candidate and NV-07 the Company’s anti-inflammatory drug candidate, may be delayed if the U.S. 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.

Any failure in the clinical trial program could impair the commercial prospects of the Company’s phenolic drug program.

Clinical trials 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.

We have a limited operating history, and we are likely to incur operating losses for the foreseeable future.

We have incurred net losses of $116,069,000 since our inception, including net losses of $12,281,000, $12,579,000 and $10,666,000 for the years ended June 30, 2005, 2004 and 2003, respectively. We anticipate that we will incur operating losses and negative cash flow for the foreseeable future. Although we have generated revenues from the sale of our dietary supplements, we expect to expand our clinical trials for our pharmaceutical product candidates, which may result in increasing losses.

If the Company does not receive marketing approval for its phenolic drug candidates or regulatory approval is withdrawn for the dietary supplements the Company will not be able to commercialize its products and product candidates.

Marketing approval is needed in order to commercialize the Company’s phenolic drug candidates. The Company may never receive marketing approval for any of its phenolic drug candidates or if the Company does it will be limited to those disease states and conditions for which they have been proven to be safe and effective.

In order for the Company to market its products in the U.S., Europe, Australia, Canada, Japan and certain other foreign jurisdictions, the Company must obtain required marketing 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.

The FDA and other governmental approvals that may be granted to the Company will be subject to continual review, and later discovery of previously unknown problems may result in withdrawal of products from the market. 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, under regulations of the TGA. Following the completion of this review, these products could retain this status or be de-listed 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 any FDA or other governmental 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 marketing approvals, operating restrictions and criminal prosecution.

The Company will need to raise additional funds in order to finance future operations, clinical development program and possible capital expenditures.

The Company’s funding requirements have been and will continue to be significant. The Company anticipates that its existing cash resources will be adequate to fund the Company’s operating requirements through at least the next 12 months based upon the Company’s current business plan. The Company’s operating requirements may vary materially from those now planned due to a number of factors, including the success of the Company’s research and development efforts and the ability of the Company to satisfy applicable regulatory requirements, the extent of 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 and the level of expenditure required to expand its production facilities should it need to do so. 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.

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

An important risk concerns the supply of raw material (red clover) used to produce the Company’s consumer products. Numerous environmental factors (drought, disease, storms) 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.

The Company’s success is largely dependent on its ability to obtain and maintain patent protection and preserve trade secrets, which cannot be guaranteed.

The Company’s success is dependent to a significant degree on whether it can obtain patents, maintain trade secret protection and operate without infringing on the proprietary

rights of third parties. If the Company were determined to be infringing any third party patent, the Company could be required to pay damages, alter its products or processes, obtain licenses or to cease certain operations. If the Company is required to obtain any licenses, there can be no assurance that the Company will be able to do so on commercially favorable terms, if at all. The Company’s failure to obtain a license for any technology that it may require to commercialize its products could have a material adverse effect on the Company’s business, financial condition and results of operations.

Litigation, which could result in substantial costs to and diversion of effort by the Company, may also be necessary to enforce any patents issued or licensed to the Company or to determine the scope and validity of third party proprietary rights. If competitors of the Company that claim technology also claimed by the Company prepare and file patent applications in the U.S., the Company may have to participate in interference proceedings declared by the U.S. 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.

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

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.

Revenue is affected by fluctuations in currency exchange rates.

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 2005, the Company’s revenue was generated approximately 33% in U.S. dollars and approximately 35% in Australian dollars with the balance of revenue in Pounds Sterling, Euros and Canadian dollars. Fluctuations in the rates of exchange between U.S. dollar and other foreign currencies may negatively impact the Company’s financial condition and results of operations. As the Company expands its presence into the U.S. 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 U.S. dollars.

The Company depends on a number of key personnel to provide the strategic direction of its research and development programs and other corporate activities. If the Company is unable to procure the services of key personnel in the future the research and development programs could be delayed.

The Company 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 Professor Kelly, Mr. Naughton and Professor Husband, currently set at A$2,226,000 each. In addition the company also maintains key person life insurance for all members of the executive team and other key staff, the policies for these personnel range between A$800,000 and A$1,600,000. The proceeds of such policies are payable to the Company.

The Company has no direct control over the cost of formulation and packaging of its dietary supplement products and will be relying on third parties to manufacture commercial quantities of pharmaceutical drug candidates.

The Company currently relies on its own extraction facility to produce commercial quantities of isoflavones used in the manufacture of dietary supplement products. The facility is expected to be sufficient to meet anticipated demand during fiscal 2006 and beyond. The Company relies on others to manufacture and package our dietary supplement products to satisfy performance and quality standards and dedicate sufficient production capacity to meet demand and delivery times. The Company will also rely on third parties to manufacture

commercial quantities of our pharmaceutical drug candidates. 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 manufacturing facilities of the Company’s products are subject to periodic 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 which may result in our products not being available to supply the market demand which will adversely affect our sales revenues.

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

The Company relies on its own marketing staff for the marketing and sale of its current and proposed dietary supplement products in Australia, Canada, the U.S., 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.

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

Pharmaceutical products, including the Company’s pharmaceutical drug candidates, are significantly regulated by a number of governmental entities, including the FDA in the U.S. 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.

The Company faces the risk of product liability claims and may not be able to obtain adequate insurance.

The Company’s business exposes it to the risk of product liability claims. This risk is inherent in the manufacturing, testing and marketing of human therapeutic products. The Company has product liability insurance coverage of up to approximately $A20 million. Although the Company believes that this amount of insurance coverage is appropriate for its business at this time, it is subject to deductibles and coverage limitations, and the market for such insurance is becoming more restrictive. The Company may not be able to obtain or maintain adequate protection against potential liabilities. If the Company is unable to sufficiently insure against potential product liability claims, it will be exposed to significant liabilities, which may materially and adversely affect the business development and commercialization efforts.

Enforceability of Civil Liabilities under the Federal Securities Laws against the Company’s officers and directors may be difficult.

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

The ongoing criminal investigations involving Professor Kelly, the Company’s Oncology Program Director, could have a material adverse effect on its business or cause the stock price to decline.

Professor Kelly is one of a number of individuals who, and whose associated entities and advisors, have been the subject of investigations by certain Australian authorities relative to their alleged involvement in the evasion of Australian tax, fraud and money laundering. Professor Kelly has informed the Company that he does not believe that he has committed any wrongdoing and denies that he has been involved in any wrongdoing. Nevertheless, Professor Kelly may need to allocate time and resources to deal with the investigation. Additionally, if the Australian authorities were to decide to prosecute Professor Kelly upon concluding their investigation and if such prosecution were to result in a conviction, Professor Kelly may be barred from acting as an officer or director and may become unavailable to the Company. Any publicity related to this investigation or potential prosecution or conviction of Professor Kelly could have a material adverse effect on the business or cause the stock price to decline.

The Company is in the process of strengthening its internal control over financial reporting.

The Company determined in 2004 that the personnel and management who perform the financial reporting functions were not sufficiently expert in U.S. GAAP and the requirements of the Securities and Exchange Commission and the Public Company Accounting Oversight Board, and that this lack of expertise represented a material weakness in the operation of its internal control over financial reporting. A material weakness occurs when there is a significant deficiency, or a combination of significant deficiencies, that results in a more-than-remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. In addition, the Company also determined that its system of financial reporting was not designed to prepare financial statements in accordance with U.S. GAAP. The Company’s system of internal control, in particular its processes to review and analyse elements of the financial statement close process and to prepare financial statements in accordance with U.S. GAAP, had not reduced to a relatively low level the risk that errors in amounts that would be material in relation to those financial statements might occur and might not be detected within a timely period by management in the normal course of business.

While the Company has undertaken a re-evaluation of its internal controls and procedures and has implemented enhancements to improve them, additional measures may be required in the future to further enhance their internal controls and procedures.

The trading price of the shares of the Company’s common stock and ADRs could decline in value if the trading price of the shares of common stock of its listed subsidiary company, Marshall Edwards, Inc., declines.

Novogen currently owns 86.9% of its subsidiary Marshall Edwards, Inc., whose shares are traded on the Nasdaq National Market and on the Alternative Investment Market of the London Stock Exchange. If the trading price of Marshall Edwards’ shares declines or its business does not achieve its objectives or its product development program is delayed, it could have an adverse affect on Novogen’s share price.

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

The trading price of the Company’s common stock and ADRs is highly volatile in response to various factors, many of which are beyond the Company’s control including:

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

In addition, equity markets in general and the market for biotechnology and life sciences companies in particular, have experienced 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 the Company’s ability to grow profitably. Adverse economic changes are outside the Company’s control and may result in material adverse impacts on its business or its results of operations. These broad market and industry factors may materially affect the market price of the Company’s shares and ADRs regardless of its 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 the Company could cause it to incur substantial costs and divert management’s attention and resources.

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 website, www.novogen.com (the information contained in the website does not form part of the Annual Report). The Company’s Ordinary Shares are listed on the Australian Stock Exchange (“ASX”) under the symbol “NRT” and its American Depositary Receipts (ADRs), 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 isoflavoniod technology. The Company’s product development program embraces both a novel range of pharmaceuticals based on a range of phenolic compounds in humans and dietary supplements based on plant 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 compounds.

Recent Financing Activities

Glycotex, Inc.

During May 2003, Glycotex, Inc., a U.S. subsidiary of Novogen Inc., established in May 1999, to provide a commercial vehicle for Novogen’s glucan technology, raised A$500,000 in an initial private placement of 350,000 shares from Australian and international investors and institutions.

The shares were issued at A$1.43 each with attaching warrants to purchase a further two shares at an exercise price of A$1.43 per share. The attaching warrants were exercisable prior to November 5, 2004. Novogen also issued to these investors a convertible security enabling investors to convert their investment in Glycotex Inc. into Novogen shares at an equivalent Novogen share price of A$5.00 per share.

On November 5, 2004 Glycotex Inc. received a total of A$900,000 following the exercise of 630,000 warrants at an exercise price of A$1.43 per share which were issued as part of the initial private placement. On December 24, 2004 Novogen issued 10,000 of its shares following the conversion of 35,000 Glycotex shares under the terms of the Novogen convertible security.

In April 2005, Glycotex issued 1,664,446 shares of its common stock in a private placement at an equivalent AUD exercise price of $3.11 per share. As a result Glycotex Inc. raised $5,183,000.

On November 29, 2005, Glycotex, Inc. effected a one-for-seven common stock split whereby the 2,377,778 outstanding shares of common stock were split into 16,644,446 shares of common stock. All Glycotex, Inc. share and per share information has been restated to reflect this split.

Capital expenditures

The Company made no major investments of a capital nature during fiscal 2005. 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 company has established 100% owned subsidiary companies in the U.S., Canada, the UK and The Netherlands to market and distribute its range of dietary supplements The Company also entered into agency agreements to distribute its dietary supplements in Singapore and South Africa, Indonesia, Austria and Italy.

Promensil, Trinovin and Rimostil are “dietary supplements” that deliver standardized levels of all four isoflavones — daidzein, genistein, formononetin and biochanin. Promensil, Trinovin and Rimostil are listed with the appropriate regulatory bodies in the countries in which they are sold. Currently Promensil and Trinovin’s regulatory status is under review by the TGA in Australia. 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, under regulations of the TGA. Following the completion of this review, these products could retain this status or be de-listed 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. Refer to “Risk Factors” for further details.

The Company has established a subsidiary company, Marshall Edwards, Inc. to develop and commercialize its anti-cancer drug candidate phenoxodiol. Marshall Edwards, Inc. was listed on the Alternative Investment Market of the London Stock Exchange in May 2002 and on the Nasdaq National Market in December 2003. Novogen currently owns 86.9% of Marshall Edwards, Inc.

In May 1999 the Company established Glycotex, Inc., a U.S. subsidiary of Novogen Inc., to provide a commercial vehicle for Novogen’s glucan technology. Novogen currently owns 84.3% of Glycotex Inc. On September 9, 2005, Glycotex filed a registration statement with the SEC on Form S-1 in respect of an initial public offering of Glycotex’s common stock units. This registration statement has not become effective.

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 interest income, grants received and royalty receipts. See Note 2 to the Consolidated Financial Statements.

Category of Activity

Dietary Supplements

		Year Ended June 30
		2003				2004				2005
		(A$’000)				(A$’000)				(A$’000)
Sales Revenue			19,630				12,720				13,404
Other Revenue			4,626				3,726				4,274
Total Revenue			24,256				16,446				17,678

Geographical Markets

		2003				2004				2005
		(A$’000)				(A$’000)				(A$’000)
Sales Revenue
Australasia			6,228				4,022				4,646
UK & Europe			2,744				2,341				2,518
US & Canada			10,658				6,357				6,240
			19,630				12,720				13,404
Other Revenue
Australasia			4,436				3,321				3,877
UK & Europe			1				4				80
US & Canada			189				401				317
			4,626				3,726				4,274
Total Revenue			24,256				16,446				17,678

The Company earned gross revenues for the year ended June 30, 2005 of A$17.7 million versus A$16.4 million in the previous corresponding period, an increase of A$1.3 million. The increase in revenue was due to increased sales of the Company’s consumer products which were A$13.4 million for the year ended June 30, 2005 compared with A$12.7 million for the previous year, an increase of A$0.7 million or 5%. This increase compares with a 35% decrease in sales revenue in the fiscal year ended June 30, 2004. The other major impact on revenue was due to royalty receipts in line with the Company’s licence agreement with “The Solae Company” (licence transferred to Archer Daniels Midland Company (ADM)) and Licence fees received from Melbrosin International GmbH & Co under the terms of a

licence agreement resulting from the recent granting to Novogen of certain patents relating to our consumer business. These receipts were partially off set by a reduction in START Grant income coinciding with the completion of the START Grant agreements.

Sales in Australasia for the year ended June 30, 2005 were up A$0.6 million or 15% to A$4.6 million from A$4 million for the year ended June 30, 2004. Sales in North America for the year ended June 30, 2005 declined by A$0.2 million to A$6.2 million for the year down from A$6.4 million for the year ended June 30, 2004. Sales in Europe of A$2.5 million for the year were up slightly by A$0.2 million. Sales levels of our consumer products have started to benefit from our targeted promotional programs with sales increasing in Australasia and Europe. We have also made a significant impact on sales levels in the North American market with sales declining by 3%, slowing the rate of the prior year. We expect the market for menopause products to continue to be affected by the debate among medical professionals relating to the safety and efficacy of Hormone Replacement Therapy (HRT) versus natural alternatives. Hormone therapy (HT) has been the internationally accepted treatment for vasomotor symptoms, however, in July 2002, the Women’s Health Initiative and other studies indicated that the use of combined estrogen and progestin HT may be associated with an increased risk of certain adverse medical conditions. Considerable confusion and concerns among health care professionals and women followed. Among the therapies being used as an alternative to HT are complementary and alternative medicines (CAM’s) including herbal extracts. While CAM usage is reportedly increasing, discussion about the safety and efficacy of these treatments continues.

Also it will take some time for confidence to return to the global market. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market. The Company believes that sales revenues are starting to increase in response to focused marketing initiatives, increased sales representation to pharmacies, and extended distribution.

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 the Company’s 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.

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

Phenoxodiol

The Company’s lead anti-cancer drug, phenoxodiol, continued its clinical development program through its 86.9% owned subsidiary company Marshall Edwards, Inc. Phenoxodiol is currently being evaluated in phase II clinical trials for the treatment of prostate cancer, ovarian cancer, squamous cell carcinomas (SCC) of the cervix, vagina and vulva.

During 2005, Marshall Edwards, Inc. made significant progress in the clinical development of phenoxodiol including:

•

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

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

Source and Availability of Raw Materials

Isoflavones

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

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

The existing isoflavone extraction facility at Wyong NSW is currently meeting existing demand for product. The Company has moved its manufacturing facility from New Zealand to the Wyong site. The Company anticipates being able to increase output from the Wyong facility through continuing improvements in yield efficiencies, refinements in the extraction process and the use of higher isoflavone-yielding clover varieties. The Company currently uses contract formulators and packers in both Australia and the U.S. to tablet and to pack the final product. All products sold in the U.S. are produced by a contract formulator and packer in the U.S. 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, cardiovascular program compounds and anti-inflammatory compounds 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 outsource the manufacture of its synthetic drug compounds to third party manufacturers.

Marketing Channels

The Company is currently marketing dietary supplement products 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 (U.S. 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, Ireland and Italy.

The Company is planning to commence a phase III clinical trial of its lead pharmaceutical product candidates. In this way, the potential value of the product candidates will be maximized prior to any alliance being sought. The Company intends to seek alliances with strategic partners to commercialize its pharmaceutical product candidates.

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 Cooperation Treaty) patent applications pending relating to these compounds and a wide range of therapeutic applications.

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

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

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

Intellectual Property Development

During the fiscal year 10 patents were granted over the Company’s intellectual property. The areas with expanding patent coverage include isoflavone formulation and uses, synthetic drug compounds and their use, and a novel food product.

Europe
Patent # 0656786		Use of isoflavone phyto-oestrogen extracts of soy or clover

Australia
Patent # 776131		Food product and process
Patent # 776894		Therapeutic methods and compositions involving isoflavones
Patent # 777632		Health supplements containing isoflavones
Patent # 777561		Health supplements containing phyto-oestrogen, analogues or metabolites thereof
Patent # 777653		Health supplements containing phyto-oestrogen, analogues or metabolites thereof
Patent # 779210		Treatment or prevention of menopausal symptoms and osteoporosis

Singapore
Patent # 90371		Food product and process
Patent # 81773		Production of isoflavone derivatives

New Zealand
Patent # 506063		Therapeutic methods and compositions involving isoflavones

These grants bring the number of Company patents granted to 45.

European Health Supplements Patent No. 0656786 has been filed in the following countries:
Austria, Belgium, Switzerland, Germany (file no. 693 33 624.2-08), Denmark, Spain, France, Greece, Ireland, Italy (file no. 50256BE/2004), Luxembourg, Monaco, Netherlands, Portugal, Sweden and United Kingdom

The following is a list of all published PCT patent applications held by the Company.

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	)		All PCT countries including the USA
2		PROCESS FOR GLUCAN PREPARATION THERAPEUTIC USES OF GLUCAN			(1	)		All PCT countries including the USA
3		THERAPEUTIC METHODS AND COMPOSITIONS INVOLVING ISOFLAVONES			(1) +	(2)		All PCT countries including the USA
4		PREPARATION OF ISOFLAVONES FROM LEGUMES			(1) +	(2)		All PCT countries including the USA
5		TREATMENT OR PREVENTION OF MENOPAUSAL SYMPTOMS AND OSTEOPOROSIS			(1) +	(2)		All PCT countries including the USA
6		COMPOSITIONS AND METHOD FOR PROTECTING SKIN FROM UV INDUCED IMMUNOSUPPRESSION AND SKIN DAMAGE			(1	)		All PCT countries including the USA
7		THERAPY OF ESTROGEN-ASSOCIATED DISORDERS			(1	)		All PCT countries including the USA
8		PRODUCTION OF ISOFLAVONE DERIVATIVES			(1	)		All PCT countries including the USA
9		CARDIOVASCULAR AND BONE TREATMENT USING ISOFLAVONES			(1	)		All PCT countries including the USA
10		COMPOSITIONS AND THERAPEUTIC METHODS INVOLVING ISOFLAVONES AND ANALOGUES THEREOF			(1	)		All PCT countries including the USA
11		FOOD PRODUCT AND PROCESS			(1	)		All PCT countries including the USA
12		REGULATION OF LIPIDS AND/OR BONE DENSITY AND COMPOSITIONS THEREFORE			(1	)		All PCT countries including the USA
13		DIMERIC ISOFLAVONES			(1	)		All PCT countries including the USA
14		TREATMENT OF RESTENOSIS			(1	)		All PCT countries including the USA
15		6-HYDROXY ISOFLAVONES, DERIVATIVES AND MEDICAMENTS INVOLVING THE SAME			(1	)		All PCT countries including the USA
16		THERAPEUTIC METHODS AND COMPOSITIONS INVOLVING COMPOUNDS BASED ON AN ISOFLAV-3-ENE AND ISOFLAVAN STRUCTURE			(1	)		All PCT countries including the USA
17		REPAIR OF DNA MUTAGENIC DAMAGE			(1	)		All PCT countries including the USA
18		SKIN PHOTOAGEING AND ACTINIC DAMAGE TREATMENT			(1	)		All PCT countries including the USA
19		COMBINATION CHEMOTHERAPY COMPOSITIONS AND METHODS			(1	)		All PCT countries including the USA
20		AMINATED ISOFLAVONOID DERIVATIVES AND USES THEREOF			(1	)		All PCT countries including the USA

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.

Licensing Arrangements

In 1997 the Company granted an exclusive license for the use of soy under three Novogen patent applications to Dupont Protein Technologies, Inc. (“PTI”) and its subsequent joint venture with Bunge now called Solae LLC. During fiscal 2005, this licence was transferred to Archer Daniels Midland (ADM). Under the terms of the transfer, ADM assumes the rights and obligations formally held by Solae, including the obligation for royalty and milestone payments under the terms of the licence. In fiscal year ended 2003 the Company received A$2.3 million in royalty payments under this license agreement, and in fiscal 2004 the Company received A$1.0 million. In fiscal 2005 the Company received A$1.7 million royalty in line with the Company’s licence agreement with “The Solae Company” (licence transferred to Archer Daniels Midland Company (ADM)) and A$0.2 million Licence fees received from Melbrosin International GmbH & Co under the terms of a licence agreement resulting from the recent granting to Novogen of certain patents relating to our consumer business. See “Item 5. Operating and Financial Review and Prospects – Operating Results — Fiscal 2005 v. Fiscal 2004.”

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 organization 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 materially complies 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.

Australian Regulatory Requirements

The Therapeutic Goods Act 1989, or 1989 Act, sets out the legal requirements for the import, export, manufacture and supply of pharmaceutical products in Australia. The 1989 Act requires that all pharmaceutical products to be imported into, supplied in, manufactured in or exported from Australia be included in the Australian Register of Therapeutic Goods, or ARTG, unless specifically exempted under the Act.

In order to ensure that a product can be included in the ARTG, a sponsoring company must make an application to the Therapeutic Goods Administration, or TGA. The application usually consists of a form accompanied by data (usually based on the European Union requirements) to support the quality, safety and efficacy of the drug and payment of a fee. Application details are available on the TGA website http://www.tga.gov.au.

The first phase of evaluation, known as the Application Entry Process, is usually a short period during which an application is assessed on an administrative level to ensure that it complies with the basic guidelines. The TGA must decide within 40 working days whether it will accept the application for evaluation.

Once an application is accepted for evaluation, aspects of the data provided are allocated to evaluators, who prepare evaluation reports. The evaluation reports are then sent to the sponsoring company who then has the opportunity to comment on the views expressed within the evaluation report and to submit supplementary data to address any issues raised in the evaluation reports. Following this evaluation, the chemistry and quality control aspects of a product may be referred to a sub-committee of the Australian Drug and Evaluation Committee, or ADEC, to review the evaluation reports.

Once the evaluations are complete, the TGA prepares a summary document on the key issues on which advice will be sought from the ADEC. This summary is sent to the sponsoring company which is able to submit a response to the ADEC dealing with issues raised in the summary and those not previously addressed in the evaluation report. The ADEC provides independent advice on the quality, risk-benefit, effectiveness and access of the drug and conduct medical and scientific evaluations of the application. The ADEC’s resolutions are provided to the sponsoring company after 5 working days after the ADEC meeting.

The TGA takes into account the advice of the ADEC in reaching a decision to approve or reject a product. Any approval for registration on the ARTG may have conditions associated with it.

From the time that the TGA accepts the initial application for evaluation, the TGA must complete the evaluation and make a decision on the registration of the product within 255 working days. The TGA also has a system of priority evaluation for products that meet certain criteria, including where the product is a new chemical entity that it is not otherwise available on the market as an approved product, and is for the treatment of a serious, life-threatening illness for which other therapies are either ineffective or not available.

U.S. Regulatory Requirements

The U.S. Food and Drug Administration, or FDA, and comparable regulatory agencies in foreign countries, regulate and impose substantial requirements upon the research, development, pre-clinical and clinical testing, labeling, manufacture, quality control, storage, approval, advertising, promotion, marketing, distribution and export of pharmaceutical

products including biologics, as well as significant reporting and record-keeping obligations. State governments may also impose obligations in these areas.

In the United States, pharmaceutical products are regulated by the FDA under the Federal Food Drug and Cosmetic Act or FDCA and other laws including in the case of biologics, the Public Health Service Act. We believe, but cannot be certain, that our products will be regulated as drugs by the FDA. The process required by the FDA before drugs may be marketed in the United States generally involves the following:

	•		pre-clinical laboratory evaluations, including formulation and stability testing, and animal tests performed under the FDA’s Good Laboratory Practices regulations to assess potential safety and effectiveness;
	•		submission and approval of an IND, including results of pre-clinical tests and protocols for clinical tests, which must become effective before clinical trials may begin in the United States;
	•		obtaining approval of Institutional Review Boards to administer the products to human subjects in clinical trials;
	•		adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for the product’s intended use;
	•		development of manufacturing processes which conform to FDA current Good Manufacturing Practices, or cGMPs, as confirmed by FDA inspection;
	•		submission of pre-clinical and clinical test results, and chemistry, manufacture and control information on the product to the FDA in a New Drug Approval Application, or NDA; and
	•		FDA review and approval of an NDA, prior to any commercial sale or shipment of a product.

The testing and approval process requires substantial time, effort, and financial resources, and we cannot be certain that any approval will be granted on a timely basis, if at all.

The results of the pre-clinical tests, together with initial specified manufacturing information, the proposed clinical trial protocol, and information about the participating investigators are submitted to the FDA as part of an IND, which must become effective before we may begin human clinical trials. Additionally, an independent Institutional Review Board at each clinical trial site proposing to conduct the clinical trials must review and approve each study protocol and oversee conduct of the trial. An IND becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day period, raises concerns or questions about the conduct of the trials as outlined in the IND and imposes a clinical hold. If the FDA imposes a clinical hold, the IND sponsor must resolve the FDA’s concerns before clinical trials can begin. Pre-clinical tests and studies can take several years to complete, and there is no guarantee that an IND we submit based on such tests and studies will become effective within any specific time period, if at all.

Human clinical trials are typically conducted in three sequential phases that may overlap.

• Phase I: The drug is initially introduced into healthy human subjects or patients and tested for safety and dosage tolerance. Absorption, metabolism, distribution, and excretion testing is generally performed at this stage.

• Phase II: The drug is studied in controlled, exploratory therapeutic trials in a limited number of subjects with the disease or medical condition for which the new drug is intended to be used in order to identify possible adverse effects and safety risks, to determine the preliminary or potential efficacy of the product for specific targeted diseases or medical conditions, and to determine dosage tolerance and the optimal effective dose.

• Phase III: When Phase II studies demonstrate that a specific dosage range of the drug is likely to be effective and the drug has an acceptable safety profile controlled, large-scale therapeutic Phase III trials are undertaken at multiple study sites to demonstrate clinical efficacy and to further test for safety in an expanded patient population.

We cannot be certain that we will successfully complete Phase I, Phase II, or Phase III testing of our products within any specific time period if at all. Furthermore the FDA, the Institutional Review Board or we may suspend or terminate clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

Results of pre-clinical studies and clinical trials, as well as detailed information about the manufacturing process, quality control methods, and product composition, among other things, are submitted to the FDA as part of an NDA seeking approval to market and commercially distribute the product on the basis of a determination that the product is safe and effective for its intended use. Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured and will not approve the product unless cGMP compliance is satisfactory. If applicable regulatory criteria are not satisfied, the FDA may deny the NDA or require additional testing or information. As a condition of approval, the FDA also may require post-marketing testing or surveillance to monitor the product’s safety or efficacy. Even after an NDA is approved, the FDA may impose additional obligations or restrictions (such as labeling changes), or even suspend or withdraw a product approval on the basis of data that arise after the product reaches the market, or if compliance with regulatory standards is not maintained. We cannot be certain that any NDA we submit will be approved by the FDA on a timely basis, if at all. Also, any such approval may limit the indicated uses for which the product may be marketed. Any refusal to approve, delay in approval, suspension or withdrawal of approval, or restrictions on indicated uses could have a material adverse impact on our business prospects.

Each NDA must be accompanied by a user fee, pursuant to the requirements of the Prescription Drug User Fee Act, or PDUFA, and its amendments. According to the FDA’s fee schedule, effective on October 1, 2004 for the fiscal year 2005, the user fee for an application requiring clinical data, such as an NDA, is $672,000. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual product fee for prescription drugs and biologics ($41,710), and an annual establishment fee ($262,200) on facilities used to manufacture prescription drugs and biologics. A written request can be submitted for a waiver for the application fee for the first human drug application that is filed by a small business, but there are no waivers for product or establishment fees. We are not at the stage of development with our products where we are subject to these fees, but they are significant expenditures that will be incurred in the future and must be paid at the time of application submissions to FDA.

Satisfaction of FDA requirements typically takes several years. The actual time required

varies substantially, based upon the type, complexity, and novelty of the pharmaceutical product, among other things. Government regulation imposes costly and time-consuming requirements and restrictions throughout the product life cycle and may delay product marketing for a considerable period of time, limit product marketing, or prevent marketing altogether. Success in pre-clinical or early stage clinical trials does not assure success in later stage clinical trials. Data obtained from pre-clinical and clinical activities is not always conclusive and may be susceptible to varying interpretations that could delay, limit, or prevent marketing approval. Even if a product receives marketing approval, the approval is limited to specific clinical indications. Further, even after marketing approval is obtained, the discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market.

After product approval, there are continuing significant regulatory requirements imposed by the FDA, including record-keeping requirements, obligations to report adverse side effects in patients using the products, and restrictions on advertising and promotional activities. Quality control and manufacturing procedures must continue to conform to cGMPs, and the FDA periodically inspects facilities to assess cGMP compliance. Additionally, post-approval changes in ingredient composition, manufacturing processes or facilities, product labeling, or other areas may require submission of an NDA Supplement to the FDA for review and approval. New indications will require additional clinical tests and submission of an NDA Supplement. Failure to comply with FDA regulatory requirements may result in an enforcement action by the FDA, including Warning Letters, product recalls, suspension or revocation of product approval, seizure of product to prevent distribution, impositions of injunctions prohibiting product manufacture or distribution, and civil and criminal penalties. Maintaining compliance is costly and time-consuming. We cannot be certain that we, or our present or future suppliers or third-party manufacturers, will be able to comply with all FDA regulatory requirements, and potential consequences of noncompliance could have a material adverse impact on our business prospects.

The FDA’s policies may change, and additional governmental regulations may be enacted that could delay, limit, or prevent regulatory approval of our products or affect our ability to manufacture, market, or distribute our products after approval. Moreover, increased attention to the containment of healthcare costs in the United States and in foreign markets could result in new government regulations that could have a material adverse effect on our business. Our failure to obtain coverage, an adequate level of reimbursement, or acceptable prices for our future products could diminish any revenues we may be able to generate. Our ability to commercialize future products will depend in part on the extent to which coverage and reimbursement for the products will be available from government and health administration authorities, private health insurers, and other third-party payers. European Union and U.S. government and other third-party payers increasingly are attempting to contain healthcare costs by consideration of new laws and regulations limiting both coverage and the level of reimbursement for new drugs. We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the United States or abroad.

Our activities also may be subject to state laws and regulations that affect our ability to develop and sell our products. We are also subject to numerous federal, state, and local laws relating to such matters as safe working conditions, clinical, laboratory, and manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws and regulations now or in the future, and the failure to comply may have a material adverse impact on our business prospects.

The FDCA (Federal Food Drug and Cosmetic Act) includes provisions designed to facilitate and expedite the development and review of drugs and biological products intended for treatment of serious or life-threatening conditions that demonstrate the potential to address unmet medical needs for such conditions. These provisions set forth a procedure for designation of a drug as a “fast track product.” The fast track designation applies to the combination of the product and specific indication for which it is being studied. A product designated as fast track is ordinarily eligible for additional programs for expediting development and review, but products that are not in fast track drug development programs may also be able to take advantage of these programs. These programs include approval, priority review of NDAs and accelerated approval. Drug approval under the accelerated regulations may be based on evidence of clinical effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. A post-marketing clinical study will be required to verify clinical benefit, and other restrictions to assure safe use may be imposed.

Under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Patent Act”), a sponsor may obtain marketing exclusivity for a period of time following FDA approval of certain drug applications, regardless of patent status, if the drug is a new chemical entity or if new clinical studies were required to support the marketing application for the drug. This marketing exclusivity prevents a third party from obtaining FDA approval for an identical or nearly identical drug under an Abbreviated New Drug Application (“ANDA”) or a “505(b)(2) New Drug Application.” The statute also allows a patent owner to obtain an extension of applicable patent terms for a period equal to one-half the period of time elapsed between the filing of an IND and the filing of the corresponding NDA plus the period of time between the filing of the NDA and FDA approval, with a five year maximum patent extension. We cannot be certain that Novogen will be able to take advantage of either the patent term’ extension or marketing exclusivity provisions of these laws.

The Best Pharmaceuticals for Children Act, signed into law on January 4, 2002, provides an additional six months of marketing exclusivity for new or marketed drugs, for which specific pediatric studies were conducted at the written request of the FDA. On December 3, 2003, the Pediatric Research Equity Act was signed into law, authorizing the FDA to require pediatric studies for drugs and biological products to ensure the drugs’ or products’ safety and effectiveness in children. This Act required that New Drug Applications (“NDAs”) or supplements to NDAs contain data assessing the safety and effectiveness for the claimed indication in all relevant pediatric subpopulations. Dosing and administration must be supported for each pediatric subpopulation for which the drug is safe and effective. The FDA may grant deferrals for submission of data, or full or partial waivers. We cannot be certain that we will be able to take advantage of these statutory pediatric marketing exclusivity provisions.

European Union Regulatory Requirements

Outside the United States, our ability to market our products will also be contingent upon receiving marketing authorizations from the appropriate regulatory authorities and compliance with applicable post-approval regulatory requirements. Although the specific requirements and restrictions vary from country to country, as a general matter, foreign regulatory systems include risks similar to those associated with FDA regulation, described above. Under EU regulatory systems, marketing authorizations may be submitted either under a centralized or decentralized procedure. Under the centralized procedure, a single application to the European Medicines Evaluation Agency (EMEA) leads to an approval granted by the European Commission which permits the marketing of the product throughout the EU. The centralized procedure is mandatory for certain classes of medicinal products,

but optional for others. For example, all medicinal products developed by certain biotechnological means must be authorized via the centralized procedure. We assume that the centralized procedure will apply to our products that are developed by means of a biotechnology process. The decentralized procedure provides for mutual recognition of nationally approved decisions and is used for products that are not required to be authorized by the centralized procedure. Under the decentralized procedure, the holders of a national marketing authorization may submit further applications to the competent authorities of the remaining member states, which will then be requested to recognize the original authorization based upon an assessment report prepared by the original authorizing competent authority. The recognition process should take no longer than 90 days, but if one member state makes an objection, which under the legislation can only be based on a possible risk to human health, we have the option to withdraw the application from that country or take the application to arbitration by the Committee for Medicinal Products for Human Use (CHMP) of the EMEA. If a referral for arbitration is made, the procedure is suspended, and in the intervening time, the only EU country in which the product can be marketed will be the country where the original authorization has been granted, even if all the other designated countries are ready to recognize the product. The opinion of the CHMP, which is binding, could support or reject the objection or alternatively could reach a compromise position acceptable to all EU countries concerned. Arbitration can be avoided if the application is withdrawn in the objecting country, but once the application has been referred to arbitration, it cannot be withdrawn. The arbitration procedure may take an additional year before a final decision is reached and may require the delivery of additional data.

As with FDA approval we may not be able to secure regulatory approvals in Europe in a timely manner, if at all. Additionally, as in the United States, post-approval regulatory requirements, such as those regarding product manufacture, marketing, or distribution, would apply to any product that is approved in Europe, and failure to comply with such obligations could have a material adverse effect on our ability to successfully commercialize any product.

New European Legislation was introduced in 2001 designed to harmonize the regulation of clinical trials across the EU. This legislation has now been implemented in all EU countries. In addition, the entire EU regulatory regime has recently undergone a significant revision and new laws have been introduced that amend the current EU Medicines Directive. These amendments came into effect on October 30, 2005 and are currently being implemented on a country by country basis. For example, the centralized procedure for the authorization of new medicines will be compulsory for biotechnology products and those developed for cancer and other specified diseases and disorders. Accordingly, there is a marked degree of change and uncertainty both in the regulation of clinical trials and in respect of marketing authorizations which face us for our products in Europe.

Dietary Supplements

The Company’s products, Promensil, Trinovin and Rimostil are classified as “dietary supplements”. “Dietary supplements”, although subject to the FDCA, are treated differently than pharmaceuticals and are the subject of recent legislation known as the Dietary Supplement Health and Education Act of 1994 (the “Dietary Supplement Act”). The Dietary Supplement Act defines dietary supplements, and regulates claims and labeling of dietary supplements. Under the Dietary Supplement Act, a company is responsible for determining that the dietary supplements it manufactures or distributes are safe, and that any representations or claims made about them are substantiated by adequate evidence to show

that they are not false or misleading. The FDA has proposed cGMP regulations for dietary supplements. The Company believes that Promensil, Trinovin and Rimostil, the products of the Company currently sold in the U.S., 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 U.S. which informed the Company that it is compliant with the FDA’s proposed cGMP requirements. 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 U.S. be manufactured according to the FDA’s cGMP standards. The discussion below generally relates to pharmaceutical products and not products characterized as “dietary supplements”.

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 enforcement 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 U.S. are produced by a contract formulator and packer who has informed the Company that its facilities are compliant with the FDA’s cGMP regulations.

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” have prepared a consolidated financial report incorporating the entities that it controlled during the financial year, which included the following controlled entities:

Name of Entity		Country of Incorporation		Ownership %
Novogen Laboratories Pty Ltd		Australia			100
Novogen Research Pty Ltd		Australia			100
Central Coast Properties Pty Ltd		Australia			100
Phytosearch Pty Ltd		Australia			100
Phytogen Pty Ltd		Australia			100
Glycotex Pty Ltd		Australia			100
Norvogen Pty Ltd		Australia			100
Novogen Inc		USA			100
Glycotex Inc		USA			84.3
Novogen Limited (UK)		UK			100
Promensil Limited		UK			100
Novogen BV		Netherlands			100
Novogen New Zealand Limited		New Zealand			100
Novogen Canada Limited		Canada			100
Marshall Edwards Inc		USA			86.9
Marshall Edwards Pty Limited*		Australia			86.9

Property, Plants and Equipment

The Company’s major isoflavone extraction manufacturing plant is located in Wyong in New South Wales. This plant is used to manufacture the active raw material used in the Company’s dietary supplement products. 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 is leased to the Company and such leased equipment is pledged as security for the lease liability The manufacturing capacity of the Wyong extraction and manufacturing facility is adequate to produce the forecasted isoflavone extract requirements for at least the next two years.

The pilot plant used for the manufacture of the phenoxodiol clinical trial material and other pharmaceutical product candidates is located in the Company’s leased premises in North Ryde, Sydney. These premises are also used as Novogen’s corporate headquarters.

The Company owns the majority of the equipment used in the pilot plant. The plant has enough capacity to produce Phase II clinical trial quantities of the company’s product candidates. The company will need to identify alternate sources of supply for phase III clinical trial volumes and for future commercial quantities.

Item 5. Operating and Financial Review and Prospects

The following discussion and analysis should be read in conjunction with “Item 18. Financial Statements” included below. Operating results are not necessarily indicative of results that may occur in future periods. This discussion and analysis contains forward-looking statements that involve risks uncertainties and assumptions. The actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors including, but not limited to, those set forth under “Forward-Looking Statements” and “Risk Factors” in Part 1, Item 3. “Key Information” included above in this Annual Report. All forward-looking statements included in this document are based on the information available to us on the date of this document and we assume no obligation to update any forward-looking statements contained in this Annual Report.

Application of Critical Accounting Policies

The summary of significant accounting policies are described in Note 1 to the Consolidated Financial Statements under Item 18 of this Annual Report. A reconciliation of operating results to U.S. generally accepted accounting principles (“US GAAP”) is included in Note 29 to the Consolidated Financial Statements under Item 18 of this Annual Report

Revenue Recognition

Revenues from product sales and manufacturing revenue are recognized at the time of shipment and a provision is made at that time for estimated future credits, chargebacks, sales discounts, and returns. These sales provision accruals are presented as an increase in accounts payable balances. The Company continually monitors the adequacy of the accruals by comparing the actual payments to the estimates used in establishing the accruals. The Company ships product to customers primarily FOB and utilizes the following criteria to determine appropriate revenue recognition: pervasive evidence of an arrangement exists, delivery has occurred, selling price is fixed and determinable and collection is reasonably assured. Sales terms are generally 30 days.

Royalties under license agreements with third parties are recognized when earned through the sale of the product by the licensor net of any estimated future credits, charge-backs, sales discounts and refunds.

Allowance for doubtful debts

The Company maintains an accounts receivable allowance for an estimated amount of losses that may result from the customer’s inability to pay for the product purchased. If the financial condition of 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. The Company reviews 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.

Results of Operations

The following table provides a summary of revenues and expenses to supplement the more detailed discussions below:

STATEMENT OF FINANCIAL PERFORMANCE
Year ended June 30, 2005

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

Operating Results — Fiscal 2005 v Fiscal 2004

Revenue

Total revenue increased by A$1.3 million or 7.5% to A$17.7 million in fiscal 2005 from A$16.4 million in fiscal 2004. The increase was primarily due to the increase in sales revenue from sales of the Company’s consumer health care products. The other major impact on revenue was due to royalty receipts in line with the Company’s license agreement with “The Solae Company” (license transferred to Archer Daniels Midland Company (ADM)) and License fees received from Melbrosin International GmbH & Co under the terms of a license agreement resulting from the recent granting to Novogen of certain patents relating to our consumer business.

Total revenue, adjusted for U.S. GAAP, increased by A$1.7 million from A$14.2 million in fiscal 2004 to A$15.9 million in 2005. Revenue under U.S. GAAP is reduced by certain trade

promotions which are treated as discounts to Sales Revenue. These trade promotion expenditures are treated as a marketing expense under Australian GAAP. Other Revenue under U.S. GAAP is also reduced by interest revenue being recognized in Other Income whereas under Australian GAAP interest income is recognized in Other Operating Revenue. See Note 29 “Differences between Australian GAAP and U.S. GAAP” for detailed U.S. GAAP formatted Statement of Financial Performance.

The consumer products sales increased by A$0.7 million to A$13.4 million in fiscal 2005 from A$12.7 in fiscal 2004. Sales in Australasia for the year ended June 30, 2005 were up A$0.6 million or 15% to A$4.6 million from A$4 million for the previous year. Sales in North America reduced by A$0.2 million to A$6.2 million for the year down from A$6.4 million for the previous year. Sales in Europe of A$2.5 million for the year were up slightly by A$0.2 million. Sales levels of our consumer products have started to benefit from our targeted promotional programs with sales increasing in Australasia and Europe. We have also made a significant impact on sales levels in the North American market with sales declining by 3%, slowing the rate of the prior year. We expect the market for menopause products to continue to be affected by the safety and efficacy of HRT and the natural alternatives debate. Hormone therapy (HT) has been the internationally accepted treatment for vasomotor symptoms, however, in July 2002, the Women’s Health Initiative and other studies indicated that the use of combined estrogen and progestin HT may be associated with an increased risk of certain adverse medical conditions. Considerable confusion and concerns among health care professionals and women followed. Among the therapies being used as an alternative to HT are complementary and alternative medicines (CAM’s) including herbal extracts. While CAM usage is reportedly increasing, discussion about the safety and efficacy of these treatments continues.

Also it will take some time for confidence to return to the global market. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market. Sales revenues are starting to increase in response to focused marketing initiatives, increased sales representation to pharmacies, and extended distribution.

Other Revenue

Other Revenue includes revenue received from non-operating activities, such as, research grants received from the Australian government, royalties received under the Company’s license agreements and proceeds from the sale of Company assets.

The Company’s other revenue increased by A$0.6 million to A$4.3 million in fiscal 2005 from A$3.7 million in fiscal 2004. There was an increase in royalties under the license agreement with Solae LLC (now transferred to ADM) during the year of A$0.7 million, an increase in license fees of A$0.2 million and an increase in other income of A$0.4 million. These increases were offset partially by decreased receipts of funds from government start grants of A$0.7 million. The start grant program has now been completed and all revenue have now been received under the terms of the grants.

Costs and Expenses

The Company’s Costs and Expenses are comprised of Cost of Goods Sold, Research and Development, Selling and Promotions, Shipping and Handling, General and Administrative Expenses and Currency Gains and Losses. The Company’s Total Costs and Expenses (excluding interest expense) increased A$1.0 million, or 3% in fiscal 2005 to A$29.9 million

from A$28.9 million in fiscal 2004, primarily due to research and development expenses which increased by A$1.9 million to A$10.2 million in fiscal 2005 from A$8.3 in fiscal 2004. This increase reflects the higher costs associated with the pre-clinical and clinical trial programs. Cost of Goods Sold decreased by A$0.1 million to A$4.7 million in fiscal 2005 from A$4.8 million in fiscal 2004. The cost of Selling and Promotional expenses reduced by approximately A$1.4 million to A$8.4 million in fiscal 2005 from A$9.8 million in fiscal 2004. The reduction was due to the Company’s continued strategy of conserving cash by pursuing a more targeted promotional program. General and Administrative expenses increased by A$0.5 million in fiscal 2005 to A$6.2 million from A$5.7 million in fiscal 2004.

Net Loss

The Company’s Net Loss attributable to members of Novogen increased by approximately A$0.2 million, or 2% in fiscal 2005 to A$11.1 million from A$10.9 million in fiscal 2004.

Operating Results — Fiscal 2004 v Fiscal 2003

Revenue

Total revenue decreased by A$7.9 million or 32% to A$16.4 million in fiscal 2004 from A$24.3 million in fiscal 2003. The reduction was primarily due to the reduction in sales revenue from sales of the Company’s consumer health care products and the phasing out of royalty receipts in line with the license agreement with Solae LLC.

Total revenue, adjusted for U.S. GAAP, reduced by A$8.1 million from A$22.3 million in fiscal 2003 to A$14.2 million in 2004. Revenue under U.S. GAAP is reduced by certain trade promotions which are treated as discounts to Sales Revenue. These trade promotion expenditures are treated as a marketing expense under Australian GAAP. Other Revenue under U.S. GAAP is also reduced by interest revenue being recognized in Other Income whereas under Australian GAAP interest income is recognized in Other Operating Revenue. See Note 29 “Differences between Australian GAAP and U.S. GAAP” for detailed U.S. GAAP formatted Statement of Financial Performance.

The consumer products sales decreased by A$6.9 million to A$12.7 million in fiscal 2004 from A$19.6 in fiscal 2003. Sales in Australia and New Zealand for the year ended June 30, 2004 were down A$2.2 million in fiscal 2004 to A$4.0 million from A$6.2 million for fiscal 2003. Sales in North America decreased by A$4.3 million to A$6.4 million in fiscal 2004 down from A$10.7 million for fiscal 2003. Sales in Europe of A$2.3 million for fiscal 2004 were down slightly by A$0.4 million. Sales revenues were affected by the increased value of the Australian Dollar versus the currencies of major trading partners, particularly those trading in USD. The adverse currency movements reduced reported sales by A$1.3 million for the year. Sales were also negatively impacted by the conflicting publicity and conflicting professional opinions about the safety and efficacy of HRT and natural menopause products and the mass recall of many products in the Australian market produced by an unrelated company under investigation for unsatisfactory quality standards. The Company expects the market for menopause products to continue to be affected by the safety and efficacy of HRT and natural alternatives debate. Also it will take some time for confidence to return to the Australian market. The Company will continue to position its products as the most clinically tested natural alternatives in the menopause market.

Other Revenue

Other Revenue includes revenue received from non-operating activities, such as, research grants received from the Australian government, royalties received under the Company’s license agreement with ADM (Archer Daniels Midland) (transferred from Solae formally Protein Technologies International, Inc.) and proceeds from the sale of Company assets.

The Company’s other revenue decreased by A$0.9 million to A$3.7 million in fiscal 2004 from A$4.6 million in fiscal 2003. There was a reduction in royalties from the license agreement with ADM during the year of A$1.3 million offset partially by increased receipts of funds from government start grants of A$0.4 million.

Costs and Expenses

The Company’s Costs and Expenses are comprised of Cost of Goods Sold, Research and Development, Selling and Promotions, Shipping and Handling, General and Administrative Expenses and Currency Gains and Losses. The Company’s Total Costs and Expenses (excluding interest expense) decreased A$5.9 million, or 17% in fiscal 2004 to A$28.9 million from A$34.8 million in fiscal 2003, primarily due to the decrease in cost of goods sold in line with lower sales volumes. Cost of Goods Sold decreased by A$2.4 million to A$4.8 million in fiscal 2004 from A$7.2 million in fiscal 2003. The cost of Selling and Promotional expenses reduced by approximately A$2.9 million to A$9.8 million in fiscal 2004 from A$12.7 million in fiscal 2003. The reduction was due to the Company’s continued strategy of conserving cash by pursuing a more targeted promotional program. These savings were partially offset by an inventory write-down provision of A$0.7 million for Rimostil following its withdrawal from the Australian market. General and Administrative expenses decreased by A$0.5 million in fiscal 2004 to A$5.7 million from A$6.2 million in fiscal 2003. This reduction was due to favorable currency movements.

Net Loss

The Company’s Net Loss attributable to members of Novogen increased by approximately A$0.4 million, or 4% in fiscal 2004 to A$10.9 million from A$10.5 million in fiscal 2003.

Liquidity and capital resources

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

At June 30, 2005, the Company had cash balances of A$47.3 million, a decrease of A$11.1 million from the previous year’s balance of A$58.4 million. Cash was used to fund the company’s operations including the clinical trial program for the anti-cancer drug phenoxodiol, being undertaken by Novogen’s 86.9% owned subsidiary Marshall Edwards, Inc. Cash resources were also used to fund the ongoing efforts in the areas of cardiovascular and anti-inflammatory research and development. Cash was also used to supplement the cash flows from the consumer products business and general corporate purposes.

During November 2004, Glycotex, Inc., the Company’s U.S. subsidiary received a total of A$0.9 million following the exercise of 90,000 warrants at an exercise price of A$10.00 per share. The warrants were issued as part of the initial private placement made by Glycotex to fund a clinical trial of its experimental wound healing compound glucoprime. Also, Novogen issued 10,000 of its shares following the conversion of 5,000 Glycotex shares under the

terms of the Novogen convertible security. Glycotex, Inc. holds a license from Novogen Limited for the development of its Glucan technology.

In April 2005 Glycotex issued a further 237,778 shares of common stock in a private placement. The proceeds of the placement amounted to $5.183 million. As a result of the above transactions, Novogen retains 84.3% of Glycotex Inc.

On September 9, 2005, Glycotex filed a registration statement with the SEC on Form S-1 in respect of an initial public offering. This registration statement has not become effective.

The Company invests its cash and cash equivalents in interest bearing facilities with various maturity dates. At the end of fiscal 2005, deposits amounting to A$27.8 million had a weighted average interest rate of 4.26% and cash deposits of A$19.4 million had a weighted average interest rate of 1.34%.

At the end of fiscal 2005, the Company had outstanding interest bearing liabilities in the form of lease liabilities of A$0.8 million. These leases have an average lease term of 4 years. The average interest rate implicit in the leases is 8.33% (2004: 8.42%).

The Company has arranged finance lease facilities with St George Bank Limited, an Australian commercial bank, of A$4.0 million, of which A$2.5 million was unused at the end of fiscal 2005.

The Company does not hedge its foreign exchange exposures. The Company, however, continues to minimise foreign exchange risk by having international sales and marketing expenses being denominated in local currencies. See “Item 11 Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk”.

During fiscal 2005, the Company had net cash outflows from operating activities of A$12.8 million. Included in this amount are cash receipts of A$1.3 million of interest received from invested cash balances, A$0.3 million from the proceeds of Government grants being primarily the START Grants for research and development and A$1.4 million royalty received from ADM pursuant to a license agreement between the Company and PTI. See “Item 4. Information on the Company- Business Overview – Clinical Developments — License Agreements”.

It is the opinion of the Company that the current level of working capital is sufficient to meet present requirements. There are no commitments for capital expenditure outstanding at the end of the financial year.

Table of Contractual Obligations

The following table summarizes our future payment obligation and commitments as at June 30, 2005.

		Payments due by period
In $000’s		Total				Less than 1 year				1-3 years				4-5 years				After 5 years
Operating Leases			1,104				199				713				192				—
Finance Leases			782				767				15				—				—
Other Expenditure Commitments			4,163				3,556				607				—				—
Total Contractual Cash Obligations			6,049				4,522				1,335				192				—

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Research and Development

Major advances were made during the year on the Group’s clinical development program.

Phenoxodiol

The Group’s lead anti-cancer drug, phenoxodiol, continued its clinical development program through its 86.9% owned subsidiary company Marshall Edwards, Inc. Phenoxodiol is currently being evaluated for safety and effectiveness in phase II clinical trials for the treatment of prostate cancer, ovarian cancer, squamous cell carcinomas (SCC) of the cervix, vagina and vulva and renal cancer. Phenoxodiol is an investigational drug, and has not been approved for marketing.

During 2005, Marshall Edwards, Inc. made significant progress in the clinical development of phenoxodiol including:

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

The Company spent A$10.2 million on gross R&D expenditure during fiscal 2005. The Company spent A$8.3 million on gross R&D expenditure in fiscal 2004.

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 costs of R&D projects are not estimated on a project by project basis and to analyse costs between projects could only be performed on an arbitrary and subjective basis.

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

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

Trend Information

Sales of the Company’s dietary supplements increased in fiscal 2005 compared to fiscal 2004. Sales levels of our consumer products have started to benefit from our targeted promotional programs with sales increasing in Australasia and Europe. We have also made a significant impact on sales levels in the North American market with sales declining by 3%, slowing the rate of the prior year. We expect the market for menopause products to continue to be affected by the safety and efficacy of HRT and natural alternatives debate. Also it will take some time for confidence to return to the global market. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market. Sales revenues are starting to increase in response to focused marketing initiatives, increased sales representation to pharmacies, and extended distribution.

The Company expects to continue its expenditure on research and development and the impact on cash resources and results from operations of this expenditure will vary with the extent and timing of the future clinical trial program. It is not possible to make accurate predictions of future operating results.

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)
Professor G. E. Kelly (Executive Director) (resigned September 2, 2005)
Mr. P. B. Simpson
Professor P. J. Nestel AO
Dr. L. C. Read
Mr. G. Leppinus (appointed February 24, 2005)

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. Johnston Non-Executive Chairman
Dip Eng (Production)

Non-Executive Director since 1997, Mr. Johnston was elected chairman of the Novogen Group with effect from 1 January 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. Mr. Johnston is also a Director of Lipa Pharmaceuticals Limited.

During the last three years Mr. Johnston has served as a director of the ASX listed company, Lipa Pharmaceuticals Limited and as a director for the NASDAQ listed, Novogen subsidiary, Marshall Edwards, Inc. In September 2005, Mr. Johnston was appointed a director of the Company’s subsidiary Glycotex, Inc.

Christopher Naughton Managing 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 ANU and in Law from the UNSW. 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 20 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.

During the last three years Mr. Naughton has served as CEO and director for the NASDAQ listed, Novogen subsidiary, Marshall Edwards, Inc. Mr. Naughton has been a director of the Company’s subsidiary, Glycotex, Inc. from 1999 and was appointed Chairman in September 2005.

Professor Graham E. Kelly Executive Director
BSc(Vet), BVSc, PhD

Executive Director since 1994, Professor Kelly is founder and was the first Managing Director of Novogen Limited. Professor Kelly was Chairman of the Novogen Group until 31 December 2000, a position he had held since March 1997. He has spent nearly 30 years in medical research involving drug development, immunology, surgery and cancer. Professor Kelly was Senior Research Fellow in Experimental Surgery in the Faculty of Medicine at the University of Sydney and was appointed an Adjunct Professor of the University in May 2004. He developed the ß-1, 3-Glucan and Isoflavone intellectual property now owned by the Novogen Group. Professor Kelly resigned from the board of Novogen Limited on September 2 ,2005 in order to focus on the development and expansion of Novogen U.S. subsidiary companies Marshall Edwards, inc and Glycotex, Inc.

During the last three years Professor Kelly has served as Chairman and director for the NASDAQ listed, Novogen subsidiary, Marshall Edwards, Inc. In September 2005, Professor Kelly was appointed Director and CEO of Glycotex, Inc.

Professor Paul J. Nestel Non-Executive Director
AO MD, FTSE, FRACP, FAHA, FCSANZ

Professor Nestel is currently a 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 (Australasia) and is a member of the board of directors of ILSI South East Asia. He was formally Clinical Professor in Medicine, The Flinders University of South Australia. Professor Nestel has been and remains a member of many national and international committees for research and policy on cardiovascular disease. He has published over 400 scientific and medical papers and is a Fellow of the Australian Academy of Technological Sciences and Engineering, a Fellow of the American Heart Association and a Fellow of the Cardiac Society of Australia and New Zealand. Professor Nestel is an Officer of the Order of Australia.

During the last three years Professor Nestel has served as a director for the NASDAQ listed, Novogen subsidiary, Marshall Edwards, Inc.

Peter B. Simpson Non-Executive Director
MPharm, PhC

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 an effective cure for influenza and the licensing of that discovery to Glaxo Limited. Mr. Simpson is currently associated with a wide range of biotechnology and pharmaceutical interests, predominately associated with the conduct of late stage clinical studies and the commercialisation of Australian biomedical discoveries.

During the last three years Mr. Simpson has served as a director for the ASX listed company Norwood Abbey Limited (October 1999 to November 2002).

Dr. Leanna C. Read Non-Executive Director
BAgSc (Hons), PhD, FTSE

Dr. Read was appointed Non-Executive Director in September 2003. Dr 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. Dr. Read holds a professorial appointment at Flinders University and has published over 90 scientific papers. Board appointments currently include the Prime Minister’s Science and Engineering Council and the Australian Proteome Analysis Facility Inc. Dr. 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.

Geoffrey M. Leppinus Non-Executive Director
BEc FCA

Non-executive Director since February 2005, Mr. Leppinus was, until July 2002, a Senior Audit and Advisory partner of KPMG with over 30 years experience in professional accounting and auditing. At KPMG he was responsible for the audit of a number of large public companies and the Australian subsidiaries of U.S. listed public corporations. Mr. Leppinus has experience in the assessment of systems of internal control over financial reporting and the financial reporting requirements applicable to listed public companies. He has also had a wide range of experience in conducting due diligence for business acquisitions. Mr. Leppinus has served as a member of the Australian Auditing Standards Board and member of the State Council of the Institute of Chartered Accountants in Australia.

Executive Officers’ profiles

Professor Alan J. 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. In 1998, Professor Husband was awarded the Pfizer International Distinguished Immunologist Award by the Veterinary Immunology Committee of the International Union of Immunological Societies ,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.

David R. 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.

In September 2005, Mr. Seaton was appointed a director of Glycotex, Inc.

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.

Bryan Palmer — Operations General Manager

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

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 the U.S. 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.

Ronald L. Erratt — Company Secretary
FINA

Mr. Erratt has been the Company Secretary of Novogen Limited since it floated on the Australian Stock Exchange in 1994. He is also the Company Secretary for all the wholly owned subsidiaries of Novogen. Mr. Erratt has over 30 years experience in accounting and commercial roles. Prior to joining Novogen he was the Director of Superannuation Fund Administration at Towers Perrin, an international firm of Actuaries and Management Consultants.

Compensation

The Remuneration 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, 2004 — June 30, 2005

		Annual emoluments												Long term emoluments																				Total
														Termination
						Committee								& similar				Options granted													Super-
		Base fee				fee				Other				payments								Amortised cost				Remuneration				annuation
		$				$				$				$				Number				$				%				$				$
PA Johnston			90,588				14,000				—				—				—				136				0.12	%			9,412				114,136
C Naughton			507,724				—				53,643				—				—				—				—				45,696				607,063
GE Kelly			334,314				—				29,981				—				—				—				—				30,088				394,383
PJ Nestel AO			70,000				12,000				—				—				—				—				—				—				82,000
LC Read			36,368				4,000				—				—				—				—				—				3,632				44,000
PB Simpson			35,376				16,000				—				—				—				136				0.24	%			4,624				56,136
G Leppinus *			15,160				1,660				—				—				—				—				—				1,513				18,333
			1,089,530				47,660				83,624				—				—				272				—				94,965				1,316,051

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.

Mr. Johnston and Professor Nestel are also directors of Marshall Edwards, Inc and receive remuneration in the form of directors fees of A$30,000 per annum. These amounts have been included in the above table.

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.

Compensation of the Executive Officers of the Company and the consolidated entity July 1, 2004 — June 30, 2005.

		Annual emoluments								Long term emoluments
										Termination
										& similar				Options granted												Super-
		Base fee				Other				payments								Amortised cost				Remuneration				annuation				Total
		$				$				$				Number				$				%				$				$
AJ Husband			286,818				51,155				—				22,592				40,940				10.12	%			25,814				404,727
DR Seaton			298,526				20,085				—				22,592				41,031				10.62	%			26,867				386,509
WJ Lancaster (USA)			186,822				6,197				—				10,224				21,595				9.21	%			19,915				234,529
BM Palmer			142,942				33,594				—				12,392				23,366				10.98	%			12,865				212,767
CD Kearney			164,376				22,951				—				12,088				21,417				9.58	%			14,794				223,538
RL Erratt			152,026				20,157				—				12,264				23,774				11.34	%			13,682				209,639
			1,231,510				154,139				—				92,152				172,123								113,937				1,671,709

The terms ‘Director’ and ‘Officer’ have been treated as mutually exclusive for the purposes of this disclosure. Executive director’s remuneration has been disclosed under Directors remuneration. Executive Officers are those directly accountable and responsible for the operational management and strategic direction of the Company and include the Company Secretary.

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$597,000 during fiscal 2005 for employee superannuation benefits and pension benefits.

Board Practices

Novogen Board of Directors

Year First

Current Term

Name

Postion Held

Appointed

Expires

P A Johnston

Chairman

1997

October-2006

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-2008

G M Leppinus

Director

2005

October-2008

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. For more information about the term and details of the Managing Director’s term refer to the Employment contract attached.

Mr. Geoffrey Leppinus was appointed to the board on February 24, 2005.

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.

From September 2, 2005 the Board comprises six Directors of whom five are non-executive Directors. In addition the Board has established the following Committees — Audit, Remuneration, and Capital Works Committees.

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

The Board has established an audit committee, which operates under a charter approved by the board. 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, the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information as well as non-financial considerations such as bench marking of operational key performance indicators. 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 consolidated entity to the Audit Committee.

The committee also provides the board with additional assurance regarding the reliability of financial information for inclusion in the financial reports. All members of the audit committee are independent non-executive directors. The members of the audit committee during the year were Geoffrey Leppinus (Chairman), Peter Simpson, Paul Nestel AO, Philip Johnston and Leanna Read.

Remuneration Committee

The Remuneration Committee has been formed in order to review the remuneration of the Executive Directors and key executives by reference to independent data, external professional advice and the requirements to retain high quality management.

The committee comprises the Non-Executive Directors Peter Simpson (Chairman), Paul Nestel AO and Philip Johnston.

Capital Works Committee

The Capital Works 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 AO and Christopher Naughton.

Executive Directors’ Employment Contracts

It is the Remuneration Committee policy that employment agreements are entered into with the Chief Executive Officer, the Executive Director, and each of the specified Executives except for the VP Commercial and Corporate Development. The contract term for the CEO is five years with a six months notice period. The contracts for service between the Company and Executive Director and the specified Executives are for terms of three years with a notice period of six months. In the event of the Company terminating the employment under the terms of the contract the Company shall pay the pro-rata balance of the unexpired contract term plus an additional amount of one and one half times the then current annual remuneration of the employee.

Employees

The Company employed 74 people at June 30, 2005 as follows (June 30, 2004 : 66 people June 30, 2003 : 61).

Category of Activity

		Number of People
		2005				2004				2003
Research and Development			23				19				18
Production			21				21				14
Sales and Marketing			18				12				17
Finance and Administration			12				14				12
Total			74				66				61

Geographic Location

		Number of People
		2005				2004				2003
Australasia			65				54				47
North America			8				11				13
Europe			1				1				1
Total			74				66				61

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 October 31, 2005.

		Ordinary				%								Options
		Shares Fully				Total Shares				Number				Exercise				Expiry
		Paid				on Issue				Outstanding				Price				Date
G.E Kelly			8,209,152				8.5				—				—				—
C Naughton			633,511				0.7				—				—				—
P A Johnston			48,594				—				—				—				—
P B Simpson			500				—				—				—				—
P J Nestel			32,000				—				—				—				—
L C Read			2,000				—				—				—				—

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

Shares Held

		Ordinary Shares				%
		Fully				Total Shares
		Paid				on Issue
AJ Husband			61,148				0.1
DR Seaton			—				—
WJ Lancaster (USA)			40,000				—
BM Palmer			133,702				0.1
CD Kearney			8,850				—
RL Erratt			115,356				0.1

Options Granted and held by named Executives

		Eligible
		executives		Exercise price
Total Options		participating		(A$)				Grant date				Expiry date
123,499		5			1.53				10/08/2001				10/08/2006
159,916		6			2.10				30/11/2002				30/11/2007
62,224		6			6.76				27/02/2004				27/02/2009
92,152		6			4.90				16/03/2005				16/03/2010

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 47 employees eligible for this scheme.

Exemptions from Certain Nasdaq Corporate Governance Rules

Exemptions from the Nasdaq corporate governance standards are available to foreign private issuers such as Novogen when those standards are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or contrary to generally accepted business practices in the issuer’s county of domicile. In connection with Novogen’s National Market Listing Application, Nasdaq granted Novogen exemptions from

certain corporate governance standards that were contrary to the laws, rules, regulations or generally accepted business practices of Australia. These exemptions and the practices followed by Novogen are described below:

•

Novogen is exempt from Nasdaq’s quorum requirements applicable to meetings of ordinary shareholders. In keeping with the law of Australia and generally accepted business practices in Australia, Novogen’s Constitution (formerly known as the Memorandum of Association and Articles of Association) requires a quorum of three shareholders for a shareholders’ meeting.

•

Novogen is exempt from Nasdaq’s requirement that each Nasdaq issuer shall require shareholder approval of a plan or arrangement in connection with the acquisition of the stock or assets of another company if “any director, officer or substantial shareholder of the issuer has a 5 percent or greater interest (or such persons collectively have a 10 percent or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction or series of related transactions and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5 percent or more”.

Novogen is listed on the Australian Stock Exchange (ASX) and subject to chapter 10 of the ASX Listing rules which require shareholder approval for an acquisition from or disposal to a “related party” (including a director) or “substantial shareholder” (who is entitled to at least 10% of the voting securities) of “substantial assets”. The Australian Corporations Act to which Novogen is also subject generally requires shareholder approval for a transaction with a director or director-controlled entity unless on arm’s length terms.

Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

The names of the major shareholders known to the Company are as follows at November 30, 2005.

Bende Holdings Pty Ltd — holding 6,194,638 Ordinary Shares representing 6.5% of the outstanding Ordinary Shares. Bende Holdings Pty Ltd is a company controlled by Professor Graham E. Kelly.

Oppenheimer Funds Inc — holding 13,462,783 Ordinary Shares representing 13.9% of the outstanding Ordinary Shares.

Josiah T. Austin and El Coronado Holdings, LLC — holding 5,304,035 Ordinary Shares representing 5.5% of the outstanding Ordinary Shares.

The major shareholders do not have any different voting rights than other shareholders of the Company. Josiah T. Austin and El Coronado Holdings has become a significant shareholder during the year. There have been no other significant changes to the shareholding of the known major shareholders over the last three years.

At November 30, 2005 there were 8,005,210 ADRs outstanding, representing 40,026,050 Ordinary Shares (or 41.2% of the then outstanding Ordinary Shares). At November 30, 2005 there were 40 registered holders of Novogen ADRs.

Item 8. Financial Information

Consolidated financial statements are included in “Item 18 — Financial Statements” on pages 69 through 140.

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 — “Information on the Company”.

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.

Significant Changes

No significant change has occurred since the date of the consolidated financial statements included in this Annual Report.

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”). The trading symbol on ASX is “NRT”.

American Depositary Receipts

Novogen’s Ordinary Shares trade in the U.S. in the form of ADR’s on the Nasdaq National Market. Each ADR represents five ordinary Novogen shares. The trading symbol on Nasdaq is “NVGN”. 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.

NOVOGEN LIMITED SHARE PRICE HISTORY

		Per Ordinary Share (A$)								Per ADR (US$)
Period		High				Low				High				Low
Year Ended
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
June 2004			8.80				4.00				31.90				12.30
June 2005			6.25				4.15				24.35				14.85
Quarter Ended
December 2003			8.80				5.33				31.90				17.63
March 2004			7.65				4.58				29.49				17.40
June 2004			6.80				4.93				26.00				17.25
September 2004			5.60				4.15				20.00				14.85
December 2004			6.25				4.54				24.35				17.44
March 2005			5.76				4.65				22.94				18.15
June 2005			5.98				4.35				23.55				17.01
September 2005			5.22				4.46				20.18				17.68
Month Ended
June 2005			5.98				4.65				23.55				18.05
July 2005			5.22				4.70				19.90				18.00
August 2005			5.20				4.71				20.18				17.85
September 2005			5.07				4.46				19.59				17.68
October 2005			5.02				4.66				19.10				17.20
November 2005			6.00				4.85				22.08				17.76

Item 10. Additional Information praveen

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 U.S. dollars. In addition, (other than as specified under “taxation” below and certain restrictions imposed under Australian law in relation to dealings with the assets of and transactions with, designated countries, entities and persons specified by the Reserve Bank of Australia from time to time, including, 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 Transaction Reports and Analysis Centre, which monitors such transactions. However, as mentioned above, the Reserve Bank of Australia does retain 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 or business with assets totaling over A$50 million; or (ii) any direct or indirect ownership interest in Australian urban land. However, since the introduction of the Free Trade Agreement between the U.S. and Australia, proposals by U.S. entities for investment in non-sensitive sectors do not require notification to the Treasurer or the Treasurer’s approval unless the amount to be invested or the value of the target Australian company or business exceeds A$800 million.

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.

Taxation

The following discussion is a summary of the Australian taxes generally applicable to U.S. Holders of ADRs. For the purposes of this discussion, “U.S. Holder” means a beneficial owner of ADRs who:

(a) for U.S. federal income tax purposes is a U.S. resident, a U.S. citizen, a domestic corporation, a domestic partnership, or a non-foreign estate or trust; and

(b) has not owned, at any time 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 U.S. and Australian tax consequences of owning and disposing of Ordinary Shares and ADRs. Further, prospective investors who are residents of jurisdictions other than the U.S. 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.

This 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 U.S. Holders, and does not address the Australian taxes applicable to special classes of U.S. 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 U.S. (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 on shares in Australian companies.

In accordance with the Treaty, dividends derived by a non-resident of Australia who is a resident of the U.S. for the purposes of Treaty may be taxed on those dividends 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 in Australia. In this case, the non-resident may be taxed at the rate applicable to them. Some U.S. residents may be entitled to a withholding rate of 5% if they hold at least 10% of the voting power of the Australian company.

In some instances withholding tax may not apply. Under the Australian dividend imputation 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. Non-resident shareholders are exempt from dividend withholding tax in respect of the franked portions of the dividends received.

Under the Foreign Dividend Account system, the unfranked portion of a dividend paid to a non-resident of Australia is not subject to withholding tax if the unfranked amount is sourced from certain foreign source income earned by the Australian company on which foreign tax has been paid.

Dispositions

Upon disposal of shares or ADRs, a capital gain or a capital loss may be made. A capital gain is calculated as the difference between the disposal proceeds and the cost base of the shares or ADRs. Broadly, the cost base is the total of the amount paid for the shares or ADRs plus acquisition and/or disposal costs (such as brokerage or stamp duty).

Australian capital gains tax (CGT) is payable by non-residents on gains made on the disposal of assets which have the necessary connection with Australia. There is currently a proposal to remove most shares from this category, but the legislation implementing this proposal has not been introduced into parliament.

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 CGT on the disposal of shares or ADRs of such a company as such assets will not have the “necessary connection” with Australia.

However, shares or ADRs will have the necessary connection with Australia and the disposal of such shares or ADRs will be subject to capital gains tax if they have at any time been used by a taxpayer in carrying on a business through a permanent establishment in Australia.

If the shares or ADRs were acquired before 11:45 am on 21 September 1999 the cost base may be indexed for inflation up to 30 September 1999. For a Holder to whom the CGT discount applies (see below), indexation will only apply if the Holder elects to use indexation instead of the discount. Indexation will not be available if the shares or ADRs were acquired after 11:45 am on 21 September 1999 and will effectively only be relevant if the shares were acquired before 1 July 1999.

Holders who are individuals or who hold shares or ADRs directly through trusts may be eligible to have their capital gain (after applying any capital losses against it) discounted if they have held their shares or ADRs for at least 12 months. The CGT discount is 50%. If the shares or ADRs were acquired before 11:45 am on 21 September 1999, such Holders may choose whether to calculate their capital gain using indexation frozen at 30 September 1999 or by applying the CGT discount without indexation. If the shares or ADRs were acquired after 11:45 am on 21 September 1999, it will not be possible to elect to apply indexation and

such Holders will be entitled to the CGT discount if they have held the shares or ADRs for at least 12 months. Companies are not entitled to the CGT discount.

A capital loss will be made if the disposal proceeds are less than the reduced cost base. Broadly, the reduced cost base will be calculated in a similar way to the cost base, however, the reduced cost base is calculated without indexation. Capital losses can only be offset against capital gains realised in the same year or in later years.

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, without indexation or discount, unless such profits are exempt from Australian tax under the Treaty. The profits will not be subject to tax in Australia unless the profits are attributable to the carrying on of a 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 as 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 U.S. shareholder. However, the transfer by a U.S. 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.

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 generally 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 U.S. and the UK. As of June 30, 2005, 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 international sales, marketing and support operations in which all costs are local currency based. Net foreign currency losses in fiscal year 2005 were A$325,000 compared with net foreign currency losses of A$137,000 in fiscal year 2004.

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.

PART II

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

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this report, the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not designed nor were functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934 was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The identified weakness in internal control over financial reporting and in disclosure controls is described below under the heading “Changes in Internal Controls”.

Changes in Internal Controls

In 2004, the Company determined that the personnel and management who perform the accounting and financial reporting functions are not sufficiently expert in U.S. GAAP and the requirements of the SEC and the Public Company Accounting Oversight Board and that this lack of expertise represents a material weakness in the operation of the Company’s internal control over financial reporting.

In addition, the Company’s system of financial reporting was not designed to prepare financial statements in accordance with U.S. GAAP and that the system of internal control, in particular the processes to review and analyze elements of the financial statement close process and prepare consolidated financial statements in accordance with U.S. GAAP, has not reduced to a relatively low level the risk that errors in amounts that would be material in relation to those financial statements may occur and may not be detected within a timely period by management in the normal course of business.

The Company has developed a plan that is designed to ensure that the preparation of our consolidated financial statements, including the processes to review and analyze elements of our financial statement close process, is in accordance with U.S. GAAP and that relevant information about U.S. GAAP, SEC financial reporting requirements, and the requirements of the Public Company Accounting Oversight Board is available to those persons involved in the process by which our financial statements are prepared. Specifically the plan provides for additional resources and further training of the Novogen accounting team including:

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

Progress on the implementation of Novogen’s plan to address the material weakness.

During the period covered by the report, the Company has made significant progress in implementing its plan to address the identified material weakness.

The Company has already recruited an additional degree qualified accountant, enabling senior finance staff responsible for the preparation of U.S. GAAP financial reports to spend more time dealing with U.S GAAP reporting issues. Additionally, senior finance staff have completed training courses including the SEC Institute’s SEC Reporting Conference, the SEC Institute’s Workshop on Implementing SOX404 Internal Control Reporting and will continue to evaluate the merits of additional courses as they become available. The Company has already begun to receive additional publications and updates of SEC, U.S. GAAP and Public Company Accounting Oversight Board requirements and will continue to review the adequacy of this additional information to determine whether additional resources are required.

Until the Company is satisfied that it has addressed the need for sufficient expertise in preparing financial statements required in filing under the securities law it will seek to mitigate this weakness by conferring with its outside accounting advisors with respect to the technical requirements applicable to the financial statements.

The implementation of the initiatives described above are among the Company’s highest priorities. The Company’s Board of Directors, in coordination with the Audit Committee, will continually assess the progress and sufficiency of these initiatives and make adjustments as and when necessary. As of the date of this report, the Company believes that the plans outlined above, when completed, will eliminate the weakness in internal accounting control as described above. Nonetheless, a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues have been detected.

Item 16. Reserved

Item 16A. Audit Committee Financial Expert

The Board of Directors has determined that Mr. Geoffrey Leppinus, appointed during the year as a non-executive Director and member of the audit committee, qualifies as an “audit committee financial expert” as that term is defined in Item 16A of Form
20-F. Mr. Geoffrey Leppinus meets the independence requirements of the Nasdaq National Market and SEC rules and regulations.

Item 16B. Code of Ethics

The company has adopted a code of ethics that applies to all its employees, officers and directors, including its Chief Executive Officer, its Chief Financial Officer and persons performing similar functions. A copy of the code of ethics is posted in the “About Novogen — Corporate Governance” section of the Novogen Limited website, and may be viewed at http://www.novogen.com. If the Company makes any substantive amendment, to the Code of Ethics or grant any waiver, including an implicit waiver, from a provision of the Code of Ethics to directors or executive officers, it will disclose the nature of such amendment or waiver on the Company’s website.

Item 16C. Principal Accounting Fees and Services

BDO has audited the Company’s annual financial statements acting as the independent registered public accountant for the fiscal year ended June 30, 2005. For the fiscal year ended June 30, 2004 the Company’s annual financial statements were audited by Ernst and Young, acting as the independent registered public accountant.

The two charts below set forth the total fees for services performed by BDO and Ernst & Young respectively in 2005 and 2004 and breaks down these amounts by the category of service.

BDO		2004				2005
		A$’000				A$’000
Audit fees			—				245.0
Audit related fees			—				—
Tax fees			—				10.0
Other Fees			—				5.0
Total fees			—				260.0

Ernst & Young		2004				2005
		A$’000				A$’000
Audit fees			431.2				35.0
Audit related fees			106.6				3.0
Tax fees			33.3				—
Other Fees			—				5.0
Total fees			571.1				43.0