20-F

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

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

OR

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

For the fiscal year ended June 30, 2006

OR

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

OR

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

Date of event requiring this shell company report                     .

For the transition period from                      to                     

Commission file number 0-29962

Novogen Limited

ACN 063 259 754

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

New South Wales, Australia

(Jurisdiction of incorporation or organization)

140 Wicks Road, North Ryde, New South Wales 2113, Australia

(Address of principal executive offices)

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

None

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

Ordinary Shares*

American Depositary Shares, each representing five Ordinary Shares

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

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

Not Applicable

The number of outstanding Ordinary Shares of the issuer as at June 30, 2006 was 97,294,054.

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

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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o       Accelerated filer þ       Non-accelerated filer 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	18
ITEM 4A Unresolved Staff Comments	36
ITEM 5. Operating and Financial Review and Prospects	36
ITEM 6. Directors, Senior Management and Employees	44
ITEM 7. Major Shareholders and Related Party Transactions	61
ITEM 8. Financial Information	62
ITEM 9. Offer and Listing Details	63
ITEM 10. Additional Information	65
ITEM 11. Quantitative and Qualitative Disclosures about Market Risk	70
ITEM 12. Description of Securities other than Equity Securities	70
PART II
ITEM 13. Defaults, Dividend Arrearages and Delinquencies	71
ITEM 14. Material Modifications to the Rights of Security Holders and the Use of Proceeds	71
ITEM 15. Controls and Procedures	71
ITEM 16. Reserved	73
ITEM 16A. Audit Committee Financial Expert	73
ITEM 16B Code of Ethics	73
ITEM 16C Principal Accountant Fees and Services	73
ITEM 16D Exemptions from the Listing Standards for Audit Committees	75
ITEM 16E Purchases of Equity Securities by the Issuer and Affiliated Purchases	75

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PART III
ITEM 17. Financial Statements – Not Applicable	76
ITEM 18. Financial Statements	76
ITEM 19. Exhibits	76

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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 U.S. Food and Drug Administration (“FDA”) or other required governmental approvals, or the failure to obtain such approvals, for our products;

• uncertainties in clinical trial results;

• our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products;

• competition and competitive factors;

• our inability to enforce our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business;

• our inability to operate our business without infringing the patents and proprietary rights of others;

• the failure of any product candidate to gain market acceptance;

• general economic conditions;

• government regulation generally and the receipt of regulatory approvals;

• changes in industry practice; and

• one-time events.

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

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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.

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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 2006 and 2005 and for the years ended June 30, 2006 and 2005 have been derived from the Consolidated Financial Statements of Novogen Limited ( the “Company” or the “Group”) included in this Annual Report and should be read in conjunction with, and are qualified in their entirety by, reference to those statements and the notes thereto. The Consolidated Financial Statements in this annual report comply with Australian Accounting Standards, being Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (“IFRS”).

The Company qualifies for First-Time “Application of International Financial Reporting Standards” relief and therefore has presented only two years of financial information. Comparatives for the year ended June 30, 2005 have been restated to be consistent with AIFRS.

AIFRS varies in certain respects from accounting principles generally accepted in the United States (“U.S. GAAP”). A reconciliation of the major differences between AIFRS and U.S. GAAP is included in Note 24 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 2006” refers to the 12 months ended June 30, 2006. Except as otherwise indicated, all dollar amounts referred to in this Annual Report are at the consolidated level and exclude inter-company amounts.

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Summary of Consolidated Income Statements
(AIFRS)

	2005			2006			2006
	(A$’000)			(A$’000)			(US$’000)
Continuing operations
Revenue		13,404			13,500			10,021
Other income		4,274			4,738			3,517
Total revenue		17,678			18,238			13,538
Net loss		(12,682	)		(17,912	)		(13,296	)
Net loss attributable to members of Novogen		(11,532	)		(16,220	)		(12,040	)
Basic and diluted earnings/(loss) per share (cents per share)		(11.9	)		(16.7	)		(12.4	)
Weighted average number of ordinary shares used to calculate earnings per share		96,839,570			97,207,053
Number of outstanding ordinary shares at year end		97,045,662			97,294,054

Adjusted to accord with	2002			2003			2004			2005			2006			2006
US GAAP	(A$’000)			(A$’000)			(A$’000)			(A$’000)			(A$’000)			(US$’000)
Sales revenue		17,644			18,977			11,774			12,928			12,654			9,393
Other operating revenue		3,463			3,325			2,414			2,955			3,278			2,433
Total revenue		21,107			22,302			14,188			15,883			15,932			11,826
Net loss		(15,420	)		(10,670	)		(11,760	)		(11,640	)		(16,228	)		(12,046	)
Net (loss) from operations per share (cents per share)		(16.2	)		(11.2	)		(12.2	)		(12.0	)		(16.7	)		(12.4	)

Note: Sales revenue reported under U.S. GAAP has been adjusted to reflect the impact of certain promotional expenditures in accordance with EITF Issue 01-9 Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products). Prior year’s financial statements have been reclassified where appropriate. Certain trade promotion expenditures are charged to marketing and selling expenses under AIFRS. 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 payments for advertisments in retailers cataloges, magazines, and instore product promotions. The payment of co-operative advertising is usually made in the form of an agreed amount taken off invoice or by direct payment. Under U.S. GAAP these amounts are treated as a discount to sales hence reducing the reported sales figures. See Note 24 to the Consolidated Financial Statements for the reconciliation to U.S. GAAP. Under AIFRS interest income is included in other income and is a component of total revenue. Under U.S. GAAP interest income is excluded from other operating revenue and total revenue.

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Summary of Consolidated Balance Sheets
(AIFRS)

	2005		2006		2006
	(A$’000)		(A$’000)		(US$’000)
Cash and Cash Equivalents		47,260		33,513		24,877
Total Assets		67,485		51,098		37,930
Net Assets		60,492		44,578		33,090
Capital Stock		176,235		176,989		131,379

Adjusted to accord with	2002		2003		2004		2005		2006		2006
US GAAP	(A$’000)		(A$’000)		(A$’000)		(A$’000)		(A$’000)		(US$’000)
Total Assets		61,676		50,812		77,413		67,485		51,098		37,930
Shareholders Equity		51,852		41,069		65,759		57,725		43,415		32,227

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$” are to the currency of the United States of America (“U.S.”) and references to “Australian dollars” or “A$” 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$0.7423 = 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, 2006.

The noon buying rate on October 31, 2006 was US$0.7743 = A$1.00

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Exchange Rates for the six months to October 2006
A$ versus US$

Month	High		Low
May	$	0.7781	$	0.7509
June	$	0.7527	$	0.7284
July	$	0.7664	$	0.7407
August	$	0.7699	$	0.7568
September	$	0.7704	$	0.7461
October	$	0.7743	$	0.7434

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

Fiscal Year	Average
Ended June 30	Rate
2002	$	0.5236
2003	$	0.5836
2004	$	0.7109
2005	$	0.7529
2006	$	0.7472

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Risk Factors

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

The Company has incurred operating losses since its inception, and is likely to incur operating losses for the foreseeable future.

The Company has incurred net losses of $131,700,000 since its inception, including net losses of $17,913,000, and $12,684,000 for the years ended June 30, 2006, and 2005, respectively. The Company anticipates that it will incur operating losses and negative cash flow for the foreseeable future.

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

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, manufacturing difficulties, 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 do not demonstrate the safety and efficacy of the phenolic drug candidates to the FDA’s and other regulatory authorities’ satisfaction, the Company will not receive approval to market its drug candidates in the U.S. or other jurisdictions.

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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 includes the anti-cancer drug candidates phenoxodiol and NV-196 being developed by Marshall Edwards, Inc., a subsidiary of Novogen, TransNV-04, the Company’s cardiovascular drug candidate and NV-52 the Company’s anti-inflammatory drug candidate, may be delayed if the 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.

In 2004, the FDA granted phenoxodiol Fast Track status for patients with recurrent late stage ovarian cancer that is resistant or refractory to platins and taxanes. In 2005, the FDA granted phenoxodiol Fast Track status for its intended use in patients with hormone-refractory prostate cancer (prostate cancer that grows and is no longer inhibited by hormone therapy). More recently we completed a Special Protocol Assessment (“SPA”) and reached agreement with the FDA on a pivotal Phase III study of phenoxodiol in combination with carboplatin in women with platinum-resistant ovarian cancer (ovarian cancer that does not respond to platinum based anti-cancer agents such as cisplatin). The SPA process allows for FDA evaluation of a clinical trial protocol that will form the basis of an efficacy claim for a marketing application. As a Fast Track product, phenoxodiol will be eligible for accelerated approval and priority review by the FDA of the marketing application for this indication. If the FDA concludes that the data from our pivotal clinical trial have failed to demonstrate the safety and effectiveness of phenoxodiol, we will not receive FDA approval to market phenoxodiol for those indications in the United States. We cannot assure you that the results of our Phase III pivotal trial will be successful.

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.

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

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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 jurisdictions 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, in 2004 the Company was notified by the Therapeutic Goods Administration (“TGA”) that the TGA is reviewing the current listing status of the Company’s 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 may retain this status or may 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 will remain subject to extensive regulatory requirements administered by the FDA and other regulatory bodies. Failure to comply with these regulatory requirements may, 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 its future operations and the clinical development program. The actual amount of funds that we will need will be determined by a number of factors, some of which are beyond our control.

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. These factors include the success of the Company’s research and development efforts, the ability of the Company to satisfy applicable

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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 the Company’s 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 shareholders will result and future investors may be granted rights superior to those of existing shareholders. 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 is subject to a number of environmental factors beyond the Company’s control. If the Company cannot maintain a reliable supply of red clover, it may not be able to continue to sell its dietary supplement products and sales volumes could be significantly reduced.

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 of clover. 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 Company has identified a third party supplier of isoflavones to augment its supply of quality isoflavones for use in the consumer products.

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

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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 relies on third parties to manufacture and package its 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 its 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 the Company’s products not being available to supply the market demand which will adversely affect the Company’s sales revenues.

The Company’s success is largely dependent on its ability to obtain 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 was 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 relating to patent infringement could result in substantial costs to, and diversion of effort by, the Company, and 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. The Company is currently involved in a number of litigation proceedings against companies which were infringing certain Company patents related to dietary supplements.

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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 in 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 to the Company or requiring 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 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. There can be no assurance 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 the Company’s 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, research and Development (“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

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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 2006, the Company’s revenue generated was approximately 31% in U.S. dollars and approximately 47% 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 Company’s 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. As of October 30, 2006, Professor Kelly’s employment with the Company ceased and as a result, he is no longer acting as Phenoxodiol Program Director. The Company is currently negotiating a consulting agreement with Professor Kelly to provide strategic consulting advice. If Professor Kelly does not enter into a consulting agreement, the clinical program for phenoxodiol may be disrupted which may cause delays in obtaining marketing approval. The Company maintains key person life insurance for 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

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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 ongoing criminal investigations involving Professor Kelly, a Director of Marshall Edwards, Inc., could have a material adverse effect on the Company’s business or cause the stock price to decline.

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 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.K. 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. The Company recently announced in October 2006 that it had licensed the U.S. rights to market Promensil and Trinovin brands to Natrol, Inc.

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. There can be no assurance 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

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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, the Company 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 or its 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, the Company will not receive FDA approval to market those product candidates in the United States.

Pharmaceutical products, including the Company’s pharmaceutical drug candidates, are subject to significant regulation 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, which 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.

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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, the insurance coverage 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 trading price of the shares of the Company’s common stock and Alternative Depository Receipts (“ADRs”) could decline in value if the trading price of the shares of common stock of its listed subsidiary company, Marshall Edwards, Inc., declines.

Novogen currently owns 78.1% of its subsidiary Marshall Edwards, Inc. (“MEI”), whose shares are traded on the Nasdaq Global Market. 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.

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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 the Company’s 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.

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Item 4. Information on the Company

History and development of the Company

Novogen Limited, a company limited by shares, was incorporated in March 1994 under the jurisdiction of the laws of New South Wales, Australia. Novogen has its registered office at 140 Wicks Rd, North Ryde, New South Wales 2113. Its telephone number and other contact details are: Phone 61-2-9878-0088; Fax 61-2-9878-0055; and 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 Global Market under the symbol “NVGN”.

Capital expenditures

The Company made no major investments of a capital nature during fiscal 2006. Future facilities will be developed where appropriate, 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

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.

Dietary supplements

The Company launched its first dietary supplement product, Promensil™ (“Promensil”), in September 1997 in Australia. Subsequently, the Company has established 100% owned subsidiary companies in the U.S., Canada, the U.K. 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. In October 2006 the Company announced that it had licensed the U.S. rights to market Promensil and Trinovin brands to Natrol, Inc.

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.

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During the financial year, the consumer business (dietary supplement products) launched three new product introductions into selected markets including the dietry supplement Promensil Post Menopause into the U.S. market in September 2005, Promensil After Menopause in Canada in January 2006, and a diagnostic Promensil menopause test in Australia in March 2006. These products will be launched progressively into other markets and are targeted to augment the Promensil brand by extending the market to include an after menopause dietary supplement product and menopause test to help women diagnose the symptoms of menopause. Different regulatory requirements will apply for diagnostic tests intended for market in the U.S.

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

	2005		2006
	(A$’000)		(A$’000)
Dietary Supplements
Revenue		13,404		13,500
Other income		1,299		873
Pharmaceutical research and development
Other income		2,975		3,865
Total Revenue		17,678		18,238

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Geographical Markets

	2005		2006
	(A$’000)		(A$’000)
Revenue
Australasia		4,646		5,166
UK & Europe		2,518		2,614
US & Canada		6,240		5,720
		13,404		13,500
Other income
Australasia		3,877		4,159
UK & Europe		80		4
US & Canada		317		575
		4,274		4,738
Total Revenue		17,678		18,238

Revenue

The Group earned gross revenues for the year ended June 30, 2006 of A$18.2 million versus A$17.7 million in the previous corresponding period, an increase of A$0.5 million. The increase in revenue was due to increased sales of the Company’s consumer products which were A$13.5 million for the year ended June 30, 2006 compared with A$13.4 million for the previous year, an increase of A$0.1 million or 1%. Other income increased by A$0.4 million to A$4.7 million verses A$4.3 million for the previous corresponding period. The increase in other income was mainly due to increased government grant income through the Pharmaceutical Partnership Program and an increase in revenue received from litigation settlements from our consumer products patent defence activities.

Consumer product sales

Sales in Australasia for the year ended June 30, 2006 were A$5.2 million, an increase of A$0.6 million or 13% from A$4.6 million for the previous year. Sales in North America were, A$5.7 million, a reduction of A$0.5 million or 8% from A$6.2 million for the previous year. Sales in Europe of A$2.6 million for the year were up slightly by A$0.1 million from A$2.5 million for the previous corresponding period.

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During the financial year, the consumer business launched three new product introductions into selected markets including Promensil Post Menopause into the U.S. market in September 2005, Promensil After Menopause in Canada in January 2006 and a Promensil menopause test in Australia in March 2006. These products will be launched progressively into other markets and are targeted to augment the Promensil brand by extending the market to include an after menopause product and menopause test to help women diagnose the symptoms of menopause.

Sales levels of our consumer products in Australia, Canada and to a lesser extent in Europe, have continued to benefit from our targeted promotional programs. Sales in the U.S. market were affected by the market decline in the natural menopause product market of 18%. This decline was due to reduced advertising and sales and marketing effort across the sector and increased competition from hormone replacement therapy (“HRT”) products which appear to be regaining some of the markets which were impacted by the recent controversies surrounding safety issues. In October 2006, the Company licensed the U.S. rights to market Promensil and Trinovin brands to Natrol, Inc. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market.

Product Research and Development.

Cardiovascular drug development

In September 2005, the Company announced that its cardiovascular drug transNV-04 had demonstrated significant reduction in blood pressure and reduced arterial stiffness in a Phase Ib human clinical trial in Australia. TransNV-04 was administered to 25 middle aged men and women who were overweight and had suffered from at least two complications of fatness (overweight), abnormal blood fats, high blood glucose or raised blood pressure. The trial results showed that arterial stiffness was reduced and that blood pressures, both systolic and diastolic, were lowered significantly.

Anti-inflammatory drug development

In March 2006, the Company announced that the anti-inflammatory drug NV-52 which is being developed for inflammatory bowel disease had completed a Phase I human clinical trial in Australia. Six patients were given a single oral dose. The study was designed to demonstrate safety and the mechanics of the drugs accumulation and elimination in human subjects. The rapid absorption indicates a potential as an oral therapy.

Cancer drug development

The Company has established a subsidiary company, Marshall Edwards, Inc. (“MEI”) to develop and commercialize its anti-cancer drug candidates. MEI was listed on the Alternative Investment Market of the London Stock Exchange in May 2002 and on the Nasdaq Global Market in December 2003. In January, 2006, MEI voluntarily cancelled the trading of its common stock on the Alternative Investment Market of the London Stock Exchange.

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Phenoxodiol

The Group’s lead anti-cancer drug, phenoxodiol, continued its clinical development program through MEI. Phenoxodiol is currently being evaluated for the treatment of prostate cancer, ovarian cancer and squamous cell carcinomas (SCC) of the cervix, vagina and vulva.

In May 2006, MEI completed a SPA and agreement with the FDA on a pivotal Phase III study of phenoxodiol as a chemo-sensitizing agent in combination with carboplatin in women with platinum-resistant ovarian cancer. The SPA process allows for FDA evaluation of a clinical trial protocol that will form the basis of an efficacy claim for a marketing application, and provides an agreement that the study design, including patient numbers, clinical endpoints and analyses are acceptable to the FDA. As a Fast Track product, phenoxodiol will be eligible for accelerated approval and priority review by the FDA of the future marketing application for this indication.

During fiscal year 2006, MEI also made significant progress in the clinical development of phenoxodiol including:

• In March 2006, MEI announced that Yale researchers presented data at the Annual Meeting on Women’s Cancer. The data was from the study conducted at Yale – New Haven Hospital, Connecticut, U.S. as well as the Royal Women’s Hospital, Melbourne, Australia, The Yale researchers reported that 74 percent of patients with late-stage, platinum-resistant tumors who received the phenoxodiol and cisplatin combination showed evidence of a change in tumor growth by way of either tumor shrinkage or no increase in tumor size.

• In November 2005, MEI announced plans for a Phase Ib/IIa clinical study of the investigational anti-cancer drug, phenoxodiol in combination with docetaxel for women with recurrent ovarian cancer. The investigator-initiated clinical study is taking place at the Yale University School of Medicine and is supported jointly by Sanofi-Aventis and MEI.

• In November 2005, MEI announced that phenoxodiol delays tumor progression in men suffering from late-stage hormone refractory prostate cancer. This study is being conducted at the Sir Charles Gairdner Hospital in Perth, Australia and was presented at the International Conference on Molecular Targets and Cancer Therapeutics in Philadelphia.

• Also in November 2005, MEI announced at the International Conference on Molecular Targets and Cancer Therapeutics in Philadelphia, that Yale University’s School of Medicine reported a further update on results from a clinical study conducted with women with early-stage cancer of the cervix and vagina. The data presented by Yale researchers indicates continuing confidence that the

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investigational drug phenoxodiol produces anti-cancer responses in women with cervical cancer.

•

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

In May 2006 the Company concluded with MEI’s wholly owned subsidiary, Marshall Edwards Pty Limited (“MEPL”), an exclusive, worldwide non-transferable licence under its patent and patent applications and in its know how for MEPL to conduct clinical trials, commercialize and distribute the anti-cancer drug candidates, NV-196 and NV-143.

NV-196, is a synthetic anti-cancer compound developed by Novogen, based on an isoflavan ring structure and like phenoxodiol, is a signal transduction inhibitor. Preliminary screening studies conducted by Novogen have identified NV-196 as a candidate for product development showing a favorable in vitro toxicity profile against normal cells and broad activity against cancer cells. NV-196 is currently in Phase I human testing in Australia and is being developed initially in oral form for the treatment of pancreatic and bile duct cancers.

NV-143 is currently in pre-clinical testing and preliminary screening studies have identified broad anti-cancer activity, against cancer cells representative of melanoma, glioma, prostate, ovarian, breast and lung cancer. NV-143 also exhibits broadly acting chemosensitizing activity. The mechanisms by which NV-143 elicits its anti-cancer/chemosensitizing effect are being researched. NV-143 is being initially developed to target the treatment of melanoma.

Novogen currently owns 78.1% of Marshall Edwards, Inc.

Wound healing

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.

Source and Availability of Raw Materials

Isoflavones

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

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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. More recently, the Company has entered into a contract with a third party supplier of isoflavones to augment its supply of quality isoflavones for use in the consumer products. The Company currently uses contract formulators and packers in Australia to tablet and to pack the final product.

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. The Company has taken the strategic decision not to manufacture commercial scale Active Pharmaceutical Ingredients (API) for cancer drugs, including phenoxodiol, as these can be more economically supplied by third parties with particular expertise in this area. The contract facilities that have been identified are registered with the FDA as drug manufacturing establishments, have a track record of large scale API manufacture and have already invested in capital and equipment.

MEPL has entered into contracts with third parties to develop a scalable manufacturing method to ensure that sufficient quantities of phenoxodiol can be manufactured in compliance with cGMP (Current Good Manufacturing Practices) and to complete the analytical and stability work necessary for an NDA submission. An NDA will be submitted if the Phase III study is successful, and approval of the NDA is required to market phenoxodiol. The Company will need to arrange similar contracts in the future to secure the supply of NV-196 and NV-143.

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, 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 and licensed the U.S. rights to Promensil and Trinovin.

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Patent Protection

The first and most important area of the intellectual property (“IP”) of the Company is based upon 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 application filing strategy, filing PCT patent applications which can be used to pursue patent protection in countries with significant markets for our products. All current patent applications are filed in the name of or assigned to either Novogen Inc., Novogen’s wholly-owned U.S. subsidiary, or Novogen Research Pty Ltd, one of Novogen’s wholly-owned Australian subsidiaries.

The Company believes that the protection of its intellectual property is fundamental to the success of its businesses. During the year the Company commenced a number of patent infringement litigation proceedings against companies which were in breach of certain patents. The Company has received A$613,000 in settlement fees resulting from actions resolved in Canada and the U.S. The Company is continuing to prosecute its IP rights and in June announced that the Vienna Commercial Court had upheld a provisional injunction against an Austrian company, APOtrend. The Company has provided a guarantee to the value of 250,000 Euros with the court to confirm its commitment to the ongoing enforcement process.

Intellectual property development

During the past fiscal year 16 patents were granted to the Company which relate to the Company’s technology and products. The areas with expanding patent cover include

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isoflavone formulation and uses, synthetic drug compounds and their use, and a novel food product.

Europe
Patent # 1049451	Compositions and methods for protecting skin from UV induced immunosuppresion and skin damage
Australia
Patent # 2002238278	Dimeric Isoflavones
USA
Patent # 7033621	Preparation of isoflavones from legumes
Patent # 6987098	Health supplements containing phyto-oestrogen, analogues or metabolites thereof
Czech
Patent # 295625	Therapeutic methods and compositions involving isoflavones
Singapore
Patent # 86589	Compositions and therapeutic methods involving isoflavones and methods thereof
Patent # 97715	Regulation of lipids and/or bone density and compositions thereof
Sweden
Patent # 526737	Compositions and methods for protecting skin from UV induced immunosuppresion and skin damage
South Africa
Patent # 2001/6502	Production of isoflavone derivatives
Patent # 2003/5091	Regulation of lipids and/or bone density and compositions thereof
China
Patent # 222038	Preparation of isoflavones from legumes
Patent # ZL01804008.X	Food product and process
Israel
Patent # 138129	Therapy of estrogen-associated disorders
Patent # 136784	Compositions and methods for protecting skin from UV induced immunosuppresion and skin damage
New Zealand
Patent # 528067	Dimeric Isoflavones
Patent # 538323	Production of isoflavone derivatives

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These grants bring the number of Company patents granted in the U.S. and abroad to 61 as compared to 45 patents granted at the end of fiscal year 2005.

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 PTI’s subsequent joint venture with Bunge now called Solae LLC. During fiscal 2005, this licence was transferred to Archer Daniels Midland Company (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 2005, the Company received A$1.7 million royalty in line with the Company’s licence agreement with “The Solae Company” (licence transferred to ADM) and A$0.2 million Licence fees received from Melbrosin International GmbH & Co under the terms of a licence agreement resulting from the granting to Novogen of certain patents relating to our consumer business. In fiscal 2006, the Company received $A1.2 million from ADM and $A0.5 million from Melbrosin International GmbH & Co. See “Item 5. Operating and Financial Review and Prospects – Operating Results – Fiscal 2006 v. Fiscal 2005.”

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.

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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 (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 at least 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 within the different relevant sections, who prepare evaluation reports. Following 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 relevant evaluation reports. The evaluation reports (along with any resolutions of the ADEC sub-committee) are then sent to the sponsoring company who then has the opportunity to comment on the views expressed within the evaluation report, provide corrections and to submit supplementary data to address any issues raised in 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 5 working days after the ADEC meeting.

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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 at least 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.

Promensil and Trinovin’s regulatory status is currently under review by the TGA in Australia. In 2004, the Company was notified by the TGA that it was reviewing the 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.

U.S. Regulatory Requirements

The FDA, and comparable regulatory agencies in other 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 Initial New Drug Application (“IND”), including results of pre-clinical tests, manufacturing information and protocols for clinical tests, which must become effective before clinical trials may begin in the United States;

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• obtaining approval of Institutional Review Boards to administer the products to human subjects in clinical trials;

• adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for the product’s intended use;

• development of manufacturing processes which conform to FDA current Good Manufacturing Practices, or cGMPs, as confirmed by FDA inspection;

• submission of pre-clinical and clinical test results, and chemistry, manufacturing and controls information on the product to the FDA in a NDA; and

• FDA review and approval of an NDA, prior to any commercial sale or shipment of a product.

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 in the U.S. Additionally, an independent Institutional Review Board 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 or information 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.

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• 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, 2006 for the fiscal year 2007, the user fee for an application requiring clinical data, such as an NDA, is $896,200. The FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual product fee for prescription drugs and biologics ($49,750), and an annual establishment fee ($313,100) 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 small business 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-

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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 ensure success in later stage clinical trials. Data obtained from pre-clinical and clinical activities are 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.

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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 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 priority review of NDAs and accelerated approval. Drug approval under the accelerated approval regulations may be based on evidence of clinical effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. A postmarketing 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 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.

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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 a national procedure. Under the centralized procedure, a single application to the European Medicines 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, and those developed for cancer and other specified diseases and disorders, 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 national procedure is used for products that are not required to be authorized by the centralized procedure. Under the national procedure, an application for a marketing authorization is submitted to the competent authority of one member state of the EU. The holders of a national marketing authorization may submit further applications to the competent authorities of the remaining member states via either the decentralized or mutual recognition procedure. The decentralized procedure enables applicants to submit an identical application to the competent authorities of all member states where approval is sought at the same time as the first application, while under the mutual recognition procedure, products are authorized initially in one member state, and other member states where approval is sought are then requested to recognize the original authorization based upon an assessment report prepared by the original authorizing competent authority. Both the decentralized and mutual recognition procedures 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, the application will be automatically referred to the Committee for Medicinal Products for Human Use (CHMP) of the EMEA. If a referral for arbitration is made, the procedure is suspended. However, member states that have already approved the application may, at the request of the applicant, authorize the product in question without waiting for the result of the arbitration. Such authorizations will be without prejudice to the outcome of the arbitration. For all other concerned member states, 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. 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

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obligations could have a material adverse effect on our ability to successfully commercialize any product.

The conduct of clinical trials in the European Union is governed by the European Clinical Trials Directive (2001/20/EC), which was implemented in May 2004. This Directive governs how regulatory bodies in member states control clinical trials. No clinical trial may be started without a clinical trial authorization granted by the national competent authority and favorable ethics approval.

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 published a proposed rule for 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. The products are formulated and packaged 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.

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

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Name of Entity	Country of Incorporation	Ownership %
Novogen Inc	USA		100
Glycotex Inc	USA		84.3
Novogen Limited (U.K.)	U.K.		100
Promensil Limited	U.K.		100
Novogen BV	Netherlands		100
Novogen Canada Limited	Canada		100
Marshall Edwards Inc	USA		86.9
Marshall Edwards Pty Limited*	Australia		86.9

* Indirect ownership through Marshall Edwards, Inc.

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 site which covers an area of approximately 3.37 hectares. The Company also owns the equipment used in the extraction process and laboratories. 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. The North Ryde premises occupies 1,088 square meters. These premises are also used as Novogen’s corporate headquarters. The Company owns the equipment used in the pilot plant. The plant has enough capacity to produce clinical trial quantities up to Phase II of the Company’s product candidates.

Item 4A. Unresolved Staff Comments

None

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 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.

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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 24 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.

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.

Research and development expenses

The directors do not consider the development programs to be sufficiently advanced to reliably determine the economic benefits and technical feasibility to justify capitalisation of development costs. These costs have been recognised as an expense when incurred.

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined using a binomial model, using the assumptions detailed in Note 10.

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Impairments

The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

Results of Operations

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

INCOME STATEMENTS
for the year ended June 30, 2006

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

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Operating Results – Fiscal 2006 v Fiscal 2005

Revenue

The Group earned gross revenues for the year ended June 30, 2006 of $18.2 million versus $17.7 million in the previous corresponding period, an increase of $0.5 million. The increase in revenue was due to increased sales of the Company’s consumer products which were $13.5 million for the year ended June 30, 2006 compared with $13.4 million for the previous year, an increase of $0.1 million or 1%. Other income increased by $0.4 million to $4.7 million verses $4.3 million for the previous corresponding period. The increase in Other income was mainly due to increased government grant income through the Pharmaceutical Partnership Program and an increase of A$0.5 million in revenue received from litigation settlements from our consumer products patent defence activities.

Total revenue, adjusted for U.S. GAAP, remained constant at A$15.9 million in fiscal 2006 and 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 AIFRS. Other Revenue under U.S. GAAP is also reduced by interest revenue being recognized in Other Income whereas under AIFRS interest income is recognized in Other Operating Revenue. See Note 24 “Differences between AIFRS and U.S. GAAP” for detailed U.S. GAAP formatted Statement of Financial Performance.

Consumer product sales

Sales in Australasia for the year ended June 30, 2006 were $5.2 million, an increase of $0.6 million or 13% from $4.6 million for the previous year. Sales in North America were, $5.7 million, a reduction of $0.5 million or 8% from $6.2 million for the previous year. Sales in Europe of $2.6 million for the year were up slightly by $0.1 million from $2.5 million for the previous corresponding period.

During the financial year, the consumer business launched three new product introductions into selected markets including Promensil Post Menopause into the U.S. market in September 2005, Promensil After Menopause in Canada in January 2006 and a Promensil menopause test in Australia in March 2006. These products will be launched progressively into other markets and are targeted to augment the Promensil brand by extending the market to include an after menopause product and menopause test to help women diagnose the symptoms of menopause.

Sales levels of our consumer products in Australia, Canada and to a lesser extent in Europe, have continued to benefit from our targeted promotional programs. Sales in the U.S. market were affected by the market decline in the natural menopause product market of 18%. This decline was due to reduced advertising and sales and marketing effort across the sector and increased competition from hormone replacement therapy (“HRT”) products which appear to be regaining some of the markets which were

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impacted by the recent controversies surrounding safety issues. In October 2006, the Company licensed the U.S. rights to Promensil and Trinovin brands to Natrol, Inc. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market.

Costs and Expenses

Total expenses before interest and tax increased by $5.8 million to $36.1 million for the year ended June 30, 2006 from $30.3 million for the previous year. Cost of sales increased by $0.8 million, reflecting lower production volumes. Selling and promotional expenses increased by $0.6 million to $9.0 million. The increase was associated with the expenses incurred to fund new product launches and to continue our targeted promotional program. Research and development expenses were $12.0 million, an increase of $1.8 million from $10.2 million for the same period last year, reflecting the costs associated with progressing the pre-clinical and clinical development program including the anti-cancer program being conducted by MEI and manufacturing scale-up costs associated with phenoxodiol. General and administrative expenses were $8.8 million an increase of $2.2 million from $6.6 million for the same period last year. The increased costs included the costs associated with the withdrawn registration statement for Glycotex, Inc. of $1.0 million, $0.2 million increase in share based payments to employees and consultants and increases in other corporate costs.

Net loss

The operating loss attributable to Novogen shareholders for the fiscal year, after allowing for losses attributable to minority interests of $1.7 million, increased by $4.7 million to $16.2 million from a loss of $11.5 million for the previous year.

The net loss from ordinary activities after income tax for the consolidated group for the year ended June 30, 2006 increased by $5.2 million to $17.9 million from $12.7 million for the previous year. The increase in the Company’s net loss for the year ended June 30, 2006 was due to higher cost of goods due to reduced production volumes, higher sales and marketing expenditure, increased research and development costs and additional administration and general expenses. The increased loss was partly offset by an increase in sales and other revenues.

Liquidity and capital resources

The Company has continued to finance its operations from equity capital.

At June 30, 2006, the Company had cash balances of A$33.5 million, a decrease of A$13.8 million from the previous year’s balance of A$47.3 million. Cash was used to fund the Company’s operations including the clinical trial program for the anti-cancer drug phenoxodiol, being undertaken by MEI. 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

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products business and general corporate purposes. At June 30, 2006 the Company held cash balances in U.S. dollars of US$13.2 million.

Marshall Edwards, Inc. post balance date capital raising

On July 11, 2006, MEI entered into a securities purchase agreement with certain accredited investors providing for the placement of 6,329,311 shares of its common stock and warrants exercisable for 2,215,258 shares of its common stock at a purchase price of US$2.90 per unit (PIPE). The warrants have an exercise price of US$4.35 per share, subject to certain adjustments. The warrants may be exercised no less than six months from the closing date and will expire four years from the date of issuance, or July 11, 2010. MEI closed the private placement on July 11, 2006. In conection with the PIPE the Company received proceeds of US$16.9 million net of US$1.5 million commissions and other costs.

On July 11, 2006, MEI entered into a standby equity distribution agreement (SEDA), with Cornell Capital Partners, LP. Under the SEDA, MEI may issue and sell to Cornell shares of its common stock for a total purchase price of up to US$15 million, once a resale registration statement is in effect. MEI has sole discretion whether and when to sell shares of its common stock to Cornell. Cornell will be irrevocably bound to purchase shares of common stock from MEI after MEI sends a notice that it intends to sell shares of common stock to Cornell. Each advance under the SEDA is limited to a maximum of US$1.5 million. Management does not believe that it will access the SEDA until 2007.

The Company invests its cash and cash equivalents in interest bearing facilities with various maturity dates. At the end of fiscal 2006, deposits amounting to A$12.1 million had a weighted average interest rate of 5.78% and cash deposits of A$21.4 million had a weighted average interest rate of 3.65%.

At the end of fiscal 2006, the Company had outstanding interest bearing liabilities in the form of lease liabilities of A$0.1 million. These leases have an average lease term of 4 years. The average interest rate implicit in the leases is 7.75% as compared to 8.33% in fiscal 2005.

The Company has arranged finance lease facilities with St George Bank Limited, an Australian commercial bank, of A$4.0 million, of which A$3.4 million was unused at the end of fiscal 2006.

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 2006, the Company had net cash outflows from operating activities of A$14.4 million. Included in this amount are cash receipts of A$1.5 million of interest received from invested cash balances, A$1.3 million from the proceeds of government

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grants being primarily the Pharmaceutical Partnerships Program grants for research and development and A$1.2 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.

Research and Development

Research and development policy

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

The Company spent A$12.0 million on gross R&D expenditure during fiscal 2006. The Company spent A$10.2 million on gross R&D expenditure in fiscal 2005.

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.

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Trend Information

Sales of the Company’s dietary supplements increased slightly in fiscal 2006 compared to fiscal 2005. Sales levels of our consumer products in Australia, Canada and to a lesser extent in Europe, have continued to benefit from our targeted promotional programs. Sales in the U.S. market were affected by the market decline in the natural menopause product market of 18%. This decline was due to reduced advertising and sales and marketing effort across the sector and increased competition from HRT products which appear to be regaining some of the markets which were impacted by the recent controversies surrounding safety issues. The Company will continue to position its products as the most clinically trialled natural alternatives in the menopause market.

The Company expects to continue its significant 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.

Off-Balance Sheet Arrangements

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

Table of Contractual Obligations

The following table summarizes our future payment obligation and commitments as at June 30, 2006.

	Payments due by period
In $000’s	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Operating Leases		1,858		427		1,367		64		—
Finance Leases		15		15		—		—		—
Other Expenditure Commitments *		3,575		3,506		69		—		—
Total Contractual Cash Obligations		5,448		3,948		1,436		64		—

* represents research and development contracts for services to be rendered.

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Item 6. Directors, Senior Management and Employees.

DIRECTORS

The names and details of the Company’s Directors during the financial year and up to the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr P A Johnston (Chairman)
Mr C Naughton (Managing Director)
Professor G E Kelly (Executive Director) resigned from the Board on September 2, 2005, employment with the Company ceased
    on October 30, 2006.
Professor P J Nestel
Mr P B Simpson
Dr L C Read
Mr G M Leppinus
Professor AJ Husband (Executive Director) Appointed May 23, 2006

Names, qualifications, experience and special responsibilities

Philip A Johnston Non-Executive Chairman
Dip Eng (Production)

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

During the last three years Mr Johnston has served as a director and is currently a director of the ASX listed company, Lipa Pharmaceuticals Limited and NASDAQ listed, Novogen subsidiary, Marshall Edwards, Inc. (MEI or Marshall Edwards)

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 21 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 U.K.

44

During the last three years Mr Naughton has served as Chief Executive Officer (“CEO”) and director and is currently CEO and director for the NASDAQ listed, Novogen subsidiary, Marshall Edwards, 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 and is currently 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.

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

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 therapeutics 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 the

45

University of South Australia and has published over 90 scientific papers. Board appointments currently include the Prime Minister’s Science, Engineering and Innovation 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.

Mr 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.

Professor Alan Husband Executive Director
PhD, DSc, FASM

Professor Husband was appointed as a Director of Novogen Limited on the May 23, 2006. Professor Husband has over 30 years experience in basic and applied scientific research and research management. His academic research interests in immunology and pathology have been reflected in the publication of several books and over 200 scientific papers and he currently holds a professorial appointment at the University of Sydney. These activities in basic and applied research, coupled with experience in the biotechnology industry, provided the foundations for his current appointment as Group Director of Research for the Novogen group of companies, which he has held since 1996. In this position Professor Husband is responsible for the development and commercialisation of the Company’s flavonoid drug technology platform. During this time he has managed the scientific discovery and clinical trial programs, including development of novel oncology, cardiovascular and anti-inflammatory therapeutics as well as wound healing technologies.

Executive Officers’ profiles

David R. Seaton – Chief Financial Officer
B Bus KCAE, M Com UNSW, CPA

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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 20 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 and secretary of Glycotex, Inc. Mr Seaton was appointed Chief Financial Officer (“CFO”) of Glycotex, Inc. in November 2006.

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
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

47

Fund Administration at Towers Perrin, an international firm of Actuaries and Management Consultants.

Compensation

Remuneration Philosophy

Remuneration is assessed for Directors and senior Executives with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality executive team. The appropriateness and nature of emoluments is assessed by reference to employment market conditions. The performance criteria against which Directors and Executives are assessed have regard to the financial and non-financial objectives of Novogen Limited, however, Directors and senior Executive annual remuneration have no variable performance elements that are directly linked to company performance.

Employee share option plan.

The employee share option plan provides for the issue of options to eligible employees being an employee or Director of the Company or related company. Each option entitles its holder to acquire one fully paid ordinary share and is exercisable at a price equal to the weighted average price of such shares at the close of trading on the Australian Stock Exchange Limited for the five days prior to the date of issue. Options are not transferable. The option lapses if the employee ceases to be an employee during the vesting period. Options vest equally over a four year period from date of grant and expire five years after grant date. There are currently 51 employees eligible for this scheme (2005: 47)

The philosophy behind the employee share option plan is to encourage a level of ownership in the Company by employees and align their interests with those of shareholders. The employee share option plan is modest in scale and is principally designed to foster teamwork and the benefits of pursuing shared goals.

The Company is a small to medium sized research organisation pursuing a significant number of different projects where it relies on its staff being flexible in the way in which they work with their own colleagues together with outside collaborators. The Company’s desire to capitalise on its ability to be flexible and adapt as new information is discovered and new opportunities arise underpins the Company’s business strategies. In this context the Company believes it is inappropriate to have individual performance hurdles tied to share options or other variable remuneration.

The Company believes it has a highly motivated workforce which responds better to the existing remuneration arrangements than the more complex variable systems popular with companies trying to engender individual competition amongst their fellow staff.

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All Executive Directors and Executives have the opportunity to qualify for participation in the Employee Share Option Plan after achieving a qualifying service period.

Remuneration committee

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors, the Managing Director, Executive Director and senior Executives.

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 executive team.

Remuneration structure

In accordance with best practice corporate governance, the remuneration structure of Non-Executive Directors and Executive Director and senior management are separate and distinct.

Non-Executive director remuneration

The Constitution of the Company and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The latest determination for Novogen Limited was at the Annual General Meeting held on the October 28, 2005 when the shareholders approved an aggregate remuneration of $560,000. The total Non-Executive Director remuneration of Novogen Limited for the year ended June 30, 2006 utilised $280,000 of this authorised amount.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed periodically.

Each Non-Executive Director receives a fee for being a Director of the Company. An additional fee is also paid for each board committee on which a Director sits. The payment of additional fees for serving on a committee recognises the additional time commitment required by Non-Executive Directors who serve on one or more sub committees.

The remuneration of Non-Executive Directors for the period ending June 30, 2006 is detailed in the table below.

Executive and senior manager remuneration

The Remuneration Committee of the Board of Directors is responsible for determining

49

and reviewing compensation arrangements for the Managing Director, Executive Director and senior Executives. 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 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 Group.

All Executive Directors and Executives have the opportunity to qualify for participation in the Employee Share Option Plan after achieving a qualifying service period.

The performance criteria against which Directors and Executives are assessed have regard to the financial and non-financial objectives of Novogen Limited.

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 Executives except for the VP Commercial and Corporate Development. The contracts for service between the Company and the CEO, Executive Director and the 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. However, the maximum payable on termination by the Company will be three years’ remuneration. The minimum payable on termination by the Company will be eighteen months’ remuneration. The Company may terminate the contracts at anytime without notice if serious misconduct has occurred. Where termination with cause occurs, there is no entitlement to termination payments under the term of the contract. On termination, any unvested options issued under the employee share option plan are immediately forfeited.

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:

50

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

																Post
	Short term emoluments						Termination		Share based payments							Employment
	Salary		Committee				& similar		Options granted							Super-
	and Fees		fee		Other		payments				Amortised cost		Remuneration			annuation		Total
	A$		A$		A$		A$		Number ***		A$		%			A$		A$
PA Johnston		63,064		14,000		—		—		—		—		—			6,936		84,000
C Naughton		518,835		—		46,827		—		—		—		—			100,587		666,249
AJ Husband *		290,766		—		41,785		—		30,436		51,281		11.9	%		47,618		431,450
GE Kelly **		362,388		—		—		—		31,792		7,145		1.8	%		32,615		402,148
PJ Nestel AO		40,000		12,000		—		—		—		—		—			—		52,000
PB Simpson		35,540		14,000		—		—		—		—		—			4,460		54,000
LC Read		36,368		4,000		—		—		—		—		—			3,632		44,000
GM Leppinus		25,650		6,000		—		—		—		—		—			14,350		46,000
		1,372,611		50,000		88,612		—		62,228		58,426		3.3	%		210,198		1,779,847

*	appointed May 23, 2006
**	resigned September 2, 2005
***	options were granted while acting in capacity as Executive

Director remuneration from Marshall Edwards for the year ended June 30, 2006

															Post
	Short term emoluments						Termination		Share based payments						Employment
			Committee				& similar		Options granted						Super-
	Base fee		fee		Other		payments				Amortised cost		Remuneration		annuation		Total
	A$		A$		A$		A$		Number		A$		%		A$		A$
PA Johnston		27,524		—		—		—		—		—		—		2,476		30,000
PJ Nestel AO		30,000		—		—		—		—		—		—		—		30,000
		57,524		—		—		—		—		—		—		2,476		60,000

Director remuneration from Glycotex for the year ended June 30, 2006

															Post
	Short term emoluments						Termination		Share based payments						Employment
			Committee				& similar		Options granted						Super-
	Base fee		fee		Other		payments				Amortised cost		Remuneration		annuation		Total
	A$		A$		A$		A$		Number		A$		%		A$		A$
PA Johnston		39,024		—		—		—		—		—		—		—		39,024
		39,024		—		—		—		—		—		—		—		39,024

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Total Directors’ remuneration for the year ended June 30, 2006

																Post
	Short term emoluments						Termination		Share based payments							Employment
	Salary and		Committee				& similar		Options granted							Super-
	Fees		fee		Other		payments				Amortised cost		Remuneration			annuation		Total
	A$		A$		A$		A$		Number ***		A$		%			A$		A$
PA Johnston		129,612		14,000		—		—		—		—		—			9,412		153,024
C Naughton		518,835		—		46,827		—		—		—		—			100,587		666,249
AJ Husband *		290,766		—		41,785		—		30,436		51,281		11.9	%		47,618		431,450
GE Kelly **		362,388		—		—		—		31,792		7,145		1.8	%		32,615		402,148
PJ Nestel AO		70,000		12,000		—		—		—		—		—			—		82,000
PB Simpson		35,540		14,000		—		—		—		—		—			4,460		54,000
LC Read		36,368		4,000		—		—		—		—		—			3,632		44,000
GM Leppinus		25,650		6,000		—		—		—		—		—			14,350		46,000
		1,469,159		50,000		88,612		—		62,228		58,426		3.1	%		212,674		1,878,871

*	appointed May 23, 2006
**	resigned September 2, 2005
***	options were granted while acting in capacity as Executive

Compensation of the Executive Officers of the Company and the consolidated entity for the year ended June 30, 2006

														Post
					Termination		Share based payments							Employment
	Short term emoluments				& similar		Options granted							Super-
	Salary		Other		payments				Amortised cost		Remuneration			annuation		Total
	A$		A$		A$		Number		A$		%			A$		A$
DR Seaton		284,916		28,976		—		30,436		51,310		12.18	%		56,162		421,364
WJ Lancaster (USA)		195,843		6,243		—		12,232		24,137		9.73	%		21,956		248,179
BM Palmer		153,085		33,239		—		16,692		28,562		12.49	%		13,778		228,664
CD Kearney		181,405		22,952		—		17,752		28,209		11.33	%		16,326		248,892
RL Erratt		149,939		26,203		—		16,520		28,381		12.11	%		29,845		234,368
		965,188		117,613		—		93,632		160,599		11.6	%		138,067		1,381,467

Executive Directors have been disclosed under Directors’ remuneration only and have been excluded from the Executive remuneration.

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

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

Executives are those directly accountable and responsible for the operational management and strategic direction of the Company and its consolidated entities and include the Company Secretary.

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PA Johnston and PJ Nestel are also directors of Marshall Edwards, Inc. and receive remuneration in the form of director’s fees of $30,000 per annum. PA Johnston is also a director of Glycotex, Inc. and receives directors fees of US$50,000 per annum. These amounts have been separately identified and included in the table above.

The elements of emoluments have been determined on the basis of the cost to the Company and the consolidated entity.

The Company has adopted the fair value measurement provisions of Australian Accounting Standard, AASB 1046 “Director and Executive Disclosures for Disclosing Entities” prospectively for all options granted to Directors and relevant Executives, which had not vested at July 1, 2003. The fair value of such grants being amortised are disclosed as part of Director and Executive emoluments on a straight-line basis over the vesting period. No adjustments have been made or will be made to reverse amounts in relation to options that never vest (i.e. forfeitures).

Options granted as part of Director and Executive emoluments have been valued using the binomial option pricing model, which takes account of factors including the option exercise price, the volatility of the underlying share price, the risk free interest rate, expected dividends, the current market price of the underlying share and the expected life of the option.

Fair values of options:

The fair value of each option is estimated on the date of grant using a binomial option-pricing model with the following assumptions used for grants made on:

	April 21,			March 16,			February 27,			November 29,
	2006			2005			2004			2002
Dividend yield		0	%		0	%		0	%		0	%
Expected volatility		66	%		69	%		69	%		68	%
Historical volatility		66	%		69	%		69	%		68	%
Risk-free interest rate		5.62	%		5.67	%		5.52	%		5.27	%
Expected life of option	5 years			5 years			5 years			5 years
Option fair value		2.10			2.96			2.82			1.26

The dividend yield reflects the assumption that the current dividend payout, which is zero, will continue with no anticipated increases. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

Further detail on the remuneration of Directors and Executives are also provided in Note 20.

53

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$735,000 during fiscal 2006 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-2009
C Naughton	Managing Director	1997	—
*G E Kelly	Executive Director	1994	—
P B Simpson	Director	1994	October-2009
P J Nestel	Director	2001	October-2009
L C Read	Director	2003	October-2008
G M Leppinus	Director	2005	October-2008
**A J Husband	Executive Director	2006	October-2009

*	Professor Kelly resigned from the board of Novogen Limited on September 2, 2005.
**	Professor Husband was appointed to the board on May 23, 2006

Term of Directors

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.

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.

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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.

Since May 23, 2006, the Board has been comprised of seven Directors of whom five are non-executive Directors. In addition the Board has established the following Committees — Audit, Remuneration, and Capital Works Committees.

There are also Scientific Advisory Boards whose membership includes the Executive Director which advises on clinical and scientific strategy and direction.

Structure of the Board of Directors

The skills, expertise and experience relevant to the position of director held by each director in office at the date of this annual report is included in Item 6 beginning on page 44. Directors are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In the context of director independence, “materiality” is considered from both the Company and individual director perspective. In determining whether a non-executive director is independent, they must not hold more than 5% of the Company’s outstanding shares. Also, qualitative factors are considered, including not having been employed as an Executive within the last three years, not been a principal of a material professional advisor or consultant, not have a material contractual relationship with the Company, not served on the Board for a period which could be perceived to interfere with their ability to act in the best interests of the Company or engaged in any business interests which could be perceived to interfere with their ability to act in the best interests of the Company.

In accordance with the definition of independence above, and the materiality thresholds set, the following Directors of Novogen Limited are considered to be independent:

Name	Position
P A Johnston	Non-Executive Chairman
Professor P J Nestel AO	Non-Executive Director
P B Simpson	Non-Executive Director
Dr L C Read	Non-Executive Director
G M Leppinus	Non-Executive Director

There are procedures in place, agreed upon by the Board, to enable Directors in the furtherance of their duties, to seek independent professional advice at the Company’s expense.

55

For additional details regarding Board appointments please refer to the Company’s web site.

Audit Committee

The Board has 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 Group. 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), Paul Nestel, Philip Johnston, Leanna Read and Peter Simpson.

Performance

The performance of the Board and the key Executives is reviewed regularly against both measurable and qualitative indicators. During the reporting period the Board conducted a performance evaluation which involved the assessment of each Board member’s and key Executive’s performance. The performance criteria against which Directors and Executives are assessed have regard to the financial and non-financial objectives of Novogen Limited.

Remuneration Committee

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors, the Managing Director, Executive Director and senior Executives.

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 executive team.

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Capital Works Committee

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

There were no major capital works undertaken by the Company in the financial year.

Nomination Committee

The duties and responsibility typically delegated to such a committee are included in the responsibilities of the entire Board. Accordingly, during the year ended June 30, 2006, Novogen Limited did not have a separately established Nomination Committee. The Board does not believe that any marked efficiencies or enhancements would be achieved by the creation of a separate Nomination Committee.

Employees

The Company employed 67 people at June 30, 2006 as follows (June 30, 2005 : 74 people June 30, 2004 : 66).

Category of Activity	Number of People
	2006		2005		2004
Research and development		29		23		19
Production		13		21		21
Sales and marketing		13		18		12
Finance and administration		12		12		14
Total		67		74		66

Geographic Location	Number of People
	2006		2005		2004
Australasia		63		65		54
North America		3		8		11
Europe		1		1		1
Total		67		74		66

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Share Ownership

Directors’ holdings of shares and options in the Company

The table below shows the number of ordinary shares and options to purchase ordinary shares held directly or indirectly by the Directors of the Company as of October 31, 2006.

	Ordinary		%				Options
	Shares Fully		Total Shares		Number		Exercise		Expiry
	Paid		on Issue		Outstanding		Price		Date
P A Johnston		48,594		—		—		—		—
C Naughton		633,511		0.6		—		—		—
A J Husband		102,920		0.1		38,256		2.10		30/11/2007
						14,892		6.76		27/02/2009
						22,592		4.90		16/03/2010
						30,436		3.64		21/04/2011
P J Nestel		32,000		—		—		—		—
P B Simpson		500		—		—		—		—
L C Read		2,000		—		—		—		—

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The tables below shows the number of ordinary shares and options to purchase ordinary shares held directly or indirectly by the named Executives of the Company as of October 31, 2006.

Shares held

	Ordinary		%
	shares fully		Total shares
	paid		on issue
GE Kelly		7,810,152		8.0
DR Seaton		37,378		—
WJ Lancaster (USA)		—		—
BM Palmer		205,636		0.2
CD Kearney		8,850		—
RL Erratt		232,368		0.2

Options granted to and held by named Executives

		Eligible
Total		executives	Exercise
options		participating	price		Grant date		Expiry date
			(A$)
	116,286	5		2.10		30/11/2002		30/11/2007
	47,332	5		6.76		27/02/2004		27/02/2009
	69,560	5		4.90		16/03/2005		16/03/2010
	125,424	6		3.64		21/04/2006		21/04/2011

Each option represents the right to purchase one ordinary share.

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 country 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:

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• 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 requires 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.

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Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

The names of the major shareholders known to the Company are as follows at October 31, 2006

Bende Holdings Pty Ltd — holding 6,299,638 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 13.8% of the outstanding Ordinary Shares.

Josiah T. Austin and El Coronado Holdings, LLC (beneficially owned by Mr Austin) — holding 8,719,100 Ordinary Shares representing 8.9% 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 have 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 October 31, 2006 there were 8,057,381 ADRs outstanding, representing 40,286,905 Ordinary Shares (or 41.3% of the then outstanding Ordinary Shares). At October 31, 2006 there were 37 registered holders of Novogen ADRs.

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Item 8. Financial Information

Consolidated financial statements are included in “Item 18 — Financial Statements” on pages 80 through 138.

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

On August 11, 2006, Camellia Properties Pty Limited initiated proceedings against the Company, claiming damages of $5,161,487 in connection with terminated negotiations of a commercial property lease. The Directors are of the view that the basis of the claim is without foundation and the Directors are obtaining legal advice with the intention of vigorously defending the claim.

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

Since the date of the consolidated financial statements, the Company has announced that it has licensed the U.S. rights to the Promensil and Trinovin brands to Natrol, Inc. No other significant change has occurred since the date of the consolidated financial statements included in this Annual Report.

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Item 9. Offer and Listing Details

Trading Markets

The principal listing of Novogen and quotation of its Ordinary Shares and listed options to purchase Ordinary Shares is on the Australian Stock Exchange (“ASX”). The trading symbol on ASX is “NRT”.

American Depositary Receipts

Novogen’s Ordinary Shares trade in the U.S. in the form of ADRs on the Nasdaq Global 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.

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NOVOGEN LIMITED SHARE PRICE HISTORY

Period	Per Ordinary Share (A$)				Per ADR (US$)
	High		Low		High		Low
Year Ended
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
June 2006		6.00		2.14		22.08		8.03
Quarter Ended
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
December 2005		6.00		4.66		22.08		17.20
March 2006		5.05		3.30		18.41		11.62
June 2006		4.04		2.14		14.49		8.03
September 2006		3.80		2.40		13.25		9.10
Month Ended
May 2006		3.66		2.53		13.91		9.50
June 2006		2.90		2.14		11.08		8.03
July 2006		3.80		2.48		13.25		9.46
August 2006		3.03		2.44		11.60		9.51
September 2006		3.20		2.40		11.95		9.10
October 2006		3.01		2.61		11.58		9.92

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Item 10. Additional Information

Memorandum and Articles of Association

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

Material Contracts

The Company has entered into employment agreements with Christopher Naughton, the Company’s Chief Executive Officer, Professor Alan Husband, the Company’s Research and Development Director, Ronald Erratt, the Company’s Secretary, David Seaton, the Company’s Chief Financial Officer, Professor Graham Kelly, the Company’s Phenoxodiol Program Director, Bryan Palmer, the Company’s Operations General Manager and Craig Kearney, the Company’s General Manager Consumer Business. These employment agreements are filed as exhibits to this Annual Report.

Effective October 30, 2006, Professor Kelly’s employment with the Company ceased and as a result, he is no longer the Company’s Phenoxodiol Program Director.

There have been no other 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 1975 (the “Foreign Takeovers Act”).

Under the Foreign Takeovers Act, as currently in effect, any foreign person, together with associates, is prohibited from acquiring, without prior approval from the Australian Treasurer, 15% or more of the outstanding shares of an entity such as Novogen, whose gross assets exceed A$50 million, unless the person is a U.S. investor, in which case a threshold of A$831 million rather than A$50 million threshold applies. Where an acquisition is made in breach of these requirements, the Australian Treasurer may make an order requiring the acquirer to dispose of those shares within a specified period of

65

time. In addition, if a foreign person acquires shares in Novogen in circumstances where the above thresholds would be exceeded 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 Australian 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 Australian 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 Australian 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 Australian 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 Australian 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, as mentioned above, proposals by U.S. investors for investment in non-sensitive sectors do not require notification to the Australian Treasurer or the Australian Treasurer’s approval unless the amount to be invested or the value of the target Australian company or business exceeds A$831 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,

66

including in relation to state and local tax laws. 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 conduit foreign income rules, 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 enacted.

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

67

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 September 21, 1999 the cost base may be indexed for inflation up to September 30, 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 September 21, 1999 and will effectively only be relevant if the shares were acquired before July 1, 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 September 21, 1999, such Holders may choose whether to calculate their capital gain using indexation frozen at September 21, 1999 or by applying the CGT discount without indexation. If the shares or ADRs were acquired after 11:45 am on September 21, 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.

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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 SEC. These materials, including this Annual Report and the exhibits hereto, may be inspected without charge and copied at established rates at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C., 20549, and at the SEC’s regional offices located at Suite 1400, Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois, 60661-2551 and 233 Broadway, New York, New York 10279. For more information on the public reference rooms, call the Commission at 1-800-SEC-0330.

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Item 11. Quantitative and Qualitative Disclosures about Market Risk.

Interest Rate Risk

The Company has cash reserves and places funds on deposit with financial institutions for periods 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 U.K.. As of June 30, 2006, 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 gains in fiscal year 2006 were A$112,000 compared with net foreign currency losses of A$325,000 in fiscal year 2005.

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

Item 12. Description of Securities Other than Equity Securities

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

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PART 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 are effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 were recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

The removal of the identified weakness in internal control over financial reporting and in disclosure controls which was identified and reported in prior filings 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 were 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 represented a material weakness in the operation of the Company’s internal control over financial reporting.

In addition, the Company concluded that its system of financial reporting was not designed to prepare financial statements in accordance with U.S. GAAP and that its 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

71

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 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 its consolidated financial statements, including the processes to review and analyze elements of its 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 the Company’s plan to address the material weakness.

Prior to the period covered by this report, the Company had made significant progress in implementing its plan to address the identified material weakness. However, as of the end of such prior reporting periods it was not satisfied that it had fully addressed the issues underlying the material weakness

During the period covered by this report, the Company finalized its procedures in addressing the material weakness and now believes that it has adopted processes that are designed to ensure that the preparation of consolidated financial statements, including the processes to review and analyze elements of the 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 the financial statements are prepared. As a result, the Company has re-assessed the effectiveness of its disclosure controls and procedures and having allowed a period of time to determine the effectiveness of additional controls and procedures, now believes that the weakness in internal accounting control as described above has been eliminated.

The changes that have been made to the Company’s internal control procedures have occurred gradually over time. Therefore, during the fiscal year ended June 30, 2006,

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there has been no change in internal control over reporting that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Item 16. Reserved

Item 16A. Audit Committee Financial Expert

The Board of Directors has determined that Mr. Geoffrey Leppinus, 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 Global 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, 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 grants 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 years ended June 30, 2006 and 2005.

The charts below set forth the total fees for services performed by BDO and Ernst and Young in 2006 and 2005 and breaks down these amounts by the category of service.

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BDO	2005		2006
	A$’000		A$’000
Audit fees		245.0		257.0
Audit related fees		—		114.0
Tax fees		10.0		39.0
Other Fees		5.0		21.0
Total fees		260.00		431.0

Ernst & Young	2005		2006
	A$’000		A$’000
Audit fees		35.0		83.0
Audit related fees		3.0		—
Tax fees		—		—
Other Fees		5.0		—
Total fees		43.0		83.0

Audit fees

The audit fees include the aggregate fees incurred in fiscal years 2006 and 2005 for professional services rendered for the audit of the Company’s annual financial statements and for related services that are reasonably related to the performance of the audit or services that are normally provided by the auditor in connection with regulatory filings of engagements for those financial years (including review of the 20-F, consents and other services related to SEC matters).

Audit Related Services

Audit related services include audit services provided in respect of the filing of an S-1 registration document for Glycotex, Inc. and the requirements of the provisions of government grant agreements under which the Company receives reimbursement of certain expenses incurred in research and development including START grants and Pharmaceutical Partnership Program. Audit related services also include audit services provided for the audit of the Company’s Workers Compensation Insurance.

Tax Fees

Tax fees were for the preparation of tax returns.

All Other Fees

Other fees incurred by the Company in fiscal years 2006 and 2005 relate to the costs associated with regulatory compliance and other general matters.

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Pre-approval Policies and Procedures

The Audit Committee Charter sets forth the Company’s policy regarding the appointment of independent auditors, requiring the Audit Committee to review and approve in advance the appointment of the independent auditors for the performance of 100% all audit and, after taking into account the opinion of management, 100% lawfully permitted non audit services. The Audit Committee may delegate authority to one or more members of the Audit Committee where appropriate, but no such delegation is permitted if the authority is required by law, regulation or listing standard to be exercised by the Audit Committee as a whole.

Item 16D. Exemptions from the Listing Standards for Audit Committees.

This item is not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

This item is not applicable.

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PART III

Item 17. Financial Statements

Not Applicable

Item 18. Financial Statements

The financial statements filed as part of this Annual Report are included on pages 80 through 138 hereof.

Item 19. Exhibits

     (a) Exhibits

Exhibit No.	Exhibit Description
1.1	Constitution of Novogen Limited (formerly known as the Memorandum of Association and Articles of Association). (1)
2.1	Deposit Agreement as further amended and restated, dated as of September 29, 2005, among Novogen Limited, the Bank of New York, as Depositary, and owners and holders from time to time of ADRs issued thereunder. (2)
4.1	Employment Contract between the Company and Mr. C. Naughton dated June 21, 2006.
4.2	Employment Contract between the Company and Professor Alan Husband dated June 21, 2006.
4.3	Employment Contract between the Company and Dr G. E. Kelly dated June 21, 2006.
4.4	Lease between Kendall Glen Pty Limited (Lessor) and Novogen Laboratories Pty Ltd for the Company’s corporate headquarters at 140 Wicks Road, North Ryde, New South Wales. (3)
4.5	Employment Contract between the Company and Bryan Palmer dated June 21, 2006.

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Exhibit No.	Exhibit Description
4.6	Employment Contract between the Company and Craig Kearney dated June 21, 2006.
4.7	Employment Contract between the Company and David Seaton dated June 21, 2006.
4.8	Employment Contract between the Company and Ronald Erratt dated June 21 30, 2006.
8.1	Company Subsidiaries.
12.1	Certification of Chief Executive Officer pursuant to Rule 13a - - 14(a) of the Securities Exchange Act of 1934, as amended.
12.2	Certification of Chief Financial Officer a pursuant to Rule 13a — 14(a) of the Securities Exchange Act of 1934, as amended.
13.1	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes — Oxley Act of 2002.

(1)	Incorporated by reference to the Registration Statement on Form 20-F filed with the Securities and Exchange Commission on December 24, 1998 (File No. 0-29962)
(2)	Incorporated by reference to the Registration Statement on Form F-6 filed with the Securities and Exchange Commission on September 29, 2005 (File No. 333- 128681)
(3)	Incorporated by reference to the Annual Report on Form20-F filed with the Securities and Exchange Commission on November 27, 2000 (File No. 0-29962)

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Report of Independent Registered Public Accounting Firm

The Board of Directors
Novogen Limited

We have audited the accompanying consolidated balance sheet of Novogen Limited as of June 30, 2006, and the related consolidated income statement, consolidated statement of recognised income and expense, and consolidated statements of cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Novogen Limited at June 30, 2006, and the consolidated results of its operations and its cash flows for the year then ended in conformity with Australian Accounting Standards, being Australian equivalents to International Financial Reporting Standards.

Australian equivalents to International Financial Reporting Standards vary in certain significant respects from U.S. generally accepted accounting principles. Information relating to the nature and effect of such differences is presented in Note 24 to the consolidated financial statements.

/s/ BDO
BDO
Sydney, NSW, Australia
November 24, 2006

78

Directors’ Declaration

In accordance with a resolution of the Directors of Novogen Limited, I state that:

1. In the opinion of the Directors:

a) the financial statements and notes of the Company are in accordance with the Corporations Act 2001, including:

i)	giving a true and fair view of the Company’s financial position as at June 30, 2006 and of their performance for the year ended on that date; and
ii)	complying with Accounting Standards and Corporations Regulations 2001; and

b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial period ending June 30, 2006.

3. In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in Note 18, will be able to meet any obligations or liabilities to which they are or may become subject to, by virtue of the Deed of Cross Guarantee.

On behalf of the Board,

/s/ Christopher Naughton
Christopher Naughton Managing Director

Sydney, November 24, 2006

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Novogen Limited, Consolidated Financial Statements

The financial report complies with Australian Accounting Standards, being Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

This is the first financial report prepared based on AIFRS and comparatives for the year ended June 30, 2005 have been restated accordingly.

INCOME STATEMENTS
for the year ended June 30, 2006

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

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BALANCE SHEETS
As at June 30, 2006

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

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STATEMENTS OF RECOGNISED INCOME AND EXPENSE
for the year ended June 30, 2006

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

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STATEMENTS OF CASH FLOWS
for the year ended June 30, 2006

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

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NOTES TO THE FINANCIAL STATEMENTS

The financial report of Novogen Limited for the year ended June 30, 2006 was authorised for issue in accordance with a resolution of the Board of Directors on August 23, 2006.

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies which have been adopted in the preparation of the financial report are:

Basis of preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared on a historical cost basis with all amounts presented in Australian dollars, unless otherwise stated.

The amounts contained in this report and in the Financial Statements have been rounded off under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies. Amounts have been rounded off to the nearest thousand dollars unless otherwise stated.

Statement of compliance

The financial report complies with Australian Accounting Standards, being Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

This is the first financial report prepared based on AIFRS and comparatives for the year ended June 30, 2005 have been restated accordingly.

Basis of consolidation

The consolidated financial statements comprise the financial statements of Novogen Limited and its subsidiaries as at June 30 each year (the “Group”).

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

Minority interests represent the portion of profit or loss and net assets in Marshall

84

Edwards, Inc. and Glycotex Inc. not held by the Company and are presented separately in the income statement and within equity in the consolidated balance sheet.

Significant accounting judgements, estimates and assumptions

(i) Significant accounting judgements

In the process of applying the Groups accounting policies, management has made the following judgement, apart from those involving estimations.

Research and development expenses

The directors do not consider the development programs to be sufficiently advanced to reliably determine the economic benefits and technical feasibility to justify capitalisation of development costs. These costs have been recognised as an expense when incurred.

(ii) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined using a binomial model, using the assumptions detailed in Note 10.

Impairments

The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. In determining the economic benefits, provisions are made for certain trade discounts and returned goods. The following specific recognition criteria must also be met:

Sale of goods

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer when the goods have been dispatched to a customer pursuant to a sales order and invoice.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

85

Government Grants

Grant income is recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Grant income is recognised in the income statement over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Royalties

Royalty revenue is recognised on an accruals basis in accordance with the substance of the relevant agreements.

Borrowing costs

Borrowing costs are recognised as an expense when incurred.

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term. Lease incentives are recognised in the income statement as an integral part of the total lease expense.

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

Cash and cash equivalents

Cash and short term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

86

Trade and other receivables

Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

Inventories

Inventories are measured at the lower of cost and net realisable value.

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

• Raw materials — purchase cost on a first-in, first-out basis; and

• Finished goods and work-in-progress — cost of direct material, direct labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Foreign currency translation

Functional Currency

Both the functional and presentation currency of Novogen Limited and its subsidiaries is Australian dollars (A$) except for Marshall Edwards, Inc., Marshall Edwards Pty Limited and Glycotex, Inc. where the functional currency is U.S. dollars.

Translation of foreign currency transactions

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of the exchange ruling at the balance sheet date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Translation of financial reports of overseas operations

As at the reporting date the assets and liabilities of overseas subsidiaries are translated into the presentation currency of the Company at the rate of exchange ruling at the balance sheet date and the income statements are translated at the weighted average exchange rates for the period.

The exchange differences arising on the retranslation of overseas operations which have a functional currency of $A are taken directly to the income statement. The exchange

87

differences arising on the retranslation of overseas operations which have a functional currency that is not $A are taken directly to a separate component of equity.

Taxes

Income tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.

Other taxes

Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (“GST”) receipt except:

• when the GST incurred on a purchase of goods or services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amounts of GST included.

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

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

Commitments and contingencies are disclosed net of the amount of GST recoverable

88

from, or payable to, the taxation authority.

Property, plant & equipment

Cost and valuation

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Depreciation

Depreciation is calculated on a straight-line basis to write off the depreciable amount of each item of property, plant and equipment (excluding land) over its expected useful life to the Group.

Major depreciation periods are:

Buildings	8 — 20 years
Plant and equipment	2.5-10 years
Leasehold improvements	the lease term

Impairment of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Derecognition and disposal

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

Research and development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably.

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Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

Trade and other payables

Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchases of these goods and services.

Interest bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

Gains and losses are recognised in profit or loss when the liabilities are derecognised.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Employee benefits

Wages, salaries, annual leave

Liabilities for wages, salaries, including non-monetary benefits, are recognised in other payables in respect of employees’ services up to the reporting date. Liabilities for annual leave are recognised in current provisions in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

Defined contribution plan

Defined superannuation contributions are recognised as an expense in the period they are incurred.

Share-based payment transactions

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for

90

shares or rights over shares (equity-settled transactions) under the terms of the Employee Share Option Plan (ESOP).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a binomial model. Further details are given in Note 10.

In valuing equity-settled transactions, no account is taken of any performance conditions.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the vesting period of the instrument. The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown as a deduction, net of tax, from the proceeds.

Subsidiary Equity Issues

Where a subsidiary makes a new issue of capital subscribed by outside equity interests the parent company may make a gain or loss due to dilution of outside equity interests. These gains or losses are recognised in equity attributable to the parent company.

Earnings per share (EPS)

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

Diluted EPS is calculated as net profit/(loss) attributable to members of the parent, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares,

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

Deferred Offering Costs

Where costs associated with a capital raising have been incurred at balance date and it is probable that the capital raising will be successfully completed after balance date,

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such costs are deferred and offset against the proceeds subsequently received from the capital raising.

Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

Comparatives

Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.

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Note 2. (LOSS) BEFORE INCOME TAX

	Consolidated
	2006		2005
	$’000		$’000
Revenue and expenses from continuing operations
(a) Revenue
Sale of goods		13,500		13,404
		13,500		13,404
(b) Other income
Bank interest		1,460		1,319
Government grants — research and development		783		289
Royalties		1,753		1,711
Licence fees		—		207
Net gains on disposal of property, plant and equipment		10		—
Litigation settlements		613		160
Other		119		588
		4,738		4,274

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	Consolidated
	2006			2005
	$’000			$’000
(c) Other expenses
Write-down of plant and equipment		301			—
		301			—
(d) Finance costs
Finance charges payable under finance leases		52			56
		52			56
(e) Depreciation, amortisation and cost of inventories included in the income statement
Included in cost of sales:
Depreciation		499			454
Amortisation of leased assets		197			236
Costs of inventories recognised as an expense		1,022			276
(f) Lease payments and other expenses included in the income statement
Included in administrative expenses:
Depreciation		669			842
Amortisation		24			94
Minimum lease payments — operating leases		669			668
Net foreign exchange differences		(112	)		325
(g) Employee benefit expense
Wages and salaries		6,975			6,501
Workers’compensation costs		66			68
Defined contribution plan expense		735			597
Employee entitlement provision		146			98
Share-based payments expense		562			389
		8,484			7,653

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Note 3. INCOME TAX

	Consolidated
	2006			2005
	$’000			$’000
A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the Group’s applicable tax rate is as follows:
Accounting loss before tax from operations		(17,912	)		(12,682	)
At the Group’s statutory income tax rate of 30% (2005: 30%)		(5,374	)		(3,805	)
Foreign tax rate differentials		(132	)		126
Non deductible expenses		598			165
Research and development allowance		(466	)		(411	)
Sub-total		(5,374	)		(3,925	)
Under/over provision		370			751
Change in Valuation Allowance		5,005			3,176
Tax expense		1			2
Components of Income Tax Expense/(Benefit)
Current Expense/(Benefit)		1			2
Under/over provision		370			751
Deferred Expense/(Benefit)		(5,375	)		(3,927	)
Movement in valuation allowance		5,005			3,176
Income Tax Expense/(Benefit)		1			2

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Deferred Income Tax	Consolidated
	2006			2005
	$’000			$’000
Deferred income tax at 30 June relates to the following:
Deferred tax assets
Depreciation		806			975
Provisions accruals		1,536			1,323
Exchange gains		—			—
Other		102			67
Losses carried forward
- Australia		19,319			14,469
- USA		12,904			12,894
- Other		4,200			4,098
Total deferred tax assets		38,867			33,826
Deferred tax liability
Exchange losses		(165	)		(146	)
Other		(117	)		(100	)
Total deferred tax liability		(282	)		(246	)
Net deferred tax asset		38,585			33,580
Valuation allowance for deferred tax assets		(38,585	)		(33,580	)
Net recorded deferred taxes		—			—

Tax consolidation

Novogen Limited and its 100% owned Australian subsidiaries elected to form a tax consolidation group for income tax purposes with effect from July 1, 2003. The Australian Tax Office has been formally notified of this decision. Novogen Limited as the head entity discloses all of the deferred tax assets of the tax consolidated group in relation to tax losses carried forward (after elimination of inter-group transactions).

As the tax consolidation group continues to generate tax losses there has been no reason for the Company to enter a tax funding agreement with members of the tax consolidation group.

96

Note 4. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing net loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The notional issue of potential ordinary shares resulting from the exercise of options detailed in Note 10 does not result in diluted earnings per share that shows a different view of the earnings performance of the Company, therefore the information has not been disclosed.

Potential ordinary shares (non-dilutive) and not included in determining earnings per share: 1,482,148 options (refer Note 10).

There have been 298,254 conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	Consolidated
	2006			2005
	$’000			$’000
Net loss attributable to ordinary equity holders of the parent		(16,220	)		(11,532	)

	2006			2005
	Thousands			Thousands
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share		97,207			96,840
Basic and diluted loss per share — (cents)		(16.7	)		(11.9	)

97

Note 5. CASH AND CASH EQUIVALENTS

	Consolidated
	2006		2005
	$’000		$’000
Cash at bank and in hand		21,384		19,421
Short-term deposits		9,129		24,689
		30,513		44,110
Secured cash (Refer Note 12)		3,000		3,150
		33,513		47,260

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

Reconciliation of net loss after tax to net cash from operations

	Consolidated
	2006			2005
	$’000			$’000
Net loss		(17,913	)		(12,684	)
Adjustments for:
Depreciation and amortisation		1,389			1,626
Net loss on disposal of property, plant and equipment		291			—
Share-based payments		589			403
Changes in assets and liabilities:
(increase)/decrease in trade debtors		574			(17	)
(increase)/decrease in prepayments		136			44
(increase)/decrease in other debtors		(829	)		(391	)
(increase)/decrease in inventories		1,682			(1,615	)
increase/(decrease) in accounts payable		145			(462	)
increase/(decrease) in provisions		(166	)		(37	)
exchange rate change on opening cash		(335	)		325
Net cash outflow from operating activities		(14,437	)		(12,808	)

98

Note 6. TRADE AND OTHER RECEIVABLES

	Consolidated
	2006			2005
	$’000			$’000
Current
Trade receivables (i)		2,717			3,291
Allowance for doubtful debts		(7	)		(305	)
		2,710			2,986
Deposits held		462			—
Deferred offering costs		128			—
Other debtors (ii)		730			491
		4,030			3,477

(i)	Trade receivables are non-interest bearing and are generally on 30-60 day terms.
(ii)	Other debtors are non-interest bearing and have repayment terms between 7 and 30 days.

Note 7. INVENTORIES

	Consolidated
	2006		2005
	$’000		$’000
Current
Work in progress (at cost)		3,965		2,722
Finished goods (at cost)		1,557		2,766
		5,522		5,488
Non-current
Raw materials (at cost)		912		1,056
Work in progress (at cost)		1,952		3,380
Other inventory (at NRV)		—		144
		2,864		4,580

Note 8. OTHER CURRENT ASSETS

	Consolidated
	2006		2005
	$’000		$’000
Prepayments		685		821
		685		821

99

Note 9. PROPERTY, PLANT AND EQUIPMENT

	Consolidated
	2006			2005
	$’000			$’000
Land at cost		1,572			1,572
Buildings at cost		3,459			3,459
Accumulated depreciation		(2,587	)		(2,296	)
		872			1,163
Total land and buildings (property)		2,444			2,735
Plant and equipment under lease — at cost		52			2,591
Accumulated amortisation		(52	)		(1,624	)
		—			967
Plant and equipment — at cost		9,575			8,721
Accumulated depreciation		(7,625	)		(6,564	)
		1,950			2,157
Leasehold improvements — at cost		100			—
Accumulated depreciation		(10	)		—
		90			—
Total property, plant and equipment — at cost		14,758			16,343
Accumulated amortisation and depreciation		(10,274	)		(10,484	)
Total property, plant and equipment		4,484			5,859

a) Assets pledged as security

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

The book value of assets pledged as security are:

	Consolidated
	2006		2005
	$’000		$’000
Plant and equipment under lease		—		967

100

b) Reconciliations

Reconciliations of the carrying amount of plant property and equipment at the beginning and at the end of the current financial year.

	Consolidated
	2006			2005
	$’000			$’000
Freehold land
Carrying amount at beginning of financial year		1,572			1,572
Carrying amount at end of financial year		1,572			1,572
Buildings on freehold land
Carrying amount at beginning of financial year		1,163			1,454
Depreciation expense		(291	)		(291	)
Carrying amount at end of financial year		872			1,163
Plant and equipment under lease
Carrying amount at beginning of financial year		967			1,297
Transfers to plant and equipment		(746	)		—
Amortisation expense		(221	)		(330	)
Carrying amount at end of financial year		—			967
Plant and equipment
Carrying amount at beginning of financial year		2,157			2,366
Additions		219			757
Transfers from plant and equipment under lease		746			—
Impairment loss *		(301	)		—
Disposals		(4	)		—
Depreciation expense		(867	)		(966	)
Carrying amount at end of financial year		1,950			2,157
Leasehold improvements
Carrying amount at beginning of financial year		—			39
Additions		100			—
Depreciation expense		(10	)		(39	)
Carrying amount at end of financial year		90			—

* The $301,000 impairment loss represents the write-down of certain plant and equipment to nil value as its future use and expected cash inflows are not certain.

101

Note 10. SHARE BASED PAYMENT PLANS

Employee share option plan

The employee share option plan provides for the issue of options to eligible employees being an employee or Director of the Company or related company. Each option entitles its holder to acquire one fully paid ordinary share and is exercisable at a price equal to the weighted average price of such shares at the close of trading on the Australian Stock Exchange Limited for the five days prior to the date of issue. Options issued under the Employee Share Option Plan vest in four equal annual instalments over the vesting period. Options are not transferable. The option lapses if the employee ceases to be an employee during the vesting period. There are currently 51 employees eligible for this scheme. (2005: 47)

Consultant options

The Company has also granted options by way of compensation to consultants who perform services for Novogen and its controlled entities. Options issued to consultants generally vest in four equal annual instalments over the vesting period. The expense recognised in the income statement relation to consultant options is $26,861. (2005: $16,310)

The contractual life of all options granted is five years. There are no cash settlement alternatives.

The expense recognised in the income statement in relation to employee share-based payments is disclosed in Note 2(g).

The following table illustrates the number (No.) and weighted average exercise price (WAEP) of and movements in share options issued to employees during the year;

	2006				2005
	No.		WAEP		No.		WAEP
Outstanding at the beginning of the year (i)		1,139,892	$	3.49		1,189,167	$	3.00
Granted		438,948	$	3.64		276,844	$	4.90
Forfeited		81,546	$	4.72		37,652	$	3.96
Exercised (ii)		196,400	$	2.89		288,467	$	2.75
Expired		6,256	$	4.01		—		—
Outstanding at the end of the year (i)		1,294,638	$	3.55		1,139,892	$	3.49
Exercisable at the end of the year		527,691	$	2.85		430,996	$	2.81

(i) Included within these balances are options over 316,834 shares (2005: 499,982) that have not been recognised in accordance with AASB 2 as the options were granted on or before November 7, 2002 or vested prior to January 1, 2005. These options have not

102

	been subsequently modified and therefore do not need to be accounted for in accordance with AASB 2.
(ii)	The exercise of the options occurred on a regular basis throughout the year. The weighted average share price for the year ended June 30, 2006 was $4.22 (2005: $5.18).

The following table details the exercise price, expiry date and number of options issued to employees that were outstanding as at the end of the year:

Exercise	Expiry		No. outstanding 30		No. outstanding 30
Price	Date		June, 2006		June, 2005
$4.00		30/11/05		—		96,689
$4.01		27/10/05		—		6,256
$1.53		10/08/06		196,304		247,341
$2.10		30/11/07		292,298		350,478
$6.76		27/02/09		147,648		162,284
$4.90		16/03/10		231,304		276,844
$3.64		16/04/11		427,084		—
				1,294,638		1,139,892

The following table illustrates the number (No.) and weighted average exercise price (WAEP) of and movements in share options issued to consultants during the year;

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

The following table details the exercise price, expiry date and number of options issued to consultants that were outstanding as at the end of the year:

103

Exercise	Expiry		No. outstanding 30		No. outstanding 30
Price	Date		June, 2006		June, 2005
$3.5819		20/07/05		—		50,180
$4.00		30/11/05		—		1,812
$2.05		13/07/06		101,950		101,950
$2.10		30/11/07		37,200		37,200
$6.76		27/02/09		6,660		6,660
$4.90		16/03/10		14,244		14,244
$3.64		16/04/11		27,456		—
				187,510		212,046

The weighted average remaining contractual life for the share options outstanding as at June 30, 2006 is between 1 and 5 years (2005: 1 and 5 years). As at June 30, 2006, the total compensation cost related to nonvested share options not yet recognized is $1,249,000.

The weighted average fair value of options granted during the year was $2.10 (2005: $2.96)

The fair value of the equity-settled share options granted to both employees and consultants is estimated as at the date of grant using a binomial model taking into account the terms and conditions upon which the options were granted.

The following table lists the inputs to the model used to calculate the fair value of the options.

	April 21,			March 16,			February 27,			November 29,
	2006			2005			2004			2002
Dividend yield		0	%		0	%		0	%		0	%
Expected volatility		66	%		69	%		69	%		68	%
Historical volatility		66	%		69	%		69	%		68	%
Risk-free interest rate		5.62	%		5.67	%		5.52	%		5.27	%
Expected life of option	5 years			5 years			5 years			5 years
Option fair value		2.10			2.96			2.82			1.26

The dividend yield reflects the assumption that the current dividend payout, which is zero, will continue with no anticipated increases. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

104

Note 11. TRADE AND OTHER PAYABLES

	Consolidated
	2006		2005
	$’000		$’000
Current
Trade payables		2,312		3,078
Accrued trade payables		2,654		1,689
Accrued clinical trial payments		680		734
		5,646		5,501

Terms and conditions relating to the above payables:

• trade creditors are non interest bearing and normally settled on 30 day terms; and

• clinical trial creditors are non-interest bearing and normally settled on 30 day terms.

Note 12. INTEREST BEARING LOANS AND LIABILITIES

	Consolidated
	2006		2005
	$’000		$’000
Current
Obligations under finance leases (secured) (Note 17)		15		750
		15		750
Non-current
Obligations under finance leases (secured) (Note 17)		—		15
		—		15

105

Financing facilities available

At reporting date, the following financing facilities had been negotiated and were available:

	Consolidated
	2006		2005
	$’000		$’000
Total facilities
Lease facilities		4,000		4,000
		4,000		4,000
Used at balance date		572		1,454
Unused at balance date		3,428		2,546
		4,000		4,000

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

Novogen Limited has entered into a Deed of Set-off where it has agreed to hold a deposited sum with the bank of at least $3 million at all times as additional security for the lease facility.

Note 13. PROVISIONS

	Consolidated
	2006		2005
	$’000		$’000
Employee Benefit Provision
Opening balance at beginning of the year		727		631
Additional provision made in the period		86		96
Closing balance at the end of the year		813		727
Current		520		474
Non-current		293		253
		813		727

106

	Consolidated
	2006		2005
	$’000		$’000
Make Good Provision
Opening balance at beginning of the year		—		—
Additional provision made in the period		46		—
Closing balance at the end of the year		46		—
Current		—		—
Non-current		46		—
		46		—

In accordance with its Sydney premises lease, the Group must restore the leased premises to agreed condition at the end of the lease term. A provision of $46,000 was made during the year ended June 30, 2006 in respect of the Group’s expected obligation.

107

Note 14. CONTRIBUTED EQUITY AND RESERVES

(a) Contributed equity

	Consolidated
	2006		2005
	$’000		$’000
(a) Fully paid ordinary shares
Novogen Limited
97,294,054 (2005: 97,045,662) ordinary shares		127,060		126,306
		127,060		126,306
(b) Other
Gain arising on issue of shares by subsidiaries to outside shareholders :
Marshall Edwards, Inc.		44,424		44,424
Glycotex, Inc		5,505		5,505
		49,929		49,929
Contributed Equity		176,989		176,235

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

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

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

			Issue
	Number of		price
	shares		$		$’000
On issue July 1, 2005		97,045,662				126,306
Options converted to shares		50,180		3.58		180
Options converted to shares		98,501		4.00		394
Options converted to shares		51,037		1.53		78
Options converted to shares		48,674		2.10		102
Total options exercised during the period		248,392				754
On issue June 30, 2006		97,294,054				127,060

Share options

The Company has an employee share option plan under which options to subscribe for the Company’s shares have been granted to certain executive and other employees (refer Note 10).

108

(b) Reserves

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

Movements in the currency translation reserve were as follows:

	Consolidated
	2006			2005
	$’000			$’000
Balance at the beginning of the year		(3,413	)		(449	)
Gain/(loss) on translation of overseas controlled entities		566			(2,964	)
Balance at the end of the year		(2,847	)		(3,413	)

(c) Accumulated losses

Movements in accumulated losses were as follows:

	Consolidated
	2006			2005
	$’000			$’000
Balance at the beginning of the year		(116,069	)		(104,972	)
Adjustment to opening retained earnings attributed to outside equity interest holders		—			32
Equity attributable to share based payments		589			403
Current year losses		(16,220	)		(11,532	)
Balance at the end of the year		(131,700	)		(116,069	)

(d) Minority interests

The minority interests are detailed as follows:

	Consolidated
	2006			2005
	$’000			$’000
Ordinary shares		7,699			7,699
Foreign currency translation reserve		(423	)		(513	)
Accumulated losses		(5,140	)		(3,447	)
		2,136			3,739

109

Note 15. SEGMENT INFORMATION

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

The Novogen Group operates subsidiary companies in 3 major geographical areas being Australia/New Zealand, North America (including the USA and Canada), and Europe (including the U.K. and the Netherlands). The subsidiaries are involved in the selling and marketing of Novogen’s dietary supplements including Promensil, Trinovin and Rimostil.

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

Geographic Segments

The following table presents revenue and profit information and certain asset and liability information regarding business segments for the years ended June 30, 2006 and June 30, 2005.

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

110

Business Segments

The following table presents revenue, expenditure and certain asset information regarding business segments for the years ended June 30, 2006 and June 30, 2005.

					Pharmaceutical
	Dietary				research and
	supplements				development				Elimination						Consolidated
	2006		2005		2006		2005		2006			2005			2006		2005
	$’000		$’000		$’000		$’000		$’000			$’000			$’000		$’000
Segment revenue		14,373		14,703		3,865		2,975		—			—			18,238		17,678
Segment assets		32,611		35,183		19,042		35,117		(555	)		(2,815	)		51,098		67,485

Note 16. FINANCIAL INSTRUMENTS

The Group’s principal financial instruments comprise finance leases and cash and short term deposits. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk and credit risk.

(a) 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.

111

The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and liabilities is set out below.

																									Weighted
			Floating				Fixed				Fixed					Non-interest									Average Rate
			Interest Rate				1 year or less				Over 1 to 5 years					bearing					Total				of Interest
	Note		2006		2005		2006		2005		2006		2005			2006			2005		2006		2005		2006			2005
			$’000		$’000		$’000		$’000		$’000		$’000			$’000			$’000		$’000		$’000
Financial assets
Cash		5		20,671		12,777		—		—		—		—			713			6,644		21,384		19,421		3.65	%		1.34	%
Deposits		5		2,138		2,621		9,991		25,218		—		—			—			—		12,129		27,839		5.78	%		4.26	%
Trade and other receivables		6		—		—		—		—		—		—			4,030			3,477		4,030		3,477		N/A			N/A
				22,809		15,398		9,991		25,218		—		—			4,743			10,121		37,543		50,737
Financial liabilities
Trade and other payables		11		—		—		—		—		—		—			5,646			5,501		5,646		5,501		N/A			N/A
Interest bearing loans and borrowings		12		—		—		15		750		—		15			—			—		15		765		7.75	%		8.33	%
				—		—		15		750		—		15			5,646			5,501		5,661		6,266
Net financial assets/(liabilities)				22,809		15,398		9,976		24,468		—		(15	)		(903	)		4,620		31,882		44,471

(b) Foreign currency risk

The Company conducts a portion of its business in various foreign currencies, primarily in the U.S. and the U.K.. As of June 30, 2006, 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.

(c) Credit risk

The Group trades only with recognised, creditworthy third parties.

It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

The consolidated entity’s maximum exposures to credit risk at balance date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the Balance Sheet.

Concentration of credit risk

The Group minimises concentration of credit risk in relation to trade receivables by undertaking transactions with a large number of customers.

Credit risk is managed in the following way:

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

(d) Net fair value of financial assets and liabilities

The net fair value of financial assets and liabilities approximates their carrying value in

112

the Balance Sheet, because they are short term and at market rates of interest.

Note 17. COMMITMENTS AND CONTINGENCIES

	Consolidated
	2006		2005
	$’000		$’000
(a) Lease commitments *
Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities payable:
Not later than 1 year		427		199
Later than 1 year but not later than 2 years		463		218
Later than 2 years but not later than 3 years		471		247
Later than 3 years but not later than 4 years		433		248
Later than 4 years but not later than 5 years		64		192
		1,858		1,104
(b) Finance leases **
Commitments in relation to finance leases are payable as follows:
Not later than 1 year		15		767
Later than 1 year but not later than 2 years		—		15
Minimum lease payments		15		782
Less: Future finance charges		—		(17	)
		15		765
Representing lease liabilities:
Current — (Note 12)		15		750
Non-current — (Note 12)		—		15
		15		765
(c) Other expenditure commitments
Research and development contracts for service to be rendered:
Not later than 1 year		3,506		3,556
Later than 1 year but not later than 2 years		69		607
		3,575		4,163

*	Operating leases represent payments for property and equipment rental. Leases for property include an annual review for CPI increases.
**	Finance leases have an average lease term of 4 years with the option to purchase the asset at the completion of the lease term for the residual value. The average interest rate implicit in the leases is 7.75% (2005: 8.33%). Assets under lease are pledged as security for the associated lease liability.

113

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

(d) Parent entity guarantees

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

114

Note 18. RELATED PARTY DISCLOSURES

Interests in controlled entities

The consolidated financial statements include the financial statements of Novogen Limited and the subsidiaries listed in the following table.

	Country of	% Equity interest			Investment ($'000)
Name of Entity	Incorporation	2006	2005		2006		2005
Novogen Laboratories Pty Ltd ^	Australia	100		100		400		400
Novogen Research Pty Ltd ^	Australia	100		100		7,000		7,000
Phytosearch Pty Ltd	Australia	100		100		—		—
Phytogen Pty Ltd	Australia	100		100		20		20
Glycotex Pty Ltd	Australia	100		100		—		—
Norvogen Pty Ltd	Australia	100		100		—		—
Central Coast Properties Pty Ltd ^	Australia	100		100		—		—
Novogen Inc	USA	100		100		—		—
Glycotex, Inc.	USA	84.3		84.3		54		54
Novogen Limited (UK)	UK	100		100		—		—
Promensil Limited	UK	100		100		—		—
Novogen BV	Netherlands	100		100		—		—
Novogen Canada Limited	Canada	100		100		—		—
Marshall Edwards, Inc.	USA	86.9		86.9		—		—
Marshall Edwards Pty Limited	Australia	86.9		86.9		—		—
			(Note 10)			7,474		7,474

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

^ Entities subject to class order relief

Pursuant to Class Order 98/1418, relief has been granted to these companies from the Corporations Act 2001 requirements for preparation, audit and lodgement of their financial reports.

As a condition of the Class Order, Novogen Limited and the controlled entities subject to the Class Order (the “Closed Group”), entered into a Deed of Cross Guarantee on May 28, 1999. The effect of the deed is that Novogen Limited has guaranteed to pay any deficiency in the event of winding up of the controlled entities. The controlled entities have also given a similar guarantee in the event that Novogen Limited is wound up.

The consolidated income statement and balance sheet of the entities that are members of the “Closed Group” are as follows:

115

Consolidated Income Statement

	CLOSED GROUP
	2006			2005
	$’000			$’000
Loss from continuing operations before income tax		(1,069	)		(5,479	)
Income tax expense		—			—
Loss after tax from continuing operations		(1,069	)		(5,479	)
Accumulated losses at the beginning of the period		(55,524	)		(50,448	)
Net income recognised directly in equity		589			403
Accumulated losses at the end of the financial year		(56,004	)		(55,524	)

Consolidated Balance Sheet

	CLOSED GROUP
	2006			2005
	$’000			$’000
CURRENT ASSETS
Cash and cash equivalents		15,541			15,655
Trade and other receivables		2,971			5,050
Inventories		4,520			3,249
Other current assets
Total current assets		23,032			23,954
NON-CURRENT ASSETS
Receivables		44,811			41,873
Inventories		2,864			4,016
Property, plant and equipment		4,395			5,767
Other financial assets		54			54
Total non-current assets		52,124			51,710
TOTAL ASSETS		75,156			75,664
CURRENT LIABILITIES
Trade and other payables		3,295			3,419
Interest bearing loans and borrowings		15			750
Provisions		497			445
Total current liabilities		3,807			4,614
NON-CURRENT LIABILITIES
Interest bearing loans and borrowings		—			15
Provisions		293			253
Total non-current liabilities		293			268
TOTAL LIABILITIES		4,100			4,882
NET ASSETS		71,056			70,782
EQUITY
Contributed equity		127,060			126,306
Accumulated losses		(56,004	)		(55,524	)
TOTAL EQUITY		71,056			70,782

116

Note 19. REMUNERATION OF AUDITORS

	Consolidated
	2006		2005
	$		$
Amounts received or due and receivable by BDO Australia for
(a) an audit or review of the financial report of the entity and any other entity in the consolidated entity;		257,460		245,067
(b) other services in relation to the entity and any other entity in the consolidated entity
- - Tax compliance services		39,476		9,500
- Glycotex S1 audit and review services		109,394		—
- Sarbanes-Oxley Section 404 services		1,944		5,000
- Review of accounting papers		13,810		—
- Review of government grants		4,900		—
- Other		3,661		—
		430,645		259,567
Amounts received or due and receivable by Ernst & Young Australia for:
(a) an audit or review of the financial report of the entity and any other entity in the consolidated entity;		82,764		34,407
(b) other services in relation to the entity and any other entity in the consolidated entity
- - Tax Services		—		650
- Review of government grants		—		3,045
- Other		—		4,500
		82,764		42,602
Amounts received or due and receivable by related practice of Ernst & Young Australia for other services in relation to any entity in the consolidated entity
- - Tax Services		—		11,616
Amounts received or due and receivable by auditors of other subsidiaries in the consolidated entity for an audit/review, which are not already disclosed		23,264		30,313
		536,673		332,482

117

Note 20. DIRECTOR AND EXECUTIVE DISCLOSURES

a) Details of Key Management Personnel

(i) Directors

PA Johnston	Chairman (Non-executive)
C Naughton	CEO
AJ Husband	Executive Director appointed 25 May, 2006
GE Kelly	Executive Director resigned September 2, 2005
PJ Nestel AO	Director (Non-executive)
PB Simpson	Director (Non-executive)
LC Read	Director (Non-executive)
GM Leppinus	Director (Non-executive)
(ii) Executives
DR Seaton	Chief Financial Officer
WJ Lancaster	VP Commercial and Corporate Development
BM Palmer	General Manager Operations
CD Kearney	General Manager Consumer Business
RL Erratt	Company Secretary

b) Compensation of Key Management Personnel

(i) Remuneration policy

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors, the Managing Director, Executive Director and senior Executives. 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 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 Group.

All Executive Directors and Executives have the opportunity to qualify for participation in the Employee Share Option Plan after achieving a qualifying service period.

The performance criteria against which Directors and Executives are assessed have regard to the financial and non-financial objectives of Novogen Limited.

118

It is the Remuneration Committee policy that employment agreements are entered into with the Chief Executive Officer, the Executive Director, and each of the Executives except for the Vice President Commercial and Corporate Development. The contracts for service between the Company and the Chief Executive Officer, Executive Director and the 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. However, the maximum payable on termination by the Company will be three years’ remuneration. The minimum payable on termination by the Company will be eighteen months’ remuneration. The Company may terminate the contracts at anytime without notice if serious misconduct has occurred. Where termination with cause occurs, there is no entitlement to termination payments under the term of the contract. On termination, any unvested options issued under the Employee Option scheme are immediately forfeited.

119

(ii) Remuneration of Key Management Personnel

						Post		Share based
		Short term benefits				employment		payments		Other		Total
				Non-
				monetary		Superan-
		Salary & fees		benefits		nuation		Options		Bonuses
Specified Directors
PA Johnston
	2006		143,612		—		9,412		—		—		153,024
	2005		104,588		—		9,412		136		—		114,136
C Naughton
	2006		518,835		46,827		100,587		—		—		666,249
	2005		507,724		53,643		45,696		—		—		607,063
AJ Husband *
	2006		290,766		41,785		47,618		51,281		—		431,450
	2005		286,818		51,155		25,814		40,940		—		404,727
GE Kelly **
	2006		362,388		—		32,615		7,145		—		402,148
	2005		334,314		29,981		30,088		—		—		394,383
PJ Nestel AO
	2006		82,000		—		—		—		—		82,000
	2005		82,000		—		—		—		—		82,000
PB Simpson
	2006		49,540		—		4,460		—		—		54,000
	2005		51,376		—		4,624		136		—		56,136
LC Read
	2006		40,368		—		3,632		—		—		44,000
	2005		40,368		—		3,632		—		—		44,000
GM Leppinus
	2006		31,650		—		14,350		—		—		46,000
	2005		16,820		—		1,513		—		—		18,333
Total Remuneration: Specified Directors
	2006		1,519,159		88,612		212,674		58,426		—		1,878,871
	2005		1,424,008		134,779		120,779		41,212		—		1,720,778

*	appointed May 23, 2006 – remuneration while a director of Novogen Limited includes salary of $24,131, other benefits of $3,482 and superannuation benefits of $3,968. Options were granted while in capacity of Executive prior to joining the Board..
**	resigned September 2, 2005 – remuneration while a director of Novogen Limited includes salary of $56,576 and superannuation benefits of $5,092. Options were granted while acting in capacity of Executive following resignation from the Board.

120

						Post		Share based
		Short term benefits				employment		payments		Other		Total
				Non-
				monetary		Superan-
		Salary & fees		benefits		nuation		Options		Bonuses
Executives
DR Seaton
	2006		284,916		28,976		56,162		51,310		—		421,364
	2005		298,526		20,085		26,867		41,031		—		386,509
WJ Lancaster (USA)
	2006		195,843		6,243		21,956		24,137		—		248,179
	2005		186,822		6,197		19,915		21,595		—		234,529
BM Palmer
	2006		153,085		33,239		13,778		28,562		—		228,664
	2005		142,942		33,594		12,865		23,366		—		212,767
CD Kearney
	2006		181,405		22,952		16,326		28,209		—		248,892
	2005		164,376		22,951		14,794		21,417		—		223,538
RL Erratt
	2006		149,939		26,203		29,845		28,381		—		234,368
	2005		152,026		20,157		13,682		23,774		—		209,639
Total remuneration: Executives
	2006		965,188		117,613		138,067		160,599		—		1,381,467
	2005		944,692		102,984		88,123		131,183		—		1,266,982

c) Remuneration options: Granted and vested during the year

During the financial year further options were granted as equity compensation benefits to certain specified Directors and Executives as disclosed below. The options were issued free of charge. Each option entitles the holder to subscribe for one fully paid ordinary share in Novogen Limited at an exercise price of $3.64. The options expire five years after grant date and vest annually in four equal instalments commencing one year after grant date.

121

The following table sets out options issued to Directors and Executives during the year and the number of previously issued options which vested during the year:

Terms and conditions for each grant

Options

Value per

Exercise

First

Last

vesting in

Granted

option at

price per

exercise

exercise

year number

number

Grant date

grant date

share

date

date

($)

($)

Specified Directors

AJ Husband

29,378

30,436

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

GE Kelly

—

31,792

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

Executives

DR Seaton

29,559

30,436

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

WJ Lancaster (USA)

17,029

12,232

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

BM Palmer

17,045

16,692

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

CD Kearney

11,023

17,752

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

RL Erratt

18,739

16,520

21/04/2006

2.10

3.64

21/04/2007

21/04/2011

Total

122,773

155,860

d) Shares issued on exercise of remuneration options

	Shares
	issued		Paid		Unpaid
	number		$ per share		$ per share
Specified Directors
AJ Husband		16,000		4.00		—
PJ Nestel		20,000		3.58		—
Executives
DR Seaton		16,236		4.00		—
WJ Lancaster (USA)		12,511		1.77		—
BM Palmer		8,976		4.00		—
RL Erratt		11,496		4.00		—
Total		85,219

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e) Option holding of specified Directors and Executives

	Balance at							Net					Vested at
	beginning of		Granted as		Options			change			Balance at		June 30,
	period		remuneration		exercised			other			end of period		2006
															Not
	July 1, 2005										June 30, 2006		Total		exercisable		Exercisable
	Number		Number		Number			Number			Number		Number		Number		Number
Specified Directors
PA Johnston		3,128		—		—			(3,128	)		—		—		—		—
C Naughton		—		—		—			—			—		—		—		—
AJ Husband		133,512		30,436		(16,000	)		—			147,948		83,558		—		83,558
GE Kelly		—		31,792		—			—			31,792		—		—		—
PJ Nestel AO		20,000		—		(20,000	)		—			—		—		—		—
PB Simpson		3,128		—		—			(3,128	)		—		—		—		—
Executives
DR Seaton		113,330		30,436		(16,236	)		—			127,530		63,087		—		63,087
WJ Lancaster (USA)		35,957		12,232		(12,511	)		—			35,678		6,480		—		6,480
BM Palmer		77,156		16,692		(8,976	)		—			84,872		48,737		—		48,737
CD Kearney		44,092		17,752		—			—			61,844		24,977		—		24,977
RL Erratt		86,452		16,520		(11,496	)		—			91,476		55,549		—		55,549
Total		516,755		155,860		(85,219	)		(6,256	)		581,140		282,388		—		282,388

123

f) Shareholdings of specified Directors and their related parties and Executives and their related parties

	Balance		Granted as		On exercise		Net change			Balance
	July 1, 2005		remuneration		of options		other			June 30, 2006
	Number Ord		Number Ord		Number Ord		Number Ord			Number Ord
Specified Directors
PA Johnston		48,594		—		—		—			48,594
C Naughton		633,511		—		—		—			633,511
AJ Husband		60,148		—		16,000		(15,000	)		61,148
GE Kelly		8,359,152		—		—		(379,200	)		7,979,952
PJ Nestel AO		12,000		—		20,000		—			32,000
PB Simpson		500		—		—		—			500
LC Read		2,000		—		—		—			2,000
Executives
DR Seaton		—		—		16,236		—			16,236
WJ Lancaster (USA)		40,000		—		12,511		(52,511	)		—
BM Palmer		154,726		—		8,976		(35,000	)		128,702
CD Kearney		8,850		—		—		—			8,850
RL Erratt		103,860		—		11,496		87,000			202,356
Total		9,423,341		—		85,219		(394,711	)		9,113,849

All equity transactions with specified directors and executives, other than those arising from the exercise of remuneration options, have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm’s length.

Note 21. EVENTS AFTER THE BALANCE SHEET DATE

On July 11, 2006, MEI entered into a securities purchase agreement with certain accredited investors providing for the placement of 6,329,311 shares of its common stock and warrants exercisable for 2,215,258 shares of its common stock at a purchase price of US$2.90 per unit (the”PIPE”). The warrants have an exercise price of US$4.35 per share, subject to certain adjustments. The warrants may be exercised no less than six months from the closing date and will expire four years from the date of issuance, or July 11, 2010. MEI closed the private placement on July 11, 2006.

On July 11, 2006, MEI entered into a standby equity distribution agreement (“SEDA”), with Cornell Capital Partners, LP (“Cornell”). Under the SEDA, MEI may issue and sell to Cornell shares of its common stock for a total purchase price of up to US$15 million, once a resale registration statement is in effect. MEI has sole discretion whether and when to sell shares of its common stock to Cornell. Cornell will be irrevocably bound to purchase shares of common stock from MEI after MEI sends a notice that it intends to sell shares of common stock to Cornell. Each advance under the SEDA is limited to a maximum of US$1.5 million.

124

MEI has entered into a registration rights agreement which provides for liquidated damages of up to 10% of the aggregate purchase price of the shares issued as part of the PIPE transaction if certain deadlines for registration are not met. MEI was required under the registration rights agreement to file a registration statement within 30 days of closing, have the registration statement declared effective 90 calendar days following closing or 120 days if the SEC reviews the registration statement. MEI is also required to maintain an effective registration statement.

On August 11, 2006, Camellia Properties Pty Limited initiated proceedings against the Company, claiming damages of $5,161,487 in connection with terminated negotiations of a commercial property lease. The Directors are of the view that the basis of the claim is without foundation and the Directors are obtaining legal advice with the intention of vigorously defending the claim.

On October 23, 2006, the Company announced that it had licensed the U.S. rights to the Promensil and Trinovin brands to Natrol. The licence provides for Novogen to receive royalties on sales of Promensil and Trinovin made by Natrol in the future. The estimated financial effect of the licence transaction will be a reduction in Group sales and an increase in royalty income.

On October 30, 2006, the Company announced that Dr Graham Kelly ceased his operational and executive functions with the Company.

Note 22. TRANSITION TO IFRS

For all periods up to and including the year ended June 30, 2005, the Group prepared its financial statements in accordance with Australian generally accepted accounting practice (AGAAP). These financial statements for the year ended June 30, 2006 are the first the Group is required to prepare in accordance with Australian equivalents to International Financial Reporting Standards (AIFRS).

Accordingly, the Group has prepared financial statements that comply with AIFRS applicable for periods beginning on or after January 1, 2005 and the significant accounting policies meeting those requirements are described in Note 1. In preparing these financial statements, the Group has started from an opening balance sheet as at July 1, 2004, the Group’s date of transition to AIFRS, and made those changes in accounting policies and other restatements required by AASB 1 First-time adoption of AIFRS.

This note explains the principal adjustments made by the Group in restating its AGAAP balance sheet as at July 1, 2004 and its previously published AGAAP financial statements for the year ended June 30, 2005.

Exemptions applied

AASB 1 allows first-time adopters certain exemptions from the general requirement to apply AIFRS retrospectively.

125

The Group has applied the following exemptions:

• AASB 2 Share-based Payment: has not been applied to any entity instrument that was granted on or before November 7, 2002, nor has it been applied to equity instruments that were granted after November 7, 2002 that vested before January 1, 2005.

INCOME STATEMENT reflecting reconciliation of adjustments to AIFRS
for the year ended June 30, 2005

							Consolidated
							A-IFRS
				AGAAP			impact			A-IFRS
	Notes			$’000			$’000			$’000
Continuing Operations
Revenue					13,404			—			13,404
Cost of sales					(4,666	)		—			(4,666	)
Gross profit					8,738			—			8,738
Other income					4,274			—			4,274
Research & development expenses					(10,217	)		—			(10,217	)
Selling & promotional expenses					(8,411	)		—			(8,411	)
Shipping and handling expenses					(444	)		—			(444	)
General and administrative expenses		(i	)		(6,163	)		(403	)		(6,566	)
Finance costs					(56	)		—			(56	)
Loss before income tax					(12,279	)		(403	)		(12,682	)
Income tax expense					(2	)		—			(2	)
Loss for the period					(12,281	)		(403	)		(12,684	)
Loss attributable to minority interest					1,152			—			1,152
Loss attributable to members of Novogen Limited					(11,129	)		—			(11,532	)

(i) Under AASB 2 Share-based Payment, the Company has recognised the fair value of options issued as an expense on a pro-rata basis in the income statement. Share-based payment costs were not recognised under AGAAP. This has resulted in a decrease in profit from AGAAP to AIFRS.

126

BALANCE SHEET reflecting reconciliation of adjustments to AIFRS
As at July 1, 2004

							Consolidated
							A-IFRS
				AGAAP			impact		A-IFRS
	Notes			$’000			$’000		$’000
CURRENT ASSETS
Cash and cash equivalents					58,431			—		58,431
Trade and other receivables					2,936			—		2,936
Inventories					5,589			—		5,589
Other current assets					865			—		865
Total current assets					67,821			—		67,821
NON-CURRENT ASSETS
Inventories					2,864			—		2,864
Property, plant and equipment					6,728			—		6,728
Other financial assets					—			—		—
Total non-current assets					9,592			—		9,592
TOTAL ASSETS					77,413			—		77,413
CURRENT LIABILITIES
Trade and other payables					5,963			—		5,963
Interest-bearing loans and borrowings					843			—		843
Provisions					361			—		361
Total current liabilities					7,167			—		7,167
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings					765			—		765
Provisions					270			—		270
Total non-current liabilities					1,035			—		1,035
TOTAL LIABILITIES					8,202			—		8,202
NET ASSETS					69,211			—		69,211
EQUITY
Contributed equity					170,276			—		170,276
Reserves					(449	)		—		(449	)
Accumulated losses		(i	)		(104,972	)		—		(104,972	)
Parent interest					64,855			—		64,855
Minority Interest					4,356			—		4,356
TOTAL EQUITY					69,211			—		69,211

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BALANCE SHEET reflecting reconciliation of adjustments to AIFRS
As at June 30, 2005

							Consolidated
							A-IFRS
				AGAAP			impact		A-IFRS
	Notes			$’000			$’000		$’000
CURRENT ASSETS
Cash and cash equivalents					47,260			—		47,260
Trade and other receivables					3,477			—		3,477
Inventories					5,488			—		5,488
Other current assets					821			—		821
Total current assets					57,046			—		57,046
NON-CURRENT ASSETS
Inventories					4,580			—		4,580
Property, plant and equipment					5,859			—		5,859
Other financial assets					—			—		—
Total non-current assets					10,439			—		10,439
TOTAL ASSETS					67,485			—		67,485
CURRENT LIABILITIES
Trade and other payables					5,501			—		5,501
Interest-bearing loans and borrowings					750			—		750
Provisions					474			—		474
Total current liabilities					6,725			—		6,725
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings					15			—		15
Provisions					253			—		253
Total non-current liabilities					268			—		268
TOTAL LIABILITIES					6,993			—		6,993
NET ASSETS					60,492			—		60,492
EQUITY
Contributed equity					176,235			—		176,235
Reserves					(3,413	)		—		(3,413	)
Accumulated losses		(i	)		(116,069	)		—		(116,069	)
Parent interest					56,753			—		56,753
Minority Interest					3,739			—		3,739
TOTAL EQUITY					60,492			—		60,492

(i) Under AASB 2 Share-based Payment, the Company has recognise the fair value of options issued as an expense on a pro-rata basis over the vesting period in the income statement with a corresponding adjustment in equity (retained earnings). The reduced profit amount is also carried through to equity (retained earnings) as an offsetting amount. Share-based payment costs were not recognised under AGAAP. The total amount adjusted is $630,000, which represents $403,000 for the year ended June 30.

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2005 and $215,000 from prior financial periods, for options that were granted on or after November 7, 2002 that vest after January 1, 2005. The Company has applied the transition provisions under AASB 1.

Restated AIFRS Statement of Cash Flows for the year ended June 30, 2005.

There were no material impacts on the cash flows presented under AGAAP on adoption of AIFRS.

Note 23. DIVIDENDS

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

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Note 24. DIFFERENCES BETWEEN AIFRS AND U.S. GAAP

Australian equivalents to International Financial Reporting Standards (AIFRS) varies in certain respects from accounting principles generally accepted in the United States (US GAAP). The differences relate principally to the following items and the adjustments necessary to reconcile the consolidated net loss for the years ended June 30, 2005 and 2006 and equity at June 30, 2005 and 2006 in accordance with U.S. GAAP are shown below.

The U.S. GAAP statements of operations for the years ended June 30, 2005 and 2006 are as follows:

	US GAAP
	2005			2006			2006
	A$’000			A$’000			US’$’000
Operating Revenue
Sales Revenue		12,928			12,654			9,393
Other Operating Revenue		2,955			3,278			2,433
Total Operating Revenue		15,883			15,932			11,826
Costs and Expenses
Cost of Goods Sold		(4,666	)		(5,445	)		(4,042	)
Research & Development		(10,217	)		(12,014	)		(8,918	)
Selling and Promotions		(7,935	)		(8,167	)		(6,062	)
Shipping and Handling		(444	)		(556	)		(413	)
General and Administrative		(6,306	)		(8,889	)		(6,598	)
Other Expense		—			(301	)		(223	)
Total Costs and Expenses		(29,568	)		(35,372	)		(26,256	)
Loss from operations		(13,685	)		(19,440	)		(14,430	)
Other Income (Expense)
Interest Expense		(56	)		(52	)		(39	)
Exchange Gains/(Losses)		(325	)		112			83
Other		1,319			1,460			1,084
Total Other Income (Expense)		938			1,520			1,128
Loss Before Income Tax		(12,747	)		(17,920	)		(13,302	)
Income Tax Expense/(Benefit)		(2	)		(1	)		(1	)
Minority Interest		1,109			1,693			1,257
Net loss		(11,640	)		(16,228	)		(12,046	)
Loss per share — basic and diluted (cents)		(12.0	)		(16.7	)		(12.4	)

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			Year ended 30 June
			2005			2006
			A$’000			A$’000
Consolidated Net Loss
Net loss reported under AIFRS				(12,684	)		(17,913	)
Adjustments required to accord with U.S. GAAP:
Stock based compensation cost	(i	)		(65	)		(8	)
Minority interest in net losses of subsidiaries	(v	)		1,109			1,693
Net loss under U.S. GAAP				(11,640	)		(16,228	)
Basic and diluted (loss) per share according to U.S. GAAP (cents)				(12.0	)		(16.7	)
Weighted average number of ordinary shares outstanding during the year used in calculation of basic and diluted (loss) per share				96,839,570			97,207,053
Comprehensive Income
Net loss according to U.S. GAAP				(11,640	)		(16,228	)
Other comprehensive income resulting from foreign currency translation				(2,964	)		567
Total comprehensive income				(14,604	)		(15,661	)
Other Comprehensive Income Movement
				2005			2006
				A$’000			A$’000
Balance at beginning of year				(556	)		(3,520	)
Foreign currency translation adjustment				(2,964	)		567
Closing Other Comprehensive Income				(3,520	)		(2,953	)

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In 2005 and 2006, exercise of the options issued by the Company would have been anti-dilutive and, therefore, was not considered in the computation of diluted earnings per share. Details of options are set out in Note 10. Outstanding options at the end of the financial years are, 1,351,938 in 2005 and 1,482,148 in 2006.

The following is a reconciliation of the adjustments necessary to reconcile shareholders’ equity in accordance with AIFRS to the amounts determined under U.S. GAAP as at June 30, 2003, 2004 and 2005:

			At June 30,
			2005			2006
			A$’000			A$’000
Shareholders’ Equity
Shareholders’ equity reported using AIFRS				60,492			44,578
Cumulative adjustments required to accord with U.S. GAAP:
Minority interest equity	(v	)		(2,767	)		(1,163	)
Shareholders’ equity according to U.S. GAAP				57,725			43,415

The following is a reconciliation of the shareholders’ equity roll forward showing the movement shareholders’ equity under U.S. GAAP for the years ended June 30, 2005 and 2006:

	2005			2006
	A$’000			A$’000
Opening Shareholders’ equity according to U.S. GAAP		65,759			57,725
Less: Net loss according to U.S. GAAP		(11,640	)		(16,228	)
Add: New Equity		7,439			1,351
less: Minority interest in new equity		(869	)		0
Add: movement in other comprehensive income		(2,964	)		567
Closing Shareholders’ equity according to U.S. GAAP		57,725			43,415

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A description of the differences between AIFRS, as followed by Novogen, and U.S. GAAP is provided below:

(i) Stock Based Compensation

In accordance with AIFRS, the cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the vesting period of the instrument. The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a binomial model. Under AIFRS transition provisions only options that were granted on or after November 7, 2002 that vest after January 1, 2005 have been recognised. Further details are given in Note 10.

(a) For U.S. GAAP purposes, the Company has applied SFAS 123R “Share-Based Payments” which became effective in fiscal 2006, in respect of the options issued to executive officers and employees. Statement 123R requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. The total compensation cost is amortized over the service (vesting) period. The Company has adopted the Modified Retrospective Application for all prior years for which Statement 123 was effective.

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

The number of shares authorised for grant under the various option plans are limited by the share option plan. At any one time the total number of shares which the Company would have to issue if all options granted under the plan that are outstanding were exercised, must not exceed 5 per cent of the number of issued shares at that time.

Shares are not reserved for future issuance as there are no restrictions on the issuance of shares, up the authorised number of shares, subject to ASX Listing Rule 7. This rule allows for the Company to issue up to 15% of the total issued shares in new shares, per annum, without shareholder approval.

(ii) Cash Flow Statement

Cash for the purposes of the cash flow statement includes cash held as a minimum deposit by the lessor (Note 5). Under U.S. GAAP this would be treated as ‘restricted

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cash’ and would be removed from cash and cash equivalents and included in cash flows from investing activities.

	2005			2006
	A$’000			A$’000
Cash and cash equivalents under AIFRS		47,260			33,513
Restricted cash (Note 5)		(3,150	)		(3,000	)
Cash and cash equivalents under U.S. GAAP		44,110			30,513

(iii) Income Tax

The Novogen Group has adopted SFAS No. 109 for U.S. GAAP purposes. SFAS No. 109 requires a ‘liability approach’ to accounting for income taxes, which as it applies to the Company is very similar to that adopted under AIFRS.

Pretax accounting loss under AIFRS for the year ended June 30, 2005 and 2006 was taxed in the following jurisdictions:

	2005			2006
	$’000			$’000
Domestic		(13,865	)		(10,128	)
Foreign		1,586			(7,784	)
		(12,279	)		(17,912	)

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The components of the U.S. GAAP net deferred tax asset at June 30, 2005 and 2006, are as follows:

	2005			2006
	$’000			$’000
Deferred tax assets
Depreciation		975			807
Provisions accruals		1,323			1,535
Exchange gains		—			—
Other		—			14
Losses carried forward — Australia		14,469			19,320
— USA		12,894			12,904
— Other		4,098			4,202
Total deferred tax assets		33,759			38,781
Deferred tax liability
Exchange losses		(146	)		(165	)
Other		(160	)		(117	)
Total deferred tax liability		(306	)		(282	)
Net deferred tax asset		33,453			38,499
Valuation allowance for deferred tax assets		(33,453	)		(38,499	)
Net recorded deferred taxes		—			—

	2005						2006
	$’000			%			$’000			%
Tax at Australian statutory rates		(3,492	)		30	%		(4,868	)		30	%
Foreign Rate Differentials		126			(1	%)		(132	)		1	%
Non deductible expenses		44			(0	%)		597			(5	%)
Research and development allowance		(411	)		4	%		(466	)		4	%
Other		(194	)		2	%		(506	)		4	%
Reversal of intercompany profit in inventory elimination		(105	)		1	%		(39	)		0	%
Tax expense/(benefit)		(4,032	)					(5,414	)
Filing Differences		748			(6	%)		367			(3	%)
Change in valuation allowance		3,282			(28	%)		5,046			(31	%)
Income Tax Expense		(2	)					(1	)

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

Components of Income Tax Expense/(Benefit)

	2005			2006
	$’000			$’000
Current Expense/(Benefit)		(2	)		(1	)
Under/over provision prior year		748			367
Deferred Expense/(Benefit)		(4,030	)		(5,412	)
Movement in Valuation Allowance		3,282			5,046
Income Tax Expense		(2	)		(0	)

Tax effected carry forward losses amounting to $21,880,000 may be carried forward indefinitely and tax losses of $14,546,000 expire over the period 2007 through 2025.

(iv) Revenue

	2005			2006
	A$’000			A$’000
Sales Revenue reported using AIFRS		13,404			13,500
Trade Promotions		(476	)		(846	)
Sales Revenue reported using US GAAP		12,928			12,654

Trade Promotions

EITF Issue 01-9 — Accounting for consideration given by a vendor to a customer (including a reseller of the venders products) expenditure to be deducted from sales revenue. Certain trade promotion expenditures are charged to selling and marketing expenses under AIFRS. These expenses are for retail price discounts whereby Novogen makes a contribution to the retailers’ promotional costs of Novogen’s products. Under U.S. GAAP, these amounts are treated as a discount reducing the reported sales figures.

(v) Minority interests

Under AIFRS, equity in consolidated subsidiaries issued outside the economic entity is referred to as “Outside Equity Interests” and is included as a component of equity but

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excluded from the determination of net loss. Under U.S. GAAP, Outside Equity Interests are referred to as “Minority Interests” and are separately classified between the liabilities and equity sections of the Statement of Financial Position. Net loss, in the income statement, is presented net of the minority’s share of the subsidiary’s net loss.

According to U.S. GAAP minority interests in profits, losses and reserves are calculated incrementally as the minority holding changes. Under AIFRS minorities are allocated their share of previous profits, losses and reserves according to the percentage holding at year end. This creates a gain/loss for the Group which under U.S. GAAP is not recognized. In addition, the allocation of net loss and foreign currency translation adjustments to minority interest differs between AIFRS and U.S. GAAP when there is a change in ownership in a subsidiary during the period.

(vi) Other Comprehensive Income

Under AIFRS, other comprehensive income arising on the restatement of foreign subsidiaries for consolidation purposes is referred to as the “Foreign Currency Translation Reserve” and is included as a component of equity. Where a portion of other comprehensive income is attributable to minority interests this is calculated differently under AIFRS and U.S. GAAP as described in Note 24(v) above.

Reconciliation of outside equity interest in controlled entities:

	2005			2006
	$’000			$’000
Opening balance		3,452			2,767
Additions to outside equity interest by way of share issue:
Marshall Edwards, Inc.		—			—
Glycotex, Inc.		869			—
Add shares of operating losses of controlled entities
Marshall Edwards, Inc.		(1,078	)		(1,287	)
Glycotex, Inc.		(31	)		(406	)
Add shares of other comprehensive income
Marshall Edwards, Inc.		(446	)		66
Glycotex, Inc.		1			23
		2,767			1,163

(vii) Summary of Significant Accounting Policies

Use of Estimates

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

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Advertising Expenses

Costs incurred in advertising expenditure are expensed as incurred. The Company incurred A$3,600,000 in fiscal 2005 and A$4,031,000 in 2006.

(viii) Payables

Under U.S. GAAP amounts that exceed 5% of the total of creditors and accruals are disclosed separately. The table below details those creditors and accruals that exceed 5% of the total balance:

	2005		2006
	A$’000		A$’000
Insurance Premiums		405		288
Mayne Pharmaceuticals (Contract Drug Manufacturer)		—		454
Provision for Sales Returns		307		—
Provision for Grant Rebate		—		558

(ix) Segment Information

The central operating decision makers review the Company’s operations based on geography and this is disclosed as the primary segment information in Note 15.

(x) Recent Accounting Pronouncements

In June 2006, FASB issued FASB Interpretation No. 48 (“FIN48”), “Accounting for Uncertainty in Income Taxes”, which is an interpretation of SFAS 109. FIN48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken to be taken in a tax return. The evaluation of a tax position is a two step process. First step is recognition, in which the company determines whether it is more likely than not that a tax position will be sustained upon examination based on the merits of the position. The second step is measurement in which a tax position which meets the more likely than not threshold of the first step is measured to determine the amount of benefit to recognize in its financial statements. FIN48 is effective for fiscal years beginning after December 15, 2006. The Company will adopt FIN48 on July 1, 2007. While the Company is still evaluating the impact of FIN48 on its financial statements, it does not expect FIN48 to have a material impact on its balance sheet, income or cash flows.

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SIGNATURES

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

NOVOGEN LIMITED

/s/ Christopher Naughton

Mr Christopher Naughton
Managing Director

Date: November 24, 2006

139

Exhibit Index

Exhibit No.	Exhibit Description
1.1	Constitution of Novogen Limited (formerly known as the Memorandum of Association and Articles of Association). (1)
2.1	Deposit Agreement as further amended and restated, dated as of September 29, 2005, among Novogen Limited, the Bank of New York, as Depositary, and owners and holders from time to time of ADRs issued thereunder. (2)
4.1	Employment Contract between the Company and Mr. C. Naughton dated June 21, 2006.
4.2	Employment Contract between the Company and Professor Alan Husband dated June 21, 2006.
4.3	Employment Contract between the Company and Dr G. E. Kelly dated June 21, 2006.
4.4	Lease between Kendall Glen Pty Limited (Lessor) and Novogen Laboratories Pty Ltd for the Company’s corporate headquarters at 140 Wicks Road, North Ryde, New South Wales. (3)
4.5	Employment Contract between the Company and Bryan Palmer dated June 21, 2006.
4.6	Employment Contract between the Company and Craig Kearney dated June 21, 2006.
4.7	Employment Contract between the Company and David Seaton dated June 21, 2006.
4.8	Employment Contract between the Company and Ronald Erratt dated June 21 30, 2006.

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Exhibit No.	Exhibit Description
8.1	Company Subsidiaries.
12.1	Certification of Chief Executive Officer pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended.
12.2	Certification of Chief Financial Officer a pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended.
13.1	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes – Oxley Act of 2002.

(1)	Incorporated by reference to the Registration Statement on Form 20-F filed with the Securities and Exchange Commission on December 24, 1998 (File No. 0-29962)
(2)	Incorporated by reference to the Registration Statement on Form F-6 filed with the Securities and Exchange Commission on September 29, 2005 (File No. 333-128681)
(3)	Incorporated by reference to the Annual Report on Form20-F filed with the Securities and Exchange Commission on November 27, 2000 (File No. 0-29962)

141

EX-4.1

Exhibit 4.1

EMPLOYMENT AGREEMENT made June 21, 2006

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

AND

CHRISTOPHER NAUGHTON
of 126 Braeside Street, Wahroonga, NSW, 2076 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:
	(a) information which was in the public domain before it was given to or accessed by the Employee; or

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	(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;
(7)	“Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	"Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i) that Statutory Provision as amended or re-enacted from time to time; and

143

(ii) a statute, regulation or provision enacted in replacement of that Statutory Provision.

(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the     Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1) be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;

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(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;
(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;
(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything

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	whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution, after the Company has previously in writing forbidden the Employee to deal with such person; or
(4)	enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company..

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to be paid annual leave of twenty five (25) working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.
11.3	The entitlement to annual leave is deemed to arise pro rata.

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11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.
11.5	Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

	as may be determined from time to time.
14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board of each member of the Novogen Group and the Employee gives an irrevocable authority to the

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Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the

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	confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.
17.5	It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.
17.6	Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6 A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.

18.7 For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

21. Duty to Deliver Up

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21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

	created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.
22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1	Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.
25.2	If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

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26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1	This Agreement:
	(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and
	(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.
27.2	Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.
30.4	If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President

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of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2)	sent by postage prepaid to that party’s address set out in this Agreement or as notified to each party at any time.

31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position
	(1)	Managing Director
	(2)	with responsibilities for:
		(a) oversight of the Novogen Group of Companies affairs and interests;
		(b) supervision of executive staff;
		(c) negotiation and settlement of significant Corporate dealings;
		(d) financial supervision;
		(e) legal affairs;
		(f) strategy implementation;
		(g) represent the Company at business meetings;
		(h) chair the Executive Committee; and
		(i) provide recommendations to the Board.
Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Board of Directors.
Item 6.	Accrued Annual Leave
	As accrued from 15 August, 1996
Item 7.	Accrued Sick Leave
	As accrued from 15 August, 1996

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Item 8.	Long Service Leave
	As accrued from 15 August, 1996
Item 9.	Remuneration
	$640,000 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Board of Directors of Novogen Limited.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)
Director/Secretary		Director
Name of Director/Secretary (BLOCK LETTERS)		Name of Director (BLOCK LETTERS)
		Director
		Name of Director (BLOCK LETTERS)
SIGNED by:	)
Christopher Naughton	)
in the presence of:	)
Signature of Witness
Name of Witness (BLOCK LETTERS)
Address of Witness

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EX-4.2

Exhibit 4.2

EMPLOYMENT AGREEMENT made June 21, 2006

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

AND

PROFESSOR ALAN JAMES HUSBAND
of Unit 2, 18 West Crescent Street, McMahons Point, NSW, 2060 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:
	(a) information which was in the public domain before it was given to or accessed by the Employee; or

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	(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;
(7)	“Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	"Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i) that Statutory Provision as amended or re-enacted from time to time; and

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(ii) a statute, regulation or provision enacted in replacement of that Statutory Provision.

(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the     Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1) be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;

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(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;
(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;
(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything

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	whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution; or
(4)	enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company.

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to paid annual leave of 20 working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.
11.3	The entitlement to annual leave is deemed to arise pro rata.

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11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.
11.5	Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

	as may be determined from time to time.
14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board of each member of the Novogen Group and the Employee gives an irrevocable authority to the

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Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the

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	confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.
17.5	It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.
17.6	Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6	A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.
18.7	For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

21. Duty to Deliver Up

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21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

	created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.
22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1	Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.
25.2	If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

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26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1	This Agreement:
	(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and
	(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.
27.2	Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.
30.4	If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President

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of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2) sent by postage prepaid to that party’s address set out in this Agreement or as     notified to each party at any time.

31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position
		(1	)	Research Director
		(2	)	with responsibilities for:
				(a) clinical trials;
				(b) discovery program;
				(c) research program;
				(d) development activities;
				(e) R&D staff;
				(f) technical advice to the Company;
				(g) represent the Company at scientific and corporate meetings;
				(h) expenditure and control within the given R&D budget;
				(i) R&D strategy formulation and implementation; and
				(j) supervision of scientific developments and identification of intellectual property opportunities.
Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Managing Director.
Item 6.	Accrued Annual Leave
	As accrued from 1 April, 1999
Item 7.	Accrued Sick Leave

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	As accrued from 1 April, 1999
Item 8.	Long Service Leave
	As accrued from 1 April, 1999
Item 9.	Remuneration
	$389,621 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Managing Director.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)
Director/Secretary		Director
Name of Director/Secretary (BLOCK LETTERS)		Name of Director (BLOCK LETTERS)
		Director
		Name of Director (BLOCK LETTERS)
SIGNED by:	)
Alan James Husband	)
in the presence of:	)
Signature of Witness
Name of Witness (BLOCK LETTERS)
Address of Witness

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EX-4.3

Exhibit 4.3

EMPLOYMENT AGREEMENT made June 21, 2006

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

AND

DR GRAHAM EDMUND KELLY
of 21 Peel Street, Kirribilli, NSW, 2061 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:
	(a) information which was in the public domain before it was given to or accessed by the Employee; or

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	(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;
(7)	“Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	"Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i) that Statutory Provision as amended or re-enacted from time to time; and

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(ii) a statute, regulation or provision enacted in replacement of that Statutory Provision.

(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the     Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1) be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;

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(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;
(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;
(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything

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	whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution; or
(4)	enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company..

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to paid annual leave of 20 working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.
11.3	The entitlement to annual leave is deemed to arise pro rata.

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11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.
11.5	Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

	as may be determined from time to time.
14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board of each member of the Novogen Group and the Employee gives an irrevocable authority to the

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Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the

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	confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.
17.5	It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.
17.6	Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6	A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.
18.7	For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

21. Duty to Deliver Up

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21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

	created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.
22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1	Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.
25.2	If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

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26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1	This Agreement:
	(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and
	(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.
27.2	Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.
30.4	If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President

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of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2)	sent by postage prepaid to that party’s address set out in this Agreement or as notified to each party at any time.

31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position
		(1	)	Phenoxodiol Program Director
		(2	)	with responsibilities for:
				(a) chairing of Company and Directors meetings for Marshall Edwards Inc;
				(b) managing the clinical development of phenoxodiol and any other oncology compounds in-licensed into Marshall Edwards;
				(c) representation of the Novogen Group of Companies at scientific and business meetings and to make presentations where required;
				(d) preparation of reports on matters relating to the Novogen Group of Companies for presentation to the Board; and
				(e) corporate relations for the Novogen Group of Companies.
Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Board of Directors.
Item 6.	Accrued Annual Leave
	As accrued from 1 July, 1994
Item 7.	Accrued Sick Leave
	As accrued from 1 July, 1994
Item 8.	Long Service Leave
	As accrued from 1 July, 1994
Item 9.	Remuneration

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	$420,000 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Managing Director.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)
Director/Secretary		Director
Name of Director/Secretary (BLOCK LETTERS)		Name of Director (BLOCK LETTERS)
		Director
		Name of Director (BLOCK LETTERS)
SIGNED by:	)
Graham Edmund Kelly	)
in the presence of:	)
Signature of Witness
Name of Witness (BLOCK LETTERS)
Address of Witness

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EX-4.5

Exhibit 4.5

EMPLOYMENT AGREEMENT made June 21, 2006

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

AND

MR BRYAN MARK PALMER
of 85 Kameruka Road, Northbridge, NSW 2063 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:

(a) information which was in the public domain before it was given to or accessed by the Employee; or

(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;

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(7)	“Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	“Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i)	that Statutory Provision as amended or re-enacted from time to time; and
(ii)	a statute, regulation or provision enacted in replacement of that Statutory Provision.

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(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1)	be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;
(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;

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(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;
(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution; or

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(4) enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company..

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to paid annual leave of 20 working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.
11.3	The entitlement to annual leave is deemed to arise pro rata.
11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.

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11.5 Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

	as may be determined from time to time.
14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board of each member of the Novogen Group and the Employee gives an irrevocable authority to the Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

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16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.

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17.5

It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.

17.6

Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6	A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.
18.7	For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

     and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

21. Duty to Deliver Up

21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all

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correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.

22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1	Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.
25.2	If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

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26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1 This Agreement:

(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and

(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.

27.2 Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.
30.4	If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

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31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2)	sent by postage prepaid to that party’s address set out in this Agreement or as            notified to each party at any time.

31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position

(1)	Operations General Manager
(2)	with responsibilities for:

(a)	logistics, transport and storage;
(b)	production at Wyong;
(c)	facilities and real estate;
(d)	grain, clover, harvesting and storage of clover;
(e)	forecasting of production for Consumer Business and clinical trials material;
(f)	asset control;
(g)	Occupational Health & Safety coordinator; and
(h)	recommendations to Executive Committee on labour, production, logistics, facilities, inventory management, cost and planning controls.

Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Managing Director.
Item 6.	Accrued Annual Leave
	As accrued from 4 March, 1993
Item 7.	Accrued Sick Leave
	As accrued from 4 March, 1993
Item 8.	Long Service Leave

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	As accrued from 4 March, 1993
Item 9.	Remuneration
	$213,648 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Managing Director.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)

Director/Secretary	Director
Name of Director/Secretary (BLOCK LETTERS)	Name of Director (BLOCK LETTERS)
	Director
	Name of Director (BLOCK LETTERS)

SIGNED by:	)
Bryan Mark Palmer	)
in the presence of:	)

Signature of Witness

Name of Witness (BLOCK LETTERS)

Address of Witness

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EX-4.6

Exhibit 4.6

EMPLOYMENT AGREEMENT made June 21, 2006.

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

MR CRAIG DAWSON KEARNEY
of 12 Shackel Avenue, Clovelly, NSW, 2031 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:

(a) information which was in the public domain before it was given to or accessed by the Employee; or

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(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;

(7)	"Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	“Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i) that Statutory Provision as amended or re-enacted from time to time; and

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(ii) a statute, regulation or provision enacted in replacement of that Statutory Provision.

(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1) be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;

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(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;
(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;
(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything

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	whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution; or
(4)	enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company..

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to paid annual leave of 20 working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.
11.3	The entitlement to annual leave is deemed to arise pro rata.

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11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.
11.5	Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

	as may be determine from time to time.
14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board of each member of the Novogen Group and the Employee gives an irrevocable authority to the

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Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the

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confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.

17.5

It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.

17.6

Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6	A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.
18.7	For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

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21. Duty to Deliver Up

21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.

22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1 Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.

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25.2 If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1 This Agreement:

(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and

(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.

27.2 Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.

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30.4 If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2)	sent by postage prepaid to that party’s address set out in this Agreement or as                   notified to each party at any time. 31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position

(2)	General Manager, Consumer Products
(3)	with Group responsibility for Consumer Products:

(a) sales;

(b) marketing;

(c) planning and strategy;

(d) staff;

(e) international operations;

(f) financial reports and agreed contribution of Consumer Products regions to profit and loss of the Novogen Group; and

(g) recommendations to the Executive Committee in areas of new products, international territory expansion.

Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Managing Director.
Item 6.	Accrued Annual Leave
	As accrued from 26 November, 2001.
Item 7.	Accrued Sick Leave
	As accrued from 26 November, 2001.
Item 8.	Long Service Leave
	As accrued from 26 November, 2001.

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Item 9.	Remuneration
	$222,070 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Managing Director.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)

Director/Secretary	Director
Name of Director/Secretary (BLOCK LETTERS)	Name of Director (BLOCK LETTERS)
	Director
	Name of Director (BLOCK LETTERS)

SIGNED by:	)
	)
in the presence of:	)

Signature of Witness

Name of Witness (BLOCK LETTERS)

Address of Witness

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EX-4.7

Exhibit 4.7

EMPLOYMENT AGREEMENT made June 21, 2006

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

AND

MR DAVID ROSS SEATON
of 9 Claude Avenue, Cremorne, NSW, 2090 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:

(a) information which was in the public domain before it was given to or accessed by the Employee; or

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(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;

(7)	“Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	“Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i) that Statutory Provision as amended or re-enacted from time to time; and

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(ii) a statute, regulation or provision enacted in replacement of that Statutory Provision.

(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1) be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;

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(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;
(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;

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(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution; or
(4)	enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company..

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to paid annual leave of 20 working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.

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11.3	The entitlement to annual leave is deemed to arise pro rata.
11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.
11.5	Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

as may be determined from time to time.

14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board

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of each member of the Novogen Group and the Employee gives an irrevocable authority to the Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the

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confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.

17.5

It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.

17.6

Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6	A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.
18.7	For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

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21. Duty to Deliver Up

21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.

22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1 Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.

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25.2 If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1 This Agreement:

(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and

(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.

27.2 Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.
30.4	If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through

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mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2)	sent by postage prepaid to that party’s address set out in this Agreement or as notified to each party at any time.

31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position

(1)	Chief Financial Officer of the Novogen Group
(2)	With responsibilities for:

a)	monitoring and reporting on the financial performance of the Novogen Group;
b)	Company Secretary of Marshall Edwards Inc and Marshall Edwards Pty Ltd;
c)	preparing and filing all financial reports as required under the corporations law in Australia, the USA ( NASDAQ requirements), and the UK (LSE-AIM);
c)	preparing and filing all corporate tax returns;
d)	providing financial and commercial advice to the Novogen Management Committee and Board;
e)	co-ordinating the financial management of the Novogen Group companies;
f)	managing and reporting on the Group’s cash flows;
g)	effectively managing and reporting on the utilisation of the Groups assets;
h)	developing and co-ordinating the preparation of the Groups budgets and forecasts;
i)	developing key financial staff:
j)	developing effective relationships with auditors, bankers, lawyers, the financial community and other external advisors;
k)	completing financial analysis and participate in projects which have a significant impact on the Company;
l)	identifying new and better ways of doing business.

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Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Managing Director.
Item 6.	Accrued Annual Leave
	As accrued from 20 September, 1999
Item 7.	Accrued Sick Leave
	As accrued from 20 September, 1999
Item 8.	Long Service Leave
	As accrued from 20 September, 1999
Item 9.	Remuneration
	$389,622 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Managing Director.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)
Director/Secretary		Director
Name of Director/Secretary (BLOCK LETTERS)		Name of Director (BLOCK LETTERS)
		Director
		Name of Director (BLOCK LETTERS)
SIGNED by:	)
David Seaton	)
in the presence of:	)
Signature of Witness
Name of Witness (BLOCK LETTERS)
Address of Witness

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EX-4.8

Exhibit 4.8

EMPLOYMENT AGREEMENT made June 21, 2006

PARTIES

NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of 140 Wicks Road, North Ryde 2113, New South Wales (“Company”)

AND

RONALD LEA ERRATT of 10 Bega Road, Northbridge, NSW, 2063 (“Employee”)

INTRODUCTION

A.	The Company carries on the Business.
B.	The Company wishes to employ the Employee to provide the Services.
C.	The parties have agreed to the employment of the Employee in accordance with the provisions of this Agreement and with the intention that this Agreement will supersede any written or oral agreement between the parties or between the Employee and any other member of Novogen Group.

IT IS AGREED

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires:

(1)	“Agreement” means this employment agreement and any variation amendment or replacement of it;
(2)	“Business” means the business carried on by the Company and the members of the Novogen Group;
(3)	“Business Day” means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in the place where an act is to be performed or a payment is to be made;
(4)	“Commencement Date” means the date set out in Item 1 of the Schedule;
(5)	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes the successors and assigns of that company;
(6)	“Confidential Information” means all information concerning the Business, the business methods of the Company and any member of the Novogen Group, their technologies, pricing policies, marketing strategies, Intellectual Property and any other information relating to the affairs of the Company or the Novogen Group, but does not include:
	(a) information which was in the public domain before it was given to or accessed by the Employee; or

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(b) information which, after being given to or accessed by the Employee, became part of the public domain other than as a result of a breach by the Employee of any obligation of confidence to the Company or the Novogen Group;

(7)	“Design” has the same meaning as in the Designs Act 2003 (Cth);
(8)	“Intellectual Property” means all industrial and intellectual property rights throughout the world, including trade marks, logos, service marks, trade names, business names, copyrights, designs, patents, inventions, processes and other technical know-how (including extraction and manufacturing know-how), secret information and other rights in industrial or intellectual property and applications for them or licence agreements or other arrangements under which a person has the right to use any of them;
(9)	“Inventions” means all inventions, discoveries and novel designs, whether or not registrable as designs under the Designs Act 2003 (Cth) or patents under the Patents Act 1990 (Cth), or any corresponding law in any other country, including any inventions, developments, improvements or modifications to compounds, equipment, technology, methods or techniques;
(10)	“Novogen Group” means the Company and each of Novogen Research Pty Limited ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any of them from time to time;
(11)	“Patents” has the same meaning as in the Patents Act 1990 (Cth);
(12)	“Related Body Corporate” in relation to a body corporate means a body corporate that is related to the first mentioned body by virtue of section 50 of the Corporations Act;
(13)	"Remuneration” means the amount determined under clause 14;
(14)	“Restraint Period” means the period described in Item 10 of the Schedule;
(15)	“Services” means the services described in clause 4 to be provided in accordance with this Agreement; and
(16)	“Works” means all works and other subject matter as defined in the Copyright Act 1968 (Cth), and any other thing in which copyright subsists.

1.2 Interpretation

(1) Reference to:

(a)	one gender includes the other genders;
(b)	the singular includes the plural and the plural includes the singular;
(c)	a person includes a body corporate;
(d)	a party includes the party’s executors, administrators, successors and permitted assigns; and
(e)	a statute, regulation or provision of a statute or regulation (“Statutory Provision”) includes:

(i) that Statutory Provision as amended or re-enacted from time to time; and

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(ii) a statute, regulation or provision enacted in replacement of that Statutory Provision.

(2)	All monetary amounts are in Australian dollars, unless otherwise stated.
(3)	Headings are for convenience only and do not affect the interpretation, or form part, of this Agreement.
(4)	Where a word or expression is given a particular meaning, other parts of speech and grammatical forms of that word or expression have a corresponding meaning.
(5)	If an act must be done on a specified day which is not a Business Day, the act must be done instead on the next Business Day.

2. Employment

2.1	The Company employs the Employee to provide the Services to the Company upon and subject to the terms and conditions of this Agreement and the Employee accepts such employment.
2.2	The position in which the Employee is employed by the Company as and from the Commencement Date is as set out in Item 4 of the Schedule.
2.3	The Employee shall as at the Commencement Date be located at the office of the Company set out in Item 5 of the Schedule.

3. Term

3.1	The Company employs the Employee to provide the Services to the Company for the period set out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in accordance with clause 18 of this Agreement.
3.2	On expiry of the Initial Term, the employment will continue until terminated by either party giving the period of notice set out in Item 3 of the Schedule, or, in the case of termination by the Company, by the making of a payment in lieu of the period of notice set out in Item 3 of the Schedule.

4. Services

4.1	The Employee will perform all the functions of a person in the position set out in Item 4 of the Schedule or such other services as may be determined by the Company from time to time.
4.2	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as amended by the Company in such manner and at such time as the Company may from time to time reasonably determine.

5. General Duties and Obligations

5.1 Without limiting any other provision of this Agreement the Employee must at all times during his employment hereunder:

(1) be just and faithful in all transactions relating to the Company and the Novogen Group and must show the utmost good faith in the business of the Company and the Novogen Group;

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(2)	give to the Company a just and faithful account of such transaction and also upon every reasonable request furnish a full and correct explanation thereof to the Company;
(3)	divulge to the Company all information or knowledge which he may possess in relation to the affairs, business and activities of the Company;
(4)	use his best skill and endeavour to promote the interest and welfare of the Company and the Novogen Group and carry out the same for the utmost benefit of the Company and the Novogen Group and diligently and faithfully apply himself to the affairs, business and activities of the Company; and
(5)	not at any time intentionally do anything which directly or indirectly may impair or be likely to impair the good name and reputation of the Company or the Novogen Group.

5.2 The Employee must carry out his employment and must conduct himself at all times in a professional manner.

6. Compliance with Directions

6.1 The Employee must at all times during his employment hereunder obey, comply with and carry out the proper and reasonable directions, orders and instructions of and shall be directly responsible and answerable to the Individual or Group identified in Item 11 of the Schedule or as amended by the Company from time to time under clause 4.

7. Time Devoted to Employment

7.1	The Employee must at all times during his employment hereunder devote the whole of his attention and abilities to the business and activities of the Company and in the performance of his responsibilities and duties under this Agreement.
7.2	Without the prior written consent of the Company, the Employee must not be a director of any body corporate which carries on or is concerned with any activity identical to or substantially similar to that of the Novogen Group or where being a director may directly or indirectly affect the Business of the Novogen Group.
7.3	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of stocks, securities, real estate or personal property (tangible or intangible) for purposes of investment or from making any other private investment other than as may be prohibited by clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the interest of the Novogen Group.

8. Duty to Act within Limits

The Employee must not without the prior written consent of the Company:

(1)	employ any of the money, goods or effects of the Company or any member of Novogen Group or pledge the credit thereof except in the ordinary course of business and upon the account of and or the benefit of the Company or member of the Novogen Group;
(2)	lend money or give credit on behalf of the Company or any member of the Novogen Group or have any dealings with any person whom the Company has previously in writing forbidden the Employee to deal with or trust;
(3)	give any guarantee, undertaking or indemnity or enter into any bond with or become bail, surety or surety for any person or do or knowingly cause or suffer to be done anything

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	whereby the property of the Company or any member of the Novogen Group or any part thereof may be seized, attached or taken in execution, after the Company has previously in writing forbidden the Employee to deal with such person; or
(4)	enter into any leasing, hiring, hire-purchase, rental or financing arrangements or transactions with respect to assets or property acquired or to be acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

9.1 Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants that at all times during his engagement hereunder and thereafter indemnify and keep indemnified the Company or member of the Novogen Group, as the case may be, in respect of any loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or suffer by reason of any breach by the Employee of any of the provisions of clause 8. This indemnity is in addition to and not in substitution for any other right or remedy available to the Company in the event of such breach.

10. Indemnity by Company

10.1

Subject to the Corporations Act and the Constitution of the Company, the Company agrees to indemnify and keep indemnified the Employee and his executors, administrators and legal personal representatives against any loss, costs, damages, judgments or liability suffered or incurred by the Employee in respect of any act, neglect, default or error or judgement in the course of his employment and for which the Company would be vicariously liable other than any wilful or gross neglect, default or breach of duty or breach of trust.

10.2

Without limiting clause 10.1 :

(1)	the Employee may be indemnified by the Company where the Board of Directors of the Company considers it appropriate, against any liability incurred by the Employee in the connection with the performance by him of his position with the Company, unless the liability arises out of conduct involving lack of good faith;
(2)	the Employee shall be indemnified by the Company against any liability incurred by him in defending any proceedings in connection with the performance by him of his position with the Company whether civil or criminal in which judgment is given in his favour or in which the Employee is acquitted or in connection with any application in relation to any proceedings in which relief under the Corporations Act is granted to him by the court;
(3)	to the extent permissible by law, the Company may, pay a premium in respect of a contract insuring the Employee against a liability incurred by the Employee in connection with the performance by him of his position with the Company except for a liability arising out of conduct involving a wilful breach of duty in relation to the Company..

11. Annual Leave

11.1	During the course of his employment hereunder the Employee is entitled to paid annual leave of 20 working days for every period of 12 months of service as from the Commencement Date.
11.2	The days of annual leave referred to in clause 11.1 are in addition to any day which is proclaimed to be a public holiday in the place in which the Employee is at the relevant time located.
11.3	The entitlement to annual leave is deemed to arise pro rata.

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11.4	Any annual leave entitlement must be taken by the Employee at such time or times as is mutually convenient to the Employee and the Company.
11.5	Any annual leave entitlement not taken may be added to and taken with any further annual leave entitlement.

12. Sick Leave

12.1	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of service.
12.2	Any sick leave entitlement not taken in any year may be taken by the Employee in another year provided that any accumulated sick leave entitlement which immediately prior to the termination of the employment of the Employee hereunder has not been taken shall be forfeited on termination.

13. Long Service Leave

13.1 The Employee is entitled to long service leave under the Long Service Leave Act of the State or Territory in which the Employee is located.

14. Remuneration

14.1 In consideration of the provision by the Employee of his services to the Company hereunder, the Company shall pay the Employee Remuneration, the amount of which and the rate of payment of which shall be, if not otherwise determined under this clause 14:

(a)	a base salary;
(b)	a superannuation contribution which, as a minimum, is the amount the Company must contribute on behalf of the Employee to avoid being liable for the superannuation guarantee charge under superannuation guarantee legislation;
(c)	motor vehicles;
(d)	other allowances; and
(e)	otherwise,

	as may be determined from time to time.
14.2	Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date, shall receive from the Company such remuneration salary as is set out in Item 9 of the Schedule.
14.4	The Remuneration is designed to compensate the Employee for all hours worked and the Employee is not entitled to any payment of overtime rates during the term of his employment hereunder.

15. Directorships

15.1	It is acknowledged by the employee that the Company and any other member of the Novogen Group may require the Employee to serve as a director on the Board of any member to the Novogen Group.
15.2	It is further acknowledged that the Employee shall serve as a director of another member of the Novogen Group as the nominee of the Company, and that the Employee must retire as a director from any such Board forthwith upon his being requested to do so by the Company.
15.3	In the event of the Employee ceasing to be an employee of the Company or member of the Novogen Group, he is deemed to have automatically retired from and vacated his office as a member of the Board of each member of the Novogen Group and the Employee gives an irrevocable authority to the

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Managing Director or other appointee of the Board to do all things and execute all documents necessary on behalf of the Employee to give effect to the resignations.

16. Confidentiality

16.1	Without limiting or derogating from in any way any rule of law or equity the Employee covenants with the Company that he shall not at any time without the prior written consent of the Company publish or divulge any Confidential Information to any person unless such publication or disclosure is made in the normal course of his employment or with the prior written consent of the Company.
16.2	The provisions of this clause 16 do not prejudice any other express or implied obligation on the part of the Employee to maintain confidentiality.
16.3	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information may include information disclosed to the Company or the Employee by any existing or potential customer, supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
16.4	The Employee will at the request of the Company sign a confidentiality agreement containing provisions similar to the provisions in this clause 16 in favour of any member of the Novogen Group or any of the persons referred to in clause 16.3.
16.5	This clause 16 survives termination of this Agreement with respect to any information until such information is no longer Confidential Information.

17. Restraint on Competition

17.1	The Employee covenants and agrees with the Company that without derogating from or limiting the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser, officer or contractor of any other person or persons, other than as an employee of the Company or a member of the Novogen Group, either directly or indirectly carry on or manage or be concerned or interested in or assist any other person or persons to carry on or be concerned or to obtain any interest in any industry or business engaged in the research, development, manufacture, extraction, processing, marketing, distribution or sale of any veterinary or human pharmaceutics or therapeutics or any business or industry identical to or substantially similar to the Business of the Company, or any of the members of the Novogen Group in any State or Territory of Australia or any other place in the world at any time during the course of his employment hereunder.
17.2	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the Employee may hold shares in a public company the shares of which are quoted on any share or stock exchange in the world.
17.3	The Employee convenants and agrees with the Company that he will not during the period set out in item 10 of the Schedule as from the date upon which this Agreement is terminated either directly or indirectly on his own account or for or with any other person or persons, solicit, interfere with or endeavour to entice away from the Company, or any of the members of the Novogen Group any person who, during the employment of the Employee with the Company or any member of the Novogen Group was a customer, supplier, contractor, agent, licensee or licensor or to the knowledge of the Employee was a person with whom any of the aforesaid was negotiating with a view to that person becoming a customer, supplier, contractor, agent, licensee or licensor of any of the aforesaid.
17.4	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are necessary in order to protect the interests of the Company, the Novogen Group and of the Business and the

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	confidentiality of the knowledge of the Employee as to the affairs, business and activities of the Company and the Novogen Group.
17.5	It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1 and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far as the provisions of clause 17.1 relate to any activities, state or territory the restraint is distinct and severable from any other activity, state or territory and the invalidity of the restraint in respect of one or more of such activities, states or territories shall not affect its validity in respect of any of the other such activities, states or territories.
17.6	Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right of any court of competent jurisdiction upon the application of any party in appropriate proceedings from imposing upon the Employee a lesser restraint in circumstances where the restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court, excessive or unreasonable in the circumstances.

18. Termination of Employment

Termination at any time

18.1	This Agreement is terminated immediately on the death or Total or Permanent Disability of the Employee. For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being absent from his employment by reason of sickness, ill health or other incapacity or disability for a period of more than 3 months in excess of accrued sick leave in any period of 12 consecutive months.
18.2	At any time, this Agreement may be terminated forthwith by the Company in the event that the Employee:

(1)	is guilty of any criminal or indictable offence or of any dishonesty, whether in relation to the affairs of the Company or any of the members of the Novogen Group or not; or
(2)	is guilty of any serious breach of faith, or serious neglect or default or wilful disregard of directions or serious professional misconduct or gross misconduct; or
(3)	is in serious and fundamental breach of this Agreement and persists in such breach after being previously directed in writing by the Company to remedy such breach and fails to do so within 14 days of the giving of such direction, which direction shall specifically draw the attention of the Employee to this clause 18.2 (3); or
(4)	if and for so long as he is a member of any board of directors of any body corporate has his office vacated under the Corporations Act; or
(5)	a person whose person or estate is being dealt with under the law relating to mental health; or
(6)	ceases to be registered or has his registration suspended for any reason whatsoever under the provision of any legislation for the time being in force dealing with the registration of persons providing services of the nature of those provided by the Employee to the Company and which registration is required for the provision by the Employee of those services.

Termination during Initial Term

18.3 Except as provided in clauses 18.1 and 18.2, the Company may only terminate the employment during the Initial Term by the Company making a payment equivalent to the Employee’s Remuneration for the unexpired portion of the Initial Term.

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Termination after Initial Term

18.4	After expiry of the Initial Term, the Company may terminate the employment in accordance with clause 3.2.
18.5	After expiry of the Initial Term, the Employee may terminate the employment by resignation in accordance with clause 3.2. If the Employee resigns pursuant to clause 3.2, the Company may choose:

(a)	to retain the services of the Employee during the notice period; or
(b)	not to retain the services of the Employee for some or all of the notice period, and make a payment in lieu of notice for the part of the notice period for which the Employee is not retained.

18.6	A payment in lieu of notice made under clause 18.4 or 18.5, will be calculated on the basis of the Employee’s Remuneration, and constitutes satisfaction of the Company’s obligations to employ the Employee during the notice period.
18.7	For all or part of the Employee’s notice period under clauses 18.4 or 18.5, the Company may direct the Employee:

(a)	not to attend for work at the Company’s premises;
(b)	to attend for work at a different location to the Employee’s usual work location;
(c)	to perform no work; or
(d)	to perform designated duties which are within the Employee’s skill and competence, whether or not these duties form part of the Employee’s usual role;

and all the Employee’s obligations under this Agreement will continue to apply during the notice period.

Termination Payments

18.8	Subject to clause 18.9, on termination by the Company under clauses 18.3 or 18.4, in addition to any amount payable under those clauses by way of Remuneration or pay in lieu of notice, the Company will pay to the Employee a termination payment equal to 18 months’ Remuneration.
18.9	The total amount payable under clauses 18.3, 18.4 and 18.8 will be:

(a)	a minimum of 18 months’ Remuneration
(b)	a maximum of 3 years’ Remuneration.

19. Compliance with Obligations on Termination

19.1	Termination of this Agreement for any reasons whatsoever does not relieve the Company from payment in full of all sums then owing by the Company to the Employee by way of remuneration accrued to the date of termination.
19.2	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from payment in full of all sums then owing to the Company or which may become owing in respect of any period prior to termination and shall be without prejudice to the rights of the Company to sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

20.1 In the event that this Agreement is terminated, the Employee has no claim against the Company for compensation, damages or otherwise for or in respect of or by a reason of such termination except as set out in this Agreement.

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21. Duty to Deliver Up

21.1 Upon the termination of this Agreement and the employment of the Employee for any reason whatsoever the Employee, on request from the Company must deliver up to the Company all correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes, access codes, keys and property of any nature whatsoever belonging to the Company, or to any member of the Novogen Group which may be in the possession or under custody or control of the Employee. Any such request must not be made unreasonably.

22. Inventions, Works and other Intellectual Property

22.1 The Employee assigns to the Company:

(1)	all Inventions;
(2)	the entire copyright in all Works; and
(3)	all other Intellectual Property,

	created by the Employee in the course of his employment, or by any use of the Company’s facilities, resources or Intellectual Property.
22.2	The assignment in clause 22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge accumulated by the Employee in the performance of the Services and the Employee is entitled to use routine procedures developed by the Employee in the performance of the Services, provided that the Employee must not exploit any Invention or make any reproduction or substantial reproduction of any Works without the written consent of the Company.
22.3	Where the Employee makes a Design arising out of the Services, the Design will be owned by the Company or the member of the Novogen Group for whom it was made.
22.4	Where the Employee makes any patentable process or article, the Patent will be owned by the Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

23.1	The Employee by this Agreement assigns to the Company the copyright that will subsist in respect of any new Works, and the new Works will form part of the Works under this Agreement and the terms and conditions of this Agreement will apply to those new Works.
23.2	The Employee must immediately provide the Company with copies of any new Works he prints, publishes, makes or procures during the employment.

24. Further Assurances as to Intellectual Property

24.1 The Employee must during and after the employment and at any time thereafter do all acts and things and sign all documents as the Company may reasonably request to secure the ownership of the Company or any member of the Novogen Group in any Inventions, Works, Designs or other Intellectual Property.

25. Severability

25.1 Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is severable.

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25.2 If a Court determines that any provision of this Agreement is unenforceable, illegal or void then it is severed and the other provisions of this Agreement remain operative unless without the offending provision they are fundamentally different.

26. Waiver

26.1	A party’s failure or delay to exercise a power or right does not operate as a waiver of that power or right.
26.2	The exercise of power or right does not preclude either its exercise in the future or the exercise of any other power or right.
26.3	No waiver is effective unless it is in writing.
26.4	The waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

27. Entire Understanding

27.1	This Agreement:
	(1) contains the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement; and
	(2) supersedes and merges any prior agreement or understanding on anything connected with that subject matter.
27.2	Each party has entered into this Agreement without relying on any representation by any other party or any person purporting to represent that party.

28. Variation

28.1 An amendment or variation to this Agreement is not effective unless it is in writing and signed by both parties.

29. Further Assurance

29.1 Each party must promptly at its own cost do all things (including executing all documents) necessary or desirable to give full effect to this Agreement.

30. Dispute Resolution

30.1	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence court proceedings relating to any dispute under this Agreement, except where that party seeks urgent interlocutory relief.
30.2	If there is a dispute under this Agreement the parties must negotiate in good faith to resolve the dispute in a spirit of goodwill and compromise.
30.3	If there is a dispute under this Agreement that is not resolved in accordance with clause 30.2, either party may give written notice to the other party stating that it is a notice under this clause and specifying the dispute.

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30.4 If the dispute is not settled by agreement within 14 days after the notice referred to in clause 30.3 is given, the parties must appoint a mediator and must seek in good faith to settle the dispute through mediation. If the parties are unable to agree upon a mediator within 14 days after the expiration of the initial 14 days referred to in this clause 30.4, the mediator must be a person nominated by the President of the Law Society of New South Wales or his or her delegate, and either party may request the nomination at any time after the expiration of the second 14 days referred to in this clause.

31. Notices

31.1 A notice or other communication required or permitted to be given by a party to another will be in writing and;

(1)	delivered; or
(2)	sent by postage prepaid to that party’s address set out in this Agreement or as               notified to each party at any time.

31.2 A notice or other communication is deemed given and received if:

(1)	delivered, upon delivery; or
(2)	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

32.1	The law of New South Wales governs this Agreement.
32.2	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.

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SCHEDULE

Item 1.	Commencement Date
	The date of this Agreement as first written on the first page.
Item 2.	Initial Term
	Three years.
Item 3.	Notice Period
	Six months.
Item 4.	Position
		(1	)	Company Secretary of the Novogen Group
		(2	)	with responsibilities for:
				(a) all Company Secretarial matters for the Novogen Group of Companies including Company Secretarial support to the Company Secretary of Marshall Edwards Inc and Marshall Edwards Pty Ltd;
				(b)	Trade Marks and copy write;
				(c)	treasury;
				(d)	Insurance;
				(e)	Information Technology;
				(e)	legal and financial duties delegated from the Managing Director;
				(f)	represent the Company in its best interests; and
				(g)	provide recommendations to the Executive and the Board for any of these matters for the Company.
Item 5.	Location
	140 Wicks Road, North Ryde, 2113, New South Wales or such other place within the Metropolitan Sydney area as is designated from time to time by the Board of Directors.
Item 6.	Accrued Annual Leave
	As accrued from 30 August, 1994
Item 7.	Accrued Sick Leave
	As accrued from 30 August, 1994

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Item 8.	Long Service Leave
	As accrued from 30 August, 1994
Item 9.	Remuneration
	$203,779 or such other amount as agreed to from time to time.
Item 10.	Restraint Period
	5 years
Item 11.	The Managing Director.

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EXECUTED as an agreement on the date set out at the commencement of this Agreement.

THE COMMON SEAL OF	)
NOVOGEN LABORATORIES PTY LTD	)
was affixed in accordance with its	)
Articles of Association in the presence of:	)
Director/Secretary		Director
Name of Director/Secretary (BLOCK LETTERS)		Name of Director (BLOCK LETTERS)
		Director
		Name of Director (BLOCK LETTERS)
SIGNED by:	)
Ronald Lea Erratt	)
in the presence of:	)
Signature of Witness
Name of Witness (BLOCK LETTERS)
Address of Witness

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EX-8.1

Exhibit 8.1

Company Subsidiaries

Novogen Limited is a company limited by shares and is incorporated and domiciled in Australia. Novogen Limited has prepared a consolidated financial report incorporating the entities that it controlled during the financial year ended June 30, 2006, which included the following:

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(U.K.)	U.K.		100
Promensil Limited	U.K.		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

* Owned indirectly through Marshall Edwards, Inc.

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EX-12.1

Exhibit 12.1

Certification
Pursuant to Section 302
The Sarbanes-Oxley Act of 2002

I, Christopher Naughton, certify that:

1.	I have reviewed this annual report on Form 20-F of Novogen Limited;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report.
4.	The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) for the company and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared:
(b)	Omitted
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions).

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: November 24, 2006
	/s/ Christopher Naughton Managing Director

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EX-12.2

Exhibit 12.2

Certification
Pursuant to Section 302
The Sarbanes-Oxley Act of 2002

I, David Ross Seaton, certify that:

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

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) ) for the company and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared:
(b)	Omitted
(c)	Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions).

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: November 24, 2006
	/s/ David Seaton Chief Financial Officer

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EX-13.1

Exhibit 13.1

Certification
Pursuant to Section 302
The Sarbanes-Oxley Act of 2002

Each of Christopher Naughton, Managing Director, and David Ross Seaton, Chief Financial Officer of Novogen Limited, a New South Wales corporation (the “Company”), hereby certifies that:

(1)	The Company’s periodic report on form 20-F for the period ended June 30, 2005 (the “Form 20-F”) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 as amended; and
(2)	The information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

*     *     *

Managing Director	Chief Financial Officer
/s/ Christopher Naughton	/s/ David Seaton
Christopher Naughton	David Seaton
Date: November 24, 2006	Date: November 24, 2006

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