EX-99 2 novogenltd4d311212finalsigne.htm CONVERTED BY EDGARWIZ

NOVOGEN LIMITED

ABN 37-063-259-754

www.novogen.com

Level 1,1-7 Waterloo Road, NORTH RYDE, NSW 2113

Telephone: 02 9878 0088

APPENDIX 4D

incorporating

INTERIM FINANCIAL REPORT

FOR THE HALF-YEAR ENDED

31 DECEMBER 2012

Lodged with the ASX under Listing Rule 4.2A

This is a half-yearly report. It is to be read in conjunction with the most recent annual financial report

Novogen Limited

Table of contents

31 December 2012

Contents

Results for announcement to the market

1

Directors’ report

2

Auditor’s independence declaration

5

Statement of profit or loss and other comprehensive income

6

Statement of financial position

7

Statement of changes in equity

8

Statement of cash flows

9

Notes to the financial statements

10

Directors’ declaration

21

Independent auditor’s report

22

.

Novogen Limited

Appendix 4D Specific Requirements

31 December 2012

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Revenues from ordinary activities

down

21.2%

to

$610,001

Profit from ordinary activities after tax attributable to members

down

89.4%

to

$495,877

of Novogen Limited

Net profit for the period attributable to members

down

29.8%

to

$3,201,266

The Directors paid a dividend on 27 November 2012 via an in-specie distribution of shares in MEI

Pharma Inc. (2011: Nil)

Refer to Review of Operations shown in the attached Directors’ Report for an explanation of the above

disclosures.

1

Novogen Limited

Directors’ report

31 December 2012

Directors’ report for the half-year 31 December 2012

Your directors submit their report for the half-year ended 31 December 2012.

Directors

The names of the Company’s Directors during or since the end of the financial year are as follows:

Prof. G Kelly – Chairman (appointed 7 December 2012)

Dr A Heaton (appointed 7 December 2012)

Mr JT Austin

Mr R Birch (appointed 12 December 2012)

Mr SR Coffey (appointed 8 November 2012)

Mr JP O’Connor

Mr WD Rueckert (resigned 7 December 2012)

Mr PR White (resigned 7 December 2012)

Mr RC Youngman (resigned 8 November 2012)

Directors were in office for the entire period unless otherwise stated.

Review of operations

Cash Resources

At 31 December 2012, the Group had total cash of $1.0 million compared to $8.3 million at 30 June 2012.

The decrease was primarily a result of the Group distributing its investment in MEI Pharma Inc (MEI) by

way of an in specie distribution during the period. MEI accounted for $6,085,946 of the balance at 30

June 2012.

Revenue and Other income

The Company earned revenues from continuing operations for the six months ended 31 December 2012

of $0.6 million compared to $0.8 million for the same period last year. The decrease is primarily due to the

decrease in interest earned in cash balances held in deposit accounts.

Other income for the six months ended 31 December 2012 was $0.6 million compared to $0.7 million for

the corresponding period last year.

2

Novogen Limited

Directors’ report

31 December 2012

Net Profit

The operating profit attributable to Novogen shareholders for the six months ended 31 December 2012,

decreased by $4.2 million to $0.5 million compared to a profit of $4.7 million in the previous

corresponding period. Of this $4.9 million relates to the profit on disposal of MEI Pharma Inc.

Profit from discontinued operations was $0.7 million for the six months ended 31 December 2012, as

compared to $4.3 million in the same period last year.

The net profit from continuing operations after income tax for the consolidated Group for the six months

ended 31 December 2012 increased by $0.9 million to $0.019 million from a loss of $0.9 million for the

same period last year.

General and administrative expenses from continuing operations decreased by $1.0 million from $2.2

million to $1.2 million for the six months ended 31 December 2012.

Research and Development Activities

For the year up until 5 December 2012, the Group conducted no R&D activity other than through its

subsidiary MEI Pharma Inc. In that time, Novogen disposed of its interests in two subsidiaries, Glycotex

Inc (by sale) and MEI Pharma Inc(via in-specie distribution) in which it held majority ownership and which

conducted any R&D activities.

Glycotex held the intellectual property originally developed by Novogen in the field of glucan therapeutics

in the treatment of trophic ulcers. This company was sold on 27 November 2012.

MEI Pharma held the intellectual property originally developed by Novogen in the field of isoflavonoid

drugs. On 17 November 2012, shareholders approved the in specie distribution of Novogen’s

shareholding in MEI Pharma.

On 5 December 2012 Novogen acquired the biotechnology company, Triaxial Pharmaceuticals Pty Ltd

(‘Triaxial’). Triaxial had developed a novel technology platform allowing the design and construction of a

novel family of compounds that Triaxial refers to as super-benzopyrans.

The origins of this technology lie in the isoflavonoid drug development program originally conducted by

Novogen from 1994-2011 and which subsequently was the subject of final in specie distribution MEI

Pharma. Triaxial believed that while highly promising, the original Novogen technology that allowed the

design and manufacture of such drugs, was limited in terms of the range of different molecular structures

that could be built and in the ability of the drugs to access end target tissues such as cancer tissue.

Triaxial subsequently developed a method of greatly increasing the flexibility of the basic isoflavonoid

molecular scaffold to allow the insertion of a much greater range of chemical moieties. The result of this

was the ability to create compounds of far greater structural complexity than previously achieved. These

complex structures have been termed super-benzopyrans by Triaxial.

The super-benzopyran, CS-6, had been identified in mid-2012 by Triaxial as its lead drug candidate for

development as an anti-cancer drug. In addition to displaying considerably greater anti-cancer potency in

vitro compared to the family of isoflavonoid drugs previously developed by Novogen, CS-6 also showed

3

Novogen Limited

Statement of Profit or Loss and Other Comprehensive Income

For the half-year ended 31 December 2012

Notes

Consolidated

2012

2011

Continuing Operations

Revenue

2

610,001

773,998

Other incom e

2

617,795

737,201

Research and developm ent expenses

-

(297,591)

General and adm inistrative expenses

(1,209,268) (2,165,274)

Profit(Loss) before incom e tax

2

18,528

(951,666)

Incom e tax expense

-

-

Profit(Loss) after tax from continuing operations

18,528

(951,666)

Profit(Loss) after tax from discontinued operations

9

723,641

4,265,952

Profit/(loss) for the period

742,169

3,314,286

Other comprehensive profit/(loss)

Net exchange difference on translation of financial

statem ents of foreign controlled entities (Net of tax

2012: Nil, 2011: Nil)

3,967,912

(151,137)

Other comprehensive loss

3,967,912

(151,137)

Total com prehensive incom e/(loss)

4,710,081

3,163,149

Profit/(loss) attributable to:

Non-controlling interest

246,292

(1,367,661)

Novogen Lim ited

495,877

4,681,947

742,169

3,314,286

Total com prehensive incom e/(loss) attributable to:

Non-controlling interest

1,508,814

(1,395,318)

Novogen Lim ited

3,201,266

4,558,467

4,710,080

3,163,149

Basic and diluted earnings/(loss) per share (cents) from

continuing operations

11

0.01

(0.93)

Basic and diluted earnings/(loss) per share (cents) from

discontinued operations

0.46

4.18

Basic and diluted earnings/(loss) per share (cents)

0.47

4.58

The above statement of profit or loss and other comprehensive income should be read in conjunction with the

accompanying notes.

6

Novogen Limited

Statement of Financial Position

31 December 2012

Consolidated

December

June

2012

2012

CURRENT ASSETS

Cash and cash equivalents

993,106

8,347,908

Trade and other receivables

333,091

404,506

Other current assets

-

205,666

Total Current Assets

1,326,197

8,958,080

NON-CURRENT ASSETS

Property, plant and equipment

2,366

26,904

Investments

58,627

-

Intangibles

6

2,850,517

-

Total Non-Current Assets

2,911,510

26,904

TOTAL ASSETS

4,237,707

8,984,984

CURRENT LIABILITIES

Trade and other payables

7

399,022

3,674,583

Provisions

-

190,000

Total Current Liabilities

399,022

3,864,583

NON-CURRENT LIABILITIES

Borrowings

8

926,137

-

Provisions

-

7,330

Total Non-Current Liabilities

926,137

7,330

TOTAL LIABILITIES

1,325,159

3,871,913

NET ASSETS

2,912,548

5,113,071

EQUITY

Contributed equity

10

134,488,170 199,026,306

Other contributed equity

735,863

-

Reserves

-

(3,849,563)

Accumulated losses

(132,311,485) (191,700,929)

Parent interest

2,912,548

3,475,814

Non-controlling interest

-

1,637,257

TOTAL EQUITY

2,912,548

5,113,071

The above statement of financial position should be read in conjunction with the accompanying notes.

7

Novogen Limited

Statement of Changes in Equity

For the half-year ended 31 December 2012

Reserves &

Other

Other

Non-

Contributed Contributed Accumulated Contributed

controlling

Consolidated

equity

equity

losses

Equity

Total

interest

Total equity

At 1 July 2011

194,295,000

-

(186,644,000) (3,422,000)

4,229,000

191,000

4,420,000

Profit/(loss) for the period

-

-

4,682,000

-

4,682,000

(1,368,000)

3,314,000

Exchange differences on translation of foreign operations

-

-

-

(124,000)

(124,000)

(27,000)

(151,000)

Total comprehensive income/(loss) for the half year

-

-

4,682,000

(124,000)

4,558,000

(1,395,000)

3,163,000

Issue of share capital by subsidiary

966,000

-

-

-

966,000

-

966,000

less non-controlling interest in relation to issued capital by

subsidiary

(2,091,000)

-

-

-

(2,091,000)

2,091,000

-

Share-based payments

-

-

128,000

-

128,000

137,000

265,000

Opening equity transferred to non-controlling interest due to

issuing of shares by subsidiary

(979,000)

-

935,000

62,000

18,000

(18,000)

-

Total transactions with owners in their capacity as

owners

(2,104,000)

-

1,063,000

62,000

(979,000)

2,210,000

1,231,000

At 31 December 2011

192,191,000

-

(180,899,000) (3,484,000)

7,808,000

1,006,000

8,814,000

At 1 July 2012

199,026,306

-

(191,700,929) (3,849,563)

3,475,814

1,637,257

5,113,071

Profit/(loss) for the period

-

-

6,205,497

-

6,205,497

(5,463,328)

742,169

Exchange differences on translation of foreign operations

-

-

2,705,239

-

2,705,239

1,262,673

3,967,912

Total comprehensive income/(loss) for the half year

-

-

8,910,736

-

8,910,736

(4,200,655)

4,710,081

De-recognition of non-controlling interest

(1,637,257) (1,637,257)

Dividend distribution on Subsidiary Disposal

-

(24,774,709)

- (24,774,709)

- (24,774,709)

Less Movement in disposal of Subsidiary

(65,807,136)

-

75,253,417

3,849,563 13,295,844

-

13,295,844

Less non-controlling interest

-

-

-

-

-

4,200,655

4,200,655

Issue of Shares on Subsidiary Acquisition

1,269,000

117,000

-

-

1,386,000

-

1,386,000

Recognition of Equity component of Compound Financial

Instrument

-

618,863

-

-

618,863

-

618,863

Total transactions with owners in their capacity as

owners

(64,538,136)

735,863

50,478,708

3,849,563

(9,474,002)

2,563,398

(6,910,604)

At 31 December 2012

134,488,170

735,863 (132,311,485)

-

2,912,548

-

2,912,548

The above statement of changes in equity should be read in conjunction with the accompanying notes.

8

Novogen Limited

Statement of Cash Flows

For the half-year ended 31 December 2012

Consolidated

2012

2011

Cash flows from operating activities

Profit/(loss) after tax

742,169

3,324,000

Income tax paid

-

(10,000)

Adjustments to reconcile profit/(loss) to net cash used in operating activities:

Depreciation and amortisation

14,801

13,436

Net (gain)/loss on disposal of property, plant and

equipment

-

9,818

Share-based payments

401,550

266,312

Gain on capital reduction - in specie distribution

(4,951,301)

-

Gain on sale of Glycotex

(612,354)

Sale of business - net proceeds

-

(7,980,000)

Share issue costs

395,000

Bad and doubtful debt expense

(37,472)

(808,000)

Net (gain)/loss on exchange rate changes

62,558

(207,000)

Changes in operating assets and liabilities:

(increase)/decrease in trade receivables

40,904

2,610,000

(increase)/decrease in other receivables

69,932

3,078,000

(increase)/decrease in inventories

-

654,000

(increase)/decrease in prepayments

205,665

6,000

increase/(decrease) in trade and other payables

(3,275,562)

(2,277,000)

increase/(decrease) in provisions

(197,330)

(223,000)

increase/(decrease) in derivative liability

-

(1,047,000)

Net cash flows used in operating activities

(7,536,440)

(2,195,434)

Cash flows from investing activities

Proceeds from sale of assets

150,000

2,000

Proceeds from sale of business

-

9,500,000

Sale of business - Other costs

-

(1,520,000)

Proceeds from acquisition of Triaxial

31,667

-

Net cash flows (used in)/provided by investing activities

181,667

7,982,000

Financing Activities

Proceeds from the issue of shares by subsidiary

-

966,000

Share issue costs

-

(395,000)

Net cash provided by/(used in) financing activities

-

571,000

Net (decrease)/increase in cash and cash equivalents

(7,354,773)

6,357,566

Cash and cash equivalents at beginning of period

8,097,908

5,766,000

Effect of exchange rates on cash holdings in foreign

currencies

-

56,000

Cash and cash equivalents at end of period *

743,135

12,179,566

* Note: an additional $250,000 (2011: $250,000) is held as secured

cash and is not included in cash equivalents in this cash flow

statement.

The above statement of cash flows should be read in conjunction with the accompanying notes.

9

Novogen Limited

Notes to the financial statements

31 December 2012

Note 1. Basis of preparation

This general purpose interim financial report, which incorporates the interim financial statements, for the

half-year ended 31 December 2012 has been prepared in accordance with the requirements of the

Corporations Act 2001 and the Australian Accounting Standard AASB 134: Interim Financial Reporting.

The interim financial statements have also been prepared on a historical cost basis with all amounts

presented in Australian dollars, unless otherwise stated.

It is recommended that this interim financial report be read in conjunction with the annual financial report

for the year ended 30 June 2012 and any public announcements made by Novogen Limited and its

controlled entities during the half-year in accordance with the continuous disclosure requirements arising

under the Corporations Act 2001. The half-year interim financial report does not include full disclosures of

the type normally included within the annual financial report.

These financial statements were authorised for issued by the board of directors on 28 February 2013.

Reporting Basis and Conventions

The accounting policies and methods of computation followed in this interim financial report are

consistent with those applied in the annual report for the year ended 30 June 2012, with the addition of

the following accounting policy.

New and revised accounting standards applicable for the first time to the current half-year

reporting period

The Group has adopted all new and revised Australian Accounting standards and Interpretations that

became effective for the first time and are relevant to the Group, including:

AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other

Comprehensive Income which requires entities to group items presented in Other Comprehensive Income

(OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently, and

changes the title of ‘statement of comprehensive income’ to ‘statement of profit or loss and other

comprehensive income’.

The adoption of the new and revised Australian Accounting Standards and Interpretations has had no

significant impact on the Group’s accounting policies or the amounts reported during the current half-year

period. The adoption of AASB 2011-9 has resulted in the title of ‘statement of comprehensive income’

being changed to ‘statement of profit or loss and other comprehensive income’.

Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups classified as held for sale are measured at the lower of their

carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as

held for sale if their carrying amounts will be recovered principally through a sale transaction rather than

through continuing use. This condition is regarded as met only when the sale is highly probable and the

asset or disposal group is available for immediate sale in its present condition. Management must be

committed to the sale, which should be expected to qualify for recognition as a completed sale within one

year from the date of classification.

In the statement of comprehensive income, income and expenses from discontinued operations are

reported separately from income and expenses from continuing operations. The resulting profit or loss

(after taxes) is reported separately in the statement of comprehensive income.

10

Novogen Limited

Notes to the financial statements

31 December 2012

Property, plant and equipment, once classified as held for sale, are not depreciated or amortised.

Business combination

The Group applies the acquisition method in accounting for business combinations. The consideration

transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date

fair value of assets transferred, liabilities incurred and the equity interests issued by the Group, which

includes the fair value of any asset or liability arising from a contingent consideration arrangement.

Acquisition costs are expensed as incurred. The Group recognises identifiable assets acquired and

liabilities assumed in a business combination regardless of whether they have been previously

recognised in the acquiree's financial statements prior to the acquisition. Assets acquired and liabilities

assumed are generally measured at their acquisition-date fair values.

Going concern

The financial statements have been prepared on a going concern basis, which contemplates continuity of

normal activities and realisation of assets and settlement of liabilities in the normal course of business. As

is often the case with development companies, the ability of the Company to continue it’s development

activities as a going concern including paying its debts when due, settling its liabilities and realising it’s

assets in the normal course of business at amounts stated in the accounts, is dependent upon it deriving

sufficient cash from investors and sales revenue.

There is a risk that the Company’s capital reserves, may not be adequate for future funding requirements

and potential future capital raisings may be required.

The directors are of the opinion that the above requirements will be satisfied and accordingly have

prepared the financial statements on a going concern basis. There is a material uncertainty whether the

Group will continue as a going concern and therefore whether it will realise its assets and extinguish its

liabilities in the normal course of business and at the amounts stated in the financial report.

Compound financial instruments

Compound financial instruments issued by the Group comprise convertible notes that can be converted to

share capital at the option of the holder, and the number of shares does not vary with changes in fair

value. The liability component of a financial instrument is recognised originally at the fair value of a similar

liability that does not have an equity conversion option. The equity component is recognised initially at the

difference between the fair value of the compound financial instrument as a whole and the fair value of

the liability component. Any directly attributable transaction costs are allocated to the liability and equity

components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured

at amortised cost using the effective interest rate method. The equity component of a compound financial

instrument is not remeasured subsequent to initial recognition.

Interest, losses and gains relating to the financial liability are recognised in the profit or loss. On

conversion, the financial liability is reclassified to equity; no gain or loss is recognised on conversion.

Significant management judgement in applying accounting policies

In the process of applying the Group’s accounting policies management has made judgements.

11

Novogen Limited

Notes to the financial statements

31 December 2012

Discontinued operations

Management has made a judgement that the disposal of its interest in Glycotex Inc is not subject to

classification as a discontinued operation, due to the size and nature of the interest. AASB 5 was

considered and it was not assessed as a major line of business, with significant cash generating units,

nor a subsidiary acquired exclusively with a view to resale.

Acquired intangible assets

Acquired intangibles in a business combination qualify for separate recognition are recognised as

intangible assets at their fair values. The asset will be amortised over its useful life of five years beginning

in the month of acquisition.

Tax

Gains on disposal of subsidiaries during the period gave rise to capital gain tax events. However

management has applied tax concessions, and with the existence of prior period losses has assessed

there to be no income tax expense on the transactions for the period.

12

Novogen Limited

Notes to the financial statements

31 December 2012

Note 2. Revenue and expenses

Consolidated

2012

2011

Revenue from continuing operations

Bank Interest

32,101

192,998

Royalties

577,900

581,000

Total revenue

610,001

773,998

Other Income from continuing operations

Gain on disposal of Glycotex

462,354

-

Gain on fair value of derivative liability

-

727,383

Glycotex Sale on Assets - Glucan Technology

150,000

9,818

Other

5,441

-

617,795

737,201

Depreciation included in the statement of comprehensive

income*

Included in administrative expenses

14,801

13,436

Total depreciation and amortisation expenses

14,801

13,436

Expenses included in the statement of profit or loss

and comprehensive income*

Included in administrative expenses:

Net foreign exchange differences

62,558

(208,170)

Net loss on disposal of plant and equipment

-

9,818

Onerous lease provision movement - operating

leases

-

31,000

Provision for doubtful debts

37,472

808,000

Included in research and development expenses:

Employee benefit expense*

Termination costs

374,590

1,018,000

Share-based payment expense

401,550

265,312

*includes amounts from discontinued operations

13

Novogen Limited

Notes to the financial statements

31 December 2012

Note 3. Contingent assets and liabilities

Guarantees

(a) The Company is continuing to prosecute its IP rights and in June 2007 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 with the court to confirm its

commitment to the ongoing enforcement process.

(b) Although the Company assigned its liability for the property lease in June 2012, it remains as the

original lessee and should the assignee default on the lease, a potential liability may exist. Offsetting this

contingent liability the Company holds a letter of personal guarantee from the director of the assignee

company, which guarantees the obligations of the assignee company contained or implied in the original

lease.

There have been no other changes in contingent assets or contingent liabilities since the end of the

previous annual reporting period, 30 June 2012.

Note 4. Operating segments

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used

by the executive management team (the chief operating decision makers) in assessing performance and

in determining the allocation of resources.

The operating segments indentified by management are based on the specific area of targeted

therapeutic treatment or the individual market in which products are sold.

The Group has identified four unique segments as follows:

1 – Drug Development - includes the discovery of new compounds and the early stage screening for

bioactivity of such compounds through both in vivo and in vitro testing.

2 – Oncology Drug Program (Disposed in November 2012 via an in specie distrubution)– involves the

development of selected oncology drug candidates which have indicated potential bioactivity against

cancer cells through clinical trial programs to assess safety and efficacy.

3 – Consumer Business (Sold August 2011) - a dietary supplement business based on red clover

isoflavones which are marketed and soldworld-wide.

4 – Wound Healing (Disposed in November 2012) – a separate and unique technology based on Beta-1

Glucan to aid in the management of wounds.

The accounting policies used by the Group in reporting segments internally are consistent with those

applied to the consolidated year-end, annual financial statements as contained in Note 1 there

to.Corporate costs have been allocated between segments and are therefore included in the net

profit/(loss) for each segment.

14

Novogen Limited

Notes to the financial statements

31 December 2012

Segment report

DRUG

ONCOLOGY DRUG

CONSUMER

DEVELOPMENT

PROGRAM

BUSINESS

WOUND HEALING

TOTAL

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

Net sales

-

-

-

-

-

978,000

-

-

-

978,000

Other revenue

615,442 774,000

4,954,688

5,000

-

43,286

612,354

-

6,182,484

822,286

Total revenue

615,442 774,000

4,954,688

5,000

-

1,021,286

612,354

-

6,182,484

1,800,286

Net(loss)/profit (3,253,315) (514,000)

723,640 (3,043,000)

-

7,323,286

3,271,844 (452,000)

742,169

3,314,286

Total assets, as reviewed and used by the executive management team, are not allocated between

segments where the segments are contained within the same legal entity. The oncology and wound

healing segments were disposed as at 31 December 2012. The consumer business was disposed of in

August 2011. As at 30 June 2012 the total segment assets were $3,872,000.

The total segment assets were $4,237,707 and $3,872,000 at 31 December 2012 and 30 June 2012,

respectively

Note 5. Net tangible assets per share

Consolidated

2012

2011

Net tangible asset backing per share

$0.05

$0.07

Note 6. Intangible Assets - Patents

Acquired

intangibles

Total

Gross carrying amount

Balance at 1 July 2012

-

-

Patents acquireds through business combination (note 8)

2,850,517

-

Amortisation

-

-

Carrying Amount 31 December 2012

2,850,517

-

15

Novogen Limited

Notes to the financial statements

31 December 2012

Note 7. Trade Payables

Trade and other payables consist of the following:

31 December

30 June

2012

2012

Trade payables

18,225

830,598

Accrued payables

60,265

1,763,197

Deferred royalty income

320,532

1,081,158

Total trade and other payables

399,022

3,674,953

Note 8. Borrowings

31 December

30 June

Financial liabilities designated at fair value

2012

2012

Borrowings at face value

1,500,000

-

Less equity component of compound financial instrument

(573,863)

-

Total Carrying Amounts

926,137

-

Note 9. Acquisition of Triaxial Pharmaceuticals

On 5 December 2012 Novogen acquired the biotechnology company, Triaxial Pharmaceuticals Pty Ltd

(‘Triaxial’). Triaxial had developed a novel technology platform allowing the design and construction of a

novel family of compounds that Triaxial refers to as super-benzopyrans.

The details of the business combination are as follows:

Fair value of consideration transferred

$

Shares issued at fair value (13,600,000 at $0.09)

1,224,000

Shares to be issued, subject to shareholder approval (1,800,000 at $0.09)

162,000

Borrowings at face value

1,500,000

Total consideration paid

2,886,000

Recognised amounts of identifiable net assets

Fair Value

Cash

31,667

Debtors

1,949

Plant & Equipment

1,867

Intangible assets

2,850,517

Total Assets

$2,886,000

16

Novogen Limited

Notes to the financial statements

31 December 2012

Note 9. Discontinued operations

Novogen disposed of the operations of MEI Pharma Inc (‘MEI Pharma) in which it held majority

ownership, via an in-specie distribution.

MEI Pharma held the intellectual property originally developed by Novogen in the field of isoflavonoid

drugs. On 17 November 2012, shareholders approved the in specie distribution of Novogen’s

shareholding in MEI Pharma. Refer note a) below.

At the Company’s AGM in October 2010 it was announced that the Company was looking at strategic

alternatives for its Consumer Business. On 1 August 2011, the consumer products business was sold to

Pharm-a-Care Laboratories Pty Limited. Refer note b) below.

Financial information for each discontinued operation is set out below:

1 July 2012 to

Half-year ended

27 November 2012

31 December 2011

a) MEI

Revenue

3,387

28,573

Expenses

(4,231,047)

(3,084,796)

(4,227,660)

(3,056,223)

Other revenue

Gain/Loss on disposal on shares

6,386,034

-

Movement in provision on investment

11,078,860

-

Foreign Currency Translation

(12,513,593)

-

4,951,301

-

Profit(Loss) before tax from discontinued operations

723,641

(3,056,223)

Tax expense

-

(825)

Profit after tax from discontinued operations

723,641

(3,057,048)

Net cash inflow from operating activities

(4,179,060)

1,338,000

Net cash inflow from investment activities

(2,360)

-

Net cash inflow from financing activities

-

-

Net cash increase(decrease) generated by

discontinued operations

(4,181,420)

1,338,000

17

Novogen Limited

Notes to the financial statements

31 December 2012

b) Consumer Business (Sold August 2011)

1 July 2012 to 31

December 2012

1 July to 1 August 2011

Revenue

-

1,021,000

Expenses

-

(1,669,000)

(648,000)

Proceeds from sale of consumer business

-

9,500,000

Movement in provision on investment

-

(1,018,000)

Foreign Currency translation

-

(502,000)

-

7,980,000

Profit(Loss) before tax from discontinued operations

-

7,332,000

Tax expense

-

(9,000)

Profit after tax from discontinued operations

-

7,323,000

Net cash Inflow from operating activities

-

10,587,000

Net cash increase generated by discontinued operations

-

10,587,000

Information relating to the financial position of the discontinued businesses are set out below. For the

consumer business no amount is included for receivables or payables which were not included in the

assets transferred in the sale of the business.

Assets and Liabilities

From annual financial

Disposal date

statements

27 November 2012

30 June 2012

a) MEI

2,837,454

6,461,000

Total assets

2,837,454

6,461,000

1 July 2012 to 31

1 July to 1 August

December 2012

2011

b) Consumer business

Inventories

-

654,000

18

Novogen Limited

Notes to the financial statements

31 December 2012

Note 10. Equity

$

Total

Balance at 30 June 2012

199,026,306

Disposal of Subsidiaries

(65,807,136)

Issue of Shares on Subsidiary Acquisition (Market Value)

1,269,000

Total Equity at 31 December 2012

134,488,170

Note 11. Earnings per share

Both the basic and diluted earnings per share have been calculated using the profit attributable to

shareholders of the parent company. The reconciliation of the weighted average number of shares for the

purposes of diluted earnings per share to the weighted average number of ordinary shares used in the

calculation of basic earnings per share is as follows:

Consolidated

2012

2011

Net loss attributable to owners of the parent from

continuing operations

8,801

(951,666)

Net profit attributable to owners of the parent from

discontinuing operations

487,076

4,265,952

Net loss attributable to owners of the parent

495,877

3,314,286

2012

2011

Weighted average number of ordinary shares used in

calculating basic and diluted earnings per share

105,814,372

102,126,000

Note 12. Events after the end of the reporting period

On 5 February 2013 Novogen announced the filing of a provisional patent application covering the novel

technology assiciates with the manufacture and use of its new class of molecules referred to as ‘Super-

Benzopyrans’

On 18 February 2013 Novogen announced results of an important study concerning its lead experimental

drug CS-6. Initial studies showed highly effective results regarding ovarian cancer stem cells. However it

is important to note studies are still at an early stage, with some way to go before there is clinical

evidence

19

Novogen Limited

Notes to the financial statements

31 December 2012

Note 13. Related Party disclosures

Transactions with related parties

Steven Coffey was appointed director. Mr Coffey is a partner of the firm Watkins Coffey Martin Chartered

Accountants. No fees were paid to this firm during the reporting period.

The sale of Glycotex Inc. as mentioned earlier in the directors report was made to a company which is

associated with former chairman and director William Rueckert. Details of this sale are shown in Note 2.

The company acquired the outstanding shares of Triaxial Pharmaceuticals Pty Ltd which included its

shareholders Professor Graham Kelly, Dr Andrew Heaton and Robert Birch, who became directors of

Novogen as a result of this transaction. The market value of this transaction was $2,850,517. Details of

this acquisition are shown in Note 9.

20