![[novogenltd4d311212finalsi001.jpg]](novogenltd4d311212finalsi001.jpg)
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
