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POWERLAN LIMITED 2002-06-24 ASX-SIGNAL-G

HOMEX - Sydney

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RESPONSE TO ASX QUERY

1. Is the Company aware of any information concerning it that has not
been announced which if known could be an explanation for trading in
the in securities of the Company?

Powerlan has recently completed/concluding an on-market takeover of
Clarity International Limited. Clarity posted, a half-year loss of
$5.5m - (information which is in the public domain). Powerlan
anticipates that Clarity will loose a further amount in the final
half of 2002. As yet Powerlan cannot quantify the magnitude of
Clarity's potential loss, as it is currently conducting extensive
auditing of Clarity's accounts. Powerlan does however suspect that
Clarity will have to take a provision for one large project and will
need to also write down WIP due to Powerlan's more conservative
accounting.

Powerlan made an announcement on 29 April 2002 in regards to the
transformation of its business from a traditional IT product and
services reseller to a global software company. In the announcement
Powerlan indicated that it is considering taking certain non-cash
write downs which will result in Powerlan showing a loss for year
ended 30 June 2002. The magnitude of the loss was not quantified, as
this is to be determined in consultation with the Powerlan auditors.

In the Powerlan update announcement Powerlan also collaborated on its
strategy of divesting of many of its non-core assets to ensure
complete focus on its stated objectives - this program is now well
underway with about 2 non-core assets already sold and another 2
assess under negotiations. The media has reported this strategy as
"risky" but logical. The result of these non-core sales may require
Powerlan to take a provision for out-of-date stock, which will not
realize my value in the sales - this provision cannot be quantified
at this point, as it is dependant upon the outcome of any asset
sales.

Powerlan purchased a company called IMX 12 months ago. The sale
agreement calls for a final consideration payment based on IMX's
earning for the year, to be made 1 July, 2002 amounting to $5M and
the balance of the consideration to be made by way of issuing
Powerlan shares after the audit of IMX. IMX has by far exceeded its
profit forecasts and now it is anticipated that the amount payable in
shares is in between $20M to $25M. This information and its
dilutionary effect on Powerlan were disclosed in detail, in the
Powerlan's Bidders Statement (para 3.5.2) regarding the Clarity on
market takeover. Powerlan is now in negotiations with IMX to quantify
the final earnings number and also discussing alternatives to the
original share issue consideration. These negotiations are expected
make at least 4 weeks before an outcome is concluded. This
information will be released to the market on conclusion of these
negotiations.

2 If the answer to Q1 is yes can an announcement be made immediately?
If not, why not and when is it expected that an announcement will be
made?

Powerlan believes that it will be in a position to make an informal
announcement within the next four weeks, as indicated above.

3 Is there any reason to think that there may be a change in the
operating profit before abnormal items and income tax so that the
figure for the financial year ended 30 June 2002 would vary from the
previous year by more than 15%. If so, please provide details.

Yes, last financial year Powerlan posted an EBIT of approximately
$20M. Considering that Powerlan has divested of a number of business
units, is in the process of divesting Of two additional business
units and is in the process of assessing the extent of losses which
will remit from the Clarity acquisition, Powerlan's operating profit
will vary by more the 15% from last year's results. As stated in the
response to Question 1, it is difficult for Powerlan to quantify the
operating costs and potential losses related to discountinuing
operations, divestment of non-core operations and relevant write
downs that will be bought to account at this point. It should however
be pointed out that the majority of the losses that is intended to
bring to account in 2001 is considering to be abnormal (once off) and
is expected not to be of a recurring nature. The provision for such
costs and bringing to account certain losses is a result of Powerlan
taking a very conservative view on Clarity's accounts providing for
recoverability or write downs of old stock which will more than
likely be crystallized as a result of Powerlan selling its non-core
assets and anticipated write down of good will.The losses to which I
have referred will have minimal cash impact as they me a result of
adjustments for which cash has either already been paid in the past
or is of a non-cash nature ie: goodwill.

4 Is there any reason to think that the Company may record any
material abnormal or extraordinary profit/loss for the financial year
ended 30 June 2002? If so, please provide details.

As above. Also in our preliminary view it is considered that Clarity
will contribute in operating loss of approximately $20M as questions
are raised as to the recoverability of Work-in-Progress (WIP) and
trade debtors. As 2 result of the anticipated non-core asset sales,
debtor provisions and losses relating to the Education business
Powerlan is expected to incur $8M in stock write downs. The
management is also currently considering the carrying value of
goodwill and is yet not in a position to determine the quantum of
the potential write down. It should be stressed that these details
are very rough estimates and may change considerably in either
direction and are dependant heavily upon our auditor's advice.

5 Is there any other explanation that the Company may have for the
price change and increase in value in the securities of the Company?

Large fund manager institutions are exiting the Powerlan stock (and
many other technology stocks), tax loss selling, nervousness of the
Powerlan's business strategy and stated transformation, Powerlan's
acquisition of a loss making public company namely Clarity, the
significant earn out which is payable to IMX, an acquisition made by
Powerlan about one year ago and the general negative global sentiment
regarding technology companies.

6. Please confirm that the Company is in compliance with the listing
rules and particular listing rule 3.1.

Considering the significant changes underway within Powerlan, the
company believes that it has been compliant with the listing rules.

Should you have any queries regarding this please do not hesitate to
call.


P Giannopoulos
COMPANY SECRETARY


Gyro