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NetPlay TV plc

Capital reduction and cancellation of certain reserves

NetPlay TV plc (AIM: NPT), ("NetPlay" or the "Company"), announces that it has today published a circular containing details of a proposed Capital Reduction to create positive distributable reserves in the Company. The proposals are conditional on the passing of the Resolutions set out in the notice of General Meeting and Court approval.

A General Meeting has been convened to seek Shareholder consent to the proposals at 10.30am on 3 April 2012.

The following text is taken from the Chairman's letter extracted from the circular is set out below.

Dear Shareholder

Notice of General Meeting in relation to the proposed Capital Reduction

1. Introduction and background for the Capital Reduction

The purpose of the Circular is to provide you with details of your Board's proposal to restructure the Company's balance sheet by way of the Capital Reduction which, if approved, will cancel certain reserve balances of the Company in order to provide the Company with distributable reserves.

The Company has negative retained earnings due to accrued losses between the 2007 and 2010 financial years. Following steps taken by the Board in 2010 the Company has seen a turnaround in its trading performance. Having viewed the Company's current capital structure and balance sheet strength, and taking into account the Company's recent trading performance, the Board believes that the proposed capital restructure will provide the Company with greater flexibility in the future.

The proposals envisage the creation of distributable reserves for the Company by the reduction by £22,838,010 of the share premium account and the cancellation of the 196,391,315 Deferred Shares already in issue. This would have the effect of eliminating the accumulated deficit in the Company's profit and loss account creating positive distributable reserves for the Company. The proposals require the passing of the Resolution set out in the notice of General Meeting and Court approval.

If the Resolution is not passed and/or the Court confirmation is not obtained, it will not be possible for the Company to make dividend payments or other distributions to Shareholders for the foreseeable future.

Further details of the proposed Capital Reduction is set out in paragraph 2 below.

2. Capital Reduction

As at 30 June 2011, the balance of the share premium account was £22,838,010. The retained earnings as at 30 June 2011, show a cumulative loss of £25,477,000.

Part of the Capital Reduction involves the cancellation of the issued 196,391,315 Deferred Shares. The Deferred Shares have extremely limited rights as set out in the Articles. In particular, the Deferred Shares are not admitted to trading on AIM, carry no rights to participate in the profits of the Company and no rights to participate in the Company's assets save on a winding up and only then they have the right to receive 0.1p for each £999,999 of the assets of the Company available for distribution amongst the members. The Deferred Shares are transferable, but no market exists for them and therefore the Deferred Shares have negligible economic value in the opinion of the Board.

The Board is seeking approval for the elimination of the current negative distributable reserves of the Company and the creation of positive distributable reserves. In order to achieve those aims it is proposed to cancel the balance standing to the credit of the share premium account and to cancel all the issued Deferred Shares;

The above steps, if approved by the Court, will create realised profits which would first be applied in eliminating the accumulated deficit on the Company's profit and loss account. The Capital Reduction does not involve any distribution or repayment of capital or share premium by the Company and will not reduce the underlying net assets of the Company. Its principal effect will be to create distributable reserves to facilitate any future return of value to Shareholders.

The proposals require the approval of Shareholders and, under the Act, the subsequent confirmation of the Court. In order to approve the Capital Reduction the Court will need to be satisfied that the interests of creditors will not be prejudiced by the Capital Reduction. In seeking this confirmation, the Company will be required to give such undertakings or other form or creditor protection as the Court may require for the protection of the Company's creditors at the Effective Date. These may include seeking the consent of the creditors to the Capital Reduction, or the provision by the Company to the Court of an undertaking to deposit a sum of money into a blocked account created for the purpose of discharging creditors of the Company.

The Company will not be in a position to complete the proposals until confirmation from the Court has been obtained and the Court's orders have been registered at Companies House. If the Resolution is passed by Shareholders, it is proposed to commence the proceedings to obtain the confirmation of the Court as soon as possible. It is anticipated that the final hearing at which the Court will confirm the Capital Reduction will take place on 2 May 2012.

The Capital Reduction does not affect the voting or dividend rights of any Shareholder, or the rights of any Shareholder on a return of capital and following the implementation of the Capital Reduction, there will be no change to the number of Ordinary Shares in issue.

3. General Meeting

A notice convening the General Meeting to be held at Battersea Studios, 80 Silverthorne Road, Battersea, SW8 3HE at 10.30 am on 3 April 2012 is set out on page 7 of the Circular. The following Resolution, which is a special resolution, will be proposed at the General Meeting namely to reduce the share premium account and cancel the issued Deferred Shares.

4. Recommendation

The Board considers the Capital Reduction and the Resolution will promote the success of the Company for the Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution, as they intend to do or procure to be done in respect of their shareholdings of 34,730,647 Ordinary Shares (representing approximately 12.3 per cent. of the Company's existing issued Ordinary Share capital).

Yours faithfully

Clive William Jones

Chairman

Terms used and not defined in this announcement bear the meaning given to them in the circular dated 16 March 2012.

A copy of the circular will be available to view shortly on the Company's website in accordance with AIM Rule 26: www.netplaytv.plc.uk.

Enquiries:

Notes to Editors:

About NetPlayTV plc

NetPlayTV TV plc is listed on the AIM market of the London Stock Exchange (NPT). NetPlayTV TV operates a number of interactive gaming services under an Alderney gaming license, including SuperCasino.com and Jackpot247.com. These services can also be viewed 24 hours a day live on Sky Channel 866, every evening on Channel 5and ITV1.

The Company is focused on the delivery of a converged interactive gaming experience allowing its customers to interact with its games on a variety of platforms, TV, Internet and mobile from a common integrated wallet.