Reduction of Share Premium

I2S PLC
8 May 2002

I2S PLC


                  PROPOSED REDUCTION OF SHARE PREMIUM ACCOUNT


In the Company's Annual Report for the year ended 31 March 2001, it was noted
that, in the event that the Company's shares continued to trade at a significant
discount to net asset value, the Directors might use some of the Company's
liquid resources to buy back shares, thereby improving the net asset value per
share of the Company's remaining issued shares.  A general authority for the
Company to make market purchases of up to 1,113,000 its own shares (representing
approximately 15% of the Company's issued share capital) was conferred by
special resolution at the Company's Annual General Meeting held on 19 July 2001.
  No purchases have yet been made under that authority, nor does the Board
currently have any specific intentions to make such purchases, but the Directors
consider it desirable that the Company be in a position to make such purchases
if and when they believe it to be in the best interests of continuing
shareholders to do so.


Under the Companies Act 1985, the Company may not repurchase its own shares
except out of profits available for distribution (or the proceeds of a fresh
issue of shares made for that purpose, which is not in contemplation). Following
the exceptional losses realised from the Company's investments in Eighteen
Global Inc. and Getmapping.com and further losses during the half-year to 30
September 2001, the Company had a deficit on profit and loss account of
approximately £31,000. The Company intends to publish its accounts for the full
year to 31 March 2002 in June 2002.


The Board is therefore seeking the approval of shareholders for reduction of the
Company's share premium account (currently at £3,827,925) to nil, in order to
create a distributable reserve which would be available for writing off of
losses, share buy-backs or (although the Board has no current intentions to
recommend payment of a dividend) making distributions.


If the proposed reduction is approved by Shareholders, it will have to be
confirmed by the Court before it can become effective. If the Special Resolution
is passed at an Extraordinary General Meeting to be convened for this purpose,
application will be made to the Court promptly thereafter for the necessary
confirmation, which would be expected to be on or about 3 July 2002. In order to
obtain such confirmation, it will be necessary for the Company to satisfy the
Court that consents have been obtained from, and/or appropriate arrangements
have been made for the protection of, creditors of the Company.


The Extraordinary General Meeting referred to above has been convened for 7 June
2002, at which a Special Resolution will be proposed for the reduction of the
share premium account of the Company. The circular to shareholders containing
the notice of Extraordinary General Meeting has been posted to Shareholders
today.


8 May 2002



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