Interim Results

Dated: 15 September 2006

                       Kleenair Systems International Plc
                          ("Kleenair" or the "Company")

                                 Interim Report
                         for the period to 30 June 2006


Chairman's Statement

The  Company's Alternative Investment Market (AIM) launch in March of this  year
was   fully  subscribed  with  net  proceeds  of  £1,112,804.  Major  government
initiatives  concerning climate change and air quality continue to be  announced
and reinforce the Company's expectations of a significant role in the burgeoning
environmental market place.

The  use of funds is primarily intended to establish the technical and marketing
infrastructure  necessary to commercialize the Company's  intellectual  property
and related technologies. There has been no sales activity during the first half
as the Company prepares itself for the market launch of its technologies.

Our  wholly owned operating subsidiary, KleenAir Systems Limited, benefited from
the  appointment  in  April,  immediately after  the  launch,  of  a  Commercial
Director, Alan Barnard, with almost 30 years experience in the emissions control
industry,  primarily  with Engelhard and STT systems. He joined  Karl  Grimston,
Technical  Director,  with almost 20 years experience with  both  Engelhard  and
Delphi.

Mark Joyce, also with over 10 years Engelhard experience, has joined the Company
as  Senior  Engineer with operating oversight of our new technical  facility  in
Ross-on-Wye, which is expected to be completed by October. The Company will then
be  poised  to  commence  the applications engineering activities  necessary  to
support   test  and  evaluation  programs  and  subsequent  sales  and   systems
installation.

Over  the  coming  months, specific KleenAir - branded products  and  integrated
emission  control systems will be finalized and prepared for market.  The  first
stage  will be to place a variety of evaluation systems in a number of promising
market  segments  both  in  the UK and in certain European  markets.  This  will
commence late in the fourth quarter and gather pace in the first half of 2007.

The  second  stage  will  be the delivery of commercial  quantities  of  product
resulting  in a significant increase in revenue in the latter half of  2007  and
early 2008. The implementation of the Low Emission Zone programme for London  is
anticipated  to  generate major sales opportunities for  the  Company.  This  is
expected  to  have a roll out effect in other parts of the country  and  certain
other European cities.

The  Company  believes  it has the right and most cost-effective  solutions  for
automotive  pollution  control  and  is  looking  forward  to  engaging  in  the
marketplace.



Lionel Simons
15 September 2006





 Interim profit and loss account     Note      6 months to          12 months to
                                               30 June 2006          31 Dec 2005

                                                    £                      £

 Group turnover                                        -                 8,961

 Sales and Marketing                             (29,498)                    -

 R & D Expense                                   (54,666)                    -

 Other operating charges                        (229,625)             (451,658)

 Operating Loss                                 (313,789)             (442,697)

 Interest receivable                               5,636                 4,596

 Loss on ordinary activities before taxation    (308,153)             (438,101)

 Tax on loss on ordinary activities                    -                     -

 Loss on ordinary activities after taxation     (308,153)             (438,101)



 Earnings per share
 basic                                             (0.01)                    -
 diluted                                           (0.01)                    -




All of the activities of the company are classed as continuing.

The company has no recognised gains or losses other than the results for the
period as set out above.




Group balance sheet               6 months to         12 months
                                  30 June 2006        to 31 Dec 05

                                          £                    £
Fixed Assets
Intangible Fixed Assets              214,676               227,877

Tangible Fixed Assets                    425                     -

Total Fixed assets                   215,101               227,877

Current assets
Debtors                               75,384                54,056

Cash at bank and in hand             758,246                46,846

Total Current assets                 833,630               100,902

Creditors: amounts falling
due within one year                  127,576               250,392

Net Current Assets/Liabilities       706,054              (149,490)

Total Assets less
Current Liabilities                  921,155                78,387


Capital and Reserves                 921,155                78,387








Group cash flow                                        6 months to                 12 months
                                                       30 June 2006               to 31 Dec 05

                                                            £                           £

Net cash outflow from operating activities              (431,623)                   (300,129)

Returns on investments and servicing of finance            5,636                       4,596

Capital expenditure and/financial investment -
(Including repayment of loan to subsidiary)                 (425)                   (100,000)

Net Financing *                                        1,137,803                     346,455

Increase/Decrease in cash                                711,391                     (49,078)

* Total funds raised on AIM listing less fees £1,112,804, additional funds
raised prior to AIM listing £24,999.



Principal Accounting Policies

Basis of accounting

The   financial  statements  have  been  prepared  under  the  historical   cost
convention.

With the exception of the adoption of FRS20 `Share based Payment', the principal
accounting policies of the company have remained unchanged from those set out in
the company's 2005 annual report and financial statements.

The  group  has  applied FRS 20 `Share based Payment' for the  first  time  this
period.

All  employee  services received in exchange for the grant of any  share-  based
remuneration are measured at their fair values. These are indirectly  determined
by  reference  to the fair value of the share options awarded.  Their  value  is
appraised at the grant date and excludes the impact of any non - market  vesting
conditions (for example, profitability and sales growth targets).

All  share-based  remuneration is ultimately recognised as  an  expense  in  the
profit  and  loss with a corresponding credit to other reserve, net of  deferred
tax  where applicable. If vesting periods or other vesting conditions apply, the
expense  is  allocated  over the vesting period, based  on  the  best  available
estimate  of  the number of share options expected to vest. Non -market  vesting
conditions  are  included in assumptions about the number of  options  that  are
expected to become exercisable. Estimates are subsequently revised, if there  is
any  indication that the number of share options expected to vest  differs  from
previous  estimates.  No  adjustment is made to  expenses  recognised  in  prior
periods  if  fewer  share  options  ultimately  are  exercised  than  originally
estimated.

Upon  exercise  of  share options, the proceeds received  net  of  any  directly
attributable transaction costs up to the nominal value of the shares issued  are
allocated to share capital with any excess being recorded as additional paid  in
capital.


Notes to the financial statements
                                                6 months to                 12 months
                                                30 June 2006               to 31 Dec 05
                                                      £                         £
1.   Other operating income and charges
Sales and Marketing expenses                       29,498                        -

Research and Development expenses                  54,666                        -

Administrative expenses                           229,625                  451,658


2. Operating Loss
Operating loss is stated after charging/crediting)
Amortisation                                       13,201                   19,734
Auditors remuneration                               2,500                        -
Audit fees                                              -                   17,950
Net profit on foreign currency translation              -                     (303)

3. Fixed Assets                        Goodwill      IPR       Tangible   Total
                                          £           £           £         £
Cost
At 1 January 2006                       164,012    100,000        -      264,012
Additions                                              425       425
at 30 June 2006                         164,012    100,000       425     264,437

Amortisation
At 1 January 2006                        32,802      3,333         -      36,135
Charge for the period                     8,200      5,000         -      13,200
at 30 June 2006                          41,002      8,333         -      49,335

Net book value
At 30 June 2006                         123,010     91,667       425     215,102

At 1 January 2006                       131,210     96,667         -     227,877


4. Investments                                  £

Cost
At 1 January 2006 and 30 June 2006           99,990

Net Book Value
At 30 June 2006                              99,990

At 31 December 2005                          99,990

At 30 June 2006 KleenAir Systems International Plc held 100% of the issued
ordinary share capital of the companies listed below:

                                  KleenAir Systems           KleenAir Systems
                                  International Inc.              Ltd

Country of Incorporation                Bahamas              England & Wales

Proportion of share capital held      100% (Direct)           100% (Indirect)

Nature of Business                 Non Trading Holding           Trading


5. Debtors                            6 months to             12 months
                                      30 June 2006            to 31 Dec 05
                                            £                     £

Trade Debtors                             20,011                 20,011
VAT Recoverable                           10,339
Other debtors                             20,177                 14,315
Prepayments and accrued income            24,857                 19,730
Total debtors                             75,384                 54,056


6. Creditors                          6 months to            12 months
                                      30 June 2006          to 31 Dec 05
                                            £                    £

Trade Creditors                           16,689                21,386
Amounts due to related undertakings       52,345               119,011
Other taxation and social security         8,957
Other creditors                           24,000                40,893
Accruals and deferred income              25,584                69,102
Total creditors                          127,575               250,392


7 Publication of non statutory accounts.
The financial information set out in this interim financial report does not
constitute statutory accounts as defined in s 240 of the Companies Act 1985. The
figures for the year ended December 2005 have been extracted from the statutory
financial statements. The auditors' report on those financial statements was
unqualified and did not contain a statement under section 237(2) of the
Companies Act 1985.