Statement re Admission to Trading on AIM

20 March 2006

KleenAir Systems International plc
("KleenAir", "KSIP", "the Company" or "the Group")
Admission to Trading
on the Alternative Investment Market

Key Points

KleenAir, which specialises in emissions-reducing products and technologies, is delighted to announce that its ordinary
shares commenced trading on AIM today.

        The Company has raised a total of £1.25 million (gross) via a placing of 2,777,777 new Ordinary   Shares at 45 p per
share
        The funds raised will be used to meet the expenses of the Placing, to provide working capital to support sales
activity and to develop technical infrastructure for applications engineering
        The Company aims to exploit patented, leading edge automotive pollution reduction technology in the UK, in Europe and
in China
        KleenAir Systems Ltd, a wholly owned subsidiary of KleenAir Systems International, has proven the technology in
independent tests, with the help of UK government support
        Sales will be driven by legislation resulting from increasing political and social pressure to improve air quality due
to the effect of pollution on public health
        This legislative drive will begin with the implementation of a Low Emission Zone for London
        The company has licensed its technology and has a supply agreement with Dinex A/S, a market leader in the European
exhaust systems aftermarket
        At the placing price, KleenAir's market capitalisation will be approximately £8.5 million

Lionel Simons, Executive Chairman & Chief Executive, comments

"I am delighted with our move to AIM.  The imminent introduction of the Low Emission Zone to London gives us a fantastic
opportunity to lead the retrofit market in the capital. We believe that further legislation will drive the emission
reducing technology market for many years to come, giving us every chance of proving ourselves in our key markets of the
UK, Europe and China."

Enquiries

KleenAir Systems International plc
Lionel Simons, Chairman & Chief Executive
Tel: [phone]

Biddicks - Financial Public Relations
Zoë Biddick        Tel: [phone]

ARM Corporate Finance
Nick Harriss    Tel: [phone]

PLACING STATISTICS


Issue Price     45p
Number of Ordinary Shares being placed  2,777,777
Percentage of enlarged issued Ordinary Share capital being placed       14.7%
Number of Ordinary Shares in issue following Admission  18,900,151
Gross proceeds of the Placing receivable by the Company £1,250,000
Net proceeds of the Placing receivable by the Company   £1,001,000
Market capitalisation on Admission at the Issue Price   £8,505,000


BACKGROUND AND HISTORY

The reduction of automotive emissions such as Nitrogen Oxides ("NOx") and Particulate Matter ("PM") is an increasingly
important political and social issue. Nearly half of all harmful emissions in the atmosphere are created by automotive
vehicles.

Of the various harmful emissions produced by automotive vehicles, nitrogen oxides are one of the most difficult exhaust
pollutants to control. They play a significant part in regional air pollution throughout the UK, (not least at Heathrow
Airport, one of the worst NOx affected areas in Europe), and the problems associated with such pollution, such as smog,
acid deposition and the greenhouse effect.

Throughout Europe there is increasing regulatory pressure to reduce NOx emissions. Regulation is creating both a
retrofit market for the fitting of new emissions control systems to existing diesel vehicles and a new diesel car market
in which OEMs (original equipment manufacturers) are installing emissions control systems on their new vehicles.
However, few technologies are available which reduce these emissions to the levels required by current and future
legislation. In consequence, the directors anticipate substantial growth during the next five years in the market for
those emerging emissions technologies which are the most cost effective.


OVERVIEW OF THE BUSINESS

KleenAir Systems International plc has been set up to exploit the patented NOxMaster™ technology in order to meet the
growing demand for lower NOx emissions levels for diesel automotive engines.

KleenAir Systems International plc ("KSIP") has acquired all rights to its SCR (Selective Catalytic Reduction) ammonia
technology from KleenAir Systems Inc. ("KAIR"), a 23 per cent. shareholder in the Company (as at the date of this
document). This technology has been extensively tested and has a proven ability to reduce NOx emissions by up to 70 per
cent. It diffuses ammonia in a controlled manner into the exhaust stream ahead of a catalytic converter.  The ammonia
acts as a reductant over the catalyst selectively to reduce NOx to nitrogen. The system has been designed so as to be
fitted easily to vehicles by simply replacing the exhaust system and installing the electronics and piping.

The Group has no plans to manufacture the NOxMaster™ itself but is working closely with a non-exclusive licensee, Dinex,
as its European systems integrator. Dinex is a leading supplier to the European exhaust systems aftermarket. It has
manufacturing facilities in Denmark, Germany and Latvia and Europe-wide marketing and distribution capability. It has
effectively "packaged" KleenAir's NOxMaster™ system and has engineered a commercially available combined
NOx/particulates reduction system using NOxMaster™ technology known as the DiNOx™ which reduces both NOx and
particulates, the two elements which reduce air quality and which are of particular concern to governments.

Dinex currently supplies the retrofit market for light, medium and heavy duty diesel vehicles with the NOxMaster™ and
DiNOx™ systems and will seek to gain significant market share in these sectors.  In addition KSL has entered into a
supply agreement with Dinex which enables KSL to sell the NOxMaster™ and the DiNOx™ into key market sectors not being
addressed by Dinex.

Business strategy

The Company and Dinex are currently targeting the automotive retrofit industry. This involves the sale of automotive
products for use in or on a vehicle after it has been purchased by the end user. Selling to OEMs will be considered
after the product has established itself in the field with large fleet operators.

As the Company's European systems integrator, Dinex's factories in Denmark and Latvia purchase SCR components which they
then assemble and package into a system ready for installation on customers' vehicles.

The business will initially focus on retrofit systems for NOx and NOx/particulates for light, medium and heavy duty
vehicles in the UK, commencing with London taxis, light commercial vehicle fleets and buses owned by or contracted to
local authorities. The retrofit market is expected to provide significant opportunities for at least 5 years.

The Company is anticipating revenues in 2006 both from royalties deriving from its licence agreement with Dinex and from
direct sales deriving from its supply agreement with Dinex under which it is able to buy from Dinex SCR and SCR filter
products at the lowest price available to any Dinex customer.

With the full support of the Company, Dinex has agreed arrangements for the supply and support of ammonia products with
Terra Nitrogen Limited, one of the largest UK manufacturers of bulk ammonia products and Air Products plc one of the
UK's largest ammonia distributors.  This arrangement includes the training of installation operatives in the handling
and storage of ammonia.


THE MARKET OPPORTUNITY

Due to the legislative environment, the retrofit portion of the European diesel emissions control market (heavy duty
alone) has a potential in excess of £8 billion, as indicated by the European Automobile Manufacturers Association
website (www.acea.be). This figure reflects the numbers of medium and heavy duty vehicles expected to be on the road at
the beginning of 2008 and the cost of making them Euro II compliant, as is expected to be required for London's Low
Emission Zone ("LEZ").  It is not expected that all these vehicles will be required to be Euro II compliant, but the
developing regulatory pressure indicates the potential for suppliers of emission control equipment that could develop.

There are still over 1.4 million HGVs and over 11 million Light Commercial Vehicles (LCVs) on the roads of Europe which
are, respectively, not Euro II or Euro III compliant, which are causing significant air pollution and which are of great
concern to regulators. Key segments of this retrofit diesel market will be addressed specifically by the Company in the
next three to five years.

UK

In the UK, the tightening of air quality regulations will lead to significant demand for emission control systems.

Taxis

In London there are approximately 16,500 taxi cabs which do not meet the Euro III standards for emissions of nitrogen
oxide and particulates.  The Public Carriage Office confirmed in March 2005 that it will require taxis, starting with
the older Fairways, to meet the Euro III standards from July 2006 on a rolling programme to be completed by July 2008.

Buses

Dinex has fitted 24 London sightseeing buses with the DiNOx™ system which incorporates the Company's SCR system, and the
directors believe that there may be opportunities for further orders providing that the installations prove as durable
as the Company believes them to be. Transport for London ("TfL") is currently testing SCR systems with a view to adding
them to its existing bus fleet which already has particulate filters installed.

Light commercial vehicles

There are more than 2,600,000 light commercial, diesel powered vehicles registered in the UK. The Company estimates that
approximately 245,000 will need to be upgraded with emission reduction technologies in order to operate within the LEZ
by 2010 or be replaced by new vehicles or rerouted. The conversion cost per vehicle is currently estimated at £3,000
which is likely to have to be borne by the vehicle owner.

DiNOx™ systems have been fitted by Dinex on 36 Volkswagen LCVs for Glasgow City Council. This order was part funded by
the Energy Savings Trust and further shows the potential of the local authority market.

Heavy duty vehicles

Of the 650,000 heavy-duty diesel-powered vehicles currently registered in the UK, the Company estimates that
approximately 28,000 will need to be either upgraded with emission reduction technologies in order to operate within the
LEZ in 2008 or be replaced by new vehicles or rerouted. The conversion cost per vehicle is currently estimated at £7,500
which is likely to have to be borne by the vehicle owner.

Local authority vehicles

Most local authorities have outsourced the provision of bus services to third parties and are increasingly requiring
those companies to operate to tighter emissions standards via the negotiation of "green" contracts.  A significant
opportunity exists within those companies as they work to clean up their fleets.


Heathrow Airport

Heathrow Airport has one of the most serious concentrations of NOx in the EU and the UK government is requiring that
this is reduced to EU acceptable levels as a key condition of adding a third runway.  Since there is virtually no
capacity for air traffic increases on the existing runway system, this means that BAA and the other major companies
operating out of Heathrow will be constrained to virtually zero growth without significant landside NOx reduction. In
consequence BAA and 47 other companies based around Heathrow have signed up to the Clean Vehicles Programme, which,
inter alia, commits them to lower emissions output from their existing fleets. Dinex has been invited to implement a
test and evaluation programme of SCR systems on 3 different BAA vehicles starting in the first half of 2006.  The
Company will be aiming, together with Dinex, to work closely with BAA and other suppliers to London Heathrow who are
committed to cleaner vehicles (including British Airways and DHL), to reduce NOx levels in and around the area.


Corporate Social Responsibility (CSR)

There has been increased concern in most major public companies in recent years with presenting themselves to the public
and to shareholders as good corporate citizens.  This has resulted in companies setting aside funds to discharge this
perceived social responsibility.  A key budget category for many of them is enhancing the environment and specifically
air quality standards by reducing the pollution from their vehicle fleets.

The Company has completed a major research project designed to highlight those companies most likely to be receptive to
the fitting of NOx and NOx/PM after-treatment systems to their fleets.   The important issue here is that as CSR budgets
are already in existence, there is no need for additional funding to be found from operational budgets.

The Company believes that 18 out of the 60 FTSE 100 companies it has so far investigated have the potential to be CSR
clients.  This is based on a combination of the size of their fleets and their stated commitment to a cleaner
environment. The Company is not aware of any other organisation using this approach to this niche market.

Europe

The arrangements with Dinex referred to below position the Company to exploit the fact that the EU regulatory
environment applies equally across Europe.

Dinex is a leading supplier in the European exhaust system aftermarket. In 2004 it acquired Hildebrand Metallprodukte
GmbH, one of the largest German exhaust systems suppliers, which, together with its own network in Germany, makes Dinex
the leading supplier in the German aftermarket. As a result, the Company together with Dinex can compete vigorously for
the NOx and NOx/particulates retrofit market in Germany, which is the largest automotive producer in the EU.

Dinex also has strong distribution networks in Scandinavia, France, Spain, Italy and Poland and manufacturing facilities
in Denmark, Germany and Latvia.  Initial target markets in Europe will depend on which market areas in the UK have been
the easiest to penetrate.


Current prospects
Whilst the Group is not yet making sales nor trading at a profit, it has made good progress in developing and promoting
the NOxMasterTM and the DiNOxTM systems in its chosen markets.  Given the current legislative environment and the
expected further tightening of air quality legislation, the directors believe that the Company will start to exploit
these markets effectively, through both licensing and direct sales revenue during the coming twelve months.