Amiad Filtration Systems Ltd: First Day of Dealings.

LONDON -- Amiad Filtration Systems Ltd:

Amiad Filtration Systems Ltd. ("Amiad" or "the Company")

First Day of Dealings

Amiad, a producer and global supplier of water filters and filtration systems for the industrial & municipal and the irrigation markets announces that the Company's shares have been admitted today to trading on the Alternative Investment Market of the London Stock Exchange plc ("AIM"). The Company's trading symbol is "AFS".

5,045,965 new ordinary shares have been allocated to institutional investors at a price of 129 pence per share (the "Placing Price"), raising approximately GBP 6.5 million for the Company. In addition, an existing shareholder has transferred 1,164,454 ordinary shares to institutional investors at the Placing Price. On admission to AIM a total of 19,491,415 ordinary shares were in issue (on a fully diluted basis) capitalising the Company at approximately GBP 25.1 million at the Placing Price.

The Company's nominated adviser and broker is Panmure Gordon (Broking) Limited.

Notes to Editor

Introduction

Amiad is a producer and global supplier of water filters and filtration systems used in two key markets, namely the industrial & municipal market and the irrigation market. The Company specialises in automatic self-cleaning filters that require low maintenance and that can be adapted to provide bespoke solutions to a wide range of application in industries including, inter alia, steel, power, oil and gas, pulp and paper, in addition to a wide variety of other applications in the irrigation market.

Amiad currently sells its products worldwide to over 60 countries across the Americas, Africa, Europe, Asia and Australasia. In the year ended 31 December 2004, Amiad generated revenues of approximately $37 million and profit after tax of approximately $3 million*. The corresponding profit after tax for the years ended 31 December 2002, 31 December 2003 and for the six month period ended 30 June 2005 were approximately $2.0 million, $2.1 million and $1.9, respectively*. In the nine month period ended 30 September 2005, based in each case on unaudited financial information, revenues were approximately $33 million and profit after tax was approximately $2.8 million*. The Group sells principally through distributors to a wide range of customers, including Air Liquide, Aluminum Norf, Avebe, Bayer, Dayen Environmental, Folkstone and Dover Water Services, Ha'Dan Ha'Mizrahi, Infineon Technologies, Membratec, Meyer Werft, Novelis, OMEX, ONI, PB Techniek, South East Water, Stereau and StoraEnso.

Clean water is a scarce resource that is facing increasing demand due primarily to the growth in the global population, which is estimated to increase from 6.5 billion in 2004 to 8 billion by 2025. While the world population has doubled since 1950, water consumption has increased six-fold over that period.

Approximately 40 per cent. of the global population, across 80 countries, currently suffers from water shortages, and 1.1 billion people do not have access to safe water. Asia alone accounts for two-thirds of the people worldwide whose drinking water comes from unsafe sources like rivers and ponds.

Further, industrialisation, increased environmental awareness and tighter regulations are driving the need for water purification and recycling systems. Accordingly, there is a growing demand for solutions that facilitate the provision of clean water for drinking, manufacturing and irrigation, sewage treatment and the safe disposal of industrial wastewater.

Amiad's filtration products serve a key role in fulfilling these needs. The Company's products are used for a wide range of purposes, from improving the quality of drinking water to recycling water used by car manufacturers to wash vehicle chassis before the application of paint.

The Company's core filtration technology is designed to have a small footprint, low maintenance requirement for end users, reliability, scalability and low energy consumption. The directors of the Company believe that Amiad is at the forefront of innovation in the design of automatic self cleaning filtration equipment.

The Company is modifying its technology so as to be able to expand its business into a number of high growth market segments, including ballast water for shipping, off-shore oil and gas, prefiltration of drinking and process water, naval filtration equipment and high-flow rate filters for wastewater features.

* The figures for profit after tax have been determined by excluding from the Company's consolidated statements of income for the relevant years (as set out in Part III of the Admission document) non-recurring expenses, management fees payable to the shareholders, which terminated with effect from Admission, and amortization of non-tangible assets.

Background and History

Amiad was incorporated as an Israeli company in June 1997. In January 1998, Amiad acquired a filtration and irrigation business from a partnership owned and controlled by the Kibbutz Amiad Agricultural Cooperative Association ("Kibbutz Amiad"). Kibbutz Amiad established the business in the early sixties as a manufacturer of high efficiency irrigation products. During the 1970s, in response to a growing demand for filtered water in irrigation systems, the business began to specialise in the production of water filtration equipment for irrigation.

As an arid country with a growing population, Israel has a critical need for agricultural irrigation and clean drinking water. Israel has evolved into a natural base for major innovative players in the global filtration and irrigation markets. Three of the four largest global low volume irrigation companies are based in Israel.

In October 2000, Amiad acquired Filtration Ltd. (''Filtration''), an Israeli company engaged in the development, production and marketing of water filtration systems. The acquisition enabled the Company to broaden its product range, enhance its marketing channels and expand its market share in filtration systems.

The Company operates from its headquarters located in Israel. In addition, the Group has offices in Singapore, Australia, China, France, North America, Germany and Uruguay. The Group also has representatives in Holland and third party distributors around the world. The Group's workforce as of 30 June 2005 totalled 260 persons (not including 45 persons employed in China), of whom 190 were employees of the Group and 70 were personnel provided pursuant to manpower agreement entered into with Kibbutz Amiad.