מעב תוישעת ןגא םישתכמ Makhteshim Agan Industries Ltd....Makhteshim Agan Industries Ltd. Quarterly Report for March 31, 2013 Chapter A – Board of Directors' Report

מ"מכתשים אגן תעשיות בע

Makhteshim Agan Industries Ltd.

3, 201March 31Quarterly Report for

Chapter A – Board of Directors' Report on the state of the Company's Affairs

Chapter B – Financial Statements (Unaudited) for March 31,

2013 Chapter C – Report Regarding the Effectiveness of the

Internal Auditing of Financial Reporting and Disclosure

The information contained herein constitutes an unofficial translation of the Quarterly Report for the first quarter of

2013 published by the Company in Hebrew. The Hebrew version is the binding version. This translation

was prepared for convenience purposes only.

1

Makhteshim Agan Industries Ltd.

Board of Directors' Report for the Quarter ended March 31, 2013

The Board of Directors of the Company is pleased to present the Directors' Report on the state of the Company’s

affairs as of March 31, 2013 and for the three-month period then ended ("the Reporting Period"). The Directors'

Report for the Reporting Period is limited in scope and should be read together with the Periodic Report for 2012

published on March 10, 2013 (Ref: 2013-01-000151) ("the Periodic Report for 2012").

A. Board of Directors' remarks on the state of the Company's affairs

1. UBrief description of the corporation and its business environment

Makhteshim Agan Industries Ltd. and its subsidiaries ("the Company") specialize in the chemical industry

and as at the reporting date, focuses primarily on the agriculture-related chemical industry (agrochemicals).

As such, the Company develops, manufactures and markets crop protection products. Furthermore, the

Company has other operations which are based on its core capacities (in the agricultural and chemical

industries), the scope of which, as at the reporting date, is insignificant. At the reporting date the Company is

the leading global generic manufacturer of crop protection products, and sells its products in approximately

120 countries worldwide. The Company's key success factors are primarily wide global deployment, a broad

portfolio of specialty products adapted to the farmer’s needs, its goodwill, know-how, exceptional

agronomical experience and ability, excellent technological-chemical capacities, first-rate research and

development capacities and product licensing expertise, adherence to stringent ecological standards, strict

quality control, global marketing and distribution system, comprehensive production system from R&D

through manufacture, cooperation with multinational companies for the production and marketing of the

products, financial robustness and available cash resources. Steady and consistent R&D investment

facilitates the launching of new generic products, compounds and formulations at opportune times.

For a description of the Company's business strategy and goals, including its plan following completion of the

merger transaction with a company from the ChemChina group, see section 31 in Chapter A of the Periodic

Report for 2012.

Brief review of the changes in the industry and in the Company's operations

In the first quarter of 2013 the Company posted an increase in sales – that reflects the highest sales ever

posted by the Company in any quarter – and in gross profit compared with the corresponding period last

year. These increases stemmed primarily from an increase in quantities sold and raising the selling prices,

which compensated for the price rises of the inputs that the Company purchases.

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The plant protection product market and the Company's operations were influenced by the following trends in

the first quarter of 2013:

1. Stable weather conditions in most regions during the quarter contributed to stabilization of prices of

most agricultural commodities.

2. The high prices of the agricultural commodities, in addition to the low level of stocks in the market,

contributed to an increase in the Company's sales despite the dry weather conditions in Australia

and the cold weather conditions in Europe at the end of the quarter.

3. An ongoing rise in the prices of raw materials, together with the low stock levels in the market, led to

a rise in product prices in the crop protection industry, which was of assistance, inter alia, to the

Company for raising its prices.

2. Results of Operations – Condensed Statement of Income

Accounting Statement of Income for Q1 2013 (in USD millions): % 1-3/2013 % 1-3/2012 Change % of change Revenue 885.4 828.0 57.4 6.9%* Gross profit 33.3% 294.8 34.6% 286.9 7.9 2.7% R&D, selling and G&A expenses 18.5% 163.7 19.6% 161.9 1.8 1.1% Operating profit (EBIT) 14.8% 131.1 15.1% 125.0 6.1 4.9% Finance expenses, net 3.3% 29.3 2.6% 21.3 8.0 37.4% Pre-tax profit 11.6% 102.8 12.3% 101.6 1.2 1.2% Net profit after non-controlling interest 10.2% 90.2 10/8% 89.3 0.9 1.0% EBITDA 19.0% 168.5 19.7% 163.2 5.3 3.3%

* The Company's revenue in the first quarter of 2013, eliminating currency effects, increased by 8.4% compared with the corresponding quarter last year.

3. Analysis of business results

A. Breakdown of revenues by geographical region

Company sales in the first quarter of 2013 amounted to USD 885.4 million, compared with USD 828.0 million

in the corresponding quarter last year, an increase of USD 57.4 million.

The increase in total sales stemmed mainly from am increase in quantities sold in most regions (notably

Latin America and India), and from raising the selling prices in most regions (primarily Europe). It is noted

that the effective level of exchange rates the first quarter of 2013 was lower than the level of the effective

rates at which the Company operated in the first quarter of 2012.

See below for a specific description of trends unique to the principal regions of operation.

Breakdown of quarterly sales (in USD millions):

% 1-3/2013 % 13//2012 Change % of Change Europe 49.2% 436.0 51.1% 423.5 12.5 2.9% Latin America 14.5% 128.3 13.0% 107.4 20.9 19.5% North America 16.5% 145.8 15.9% 131.9 13.9 10.5% Asia Pacific and Africa 16.7% 148.1 17.1% 141.2 6.9 4.9% Israel 3.1% 27.2 2.9% 24.0 3.2 13.4% Total 100.0% 885.4 100.0% 828.0 57.4 6.9%

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Breakdown of quarterly sales by percentage:

Europe: Sales in the first quarter of 2013 amounted to USD 436.0 million, compared with USD 423.5 million

in the corresponding quarter last year, an increase of USD 12.5 million, representing a 2.9% increase.

The increase in sales in the quarter stemmed primarily from raising the selling prices and an increase in

quantities sold, despite the cold weather conditions at the end of the quarter. It is noted that the effective

level of exchange rates the first quarter of 2013 was lower than the level of the effective rates at which the

Company operated in the first quarter of 2012.

Latin America: Sales in the first quarter of 2013 amounted to USD 128.3 million, compared with USD 107.4

million in the corresponding quarter last year, an increase of USD 20.9 million, representing a 19.5%

increase.

The increase in total sales in the quarter stemmed mainly from an increase in quantities sold together with

higher selling prices.

North America: Sales in the first quarter of 2013 amounted to USD 145.8 million, compared with USD 131.9

million in the corresponding quarter last year, an increase of USD 13.9 million, representing a 10.5%

increase.

The increase in total sales in the quarter stemmed from an increase in quantities sold and the higher selling

prices.

Asia Pacific and Africa: Sales in the first quarter of 2013 amounted to USD 148.1 million, compared with

USD 141.2 million in the corresponding quarter last year, an increase of USD 6.9 million, representing a

4.9% increase.

The increase in total sales in the quarter stemmed from an increase in quantities sold and from raising the

selling prices, and was achieved despite the decrease in sales in Australia owing to dry weather conditions.

Israel: Sales in the first quarter of 2013 amounted to USD 27.2 million, compared with USD 24.0 million in

the corresponding quarter last year, an increase of USD 3.2 million, representing a 13.4% increase.

The increase in sales in the quarter stemmed mainly from the increase in quantities sold.

B. Revenues by segment of operation Breakdown of quarterly sales by segment of operation (in USD millions)

% 1-3.2013 % 1-3/2012 Change % of Change Crop protection products 94.5% 836.5 94.2% 780.0 56.5 7.2% Other operations 5.5% 48.9 5.8% 48.0 0.9 1.9%

Europe 49.2%

Latin America 14.5%

North America 16.5%

Asia Pacific

and Africa 16.7%

Israel 3.1%

Q1 2013

Europe 51.1%

Latin America 13.0%

North America 15.9%

Asia Pacific

and Africa 17.1%

Israel 2.9%

Q1 2012

4

Sales of crop protection products in the first quarter of 2013 amounted to USD 836.5 million, compared with

USD 780.0 million in the corresponding quarter last year.

Sales from the Company’s other operations in the first quarter amounted to USD 48.9 million, compared with

USD 48.0 million in the corresponding quarter last year.

C. Gross profit

Gross profit in the first quarter of 2013 amounted to USD 294.8 million (33.3% of sales), compared with USD

286.9 million (34.6% of sales) in the corresponding quarter last year.

The increase in gross profit in the quarter stemmed mainly from raising the selling prices, an increase in

quantities sold, and a better product mix, which compensated for the rise in the prices of the Company's

inputs.

The change in the rate of gross profit in the quarter stemmed mainly from the fact that the effective level of

exchange rates the first quarter of 2013 was lower than the level of the effective rates at which the Company

operated in the first quarter of 2012.

D. Operating income

Operating income in the first quarter of 2013 amounted to USD 131.1 million (14.8% of sales) compared with

USD 125.0 million (15.1% of sales) in the corresponding quarter last year.

Operating expenses in the first quarter of 2013 amounted to USD 163.7 million (18.5% of sales), compared

with USD 161.9 million (19.6% of sales) in the corresponding quarter last year.

R&D expenses in the first quarter of 2013 amounted to USD 8.8 million (1.0% of sales), compared with USD


Selling expenses in the first quarter of 2013 amounted to USD 128.3 million (14.5% of sales), compared with

USD 127.5 million (15.4% of sales) in the corresponding quarter last year.

General and administrative expenses in the first quarter of 2013 amounted to USD 26.8 million (3.0% of

sales), compared with USD 26.5 million (3.2% of sales) in the corresponding quarter last year.

E. Finance expenses

Finance expenses (net) in the first quarter of 2013 amounted to USD 29.3 million, compared with USD 21.3

million in the corresponding quarter last year.

The finance expenses in the quarter increased compared to the corresponding quarter due mainly to an

increase in the Company's debt, inter alia as a result of the issue of debentures by way of expansion of

series B in January 2013.

It is noted that in the first quarter of 2013, the expectation of a rise in the CPI later in 2012 resulted in high

finance income in the quarter in respect of hedging transactions made by the Company.

F. Income tax Tax expenses in the first quarter of 2013 amounted to USD 12.7 million compared with USD 12.2 million in

the corresponding quarter last year.

The first quarter is characterized by a lower tax rate than the annual effective rate applicable to the

Company, due mainly to the profits generated by the companies in which the tax rate is significantly lower

than the effective rate applicable to the Company.

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G. Net profit

Net profit in the first quarter of 2013 amounted to USD 90.2 million (10.2% of sales), compared with USD


H. EBITDA

EBITDA in the first quarter of 2013 amounted to USD 168.5 million (19.0% of sales), compared with USD


4. Financial Condition and Liquidity

Commencing January 1, 2013, the Company has been implementing IFRS 10 – Consolidated Financial

Statements ("IFRS 10").

IFRS 10 was implemented by way of increasing the balance of customer debts sold under the securitization

transaction for which the consideration was received in cash, while recording a short-term loan in the same

amount.

For more information about the effect on the financial condition report and on the cash flow report, including

the impact of retrospective application of IFRS 10 on the comparison data for March 31, 2012 and December

31, 2012, see Note 3B to the financial report as of March 31, 2013.

For more information about the securitization agreement, see section 22.3 in Chapter A of the Periodic

Report for 2012.

A. Cash flow

The Company's current cash flow in the first quarter of 2013 was negative at USD 156.7 million, compared

with a negative current cash flow of USD 124.0 million in the corresponding quarter last year.

The change in cash flow from operating activities stemmed primarily from timing differences in the working

capital, which are expected to reverse during the year. It should be noted that the first quarter of each year is

marked by a growth in the working capital in light of the high volume of sales compared to other quarters due

to the seasonality of sales, and therefore higher trade receivables which are repaid during the year.

The Company's investments in the first quarter of 2013 amounted to USD 57.6 million, compared with

approx. USD 61.7 million in the corresponding quarter last year. These investments were mostly in product

registration, intangible assets and fixed assets. The investment in fixed assets, which included investment in

equipment and facilities, including facilities for the maintenance and protection of environmental standards,

amounted to approx. USD 22.3 million, compared with approx. USD 24.2 million in the corresponding quarter

last year.

B. Current assets

Total current assets as of March 31, 2013 amounted to USD 2,919.2 million compared with USD 2,975.0

million on March 31, 2012 and USD 2,569.6 million on December 31, 2012.

C. Investments in property, plant and equipment

See the section on cash flows above.

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D. Cash, current liabilities and long-term loans

The volume of the Company's credit (bank loans and debentures) as of March 31, 2013 amounted to USD

1,864.1 million (of which 33.7% short term), compared with USD 1,967.5 million (of which 41.7% short term)

on March 31, 2012 and USD 1,625.8 million (of which 34.7% short term) on December 31, 2012.

The Company's balances of cash and short-term investments as of March 31, 2013 amounted to USD 305.4

million, compared with USD 597.1 million on March 31, 2012 and USD 302.0 million on December 31, 2012.

The Company's net debt (bank loans, debentures and finance of securitization) net of cash and short-term

investments and the effects of hedging transactions attributed to debt) as of March 31, 2013 amounted to

USD 1,509.2 million, compared with USD 1,339.4 million on March 31, 2012 and USD 1,299.9 million on

December 31, 2012.

For details regarding the issuance of NIS 600 million par value debentures (series B) on January 9, 2013, in

a private placement by way of series expansion, see the chapter Material Changes and Innovations in the

Company's Business.

According to the bank finance documents for the long-term loans of the Company and its subsidiaries, the

Company is required to comply with financial covenants towards certain banks ("the Finance Documents"),

the principal of which at March 31, 2013 and at the date of publication of this report, are these: (1) The ratio between the Company's interest-bearing financial liabilities and its equity will not exceed

1.25. At March 31, 2013, the actual ratio was 1.1.

(2) The ratio between the Company's interest-bearing financial liabilities and its earnings before finance

expenses, taxes, depreciation and amortization (EBITDA) will not exceed 4. At March 31, 2013, the

ratio between the Company's interest-bearing financial liabilities and EBITDA was 3.5.

(3) The Company's equity will be no less than USD 1.22 billion. At March 31, 2013, equity totaled USD

1.44 billion.

(4) The Finance Documents of one of the banks further provide that the balance of Company's surpluses

or of its retained earnings according to the financial statements for every date, shall not be less than

USD 700 million. At March 31, 2013, the Company's surplus balance is USD 926 million.

In addition, some of the Finance Documents contain sections providing that a Change of Control (as defined

in the relevant Finance Documents) in the Company or in the subsidiaries Makhteshim and Agan, which is

effected without the prior written consent of the relevant banks, shall constitute cause for immediate and full

foreclosure on the relevant liabilities.

The customer debt securitization agreement of the Company and its subsidiaries (as detailed in section 22.3

in Chapter A of the Periodic Report for 2012) ("the Securitization Agreement") includes undertakings by the

Company to comply with financial covenants, of which the key covenants are:

(1) The ratio between the Company's financial liabilities and its equity will not exceed 1.25. At March 31,

2013, the ratio was 1.1. (2) The ratio between the Company's interest-bearing financial liabilities and EBITDA will not exceed 4.

At March 31, 2013, the ratio was 3.5.

(3) The Company's equity will be no less than USD 1 billion, At March 31, 2013, the equity totaled USD

1.44 billion.

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At March 31, 2013 and during the first quarter of 2013, the Company was in compliance with the financial

covenants applicable to it under the Finance Documents and the Securitization Agreement.

For more information, see section 23.4 in Chapter A of the Periodic Report for 2012, and Note 20(c) and (d)

to the financial statements as of December 31, 2012.

E. Equity

The Company's Equity as of March 31, 2013 amounted to USD 1,435.7 million, compared with USD 1,320.6

million on March 31, 2012 and USD 1,328.8 million on December 31, 2012. Equity as a proportion of the total

balance sheet was 31.8% as of March 31, 2013, 29.1% on March 31, 2012, and 31.9% on December 31,

2012.

The Company's issued and paid-up share capital as of March 31, 2013 is 430,531,550 ordinary shares of

NIS 1 par value each.

F. Financial ratios

March 31 December 31 2013 2012 2012

Ratio of current assets to current liabilities (current ratio) 1.72 1.54 1.59 Ratio of current assets, excluding inventory, to current liabilities (quick ratio) 1.04 0.99 0.82 Ratio of financial liabilities to total gross balance sheet 41.3% 43.4% 39.1% Ratio of financial liabilities to total equity, gross 129.8% 149.0% 122.4%

G. Finance resources

The Company finances its business operations from its equity and from non-bank credit (mainly debentures),

bank loans (short- and long-term), customer debt securitization, and supplier credit.

H. Warning Signs

The Board of Directors of the Company reviewed the existence of Warning Signs in the Company, as these

are defined in Article 10B(4) of the Securities regulations (Periodic and Immediate Reports), 1970. In view of

the consolidated financial structure of the Company and its subsidiaries and based on the financial data

appearing in the Company's consolidated financial statements as reviewed by the Company's management,

the Board of Directors determined that the fact that the Company's separate reports indicate an ongoing

negative cash flow from operating activities does not point to a liquidity problem, and accordingly and as of

the date of the report, there are no Warning Signs in the Company.

The main considerations behind the resolution of the Board of Directors include, inter alia, these:

1. The Company's consolidated financial statements reflect a positive working capital. Furthermore, the

consolidated annual financial statements reflect and ongoing positive cash flow from operating activities.

This positive working capital, which includes, at the reporting date, a cash balance of approx. USD 300

million, is the principal source for payment of the Company's liabilities.

2. Based on the structure of the operations of the Group, the manufacturing subsidiaries in Israel,

Makhteshim and Agan ("the Manufacturing Companies") are the principal manufacturers of the Group's

products that are sold by the Group's marketing companies all over the world, so that there is a current

liability of the marketing companies towards the manufacturing Companies.

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3. The proceeds from the debentures issued by the Company were granted as loans to the manufacturing

Companies on the same terms as the terms of the debentures, including the dates of payment.

B. Summary of Key Developments

See the chapter on Material Changes and Innovations in the Company's business.

C. Market Risks – Exposure and Management

1. General The Company conducts its business in business environments that operate in various currencies. Due to its

activities, the Company is exposed to market risks, mainly exchange rate fluctuations, partial adjustment of

the prices of products to reflect the prices of raw materials, change in the rate of rise of the Consumer Price

Index (CPI), and changes in the LIBOR interest rate. The Company's Board of Directors approved a policy of

use of accepted financial instruments (such as options, forward contracts and swap transactions) for hedging

against exposure – stemming from the Company's operations – to exchange rate fluctuations and a rise in

the CPI. The Company effects these transactions only through banks and stock exchanges which must

comply with capital adequacy requirements or maintain a scenario-based level of collateral.

For details of the credit risk and the liquidity risk, see Note 30 to the consolidated financial statements of the

Company as of December 31, 2012.

Exchange rate data for the Company's principal functional currencies vis-à-vis the US dollar and LIBOR:

March 31, 2013 1-3 average 2013 2012 Change 2013 2012 Change EUR/USD 1.278 1.333 4.2% 1.321 1.311 (0.8%) USD/BRL 2.014 1.822 10.5% 1.996 1.768 12.9% USD/PLN 3.259 3.119 4.6% 3.147 3.226 (2.5%) USD/ZAR 9.25 7.685 20.4% 8.933 7.741 14.8% AUD/USD 1.043 1.039 (0.3%) 1.039 1.055 1.5% GBP/USD 1.517 1.599 5.1% 1.553 1.571 1.1% USD/ILS 3.648 3.715 (1.8%) 3.701 3.766 (2.0%) USD L 3M 0.28% 0.47% (40.8%) 0.29% 0.52% (43.9%)

The exchange rate fluctuations of these currencies during the Reporting Period are attributed to the various

items in the Company's financial statements. The net impact of the changes in currency exchange rates in

the period after the date of the financial statements on the equity exposure is not material, due to the high

rate of balance sheet hedging carried out by the Company as noted above.

2. Risk Management Officer

The Company’s CFO, Mr. Aviram Lahav, is responsible for the Company's market risk management. For

information about his education, qualifications and business experience, see section 26A in Chapter D of the

Periodic Report for 2012.

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3. Description of Market Risks

For details of the Company's exposure to market risks and how they are managed, see the Directors' report

of the Company as of December 31, 2012 and Note 30 to the Company's financial statements as of

December 31, 2012.

D. Corporate Governance

1. Approval of the financial statements

Since February 27, 2012, the Company has a Financial Statements Review Committee whose members are

members of the Audit Committee – Messrs. Yehezkel Ofir (chairman of the committee, who is an

independent external director with accounting and financial expertise), Shushan Haran (independent external

director who reads and understands financial statements), and Zhang Gong (independent director with

accounting and financial expertise) ("the Committee Members"). All the Committee Members gave a

declaration prior to their appointment, concerning their education and experience, as noted in section 26 of

Chapter D of the Periodic Report for 2012, based on which the Company sees them as having accounting

and financial expertise or as having the ability to read and understand financial statements, as the case may

be. As part of the process for approval of the financial statements as of March 31, 2013, the CFO presented

to the committee a detailed presentation of the financial results, and the committee discussed them as

reflected in the financial statements, as well as the assessments and estimates made in connection with

them, the internal controls relating to the financial statements, the integrity and appropriateness of the

disclosure in them, and the accounting policy adopted and the accounting treatment applied in matters that

are material to the Company. The committee also discussed other important issues. The committee met on

May 6, 2013 to review the financial statements for the period ended March 31, 2013. Other than the

Committee Members, the meeting was attended by interested parties and senior officers Aviram Lahav –

CFO, Michal Arlosoroff – SVP and General Counsel, and Keren Yonayov – Controller.

The Committee Members and the members of the Board of Directors received a draft of the financial

statements several days prior to the meeting.

Representatives of the Company's auditors, who comment and respond to questions from the Committee

Members and members of the Board of Directors on the material issues arising from the data presented in

the financial statements under discussion, are invited to the meetings of the Board of Directors at which the

financial statements are discussed and approved. The Company's Internal Auditor was notified of the

committee's meeting and invited to attend. After discussing the financial statements, the committee drafted

its recommendations concerning their approval and submitted them in writing to the Board of Directors three

business days prior to the date of the Board's discussions.

On May 9, 2013, when presenting the financial statements to the Board of Directors, the Company's CEO,

Mr. Erez Vigodman, presented the main results of the Company's operations during the period under review

and referred to material events that occurred during the period. In addition, the CFO, Mr. Aviram Lahav, gave

a detailed presentation of the Company's financial results in the period, while comparing them with prior

periods and emphasizing substantial issues arising from them. During the reviews, the Company's

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management responded to questions from the members of the Board of Directors on all areas of the

Company's operations.

The Board of Directors of the Company discussed the Company's financial statements as of March 31, 2013

and resolved to approve them.

E. Disclosure in financial reporting

1. Critical accounting estimates

As of the reporting date, no material changes occurred during the first quarter of 2013 in the critical

accounting estimates used by the Company for its financial statements.

2. Events after the date of the report on the state of the Company's affairs

For events after the reporting date, see the chapter Material Changes and Innovations in the Company's

Business.

F. Information pertaining to the Company’s Debentures

See the table attached hereto as an appendix.

Aviram Lahav Erez Vigodman Yang Xingqiang CFO President & CEO Chairman of the Board

May 9, 2013

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Appendix – Details of the Company's Liability Certificates

Series Date of issue Rating

Total par value on date of

issue (in NIS millions)

Type of interest

Stated interest

Effective interest at report date

Stock exchange value on Mar. 31,

2013 (NIS)

Dates of interest

payments

Dates of principal payments

Linkage basis

Nominal par value at Mar. 31, 2013 (in

NIS millions)

CPI-linked nominal par value at Mar. 31, 2013 (in

NIS millions)

Carrying value of

debenture balances at

Mar. 31, 2013 (in USD millions)

Carrying value of interest

payable on Mar. 31, 2013

(in USD millions)

Fair value at Mar. 31, 2013 (in

USD millions)

Series B (1)(3) (4)(5)

Dec. 06

ilA+ (7)

1,650 CPI-linked

annual interest

5.15% 5.5% 3,148.4 (8)

Twice a year on May 31

and on Nov, 30 in each of

the years 2006-2036

Nov. 30 of each of

the years 2020- 2036

CPI for October

2006 2,683.1(8) 3,178.4(8) 835.9(8) 13.8(8) 863.0(8) Jan. 12 514

Jan. 13 600

Series C (2)(3)

(6)

Dec. 06 ilA+ (7)

465 CPI-linked annual interest

4.45% 0.2% 347.8


and Nov. 30 in each of the years 2006-

2013

Nov. 30 of each of

the years 2010-2013

CPI for October

2006 281.5 333.5 91.4 1.3 95.3

Mar. 09 661

Series D (2)(3) (5)(6)

Dec. 06 ilA+ (7)

235 Annual interest 6.50% 3.0% 989.5


and Nov. 30 of each of the years 2006-

2016

Nov. 30 of each of

the years 2011-2016

Unlinked 903.8 903.8 249.1 5.3 271.2

Mar. 09 472 Jan.12 541

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(1) The trustee for Debentures (Series B) is Aurora Fidelity Trust Company Ltd., 12 Menachem Begin Road, Ramat Gan (Tel: 03-6005946; Fax: 03-6120675). Contact person: Adv. Iris Shlevin, CEO. E-mail: [email protected] 4T. Series B is considered a material liability of the Company.

(2) The trustee for Debentures (Series C and D) is Hermetic Trust (1975) Ltd., 113 Hayarkon Street, Tel Aviv, Israel; (Tel: 03-5274867, Fax: 03-5271736). Contact person: Dan Avnon or Meirav Ofer. Email: [email protected] 4T. Series C and D are considered a material liability of the Company.

(3) At the date of the report, the Company was in compliance with all the terms and undertakings under the Deed of Trust and no conditions existed giving rise to a cause of action for immediate repayment of the debentures.

(4) On January 9, 2013 the Company issued, in a private placement by way of series expansion, NIS 600,000,000 par value of Debentures (Series B). For details, see the Company's immediate reports dated January 6 and 8, 2013 (Refs. 2013-01-004971 and 2013-01-008559).

(5) On January 16, 2012 the Company issued, by way of series expansion under a shelf prospectus published by the Company in May 2010, NIS 513,527,000 par value debentures (Series B) and NIS 540,570,000 par value of debentures (Series D). For more details, see the Company's immediate report dated January 17, 2012 (Ref: 2012-01-017373) and the amending report of the same date (Ref: 2012-01-018225).

(6) On March 25, 2009 the Company issued, by way of series expansion under a shelf prospectus published by the Company in May 2008, NIS 661,000,000 par value of debentures (Series C) and NIS 472,000,000 par value of debentures (Series D). For more details, see the Company's immediate report dated Match 26, 2009 (Ref: 2009-01-067944).

(7) On July 6, 2011, Standard & Poor's Maalot ("Maalot") announced that it was lowering the rating for Debentures (Series B, C and D) from ilAA to ilA+ with stable outlook (Ref. 2011-01-205167). On January 4, 2012 Maalot announced that it had set a rating of ilA+ for Debentures (Series B and/or D), issued by way of series expansion pursuant to a shelf prospectus, of up to NIS 950 million (Ref. 2012-01-005190). On January 12, 2012 Maalot announced that the above rating will be valid also for additional expansions of these series up to NIS 200 million, so that the total expansion will amount to up to NIS 1,150 million par value (Ref: 2012-01-013914). On August 20, 2012, Maalot confirmed the rating of ilA+ for the Company's debentures (Ref. 2012-01-214512). On December 31, 2012 Maalot confirmed a rating of ilA+ for Debentures (Series B) issued in a private placement by way of series expansion, of up to NIS 600 million par value (Ref. 2012-01-325494).

(8) Net of debentures purchased by a wholly-owned subsidiary, which at the date of this report holds 67,909,858 debentires (Series B), accounting for 2.46% of total issued debenturs (Series B).

mailto:[email protected]�

mailto:[email protected]�

13

Material changes or innovations in matters described in Chapter A – Description of the Corporation's Business in the Periodic Report for 2012, as of March 31, 2013

1. Section 7.7 – Product return and product liability policy

The insurance policy held by the Company as of the date of this report, for the first insurance layer in

respect of third party liability and faulty products, will end in June 2013. The longstanding agreement

with the insurer for this policy will not be renewed, and the Company is working to purchase a substitute

policy. The Company is unable to estimate the date on which a new third party liability and faulty

products policy will be issued. The first insurance layer covers a non-material amount.

2. Section 21.5 – Senior officers in the Company

For details of the senior officers in the Company as of the date of this Report, including changes made

during the Reporting Period, see the Company's immediate report of February 12, 2013 (Ref. 2013-01-

036951).

3. Section 23.3 – Debentures issued by the Company

On January 9, 2013 the Company issued in a private placement by way of series expansion, NIS

600,000,000 par value of debentures (series B) in consideration for 94.8% of their par value. The total

consideration in USD amounted to 177.2 million. For additional information, see the Company's

immediate reports of January 6 and 8, 2013 (Refs. 2013-01-0004971 and 2013-01-008559).

4. Section 29 – Corporate governance

The Board of Directors of the Company, at its meeting on March 7, 2013, reviewed the need to revise

the Company's negligible transactions procedure in view of the volume of purchasing transactions made

during the normal course of business with companies directly and/or indirectly controlled by China

National Chemical Company, and resolved to revise the quantitative measure criterion without changing

the other criteria. For information about the negligible transactions procedure, including its

aforementioned revision, see Note 29 to the financial statements of the Company as of December 31,

2012.

5. Section 30 – Legal proceedings

For an update on material legal proceedings to which the Company is a party, see Note 6 to the

condensed interim consolidated financial statements as of March 31, 2013.

Makhteshim-Agan Industries Ltd.

Condensed Consolidated Interim

Financial Statements

(Unaudited)

As at March 31, 2013

In U.S. Dollars

Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Financial Statements as at March 31, 2013 (Unaudited) Contents Page Auditors' Review Report 2 Condensed Consolidated Interim Statement of Financial Position 3 Condensed Consolidated Interim Statement of Income 5 Condensed Consolidated Interim Statement of Comprehensive Income 6 Condensed Consolidated Interim Statement of Changes in Equity 7 Condensed Consolidated Interim Statement of Changes in Cash Flows 10 Notes to the Condensed Consolidated Interim Financial Statements 12

Somekh Chaikin Telephone 972 3 684 8000

KPMG Millennium Tower Fax 972 3 684 8444 17 Ha'arba'a Street, PO Box 609 Internet www.kpmg.co.il Tel Aviv 61006 Israel

Somekh Chaikin, a partnership registered under the Israeli Partnership Ordinance, is the Israeli member firm of KPMG International, a Swiss cooperative.

Review Report to the Shareholders of Makhteshim–Agan Industries Ltd.

Introduction

We have reviewed the accompanying financial information of Makhteshim–Agan Industries Ltd. and its subsidiaries (hereinafter – “the Group”) consisting of the condensed consolidated interim statement of financial position as of March 31, 2013 and the related condensed consolidated interim statements of income, comprehensive income, changes in equity and cash flows for the three-month period then ended. The Board of Directors and Management are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 “Interim Financial Reporting”, and are also responsible for the preparation of financial information for this interim period in accordance with Section D of the Securities Regulations (Periodic and Immediate Reports), 1970. Our responsibility is to express a conclusion on this interim financial information based on our review.

We did not review the condensed interim financial information of certain consolidated subsidiaries whose assets constitute 5.6% of the total consolidated assets as of March 31, 2013 and whose revenues constitute 7.1% of the total consolidated revenues for the three-month period then ended. In addition, we did not review the condensed interim financial information of investee companies accounted for based on the equity method of accounting, the investment in which was about $5,493 thousand, as at March 31, 2013, and the Group’s share in their revenues was about $240 thousand, for the three-month period then ended. The condensed interim financial information of those companies was reviewed by other auditors whose review reports thereon were furnished to us, and our conclusion, insofar as it relates to amounts emanating from the financial information of such companies, is based solely on the said review reports of the other auditors.

Scope of Review

We conducted our review in accordance with Standard on Review Engagements 1, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" of the Institute of Certified Public Accountants in Israel. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying financial information was not prepared, in all material respects, in accordance with IAS 34.

In addition to that mentioned in the previous paragraph, based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not comply, in all material respects, with the disclosure requirements of Section D of the Securities Regulations (Periodic and Immediate Reports), 1970. Somekh Chaikin Certified Public Accountants (Isr.) May 9, 2013

3

Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Financial Position as at March 31 March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Current assets Cash and cash equivalents 302,631 594,765 300,412 Short-term investments 2,767 2,384 1,607 Trade receivables 1,265,468 *1,149,405 *875,047 Prepaid expenses 18,267 17,172 16,313 Financial and other assets, including derivatives 157,280 132,338 119,712 Current tax assets 11,741 4,066 17,329 Inventories 1,161,032 1,074,852 1,239,154 Total current assets 2,919,186 2,974,982 2,569,574 Long-term investments, loans and receivables Investments in investee companies accounted for using the equity method of accounting 18,145 – – Other financial investments and receivables 53,943 83,233 47,970 Non-financial assets 38,005 29,474 42,728 110,093 112,707 90,698 Fixed assets Cost 1,422,406 1,354,154 1,419,563 Less – accumulated depreciation 722,782 680,866 712,024 699,624 673,288 707,539 Deferred tax assets 81,084 82,582 78,792 Intangible assets Cost 1,455,956 1,357,234 1,440,047 Less – accumulated amortization 753,729 662,671 732,537 702,227 694,563 707,510 Total non current assets 1,593,028 1,563,140 1,584,539 Total assets 4,512,214 4,538,122 4,154,113 * Retroactive application – see Note 3A(1) with respect to first-time application of the new set of standard

regarding consolidation of financial statements.

4

Makhteshim-Agan Industries Ltd. March 31 March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Current liabilities Credit from banks and other lenders 473,736 *671,459 *414,000 Current maturities of debentures 153,661 149,796 150,140 Trade payables 556,388 603,580 597,245 Other payables 413,460 430,318 372,382 Current tax liabilities 44,456 30,550 32,590 Put options to holders of non-controlling interests 53,277 40,411 48,292 Total current liabilities 1,694,978 1,926,114 1,614,649 Long-term liabilities Loans from banks 213,952 182,982 242,553 Debentures 1,022,773 963,287 819,102 Other long-term liabilities 33,115 28,713 37,128 Deferred tax liabilities 25,253 22,913 23,893 Employee benefits 86,465 89,166 88,012 Put options to holders of non-controlling interests – 4,361 – Total long-term liabilities 1,381,558 1,291,422 1,210,688 Total liabilities 3,076,536 3,217,536 2,825,337 Equity capital Share capital 125,595 125,595 125,595 Share premium 623,829 623,829 623,829 Capital reserves (240,800) (238,061) (257,662)Retained earnings 926,273 809,223 836,378 Total equity attributable to the owners of the Company 1,434,897 1,320,586 1,328,140 Non-controlling interests 781 – 636 Total equity 1,435,678 1,320,586 1,328,776 Total liabilities and equity 4,512,214 4,538,122 4,154,113

Yang Xingqiang Erez Vigodman Aviram Lahav Chairman of the Board of Directors President & Chief Executive

Officer Chief Financial Officer

Date the financial statements were approved: May 9, 2013 * Retroactive application – see Note 3A(1) with respect to first-time application of the new set of standard

regarding consolidation of financial statements. The notes to the condensed consolidated interim financial statements are an integral part thereof.

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Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Income for the Three-month period ended Year ended March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Revenues 885,385 828,033 2,834,503 Cost of sales 590,598 541,129 1,934,916 Gross profit 294,787 286,904 899,587 Other income (400) (356) (3,897)Selling and marketing expenses 128,305 127,549 487,073 General and administrative expenses 26,799 26,525 101,520 Research and development expenses 8,833 8,083 30,128 Other expenses 163 117 3,172 163,700 161,918 617,996 Operating income 131,087 124,986 281,591 Financing expenses 73,729 45,751 232,261 Financing income (44,455) (24,439) (122,010)Financing expenses, net 29,274 21,312 110,251 Share of income (losses) of investee company accounted for using the equity method of accounting, net 995 (2,083) (9,603) Profit before taxes on income 102,808 101,591 161,737 Taxes on income 12,674 12,175 39,164 Profit for the period 90,134 89,416 122,573 Attributable to: The owners of the Company 90,198 89,299 122,463 Non-controlling interests (64) 117 110 Profit for the period 90,134 89,416 122,573 The notes to the condensed consolidated interim financial statements are an integral part thereof.

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Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Comprehensive Income for the Three-month period ended Year ended

March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Profit for the period 90,134 89,416 122,573 Components of other comprehensive income where after the initial recognition as part of the comprehensive income were transferred or will be transferred to the statement of income

Foreign currency translation differences in respect of foreign operations (2,539) 10,522 10,695

Effective portion of change in fair value of cash flow hedges 26,002 (5,949) (16,982)

Net change in fair value of cash flow hedges transferred to the statement of income (4,532) (15,449) (26,692)

Taxes on the components of other comprehensive income that were transferred or will be transferred to the statement of income (1,860) 1,548 3,974

Total other comprehensive income (loss) for the period where after the initial recognition as part of the comprehensive income were transferred or will be transferred to the statement of income, net of tax 17,071 (9,328) (29,005) Components of other comprehensive income that will not be transferred to the statement of income

Actuarial gains (losses) from defined benefit plan 602 (772) (4,946)

Taxes in respect of items of comprehensive income that will not be transferred to the statement of income (42) 69 670

Total components of other comprehensive income (loss) for the period that will not be transferred to the statement of income 560 (703) (4,276) Total comprehensive income for the period 107,765 79,385 89,292 Total comprehensive income attributable to: The owners of the Company 107,829 79,235 89,149 Non-controlling interests (64) 150 143

Total comprehensive income for the period 107,765 79,385 89,292 The statement of comprehensive income in the comparative periods was restated in accordance with the initial application of the amendment to IAS 1. Accordingly, the presentation format of the statement of comprehensive income was changed. See also Note 3A(4) with respect to Changes in Accounting Policies. The notes to the condensed consolidated interim financial statements are an integral part thereof.

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Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Changes in Equity

Total equity attributable to Share Capital Retained the owners of Non-controlling Share capital premium reserves (1) earnings the Company interests Total equity $ thousands $ thousands $ thousands $ thousands $ thousands $ thousands $ thousands

For the three-month period ended March 31, 2013 (unaudited)

Balance as at January 1, 2013 125,595 623,829 (257,662) 836,378 1,328,140 636 1,328,776

Other comprehensive income for the period

Profit for the period – – – 90,198 90,198 (64) 90,134

Components of other comprehensive income

Foreign currency translation differences in respect of foreign operations – – (2,539) – (2,539) – (2,539)

Effective portion of change in fair value of cash flow hedges – – 26,002 – 26,002 – 26,002

Net change in fair value of hedged cash flows transferred to the

statement of income – – (4,532) – (4,532) – (4,532)

Actuarial losses from defined benefit plan – – – 602 602 – 602

Taxes on components of other comprehensive income – – (1,860) (42) (1,902) – (1,902)

Other comprehensive income for the period, net of tax – – 17,071 560 17,631 – 17,631

Total comprehensive income for the period – – 17,071 90,758 107,829 (64) 107,765

Dividends to holders of non-controlling interests – – – (863) (863) – (863)

Capital reserve for transactions with holders of non-controlling interests – – (209) – (209) 209 –

Balance as at March 31, 2013 125,595 623,829 (240,800) 926,273 1,434,897 781 1,435,678

(1) Including treasury shares that were cancelled in the amount of $245,548 thousand. The notes to the condensed consolidated interim financial statements are an integral part thereof.

8

Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Changes in Equity Total equity attributable to Share Capital Retained the owners of Non controlling Share capital premium reserves (1) earnings the Company interest Total equity $ thousands $ thousands $ thousands $ thousands $ thousands $ thousands $ thousands

For the three-month period ended March 31, 2012 (unaudited) Balance at January 1, 2012 125,595 623,829 (229,110) 720,627 1,240,941 657 1,241,598 Other comprehensive income for the period Profit for the period – – – 89,299 89,299 117 89,416 Components of other comprehensive income Foreign currency translation differences in respect of foreign operations – – 10,489 – 10,489 33 10,522 Effective portion of change in fair value of cash flow hedges – – (5,949) – (5,949) – (5,949) Net change in fair value of hedged cash flows transferred to statement of income – – (15,449) – (15,449) – (15,449) Actuarial losses from defined benefit plan – – – (772) (772) – (772) Taxes on components of other comprehensive income – – 1,548 69 1,617 – 1,617 Total other comprehensive income (loss) for the period, net of tax – – (9,361) (703) (10,064) 33 (10,031) Total comprehensive income for the period – – (9,361) 88,596 79,235 150 79,385 Acquisition of non-controlling interests – – 410 – 410 (807) (397) Balance at March 31, 2012 125,595 623,829 (238,061) 809,223 1,320,586 – 1,320,586 (1) Including treasury shares that were cancelled at the amount of $245,548 thousand. The notes to the condensed consolidated interim financial statements are an integral part thereof.

9

Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Changes in Equity Total equity attributable to Share Capital Retained the owners of Non-controlling Share capital premium reserves (1) earnings the Company interests Total equity $ thousands $ thousands $ thousands $ thousands $ thousands $ thousands $ thousands

For the year ended December 31, 2012 (Audited)

Balance as at January 1, 2012 125,595 623,829 (229,110) 720,627 1,240,941 657 1,241,598

Other comprehensive income for the year

Profit for the year – – – 122,463 122,463 110 122,573

Components of other comprehensive income

Foreign currency translation differences in respect of foreign operations – – 10,662 – 10,662 33 10,695

Effective portion of change in fair value of cash flow hedges – – (16,982) – (16,982) – (16,982)

Net change in fair value of hedged cash flows transferred to the

statement of income – – (26,692) – (26,692) – (26,692)

Actuarial losses from defined benefit plan – – – (4,946) (4,946) – (4,946)

Taxes on components of other comprehensive income – – 3,974 670 4,644 – 4,644

Other comprehensive income (loss) for the year, net of tax – – (29,038) (4,276) (33,314) 33 (33,281)

Total comprehensive income for the year – – (29,038) 118,187 89,149 143 89,292

Dividends to holders of non-controlling interests holding a put option – – – (2,436) (2,436) – (2,436)

Holders of non-controlling interests in respect of acquisition of activities – – – – – 643 643

Acquisition of non-controlling interests – – 410 – 410 (807) (397)

Liability in respect of dividend to holders of non-controlling interests – – 76 – 76 – 76

Balance as at December 31, 2012 125,595 623,829 (257,662) 836,378 1,328,140 636 1,328,776

(1) Including treasury shares that were cancelled in the amount of $245,548 thousand. The notes to the condensed consolidated interim financial statemets are an integral part thereof.

10

Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Changes in Cash Flows for the Three month period ended Year ended March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Cash flows from operating activities Profit for the period 90,134 89,416 122,573 Adjustments Depreciation and amortization 37,396 38,214 148,314Impairment loss of fixed, intangible and other assets – – 1,111Capital loss (gain) on realization of fixed and other assets, net (52) (72) 64Amortization of discount/premium and issuance expenses 155 (35) (228)Share of (income) losses of investee company accounted for using the equity method of accounting (995) 2,083 9,603Revaluation of put options 3,301 175 1,327Adjustment of long-term liabilities 30,303 33,903 37,182SWAP transactions (1,990) (4,511) (5,481)Change in provision for taxes and advance tax deposits, net 17,328 15,602 5,482Decrease (increase) in deferred taxes, net (2,945) (5,197) 1,594 Changes in assets and liabilities Decrease (increase) in trade and other receivables (416,310) *(401,768) *(112,553)Decrease (increase) in inventories 69,793 (7,908) (187,636)Increase in trade and other payables 16,445 107,485 35,914Change in employee benefits 737 8,600 1,583 Net cash provided by (used in) operating activities (156,700) (124,013) 58,849 Cash flows for investing activities Acquisition of fixed assets (22,281) (24,166) (99,592)Investment grant received – – 3,074Investment in investee company accounted for using the equity method of accounting – (2,083) (4,907)Transition from proportionate consolidation to the equity method (1,603) – –Change in intangible assets (32,747) (35,655) (103,373)Short-term investments, net (1,160) (45) 1,619Long-term investment, net – 135 2,459Proceeds from realization of fixed and intangible assets 147 126 2,337Acquisition of subsidiaries net of cash acquired – – (9,164)Net cash used in investing activities (57,644) (61,688) (207,547) * Retroactive application – see Note 3A with respect to first-time application of the new set of standard regarding

consolidation of financial statements. The notes to the condensed consolidated interim financial statements are an integral part thereof.

11

Makhteshim-Agan Industries Ltd. Condensed Consolidated Interim Statement of Changes in Cash Flows for the (cont’d) Three month-period ended Year ended March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Cash flows from financing activities Receipt of long-term loans from banks 2,461 61,780 235,998 Repayment of long-term loans and liabilities from banks and others (28,237) (27,693) (164,750)Repayment of debentures – – (147,230)Increase (decrease) in short-term liabilities to banks and others 65,473 *52,250 *(178,844)SWAP repayment – – 12,242 Dividend to holders of non-controlling interests (349) – (2,436)Issuance of debentures less issuance expenses 177,215 276,182 276,183 Acquisition of non-controlling interests – (397) (397)Net cash provided by financing activities 216,563 362,122 30,766 Increase (decrease) in cash and cash equivalents 2,219 176,421 (117,932) Cash and cash equivalents at the beginning of the period 300,412 418,344 418,344 Cash and cash equivalents at the end of the period 302,631 594,765 300,412

Additional information: Interest paid in cash (9,148) (7,032) (90,442)

Interest received in cash 3,893 3,352 22,166

Taxes received (paid) in cash, net 1,052 (2,183) (20,372)

A. Investments in first time consolidated companies Working capital (excluding cash and cash equivalents) – – (344)Fixed assets, net – – (2,012)Excess cost created on acquisition – – (8,049)Long-term liabilities – – 159 Liability in respect of acquisition of a company – – 822 Non controlling interests – – 260

– – (9,164)

* Retroactive application – see Note 3A(1) with respect to first-time application of the new set of standard

regarding consolidation of financial statements.

The notes to the condensed consolidated interim financial statements are an integral part thereof.

Makhteshim-Agan Industries Ltd. Notes to the Financial Statements as at March 31, 2013 (Unaudited)

12

Note 1 - Reporting Principles and Accounting Policies

A. The reporting entity (1) Makhteshim-Agan Industries Ltd. (hereinafter – “the Company”) is an Israel-resident company

that was incorporated in Israel, and its official address is the Arava Building in Airport City Park. The condensed consolidated financial statements of the Company as at March 31, 2013 include those of the Company and its subsidiaries as well as the Company’s rights in an associated company and in jointly-controlled entities (together – “the Group”). The Group operates in Israel and abroad and is engaged in the development, manufacture and marketing of agrochemicals, intermediate materials for other industries, food additives and synthetic aromatic products, mainly for export.

(2) Sales of agrochemical products are directly impacted by the agricultural seasons (in each of the

different markets) weather in each region, and the cycles of the growing seasons. Therefore, the Company’s income is not uniform or the same during the quarters of the year. The agricultural seasons in countries located in the northern hemisphere (mainly the United States and Europe) take place in the first two quarters of the year, and therefore in these countries the highest sales are usually in the first half of the year. On the other hand, in the southern hemisphere, the seasonal trends are the opposite and most of the local sales are made in the second half of the year, except for Australia where most of the sales are made in April through July.

In the Company’s estimation, the Company’s worldwide operations along with the dispersement of the markets in which it operates, moderates part of the seasonal impacts, even though the Company’s sales are higher in the northern hemisphere.

Note 2 - Basis for Financial Statement Preparation

A. Declaration of compliance with International Financial Reporting Standards (IFRS) These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 –Interim Financial Reporting and do not include all the information required for full annual financial statements. They should be read in conjunction with the financial statements as at and for the year ended December 31, 2012 (hereinafter – “the Annual Financial Statements”). Furthermore, these financial statements have been prepared in accordance with the Section D of the Securities Regulations (Periodic and Immediate Reports), 1970. The condensed consolidated interim financial statements were authorized for issue by the Group's Board of Directors on May 9, 2013. B. Use of estimates and judgment When preparing condensed financial statements in conformance with IFRS, Company management is required to use judgment when making assessments, estimates and assumptions that affect the implementation of the policies and amounts of assets and liabilities, revenues and expenses. It is clarified that the actual results are likely to be different from these estimates. Management’s judgment when applying the Group’s accounting policies and the key assumption used in estimates that involve uncertainty are consistent with those used in the Annual Financial Statements.


13

Note 3 - Significant Accounting Policies

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its annual financial statements. Set forth below is a description of the essence of the changes made in the accounting policies in these condensed consolidated interim financial statements and their effect. A. First-time application of new standards

(1) A new suite of accounting standards regarding consolidation of financial statements, joint arrangements and disclosure of involvement with other entities

(a) IFRS 10, Consolidated Financial Statements The standard introduces a new single control model for determining whether an investee should be consolidated, which is to be implemented with respect to all investees. According to the standard, de facto power is to be considered when assessing control, which means that the existence of effective control of an investee will require consolidation. In addition, when assessing the existence of control, all substantive potential voting rights will be taken into account, and not only potential voting rights that are currently exercisable. The requirements of IAS 27 will continue to be valid only for separate financial statements. The standard was applied retroactively. The Company examined the control conclusion with respect to a foreign company that was set up for purposes of a securitization agreement for sale of debts of some of the Group’s customers (hereinafter – “the Foreign Company”). As a result, the control conclusion was changed with respect to the Foreign Company and it was determined that the Company is the controlling shareholder of the Foreign Company pursuant to the provisions of IFRS 10. Accordingly, the Company’s financial statements were retroactively restated in order to reflect consolidation of the Foreign Company in the Company’s financial statements. The revision was made by increasing the balance of the Group’s trade receivables sold as part of the securitization transaction, where the consideration in respect thereof was received in cash, against recording of a short-term loan in the same amount. This retroactive amendment had no impact on the Group’s shareholders’ equity, statements of income and statements of comprehensive income. See Note 3B below, regarding the quantitative impacts on the Group’s financial statements.


14

Note 3 - Significant Accounting Policies (cont’d)

A. First-time application of new standards (cont’d)

(1) A new suite of accounting standards regarding consolidation of financial statements, joint arrangements and disclosure of involvement with other entities (cont’d)

(b) IFRS 11, Joint Arrangements The standard classifies joint arrangements as joint operations or as joint ventures on the basis of the rights and obligations of the parties to the arrangement. Joint ventures, which are all the joint arrangements structured in a separate vehicle in which the parties with joint control have rights to the net assets of the joint arrangement, shall only be accounted for using the equity method (the option to apply the proportionate consolidation method has been eliminated).

Application of the standard did not have a significant impact on the financial statements.

(2) IFRS 13 Fair Value Measurement The standard replaces the fair value measurement guidance that currently appears in various IFRSs. For this purpose, it defines fair value and provides measurement and disclosure guidance. Nevertheless, the standard does not introduce new fair value measurement requirements, but explains how to measure fair value when such measurement is required by other IFRSs. The standard is applied when fair value measurements or disclosures are required or permitted by other IFRSs. The standard is to be applied prospectively, where the standard’s disclosure requirements will not apply to comparative data for periods prior to the initial application. Application of the standard did not have a significant impact on the financial statements. (3) Amendment to IAS 19, Employee Benefits The amendment to IAS 19 introduces a number of changes to the accounting treatment of employee benefits, including the recognition of all actuarial gains and losses immediately through other comprehensive income, and it eliminates the corridor method and the method of immediately recognizing actuarial gains and losses in profit or loss. Furthermore, the interest that is recognized in profit or loss will be calculated on the balance of the net defined benefit liability (asset), according to the discount rate that is used to measure the liability. In addition, employee benefits will be classified as short or long term depending on when the entity expects the benefits to be wholly settled. Application of the amendment did not have a significant impact on the financial statements.


15


A. First-time application of new standards (cont’d)

(4) Amendment to IAS 1, Presentation of Financial Statements The amendment to IAS 1 changes the presentation of items of other comprehensive income in the financial statements, so that items of other comprehensive income that may be reclassified to profit or loss in the future will be presented separately from those that will never be reclassified to profit or loss. The statement of comprehensive income for the comparative periods was restated in accordance with the amendment.

B. Impact on the financial statements

(1) Impact on the statement of financial position

As at March 31 2012 (Unaudited) Impact of As reported As retroactive in these previously application financial reported of IFRS 10 statements $ thousands $ thousands $ thousands

Assets Trade receivables 654,052 495,353 1,149,405 Trade receivables in the securitization transaction not yet eliminated 236,533 (236,533) – Total current assets 2,716,162 258,820 2,974,982 Total assets 4,279,302 258,820 4,538,122

Liabilities Credit from banks and others 412,639 258,820 671,459 Total current liabilities 1,667,294 258,820 1,926,114 Total liabilities 2,958,716 258,820 3,217,536 Total liabilities and equity 4,279,302 258,820 4,538,122


16


B. Impact on the financial statements (cont’d)

(1) Impact on the statement of financial position (cont’d)

As at December 31 2012 (Audited) Impact of As reported As retroactive in these previously application financial reported of IFRS 10 statements $ thousands $ thousands $ thousands

Assets Trade receivables 614,005 261,042 875,047 Trade receivables in the securitization transaction not yet eliminated 81,952 (81,952) – Total current assets 2,390,484 179,090 2,569,574 Total assets 3,975,023 179,090 4,154,113

Liabilities Credit from banks and others 234,910 179,090 414,000 Total current liabilities 1,435,559 179,090 1,614,649 Total liabilities 2,646,247 179,090 2,825,337 Total liabilities and equity 3,975,023 179,090 4,154,113

(2) Impact on the statement of cash flows

For the three months ended March 31 2012 (Unaudited) Impact of As reported As retroactive in these previously application financial reported of IFRS 10 statements $ thousands $ thousands $ thousands

Net cash used in operating activities (39,855) (84,158) (124,013)

Net cash provided by financing activities 277,964 84,158 362,122

For the year ended December 31 2012 (Audited) Impact of As reported As retroactive in these previously application financial reported of IFRS 10 statements $ thousands $ thousands $ thousands

Net cash provided by operating activities 63,277 (4,428) 58,849

Net cash provided by financing activities 26,338 4,428 30,766


17


C. New standards and interpretations not yet adopted IFRS 9 (2010), Financial Instruments (hereinafter – “the Standard”) Further to that stated in the disclosure regarding new standards and interpretations not yet adopted, in Note 3R(4) of the Significant Accounting Policies in the Annual Financial Statements, the Company is examining the impacts of application of the Standard on the financial statements with no intention of adopting it early.

Note 4 - Information on Business Segments A. Products and services: The Company presents its segment reporting according to a primary format, which is based on a breakdown by business segments: Activity in the agrochemical products market (Agro)

This is the main area of the Company’s operation and includes the manufacture and marketing of conventional agrochemical products and activities in the area of seeds.

Non-agro activity

This field of activity includes a large number of sub-fields, including: Lycopan (an oxidization retardant), aromatic products, and other chemicals. It combines all the Company’s activities not included in the agro-products segment.

The basis of segmentation and the measurement basis for the segment profit or loss are the same as that presented in Note 31 “Operating Segments” in the Annual Financial Statements for 2012. Segment results reported to the chief operating decision maker include items directly attributable to a segment as well at those that can be allocated on a reasonable basis. Unallocated items comprise mainly financing expenses, net.


18

Note 4 - Information on Business Segments (cont’d)

A. Products and services: (cont’d)

For the three-month period ended March 31, 2013 (Unaudited) Non-agro Agro activity activity Adjustments Consolidated $ thousands $ thousands $ thousands $ thousands

Statement of income information: Revenues Sales outside the Group 836,416 48,969 – 885,385Inter-segment sales – 337 (337) –Total revenues 836,416 49,306 (337) 885,385Results Segment’s results 127,948 3,082 57 131,087 Financing expenses, net (29,274)Share of income of equity accounted in investees 995Taxes on income (12,674)Non-controlling interests 64Income for the period 90,198

For the three-month period ended March 31, 2012 (Unaudited) Non-agro Agro activity activity Adjustments Consolidated $ thousands $ thousands $ thousands $ thousands

Statement of income information: Revenues Sales outside the Group 779,992 48,041 – 828,033Inter–segment sales – 188 (188) –Total revenues 779,992 48,229 (188) 828,033Results Segment’s results 120,826 4,194 (34) 124,986 Financing expenses, net (21,312)Share of losses of equity accounted investees (2,083)Taxes on income (12,175)Non-controlling interests (117)Income for the period 89,299

For the year ended December 31, 2012 (Audited) Non-Agro Agro activity activity Adjustments Consolidated $ thousands $ thousands $ thousands $ thousands

Statement of income information: Revenues 2,648,673 185,830 – 2,834,503Sales outside the Group Inter–segment sales – 1,103 (1,103) –Total revenues 2,648,673 186,933 (1,103) 2,834,503Results Segment’s results 271,134 10,269 188 281,591 Financing expenses, net (110,251)Share of losses of equity accounted investees (9,603)Taxes on income (39,164)Non-controlling interests (110)Net income for the year 122,463


19

Note 4 - Information on Business Segments (cont’d)

B. Sales distribution by geographic regions

Three month period ended Year ended March 31 March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Europe 435,982 423,518 1,092,373 North America 145,789 131,860 497,542 Latin America 128,311 107,397 642,906 Asia Pacific and Africa 148,093 141,188 497,280 Israel 27,210 24,070 104,402 885,385 828,033 2,834,503

Note 5 - Financial Instruments

Fair value The fair value of forward contracts on foreign currency is based on their listed market price, if available. In the absence of market prices, the fair value is estimated based on the discounted difference between the stated forward price in the contract and the current forward price for the balance of the contract period to maturity, using an appropriate interest rate. The fair value of foreign currency options and interest rate swaps is based on bank quotes. The reasonableness of the quotes is evaluated through discounting future cash flow estimates, based on the conditions and duration to maturity of each contract, using the market interest rates of a similar instrument at the measurement date and in accordance with the Black & Scholes model. (1) Fair value compared with carrying value The carrying value of certain financial assets and liabilities, including cash and cash equivalents, trade receivables, other receivables, other short-term investments, derivatives, bank overdrafts, short-term loans and credit, trade payables and other payables, conform to or approximate their fair value. The table below provides the carrying value and fair value of categories of long-term financial instruments, which are stated in the financial statements at other than their fair value:

March 31, 2013 (unaudited) Carrying value Fair value $ thousands $ thousands

Financial assets Long-term loans and other receivables (a) 48,011 32,741

Financial liabilities Long-term loans (b) 358,181 363,508 Debenture (c) 1,176,434 1,299,614


20

Note 5 - Financial Instruments (cont’d) (1) Fair value compared with carrying value (cont’d) (a) The fair value of the long-term loans granted is based on a calculation of the present value of

cash flows, using the acceptable interest rate for similar loans having similar characteristics. (b) The fair value of the long-term loans received is based on a calculation of the present value of

cash flows, using the acceptable interest rate for similar loans having similar characteristics. (c) The fair value of the debentures is based on stock exchange quotes. (2) Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active market for identical instrument. Level 2: inputs other than quoted prices included within Level 1 that are observable, either

directly or indirectly. Level 3: inputs that are not based on observable market data. The Company’s financial instruments carried at fair value, are evaluated by observable inputs and therefore are concurrent with the definition of level 2.

March 31, 2013 (Unaudited) $ thousands

Derivatives used for hedging: Interest rate swaps 16,461 Forward contracts and options 16,523 Derivatives not used for hedging: Forward contracts and options 53,381 86,365

Note 6 - Additional Information

(1) In the ordinary course of business, legal claims have been filed against the consolidated companies, including lawsuits, regarding claims for patent infringement. Among other things, from time to time, the Company is exposed to class actions in large amounts, which it must defend against while incurring considerable costs, even if these claims, right from the start, have no basis. A trend has recently become evident of an increase in the filing of claims against companies engaged in activities similar to those of the Company, with motions for recognition as class actions, due to various causes of action. In the estimation of the Company's management, based on, among other things, opinions of its legal advisors, regarding the prospects of the proceedings, the financial statements include appropriate provisions where necessary to cover the exposure resulting from the claims. A detailed description of contingent liabilities outstanding against the Company appears in Note 19 to the Annual Financial Statements for 2012.


21

Note 6 - Additional Information (cont’d)

(1) (cont’d) Set forth below are details of the material changes that occurred in the significant legal claims

to which the Company is a party: On April 8, 2010, BASF filed a lawsuit and motion for a restraining order against subsidiaries

in the United States, claiming that actions taken by the subsidiaries for future marketing of a product based on the Active Ingredient Fipronil, allegedly constitute patent infringement of a registered BASF patent.

In October 2010, as part of the said claim, the parties reached an agreement that received the

force of a court judgment whereby the production process of Fipronil which was attached to the agreement does not violate the patent (hereinafter – “the Agreed Court Decision”). Nevertheless, the legal proceedings between the parties continued due to the contention of BASF that the uses made by the Company of the said product violate other patents it holds.

In its decision of January 9, 2012, the Court ruled that the uses made of the products containing

the active ingredient Fipronil and marketed by the subsidiaries do not violate the patent with respect to which the claim was filed. On February 1, 2012, BASF filed an appeal with the Court, which was rejected on March 20, 2013.

On April 30, 2012, a request was filed with the Court wherein it is contended that the

subsidiaries breached the Agreed Court Decision in that they made a significant change in the production process agreed to in the Agreed Court Decision (hereinafter – “the Request”). In the opinion of Management, based on its legal advisors, the chances that the Request will be accepted are remote.

In addition to that stated, on March 19, 2013, BASF filed a claim for damages without

specifying the amount thereof in another court in the United States against the subsidiaries and a distributor of one of the subsidiaries, claiming that they are in breach of the production process included in the Agreed Court Decision. On April 19, 2013, the subsidiaries filed a request to cancel the claim or, alternatively, to transfer it to the court in which the Agreed Court Decision was approved and in which a hearing is underway regarding the Request.

In light of the fact that recently it became clear to the Company that due to an error two

shipments were made to the United States that included material that is in violation of the Agreed Court Decision, on April 22, 2013, the subsidiaries filed a notification with the Court wherein they provided details of the said error.

In the estimation of the Company’s legal advisors, it is reasonable that the claim will be

cancelled and transferred to the court in which the Agreed Court Decision was approved. Accordingly, the Company’s legal advisors estimate that the chances that the Company will be required to pay compensation in the said court are remote, however there is a chance that the subsidiaries will be required to pay compensation in the court in which the Agreed Court Decision was approved, although, at this stage, the Company is not able to estimate the amount of the compensation the subsidiaries will be required to pay, if any (and it is unable to estimate whether or not these amounts will be significant).


22

Note 6 - Additional Information (cont’d)

(2) On January 7, 2013, the Company issued debentures through an expansion of Series B totaling NIS 600 million par value of debentures, in consideration for 94.88% of their par value. The total net proceeds from the issuance amounted to $177.2 million.

Series B constitutes CPI-linked debentures, bearing basic annual interest of 5.15%. The

principal will be repaid in 17 equal payments in the years 2020 to 2036. The issuance costs for this series totaled $651 thousand.

Makhteshim-Agan Industries Ltd.

Condensed Separate Interim

Financial Data

(Unaudited)

As of March 31, 2013

In U.S. Dollars

Somekh Chaikin Telephone 972 3 684 8000 KPMG Millennium Tower Fax 972 3 684 8444 17 Ha'arba'a Street, PO Box 609 Internet www.kpmg.co.il Tel Aviv 61006 Israel

Somekh Chaikin, a partnership registered under the Israeli Partnership Ordinance, is the Israeli member firm of KPMG International, a Swiss cooperative.

To the Shareholders of Makhteshim-Agan Industries Ltd.

Subject: Special Auditors' Report on Separate Interim Financial Information according to Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970

Introduction

We have reviewed the separate interim financial information presented in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970 of Makhteshim-Agan Industries Ltd. (hereinafter – “the Company”) as at March 31, 2013 and for the three-month period then ended. The separate interim financial information is the responsibility of the Company’s Board of Directors and of its Management. Our responsibility is to express a conclusion on the separate interim financial information, based on our review.

We did not review the separate interim financial information of investee companies the investment in which amounted to $101,248 thousand as at March 31, 2013, and the profit from these investee companies amounted to $4,594 thousand for the three-month period then ended. The financial statements of those companies were reviewed by other auditors whose review reports thereon were furnished to us and our conclusion, insofar as it relates to amounts emanating from the financial statements of such companies, is based solely on the said review reports of the other auditors. Scope of review

We conducted our review in accordance with standard on Review Engagements 1, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” of the Institute of Certified Public Accountants in Israel. A review of separate interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel, and consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion

Based on our review and the review reports of other auditors, nothing has come to our attention that causes us to believe that the accompanying separate interim financial information was not prepared, in all material respects, in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970. Somekh Chaikin Certified Public Accountants

May 9, 2013

2

Makhteshim-Agan Industries Ltd. Condensed Interim Information on Financial Position

March 31 March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited)

$ thousands $ thousands $ thousands

Current assets Cash and cash equivalents 1,424 165,415 1,095Prepaid expenses 1,515 789 868Other receivables and investee companies 259,522 288,826 195,952Derivatives 49,484 30,836 25,774 Total current assets 311,945 485,866 223,689 Long-term investments, loans and receivables Balance of investee companies 1,504,393 1,385,787 1,396,230Loans to investee companies 853,596 614,304 717,331Derivatives 1,532 13,363 – 2,359,521 2,013,454 2,113,561 Fixed assets, net 2,819 2,884 2,883 Intangible assets, net 1,482 1,867 1,492 Deferred tax assets 351 408 410 Total non-current assets 2,364,173 2,018,613 2,118,346

Total assets 2,676,118 2,504,479 2,342,035

3

Makhteshim-Agan Industries Ltd. Condensed Interim Information on Financial Position

March 31 March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited)


Current liabilities

Debentures 153,661 149,796 150,140

Other payables 37,819 33,815 18,293

Derivatives 1,524 13,195 1,923 Total current liabilities 193,004 196,806 170,356 Long-term liabilities

Debentures 1,044,785 984,590 840,609

Employee benefits 3,432 2,497 2,930 Total non-current liabilities 1,048,217 987,087 843,539 Total liabilities 1,241,221 1,183,893 1,013,895 Equity

Share capital 125,595 125,595 125,595

Share premium 623,829 623,829 623,829

Reserves (240,800) (238,061) (257,662)

Retained earnings 926,273 809,223 836,378

Total equity attributable to the owners of the Company 1,434,897 1,320,586 1,328,140 Total liabilities and equity 2,676,118 2,504,479 2,342,035

Yang Xingqiang Erez Vigodman Aviram Lahav Chairman of the Board of Directors President & Chief Executive Officer Chief Financial Officer Date the financial statements were approved: May 9, 2013 The attached additional information to the separate interim information is an integral part thereof.

4

Makhteshim-Agan Industries Ltd. Condensed Interim Information on Income Three-month period ended Year ended March 31 March 31 December 31

2013 2012 2012

(Unaudited) (Unaudited) (Audited)


Revenues Management fees from investee companies 10,166 11,189 29,149 Expenses General and administrative 11,865 11,403 33,498 Operating loss (1,699) (214) (4,349) Financing income 44,660 28,002 166,508 Financing expenses (44,660) (30,167) (168,333) Financing expenses, net – (2,165) (1,825) Loss after financing expenses, net (1,699) (2,379) (6,174) Income from investee companies 92,083 91,308 128,556 Profit before tax on income 90,384 88,929 122,382 Taxes on income (tax benefit) 186 (370) (81) Profit for the year attributable to the owners of the Company 90,198 89,299 122,463 The attached additional information to the separate interim information is an integral part thereof.

5

Makhteshim-Agan Industries Ltd. Condensed Interim Information on Comprehensive Income Three-month period ended Year ended

March 31 March 31 December 31

2013 2012 2012

(Unaudited) (Unaudited) (Audited)


Income for the period attributable to the owners of the Company 90,198 89,299 122,463 Components of other comprehensive income where after the initial recognition as part of the comprehensive income were transferred or will be transferred to the statement of income Effective portion of changes in fair value of cash flow hedges 2,448 4,411 3,943 Net change in fair value of cash flow hedges transferred to the statement of income (1,992) (4,511) (5,482) Other comprehensive income (loss) in respect of investee companies, net from tax 16,660 (9,007) (27,490) Taxes on the components of other comprehensive income that were transferred or will be transferred to the statement of income (45) (254) (9) Total other comprehensive income (loss) for the period where after the initial recognition as part of the comprehensive income were transferred or will be transferred to the statement of income, net of tax 17,071 (9,361) (29,038) Components of other comprehensive income that will not be transferred to the statement of income Actuarial gains (losses) from defined benefit plan 69 (61) (302) Other comprehensive income (loss) in respect of investee companies, net from tax 491 (642) (3,974) Total components of other comprehensive income (loss) for the period that will not be transferred to the statement of income 560 (703) (4,276) Total comprehensive income for the period attributable to the owners of the Company 107,829 79,235 89,149 The statement of comprehensive income for the comparative periods was restated in accordance with the first-time application of the amendment to IAS 1. Accordingly, the format of the presentation of the statement of comprehensive income was changed. The attached additional information to the separate interim information is an integral part thereof.

6

Makhteshim-Agan Industries Ltd. Condensed Interim Information on Cash Flows Three-month period ended Year ended March 31 March 31 December 31 2013 2012 2012 (Unaudited) (Unaudited) (Audited) $ thousands $ thousands $ thousands

Cash flows from operating activities Profit for the period attributable to the owners of the Company 90,198 89,299 122,463 Adjustments Income in respect of investee companies (92,083) (91,308) (128,556)Depreciation and amortization 407 426 1,666Amortization of discount/premium and issuance costs 155 (35) (228)Adjustment of long-term liabilities 29,822 33,180 36,759SWAP transactions (1,990) (4,511) (5,481)Change in deferred taxes, net 15 (461) (218) Changes in assets and liabilities Increase in accounts receivable and current assets (23,434) (17,993) (12,370)Increase (decrease) in accounts payable and other liabilities 19,291 (21,035) (47,473)Change in provisions and employee benefits 407 200 36 Net cash used in operating activities in respect of transactions with investee companies (26,987) (20,703) (95,520) Net cash used in operating activities (4,199) (32,941) (128,922) Cash flows from investing activities Acquisition of fixed assets (60) (79) (424)Additions to intangible assets (274) (218) (736) Net cash used in operating activities in respect of transactions with investee companies (172,353) (68,380) (869) Net cash used in investing activities (172,687) (68,677) (2,029) Cash flows from financing activities Issuance of debentures net of issuance costs 177,215 276,182 276,183Repayment of debentures – – (147,230)Settlement of SWAP transaction – – 12,242Decrease in short-term liabilities to banks – (9,993) (9,993) Net cash provided by financing activities 177,215 266,189 131,202 Increase in cash and cash equivalents 329 164,571 251 Cash and cash equivalents at beginning of the period 1,095 844 844 Cash and cash equivalents at end of the period 1,424 165,415 1,095 Supplementary information: Interest paid in cash – – (61,111) Interest received in cash 484 1,117 4,225 Taxes paid in cash, net (171) (88) (135) The attached additional information to the separate interim information is an integral part thereof.

7

Makhteshim-Agan Industries Ltd. Notes to the Condensed Financial Statements as of March 31, 2013 Additional Information 1. General

Presented herein is condensed financial data from the Group’s condensed consolidated interim financial statements as at March 31, 2013 (hereinafter – “the Consolidated Financial Statements”), which are published as part of the Periodic Reports, relating to the Company itself hereinafter – “the Condensed Interim Separate Financial Data”), presented in accordance with the provisions of Regulation 38D (“the Regulation”) and Addendum 10 to the Securities Regulations (Periodic and Immediate Reports) – 1970 (“Addendum 10”) regarding Condensed Interim Separate Financial Data of the Corporation. The Condensed Interim Separate Financial Data should be read in conjunction with the separate financial information as at and for the period ended December 31, 2012 and in conjunction with the interim condensed consolidated financial statements. In this interim financial information: (1) The Company – Makhteshim-Agan Industries Ltd. (2) Subsidiaries – Companies, including partnerships, whose financial statements are

fully consolidated, directly or indirectly, with the financial statements of the Company.

(3) Investee companies – Subsidiaries and companies, including partnerships or joint ventures, the Company's investment in which is included in the financial statements, directly or indirectly, based on the equity method of accounting.

2. Significant Accounting Policies Applied in the Condensed Separate Financial

Data

The accounting policies in these condensed interim financial data conform to the accounting principles detailed in the separate financial information as of December 31, 2012.

Periodic report regarding the effectiveness of the internal auditing of financial reporting and disclosure according to Regulation 38C(a): The Management, under the supervisions of the Board of Directors of Makhteshim Agan Industries Ltd. (hereafter: the corporation) is responsible for determining and maintaining appropriate internal auditing of financial reporting and of disclosure in the corporation. In this matter, the members of the Management are as follows: 1. Erez Vigodman, President & CEO 2. Chen Lichtenstein, Deputy CEO 3. Aviram Lahav, SVP CFO 4. Ignacio Dominguez, SVP CCO and Head of Global Products and Marketing 5. Michal Arlosoroff, SVP General Legal Counsel 6. Amos Rabin, SVP Global HR 7. Dani Harari, SVP Strategy, Innovation and Business Intelligence 8. Elhanan Abramov, SVP Global Resources 9. Rony Patishi-Chillim, SVP Global Corporate Communications The internal auditing of financial reporting and disclosure includes the existing controls and procedures in the corporation, which were designed by the Chief Executive Officer and the senior corporate financial officer or under their supervision, or by someone who in practice carries out these functions, under the supervision of the corporation‘s Board of Directors and which are intended to provide a reasonable degree of confidence regarding the reliability of financial reporting and the preparation of the reports according to the instructions of the law and to ensure that the information which the corporation is required to disclose in the reports that it publishes according to the instructions of the law is gathered, processed, summarized and reported on the dates and in the format dictated by law. The internal auditing includes, among other things, audits and procedures that were designed to ensure that the information which the corporation is required to disclose was accumulated and submitted to the corporation‘s Management, including the Chief Executive Officer and the senior corporate financial officer or someone who in practice fulfills these functions, in order to facilitate decision making at the appropriate time, with regard to the disclosure requirements. Due to its structural constraints, internal auditing of financial reporting and disclosure is not intended to fully guarantee that a biased presentation or the omission of information in the reports will be avoided or discovered. In the annual report on the effectiveness of the internal auditing of the financial reports and disclosure which was attached to the periodic report for the period ended on December 31, 2012 (hereinafter: the last annual report on internal auditing), the Board of Directors and the Management assessed the corporation's internal auditing. Based on that assessment, the Board of Directors and the Management of the corporation reached the conclusion that the aforementioned internal auditing, as of December 31, 2012 is effective. Up to the date of the report, the Board of Directors and the Management were not made aware of any event or matter that would have changed their assessment of the effectiveness of internal auditing, as it was presented in the annual report on internal auditing. As of the date of the report and based on the assessment of the effectiveness of the internal auditing in the last annual report on internal auditing and on the information brought to the attention of the Management and the Board of Directors as mentioned above, the internal auditing is effective.

Officers’ Certification Certification of CEO

I, Erez Vigodman, certify that: (1) I have reviewed the quarterly report of Makhteshim Agan Industries Ltd. (hereinafter

– "the Company") for the first quarter of 2013 (hereinafter – “the reports"). (2) Based on my knowledge, the reports do not contain any untrue statement of a material

fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the reports.

(3) Based on my knowledge, the financial statements and other financial information

included in the reports, fairly present in all material respects, the financial condition, results of operations and cash flows of the Company as of the dates and for the periods presented in the reports.

(4) I have disclosed, based on my most recent evaluation regarding internal control over

financial reporting and disclosure, to the Company's Auditors, Board of Directors and Audit Committee and Financial Statements Committee of the Board of Directors: (a) All significant deficiencies and material weaknesses in the design or operation

of internal control over financial reporting and disclosure, which could reasonably adversely affect the Company's ability to record, process, summarize and report financial data so as to cast doubt on the reliability of financial reporting and the preparation of financial statements in accordance with law; and –

(b) Any fraud, whether or not material, that involves the CEO or anyone directly

subordinated to the CEO or that involves other employees who have a significant role in internal control over financial reporting and disclosure.

(5) I, alone or together with others in the Company, state that:

(a) I have designed such controls and procedures, or caused such controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated corporations within their meaning in the Securities Law (Annual Financial Statements) – 2010, is made known to me by others in the Company and within those corporations, particularly during the period in which the reports are being prepared; and –

(b) I have designed such controls and procedures, or caused such controls and

procedures to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with law, including in accordance with generally accepted accounting principles;

(c) No event or matter during the course of the period between the date of the last

periodic report and the date of this report has been brought to my attention that would change the conclusion of the Board of Directors and the Management

with respect to the effectiveness of the internal auditing of the Company's financial reporting and disclosure.

Nothing in the aforesaid derogates from my responsibility or from the responsibility of any other person under the law.

___________________ Erez Vigodman

CEO 9 May 2013

Officers’ Certification Certification of Chief Financial Officer

I, Aviram Lahav, certify that: (1) I have reviewed the quarterly report of Makhteshim Agan Industries Ltd. (hereinafter

– "the Company") for the first quarter of 2013 (hereinafter – “the reports" or "the interim period reports").

(2) Based on my knowledge, the interim financial statements and other financial

information included in the interim period reports do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the reports.

(3) Based on my knowledge, the interim financial statements and other financial

information included in the interim period reports, fairly present in all material respects, the financial condition, results of operations and cash flows of the Company as of the dates and for the periods presented in the reports.

(4) I have disclosed, based on my most recent evaluation regarding internal control over

financial reporting and disclosure, to the Company's Auditors, Board of Directors and Audit committee and Financial Statements Committee of the Board of Directors: (a) All significant deficiencies and material weaknesses in the design or operation

of internal control over financial reporting and disclosure to the extent it relates to the interim financial statements and other financial information included in the interim period reports, which could reasonably adversely affect the Company's ability to record, process, summarize and report financial data so as to cast doubt on the reliability of financial reporting and the preparation of financial statements in accordance with law; and –

(b) Any fraud, whether or not material, that involves the CEO or anyone directly

subordinated to the CEO or that involves other employees who have a significant role in internal control over financial reporting and disclosure.

(5) I, alone or together with others in the Company, state that:

(a) I have designed such controls and procedures, or caused such controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated corporations within their meaning in the Securities Law (Annual Financial Statements) – 2010, to the extent it relates to the financial statements and other financial information included in the reports, is made known to me by others in the Company and within those corporations, particularly during the period in which the reports are being prepared; and –

(b) I have designed such controls and procedures, or caused such controls and

procedures to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with law, including in accordance with generally accepted accounting principles;

(c) No event or matter has been brought to my attention which occurred during the course of the period between the date of the last report (quarterly or periodic, as the case may be) and the date of this report that relates to the interim financial statements and any other financial information that is included in the interim period reports, that would change the conclusion of the Board of Directors and the Management with respect to the effectiveness of the internal auditing of the Company's financial reporting and disclosure.

Nothing in the aforesaid derogates from my responsibility or from the responsibility of any other person under the law. ___________________

Aviram Lahav CFO 9 May 2013