Makhteshim Agan reported today, August 2, 2009, the following:

1. Pursuant to the description included in the Company's annual report filed by the Company on March 11, 2009 with respect to a temporary provision resulting from the amendment of section 169 of the Israeli Income Tax Ordinance ("the Ordinance”) which allows the Company, during the 2009 tax year only, to pay a reduced tax at a rate of 5% instead of 25% on dividends received  from affiliated companies overseas, and following the Company examination of implementation of the aforesaid amendment to the Ordinance, the Company's management intends to submit a proposal for the approval of the Company's Board of Directors for a one-time withdrawal of profits from the Group's overseas companies, in the sum of up to $300 million. This withdrawal shall not affect the Company’s dividend policy and timing as specified in the Company's immediate report of March 17, 2007 (number 2007-01-334826).
   
   
2. Should the withdrawal be approved by the Company's Board of Directors, the Company shall be required to pay a one-time tax of approximately $15 million (approx. 5% of the above amount).
   
   
3. Following immediate report of July 7, 2009 (number 2009-01-164559) the Company updates that its Brazilian affiliate Milenia Agrociencias S.A. ("Milenia") is in ongoing contact with the authorities and that pursuant to the Brazilian Ministry of Health's request, the Brazilian Ministry of Agriculture, which is responsible for authorizing product registrations in Brazil, has confirmed that the changes made by Milenia to the products which were the subject of the examination, are acceptable and should not prevent the Company from continuing manufacturing and selling those products. Milenia's position, as presented to the authorities, is that the formulations are similar to those produced and sold by other companies in the Brazilian market, that the changes made to the formulations were minor, aimed to improve their quality, and if any variation exists – it is of a mere procedural nature. Milenia's position is that it applies advanced technologies in the formulation process, in accordance with the best public health standards.
   

Should the contact with the Ministry of Health not resolve this matter, and based on measures taken by the Company to ensure supply of most of the formulations which were temporarily halted, the Company estimates, at this time, that there will be no material effect on the Company's sales and profits in the second half of the year. Due to the foregoing, the Company's management has resolved to make a one-time provision, in the second quarter, of $15 million pre-tax benefit, with respect to inventories, sold products and other costs related to this matter. Consequently, the Company's net income in the second quarter is expected to be marginal.