Below is the immediate report submitted to the Israeli Securities Authority ("ISA") and the Tel-Aviv Stock Exchange through the ISA's electronic submission system in accordance with the Securities Regulations (Periodic and Immediate Reports), 1970.

Frutarom Industries Ltd.

("Company")

Registration No.: 52-004280-5

The securities of the Company are listed for trading on the Tel-Aviv Stock Exchange

Name: Frutarom

25 HaShaish St., P.O.B. 10067, Haifa 26110

Tel: +972-4-846 2401, Fax: +972-4-872 2517, www.frutarom.com

Email: kbenari@frutarom.com

February 16, 2012

Immediate Report

Nature of the Event: update of Financial Covenants

Frutarom Industries Ltd. ("Frutarom" or the "Company") hereby announces that on February 16, 2012 its financial covenants were updated as follows:

1.

The Company's equity shall not at any time be less than US$300,000 K. On September 30, 2012 the Company's equity was approximately US$ 395,549 K.

2.

The Company's equity shall not at any time be less than 35% of the Company's total balance sheet. On September 30, 2012 the Company's equity was approximately 65% of the Company's total balance sheet.

3.

The ratio between debt (excluding cash) and EBITDA shall not exceed 4.25. On September 30, 2012 the aforementioned ratio was approximately 1.

The Company has a negative pledge on its assets (in addition to the existing negative pledge on the assets of its subsidiary Frutarom Ltd.) and it has undertaken a limitation on dividend distribution according to which it will be permitted to distribute:

(a) Up to 50% of the balance of the accumulated surplus as of December 31, 2011, as appearing in the Company's December 31, 2011 balance sheet.

(b) Up to 50% of the Company's annual profit for each calendar year, as appears in the Company's annual financial report relating to such calendar year in which such profit accrued.

Date and time at which the Company was first made aware of the event: February 16, 2012 at 15:45 P.M.

Sincerely Yours,

Karin Ben-Ari, Adv.

Legal Counsel