|  ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------------------|

| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-------------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------------|

|  ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------------------------------------------------------------------------------------------------|

| Title of each class                                    |   | Name of each exchange on which registered |
|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------|
|                                                                  |   |                                                               |
| American Depositary Shares, each representing twelve Series B Shares. |   | New York Stock Exchange                                            |

----

| U.S. GAAP  ̈ | International Financial Reporting                  | Other x |
|------------------|----------------------------------------------------|--------------|
|             | Standards as issued by the International           |         |
|             | Accounting Standards Board    ̈ |         |

----

|      |   |                                                  |   | Page   |   |
|-----------|--------|-------------------------------------------------------|--------|--------|--------|
|      |   |                                                  |   |   |   |   |
| PART I    |   |                                                  |   |   | 3      |   |
|      |   |                                                  |   |   |   |   |
| ITEM 1.   |   | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |   |   | 3      |   |
| ITEM 2.   |   | OFFER STATISTICS AND EXPECTED TIMETABLE               |   |   | 3      |   |
| ITEM 3.   |   | KEY INFORMATION                                       |   |   | 3      |   |
| A.        |   | Selected Financial Data                               |   |   | 3      |   |
|      |   |                                                  |   |   |   |   |
| B.        |   | Capitalization and Indebtedness                       |   |   | 6      |   |
|      |   |                                                  |   |   |   |   |
| C.        |   | Reasons for the Offer and Use of Proceeds             |   |   | 6      |   |
|      |   |                                                  |   |   |   |   |
| D.        |   | Risk Factors                                          |   |   | 6      |   |
|      |   |                                                  |   |   |   |   |
| ITEM 4.   |   | INFORMATION ON THE COMPANY                            |   |   | 12     |   |
| A.        |   | History and Development of the Company                |   |   | 12     |   |
|      |   |                                                  |   |   |   |   |
| B.        |   | Business Overview                                     |   |   | 16     |   |
|      |   |                                                  |   |   |   |   |
| C.        |   | Organizational Structure                              |   |   | 25     |   |
|      |   |                                                  |   |   |   |   |
| D.        |   | Property, Plant and Equipment                         |   |   | 26     |   |
|      |   |                                                  |   |   |   |   |
| ITEM 4.A. |   | UNRESOLVED STAFF COMMENTS                             |   |   | 27     |   |
| ITEM 5.   |   | OPERATING AND FINANCIAL REVIEW AND PROSPECTS          |   |   | 27     |   |
| A.        |   | Operating Results                                     |   |   | 32     |   |
|      |   |                                                  |   |   |   |   |
| B.        |   | Liquidity and Capital Resources                       |   |   | 41     |   |
|      |   |                                                  |   |   |   |   |
| C.        |   | Research and Development, Patents and Licenses, etc.  |   |   | 42     |   |
|      |   |                                                  |   |   |   |   |
| D.        |   | Trend Information                                     |   |   | 42     |   |
|      |   |                                                  |   |   |   |   |
| E.        |   | Off-Balance Sheet Arrangements                        |   |   | 42     |   |
|      |   |                                                  |   |   |   |   |
| F.        |   | Tabular Disclosure of Contractual Obligations         |   |   | 42     |   |
|      |   |                                                  |   |   |   |   |
| G.        |   | Safe Harbor                                           |   |   | 43     |   |
|      |   |                                                  |   |   |   |   |
| ITEM 6.   |   | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES            |   |   | 43     |   |
| A.        |   | Directors and Senior Management                       |   |   | 43     |   |
|      |   |                                                  |   |   |   |   |
| B.        |   | Compensation                                          |   |   | 49     |   |
|      |   |                                                  |   |   |   |   |
| C.        |   | Board Practices                                       |   |   | 49     |   |

----

| D.       |   | Employees                                                  |   |   | 50     |   |
|----------|--------|------------------------------------------------------------|--------|--------|--------|--------|
|     |   |                                                       |   |   |   |   |
| E.       |   | Share Ownership                                            |   |   | 50     |   |
|     |   |                                                       |   |   |   |   |
| ITEM 7.  |   | MAJOR STOCKHOLDERS AND RELATED PARTY TRANSACTIONS          |   |   | 50     |   |
| A.       |   | Major Shareholders                                         |   |   | 50     |   |
|     |   |                                                       |   |   |   |   |
| B.       |   | Related Party Transactions                                 |   |   | 51     |   |
|     |   |                                                       |   |   |   |   |
| C.       |   | Interests of Experts and Counsel                           |   |   | 52     |   |
|     |   |                                                       |   |   |   |   |
| ITEM 8.  |   | FINANCIAL INFORMATION                                      |   |   | 52     |   |
| A.       |   | Consolidated Statements and Other Financial Information    |   |   | 52     |   |
|     |   |                                                       |   |   |   |   |
| B.       |   | Significant Changes                                        |   |   | 53     |   |
|     |   |                                                       |   |   |   |   |
| ITEM 9.  |   | THE OFFER AND LISTING                                      |   |   | 54     |   |
| A.       |   | Offer and Listing Details                                  |   |   | 54     |   |
|     |   |                                                       |   |   |   |   |
| B.       |   | Plan of Distribution                                       |   |   | 54     |   |
|     |   |                                                       |   |   |   |   |
| C.       |   | Markets                                                    |   |   | 55     |   |
|     |   |                                                       |   |   |   |   |
| D.       |   | Selling Shareholders                                       |   |   | 56     |   |
|     |   |                                                       |   |   |   |   |
| E.       |   | Dilution                                                   |   |   | 56     |   |
|     |   |                                                       |   |   |   |   |
| F.       |   | Expenses of the Issue                                      |   |   | 56     |   |
|     |   |                                                       |   |   |   |   |
| ITEM 10. |   | ADDITIONAL INFORMATION                                     |   |   | 56     |   |
| A.       |   | Share Capital                                              |   |   | 56     |   |
|     |   |                                                       |   |   |   |   |
| B.       |   | Memorandum and Articles of Association                     |   |   | 56     |   |
|     |   |                                                       |   |   |   |   |
| C.       |   | Material Contracts                                         |   |   | 66     |   |
|     |   |                                                       |   |   |   |   |
| D.       |   | Exchange Controls                                          |   |   | 66     |   |
|     |   |                                                       |   |   |   |   |
| E.       |   | Taxation                                                   |   |   | 66     |   |
|     |   |                                                       |   |   |   |   |
| F.       |   | Dividends and Paying Agents                                |   |   | 72     |   |
|     |   |                                                       |   |   |   |   |
| G.       |   | Statement by Experts                                       |   |   | 72     |   |
|     |   |                                                       |   |   |   |   |
| H.       |   | Documents on Display                                       |   |   | 72     |   |
|     |   |                                                       |   |   |   |   |
| I.       |   | Subsidiary Information                                     |   |   | 72     |   |
|     |   |                                                       |   |   |   |   |
| ITEM 11. |   | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |   |   | 73     |   |
| ITEM 12. |   | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES     |   |   | 74     |   |

----

| A.                |   | Debt Securities                                                              |   |   | 74     |   |
|-------------------|--------|------------------------------------------------------------------------------|--------|--------|--------|--------|
|              |   |                                                                         |   |   |   |   |
| B.                |   | Warrants and Rights                                                          |   |   | 74     |   |
|              |   |                                                                         |   |   |   |   |
| C.                |   | Other Securities                                                             |   |   | 74     |   |
|              |   |                                                                         |   |   |   |   |
| D.                |   | American Depository Receipts                                                 |   |   | 74     |   |
|              |   |                                                                         |   |   |   |   |
| PART II           |   |                                                                         |   |   | 76     |   |
|              |   |                                                                         |   |   |   |   |
| ITEM 13.          |   | DEFAULT, DIVIDEND ARREARAGES AND DELINQUENCIES                               |   |   | 76     |   |
| ITEM 14.          |   | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |   |   | 76     |   |
| ITEM 15.          |   | CONTROLS AND PROCEDURES                                                      |   |   | 76     |   |
| ITEM 16.          |   | [RESERVED]                                                                   |   |   | 78     |   |
| ITEM 16.A.        |   | AUDIT COMMITTEE FINANCIAL EXPERT                                             |   |   | 78     |   |
| ITEM 16.B.        |   | CODE OF ETHICS                                                               |   |   | 79     |   |
| ITEM 16.C.        |   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |   |   | 79     |   |
| ITEM 16.D.        |   | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |   |   | 80     |   |
| ITEM 16.E.        |   | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |   |   | 80     |   |
| ITEM 16.F.        |   | CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT                          |   |   | 81     |   |
| ITEM 16.G.        |   | CORPORATE GOVERNANCE                                                         |   |   | 81     |   |
|              |   |                                                                         |   |   |   |   |
| PART III          |   |                                                                         |   |   | 85     |   |
|              |   |                                                                         |   |   |   |   |
| ITEM 17.          |   | FINANCIAL STATEMENTS                                                         |   |   | 85     |   |
| ITEM 18.          |   | FINANCIAL STATEMENTS                                                         |   |   | 85     |   |
| ITEM 19.          |   | EXHIBITS                                                                     |   |   | 85     |   |
| INDEX OF EXHIBITS |   |                                                                         | 85     |   |

----

----

----

| ITEM 1.  | Identity of Directors, Senior Management and Advisers |
|--------------------|-------------------------------------------------------------------------------------|

| ITEM 2.  | Offer Statistics and Expected Timetable |
|--------------------|-------------------------------------------------------------|

| ITEM 3.  | Key Information |
|--------------------|----------------------|

| A. | Selected Financial Data |
|----|-----------------------------------|

----

|                                            |   | As of and for the year ended December 31,                                                                                                                                                                          |     |
|-------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                            |   | 2006                                                                                                                                                                                                                                                       |     |   | 2007  |   |   | 2008 |   |   | 2009  |   |   | 2010 |   |   | 2010(2) |   |
| Income Statement Data                 |   | in millions of constant pesos as of December 31, 2007 for years 2006 and 2007and in millions of nominal pesos for years 2008 to 2010(1) |     |   | In millions ofU.S. dollars(1) |   |
| Mexican FRS:                                    |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net revenues                                    |   | Ps.                                                                                                                                                                                                                                                        | 15,551.0 |   |   | Ps. | 18,219.6 |   |   | Ps. | 20,125.3 |   |   | Ps. | 23,262.9 |   |   | Ps. | 24,715.5 |   |   | US. $ | 1,998.0 |   |
| Cost of sales                                   |   |                                                                                                                                                                                                                                                       | 12,053.0 |   |   |   | 14,477.9 |   |   |   | 17,482.5 |   |   |   | 19,326.8 |   |   |   | 19,500.7 |   |   |   | 1,576.4 |   |
| Gross profit                                    |   |                                                                                                                                                                                                                                                       | 3,498.0  |   |   |   | 3,741.8 |   |   |   | 2,642.9 |   |   |   | 3,936.1 |   |   |   | 5,214.8 |   |   |   | 421.6 |   |
| Operating income                                |   |                                                                                                                                                                                                                                                       | 1,425.4  |   |   |   | 1,496.3 |   |   |   | 230.1 |   |   |   | 1,413.8 |   |   |   | 2,463.0 |   |   |   | 199.1 |   |
| Comprehensive financing income (loss)           |   |                                                                                                                                                                                                                                                       | 61.4     |   |   |   | 19.1 |   |   |   | (1,369.2 | ) |   |   | (133.2 | ) |   |   | 122.1 |   |   |   | 9.9 |   |
| Net controlling interest income (loss)          |   |                                                                                                                                                                                                                                                       | 906.2    |   |   |   | 1,270.9 |   |   |   | (879.0 | ) |   |   | 797.6 |   |   |   | 1,983.4 |   |   |   | 160.3 |   |
| Net consolidated income (loss) per Share(3)     |   |                                                                                                                                                                                                                                                       | 1.5      |   |   |   | 2.1 |   |   |   | (1.5 | ) |   |   | 1.3 |   |   |   | 3.3 |   |   |   | 0.3 |   |
| Net consolidated income (loss) per ADS(4)       |   |                                                                                                                                                                                                                                                       | 18.1     |   |   |   | 25.4 |   |   |   | (17.5 | ) |   |   | 16.0 |   |   |   | 39.7 |   |   |   | 3.2 |   |
| Dividends per Share(5)                          |   |                                                                                                                                                                                                                                                       | 0.61     |   |   |   | 0.59 |   |   |   | 0.59 |   |   |   | 0.42 |   |   |   | 0.42 |   |   |   | 0.03 |   |
| Weighted average Shares outstanding (thousands) |   |                                                                                                                                                                                                                                                       | 599,571  |   |   |   | 600,000 |   |   |   | 600,000 |   |   |   | 600,000 |   |   |   | 600,000 |   |   |   | 600,000 |   |
|                                            |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. GAAP:                                      |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net revenues                                    |   | Ps.                                                                                                                                                                                                                                                        | 15,551.0 |   |   | Ps. | 18,219.6 |   |   | Ps. | 20,125.3 |   |   | Ps. | 23,262.9 |   |   | Ps. | 24,715.5 |   |   |   | 1,998.0 |   |
| Operating income                                |   |                                                                                                                                                                                                                                                       | 1,395.7  |   |   |   | 1,481.0 |   |   |   | 185.6 |   |   |   | 1,391.0 |   |   |   | 2,400.3 |   |   |   | 194.0 |   |
| Net controlling interest income (loss)          |   |                                                                                                                                                                                                                                                       | 895.6    |   |   |   | 1,261.9 |   |   |   | (869.4 | ) |   |   | 787.0 |   |   |   | 1,975.0 |   |   |   | 159.7 |   |
|                                            |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Statement of Financial Position Data            |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mexican FRS:                                    |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents(7)                    |   | Ps.                                                                                                                                                                                                                                                        | 3,583.9  |   |   | Ps. | 3,039.9 |   |   | Ps. | 1,998.2 |   |   | Ps. | 2,399.1 |   |   | Ps. | 3,967.9 |   |   |   | 320.77 |   |
| Primary financial instruments                   |   |                                                                                                                                                                                                                                                       | 0.0      |   |   |   | 0.0 |   |   |   | 0.0 |   |   |   | 151.8 |   |   |   | 209.3 |   |   |   | 16.92 |   |
| Total assets                                    |   |                                                                                                                                                                                                                                                       | 17,559.2 |   |   |   | 19,116.4 |   |   |   | 19,455.0 |   |   |   | 19,877.9 |   |   |   | 21,197.8 |   |   |   | 1,713.6 |   |
| Short-term debt(6)                              |   |                                                                                                                                                                                                                                                       | 9.8      |   |   |   | 58.8 |   |   |   | 234.2 |   |   |   | 591.9 |   |   |   | 139.9 |   |   |   | 11.3 |   |
| Long-term debt                                  |   |                                                                                                                                                                                                                                                       | 35.5     |   |   |   | 50.8 |   |   |   | 391.7 |   |   |   | 372.0 |   |   |   | 507.1 |   |   |   | 41.0 |   |
| Total stockholders’ equity                |   |                                                                                                                                                                                                                                                       | 14,102.9 |   |   |   | 15,127.2 |   |   |   | 14,079.4 |   |   |   | 14,638.5 |   |   |   | 16,368.4 |   |   |   | 1,323.2 |   |
| Capital Stock                                   |   |                                                                                                                                                                                                                                                       | 2,294.9  |   |   |   | 2,294.9 |   |   |   | 2,294.9 |   |   |   | 2,294.9 |   |   |   | 2,294.9 |   |   |   | 185.5 |   |
|                                            |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. GAAP:                                      |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total controlling interest equity               |   |                                                                                                                                                                                                                                                       | 14,053.2 |   |   |   | 15,071.7 |   |   |   | 13,786.7 |   |   |   | 14,329.2 |   |   |   | 16,052.8 |   |   |   | 1,297.7 |   |
|                                            |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selected Operating Data                         |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales volume (thousands of tonnes):             |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Chicken                                         |   |                                                                                                                                                                                                                                                       | 773.7    |   |   |   | 837.2 |   |   |   | 878.1 |   |   |   | 918.1 |   |   |   | 983.9 |   |   |   |   |   |
| Eggs                                            |   |                                                                                                                                                                                                                                                       | 143.4    |   |   |   | 147.8 |   |   |   | 143.6 |   |   |   | 143.4 |   |   |   | 141.9 |   |   |   |   |   |
| Swine and Others                                |   |                                                                                                                                                                                                                                                       | 8.9      |   |   |   | 16.1 |   |   |   | 18.8 |   |   |   | 19.0 |   |   |   | 20.0 |   |   |   |   |   |
| Balanced Feed                                   |   |                                                                                                                                                                                                                                                       | 484.4    |   |   |   | 438.8 |   |   |   | 370.7 |   |   |   | 337.9 |   |   |   | 327.5 |   |   |   |   |   |
| Margins (Mexican FRS)                           |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin (%)                                |   |                                                                                                                                                                                                                                                       | 22.5     | % |   |   | 20.5 | % |   |   | 13.1 | % |   |   | 16.9 | % |   |   | 21.1 | % |   |   |   |   |
| Operating margin (%)                            |   |                                                                                                                                                                                                                                                       | 9.2      | % |   |   | 8.2 | % |   |   | 1.1 | % |   |   | 6.1 | % |   |   | 10.0 | % |   |   |   |   |
| Consolidated net margin (%)                     |   |                                                                                                                                                                                                                                                       | 5.8      | % |   |   | 7.0 | % |   |   | (4.4 | )% |   |   | 3.5 | % |   |   | 8.0 | % |   |   |   |   |
|                                            |   |                                                                                                                                                                                                                                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total employees                                 |   |                                                                                                                                                                                                                                                       | 21,035   |   |   |   | 23,088 |   |   |   | 23,248 |   |   |   | 24,065 |   |   |   | 23,473 |   |   |   |   |   |

----

|   |   | Exchange Rate(1)(in current pesos per U.S. dollar) |   |
|--------|--------|----------------------------------------------------------------------------------|--------|
| Year   |   | High                                                                             |   |   | Low |   |   | Average(2) |   |   | Year End |   |
| 2006   |   |                                                                             | 11.46  |   |   |   | 10.43 |   |   |   | 10.91 |   |   |   | 10.80 |   |
| 2007   |   |                                                                             | 11.27  |   |   |   | 10.67 |   |   |   | 10.93 |   |   |   | 10.92 |   |
| 2008   |   |                                                                             | 13.94  |   |   |   | 9.92 |   |   |   | 11.14 |   |   |   | 13.83 |   |
| 2009   |   |                                                                             | 15.41  |   |   |   | 12.63 |   |   |   | 13.50 |   |   |   | 13.08 |   |
| 2010   |   |                                                                             | 13.19  |   |   |   | 12.16 |   |   |   | 12.62 |   |   |   | 12.38 |   |

| (1)  | The exchange rates are the noon buying rates in New York City for cable transfers in pesos as certified for customs purposes by the Federal Reserve Bank of New York (the “noon buying rate”). |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | Average of month-end rates for each period shown. |
|-----------|---------------------------------------------------|

|               |   | Exchange Rate(1) (in current pesos per U.S. dollar) |   |
|--------------------|--------|----------------------------------------------------------------------------------------|--------|
| Period             |   | High                                                                                   |   |   | Low |   |
| December 2010 |   |                                                                                   | 12.47  |   |   |   | 12.33 |   |
| January 2011  |   |                                                                                   | 12.25  |   |   |   | 12.04 |   |
| February 2011 |   |                                                                                   | 12.18  |   |   |   | 11.97 |   |
| March 2011    |   |                                                                                   | 12.11  |   |   |   | 11.92 |   |
| April 2011    |   |                                                                                   | 11.86  |   |   |   | 11.52 |   |
| May 2011      |   |                                                                                   | 11.77  |   |   |   | 11.51 |   |

| (1) | The exchange rates are the noon buying rates in New York City for cable transfers in pesos as certified for customs purposes by the Federal Reserve Bank of New York. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| B. | Capitalization and Indebtedness |
|----|---------------------------------|

| C. | Reasons for the Offer and Use of Proceeds |
|----|-------------------------------------------|

| D. | Risk Factors |
|----|--------------|

| Period |   | GDP    |   |   | Inflation Rate |   |   | CETES |   |
|--------|--------|--------|--------|--------|---------------------|--------|--------|-------|--------|
| 2006   |   |   | 4.8    | %      |                |   | 4.05   | %     |   |   | 7.2 | % |
| 2007   |   |   | 3.3    | %      |                |   | 3.80   | %     |   |   | 7.2 | % |
| 2008   |   |   | 1.3    | %      |                |   | 6.50   | %     |   |   | 7.6 | % |
| 2009   |   |   | -6.5   | %      |                |   | 3.57   | %     |   |   | 5.4 | % |
| 2010   |   |   | 5.5    | %      |                |   | 4.40   | %     |   |   | 4.4 | % |

----

|   | · | In 2006, the Mexican peso was reasonably stable in its peso-dollar exchange rate with a final depreciation of 1.6%, compared to the end of 2005.  The average value of the Mexican peso was 0.1% lower than the average of 2005. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In 2007, the Mexican peso remained reasonably stable in its peso-dollar exchange rate.  According to the U.S. Federal Reserve Bank, the peso depreciated with respect to the U.S. dollar by 1.1% at year-end.  The average value of the Mexican peso was 0.2% lower than the average of 2006. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In 2008, the Mexican peso was highly volatile during the year in its peso-dollar exchange rate with a final depreciation of 21.0%, compared to the end of 2007.  The average value of the Mexican peso was 1.9% lower than the average in 2007. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In 2009, the Mexican peso experienced greater stability during the second half of the year in its peso-dollar exchange rate, with a final appreciation of 5.4%, compared to the end of 2008. The average value of the Mexican peso was 17.4% higher than the average in 2008. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In 2010, the Mexican peso appreciated 5.3% as compared to the end of 2009. The average value of the Mexican peso was 6.5% higher than the average of the previous year. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| ITEM 4.  | Information on the Company |
|--------------------|----------------------------|

| A. | History and Development of the Company |
|----|----------------------------------------|

----

|                                  |   | Year Ended December 31, |   |
|---------------------------------------|--------|----------------------------------------|--------|
| (In thousands of tons) |   | 2006                                   |   |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                  |   |                                   |   |
| Chicken                               |   |                                   | 773.7  |   |   |   | 837.2 |   |   |   | 878.1 |   |   |   | 918.1 |   |   |   | 983.9 |   |
| Eggs                                  |   |                                   | 143.4  |   |   |   | 147.8 |   |   |   | 143.6 |   |   |   | 143.4 |   |   |   | 141.9 |   |
| Swine and others(1)                   |   |                                   | 8.9    |   |   |   | 16.1 |   |   |   | 18.8 |   |   |   | 19.0 |   |   |   | 20.0 |   |
| Balanced feed                         |   |                                   | 484.4  |   |   |   | 438.8 |   |   |   | 370.7 |   |   |   | 337.9 |   |   |   | 327.5 |   |

----

----

|   | · | Increased market penetration through expanded distribution.  We have an extensive distribution network, supported by our own transportation fleet, superior knowledge of existing wholesale channels and strategically located cold storage warehouses and facilities.  We have substantially increased our distribution routes during the past years.  We plan to continue to develop and improve our distribution network and systems in every product category and throughout our expanded geographic coverage in Mexico. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increased service and market responsiveness.  We seek to remain a leader in the Mexican poultry market by maintaining high standards of customer service and continuing to be responsive to the changing needs of varying market segments.  As part of this strategy, we have structured our operations in such a way as to enable us to vary the size, weight, color and presentation of our chicken products, depending upon the particular demands of the market segment.  In addition, we have decentralized order and sales services from our headquarters to our cold storage warehouses and facilities, which serve as midpoints in the distribution chain to wholesalers and local customers.  This strategy allows us to stay closer to our customer base and to better cultivate growing customer segments, such as food-service operators, supermarkets and food wholesale clubs. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Low-cost production and operating efficiency.  We are among Mexico’s lowest-cost producers and distributors of chicken, due in part to economies of scale and vertically integrated operations.  We pursue on-going programs to increase operating efficiencies and reduce operating costs. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continued brand differentiation.  We developed a brand image for premium fresh chicken and table eggs in Mexico.  Building on the success of our branded products to date, we seek to continue to promote our brand name through billboards, packaging, special publicity campaigns and through development of brand loyalty among wholesale and retail distributors. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In 2008, we made capital expenditures of Ps. 1.1 billion, with which we: |
|--------|--------|--------------------------------------------------------------------------|

|   | - | Increased capacity and implemented new technology in the processing plants located in Celaya and Culiacan; |
|--------|---|------------------------------------------------------------------------------------------------------------|

|   | - | Increased chicken capacity in farms located in Merida and Veracruz; |
|--------|---|---------------------------------------------------------------------|

|   | - | Finished the construction of new farms located in Ciudad Obregon and Hermosillo; |
|--------|---|----------------------------------------------------------------------------------|

|   | - | Began the construction of new farms located in the state of Chiapas; and |
|--------|---|--------------------------------------------------------------------------|

|   | - | Updated our transportation fleet. |
|--------|---|-----------------------------------|

|   | · | In 2009, we made capital expenditures of Ps. 988.2 million, with which we: |
|--------|--------|----------------------------------------------------------------------------|

|   | - | Entered into a business agreement with a company located at the Northeast of Mexico; |
|--------|---|--------------------------------------------------------------------------------------|

|   | - | Increased capacity in chicken farms in the states of Chiapas, Sonora, and the Peninsula de Yucatan; and |
|--------|---|---------------------------------------------------------------------------------------------------------|

----

|   | - | Updated our transportation fleet. |
|--------|---|-----------------------------------|

|   | · | In 2010, we made capital expenditures of Ps. 560.6 million, with which we: |
|--------|--------|----------------------------------------------------------------------------|

|   | - | Increased capacity for live chicken in Merida and Tecamachalco facilities; |
|--------|---|----------------------------------------------------------------------------|

|   | - | Increased egg production capacity in the Mexicali facility; |
|--------|---|-------------------------------------------------------------|

|   | - | Conducted productivity projects in the Tecamachalco and Merida processing plants, as well as adjusted production process to export requirements for the export of chicken claws to Asia; and |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Updated our transportation fleet. |
|--------|---|-----------------------------------|

| B. | Business Overview |
|----|-------------------|

|    |   | 2008   |   |   | 2009   |   |   | 2010   |   |
|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Chicken |   |   | 2,853  |   |   |   | 2,781  |   |   |   | 2,822 |   |
| Beef    |   |   | 1,673  |   |   |   | 1,700  |   |   |   | 1,751 |   |
| Swine   |   |   | 1,149  |   |   |   | 1,162  |   |   |   | 1,165 |   |

----

|   | - | Live chicken is delivered alive to small independent slaughtering operations or to wholesalers that contract with independent slaughtering operations for processing.  The freshly slaughtered chicken is then sold to chicken shops and other specialized retailers for sale to consumers and in some areas is sold directly to consumers by the slaughterhouse.  According to the UNA, live chicken accounted for approximately 31.0% by volume of the chicken sold by producers in Mexico. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Public market chicken is a whole broiler presented either uneviscerated or eviscerated, generally sold within 48 hours after slaughter in public markets throughout Mexico, but primarily concentrated in the Mexico City metropolitan region.  According to the UNA, public market chicken accounts for 20.0% by volume of the chicken sold by producers in Mexico. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Rotisserie chicken is a whole broiler presented eviscerated and ready to cook.  Rotisserie chicken is sold by wholesalers and directly by producers to small shops, stands called rosticerias and supermarkets, which cook the chicken and sell it whole and freshly cooked to the end-consumer, providing an economical form of fast-food.  According to the UNA, rotisserie chicken accounts for 24.0% by volume of the chicken sold by producers in Mexico. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Supermarket chicken is a fresh whole broiler presented with the edible viscera packed separately.  In most cases, it is sold directly by producers to supermarkets and, in some regions, to other independent food shops.  Mexican consumers’ preference for freshness requires regular deliveries of chicken to supermarkets and other food shops.  According to information provided by the UNA, the supermarket broiler chicken accounted by the 15.0% of the volume of the chicken sold by producers in Mexico. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Chicken parts refers to cut-up fresh chicken parts sold wrapped in trays or in bulk principally to supermarket chains, the fast-food industry and other institutional food-service providers.  Producers generally sell directly to the supermarket chains and deliver the chicken directly to the outlet.  Sales to the institutional market often require customized cutting and presentation.  According to the UNA, chicken parts accounts for 7.0% of the chicken volume sold by producers in Mexico. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | - | Value-added Products refers mainly to cut up fresh chicken parts with value-added treatment like marinating, breading and individual quantity frozen, sold mainly wrapped in trays principally to supermarkets and other institutional chains.  Producers generally sell directly to the supermarket chains and deliver the chicken directly to the store.  Sales to the institutional market often require customized cutting and presentation.  According to the UNA, these products accounted for 3.0% of the chicken volume sold by producers in 2010. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |   | Bachoco’s chicken volume sold |   |
|------------------------------------------|--------|----------------------------------------------------|--------|
|                                     |   |                                               |   |   |   |   |   |   |   |
|                                     |   | 2008                                               |   |   | 2009 |   |   | 2010 |   |
|                                     |   | Tonnes                                             |   |   | % |   |   | Tonnes |   |   | % |   |   | Tonnes |   |   | % |   |
| Public market and rotisserie             |   |                                               | 402.1  |   |   |   | 45.8 |   |   |   | 418.2 |   |   |   | 45.5 |   |   |   | 413.0 |   |   |   | 42.0 |   |
| Supermarket, chicken parts and others(1) |   |                                               | 239.0  |   |   |   | 27.2 |   |   |   | 217.1 |   |   |   | 23.7 |   |   |   | 235.3 |   |   |   | 23.9 |   |
| Live                                     |   |                                               | 237.0  |   |   |   | 27.0 |   |   |   | 282.8 |   |   |   | 30.8 |   |   |   | 335.6 |   |   |   | 34.1 |   |
| Total                                    |   |                                               | 878.1  |   |   |   | 100.0 | % |   |   | 918.1 |   |   |   | 100.0 | % |   |   | 983.9 |   |   |   | 100.0 | % |

| (1) | “Other” comprises sales of value-added poultry products, viscera and other products. |
|-----|--------------------------------------------------------------------------------------------------|

----

|   | - | At the end of 2006, we acquired assets of Del Mezquital a private broiler producer located in the state of Sonora. |
|--------|---|--------------------------------------------------------------------------------------------------------------------|

|   | - | At the beginning of 2007, we reached a business agreement with Grupo Libra, a chicken producer located in northeast Mexico.  We also started to build a new complex in Hermosillo City. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | In 2008, we finished several projects to expand our facilities in Merida and continued increasing our production in Northern Mexico, specifically in the city of Hermosillo and in the state of Chiapas. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | In 2009, we (i) acquired the assets of a balanced feed mill and a soybean processing plant from Productora de Alimentos Pecuarios de Nuevo Leon, S.A. de C.V. through our Campi subsidiary; (ii) acquired the assets of a chicken processing plant from Avi Carnes Monterrey, S.A. de C.V. through our Bachoco subsidiary with a production capacity of 9,000 chickens per hour; (iii) entered into agreements to rent breeder farms and egg incubation plants from Reproductoras Asociadas, S.A. de C.V. and one-day-old breeder capacity farms and egg incubation plants from Produccion Avicola Especializada, S.A. de C.V.; and (iv) made arrangements with contract growers to acquire their inventories. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Live chicken – We sell live chicken primarily to wholesalers, which contract out the processing to independent slaughterhouses and then resell the processed product as public market chicken.  To a lesser extent, we sell to small, independent slaughterhouses in the southeast, where live chicken continues to be the standard for consumption.  Additionally, customers can purchase live chicken directly from us on our farms.  However, we believe that the market as a whole is moving slowly away from live chicken. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Public market chicken – We believe that we are the largest producer of public market chicken in Mexico.  Most of our wholesale customers rely primarily on us for public market chicken, although we have no exclusive supply agreements.  Our principal focus in this market has been to provide superior distribution and service to selected wholesalers in order to maintain and further develop loyalty.  Public market chicken is ordinarily sold to consumers without any packaging or other identification of the producer, but our distribution system encourages wholesalers to sell to retailers in containers from our own “Bachoco” trailers, reinforcing our reputation for freshness and efficiency of service and fostering brand loyalty among retailers.  We believe we have developed excellent relationships with the wholesalers we serve. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Rotisserie chicken – We sell rotisserie chicken directly to rosticerias and supermarkets.  We attribute the growth in our sales of rotisserie chicken in large part to the rapid growth of the market for freshly cooked chicken sold by these stores and in the rotisserie sections of supermarkets.  We believe this market will continue to grow, as in the past, because of an ever-increasing consumer demand for convenient, low-priced products and high-quality fast food.  Success in supplying rotisserie chicken depends on consistency and good service, and only larger producers with more modern processing facilities and distribution capacity can compete in this market. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | - | Supermarket chicken – We sell supermarket broilers, chicken parts and eggs, directly to the principal supermarkets, convenience store chains and wholesale clubs in Mexico.  In order to build consumer loyalty for our supermarket broiler chicken, we emphasize our brand image as well as our superior service, reinforced by frequent delivery to ensure freshness.  Each chain negotiates purchases centrally, but we deliver directly to many points of sale, ordinarily at least once every 48 hours.  We believe that we lead the market in frequency of deliveries to supermarkets. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Chicken parts – We sell chicken parts principally to supermarkets, using the same marketing strategy that we use for supermarket broiler chicken.  We are also an important supplier of chicken parts to the growing franchise fast-food and institutional food-service industries.  We continue to develop custom-cutting processes to help meet demand from fast-food and institutional customers for a wider variety of chicken parts. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Value-added products – Mexican consumers have a greater preference for fresh chicken than their U.S. counterparts.  Frozen, heat and serve and other further processed poultry products make up only a small proportion of total Mexican poultry consumption today.  Demand for these kinds of fresh products is growing rapidly.  The potential for substantial growth in this market is large and we believe that our distribution network, our large market share for supermarket chicken sales, our brand name and our experience in a wide range of existing Mexican distribution channels will be important competitive strengths in this area. Even though sales of value-added products have increased during recent years, fresh chicken still dominates the industry and its growth rate will depend on the purchasing power of consumers.  The Company is constantly developing new, convenient value-added products. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| C. | Organizational Structure |
|----|--------------------------|

----

|                                               |   | Percentage Equity Interest |   |
|----------------------------------------------------|--------|--------------------------------------|--------|
|                                               |   | 2008                                 |   |   | 2009 |   |   | 2010 |   |
| Acuicola Bachoco, S.A. de C.V.                     |   |                                 | 100    |   |   |   | - |   |   |   | - |   |
| Aviser, S.A. de C.V.                               |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Bachoco, S.A. de C.V.                              |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Bachoco Comercial, S.A. de C.V.                    |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Campi Alimentos, S.A. de C.V.                      |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Huevo y Derivados, S.A. de C.V.                    |   |                                 | 97     |   |   |   | 97 |   |   |   | - |   |
| Operadora de Servicios de Personal, S.A. de C.V.   |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Pecuarius Laboratorios, S.A. de C.V.               |   |                                 | 64     |   |   |   | 64 |   |   |   | 64 |   |
| Secba, S.A. de C.V.                                |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Sepetec, S. A. de C.V.                             |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Servicios de Personal Administrativo, S.A. de C.V. |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Induba Pavos, S.A. de C.V.                         |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |

| D. | Property, Plant and Equipment |
|----|-------------------------------|

| Bachoco Production Facilities |   | Number |   |
|-----------------------------------------|--------|--------|--------|
| Chicken breeding farms                  |   |   | 171    |   |
| Broiler grow-out farms                  |   |   | 518    |   |
| Broiler processing plants               |   |   | 9      |   |
| Egg incubation plants                   |   |   | 21     |   |
| Egg production farms                    |   |   | 91     |   |
| Swine breeding farms                    |   |   | 1      |   |
| Swine grow-out farms                    |   |   | 10     |   |
| Feed mills                              |   |   | 18     |   |
| Further process plants                  |   |   | 3      |   |

----

| ITEM4.A.   | Unresolved Staff Comments |
|-----------------|---------------------------|

| ITEM 5. | Operating and Financial Review and Prospects |
|---------|----------------------------------------------|

----

----

----

----

|   | · | On April 13, 2008, our processing plant in Monterrey caught fire. While the fire destroyed the entire further processing area, our broiler production processing did not suffer any damage and continued operating under nearly normal conditions until 2009. In 2009, the Company closed this facility and moved the broiler production processing to a new facility in Monterrey. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In July 2009, the Company made several asset acquisitions and reached a series of agreements to improve productivity and efficiency in the Northeast production complex headquartered in Monterrey. The specific acquisitions and agreements made were: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | The acquisition of the assets of a balanced feed mill from Productora de Alimentos Pecuarios de Nuevo Leon, S.A. de C.V. through our Campi subsidiary.  The purpose of this acquisition was to improve the quality and production capacity of balanced feed. The mill’s production capacity is about 3,000 tons of pellet feed per week. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | The acquisition of the assets of a chicken processing plant from Avi Carnes Monterrey, S.A. de C.V., through our Bachoco subsidiary, with a production capacity of 9,000 chickens per hour.  The goal of this acquisition was to reduce production costs, replace the Monterrey processing plant and to increase production capacity and diversify the chicken business in that region. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | An agreement to rent breeder farms and egg incubation plants from Reproductoras Asociadas, S.A. de C.V. and one-day-old breeder capacity farms and egg incubation plants from Produccion Avicola Especializada, S.A. de C.V. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | The Company also made arrangements with contract growers to acquire their inventories. |
|--------|----|----------------------------------------------------------------------------------------|

----

| A. | Operating Results |
|----|-------------------|

|                                         |   | Year Ended December 31,      |   |
|----------------------------------------------|--------|---------------------------------------------|--------|
|                                         |   | 2008                                        |   |   | 2009 |   |   | 2010 |   |
|                                         |   | (percentage of net revenues) |   |
| Net revenues                                 |   |                                        | 100.0  | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Cost of sales                                |   |                                        | (86.9  | ) |   |   | (83.1 | ) |   |   | (78.9 | ) |
| Gross profit                                 |   |                                        | 13.1   |   |   |   | 16.9 |   |   |   | 21.1 |   |
| Selling, general and administrative expenses |   |                                        | (12.0  | ) |   |   | (10.8 | ) |   |   | (11.1 | ) |
| Operating income                             |   |                                        | 1.1    |   |   |   | 6.1 |   |   |   | 10.0 |   |
| Comprehensive financing income (loss)        |   |                                        | (6.8   | ) |   |   | (0.6 | ) |   |   | 0.5 |   |
| Taxes                                        |   |                                        | 1.4    |   |   |   | (1.7 | ) |   |   | 2.0 |   |
| Net income (loss)                            |   |                                        | (4.4   | ) |   |   | 3.5 |   |   |   | 8.0 |   |

|             |   | Year Ended December 31,      |   |
|------------------|--------|---------------------------------------------|--------|
|             |   | 2008                                        |   |   | 2009 |   |   | 2010 |   |
|             |   | (percentage of net revenues) |   |
| Chicken          |   |                                        | 76.9   | % |   |   | 78.3 | % |   |   | 81.3 | % |
| Feed             |   |                                        | 7.3    | % |   |   | 6.3 | % |   |   | 5.6 | % |
| Eggs             |   |                                        | 10.5   | % |   |   | 10.1 | % |   |   | 8.5 | % |
| Swine and Others |   |                                        | 5.3    | % |   |   | 5.3 | % |   |   | 4.6 | % |
| Total            |   |                                        | 100.0  | % |   |   | 100.0 | % |   |   | 100.0 | % |

----

----

----

----

----

----

| Base Year |   | Asset tax restated atDecember 31, 2010 |   |   | Year of expiration |   |
|----------------|--------|-----------------------------------------------------------------|--------|--------|------------------------------|--------|
| 2005           |   |                                                            | 1.6    |   |                         |   | 2015 |   |
| 2006           |   |                                                            | 3.3    |   |                         |   | 2016 |   |
| Million of Ps. |   |                                                            | 4.9    |   |                         |   |   |   |

----

----

----

|   | · | Defined contribution plan: This fund consists of employee and Company contributions. The employee contribution percentage ranges from 1.0% to 5.0%. The Company contribution ranges from 1.0% to 2.0% in the case of employees with less than 10 years’ seniority, and the same contribution percentage as the employee (up to 5.0%) when the employee has more than 10 years’ seniority. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Defined benefit plan: This fund consists solely of Company contributions and covers the Company's labor obligations with each employee. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

| B. | Liquidity and Capital Resources |
|----|---------------------------------|

----

| C. | Research and Development, Patents and Licenses, etc. |
|----|------------------------------------------------------|

| D. | Trend Information |
|----|-------------------|

| E. | Off-Balance Sheet Arrangements |
|----|--------------------------------|

| F. | Tabular Disclosure of Contractual Obligations |
|----|-----------------------------------------------|

|   | · | As of December 31, 2010, we had Ps. 139.9 million in current installments of long-term debt. |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Long-term debt to banks, as of December 31, 2010, was Ps. 507.1 million outstanding (excluding current portion), which is more than the Ps. 372.0 million outstanding on December 31, 2009. The weighted average interest rates on long-term debt for 2009 and 2010 were 6.8% and 6.3%, respectively. See Note 9 of the Audited Consolidated Financial Statements for more detail. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                         |   | Payments Due by Period(millions of constant pesos as of December 31, 2010) |   |
|------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|--------|
| Contractual Obligations |   | Total                                                                                                                             |   | 2012 |   |   | 2013 |   |   | 2014 |   |   | 2015 |   |
| Long-term debt               |   | Ps.                                                                                                                               | 507.1  |   |   | 153.0 |   |   |   | 148.3 |   |   |   | 129.1 |   |   |   | 76.6 |   |
| Operating leases             |   | Ps.                                                                                                                               | 617.3  |   |   | 181.3 |   |   |   | 159.4 |   |   |   | 140.5 |   |   |   | 136.2 |   |

| G. | Safe Harbor |
|----|-------------|

| A. | Directors and Senior Management |
|----|---------------------------------|

----

| Name                                    |   | Position                                                   |   | Years as aMember of theBoard of Directors |
|-----------------------------------------|--------|------------------------------------------------------------|--------|-------------------------------------------------------------------------|
| Francisco Javier R. Bours Castelo       |   | Chairman of the Board and Proprietary Shareholder Director |   | 29                                                                      |
| Eduardo Rojas Crespo                    |   | Secretary of the Board                                     |   | 3                                                                       |
| Jose Gerardo Robinson Bours Castelo     |   | Proprietary Shareholder Director                           |   | 3                                                                       |
| Jesus Enrique Robinson Bours Muñoz |   | Proprietary Shareholder Director                           |   | 17                                                                      |
| Jesus Rodolfo Robinson Bours Muñoz |   | Proprietary Shareholder Director                           |   | 9                                                                       |
| Arturo Bours Griffith                   |   | Proprietary Shareholder Director                           |   | 17                                                                      |
| Octavio Robinson Bours                  |   | Proprietary Shareholder Director                           |   | 14                                                                      |
| Ricardo Aguirre Borboa                  |   | Proprietary Shareholder Director                           |   | 17                                                                      |
| Juan Salvador Robinson Bours Martinez   |   | Proprietary Shareholder Director                           |   | 17                                                                      |
| Jose Eduardo Robinson Bours Castelo     |   | Alternate Director                                         |   | 17                                                                      |
| Jose Francisco Bours Griffith           |   | Alternate Director                                         |   | 17                                                                      |
| Guillermo Pineda Cruz                   |   | Alternate Director                                         |   | 17                                                                      |
| Gustavo Luders Becerril                 |   | Alternate Director                                         |   | -                                                                       |
| Avelino Fernandez Salido                |   | Independent Director                                       |   | 8                                                                       |
| Felizardo Gastelum Felix                |   | Independent Director                                       |   | -                                                                       |
| Humberto Schwarzbeck Noriega            |   | Independent Director                                       |   | 8                                                                       |
| Cristobal Gustavo Mondragon Fragoso     |   | Related Proprietary Director                               |   | -                                                                       |
| Enrique Robinson Bours Almada           |   | Honorary Chairman of the board                             |   | 57                                                                      |
| Mario Javier Robinson Bours Almada      |   | Life Honorary Shareholder Director                         |   | 57                                                                      |
| Juan Bautista Salvador Robinson Bours   |   | Life Honorary Shareholder Director                         |   | 57                                                                      |

| Brothers and Co-Founders           |   | Sons                                                                                                                                           |   | Nephews                                                |   | Son in Law   |
|----------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|------------------------|
| Enrique Robinson Bours Almada                |   | ·  Jesus Enrique Robinson Bours Muñoz·  Jesus Rodolfo Robinson Bours Muñoz                                       |   | ·  Arturo Bours Griffith                     |   | Gillermo Pineda Cruz   |
| Mario Javier Robinson Bours Almada           |   | ·  Francisco Javier R. Bours Castelo·  Jose Gerardo Robinson Bours Castelo·  Jose Eduardo Robinson Bours Castelo |   |  ·  Jose Francisco Bours Griffith  |   |                   |
| Juan Bautista Salvador Robinson Bours Almada |   | Juan Salvador Robinson Bours Martinez                                                                                                          |   | ·  Octavio Robinson Bours               |   | Ricardo Aguirre Borboa |

----

----

----

| Name                             |   | Position                                       |   | Year of Birth |
|----------------------------------|--------|------------------------------------------------|--------|-------------------------|
| Rodolfo Ramos Arvizu             |   | Chief Executive Officer                        |   | 1957                    |
| Daniel Salazar Ferrer            |   | Chief Financial Officer                        |   | 1964                    |
| David Gastelum Cazares           |   | Director of Sales                              |   | 1951                    |
| Jose Luis Lopez Lepe             |   | Director of Personnel                          |   | 1947                    |
| Ernesto Salmon Castelo           |   | Director of Operations                         |   | 1962                    |
| Andres Morales Astiazaran        |   | Director of Marketing and Value-added Products |   | 1968                    |
| Marco Antonio Esparza Serrano    |   | Comptroller Director                           |   | 1955                    |
| Alejandro Elias Calles Gutierrez |   | Director of Purchasing                         |   | 1956                    |

----

|   | (a) | Submit an annual report to the Board of Directors; |
|--------|-----|----------------------------------------------------|

----

|   | (b) | Provide the Board of Directors with its opinion on the matters that pertain to the Auditing Committee, in accordance with the Securities Market Law; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Inform the Board of Directors of the current condition of the internal controls and internal auditing system of the Company or of the entities it controls, including any irregularities detected; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Require the relevant directors and other employees of the Company, or of the entities it controls, to provide reports relative to the preparation of the financial information or any other kind of reports or information it deems appropriate to perform its duties; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Receive observations formulated by shareholders, Board members, relevant officers, employees and, in general, any third party with regard to the matters under the Audit Committee duties, as well as carry out the actions that, in its judgment, may be appropriate in connection with such observations; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (f) | Inform the Board of Directors of any material irregularities detected as a result of the performance of its duties and, as applicable, inform the Board of Directors of the corrective actions taken, or otherwise propose the actions that should be taken; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Call Shareholders Meetings and cause the items it deems pertinent to be inserted into the agendas of such Shareholders’ Meetings; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) | Assist the Board of Directors in selecting candidates for audit and reviewing the scope and terms of the auditor’s engagement, as well as evaluate the performance of the entity that provides the external auditing services and analyze the report, opinions, statements and other information prepared and signed by the external auditor. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | Compensation |
|----|--------------|

| C. | Board Practices |
|----|-----------------|

----

| D. | Employees |
|----|-----------|

| E. | Share Ownership |
|----|-----------------|

| A. | Major Shareholders |
|----|--------------------|

----

| Year            |   | Percentage |   |
|-----------------|--------|------------|--------|
|            |   |       |   |
| Mexico          |   |       | 87.80  | % |
| Other Countries |   |       | 12.20. | % |

| B. | Related Party Transactions |
|----|----------------------------|

----

| C. | Interests of Experts and Counsel |
|----|----------------------------------|

| A. | Consolidated Statements and Other Financial Information |
|----|---------------------------------------------------------|

----

| B. | Significant Changes |
|----|---------------------|

----

| ITEM 9. | The Offer and Listing |
|--------------|-----------------------|

| A. | Offer and Listing Details |
|----|---------------------------|

| Mexican Stock Exchange(Nominal pesos per Share) |   |   | The New York Stock Exchange(U.S.$ per ADS) |   |
|-------------------------------------------------|--------|--------|--------------------------------------------|--------|
| Year                                            |   | High   |                                       |   | Low |   |   | Close |   |   | High |   |   | Low |   |   | Close |   |
| 2006                                            |   |   | 23.70                                      |   |   |   | 15.70 |   |   |   | 23.66 |   |   |   | 29.00 |   |   |   | 16.33 |   |   |   | 29.00 |   |
| 2007                                            |   |   | 30.96                                      |   |   |   | 20.00 |   |   |   | 28.60 |   |   |   | 35.11 |   |   |   | 24.10 |   |   |   | 31.81 |   |
| 2008                                            |   |   | 30.15                                      |   |   |   | 14.21 |   |   |   | 15.99 |   |   |   | 33.34 |   |   |   | 12.75 |   |   |   | 14.50 |   |
| 2009                                            |   |   | 26.00                                      |   |   |   | 11.85 |   |   |   | 25.00 |   |   |   | 23.16 |   |   |   | 9.03 |   |   |   | 23.00 |   |
| 2010                                            |   |   | 26.99                                      |   |   |   | 18.40 |   |   |   | 25.55 |   |   |   | 26.10 |   |   |   | 17.01 |   |   |   | 24.19 |   |

| Mexican Stock Exchange(Nominal pesos per Share) |   |   | The New York Stock Exchange(U.S.$ per ADS) |   |
|-------------------------------------------------|--------|--------|--------------------------------------------|--------|
| Period                                          |   | High   |                                       |   | Low |   |   | Close |   |   | High |   |   | Low |   |   | Close |   |
| First Quarter 2009                              |   |   | 18.00                                      |   |   |   | 11.85 |   |   |   | 13.80 |   |   |   | 15.30 |   |   |   | 9.03 |   |   |   | 11.35 |   |
| Second Quarter 2009                             |   |   | 25.00                                      |   |   |   | 13.00 |   |   |   | 23.84 |   |   |   | 22.57 |   |   |   | 11.60 |   |   |   | 21.30 |   |
| Third Quarter 2009                              |   |   | 24.92                                      |   |   |   | 21.99 |   |   |   | 22.90 |   |   |   | 22.40 |   |   |   | 20.00 |   |   |   | 21.00 |   |
| Fourth Quarter 2009                             |   |   | 26.00                                      |   |   |   | 21.00 |   |   |   | 25.00 |   |   |   | 23.16 |   |   |   | 18.90 |   |   |   | 23.00 |   |
| First Quarter 2010                              |   |   | 25.45                                      |   |   |   | 21.00 |   |   |   | 22.79 |   |   |   | 23.99 |   |   |   | 19.70 |   |   |   | 22.15 |   |
| Second Quarter 2010                             |   |   | 24.50                                      |   |   |   | 18.50 |   |   |   | 18.50 |   |   |   | 22.74 |   |   |   | 17.01 |   |   |   | 17.01 |   |
| Third Quarter 2010                              |   |   | 21.50                                      |   |   |   | 18.40 |   |   |   | 20.53 |   |   |   | 19.67 |   |   |   | 17.16 |   |   |   | 18.95 |   |
| Fourth Quarter 2010                             |   |   | 26.99                                      |   |   |   | 20.50 |   |   |   | 25.55 |   |   |   | 26.10 |   |   |   | 19.07 |   |   |   | 24.19 |   |

| Mexican Stock Exchange(Nominal pesos per Share) |   |   | The New York Stock Exchange(U.S.$ per ADS) |   |
|-------------------------------------------------|--------|--------|--------------------------------------------|--------|
| Period                                          |   | High   |                                       |   | Low |   |   | Close |   |   | High |   |   | Low |   |   | Close |   |
| December 2010                              |   |   | 26.70                                      |   |   |   | 24.50 |   |   |   | 25.55 |   |   |   | 26.10 |   |   |   | 23.61 |   |   |   | 24.19 |   |
| January 20011                              |   |   | 26.25                                      |   |   |   | 25.01 |   |   |   | 25.58 |   |   |   | 26.20 |   |   |   | 24.20 |   |   |   | 25.15 |   |
| February 2011                              |   |   | 27.70                                      |   |   |   | 25.00 |   |   |   | 26.48 |   |   |   | 27.44 |   |   |   | 24.82 |   |   |   | 26.13 |   |
| March 2011                                 |   |   | 27.84                                      |   |   |   | 26.69 |   |   |   | 27.53 |   |   |   | 28.00 |   |   |   | 26.45 |   |   |   | 27.97 |   |
| April 2011                                 |   |   | 27.86                                      |   |   |   | 27.30 |   |   |   | 27.30 |   |   |   | 28.75 |   |   |   | 27.98 |   |   |   | 28.51 |   |
| May 2011                                   |   |   | 27.25                                      |   |   |   | 25.00 |   |   |   | 27.25 |   |   |   | 28.26 |   |   |   | 25.84 |   |   |   | 25.84 |   |

| B. | Plan of Distribution |
|----|----------------------|

----

| C. | Markets |
|----|---------|

----

|   | · | on the following day of operation, if any stockholder of a company listed on the Mexican Stock Exchange effects one or more transactions resulting in the ownership of more than 10.0% and less of 30.0% of capital stock; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | on the following day of operation, if any Related Person increases his ownership of the stock of a company; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | at least 15 days before the operation becomes effective, if any stockholder of a company listed on the Mexican Stock Exchange undertakes in a Public Offering of one or more transactions resulting in the ownership of more than 30.0% but less than 50.0% of capital stock. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| D. | Selling Shareholders |
|----|----------------------|

| E. | Dilution |
|----|----------|

| F. | Expenses of the Issue |
|----|-----------------------|

| ITEM 10. | Additional Information |
|----------|------------------------|

| A. | Share Capital |
|----|---------------|

| B. | Memorandum and Articles of Association |
|----|----------------------------------------|

----

| Prior language                                                                                                                                                                    |         | Current language                                                                                                                                                                                                                                                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                              |         |                                                                                                                                                                                                                                                                                   |
| Produce, transform, adapt, import, export, purchase and sell, under any title, machinery, parts, materials, raw materials, industrial products, goods and merchandise of any kind |    | “Produce, transform, adapt or manufacturing of processed food in package and/or canned and/or in flask, as well as import, export, purchase and sell, under any title, machinery, parts, materials, raw materials, industrial products, goods and merchandise of any kind” |

----

----

----

----

|   | (i) | The Board of Directors will be integrated by a minimum of 5 (five) and a maximum of 21 (twenty-one) principal members. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | At least 25.0% (twenty-five percent) of the members of the Board of Directors must be independent, in accordance with the terms of article 24 of the Securities Market Law. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | For each principal member, a substitute will be appointed, in the understanding that the substitutes of independent Board members must also be independent. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|   | · | Submit an annual report to the Board of Directors; |
|--------|--------|----------------------------------------------------|

|   | · | Provide the Board of Directors with its opinion on the matters that pertain to the Auditing Committee, in accordance with the Securities Market Law; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inform the Board of Directors of the current condition of the internal controls and internal auditing system of the Company, or of the entities it controls, including any irregularities detected; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Require the relevant directors and other employees of the Company or of the entities it controls to provide reports relative to the preparation of the financial information or any other kind of reports or information it deems appropriate to perform its duties; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Receive observations formulated by shareholders, Board members, relevant officers, employees and, in general, any third party with regard to the matters under his duties, as well as carry out the actions that, in its judgment, may be appropriate in connection with such observations; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inform the Board of Directors of any material irregularities detected as a result of the performance of its duties and, as applicable, inform the Board of Directors of the corrective actions taken or propose the actions that should be taken; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Call Shareholders Meetings and cause the items it deems pertinent to be inserted into the agendas of such Shareholder’s Meetings, and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Assist the Board of Directors in selecting candidates for audit and reviewing the scope and terms of the auditor’s engagement, as well as evaluate the performance of the entity that provides the external auditing services and analyze the report, opinions, statements and other information prepared and signed by the external auditor. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| C. | Material Contracts |
|----|--------------------|

| D. | Exchange Controls |
|----|-------------------|

| E. | Taxation |
|----|----------|

|   | · | an individual who is a citizen or resident of the United States; |
|--------|--------|------------------------------------------------------------------|

|   | · | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an estate, the income of which is subject to U.S. federal income tax without regard to its source; or |
|--------|--------|-------------------------------------------------------------------------------------------------------|

----

|   | · | a trust that is subject to the primary supervision of a U.S. court and the control of one or more U.S. persons, or that has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| F. | Dividends and Paying Agents |
|----|-----------------------------|

| G. | Statement by Experts |
|----|----------------------|

| H. | Documents on Display |
|----|----------------------|

| I. | Subsidiary Information |
|----|------------------------|

----

| ITEM 11. | Quantitative and Qualitative Disclosures about Market Risk |
|----------|------------------------------------------------------------|

----

| ITEM 12. | Description of Securities Other Than Equity Securities |
|----------|--------------------------------------------------------|

| A. | Debt Securities |
|----|-----------------|

| B. | Warrants and Rights |
|----|---------------------|

| C. | Other Securities |
|----|------------------|

| D. | American Depository Receipts |
|----|------------------------------|

----

| Persons depositing or withdrawing sharesmust pay:                                                                                                                                          |   | For:                                                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| $5.00 (or less) per 100 ADSs (or portion of 100 ADSs)                                                                                                                                      |   | • Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property• Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates |
| $.02 (or less) per ADS                                                                                                                                                                     |   | • Any cash distribution to ADS registered holders                                                                                                                                                                    |
| A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs                                  |   | • Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders                                                                        |
| $.02 (or less) per ADSs per calendar year                                                                                                                                                  |   | • Depositary services                                                                                                                                                                                                |
| Registration or transfer fees                                                                                                                                                              |   | • Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares                                                                   |
| Expenses of the depositary                                                                                                                                                                 |   | • Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)• Converting foreign currency to U.S. dollars                                                                     |
| Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes |   | • As necessary                                                                                                                                                                                                       |
| Any charges incurred by the depositary or its agents for servicing the deposited securities                                                                                                |   | • As necessary                                                                                                                                                                                                       |

----

| ITEM 13. | Default, Dividend Arrearages and Delinquencies |
|----------|------------------------------------------------|

| ITEM 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
|----------|------------------------------------------------------------------------------|

| ITEM 15. | Controls and Procedures |
|----------|-------------------------|

----

----

|   | Demetrio Villa Michel     |
|--------|---------------------------|
|   | KPMG Cardenas Dosal, S.C. |

| ITEM 16. | [Reserved] |
|----------|------------|

|   | ITEM 16.A. | Audit Committee Financial Expert |
|--------|------------|----------------------------------|

----

|   | ITEM 16.B. | Code of Ethics |
|--------|------------|----------------|

|   | ITEM 16.C. | Principal Accountant Fees and Services |
|--------|------------|----------------------------------------|

|               |   | Mancera, S.C. |    |
|--------------------|--------|--------------------|---------|
|               |   | 2009               |    |   | 2010 |   |
|               |   |               |    |
| Audit fees         |   | Ps. 488            |    |   | Ps. 353 |   |
| Audit related fees |   |               |    |   |   |   |
| Tax fees           |   |               | 50      |   |   |   | 58 |   |
| All other fees     |   |               | — |   |   |   | — |   |
| Total fees         |   | Ps. 538            |    |   | Ps. 411 |   |

|               |   | KPMG Cardenas Dosal, S.C. |    |
|--------------------|--------|------------------------------------------|---------|
|               |   | 2009                                     |    |   | 2010 |   |
|               |   |                                     |    |
| Audit fees         |   | Ps. 4,275                                |    |   | Ps. 7,184 |   |
| Audit related fees |   |                                     |    |   |   | 1,602 |   |
| Tax fees           |   |                                     | — |   |   |   | — |   |
| All other fees     |   |                                     | 50      |   |   |   | 713 |   |
| Total fees         |   | Ps. 4,325                                |    |   | Ps. 9,499 |   |

----

|   | ITEM 16.D. | Exemptions from the Listing Standards for Audit Committees |
|--------|------------|------------------------------------------------------------|

|   | ITEM 16.E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
|--------|------------|------------------------------------------------------------------------|

| Month of 2010 |   | Total Numberof SharesPurchased |    | AveragePrice Paidper Share |      | Total Number ofShares Purchasedas Part of theRepurchase Plan |   |    | Maximum Number ofShares (Estimate) thatMay Yet Be Purchasedunder the Plan1 |   |
|-------------------------|--------|------------------------------------------|---------|--------------------------------------|-----------|-------------------------------------------------------------------------------------------------|--------|---------|-------------------------------------------------------------------------------------------------------------------------|--------|
| November                |   |                                     | 134,900 |                                 | Ps. 25.38 |                                                                                            |   | 134,900 |                                                                                                                    |   |   | 11,865,100 |   |
| December                |   |                                     | 65,100  |                                 | Ps. 25.92 |                                                                                            |   | 65,100  |                                                                                                                    |   |   | 11,800,000 |   |
| Total                   |   |                                     | 200,000 |                                 | Ps. 25.62 |                                                                                            |   | 200,000 |                                                                                                                    |   |   | 11,800,000 |   |

----

|   | ITEM 16.F. | Changes in Registrant’s Certifying Accountant |
|--------|------------|-----------------------------------------------------|

|   | ITEM 16.G. | Corporate Governance |
|--------|------------|----------------------|

|   | · | prior to July 31, 2005, we must comply with the requirements set forth by the SEC concerning audit committees; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | we must submit an annual Written Affirmation to the NYSE and an Interim Written Annual Affirmation each time a change occurs in the Board of Directors or the Audit Committee; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our CEO must promptly notify the NYSE in writing after any executive officer becomes aware of any material non-compliance with any of the applicable NYSE corporate governance rules; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we must provide a brief description disclosing any significant ways in which our corporate governance practices differ from those followed by U.S. companies under NYSE listing standards. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NYSE Corporate Governance Rules for DomesticIssuers                                                                                                                                                                              |   | Our Corporate Governance Practices                                                                                                                                                                                                                                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                  |
| Director Independence.  Majority of board of directors must be independent.  “Controlled companies,” which would include our company if it were a U.S. issuer, are exempt from this requirement. |   | Pursuant to the Mexican Securities Market Law and our bylaws, our stockholders are required to appoint a board of directors of between five and 20 members, 25% of whom must be independent.  Our board of directors is not required to make a determination as to the independence of our directors.  |
| A director is not independent if such director is:                                                                                                                                                                               |   | Under Article 14 Bis of the Mexican Securities Market Law, a director is not independent if such director is:                                                                                                                                                                                               |
| (i)        a person who the board determines has a material direct or indirect relationship with the company, its parent or a consolidated subsidiary;                                   |   | (i) an employee or officer of the company (one-year cooling off period);                                                                                                                                                                                                                                         |

----

| NYSE Corporate Governance Rules for DomesticIssuers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Our Corporate Governance Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (ii)        an employee, or an immediate family member of an executive officer, of the company, its parent or a consolidated subsidiary, other than employment as interim chairman or CEO;                                                                                                                                                                                                                                                                                                                                                                                                     |   | (ii) a stockholder that, without being an employee or officer of the company, has influence or authority over the company’s officers;                                                                                                                                                                                                                                                                                                                                                                                 |
| (iii)        a person who receives, or whose immediate family member receives, more than $100,000 per year in direct compensation from the company, its parent or a consolidated subsidiary, other than director and committee fees or deferred compensation for prior services only (and other than compensation for service as interim chairman or CEO or received by an immediate family member for service as a non-executive employee);                                                                                                                                                   |   | (iii) a consultant, or partner or employee of a consultant, to the company or its affiliates, where the income from the company represents 10% or more of the overall income of such consultant;                                                                                                                                                                                                                                                                                                                            |
| (iv)        a person who is affiliated with or employed, or whose immediate family member is affiliated with or employed in a professional capacity, by a present or former internal or external auditor of the company, its parent or a consolidated subsidiary;                                                                                                                                                                                                                                                                                                                                   |   | (iv) an important client, supplier, debtor or creditor (or a partner, director or employee thereof).  A client and supplier is considered important where its sales to or purchases from the company represent more than 10% of the client’s or supplier’s total sales or purchases.  A debtor or creditor is considered important whenever its sales to or purchases from to the company represent more than 15% of the debtor’s or creditor’s total sales or purchases;  |
| (v)        an executive officer, or an immediate family member of an executive officer, of another company whose compensation committee’s membership includes an executive officer of the listed company, its parent or a consolidated subsidiary; or                                                                                                                                                                                                                                                                                                                                    |   | (v)        an employee of a non-profit entity that receives contributions from the company that represent more than 15% of the total contributions received;                                                                                                                                                                                                                                                                                                                             |
| (vi)        an executive officer or employee of a company, or an immediate family member of an executive officer of a company, that makes payments to, or receives payments from, the listed company, its parent or a consolidated subsidiary for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues (charities are not included, but any such payments must be disclosed in the company’s proxy (or, if no proxy is prepared, its Form 10-K / Annual Report)).  |   | (vi)        a CEO or other high ranking officer of another company in which the issuer’s CEO or other high ranking officer is a member of the board of directors; or                                                                                                                                                                                                                                                                                                               |

----

| NYSE Corporate Governance Rules for DomesticIssuers                                                                                                                                                                                                                                                                                                                                                                              |   | Our Corporate Governance Practices                                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (vii) “Immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law and anyone (other than domestic employees) who shares the person’s home.  Individuals who are no longer immediate family members due to legal separation, divorce or death (or incapacity) are excluded.  §303A.02(b)  |   | (vii) a “family member” related to any of the persons mentioned above in (i) through (vi).  “Family member” includes a person’s spouse, concubine or other relative of up to three degrees of consanguinity and affinity, in the case of (i) and (ii) above, and a spouse, concubine or other relative of up to one degree of consanguinity or affinity in the case of (iii) through (vi) above.       |
| Executive Sessions.  Non-management directors must meet regularly in executive sessions without management.  Independent directors should meet alone in an executive session at least once a year.  §303A.03                                                                                                                                                                             |   | There is no similar requirement under our bylaws or applicable Mexican law.                                                                                                                                                                                                                                                                                                                                                                         |
| Audit committee.  Audit committee satisfying the independence and other requirements of Rule 10A-3 under the Exchange Act and the more stringent requirements under the NYSE standards is required.  §§303A.06, 303A.07                                                                                                                                                                  |   | The members of our audit committee are independent as independence is defined by Rule 10A-3.                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Our audit committee complies with the requirements of the Mexican Securities Market Law and has the following attributes:                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |   | ·      We have a three-member audit committee, which is composed of one proprietary director and two proprietary independent directors. ·      The president of the audit committee and one additional member are independent.  Under the Mexican Securities Market Law, the president and the majority of the members of the audit committee must be independent.  |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |   | ·      Our audit committee operates pursuant to a written charter adopted by our board of directors.  See Item 6 for a detailed description of the duties of our audit committee.                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                             |   | ·      Pursuant to our bylaws and Mexican law, our audit committee submits an annual report regarding its activities to our board of directors.                                                                                                                                                                                                                                                                       |

----

| NYSE Corporate Governance Rules for DomesticIssuers                                                                                                                                                                                                                                                                                                                                                                                                  |   | Our Corporate Governance Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Nominating/corporate governance committee.  Nominating/corporate governance committee of independent directors is required.  The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee.  “Controlled companies,” which would include our company if it were a U.S. issuer, are exempt from these requirements.  §303A.04             |   | We are not required to have a nominating/corporate governance committee, and it is not expressly recommended by the Mexican Code of Best Corporate Practices.                                                                                                                                                                                                                                                                                                                                     |
| Compensation committee.  Compensation committee of independent directors is required, which must approve executive officer compensation.  The committee must have a charter specifying the purpose, duties and evaluation procedures of the committee.  “Controlled companies,” which would include our company if it were a U.S. issuer, are exempt from this requirement.  §303A.05  |   | We are not required to have a compensation committee.  As recommended by the Mexican Code of Best Corporate Practices, we have an evaluation mechanism for assisting the board of directors in approving executive officer compensation.                                                                                                                                                                                                                                                |
| Equity compensation plans.  Equity compensation plans require stockholder approval, subject to limited exemptions.  §303A.08                                                                                                                                                                                                                                                                                                |   | Stockholder approval is not expressly required under Mexican law or our bylaws for the adoption and amendment of an equity-compensation plan.  However, regulations of the Mexican Banking and Securities Commission require stockholder approval under certain circumstances.  We currently do not have any equity-compensation plans in place.                                                                                                                         |
| Code of Ethics.  Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver for directors or executive officers.  §303A.10                                                                                                                                                                                                                                        |   | We have adopted a code of ethics, which has been accepted by to our chief executive officer, chief financial officer, controller and persons performing similar functions, as well as to other officers and employees.  We are required by Item 16B of Form 20-F to disclose any waivers granted to our chief executive officer, chief financial officer, principal accounting officer and persons performing similar functions.  We have no such waivers in place. |

----

| ITEM 17. | Financial Statements |
|----------|----------------------|

| ITEM 18. | Financial Statements |
|----------|----------------------|

| ITEM 19. | Exhibits |
|----------|----------|

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1         |   | An English translation of the Bylaws (estatutos sociales) of Industrias Bachoco, S.A. de C.V. dated June 29, 2007 (incorporated by reference to Exhibit 1.1 on Form 20-F filed with the U.S. Securities and Exchange Commission on June 29, 2007 (File No. 333-07950)).                                                                                                                                        |
| 2.1         |   | Form of Amended and Restated Deposit Agreement, among Industrias Bachoco, S.A. de C.V., the Depositary and each Owner and Beneficial Owner from time to time of American Depositary Receipts issued thereunder, including the form of American Depositary Receipt (incorporated by reference to Exhibit 1.1 on Form F-6 filed with the U.S. Securities and Exchange Commission on August 18, 2006 (File No. 333-07480)). |
| 2.2         |   | Trust Agreement, dated April 1, 1995, among Banco Internacional, S.A., Institucion de Banca Multiple, Grupo Financiero Prime Internacional, as trustee, and the stockholders of the Company named therein, together with an English translation, (incorporated by reference on our registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission on August 22, 1997 (File No. 333-7472)).    |
| 2.3         |   | Trust Agreement, dated August 20, 1997, among Banco Internacional, S.A., Institucion de Banca Multiple, Grupo Financiero Bital, as trustee, and the stockholders of the Company named therein, together with an English translation, (incorporated by reference on our registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission on August 22, 1997 (File No. 333-7472)).                |
| 8.1         |   | Subsidiaries of Industrias Bachoco S.A. de C.V.                                                                                                                                                                                                                                                                                                                                                                                    |
| 12.1        |   | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                       |
| 12.2        |   | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                       |
| 13.1        |   | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                      |

----

|   | INDUSTRIAS BACHOCO, S.A.B de C.V. |
|--------|-----------------------------------|
|   |                              |   |
|   | By:                               | /s/ DANIEL SALAZAR FERRER |
|   |                              | Daniel Salazar Ferrer |
|   |                              | Chief Financial Officer |

----

----

| Reports of Independent Registered Public Accounting Firms | F-3          |
|-----------------------------------------------------------|--------------|
| Consolidated Financial Statements:                        |    |
| Balance Sheets                                            | F-5          |
| Statements of Operations                                  | F-6          |
| Statements of Changes in Stockholders’ Equity       | F-7          |
| Statements of Changes in Cash Flows                       | F-8          |
| Notes to the Consolidated Financial Statements            | F-9          |

----

----

|              | KPMG CARDENAS DOSAL, S. C. |
|-------------------|----------------------------|
|              |                       |
|              | Demetrio Villa Michel      |
|              |                       |
| Queretaro, Mexico |                       |
| June 16, 2011     |                       |

----

|                                             |   |   |       |   |   |   |       | (Thousands ofU.S. dollars)(note 2v) |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|----------------------------------------------------|--------|
|                                             |   | 2009   |       |   | 2010   |   |       | 2010                                               |   |
|                                             |   |   |       |   |   |   |       |                                               |   |
| Assets                                           |   |   |       |   |   |   |       |                                               |   |
| Current assets:                                  |   |   |       |   |   |   |       |                                               |   |
| Cash and cash equivalents (note 3)               |   | $      | 2,399,127  |   |   |   | 3,967,874  |                                               |   |   | 320,765 |   |
| Primary financial instruments (note 10b)         |   |   | 151,841    |   |   |   | 209,348    |                                               |   |   | 16,924 |   |
| Accounts receivable:                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Trade, net (note 4)                              |   |   | 903,609    |   |   |   | 963,273    |                                               |   |   | 77,872 |   |
| Value added and other recoverable taxes          |   |   | 482,469    |   |   |   | 473,228    |                                               |   |   | 38,256 |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Total accounts receivable                        |   |   | 1,386,078  |   |   |   | 1,436,501  |                                               |   |   | 116,128 |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Inventories, net (note 6a)                       |   |   | 3,613,212  |   |   |   | 3,577,929  |                                               |   |   | 289,241 |   |
| Biological current assets (note 6b)              |   |   | 156,460    |   |   |   | 153,993    |                                               |   |   | 12,449 |   |
| Derivative financial instruments (note 10a)      |   |   | 11,272     |   |   |   | 12,897     |                                               |   |   | 1,043 |   |
| Prepaid expenses and other current assets        |   |   | 155,219    |   |   |   | 138,954    |                                               |   |   | 11,233 |   |
| Property, plant and equipment available for sale |   |   | 29,991     |   |   |   | 40,222     |                                               |   |   | 3,252 |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Total currents assets                            |   |   | 7,903,200  |   |   |   | 9,537,718  |                                               |   |   | 771,035 |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Property, plant and equipment, net (note 7)      |   |   | 10,910,126 |   |   |   | 10,587,321 |                                               |   |   | 855,887 |   |
| Biological non-current assets (note 6b)          |   |   | 743,609    |   |   |   | 750,288    |                                               |   |   | 60,654 |   |
| Goodwill, net (note 8)                           |   |   | 300,848    |   |   |   | 300,848    |                                               |   |   | 24,321 |   |
| Other assets                                     |   |   | 20,096     |   |   |   | 21,593     |                                               |   |   | 1,746 |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Total assets                                     |   | $      | 19,877,879 |   |   |   | 21,197,768 |                                               |   |   | 1,713,643 |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Liabilities and stockholders' equity             |   |   |       |   |   |   |       |                                               |   |   |   |   |
|                                             |   |   |       |   |   |   |       |                                               |   |   |   |   |
| Current liabilities:                             |   |   |       |   |   |   |       |                                               |   |   |   |   |

| Notes payable to banks (note 9a)                         |   | $      | 234,296    |   |   |   | -          |   |   |   | -         |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|-----------|--------|
| Current installments of long-term debt (note 9b)         |   |   | 357,569    |   |   |   | 139,867    |   |   |   | 11,307    |   |
| Accounts payable                                         |   |   | 1,653,988  |   |   |   | 1,572,292  |   |   |   | 127,105   |   |
| Related parties (note 5)                                 |   |   | 67,613     |   |   |   | 60,873     |   |   |   | 4,921     |   |
| Other taxes payable and other accruals (note 12)         |   |   | 437,770    |   |   |   | 393,722    |   |   |   | 31,828    |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Total current liabilities                                |   |   | 2,751,236  |   |   |   | 2,166,754  |   |   |   | 175,161   |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Long term liabilities:                                   |   |   |       |   |   |   |       |   |   |   |      |   |
| Long term debt, excluding current installments (note 9b) |   |   | 371,970    |   |   |   | 507,053    |   |   |   | 40,991    |   |
| Deferred income tax (note 16e)                           |   |   | 2,021,581  |   |   |   | 2,029,150  |   |   |   | 164,038   |   |
| Labor obligations (note 14)                              |   |   | 94,629     |   |   |   | 126,457    |   |   |   | 10,223    |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Total liabilities                                        |   |   | 5,239,416  |   |   |   | 4,829,414  |   |   |   | 390,413   |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Commitments and contingencies (note 11)                  |   |   |       |   |   |   |       |   |   |   |      |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Stockholders' equity (note 15):                          |   |   |       |   |   |   |       |   |   |   |      |   |
| Controlling interest:                                    |   |   |       |   |   |   |       |   |   |   |      |   |
| Capital stock                                            |   |   | 2,294,927  |   |   |   | 2,294,927  |   |   |   | 185,523   |   |
| Additional paid-in capital                               |   |   | 744,753    |   |   |   | 744,753    |   |   |   | 60,206    |   |
| Reserve for repurchase of shares                         |   |   | 159,455    |   |   |   | 154,288    |   |   |   | 12,473    |   |
| Retained earnings                                        |   |   | 10,591,519 |   |   |   | 11,139,037 |   |   |   | 900,488   |   |
| Net controlling interest income of the year              |   |   | 797,600    |   |   |   | 1,983,350  |   |   |   | 160,336   |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Total controlling interest                               |   |   | 14,588,254 |   |   |   | 16,316,355 |   |   |   | 1,319,026 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Non-controlling interest                                 |   |   | 50,209     |   |   |   | 51,999     |   |   |   | 4,204     |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Total stockholders' equity                               |   |   | 14,638,463 |   |   |   | 16,368,354 |   |   |   | 1,323,230 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |      |   |
| Total liabilities and stockholders' equity               |   | $      | 19,877,879 |   |   |   | 21,197,768 |   |   |   | 1,713,643 |   |

----

|                                                               |   |   |        |   |   |   |        |   |   |   | (Thousands of U.S. dollars)(note 2v) |   |
|--------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|------------------------------------------------|--------|
|                                                               |   | 2008   |        |   | 2009   |   |        | 2010   |   |   | 2010                                           |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |
| Net revenues                                                       |   | $      | 20,125,321  |   |   |   | 23,262,850  |   |   |   | 24,715,456                                     |   |   |   | 1,998,016 |   |
| Cost of sales (note 5b)                                            |   |   | (17,482,468 | )      |   |   | (19,326,759 | )      |   |   | (19,500,677                                    | )      |   |   | (1,576,449 | ) |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Gross profit                                                       |   |   | 2,642,853   |   |   |   | 3,936,091   |   |   |   | 5,214,779                                      |   |   |   | 421,567 |   |
| Selling, general and administrative expenses (note 5b)             |   |   | 2,412,788   |   |   |   | 2,522,291   |   |   |   | 2,751,782                                      |   |   |   | 222,457 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Operating income                                                   |   |   | 230,065     |   |   |   | 1,413,800   |   |   |   | 2,462,997                                      |   |   |   | 199,110 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Other expense, net (note 17)                                       |   |   | (20,958     | )      |   |   | (65,189     | )      |   |   | (95,315                                        | )      |   |   | (7,705 | ) |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Comprehensive financial results:                                   |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Interest income                                                    |   |   | 173,694     |   |   |   | 170,655     |   |   |   | 165,646                                        |   |   |   | 13,391 |   |
| Valuation effects of financial instruments (note 10)               |   |   | (1,666,821  | )      |   |   | (174,603    | )      |   |   | 18,850                                         |   |   |   | 1,524 |   |
| Interest and financial expenses                                    |   |   | (36,202     | )      |   |   | (91,326     | )      |   |   | (73,519                                        | )      |   |   | (5,943 | ) |
| Net interest income and valuation effects of financial instruments |   |   | (1,529,329  | )      |   |   | (95,274     | )      |   |   | 110,977                                        |   |   |   | 8,972 |   |
| Foreign exchange gain (loss), net                                  |   |   | 160,166     |   |   |   | (37,934     | )      |   |   | 11,082                                         |   |   |   | 896 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Comprehensive financial results, net                               |   |   | (1,369,163  | )      |   |   | (133,208    | )      |   |   | 122,059                                        |   |   |   | 9,868 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| (Loss) income before income taxes, and non-controlling interest    |   |   | (1,160,056  | )      |   |   | 1,215,403   |   |   |   | 2,489,741                                      |   |   |   | 201,273 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Income tax (benefit) expense  (note 16d)                 |   |   | (274,019    | )      |   |   | 406,358     |   |   |   | 503,415                                        |   |   |   | 40,696 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Net consolidated (loss) income                                     |   |   | (886,037    | )      |   |   | 809,045     |   |   |   | 1,986,326                                      |   |   |   | 160,577 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Net controlling interest (loss)  income                  |   |   | (879,048    | )      |   |   | 797,600     |   |   |   | 1,983,350                                      |   |   |   | 160,336 |   |
| Non-controlling interest                                           |   |   | (6,989      | )      |   |   | 11,445      |   |   |   | 2,976                                          |   |   |   | 241 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Consolidated net (loss)  income                          |   | $      | (886,037    | )      |   |   | 809,045     |   |   |   | 1,986,326                                      |   |   |   | 160,577 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Weighted average outstanding (shares in thousands)                 |   |   | 600,000     |   |   |   | 600,000     |   |   |   | 600,000                                        |   |   |   | 600,000 |   |
|                                                               |   |   |        |   |   |   |        |   |   |   |                                           |   |   |   |   |   |
| Net controlling interest (loss) income per share                   |   | $      | (1.46       | )      |   |   | 1.33        |   |   |   | 3.31                                           |   |   |   | 0.27 |   |

----

|                                                                                            |   | Number of |    |   |    |   |            |                 |   |   |               |   |   |     |    |   | Net controlling    |   |       | Minimun       |   |   | Deficit from |   |   |                |   |   |        |   |       |            |   |   |          |   |
|-------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|---------|--------|-----------------|----------------------|--------|--------|--------------------|--------|--------|----------|---------|--------|-------------------------|--------|------------|---------------|--------|--------|-------------------|--------|--------|---------------------|--------|--------|-------------|--------|------------|-----------------|--------|--------|---------------|--------|
|                                                                                            |   | shares of |    |   |    |   |            |                 |   |   |               |   |   |     |    |   | interest                |   |       | liability     |   |   | restatement       |   |   | Derivative          |   |   |        |   |       |            |   |   |          |   |
|                                                                                            |   | capital        |    |   |    |   |            |                 |   |   | Reserve for   |   |   |     |    |   | income                  |   |       | adjustment    |   |   | of                |   |   | financial ins- |   |   | Total       |   |       |            |   |   | Total         |   |
|                                                                                            |   | stock          |    |   | Capital |   |            | Additional           |   |   | repurchase of |   |   | Retained |    |   | (loss) of the |   |       | of labor |   |   | stockholders'     |   |   | truments            |   |   | controlling |   |       | Non-controlling |   |   | stockholders' |   |
|                                                                                            |   | (thousands)    |    |   | stock   |   |            | paid-in capital |   |   | shares             |   |   | earnings |    |   | year                    |   |       | obligations   |   |   | equity            |   |   | effects             |   |   | interest    |   |       | interest        |   |   | equity        |   |
|                                                                                            |   |           |    |   |    |   |            |                 |   |   |               |   |   |     |    |   |                    |   |       |          |   |   |              |   |   |                |   |   |        |   |       |            |   |   |          |   |
| Balances as of December 31, 2007                                                                |   |           | 600,000 |   |    | $      | 2,294,927       |                 |   |   | 743,674            |   |   |     | 159,455 |   |                    |   | 14,250,225 |          |   |   | 1,270,941         |   |   |                | (2,512 | )      |        |   | (3,735,254 | )               |   |   | 98,922        |   |   |   | 15,080,378 |   |   |   | 46,788 |   |   |   | 15,127,166 |   |
| Transfer of prior year's net income based on stockholders' meeting held on April 2008 |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | 1,270,941  |          |   |   | (1,270,941        | )      |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Cash dividends paid (note 15b)                                                                  |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | (353,880   | )             |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | (353,880 | ) |   |   | - |   |   |   | (353,880 | ) |
| Write-off of additional deferred tax liability (note 16e)                                  |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | 288,580    |          |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 288,580 |   |   |   | - |   |   |   | 288,580 |   |
| Reclasification of deficit from restatement of stockholders' equity (note 2c)              |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | (3,735,254 | )             |   |   | -                 |   |   |                | -      |   |        |   | 3,735,254  |            |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Comprehensive loss, net of taxes (note 2o)                                                      |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | -          |          |   |   | (879,048          | )      |   |                | 2,512  |   |        |   | -          |            |   |   | (98,922       | )      |   |   | (975,458 | ) |   |   | (6,989 | ) |   |   | (982,447 | ) |
|                                                                                            |   |           |    |   |    |   |            |                 |   |   |               |   |   |     |    |   |                    |   |       |          |   |   |              |   |   |                |   |   |        |   |       |            |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances as of December 31, 2008                                                                |   |           | 600,000 |   |    |   | 2,294,927       |                 |   |   | 743,674            |   |   |     | 159,455 |   |                    |   | 11,720,612 |          |   |   | (879,048          | )      |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 14,039,620 |   |   |   | 39,799 |   |   |   | 14,079,419 |   |
| Transfer of prior year's net loss based on stockholders' meeting held on April 2009   |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | (879,048   | )             |   |   | 879,048           |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Cash dividends paid (note 15b)                                                                  |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | (250,045   | )             |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | (250,045 | ) |   |   | - |   |   |   | (250,045 | ) |
| Cash dividends paid to non-controlling interest                                                 |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | -          |          |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | - |   |   |   | (1,035 | ) |   |   | (1,035 | ) |
| Repurchase of shares (note 15d)                                                                 |   |           | -       |   |    |   | -               |                 |   |   | 1,079              |   |   |     | -       |   |                    |   | -          |          |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 1,079 |   |   |   | - |   |   |   | 1,079 |   |
| Comprehensive income, net of taxes (note 2o)                                                    |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | -          |          |   |   | 797,600           |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 797,600 |   |   |   | 11,445 |   |   |   | 809,045 |   |
|                                                                                            |   |           |    |   |    |   |            |                 |   |   |               |   |   |     |    |   |                    |   |       |          |   |   |              |   |   |                |   |   |        |   |       |            |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances as of December 31, 2009                                                                |   |           | 600,000 |   |    |   | 2,294,927       |                 |   |   | 744,753            |   |   |     | 159,455 |   |                    |   | 10,591,519 |          |   |   | 797,600           |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 14,588,254 |   |   |   | 50,209 |   |   |   | 14,638,463 |   |
| Transfer of prior year's net income based on stockholders' meeting held on April 2010 |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | 797,600    |          |   |   | (797,600          | )      |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Cash dividends paid (note 15b)                                                                  |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | (250,082   | )             |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | (250,082 | ) |   |   | - |   |   |   | (250,082 | ) |
| Cash dividends paid to non-controlling interest                                                 |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | -          |          |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | - |   |   |   | (1,186 | ) |   |   | (1,186 | ) |
| Repurchase of shares (note 15d)                                                                 |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | (5,167  | )      |                    |   | -          |          |   |   | -                 |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | (5,167 | ) |   |   | - |   |   |   | (5,167 | ) |
| Comprehensive income, net of taxes (note 2o)                                                    |   |           | -       |   |    |   | -               |                 |   |   | -                  |   |   |     | -       |   |                    |   | -          |          |   |   | 1,983,350         |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 1,983,350 |   |   |   | 2,976 |   |   |   | 1,986,326 |   |
|                                                                                            |   |           |    |   |    |   |            |                 |   |   |               |   |   |     |    |   |                    |   |       |          |   |   |              |   |   |                |   |   |        |   |       |            |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances as of December 31, 2010                                                                |   |           | 600,000 |   |    | $      |  2,294,927 |                 |   |   | 744,753            |   |   |     | 154,288 |   |                    |   | 11,139,037 |          |   |   | 1,983,350         |   |   |                | -      |   |        |   | -          |            |   |   | -             |   |   |   | 16,316,355 |   |   |   | 51,999 |   |   |   | 16,368,354 |   |

----

|                                                                                               |   |            |       |   |   |      |      |   |   |      | Thousands of |   |
|----------------------------------------------------------------------------------------------------|--------|-----------------|------------|--------|--------|-----------|-----------|--------|--------|-----------|-------------------|--------|
|                                                                                               |   |            |       |   |   |      |      |   |   |      | U.S. dollars |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      | (note 2v)    |   |
|                                                                                               |   | 2008            |       |   | 2009   |      |      | 2010   |   |      | 2010              |   |
| Cash flows from operating activities:                                                              |   |            |       |   |   |      |      |   |   |      |              |   |
| (Loss) income before income taxes and non-controlling interest                                     |   | $               | (1,160,056 | )      |   |      | 1,215,403 |   |   |      | 2,489,741         |   |   |   | 201,273 |   |
| Items relating to investing activities:                                                            |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Depreciation and amortization                                                                      |   |            | 616,358    |   |   |      | 662,630   |   |   |      | 692,640           |   |   |   | 55,992 |   |
| Loss on sale of plant and equipment                                                                |   |            | 49,485     |   |   |      | 88,187    |   |   |      | 148,572           |   |   |   | 12,010 |   |
| Interest income                                                                                    |   |            | (173,694   | )      |   |      | (170,655  | )      |   |      | (165,646          | )      |   |   | (13,391 | ) |
| Item relating to financing activities:                                                             |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Interest expense                                                                                   |   |            | 36,202     |   |   |      | 91,326    |   |   |      | 73,519            |   |   |   | 5,943 |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Subtotal                                                                                           |   |            | (631,705   | )      |   |      | 1,886,891 |   |   |      | 3,238,826         |   |   |   | 261,827 |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Derivative financial instruments                                                                   |   |            | 919,026    |   |   |      | (804,134  | )      |   |      | (1,625            | )      |   |   | (131 | ) |
| Accounts receivable, net                                                                           |   |            | (151,635   | )      |   |      | (11,402   | )      |   |      | (59,664           | )      |   |   | (4,823 | ) |
| Recoverable taxes                                                                                  |   |            | 52,972     |   |   |      | (22,432   | )      |   |      | 9,241             |   |   |   | 747 |   |
| Inventories and biological assets                                                                  |   |            | (784,442   | )      |   |      | 281,755   |   |   |      | 31,071            |   |   |   | 2,512 |   |
| Prepaid expenses and other current assets                                                          |   |            | (24,703    | )      |   |      | (934      | )      |   |      | 16,265            |   |   |   | 1,315 |   |
| Trade accounts payable, taxes payable and other accruals                                           |   |            | 596,229    |   |   |      | 110,092   |   |   |      | (125,744          | )      |   |   | (10,165 | ) |
| Income taxes paid                                                                                  |   |            | (147,426   | )      |   |      | (107,158  | )      |   |      | (495,846          | )      |   |   | (40,084 | ) |
| Accounts payable to related parties                                                                |   |            | 23,517     |   |   |      | 17,277    |   |   |      | (6,740            | )      |   |   | (545 | ) |
| Net periodic cost from termination and retirement benefits                                         |   |            | 56,975     |   |   |      | 54,391    |   |   |      | 75,174            |   |   |   | 6,077 |   |
| Contributions to plan assets for termination and retirement benefits                               |   |            | -          |   |   |      | (20,634   | )      |   |      | (26,373           | )      |   |   | (2,132 | ) |
| Payments for termination and retirement benefits                                                   |   |            | (41,805    | )      |   |      | (19,818   | )      |   |      | (16,973           | )      |   |   | (1,372 | ) |
| Derivative financial instruments in stockholders' equity                                           |   |            | (122,126   | )      |   |      | -         |   |   |      | -                 |   |   |   | - |   |
| Assets available for sale                                                                          |   |            | 2,159      |   |   |      | (7,220    | )      |   |      | (10,231           | )      |   |   | (827 | ) |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Net cash (used in) provided by operating activities                                                |   |  (252,964) |       |   |   | 1,356,674 |      |   |   | 2,627,381 |              |   |   | 212,399 |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Cash flows from investing activities:                                                              |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Acquisition of property, plant and equipment                                                       |   |            | (1,156,168 | )      |   |      | (988,250  | )      |   |      | (560,586          | )      |   |   | (45,318 | ) |
| Proceeds from sale of plant and equipment                                                          |   |            | 57,329     |   |   |      | 16,542    |   |   |      | 42,179            |   |   |   | 3,410 |   |
| Primary financial instruments                                                                      |   |            | (61,998    | )      |   |      | 316,162   |   |   |      | (57,507           | )      |   |   | (4,649 | ) |
| Increase in other non-current assets                                                               |   |            | (1,113     | )      |   |      | (650      | )      |   |      | (1,497            | )      |   |   | (121 | ) |
| Interest collected                                                                                 |   |            | 173,694    |   |   |      | 170,655   |   |   |      | 165,646           |   |   |   | 13,391 |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Net cash used in investing activities                                                              |   |            | (988,256   | )      |   |      | (485,541  | )      |   |      | (411,765          | )      |   |   | (33,287 | ) |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| (Cash to be obtained from financing activities) Cash surplus to be applied in financing activities |   |            | (1,241,220 | )      |   |      | 871,133   |   |   |      | 2,215,616         |   |   |   | 179,112 |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Cash flows from financing activities:                                                              |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Additional paid-in capital and reserve for repurchases of shares                                   |   |            | -          |   |   |      | 1,079     |   |   |      | (5,167            | )      |   |   | (418 | ) |
| Dividends paid                                                                                     |   |            | (353,880   | )      |   |      | (250,045  | )      |   |      | (250,082          | )      |   |   | (20,217 | ) |
| Dividends paid to non-controlling interest                                                         |   |            | -          |   |   |      | (1,035    | )      |   |      | (1,186            | )      |   |   | (96 | ) |
| Proceeds from loans                                                                                |   |            | 535,100    |   |   |      | 1,044,611 |   |   |      | 778,955           |   |   |   | 62,971 |   |
| Interest paid                                                                                      |   |            | (33,339    | )      |   |      | (90,192   | )      |   |      | (73,519           | )      |   |   | (5,943 | ) |
| Asset tax recovery                                                                                 |   |            | 8,521      |   |   |      | -         |   |   |      | -                 |   |   |   | - |   |
| Principal payments on loans                                                                        |   |            | (18,809    | )      |   |      | (706,668  | )      |   |      | (1,095,870        | )      |   |   | (88,591 | ) |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Net cash provided by (used in) financing activities                                                |   |            | 137,593    |   |   |      | (2,250    | )      |   |      | (646,869          | )      |   |   | (52,294 | ) |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                                               |   |            | (1,103,627 | )      |   |      | 868,883   |   |   |      | 1,568,747         |   |   |   | 126,818 |   |
|                                                                                               |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| Cash and cash equivalents:                                                                         |   |            |       |   |   |      |      |   |   |      |              |   |   |   |   |   |
| At beginning of year                                                                               |   |            | 2,633,871  |   |   |      | 1,530,244 |   |   |      | 2,399,127         |   |   |   | 193,947 |   |
| At end of year (note 2w and 3)                                                                     |   | $               | 1,530,244  |   |   |      | 2,399,127 |   |   |      | 3,967,874         |   |   |   | 320,765 |   |

----

| (1) | Organization, business activity and significant transactions- |
|-----|---------------------------------------------------------------|

----

| (2) | Accounting Policies and Practices- |
|-----|------------------------------------|

|   | a) | Consolidation- |
|--------|----|----------------|

----

|                                               |   | Percentage equity interest |   |
|----------------------------------------------------|--------|--------------------------------------|--------|
|                                               |   | 2008                                 |   |   | 2009 |   |   | 2010 |   |
| Acuícola Bachoco, S.A. de C.V. (1)            |   |                                 | 100    |   |   |   | - |   |   |   | - |   |
| Aviser, S.A. de C.V.                               |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Bachoco, S.A. de C.V. (“BSACV”)        |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Bachoco Comercial, S.A. de C.V.                    |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Campi Alimentos, S.A. de C.V.  (1)       |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Huevo y Derivados, S.A. de C.V. (2)                |   |                                 | 97     |   |   |   | 97 |   |   |   | - |   |
| Operadora de Servicios de Personal, S.A. de C.V.   |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Pecuarius Laboratorios, S.A. de C.V.               |   |                                 | 64     |   |   |   | 64 |   |   |   | 64 |   |
| Secba, S.A. de C.V.                                |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Sepetec, S.A de C.V.                               |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Servicios de Personal Administrativo, S.A. de C.V. |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |
| Induba Pavos, S.A. de C.V.                         |   |                                 | 100    |   |   |   | 100 |   |   |   | 100 |   |

----

|   | b) | Revenue recognition- |
|--------|----|----------------------|

|   | c) | Recognition of the effects of inflation- |
|--------|----|------------------------------------------|

----

| December 31 |   | NCPI   |    |   | Inflation |   |
|------------------|--------|--------|---------|--------|-----------|--------|
|             |   |   |    |   | Yearly    |   |   | Cumulative |   |
|             |   |   |    |   |      |   |   |   |   |
| 2010             |   |   | 144.639 |   |      |   | 4.40 | % |   |   | 15.19 | % |
| 2009             |   |   | 138.541 |   |      |   | 3.57 | % |   |   | 14.48 | % |
| 2008             |   |   | 133.761 |   |      |   | 6.52 | % |   |   | 15.01 | % |
| 2007             |   |   | 125.564 |   |      |   | 3.75 | % |   |   | 11.56 | % |

----

|   | d) | Cash and cash equivalents- |
|--------|----|----------------------------|

|   | e) | Available on-demand investments and primary investment securities- |
|--------|----|--------------------------------------------------------------------|

----

|   | f) | Accounts receivable and allowance for doubtful accounts- |
|--------|----|----------------------------------------------------------|

|   | g) | Inventories, agricultural products and biological assets- |
|--------|----|-----------------------------------------------------------|

----

----

|   | h) | Property, plant and equipment- |
|--------|----|--------------------------------|

----

|   | i) | Impairment of property, plant and equipment- |
|--------|----|----------------------------------------------|

|   | j) | Leases- |
|--------|----|---------|

|   | k) | Goodwill- |
|--------|----|-----------|

----

|   | l) | Liabilities, provisions, contingent liabilities and commitments- |
|--------|----|------------------------------------------------------------------|

|   | m) | Employee benefits- |
|--------|----|--------------------|

----

|   | n) | Comprehensive financial results (CFR)- |
|--------|----|----------------------------------------|

|   | o) | Comprehensive (loss) income- |
|--------|----|------------------------------|

----

|   | p) | Derivative financial instruments- |
|--------|----|-----------------------------------|

|   | q) | Derivative financial Instruments, designated and qualified as hedging instruments for one or more risks- |
|--------|----|----------------------------------------------------------------------------------------------------------|

----

----

|   | r) | Income taxes (income tax (IT), flat rate business tax (IETU)), and employee statutory profit sharing (ESPS)- |
|--------|----|--------------------------------------------------------------------------------------------------------------|

|   | s) | Net controlling interest (loss) income per share- |
|--------|----|---------------------------------------------------|

|   | t) | Financial information by segments- |
|--------|----|------------------------------------|

|   | u) | Reclassifications- |
|--------|----|--------------------|

----

|   | v) | Convenience translation- |
|--------|----|--------------------------|

|   | w) | New accounting pronouncements- |
|--------|----|--------------------------------|

|   | (a) | FRS C-1 “Cash and cash equivalents” – FRS C-1 supersedes Bulletin C-1 “Cash” and is effective beginning January 1, 2010.  The principal changes with respect to the superseded Bulletin include the following: |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS C-1 requires the presentation of restricted cash and cash equivalents in caption “Cash and cash equivalents” on the balance sheet. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The term “demand temporary investment” is replaced by “available on-demand investments”. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | To be identified as available on-demand investment, the investments should be highly liquid (original maturities of three months or less). |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS C-1 includes the definition of the terms: acquisition cost, cash equivalents, restricted cash and cash equivalents; available demand investments, net realizable value, nominal value and fair value. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Accounting changes resulting from the initial application of this standard were recognized retrospectively, affecting the financial information as follows: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                    |   | Previouslyreportedamounts |      |   | Accountingchange |   |     | Adjustedamounts |   |
|---------------------------------------------------------|--------|---------------------------|-----------|--------|------------------|--------|----------|-----------------|--------|
| Avaliable on-demand investments as of December 31, 2009 |   | $                         | 2,363,949 |   |             |   | (151,841 | )               |   |   | 2,212,108 |   |
| Cash and cash equivalents as of December 31, 2009       |   |                      | 2,550,968 |   |             |   | (151,841 | )               |   |   | 2,399,127 |   |

|   | (b) | 2010 FRS Revisions- |
|--------|-----|---------------------|

|   | In December 2009, the Mexican Board for Research and Development of Financial Reporting Standards (Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera or CINIF) issued the document referred to as “2010 FRS Revisions”  setting forth the following accounting changes: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS B-2 “Statement of Cash Flows”- Unrealized accrued foreign exchange fluctuations and the effects of fair value recognition are excluded from the cash balance on the statement of cash flows. Likewise, the concept “Adjustment to cash flow from foreign exchange fluctuations and inflation levels” is changed to “Effects from cash value changes” which includes effects from translation, inflation, foreign exchange fluctuations and fair value of cash balances. Additionally, includes the change of the definition of “available on-demand investments” as mentioned in paragraph (a) of this note. The changes in the presentation of the statement of cash flows were recognized retrospectively, and are as follows: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                           |   | Previouslyreportedamounts |       |   | Accountingchange |   |     | Adjustedamounts |   |
|------------------------------------------------|--------|---------------------------|------------|--------|------------------|--------|----------|-----------------|--------|
| Net cash used in investing activities          |   | $                         | (926,258   | )      |             |   | (61,998  | )               |   |   | (988,256 | ) |
| Net decrease in cash and cash equivalents      |   |                      | (1,041,629 | )      |             |   | (61,998  | )               |   |   | (1,103,627 | ) |
| Cash and cash equivalents at beginning of year |   |                      | 3,039,876  |   |             |   | (406,005 | )               |   |   | 2,633,871 |   |
| Cash and cash equivalents at end of year       |   |                      | 1,998,247  |   |             |   | (468,003 | )               |   |   | 1,530,244 |   |

|                                           |   | Previouslyreportedamounts |      |   | Accountingchange |   |     | Adjustedamounts |   |
|------------------------------------------------|--------|---------------------------|-----------|--------|------------------|--------|----------|-----------------|--------|
| Net cash used in investing activities          |   | $                         | (801,703  | )      |             |   | 316,162  |            |   |   | (485,541 | ) |
| Net increase in cash and cash equivalents      |   |                      | 552,721   |   |             |   | 316,162  |            |   |   | 868,883 |   |
| Cash and cash equivalents at beginning of year |   |                      | 1,998,247 |   |             |   | (468,003 | )               |   |   | 1,530,244 |   |
| Cash and cash equivalents at end of year       |   |                      | 2,550,968 |   |             |   | (151,841 | )               |   |   | 2,399,127 |   |

|   | · | FRS C-7 “Investments in associates and other permanent investments” – Capital contributions by the holding company to the associate that increase its equity percentage are to be recognized based on the net fair value of identifiable assets and liabilities. For that purpose, the valuation must be in proportion to the increase. The changes resulting from the application of this FRS Revision are recognized prospectively beginning January 1, 2010. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | There is not any effect as result of this FRS Revision. |
|--------|---------------------------------------------------------|

----

| (3) | Cash and cash equivalents- |
|-----|----------------------------|

|                                        |   | 2009   |      |   | 2010   |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                        |   |   |      |   |   |   |
| Cash and bank accounts                      |   | $      | 178,749   |   |   | $      | 513,076 |   |
| Available on-demand investments (note 10 b) |   |   | 2,212,108 |   |   |   | 3,445,899 |   |
| Unrestricted cash and cash equivalents      |   |   | 2,390,857 |   |   |   | 3,958,975 |   |
|                                        |   |   |      |   |   |   |   |   |
| Restricted cash                             |   |   | 8,270     |   |   |   | 8,899 |   |
|                                        |   |   |      |   |   |   |   |   |
| Total cash and cash equivalents             |   | $      | 2,399,127 |   |   | $      | 3,967,874 |   |

| (4) | Trade receivables, net- |
|-----|-------------------------|

----

| (5) | Related parties- |
|-----|------------------|

|   | a) | A summary of related party accounts payable as of December 31, 2009 and 2010 is as follows: |
|--------|----|---------------------------------------------------------------------------------------------|

|                                                 |   | 2009   |   |   | 2010   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Vimifos, S.A. de C.V.                                |   | $      | 43,749 |   |   | $      | 43,051 |   |
| Maquinaria Agrícola, S.A. de C.V.               |   |   | 5,570  |   |   |   | 7,973 |   |
| Frescopack, S.A. de C.V.                             |   |   | 8,767  |   |   |   | 6,670 |   |
| Llantas y Accesorios, S.A. de C.V.                   |   |   | 4,418  |   |   |   | 1,144 |   |
| Autos y Tractores de Culiacán, S.A. de C.V.     |   |   | 855    |   |   |   | 1,025 |   |
| Autos y Accesorios, S.A. de C.V.                     |   |   | 53     |   |   |   | 678 |   |
| Distribuidora Automotriz de los Mochis, S.A. de C.V. |   |   | 16     |   |   |   | 213 |   |
| Camiones y Tractocamiones de Sonora, S.A. de C.V.    |   |   | 108    |   |   |   | 67 |   |
| Alfonso R. Bours, S.A. de C.V.                       |   |   | -      |   |   |   | 52 |   |
| Pulmex 2000, S.A. de C.V.                            |   |   | 4,077  |   |   |   | - |   |
|                                                 |   | $      | 67,613 |   |   | $      | 60,873 |   |

----

|   | b) | For the years ended December 31, 2008, 2009 and 2010, the Company had the following transactions with related parties: |
|--------|----|------------------------------------------------------------------------------------------------------------------------|

| Purchases of feed, raw materials and packingsupplies |   | 2008   |    |   | 2009   |   |    | 2010   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                 |   |   |    |   |   |   |    |   |   |
| Vimifos, S.A. de C.V.                                |   | $      | 283,912 |   |   | $      | 261,385 |   |   | $ | 215,967 |   |
| Frescopack, S.A. de C.V.                             |   |   | 128,176 |   |   |   | 136,609 |   |   |   | 113,229 |   |
| Pulmex 2000, S.A. de C.V.                            |   |   | 15,619  |   |   |   | 17,307  |   |   |   | 10,896 |   |
| Qualiplast, S.A. de C.V.                             |   |   | 22      |   |   |   | 21      |   |   |   | 19 |   |
|                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Purchases of vehicles, tires and spare parts         |   | 2008   |    |   | 2009   |   |    | 2010   |   |
|                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Maquinaria Agrícola, S.A. de C.V.               |   | $      | 54,502  |   |   | $      | 56,502  |   |   | $ | 64,546 |   |
| Llantas y Accesorios, S.A. de C.V.                   |   |   | 22,426  |   |   |   | 30,848  |   |   |   | 32,775 |   |
| Autos y Tractores de Culiacán, S.A. de C.V.     |   |   | 26,665  |   |   |   | 19,555  |   |   |   | 16,551 |   |
| Autos y Accesorios, S.A. de C.V.                     |   |   | 21,729  |   |   |   | 11,849  |   |   |   | 13,371 |   |
| Distribuidora Automotriz de los Mochis, S.A. de C.V. |   |   | 13,687  |   |   |   | 11,093  |   |   |   | 7,635 |   |
| Alfonso R. Bours, S.A. de C.V.                       |   |   | 3,356   |   |   |   | 847     |   |   |   | 931 |   |
| Camiones y Tractocamiones de Sonora, S.A. de C.V.    |   |   | 14,501  |   |   |   | 8,391   |   |   |   | 338 |   |
|                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Airplane leasing expenses                            |   | 2008   |    |   | 2009   |   |    | 2010   |   |
|                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Taxis Aéreos del Noroeste, S.A. de C.V.         |   | $      | 2,106   |   |   | $      | 9,810   |   |   | $ | 8,866 |   |

----

| (6) | Inventories and biological assets- |
|-----|------------------------------------|

|   | a) | Inventories consist of the following: |
|--------|----|---------------------------------------|

|                                        |   | 2009   |      |   | 2010   |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                        |   |   |      |   |   |   |
| Raw materials and subproducts               |   | $      | 1,769,251 |   |   | $      | 1,889,850 |   |
| Restricted raw material (sorghum) (note 9a) |   |   | 24,584    |   |   |   | - |   |
|                                        |   |   | 1,793,835 |   |   |   | 1,889,850 |   |
|                                        |   |   |      |   |   |   |   |   |
| Medicine, materials and spare parts         |   |   | 480,459   |   |   |   | 452,373 |   |
| Finished feed                               |   |   | 57,613    |   |   |   | 60,405 |   |
|                                        |   |   | 2,331,907 |   |   |   | 2,402,628 |   |
| Agricultural products:                      |   |   |      |   |   |   |   |   |
| Live chicken                                |   |   | 889,415   |   |   |   | 877,654 |   |
| Processed chicken                           |   |   | 339,965   |   |   |   | 250,904 |   |
| Commercial egg                              |   |   | 27,441    |   |   |   | 22,094 |   |
| Turkey                                      |   |   | 21,567    |   |   |   | 20,186 |   |
| Beef                                        |   |   | 1,493     |   |   |   | 4,463 |   |
| Others                                      |   |   | 1,424     |   |   |   | - |   |
|                                        |   |   | 1,281,305 |   |   |   | 1,175,301 |   |
| Total                                       |   | $      | 3,613,212 |   |   | $      | 3,577,929 |   |

|   | b) | Biological assets at December 31, 2009 and 2010 consist of the following: |
|--------|----|---------------------------------------------------------------------------|

|                                |   | 2009   |     |   | 2010   |   |
|-------------------------------------|--------|--------|----------|--------|--------|--------|
| Current biological assets:          |   |   |     |   |   |   |
| Breeder pigs                        |   | $      | 45,808   |   |   | $      | 48,120 |   |
| Incubatable eggs                    |   |   | 110,652  |   |   |   | 105,873 |   |
| Total current biological assets     |   | $      | 156,460  |   |   | $      | 153,993 |   |
|                                |   |   |     |   |   |   |   |   |
| Non-current biological assets:      |   |   |     |   |   |   |   |   |
| Laying and breeder hens             |   | $      | 252,415  |   |   | $      | 282,111 |   |
| Breeder pigs                        |   |   | 31,409   |   |   |   | 34,828 |   |
| Hens in production                  |   |   | 818,415  |   |   |   | 771,454 |   |
| Allowance for productivity declines |   |   | (358,630 | )      |   |   | (338,105 | ) |
|                                |   |   |     |   |   |   |   |   |
| Total non-current biological assets |   | $      | 743,609  |   |   | $      | 750,288 |   |

----

| (7) | Property, plant and equipment- |
|-----|--------------------------------|

|   | a) | Property, plant and equipment at December 31, 2009 and 2010 consists of the following: |
|--------|----|----------------------------------------------------------------------------------------|

|                                          |   | Useful lives(years) |   |   | 2009   |   |       | 2010   |   |
|-----------------------------------------------|--------|--------------------------|--------|--------|--------|--------|------------|--------|--------|
| Buildings, farm structures and equipment      |   |                     | 7-27   |   |   | $      | 15,823,099 |   |   | $ | 16,068,754 |   |
| Office, furniture and equipment               |   |                     | 3      |   |   |   | 238,607    |   |   |   | 246,349 |   |
| Transportation equipment                      |   |                     | 6      |   |   |   | 1,219,437  |   |   |   | 1,158,660 |   |
|                                          |   |                     |   |   |   |   | 17,281,143 |   |   |   | 17,473,763 |   |
|                                          |   |                     |   |   |   |   |       |   |   |   |   |   |
| Accumulated depreciation and amortization     |   |                     |   |   |   |   | (7,700,155 | )      |   |   | (8,157,371 | ) |
|                                          |   |                     |   |   |   |   | 9,580,988  |   |   |   | 9,316,392 |   |
|                                          |   |                     |   |   |   |   |       |   |   |   |   |   |
| Land                                          |   |                     |   |   |   |   | 937,478    |   |   |   | 948,036 |   |
| Construction in progress and advance payments |   |                     |   |   |   |   | 391,660    |   |   |   | 322,893 |   |
|                                          |   |                     |   |   |   |   |       |   |   |   |   |   |
| Total                                         |   |                     |   |   |   | $      | 10,910,126 |   |   | $ | 10,587,321 |   |

|   | b) | Depreciation and amortization expense for the years ended December 31, 2008, 2009 and 2010, amounted to $616,358, $662,630, and $692,640, respectively. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | As of December 31, 2009, the construction in progress amount of $347,516, has been placed in service in 2010. |
|--------|----|---------------------------------------------------------------------------------------------------------------|

|   | d) | As of December 31, 2010, the construction in progress amount of $279,603, are expected to be placed in service in 2011. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------|

----

| (8) | Goodwill- |
|-----|-----------|

|   | In 1999, goodwill was derived from the purchase of the shares of Campi Alimentos, S.A. de C.V. in the amount of $359,564. At December 31, 2005 (the last year of amortization), accumulated amortization aggregated to $58,716. In 2008, 2009 and 2010, goodwill was not amortized, but subject to impairment test on an annual basis, as a result of the adoption of Mexican FRS B-7 “Business Acquisitions” (see note 2k). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9) | Notes payable to banks and long-term debt- |
|-----|--------------------------------------------|

|   | a) | Short-term notes payable to banks consist of the following: |
|--------|----|-------------------------------------------------------------|

|                                                                                             |   | 2009   |    |   | 2010   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Unsecured notes payable to banks (i) (ii):                                                       |   |   |    |   |   |   |
|                                                                                             |   |   |    |   |   |   |
| Denominated in pesos, interest rate: TIIE(1) FIRA(2) rate less 3 points                          |   | $      | 40,000  |   |   | $      | - |   |
| Denominated in pesos, interest rate: TIIE(1) FIRA(2) rate plus .75 points                        |   |   | 40,000  |   |   |   | - |   |
| Denominated in pesos, interest rate: TIIE(1) rate plus 2 points                                  |   |   | 133,400 |   |   |   | - |   |
|                                                                                             |   |   |    |   |   |   |   |   |
| Secured by sorghum deposit certificates (iii):                                                   |   |   |    |   |   |   |   |   |
| Denominated in pesos, maturity on February 11, 2010, with appraisal 85% and interest rate of 9%. |   |   | 20,896  |   |   |   | - |   |
|                                                                                             |   |   |    |   |   |   |   |   |
| Short-term notes payable total                                                                   |   | $      | 234,296 |   |   | $      | - |   |

|   | (i) | The weighted average interest rate on short-term unsecured notes payable at December 31, 2009 and at the date of the payment in 2010 were 6.03% and 6.01% respectively. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Average interest rate on short-term unsecured notes for the years ended December 31, 2009 and at the date of the payment in 2010 were 5.73% and 6.05%, respectively. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | At December 31, 2009 and 2010, unused sorghum deposit certificates lines of credit amounted to $179,104 and $100,000, respectively. In 2009 and 2010, the Company was not required to pay any fee for unused lines of credit. |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | TIIE = Interbank Equilibrium Rate |
|--------|-----|-----------------------------------|

|   | (2) | FIRA = Agriculture trust (Fideicomiso Instituido en Relación con la Agricultura by its Spanish acronym) |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

----

|   | b) | Long-term debt, as of December 31, consist of the following: |
|--------|----|--------------------------------------------------------------|

|                                                                                                                      |   | 2009   |     |   | 2010   |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                                                                                      |   |   |     |   |   |   |
| Secured by equipment:                                                                                                     |   |   |     |   |   |   |
| Denominated in pesos, payable in monthly installments through December 2010, at CETES (3) rate plus 2 points.             |   | $      | 10,500   |   |   | $      | - |   |
|                                                                                                                      |   |   |     |   |   |   |   |   |
| Unsecured:                                                                                                                |   |   |     |   |   |   |   |   |
| Denominated in pesos, maturing in July 2015, at TIIE (1) plus 1.50 points.                                                |   |   | -        |   |   |   | 250,000 |   |
| Denominated in pesos, maturing in April 2015, at TIIE (1) FIRA (2) rates plus 1.90 points.                                |   |   | -        |   |   |   | 250,000 |   |
| Denominated in pesos, maturing in June 2015, at TIIE (1) rate plus 2.50 points.                                           |   |   | -        |   |   |   | 38,993 |   |
| Denominated in pesos, maturing in December 2013, at TIIE (1) FIRA (2) rates less 1.00 point.                              |   |   | -        |   |   |   | 38,133 |   |
| Denominated in pesos, maturing in April 2012 and June 2013, at TIIE (1) FIRA (2) rates less 1.10 points and 0.875 points. |   |   | 46,000   |   |   |   | 30,720 |   |
| Denominated in pesos, maturing in April 2015, at TIIE (1) rate plus 0.95 points.                                          |   |   | -        |   |   |   | 23,617 |   |
| Denominated in pesos, maturing in June 2011, at TIIE (1) FIRA(2) rates plus 2 points.                                     |   |   | 137,500  |   |   |   | 12,500 |   |
| Denominated in pesos, maturing in March 2014, at TIIE (1) rate plus 2 points.                                             |   |   | -        |   |   |   | 2,957 |   |
| Denominated in pesos, maturing in July 2011, at TIIE (1) rate plus 2 points.                                              |   |   | 500,000  |   |   |   | - |   |
| Denominated in pesos, maturing in 2014, at TIIE (1) rate plus 3.5 points.                                                 |   |   | 33,750   |   |   |   | - |   |
| Denominated in pesos, maturing in December 2010, at TIIE (1) FIRA (2) rate less 3.30 points, at minimum rate of 2.90%.    |   |   | 1,789    |   |   |   | - |   |
| Total                                                                                                                     |   |   | 729,539  |   |   |   | 646,920 |   |
| Less current installments.                                                                                                |   |   | (357,569 | )      |   |   | (139,867 | ) |
|                                                                                                                      |   |   |     |   |   |   |   |   |
| Long-term debt, excluding current installments.                                                                           |   | $      | 371,970  |   |   | $      | 507,053 |   |

----

|   | (1) | TIIE = Interbank Equilibrium Rate |
|--------|-----|-----------------------------------|

|   | (2) | FIRA = Agriculture trust (Fideicomiso Instituido en Relación con la Agricultura by its Spanish acronym) |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

|   | (3) | CETE = Treasury Bills. |
|--------|-----|------------------------|

|   | c) | At December 31, 2009 and 2010, unused lines of credit amounted to $823,320 and $2,047,839, respectively. In 2009 and 2010, the Company did not pay any fee for unused lines of credit. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | The book value of assets collateralizing long-term debt was $120,844 at December 31, 2009. |
|--------|----|--------------------------------------------------------------------------------------------|

|   | e) | Maturities of long-term debt as of December 31, 2010, are as follows: |
|--------|----|-----------------------------------------------------------------------|

| Year   |   | Amount |    |
|--------|--------|--------|---------|
|   |   |   |    |
| 2012   |   | $      | 153,038 |   |
| 2013   |   |   | 148,332 |   |
| 2014   |   |   | 129,083 |   |
| 2015   |   |   | 76,600  |   |
|   |   |   |    |   |
|   |   | $      | 507,053 |   |

----

| (10-a) | Financial Instruments and hedging activities as at December 31, 2009 and 2010- |
|--------|--------------------------------------------------------------------------------|

----

| Counter-party  |   | Instrument           |   | Underlaying6         |   | Notional |   | Maturity     |   | Effects onthe results ofoperationsCFR/loss(gain) |   |
|----------------|--------|----------------------|--------|----------------------|--------|----------|--------|--------------|--------|-----------------------------------------------------------------|--------|
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |
| Morgan Stanley |   | Collar2              |   | Exchange rateMXP/USD |   | 1,000US$ |   | May 2010     |   | $                                                               | (2,537 | ) |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
|           |   | KO collars2          |   | Exchange rateMXP/USD |   | 1,000US$ |   | March 2010   |   |                                                            | (185   | ) |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
|           |   | KO collars2          |   | Exchange rateMXP/USD |   | 2,000US$ |   | July 2010    |   |                                                            | 8      |   |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
|           |   | KO put spread4       |   | Exchange rateMXP/USD |   | 1,000US$ |   | March 2010   |   |                                                            | (256   | ) |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
|           |   | Call spread3         |   | Exchange rateMXP/USD |   | 1,000US$ |   | March 2010   |   |                                                            | (902   | ) |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
| UBS            |   | Knock out-5 knock in |   | Exchange rateMXP/USD |   | 2,000US$ |   | January 2010 |   |                                                            | (45    | ) |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
|           |   | Forwards             |   | Exchange rateMXP/USD |   | 2,000US$ |   | July 2010    |   |                                                            | 1,026  |   |
|           |   |                 |   |                 |   |     |   |         |   |                                                            |   |   |
|           |   |                 |   |                 |   |     |   |         |   | $                                                               | (2,891 | ) |

----

----

| Counter-party |   | Instrument      |   | Underlaying |   | Maturity 2010 |   | Effects ontheresults ofoperationsCFR/loss (gain) |   |
|---------------|--------|-----------------|--------|-------------|--------|--------------------|--------|-----------------------------------------------------------------|--------|
|          |   |            |   |        |   |               |   |                                                            |   |
| Cargill       |   | Swaps           |   | Corn        |   | March              |   | $                                                               | (445   | ) |
| (OTC)         |   |            |   |        |   |               |   |                                                            |   |   |
|          |   |            |   |        |   |               |   |                                                            |   |   |
| New Edge 7    |   | Futures         |   | Corn        |   | March              |   |                                                            | (409   | ) |
|          |   | Futures         |   | Corn        |   | March              |   |                                                            | (361   | ) |
|          |   | Futures         |   | Corn        |   | March              |   |                                                            | (1,360 | ) |
|          |   | Futures         |   | Corn        |   | March              |   |                                                            | 4,162  |   |
|          |   | Futures         |   | Corn        |   | March              |   |                                                            | (215   | ) |
|          |   | Futures         |   | Corn        |   | March              |   |                                                            | (314   | ) |
|          |   | Futures         |   | Corn        |   | March              |   |                                                            | (98    | ) |
|          |   | Puts on futures |   | Corn        |   | March              |   |                                                            | (159   | ) |
|          |   | Puts on futures |   | Corn        |   | March              |   |                                                            | (337   | ) |
|          |   | Puts on futures |   | Corn        |   | March              |   |                                                            | (311   | ) |
|          |   | Puts on futures |   | Corn        |   | March              |   |                                                            | 104    |   |
|          |   | Puts on futures |   | Corn        |   | March              |   |                                                            | (503   | ) |
|          |   |            |   |        |   |               |   |                                                            |   |   |
|          |   |            |   |        |   |               |   | $                                                               | (246   | ) |

----

----

| Counter-party  |   | Instrument          |   | Underlaying11             |   | Notional       |   | Maturity     |   | Effects onthe results ofoperationsCFR/loss(gain) |   |
|----------------|--------|---------------------|--------|---------------------------|--------|----------------|--------|--------------|--------|--------------------------------------------------|--------|
|           |   |                |   |                      |   |           |   |         |   |                                             |   |
| Morgan Stanley |   | European options10  |   | Exchange rateMXP/USD |   | Several inUS$  |   | January 2011 |   | $                                                | 211    |   |
|           |   |                |   |                      |   |           |   |         |   |                                             |   |   |
|           |   | Knock out-knock in9 |   | Exchange rate MXP/USD     |   | Several in US$ |   | January 2011 |   |                                             | (199   | ) |
|           |   |                |   |                      |   |           |   |         |   |                                             |   |   |
|           |   | Forwards            |   | Exchange rate MXP/USD     |   | Several in US$ |   | January 2011 |   |                                             | 19     |   |
|           |   |                |   |                      |   |           |   |         |   |                                             |   |   |
| Deutsche Bank  |   | Knock in9           |   | Exchange rate MXP/USD     |   | $150US         |   | January 2011 |   |                                             | (63    | ) |
|           |   |                |   |                      |   |           |   |         |   |                                             |   |   |
| Santander      |   | European options10  |   | Exchange rate MXP/USD     |   | Several in US$ |   | January 2011 |   |                                             | 9      |   |
|           |   |                |   |                      |   |           |   |         |   |                                             |   |   |
|           |   | Forwards            |   | Exchange rate MXP/USD     |   | Several in US$ |   | January 2011 |   |                                             | 41     |   |
|           |   |                |   |                      |   |           |   |         |   |                                             |   |   |
|           |   |                |   |                      |   |           |   |         |   | $                                                | 18     |   |

----

----

|          |   |             |   |       |   |             |   | Effects onthe result ofoperations |   |
|---------------|--------|------------------|--------|------------|--------|------------------|--------|--------------------------------------------------|--------|
| Counter-party |   | Instrument       |   | Underlying |   | Maturity         |   | CFR/loss(gain)                                   |   |
|          |   |             |   |       |   |             |   |                                             |   |
| Cargill       |   | Swaps            |   | Corn       |   | January-May 2011 |   | $                                                | (2,868 | ) |
|          |   |             |   |       |   |             |   |                                             |   |   |
| (OTC)         |   | Swaps            |   | Soy bean   |   | January-May 2011 |   |                                             | (950   | ) |
|          |   |             |   |       |   |             |   |                                             |   |   |
| New Edge12    |   | American options |   | Corn       |   | March 2011       |   |                                             | (735   | ) |
|          |   |             |   |       |   |             |   |                                             |   |   |
|          |   | Futures          |   | Corn       |   | March 2011       |   |                                             | (2,561 | ) |
|          |   |             |   |       |   |             |   |                                             |   |   |
|          |   |             |   |       |   |             |   | $                                                | (7,114 | ) |

----

----

----

| Counter-party |   | Instrument |   | Underlaying |   | Maturity           |   | Effective offsetting effects on comprehensivefinancialresults/loss (gain) |   |
|---------------|--------|------------|--------|-------------|--------|--------------------|--------|----------------------------------------------------------------------------------------------------|--------|
|          |   |       |   |        |   |               |   |                                                                                               |   |
| ASERCA        |   | Puts       |   | Corn        |   | March and May 2010 |   | $                                                                                                  | (8,135 | ) |

| Counter-party |   | Instrument |   | Underlaying |   | Maturity           |   | Effective offsetting effects on comprehensivefinancialresults/loss (gain) |   |
|---------------|--------|------------|--------|-------------|--------|--------------------|--------|----------------------------------------------------------------------------------------------------|--------|
|          |   |       |   |        |   |               |   |                                                                                               |   |
| ASERCA        |   | Puts       |   | Corn        |   | March and May 2011 |   | $                                                                                                  | (5,801 | ) |

----

|   | 13  | Sorghum price is not listed in an agriculture exchange, but its price-as feeding substitute for corn (which is negotiated and listed in the CBOT) has a high correlation with the futures prices of corn, therefore, corn prices are usually used as a sound proxy the hedge sorghum related prices exposure. |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Description                                                                                    |   | Risk covered andsecondary assigned                                                                                                        |   | Changes in the fair value of the firmcommitmentrecognized within thebalance sheet |   |
|------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                           |   |                                                                                                                                                     |   |                                                                                                                                |   |
| Firm Commitments with a fix price and USD denominated to sorghum and corn purchases agreements |   | ASERCA Puts that were re-designated as to hedge the fair value of Commodity grain inventories from losing fair value, attributable to lower grain prices |   | $                                                                                                                                   | (8,135 | ) |

| Description                                                                                    |   | Risk covered andsecondary assigned                                                                                                        |   | Changes in the fair value of the firmcommitmentrecognized within thebalance sheet |   |
|------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                           |   |                                                                                                                                                     |   |                                                                                                                                |   |
| Firm Commitments with a fix price and USD denominated to sorghum and corn purchases agreements |   | ASERCA Puts that were re-designated as to hedge the fair value of Commodity grain inventories from losing fair value, attributable to lower grain prices |   | $                                                                                                                                   | (5,801 | ) |

----

|   | 14  | These represent contracts the Company enters into with an unrelated party that can be executed through legal means and specify the amount the Company expects to exchange, the fixed price, the currency and the transaction schedule, among other important aspects. |
|--------|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (10-b) | Investment in primary financial securities at December 31, 2009 and 2010- |
|--------|---------------------------------------------------------------------------|

|                                      |   | 2009      |      |   | 2010      |   |
|-------------------------------------------|--------|-----------|-----------|--------|-----------|--------|
| For trading16                        |   | Bookvalue |      |   | Fairvalue |   |   | Interest15rates |   |   | Bookvalue |   |   | Fairvalue |   |   | Interest15rate |   |
|                                      |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mexican peso denominated debt securities: |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued                         |   | $         | 748,251   |   |      |   | 748,251 |   |   |   | 4.63 | % |   | $ | - |   |   |   | - |   |   |   | - |   |
| Bank issued                               |   |      | 1,228,755 |   |      |   | 1,228,755 |   |   |   | 4.79 | % |   |   | 3,150,010 |   |   |   | 3,150,010 |   |   |   | 5.01 | % |
| Commercial paper                          |   |      | 1         |   |      |   | 1 |   |   |   | 8.34 | % |   |   | 31,150 |   |   |   | 31,150 |   |   |   | 8.31 | % |
| Repo                                      |   |      | -         |   |      |   | - |   |   |   |   |   |   |   | 203,410 |   |   |   | 203,410 |   |   |   | 4.55 | % |
|                                      |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | $         | 1,977,007 |   |      |   | 1,977,007 |   |   |   |   |   |   | $ | 3,384,570 |   |   |   | 3,384,570 |   |   |   |   |   |
|                                      |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. dollars denominated debt securities: |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued                         |   | $         | -         |   |      |   | - |   |   |   | - |   |   | $ | 359 |   |   |   | 359 |   |   |   | 0.27 | % |
| Bank issued                               |   |      | 68,981    |   |      |   | 68,981 |   |   |   | 6.63 | % |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial paper                          |   |      | 117,706   |   |      |   | 117,706 |   |   |   | 6.41 | % |   |   | 19,121 |   |   |   | 19,121 |   |   |   | 6.40 | % |
|                                      |   |      | 186,687   |   |      |   | 186,687 |   |   |   |   |   |   |   | 19,480 |   |   |   | 19,480 |   |   |   |   |   |
|                                      |   |      |      |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                     |   | $         | 2,163,694 |   |      |   | 2,163,694 |   |   |   |   |   |   | $ | 3,404,050 |   |   |   | 3,404,050 |   |   |   |   |   |

----

|                                      |   | 2009      |    |   | 2010            |   |
|-------------------------------------------|--------|-----------|---------|--------|-----------------|--------|
| For trading16maturity over 90 days        |   | Bookvalue |    |   | Fair value |   |   | Interest15rates |   |   | Bookvalue |   |   | Fairvalue |   |   | Interest 15value |   |
|                                      |   |      |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mexican peso denominated debt securities: |   |      |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government issued                         |   | $         | 30,449  |   |            |   | 30,449 |   |   |   | 4.95 | % |   | $ | 32,395 |   |   |   | 32,395 |   |   |   | 5.25 | % |
| Bank issued                               |   |      | 31,232  |   |            |   | 31,232 |   |   |   | 8.31 | % |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial paper                          |   |      | 81,898  |   |            |   | 81,898 |   |   |   | 8.34 | % |   |   | 70,487 |   |   |   | 70,487 |   |   |   | 6.03 | % |
|                                      |   |      |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | $         | 143,579 |   |            |   | 143,579 |   |   |   |   |   |   | $ | 102,882 |   |   |   | 102,882 |   |   |   |   |   |
|                                      |   |      |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. dollars denominated debt securities: |   |      |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank issued                               |   | $         | 737     |   |            |   | 737 |   |   |   | 6.63 | % |   | $ | 14,593 |   |   |   | 14,593 |   |   |   | 5.82 | % |
| Commercial paper                          |   |      | 7,524   |   |            |   | 7,524 |   |   |   | 6.57 | % |   |   | 91,873 |   |   |   | 91,873 |   |   |   | 7.31 | % |
|                                      |   | $         | 8,261   |   |            |   | 8,261 |   |   |   |   |   |   | $ | 106,466 |   |   |   | 106,466 |   |   |   |   |   |
|                                      |   |      |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                     |   |      | 151,840 |   |            |   | 151,840 |   |   |   |   |   |   |   | 209,348 |   |   |   | 209,348 |   |   |   |   |   |

|                       |   | 2009      |   |   | 2010      |   |
|----------------------------|--------|-----------|--------|--------|-----------|--------|
| Held to maturity |   | Bookvalue |   |   | Fairvalue |   |   | Interest15rates |   |   | Bookvalue |   |   | Fairvalue |   |   | Interest 15 value |   |
|                       |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pesos:                     |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial paper           |   | $         | 48,415 |   |      |   | 48,415 |   |   |   | 8.2 | % |   | $ | 36,725 |   |   |   | 36,725 |   |   |   | 4.87 | % |

|                         |   | 2009      |   |   | 2010      |   |
|------------------------------|--------|-----------|--------|--------|-----------|--------|
| For trading withoutmaturity: |   | Bookvalue |   |   | Fairvalue |   |   | Bookvalue |   |   | Fairvalue |   |
|                         |   |      |   |   |      |   |   |   |   |   |   |   |
| U.S. dollars:                |   |      |   |   |      |   |   |   |   |   |   |   |
| Equity instruments           |   |      | -      |   |      |   | - |   |   |   | 5,124 |   |   |   | 5,124 |   |
|                         |   | $         | -      |   |      |   | - |   |   |   | 5,124 |   |   |   | 5,124 |   |

----

----

| (11) | Commitments and contingencies- |
|------|--------------------------------|

|   | a) | The Company has entered into operating leases for certain offices, production sites, and automotive and computer equipment. Most leases contain renewal options. These agreements have terms between one and five years. Rental expense under these leases was as follows: |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year endedDecember 31, |   | Amount |    |
|----------------------------------|--------|--------|---------|
|                             |   |   |    |
| 2008                             |   | $      | 167,871 |   |
| 2009                             |   |   | 177,292 |   |
| 2010                             |   |   | 197,504 |   |

|   | b) | There is a contingent liability arising from the labor obligations mentioned in note 2m. |
|--------|----|------------------------------------------------------------------------------------------|

|   | c) | The Company is involved in a number of lawsuits and claims arising in the normal course of business. In the opinion of management, it is expected that the final outcome of these matters will not have significant adverse effects on the Company’s consolidated financial position and results of operations. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | d) | In accordance with Mexican tax law, the tax authorities are entitled to examine transactions carried out during the five years prior to the most recent income tax return filed. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | The Company has agreed contracts to supply grain from third parties as part of the normal course of operations. |
|--------|----|-----------------------------------------------------------------------------------------------------------------|

|   | f) | In accordance with the Income Tax Law, companies carrying out transactions with related parties are subject to certain requirements as to the determination of prices, which should be similar to those that would be used in arms-length transactions. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Should the tax authorities examine the transactions and reject the related-party prices, they could assess additional taxes plus the related inflation adjustment and interest in addition to penalties of up to 100% of the omitted taxes. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12) | Other taxes payable and other accruals- |
|------|-----------------------------------------|

|   | An analysis of other taxes payable and other accruals as follows: |
|--------|-------------------------------------------------------------------|

|                              |   | 2009   |    |   | 2010   |   |
|-----------------------------------|--------|--------|---------|--------|--------|--------|
| Other accounts payable            |   | $      | 90,923  |   |   | $      | 35,963 |   |
| Expenses payable                  |   |   | 162,467 |   |   |   | 148,357 |   |
| Trade advances                    |   |   | 53,693  |   |   |   | 66,189 |   |
| Employee statutory profit sharing |   |   | 38,149  |   |   |   | 37,921 |   |
| IMSS (1)                          |   |   | 33,847  |   |   |   | 35,073 |   |
| INFONAVIT (3)                     |   |   | 28,724  |   |   |   | 30,743 |   |
| Payroll taxes                     |   |   | 13,035  |   |   |   | 21,277 |   |
| SAR (2)                           |   |   | 6,020   |   |   |   | 6,266 |   |
| Taxes payable                     |   |   | 5,465   |   |   |   | 6,520 |   |
| Salaries payable                  |   |   | 4,313   |   |   |   | 4,924 |   |
| Interests payable                 |   |   | 1,134   |   |   |   | 489 |   |
|                              |   |   |    |   |   |   |   |   |
| Total                             |   | $      | 437,770 |   |   | $      | 393,722 |   |

----

| (13) | Foreign currency position- |
|------|----------------------------|

|   | a) | A summary of the Company’s monetary assets and liabilities denominated in U.S. dollars (the only foreign currency) translated into reporting currency, as of December 31, 2009 and 2010, were as follows: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                              |   | Pesos  |     |
|-----------------------------------------------------------------------------------|--------|--------|----------|
|                                                                              |   | 2009   |     |   | 2010 |   |
| Assets:                                                                           |   |   |     |   |   |   |
| Cash and cash equivalents                                                         |   | $      | 195,495  |   |   | $ | 357,933 |   |
| Primary financial instruments                                                     |   |   | 8,261    |   |   |   | 106,466 |   |
| Other accounts                                                                    |   |   | 3,753    |   |   |   | 6,926 |   |
| Advances to suppliers (included in inventories and property, plant and equipment) |   |   | 368,099  |   |   |   | 170,170 |   |
|                                                                              |   |   | 575,608  |   |   |   | 641,495 |   |
| Liabilities:                                                                      |   |   |     |   |   |   |   |   |
| Accounts payable                                                                  |   |   | (892,691 | ) |   |   | (770,931 | ) |
|                                                                              |   |   |     |   |   |   |   |   |
| Net liability                                                                     |   | $      | (317,083 | ) |   | $ | (129,436 | ) |

|   | b) | As of December 31, 2009 and 2010, the exchange rate was $13.08 and $12.37 per US dollar, respectively. At June 16, 2011, date of issuance of the consolidated financial statements the exchange rate was $11.79 per US dollar. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | As of December 31, 2009 and 2010, foreign exchange (loss) gains, net amounting to $(37,934) and $11,082, respectively, were recorded. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | At December 31, 2010 the Company had the foreign exchange hedging instruments mentioned in note 10a. |
|--------|----|------------------------------------------------------------------------------------------------------|

| (14)  | Labor obligations- |
|------------|--------------------|

|   | The Company has a defined benefit pension plan covering non unionized personnel. The benefits are based on years of service and the employee’s compensation. The Company makes annual contributions to the plan equal to the maximum amount that can be deducted for income tax purposes based on the projected unit credit method. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|        |   | Plan Contributions |   |   | Benefits paid |   |
|-------------|--------|-------------------------|--------|--------|--------------------|--------|
|        |   | 2008                    |   |   | 2009               |   |   | 2010 |   |   | 2008* |   |   | 2009 |   |   | 2010 |   |
|        |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Termination |   | $                       | -      |   |               |   | - |   |   |   | - |   |   | $ | 21,489 |   |   |   | - |   |   |   | - |   |
| Retirement  |   |                    | 17,450 |   |               |   | 17,436 |   |   |   | 14,039 |   |   |   | 2,865 |   |   |   | 2,382 |   |   |   | 2,934 |   |
|        |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total       |   | $                       | 17,450 |   |               |   | 17,436 |   |   |   | 14,039 |   |   | $ | 24,354 |   |   |   | 2,382 |   |   |   | 2,934 |   |

|                                                      |   | Benefits    |   |
|-----------------------------------------------------------|--------|-------------|--------|
|                                                      |   | Termination |   |   | Retirement |   |
|                                                      |   | 2008        |   |   | 2009 |   |   | 2010 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
| Net periodic cost:                                        |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                              |   | $           | 13,122 |   |   |   | 13,898 |   |   |   | 14,720 |   |   | $ | 18,539 |   |   |   | 16,187 |   |   |   | 18,962 |   |
| Interest cost                                             |   |        | 5,324  |   |   |   | 6,220 |   |   |   | 6,605 |   |   |   | 19,880 |   |   |   | 20,043 |   |   |   | 22,453 |   |
| Return on plan assets                                     |   |        | -      |   |   |   | - |   |   |   | - |   |   |   | (18,683 | ) |   |   | (19,307 | ) |   |   | (22,508 | ) |
| Net actuarial loss (gain)                                 |   |        | 7,012  |   |   |   | 7,171 |   |   |   | 24,597 |   |   |   | (380 | ) |   |   | (1,982 | ) |   |   | (1,816 | ) |
| Prior service cost:                                       |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of prior service cost and plan modifications |   |        | -      |   |   |   | - |   |   |   | - |   |   |   | 1,885 |   |   |   | 1,885 |   |   |   | 1,885 |   |
| Amortization of transition liability                      |   |        | 4,828  |   |   |   | 4,828 |   |   |   | 4,828 |   |   |   | 5,448 |   |   |   | 5,448 |   |   |   | 5,448 |   |
| Net periodic cost                                         |   | $           | 30,286 |   |   |   | 32,117 |   |   |   | 50,750 |   |   | $ | 26,689 |   |   |   | 22,274 |   |   |   | 24,424 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                          |   | Benefits    |    |
|-----------------------------------------------|--------|-------------|---------|
|                                          |   | Termination |    |   | Retirement |   |
|                                          |   | 2008        |    |   | 2009 |   |   | 2010 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acumulated Benefit Obligation (ABO)           |   | $           | 52,131  |   |   |   | 64,328 |   |   |   | 91,255 |   |   | $ | 138,077 |   |   |   | 151,796 |   |   |   | 152,737 |   |
|                                          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Projected Benefit Obligation (PBO)            |   |        | 70,915  |   |   |   | 76,988 |   |   |   | 95,216 |   |   |   | 210,319 |   |   |   | 240,968 |   |   |   | 275,550 |   |
|                                          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Plan asset at fair value                      |   |        | -       |   |   |   | - |   |   |   | - |   |   |   | (188,815 | ) |   |   | (223,778 | ) |   |   | (256,382 | ) |
| Projected benefit obligation over plan assets |   |        | 70,915  |   |   |   | 76,988 |   |   |   | 95,216 |   |   |   | 21,504 |   |   |   | 17,190 |   |   |   | 19,168 |   |
|                                          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrecognized ítems:                      |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transition liability                          |   |        | (18,370 | ) |   |   | (13,542 | ) |   |   | (8,714 | ) |   |   | (21,793 | ) |   |   | (16,345 | ) |   |   | (10,896 | ) |
| Plan modifications                            |   |        | -       |   |   |   | - |   |   |   | - |   |   |   | (25,437 | ) |   |   | (23,552 | ) |   |   | (21,667 | ) |
| Actuarial gains                               |   |        | -       |   |   |   | - |   |   |   | - |   |   |   | 53,871 |   |   |   | 53,890 |   |   |   | 53,350 |   |
|                                          |   |        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Projected liability, net                      |   | $           | 52,545  |   |   |   | 63,446 |   |   |   | 86,502 |   |   | $ | 28,145 |   |   |   | 31,183 |   |   |   | 39,955 |   |

|                                                                         |   | Benefits    |   |
|------------------------------------------------------------------------------|--------|-------------|--------|
|                                                                         |   | 2008        |   |   | 2009 |   |   | 2010 |   |
|                                                                         |   |        |   |   |   |   |   |   |   |
| Discount rate (net of inflation)                                             |   |        | 9.75   | % |   |   | 9.50 | % |   |   | 8.00 | % |
| Rate of compensation increase*                                               |   |        | 4.50   | % |   |   | 4.50 | % |   |   | 4.50 | % |
| Expected return on plan assets                                               |   |        | 9.75   | % |   |   | 9.75 | % |   |   | 9.00 | % |
| Amortization period of unrecognized items (applicable to retirement benefit) |   | 19.66 years |   |   | 19.33 years |   |   | 19.06 years |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                                     |   | Retirement benefits 2008 |   |
|----------------------------------------------------------|--------|------------------------------------|--------|
|                                                     |   | Senioritypremium                   |   |   | Pensionplan |   |   | Total |   |
| Defined benefit obligations:                             |   |                               |   |   |   |   |   |   |   |
| Obligations of defined benefits at the beginning of year |   | $                                  | 32,095 |   |   |   | 199,333 |   |   |   | 231,428 |   |
| Current labor cost                                       |   |                               | 2,658  |   |   |   | 15,880 |   |   |   | 18,538 |   |
| Interest cost                                            |   |                               | 2,743  |   |   |   | 17,137 |   |   |   | 19,880 |   |
| Actuarial gain and losses                                |   |                               | (3,187 | ) |   |   | (51,298 | ) |   |   | (54,485 | ) |
| Benefits paid                                            |   |                               | (1,329 | ) |   |   | (3,713 | ) |   |   | (5,042 | ) |
| Defined benefit obligations at end of year               |   | $                                  | 32,980 |   |   |   | 177,339 |   |   |   | 210,319 |   |

|                                                     |   | Retirement benefits 2009 |   |
|----------------------------------------------------------|--------|------------------------------------|--------|
|                                                     |   | Senioritypremium                   |   |   | Pensionplan |   |   | Total |   |
| Defined benefit obligations:                             |   |                               |   |   |   |   |   |   |   |
| Obligations of defined benefits at the beginning of year |   | $                                  | 32,980 |   |   |   | 177,339 |   |   |   | 210,319 |   |
| Current labor cost                                       |   |                               | 3,034  |   |   |   | 13,153 |   |   |   | 16,187 |   |
| Interest cost                                            |   |                               | 3,130  |   |   |   | 16,913 |   |   |   | 20,043 |   |
| Actuarial gain and losses                                |   |                               | 1,439  |   |   |   | (2,836 | ) |   |   | (1,397 | ) |
| Benefits paid                                            |   |                               | (1,801 | ) |   |   | (2,383 | ) |   |   | (4,184 | ) |
| Defined benefit obligations at end of year               |   | $                                  | 38,782 |   |   |   | 202,186 |   |   |   | 240,968 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                                   |   | Retirement benefits 2010 |   |
|--------------------------------------------------------|--------|------------------------------------|--------|
|                                                   |   | Senioritypremium                   |   |   | Pensionplan |   |   | Total |   |
| Defined benefits obligations:                          |   |                               |   |   |   |   |   |   |   |
| Obligation of defined benefit at the beginning of year |   | $                                  | 38,782 |   |   |   | 202,186 |   |   |   | 240,968 |   |
| Current labor cost                                     |   |                               | 3,675  |   |   |   | 15,287 |   |   |   | 18,962 |   |
| Interest cost                                          |   |                               | 3,574  |   |   |   | 18,879 |   |   |   | 22,453 |   |
| Actuarial gain and losses                              |   |                               | 1,523  |   |   |   | (3,809 | ) |   |   | (2,286 | ) |
| Benefits paid                                          |   |                               | (1,613 | ) |   |   | (2,934 | ) |   |   | (4,547 | ) |
| Defined benefit obligations at end of year             |   | $                                  | 45,941 |   |   |   | 229,609 |   |   |   | 275,550 |   |

|                                |   | Retirement benefits 2008 |   |
|-------------------------------------|--------|------------------------------------|--------|
|                                |   |                               |   |   |   |   |   |   |   |
|                                |   | Senioritypremium                   |   |   | Pensionplan |   |   | Total |   |
| Plan assets:                        |   |                               |   |   |   |   |   |   |   |
| Plan asset at the beginning of year |   | $                                  | -      |   |   |   | 182,017 |   |   |   | 182,017 |   |
| Yield expected                      |   |                               | -      |   |   |   | (8,475 | ) |   |   | (8,475 | ) |
| Company contributions               |   |                               | -      |   |   |   | 17,450 |   |   |   | 17,450 |   |
| Benefits paid                       |   |                               | -      |   |   |   | (2,177 | ) |   |   | (2,177 | ) |
|                                |   |                               |   |   |   |   |   |   |   |   |   |   |
| Plan assets at end of year          |   | $                                  | -      |   |   |   | 188,815 |   |   |   | 188,815 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                |   | Retirement benefits 2009 |   |
|-------------------------------------|--------|------------------------------------|--------|
|                                |   | Seniority premium             |   |   | Pensionplan |   |   | Total |   |
| Plan assets:                        |   |                               |   |   |   |   |   |   |   |
| Plan asset at the beginning of year |   | $                                  | -      |   |   |   | 188,815 |   |   |   | 188,815 |   |
| Yield expected                      |   |                               | -      |   |   |   | 19,307 |   |   |   | 19,307 |   |
| Actuarial gain and losses           |   |                               | -      |   |   |   | 602 |   |   |   | 602 |   |
| Company Contributions               |   |                               | -      |   |   |   | 17,436 |   |   |   | 17,436 |   |
| Benefits Paid                       |   |                               | -      |   |   |   | (2,382 | ) |   |   | (2,382 | ) |
|                                |   |                               |   |   |   |   |   |   |   |   |   |   |
| Plan assets at end of year          |   | $                                  | -      |   |   |   | 223,778 |   |   |   | 223,778 |   |

|                                |   | Retirement benefits 2010 |   |
|-------------------------------------|--------|------------------------------------|--------|
|                                |   |                               |   |   |   |   |   |   |   |
|                                |   | Seniority                          |   |   | Pension |   |   |   |   |
|                                |   | premium                            |   |   | plan |   |   | Total |   |
| Plan assets:                        |   |                               |   |   |   |   |   |   |   |
| Plan asset at the beginning of year |   | $                                  | -      |   |   |   | 223,778 |   |   |   | 223,778 |   |
| Yield expected                      |   |                               |   |   |   |   | 22,507 |   |   |   | 22,507 |   |
| Actuarial gains and losses          |   |                               | -      |   |   |   | (1,008 | ) |   |   | (1,008 | ) |
| Company contributions               |   |                               | -      |   |   |   | 14,039 |   |   |   | 14,039 |   |
| Benefits paid                       |   |                               | -      |   |   |   | (2,934 | ) |   |   | (2,934 | ) |
|                                |   |                               |   |   |   |   |   |   |   |   |   |   |
| Plan assets at end of year          |   | $                                  | -      |   |   |   | 256,382 |   |   |   | 256,382 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                        |   | Seniortiy premium* |   |
|-----------------------------|--------|-------------------------|--------|
|                        |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | 2006                    |   |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
| Defined benefit obligations |   | $                       | 49,097 |   |   |   | 56,601 |   |   |   | 59,086 |   |   |   | 66,711 |   |   |   | 83,871 |   |
| Plan assets                 |   |                    | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Plan status                 |   | $                       | 49,097 |   |   |   | 56,601 |   |   |   | 59,086 |   |   |   | 66,711 |   |   |   | 83,871 |   |

|   | * | The results of seniority premium include retirement and termination, due to the fact that this division did not exist in prior years in accordance with the Bulletin D-3. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                        |   | Pension plan |     |
|-----------------------------|--------|-------------------|----------|
|                        |   |              |     |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | 2006              |     |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
| Defined benefit obligations |   | $                 | 189,355  |   |   |   | 199,333 |   |   |   | 177,339 |   |   |   | 202,186 |   |   |   | 229,609 |   |
| Plan assets                 |   |              | (160,421 | ) |   |   | (182,017 | ) |   |   | (188,815 | ) |   |   | (223,778 | ) |   |   | (256,382 | ) |
|                        |   |              |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Plan status                 |   | $                 | 28,934   |   |   |   | 17,316 |   |   |   | (11,476 | ) |   |   | (21,592 | ) |   |   | (26,773 | ) |

|                     |   | 2008   |   |   | 2009   |   |   | 2010   |   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                     |   |   |   |   |   |   |   |   |   |
| Fixed rate investment    |   |   | 77     | %      |   |   | 75     | %      |   |   | 75 | % |
| Variable rate investment |   |   | 23     | %      |   |   | 25     | %      |   |   | 25 | % |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    |   |   | 100    | %      |   |   | 100    | %      |   |   | 100 | % |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

| (15)  | Stockholders’ Equity- |
|------------|-----------------------------|

|   | a) | As of December 31, 2008, 2009 and 2010, the Company’s capital stock is represented by 600,000,000 “B” shares with a par value of $1 peso each. All shares issued and outstanding have voting rights. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | In 2008, 2009 and 2010, the Company declared and paid cash dividends at nominal values of $353,880, $250,045 and $250,082, respectively, or $0.59, $0.42 and $0.42 respectively, per share in nominal pesos. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | The Mexican Corporation Law requires that at least 5% of each year’s net income be appropriated to increase the legal reserve until such reserve is equal to 20% of capital stock issued and outstanding. The balance of the legal reserve at December 31, 2008, 2009 and 2010, included in retained earnings, was $209,399. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | The Company approved a stock repurchase plan in 1998, in conformity with the Mexican Securities Trading Act, providing a stock repurchase reserve for that purpose of $180,000 ($303,861 expressed in constant Mexican pesos at December 31, 2007) through the appropriation of retained earnings in 1998. During 2007 and 2008 no shares were repurchased or sold. In 2009, the Company repurchased and sold 147 thousand of shares. The repurchase value was for $1,880 and the sales value was for $2,959, resulting in a gain of $1,079, recorded as additional paid in capital. During 2010 the Company repurchased 200 thousands of shares for $5,167; the Company estimates that such shares will be sold during 2011. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | The Company is required to pay taxes on dividends distributed to stockholders only to the extent that the payment made exceeds the balance of the “net tax profit account” (CUFIN), which is used to control earnings on which income tax has already been paid. Income tax paid on dividends refers to a tax payable by corporate entities and not by individuals. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f) | The Company obtains the majority of its revenues and net profit from Bachoco,      S.A. de C.V. (“BSACV”). For the years 2008, 2009 and 2010, pretax (loss) income of BSACV, represented approximately (94%), 98%, and 98% respectively of Bachoco’s consolidated pretax (loss) income. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | g) | From 1999 through 2001, under Mexican income tax law, corporate taxpayers were extended with the option of deferring payment of a portion of their annual corporate income tax, so that the tax rate will represent 30%. The earnings on which taxpayers opted to defer payment of a portion of corporate income tax had to be controlled in the so-called “net reinvested tax profit account” (CUFINRE). |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | h) | Stockholders contribution restated as provided for by the tax law (CUCA), aggregating $2,162,080, may be refunded to stockholders tax-free, to the extent that such contribution equals or exceeds stockholders’ equity. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (16) | Income Tax (IT), Asset Tax (AT), and Flat Rate Business Tax (IETU) and Employee Statutory Profit Sharing (ESPS)- |
|------|------------------------------------------------------------------------------------------------------------------|

|   | a) | Income tax (IT)- |
|--------|----|------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | b) | Flat Rate Business Tax (IETU)- |
|--------|----|--------------------------------|

|   | c) | Asset tax (AT)- |
|--------|----|-----------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|           |   | Asset tax    |   |   |         |   |
|----------------|--------|-------------------|--------|--------|--------------|--------|
|           |   | restated at  |   |   |         |   |
|           |   | December 31, |   |   | Year of |   |
| Base year |   | 2010              |   |   | expiration   |   |
|           |   |              |   |   |         |   |
| 2005           |   | $                 | 1,556  |   |         |   | 2015 |   |
| 2006           |   |              | 3,303  |   |         |   | 2016 |   |
|           |   |              |   |   |         |   |   |   |
|           |   | $                 | 4,859  |   |         |   |   |   |

|   | d) | Income tax charged to operations- |
|--------|----|-----------------------------------|

|                               |   | 2008   |     |   | 2009   |   |    | 2010   |   |
|------------------------------------|--------|--------|----------|--------|--------|--------|---------|--------|--------|
|                               |   |   |     |   |   |   |    |   |   |
| Current income tax                 |   | $      | 78,559   |   |   | $      | 103,482 |   |   | $ | 495,828 |   |
| Flat rate business tax             |   |   | 108      |   |   |   | 371     |   |   |   | 18 |   |
| Deferred income tax                |   |   | (352,686 | )      |   |   | 302,505 |   |   |   | 7,569 |   |
|                               |   |   |     |   |   |   |    |   |   |   |   |   |
| Total (benefit) income tax expense |   | $      | (274,019 | )      |   | $      | 406,358 |   |   | $ | 503,415 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                                                                   |   | 2008   |     |   | 2009   |   |     | 2010   |   |
|---------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                                                                        |   | IT     |     |   | ESPS   |   |     | IT     |   |   | ESPS |   |   | IT |   |   | ESPS |   |
|                                                                                        |   |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Computed “expected” tax (benefit) expense                                       |   | $      | (220,411 | )      |   |   | (116,006 | )      |   |   | 230,927 |   |   |   | 121,540 |   |   | $ | 522,846 |   |   |   | 248,974 |   |
| Add ESPS expense                                                                            |   |   | -        |   |   |   | 3,298    |   |   |   | - |   |   |   | 3,300 |   |   |   | - |   |   |   | 3,369 |   |
| Increase (decrease) in income taxes resulting from:                                         |   |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effects of inflation, net                                                                   |   |   | (69,435  | )      |   |   | -        |   |   |   | (50,596 | ) |   |   | - |   |   |   | (66,504 | ) |   |   | - |   |
| Non-deductible expenses                                                                     |   |   | 3,646    |   |   |   | 251      |   |   |   | 4,538 |   |   |   | 183 |   |   |   | 8,032 |   |   |   | 1,872 |   |
| Adjustment to deferred tax assets and liabilities for enacted changes in tax laws and rates |   |   | -        |   |   |   | -        |   |   |   | 188,754 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Subsidiaries not subject to labor obligations                                               |   |   | -        |   |   |   | 147,174  |   |   |   | - |   |   |   | (92,661 | ) |   |   | - |   |   |   | (226,341 | ) |
| Effect of companies outside simplified regime                                               |   |   | (31,413  | )      |   |   | -        |   |   |   | 38,163 |   |   |   | - |   |   |   | 31,661 |   |   |   | - |   |
| Change in the valuation allowance for deferred tax assets                                   |   |   | 23,402   |   |   |   | -        |   |   |   | 8,130 |   |   |   | - |   |   |   | 17,164 |   |   |   | - |   |
| Other, net                                                                                  |   |   | 20,192   |   |   |   | (1,736   | )      |   |   | (13,558 | ) |   |   | 639 |   |   |   | (9,784 | ) |   |   | 5,822 |   |
|                                                                                        |   |   |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| IT and ESPS (benefit) expense                                                               |   | $      | (274,019 | )      |   |   | 32,981   |   |   |   | 406,358 |   |   |   | 33,001 |   |   | $ | 503,415 |   |   |   | 33,696 |   |

|   | e) | Deferred income tax- |
|--------|----|----------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                        |   | 2009   |      |   | 2010   |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deferred tax assets:                        |   |   |      |   |   |   |
| Accounts payable                            |   | $      | 438,174   |   |   | $      | 493,645 |   |
| Labor obligations                           |   |   | 24,350    |   |   |   | 33,407 |   |
| ESPS payable                                |   |   | 11,349    |   |   |   | 11,311 |   |
| Effects on derivative financial instruments |   |   | -         |   |   |   | 1,635 |   |
| Recoverable AT                              |   |   | 4,654     |   |   |   | 4,859 |   |
| Tax loss carryforwards                      |   |   | 89,698    |   |   |   | 17,698 |   |
| Others                                      |   |   | -         |   |   |   | 1,006 |   |
| Total gross deferred tax assets             |   |   | 568,225   |   |   |   | 563,561 |   |
| Less valuation allowance                    |   |   | 36,145    |   |   |   | 53,309 |   |
| Net deferred tax assets                     |   |   | 532,080   |   |   |   | 510,252 |   |
|                                        |   |   |      |   |   |   |   |   |
| Deferred tax liabilities:                   |   |   |      |   |   |   |   |   |
| Inventories                                 |   |   | 838,854   |   |   |   | 842,767 |   |
| Accounts receivable                         |   |   | 170,667   |   |   |   | 190,082 |   |
| Property, plant and equipment, net          |   |   | 1,525,593 |   |   |   | 1,490,183 |   |
| Other deductions                            |   |   | 16,261    |   |   |   | 16,370 |   |
| Effects on derivative financial instruments |   |   | 2,286     |   |   |   | - |   |
|                                        |   |   |      |   |   |   |   |   |
| Total gross deferred tax liabilities        |   |   | 2,553,661 |   |   |   | 2,539,402 |   |
| Net deferred tax liability                  |   | $      | 2,021,581 |   |   | $      | 2,029,150 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | f) | Tax loss carryforwards- |
|--------|----|-------------------------|

| Tax loss carryforwards as adjusted by inflationthrough December 31, 2010 |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                  |   | Year of |   | Restated |   |
| Base year                                                                                                        |   | expiration |   | Amount |   |
|                                                                                                                  |   |   |   |   |   |
| 2007                                                                                                                  |   | 2017 |   | $ | 3,149 |   |
| 2008                                                                                                                  |   | 2018 |   |   | 45,496 |   |
| 2009                                                                                                                  |   | 2019 |   |   | 12,523 |   |
| 2010                                                                                                                  |   | 2020 |   |   | 510 |   |
|                                                                                                                  |   |   |   | $ | 61,678 |   |

|   | g) | Equity tax value- |
|--------|----|-------------------|

|                                                                           |   | 2009   |      |   | 2010   |   |
|--------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                           |   |   |      |   |   |   |
| Restated contribution capital (CUCA)                                           |   | $      | 2,070,958 |   |   | $      | 2,162,080 |   |
| Net tax profit account (CUFIN) and net reinvested tax profit account (CUFINRE) |   |   | 2,622,015 |   |   |   | 4,203,221 |   |
|                                                                           |   |   |      |   |   |   |   |   |
| Total                                                                          |   | $      | 4,692,973 |   |   | $      | 6,365,301 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | h)  | Employee statutory profit sharing |
|--------|----------|-----------------------------------|

| (17)  | Other income (expense), net- |
|------------|------------------------------|

|                                                         |   | 2008   |     |   | 2009   |   |     | 2010   |   |
|--------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
| Other income:                                                |   |   |     |   |   |   |     |   |   |
| Sales of waste animals, raw material, by-products and others |   | $      | 187,911  |   |   | $      | 139,555  |   |   | $ | 202,523 |   |
| Tax incentives                                               |   |   | 44,899   |   |   |   | 5,496    |   |   |   | - |   |
| Others                                                       |   |   | 8,106    |   |   |   | -        |   |   |   | - |   |
|                                                         |   |   |     |   |   |   |     |   |   |   |   |   |
| Total other income                                           |   |   | 240,916  |   |   |   | 145,051  |   |   |   | 202,523 |   |
|                                                         |   |   |     |   |   |   |     |   |   |   |   |   |
| Other expense:                                               |   |   |     |   |   |   |     |   |   |   |   |   |
| Cost of waste animals, raw material, byproducts and other    |   |   | (200,960 | )      |   |   | (162,957 | )      |   |   | (223,537 | ) |
| Employee statutory profit sharing                            |   |   | (32,981  | )      |   |   | (33,001  | )      |   |   | (33,696 | ) |
| Others                                                       |   |   | (27,933  | )      |   |   | (14,282  | )      |   |   | (40,605 | ) |
|                                                         |   |   |     |   |   |   |     |   |   |   |   |   |
| Total  other expense                               |   |   | 261,874  |   |   |   | (210,240 | )      |   |   | (297,838 | ) |
|                                                         |   |   |     |   |   |   |     |   |   |   |   |   |
| Total other expense, net                                     |   | $      | (20,958  | )      |   | $      | (65,189  | )      |   | $ | (95,315 | ) |

| (18) | Segment financial information- |
|------|--------------------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                       |   | As of and for the year ended at December 31, 2008 |        |
|--------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|-------------|
|                                       |   | Poultry                                                                                             |        |   | Others |   |   | Total |   |
| Net revenues                               |   | $                                                                                                   | 17,594,994  |   |   |   | 2,530,327 |   |   |   | 20,125,321 |   |
| Cost of sales                              |   |                                                                                                | (15,171,145 | ) |   |   | (2,311,323 | ) |   |   | (17,482,468 | ) |
| Gross profit                               |   |                                                                                                | 2,423,849   |   |   |   | 219,004 |   |   |   | 2,642,853 |   |
| Interest income                            |   |                                                                                                | 168,283     |   |   |   | 5,411 |   |   |   | 173,694 |   |
| Valuation effects of financial instruments |   |                                                                                                | (1,666,821  | ) |   |   | - |   |   |   | (1,666,821 | ) |
| Interest and financial expenses            |   |                                                                                                | (16,691     | ) |   |   | (19,511 | ) |   |   | (36,202 | ) |
| Income taxes                               |   |                                                                                                | 292,563     |   |   |   | (18,544 | ) |   |   | 274,019 |   |
| Net controlling interest income            |   |                                                                                                | (939,068    | ) |   |   | 60,020 |   |   |   | (879,048 | ) |
| Property, plant and equipment, net         |   |                                                                                                | 10,422,423  |   |   |   | 266,812 |   |   |   | 10,689,235 |   |
| Goodwill, net                              |   |                                                                                                | 212,833     |   |   |   | 88,015 |   |   |   | 300,848 |   |
| Total assets                               |   |                                                                                                | 18,386,409  |   |   |   | 1,068,562 |   |   |   | 19,454,971 |   |
| Total liabilities                          |   |                                                                                                | 5,039,205   |   |   |   | 336,347 |   |   |   | 5,375,552 |   |
| Capital expenditures                       |   |                                                                                                | 1,140,843   |   |   |   | 15,325 |   |   |   | 1,156,168 |   |
| Expenses not requiring cash disbursement:  |   |                                                                                                |        |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization              |   |                                                                                                | 594,704     |   |   |   | 21,654 |   |   |   | 616,358 |   |
|                                       |   |                                                                                                |        |   |   |   |   |   |   |   |   |   |

|                                                  |   | As of and for the year ended at December 31, 2009 |        |
|-------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|-------------|
|                                                  |   | Poultry                                                                                             |        |   | Others |   |   | Total |   |
| Net revenues                                          |   | $                                                                                                   | 20,567,944  |   |   |   | 2,694,906 |   |   |   | 23,262,850 |   |
| Cost of sales                                         |   |                                                                                                | (16,900,540 | ) |   |   | (2,426,219 | ) |   |   | (19,326,759 | ) |
| Gross profit                                          |   |                                                                                                | 3,667,404   |   |   |   | 268,687 |   |   |   | 3,936,091 |   |
| Interest income                                       |   |                                                                                                | 149,160     |   |   |   | 21,495 |   |   |   | 170,655 |   |
| Valuation effects of  financial instruments |   |                                                                                                | (174,603    | ) |   |   | - |   |   |   | (174,603 | ) |
| Interest and financial expenses                       |   |                                                                                                | (77,052     | ) |   |   | (14,274 | ) |   |   | (91,326 | ) |
| Income taxes                                          |   |                                                                                                | (370,734    | ) |   |   | (35,624 | ) |   |   | (406,358 | ) |
| Net controlling interest (loss) income                |   |                                                                                                | 702,344     |   |   |   | 95,256 |   |   |   | 797,600 |   |
| Property, plant and equipment, net                    |   |                                                                                                | 10,497,525  |   |   |   | 412,601 |   |   |   | 10,910,126 |   |
| Goodwill, net                                         |   |                                                                                                | 212,833     |   |   |   | 88,015 |   |   |   | 300,848 |   |
| Total assets                                          |   |                                                                                                | 18,706,330  |   |   |   | 1,171,549 |   |   |   | 19,877,879 |   |
| Total liabilities                                     |   |                                                                                                | 4,817,238   |   |   |   | 422,178 |   |   |   | 5,239,416 |   |
| Capital expenditures                                  |   |                                                                                                | 857,772     |   |   |   | 130,478 |   |   |   | 988,250 |   |
| Expenses not requiring cash disbursement:             |   |                                                                                                |        |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                         |   |                                                                                                | 621,324     |   |   |   | 41,306 |   |   |   | 662,630 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|                                                  |   | As of and for the year ended at December 31, 2010 |        |
|-------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|-------------|
|                                                  |   | Poultry                                                                                             |        |   | Others |   |   | Total |   |
| Net revenues                                          |   | $                                                                                                   | 22,229,505  |   |   |   | 2,485,951 |   |   |   | 24,715,456 |   |
| Cost of sales                                         |   |                                                                                                | (17,377,938 | ) |   |   | (2,122,739 | ) |   |   | (19,500,677 | ) |
| Gross profit                                          |   |                                                                                                | 4,851,567   |   |   |   | 363,212 |   |   |   | 5,214,779 |   |
| Interest income                                       |   |                                                                                                | 154,203     |   |   |   | 11,443 |   |   |   | 165,646 |   |
| Valuation effects of  financial instruments |   |                                                                                                | 18,850      |   |   |   | - |   |   |   | 18,850 |   |
| Interest and financial expenses                       |   |                                                                                                | (65,007     | ) |   |   | (8,512 | ) |   |   | (73,519 | ) |
| Income taxes                                          |   |                                                                                                | (463,616    | ) |   |   | (39,799 | ) |   |   | (503,415 | ) |
| Net controlling interest (loss) income                |   |                                                                                                | 1,896,160   |   |   |   | 90,166 |   |   |   | 1,986,326 |   |
| Property, plant and equipment, net                    |   |                                                                                                | 10,283,410  |   |   |   | 303,911 |   |   |   | 10,587,321 |   |
| Goodwill, net                                         |   |                                                                                                | 212,833     |   |   |   | 88,015 |   |   |   | 300,848 |   |
| Total assets                                          |   |                                                                                                | 20,109,011  |   |   |   | 1,088,757 |   |   |   | 21,197,768 |   |
| Total liabilities                                     |   |                                                                                                | 4,407,236   |   |   |   | 422,178 |   |   |   | 4,829,414 |   |
| Capital expenditures                                  |   |                                                                                                | 547,965     |   |   |   | 12,621 |   |   |   | 560,586 |   |
| Expenses not requiring cash disbursement:             |   |                                                                                                | -           |   |   |   | - |   |   |   | - |   |
| Depreciation and amortization                         |   |                                                                                                | 664,054     |   |   |   | 28,586 |   |   |   | 692,640 |   |

|         |   | As of and for year ended atDecember 31, 2008 |       |
|--------------|--------|--------------------------------------------------------------------------------------|------------|
|         |   | Chicken                                                                              |       |   | Eggs |   |   | Total |   |
|         |   |                                                                                 |       |   |   |   |   |   |   |
| Net revenues |   | $                                                                                    | 15,486,614 |   |   |   | 2,108,380 |   |   |   | 17,594,994 |   |
|         |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |
|         |   | As of and for year ended atDecember 31, 2009                                         |       |
|         |   | Chicken                                                                              |       |   | Eggs |   |   | Total |   |
|         |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |
| Net revenues |   | $                                                                                    | 18,211,109 |   |   |   | 2,356,835 |   |   |   | 20,567,944 |   |
|         |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |
|         |   | As of and for year ended atDecember 31, 2010                                         |       |
|         |   | Chicken                                                                              |       |   | Eggs |   |   | Total |   |
|         |   |                                                                                 |       |   |   |   |   |   |   |   |   |   |
| Net revenues |   | $                                                                                    | 20,127,721 |   |   |   | 2,101,784 |   |   |   | 22,229,505 |   |

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

| (19)  | Recently issued financial accounting standards- |
|------------|-------------------------------------------------|

|   | a) | FRS B-5 “Segment financial information” - FRS B-5 is effective beginning January 1, 2011, with retrospective application.  The principal changes as compared to superseded Bulletin B-5 – “Segment financial information” include the following: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The information to be disclosed by operating segment is the information regularly used by top management and does not require segmentation into primary and secondary information or into segments identified based on products or services (economic segments), geographical areas, and homogeneous customer groups. Additionally, disclosure by the entity as a whole of information on its products or services, geographical areas and principal customers and suppliers is required. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS B-5 does not require that the entity’s business areas be subject to different risks to qualify as operating segments. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | Business areas in pre-operating stage may be classified as operating segments. |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | FRS B-5 requires disclosing separately by segment, interest revenue and expense, as well as all other components of comprehensive financial results (CFS). In specific cases, disclosure of net interest income is permissible. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Disclosure of the liability amounts included in the usual operating segment information normally used by top management for making the entity’s operating decisions is required. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | b) | FRS C-4 “Inventories”- FRS C-4 is effective beginning January 1, 2011 with retrospective application, supersedes Bulletin C-4 and establishes new valuation, presentation and disclosure rules for initial and subsequent recognition of inventories on the balance sheet.  The principal changes are as follows: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS C-4 eliminates: a) direct costing as a valuation system and, b) the inventory cost assignment formula (formerly method) referred to as Last In – First Out (LIFO). |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inventory cost can only be modified solely to “Lower of cost or market value, except that the net realizable value is not to exceed market value.” |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS C-4 establishes that the following types of inventories are beyond scope: a) from the constructor’s viewpoint, work in process, b) financial instruments, and, c) biological assets related to agricultural activities and agricultural products up to the harvest point. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS C-4 provides that the following types of inventories are exempted from the valuation requirements, but are subject to all other requirements established by the standard: a) producers of agricultural and forestry products, agricultural products after harvest and minerals and mineral products, and b) intermediaries trading in commodities. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For inventories acquired on an installment payment basis, the difference between the purchase price under normal credit conditions and the amount paid must be recognized as financial cost during the financing period. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Under certain circumstances, estimates of impairment losses on inventories recognized in a prior period may be deducted or charged off against results of operations for the period in which such modifications occur. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Items whose benefits and risks have already been transferred to the entity must be recognized as inventories; therefore, prepayments are not part of inventory. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | c) | FRS C-5 “Prepayments”– FRS C-5 is effective beginning January 1, 2011, with retrospective application, supersedes Bulletin C.5, and includes primarily the following changes: |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Advances for purchase of inventories (current assets) or property, plant and equipment and intangible assets (non-current assets), among others, must be reported under prepayments provided the benefits and risks inherent in the assets to be acquired or the services to be received have not yet been transferred to the entity.  Furthermore, prepaid expenses must be reported based on the nature of the item to be acquired, either under current assets or non-current assets. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | When an impairment loss on the value of prepayments occurs, the unrecoverable amount must be reported in the income statement. Additionally, if the necessary conditions exist, the impairment effect may be reversed and recorded on the income statement for the related future period. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Among other things, the following must be disclosed in notes to financial statements: breakdown of pepayments, accounting policies for recognition and impairment losses, as well as relevant reversal of impairments. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | FRS C-6 “Property, plant and equipment”- FRS C-6 is effective beginning January 1, 2011, except for changes arising from segregation into the components of property, plant and equipment items having a clearly different useful life, which will be effective for fiscal years beginning on or after January 1, 2012.  The accounting changes resulting from the initial application of this FRS must be prospectively recognized.  The principal changes with respect to the superseded Bulletin include the following: |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Property, plant and equipment to develop or maintain biological and extraction industry assets are within the scope of this FRS. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------|

|   | · | The treatment for asset exchanges based on the economic substance is included. |
|--------|--------|--------------------------------------------------------------------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | · | The bases for determination of the residual value of a component are added. |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | The requirement to assign an appraised value to property, plant and equipment acquired at no cost or at an inadequate cost is eliminated. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Depreciation for components representative of a property, plant and equipment item is mandatory, independently of the depreciation of the rest of the item as if it were a single component. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Depreciation of idle components must continue, unless depreciation is determined based on the activity. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | e) | FRS C-18 “Property, plant and equipment retirement obligations” – FRS C-18 is effective beginning January 1, 2011, and primarily provides for the following: |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Requirements that must be considered for valuation of a (Fixed Asset) component retirement obligation. |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | Requirement to recognize retirement obligations as a provision that increases the acquisition cost of a component. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | How changes in the valuation of retirement obligations (provisions) resulting from revisions to the cash flows, the periodicity for settlement and the suitable discount rate to be used must be recognized for accounting purposes. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Use of a suitable discount rate on estimated future cash flows, incorporating the cost of money and the entity’s credit risk |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Use of the expected present value technique to determine the best estimate for retirement obligations. |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | Disclosures that are to be made in case an entity has component retirement obligation. |
|--------|--------|----------------------------------------------------------------------------------------|

----

| INDUSTRIAS BACHOCO, S.A.B. DE C.V.AND SUBSIDIARIES |
|----------------------------------------------------|
|                                               |
| Notes to the Consolidated Financial Statements     |
|                                               |
| Years ended December 31, 2008, 2009 and 2010       |
|                                               |
| (Thousands of pesos,                               |
| except per share amounts)                          |

|   | f) | 2011 FRS Revisions |
|--------|----|--------------------|

|   | · | Bulletin C-3 “Accounts receivable” - Recognition of interest income on accounts receivable when accrued is established, provided the relevant amount is reliably valued and likely to be recovered.  Furthermore, it is provided that interest income on accounts receivable unlikely to be recovered must not be recognized.   These revisions are effective beginning January 1, 2011 and are retrospectively applicable. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FRS C-10 “Derivative financial instruments and hedging activities” – The revisions to this new FRS are effective beginning January 1, 2011, with retrospective application.  The principal revisions include the following: |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Certain effects of hedge effectiveness may be excluded. |
|--------|--------|---------------------------------------------------------|

|   | · | An intra-group transaction may be recognized as hedging only when the functional currencies of the related parties are different from each other. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Reporting of the effect of the hedged interest rate risk is required, when a portfolio portion is the hedged position. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | Account margins must be reported separately. |
|--------|--------|----------------------------------------------|

|   | · | In a hedge relationship, a proportion of the total amount of the hedging instrument may be designated as the hedging instrument. The impossibility of designating a hedge relationship for a portion of the term of the hedging instrument is specified. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Bulletin D-5 “Leases”- The discount rate to be used on capital leases is established, disclosures related to such leases are added, and the timing for recognition of the gain or loss on a sale and leaseback transaction is modified.  Application is on a prospective basis, except for the changes in disclosures, which must be retrospectively recognized and are effective beginning January 1, 2011. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Management is in the process of evaluating the effects of these Mexican Revisions. |
|--------|------------------------------------------------------------------------------------|

| (20) | Financial reporting requirements for Public Companies - |
|------|---------------------------------------------------------|

----

|   | · | Property, plant and equipment |
|--------|--------|-------------------------------|

|   | · | Deferred income taxes |
|--------|--------|-----------------------|

|   | · | Labor obligations |
|--------|--------|-------------------|

|   | · | Capital stock |
|--------|--------|---------------|

|   | · | Additional paid-in capital |
|--------|--------|----------------------------|

|   | · | Retained earning |
|--------|--------|------------------|

| (21) | Differences between Mexican Financial Reporting Standards and United States Generally Accepted Accounting Principles |
|------|----------------------------------------------------------------------------------------------------------------------|

----

----

| Cash Flow Information                                                                    |   | Years ended December 31, |      |
|----------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|
|                                                                                               |   | 2008                                    |      |   | 2009 |   |   | 2010 |   |
| OPERATING ACTIVITIES:                                                                              |   |                                    |      |   |   |   |   |   |   |
| Net (loss) income under U.S. GAAP                                                                  |   | $                                       | (876,358  | ) |   | $ | 798,440 |   |   | $ | 1,977,951 |   |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                                       |   |                                    | 620,041   |   |   |   | 667,354 |   |   |   | 697,364 |   |
| Deferred income tax                                                                                |   |                                    | (341,925  | ) |   |   | 291,459 |   |   |   | 50,949 |   |
| Impairment on investment securities                                                                |   |                                    | 13,116    |   |   |   | - |   |   |   | - |   |
| Unrealized loss (gain) on derivative financial Instruments                                         |   |                                    | 887,174   |   |   |   | (785,398 | ) |   |   | (1,625 | ) |
| Loss on sale of plant and equipment                                                                |   |                                    | 49,485    |   |   |   | 88,186 |   |   |   | 148,571 |   |
| Labor obligations, net period cost                                                                 |   |                                    | 48,345    |   |   |   | 46,682 |   |   |   | 42,865 |   |
|                                                                                               |   |                                    | 399,878   |   |   |   | 1,106,723 |   |   |   | 2,916,075 |   |
| Changes in assets and liabilities:                                                                 |   |                                    |      |   |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                                |   | $                                       | (165,763  | ) |   | $ | (44,359 | ) |   | $ | (60,654 | ) |
| Inventories and biological assets                                                                  |   |                                    | ( 768,084 | ) |   |   | 274,541 |   |   |   | (945 | ) |
| Prepaid expenses and other accounts receivable                                                     |   |                                    | (24,703   | ) |   |   | (934 | ) |   |   | 16,265 |   |
| Accounts payable                                                                                   |   |                                    | 513,919   |   |   |   | 2,058 |   |   |   | (81,696 | ) |
| Related parties payable                                                                            |   |                                    | 23,517    |   |   |   | 17,277 |   |   |   | (6,740 | ) |
| Other taxes payable and other accruals                                                             |   |                                    | 93,694    |   |   |   | 109,168 |   |   |   | (44,048 | ) |
| Labor obligations, net                                                                             |   |                                    | (41,805   | ) |   |   | (40,452 | ) |   |   | (18,749 | ) |
| Derivative financial instruments                                                                   |   |                                    | (122,126  | ) |   |   | - |   |   |   | - |   |
| Cash flows (used in) provided by operating activities to next page                                 |   | $                                       | (90,973   | ) |   | $ | 1,424,022 |   |   | $ | 2,719,508 |   |

----

|                                                                     |   | Years ended December 31, |       |
|--------------------------------------------------------------------------|--------|-----------------------------------------|------------|
|                                                                     |   | 2008                                    |       |   | 2009 |   |   | 2010 |   |
| Cash flows (used in) provided by operating activities from previous page |   | $                                       | (90,973    | ) |   | $ | 1,424,022 |   |   | $ | 2,719,508 |   |
| INVESTING ACTIVITIES:                                                    |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Acquisition of property, plant and Equipment                             |   | $                                       | (1,156,168 | ) |   | $ | (988,250 | ) |   | $ | (560,586 | ) |
| Proceeds from sale of property, plant and Equipment                      |   |                                    | 57,329     |   |   |   | 16,541 |   |   |   | 42,179 |   |
| Restricted cash                                                          |   |                                    | (223,921   | ) |   |   | 215,651 |   |   |   | (629 | ) |
| Investment securities                                                    |   |                                    | (61,998    | ) |   |   | 316,162 |   |   |   | (57,507 | ) |
| Other assets                                                             |   |                                    | (1,112     | ) |   |   | (650 | ) |   |   | (1,497 | ) |
| Cash flows used in  investing activities                            |   | $                                       | (1,385,870 | ) |   | $ | (440,546 | ) |   | $ | (578,040 | ) |
|                                                                     |   |                                    |       |   |   |   |   |   |   |   |   |   |
| FINANCING ACTIVITIES:                                                    |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Proceeds from issuance of notes payable to Banks                         |   | $                                       | 535,100    |   |   | $ | 1,044,611 |   |   | $ | 778,955 |   |
| Repayment of long-term debt and notes payable                            |   |                                    | (18,809    | ) |   |   | (706,668 | ) |   |   | (1,095,870 | ) |
| Cash dividends paid                                                      |   |                                    | (353,880   | ) |   |   | (250,045 | ) |   |   | (250,082 | ) |
| Dividends paid to non-controlling interest                               |   |                                    | -          |   |   |   | (1,035 | ) |   |   | (1,186 | ) |
| Additional paid-in capital                                               |   |                                    | -          |   |   |   | 1,079 |   |   |   | (5,167 | ) |
| Cash flows provided by (used in) financing activities                    |   |                                    | 162,411    |   |   |   | 87,942 |   |   |   | (573,350 | ) |
| Net  (decrease) increase in cash and Investments                    |   |                                    | (1,314,432 | ) |   |   | 1,071,418 |   |   |   | 1,568,118 |   |
| Cash and cash equivalents at beginning of year                           |   |                                    | 2,633,871  |   |   |   | 1,319,439 |   |   |   | 2,390,857 |   |
| Cash and cash equivalents at end of year                                 |   | $                                       | 1,319,439  |   |   | $ | 2,390,857 |   |   | $ | 3,958,975 |   |

| Supplemental disclosure of cash flows information:    |   |
|-------------------------------------------------------|--------|
|                                                  |   | Years ended December 31, |   |
|                                                  |   | 2008 |   |   | 2009 |   |   | 2010 |   |
| Interest paid during the year                         |   | $ | (33,339 | ) |   | $ | (90,192 | ) |   | $ | (73,519 | ) |
| Payment of valuation effects of financial instruments |   |   | (747,795 | ) |   |   | 177,740 |   |   |   | - |   |
| Income taxes paid during the year                     |   | $ | (147,426 | ) |   | $ | (107,158 | ) |   | $ | (495,846 | ) |

----

----

----

----

----

|                                                     |   | 2009        |     |
|----------------------------------------------------------|--------|-------------|----------|
|                                                     |   | Pensionplan |     |   | Senioritypremium |   |   | Severance |   |   | Total |   |
| Projected benefit obligation                             |   | $           | 202,186  |   |   |   | 66,711 |   |   | $ | 49,059 |   |   | $ | 317,956 |   |
| Market value of plan assets                              |   |        | (223,778 | ) |   |   | - |   |   |   | - |   |   |   | (223,778 | ) |
| (Funded) unfunded defined benefit plan (asset) liability |   | $           | (21,592  | ) |   |   | 66,711 |   |   | $ | 49,059 |   |   | $ | 94,178 |   |

|                                                     |   | 2010        |     |
|----------------------------------------------------------|--------|-------------|----------|
|                                                     |   | Pensionplan |     |   | Senioritypremium |   |   | Severance |   |   | Total |   |
| Projected benefit obligation                             |   | $           | 229,609  |   |   |   | 83,871 |   |   | $ | 57,286 |   |   | $ | 370,766 |   |
| Market value of plan assets                              |   |        | (256,382 | ) |   |   | - |   |   |   | - |   |   |   | (256,382 | ) |
| (Funded) unfunded defined benefit plan (asset) liability |   | $           | (26,773  | ) |   |   | 83,871 |   |   | $ | 57,286 |   |   | $ | 114,384 |   |

|                 |   | Pension benefits (Level 2) |    |
|----------------------|--------|-------------------------------------------|---------|
|                 |   | 2009                                      |    |   | 2010 |   |
| Asset category: |   |                                      |    |   |   |   |   |   |
| Debt securities      |   | $                                         | 223,778 |   |   | $ | 256,382 |   |
| Total                |   | $                                         | 223,778 |   |   | $ | 256,382 |   |

----

----

----

|              |   | Balance atbeginningof period |   |   | Charged tocost andexpenses |   |   | Deductions |   |   | Balanceat end ofperiod |     |
|-------------------|--------|----------------------------------------|--------|--------|--------------------------------------|--------|--------|------------|--------|--------|----------------------------------|----------|
| Allowance for     |   |                                   |   |   |                                 |   |   |       |   |   |                             |     |   |
| doubtful accounts | 2010   |                                   | $      | 29,801 |                                 |   | $      | 18,743     |   |   | $                                | (15,554) |   |   | $ | 32,990 |   |
|              | 2009   |                                   | $      | 28,320 |                                 |   | $      | 12,647     |   |   | $                                | (11,166) |   |   | $ | 29,801 |   |
|              | 2008   |                                   | $      | 36,154 |                                 |   | $      | 7,637      |   |   | $                                | (15,471) |   |   | $ | 28,320 |   |

----

----

----

----

----

----

----

----

----

|                  |   | 2009           |      |   | 2010      |   |
|-----------------------|--------|----------------|-----------|--------|-----------|--------|
|                  |   | Carryingamount |      |   | Fairvalue |   |   | Carryingamount |   |   | Fair value |   |
| Cash                  |   | $              | 178,749   |   |      | $      | 178,749 |   |   | $ | 513,076 |   |   | $ | 513,076 |   |
| Investment Securities |   |           | 2,315,534 |   |      |   | 2,315,534 |   |   |   | 3,655,247 |   |   |   | 3,655,247 |   |
|                  |   |           |      |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Short term debt       |   |           | (591,865  | )      |      |   | (662,392 | ) |   |   | (139,867 | ) |   |   | (163,405 | ) |
| Long term debt        |   |           | (371,970  | )      |      |   | (345,128 | ) |   |   | (507,053 | ) |   |   | (466,930 | ) |

----

|   | · | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Assets and liabilities utilizing Level 2 inputs include investment securities that are not actively traded and derivative contracts. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 inputs for the asset or liability are unobservable and significant to the overall fair value measurement. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------|

----

| At December 31, 2009 |   | Total asset/liabilities atFair Value |      |   | Quoted pricesin activemarkets foridentical assets(Level 1) |   |   | Significantotherobservableinputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|-------------------------------------|--------|-----------------------------------------------------|-----------|--------|-------------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|
| Assets:                             |   |                                                |      |   |                                                                                |   |   |                                           |   |   |                                        |   |
|                                |   |                                                |      |   |                                                                                |   |   |                                           |   |   |                                        |   |
| Trading  securities       |   | $                                                   | 2,315,662 |   |                                                                                |   | -      |                                           |   |   | 2,315,662                                   |   |   |   | - |   |
|                                |   |                                                |      |   |                                                                                |   |   |                                           |   |   |                                        |   |   |   |   |   |
| Derivative instruments              |   |                                                | 11,272    |   |                                                                                |   | 8,381  |                                           |   |   | 2,891                                       |   |   |   | - |   |
|                                |   |                                                |      |   |                                                                                |   |   |                                           |   |   |                                        |   |   |   |   |   |
| Total                               |   | $                                                   | 2,326,934 |   |                                                                                |   | 8,381  |                                           |   |   | 2,318,553                                   |   |   |   | - |   |

| At December 31, 2010 |   | Total asset/liabilities atFair Value |      |   | Quoted pricesin activemarkets foridenticalassets(Level 1) |   |   | Significantotherobservableinputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|-------------------------------------|--------|-----------------------------------------------------|-----------|--------|-------------------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|---------------------------------------------|--------|
| Assets:                             |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |
|                                |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |
| Trading Securities                  |   | $                                                   | 3,655,247 |   |                                                                          |   | -      |                                           |   |   | 3,655,247                                   |   |   |   | - |   |
| Derivative instruments              |   |                                                | 3,841     |   |                                                                          |   | 3,573  |                                           |   |   | 268                                         |   |   |   | - |   |
|                                |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |   |   |   |   |
| Total                               |   | $                                                   | 3,659,088 |   |                                                                          |   | 3,573  |                                           |   |   | 3,655,515                                   |   |   |   | - |   |
|                                |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |   |   |   |   |
| Liabilities:                        |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |   |   |   |   |
|                                |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |   |   |   |   |
| Derivative instruments              |   |                                                | (568      | )      |                                                                          |   | (282   | )                                              |   |   | (286                                        | )      |   |   | - |   |
|                                |   |                                                |      |   |                                                                          |   |   |                                           |   |   |                                        |   |   |   |   |   |
| Total                               |   | $                                                   | (568      | )      |                                                                          |   | (282   | )                                              |   |   | (286                                        | )      |   |   | - |   |

----

----

|                                                                                        |   | 2008   |     |   | 2009   |   |    | 2010   |   |
|---------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|---------|--------|--------|
|                                                                                        |   |   |     |   |   |   |    |   |   |
| Computed “expected” tax (benefit) expense                                       |   | $      | (216,527 | )      |   |   | 226,813 |   |   |   | 530,197 |   |
| Increase (decrease) in income taxes resulting from:                                         |   |   |     |   |   |   |    |   |   |   |   |   |
| Effects of inflation, net                                                                   |   |   | (69,435  | )      |   |   | (50,596 | )      |   |   | (66,504 | ) |
| Non-deductible expenses                                                                     |   |   | 3,646    |   |   |   | 4,538   |   |   |   | 8,032 |   |
| Adjustment to deferred tax assets and liabilities for enacted changes in tax laws and rates |   |   | -        |   |   |   | 192,614 |   |   |   | - |   |
| Effect of companies outside simplified regime                                               |   |   | (31,413  | )      |   |   | 38,163  |   |   |   | 31,661 |   |
| Change  in the valuation allowance of deferred tax assets                         |   |   | 23,402   |   |   |   | 8,130   |   |   |   | 17,164 |   |
| (Reversal) addition of deferred tax liability related to simplified regime                  |   |   | (4,354   | )      |   |   | (9,273  | )      |   |   | 34,153 |   |
| Other, net                                                                                  |   |   | 31,424   |   |   |   | (15,078 | )      |   |   | (7,908 | ) |
|                                                                                        |   |   |     |   |   |   |    |   |   |   |   |   |
| IT (benefit) expense                                                                        |   | $      | (263,257 | )      |   |   | 395,311 |   |   |   | 546,795 |   |

----

|   | b) | Deferred income tax- |
|--------|----|----------------------|

|                                                                  |   | 2009   |      |   | 2010   |   |
|-----------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deferred tax assets:                                                  |   |   |      |   |   |   |
| Accounts payable                                                      |   | $      | 438,174   |   |   |   | 493,645 |   |
| Labor obligations                                                     |   |   | 24,224    |   |   |   | 29,785 |   |
| ESPS payable                                                          |   |   | 11,349    |   |   |   | 11,311 |   |
| Effects on derivative financial instruments                           |   |   | -         |   |   |   | 1,635 |   |
| Others                                                                |   |   | -         |   |   |   | 1,006 |   |
| Recoverable AT                                                        |   |   | 4,654     |   |   |   | 4,859 |   |
| Tax loss carryforwards                                                |   |   | 89,698    |   |   |   | 17,698 |   |
| Total gross deferred tax assets                                       |   |   | 568,099   |   |   |   | 559,939 |   |
|                                                                  |   |   |      |   |   |   |   |   |
| Less valuation allowance                                              |   |   | 36,145    |   |   |   | 53,309 |   |
| Net deferred tax assets                                               |   |   | 531,954   |   |   |   | 506,630 |   |
|                                                                  |   |   |      |   |   |   |   |   |
| Deferred tax liabilities:                                             |   |   |      |   |   |   |   |   |
| Inventories                                                           |   |   | 816,903   |   |   |   | 827,540 |   |
| Accounts receivable                                                   |   |   | 170,667   |   |   |   | 190,082 |   |
| Property, plant and equipment, net                                    |   |   | 1,551,675 |   |   |   | 1,515,271 |   |
| Other deductions                                                      |   |   | 16,261    |   |   |   | 16,370 |   |
| Effects on derivative financial instruments                           |   |   | 2,286     |   |   |   | - |   |
| Additional deferred income tax liability related to simplified regime |   |   | 274,953   |   |   |   | 309,106 |   |
| Total deferred tax liabilities                                        |   |   | 2,832,745 |   |   |   | 2,858,369 |   |
|                                                                  |   |   |      |   |   |   |   |   |
| Net deferred tax liability                                            |   | $      | 2,300,791 |   |   |   | 2,351,739 |   |

----

----

----

----

|                                                                  |   | Years ended December 31, |     |
|-----------------------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                                  |   | 2008                                    |     |   | 2009 |   |   | 2010 |   |
| Net (loss) income as reported under MexFRS                            |   | $                                       | (886,037 | ) |   | $ | 809,045 |   |   | $ | 1,986,326 |   |
| Adjustments to reconcile net (loss) income to U.S. GAAP:              |   |                                    |     |   |   |   |   |   |   |   |   |   |
| Biological assets and agricultural products valuation at fair value   |   |                                    | (16,358  | ) |   |   | 7,214 |   |   |   | 32,016 |   |
| Depreciation of capitalized interest                                  |   |                                    | (3,683   | ) |   |   | (4,724 | ) |   |   | (4,724 | ) |
| Severance cost                                                        |   |                                    | 4,828    |   |   |   | 4,828 |   |   |   | 4,828 |   |
| Pensions and labor liabilities                                        |   |                                    | 3,802    |   |   |   | 2,882 |   |   |   | 2,885 |   |
| Deferred income tax on US GAAP adjustments                            |   |                                    | (15,116  | ) |   |   | 1,774 |   |   |   | (9,227 | ) |
| Fair value credit valuation adjustment effect                         |   |                                    | 31,852   |   |   |   | (31,852 | ) |   |   |   |   |
| Additional deferred income tax liability related to simplified regime |   |                                    | 4,354    |   |   |   | 9,273 |   |   |   | (34,153 | ) |
| Less: non-controlling interest income (loss)                          |   |                                    | 6,989    |   |   |   | (11,445 | ) |   |   | (2,976 | ) |
| Net controlling interest (loss) income under U.S. GAAP                |   | $                                       | (869,369 | ) |   | $ | 786,995 |   |   | $ | 1,974,975 |   |
| Other comprehensive income, net of tax                                |   |                                    | (61,836  | ) |   |   | 4,469 |   |   |   | 3,910 |   |
| Comprehensive (loss) income                                           |   |                                    | (931,205 | ) |   |   | 791,464 |   |   |   | 1,978,885 |   |
| Weighted average number of shares outstanding (thousands)             |   |                                    | 600,000  |   |   |   | 600,000 |   |   |   | 600,000 |   |
| Net (loss) income per basic and diluted share                         |   | $                                       | (1.45    | ) |   | $ | 1.31 |   |   | $ | 3.29 |   |

----

|   | - | Employee statutory profit sharing expenses are classified as other expenses under MexFRS and as selling, general and administrative expenses under U.S. GAAP. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Tax incentives for 2009 and 2008 are presented as other income under MexFRS and as a reduction of selling, general and administrative expenses under U.S. GAAP. There were not tax incentives in 2010. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                             |   | Years ended December 31 |       |
|--------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                             |   | 2009                    |       |   | 2010 |   |
| Controlling interest equity as reported under MexFRS                                             |   | $                       | 14,588,254 |   |   | $ | 16,316,355 |   |
| Adjustments to reconcile controlling interest equity to U.S. GAAP:                               |   |                    |       |   |   |   |   |   |
|                                                                                             |   |                    |       |   |   |   |   |   |
| Biological assets and agricultural products valuation at fair value                              |   |                    | (104,528   | ) |   |   | (72,512 | ) |
| Accumulated differences between the financing cost capitalized for MexFRS and U.S. GAAP purposes |   |                    | 94,481     |   |   |   | 94,481 |   |
| Accumulated depreciation on capitalized interest                                                 |   |                    | (29,002    | ) |   |   | (33,726 | ) |
| Severance cost                                                                                   |   |                    | (13,542    | ) |   |   | (8,714 | ) |
| Pensions and labor liabilities                                                                   |   |                    | 13,992     |   |   |   | 20,787 |   |
| Reversal of accumulated amortization of goodwill                                                 |   |                    | 58,716     |   |   |   | 58,716 |   |
| Deferred income taxes on U.S. GAAP adjustments                                                   |   |                    | (4,256     | ) |   |   | (13,483 | ) |
| Additional deferred income tax liability related to simplified regime                            |   |                    | (274,953   | ) |   |   | (309,106 | ) |
| Controlling interest equity as reported under U.S. GAAP                                          |   | $                       | 14,329,162 |   |   | $ | 16,052,798 |   |

----

|                                                                       |   | Capitalstock |      |   | AdditionalPaid in-capital |   |    | Reserve forrepurchaseof shares |   |   | Retainedearnings |   |   | Accumulatedothercomprehensiveincome |       |   | Comprehensiveincome |   |       | Totalcontrollinginterestequity |   |   | Non-controllinginterest |   |   | Totalstockholders ́equity |       |
|---------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------------------------------|--------|---------|------------------------------------------|--------|--------|------------------|--------|--------|-------------------------------------|------------|--------|---------------------|--------|------------|--------------------------------|--------|--------|-------------------------|--------|--------|-------------------------------|------------|
| Balance at December 31, 2007                                                    |   | $            | 2,294,927 |   |                           | $      | 743,674 |                                     |   | $      | 159,455          |   |   | $                                   | 15,544,273 |   |                | $      | (3,670,580 | )                              |   | $      | -                       |   |   | $                             | 15,071,749 |   |   | $ | 46,788 |   |   | $ | 15,118,537 |   |
| Cash dividends paid                                                             |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | (353,880   | )      |                |   | -          |                           |   |   | -                       |   |   |                          | (353,880   | ) |   |   | - |   |   |   | (353,880 | ) |
| Comprehensive loss:                                                             |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |       |                           |   |   |                    |   |   |                          |       |   |   |   |   |   |   |   |   |   |
| Net loss for the year                                                           |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | (869,369   | )      |                |   | -          |                           |   |   | (869,369                | )      |   |                          | (869,369   | ) |   |   | (6,989 | ) |   |   | (876,358 | ) |
| Components of other comprehensive income:                                       |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |       |                           |   |   |                    |   |   |                          |       |   |   |   |   |   |   |   |   |   |
| Deficit from holding of non monetary assets                                     |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | (3,735,254 | )      |                |   | 3,735,254  |                           |   |   | -                       |   |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Derivative financial instruments (net of deferred income tax effect of $23,204) |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -          |                           |   |   | (98,922                 | )      |   |                          | (98,922    | ) |   |   | - |   |   |   | (98,922 | ) |
| Other comprehensive income FASB ASC Topic 715 effect                            |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -          |                           |   |   | 37,086                  |   |   |                          | 37,086     |   |   |   | - |   |   |   | 37,086 |   |
| Other comprehensive loss, net of taxes                                          |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | (61,836    | )                              |   |   | (61,836                 | )      |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Comprehensive loss                                                              |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -          |                           |   |   | (931,205                | )      |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Balance at December 31, 2008                                                    |   | $            | 2,294,927 |   |                           | $      | 743,674 |                                     |   | $      | 159,455          |   |   | $                                   | 10,585,770 |   |                | $      | 2,838      |                           |   | $      | -                       |   |   | $                             | 13,786,664 |   |   | $ | 39,799 |   |   | $ | 13,826,463 |   |
| Cash dividends paid                                                             |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | (250,045   | )      |                |   | -          |                           |   |   | -                       |   |   |                          | (250,045   | ) |   |   | - |   |   |   | (250,045 | ) |
| Cash dividends paid to non-controlling interest                                 |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -          |                           |   |   | -                       |   |   |                          | -          |   |   |   | (1,035 | ) |   |   | (1,035 | ) |
|                                                                            |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |       |                           |   |   |                    |   |   |                          |       |   |   |   |   |   |   |   |   |   |

----

|                                            |   | Capitalstock |      |   | AdditionalPaid in-capital |   |    | Reserve forrepurchaseof shares |   |   | Retainedearnings |   |   | Accumulatedothercomprehensiveincome |       |   | Comprehensiveincome |   |   | Totalcontrollinginterestequity |   |   | Non-controllinginterest |   |   | Totalstockholders ́equity |       |
|------------------------------------------------------|--------|--------------|-----------|--------|--------------------------------|--------|---------|------------------------------------------|--------|--------|------------------|--------|--------|-------------------------------------|------------|--------|---------------------|--------|--------|--------------------------------|--------|--------|-------------------------|--------|--------|-------------------------------|------------|
| Comprehensive income:                                |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |   |                           |   |   |                    |   |   |                          |       |
| Net income for the year                              |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | 786,995    |   |                |   | -      |                           |   |   | 786,995                 |   |   |                          | 786,995    |   |   |   | 11,445 |   |   |   | 798,440 |   |
| Components of other comprehensive income:            |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |   |                           |   |   |                    |   |   |                          |       |   |   |   |   |   |   |   |   |   |
| Other comprehensive income FASB ASC Topic 715 effect |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -      |                           |   |   | 4,469                   |   |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Other comprehensive income, net of taxes             |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | 4,469  |                           |   |   | 4,469                   |   |   |                          | 4,469      |   |   |   | - |   |   |   | 4,469 |   |
| Repurchase of shares                                 |   |         | -         |   |                           |   | 1,079   |                                     |   |   | -                |   |   |                                | -          |   |                |   | -      |                           |   |   | -                       |   |   |                          | 1,079      |   |   |   | - |   |   |   | 1,079 |   |
| Comprehensive income                                 |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -      |                           |   |   | 791,464                 |   |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Balance at December 31, 2009                         |   | $            | 2,294,927 |   |                           | $      | 744,753 |                                     |   | $      | 159,455          |   |   | $                                   | 11,122,720 |   |                | $      | 7,307  |                           |   | $      | -                       |   |   | $                             | 14,329,162 |   |   | $ | 50,209 |   |   | $ | 14,379,371 |   |
| Cash dividends paid                                  |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | (250,082   | )      |                |   |   |                           |   |   | -                       |   |   |                          | (250,082   | ) |   |   | - |   |   |   | (250,082 | ) |
| Cash dividends paid to non-controlling interest      |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -      |                           |   |   | -                       |   |   |                          | -          |   |   |   | (1,186 | ) |   |   | (1,186 | ) |
| Comprehensive income:                                |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |   |                           |   |   |                    |   |   |                          |       |   |   |   |   |   |   |   |   |   |
| Net income for the year                              |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | 1,974,975  |   |                |   | -      |                           |   |   | 1,974,975               |   |   |                          | 1,974,975  |   |   |   | 2,976 |   |   |   | 1,977,951 |   |
| Components of other comprehensive income:            |   |         |      |   |                           |   |    |                                     |   |   |             |   |   |                                |       |   |                |   |   |                           |   |   |                    |   |   |                          |       |   |   |   |   |   |   |   |   |   |
| Other comprehensive income FASB ASC Topic 715 effect |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -      |                           |   |   | 3,910                   |   |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Other comprehensive income, net of taxes             |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | 3,910  |                           |   |   | 3,910                   |   |   |                          | 3,910      |   |   |   | - |   |   |   | 3,910 |   |
| Repurchase of shares                                 |   |         | -         |   |                           |   | -       |                                     |   |   | (5,167           | )      |   |                                | -          |   |                |   | -      |                           |   |   | -                       |   |   |                          | (5,167     | ) |   |   | - |   |   |   | (5,167 | ) |
| Comprehensive income                                 |   |         | -         |   |                           |   | -       |                                     |   |   | -                |   |   |                                | -          |   |                |   | -      |                           |   |   | 1,978,885               |   |   |                          | -          |   |   |   | - |   |   |   | - |   |
| Balance at December 31, 2010                         |   | $            | 2,294,927 |   |                           | $      | 744,753 |                                     |   | $      | 154,288          |   |   | $                                   | 12,847,613 |   |                | $      | 11,217 |                           |   | $      | -                       |   |   | $                             | 16,052,798 |   |   | $ | 51,999 |   |   | $ | 16,104,797 |   |

----