INDUSTRIAS BACHOCO, S.A. DE C.V.
                                AND SUBSIDIARIES



                        Consolidated Financial Statements


                                   Years ended
                        December 31, 2000, 2001 and 2002
                       With Report of Independent Auditors







                                  F-1

<PAGE>


                        INDUSTRIAS BACHOCO, S.A. DE C.V.
                                AND SUBSIDIARIES



                        Consolidated Financial Statements



                        December 31, 2000, 2001 and 2002









                                     Content



Report of Independent Auditors

Audited Consolidated Financial Statements:

  Consolidated Balance Sheets
  Consolidated Statements of Income
  Consolidated Statements of Changes in Stockholders' Equity
  Consolidated Statements of Changes in Financial Position
  Notes to the Consolidated Financial Statements



                                      F-2
<PAGE>



Report of Independent Auditors


To the Stockholders of
Industrias Bachoco, S.A. de C.V.


     We have audited the accompanying  consolidated balance sheets of Industrias
Bachoco, S.A. de C.V. and subsidiaries as of December 31, 2001 and 2002, and the
related consolidated  statements of income,  changes in stockholders' equity and
changes in  financial  position  for each of the three years in the period ended
December 31, 2002.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in Mexico and in the United States of America.  Such standards  require
that we plan and perform the audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
Industrias  Bachoco,  S.A. de C.V.,  and  subsidiaries  at December 31, 2001 and
2002,  and the  consolidated  results  of their  operations,  their  changes  in
stockholders'  equity and changes in their  financial  position  for each of the
three years in the period ended December 31, 2002, in conformity with accounting
principles  generally accepted in Mexico,  which differ in certain respects from
those followed in the United States of America (see Note 17).

     As mentioned in Note 2 to the accompanying financial statements,  effective
January 1, 2000 the  Company  adopted  the  requirements  of Mexican  Accounting
Bulletin D-4 "Accounting for Income Tax, Asset Tax and Employee Profit Sharing,"
issued by the Mexican Institute of Public Accountants.  The effects are included
in Note 13.











                                                        Mancera, S.C.
                                                    A Member practice of
                                                    Ernst & Young Global



                                               C.P.C. Felizardo Gastelum Felix




Mexico City, Mexico
March 7, 2003


                                     F-3
<PAGE>
<TABLE>
<CAPTION>

               INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

         (Thousands of constant Mexican pesos as of December 31, 2002)


                                                                          December 31,
                                                        ------------------------------------------------
                                                                                        (Thousands of
                                                                                         U.S. dollars)
                                                                                           (Note 2)
                                                        ------------------------------------------------
                                                                 2001             2002             2002
                                                        ------------------------------------------------
<S>                                                        <C>              <C>               <C>
ASSETS
Current assets:
  Cash and cash equivalents                             Ps 1,236,353      Ps 1,695,996        $162,685
                                                        ------------------------------------------------
  Accounts receivable:
      Trade, net                                              355,792          381,319           36,577
      Value added and other recoverable taxes                 233,760          168,205           16,135
                                                        ------------------------------------------------
Total accounts receivable                                     589,552          549,524           52,712
                                                        ------------------------------------------------
  Inventories, net - Note 3                                 1,701,798        1,724,108          165,383
  Prepaid expenses and other current assets                    51,077          154,517           14,822
                                                        ------------------------------------------------
Total current assets                                        3,578,780        4,124,145          395,602
                                                        ------------------------------------------------

Property, plant and equipment, net - Note 4                 7,185,078        7,132,024          684,127
Other assets                                                   19,189           13,548            1,299
Intangible assets - Note 10                                    50,410           14,590            1,400
Goodwill, net- Note 5                                         296,186          280,183           26,876
                                                        ------------------------------------------------
TOTAL ASSETS                                            Ps 11,129,643    Ps 11,564,490       $1,109,304
                                                        ================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Notes payable to banks - Note 6                      Ps    57,164     Ps    25,000           $2,398
    Current portion of long-term debt - Note 6                 99,889           92,713            8,893
    Accounts payable                                          425,564          262,301           25,160
    Related parties - Note 8                                   16,564           20,161            1,934
    Income tax                                                 20,316           13,286            1,274
    Other taxes payable and other accruals - Note 9           217,979          116,058           11,134
                                                        ------------------------------------------------
Total current liabilities                                     837,476          529,519           50,793
                                                        ------------------------------------------------

Long-term liabilities:
    Long-term debt - Note 6                                   164,585           73,300            7,031
    Deferred income tax - Note 13                           1,706,462        1,458,808          139,934
    Labor obligations - Note 10                                72,359           28,831            2,766
                                                        ------------------------------------------------
TOTAL LIABILITIES                                           2,780,882        2,090,458          200,524
                                                        ------------------------------------------------
COMMITMENTS AND CONTINGENCIES- Note 11

STOCKHOLDERS' EQUITY - Note 12
Majority stockholders' equity
    Capital stock                                           1,879,891        1,879,541          180,292
    Paid-in capital                                           506,937          534,097           51,232
    Stock repurchase reserve                                  203,438          166,734           15,993
    Retained earnings                                       8,378,608        9,238,914          886,227
    Net income for the year                                 1,138,407        1,478,511          141,823
    Minimum seniority premium liability adjustment Note
     10                                                         ( 663)           ( 683)            ( 65)
    Deficit from restatement of stockholders' equity      ( 2,640,448)     ( 2,704,566)       ( 259,431)
    Cumulative effect of deferred income tax -Note 13     ( 1,159,619)     ( 1,159,619)       ( 111,235)
                                                        ------------------------------------------------
Total majority stockholders' equity                         8,306,551        9,432,929          904,836
                                                        ------------------------------------------------

Minority interest                                              42,210           41,103            3,944
                                                        ------------------------------------------------
Total stockholders' equity                                  8,348,761        9,474,032          908,780
                                                        ------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
  EQUITY                                                Ps 11,129,643    Ps 11,564,490      $ 1,109,304
                                                        ================================================
</TABLE>


See accompanying notes.




                                     F-4
<PAGE>
<TABLE>
<CAPTION>

               INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

         (Thousands of constant Mexican pesos as of December 31, 2002)


                                                                   Years ended December 31,
                                                ---------------------------------------------------------------
                                                                                                   (Thousands
                                                                                                    of U.S.
                                                                                                    dollars)
                                                                                                    (Note 2)
                                                ---------------------------------------------------------------
                                                            2000            2001            2002          2002
                                                ---------------------------------------------------------------
<S>                                                 <C>              <C>              <C>             <C>
Net sales                                       Ps    10,140,259   Ps 10,202,252   Ps 10,357,862      $993,560
Cost of sales                                        ( 7,244,085)    ( 7,467,893)    ( 7,683,466)    ( 737,023)
                                                ---------------------------------------------------------------
Gross profit                                           2,896,174       2,734,359       2,674,396       256,537

Selling, general and administrative expenses         ( 1,241,940)    ( 1,369,865)    ( 1,432,394)    ( 137,400)
                                                ---------------------------------------------------------------
Operating income                                       1,654,234       1,364,494       1,242,002       119,137

Comprehensive financing income:
     Interest income                                     197,777         146,208         108,026        10,362
     Interest expense                                  ( 147,413)       ( 71,413)       ( 31,379)      ( 3,010)
                                                ---------------------------------------------------------------
        Net                                               50,364          74,795          76,647         7,352
     Foreign exchange (loss) gain, net                   ( 3,951)         13,551          41,467         3,978
     Gain (loss) on net monetary position                103,223          28,452       ( 103,774)      ( 9,954)
                                                ---------------------------------------------------------------
                                                         149,636         116,798          14,340         1,376
                                                ---------------------------------------------------------------

Other (expense) income, net                             ( 17,573)        ( 6,602)         40,409         3,875
                                                ---------------------------------------------------------------

  Income before income tax,
    asset tax and employee profit sharing              1,786,297       1,474,690       1,296,751       124,388

Income tax and asset tax - Note 13                     ( 434,028)      ( 330,684)        185,190        17,764
Employee profit sharing - Note 13                          ( 900)        ( 1,646)        ( 1,435)        ( 138)
                                                ---------------------------------------------------------------
NET INCOME                                          Ps 1,351,369    Ps 1,142,360    Ps 1,480,506      $142,014
                                                ===============================================================

Majority interest                                   Ps 1,345,375    Ps 1,138,407    Ps 1,478,511       141,823
Minority interest                                       ( 5,994)         ( 3,953)        ( 1,995)        ( 191)
                                                ---------------------------------------------------------------
NET INCOME                                         Ps 1,351,369     Ps 1,142,360    Ps 1,480,506      $142,014
                                                ===============================================================

Weighted average units outstanding
  (in thousands)                                        296,124         297,454         297,898       297,898
                                                ---------------------------------------------------------------

NET MAJORITY INCOME PER UNIT                           Ps  4.54        Ps  3.83          Ps 4.96         $0.47
                                                ===============================================================
</TABLE>

See accompanying notes.


                                      F-5
<PAGE>

<TABLE>
<CAPTION>

                INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                  Years ended December 31, 2000, 2001 and 2002
          (Thousands of constant Mexican pesos as of December 31, 2002)


             Number of
             Units of                             Stock                      Net
             capital                  Paid-in     Repurchase   Retained      income for
             stock        Capital     capital     reserve      earnings      the year
             (thousands)  stock
             -----------------------------------------------------------------------------
<S>           <C>       <C>          <C>         <C>          <C>            <C>
Balance at
 December 31,
 1999         296,820  Ps 1,879,124  Ps 506,937  Ps 192,491   Ps 6,574,111   Ps  978,411
Cumulative
 effect of
 deferred
   taxes            -             -          -            -              -             -
Transfer of
 prior year
 net income         -             -           -           -        978,411     ( 978,411)
Repurchase of
 stock          ( 821)        ( 469)   ( 24,156)
Sales of
 repurchased
 stock          1,453           843      29,093           -              -             -
Cash
 dividends
 paid               -             -           -           -      ( 180,004)            -
Comprehensive
 income, net
 of tax             -             -           -           -              -     1,345,375
             -----------------------------------------------------------------------------
Balance at
 December 31,
 2000         297,452     1,879,498     506,937     197,428      7,372,518     1,345,375
Transfer of
 prior year
 net
  income            -             -           -           -      1,345,375   ( 1,345,375)
Repurchase of
 stock        ( 1,846)      ( 2,105)               ( 28,047)
Sales of
 repurchased
 stock          2,548         2,498                  34,057            776             -
Cash
 dividends
 paid               -             -           -           -      ( 340,061)            -
Comprehensive
 income, net
 of tax             -             -           -           -              -     1,138,407
             -----------------------------------------------------------------------------
Balance at
 December
 31, 2001     298,154     1,879,891     506,937     203,438      8,378,608     1,138,407
Transfer of
 prior year
 net
  income            -             -           -           -      1,138,407   ( 1,138,407)
Repurchase
 of stock     ( 2,534)      ( 1,288)               ( 36,704)         ( 354)            -
Sales of
 repurchased
 stock          1,846           938      27,160
Cash
 dividends
 paid               -             -           -           -      ( 277,747)            -
Comprehensive
 income, net
 of tax             -             -           -           -              -     1,478,511
           -------------------------------------------------------------------------------
Balance at
 December
  31, 2002    297,466  Ps 1,879,541  Ps 534,097  Ps 166,734   Ps 9,238,914   Ps 1,478,511
(Note 12)  ===============================================================================

</TABLE>
<TABLE>
<CAPTION>

            Minimum
            seniority     Deficit from     Cumulative   Total Majority
            premium       restatement      effect in    stockholders'                  Total
            liability     of               deferred     equity           Minority      stockholders'
            adjustment    stockholders'    income tax                    interest      equity
            equity
            -----------------------------------------------------------------------------------------
<S>              <C>     <C>          <C>         <C>          <C>            <C>
Balance at
 December 31,
 1999               -  Ps(2,373,329)          - Ps7,757,745      Ps 33,173   Ps7,790,918
Cumulative
 effect of
 deferred
   taxes            -             -  (1,159,619) (1,159,619)                 ( 1,159,619)
Transfer of
 prior year
 net income         -             -           -           -              -             -
Repurchase of
 stock                                             ( 24,625)                    ( 24,625)
Sales of
 repurchased
 stock              -             -           -      29,936              -        29,936
Cash
 dividends
 paid               -             -           -   ( 180,004)             -     ( 180,004)
Comprehensive
 income, net
 of tax             -      ( 86,055)          -   1,259,320          8,276     1,267,596
            -----------------------------------------------------------------------------------------
Balance at
 December 31,
 2000               -   ( 2,459,384) (1,159,619)  7,682,753         41,449     7,724,202
Transfer of
 prior year
 net
  income            -             -           -           -              -             -
Repurchase of
 stock                                             ( 30,152)                    ( 30,152)
Sales of
 repurchased
 stock              -             -           -      37,331              -        37,331
Cash
 dividends
 paid               -             -           -   ( 340,061)             -     ( 340,061)
Comprehensive
 income, net
 of tax         ( 663)    ( 181,064)          -     956,680            761       957,441
            -----------------------------------------------------------------------------------------
Balance at
 December
 31, 2001       ( 663)  ( 2,640,448) (1,159,619)  8,306,551         42,210     8,348,761
Transfer of
 prior year
 net
  income            -             -           -           -              -             -
Repurchase
 of stock           -             -           -    ( 38,346)             -      ( 38,346)
Sales of
 repurchased
 stock                                               28,098                       28,098
Cash
 dividends
 paid               -             -           -   ( 277,747)             -     ( 277,747)
Comprehensive
 income, net
 of tax          ( 20)     ( 64,118)          -   1,414,373        ( 1,107)    1,413,266
            -----------------------------------------------------------------------------------------
Balance at
 December
  31, 2002    Ps (683) Ps(2,704,566)Ps(1,159,619)Ps 9,432,929    Ps 41,103  Ps 9,474,032
(Note 12)   =========================================================================================
</TABLE>


See accompanying notes.


                                      F-6
<PAGE>






               INDUSTRIAS BACHOCO, S.A. DE C.V. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

         (Thousands of constant Mexican pesos as of December 31, 2002)

<TABLE>
<CAPTION>

                                                                       Years ended December 31
                                                       -------------------------------------------------------
                                                                                                   (Thousands
                                                                                                    of U.S.
                                                                                                    dollars)
                                                                                                    (Note 2)
                                                       -------------------------------------------------------
                                                                2000           2001          2002        2002
                                                       -------------------------------------------------------
OPERATING ACTIVITIES:
<S>                                                      <C>          <C>          <C>              <C>
Net income                                             Ps 1,351,369  Ps1,142,360    Ps1,480,506      $142,014
Adjustments to reconcile net income to
  Resources provided by operating activities:
  Depreciation                                               303,804        297,130       317,004      30,408
  Deferred income tax net of inflation                       386,309        289,127     ( 235,016)   ( 22,543)
  Goodwill amortization                                       16,195         16,117        16,003       1,535
                                                       -------------------------------------------------------
                                                           2,057,677      1,744,734     1,578,497     151,414

Changes in operating assets and liabilities net of
  effects from purchase of Grupo Campi:
  Accounts receivable                                        ( 6,362)     ( 112,530)       40,028       3,841
  Inventories                                              ( 154,431)     ( 425,692)    ( 102,188)    ( 9,801)
  Prepaid expenses and other current assets                 ( 30,411)        58,092     ( 103,440)    ( 9,925)
  Accounts payable                                          ( 32,387)       106,373     ( 163,263)   ( 15,661)
  Related parties                                            ( 3,769)       ( 8,164)        3,597         345
  Taxes payable and other accruals                            23,727          7,155     ( 108,951)   ( 10,451)
   Labor obligations, net                                      3,911          9,361       ( 7,708)      ( 739)
                                                       -------------------------------------------------------
RESOURCES PROVIDED BY OPERATING
  ACTIVITIES                                               1,857,955      1,379,329     1,136,572     109,023

FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt                     583,982              -             -           -
Proceeds from issuance of notes payable to banks             962,283        868,041        50,000       4,796
Repayment of long-term debt and notes payable            ( 2,890,951)   ( 1,349,560)    ( 163,279)   ( 15,662)
Constant pesos effect on notes payable to banks
  and long term-debt                                       ( 195,601)      ( 35,366)     ( 17,346)    ( 1,664)
Cash dividends paid                                        ( 180,004)     ( 340,061)    ( 277,747)   ( 26,642)
Sales (repurchases) of Company's own stock, net                5,311          7,179      ( 10,248)      ( 983)
                                                       -------------------------------------------------------
RESOURCES USED IN FINANCING ACTIVITIES
                                                         ( 1,714,980)     ( 849,767)    ( 418,620)   ( 40,155)

INVESTING ACTIVITIES:
Acquisition of property, plant and equipment, net.         ( 253,726)     ( 576,513)    ( 263,950)   ( 25,319)
Other assets                                                  34,519       ( 35,066)        5,641         541
Investment in Grupo Campi, net of cash acquired             ( 30,056)             -             -           -
                                                       -------------------------------------------------------
RESOURCES USED IN INVESTING
  ACTIVITIES                                               ( 249,263)     ( 611,579)    ( 258,309)   ( 24,778)
                                                       -------------------------------------------------------

NET (DECREASE) INCREASE IN CASH
 AND CASH EQUIVALENTS                                      ( 106,288)      ( 82,017)      459,643      44,090

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF YEAR                                        1,424,658      1,318,370     1,236,353     118,595
                                                       -------------------------------------------------------

CASH AND CASH EQUIVALENTS AT
  END OF YEAR                                          Ps 1,318,370  Ps1,236,353    Ps1,695,996     $ 162,685
                                                       =======================================================
</TABLE>

See accompanying notes.


                                       7
<PAGE>

                        INDUSTRIAS BACHOCO, S.A. DE C.V.
                                AND SUBSIDIARIES

                 Notes to the Consolidated Financial Statements

                  Years ended December 31, 2000, 2001 and 2002

                   (Thousands of constant Mexican pesos as of
                  December 31, 2002, except per unit amounts)



1.  Organization and Business Activity

Industrias Bachoco, S.A. de C.V. and subsidiaries (collectively "Bachoco" or the
"Company")  are engaged in the  breeding,  processing  and  marketing of poultry
(chicken and eggs) swine and other products  (principally  feed).  Poultry sales
represent  89%,  90% and 90% of net sales for the year ended  December 31, 2000,
2001 and 2002. All sales  activities  are carried out in Mexico,  mainly through
retailers, wholesalers and self-service outlets.


2.  Accounting Policies and Practices

The accompanying  consolidated  financial  statements are prepared in conformity
with accounting  principles  generally  accepted in Mexico ("Mexican GAAP"). The
accounting  policies and practices followed by Bachoco in the preparation of its
consolidated financial statements are the following:

Estimates in financial statements

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles requires the use of estimates and assumptions that affect
the amounts reported in the financial  statements and accompanying notes. Actual
results could differ from those estimates.

Concentration of Risk

The Company  invests a portion of its surplus cash in cash deposits in financial
institutions with strong credit ratings and has established  guidelines  related
to diversification and maturities that the Company believes maintains safety and
liquidity.  The Company has not experienced any losses on its cash  equivalents.
The Company does not believe it has significant  concentrations  of credit risks
in  its  accounts   receivable,   because  the   Company's   customer   base  is
geographically diverse, thus spreading the credit risk.

Consolidation

The consolidated  financial  statements  include the accounts of the Company and
all of  its  majority-owned  subsidiaries.  The  ownership  interests  of  other
stockholders  in  such   subsidiaries   are  reflected  as  minority   interest.
Intercompany balances,  investments and transactions have been eliminated in the
consolidation.


                                      F-8
<PAGE>

The  accompanying   consolidated  financial  statements  include  the  following
consolidated subsidiaries as of December 31, 2000, 2001 and 2002:

<TABLE>
<CAPTION>


                                                     Percentage equity interest
                                                     ------------------------------
                                                          2000      2001      2002
                                                     ------------------------------
<S>                                                        <C>       <C>        <C>
                                                              %         %         %
Bachoco, S.A. de C.V.  ("BSACV")                           100       100       100
Operadora de Servicios de Personal, S.A. de C.V.           100       100       100
Servicios de Personal Administrativo, S.A. de C.V.         100       100       100
SECBA, S.A. de C.V.                                        100       100         -
SEPETEC, S. A. De C.V.                                     100       100       100
Acuicola Bachoco, S.A. de C.V.                             100       100       100
Huevo y Derivados, S.A. de C.V.                             97        97        97
Pecuarius Laboratorios, S.A. de C.V.                        64        64        64
Aviser, S.A. de C.V.                                       100       100       100
Campi Comercial, S.A. de C.V.                              100       100       100
</TABLE>


In April 2002,  the  subsidiary  Secba,  S.A. de C.V. was sold for Ps 5,075 to a
related  party  generating a gain of Ps 722,  which is included in other income;
consequently,  this subsidiary's  figures were not consolidated from the date of
sale.

This entity  continues to render  administrative  services to the  Company.  The
effects of the  deconsolidation  of this  subsidiary  are  immaterial and do not
affect the comparability of the accompanying financial statements.

Recognition of the effects of inflation on financial information

The  consolidated  financial  statements  of the Company  have been  prepared in
accordance  with  Bulletin  B-10,  "Recognition  of the Effects of  Inflation on
Financial  Information," as amended,  issued by the Mexican  Institute of Public
Accountants (the "Mexican Institute") which recognizes the effects of inflation.
Bulletin B-10 requires the  restatement of all financial  statements to constant
Mexican pesos as of the date of the latest financial statements being reported.

The accompanying  consolidated  financial  statements and notes were restated in
constant Mexican pesos as of December 31, 2002 as follows:

--   The  consolidated  balance  sheets,  consolidated  statements of changes in
     stockholders'  equity  and  the  consolidated   statements  of  changes  in
     financial  position  have been  restated  in constant  Mexican  pesos as of
     December 31, 2002,  using the Mexican  National  Consumer  Price Index (the
     "NCPI") published by Banco de Mexico.

--   The  consolidated  statements  of income  have been  restated  in  constant
     Mexican  pesos as of  December  31,  2002,  using the NCPI for the month in
     which the transactions (income and expenses) occurred.

The NCPI as of December 31, 2000,  2001 and 2002, and the rates of inflation for
the years then ended were:

                                      F-9
<PAGE>
<TABLE>
<CAPTION>


                                                        Rate of inflation
                                             NCPI           for the year
         ------------------------------------------------------------------
          <S>                                  <C>                  <C>
         December 31, 2000                      336.596               8.96%
         December 31, 2001                      351.418               4.40%
         December 31, 2002                      371.450               5.70%

</TABLE>

The significant effects of Bulletin B-10 are described below:

Deficit from restatement of stockholders' equity

This account  consists of the  accumulated  losses on net  monetary  position of
Bachoco at the time the  provisions  of Bulletin B-10 were first applied and the
subsequent gain or loss from holding nonmonetary assets,  principally  property,
plant and equipment  and  inventories.  A gain or loss from holding  nonmonetary
assets  originates when the replacement  cost of these assets is higher or lower
than the cost of these assets restated by the NCPI.

Comprehensive financing income

The comprehensive financing income includes interest earned and paid, as well as
the results of exchange differences and the gain or loss on monetary position.

Foreign  exchange  gains and losses on  transactions  denominated  in a currency
other than the Mexican peso result from  fluctuations in exchange rates from the
date transactions occur to the time of settlement or valuation of the receivable
or payable using the corresponding rate of exchange at the end of the period.

Gains and losses on net  monetary  position  are  computed by applying  the NCPI
inflation rate to the average net monetary long or short position.

Cash equivalents

Cash equivalents are carried at cost plus accrued interest,  which  approximates
market value.  Cash  equivalents are highly liquid and have maturities of ninety
days or less when acquired.  The market value of financial  instruments has also
been included in this caption due to its  immateriality (Ps 2,112 in 2001 and Ps
194 in 2002).

Accounts receivable

The Company periodically and systematically  reviews the aging and collection of
its accounts  receivable.  As a result of this procedure,  the Company set up an
allowance  for  doubtful  accounts of Ps 31,301 and Ps 31,701 as of December 31,
2001 and 2002, respectively.

The  recoverable  value  added  tax is  related  to  purchases  of  certain  raw
materials,  property,  plant and  equipment  and services  charged by suppliers,
which is subject to reimbursement.


                                      F-10
<PAGE>




Inventories

Inventories  are stated at average  cost of  acquisition  or  production,  which
approximates  estimated replacement cost, not in excess of net realizable value.
Declines  in  productivity  of breeder  birds and swine are  estimated  based on
expected future production and deducted from inventories.

Property, plant and equipment

Property,  plant and  equipment  were carried at  replacement  cost,  determined
annually by an  independent  appraiser,  through  1996.  The fifth  amendment to
Bulletin B-10 (as  modified),  which is applicable to financial  statements  for
periods beginning on or after January 1, 1997,  disallows the use of appraisals.
Based on such  amendment,  the Company  restated the appraisal value at December
31, 1996 and property,  plant and equipment  purchases since January 1, 1997 are
carried at cost adjusted by the NCPI.  Comprehensive  financing  cost related to
the  construction  in  progress,  is  capitalized  during  the  installation  or
preoperating period and amortized over the estimated useful lives of the assets.

Labor obligations

Under  Mexican  labor law,  employees  are  entitled to a  compensation  payment
("seniority  premium") upon death,  dismissal or at retirement  after 15 or more
years of service.  Bachoco  accounts  for this  obligation  in  accordance  with
Bulletin D-3 Labor Obligations  issued by the Mexican  Institute;  consequently,
seniority premium costs are recognized  periodically during the years of service
by employees, based on actuarial computations.

Also, in accordance  with Mexican labor law the Company is  contingently  liable
for  severance  payments to  employees  who are  unjustifiably  dismissed.  Such
payments  are charged to income in the year in which the  decision to dismiss an
employee is made.

Bachoco has  established a defined benefit pension plan which has been accounted
for in accordance with the requirements of Bulletin D-3. This Bulletin  defines,
among other things, the accounting treatment of pensions and seniority premiums.

Income taxes and employee profit sharing

On  January 1, 2000,  the  requirements  of  Mexican  accounting  Bulletin  D-4,
"Accounting  for Income Tax, Asset Tax and Employee Profit  Sharing",  issued by
the Mexican Institute,  became effective.  Bulletin D-4 requires the recognition
of deferred  taxes on all temporary  differences  in balance sheet  accounts for
financial and tax reporting  purposes,  using the enacted income tax rate at the
time the financial statements are issued.

In conformity with Bulletin D-4, the accumulated effect of deferred taxes at the
beginning of 2000 was applied to  stockholders'  equity,  without  restating the
financial statements of prior years.


                                      F-11
<PAGE>



Due to the change in tax legislation  mentioned in Note 13, effective January 1,
2002,  the annual change in the deferred tax liability is to be presented in the
statement of operations,  except for the portion that corresponds to the holding
of non-monetary  assets,  which is to be presented under  stockholders'  equity.
Through  December 31, 2001,  the current year  deferred tax was presented in the
statement of  operations  and  represented  the amount  necessary  for the total
amount  of the  current  year tax and the  deferred  tax to be  21.21% of pretax
income.  The difference  between the deferred tax amount taken to income and the
net change in the deferred tax balance was allocated to stockholders' equity.

Current  year income tax is charged to results of  operations  and  represents a
liability due and payable in less than one year net of advances.

The Company  evaluates  periodically the possibility of recovering  deferred tax
assets and if necessary, adjusts the related reserve.

Bulletin  D-4  requires  that asset tax be included in the  deferred  income tax
balance, after consideration of its recovery.

In conformity  with this Bulletin,  deferred  employee  profit sharing should be
recognized only on temporary  differences  determined in the  reconciliation  of
current year net income for financial and tax reporting purposes, provided there
is no indication that the related liability or asset will not be realized in the
future.

Current year employee  profit sharing should be charged to results of operations
and represents a liability due and payable in a period of less than one year.

Revenue recognition

Revenue is recognized as earned, when all of the following criteria are met:

-  Persuasive evidence of an arrangement exists
-  Delivery has occurred
-  The seller's price to the buyer is fixed or determinable
-  Collectibility is reasonably assured

Net income per unit

Net income per unit has been  computed  based on majority  net income and on the
weighted average number of units outstanding.

Consolidated statements of changes in financial position

Bulletin  B-12  establishes  the  appropriate  presentation  of the statement of
changes in financial  position when the financial  statements have been restated
in constant pesos in accordance with Bulletin B-10. Bulletin B-12 identifies the
sources and  applications  of  resources  representing  differences  between the
beginning  and ending  financial  statement  balances in constant  pesos.  Also,
according to this Bulletin,  the foreign  exchange gain or loss, and the gain on
net monetary  position,  are not  presented  as resources  provided by operating
activities.


                                      F-12
<PAGE>

Comprehensive income

Requirements of the new Mexican accounting Bulletin B-4, Reporting Comprehensive
Income,  went into  effect  on  January  1,  2001.  Bulletin  B-4  requires  the
disclosure of comprehensive  income in the statement of changes in shareholders'
equity. Comprehensive income represents current year net income plus those items
that are  reflected  directly in  shareholders'  equity  that do not  constitute
capital contributions, distributions or reductions.

Financial instruments

Bulletin C-2  "Financial  Instruments",  sets general rules for the  assessment,
presentation,  and disclosure of financial information that issuers or investors
in financial  instruments  should  follow.  Among those rules are the conditions
that  have  to be met in  order  to be  able  to  offset  financial  assets  and
liabilities.  Likewise,  it  establishes  that financial  instruments  should be
measured  at their  fair  value,  with the  exception  of those  that  have been
classified as being held until their  maturity and those that qualify as hedges.
The latter should be valued at their cost of acquisition.

Capitalized Software

The Company  capitalizes  software  purchased  from third  parties.  Where third
parties are developing software for the company and the related software product
under  development  has  reached  technological  feasibility  or  if  there  are
alternative  future uses, the software is  capitalized.  Costs incurred prior to
the   establishment  of   technological   feasibility  are  charged  to  product
development expense.

The Company  capitalizes  qualifying internal and external costs incurred during
the application development stage. Costs incurred during the preliminary project
stage and post implementation stage/operation stage are expensed as incurred.

Goodwill

Goodwill represents the excess of fair value of the net assets acquired over the
purchase  price paid for  acquired  subsidiaries  and  affiliates.  Goodwill  is
amortized using the straight-line method over a twenty-year period.

Recent pronouncements

Agriculture

Effective  January 1, 2003,  the  Company  adopted the  requirements  of the new
Bulletin  E-1,  Agriculture,   which  establishes  the  rules  for  recognizing,
measuring,   presenting  and  disclosing   biological  assets  and  agricultural
products,  as well as establishing the tax treatment to be applied to government
subsidies related to a biological asset.

Bulletin E-1 requires biological assets and agricultural products (the latter at
the time of  harvesting)  to be valued at their fair value,  less the  estimated
costs at the point of sale.  Bulletin  E-1 also  states that when the fair value
cannot be  determined  in a reliable and objective  manner,  the  aforementioned
assets should be valued at production cost, less accumulated depreciation.

                                     F-13
<PAGE>



After December 31, 2002, certain assets included in the caption Inventories will
be classified as biological  assets or  agricultural  products.  The Company has
estimated that the cumulative effect of adopting this new Bulletin on January 1,
2003 will increase net income by approximately Ps 65,000, net of taxes.

Intangible assets

In January 2002, the Mexican Institute issued the new Bulletin C-8,  "Intangible
Assets",  which is also effective for fiscal years beginning on or after January
1, 2003,  although  earlier  observance  is  recommended.  Bulletin  C-8 ("C-8")
replaces the previous  Bulletin C-8,  "Intangibles,"  and,  among others things,
specifies,  that project  development  costs are to be  capitalized if they meet
certain established requirements with respect to their recognition as assets.

Preoperating  costs  incurred  from the  compulsory  date of  observance  of the
requirements  of C-8 are to be expensed  as  incurred.  Unamortized  balances of
preoperating  expenses  capitalized in terms of the previous Bulletin C-8 are to
be  amortized  as  specified  in such  bulletin.  In order to  reduce as much as
possible the residual value of goodwill derived from business acquisitions,  C-8
states that certain intangibles must be identified, quantified and excluded from
goodwill when accounting for a business combination.

Contingencies and commitments

In December  2001,  the Mexican  Institute  issued  Bulletin  C-9,  Liabilities,
Provisions,  Contingent Assets and Liabilities  Commitments,  which is effective
for  fiscal  years  beginning  on or after  January 1,  2003,  although  earlier
observance  is  recommended.  Bulletin C-9 replaces the previous  Bulletin  C-9,
"Liabilities",  and Bulletin C-12,  "Contingencies  and Commitments",  and among
other things, is more precise in defining  provisions,  accrued  liabilities and
contingent  liabilities,  and  contains  new  requirements  with  respect to the
recording of provisions,  the use of the present value and the early  retirement
of debt securities or their replacement by a issuance of debt.

The  observance of these two new accounting  pronouncements  are not expected to
have a material  impact on the  Company's  financial  position or its results of
operations.

Convenience translation

United States dollar amounts as of December 31, 2002,  shown in the accompanying
consolidated financial statements, have been included solely for the convenience
of the reader and are translated from Mexican pesos to US dollars as a matter of
arithmetic  computation  only,  at an  exchange  rate of Ps  10.425  to one U.S.
dollar,  which was the  exchange  rate at December 31,  2002.  Such  translation
should not be construed as a representation  that the Mexican peso amounts could
have been or could be converted into U.S. dollars at this or any other rate.


                                      F-14
<PAGE>



Reclassifications

Some  amounts  shown  in the  2000  and  2001  financial  statements  have  been
reclassified for uniformity of presentation with 2002.


3.  Inventories

Inventories consists of the following as of December 31:
<TABLE>
<CAPTION>

                                                           2001           2002
                                                    ------------------------------
<S>                                                        <C>         <C>
Layer and breeder hens, grow-out flocks                 Ps 833,483     Ps 820,415
Processed chicken and commercial eggs                      288,046        174,603
Swine                                                       30,716         40,183
Feed material and other                                    692,910        831,914
                                                    ------------------------------
                                                         1,845,155      1,867,115
Allowance for productivity declines                      ( 143,357)     ( 143,007)
                                                    ------------------------------
Total                                                 Ps 1,701,798   Ps 1,724,108
                                                    ==============================
</TABLE>


4.  Property, Plant and Equipment

Property, plant and equipment consists of the following as of December 31:



                                       Useful
                                       lives          2001            2002
                                      ----------------------------------------
Land                                         -   Ps 595,993      Ps 605,774
Buildings, farm structures and           10-30
  Equipment                              years    8,656,369       9,052,767
Office, furniture and equipment              3      189,954         203,560
Transportation equipment                   1-9      927,730         956,729
                                              --------------------------------
                                                 10,370,046      10,818,830
Accumulated depreciation                         (3,747,956)    ( 4,001,471)
                                              --------------------------------
Net                                               6,622,090       6,817,359
Construction in progress                            562,988         314,665
                                              --------------------------------
Total                                          Ps 7,185,078    Ps 7,132,024
                                              ================================


As described in Note 2, the Company capitalizes  comprehensive financing cost on
assets under  construction  during the  construction  period.  In 2000, 2001 and
2002, there was no net cost of capitalized financing.

Depreciation expense for the years ended December 31, 2000, 2001 and 2002, was
Ps 303,804, Ps 297,130 and Ps 317,004.


5.  Goodwill

Goodwill  was  generated in 1999,  as a result of acquiring  the shares of Grupo
Campi,  S.A.  de C.V.,  for the amount of Ps 328,499.  At December  31, 2001 and
2002, accumulated amortization aggregates Ps 32,313 and Ps 48,316, respectively.

Amortization expense for the years ended December 31, 2000, 2001 and 2002, was
Ps 16,195, Ps 16,117 and Ps 16,003.


                                      F-15
<PAGE>



6.  Notes Payable to Banks and Long-term Debt

Notes  payable to banks and long-term  debt, as of December 31,  consists of the
following:

<TABLE>
<CAPTION>


                                                           2001          2002
                                                      --------------------------
<S>                                                   <C>          <C>
Notes payable to banks:
Unsecured:
Denominated in Mexican pesos, interest
  rate 2001: 8.05%; 2002: CETES FIRA rate
  less 3.5 points                                     Ps 57,164     Ps 25,000


The weighted  average  interest rate on short-term notes payable at December 31,
2001 and 2002 was 8.05% and 4.02%, respectively.

                                                          2001         2002
                                                     ---------------------------

Long-term debt to banks:
Secured by equipment
    Denominated in Mexican pesos,
    repayable in monthly installments
    through 2010, at CETES rate plus 2 points.         Ps73,357      Ps65,600

    Maturing in 2005, at interbank equilibrium
     (TIIE) rate plus 4 points or CETES rate plus 2
     points                                              17,384        12,337

Unsecured:
    Denominated in U.S. dollars
     Maturing in 2002
     LIBOR rate plus 20%                                 31,732             -
     LIBOR rate plus 35%                                 12,125             -

     Maturing in 2003.
     TIIE rate plus .5 points                            97,012        51,970
     LIBOR rate plus 20%                                 25,855        29,505
     LIBOR rate plus 35%                                  3,112         2,427

     Maturing in 2004
     LIBOR rate plus 20%                                  3,546         3,800

     Maturing in 2005
     LIBOR rate plus 20%                                    351           374
                                                     ------------------------
Total                                                   264,474       166,013
Less current portion                                    (99,889)     ( 92,713)
                                                     ------------------------
Total long-term debt                                 Ps 164,585     Ps 73,300
                                                     ========================
</TABLE>


Weighted  average interest rates on long-term debt at December 31, 2001 and 2002
were approximately 3.41% and 5.62%, respectively.  The weighted average interest
rate on the  Company's  total debt at  December  31, 2001 and 2002 was 4.23% and
5.41%, respectively.

                                      F-16
<PAGE>



Maturities of long-term debt as of December 31, 2002 are as follows:

                                            Year       Amount
                                            -------------------
                                            2004       13,810
                                            2005       11,690
                                            2006        8,200
                                            2007        9,200
                                            2008        9,900
2009 and thereafter                                    20,500
                                                 -------------
                                                 Ps   73,300
                                                 =============


At December 31, 2001 and 2002,  unused lines of credit  totaled Ps 1,942,327 and
Ps 2,042,768,  respectively.  In 2001 and 2002,  the Company did not pay any fee
for unused lines of credit.

The book  value of  assets  collateralizing  long-term  debt was Ps  484,582  at
December 31, 2001 and Ps 468,162 at December 31, 2002.


7.  Financial instruments

During 2001 the Company signed forwards contracts to hedge against exchange rate
losses  attributable  to feed purchases we make in U.S.  dollars.  The contracts
expired in 2002. As of December 2001, the outstanding forward contracts amounted
to US$ 15,000 (Ps 147,629),  which are valued at the closing  exchange rate. The
exchange rate  differences  are  incorporated  into the results of operations as
part of the comprehensive cost of financing.

In order to finance  imports of raw materials,  the Company entered into two put
options for the  acquisition  and sale of Mexican  pesos  futures in the Chicago
market that matured in December  2002. At the date of maturity both options were
exercised  and as a result,  at  December  31,  2002,  the  Company  has a short
position on 250 Mexican pesos futures contracts that expire in June 2003, with a
market  value gain of U.S.$  190,625 and a long  position  on 250  Mexican  peso
futures  contracts  expiring in January  2003 with a market  value loss of U.S.$
171,875.  The net gain of U.S.$  18,750 (Ps.  194,888)  was credited to exchange
gain (loss) in the income  statement.  These  instruments  were valued at market
because they did not quality for hedge accounting under Bulletin C-2.


8.  Related Parties

a) A summary of related party accounts payable as of December 31, is as follows:

<TABLE>
<CAPTION>

                                           Relation       2001         2002
                                       ------------------------------------------
<S>                                       <C>             <C>          <C>
Llantas y Accesorios, S.A. de C.V.        Affiliate    Ps 1,228      Ps 1,445
Maquinaria Agricola, S.A. de C.V.         Affiliate       2,029         1,104
Qualyplast, S.A. de C.V.                  Affiliate         345           109
Vimifos, S.A. de C.V.                     Affiliate      12,938         7,357
Autos y Accesorios, S.A. de C.V.          Affiliate           -         1,161
Secba, S.A. de C.V.                       Affiliate           -         8,141
Others                                                       24           844
                                                      -----------------------
                                                      Ps 16,564     Ps 20,161
                                                      =======================
</TABLE>



                                     F-17
<PAGE>


All of these companies are considered as related parties,  as the Company's main
shareholders  are also directly or indirectly,  shareholders of these companies.
All transactions are of a business nature.

b) For the years ended  December  31, 2000,  2001 and 2002,  the Company had the
following transactions with related parties:
<TABLE>
<CAPTION>



                                             2000       2001         2002
                                           ----------------------------------
<S>                                         <C>        <C>           <C>
Airplane leasing expenses                  Ps 3,036    Ps 2,761      Ps 3,384
Purchases of vehicles, tires and spare
 parts                                       51,903      32,993        48,053
Purchases of feed, raw materials and
  packing supplies                          145,485     142,084        97,911
Administrative services                           -           -       306,472

</TABLE>


9.  Other taxes payable and other accruals

An analysis of other taxes payable and other accruals presented in the financial
statements is as follows:


                                             2001         2002
                                      ----------------------------

Expenses payable                         Ps 117,899     Ps 75,548
Taxes payable                                11,490             -
Interest payable                              2,936         1,785
Salaries payable                              7,985         6,583
Rights payable                               14,659        12,291
Social Securities                            19,088        15,429
Employee profit sharing                      27,314         1,997
Other accounts payable                       16,608         2,425
                                      ----------------------------
Total                                 Ps217,979     Ps116,058
                                      ============================



10.  Labor Obligations

Bachoco  implemented a defined benefit  retirement  pension plan that covers all
non-unionized  employees.  Participating employees are required to contribute 1%
of their salary.  Such  percentage may be increased based on years of service up
to a maximum of 5%. The contributions to the plan are considered  deductible for
income tax purposes.  Bachoco recognizes these labor obligations on the basis of
independent actuarial computations,  using the projected unit-credit method, and
the provisions of Bulletin D-3.

Seniority  premiums  accruing  to  employees  are  recognized  on the  basis  of
independent  actuarial  computations,  following the  methodology  prescribed in
Bulletin D-3.

The  analysis  of the net period  cost,  the funded  status and the  assumptions
considered in the pension plan and the seniority premium  obligation at December
31, 2001 and 2002 is as follows:


                                     F-18
<PAGE>

<TABLE>
<CAPTION>

                                                      Pension plan
                                              2000        2001         2002
                                           ----------------------------------
<S>                                         <C>          <C>        <C>
Net period cost:
Labor cost                                 Ps 6,155    Ps 7,480      Ps 3,272
Return on plan assets                       ( 1,754)    ( 2,352)        ( 881)
Amortization of past service costs            2,172       2,472           509
Interest cost                                 3,605       4,441         1,216
                                          -----------------------------------
Net period cost                           Ps 10,178   Ps 12,041      Ps 4,116
                                          ===================================

Labor obligations:
Accumulated benefit obligation                        Ps 86,909     Ps 19,783
                                                      -----------------------

Projected benefit obligation                          Ps 98,960     Ps 23,802
Plan assets                                            ( 40,470)     ( 14,829)
Unrecognized prior service cost                        ( 26,939)      ( 3,915)
Actuarial losses                                        ( 2,156)        7,566
Unrecognized changes or improvements                   ( 17,354)      ( 8,507)
                                                      -----------------------
Net projected benefit obligation                      Ps 12,041      Ps 4,117
                                                      -----------------------


Unfunded accumulated benefit obligation                Ps46,439     Ps4,954
                                                       ----------------------

Additional liability                                   Ps34,398     Ps837
                                                       ----------------------
Intangible assets                                      Ps34,398     Ps837
                                                       ----------------------
Change in benefit obligation:

Benefit obligation at beginning of year               Ps 78,178    Ps98,960
Deconsolidation of the subsidiary Secba                       -     ( 84,172)
                                                       ----------------------
                                                         78,178        14,788
Service cost                                              7,480         3,272
Interest cost                                             4,441         1,216
Actuarial differences                                     9,303         4,670
Benefits paid                                             ( 442)        ( 144)
                                                      -----------------------
Projected benefit obligation at end of year           Ps 98,960     Ps 23,802
                                                      =======================
Changes in plan assets:
Fair value of plan assets at beginning of
  year                                                Ps 26,649     Ps 40,470
Deconsolidation of the subsidiary Secba                       -      ( 38,413)
                                                      -----------------------
                                                         26,649         2,057
Actual return on plan assets                              2,352           881
Employer contribution                                     8,656         3,517
Actuarial differences                                     3,255         8,518
Benefits paid                                             ( 442)        ( 144)
                                                      -----------------------
Fair value of plan assets at end of year              Ps 40,470    Ps 14,829
                                                      =======================
</TABLE>


                                      F-19
<PAGE>
<TABLE>
<CAPTION>


                                                      Seniority premium
                                              2000        2001         2002
                                           ----------------------------------
<S>                                         <C>        <C>         <C>
Net period cost:
Labor cost                                 Ps 1,910    Ps 2,050      Ps 2,253
Amortization of past service costs              880       1,220         1,548
Interest cost                                 1,162       1,234         1,297
                                          -----------------------------------
Net period cost                           Ps 3,952     Ps 4,504      Ps 5,098
                                          ===================================

Labor obligations:
Accumulated benefit obligation                        Ps 25,920     Ps 23,877
                                                      -----------------------

Projected benefit obligation                          Ps 27,733     Ps 26,499
Unrecognized prior service cost                         ( 8,289)      ( 6,850)
Actuarial losses                                        ( 8,549)      ( 3,189)
Unrecognized improvements to the plan                   ( 1,650)      ( 7,019)
                                                      -----------------------
Net projected seniority premium                        Ps 9,245      Ps 9,441
                                                      -----------------------

Unfunded accumulated benefit obligation               Ps 25,920     Ps 23,877
                                                      -----------------------

Additional liability                                 Ps (16,675)   Ps (14,436)
Intangible assets                                        16,012        13,753
                                                      -----------------------
Minimum seniority premium liability
  adjustment                                           Ps  (663)      Ps (683)
                                                      =======================


Change in benefit obligation:

Benefit obligation at beginning of year               Ps 22,949     Ps 27,733
Deconsolidation of the subsidiary Secba                       -       ( 2,746)
                                                      -----------------------
                                                         22,949        24,987
Service cost                                              2,050         2,253
Interest cost                                             1,234         1,297
Actuarial differences                                     4,446         1,324
Benefits paid                                           ( 2,946)      ( 3,362)
                                                      -----------------------
Projected benefit obligation at end of year           Ps 27,733     Ps 26,499
                                                      =======================

</TABLE>

At December 31, 2002 80% of plan assets were invested in fixed-income securities
(80% in 2001) and 20% in variable-income securities (20 % in 2001). The fair
value of plan assets is the same as their carrying value.

Intangible assets are included in the balance sheet as part of other assets.

The prior service cost, the past service costs and actuarial differences
assumptions will be amortized over a period ranging from 21 to 25 years (the
average remaining working life of employees).

The rates considered in the actuarial study were in 2000, 2001 and 2002 as
follows:




Labor obligations discount          5.50%
Future salary increases             2.50%
Return on assets                    6.50%



                                     F-20
<PAGE>



11.  Contingencies and Commitments

Bachoco has entered into operating leases for certain offices, production sites,
and in 2000 for automotive and computer equipment. Most leases contain renewal
options. Rental expense was as follows:




                   Year ended
                   December 31
                 ---------------
               2000       Ps 37,995
               2001          49,867
               2002          30,584


Future minimum annual rental payments under existing operating leases with
initial terms in excess of one year as of December 31, 2002, are as follow:




                    Year ended
                     December 31
                    ----------------
               2003      Ps  26,337
               2004          22,048
               2005          20,774
               2006          19,260
               2007          13,761
2008 and thereafter          12,757
                    ----------------
       Total             Ps 114,937
                    ================



12.  Stockholders' Equity

a) In April 1997, Bachoco had a stock split and created so-called "BL" units,
which consist of one series "B" share and one series "L" share, and so-called
"BB" units, which consist of two series "B" shares. An analysis of capital stock
is as follows:




Units at December 31, 1999                      296,820,000
Repurchased units                                 ( 821,000)
Sales of repurchased units                        1,453,000
                                    ------------------------
Units at December 31, 2000                      297,452,000
Repurchased units                               ( 1,846,000)
Sales of repurchased units                        2,548,100
                                    ------------------------
Units at December 31, 2001                      298,154,100
Repurchased units                               ( 2,534,300)
Sales of repurchased units                        1,845,900
                                    ------------------------
Units at December 31, 2002                      297,465,700
                                    ========================


Series "L" shares have limited voting rights.

b) In 2000, 2001 and 2002, the Company declared and paid cash dividends at
nominal values of Ps 156,117, Ps 313,189 and Ps 267,834, respectively (Ps
180,004, Ps 340,061 and Ps 277,747, in constant Mexican pesos) or Ps 0.53, Ps
1.05 and Ps 0.90, respectively, per unit in nominal pesos.

c) The Mexican Corporation Act 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, 2001 and 2002, included in retained earnings, was Ps 168,608.



                                     F-21
<PAGE>




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 Ps 180,000 (Ps 249,026 expressed in constant Mexican pesos) through
the appropriation of retained earnings in 1998. During 2000, 2001 and 2002, the
Company repurchased 821 thousand, 1,846 thousand and 2,534 thousand units for Ps
24,625, Ps 30,152 and Ps 38,346, respectively. In 2000, 2001 and 2002 the
Company sold 1,453 thousand, 2,548 thousand and 1,846 thousand of units,
respectively, previously repurchased; the sale value of latter was for Ps 29,936
Ps 37,331 and Ps 28,098.

e) The Company is required to pay taxes on dividends distributed to stockholders
only to the extend 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. Additionally, from January 1, 1999 through December 31,
2001, cash dividends paid to individuals as stockholders were subject not only
to the income tax payable by corporate entities but also a tax withholding of
approximately 7.70%.

The Company obtains the majority of its revenues and net profit from Bachoco,
S.A. de C.V. ("BSACV"). For the years 2000 through 2002, pretax income of BSACV
and such companies, represented between 84% and 99% of Bachoco's consolidated
pretax income.

Dividends on which BSACV has paid income tax will be credited to the Company's
"CUFIN" account and, accordingly, no further income tax will be paid when such
amounts are distributed as dividends to the Company's stockholders.

f) The corporate income tax rate for the years 2002 and 2001 was 35%. However,
from 1999 through 2001, corporate taxpayers had the option of deferring a
portion so that the tax payable represented 30% of taxable income. The earnings
on which there was a deferral of taxes had to be controlled in a so-called "net
reinvested tax profit account" ("CUFINRE"). This was basically to clearly
identify the earnings on which the taxpayer had opted to defer payment of
corporate income tax.

Since the Company opted for this tax deferral, earnings will be considered to be
distributed first from the "CUFINRE" account and any excess will be paid from
the "net tax profit account" ("CUFIN") so as to pay the 5% deferred tax.
Effective January 1, 2002, the above-mentioned option of deferring a portion of
income tax was eliminated.


13.  Income Tax, Asset Tax and Employee Profit Sharing

a) The Company and each of its subsidiaries file separate income tax returns.
Through December 31, 2001, Bachoco, S.A. de C.V. ("BSACV"), the Company's
principal operating subsidiary, has been subject to payment of corporate income
tax under the provisions of the simplified statutory regime ("Simplified
regime)", which was applicable to a company engaged in agriculture,
transportation and certain other activities that derived no more than 10% of its
net sales from the production of "processed" products, as defined in the law.

Effective January 1, 2002, the Mexican Congress passed a new income tax law that
substantially modified the procedure for determining taxable income of those
entities that will continue to pay taxes under the simplified regimen, now
called New Simplified Regime.


                                      F-22
<PAGE>



The new simplified regimen continues to be applicable to entities engaged
exclusively in agricultural activities (including livestock raising, fishing and
forestry), but instead of paying income tax on only certain types of
transactions, such as dividend payments or loans, the new law establishes a
system for determining a taxable income based on revenues collected net of
deductible expenses paid. This new tax base does not allow for the deduction of
the value of fixed assets and inventories as of December 31, 2001.

The new simplified regimen establishes a corporate income tax rate of 35%, with
a gradual one-percentage point annual decrease, until the tax rate is reduced to
32% in 2005. Companies paying income tax under the new simplified regimen also
have a 50% reduction in the rate. Under the new law, as a transition
requirement, entities paying taxes under the old regime had to determine the
total amount of earnings of prior years on which taxes need to be paid or the
available tax loss carryforward at the date on which it was enacted. As a result
of this requirement the Company determined a tax loss carryforward in the amount
of Ps. 2,938,630, as of January 1, 2002.

b) In addition to income tax, the Company and its subsidiaries are also subject
to an alternative minimum tax known as asset tax, which is assessed on the
average value of most assets net of certain liabilities. The general asset tax
rate is 1.8%, but under the simplified regime, BSACV is subject to a 0.9% rate
and to special rules excluding many assets from the determination of asset tax
and a tax compensation derived from the investment in assets. The net amount of
assets subject to asset tax at December 31,2002 was Ps 12,961.

The Company and its subsidiaries are required to pay asset tax if the amount of
asset tax exceeds the computed income tax liability. Asset tax paid can be
credited against income tax in subsequent years (up to ten years). At December
31, 2002, the Company had, at nominal value, Ps 4,620 in asset tax credits.

c) For the years ended December 31, 2000, 2001 and 2002, income tax charged
(credited) to results of operations was as follows:




                                             2000        2001          2002
                                        -------------------------------------

Current year income tax                  Ps  46,657   Ps 41,342     Ps 46,580
Current year asset tax                        1,062         215         3,246
Deferred income tax                         386,309     289,127     ( 235,016)
                                        -------------------------------------
Total income tax                        Ps 434,028   Ps 330,684   Ps (185,190)
                                        =====================================


                                     F-23
<PAGE>


As explained above, the Company's main subsidiary pays taxes under the
simplified regimen. Effective January 1, 2002, the related income tax is payable
on the basis of revenues collected net of deductible expenses paid, as well as
on dividends paid, to the extent they exceed the net tax profit account (see
Note 12 e). Consequently, the computation of deferred income tax using the asset
and liability method of Bulletin D-4 is now allowed. The effects of temporary
differences at December 31, 2001 and 2002 are as follows:



                                                        2001           2002
                                                    -------------------------
Assets:
-------
Accounts receivable                                      Ps   -    Ps (64,261)
Accounts payable                                              -      ( 64,222)
Asset tax                                                     -       ( 4,620)
Tax loss carry forward allowed
for change to new regime                                      -     ( 275,874)
                                                    -------------------------
                                                                    ( 408,977)
                                                    -------------------------

Liabilities:
------------
Inventories                                                   -       245,882
Fixed assets                                                  -     1,147,006
Additional liability from stockholders equity         1,706,462       474,897
                                                    -------------------------
                                                      1,706,462     1,867,785
                                                    -------------------------
Total deferred income tax liability, net            Ps1,706,462   Ps1,458,808
                                                    =========================


As described above, the Company was under the simplified regimen for the
calculation of income tax in previous years. Such tax was payable only in
certain types of transactions such as the payment of dividends and other
nondeductible payments. Therefore, the only temporary difference identified was
the earned capital not distributed which may be subject to taxes in the future.

The effects of temporary differences giving rise to the deferred tax liability,
taking into consideration only the difference on earned capital at December 31,
2001 and 2002, were as follows:

                                                       2001           2002
                                                   --------------------------

Effect of simplified regimes                       Ps 1,671,105  Ps 1,438,857
Other effect outside simplified regimes                  35,357        19,951
                                                   --------------------------
Deferred income tax liability                      Ps 1,706,462  Ps 1,458,808
                                                   ==========================


At December 31, 2002, the deferred tax liability determined based on the
difference between the book and the tax value of stockholders' equity is greater
than that determined using the asset and liability method. Consequently, the
Company recognized an additional liability in the amount of Ps 474,897, (Ps
1,706,462 in 2001).

The initial effect of the application of Bulletin D-4 represented a decrease in
stockholders' equity and the recognition of a liability of Ps 1,159,619 at
January 1, 2000.


                                     F-24
<PAGE>



The most significant items that gave rise to a difference between the total
amount of current year income tax and the current year deferred tax determined
at the statutory rate are as follows:


                                              2000       2001          2002
                                             --------------------------------
                                                %           %             %
Statutory income tax rate                     21.21       21.21         17.50
Effect of companies outside simplified regime  3.08        1.22          1.48
Effect of non-taxable book items                  -           -         (4.63)
Benefit derived from change in law effective
  in 2002 and changes in tax rate                 -           -        (28.63)
                                             --------------------------------
Effective income tax rate                     24.29       22.43        (14.28)
                                             ================================


In conformity with applicable requirements through December 31, 2001, deferred
taxes were determined based on differences between stockholders' equity for
financial and tax reporting purposes, at the rate of 21.21%.

At December 31, 2001 and 2002, the tax value of the company's equity, which will
not be subject to taxation, is comprised of the following:

                                                        2001           2002
                                                    -------------------------

Restated contributed capital (CUCA)                Ps 1,538,754  Ps 1,538,754
Net tax profit (CUFIN) and net reinvested
tax profit (CUFINRE)                                    493,482       374,967
                                                   --------------------------
Total                                              Ps 2,032,236  Ps 1,913,721
                                                   ==========================

The Company and BSACV have no employees, but each of the subsidiaries of the
Company is required under Mexican law to pay employees, in addition to their
compensation and benefits, profit sharing in an aggregate amount equal to 10% of
such subsidiary's taxable income subject to certain adjustments.


                                     F-25
<PAGE>


14.  Segments

The Company adopted the International Accounting Standard No. 14 "Segment
Reporting", this standard establishes the rules for reporting information
related to segments of operations. The segments of operation are the components
of operations of a company subject to risks and benefits that are different from
other segments of the business. The information included in the column "Others"
is basically related to swine and feed. The disclosures required by
International Accounting Standard are as follow:
<TABLE>
<CAPTION>


                                                       2000
                                      -----------------------------------------------

                                                    Others including
                                                     eliminations and
                                          Poultry    adjustments           Total
                                      -----------------------------------------------
<S>                                      <C>          <C>        <C>
Net Sales                              Ps 9,156,600  Ps 983,659 Ps 10,140,259
Cost of sales                             6,450,307     793,778     7,244,085
Gross profit                              2,706,293     189,881     2,896,174
Interest income                             186,807      10,970       197,777
Interest expense                            139,237       8,176       147,413
Loss on net monetary position                97,497       5,726       103,223
Income tax and asset tax                    410,130      23,898       434,028
Majority net income                       1,257,168      88,207     1,345,375
Property, plant and equipment, net        6,686,262     219,433     6,905,695
Total Assets                             10,243,711     382,089    10,625,800
Total Liabilities                         2,800,197     101,000     2,901,197
Capital expenditures and investment in
  Grupo Campi                               283,782           -       283,782
Expenses not requiring cash
  disbursement:
  Depreciation                              294,958       8,846       303,804


                                                          2001
                                      ------------------------------------------
                                                     Others including
                                                     eliminations and
                                          Poultry    adjustments          Total
                                      ------------------------------------------
Net Sales                              Ps 9,167,664 Ps1,034,588  Ps10,202,252
Cost of sales                             6,619,787     848,106     7,467,893
Gross Profit                              2,547,877     186,482     2,734,359
Interest income                             136,236       9,972       146,208
Interest expense                             66,543       4,870        71,413
Gain on net monetary position                26,512       1,940        28,452
Income tax and asset tax                    308,132      22,552       330,684
Majority net income                       1,060,768      77,639     1,138,407
Property, plant and equipment, net        7,050,190     134,888     7,185,078
Total Assets                             10,962,022     167,621    11,129,643
Total Liabilities                         2,731,291      49,591     2,780,882
Capital expenditures and investment
  in Grupo Campi, net                       576,513           -       576,513
Expenses not requiring cash
  disbursement:
  Depreciation                              289,378       7,752       297,130

</TABLE>



                                     F-26
<PAGE>
<TABLE>
<CAPTION>

                                                      2002
                                  ---------------------------------------------------
                                                  Others including
                                                  eliminations and
                                      Poultry     adjustments             Total
                                  ---------------------------------------------------
<S>                                       <C>         <C>        <C>
Net Sales                              Ps 9,354,714 Ps1,003,148  Ps10,357,862
Cost of sales                             6,820,085     863,381     7,683,466
Gross Profit                              2,534,629     139,767     2,674,396
Interest income                             102,462       5,564       108,026
Interest expense                             29,758       1,621        31,379
Loss on net monetary position             ( 103,167)      ( 607)    ( 103,774)
Income tax and asset tax                  ( 225,957)     40,767     ( 185,190)
Majority net income                       1,401,242      77,269     1,478,511
Property, plant and equipment, net        6,840,967     291,057     7,132,024
Total Assets                             11,059,203     505,287    11,564,490
Total Liabilities                         2,021,198      69,260     2,090,458
Capital expenditures                        263,950           -       263,950
Expenses not requiring cash
  disbursement:
  Depreciation                              305,994      11,010       317,004
</TABLE>

<TABLE>
<CAPTION>

                                                        2000
                                  ---------------------------------------------------
                                      Chicken            Egg           Total
                                  ---------------------------------------------------
<S>                                 <C>            <C>               <C>
Net Sales                           Ps 8,528,457   Ps  628,143    Ps 9,156,600


                                                         2001
                                  ---------------------------------------------------
                                      Chicken            Egg         Total
                                  ---------------------------------------------------

Net Sales                           Ps 8,401,789     Ps 765,875    Ps 9,167,664



                                                      2002
                                  ---------------------------------------------------
                                      Chicken            Egg          Total
                                  ---------------------------------------------------

Net Sales                           Ps 8,378,035     Ps 976,679    Ps 9,354,714

</TABLE>


15.  Foreign Currency Position

A summary of Bachoco's assets and liabilities denominated in U.S. dollars (the
only foreign currency) as of December 31:


<TABLE>
<CAPTION>


                                                      (Thousands U.S. dollars)
                                                              2001             2002
                                                ------------------------------------
<S>                                                        <C>              <C>
Assets:
  Cash and cash equivalents                                $20,033          $10,000
   Advances to suppliers                                    19,556           17,722
                                                ------------------------------------
                                                            39,589           27,722
Liabilities:
  Notes payable to banks and long-term
   Debt                                                   ( 18,929)         ( 8,473)
  Suppliers                                               ( 16,118)        ( 14,655)
                                                ------------------------------------
                                                          ( 35,047)        ( 23,128)
                                                ------------------------------------
Net long position                                           $4,542           $4,594
                                                ====================================

</TABLE>


                                     F-27
<PAGE>



As of December 31, 2001 and 2002, the exchange rate was Ps 9.178 and Ps 10.394
per dollar, respectively.

Assets from foreign origin included in the consolidated balance sheets as of
December 31, 2001 and 2002, were:


                                         (Thousands of U.S. dollars)
                                           2001            2002
                                     -----------------------------
Inventories                                $5,601         $18,854
Property, plant and equipment             114,405         112,853


Imported raw materials, in thousands of U.S. Dollars, were $ 158,692 in 2000, $
191,802 in 2001 and $131,985 in 2002. Interest expense, in thousands of U.S.
dollars from debt denominated in U.S. dollars was $ 9,780 in 2000, $ 2,622 in
2001 and $ 349 in 2002.

16.  Hurricane Isidore

In September of 2002, hurricane Isidore affected the company's complex located
in the peninsula of Yucatan, and approximately 60% of the chicken farms
operating in that region. The Company started the repair of their farms in this
area immediately and, according to its plan, expects to be finished by September
2003. Other facilities as breeder farms, processing plant and balance feed
plants suffered no material damage.

The assets were properly covered by an insurance policy and as a result of that
the Company credited Ps 19,970 to results of operations under the caption "other
income."

17. Differences Between Mexican and United States Generally Accepted
        Accounting Principles

Bachoco's consolidated financial statements are prepared in accordance with
"Mexican GAAP", which differ in certain respects from United States generally
accepted accounting principles ("U.S. GAAP").

The accompanying reconciliation to U.S. GAAP does not include the reversal of
the adjustments to the financial statements for the effects of inflation
required under Bulletin B-10, as amended, because the application of Bulletin
B-10 represents a comprehensive measure of the effects of price level changes in
the Mexican economy and, as such, is considered a more meaningful presentation
than historical cost based financial reporting for both Mexican and U.S.
accounting principles.

The principal differences between Mexican GAAP and U.S. GAAP, as they relate to
the Company, are described below together with an explanation, where
appropriate, of the method used to determine the adjustments that affect
consolidated operating income, net income, stockholders' equity and changes in
financial position for each of the three years ended December 31, 2000, 2001 and
2002.

Deferred income tax and employee profit sharing

The Company follows the requirements of Mexican accounting Bulletin D-4,
"Accounting for Income Tax, Asset Tax and Employee Profit Sharing", issued by
the IMCP. Bulletin D-4 requires the recognition of deferred taxes on all
temporary differences in balance sheet accounts for financial and tax reporting
purposes, using the enacted income tax rate at the time the financial statements
are issued.

                                     F-28
<PAGE>



Bachoco has applied Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes" ("SFAS 109"), for all periods presented, which
requires that deferred income taxes be determined using the liability method for
all temporary differences between financial reporting amounts and the tax basis
of assets and liabilities, and that deferred taxes on such differences be
measured at the enacted income tax rates for the year in which such taxes are
expected to be payable or refundable.

In the Company's case the application of both rules did not generate a
reconciling difference in 2000, 2001 and 2002; therefore, there is no difference
between Mexican and US GAAP in those years.

In addition, as described in Note 13, under Mexican labor law, the Company is
required to pay employee profit sharing. As of December 31, 2000, 2001 and 2002,
the Company did not recognize deferred employee profit sharing as required by
SFAS 109, due to its immateriality. Employee profit sharing expense has been
included in operating expenses for US GAAP presentation purposes.

The deferred tax adjustment included in net income and stockholders' equity
reconciliations, represent the effect of deferred taxes on other U.S. GAAP
adjustments reflected in the respective summaries.

Capitalized financing cost

Under Mexican GAAP, capitalization of comprehensive financing cost on assets
under construction or in the pre-operating stage is allowed but not required.
Bachoco has elected to capitalize such comprehensive financing cost. Under U.S.
GAAP, interest expense incurred during the construction period on qualifying
expenditures must be considered an additional cost to be capitalized. Under U.S.
GAAP when financing is in Mexican pesos, the monetary gain is included in this
computation; when financing is denominated in U.S. dollars, only the interest is
capitalized and exchange losses are not included. The amount of interest or net
financing cost capitalized for US GAAP purposes was determined by reference to
the Companies average cost of outstanding debt.

Minority interest

Under Mexican GAAP, minority interest is presented as a component of
stockholders' equity, immediately after total majority stockholders' equity.
Under US GAAP, this concept is generally presented out of stockholders' equity.
For US GAAP purposes the Company reclassified minority interest from
stockholders' equity, decreasing its total stockholders' equity by Ps 42,210 and
Ps 41,103 at December 31, 2001 and 2002 respectively, and reclassified minority
interest from the income statement decreasing net income by Ps 5,994, Ps 3,953
and Ps 1,995 for the years ended December 31, 2000, 2001 and 2002, respectively.

Effect of inflation accounting on U.S. GAAP adjustments

To determine the net effect on the consolidated financial statements of
recognizing U.S. GAAP adjustments, it is necessary to recognize the effects of
applying Mexican GAAP inflation accounting provisions (described in Note 2) to
the U.S. GAAP adjustments.


                                      F-29
<PAGE>



Reporting Comprehensive Income

The Company has adopted for purposes of the U.S. GAAP reconciliation Statement
of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income" (SFAS 130). SFAS 130 establishes rules for the reporting and disclosure
of comprehensive income and its components. SFAS 130 requires the minimum
seniority premium liability adjustment, the deficit from restatement of
stockholders' equity, and deferred taxes on the difference between indexed cost
and replacement cost and on the minimum seniority premium liability adjustment,
to be included in other comprehensive income. The U.S. GAAP statements of
changes in stockholders' equity include the disclosure requirements of SFAS 130.

Cumulative amounts of the deficit from restatement of stockholder's equity net
of tax and the minimum seniority premium liability adjustment included in other
comprehensive income decreased stockholders' equity at December 31, 2002 by Ps
3,754,124 and Ps 683, respectively.

Disclosure about fair value of financial instruments

In accordance with SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments", information is provided about the fair value of certain financial
instruments for which it is practicable to estimate that value.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts
payable, notes payable and accrued liabilities approximate their fair values,
due to the short maturity of these instruments.

The fair value of long-term debt, based on quoted market prices for the same or
similar issues or on the current rates offered to the Company for debt of the
same remaining maturities, approximates their carrying amounts.

Effect of Statement 133

Bulletin C-2 ("Financial Instruments"), effective beginning January 1, 2001,
sets general rules for the assessment, presentation, and disclosure of financial
information that issuers or investors in financial instruments should follow.
Among said rules are the conditions that have to be met in order to be able to
offset financial assets and liabilities. Likewise, it is established that
financial instruments should be assessed at their fair value, with the exception
of those that have been classified as held to maturity. The latter should be
valued at their cost of acquisition. The Company has no important operations
with derivatives or derivative contracts; therefore, the adoption of this
Bulletin had no material effects.

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"
(SFAS 133) requires the Company to recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges must be adjusted to fair
value through income. If the derivative is a hedge, depending on the nature of
the hedge, changes in the fair value of derivatives are either offset against
the change in fair value of assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivate's change in fair
value will be immediately recognized in earnings.

24.

Since all derivative instruments held by the company at December 31, 2002, are
considered of a speculative nature; therefore, there are no differences between
the Mexican and US GAAP accounting treatment for the Company's derivative
instruments. As all financial instruments were measured at market value, and
taken to income.

Business combinations

In June 2001, the FASB issued Statements of Financial Accounting Standards No.
141, "Business Combinations" (Statement 141), and No. 142, "Goodwill and Other
Intangible Assets" (SFAS 142). Statement 141 requires that the purchase method
of accounting be used for all business combinations initiated after June 30,
2001. Statement 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets arising from business
combinations completed after June 30, 2001. SFAS 142 prohibits the amortization
of goodwill and intangible assets with indefinite useful lives. Statement 142
requires that these assets be reviewed for impairment at least annually.
Intangible assets with finite lives will continue to be amortized over their
estimated useful lives. Additionally, Statement 142 requires that goodwill
included in the carrying value of equity method investments no longer be
amortized.

The Company adopted the requirements of SFAS 142 on January 1, 2002.
Consequently, the Company performed impairment tests at the beginning and at the
end of the year and determined that its goodwill was not impaired. The
unamortized amount for US GAAP purposes in 2002 was Ps. 296,186

Under Mexican GAAP, Goodwill is amortized using the straight-line method over a
twenty-year period. The 2002 reconciliation shows the application of the non
amortization provisions applied to goodwill, resulting a credit of Ps. 16,003.
Had this had this provision been applied to the 2000 and 2001 income statements
such results under USGAAP would have increased by Ps 16,195 and Ps 16,117,
respectively, as follow:
<TABLE>
<CAPTION>



                                               Years ended December 31,
                                        -------------------------------------
                                           2000        2001          2002
                                        -------------------------------------
<S>                                        <C>       <C>             <C>
Net income as presented                 Ps1,378,079 Ps1,156,561   Ps1,497,780
Amortization goodwill                        16,195      16,117             -
                                        ----------------------------------------
Net income pro forma                    Ps1,394,274 Ps1,172,678   Ps1,497,780
                                        ----------------------------------------
</TABLE>


Asset Retirement Obligations

In June 2001, the FASB issued Statements of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" (SFAS 143), which is
effective for fiscal years beginning after June 15, 2002, The Statement requires
legal obligations associated with the retirement of long-lived assets to be
recognized at the time that the obligations are incurred. Upon initial
recognition of a liability, that cost should be capitalized as part of the
related long-lived asset and allocated to expense over the useful life of the
asset. The Company will adopt SFAS 143 on January 1, 2003, and, based on current
circumstances, does not believe that the impact of adoption of SFAS 143 will
have a material impact on the Company's financial position or results of
operations.


                                     F-30
<PAGE>



Impairment of Assets

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS
144), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes Statement No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
(SFAS 121), and the accounting and reporting provisions of APB Opinion No. 30,
Reporting the Results of Operations for a disposal of a segment of a business.
SFAS 144 is applicable to the years succeeding December 15, 2001. The Company
adopted the requirements of Statement 144 on January 1, 2002, and determined
that it was not necessary to record any adjustments to the book value of its
long-lived assets.

Cash flow information

Under Mexican GAAP, the Company presents consolidated statements of changes in
financial position, as described in Note 2.

In accordance with Mexican GAAP, the change in current and long-term debt due to
restatements in constant Mexican pesos, including the effect of exchange
differences, is presented in the statements of changes in financial position in
the financing activities section.

The gain from monetary position and the exchange gain or loss are not presented
in the operating activities section as a reconciling adjustments, as they are
included in the respective monetary asset or liability line. Statement of
Financial Accounting Standards No. 95 ("SFAS 95"), "Statement of Cash Flows",
does not provide guidance with respect to price-level restated financial
statements.

The Company has adopted, for its US GAAP presentation of cash flow information,
the guidance issued by the AICPA SEC Regulations Committee's International
Practices Task Force in its meeting held on November 24, 1998, requiring foreign
registrants that file price level adjusted financial statements to provide cash
flow statements that show separately the effects of inflation on cash flows.
<TABLE>
<CAPTION>


         Cash Flow Information                                                 Years ended December 31,
                                                                      ----------------------------------------
                                                                          2000           2001           2002
                                                                       ----------------------------------------
<S>                                                                     <C>             <C>            <C>
OPERATING ACTIVITIES:
Net income                                                              Ps1,378,079 Ps1,156,561  Ps 1,497,780
Adjustments to reconcile net income to
  resources provided by operating
   activities:
Depreciation                                                                302,254     297,206       318,419
Deferred income tax                                                         386,309     282,398     ( 233,656)
Goodwill amortization                                                        16,195      16,117             -
                                                                       ----------------------------------------
                                                                          2,082,837   1,752,282     1,582,543

</TABLE>


                                     F-31
<PAGE>
<TABLE>
<CAPTION>

<S>                                                                         <C>           <C>         <C>
Changes in assets and liabilities, net of
  effects from the purchase of Grupo Campi:
Accounts receivable                                                        ( 46,839)    ( 135,352)       8,453
Inventories                                                                ( 58,947)    ( 490,145)   ( 441,611)
Prepaid expenses and other accounts
Receivables                                                                ( 38,342)       54,577    ( 109,034)
Accounts payable                                                           ( 63,712)      122,276    ( 144,064)
Other taxes payable and other accruals                                         ( 89)       24,037    ( 134,801)
Loss (gain) on net monetary position                                      ( 103,223)     ( 28,452)     103,774
                                                                      -----------------------------------------
Resources provided by operating activities
                                                                          1,771,685     1,299,223      865,260

FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt                                    668,931             -            -
Proceeds from issuance of notes payable
   to banks                                                               1,102,260       931,796       57,656
Repayment of long-term debt and notes
   Payable                                                              ( 3,311,478)  ( 1,448,682)   ( 188,281)
Cash dividends paid                                                       ( 180,004)    ( 340,061)   ( 277,747)
Minority interest                                                             8,275           761      ( 1,107)
Repurchase of stock                                                           5,311         7,179     ( 10,248)
                                                                     ------------------------------------------
Resources used in financing activities                                  ( 1,706,705)    ( 849,007)   ( 419,727)

INVESTING ACTIVITIES:
Acquisition of property, plant and
  Equipment                                                               ( 284,881)    ( 601,641)   ( 267,350)
Other assets                                                                 34,519      ( 35,066)       5,641
Investment in Grupo Campi, net of cash
  Acquired                                                                 ( 30,056)            -            -
                                                                    ------------------------------------------
Resources used in investing activities                                    ( 280,418)    ( 636,707)   ( 261,709)
                                                                    ------------------------------------------






Effect of inflation accounting                                              109,150       104,474      275,819
                                                                    -------------------------------------------

Net increase ( decrease ) in cash
  and cash equivalents                                                    ( 106,288)     ( 82,017)     459,643
Cash and cash equivalents at
  beginning of year                                                       1,424,658     1,318,370    1,236,353
                                                                    -------------------------------------------
Cash and cash equivalents at
  end of year                                                          Ps 1,318,370   Ps1,236,353  Ps1,695,996
                                                                    -------------------------------------------

Interest paid                                                            Ps 123,304      Ps48,305     Ps11,903
Income tax paid                                                              53,428        41,342       58,462
Asset tax paid                                                                  407           180        1,738
Employee profit sharing paid                                                  2,430         2,215        2,304
</TABLE>



Summary of adjustments to reconcile Mexican GAAP and U.S. GAAP

The following is a summary of net income adjusted to take into account certain
material differences between Mexican GAAP and U.S. GAAP.


                                     F-32
<PAGE>

<TABLE>
<CAPTION>
                                                  Years ended December 31,
                                        ---------------------------------------------
                                                  2000           2001           2002
                                        ---------------------------------------------
<S>                                       <C>              <C>             <C>
Net income as reported under Mexican
 GAAP                                      Ps1,351,369    Ps1,142,360    Ps1,480,506
Adjustments to reconcile net income to
  U.S. GAAP:
Interest cost capitalized                       31,154         24,959          3,399
Depreciation of capitalized interest             1,550           ( 76)       ( 1,415)
Deferred income tax on USGAAP
  Adjustments                                        -        ( 6,729)         1,360
Amortization goodwill                                -              -         16,003
Effect of inflation accounting on
  USGAAP adjustments                                 -              -           ( 78)
Minority interest                              ( 5,994)       ( 3,953)       ( 1,995)
                                        ---------------------------------------------
Net income under U.S. GAAP                 Ps1,378,079    Ps1,156,561    Ps1,497,780
                                        ---------------------------------------------
Weighted average number of units
  outstanding (thousands)                      296,124        297,454        297,898
Net income per unit                             Ps4.65         Ps3.88        Ps 5.03
</TABLE>

After the foregoing adjustment for the depreciation of capitalized interest, the
reclassification of employee profit sharing and the non amortization of goodwill
in 2002 operating income under U.S. GAAP would be Ps 1,654,884, Ps 1,362,772 and
Ps 1,255,155 in 2000, 2001 and 2002, respectively.

Total assets under U.S. GAAP were Ps 11,154,486 in 2001 and Ps 11,608,602 in
2002. The difference in total assets between Mexican GAAP and U.S. GAAP is
comprised of the foreign exchange loss and the monetary gain on financing in
U.S. dollars capitalized in assets under construction net of accumulated
depreciation.

The reconciliation of the stockholders' equity between Mexican GAAP and US GAAP
is as follows:
<TABLE>
<CAPTION>

                                                          Years ended December 31
                                                       -----------------------------
                                                            2001           2002
                                                       -----------------------------
<S>                                                       <C>         <C>
Majority stockholders' equity as reported under
Mexican GAAP                                             Ps8,306,551   Ps9,432,929

Adjustments to reconcile majority stockholders'
  equity to U.S. GAAP:
Accumulated differences between the financing cost
  capitalized for Mexican GAAP and U.S. GAAP
   purposes                                                   35,117         38,516
Accumulated depreciation on the above items                  ( 3,545)       ( 4,960)
Deferred income taxes on USGAAP adjustments                  ( 6,729)       ( 5,447)
Amortization goodwill                                              -         16,003
                                                       -----------------------------
Majority stockholders' equity as reported under U.S.
  GAAP                                                   Ps8,331,394   Ps9,477,041
                                                       =============================
</TABLE>


The effects of the above adjustments do not have any impact on minority
interest.

                                     F-33
<PAGE>

The consolidated statements of changes in stockholders' equity in accordance
with U.S. GAAP is as follows:
<TABLE>
<CAPTION>

                                                           Stock                    Other                     Total
                                                          repurchase Retained    comprehensive Comprehensive stockholders
                                      Capital   Paid in    reserve    earnings      income        income        equity
                                        stock    capital
                                     -----------------------------------------------------------------------------------
<S>                                <C>           <C>        <C>       <C>        <C>           <C>           <C>
Balance at December 31, 1999        Ps1,879,124 Ps506,937 Ps192,491  Ps7,416,446 Ps(3,422,887)              Ps6,572,111
Repurchase of stock                       ( 469)           ( 24,156)          -             -                  ( 24,625)
Sales of repurchased stock                  843        -     29,093                                              29,936
Cash dividends paid                           -        -          -   ( 180,004)            -                 ( 180,004)
Comprehensive income
  Net income for the year                     -        -          -   1,378,079             -  Ps1,378,079     1,378,079
  Components of other comprehensive
   income:
  Deficit from holding of non
   monetary assets                            -        -          -           -      ( 86,055)    ( 86,055)    ( 86,055)
                                                                                              -------------
Other comprehensive income, net of
 taxes                                                                                            ( 86,055)
                                                                                              -------------
Comprehensive income                                                                           Ps1,292,024
                                                                                              =============

                                     ---------------------------------------------------------             -------------
Balance at December 31, 2000          1,879,498  506,937    197,428   8,614,521   ( 3,508,942)                7,689,442
Repurchase of stock                     ( 2,105)           ( 28,047)                        -                  ( 30,152)
Sales of repurchased stock                2,498              34,057         776                                  37,331
Cash dividends paid                           -        -          -   ( 340,061)            -                 ( 340,061)
Comprehensive income
  Net income for the year                     -        -          -   1,156,561             -  Ps1,156,561     1,156,561
  Components of other comprehensive
   income:
    Deficit from holding of non
     monetary assets                                                                ( 181,064)   ( 181,064)   ( 181,064)
Minimum seniority premium liability
 adjustment                                                                             ( 663)       ( 663)       ( 663)
                                                                                                -----------
Other comprehensive income, net of
 taxes                                        -        -          -           -                  ( 181,727)
                                                                                              -------------
Comprehensive income                                                                             Ps974,834
                                                                                              =============

                                     ---------------------------------------------------------             -------------
Balance at December 31, 2001          1,879,891  506,937    203,438   9,431,797   ( 3,690,669)                8,331,394
Repurchase of stock                     ( 1,288)       -   ( 36,704)      ( 354)            -                  ( 38,346)
Sales of repurchased stock                  938   27,160          -                                              28,098
Cash dividends paid                           -        -          -   ( 277,747)            -                 ( 277,747)
Comprehensive income
  Net income for the year                     -        -          -   1,497,780             -   Ps1,497,780   1,497,780
  Components of other comprehensive
   income:
   Deficit from holding of non
    monetary assets                                                                  ( 64,118)    ( 64,118)    ( 64,118)
   Minimum seniority premium
    liability adjustment                                                                 ( 20)        ( 20)        ( 20)
                                                                                                   --------
Other comprehensive income, net of
 taxes                                        -        -          -           -                   ( 64,138)
                                                                                                  ---------
Comprehensive income                                                                            Ps1,433,642
                                                                                                ===========

                                     ---------------------------------------------------------             -------------
Balance at December 31, 2002        Ps1,879,541 Ps534,097 Ps166,734 Ps10,651,47 6Ps(3,754,807)              Ps9,477,041
                                     =========================================================             =============
</TABLE>


                                      F-34
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 12 of the Securities Exchanges Act
of 1934, the registrant certifies that it meets all requirements for filing on
Form 20-F and has duly caused this Annual Report to be signed on its behalf by
the undersigned, thereunto duly authorized.



                                                INDUSTRIAS BACHOCO, S.A. de C.V.



                                                By: /s/ Daniel Salazar Ferrer
                                                   ---------------------------
                                                        CFO




Date: June 30, 2003

     CERTIFICATIONS

     I, Daniel Salazar Ferrer, CFO, certify that:

     1. I have reviewed this annual report on Form 20-F of Industrias Bachoco;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

                                       S-1

<PAGE>

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

     Date: June 30, 2003

     /s/ DANIEL SALAZAR FERRER
     -------------------------------
     Daniel Salazar Ferrer
     Chief Financial Officer

                                       S-2
<PAGE>

     CERTIFICATIONS

     I, Cristobal Mondragon Fragoso, CEO, certify that:

     1. I have reviewed this annual report on Form 20-F of Industrias Bachoco;

     2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

     6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                      S-3
<PAGE>

     Date: June 30, 2003

     /s/ CRISTOBAL MONDRAGON FRAGOSO
     ----------------------------------
     Cristobal Mondragon Fragoso
     Chief Executive Officer



                                       S-4