ANNUAL REPORT OF

GRUPO BIMBO, S.A.B. DE C.V.

Annual Report filed pursuant to the general provisions applicable to securities issuers and other participants in the securities market (disposiciones de carcter general aplicables a las emisoras de valores y a otros participantes del mercado de valores) for the fiscal year ended on December 31, 2010. Name of the issuer: Grupo Bimbo, S.A.B. de C.V. Domicile: Prolongacin Paseo de la Reforma No. 1000, Colonia Pea Blanca Santa Fe, C.P. 01210, Mxico, D.F. The address of Grupo Bimbo, S.A.B. de C.V. in the Internet is www.grupobimbo.com, provided, however, that the information contained therein is not part of this Annual Report. Outstanding shares: the authorized capital stock of Grupo Bimbo, S.A. de C.V. consists of Series A common shares, ordinary, nominative, without expression of nominal value, registered on the National Securities Registry and listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V.) Ticker Symbol: BIMBO. The registration in the National Securities Registry does not constitute a certification as to the investment quality of the securities, the solvency of the issuer, or the accuracy or veracity of the information contained in this Annual Report, nor does it validate the acts, if any, that were performed in violation of the laws. Mexico City, Federal District, June 28, 2011

RELEVANT INFORMATION WITH RESPECT TO THE CERTIFICADOS BURSATILES ISSUED BY GRUPO BIMBO, S.A.B. DE C.V. Ticker Symbol
Amount Number of series in which the issuance is divided Issuance Date Maturity Date Issuance Period

BIMBO 02-2
$750,000,000

BIMBO 09
$5,000,000,000

BIMBO 09-2
$2,000,000,000

BIMBO 09U
706,302,200 UDIS

N.A. May 17, 2002 May 3, 2012 3,639 days

N.A. June 5, 2009 June 9, 2014 1,820 days Gross annual interest on their face value which shall be calculated by adding 1.55 percentage points to the 28 day term Interbank Equilibrium Interest Rate (Tasa de Inters Interbancaria de Equilibrio) Every 28 days beggining on July 13, 2009

N.A. June 5, 2009 June 6, 2016 2,548 days

N.A. June 5, 2009 June 6, 2016 2,548 days

Interest rate

Fixed gross annual interest on their face value at an interest rate of 10.15%

Fixed gross annual interest on their face value at an interest rate of 10.60%

Fixed gross annual interest on their face value at an interest rate of 6.05%.

Periodicity in payment of interest

Aproximately every six months, beggining on November 14, 2002

Every 182 days beggining on December 14, 2009

Every 182 days beggining on December 14, 2009

Place and manner of payment of principal and Interest

The principal and interest due will be paid in cash at the relevant maturity date, and on each of the interest payment dates respectively, by electronic The principal and interest due will be paid on their maturity date, by funds transfer, at the electronic funds transfer, at the registered office of S.D. Indeval registered office of S.D. Institucin para el Depsito de Valores, S.A. de C.v., or at the registered Indeval, S.A. de C.V., office of the Issuer. Institucin para el Depsito de Valores, upon delivery of the certificate issued by the depositary or, as the case may be, at the Companys offices.

Subordination of the certificates

N.A. The amortization of the Certificados Burstiles shall be in a single payment on the maturity date, upon delivery of the certificate or evidence issued by S.D. Indeval, S.A. de C.V., Institucin

Lien limitations / Pari Passu status

Amortization and prepayment.

A single payment on the relevant maturity date.

A single payment on the relevant maturity date. The Company shall have the right to prepay, all (but not less) than all of the Certificados Burstiles on any date, before the Maturity Date, as defined in the Supplement (Make-Whole).

Ticker Symbol

BIMBO 02-2

BIMBO 09

BIMBO 09-2

BIMBO 09U

Guarantee

para el Depsito de Valores. The Certificados Burstiles are unsecured; therefore they do not have any specific guarantee. On June 5, 2009, Grupo The Certificados Burstiles are unsecured and shall be guaranteed Bimbo and its subsidiaries (avalados) by the following subsidiaries Bimbo, S.A. de C.V., Barcel, Bimbo, S.A. de C.V., S.A. de C.V., Bimbo Bakeries USA, Inc. and Bimbo Foods, Inc. The Barcel, S.A. de C.V., Certificados Burstiles must be guaranteed (avalados) by Subsidiaries Bimbo Bakeries USA, Inc. of Grupo Bimbo that, individually or jointly, reach the Minimum and Bimbo Foods, Inc., Guarantors Requirement. At any time during the effectiveness of the entered into an agreement Certificados Burstiles and without the consent of the Holders of the (Estipulacin a Favor de Certificados Burstiles or the Common Representative, Grupo Bimbo Terceros) whereby they may release any Guarantor of its payment obligations pursuant to the agreed to guarantee, jointly Certificados Burstiles, as well as substitute any Guarantor or include and severally, new Guarantors, as long as after such release, addition or substitution, unconditionally and the Minimum Guarantors Requirement is met, based on the most recent irrevocably (except if the available audited annual consolidated financial statements. consent of the majority of the holders of the For purposes of the above, Minimum Guarantors Requirement means, Certificados Bursatiles as of the last day of each fiscal year, that the Guarantors EBITDA present in terms of the represents at least seventy five percent (75%) of Grupo Bimbos relevant certificate and the applicable law is met) the Consolidated EBITDA for such fiscal year. The abovementioned will be calculated based on the most recent available audited annual full and punctual payment consolidated financial statements of Grupo Bimbo. of any principal or interest payable under the Certificados Burstiles. See Recent Events following described in this Annual Report. N.A. Standard & Poors, S.A. de C.V. mxAA+ Fitch Mxico, S.A. de C.V. AA+(mex) Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotia Inverlat The withholding rate of the income tax applicable with respect to the interests paid in accordance with the Certificados Bursatiles is subject to, for individuals and entities considered as residents of Mexico for tax purposes in: (i) Mexico, article second transitory, paragraph LXXII, and article 160 of the Income Tax Law (Ley del Impuesto Sobre la Renta); and (ii) abroad, article 195 of the Standard & Poors, S.A. de C.V. mxAA+ Fitch Mxico, S.A. de C.V. AA+(mex) Moodys de Mxico, S.A. de C.V. Aa1.mx

Trustee

Rating

Common Representative Depositary

Banco INVEX, S.A., Institucin de Banca Mltiple, INVEX

S.D. Indeval Institucin para el Depsito de Valores S.A. de C.V. The withholding rate of the income tax applicable, as of the date of the Supplement, to the interest paid in accordance with the Certificados Bursatiles is subject to: (i) for individuals and entities considered as residents of Mexico for tax purposes, to the provisions of articles 58, 160 and other applicable provisions of the Income Tax Law (Ley del Impuesto Sobre la Renta) in effect; and (ii) for individuals and entities considered as non-Mexican residents for tax purposes, to the provisions of articles 179, 195 and other applicable provisions of the Income Tax Law in effect. Potential investors shall consult their tax advisors with respect to the tax consequences of their investment in the Certificados Bursatiles, including the application of specific rules applicable to their particular situation. The current fiscal regime may be amended during the term of the Program and while the Issuance is in effect.

Tax treatment

Ticker Symbol

BIMBO 02-2
Income Tax Law.

BIMBO 09

BIMBO 09-2

BIMBO 09U

TABLE OF CONTENTS Pgina 1) GENERAL INFORMATION a) b) c) d) e) f) g) Summary of Terms and Definitions.. Executive Summary Risk Factors Other Securities.. Relevant Changes to the Security Rights Registered in the RNV... Use of Proceeds... Public Documents 1 5 11 18 21 22 22

2) THE COMPANY a) b) Companys History and Development. Business Description i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) Principal Activity... Distribution Channels...... Patents, Trademarks, Licenses and other Contracts .. Main Customers..... Applicable Legislation and Tax Situation Human Resources.. Environmental Performance.... Market Information.... Corporate Structure Main Assets Description.. Judicial, Administrative or Arbitration Processes. Shares Representing the Capital Stock Dividends. 23 33 33 54 56 57 57 63 64 66 72 72 77 78 78

3) FINANCIAL INFORMATION a) b) c) d) Selected Financial Information. Financial Information per Business, Geographic Zone and Exportation Sales. Report on Significant Debt.. Managements Discussion and Analysis of the Companys Financial Conditions and Results of Operations.. i) ii) iii) e) Results of Operation.. Financial Position, Liquidity and Capital Resources... Internal Control.. 80 88 88 90 90 95 98 98

Critical Accounting Policies

4) ADMINISTRATION a) b) c) Independent Auditors Transactions with Related Persons and Conflicts of Interests. Administrators and Shareholders. 102 102 103

TABLE OF CONTENTS d) Corporate Bylaws and Other Agreements Pgina 114

5) CAPITAL MARKET a) b) c) Share Holding Structure Share Behavior in the Securities Market... Market Maker............................................................................................ 119 119 120

6) RESPONSIBLE PERSONS Responsible Persons...... 121

7) SCHEDULES Audited Committee Opinion with respect to the General Directors Report corresponding to the year ended as of December 31, 2009 b) Financial Audited Statements for the years ended as of December 31, 2009 and 2008....................................................................................................... c) Audited Committee Report corresponding to the year ended as of December 31, 2009 a)

No underwriter, person appointed as an attorney-in-fact to carry out operations with the public, or any other person, has been authorized to disclose any information or make any representation that is not contained in this Annual Report. As a consequence of the above, any information or representation that is not contained in this Annual Report must be understood as not authorized by Grupo Bimbo, S.A.B. de C.V. In addition, unless otherwise indicated, the Companys information contained herein is reported as of December 31, 2010.

1) GENERAL INFORMATION a) SUMMARY OF TERMS AND DEFINITIONS

Unless otherwise indicated by the context, for purposes of this Annual Report, the following terms shall have the meaning attributed thereto as follows, which shall be applicable both to singular and plural: Terms Principal Shareholders Definitions Group of shareholders holding the majority of BIMBOS capital stock shares, which are Normaciel, S.A. de C.V., Promociones Monser, S.A. de C.V., Banco Nacional de Mexico, S.A. as trustee, Philae, S.A. de C.V., Distribuidora Comercial Senda, S.A. de C.V., and Marlupag, S.A. de C.V. American Institute of Baking. Business Anti-Smuggling Coalition. BBU, Inc., (Bimbo Bakeries USA), subsidiary of Grupo Bimbo that consolidates transactions in the United States of America. Grupo Bimbo, S.A.B. de C.V., and, when the context so requires, together with its consolidated subsidiaries. Bimbo Foods, Inc. BMB Foods, LLC Project for the implementation of a rationalization of resources system ERP (Enterprise Resource Planning), data base and support systems. Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V.) English capacity measure for grains and other solid products. Certificados Negotiable instruments issued by the Company in accordance with the Securities Market Law, under the Notes Program (Programa de Certificados Burstiles) and which are outstanding. Federal Treasury Certificates. Federal Antitrust Commission. Popular Republic of China. Integral Financing Cost. Consejo Mexicano para la Investigacin y Desarrollo de Normas de Informacin Financiera, A.C. Body responsible for the operation and in charge of issuing the NIF. National Banking and Securities Commission (Comisin Nacional Bancaria y de Valores). Food ready to be eaten. Board of Directors of BIMBO. An independent corporation engaged in the analysis of information and markets.

AIB BASC BBU BIMBO, Company, Issuer, Group or Grupo Bimbo Bimbo Foods BMB Foods BIMBO XXI BMV Bushel Notes / Bursatiles

CETES or Cetes CFC China CIF or Integral financial result CINIF

CNBV fast food Board of Directors or Board Datamonitor

Terms

Definitions

DNV Dollars or dollars USA El Globo ERP Audited Financial Statements

Det Norske Veritas. Currency legal tender in the USA United States of America. Gastronoma Avanzada Pasteleras, S.A. de C.V. Enterprise Resource Planning. The Companys consolidated financial statements, audited as of December 31, 2010 and 2009, which were prepared in accordance with the Financial Reporting Standards, including its notes, which are attached to this Annual Report. Corporate Bylaws of BIMBO as amended from time to time. Countries of the European Union where BIMBO carries out transactions. Food and Drug Administration, a USA governmental agency. George Weston Bakeries, Inc., Entenmanns Products Inc., Entenmanns, Inc. an Entenmanns Sales Company, Inc. (TSX: WN) Guelph Food Technology Centre. Good Manufacturing Practices. Galaz, Yamazaki, Ruiz Urquiza, S.C., member of Deloitte Touche Tohmatsu, the Companys Independent Auditors. Hazard Analysis and Critical Control Point. Unique Rate Corporate Tax (Impuesto Empresarial a Tasa nica). International Finance Corporation. Instituto Mexicano de Normalizacin y Certificacin, A.C. Instituto Mexicano de la Propiedad Industrial S.D. Indeval Institucin para el Depsito de Valores, S.A. de C.V. National Consumer Price Index (ndice Nacional de Precios al Consumidor). International Organization for Standardization. Income Tax (Impuesto sobre la Renta). Value Added Tax (Impuesto al Valor Agregado). Central and South America; comprises the countries of this geographical area where BIMBO carries out transactions. London Interbank Offered Rate. Securities Market Law (Ley del Mercado de Valores). Square meters. United Mexican States. Financial Reporting Standards (Normas de Informacin Financiera) issued by CINIF.

Corporate Bylaws Europe FDA George Weston GFTC GMP GYRU HACCP IETU IFC IMNC IMPI Indeval INPC ISO ISR IVA Latin America Libor LMV m Mexico MFRS
2

Terms NOM OLA

Definitions Mexican Official Standard (Norma Oficial Mexicana). Organizacin Latinoamrica, division in charge of coordinating the Groups transactions in Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. World Health Organizaiton. Sliced and packed bread. Cake in individual presentation. Currency of legal tender in Mexico. Gross Domestic Product. Federal Environment Protection Advocate (Procuradura Federal de Proteccin al Ambiente). Employee Profit Sharing (Participacin de los Trabajadores en las Utilidades). This Issuers Annual Report, prepared in accordance with the general provisions applicable to securities issuers and other participants in the securities market (disposiciones de carcter general aplicables a las emisoras de valores y a otros participantes del mercado de valores) issued by CNBV. National Securities Registry (Registro Nacional de Valores). Interbanking Equilibrium Interest Rate (Tasa de Inters Interbancaria de Equilibrio). North America Free Trade Agreement. EBITDA represents income after general expenses plus depreciation and amortization. The Companys management uses this measure as an indicator of our operating results and financial condition; however it shall not be taken into consideration in isolation, as an alternative to net income, as an indicator of the operating performance or as a substitute for analysis of the results as reported under MFRS, since, among others: (i) it does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; (ii) it does not reflect changes in, or cash requirements for, the working capital needs; (iii) it does not reflect our interest expense; and (iv) it does not reflect the cash income taxes we may be required to pay; Because of the above, the EBITDA measure should not be considered a measure of discretionary cash available to invest in the growth of the Companys business or as a measure of cash that will be available to us to meet the Companys obligations. EBITDA is not a recognized financial measure under MFRS and it may not be comparable to similar titled measures presented by other companies in our industry because not all companies use the same definition. As a result, it shall be relied primarily on the MFRS results and use EBITDA only as a supplement.

WHO packaged bread cake Pesos, pesos or $ GDP PROFEPA PTU Annual Report

RNV TIIE NAFTA EBITDA

USDA WFI WGC

Food Safety and Inspection Service of the Department of Agriculture, a governmental agency of the USA Weston Foods, Inc., bakery business in the USA that was owned by George Weston Limited and which BIMBO acquired on January 21, 2009. Whole Grains Council, an organization that helps consumers to identify foods

Terms

Definitions prepared with whole grains and their benefits.

Unless otherwise specified, the financial information contained in this document is expressed in million Mexican pesos and was prepared in accordance with MFRS in Mexico. b) EXECUTIVE SUMMARY

This chapter contains a brief summary of the information provided for in this Annual Report. Since it is a summary, it is not intended to contain all relevant information contained in this Report. 1. The Company

Grupo Bimbo is one of the largest bakery companies in the world and one of the largest food companies in the American continent, with a diversified portfolio of over 7,000 products and more than 150 renowned brands, including Bimbo, Thomas, Barcel, Arnold, Marinela, Entemanns, and Nutrella. The Company is engaged in the production, distribution and commercialization of sliced and packaged bread, sweet bread, home-made type cakes, cookies, cereal bars, candies, chocolates, sweet and salted snacks, wheat tortillas, tostadas, goat milk caramel cajeta and fast food, among others. Likewise, the Company has one of the worlds most extensive distribution networks, with more than 41,000 routes and a workforce exceeded 108,000 collaborators. Through the development of brands, fresh and quality products and continuous innovations, the Group has obtained a leading participation in the bakery products market in the USA, Mexico and the majority of the Latin America countries in which it operates. As indicated by Datamonitor y and the Groups internal market surveys. By the end of 2010, the Group was ranked first or second in its main markets (USA, Mexico and Latin America) in all its categories: sliced and packaged bread, sweet bread, cakes, cookies, salted snacks, confectionery goods, tostadas and wheat tortillas. As of December 31, 2010, Grupo Bimbo, through Barcel, occupied second place in the candy market in Mexico, which mainly includes chewing gum, chocolate and sweets. The Group operates in 17 countries, including USA, Mexico, Latin America and, to a lesser extent, China. As of December 31, 2010, the Group operated 103 production plants worldwide, with capacity to produce commercial amounts of a variety of products in its principal markets. In order to ensure the freshness and quality of its products, the Group has developed an extensive direct distribution network that has one of the largest distribution fleets in the American continent. As of December 31, 2010, the Groups direct distribution network included more than 41,000 distribution routes, spread in more than 1,000 distribution centers and that reached more than 1.8 million sale points. The Group considers that this distribution network is one of its principal competitive advantages. The following table shows certain lines of the audited consolidated financial statements of Grupo Bimbo upon closing of each of the years indicated: As of December 31, 2009 2008 116,353 12,054 15,837 5,956 82,317 7,328 9,829 4,320

2010 Net Sales Profit after General Expenses EBITDA Majority Net Profit Note: Figures in million pesos.

117,163 11,393 15,468 5,395

The Groups general strategy is based on its corporate mission, that is, the development of its brands value, and fundamentally, in the commitment to be a highly productive company and fully human, as well as innovative, competitive, oriented to its clients and consumers satisfaction, leader at an international level in the bakery industry and with a long term vision. See The Company Business Description below.

Since 1980, Grupo Bimbo shares are traded in the BMV under the ticker symbol BIMBO. 2. Financial Information

The Audited Financial Statements have been prepared in accordance with MFRS in Mexico. Unless otherwise indicated, all information contained in the Audited Financial Statements included in this Annual Report has been expressed in million pesos. Figures corresponding to 2010 and 2009 are shown in nominal pesos of the date when generated, except for figures of some countries the inflation of which in the preceding three years was considered as hyperinflationary and that, consequently, require to be re-stated at the closing currency and exchange rate. The updating of this figures effects are not relevant on the Audited Financial Statements or on the information shown in this Annual Report. For a better comprehension, the summary on financial information shown herein below shall be reviewed together with the Audited Financial Statements and the Audited Financial Statements and the notes thereof. Likewise, such summary shall be reviewed with all the explanations provided by the Groups Administration in the section Financial Information of this Annual Report especially in the section Managements Discussion and Analysis of the Companys Financial Condition and Results of Operation.

Consolidated Statement of Income As of December 31 of:

Net sales (1) Cost of Sales Gross Profit Distribution and Selling Expenses Administrative Expenses General Expenses Income After General Expenses Other Income (Expenses) Net Employee Profit Sharing Other Total Income and (Expenses) Net Net Interests Exchange (Loss) Income Monetary Position Gain Consolidated Financial Statement Equity in Income of Associated Companies

2010
117,163 55,317 61,846 42,933 7,520 50,453 11,393 (297) 653 (950) (2,574) (94) 45 (2,623)

2009
116,353 54,933 61,420 0 41,724 7,642 49,366 12,054 0 (613) 563 (1,176) (2,318) 207 99 (2,012) 0 87 42

2008
82,317 40,293 42,024 0 29,621 5,075 34,696 7,328 0 (8) 467 (475) (461) (153) 75 (539) 0 24

Income befote Income Taxes Income Tax Deferred Income Tax Provisions Income before Discontinued Operations

7,907 0 2,309 54 2,363 0 5,544 0

8,908 4,041 (1,214) 2,827 6,081

6,338 2,099 (205) 1,894 4,444

Net Income Controlling Stockholders Non Controlling Stockholders Basic Earnings per Common Shares Dividend per Share Income before Financing, Interests, Depreciation and Amortization

5,544 5,395 149 4.59 0.50 15,468

6,081 0 5,956 125 5. 5.07 5. 0.46 15,837

4,444 0 4,320 124 3.6 3.67 3 0.46 9,829

(1) During 2010, 2009 and 2008, the net sales of Bimbo, S.A. de C.V., and Barcel, S.A. de C.V., in Mexico represented approximately 47%, 45% and 63%, respectively, of the consolidated net sales (see Note 2 of the Audited Financial Statements)

Consolidated Balance Sheet As of December 31 of:

Cash and Cash Equivalents Accounts and Notes Receivable Net Inventory, Net Payments in Advance Derivative Financial Instruments Total Current Assets Notes receivable from independent operators Property, Plant and Net Equipment Stock Investments in Associated Companies and Liabilities Derivative Financial Instruments Deferred Income Taxes Goodwill - Net Intangible Assets, Net Intangible Assets for Employees Retirement Benefits Other Assets Net Total Assets Payable Accounts to Suppliers Short Term Debt and Current Outstanding Portion of Long Term Debt Other Accounts Payable and Accrued Liabilities Payable Accounts to Related Parties Income Tax Employee Profit Sharing Derivative Financial Instruments Total Outstanding Debt Long Term Debt (1) Derivative Financial Instruments Employees Benefits and Social Security Employee Profit Sharing Deferred Deferred Income Taxes (2) Other Long Term Debt Total Liabilities Controlling Stockholders Non Controlling Stockholders Total Capital Stock

2010
3,325 13,118 3,149 440 180 20,212 2,140 32,028 1,553 393 1,539 19,884 19,372 1,948 99,069 5,954 1,624 6,302 802 624 709 16,015 31,586 231 4,621 249 622 1,208 54,532 43,710 827 44,537

2009
4,981 12,430 2,969 499 146 21,025 1,940 32,763 1,479 159 635 20,394 19,602 1,669 99,666 5,341 4,656 6,228 238 3,272 637 74 20,446 32,084 54 4,644 290 266 925 58,709 40,104 853 40,957

2008
7,339 8,557 2,573 431 225 19,125 451 26,039 1,416

1,417 6,313 4,951 498 60,210 4,881 2,054 1,499 584 3,624 524 17 13,183 9,079 51 982 351 1,257 333 25,236 34,264 710 34,974

Consolidated Balance Sheet Notes See effects of the reclassifications for 2009 and 2008 in the notes of the Audited Financial Statements.

(1) (2)

Some financial institutions or stock market debt provides certain restrictions and obligations to the Companys financial structure (see Note 11 of the Audited Financial Statements). See Note 17 of the Audited Financial Statements.

As of December 31 of: Depreciation and Amortization Resources Generated by Operating Activities Resources Used in Financing Activities Resources Used in Investment Activities Balance at the End of the Year Net Cash Flows from Operating Activities Net Cash Flows from Investment Activities Net Cash Flows from Financing Activities Cash and Cash Equivalents at the End of Period Margin After General Expenses EBITDA Margin Net Margin Assets Return Return on Invested Capital EBITDA Total Debt / EBITDA Net Debt / EBITDA EBITDA / Interest Expense

2010 3,729 11,375 (5,974) 6,983 3,325 9.7% 13.2% 4.7% 5.6% 11.6% 15,468 2.15 1.93 4.94

2009 3,783 13,449 (38,398) 22,606 4,981 10.4% 13.6% 5.2% 6.3% 12.0% 15,837 2.32 2.01 5.58

2008 2,501 8,850 (7,160) 1,734 7,339 8.9% 11.9% 5.2% 7.6% 12.0% 9,829 1.13 0.39 13.14

3. Capital Markets The authorized capital stock of Grupo Bimbo consists of Series A common shares, nominative, without expression of nominal value, registered on the RNV. Such shares were publicly traded in the BMV on February 1980, when the Company carried out its initial public offering. Since February 1, 1999 BIMBO is part of the Price and Quotation Index (ndice de Precios y Cotizaciones) of the Mexican Stock Exchange (BMV). As of the date of this Annual Report, BIMBO share is classified as high trading volume, in accordance with the Trading Activity Index published by the Mexican Stock Exchange (BMV). The following table shows the maximum, minimum and closing adjusted quoting prices in pesos, as well as the operation volume of BIMBOS Series A shares in the BMV, during the indicated periods.

Year ended on December 31 2006 2007 2008 2009 2010

Pesos per share Serie A Maximum 13.75 20.42 18.00 22.99 27.41 Minimum 7.61 11.38 12.45 9.98 20.56 Closing 13.50 16.26 14.58 21.64 26.36

Operation volume of Series A shares 2,833,017,600 1,853,529,600 1,844,708,800 2,286,329,600 2,424,625,600

Source: Bloomberg. Figures adjusted from the 4:1 split carried out on April 29, 2011. 4. Corporate Structure

The following table shows the principal subsidiaries that form the corporate structure of the Group:

10

c)

RISK FACTORS

The risks factors following described may adversely affect the development, financial condition and/or results of operations of the Company, as well as affect the price of any securities of the Company. Risks Related to the Companys Business and Industry Increases in prices and shortages of raw materials, fuels and utilities could cause costs of the Group to increase. Raw materials, including, among others, wheat flour, sugar, plastics used to package the Groups products and edible oils and fats, are subject to substantial price and supply fluctuations. The prices for raw materials are influenced by a number of factors, including the weather, crop production, transportation and processing costs, government regulation and policies and worldwide market supply and demand for raw materials. The prices of many commodities have recently been at record levels, and commodity markets are experiencing unprecedented volatility. Any substantial increase in the prices of raw materials that is not reflected as an increase of the price of the Companys products may adversely affect the Groups financial condition, results of operations and cash flows. Any reduction in sales revenue as a result of competitive pressures would negatively affect profit margins and, if the Groups sales volumes fail to grow sufficiently to offset any reduction in margins, the Groups results of operations will suffer. In addition, the Groups also relies on utilities to operate its business. For example, the Groups bakeries and other facilities use natural gas, liquefied petroleum gas and electricity to operate and the Companys distribution operations use gasoline and diesel fuel to deliver our products. For these reasons, substantial future increases in prices for, or shortages of, these fuels or electricity could adversely affect the Groups financial condition, results of operations and cash flows. The Group enters into wheat, natural gas and other hedging arrangements to cover its exposure from increases in prices. Notwithstanding the foregoing, and depending on their market ratings, such contracts could cause the Group to pay higher prices for raw materials than those available in the spot markets. Competition could adversely affect our results of operations. The baked goods industry is highly competitive and increased competition could reduce the market share or force the Group to reduce prices or increase promotional spending in response to competitive pressures, all of which would adversely affect the results of operations of the Company. Competitive pressures may also restrict the Groups ability to increase prices, including in response to commodity and other cost increases. Competition is based on product quality, price, customer service, brand recognition and loyalty, effective promotional activities, access to retail outlets and sufficient shelf space and the ability to identify and satisfy consumer preferences. The Group competes with large national and transnational companies, local traditional bakeries, smaller regional operators, small family owned bakeries, supermarket chains with their own bakeries, grocery stores with in-store bakery departments or with private label products and diversified food companies. To varying degrees, the Groups competitors may have strengths in particular product lines and regions as well as greater financial resources. The Group expects that it will continue to face strong competition in all of the Groups markets and anticipate that existing or new competitors may broaden their product lines and extend their geographic scope. In particular, from time to time, the Group experiences price pressure in certain of its markets as a result of the competitors promotional pricing practices, which could be exacerbated by excess industry capacity. As a result, the Group may need to reduce the prices for some of its products to respond to competitive and customer pressures and to maintain market share. Such pressures also may restrict the ability to increase prices in response to raw material and other cost increases. The Groups competitors may also improve their competitive position by introducing new products or products that can be substituted for the Groups products, improving manufacturing processes or expanding the capacity of manufacturing facilities. If the Group is unable to maintain its pricing structure and keep pace with its competitors product and manufacturing process initiatives, the results of operations and financial condition could be materially adversely affected.

11

The reputation of the brands and intellectual property rights are key to the Groups business. The substantial majority of the Groups net sales derive from sales of products under brands that the Group owns. The brand names are a key asset of the Group business. Maintaining the reputation of the brands is essential to our ability to attract and retain retailers, consumers and associates and is critical to the Groups future success. Failure to maintain the reputation of the brands could have a material adverse effect on the Groups business, results of operations and financial condition. If we fail, or appear to fail, to deal with various issues that may give rise to reputational risk, it could harm the business prospects. These issues include, but are not limited to, appropriately dealing with potential conflicts of interest, legal and regulatory requirements, safety conditions in operations, ethical issues, money-laundering, privacy, record-keeping, sales and trading practices and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in the Groups business. The principal trademarks are registered in the countries in which the Group uses such trademarks. While the Group intends to enforce its trademark rights against infringement by third parties, the actions to establish and protect the Groups trademark rights may not be adequate to prevent imitation of its products by others or to prevent others from seeking to block sales of the Companys products on grounds that the Groups products violate their trademarks and proprietary rights. If a competitor were to infringe on the Groups trademarks, enforcing our rights would likely be costly and would divert resources that would otherwise be used to operate and develop the Groups business. Although we intend to actively defend the brands and trademark rights, the Group may not be successful in enforcing our intellectual property rights. See The Company Business Description Patents, Licenses, Brands and Other Contracts. The Group relies on retailers and if they perform poorly or give preference to competing products, the financial performance of the Group could be negatively affected. The Group derives significant operating revenues from sales to retailers. The Group sells its products to non-traditional retailers, such as supermarkets and hypermarkets, and to traditional retailers, such as small family-owned stores. These retailers, in turn, sell the Groups products to consumers. Any significant deterioration in the business performance of the major customers could adversely affect the sale of products. Retailers also carry products that directly compete with the Groups products for retail space and consumer purchases. There is a risk that retailers may give higher priority to products of, or form alliances with, the Groups competitors or their own private labels other than with respect to the Groups products. If retailers fail to purchase the Groups products, or provide the Groups products with promotional support, our financial performance could be adversely affected. Inability to anticipate changes in consumer preferences may result in decreased demand for products. Our success depends in part on our ability to anticipate the tastes and dietary habits of consumers and to offer products that appeal to their preferences. Changes in consumer preferences combined with our failure to anticipate, identify or react to these changes could result in reduced demand for our products, which could in turn adversely affect our financial condition, results of operations and cash flows. In particular, demand for our products could be impacted by the popularity of trends such as low carbohydrate diets and by concerns regarding the health effects of fats, sugar content and processed wheat. In addition, the Groups success depends in part on its ability to enhance product portfolio by adding innovative new products in fast growing, profitable categories as well as increasing market share in the existing product categories. Introduction of new products and product extensions requires significant research and development as well as marketing initiatives. If the Groups new products fail to meet consumers preferences, then the return on that investment will be less than anticipated and the Groups strategy to grow net sales and profits may not be successful. Further consolidation in the retail food industry may adversely impact profitability. As supermarket chains continue to consolidate and as mass merchants gain scale, the Groups larger customers may seek more favorable terms for their purchases of our products, including increased spending

12

on promotional programs. Sales to the Groups larger customers on terms less favorable than the current terms could adversely affect the Groups financial condition, results of operations and cash flows. Health and product liability risks related to the food industry could adversely affect the Groups business, results of operation and financial condition. We are subject to risks affecting the food industry generally, including risks posed by contamination or food spoilage, evolving nutritional and health-related concerns, consumer product liability claims, product tampering, the availability and expense of liability insurance and the potential cost and disruption of product recalls. We may also become involved in lawsuits and legal proceedings if it is alleged that the consumption of any of the Groups products causes injury, illness or death. A product recall or a result adverse to the Group in any such litigation could adversely affect the Groups financial condition, results of operations and cash flows. Any actual or perceived health risks associated with the Groups products, including any adverse publicity concerning these risks, could cause customers to lose confidence in the safety and quality of the Groups products. Even if the products are not affected by contamination, the industry may face adverse publicity if the products of other producers become contaminated, which could result in reduced consumer demand for the Groups products in the affected category. In addition adverse publicity about the safety and quality of certain food products, such as the publicity about foods containing genetically modified ingredients, whether or not valid, may discourage consumers from buying the Groups products or cause production and delivery disruptions. We maintain systems designed to monitor food safety risks throughout all stages of the production process. However, the Groups systems and internal policies may not be fully effective in mitigating risks related to food safety. Any product contamination could have a material adverse impact on the Groups business, results of operations and financial condition. Changes in health-related regulations could have a negative impact on the Groups business. The Groups U.S. products and packaging materials are regulated by the U.S. Food and Drug Administration, or FDA, or, for products containing meat or poultry, the Food Safety and Inspection Service of the U.S. Department of Agriculture, or USDA. These agencies enact and enforce regulations relating to the manufacturing, distribution and labeling of food products. In addition, various states regulate the Groups U.S. operations by licensing plants, enforcing federal and state standards for selected food products, grading food products, inspecting plants and warehouses, regulating trade practices related to the sale of food products and imposing their own labeling requirements on food products. The Groups operations in Mexico are subject to extensive laws, rules, regulations and standards of hygiene and quality regulation and oversight by designated authorities such as the Secretary of Health (Secretara de Salud), the Secretary of Agriculture, Farming, Rural Growth, Fish and Food (Secretara de Agricultura, Ganadera, Desarrollo Rural, Pesca y Alimentos), the Federal Commission for Protection from Sanitary Risks (Comisin Federal para la Proteccin contra Riesgos Sanitarios) and the Secretary of the Economy (Secretara de Economa) and other authorities regarding the processing, packaging, labeling, storage, distribution and advertising of the Groups products. The Group is subject to comparable hygiene and quality local laws and regulations in other countries in which we operate. Government policies and regulations in the United States, Mexico and the Groups other markets may adversely affect the supply of, demand for, and prices of, our products, restrict our ability to do business in existing and target local and export markets and could adversely affect the Groups results of operations and financial condition. In addition, if the Group is required to comply with future material changes in food safety or health-related regulations, the Group could be subject to material increases in operating costs and also be required to implement regulatory changes on schedules that cannot be met without interruptions in the Groups operations. Increased governmental regulation of the food industry, such as proposed requirements designed to enhance food safety, impose health-related requirements or to regulate imported ingredients, could increase the Groups costs and adversely affect the profitability.

13

The Group may not achieve the targeted cost savings and efficiencies from cost reduction initiatives. The Groups success depends in part on its ability to be an efficient producer in a highly competitive industry. The Group periodically makes investments in its operations to improve the production facilities and reduce operating costs. The Group may experience operational issues when carrying out major production, procurement, or logistical changes and these, as well as any failure by us to achieve the planned cost savings and efficiencies, could have a material adverse effect on the Groups business and consolidated financial position and on the consolidated results of the Groups operations and profitability. Disruption of the Groups supply chain and distribution network could adversely affect operations. The Groups operations depend on the continuous operation of the supply chain and distribution network. Damage or disruption to manufacturing or distribution capabilities due to weather, natural disaster, fire, electricity shortages, terrorism, pandemics, strikes, disputes with, or the financial and/or operational instability of, key suppliers, distributors, warehousing and transportation providers, or other reasons could impair the Groups ability to manufacture or distribute its products. To the extent that the Group is unable, or it is not financially feasible, to mitigate interruptions in its supply chain, whether through insurance arrangements or otherwise, or their potential consequences, there could be an adverse effect on the Groups business and results of operations, and additional resources could be required to restore the supply chain. The Group may be subject to unknown or contingent liabilities related to recent and future acquisitions. The Groups recent and future acquisitions of assets and entities, including, among others, the acquisition of Weston Foods Inc., or WFI, in 2009, may be subject to unknown or contingent liabilities for which the Group may have no recourse, or only limited recourse, against the former owners. Although in some of the Groups acquisitions the former owners agreed, or may agree, to indemnify the Group for certain breaches of their representations and warranties, such indemnification obligations in some cases may be subject to various materiality thresholds, and in some cases such obligations may have expired. As a result, the Group may not recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties. In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with the acquired assets and entities may exceed the Groups expectations, plus the Group may experience other unanticipated adverse effects, all of which may adversely affect the business, results of operations and financial condition. The Groups future growth opportunities through mergers, acquisitions or joint ventures may be impacted by antitrust laws, access to capital resources and other challenges in integrating significant acquisitions. The Group may pursue further acquisitions in the future. The Group does not know if it will be able to successfully complete any acquisitions or whether we will be able to successfully integrate any acquired business into its business or retain key personnel, suppliers or distributors. The Groups ability to successfully grow through acquisitions depends upon its ability to identify, negotiate, complete and integrate suitable acquisitions and to obtain any necessary financing. These efforts could be expensive and time consuming, disrupt the ongoing business and distract management. If the Group is unable to integrate any acquired businesses effectively, including WFI, the Groups business, financial condition and results of operations will be materially adversely affected. The Group may be unable to successfully expand operations into new markets. If the opportunity arises, the Group may expand its operations into new markets. Each of the risks applicable to the Groups ability to successfully operate in the Groups current markets is also applicable to the Groups ability to successfully operate in new markets. In addition to these risks, the Group may not possess the same level of familiarity with the dynamics and market conditions of any new markets that the Group may enter, which could adversely affect its ability to expand into or operate in those markets. The Group may be unable to create similar demand for the products and business, which could adversely affect the Groups profitability. If the Group is unsuccessful in expanding its operations into new markets, it could adversely affect its business, financial condition and results of operations.

14

The current global economic crisis may adversely affect the Groups business and financial performance. The global economic slowdown and its lingering effects could negatively affect the Groups business, results of operations or financial condition. When general economic conditions deteriorate, the demand for the Groups products may experience declines, and we may suffer reductions in its sales and profitability. In addition, the financial stability of our customers and suppliers may be affected, which could result in decreased, delayed or canceled purchases of the Groups products, increases in uncollectible accounts receivable or non-performance by suppliers. The Group may also find it more costly or difficult to obtain financing to fund operations or investment or acquisition opportunities, or to refinance its debt in the future. The global economic slowdown has also negatively affected local credit markets and resulted in an increased cost of capital, which may negatively impact the ability of companies, including the Groups customers, to meet their financial requirements. If the global economy continues to deteriorate, the Groups business and financial performance may be adversely affected. The Groups business and financial performance may be adversely affected by risks inherent in international operations. The Group currently maintains production facilities and operations in the United States, Mexico, Argentina, Brazil, Colombia, Costa Rica, Chile, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela and China. The Groups ability to conduct and expand its business and its financial performance is subject to the risks inherent in international operations. The Groups liquidity, results of operations and financial condition may be adversely affected by trade barriers, currency fluctuations and exchange controls, political unrest, high levels of inflation and increases in duties, taxes and governmental royalties, as well as changes in local laws and policies of the countries in which the Group conducts business, including changes to environmental laws that could affect its manufacturing facilities or to health safety laws that could affect the Groups products. The governments of the countries in which the Group operates, or may operate in the future, could take actions that materially adversely affect it, including the taking, expropriation or condemnation of the Groups assets or subsidiaries. The Group may be subject to interruptions or failures in information technology systems. The Group relies on sophisticated information technology systems and infrastructure to support its business, including process control technology. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures and similar events. The failure of any of the Groups information technology systems may cause disruptions in its operations, adversely affecting its net sales and profitability. The Group has business continuity plans in place to reduce the negative impact of information technology system failures on its operations, but these plans may not be effective. Failure to maintain the relationships with labor unions may have an adverse effect on financial results. The majority of the Groups workforce is represented by labor unions. While we have enjoyed satisfactory relationships with all of the labor organizations that represent the Groups associates and the Group believes its relationships with labor organizations will continue to be satisfactory, labor-related disputes may still arise. Labor disputes that result in strikes or other disruptions could also cause increases in operating costs, which could damage the Groups relationships with its customers and adversely affect its business and financial results. In addition, the Groups results may be materially and adversely impacted as a result of increases in labor costs. A shortage in the labor pool or other general inflationary pressures or changes in applicable laws and regulations could increase labor cost, which could have a material adverse effect on the Groups consolidated operating results or financial condition. The Groups labor costs include the cost of providing benefits for employees. We sponsor a number of defined benefit plans for employees in the United States and Mexico, including pension, retiree health and welfare, active health care, severance and other post employment benefits. We also participate in a number of multiemployer pension plans for certain of our manufacturing locations. The annual cost of benefits can

15

vary significantly from year to year and is materially affected by such factors as changes in the assumed or actual rate of return on major plan assets, a change in the weighted-average discount rate used to measure obligations, the rate or trend of health care cost inflation, and the outcome of collectively-bargained wage and benefit agreements. The Group depends on the expertise of senior management and skilled personnel, and the Groups business may be disrupted if it loses their services. The Groups senior management team possesses extensive operating experience and industry knowledge. The Group depends on its senior management to set its strategic direction and manage its business and believes that their involvement in the Group is crucial to the Groups success. Furthermore, the Groups continued success also depends upon its ability to attract and retain experienced professionals. The loss of the services of its senior management or its inability to recruit, train or retain a sufficient number of experienced personnel could have an adverse effect on the Groups operations and profitability. The Group does not maintain any key person insurance on any of its senior management or associates. The Groups ability to retain senior management as well as experienced personnel will in part depend on having in place appropriate staff remuneration and incentive schemes. The remuneration and incentive schemes the Group has in place may not be sufficient in retaining the services of its experienced personnel. Political events in the markets in which the Group operates may result in disruptions to its business operations and decreases in sales and revenues. The governments of the markets in which the Group operates exercise significant influence over many aspects of the economy of such markets. As a result, government action concerning the economy of such markets and the regulation of certain industries could have a significant effect on private segment entities, including the Group, and on market conditions, prices of and returns on securities from such markets. The government of a market in which the Group operates may implement significant changes in laws, public policy and/or regulations that could affect such markets political and economic situation, which could adversely affect the Groups business. Social and political instability in such markets or other adverse social or political developments in or affecting such markets could affect the Group and its ability to obtain financing. It is also possible that political uncertainty in territories in which the Group operates may adversely affect financial markets. Future political developments in the markets in which the Group operates, over which it has no control, may have an unfavorable impact on its financial position or results of operations. Compliance with environmental and other governmental laws and regulations could result in added expenditures or liabilities. The Groups operations in the United States, Mexico and other markets are subject to federal, state and municipal laws, regulations and official standards, relating to the protection of the environment and natural resources. In the United States, the Group is subject to federal, state and local laws and regulations relating to the protection of the environment. These laws and regulations include the Clean Air Act, the Clean Water Act and the Resource Conservation and Recovery Act and Superfund, which imposes joint and several liability on the responsible persons. In Mexico, the Group is subject to various Mexican federal, state and municipal environmental laws and regulations that govern the discharges into the environment, as well as the handling and disposal of hazardous substances and wastes. Environmental laws impose liability and clean-up responsibility for releases of hazardous substances into the environment. The Group is subject to regulation by, among other agencies, the Secretara de Medio Ambiente y Recursos Naturales, or the Mexican Environmental and National Resources Ministry, the Secretara del Trabajo y Previsin Social, or the Mexican Labor and Social Security Ministry, the Procuradura Federal de Proteccin al Ambiente, the Federal Environmental Protection Bureau and the National Water Commission, the Comisin Nacional del Agua. These agencies may initiate administrative proceedings for violations of environmental and safety ordinances and impose economic penalties on violators. The Mexican government has recently imposed strict environmental and safety regulations.

16

Modifications of existing environmental laws and regulations or the adoption of more stringent environmental laws and regulations may result in the need for investments that are not currently provided for in the Groups capital expenditures program and may otherwise result in a material adverse effect on the Groups business, results of operations or financial condition. Developments in other countries may result in decreases in the price of the Groups securities. The market value of securities of Mexican companies is, to varying degrees, affected by economic and market conditions in other emerging market countries. Although economic conditions in these countries may differ significantly from economic conditions in Mexico, investors reactions to developments in any of these other countries may have an adverse effect on the market value of securities of Mexican issuers. In recent years, for example, prices of both Mexican debt securities and Mexican equity securities dropped substantially as a result of developments in Russia, Asia, Brazil and Greece. In addition, the direct correlation between economic conditions in Mexico and the United States has sharpened in recent years as a result of the North American Free Trade Agreement, or NAFTA, and increased economic activity between the two countries. As a result of the slowing economy in the United States and the uncertainty it could have on the general economic conditions in Mexico and the United States, our financial condition and results of operations could be adversely affected. In addition, due to recent developments in the international credit markets, capital availability and cost could be significantly affected and could restrict the Groups ability to obtain financing or refinance its existing indebtedness on favorable terms, if at all. The Groups international operations exposes to risk of fluctuations in currency exchange rates. The Group generates significant revenues and incurs operating expenses and indebtedness primarily in Mexican pesos, and to a lesser extent in other local currencies in the countries in which we operate. As of December 31, 2010 and 2009, the portion of the Groups revenues denominated in Mexican pesos was Ps. 57,475 million and Ps. 54,803 million, respectively, while the portion of the Groups revenues generated in currencies other than the Mexican peso was Ps.62,477 million and Ps.64,041 million, respectively. Moreover, as of December 31, 2010 and 2009, our indebtedness denominated in Mexican Pesos was Ps.18,794 million and Ps.22,709 million, respectively, while the Groups indebtedness denominated in currencies other than the Mexican peso was approximately Ps.14,416 million and approximately Ps.14,031 million, respectively. However, the amount of the Groups revenues denominated in a particular currency in a particular country typically varies from the amount of expenses or indebtedness incurred by the Groups operations in that country given that certain costs may be incurred in a currency different from the local currency of that country (i.e. the U.S. dollar). This situation exposes the Group to potential losses resulting from currency fluctuations. An impairment in the carrying value of goodwill or other acquired intangibles could negatively affect our consolidated operating results and net worth. The carrying value of goodwill represents the fair value of acquired businesses in excess of identifiable assets and liabilities as of the acquisition date. The carrying value of other intangibles represents the fair value of trademarks, trade names, and other acquired intangibles as of the acquisition date. Goodwill and other acquired intangibles expected to contribute indefinitely to the Groups cash flows are not amortized, but must be evaluated by management at least annually for impairment. If carrying value exceeds current fair value, the intangible is considered impaired and is reduced to fair value via a charge to earnings. Events and conditions which could result in an impairment include changes in the industries in which we operate, including competition and advances in technology; a significant product liability or intellectual property claim; or other factors leading to reduction in expected sales or profitability. Should the value of one or more of the acquired intangibles become impaired, the Groups consolidated earnings and net worth may be materially adversely affected. The Group may incur additional indebtedness in the future that could adversely affect its financial health and its ability to generate sufficient cash to satisfy the Groups outstanding debt obligations. After the offering of the notes, the Group may incur additional indebtedness that may have the following direct or indirect effects: limit the Groups ability to satisfy its obligations under the notes and other debt;

17

increase the Groups vulnerability to adverse general economic and industry conditions; require the Group to dedicate a portion of its cash flow from operations to servicing and repaying its indebtedness which may place the Group at a competitive disadvantage to its competitors with less debt; limit the Groups flexibility in planning for or reacting to changes in its business and the industry in which operates; limit, along with the financial and other restrictive covenants of the Groups indebtedness, among other things, its ability to borrow additional funds, and increase the cost of additional financing.

The Groups ability to generate sufficient cash to satisfy its outstanding and future debt obligations will depend upon its future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which the Group does not control. If the Group is unable to service its indebtedness, it will be forced to adopt an alternative strategy that may include actions such as reducing or delaying capital expenditure, selling assets, restructuring or refinancing its indebtedness, or seeking equity capital. These strategies may not be instituted on satisfactory terms, if at all. In addition, certain of the Groups financing arrangements impose operating and financial restrictions on its business. These provisions may negatively affect its ability to react to changes in market conditions, take advantage of business opportunities we believe to be desirable, obtain future financing, fund needed capital expenditures, or withstand a continuing or future downturn in its business. In the future, the Group may from time to time incur substantial additional indebtedness. If the Group or its subsidiaries incur additional debt, the risks that it faces as a result of its existing indebtedness could further intensify. Corporate Structure. The Group is a holding company which principal assets consist of shares held in its subsidiaries. In addition, it is the owner of the main trademarks of the Group. Pursuant to the above, the Groups income depends upon the dividends and interests paid by its subsidiaries, as well as the profits regarding any trademark license agreement entered into by the Group. With respect to the payment of dividends, regardless that as of today all subsidiaries have no contractual limitations for the payments of dividends to the Group, any financial agreement or any other agreement that impose a future restriction to its subsidiaries for the payment of dividends or the payment of any other amounts to the Group, may adversely affect the liquidity, financial situation and operation results of the Group. Issues regarding Competition As of December 31, 2010, the Group has not been subject of any disputes before the CFC or any other similar organism in the countries in which the Group operates which have resulted in any sanctions against the Company. In any case, the commercial practices of the Group have not been subject to suspension, correction or any relevant fines by the CFC or any other antitrust authorities in other countries in which the Group operates. Notwithstanding the above, the Group cannot guarantee that the CFC or any other authority will condition or limit in the future, the Groups expansion by means of acquisitions or compels to suspend, correct or remove any of its commercial practices or future acquisitions, which, in such case, may adversely affect its business, financial situation and operation results. d) OTHER SECURITIES

The following securities are registered by Grupo Bimbo in the RNV.

18

a.

Authorized capital stock Series A common shares, ordinary, nominative, without expression of nominal value, listed in the BMV since 1980 under ticker symbol BIMBO. Certificados Burstiles:

b.

- Bimbo 09 Issued on June 15, 2009 in the aggregate amount of Ps.5,000,000,000 (Five thousand million pesos) maturing on June, 2014. - Bimbo 09-2- Issued on June 15, 2009 in the aggregate amount of Ps.2,000,000,000 (Two thousand million pesos) maturing on June, 2016. - Bimbo 09U- Issued on June 15, 2009 in the aggregate amount of 706,302,200 Investment Units (UDIs or Unidades de Inversin), maturing on June 2016. - Bimbo 02-2- Issued on May 17, 2002 in the aggregate amount of Ps.750,000,000, (Seven hundred and fifty million pesos) maturing on May, 2012. The following securities are registered by Grupo Bimbo in the Irish Stock Exchange: - International Bond Issued on June 30, 2010, according to Rule 144A and Regulation S, in the aggregate amount of $800,000,000 (eight hundred million dollars) maturing on June 2020. The Company has been complying on time with all of its obligations to disclose any relevant events as well as the legal and financial information required by the applicable laws. I. (a) Annual Information: The third business day following the date of the annual shareholders meeting that approves its annual results, which must take place during the first four months of each year, 1. Report given by the board of directors to the shareholders meeting referred to above, certified by the secretary of the board, which in addition includes the report referred to by article 14 Bis 3, paragraph V, subparagraph a) of the Securities Market Law, making reference to the most important accounting politics adopted to elaborate the Companys financial statements, as well as the terms in which such politics were analyzed and adopted by the Company. Examiners report as provided in article 166 of the General Corporations Law, regarding the veracity, sufficiency and reasonability of the information filed by the board of directors to the shareholders meeting.

2.

A summary of the resolutions adopted at the shareholders meeting held pursuant to article 181 of the General 3. The annual financial statements together with the respective external audit opinion, as well as the audited annual financial statements of the associated entities, that contribute more than 10% the Companys earnings or consolidated assets, Letter subscribed by the secretary of the board of directors, stating the current status of the shareholders minutes meetings registry book, minutes of the board of directors book, share registry book and in the event of limited liability of variable capital corporations (sociedades annimas de capital variable) the capital increase and capital decrease registry book. The aforementioned is not applicable to debt instruments.

4.

19

5.

The independence letter of the external auditor of the Company pursuant to article 84 of the General Provisions.

(b) No later than June 30 of every year: 1. The annual report corresponding to the fiscal year immediately ended, prepared in accordance with the General Provisions. Report corresponding to the fiscal year immediately ended, regarding the level of adherence to the Best Corporate Practices Code, pursuant to the General Provisions.

2.

II.

Quarterly Information:

Within the 20 business days following the end of the first three calendar quarters and within the 40 business days following the end of the fourth calendar quarter of each fiscal year, the Company must report its financial statements and the economic, accounting and administrative information required by the corresponding electronic formats, comparing, at a minimum, the results for the relevant quarter against the results for the same quarter for the previous fiscal year and an update of the annual report regarding the operating and financial discussions and analysis of the Companys business. In addition, the Company shall deliver to the Commission a certificate subscribed by the General Director or the Finance Director, or any other person with a holding a similar title, stating, under oath, that, in the competence of their authority, they prepared the relevant information of the Company contained in the quarterly report, which, as of their knowledge, reflects in a reasonable manner the situation of the Company. Likewise, they should state that they are not aware of any relevant information that is missing in such quarterly report or that the report contains information that could confuse an investor. III. (a) Legal Information: On the date of their publication, the calls for shareholders meetings and the calls of the holders of the Certificados Bursatiles. Such calls must contain, each and all of the items of the agenda to be discussed during the relevant meeting. On the business day immediately following the date on which the relevant meeting is held: 1. A summary of the resolutions adopted at the shareholders meeting held pursuant to article 181 of the General Corporations Law, including the application of profits and, as the case may be, the payment of dividends, number of cupon o cupons against which payment will be made, as well as place and date of payment. A summary of the resolutions adopted at the shareholders meetings other than the meetings mentioned above, as well as the resolutions adopted by the meetings held by the holders of other securities.

(b)

2.

(c)

Within the 5 business days following the date of the shareholders meeting or of the holders of other securities meetings, as applicable:

20

1.

A copy, certified by the secretary of the board of directors of the Company or any person authorized thereto, of the shareholders meetings minutes, together with the attendance list signed by the examiners appointed for such purposes, stating the number of shares that correspond to each shareholder and, as the case may be, on behalf of whom is acting, as well as the total number of shares represented at the meeting. A copy, certified by the president of the meeting, of the holders of the securities minutes meetings, together with the attendance list signed by the holders of the securities or their representatives and by the examiners appointed for such purposes, stating the number of securities that correspond to each holder of the securities, as well as the total number of the securities represented at the meeting. A copy, certified by the secretary of the board of directors, of the by-laws of the Company, in the event that any amendments have been approved in the relevant meeting.

2.

3.

(d)

On the date on which the Company agrees to, as the case may be, depending on the type of security: 1. Notice to the shareholders for the exercise of any rights of first offer derived from capital increases and the subsequent issuance of shares, which amount is required to be paid in cash. Notice for the delivery or exchange of shares or other securities. Notice for the payment of dividends, which must incluye the corresponding amount and the proportion of such dividends or, as the case may be, the payment of interests. Any other notice addressed to the shareholders, holders of other securities or the general public.

2. 3.

4.

(e)

Every 5 years, on June 30, the notarization of the shareholders meeting by means of which a restatement (compulsa) of the Companys by-laws has been approved, including the registration information in the Public Registry of Commerce. Repurchase of the Companys shares:

IV.

The Company is required to disclose to the BMV, no latter than the next business day following the consummation of any transactions involving the repurchase of the Companys shares. V. Relevant events:

The Company is required to disclose to the BMV, all material events pursuant to the provisions set forth in the General Provisions Applicable to Issuers of Securities and Other Participants in the Securities Market. e) RELEVANT CHANGES TO THE SECURITY RIGHTS REGISTERED IN THE RNV

On April 28, 2011, BIMBO splitted the shares representing its capital stock, by circulating the 2011-1 Issuance, the capital stock of the Company was not modified and still represents 4,703,200,000 shares.

21

f)

USE OF PROCEEDS

The totality of the net proceeds obtained from the three offerings of the Certificados Bursatiles issued by the Company, during 2009, were used to pay short term financial debt used to finance the acquisition of WFI, according to the description in the relevant supplements of such offerings. The total net proceeds obtained from the issue of the international bond, completed by the Company during 2010, were used for the refinancing of existing debt and for general corporate purposes. g) PUBLIC DOCUMENTS

In order to request copies of this Annual Report: Grupo Bimbo, S.A.B. de C.V. Prolongacin Paseo de la Reforma No. 1000 Col. Pea Blanca Santa Fe Mxico, D.F. C.P. 01210 www.grupobimbo.com Investment Relations Armando Giner Chvez Telephone: (5255) 5268-6924 Facsimile: (5255) 5268-6697 armando.giner@grupobimbo.com Azul Argelles Rojas Telephone: (5255) 5268-6962 Facsimile: (5255) 5268-6697 azul.arguelles@grupobimbo.com In connection with the public information that has been delivered to the BMV, please consult the following electronic addresses: http://ir.grupobimbo.com www.bmv.com.mx The information available in such addresses is not a part of this Annual Report.

22

2) THE COMPANY a) 1. COMPANYS HISTORY AND DEVELOPMENT Legal backgrounds

Incorporation The Company was incorporated by public deed number 10670, dated June 15, 1966, granted before Toms OGorman, Public Notary number 96 of the Federal District, the first official transcript of which was filed in the Public Registry of Commerce of the Federal District, in the Commerce section, under number 299, pages 377, volume 636, 3rd book. Corporate Name The Company was originally incorporated under the corporate name of Promocin de Negocios, S.A. In 1978 it changed its corporate name to Grupo Industrial Bimbo, S.A. and in 1981 it adopted the modality as sociedad annima de capital variable. On August 24, 1999, the Company changed its corporate name to Grupo Bimbo, S.A. de C.V., and on November 14, 2006, by public deed number 30053, granted before Ana de Jess Jimnez Montaez, Public Notary number 146 of the Federal District, the first official transcript of which was filed in the Public Registry of Commerce of the Federal District in mercantile folio number 9506, on December 6, 2006, the Company adopted the modality of sociedad annima burstil de capital variable. Duration The Companys duration is indefinite. Domicile and Telephone Numbers The Companys headquarters are located in Prolongacin Paseo de la Reforma 1000, Colonia Pea Blanca Santa Fe, C.P. 01210, Mexico, D.F. The telephone number is 5268-6600 and the fax number is 5268-6697. The Companys web site is: www.grupobimbo.com, in the understanding that the information contained therein is not part of this Annual Report. 2. History

All figures shown in this section correspond to historical values on the dates indicated. 1945 Taking advantage of their experience in the bakery industry, Don Lorenzo Servitje Sendra and Don Jaime Sendra Grimau decided to create an American style packaged bread factory, to which they invited Don Alfonso Velasco, as well as Don Jaime Jorba Sendra and Don Jos T. Mata to participate as industrial partners. Another founder was Don Roberto Servitje Sendra, who collaborated since the inception as sales supervisor. Even though he did not participate as partner at the Companys inception, little by little Don Roberto Servitje acquired grater responsibilities and likewise participated in the decision making process. Later on he purchased BIMBO shares and, subsequently, he became General Director, position he left in 1994, when he was appointed chairman of the Board of Directors, in substitution of Don Lorenzo Servitje, who held such position since its foundation. For the creation of the packaged bread factory, the founding partners mainly took care of the needs posted by the market at that time; that is, a periodical and quality attention to the clients, and product freshness. To satisfy such needs, the products to be manufactured and the characteristics of the packing thereof were determined, in addition to putting in place direct distribution systems and the substitution of unsold products every two days. On December 2,

23

1945 Panificacin Bimbo was formally founded in Mexico City. 19471952 In 1947 the outside distribution to some cities in the states of Veracruz, Morelos, Hidalgo and Puebla was initiated. By 1952, four plants were already installed in Mexico City and the rolls category was already integrated within the Companys products. Likewise, the distribution had extended to some of Mexicos central and northern states. In May, 1956 the corporation Pasteles y Bizcochos, S.A. was incorporated, currently known as Productos Marinela, S.A., with which the Group ventured in the cake area. As of this date the establishment of plants outside Mexico City began. The first of them were Bimbo de Occidente, S.A. (Guadalajara) and Bimbo del Norte, S.A. (Monterrey), broadening both the distribution geographical coverage and the variety of products offered by the Company. The period comprised between 1963 and 1978 was characterized by a great expansion and diversification. In addition to opening eight more plants in different states of the Mexican Republic, the existing plants were enlarged and other additional cake lines were integrated to those offered by Productos Marinela, S.A. Moreover, it ventured in the candies and chocolates industry, with the establishment of the first Ricolino plant, and in the salted snack market, with what is currently known as Barcel. At that time practically all the states of the country were covered through the Companys direct distribution system. In such period, with the inauguration of the first jam plant, also the Groups vertical integration initiated. Not only the other Groups companies were supplied with these products, but also the line of products offered to the consumers was diversified. In connection with the pastries products, in the seventies decade, BIMBO launched the Suandy line into the market, whose products were prepared based on butter. This line was importantly enlarged in 1981. 1979 In 1979, Tia Rosa was introduced as a house-made bakery image in the domestic market and was rapidly developed with automated systems in some of its production lines. By this time, the Group already manufactured some equipment and parts thereof, which were used in its plants, therefore, in 1983 the inauguration of the Maquindal, S.A. plant took place, which merged in January 2001 with the corporation Moldes y Exhibidores, S.A. de C.V. In 1984, BIMBO ventured in the exportation market with the distribution of Marinela products into the USA. In 1986, after the crisis faced by Mexico during almost five years, BIMBO acquired Continental de Alimentos, S.A. de C.V., company which produced and commercialized the Wonder brand, until then BIMBOS direct competitor in bread and cakes. As of 1989, the Group experienced an important expansion through other acquisition and the establishment of plants in the lines both of final consumer products and raw materials, material and equipment for internal consumption. Regarding the transactions at an international level, in 1990 the Company acquired a bread and cake producer plant in Guatemala, which marked the beginning of the coverage that the Group has in Latin America. In 1992, BIMBO initiated the acquisition of productive plants in other countries of the region with the acquisition in 1992 of Alesa, S.A. and Cena (currently Ideal, S.A.) in Chile. Afterwards, it extended to Venezuela with the acquisition of Industrias Marinela, C.A. and Panificadora Holsum de Venezuela, C.A. in 1993, merged in 1999 under the name of Bimbo Venezuela C.A. At the same time, productive plants were installed in Argentina, Colombia, Costa Rica, El Salvador and Peru, as well as distribution companies in Honduras and Nicaragua. Additionally, the Company importantly expanded in the USA with the establishment and

1956

19631978

1983

1984

19861990

19921996

24

acquisition of several productive plants in different states in the border with Mexico. The following companies were acquired: Orbit Finer Foods, Inc., in 1993; Fabila Foods, Inc. and La Fronteriza, Inc., in 1994; C&C Bakery, Inc. and La Tapata Tortillera, Inc., in 1995; and Pacific Pride Bakeries, with two plants (Suandy Foods Inc. and Proalsa Trading Co.), in 1996. In 1992, the Company acquired the factory Galletas Lara, which allowed the formal entrance to the traditional cookie market, with maras kind and crackers, in which it did not participate with the Marinela trademark. 1998 An important level of investments characterized 1998. In this year the Mrs. Bairds planning company, sector leader in the state of Texas, USA, was acquired, and in Mexico operations were initiated in the Bimbo plant in La Paz, Baja California. Likewise, BIMBOS expansion reached the European continent with the establishment in Germany of the confectionery goods distribution company, Park Lane Confectionery. Also that year, in order to focus on its main businesses, BIMBO carried out divestments in the preparation and distribution of ice-creams in Mexico and salted snacks in Chile. In February, 1999, BIMBO carried out a strategic alliance with the company Dayhoff, in the USA, engaged in the distribution of candies, through an equity interest of 50%. In 2002, BIMBOS interest increased to 70% and in 2004 it acquired 100% of the shares. In March, 1999, BIMBO associated with Grupo MacMa by acquiring a 51% interest in the companies engaged in pastries manufacturing. In the state of California, USA, it acquired the bakery company Four-S. In 1999, a new bread producing plant was built and began operations in the city of Tijuana, Baja California, with the following production lines: white, integral and sweet bread, rolls, wheat tortillas and tostadas, among others. In July, 1999, BIMBO reinforced its presence in Colombia through the acquisition of assets in the city of Cali. In September of the same year, the Company completed an agreement with the McDonalds restaurant chain, through which it became the unique supplier of all rolls for this restaurant chain in Venezuela, Colombia and Peru. The unique concession of its rolls contributed to consolidate the Companys position in Latin America. Further, this exclusivity strengthens the relationship which both companies have since 1985, year when McDonald's was installed in Mexico. In October, 1999, BIMBO completed negotiations with the company Panacea, S.A., located in San Jose, Costa Rica. Such negotiations allowed BIMBO to acquire some of the assets owned by the Costa Rican company and the right to use Tulipn, its leading brand in that country. For an amount of $140.6 million dollars, in December, 1999, BIMBO carried out the sale of its six wheat mills and of the fresh and processed fruits and vegetables business to a group of investors represented by Mr. Roberto Servitje Achtegui. In accordance with the synergies use and operative consolidation strategy, BIMBO initiated in 1999 the administrative and operative merger of its companies in the USA, being consolidated as follows: Mrs. Bairds Bakeries Business Trust, in the Texas market, and Bimbo Bakeries USA, Inc., in the California market. 2000 In March 2000, BIMBO, Oracle de Mexico, Sun Microsystems and Cap Gemini Ernst & Young agreed the development of the computer program BIMBO XXI. In April 2000, the Company, through Ricolino, inaugurated two plants in the European Union, one in Vienna, Austria, and the other one in Ostrava, Czech Republic see The Company Business Description Principal Activity.

1999

25

Additionally, in November 2000, BIMBO acquired Pan Pyc, the second most important bakery company of Peru, with which its leadership in that country was consolidated. In December it acquired the Guatemalan bakery company La Mejor, with which it reinforced its presence in the Guatemala, El Salvador and Honduras markets. 2001 2001 highlighted the intense activity to consolidate the Groups presence in the regions where it participated and to make its operations more efficient. In March of that year, BIMBO acquired 100% of the capital stock of Plus Vita, Ltda., one of the largest bakery companies of Brazil, which produced packaged bread, sweet bread, cakes, rolls and toasted bread under brands considered among the most traditional and with the highest prestige in the Brazilian market, such as Pullman, Plus Vita, Ana Mara, Muffs and Van Mill, among others. Plus Vita operated three plants, located in Sao Paulo, Rio de Janeiro and Recife see The Company Business Description Principal Activity. Strategy and Strengths. On the other hand, and in order to add value to BIMBOS shareholders equity holding, in August 2001 a public offer to repurchase shares was completed, which achieved the expected purpose of granting to its shareholders the possibility to choose among obtaining immediate liquidity with a premium or keep their investment and participate in the Groups future results. Finally, 238,803,031 Series A, ordinary, nominative, without expression of nominal value shares, representing its capital stock were acquired, at a price of $17.25 per share. In October of that same year, the Company concluded the sale process of its shares in the companies Pastas Cora, S.A. de C.V. and Pastas Cora de la Laguna, S.A. de C.V. to Grupo La Moderna, S.A. de C.V. The companies sold were owned by Grupo Bimbo and Grupo MacMa, S.A. de C.V. and, therefore, the negotiation with La Moderna was jointly carried out. Through this transaction, La Moderna acquired 100% of the shares of Pastas Cora, S.A. de C.V. and Pastas Cora de la Laguna S.A. de C.V., and delivered as payment 4,500,000 shares representing 5.8% of its capital stock, from which 57.4% corresponds to Grupo Bimbo. In November 2001, the Company acquired certain productive assets pertaining to Gruma, S.A. de C.V., related with bread manufacturing and distribution. This acquisition included the fresh bread and frozen bread businesses in Costa Rica, as well as the equipment from the plant which Gruma closed in Escobedo, Nuevo Leon. 2002 As of January 1, 2002 the merger of all operating companies of the Group in Mexico into two big companies: Bimbo, S.A. de C.V. and Barcel, S.A. de C.V became effective. The first one consolidates all the bakery operations, while the second one embraces the salted snacks, confectionery goods and goat milk caramel cajeta divisions. The purpose of such merger was to optimize the operations and make its installed capacity and distribution force more effective. On March 4, 2002, the Company acquired, through its subsidiary in the USA, the bakery operations in the USA west region pertaining to the company George Weston Limited. This transaction, with a total price of $610 million dollars, provided Grupo Bimbo with access to leading brands and products in the United States market, such as Oroweat bread, Entenmanns cakes, English muffin bread type and the Thomas bagels, as well as Boboli pizza basis. In accordance with the terms of the agreement, Grupo Bimbo acquired, among other assets, the Oroweat bread trademark; five plants distributed in the states of Texas, Colorado, California and Oregon, and an efficient direct distribution system, with approximately 1,300 routes. Additionally, the Company obtained in the same region the rights related with the Entenmanns brand products, as well as the distribution rights of the Thomas and Boboli brands. This acquisition responded to BIMBOS strategy to build a leading bakery business in the USA. With that, the Groups position in core markets, such as the states of California and Texas, has

26

become stronger. On December 11, 2002, BIMBOS General Extraordinary Shareholders Meeting agreed the merger of the Company with its subsidiary company Central Impulsora, S.A. de C.V. By virtue of such merger, the Company became holder of the Groups main trademarks. 2003 In January 2003, BIMBO completed a strategic alliance with Wrigley Sales Company (Wrigley), to distribute its products. With this agreement, the Company, through its subsidiary Barcel, S.A. de C.V., became the exclusive distributor in Mexico of the Wrigley chewing gum brands. This transaction incorporated a line of products of the highest quality to the Groups confectionery goods platform and granted the Company the opportunity to offer Doublemint, Juicy Fruit, Orbit, Spearmint and Winterfresh, the most successful United States chewing gum brands in the industry. In June 2003, the Company, together with its partner Grupo Arteva, S. de R.L., carried out the sale of the company Novacel, S.A. de C.V., engaged in the manufacture of flexible packaging, to Pechiney Plastic Packaging, a subsidiary of the Canadian company Alcan, world leader in package manufacturing. Prior to this sale, BIMBO held an interest of 41.8% in the capital stock, while its partner owned the rest. In this transaction, Grupo Bimbo executed a supplier agreement in commercial terms and conditions in accordance with the industrys general practices. In July 2003, the Company informed about its participation as minority partner in a consortium headed by the Mexican businessman Fernando Chico Pardo. Such entity acquired certain ownership and debt rights of Compaa de Alimentos Fargo, S.A., of Argentina, and will procure its financial and operative restructuring. 2004 On March 18, 2004, Grupo Bimbo informed that it reached an agreement to acquire the confectionery goods companies Joyco de Mexico, S.A. de C.V., Alimentos Duval, S.A. de C.V. and Lolimen, S.A. de C.V., owned by a group of Mexican shareholders and the Spanish company Corporacin Agrolimen, S.A. After having obtained all the necessary approvals, the purchase and sale transaction of the confectionery goods companies concluded on May 2004. Grupo Bimbo invested $290, from which approximately $27 were used for the payment of financial liabilities. Through this investment, settled with its own funds, Grupo Bimbo acquired two production plants and rights on leading trademarks and products in the confectionery goods industry in Mexico, such as Duvaln, Bocadn and Lunetas. These companies registered annual sales near to $500. 2005 On June 9, 2005, BIMBO announced the acquisition of certain assets and trademarks owned by Empresas Chocolates La Corona, S.A. de C.V. and its subsidiaries (La Corona), in a transaction that amounted $471, that were settled with the Companys own funds. La Corona has presence in the Mexican candies market, mainly in the chocolate segment. After the regulatory approval, this transaction was completed on July 29, 2005. On July 20, 2005, the Company announced the acquisition, through a cash transaction that amounted $1,350, of Controladora y Administradora de Pasteleras, S.A. de C.V., pastries operator El Globo. Controladora y Administradora de Pasteleras, through El Globo, produces and commercializes fine pastries products. With this acquisition, Grupo Bimbo for the first time ventured in the retail commercialization of fine pastries products. After the relevant regulatory approval, the transaction was completed on September 23, 2005. On September 30, 2005, the Company executed a distribution agreement with Arcor, S.A.I.C. (Arcor), of Argentina. With this agreement, BIMBO, through its subsidiary Barcel, S.A. de C.V., became the exclusive distributor in Mexico of the Bon o Bon candy. This product was incorporated to the Companys existing candies platform as a line renowned for its high quality. The appearing parties also committed to carry out a joint investment to build in Mexico a plant to

27

produce the Arcor and Barcel candies. On January 30, 2006, BIMBO returns to the bakery market in Uruguay with the acquisition of the Uruguayan companies Walter M. Doldn y Ca. S.A. and Los Sorchantes S.A., positioning itself as the market leader. This transaction amounted $7 million dollars, from which $5.5 million were used for the purchase of 100% of the shares and the rest was used for the payment of financial liabilities. These companies are engaged in the production and commercialization of bakery products, mainly through Los Sorchantes and Kaiser trademarks. 2006 On March 24, 2006, BIMBO initiated operations in Asia with the agreement to acquire the company Beijing Panrico Food Processing Center, subsidiary of the Spanish company Panrico, S.A., located in China, in a transaction that amounted 9.2 million Euros for 98% of the shares, additionally assuming a net indebtedness of 1.3 million Euros. With this transaction, the Company acquired a company that had 800 collaborators, a production plant and a distribution network with an extended portfolio of bakery products, designed and developed for the local market, which have allowed it to achieve an important presence and acknowledgement in the cities of Beijing and Tianjin. On June 19, 2006, BIMBO announced that it reached an agreement to acquire certain assets and trademarks of the El Molino pastries, in a transaction that amounted $42, that were settled with the Companys own funds. El Molino is one of the oldest and most traditional bakeries in Mexico. In the fiscal year ended as of December 2005, its sales amounted $45. This transaction, supplementary with the acquisition of El Globo pastries, carried out in July 2005, intended to strengthen the presence of Grupo Bimbo in the retail commercialization of high end pastry products. 2007 On July 31, 2007, BIMBO carried out the purchase of 100% of the share package of Maestro Cubano Florentino Sande S.A. for a sum that amounted $93. The company is located in Uruguay, is the owner of industrial premises engaged in the production and commercialization of cookies, grissines and breadcrumbs. On October 2, 2007, BIMBO announced the acquisition of Temis for a sum that amounted $17. With this acquisition, BIMBO entered into the Paraguay market. On November 5, 2007, Grupo Bimbo announced that, as included in a judicial request dated November 2, 2007, filed by the investment group The Yucaipa Companies, LLC (Yucaipa) before the Bankruptcy Court in the West District of Missouri, in Kansas City (the Court), Yucaipa, together with BBU, Inc. (BBU), subsidiary of Grupo Bimbo, and The International Brotherhood of Teamsters (the Teamsters), intended to file a collective proposal for the reorganization of Interstate Bakeries Corporation (IBC). IBC is one of the largest bakeries and fresh bread and sweet bread distributor companies of the United States. Among its main trademarks are Wonder, Merita, Home Pride, Bakers Inn, Hostess, Drake's, and Dolly Madison. IBC operates more than 40 plants, 650 distribution centers, 6,400 routes and employs near to 25,000 collaborators. It was expected that the Court considers Yucaipas request in a hearing foreseen for November 7. In case the Court instructed IBC to grant to Yucaipa and BBU the access required to initiate a purchase audit, Yucaipa and BBU expected to carry out their review expeditiously in order to determine IBCS status and, if so determined they would submit, together with the Teamsters, the terms and conditions of IBCS reorganization plan. Grupo Bimbo intended to use such audit to evaluate if IBC represented a feasible opportunity to strengthen and impel its position in the bakery industry in the United States, consolidating at the same time its leadership position in the bakery global industry.

28

Any subsequent decision which implied to continue advancing in this process would require a series of additional steps, including the satisfactory completion of the above mentioned audit, as well as the approval of the reorganization plan by the Court and IBCS creditors. However, on December 13, 2007, Grupo Bimbo announced that after the audit process carried out to IBC it was not in a position to submit a proposal to acquire IBC. On November 29, 2007, Grupo Bimbo informed that on November 28, Compaa de Alimentos Fargo, S.A. (Fargo), Argentinean company in which Grupo Bimbo holds an indirect 30% equity interest, executed an agreement for its reorganization with its main creditors, which represent the majority of the verified indebtedness, the investment funds Rainbow Global High Yield, The Argo Capital Investors Fund SPC, Argo Global Special Situations Fund Segregated Portfolio and The Argo Fund Limited (the Bond Holders). The agreement included the payment of 33.81% of the verified unsecured indebtedness amount. Likewise, the Bond Holders committed to collaborate in order for Fargo to attain the culmination of the Meeting of Creditors (Concurso Preventivo) in which it is since June de 2002, as well as not to carry out any legal actions against it. 2008 On January 2, 2008, BIMBO announced the acquisition of Laura, company located in Brazil, for a sum that amounted $202. This way, BIMBO entered into the panettone category and enlarged the cookies portfolio through the wafers line. On February 21, 2008, BIMBO announced the acquisition of Firenze, also in Brazil, for a sum that amounted $185. The integration with Firenze allowed taking advantage of the strength in the light segment and continuing its development through the increase of the physical distribution of Firenze and Plus Vita trademarks. On April 1, 2008, the Company announced the acquisition of Plucky, company located in Uruguay, for a sum that amounted $123. The company produces and commercializes confectionery goods products. With this acquisition, for the first time Bimbo ventures in Latin America in such market. On May 7, 2008, Grupo Bimbo announced that it reached an agreement to acquire 75% of the shares of the Brazilian bakery company Nutrella Alimentos, S.A. (Nutrella). This acquisition allowed Grupo Bimbo to place itself as the leader of industrialized bread in Brazil, increasing its geographic scale and presence. Nutrella is a company founded in 1972 that produces and commercializes packaged bread, rolls and cakes, through two production units in the states of Sao Paulo and Rio Grande do Sul. With the trademarks Nutrella, Nhamy and Nutrellinhas, among others, it is positioned as leader in Brazils South Region. In 2007, Nutrella, with more than 1,600 collaborators, registered sales for R$150 million and a EBITDA* for R$21 million. This investment responded to Grupo Bimbos strategy of consolidating its transactions in the countries where it participates and gave it a stronger position to continue developing a profitable business in Brazil, by complementing its current operation. Likewise, it gave access to one of the regions with more economic activity in the country, with more than 25 million inhabitants. 2009 On January 21 2009, Grupo Bimbo announced that it completed the acquisition of the bakery business in the United States of Weston Foods, Inc. (WFI), owned by Dunedin Holdings S. r.l., a subsidiary of George Weston Limited (TSX: WN), located in Toronto, as well as the acquisition of the related financial assets, having obtained the relevant regulatory approvals and permits. Such transactions were appraised in $2,380 and $125 million dollars, respectively. The aggregate payment of $2,505 million dollars was made through a financing of $2,300 million

29

dollars, as well as with the Companys own funds. The consolidated operation in the United States, known as Bimbo Bakeries USA (BBU), became one of the largest bakery companies in the country, with a leading position in the bread, rolls, sweet bread and cake categories. The portfolio includes premium trademarks such as ARNOLD, BIMBO, BOBOLI, BROWNBERRY, ENTENMANNS, FRANCISCO, FREIHOFERS, MARINELA, MRS BAIRDS, OROWEAT, STROEHMANN, THOMAS and TIA ROSA. The new operation provides employment to more than 15,000 collaborators, operates 35 plants and distributes its products through more than 7,000 routes. Grupo Bimbos consolidated results reflect the integration of WFI transactions as of January 21, 2009. On November 18, 2009, the assets related to the production, distribution and sale of corn products under the trademark Sanissimo were acquired. 2010 At the end of 2010, Dulces Vero was acquired. Dulces Vero is the principal producer, distributor, and marketer of lollipops, hard candies, and marshmallows, most of them covered in chile, in Mexico. Vero, founded in 1952, produces a wide range of candies and jams, including hard candy lollipops, gummies and marshmallows, among others. The company has broad experience and technology for the production of hard candies and products made with chile. Vero has 1,500 collaborators and in 2009 generated sales of approximately Ps. 1,100 million, and an EBITDA of Ps. 220 million. The acquisition of these assets strengthened Grupo Bimbos position in the Mexican candy market through its subsidiary Barcel and supported the Companys strategy to reach all sociodemographic sectors. Together with the synergy of sales and costs, the strength of Vero in wholesale chains combined with Barcels extensive retail sales distribution network, will provide a solid platform for continued growth. In addition, Veros products complement Barcels portfoloio in the Hispanic market in the United States and represent an opportunity to increase the presence of the company in that country. On November 9, 2010, Grupo Bimbo announced that it reached an agreement to acquire the North American business of Sara Lees Fresh Bakery, the closing of which is expected to take place at the end of the first semester of 2011. The acquisition will significantly strengthen and expand business in the United States. The acquisition includes a perpetual license to Sara Lee brand, free of royalties, for its use in baked goods in America, Asia, Africa and the countries of Eastern and Central Europe, as well as a range of regional trademarks with high recognition in its local markets. Sara Lee NAFB operates 41 plants, around 4,800 distribution routes, and employs approximately 13,000 collaborators. During the last 12 months concluding on October 2, 2010, Sara Lee NAFB generated sales of 2 thousand million dollars and an adjusted EBITDA of 108 million dollars. This transaction will allow BBU to construct a more efficient and lower-cost platform in order to serve clients and consumers across the United States. The acquisition is highly complementary in all product lines, plants, and geographic zones. Sara Lee NAFBs brands and product ranges provide a solid business in fundamental geographic zones and categories where BBU does not currently have an important presence. The combined business will provide employment to more than 28,000 collaboraters, will operate 75 plants, and will distribute its products through more than 13,000 routes, with pro forma sales estimated at 5,805 million dollars in 2010. It is expected that the integration of Sara Lee NAFB with the current operations of BBU will generate annual synergyies in a range of approximately 150 to 200 million dollars for 2013. Grupo Bimbo announced the beginning of construction of Piedra Larga, the larges wind park

30

in the food industry worldwide, which will generate almost 100% of the electrical energy used by Grupo Bimbo in Mexico. With an installed power capacity of 90 mega watts, the park will be able to supply the electric consumption of 65 instalations (production plants and other operation centers) of the company. Grupo Bimbo invited Grupo Calidra, Frialsa Frigorficos and the museum Papalote Museo del Nio to participate in this project. Grupo Bimbo has focused its attention on the implementation of wind energy, in order to fulfill its permanent commitment to the environment and to the wellbeing of future generations.

31

The table below is a summary of the sales of the acquisitions carried out by the Company in the last 3 years (figures are expressed in million pesos): Date 2009 2010 December 3 May 5 May 1 2009 January 21 Others 2008 May 1 May 6 April 2 March 25 February 21 January 2 3. Recent Events Weston Foods, Inc. (WFI) Other businesses and assets Galletas Gabi Assets and Trademarks Nutrella Alimentos S.A. Plucky, S.A. Lido Pozuelo, S.A. Firenze Assets and Trademarks Panificio Laura, Ltda. USA Others Mexico Brazil Uruguay Honduras Brazil Brazil $31,699 320 $349 924 107 203 209 259 Dulces Vero JinHongWei BMFoods Company Country Amount

Mexico China USA

$1,285 |63 383

Below are the relevant events after December 31, 2010: Grupo Bimbo announces the hiring of Accival as market maker. On March 7, 2011, Grupo Bimbo announced the hiring of Acciones y Valores Banamex, S.A. de C.V., Casa de Bolsa, as market maker in order to operate the Companys shares listed on the Mexican Stock Exchange under the ticker symbol BIMBO. This initiative strengthened the Grupo Bimbos commitment to promote the liquidity of its securities in the capital market. Grupo Bimbo contacted a syndicated loan for $1,300 million dollars On April 26, 2011, Grupo Bimbo contracted a syndicated loan for five years for an amount of $1,3000 millon dollars, with an interest rate of Libor + 110pb, with a group of 10 participant leading financial institutions. The proceeds obtained by this transaction will be used to refinance certain existing liabilities under better terms and to partially fund the acquisition of Sara Lee, the closing of which is planned for the middle of the year, subject to the relevant approvals. The loan, which will be paid in four semestral payments beginning in month 42, increases the exchange rate composition with respect to U.S. dollars, maintaining a natural economic coverage and accounting. In addition, the transaction improves the profile of the liabilities of the Company with the increase of the average term from 4.9 to 5.5 years and the decrease of the financial holding cost from 5.7% to 3.9%. Grupo Bimbo issues a 4:1 split of its shares On April 29, Grupo Bimbo made effective a 4:1 stock split. The split is intended to improve the liquidity of the shares in the best interests of the shareholders.

32

b) BUSINESS DESCRIPTION i) 4. Principal Activity Strategy and Strengths

The Groups general strategy is based on its corporate mission, this is, the development of the value of its brands and essentially, its compromise of being a highly productive and entirely human Company, as well as innovative, competitive and aimed at total customer and consumers satisfaction, being an international leader in the baked goods industry and with a long term vision. Likewise, the Company, through its general strategy is aimed at increasing its value, which is reflected in an increased shareholders value. To strengthen the Groups vision and strategy, the Company follows particular strategies, which include the following elements: Develop Innovative New Products. BIMBO has successfully developed and introduced new products that have increased sales and satisfied consumers and the Company strives to ensure that its products suit the tastes and budget of its consumers according to the customs, needs and trends, as well as providing nutritional value. BIMBO intends to continue to invest in research and development to innovate across its product lines and new product categories, driving consumer demand and incremental revenue opportunities. BIMBO is a global Company that strives to maintain a local character through a constant pipeline of new products that seek to address its diverse customers needs and desires and enhance its customer and consumer base. For example, the Company developed a process to add functional ingredients to certain of its products to improve the health of its consumers by lowering cholesterol or enhancing mineral absorption. In addition, it is also one of the first consumer products companies in Latin America to introduce biodegradable packaging technology. the Company believes that the strength of its brands and its low-cost manufacturing base provides it an opportunity for continued expansion of its product Continued Development of the Companys Brands. BIMBO has had a strong track record of creating, nurturing and managing successful brands, which it believes reflects a deep understanding of consumer preferences and the rigor of its ongoing market research and testing programs. In most of its product categories, the Companys brands have an extraordinary top of mind awareness in the market based on its market research. The Companys packaged bread is found in virtually every household in Mexico. The Company believes that this experience provides a platform for it to develop new product lines under its existing brands as well as entirely new categories. As it expands into new markets, the Company expects to increase the recognition of its existing brands in those markets (including our Bimbo brand in the United States) and strengthen its brand portfolio with new brands targeted to those markets. Increase Market Penetration. To meet the needs of each of its customer segments, the Company uses a range of analytical tools to divide regions by distribution channel, size, brand and products and continuously develop new channels. The Companys recent market penetration efforts have resulted in customer base growth in almost every segment in Mexico, increased penetration of the United States convenience store channel and significant growth of its Central and South American customer base. The Company intends to continue its efforts to increase market penetration expand its product base and enhance its brand recognition in the markets in which the Company has gained entrance. Building on this success, the Company believes that the strength of its brands and the reach of its distribution network provide a major opportunity for increased market penetration, including into the market for baked goods in the United States and Central and South America. Increase Efficiencies throughout the Companys Business. BIMBOs growth has generated valuable economies of scale in production, distribution and marketing as well as dissemination of best practices and innovation. The Company remains focused on driving additional efficiencies

33

and improved profitability in its business. In particular, the Company aims for constant improvement in the use of its production and distribution resources and in periodically reinvesting in its plants and equipment and it strives to maintain a low-cost operation with a focus on effective cost controls. For example, redesigning packaging that is lighter to reduce unit cost and the careful calibration of the use of its distribution network. In addition, the Company frequently evaluates the data generated by its sales force and its data mining techniques to improve execution at the point of sale and refine its inventory management. The Company also monitors its pricing structure in light of raw-material costs and inflationary pressure to maintain the optimal balance. Continued Growth. The Company believes that it has benefited from its acquisition and integration of new brands and products and its expansion into new markets. BIMBO seeks to continue to expand its geographic reach through organic growth and to pursue selective strategic acquisitions in regions and categories that provide a platform for growth and acquisition of strong brands that complement its existing portfolio and increase the penetration of its brands. Given the fragmented nature of the food industry, BIMBO will continue to evaluate its expansion through organic growth as well as acquisition opportunities. The Company believes its presence in various markets around the world will provide it a platform for it to identify selective growth opportunities. Social Strategy. The Group has been dedicated to become a fully human Company. The Company has insisted and will continue to insist on an integration of managers and employees guided by the mission to fully feed, delite, and serve the client. Also, the Company has led and will continue to develop in the future, a work environment that facilitates the integration and personal identification with the Company. Its objective in this matter is that the worker starts developing in the Company and thereby conducive a productive performance and personal satisfaction. This is how the Group seeks to match its commitment for responsibility both externally and internally, not only in the economical but also in a social manner. According to the surveys conducted by the Mexican magazine Expansion, BIMBO has been pointed out as one of the most admired companies. See Business Description Principal Activity Human Resources. Regardless that the Companys management considers that the administration of the strategies described herein is the most convenient, it cannot guaranty that the strategies will have the expected effects on BIMBOs operations or that the same strategies will be maintained in the future, since the management reviews periodically the orientation and impact of said strategies. Strengths The Group has grown rapidly over the last five years and believes its business strengths will allow it to continue to grow and successfully fulfill its strategy: Leading Market Position. BIMBO is one of the largest baked goods companies in the world and one of the largest food companies in the Americas, with a diversified portfolio of approximately 7,000 products and more than 150 renowned brands, which allows the Company to reach all market categories in most of the countries in which it operates. BIMBO is the number-one or number-two market participant in its primary markets (the United States, Mexico and Central and South America) in all its categories: bread and rolls, cakes and pastries, cookies, salted snacks, confectionery goods, tostadas and wheat tortillas. The other product lines are also top players in their respective markets. As an example, in the United States, its packaged bread is purchased by approximately 50% of the households and Thomas is a highly recognized brand in the English muffins subcategory. In Mexico, Marinela is the market leader in the cakes and pastries category, and Barcel and Ricolino are the number-two market participants in the salted snacks and fragmented confectionery market, respectively.

34

Strong Brand Recognition. The Companys brands are leaders in market recognition in the United States, Mexico and Central and South America. The Company believes its understanding of the need and preferences of its consumers allows it to offer them superior quality products at competitive prices. They believe their strong brands give them a competitive advantage and allow them to more effectively leverage its new product launches in the markets in which they operate. Through the acquisition of WFI significantly strengthened the brand portfolio in the United States with brands including Thomas, Arnold and Entenmanns. Each of the Companys brands is targeted to a specific audience and supported by a comprehensive marketing plan. Some of the brand symbols, such as the Bimbo bear, the Gansito goose and the Paleta Payaso clown have developed iconic status and are immediately recognizable to millions of consumers. Extensive Direct-Distribution Network. The Company has developed an extensive directdistribution network, which fields one of the largest sales fleets in the Americas and represents a major competitive advantage. its network allows it to distribute products from its 98 plants, distribution centers and warehouses to more than 1.8 million points of sale every day to ensure the freshness and quality of its products and to meet the needs of every type of customer from hypermarkets to small convenience stores. The Company also maintains a highly efficient and sophisticated logistics operation to address distribution requirements across the markets it serves. Through the acquisition of WFI, the Company significantly extended its United States distribution network into the Northeast. BIMBO has also developed strong relationships with its customers that enable it to tailor its approach and response to their diverse and changing needs, including with respect to frequency of delivery, in a cost-effective manner. BIMBO believes this result in strong customer loyalty. Market Intelligence and Consumer Satisfaction. BIMBO offers its consumers, through its different brands, a wide variety of baked goods spanning a broad range of product types, pricing levels, flavors and sizes. The Company frequently expands and creates innovative product lines to address specific needs and desires of consumers, based on a unique understanding of their needs and preferences in the markets in which the Company operates. BIMBO has gained this unique understanding by continuously conducting market research and retrieving and analyzing key information from its consumers, including through the use of sophisticated technology by its sales force its market intelligence allows it to target the right products to each point of sale at the right time. BIMBO believes it is the leading innovator within its product categories and has consistently introduced new products that have been well received by consumers. Experienced Management Team. The strong management team of the Company has broad industry expertise and has successfully developed and consolidated its market leadership by focusing on its baked goods business and by their effective and rapid response to the constantly changing consumer demands and competitive environment in the markets in which it operates. They have completed and integrated various acquisitions in recent years and disseminated innovative ideas and best practices in manufacturing and distribution across Grupo Bimbo. Strong Corporate Culture. BIMBO places great emphasis on its relationship with its associates and seek to align their interests with its corporate goals and customer satisfaction policies. BIMBO is committed to the safety and health of its associates and consumers and practices a preventive approach to well-being. The Company believes that a high level of workforce satisfaction leads to a more productive business environment as well as customer and consumer loyalty.

35

5.

Main Operations

Grupo Bimbo is one of the largest baked goods companies in the world and one of the largest food companies in the Americas. The Company produces, distributes and markets a wide variety of baked goods, sweet and salted snacks, wheat tortillas, tostadas, cookies, confectionary goods, chocolates, goat milk caramel cajeta, confectionery goods, fast food and packaged foods it also carries renowned brands such as: Bimbo, Marinela, Ta Rosa, Lara, El Globo, Thomas, Arnold, Stroehmann, Freihofer, Dutch Country, Maiers, DItaliano, Brownberry, Oroweat, Mrs. Bairds, Entenmanns, Thomas, Francisco, Old Country Barcel, Ricolino, Dulces Vero, Coronado, La Corona, Milpa Real, Del Hogar, Ideal, Plus Vita, Pullman, Holsum, Nutrella, Firenze, Laura, Europa y Monarca, among many others. BIMBO has manufacturing operations in Mxico, the United States, Argentina, Brasil, Chile, Colombia, Costa Rica, El Salvador, Honduras, Guatemala, Panam, Paraguay, Per, Uruguay, Venezuela y China, and a distribution center in Nicaragua. Grupo Bimbo is organized in six divisions within the industry of baked goods, and sweet and salted snacks. Bimbo, S.A. de C.V., which includes brands such as Bimbo Marinela, among others; BBU, which incorporates the operative companies in the United States; OLA, which includes all the operations in Latin America; El Globo, with more than 250 bakeries; Barcel which incorporates the sweet and salted snacks operation; and Bimbo China in charge of operations in Asia since March 2006, when the Company ventured in the Asian market through the acquisition of Beijing Panrico Food Processing Center in China. The Company operates in three principal regions: Mxico, the United States, and Latin America. The Company sells its products in 17 countries: the United States, Mxico, Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela, and China. The following tables reflect the net sales of the Company in each one of the principal markets in which the Company operates, as well as production plants, distribution routes, and points of sale that the Company had in each of said markets on December 31 of 2010, 2009, and 2008:

Region

Net sales for the periods ending on December 31 of, 2010 2009 2008 (in millions of pesos) 47,875 57,870 14,207 117,163 Production Plants 34 44 25 49,850 55,388 13,606 116,353 Distribution Routes 9,000 27,000 6,000 18,049 54,845 11,346 82,317 Points of Sale 90,000 1,461,000 342,000

United States Mxico (1) Central and South America Consolidated**(3) Region United States Mxico (1) Central and America
(1) (2) (3)

South

Includes operations in Europe and Asia. Approximate figures The consolidated figures exclude the operations between the regions.

36

a.

Baked Goods Division

This sector comprises the following business units: Bimbo, S.A. de C.V. This Company produces all the baked goods in Mxico and its main brands are Bimbo and Marinela. Bimbo. Dedicated to the production, distribution and marketing of packaged bread, sweet bread, cereal bars, packaged wheat tortillas, tostadas and fast food. Regarding packaged bread, historically, Bimbo has managed to grow above the population and GDP index, due to a growing a major change in the preference and needs of consumers, in the sense of acquiring packaged bread, whose duration is greater than the traditional bread. Additionally this division has been very active in the introduction of new products with features that have managed to meet consumers needs. Regarding to sweet bread, Bimbo has not only pursued a strategy of production, distribution and marketing of traditional Mexican bakery but also has sought to differentiate itself by offering new options that meet different consumption moments. These products, sold in different varieties and presentations, represent, like the packaged bread, an excellent choice for consumers. We must emphasize the consolidation of the Company in the category of cereal bars, such as, Bran Frut, Multigrano and Doble Fibra. With respect to wheat tortilla and tostadas division, in the recent years it has experienced a significant annual growth. As a result of the above on 2009, Bimbo acquired the Company Sanissimo, which strengthened its position on the modern tostadas and tortilla chips market. The main brands under which Bimbo commercializes its products are: Product Line Packaged bread (white, wheat bread, specialized) Bread rolls Sweet bread Flour Tortillas Tostadas and Totopos Cereal Bars Fast Food Brands Bimbo, Sunbeam*, Wonder, Oroweat, Breddy Bimbo, Wonder Bimbo, Tia Rosa Tia Rosa, Del Hogar, Wonder Milpa Real, Del Hogar, Kodyz, Sanissimo Bran Frut, Doble Fibra, Multigrano Lonchibn

* Licensed use of trademark in Mxico. Marinela. This brand was founded in 1965 in Mexico City with the production of snack cakes on individual portions. In 1992 the Company acquired Galletas y Pastas Lara, S.A. de C.V., which allowed Marinela to approach in an important manner the traditional cookie sectors such as maras, salad crackers and popular cookies. In 2008 the Company acquired Galletas Gabi, which strengthen its position in the luxury cookies segment on the modern market. Currently, Marinela is dedicated to the production, distribution and marketing of various pastries, pies and cookies, mainly under the following brands: Product Line Bakery Cookies Brands Marinela, Wonder Marinela, Lara, Suandy, Tia Rosa, Gabi

Together with Bimbo, Marinela has a preferential place on the counters of most of Mexicos small businesses and convenience stores.

37

Milk beverages. In 2008 the Company ventured in the category of milk beverages in Mexico with Leche Negrito for its sale in the retail channel. The purpose is to participate in new categories using the Companys top brands in order to increase value. Prepared foods. This category offers ready-to-eatfood products at the point of sale. The principal brand is Lonchibn with products market segment of sandwiches, burritos, croissants, hamburgers, etc. The Group has 3 centers of production in Toluca, Monterrey and Tijuana and an area annexed to the Chihuahua plant. El Globo. A pastry company founded in 1884 and acquired by Grupo Bimbo in September 2005 that is recognized as a leader company and one of the most traditional, with a history of 125 years in the field of high-end pastries and artisanal bread in Mxico. The Company keeps control of all the stages of the business: procurement, production, distribution and marketing, through over a net of 250 points of sale with different formats, traditional stores, coffee houses and carts. The products consists high-end pastries and artisanal bread and is aimed to the markets superior levels. The principal categories of products are cakes, sweet and salted bread, yellows, canaps, cookies, chocolates, ice cream, pastas, prepared foods, and coffee-sandwich, these products are commercialized under the following brands: Product Line High-end pastries, artisanal bread, yellow, cookies, pastas, canaps, chocolates, ice cream y prepared foods, cafes, drinks French high-end pastries, artisanal bread Specialized bread Sandwich-coffee Cakes, bread and cookies BBU, Inc. BBU is headquartered in Horsham, Pennsylvania and is the company which controls the operations of the Group and consolidates the operations of Bimbo Bakeries and Bimbo Foods in the United States. Such operations consist mainly in the manufacture, distribution and marketing of packaged bread and sweet bread to minority and institutional clients, including the distribution of products imported from Mexico, principally focused on the Hispanic community. BBU holds a 21% market participation in packaged bread and sweet bread in the United States, a total market sum of $17,000 million dollars. Currently, BBU has 33 production plants in the U.S. and more than 8,000 distribution routes. Approximately 58% of the distribution network is operated by third parties that have a contract with the Company. BIMBO has implemented an aggressive expansion strategy in the United States, through several major acquisitions including the acquisition on January 21, 2009, of the United States bakery company of Weston Foods, Inc. (WFI) for $2,380 million dollars, and the acquisition of related financial assets. On November 2010, Grupo Bimbo announced the agreement to acquire the North American Fresh Bakery business of Sara Lee for $959 million dollars. Currently the agreement is under revision by the U.S. Departmetn of Justice and it is expected that the acquisition will be completed by mid-2011. The North American Fresh Bakery business of Sara Lee markets a wide range of baked goods including bread, bread rools, muffins and bagels. Among its principal brands are: Sara Lee, Earth Grains, Colonial, Rainbo, Holsum, Sunbeam and Heiners, some of which operate under license agreements. Sara Lee has 11.6% of participation in the market of packaged bread in dollars, such market is worth approximately $11,000 million dollars. Brands El Globo

La Balance Delibrot Breadhaus El Molino

38

These acquisitions have helped consolidate the Groups presence in the United States, and have permitted the Group to expand its presence amongst the Anglo-Saxon population. Additionally, they have allowed for the consolidation of the Groups operations with Mexican brands that are prestigious in the United States, where the Hispanic population has grown significantly over the last few years. All of this has strengthened Grupo Bimbo, as a significant part of the Companys assets are outside the Mexican territory and the contribution of these operations to BIMBOs sales is important, thereby reducing the risks posed by exchange rate fluctuations. See The Company Business Description Principal Activity Strengths and Strategy and see General Information Risk Factors. Main brand under which BBU commercializes its products:

Product Line Packaged Bread

Sweet bread, cakes and cookies. Tortillas and pizza bases

Brands Arnold, Brownberry, Oroweat, Thomas, Stroehmann, Mrs. Bairds, Bimbo, Freihofer, Maiers, DItaliano, Francisco, Old Country, Entenmanns, Marinela, Bimbo, Mrs. Bairds, Freihofer Tia Rosa, Boboli, Sahara

In certain parts of the United States, BBU commercializes products under license agreements. The following table shows the principal trademarks in the United States: BBU Brands

Latinamerica Organization in charged of coordinating all the operations of Grupo BIMBO in Latin America. These operations started through the Companys construction of its own plants of production, strategic associations and acquisitions on certain countries. As of December 31, 2010, Latinamerica operated 25 plants in 14 countries, including Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panam, Paraguay, Peru, Uruguay and Venezuela. These countries represent a potential market of more than 360 millions of consumers.

39

In this contrast BIMBO has devolved particular distribution systems for each countrys market attending to their social, geographical, policyal, labor and economical conditions of each country. The main Brands under which Latinamerica comercializes its products are: Product Line Packaged Bread and pastries Brands Bimbo, Bontrigo, Breddy, Cena, Europa, Firenze, Fuchs, Holsum, Ideal, La Mejor, Los Sorchantes, Maestro Panadero, Monarca, Morn, Nutrella, Pan Todos, Pullman, Plus Vita, Pyc, Tradiao, Trigoro, Tulipn, Wonder, Mam Ins, Guadalupe Bimbo, Ideal, Laura, Pullman, Plus Vita Ana Mara, Lagos del Sur, Maestro Cubano, Marinela, Marisela, Agua de Piedra Ricard, Ricolino

Sweet bread Cookies and cakes Confectionary goods

BIMBO decided to participate in the Latin American markets due to the great growth potential that they represent in the consumption relation between traditional bread and packaged bread, also because of the consumption tendencies observed in the last years. See The Company Business Description Principal Activity. The next table shows the share of packaged bread and traditional bread in some of the countries in the region: 2010 Chile Colombia 95.0% 66.9% 5.0% 33.1%

Traditional bread Packaged bread

Argentina 91.4% 8.6%

Brazil 80.5% 19.5%

Peru 92.5% 7.5%

Uruguay 93.4% 9.6%

Venezuela 89.1% 10.9%

Source: Datamonitor. Includes the categories of Industrial Bread & Rolls, Artisan Bread & Rolls, Industrial cakes & pastries, and Artisan cakes & pastries. The following table shows the main trademarks in Latin America:

40

OLA Brands

China. Coordinates the operations of Grupo BIMBO in Asia. Mainly, it concentrates the operation of the Beijing Panrico Food Processing Center, which was acquired in March 2006 and today is called Bimbo Beijing Food Company. Bimbo Beijing is dedicated to the manufacture, distribution and marketing of packaged bread, sweet bread, cakes and confectionary goods under the brand: BIMBO. Through the acquisition of the brand Million Land in 2009, and JinHongWei in 2010; it also markets ready-to-eat foods and Chinese baked goods. The Company has developed new products with local flavor, such as bread rolls with sweet beans and bread filled with local salty ingredients, in order to adapt to the Asian market and satisfy region-specific tastes and to develop a consistent demand for bread and similar products. The Company operates two production plants and 11 distributions centers, of which six are located in Beijing and five in the surrounding cities. It has a portfolio of over 100 products, which are distributed and commercialized through a distribution network of over 180 routes and 7,300 points of sale. Our fresh products are distrubted in 27 cities, including Beijing and the surrounding cities in a 1000 km radius. The principal markets are the cities of Beijing, Tianjin, Langfang, Baoding, Shijiazhuang, Taiyuan, Jinan, Shanghai and in Northeast China, such as Shenyan, Harbin and ChangChun. It is worth noting that the leverage of distributors and the long life products has permitted that the products have reached Chinese provinces such as: Inner Mongolia, Guandong, and Xinjiang. The table below sets forth the main brands of the Group in China:

Bimbo Beijing Brands

b.

Salted Snacks and Confectionary Division.

Barcel, S.A. de C.V. Barcel concentrates all the salted snacks, confectionary goods, chocolates, and chewing gum in Mxico and its main brands are Barcel, Ricolino, Coronado, La Corona, Chicks, Star Gum and Dulces Vero. Barcel. Its operations started with the acquisition of a snack factory in the City of Quertaro in 1977, this gave birth to Productos Nubar, S.A. de C.V. Subsequently, two plants for production and commercialization of salted snacks were constructed in Mxico, in Gmez Palacio, Durango and Lerma, Mexico State. In 2004 the Barcel Yucatn plant was built in Mrida, Yucatn, afterwards Barcel took control of the operations of the tortillas and corn tostadas in Atitalaquia, Hidalgo, which was formerly operated by Bimbo, S.A. de C.V. Likewise, new lines of production were installed in Hermosillo, Sonora in order to meet the increased demand for Barcels products. In 2010, a new plant for Barcel plant opened in Mexicali, with a line of corn products, focused primarily on covering the market of the western United States. Today, Barcel exports products to the United States, achieving a very good acceptance with consumers of both origins, Anglo-Saxon and Hispanic. The main brands under which Barcel commercializes its products are: Product Line Chips Wheat Extruded Peanuts Popcorn Brands Chips, Ondas, Toreadas and Papatinas Takis, Runners, Chipotles, Tostachos and Tortilla Nachos. Valentones, Spirrones, Big Mix Hot Nuts, Golden Nuts, Kiyakis Karameladas pop

Ricolino. Produces, distributes and sells chocolates, marshmellows covered in chocolate, confectionary goods, gum and gummy candies, acidulated tablets, caramels, lolly-pops, chewing gum, marshmallows, milk modifiers, traditional candies and goat milk caramel cajeta, through six plants of production and four collection centers, all of them located in Mxico. Likewise, Ricolino has important operations in the United States, Central and South America. In February 1999 Barcel, S.A. de C.V. associated with the Dayhoff, in the United States, by acquiring an initial participation of 50%. In 2002 its participation increased to 70% of the capital stock and in 2004 Barcel acquired the totality of the shares. With this acquisition, Barcel, S.A. de C.V. obtained distribution channels and well known brands which allows Barcel to manufacture and distribute products with and important added value. In virtue of the agreement reached in January 2003 between Wrigley Sales Company and Ricolino, the later became the exclusive distributor of Wrigleys gum products such as, Winterfresh, Orbit, Spearmint, Juicy Fruit and Doblemint. See The Company History and Development of the Company History. This agreement terminated in April 2008.

42

In 2004, Ricolino became the exclusive distributor of Bon o Bon de Arcor, leading Company of confectionery goods in Latin America. Also in May of the same year, Barcel, S.A. de C.V. acquired Joyco de Mxico, owner of the brands Duvaln, Bocadn, Lunetas and Duvaletas. In 2005, Ricolino acquired Chocolates La Corona; this Company commercializes brands like Paletn La Corona, Huevitos, Canasta and Chutazo. With this acquisition, the brand Ricolino established itself as one of the leading companies in the chocolate sector in Mxico. In 2006, the Mundo Dulce plant in the City of Toluca was inaugurated, this plant operates as a Joint Venture with Arcor. In this plant lolly-pops, caramels and chewing gums of both companies are produced. The main brands under which Ricolino commercializes its products are: Product Line Goat Milk Caramel Cajeta, hard candies, lollipops, taffies and wafers filled with cajeta (obleas) Chocolates and figures Candied Chocolates Marshmallow Chocolates Chocolate covering Chocolate cookies Chocolates spread Gum Gummies Acidulated tablets Milk Modifiers Brand Coronado, Yopi Coronado, Duvaletas, and Coroletas

La Corona, Chutazo, Jimador, Canasta, Chocosorpresa, Barra Payaso, Bon-o-bon Lunetas, Chocoretas, Almendras Paleta Payaso, Bubulubu, Paletn La Corona Kranky, Pasitas Bocadin Duvaln Chicks, Chiclub, Star Gum, Mas K Panditas, Moritas, Dulcigomas, Gomilocas, Just Fruttie, Park Lane, Dayhoff, Frutigomas Pecositas Choco Kiwi

Dulces Vero. At the end of 2010, Grupo Bimbo acquired Dules Vero, the principal producer, distributor and marketer of lollipops, hard candies and marshmallows, the majority covered in chile, in Mxico. Founded in the 1950s and located in Guadalajara, Jalisco, with 2 distribution centers and 5 manufacturing plants, 1,500 collaborators, sales achieved in 2010 around 102 MM U.S. dollars and exports to the United states, Israel, Colombia and Venezuela among others, the principal wholesale national distributor and seller. Currently, the consolidation of the two manufacturing plants has been achieved, and there are now 2 distribution centers and 2 manufacturing plants in Tlajomulco and Guadalajara. Product Line Fluffy marshmallow Gummy candies Hard candies Lollipops Brand Trencitas, Redondo, Coloretes Picagoma, Sandigoma Rellerindo, Cojn de menta Tarrido, Cupido, Bomba Chile, Mango con chile, Elote chile

6.

Products

As of December 31, 2010, BIMBO produced more than 7,000 products under 150 renowned brands, whose main product lines are described above. See: The Company Business Description Main Operations.

43

As part of its marketing program and to enhance its brand recognition and market penetration, its various brands have distinctly different packages designed to cater to the desires and expectations of consumers in each market according to our market research. The most popular are the individual packages, followed by the family packages, packages for the institutional customers, breadboxes for price clubs, and boxes of cookies for wholesale. a. Development of new products.

The innovation of products is highly important to the Company; therefore the Company continues to search for alternate ingredients, processes, packaging, and technologies that contribute to a better choice for the consumers. Innovation provides an informed consumer a choice of alternative products, particularly those that should be included in a healthy diet where bread has a predominant place. The Company has innovated in order to satisfy the tastes of consumers, and at the same time, as part of our social responsibily to those consumers, to improve the nutiritional value of our portfolio of products. Therefore, in 2008, the Company became a member of the IFBA (International Food and Beverage Alliance) in order to implement the Global Strategy of the WHO on Diet, Physical Activity and Health, with five fundamental commitments: Developing of products: improving the nutritional value of current products, introducing new products with healthier nutritional values, controlled portions, and improving guidelines in the countries in which the Company operates Adopting responsible publicity and marketing for children under the age of 12 years. Providing nutritional information to consumers through clear and user-friendly labeling. Promoting physical activity and healthy life styles. Making alliances with health organizations and public and private institutions.

Among the most significant activities in this area, the elimination of fats in 99.5% of the portfolio of products particularly stands out. In addition, in 2010, a plan to reduce by up to 50% of the saturated fat content in some of the notable products in the Mexican market was implemented by the Group, such as Marinela cookies (Canelitas, Rocko, Prncipe, etc) and Barcel snacks (Takis and Chips). Since 2009, the Group has committed to reduce the salt content in some of the important categories, such as breads and snacks. Currently, the Group has achieved a reduction in salt between 20% and 30% in breads of various leading brands in countries such as the United States, Mxico, Per, Chile, and Brazil. As of today, brands like Oroweat, Mrs. Bairds, and Arnold in the United States; Bimbo and Wonder in Mxico; and Bimbo Nutrella, Pullman and Ideal in South America have decreased the salt content in their productos and heve maintained the preference of the consumers. In addition, as of August of 2010, Grupo Bimbo signed 6 new commitments regarding publicity and childrens advertising, following the recommendations of the WHO. These commitments include 17 countries in which the Group has a presence and they apply to all of the products. Grupo Bimbo will only advertise its products to children by means of print media, television programs, radio and on the internet, when such advertisements comply with nutritional profiles based on scientific evidence and global standards. Through various innovative processes, in 2010 the Group continued to implement and consolidate strategies focused on diversifying its brands and categories of products, applying always the knowledged gained through consumer preferences, as well as new technologies. In this way, the Group has developed products with functional ingredients, such as whole grains, reduced portions and kilocalories, and lower fat, salt and sugar contents, in order to respond to the needs of the health-minded consumer.

44

In order to promote the competitiveness of the Companys products in an international and domestic level, Grupo Bimbo participates constantly and works together with the Consejo Nacional de Ciencia y Tecnologa in Mexico and with strategic alliances in innovation with universities and research centers. On the other hand, the Group continues to improve its programs and agreements with strategic suppliers, institutes, research centers and universities participating together in the developments of research projects. The Group has also formed specialized groups for the development of new products and has opened six innovation and nutrition institutes; two in Mexico, three in the United States and one in Brazil, focused on nutrition, innovation, and sustainability. Additionally, the Company has laboratories and facilities engaged in the production of prototypes and the testing and validation of new ingredients, as well as conducting functionality and stability studies and evaluating new manufacturing processes and technologies, etc. Newly developed products are approved by committees and evaluated through market testing. Significant results from our innovation and nutrition centers include: (i) the launch of biodegradable packaging technology which, unlike normal polyethylene, is degraded in five years instead of 100 years; (ii) the development of products with whole grains, receiving recognition from the WGC for introducing into the market the greatest number of whole grain products (more than 300); and (iii) the improvement of the nutritional value in certain product lines and the reduction of trans fats, fats, salt and/or sugar and the improvement in fat profiles. Regarding the task of consumer education, the Company has continued to provide information regarding nutrition and healthy diet through printed publications, radio, television and the Internet, promoting physical activity in our advertisements, as well as promoting sporting events and distributing free brochures that encourage a balanced diet and a physical activity, thereby promoting a healthy life style. In order that consumers learn the nutritional value and composition of the Groups products, all of the Groups products have their energy content by portion (kcal) displayed on the front of their packaging. Beginning in 2010, the Group began to implement a second phase in its front-labellling proposal, which consists in placing Guideline Daily Amounts (GDAs) of the nutrients with the greatest public health impact, and the incorporation of the WGC Whole Grains seal. Accordingly, the consumer may make an informed decision between a great variety of products that could be included in his or her diet, of which the product sof the Group form an important part. b. Seasonality

In most of the categories the products of the Company show a seasonal behavior, with larger levels of consumption in holiday seasons, rain season, and low temperature seasons. The low levels are presented during summer due to school vacations, and in high temperature seasons. In order to stabilize the demand for its products BIMBO has developed various promotions and advertising campaigns and new products, which launches during the periods of lower consumption in the different operations, which do not coincide due to the geographical coverage of Grupo BIMBO. See The Company Business Description- Principal Activity Promotion and Publicity. 7. a. Production Process Production Process

The Groups plants use state-of-the-art technology and equipment. The Group has adopted and implemented modern automated production processes for each of its lines of business and maintain strict operation and control systems, resulting in efficiencies throughout its production processes within a competitive cost structure. Some of its manufacturing plants may be programmed to manufacture a variety of products also contributing to production efficiencies. The bakery production process of the Groups products has slight variations between locations, but generally includes the mixing of ingredients, baking, slicing, packaging and distribution of the products.

45

As part of its strategy to respond to the changing needs of the market, the Group has implemented and continuously updates innovative systems to increase the capacity, quality, and production potential of its manufacturing lines. To that end, the Group has redesigned its current facilities and incorporated new technology (either developed by us or acquired from third parties), significantly increasing capacity and reducing production costs. As a result of productivity improvements, and to take advantage of the resources of its production plants, each plant carries out its own analysis of its production processes and, together with the corporate support areas, the Group implements the appropriate improvements. The below chart, is an example of some process lines of packaged bread, sweet bread, frozen bread, and salted snacks. Its worth mentioning that the diagrams correspond to the main productive processes, which means that the production of other foods such as tortillas, chocolates, peanuts, goat milk caramel cajeta etc. are different.

46

PACKAGED BREAD
Start

Raw material Reception

Raw material Wharehouse

Ingredients Mixture

Molding and Division

Molds Placement

Client

Distribution and Sale

Packaging Process

Cooling and Slizing

Fermentation and Bakery

End

Sweet Bread
Start

Raw material Reception

Raw material Wharehouse

Dough preparation

Paste

Molding and Division

Client

Distribution and Sale

Packaging Process

Cooling and Slizing

Decorative Process

End

Frozen Bread
Start

Raw material Reception

Raw material Wharehouse

Ingredients Mixture

Molding and Division

Frozing

Client

Distribution and Sale

Packaging Process

Bakig and Cooling

Delivery at sale Points

End

47

SALTED SNACKS

Start

.
Raw material Reception Raw material Wharehouse Mixing and Cutting Formed and Expanded Through Heat Cutting, Frying and Baking Baked And fried Flavored and Packaged Process

Raw material Reception

Cleaned and Stored Process

Washing and Peeling Process

Flavored and Packaged Process

Sales and Distribution

Start

Client

End

b.

Raw Materials

The raw materials used in the production are a determining factor in the quality and freshness of the Groups products. For this reason, the Group has adopted rigorous supply policies, including specifications for each input and packaging material, receipt of a certificate of quality (issued by each supplier), analysis of the materials in internal and/or external laboratories, and a system of auditing of the suppliers. The Group has long-standing relationships with suppliers who adhere to its extremely high quality standards. The Group seeks to maintain low supply costs, but without sacrificing quality of raw materials. Wheat flour is its main raw material. Wheat is generally traded in U.S. dollars and subject to price fluctuations depending upon factors such as weather, crop production and worldwide market supply and demand. BIMBO routinely reviews and revises its relationship with its wheat flour suppliers and the Company continuously enters into hedging arrangements to manage its exposure to price fluctuations of its key raw materials. See Risk Factors Increases in prices and shortages of raw materials, fuels and utilities could increase the Groups production costs. Other important raw materials for the Groups lines of business are sweeteners, edible oils and butters and eggs, as well as plastics used to package its products. The next table shows four of the most important raw materials and its major supplier in the markets they operate:
Raw Material Wheat Flour

Mexico Grupo Altex Harinera La Espiga Harinera de Irapuato Horizon Milling (Cargill) Molinera del Valle Molinera de Mxico

USA Archer Daniels Midland Cereal Food Processors Processor Inc. Conagra Inc. Okeene Milling Co. Horizon Milling, LLC

Central and South America Molino La Estampa Bunge Alimentos Molinos Santa Marta Cooperativa Agraria Agroindustrial Anaconda Indl e Agricola de Cereais Cargill

48

Raw Material Sugar

Mexico Beta San Miguel Cargill de Mxico Quimper Qumica Industrail Neumann

USA Domino Sugar Inc. Sweetener Products Co. Archer Daniels Midland Co. Amalgamated Sugar Company LLC Indiana Sugar Inc. United Sugars Co. Imperial Sugar USA Cargill Inc. Soybean Oil Division Bunge Foods Co. Archer Daniels Midland Co. Perdue Farms Inc. Stratas Foods LLC

Central and South America Copersucar Coop Prod A Alc Est SP Riopaila Castilla S.A. Iansagro SA Cosan Alimentos Sucden Per ED & F Man Chile SA Lodiser S.A. Cosan S/A Azucar e Alcohol Central and South America Cargill Agrcola S/A Bunge Alimentos S/A Team Foods Colombia SA Crista Industrial e Comercio Ltda. Alicorp SAA Grasas SA Umaco y Cia Camilo Ferron Chile S.A.

Raw Material Edible Oils and Fats

Mexico Aarhuskarlshamn Cargill de Mxico Industrializadora Oleofinos Ragasa Industrias Protenas y Olicos Industrial Aceitera

Liquid and Powdered Eggs

Ovoplus Alimentos de la Granja Granjas Orespi Michael Foods Procesadora de Alimentos Mex Alimentos Mexicanos Bachoco

Debell General Mills Michael Foods Inc. Primera Foods Inc. Pearson Sales Co. Sonstegard Foods Co. BCW Food Products Inc.

DMR Distribuidora Productos Alimenticios Santa Reyes SA Comercial Agricovial SA Ovo productos del Sur SA Avcola Triple A SAS Solar Comercio e Agroindustria Ltda.

The Group holds minority interests in some of its major suppliers of wheat flour, eggs and sugar. In addition to these raw materials, the Group also purchases plastic packaging from a number of suppliers. The Group currently is not dependent on any single supplier in any market in which it operates. The Group is not aware of any price controls in effect by any governmental authority with respect to any of its raw materials. The raw materials are managed using the first-in first-out method to preserve the freshness of its products. Due to the nature of its products, its inventories of raw materials, mainly perishable products, have a high turnover rate. The Group receives most of its supplies on a continuous basis, in some cases, with daily deliveries. Its corporate offices lead the negotiations of our main raw materials with its suppliers while its inventories are directly managed by each plant and storage facility. Local plants and storage facilities also manage and directly place orders of raw materials that may be obtained locally. c. Energy Consumption

The main energetic that the Group consumes is electric energy, natural gas, liquefied petroleum gas (LP), gasoline and diesel. In most of the productive installations, the Company has a generator of alternate electric energy for emergencies, in order to ensure the energy supply. In this way, it guarantees the security of its workers and its equipment, as a consequence of this, it minimizes the impact of any problem in the energy supply that the plant may have in the clients and consumers services. Grupo Bimbo has focused its attention on the implementation of wind energy, in order to compy with its permanent commitment to the environment and the wellbeing of future generations. During 2010, the Group announced the construction of the Piedra Larga park, the largest wind park in the food industry worldwide, which generates almost 100% of the electrical energy used by Grupo Bimbo in Mxico. The construction of this park is the cornerstone of our search to continue growing with the force of nature, and it gives us the distinction of being the business that makes the greatest change with respect to renewable

49

engery within the food industry; it also represents an unprecedented effort in the exploitation of renewable energy, clean and virtually inexhaustible. The wind park will be located in Union Hidalgo in the State of Oaxaca and it was made possible thanks to a strategic alliance driven by the Government, private iniciative and financial institutions. Accordingly, the operation of the park will be achieved thanks to the partnership of Grupo Bimbo with Desarrollos Elicos Mexicanos (DEMEX), a subsidiary of Renovalia Energy, S.A., which is a company from Spain who will invest approximately 200 million dollars in the project. Grupo Bimbo is constantly working to reduce its environmental footprint, under the highest standards of effort. This is an effort that we have been making for 10 years, and each time we take a major relevant decision in our 5 central tenants of environmental sustainability: energy conservation; water conservation; reduction of emissions; management of waste materials and conservation and improvement of the environment. According to the Companys vehicle replacement program, every year the most efficient delivery and transportation units are incorporated to the fleet. In case of requiring the transportation services of another supplier, the Company verifies that the supplier satisfies the standards established by the Group. With respect to diesel and gasoline, used by the fleet of transportation and distribution, the Group has gas stations in its installations which are supplied regularly. Also, BIMBO has a number of vehicles which run with LP gas and diesel instead of gasoline which are used in the large cities, in order to help the environment. In spite of having a large number of installations and vehicles working in a continued way, the energetic consumption does not represent a considerable expenditure in relation to the Companys costs, due to the high grade of efficiency in the design of the distribution routes and the control of the operation. d. Inventory

Raw materials According to Grupo Bimbos policy of keeping its products fresh in the market and considering that these are perishable, BIMBO manages at an operative level the totality of its inventories using the last-in-first-out method to assign costs to inventory. Because of the nature of the products that BIMBO produces, it maintains high inventory turnover rates of production input, primarily those perishable products to a greater extent, as the necessary inputs, for the development of packaged bread, sweet bread, cakes and cookies. In this case most of the inventories are managed by the provider and are supply to BIMBO on a recurring basis, even with a daily delivery rate. The inventory administration of the inventories of production inputs is done through the classification of each inventory according to its logistics: Local. Those inventories whose negotiation is realized in a corporative manner, but request and its storage are directly managed by each plant. Centralized and imported. Those inventories whose negotiation and orders are handled in a corporative manner and only the storage is realized in each plant. Finished Products The Group has strategically located production plants and distribution centers, which allows it to consolidate its operations in each region and to efficiently distribute its products. In addition, the Group has successfully implemented an interconnected system that allows it to synchronize its production capabilities

50

with consumer demands, resulting in optimal levels of customer order management and thus, very low inventories of its finished products. Once finished, the baked goods are immediately shipped to the the Groups distribution centers and points of sale. Inventories of salted snacks and confectionery goods have an average turnover rate of three days. Inventories of dried products, such as toasted bread and breadcrumbs, cookies, candies and chocolates, have a longer turnover rate, due to the nature of the products and the use of certain preservation technologies. The Groups high inventory turnover rate is driven by its customers needs based on daily orders and consumer behaviors. e. Quality Control System

Quality is essential for the Group. The Group has implemented a quality control system tailored to its individual needs and has adopted the highest international standards, driven by our commitment to ensure the satisfaction of its customers and consumers. This system involves quality control assurance and food safety, providing enhanced customer service, promoting and preserving a healthy labor environment and respecting the environment to contribute to the overall development of the community. Given the importance of food quality and safety, one part of its quality control system is aimed at controlling and continuously improving the quality of consumables, processes and finished products. With the implementation of its quality system the Group has won several awards, including the Premio Nacional de Calidad in 2007. The Group has earned the loyalty of its customers and consumers by its adherence to the most rigorous international standards in the food industry, certified by independent organizations and agencies with a recognized international reputation. For example, in Mexico as of December, 2010, 3 of the Groups plants has ISO 9001-2000 certification, or ISO 9001-2000, 3 of its plants had Hazard Analysis & Critical Control Points certification, or HACCP, 8 had Business Alliance for Secure Commerce certification, or BASC, 6 plants had C-TPAT certification, 27 plants were certified by BRC, 5 plants were certified in AIB, 2 plants certified in Excelencia Ambiental Mxico (Environmental Excellence Mxico), and 34 plants were certified as an Industria Limpia Mxico (Mexican Clean Industry). ISO 9001-2000 is a series of international standards that provide guidelines for a quality management system and HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of finished products. BASC certification addresses and seeks to prevent the risks associated with narcotics, terrorism and merchandise smuggling, by controlling operating processes, personnel, access, infrastructure, suppliers, and even customers. f. Productivity

As part of the Groups strategy to respond to the changing needs of the market, it has implemented and continuously updated innovative systems to increase the capacity, quality, and production potential of the various manufacturing lines. To that end, the Group has redesigned its current facilities or incorporated new technology (either developed by the Group or acquired from third parties), resulting in a significant increase in the installed capacity of the plants as well as important reductions in the costs of production. As a result of productivity improvements, and in order to take maximum advantage of the resources of the production plants, each plant carries out its own analysis of its production processes and, together with the corporate support areas, implements the applicable improvements. 8. Prices

The Companys general policies regarding the prices of its products is based primarily in the general conditions of the market and in the input costs of production. BIMBO works to maintain low prices and offering their consumers and clients more competitive prices according to the Companys system for optimization of the processes.

51

The rise of the prices in the Group is not only because of the eventual costs rise. Other factors are taken into account such as, market and competition, product sensibility and its market, a general research of the environment (mainly economical) and the no repercussion of inefficiencies by BIMBO in the consumer price. In this manner the Company estimates a system of prices that allows it to locate itself as one of the leaders in the industry. Its worth mentioning that practically none of BIMBOs products is under any price controls in effect by any governmental authority of the countries where the Company operates. See Risk Factor- Increases in prices and shortages of raw materials, fuels and utilities could cause the Groups costs to increase. 9. Publicity and Promotion

Through the calendar year, the Company carries out diverse publicity and promotion campaigns aimed at: (i) maintaining the image and growth of its leader products (ii) supporting the new products that have been launched to the market (iii) supporting specific products whose demand has decreased. BIMBO uses publicity agencies and independent media centers to develop and broadcast its advertising campaigns. Television is the form of media most used by the Group, but the Group also uses other such as external advertising, radio and magazines as well as mobile publicity (labeling various vehicles where their products are transported). Additionally, in recent years the Group has placed special emphasis on attention at points of sale, using graphic materials, exhibitions, etc. As a part of the Groups policy, the image portrayed to the audience must be mainly family-oriented and promoting physical activity. Accordingly, BIMBO seeks to be present in the television programmes that are consistent with these policies, as well as in sports and entertainment programmes. On August 16, 2010, Grupo Bimbo announced its commitment with the WHO to only advertise in the mass media to children under 12 years old, products that comply with global standards of nutrition. Grupo Bimbo has a policy of self-regualtion in order to have an advertising strategy that complies with the ethical values and morals of truthfulness, honesty, legality, decency, dignity, respect, fair competition, and health and wellbeing. Each line of products establishes its own advertising budget according to its needs, which is determined by a fixed percentage over their particular sales. 10. Technology and information systems a. Technology

Trough its own line of investigation and development, the Company focuses itself to the applied technology that specialized groups of baked goods, salted snacks and confectionary goods, use. Some of their most important research areas are: Langer life for products on the shelf, new products development, extensions of various products, healthy and ethnic products, improving quality of the products, developing new ingredients and the optimization in the use of these, research for the improving of agricultural products, quality assurance, process changes, processes automatization, lines of production analysis and packages changes. Due to the every day increase in demanding markets and consumers, the used technologies have had to evolution continuously to gain the improvements in the processes and in the produced products. This is why functional ingredients such as fiber, whole grains, trans fatty acids, the inclusion of vitamins, prebiotics, inclusion on the products which has represented a technological challenger which had to be overcome in the various markets. Generally the productive processes of baked goods are not paid by royalties or bonuses for technical assistance or Technologies transferences. The contracts in relation to these aspects are fundamentally agreements with several universities and research institutions and centers as well as the development with providers. The agreements referent to the extent, compromises, technology property, confidentiality,

52

Publications, and responsibilities are determined through specified and particular agreements. All of the above is realized with the finality of finding innovative and vanguard technologies on the baked goods, tortillas, and other type of foods, types. Regarding the machinery supply, BIMBO has very selective providers policy. Various criteria are contemplated in order to acquire new machinery, such as, specialization, sophistication, fabricants technique, top technology, labor conditions, and special emphasis on their security levels, their technical services supplied after the acquisition, price and payment conditions. Said criteria are aimed to guarantee the rigorous levels of efficiency, productivity and environment friendly policies, as well as the high levels of quality in all BIMBO products. The Company develops many designs of the related technology and automatisms; moreover regarding the fabrication of the machinery the Company uses third parties. In this case with the purpose of protecting the property of the created design the Company signs confidentiality agreements with the providers. BIMBOs technological developments are patented before the IMPI. See The Company Business Description Patents, Licenses, Brands and Other Contracts. BIMBO considers that the Company does not depend exclusively on any of its technology providers or technical assistance, due to the existence of various providers in these services. b. Information Systems

BIMBO uses automatized information systems for both, operative levels as well as management levels, which have been developed in various stages. The operational information systems link their processes from the reception of production input up to the sale process, this has resulted in more control and efficiency. On the other hand, the manager information systems have a synthesis of the operative information that has been concentrated from the various plants, distribution centers, and agencies in all the business sectors. One of the principal purposes of the integration of both information systems mentioned above, is that inside the organizational structure of Grupo Bimbo it may be as much delegation as possible in each of its members, including all levels of the organization chart. In this manner the Company can count with a decentralized system for the decision making. See The Company- Business Description- Human Resources. Since 2001, BIMBO operates a business solution integrated by an ERP system, over a data base with the capacity to manage large volumes of information. This has allowed BIMBO to have a standardized and centralized business model which simplifies the information, installed on a modern and robust technology infrastructure that enables the integration into all operations of the Company. As of December 31, 2008, the ERP system had been installed and it has been operating throughout the Group. The acquisitions have also been integrated into the Companys process and systems platform. During September, 2010, the western region of WFI was integrated into Grupo Bimbos ERP platform. Chinas operation works under the concept of on-demand services through a system of outsourcing, for both, infrastructure and applications. ERP services in China are attended from Austin, Texas, and functional support is received from Mexico. Barcels wholesale channel operates under the concept of Software as a Service. On the other hand, the El Globo stores operate under a new retail system.

53

ii) 1.

Distribution Channels Distribution and Sales Process

Among the Groups strategies, direct distribution to points of sales has been one of the key factors of its success; this is why in the commercial area more than 54,000 people are employed. The Company has developed one of the largest fleets in the American continent with more than 41,000 owned units, over 33,000 in delivery, over 6,000 in transportation and around 1,300 supervision units, in addition to the outsourced distribution route units and/or independent operators, both in the United States and in Central and South America. Every day, the sales department is in charged of visiting more than 1.8 million points of sale. The Company has more than 1,000 distribution agencies, each one of which depends for its operations on one or more plants, even when such plants are not located close to the agency. The delivery vehicles fleet consists mainly in small and efficient units, as well as large sized units (rabones), for distribution to institutional customers. The primarily transportation; the fabric or agency transportation, is performed through loaded semi-trailers, which can be single or double, depending on the applicable laws of each country. As of December 2010, the vehicles used by Grupo Bimbo all around the world were distributed according to the following: Vehicles Transporta Supervision tion 6,059 1,312 Distribution Agencies 1,056

Delivery 33,769

Total 41,140

The fleet has an average age of 6 years, and new units are been incorporated annually, whether due to replacement or expansion, in order to improve the Groups services to its customers and to optimize the operation costs. 2. Transportation

Orders to the production area are placed by the Groups sales force a week in advance of the delivery of the product to the agencies or distribution centers, and may be adjusted three to five days prior, depending on the product line and the availability of the product in question. The Companys finished products are delivered to the dispatch area, whose managers supervise the compliance with the standards established by the group, in order to make a cross-docking for their delivery to the distribution centers (where the load is consolidated), or to organize the orders according to the amount requested by each agency. The crates or tubs are loaded into trailers belonging to the Group or third parties, which daily make their programmed journeys for the transportation and delivery of the product. In the distribution agencies, the fresh products are unloaded from the trailers and grouped in the assigned area for their receipt and control, in order to later distribute them in the sales trucks according to the request of each route. At the same time, the trailer that retruns to the factory or distribution center is loaded with the empty equipment (crates and vats) and/or returned products, from the day before. The empty equipment is delivered to the production area for its cleaning and reuse.

54

3.

Sales

The sales force distributes the Companys products to its customers from distribution centers according to predetermined itineraries. Currently, 100% of the routes have hand held, where the client has control of the products placed and removed at each visit. Proudcts that are removed because they were not sold are replaced by fresh products without cost to the client. It is worth clarifying that even if the products are still fit for consumption, on the date in which they are picked up they are no longer classified as very fresh. The destinations of the returned products may one of the following; (i) sale in yesterdays bread stores, where the returned product is displayed again for two to four days for sale at a lower price (these stores may be corporate, affiliates, or third parties); (ii) reprocessing, for the purpose of obtaining another product that is placed in sale again; or (iii) sale by the kilo, to be used as cattle feed. Each product is displayed for sale in accordance with its shelf life, which varies from seven days, in the case of bread, to several months, in the case of chocolates, cookies, candies and snacks. Each of the Groups salespersons visit an average between 30 or 45 customers of the traditional channel, in the case of larger customers the daily average visits are between 4 and 8 customers. Based on its production and sale levels, visits to each customer may be daily, every three days, two times a week or weekly. The Group classifies its customers according to their purchase volume, type of distribution channel and by individual characteristics. The Groups customers include supermarkets, convenience stores, institutional customers, fast food chains, schools, customers with vending machines and traditional customers (general stores, grocery stores, etc.). For example, this last category represents approximately 70% of the total sales volume in Mxico. See The Company Business Description- Main Customers In the United States, due to the markets characteristics regarding type of clients and distances covered, between 15 and 20 clients are visited daily, on average.

55

While the Group directly operates all of its routes in Mexico, over 50% of the routes in the United States and a majority of our routes in Central and South America are operated by independent operators. Generally, the Group enters into longterm contracts with such independent operators, pursuant to which the operators agreed to exclusively sell the Groups products. The terms of these contracts detail which territories should be covered by the independent operators, as well as their compensation based on ales performance. The Group maintains strict control over the brand management, marketing strategies and pricing and a right to buy contracts from each of the independent operators under certain limited circumstances. The Group uses independent operators in order to reduce distribution costs and increase flexibility, in order to efficiently add points of sale while maintaining the quality of its services. BIMBOs sales are made principally with cash, although credit schemes exist for the clients in the traditional channel. The credit and discounts given to medium and large clients vary according to the product and the client or supermarket chain. iii) 4. Patents, Trademarks, Licenses and other Contracts. Brands and Logos

The Companys most important brands, slogans and logos are protected by trademarks in the countries in which BIMBO operates and in many other countries. It manufactures and/or commercializes more than 5,000 products under well-known brands, including, among others, Bimbo, Barcel, Marinela, Ta Rosa, Lara, El Globo, Oroweat, Mrs Bairds, Lonchibn, Ricolino, Coronado, La Corona, Milpa Real, Del Hogar, Suandy, Ideal, Plus Vita, Pullman, Monarca, Entenmanns, Thomas and Boboli, among others, BIMBO is holder of the in Mxico and in the rest of the world. Said brands are relevant because their products or group of profucts represent and important sales volume. Currently, BIMBO has approximately 5,355 brand files and registries in Mexico and more than 9,000 abroad. The Company has brands registries in every continent. Some exceptions exists, however; for example, the trademarks Bimbo in Chile and Marinela in El Salvador, Honduras, and Colombia, are registered by local producers. Therefore, the Companys products in those countries are marketed under the brands Ideal and Marisela, respectively. Nevertheless, the Company uses its own designs and packages in those countries. In addition to the foregoing, on a global level, the Company also has various registered domain names of websites related to the most important brands of the Company. Grupo Bimbo uses its brands in the national market through its subsidiaries (Bimbo, S.A. de C.V. y Barcel, S.A. de C.V., among others), and abroad through its subsidiaries in each country where BIMBO operates. Therefore the most important brands of the Company are registered to each of the subsidiaries through its respective contracts. As well, some of the subsidiaries of the Company abroad have their own brands which they use in a direct manner. 5. Patents and Copyright Patents The protection of the Companys inventions through patents is of paramount importance to it. BIMBO operates primarily with machinery developed with state-of-the-art technology and its Research and Development Department regularly requests patent protection in Mexico and abroad for new technology. As of May 17, 2011, the Company has 106 requested/been granted 157 patents and/or industrial designs in Mexico and 172 abroad, mainly in the United States, Argentina, Chile, China, Colombia, Korea, Costa Rica, El Salvador, the Philippines, Guatemala, India, Peru, the Czech Republic, Taiwan, Turkey, Venezuela and the European Union.

56

Copyright The major characters, publications, computer systems, logos and package designs used by the Company in its operations are protected by copyrights in Mexico and abroad. Legal Proceedings As of December 2010, BIMBO was not a party, in Mxico or abroad, to any judicial, administrative or arbitral proceeding relating to the intellectual property outside of the ordinary course of business, or that could have a significant adverse impact on our operations. See The Company Business Description Judicial, Administrative or Arbitration Processes. 6. Contracts

BIMBO enters into commercial tranactions within the ordinary course of its business, such as software licenses, supply of raw materials, (wheat, flour, cocoa, fats, packaging, etc.), production, buying or leasing of machinery, production, distribution and marketing contracts; which can be short, medium or long term, depending on the necessities and strategies of the operation. Additionally, BIMBO executes the necessary agreements for the ordinary course of it business. iv) Main Customers

BIMBO has more than 1.8 million points of sales in its operations. The Company has strong relationships with its customers and strives to understand and meet their specific needs. It has a diverse client base among and within the countries in which it operates that range from large institutional customers to small family-owned businesses. In the United States, more than half of its customers are supermarket chains, followed by price clubs, restaurant chains, institutional customers and convenience stores. Among its main customers in the United States are Bashas, Dennys, H.E.B., Kroger, Costco, Publix, Raleys, Safeway, Sams, Supervalu, Target, Wal-Mart, Wegmans, 7 Eleven and the U.S. Army. In Mexico, most of its customers are small family-owned convenience stores, but the Company also has a solid base of large institutional customers, including large retail stores, supermarkets, warehouses, price clubs, convenience stores and government-owned supermarkets, such as Al Super, Calimax, Casa Ley, Chedraui, Comercial Mexicana, Extra, HEB, Oxxo, 7 Eleven, Soriana, Smart and Wal-Mart. We also serve large fast food chains and other large institutional customers, such as Burger King, McDonalds, Sistema Integral para el Desarrollo Integral de la Familia and hospitals belonging to the Mexican Social Security Institute (Instituto Mexicano del Seguro Social). In South America, more than half of its sales are to supermarket chains and hypermarkets. Among its main customers in the region are Carrefour, Cativen, CBD, Cencosud, Central, Disco, xito Coto, Olmpica, Santa Isabel, Selectos, Supermercados Peruanos, and Wal-Mart. None of these clients represents over 10% of the Companys sales; therefore BIMBO does not depend on any of them. v) Applicable Legislation and Tax Situation

The development of the Groups business is regulated by several laws, rules and regulations, and general government regulations, which regulate the correct performance. The rules relating to the environment, health, advertising and intellectual property are particularly relevant to the results of the Company.

57

In Mxico some of the main applicable laws to BIMBO and its operations are the commerce, corporative government and environmental regulation such as Commerce Code (Cdigo de Comercio), General Corporations Law (Ley General de Sociedades Mercantiles), Securities Market Law (Ley del Mercado de Valores), General Law of Ecological Equilibrium and Environmental Protection (Ley General del Equilibrio Ecolgico y Proteccin al Ambiente), the National Water Law (Ley de Aguas Nacionales) and the General Law on the Prevention and Integrated Water Management (Ley General para la Prevencin y Gestin Integral de los Residuos). Also, the following laws: General Health Law (Ley General de Salud), Federal Law of Consumer Protection (Ley Federal de Proteccin al Consumidor), Federal Law on Metrology and Standardization (Ley Federal sobre Metrologa y Normalizacin), Federal Labor Law (Ley Federal del Trabajo), Social Security Law (Ley del Seguro Social), Federal Rights Law (Ley Federal de Derechos), Customs Law (Ley Aduanera) and Industrial Property Law (Ley de la Propiedad Industrial). In the same way, the Company is obligated to take the necessary actions to abide the following regulations and NOMs: Regulation of the General Law of Ecological Equilibrium and Environmental Protection in the Field of Evaluation of Environmental Impact (Reglamento de la Ley General de Equilibrio Ecolgico y Proteccin al Ambiente en Materia de Evaluacin del Impacto Ambiental); Regulation of the General Law of Ecological Equilibrium and Environmental Protection on Prevention and Control of Air Pollution (Reglamento de la Ley General del Equilibrio Ecolgico y Proteccin al Ambiente en Materia de Prevencin y Control de la Contaminacin de la Atmsfera); Regulation of the General Law of Balance Ecological Environmental Protection in the Register of Emissions and Pollutant Transfer (Reglamento de la Ley General del Equilibrio Ecolgico y la Proteccin del Ambiente en Registro de Emisiones y Transferencias de Contaminantes); Regulation of the General Law on the Prevention and Integral Management of Wastes (Reglamento de la Ley General para la Prevencin y Gestin Integral de los Residuos); Regulation of the National Waters Act (Reglamento de la Ley de Aguas Nacionales); Regulations for the Protection of the Environment against Pollution caused by Noise Emissions (Reglamento para la Proteccin del Ambiente contra la Contaminacin originada por la Emisin de Ruido); Regulation of Sanitary Control of Products and Services General Law (Reglamento de la Ley General de Salud en Materia de Publicidad); Rules of the Federal Comission For Protection Against Health Risks (Reglamento de Control Sanitario de Productos y Servicios de la Ley General de Salud); Rules of the Federal Commission for Protection Against Health Risks (Reglamento de la Comisin Federal para la Proteccin contra Riesgos Sanitarios); Rules of the General Health Law Sanitary Control in the Field of Activities (Reglamento de la Ley General de Salud en Materia de Control Sanitario de Actividades), Establishments, Products and Services; Rules of Procedure of the Ministry of Health (Reglamento Interior de la Secretara de Salud);NOM-030-SCFI-2006, Commercial Informationdeclaration of quantity on the label-specifications (Informacin comercial- Declaracin de cantidad en la etiqueta) NOM-050-SCFI-2004, Commercial Information - Products general labeling (Informacin comercial- Etiquetado general de productos); 051-SCFI/SSA1-2010 General Requirements for foodlabeling and pre-packaged soft-drinks (Especificaciones generales de etiquetado para alimentos y bebidas no alcohlicas preenvasados); Commerical and Santitary Information; NOM-186-SSA1/SCFI-2002, Products and derivates, Cocoa products and derivates I. Cacao. II Chocolate. III Derivates, Health Specifications Trade Name (Productos y servicios: Cacao, productos y derivados, I. Cacao. II Chocolate. III Derivados, Especificaciones Sanitarias Denominacin comercial); NOM-015-SCFI-2007, Commercial Information Labaling of Toys (Informacin comercial- Etiquetado para juguetes); NOM-247-SSA1-2008, Products and Services. Cereals and their Products. Cereals, cereal flour, meal or semolina, Based Foods, grains, edible seeds, flour, meal or semolina or mixtures thereof. Bakery Products. Provisions and Sanitary and nutritional specifications (Productos y servicios. Cereales y sus productos. Cereales, harinas de cereales, smolas o semolinas. Alimentos a base de: cereales, semillas comestibles, de harinas, smolas o semolinas o sus mezclas. Productos de panificacin. Disposiciones y especificaciones sanitarias y nutrimentales. Test Methods, NOM-028-SCFI-2007, Commercial Practices information elements collectable promotions and/or promotions through sweepstakes and contests (Prcticas comercialesElementos de informacin en las promociones coleccionables y/o promociones por medio de sorteos y concursos) among others.

58

Regarding environmental regulation, the Company has to fulfill the following regulation: operating license manifest, hazardous waste generating firm, clear delivery, transportation and disposal of hazardous waste, risk assessment study for high-risk activities and, in the case of new plants or expansions, environmental impact study and risk analysis, land use permits, permits for wastewater discharges, concession titles for the use and exploitation of national water, among others. Furthermore, the following regulations are also applicable to the operations of Grupo BIMBO: The Customs Law (Ley Aduanera), The Law for the Institute of the National Housing Fund For Workers (Ley del Instituto del Fondo Nacional de la Vivienda para los Trabajadores), The Law of Roads, Bridges and Federal Motor Carriers Act (Ley de Caminos, Puentes y Autotransporte Federal) The Mexican Social Security Institute Law (Ley del Instituto Mexicano del Seguro Social), The Federal Tax Code (Cdigo Fiscal de la Federacin),the Public Service Act Power and their respective rules (Ley del Servicio Pblico de Energa Elctrica y sus respectivos reglamentos) as well as provisions of state and municipal orders. In the United States, the Company must stand by the following regulations the Clean Water Act, the Storm Water Act; the Safe Drinking Water Act; the Clean Air Act, for which the Company has to install oxidative catalytic converters in the factories that require it; Toxic Substances, Control Act, Toxic Release Inventory RCRA Hazardous Waste, Occupational Safety and Health Act, regulated by the Occupational Safety and Health Administration (OSHA), and Bioterrorism Act among others. In Latin America, Grupo BIMBO has to stand by the following environmental regulation: operating license or a certificate of environmental qualifications, land use certificate, registration of potentially polluting activities, precursor chemical and controlled substances, noise emission, environmental impact statement, licensess for water discharge, certificate of water exploitation, environmental licensing in the case of new plants or expansions (Colombia), COA (cdula de operacin annual), inventory of emission into the atmosphere, control of air emissions and installations of sampling ports and platforms, management of special waste, hazardous and hospital. In Brazil, among other legislations, the Company must comply with Decree number 4,680, regarding information of food ingredients. Grupo BIMBOs plants satisfy all the rules, regulations and procedures established. Due to the variations of the law, the Company establishes actualizations with respect to the normative changes, and adequates to applicable laws in different countries, states, and municipalities where the Companys plants are located. It should be noted that BIMBOs internal policy covers a series of additional requirements. BIMBOs operations are also held to specific technical regulations; the following are the most relevant: NOM-001-SEMARNAT-1996. Maximum permissible limits of pollutants in wastewater discharges of national assets. NOM-002-SEMARNAT1996. Maximum permissible limits of pollutants to urban or municipal sewage Systems. NOM-052-SEMARNAT-2005. Establishing the characteristics, identification procedures, classification and lists of hazardous waste. NOM 085- SEMARNAT-1994. Atmospheric Contamination Stationary Sources For stationary sources that use fossil fuels, solid, liquid or gaseous, or any combination thereof, this establishes maximum permissible levels of emissions to the atmosphere of smoke, particularly suspended toal, sulfur dioxide and nitrogen oxcide and requisites and conditions for the operation of indirect heating equipments for combustion, as well as maximum permissible levels of sulfur dioxide emission in direct heating equipment for combustion. NOM 043SEMARNAT-1993. Sets the maximum permissible levels of emissions, to the atmosphere of particulate matter from stationary sources. NOM-002-STPS-2000. Safety, Prevention and Protection and Fire-Fighting policies in the workplace. NOM-015-SCFI-2007. Commercial Information- Labeling for Toys.

59

NOM-050-SCFI-2004, Commercial Information Products general labeling NOM-052-SCFI/SSA1-2010 General labeling specifications for food and pre-packaged, nonalcoholic drinks Commercial and Sanitary Information. NOM-051-SCFI-1994. General Requirements for food-labeling and pre-packaged soft-drinks NOM-247-SSA1-2008, Products and Services. Cereals and their Products. Cereals, cereal flour, meal or semolina, Based Foods, grains, edible seeds, flour, meal or semolina or mixtures thereof. Bakery Products. Provisions and Sanitary and nutritional specifications Test Methods NOM-186-SSA1/SCFI-2002. Services and Products. Cacao, Products and derivates, I. Cocoa, II. Chocolate, III. Derivatives, Sanitary Specifications, Commercial Denominaition. NOM-012-SCT-2-2008. On the weight and maximum dimensions that can move the motor carrier vehicles that travel trough the general means of communication of the federal jurisdiction. NOM-043-SSA2-2005. Basic health services, promotion and health education in relation to food. Criteria for counseling. Tax Situation Grupo Bimbo and its subsidiaries companies are taxpayers and legal entities which are bound to comply with the tax provisions of each of the countries where they are established. Income Taxes in Mxico. The Company is subject to ISR and IETU. ISR The rate is 30% for 2010 to 2012, 29% for 2013, and 28% for 2014 and thereafter. The Company pays ISR, together with its subsidiaries on a consolidated basis. IETU Revenues, as well as deductions and certain tax credits, are determined based on cash flows of each fiscal year. The IETU rate is 17.5% as of 2010. The Asset Tax Law was repealed upon enactment of the IETU Law; however, under certain circumstances, IMPAC paid in the ten years prior to the year in which ISR is paid, may be recovered, according to the terms of the law. In addition, as opposed to ISR, the parent and its subsidiaries will incur IETU on an individual basis. Income tax incurred will be the higher of ISR and IETU. Based on its financial projections, the Company determined that some of its Mexican subsidiaries will pay ISR in certain fiscal years, while in others, will pay IETU. Accordingly, the Company calculated both deferred ISR and deferred IETU and recognized the larger of the two liabilities in each subsidiary. In its other subsidiaries, based on its financial projections the Company determined that they will basically pay only ISR. Therefore, the enactment of IETU did not have any effects on the financial information for these subsidiaries, since they continue to recognize deferred ISR. Due to changes in the tax law with respect to tax consolidation, the Company elected to deconsolidate for tax purposes beginning in 2010, recognizing the effects in the financial information of 2009 of such deconsolidation, applying some of the effects against retained earnings in accordance with the rules of INIF 18, Recognition of the Effects of the 2010 Tax Reform on Income Taxes. The effect of tax deconsolidation in the results of 2009 is minimal considering the effects on deferred taxes that result from the tax deconsolidation. Income taxes in other countries The foreign subsidiaries calculate income taxes on their individual results, in accordance with the regulations of each country. The subsidiaries in the United States have authorization to file a consolidated income tax return. The tax rates applicable in other countries where the Company operates and the period in which tax losses may be applied, are as follows:

60

Statutory Income Tax Rate (%) 2010 2009 Argentina Austria Brazil Colombia Costa Rica Chile China El Salvador Spain EUA Guatemala Holland Honduras Hungary Luxemburg Nicaragua Panama Paraguay Peru Czech Republic Uruguay Venezuela 35.0 25.0 34.0 33.0 30.0 (e) 17.0 25.0 25.0 30.0 (h) 35.0 (i) 31.0 25.5 (j) 25.5 19.0 21.0 30.0 27.5 10.0 30.0 19.0 25.0 34.0 35.0 25.0 34.0 33.0 30.0 17.0 25.0 25.0 30.0 (h) 35.0 (i) 31.0 25.5 (j) 25.5 16.0 21.0 30.0 30.0 10.0 30.0 20.0 25.0 34.0

Period of Expiration (a) 5 (b) (c) (d) 3 (f) 5 (f) 15 20 (g) 9 3 (f) (f) 3 5 (g) (k) (l) (m) (n)

(a)

(b) (c) (d)

(e) (f) (g) (h) (i)

(j) (k)

(l) (m) (n)

Tax losses from sale of share or other equity investments, can only be offset against income of the same nature. Same for the loss of derivatives. Foreign source tax losses can only be amortized with income from foreign sources. Losses generated after 1990 can be depreciated indefinitely but can only be offset in each year up to 75% of the net tax utility of that year. Tax losses may be applied indefinitely, but may only be offset each year up to an amount equivalent to 30% of the net taxable profit for the year. Tax losses generated in 2003, 2004, 2005 and 2006 may be amortized within the following 8 years, but can only be up to 25% of the income tax of each year. Since 2007, tax losses may be amortized on an unlimited basis with no limit on the value and unlimited in time. The tax rate will be 20% in 2011, 18.5% in 2012 and in 2013 it will return to the rate of 17%. No expiration date. Operating losses cannot be amortized. Should add a percentage of state tax to this percentage, which varies in each state of the U.S. The weighted average statutory rate for 2010 and 2009 was 39.6% and 38.3%, respectively. The general scheme is 5% but the tax base is calculated as follows: Total gross income less Non taxable income. The optional scheme has a rate of 31% but the tax basis is different: Net income less Nontaxable income plus Nondeductible expenses less Other deductions. In case of a taxable income greater than 1 million Lempiras an additional 10% Temporary Joint and Several Contribution must be paid. There are two alternatives allowed for tax loss amortization: 1) 4 years or 2) unlimited amortization up to 50% of the value of each year. Once made, an election cannot be changed, until the accumulated losses of previous years are applied. Tax losses generated since 2004 can be amortized in the following 5 years. Tax losses generated after 2007 can be amortized in the following 5 years. Prior to 2007 only over the following 3 years. The amortization period can change based on their nature: 1) Operating losses, over the following 3 years, 2) Losses from the adjustment for inflation tax, 1 year; 3) Overseas, which can only be

61

amortized to earnings from abroad, over the following 3 years and 4) Losses from jurisdictions with preferential tax regulations only applied to profits in such jurisdictions, on the following 3 years. Operations in Argentina, Colombia, Guatemala and Nicaragua are subject to minimum payments of income tax or tax based on assets. Operations in Brazil and Venezuela are subject to profit sharing payments according to certain rules based on accounting income. During 2010 and 2009, there were no profit sharing payments in that country. Detail of provisions, effective rate and deferred effects a. Consolidated taxes on income are as follows: 2010 ISR: Current Differed $ 2,308 _____________27 $__________2,335 $ $ 2009 3,964 (1,203) 2,761

IETU: Current Differed

$ 1 _____________27 $____________28 $__________2,363

$ $ $

77 (11) 66 2,827

b. The reconciliation of the statutory and effective ISR rates expressed as a percentage of income before taxes on income for the years ended December 31, 2010 and 2009 is as follows:

2010

2009

Statutory rate in Mexico ............................................................................................. 30.0 28.0 Inflationary effects in the monetary balance sheet accounts ........................................................................................................ 6.3 5.3 Nondeductible expenses, nontaxable revenues and other ................................................................................................................ 0.1 1.6 Difference in tax rates and currency of subsidiaries in different tax jurisdictions ............................................................... 2.2 5.5 Inflationary tax effect of fixed assets .......................................................................... (1.2) (1.9) IETU ........................................................................................................................... 0.3 0.7 Reversal of allowance of deferred taxes ..................................................................... (7.8) (7.4) Effects of increase in Mexican income tax rate in deferred taxes ..................................................................................................... (0.1) Effective rate .............................................................................................................. 29.9 31.7 The main items originating a deferred ISR asset on December 31 2010 and 2009 are the following:

2010 Advances from customers ........................................................................... $ Allowance for doubtful accounts ................................................................. Inventories ................................................................................................... Property, plant and equipment ..................................................................... (3) $ (109) 9 2,358

2009 (8) (89) 52 2,894

62

2010 Intangible assets .......................................................................................... 3,812 Other reserves .............................................................................................. (3,254) Current and deferred PTU ........................................................................... (287) Tax loss carryforwards ................................................................................ (3,502) Valuation allowance of tax loss carryforwards ........................................... 173 IETU ............................................................................................................ 205 Effect of translation ..................................................................................... (260) Other items .................................................................................................. (59) Total asset, net ................................................................................... (917) $

2009 3,803 (3,342) (278) (4,602) 788 190 (262) (39) (369)

The net deferred income tax asset has not been offset in the acCompanying consolidated balance sheet as they result from different taxable entities and tax authorities. Gross amounts are as follows:

2010 Deferred income tax asset ....................................................................... (1,539) $ $ Deferred income tax liability ................................................................... 622 Total asset, net ............................................................................... $ 917 $

2009 (635) 266 (369)

c. Since the Companys tax losses are mainly derived from its transactions with the USA and some countries of OLA, certain tax losses will not be recoverable before their expiration date. Consequently, the Company has recognized a valuation allowance for a portion of such losses. d. Tax loss carry forwards for which the deferred ISR asset has been recorded may be recovered subject to certain conditions. Tax losses generated in countries and expiration dates are:

Years

Amount

2011 ....................................................................................................................................... $ 4,958 2012 ....................................................................................................................................... 28 2013 ....................................................................................................................................... 125 2014 ....................................................................................................................................... 96 2015 ....................................................................................................................................... 28 2016 and thereafter ................................................................................................................ 5,100 10,355 Tax losses included in the valuation allowance ..................................................................... (576) Total....................................................................................................................................... $ 9,759 vi) Human Resources

From its foundation BIMBO has a personnel policy aimed to harmonize the Companys interest with those of its workers; this has led to the consolidation of a good working relationship. This situation has been recognized not jus be coworkers but also by the business and academic community. The Company has sought to extend this philosophy to the companies that start integrating Grupo Bimbo. This has been endorsed with BIMBOs recognition as one of the top five leading companies in Mxico, according to the surveys conducted by HayGroup and the magazine, Gestin de Negocios.

63

The participation of the employees in the decisions concerning the operation of the Company has been a key factor for successful development. This has been achieved through the creation of a climate of trust, management by objectives, team organization, and training and development of leaders at all levels. The Company pays special attention on the selection of its staff, which the Company seeks to keep informed about the financial and operational situation of the Group. BIMBO also makes periodic assessments of performance, directs and channels the concerns of its partners, promotes training (inter alia, through programs to support education at all levels of schooling) and promotes a full and integral development within the Company. The following table shows the number of Group employees, unionized and nonunionized, at the close of the last three years: As of December 31 2009 71,885 30,501 102,386

2010 Unionized Nonunionized Total 74,367 33,697 108,064

2008 76,898 21,286 98,184

BIMBO attends a series of guidelines that allow it to maintain a positive relationship with unionized staff. Most of the Groups companies have a collective bargaining agreement, which is reviewed annually in relation to the tab of wages and every two years for the rest of its content. It should be noted that since its inception, the Group has been marked to promote and preserve a healthy work environment. Therefore, BIMBO has earned several times Company recognition as an admirable Company by the Confederation of Workers of Mexico (CTM) and the Mexican labor authority itself. The majority union group has a record, as authorized by the Ministry of Labour and Social Welfare (STPS), as an External Enabler Agent, which endorses his guidance and interest in designing courses and training to their members. The main trade unions with which BIMBO maintains employment in Mexico are: National Union of Flour, Bakers, Transport and Allied of Mexico (CTM). National Union of Food Industry and Allied of Mexico (CTM). Of the total BIMBO unionized workers, 75% are affiliated with the unions. Internationally, it should be noted that the relations in the countries where BIMBO operates have pursued the same policies of cooperation. In some countries, including the Company's labor model has served as a role model. vii) Environmental Performance

The Company recognizes the natural resource management as one of its priorities to achieve its social and economic purposes. That is why since 1995, Grupo Bimbo has shown its concern and interest in efforts for the environment, through its Environmental Management System which is committed to working in a responsible manner by identifying and controlling the factors that affect the environment, compliance with legal requirements and the Companys, always looking to improve their environmental performance. November 16, 2007, Grupo BIMBOs project began with "Committed to the environment" in order to strengthen environmental actions in each of the areas of the organization to carry and implementation throughout the Company. This project focuses on five action lines: 1) energy saving, 2) integrated waste

64

management, 3) sustainability of water, 4) reducing emissions, and 5) environmental conservation and improvement. In each of this, the Company, has the following objectives: 1) implement the use of alternative energies to the Group's operations and the standardization of energy saving programs, 2) ensuring water treatment systems to achieve discharge zero in all the group's plants, 3) the maximum reuse of treated water, 4) reduce water consumption in plants, 5) reduce emissions to the atmosphere, 6) reduce, reuse and / or recycle the waste of its products and services, 7) create an ecological culture in people, and 8) replicate the best practices of environmental stewardship to all floors Said lines of action have been implemented in both production facilities and in the distribution fleet. Currently, the Group has various certifications, including certificates in Mexicos "Clean Industry" in thirty-three of its facilities, as well as two awards for Environmental Excellence issued by PROFEPA, decentralized agency of the Ministry of Environment and Natural Resources (SEMARNAT), who gives this certificate to the companies that demonstrate compliance with all applicable rules concerning environmental protection. Some of the results obtained in 2010 are: In 2010, the gauged consumption of electric energy, in the Grupo Bimbo plants was reduced by 1.84% with respect to the previous year, expressed in kilowatts/hour for each ton of production [kWh/Ton], a percentage that represents a little more than 11 million kWh. With respect to the gauged thermal energy regarding the past year, in our plants, we achieved a reduction of 5%, expressed in Gigacalories per ton of production [Gcal/Ton]. In Mxico the combustile efficiency in 2010 was 4.81 km/lt. On eof the factors that contributed to this was the change from gasoline and LP gas to Diesel. These tasks have permitted us in 2010, in our plants in Mxico Bimbo and Barcel, to reduce by 14% of our waste generated per unit of production and to recycle more than 32,000 tons of waste generated. In addition to the implementation of technology to make biodegradable packaging, in Grupo Bimbo we have focused our efforts in order to reduce the quantity of material used in our packages, maintaining the quality and safety of the products. Throughout 2010 several projects were completed with the purpose of achieving a reduction in the thickness of our packaging, as well as reducing its dimentions. With these reductions the Group could potentially stop producing close to 394 thousand kilograms of packaging annually, of which 97% are plastics; this would be equivalent to no longer producing around 704 tons of greenhouse gases. The results of the reporting period of water conservation in the Grupo Bimbo plants are; a reduction of 229,400 m3 in drinking water consumption, equivalent to 6% less in 2009. Additionally, to help improve the environment, Grupo Bimbo has developed programs for the conservation and maintenance of protected areas, reforestation, with the foundation of Reforestamos Mexico, AC which mission is to preserve and restore the trees and forest ecosystems of Mexico, through the promotion of sustainable forest management, environmental culture and the participation of all sectors of society, the benefit of the people and the environment through five lines of action: conservation of natural areas, reforestation of areas that have lost its forest cover, community forestry, promotion of forestry education and combating climate change. During 2010, Reforestamos Mxico participated in the forming of the ECOFORCE Alliance (Alianza de Ejidos y Comunidades Forestales Certificadas de Mxico), which has a total surface of 246,557 hectares under sustainable forest Management (a surface comparable to the area of the state of Hidalgo), of which 149,633 are certified according to the standards of the Forest Stewardship Council. Grupo Bimbo believes that its operations do not impose a significant environmental risk.

65

viii)

Market Information

Unless otherwise stated, references to market size, consumption, market shares and other references in the next section, are based on information from Datamonitor, which the Company believes are reasonable. In most product lines, the Company holds a significant market because it maintains competitive advantages; among others, the most extensive distribution network in the country, costs and competitive pricing, comprehensive customer service, more points sales, operating efficiency, image and sound leadership position and market growth. Should also be mentioned that although there is a strong competition and, in some cases, direct competition between the same business group, this is not a negative aspect. The Company believes that, at all times, this situation has been a healthy competition and at the same time, each organization has led the best results, both in operations and sales, provided under a scheme of mutual respect between product lines and between organizations belonging to the Company.

66

1.

Bakerys Industry General Overview

Mexico Bread industry in Mexico comprises, in first place, the traditional bread, which receives several names depending on the relevant geographical region. This industry produces a great variety of bread manufactured in approximately 40 thousand traditional bakeries in Mexico. In this same sector, during the last years, a great number of supermarket chains have integrated their own in-store bakery departments. In second place, the bakery industry includes the cookie segment. In 2010, this sector reached a value of $2,513 million dollars. BIMBO has a strong recognition in this category, through its Marinela, Lara, Gabi, Ta Rosa and Suandy brands. There are several competitors in this market, but the main one is Gamesa, a company pertaining to PepsiCo, which has a market penetration of more than 52%, while BIMBO is second-ranked, with 35%. The bakery industry in Mexico, including bread, cakes and cookies, has a market value of $14,807 million dollars, while the per capita consumption amounts 53.4 kilos per year and the expense used for this concept is $131.6 dollars. Traditionally, white bread has been the most popular type of packaged bread in Mexico, with a strong penetration in low-income households. However, consumers adoption of more healthy diets is hindering growth as sales of other substitute products such as multigrain bread increase Given that the packaged bread manufactured by BIMBO has more than 60 years of existence in the market, it has achieved to penetrate in the households of practically all Mexican families. It should be added to the foregoing that it is foreseen that the demand of this kind of product will continue increasing due to the growing incursion of women in the labor market. The countrys rural areas are not distant from this way of life therefore, thanks to the enlargement of the road network BIMBO can arrive to a great number of homes in the countryside, thus, collaborating with the feeding of this population sector. Currently there are several competitors in the packaged bread market, whose brands have a local presence, such as: Dulcipn, S.A. de C.V., which prepares products under the Don Too brand in Mexico City, and El Panqu, S.A. de C.V., with El Panqu brand, in central Mexico specially in the state of Durango. Additionally, in the cities of Mexico and Mrida, through self service stores, the competitors are: Pan Filler, S.A. de C.V. which produces, under the Pan Filler brand, specialties bread (black, rye and German bread); Industrializadora de Alimentos del Sureste, S.A., with the packaged bread Boni Bon brand, and Panadera El Cometa, S.A. de C.V., with the packaged bread Don Rico brand, there is also La Superior brand competing in the state of San Luis Potos. In 2009 Walmart introduced nationally its own brand of packaged bread and rolls under the trademark Great Value. In Sinaloa there is Pan Panama and in the countrys northern border there are the following brands which import packaged bread and rolls: Natures Own and Butter Krust, produced by Flowers Foods, Inc. and Hill Country produced by the supermarket chain H.E.B. Likewise, in the border of Baja California Norte there is packaged bread under the Bontri, Pantry Select and Sara Lee brands, mainly. In the case of Ciudad Juarez, there is competence from Flowers Foods with products imported from the USA BIMBO holds a share in the bakery market (which includes traditional bread, cakes, cookies, and packaged bread) of approximately 26%. The foregoing allows supposing that the Company has a broad growth potential. In the bars category with less than a development decade, competence has been strong, seeking for alternatives to provide the consumers that wish to have a healthier feeding. In 2010, Bimbo kept its leadership in this category through innovation. Its main competitors in this segment are Kelloggs, Quaker and other importation bars.

67

It is important to highlight, however, that the main competence faced by Bimbo in respect to its bakery lines is integrated with nearly 40 thousand traditional bakeries and in the considerable presence of bakeries in the supermarket chains, which during 2009 and 2010 gave a special impulse to their private label packaged bread. United States BIMBO participates in United States market through BBU, which produces, distributes and commercializes packaged bread and sweet bread to minority and institutional clients. The main brands include: Arnold, Brownberry, Oroweat, Thomas, Stroehmann, Mrs. Bairds, DItaliano, Maiers, Entenmanns, Bimbo and Marinela. BBU is one of the most important players in the industry in that country. Some of its competitors include: Flower Foods, Hostess Brands and Pepperidge Farm, as well as in-store brands. The packaged bread industry in the U.S. is much more competitive than in Central and South American market and consumers have a higher interest in low-carbohydrate diets and wholewheat baked products. It is a mature market with established brands. Thus, differentiated products, solid cost controls and distribution density and efficiency are key performance drivers in this market. The United States represents the second largest baked goods market globally in terms of industry and production according to IBIS World. In 2010, according to Datamonitor, in the United States the aggregate market value of the bread industry, including bread, sweet bread, and cookies, was approximately $41,300 million dollars, the equivalent of a per capita consumption of 29 kg. per year, in contrast to a global average consumption of 23 kg per year. The bakery industry in the United States is highly fragmented, with the top four producers accounting for approximately 50% of sales. Earlier in this decade, the industry was impacted by a consumer trend towards low-carbohydrate diets. However, the industry has adapted well to the trend and bread sales have recovered, attracting consumers to value-added breads and healthy alternatives. The bread market has regained traction, supported by campaigns such as Grains for Life by the American Bakers Association and the American Millers Association. The Company has introduced a variety of whole-grain products and a sophisticated array of healthy products. BBU offers products under the Oroweat, Arnold and Brownberry brands, which share common formulas with a strong presence in the wide-pan healthy bread sector. Other brands owned by BBU such as Thomas, Boboli and DItaliano are highly differentiated unique products with limited private-label competition. The private-label segment, especially in the white-bread category, is a key segment that has continued to grow against basic, low-price brands. BBUs mainstream regional brands are more affected by this trend; however, as each of the mainstream brands is a strong regional favorite, they are less likely to be affected than smaller, secondary local brands. In recent years the United States consumers have shown a strong preference for large retail chains, as a result of which the mix of sales channels has changed significantly. The traditional supermarket chains have been challenged by large retailers like Walmart, Sams Club, and Target. The inflation in raw materials has been the greatest challenge for the bakery industry in the United States, especially the increase in costs of wheat, fuels, and healthcare costs. The industry experienced a period of hyperinflation in 2007 and 2008 when the costs of wheat flour were above 10 dollars per bushel (compared to the historical average of 5 dollars per bushel). The costs of wheat flower dropped to a range of between 5 and 6 dollars during 2009 and 2010; however, it is expected that they will reach 10 dollars during the course of 2011. Latin America The Group actively participates in Latin America, where the consumers behavior and preferences are very similar to those observed in Mexico. The Latin American countries where the Company operates are:

68

Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. In the case of Nicaragua, even though it has no factories, it distributes its products through strategically located agencies. Herein below is the Companys market participation in the bakery industry in Latin America in 2010, as well as the most important competitors in each country of the region where it operates:

Total Bakery Argentina Some competitors: La Saltea and in-store brands Brazil Some competitors: Panco, Seven Boys and Wickbold Chile Some competitors: Pierre and Castao Colombia Some competitors: Comapan, Guadalupe and Ramo Costa Rica Some competitors: Girasol, Konig and Ruiseor El Salvador Some competitors: Aladino and Lido Guatemala Some competitors: Americana and Victorias Honduras Some competitors: Bambino, Hawitt , La Popular and Tabora Nicaragua Some competitors: Aurora, Puropan and Corazn de Oro Panama Some competitors: Tasty Choice and Rimith Paraguay Some competitors: Bimbi, Fargo and My friend Peru Some competitors: Unin and Grupo Once Uruguay Some competitors: own brands Venezuela Some competitors: Croipan and Venepan
(1) (2)

2010(1) 1% 1.2% 1.1% 2.2% 4.8% 34.3% 4.2% 8.1% 21.6% 44.8% ND 1.0% 1.8% 4.3%

Source: Datamonitor. Includes the category of artensal and industrial Bread & Rolls Source: Nielson

Asia After a long investigation and analysis period, in 2006, Grupo Bimbo initiated operations in the Asian continent. China was selected as the country which offers the best economic and potential growth conditions in the region, therefore, through the acquisition of a bakery company with a strong presence in the city of Beijing, BIMBO ventured in this market. 2. Tortilla Industry General Overview

69

BIMBO participates in the wheat tortilla market, which it commercializes under the Tortillinas Tia Rosa, Wonder and Del Hogar brands, among others. The main competitor in this sector is Maseca, with the Paninas, Tortiricas and Misin brands, in wheat tortillas. In the countrys northern region there are a great number of competitors, which prepare homemade tortillas to satisfy the local tastes and that represent a small market percentage. In USA, the packaged tortilla market reports one of the highest growths within the food sector in that country. Both wheat and corn tortillas, present more varieties, sizes and amounts than in the Mexican market. Additionally, it is foreseen that, at a medium term, the Hispanic population will be the largest foreign community in the USA. That added to the GDP generated by such community (calculated in 35 million persons), which is equal to the GDP generated in Mexico, make the tortilla a line of business with a growing potential in that country. In this market, the corn and wheat tortillas produced and commercialized under Tia Rosa brand have an important presence in the western and southwest regions in the USA and are oriented both to the Hispanic and the Anglo-Saxon market. In this field, Tia Rosa faces the Gruma Corp. competence, as well as of a great number of small producers. 3. Snack Industry General Overview

At the end of 2010, the snack industry in Mexico, including the peanut category, had an estimated market value of $3,036 million dollars, representing a 10% increase compared with the preceding year. It is calculated that 90% of people have consumed snacks (corn, potato and extruded) in the preceding month, and 50% have consumed peanuts during that period. Consumers of snacks snack 2 to 3 times a week and the most frequent snackers are young people. The majority of consumers of snacks do not just snack in one place and consume as much in the home as outside of the home. The most bought presentation is the individual sized bag bought mostly in grocery stores, while the distinct presentations of the traditional bad as well as large presentations are mainly bought in supermarkets. The snack market in general terms is mainly composed of people who are loyal to the brand and collection. Barcel occupies the second place in the Mexican salted snack market with 19% participation in the market, after Sabritas, a business belonging to Pepsico, that has 72% participation. Barcel is also in second place with regard to peanuts. Taking into account that BIMBO began its participation in these sectors in 1977, it has achieved a very good position within these markets, thanks to the fact that it has constructed a strong brand image through differentiated products. Barcel has 33 years of history in the salted snack market in Mexico and as part of the Group, is a 100% Mexican business with international presence. Its products are distributed nationwide, and also have a presence in the U.S. with brands like Takis, Churritos, Tostachos, Chipotles, Toreadas, Chicahrrones, Hot Nuts and Barcel Peanuts. It is important to mention that at the close of 2010 regional, low cost branks considerably increased their participation during the past year. For example, Bokados, a snack business that operates primarily in Mexico, had a growth of 25%, while Encanto, a Mexican snack industry that operates primarily in the north of the country, had a growth of 15%. This growth is primarily driven by the peanut sector. 4. Confectionery Goods Industry General Overview

The confectionery industry in Mexico is highly diversified and competitive, since it is conformed of more than 1,200 players, which comprise both small companies and large world-wide competitors. This market is

70

comprised on three large segments: (i) chewing gums (21% of the total volume), which includes the sugar and sugar-less chewing gums segment; (ii) chocolates (21% of the total volume), which includes, mainly, national and imported bar chocolate, marshmallow covered with chocolate, surprise, spread and fine filled chocolates; and (iii) candies (58% of the total volume), which includes hard candy lollipops, gummies, wrapped hard candies and covered candies. The estimated value of this sector in Mexico is of $4,230 million dollars. Additionally, it is estimated that 13% of the sales corresponds to small home-made manufacturers, that produce and distribute no-brand products and in very concentrated regions, mainly in northern and central Mexico. The per capita consumption of confectionery goods products in Mexico is of three kilos per year, lower than in countries such as Argentina, Brazil, USA and, specially, Europe, where the annual average exceeds 8 kilos. The sugar candy segment is fragmented into 18 categories, including chewing gum, hard candy lollipops, tablets and gummies. The chocolate category is divided into ten different segments. It is important to mention that 60% of the candies and chocolates distribution in Mexico is made through the whole sale channel and 40% is made in the modern and detail channel. The great diversity of products in this market is due to a strong and constant innovation and new short-life products. One main characteristic of the confectionery goods products is that they are based in fashion and in a mainly child and youth market, which has dramatically changed its preferences in the last years, primarily due to the new restrictions and legislation regarding the obesity problem. Organizacin Barcel = Ricolino + Dulces Vero, participates in all the confectionery goods segments and as a whole occupy the second place in the market. The main competitors faced by Organizacin Barcel are: Adams, Canels, Ferrero, Mars, Hersheys, De la Rosa, Nestl, Sonrics, EFFEM and Turin.

71

ix)

Corporate Structure

BIMBO is a holding company which, as of December 31, 2010 was a direct or indirect owner of shares in 101 subsidiaries and associates. The table shown below lists the most important corporations, their main activity and the equity holding percentage held by BIMBO in each of them. Subsidiary Companies Bimbo, S.A. de C.V. Barcel, S.A. de C.V. Bimbo Bakeries USA, Inc. Bimbo do Brasil, Ltda. x) 7. a. Main Assets Description Premises Productive Premises Main Activity Bakery Candies and snacks Bakery Bakery Holding 97% 97% 100% 100%

As of December 31, 2010, BIMBO had 103 manufacturing premises in Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Honduras Guatemala, Panama, Paraguay, Peru, Uruguay and Venezuela, in respect to Latin America; regarding the United States of America it has productive plants in the states of California, Colorado, Oregon, Texas, Wisconsin, North Carolina, Indiana, Florida, Pennsylvania, New York, Maryland; and Beijing in China. The premises include lines of packaged and sweet bread, rolls, wheat and corn packaged tortillas, tostadas, cakes, cookies, fast food, chewing gum, confectionery goods, snacks and other akin manufactures. Together, the plants have a construction area of 1,446,620 m2, on a total surface of 3,556,470 m2, in addition to having a land reserve of 619,820 m2. It is worth to mention that, from the above mentioned total assets, approximately 95% is owned by BIMBO and the rest corresponds to premises leased from third parties. See Business Description Principal Activity Production Process. Historically, including during 2010, the Company has made capital investments equal to the depreciation amount shown in its financial statements. In 2010, the Company made capital investments for approximately US$ 288 million dollars, which were financed with own funds and with loans from third parties. Such capital investments will mainly consist in the construction of new production plants. The location of the Companys main assets per geographic area is shown below.

72

MEXICO

METROPOLITAN MEXICO CITY

73

USA

CENTRAL AMERICA

74

SOUTHAMERICA

75

ASIA
EUROPA

The following table shows the utilization percentage of the major capital investment lines installed capacity as of December 31, 2010: Organization and kind of product Bimbo, S.A. de C.V. Bread, rolls, doughnuts, sponge cakes, toasted, cookies, cakes, suavicremas, wheat tortillas BBU Bread, rolls, doughnuts, sponge cakes, pies, tortillas, tostadas and chips OLA Bread, rolls, doughnuts, sponge cakes, toasted, cakes, cookies, Swiss roll, puff pastry and tortillas Asia Bread, sweet, rolls, doughnuts, puff pastry and cakes Barcel, S.A. de C.V. Snack and confectionery goods
(1)

52%

61%

41%

31%

61%

Includes operations in Europe.

76

The utilized capacities were calculated based on 150 productive hours per week. Hours are used as measuring parameter because the mixture of the different products of each line implies the utilization of different volumes and weight, which impedes the direct comparison of all products and lines capacities. b. Agencies

As an important part of its distribution process, the Company has more than 1,000 distribution agencies, each of which operatively depends on a specific plant, even though it is not located nearby. 8. Asset Maintenance

In order for BIMBOS operations no to be suddenly affected, there is a policy to have preventive predictive maintenance programs, applied to all its assets, including several equipment and vehicular fleet. The purpose is that all the Groups premises and equipment present optimal operation and appearance conditions, and that they not only comply with the governmental rules and regulations, but that, in first instance, they maintain a welfare and safety environment for the personnel. When the situation so requires, the corrective maintenance is used. However, such situation occurs eventually and, therefore, it does not represent a habit in the Company. In this regard, the Company allocates approximately 2% of the net sales to preventive, predictive and corrective maintenance previously described. Likewise, it is important to mention that during the last two years, the Company has allocated between 1.5 and 2.5 additional percent points in investments to support the growth, equipment modernization and productivity of its lines. All these resources have been financed with the Companys own funds. 9. Guaranties on Assets

On the date of this Annual Report, the Company has not created liens on its important assets. 10. Insurance Aligned with the industrys standards, BIMBO has formal insurance policies that adequately cover its properties in case of fire, explosion, earthquake, flood and hurricanes, among other risks. In the case of the vehicular plant, BIMBOs policy is not to resort to a conventional insurance therefore, it created a self-insurance program, based both on the available cash flows and on its vehicle maintenance and handling policy. On the other hand, for some operations abroad civil liability insurances have been purchased. Likewise, the Company has workshops to carry out the vehicles repairs. In accordance with a research, such repairs result more economic than paying an insurance policy, considering the proportion they represent in connection with the total amount invested in a vehicular fleet. It is worth to mention that the Companys road accident index is very low in comparison with the number of transportation and distribution vehicles comprised in the fleet. xi) Judicial, Administrative or Arbitration Processes

BIMBO and some of its subsidiaries face certain judicial processes as a consequence of their ordinary course of business. As of December 31, 2010, there was no knowledge that the Group or its subsidiaries, its directors, principal shareholders or key officers are involved in judicial, administrative or arbitration processes that have had or might have a material adverse effect on the Companys or its subsidiaries operation results and financial condition. Under the provisions set forth in Annex N of the General Provisions applicable to Securities Issuers and other Participants in the Securities Market, as of the date of this Annual Report, the Company does not fit

77

any of the hypothesis established in Articles 9 and 10 of the Bankruptcy Law (Ley de Concursos Mercantiles) and has not been rendered nor may be render bankrupt. xii) Shares Representing the Capital Stock

As of the date of this Annual Report, BIMBOS capital stock at nominal value amounts $1,902, represented by 4,703,200,000 outstanding Series A common nominative shares, without expression nominal value, fully subscribed and paid, all of them representing the minimum fixed portion without right of withdrawal of the capital stock. See Note 14 to the Audited Financial Statements. BIMBO was incorporated on June 15, 1966 with a minimum fixed capital stock of $50,000,000.00 nominal pesos, represented by 50,000 shares, with a nominal value of $1,000.00 each. Since its incorporation, BIMBO has had several modifications to its capital stock structure. As of 1998, the modifications were as follows: In accordance with the Corporate Bylaws, the capital stock is variable. The capital stock shall be represented with Series A common nominative without nominal value expression shares. Additionally, the Company may issue non-voting and/or limited-voting, nominative, without nominal value expression shares, which shall be denominated with the series name determined by the Meeting which approves the issuance thereof. In no case shall the non-voting and/or limited-voting shares may represent more than twenty five percent (25%) of the total capital stock placed among the investing public or of the total shares placed therein. However, the National Banking and Securities Commission (CNBV) or, otherwise, the competent authority, may extend the above mentioned limit up to an additional twenty five percent (25%), provided that this percentage is represented by non-voting shares, with the limitation of another corporate rights, or by restricted voting shares, which shall be convertible into common shares within a term not exceeding five (5) years, computed as of their placement see Administration Corporate Bylaws and Other Agreements). On April 28, 2011, BIMBO issued a stock split of the shares representing its capital stock, circulating the Issuance 2011-1, the capital stock of the Company was not modified and remains represented by 4,703, 200,000 shares. xiii) Dividends

The information set forth herein below refers to the Companys outstanding shares as of the date of this Annual Report (see 2) b) xii) Shares Representing the Capital Stock). The decree, amount and payment of dividends to the holders of BIMBOS Series A shares is proposed by the Board of Directors and approved by the General Shareholders Meeting. Dividends paid during 2011, 2010 and 2009 amounted: Number of outstanding Series A shares (thousand) 1,175,800 1,175,800 1,175,800 1,175,800 Dividend per Series A share 0.46 0.46 0.50 0.55 Total amount of dividends paid (million pesos) $541 $541 $588 $647

Year 2008 (April) 2009 (April) 2010 (April) 2011 (April)

78

Historically, the Company has paid dividends derived from profits generated during each period. The Company administration considers that this situation will continue in the future, however, it cannot be guaranteed that this will happen. Retained profits include the legal reserve. In accordance with the General Corporation and Partnership Law, from the fiscal year net profits minimum 5% shall be separated to form the legal reserve, unit the amount thereof represents 20% of the capital stock at nominal value. The legal reserve may be capitalized, but it shall not be distributed unless the company is dissolved, and shall be reconstituted when it decreases due to any reason. The net worth distribution, except for the updated amounts of corporate capital stock contributed and of the retained taxable profits, shall cause the income tax on dividends to be discharged by the Company at the rate in effect upon the distribution. Taxes paid for such distribution may be credited against the income tax of the fiscal year in which the tax on dividends is paid and in the two immediately subsequent fiscal years, against the fiscal year tax and the provisional tax payments thereof. The net worth fiscal accounts balances as of December 31 are: 2010 Contribution capital account Net tax profit account Total $ 24,473 18,253 $ 2009 8,132 32,830 40,962

$_________42,726

Dividends on shares that are held through Indeval shall be distributed by BIMBO also through Indeval. Dividends on shares represented by certificates or physical certificates shall be paid upon presentation of the relevant coupon. In case provisional certificates exist at the time when the dividend is decreed, and if such provisional certificates have no coupons attached, the dividend shall be paid against the relevant receipt.

79

3)

FINANCIAL INFORMATION

a) SELECTED FINANCIAL INFORMATION The attached audited Financial Statements comply with the NIF. Their preparation requires that the Companys administration carries out some estimates and uses certain hypothesis to asses some of the financial statements entries and in order to effectuate the disclosures required therein. However, the actual results might differ from such estimates. The Companys administration, applying the professional judgment, considers that the estimates and hypothesis used were adequate given the circumstances. The main accounting policies followed by the Company are the following ones: a. Accounting changes As of January 1, 2010, the Company adopted the following new MFRS and new NIF: NIF C-1, Cash and cash equivalents. Requires the presentation of cash and cash equivalents, restricted by the cash and cash equivalents item, unlike Bulletin C-1, which requires its separate presentation; substitutes the term temporary available investments for ready available investments and considers as a characteristic of this type of investment the maturity at three months after the date of acquisition. Improvements to the NIF 2010. The main improvements generating accounting changes are: NIF B-1, Accounting changes and correction of errors. Requires further disclosures when a company applies a particular standard for the first time. NIF B-2, Statement of cash flows. Requires recognition, in an specific line, denominated effects for changes in the value of cash, the effects on the salaries of changes in the value of cash and cash equivalents resulting from fluctuations in exchange rates and in its fair value, in addition to the effects from conversion to the currency of reference of the salaries and cash flows of foreign operations and the effects of inflation associated with the salaries and cash flows of any of the entities which are part of such entitity and that are in an inflationary economic environment. NIF B-7, Business acquisitions. Requires that, when intangible assets or provisions exist because the acquired business has a contract whose terms and conditions are favorable or unfavorable with respect to market, such intangibles can only be recognized when the acquired business is the lessee in an operating lease. This accounting change should be recognized beginning January 1, 2010. NIF C-7, Investments in associated companies and other permanent investments. Modifies how the effects derived from increases in equity percentages in an associated company are determined. It also establishes that the effects due to an increase or decrease in equity percentages in associated companies should be recognized under equity in income (loss) of associated companies, rather than in the non-ordinary line item within the statement of income. NIF C-13. Related parties. Requires that, if the direct or ultimate controlling entity of the reporting entity does not issue financial statements available for public use, the reporting entity should disclose the name of the closest, direct / indirect, controlling entity that issues financial statements available for public use. b. Recognition of inflation effects Accumulated inflation in Mexico of the three preceding fiscal years is lower than 26% consequently, the economic environment qualifies as non inflationary. As of January 1, 2008 the Company suspended the recognition of the inflation effects on the consolidated financial statements, except for those that correspond to the subsidiaries that operate in inflationary environments; however, assets, liabilities and net worth as of December 31, 2010 and 2009 include the restatement effects recognized in all the transactions until December 31, 2007. Inflation accumulated in themajority of the countries in which the Company operates, excluding Mexico,

80

for the| three preceding fiscal years is also less than 26% for those countries that are classified as noninflationary. However, there are countries in which the Company operates that have an environment that is classified as inflationary, whose inflation in the three preceding fiscal years and as a result of this they recognized the effects of inflation in 2010 and 2009, which are the following: 2010 Argentina Costa Rica Venezuela Nicaragua 26% 31% 100% 34% 2009 28% 38% 87% 49%

And the inflation in these countries in the preceding three fiscal years that their environment was classified as inflationary in 2009 and for which there are recognized effects of inflation only in 2009, are the following: 2009 Uruguay Guatemala Honduras Paraguay 26% 26% 27% 28%

Until December 31, 2007 in all the operations and as of January 1, 2008 only for those under inflationary environment, the recognition of the effects of inflation mainly resulted in gains or losses due to inflation on non monetary and monetary entries, which are shown in the financial statements under the following rubric: Result per monetary position Represents the erosion of the purchasing power of the monetary entries originated by the inflation; it is calculated using factors derived from the inflation indeces of each country to the monthly net monetary position. Gain is originated from maintaining a net passive monetary position. c. Cash and cash equivalents Mainly consist in bank deposits in check accounts and investments in short term securities, of great liquidity, easily convertible into cash, with a maturity of up to three months after the date of acquisition and subject to little significant change of value risks. Cash is shown at nominal value and the cash equivalents are mainly represented by investments in government debt instruments with daily maturity. d. Inventories and sales cost Inventories of entities that operate in non-inflationary economic environments are assessed at the lowest between their cost or realization value. In those subsidiaries that operate in inflationary economic environments, inventories were assessed at average costs that were similar to their replacement value without exceeding their realization value, and the sale cost at the last actual production cost, that was similar to the replacement cost at the time of its sale. e. Real estate properties, machinery and equipment Are recorded at the acquisition cost in the entities under non inflationary economic environments. Balances derived from acquisitions carried out until December 31, 2007 in all the operations, and actually of those derived from the subsidiaries that operate in inflationary economic environments, were updated using factors derived from the inflationary indeces of each country until that date. Depreciation is calculated under the straight line method based on the useful lives of the following assets: Buildings Manufacturing equipment Vehicles Office equipment 5 8, 10 and 35 10 and 25 10

81

Computer equipment

30

Investment in affiliates shares and others permanent investments The permanent investments in the entities in which a significant influence is exercised, are initially recognized based on the net fair value of the entitys identifiable assets and liabilities as of the acquisition date. Such value is adjusted after the initial recognition by the relevant portion both of the affiliates integral profits or losses and the profit distribution or capital reimbursements thereof. When the fair value of the consideration paid is greater than the value of the investment in the affiliate, the difference shall correspond to goodwill, which is presented as part of the same investment. When the fair value of the consideration paid is lower than the investment value, the latter shall adjust to the fair value of the consideration paid. In case any impairment of the investments in affiliates appear the same shall be subject to impairment tests. Permanent investments made by the Company in entities in which it does not have joint control, nor significant influence shall be registered at the acquisition cost and dividends received are recognized in the periods results unless if derived from profits of periods prior to the acquisition, in which case they are decreased from the permanent investment. f. Impairment of long-lived assets in use - The Company reviews the carrying amounts of long-lived assets in use when an impairment indicator suggests that such amounts might not be recoverable, considering the greater of the present value of future net cash flows or the net sales price upon disposal. Impairment is recorded when the carrying amounts exceed the greater of such amounts. The impairment indicators considered for these purposes are, among others, the operating losses or negative cash flows in the period if they are combined with a history of losses or projected future losses, depreciations and amortization charges to results, which in percentage terms in relation to revenues are substantially higher than in previous fiscal years, obsolesce effects, reduction in the demand for the products manufactured, competition and other legal and economic factors. During 2009 the Company recognized impairment in the operation of the Czech Republic for $56. This operation was sold in January 2010 and the disinvestment amount is not representative for Grupo Bimbo. In 2010 the Company recognized deterioration in certain marks. g. Financial risks management policy The Company, within the framework of its daily operations is exposed to inherent risks to several financial variables, as well as to variations in the price of some raw material quoted in international formal markets. As a result, the Company uses derivative financial instruments to mitigate the possible impact of fluctuations in such variables and prices on its results. The Company considers that such instruments provide flexibility which results in more stable income and better visibility and certainty regarding future costs and expenses. The design and implementation of the derivative financial instruments contracting strategy formally falls on two bodies: 1) The Financial Risk Committee, in charge of the interest rate and exchange rate risk management and, 2) The Raw Materials Market Risk Sub-Committee, in charge of managing raw materials risk. Both bodies continuously report their activities to the Business Risks Corporate Committee, which is in charge of issuing the general guidelines of the Companys risk management strategy, as well as of establishing the limits and restrictions to the transactions which they may carry out. The Business Risks Corporate Committee, reports the Companys risk positions to the Audit Committee and to the Directive Committee. The Companys policy on entering derivative financial instruments is that there are only for hedging purposes. That is, the eventual entering into derivative financial instrument shall necessarily be associated to a primary position representing some risk. Consequently, the notional amounts of one of all the derivative financial instruments entered into for hedging certain risk will be consistent with the amounts of the primary positions that represent a risk position. The Company does not carry out transactions in which the intended benefit or purpose aimed to are premium earnings. If the Company decides to carry out a hedging strategy in which options are combined, the net payment of the associated premiums shall represent a disbursement by the Company.

82

h. Derivative financial instruments - The Company records all derivatives at fair value on the balance, regardless of the purpose for the holding thereof. If such instruments are not traded, the fair value is determined by applying recognized valuation techniques accepted in the financial environment. Hedging derivatives recognize valuation changes in accordance with the relevant hedging kind: (1) for fair value hedges, changes in the derivative instrument and the hedged item are recognized in current earnings; (2) for cash flow hedges, changes in the effective portion are temporarily recognized in other comprehensive income and reclassified to current earnings when affected by the hedged item; the ineffective portion is immediately recognized in current earnings; (3) for hedges of an investment in a foreign subsidiary, the effective portion is recognized in other comprehensive income as part of the cumulative translation adjustment; the ineffective portion of the gain or loss on the hedging instrument is recognized in current earnings, if it is a derivative financial instrument and if not, it is recognized in other comprehensive income until the investment is sold or transferred. To manage its exposure to interest rate and foreign currency fluctuations, the Company principally uses interest swaps and foreign currency forward contracts; as well as futures and options contracts to fix the purchase price of raw materials or inputs used in production. The derivatives are contracted for the purspoes of covering risks and complying with all of the coverage requirements, which is why their designation is documented at the beginning of the coverage operation, describing the objective, strategy, characteristics, accounting recognition, and how the measurement of their effectiveness will be determined. The negotiation with derivate instruments is only carried out by institutions of recognized solvency and limits have been established for each institution. Hedging derivative financial instruments are recorded as an asset or liability without setting them off with the hedged item. i. Goodwill- Is recorded at acquisition cost, in the local currency of origin and is updated until the 31 of December of 2007, applying the inflation index of each country. In the subsidiaries operating in inflationary economic environments, the Company will continue to update, applying the corresponding inflation index. Goodwill is not amortized but is subject, at least once every year, to impairment tests. j. Intangible assets Is primarily comprised of trademarks, rights of use and costumer-relationships. Are recorded at acquisition cost, in the currency of origina and updated until December 31, 2007, applying the inflation index of each country. In the subsidiaries operating in inflationary economic environments, they continue updating applying the corresponding inflation index. This caption mainly derives from the acquisition of the business in the USA and certain trademarks in South America. Trademarks and rights of use are not amortized; however, the carrying values are subject to impairment tests at least annually. On December 31, 2010, the Company recognized an impairment in certain trademarks for $19. Costumerrelationships have an estimated useful life of 18 years and are amortized on a straight-line basis based on their useful life. As of December 31, 2010 and 2009, the amortization recorded for the year related to intangible assets with finite lives was $258 and $257, respectively. k. Provisions Are recognized when there is a present obligation as the result of a past event that is likely to result in the use of economic resources that can be reliably estimated. l. Direct employee benefits Are calculated based on the services rendered by employees, considering their current salaries and liability is recognized as it accrues. These benefits include mainly accrued employee profit sharing (PTU), compensated absences, such as vacations and vacation premiums, and incentives and are shown in Other accounts payable and accrued liabilities caption. m. Employee benefits from to termination, retirement and social prevision The liability for seniority premiums, pensions and termination benefits is recorded as accrued and is calculated by independent actuaries based on the projected unit credit method using nominal interest rates. The social prevision liability covers medical costs of eligible employees in the U.S. incurred after retirement. Such liability for this program is recorded based on the Companys historical information in accordance with actuarial calculations.

83

n. Employee profit sharing Employee profit sharing (PTU) is recorded in the year results in which it is incurred and presented under other expenses caption in the attached statements of income. Deferred PTU generated by the subsidiaries in Mxico is determined from the temporary differences that result from comparing the accounting and tax basis of assets and liabilities. o. Tax on profits The income tax (ISR) in each country and the flat rate business tax (IETU) in Mxico, if greater than the income tax, are recorded in the results of the year when accrued. In order to recognize deferred taxes on the operations in Mxico, it is determined if, based on financial projections, the Company will incur ISR or IETU taxes and recognizes the deferred tax corresponding to the tax to be essentially paid. Deferred tax is recognized by applying the rate corresponding to the temporary differences resulting comparing the accounting and tax basis of assets and liabilities and, as the case may be, the benefits from tax losses to be amortized and from certain fiscal credits are included. The active deferred tax is recorded only when a high probability exists that it may be recovered. p. Tax on assets The tax on assets (IMPAC) incurred through December 31, 2007 that is expected to, which is expected to be recovered, is recorded as a tax credit and is shown in the balance sheet under deferred taxes. q. Foreign currency transactions Foreign currency transactions are recorded at the applicable exchange rate in effect on the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican currency at the exchange rate in effect on the balance sheet date. Exchange fluctuations are recorded in the results, except for those transactions which have been designated as foreign investment hedge. r. Revenue recognition Revenues for sales are recognized at the time in which the products risks and benefits are transferred to the customers who acquire them, which generally occurs when these products are delivered to the customer and the latter assumes the responsibility thereon. The Company deducts from sales commercialization expenses such as promotional expenses for products . s. Earnings per share Basic earnings per common share are calculated by dividing net majority income by the weighted average number of shares outstanding during the fiscal year. For a better comprehension, the financial information summary shall be reviewed together with the financial statements and their respective notes. Likewise, such summary shall be reviewed with all the explanations provided by the Groups Administration throughout chapter 3) Financial Information, specially in the section Administration Comments and Analysis on the Companys Operative Results and Financial Status.

84

Consolidated Statement of Income As of December 31 of:

Net sales (1) Cost of Sales Gross Profit Distribution and Selling Expenses Administrative Expenses General Expenses Income After General Expenses Other Income (Expenses) Net Employee Profit Sharing Other Total Income and (Expenses) Net Net Interests Exchange (Loss) Income Monetary Position Gain Consolidated Financial Statement Equity in Income of Associated Companies

2010
117,163 55,317 61,846 42,933 7,520 50,453 11,393 (297) 653 (950) (2,574) (94) 45 (2,623)

2009
116,353 54,933 61,420 0 41,724 7,642 49,366 12,054 0 (613) 563 (1,176) (2,318) 207 99 (2,012) 0 87 42

2008
82,317 40,293 42,024 0 29,621 5,075 34,696 7,328 0 (8) 467 (475) (461) (153) 75 (539) 0 24

Income befote Income Taxes Income Tax Deferred Income Tax Provisions Income before Discontinued Operations

7,907 0 2,309 54 2,363 0 5,544 0

8,908 4,041 (1,214) 2,827 6,081

6,338 2,099 (205) 1,894 4,444

Net Income Controlling Stockholders Non Controlling Stockholders Basic Earnings per Common Shares Dividend per Share Income before Financing, Interests, Depreciation and Amortization

5,544 5,395 149 4.59 0.50 15,468

6,081 0 5,956 125 5. 5.07 5. 0.46 15,837

4,444 0 4,320 124 3.6 3.67 3 0.46 9,829

(1) During 2010, 2009 and 2008, the net sales of Bimbo, S.A. de C.CV., and Barcel, S.A. de C.V., in Mexico represented approximately 45%, 63% and 64%, respectively, of the consolidated net sales (see Note 2 of the Audited Financial Statements).

Consolidated Balance Sheet As of December 31 of:

Cash and Cash Equivalents Accounts and Notes Receivable Net Inventory, Net Payments in Advance Derivative Financial Instruments Total Current Assets Notes receivable from independent operators Property, Plant and Net Equipment Stock Investments in Associated Companies and Liabilities Derivative Financial Instruments Deferred Income Taxes Goodwill - Net Intangible Assets, Net Intangible Assets for Employees Retirement Benefits Other Assets Net Total Assets Payable Accounts to Suppliers Short Term Debt and Current Outstanding Portion of Long Term Debt Other Accounts Payable and Accrued Liabilities Payable Accounts to Related Parties Income Tax Employee Profit Sharing Derivative Financial Instruments Total Outstanding Debt Long Term Debt (1) Derivative Financial Instruments Employees Benefits and Social Security Statutory employee profit sharing in Deferred Income Deferred Income Taxes (2) Other Long Term Debt Total Liabilities Controlling Stockholders Non Controlling Stockholders Total Capital Stock

2010
3,325 13,118 3,149 440 180 20,212 2,140 32,028 1,553 393 1,539 19,884 19,372 1,948 99,069 5,954 1,624 6,302 802 624 709 16,015 31,586 231 4,621 249 622 1,208 54,532 43,710 827 44,537

2009
4,981 12,430 2,969 499 146 21,025 1,940 32,763 1,479 159 635 20,394 19,602 1,669 99,666 5,341 4,656 6,228 238 3,272 637 74 20,446 32,084 54 4,644 290 266 925 58,709 40,104 853 40,957

2008
7,339 8,557 2,573 431 225 19,125 451 26,039 1,416 1,417 6,313 4,951 498 60,210 4,881 2,054 1,499 584 3,624 524 17 13,183 9,079 51 982 351 1,257 333 23,236 34,264 710 34,974

Consolidated Balance Sheet Notes

(3) (4)

Some financial institutions debt provides certain restrictions and obligations to the Companys financial structure (see Note 11 of the Audited Financial Statements). See Note 17 of the Audited Financial Statements.

Other Financial Data As of December 31 of: Depreciation and Amortization Resources Generated by Operating Activities Resources Used in Financing Activities Resources Used in Investment Activities Balance at the End of the Year Net Cash Flows from Operating Activities Net Cash Flows from Investment Activities Net Cash Flows from Financing Activities Cash and Cash Equivalents at the End of Period Margin After General Expenses EBITDA Margin Net Margin Assets Return Return on Invested Capital EBITDA Total Debt / EBITDA Net Debt / EBITDA EBITDA / Interest Expense 2010 3,729 11,375 (5,974) (6,983) 3,325 9.7% 13.2% 4.7% 5.6% 11.6% 15,468 2.15 1.93 4.94 2009 3,783 13,449 (38,398) 22,606 4,981 10.4% 13.6% 5.2% 6.3% 12.0% 15,837 2.32 2.01 5.58 2008 2,501 8,850 (7,160) 1,734 7,339 8.9% 11.9% 5.2% 7.6% 12.0% 9,829 1.13 0.39 13.14

87

b) FINANCIAL INFORMATION PER BUSINESS, GEOGRAPHIC ZONE AND EXPORTATION SALES Grupo Bimbo, through its main subsidiaries, is mainly engaged in the production, distribution and commercialization of packaged bread, sweet bread, home-made type cakes, cookies, cereal bars, candies, chocolates, sweet and salted snacks, packaged wheat tortillas, tostadas, goat milk caramel cajeta and fast food. The Company manufactures more than 7,000 products. The sale of such products constitutes Grupo Bimbos only line of business. The division between bakery products, and salted snacks and confectionery goods referred to in this Annual Report is an organizational division the only purpose of which is to achieve administrative efficiencies and which derives from historical reasons. In some cases, such division is shown exclusively in order to differentiate the market for such products. On one hand, Grupo Bimbo has no significant export sales. The following table shows certain financial information of Grupo Bimbo per geographic zone for the three preceding fiscal years: As of December 31, (1) 2919 2009 2008 Net Sales Mexico (1) USA Latin America 57,870 47,875 14,207 55,388 49,850 13,606 54,845 18,049 11,346

Profit After General Expenses Mexico (1) USA Latin America 8,013 3,738 (340) 7,499 4,261 301 EBITDA Mexico (1) USA Latin America 9.628 5,196 662 9,166 5,727 951 Total Assets 36,709 53,361 13,563 8,504 539 867 6,854 124 431

Mexico (1) USA 49,380 Latin America 16,045 (1) Includes transactions in Asia. c) REPORT ON SIGNIFICANT DEBT

36,121

36,529 14,221 11,360

The Companys relevant loans are described herein below, that is, those which represent 10% or more of its total liabilities. As of the date of this Annual Report, the Group is current in the payment of principal and interests of all its relevant loans.

88

The loan agreements establish certain covenants and also require that the Company maintain determined financial ratios based on consolidated financial statements. At December 31, 2010, the Company has complied with all the obligations established in the loan agreements. 1. Notes (Certificados Burstiles) The Company issued notes (certificados burstiles) (payable upon maturity) to refinance short-term debt contracted for the acquisition of certain assets in the USA, such issues are structured as follows: - Bimbo 09- Issued on June 15, 2009 for $5,000,000,000 (Five thousand million pesos) maturing on June 2014 with an interest rate applicable to such issue of 28-day TIIE plus 1.55 percent points. This issue is secured by Grupo Bimbos four main operative subsidiaries. - Bimbo 09-2- Issued on June 15, 2009 for $2,000,000,000 (Two thousand million pesos) maturing on June 2016 with an interest rate of 10.60%. This issue is secured by Grupo Bimbos four main operative subsidiaries. - Bimbo 09U- Issued on June 15, 2009 for 706,302,200 Investment Units (UDIS) maturing on June 2016, earning a 6.05% fixed interest rate of. The UDI value as of December 31, 2010 is $4.5263 per UDI. This issue is secured by Grupo Bimbos four main operative subsidiaries. - Bimbo 02-2- Issued on May 17, 2002 for $750,000,000 (Seven hundred fifty million pesos) maturing on May 2012, with a 10.15% fixed interest rate. As of June 5, 2009 this issue is secured by Grupo Bimbos four main operative subsidiaries. The Company issued debt securities (payable upon maturity) to refinance existing debt and for general corporate purposes. - International Bond- Issued on June 30, 2010 under Rule 144A and Regulation S for $800 million Dollars payable on June 30, 2020. Such financing, accrues interests at a fixed rate of 4.875% to be paid on a semiannually basis. The proceeds of this offering were used to refinance existing indebtedness and for general corporate purposes. The notes are guaranteed by the principal subsidiaries of the Company. 2. Committed Revolving Multicurrency Line-of-Credit On July 20, 2005, the Company entered into an amendment agreement to the committed revolving line-ofcredit agreement dated May 21, 2004 in an original amount of $250 million dollars, maturing on May 2008. The lines amount after having executed such amendment agreement is of $600 million dollars, up to 50% being available in Mexican currency. The term of the line-of-credit was 5 years, thus, its maturity date was July 2010. The applicable financial conditions were: for draw-downs in U.S. dollars, the Company was to pay Libor plus 0.40% until the third anniversary and Libor plus 0.45% during the remaining period, while, in the case of the Mexican currency draw-downs, it was to pay| pay TIIE 0.35% until the third anniversary and TIIE 0.40% as of such anniversary and until maturity. During the term of the loan, payments were made for the total amount of the loan, therefore, at its maturity, the loan was fully liquidated. 3. Bank loan On January 15, 2009 the Company contracted a long-term bank loan in an amount equal to 1,700 million US dollars, in which BBVA Bancomer S.A. Institucin de Banca Mltiple, Grupo Financiero BBVA Bancomer participates as leading agent and a bank syndicate as of this date comprised of fifteen institutions. The loan was comprised of two tranches, the first one maturing on January 2012 (Tranche A) and the second one maturing semi-annually from July 2012 until January 2014 (Tranche B).

89

During the month of July, 2010, the Company used the proceeds from the International Bond to liquidate Tranche A. Currently, the Company must pay an over rate of TIIE +1% for the tranche denominated in Mexican pesos and LIBOR + 1.25% for the tranche denominated in U.S. dollars. Of the outstanding amount, 869 million dollars, 68% is denominated in Mexican pesos and the remaining 32% is denominated in U.S. dollars. This line of credit is secured or guaranteed by the Companys principal subsidiaries. The total amount of funds obtained through this financing, in addition to those obtained in the multicurrency bridge loan were used by Grupo Bimbo to partially pay for the acquisition of WFI. 4. Other Loans Some of the Groups subsidiaries have contracted direct loans mainly to cover their working capital needs; none of such loans represents more than 10% of the Companys consolidated liabilities. d) MANAGEMENTS DISCUSSION AND ANALYSIS OF THE COMPANYS FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The following discussion and analysis should be read together with the Audited Financial Statements, including the notes thereto, contained elsewhere in this annual report. Unless otherwise stated, all amounts herein are expressed in Mexican Pesos and were prepared according to MFRS. Consolidated figures include the effects of intercompany eliminations. i) Results of Operations Comparitive analysis for the fiscal years ended on December 31, 2010 and 2009. Net Sales Net sales for 2010 were $117,163 million, which represented an increase of 0.7% with respect to 2009. Such increase was primarily driven by the increase in volumes in all regions throughout the year, despite the fact that the recuperation in consumption was delayed. The exchange rate was significantly lower, and the increase in the price of raw materials could not offset the growth in volume of sales. Net Sales Mexico USA Latin America Consolidated 2010 57,870 47,875 14,207 117,163 2009 55,388 49,850 13,606 116,353 % Change 4.5 (4.0) 4.4 0.7

90

In Mexico, sales grew by 4.5%, to $57,870 million, as a result of the increase in volume of sales in all categories of snacks, sweet bread, and packaged bread, among others. In the United States, despite the fact that the year registered a growth in volume of sales, net sales decreased by 4.0% to $47,875, as a result of the lower average prices of the products and the impact on the exchange range. In dollar terms, the sales increased by 2.0% thanks to the growth in the categories of premium bread and the national launch of Bimbo Bread and Sandwich Thins, among other products. In Latin America, the net sales showed an increase of 4.4% for a total of $14,207, as a result of the increase in volumes, which is due to the launch of new products, the incorporation of new clients, and the continued expansion of the distribution network. Brazil, Chile and Colombia showed the strongest performance. Gross Margin The gross margin remained unchanged with respect to the previous year staying at 52.8%, despite the fact that the price of raw materials began to increase during the second semester of the preivous year, the revaluation of the peso strengthened performance in Mxico during such year, which was sufficient to offset the negative impact of the increase in costs of raw materials and the decrease in the average prices of the products in the United States. By region, the gross margin in Mxico increased by 0.9 percentage points to 56.0%, which reflects the decrease in the costs of raw materials during most part of the year, together with the aforementioned revaluation of the peso. Both factors were sufficient to offset the increase in costs in the last quarter. In the United States, a margin of 49.5% was reported, which represents a decrease of 1.0 percentage points, the combined effect of the increase in the raw materials prices and the decrease in the average prices of the products was not able to be offset the increase in volume of sales. In Latin America, the gross margin was 40.5%, 1.8 percentage points less than in 2009. This was mainly due to the increase in labor costs in some operations of the Company in the region, as well as the pressure of certain raw materials. General Expenses The general costs represented 43.1% of net sales, 0.7 percentage points more than the registered costs for the previous year. This was primarily due to i) a higher level of investment in publiclity and advertising, encouraging consumption and increasing volumes of sale; ii) the incorporation of new distritubion routes, mainly in Latin America; iii) an extraordinary non-monetary cost of $346 for legal contingencies in Brazil, a point that is focused more conservatively on the creation of a reserve for the expected costs of open demands, in contrast to the previous practice of registering the real payments paid out each year; and iv) a cost to the controlling company of $222 related to the acquisitions, which have usually been considered as part of the acquisition costs, but that, according to the change in the NIF, were recognized in totality at the level of the parent company. Income after General Expenses On a consolidated basis, income after general expenses decreased by 5.5% in 2010 to $11,393 million, with a margin of 9.7%, which is equivalent to a decrease in 0.7 percentage points in relation to 2009. A better absorption of the fixed costs in all regions helped to offset the pressure on the gross margin due to the increase in the price of raw materials. Income After General Expenses Mexico USA Latin America Consolidated 2010 8,013 3,738 (340) 11,393 2009 7,499 4,261 301 12,054 % Change 6.9 (12.3) (213) (5.5)

91

In Mexico, the income after general expenses totaled $8,013, which representes an increase of 6.9% with respect to 2009. The margin after general costs increased 0.3 percentage points, for a total of 13.8%, as a result of the increase in income and the improvement in the gross margin. Excluding the extraordinary cost at the parent company level related to the acquisitions, the margin after general expenses would have increased by 0.7 percentage points to 14.2%. In the United States, the income after general expenses was $3,738, a decrease of 12.3% with a reduction in the margin of 0.7 percentage points, to 7.8%. This is due to the aforementioned pressure on the gross margin, combined with a planned increase in distribution in order to increase the penetration of the Companys brands; these factors were in some measure offset by administrative efficiencies in operation. Finally, Latin America, the pressure on the gross margin, a greater investment in new routes, and the extraordinary cost in Brazil resulted in a loss after general costs of $340 in 2010. Excluding the extraordinary cost, the income after general expenses would have been slightly greater than the point of equilibrium, situated at 0.1%. Other Costs The line dropped by $950 million, due to the recognition in 2009 of total labor of liabilities accumulated in previous fiscal years. Income Taxes The effective income tax rate for 2010 was 29.9%, less than the 31.7% in 2009, due to the benfit of the creation of differentiated taxes for losses in previous periods. Net Income of Controlling Stockholders In the year, the net income of controlling shareholders decreased 9.4% to $5,395, while the margin contracted by 50 base point, to 4.6%. This result is explained by the pressure on the gross margin and the margin after the general expenses, as well as the increase in the integral financing cost. Income after General Expenses less Depreciation and Amortization (EBITDA) The EBITDA totaled $15,468, a decrease in 2.3% relative to 2009. The EBITDA margin was 13.2%, equivalent to 40 base points less than in 2009. EBITDA Mexico USA Latin America Consolidated 2010 9,628 5,196 662 15,468 2009 9,166 5,727 951 15,837 % Change 5.0 9.3 (30.4) (2.3)

92

Financial Structure As of December 31, 2010, cash and cash equivalents of the Company were $3,325, as compared to $4,981 in 2009 due, among other things, to the acquisition of Dulces Vero and the $300 million dollars of cash proceeds used to pay indebtedness during such year. The total debt on December 31, 2010 increased to $33,210, as compared to $36,740 in the previous fiscal year. This was due to the payments on debt liabilities throughout the year. The short term debt represented only 5% of the total debt. With respecto to currency mix, 49% was Mexican pesos. The solid debt profile of the Company was supported by the Issuance of debt on June in the international market in an aggregate amount of $800 million dollars, with a maturity of 10 years. The Companys first global issuance was strongly subscribed by United States and European investors, and the proceeds were used to refinance the liabilities and to extend the average life of the debt by more than five years. The solid cash flow generation resulted in a reduction in the net debt position, from $31,759 in 2009 to $29,885 in December of 2010. Comparative analysis of the fiscal years ending on December 31 of 2009 and 2008 Net Sales Net sales for 2009 increased to $116,353 million, which represented an increase in 41.3% in relation to 2008. The increase in net sales was primarily a result of the integration of BBU East and, to a lesser extent, by a two-digit increase in sales in Latin America. In Mexico, net sales grew by 1.0% to $.55,388 million, mainly as a result of new product launches, which offset a weak consumption environment. By category, snacks had an outstanding performance as well as sales in modern channels. In the United States, net sales increased 176.2% in terms of pesos, to $49,850 million, which sales in dollars were $3,693 million, or 128% higher than recorded net sales in 2008. The foregoing is primarily as a result of the integration of BBU East, healthy volume performance, the successful launching of new products and the initiation of national distribution for certain brands that were originally only regional brands. In Latin America, net sales increased 19.9% with respect to 2008 to $13,606 million. This was primarily a result of volume growth generated by the continued expansion of our distribution network. In 2009, our customer base increased by approximately 76,000 new customers primarily through the traditional channels. The most solid results were registered in Brazil and Colombia. Net Sales Mexico USA Latin America Consolidated 2009 55,388 49,850 13,606 116,353 2008 54,845 18,049 11,346 82,317 % Change 1.0 176.2 19.9 41.3

Gross Margin The gross margin for 2009 increased by 1.7 percentage points to 52.8%, as a result of a reduction in raw materials costs compared compared to the peak commodity prices in 2008, as well as more stable exchange rates, and the cost-saving programs implemented during the year, which resulted in lower indirect production costs. In Mexico, gross margin for 2009 increased by 1.7 percentage points to 55.1%, mainly as a result of a reduction in raw material costs, a more stable Mexican Peso to U.S. dollar exchange rate and the implementation in 2009 of cost saving programs that lowered indirect production costs.

93

In the United States, a margin of 50.6% was reported, which represents an increase of 6.5 percentage points. The foregoing was a result of a series of factors, including: i) the incorporation of BBU East and its more efficient cost structure, ii) lower raw material and energy prices as compared to 2008, iii) greater manufacturing productivity in BBU West, including the benefit of a plant closure, and iv) improved absorption of fixed expenses resulting from higher sales volumes. In Latin America, the gross margin remained unchanged at 42.2%, due in large part to the more favorable raw material cost environment. This was offset by an increase in labor costs in some of the Companys operations in the region. General Expenses Costs of operation for 2009 represented 42.4% of net sales, 0.3 percerntage points less than the registered costs in the previous year. This was primarily due to: i) lower absorption of fixed expenses in Mexico, ii) higher distribution expenses in Latin America resulting from the Companys efforts to increase the penetration of packaged bread in that region, and iii) a non-cash charge of approximately US$20 million for the amortization of certain intangible assets included in the acquisition of BBU East. The foregoing factors more than offset the benefits of a more efficient distribution structure in Mexico and better results in the United States related to: i) the integration of BBU East and its more efficient expense structure, ii) ongoing initiatives at BBU West, such as route consolidation, iii) and a better expense absorption derived from higher sales volume. Income after General Expenses On a consolidated basis, income after general expenses for 2009 increased by 64.5% to $12,054 million, which represents a record margin of 10.4%. This is equivalent to an increase of 1.5 percentage points as compared to 2008. Income After General Expenses Mexico USA Latin America Consolidated 2009 7,499 4,261 301 12,504 2008 6,854 124 431 7,328 % Change 9.4 3,336.3 (30.2) 64.5

In Mexico, margin increased 1.0% with respect to the previous year, at 13.5%. Despite the minor increase of sales, less absorption of fixed expenses and promotional and publicity efforts to increase consumption. In the United States, income after general expenses was Ps.4,261 million from Ps.124 million for 2008, while gross margin increased from 0.7% in 2008 to 8.5% in 2009. The foregoing was the result of: i) the improvement in gross margin, ii) the integration of BBU East, iii) the benefits of ongoing productivity initiatives at BBU West, including the optimization of assets, routes and administrative expenses; and iv) sharing best practices between regions. In Latin America, the margin contracted 1.6 percentage points as compared to 2008, to 2.2%. This contraction is mainly explained by the higher sales and distribution expenses associated with the efforts to increase market penetration of packaged bread in the region, as well as higher labor costs. It is important to mention that although the operational performance in several countries resulted in positive results during 2009, mainly in Brazil, such improvement was offset by the significant deterioration of the results of operations of Venezuela. Comprehensive Financing Costs Comprehensive financing costs increased to $2,012, that is, $1,473 more than in 2008. This increase is fundamentally the result of the higher interest expense accrued on the debt incurred in January 2009 to finance our acquisition of BBU East.

94

Net Income of Controlling Stockholders Net income of controlling stockholders was $5,956 million, 37.9% greater than 2008. The gross margin was 5.1% a similar level to that recorded in 2008. The foregoing is due to: i) an increase in other expenses, ii) an increase in comprehensive financing costs, and iii) a net tax impact derived from the Companys decision to deconsolidate for tax purposes in Mexico. Such factors more than offset the increase in the margin afte general expenses during 2009. Income after General Expenses less Depreciation and Amortization (EBITDA) Consisted in a performance of $15,837 million, that is, 61.1% greater than 2008, while gross margin was 13.6%, that is 1.7 percentage points higher than 2008. The difference between the increase in EBITDA margin and the increase of gross margin after general expenses is due to the amortization charge in the United States, which was reincorporated into EBITDA. EBITDA Mexico USA Latin America Consolidated Financial Structure As of the close of 2009, cash and cash equivalents of the Company were $4,981 million, as compared to $7,339 million in 2008. Such decrease was fundamentally due to the prepayment of US$300 million corresponding to the revolving line due in July 2010, which reflects the solid cash generation of the United States operations as well as the continued strength of the flows of the Mexican operations. As a result of the financing of the Company in the local debt markets in June of 2009, coupled with a solid cash flow generation, net debt at the end of 2009 totalled $36,740 million, with an average maturity of 3.2 years; short-term debt represented only 13% of total debt, while long-term debt represented 87% of total debt. With respect to currency mix, 62% was Mexican Pesos and 38% was US dollars. In 2009, net debt was $31,759 million, as compared to $3,739 in 2008. This increase was due to debt incurred to finance the acquisition of BBU East in January 2009, which resulted in major changes to the companys balance sheet. The Companys decision to proceed with the deconsolidation for tax purposes in Mexico, announced on January 8, 2010, had no material consequences in its financial position. ii) Financial Position, Liquidity and Capital Resources a. Internal and External Liquidity Sources 2009 9,166 5,727 951 15,837 2008 8,504 539 867 9,829 % Change 7.8 962.5 9.7 61.1

BIMBO depends of traditional internal and external liquidity sources. The Companys liquidity is based in its operations and, historically has had sufficient levels of capital. The Company has had access to bank financings and to the domestic capital market. Likewise, BIMBO has several lines of credit from several financial institutions which, in the majority of cases, have remained unused. Notwithstanding the foregoing, the Company cannot assure that it will have access to the sources of capital mentioned above. BIMBO has not had any cyclical credit requirements. b. Debt Levels The table of Selected Financial Information contains information of the Companys debt at the end of the last three fiscal years. See Selected Financial Information. There is no cyclicality in the Companys credit requirements.

95

Significant Indebtedness Certificados Burstiles During 2009 the Company issued medium-term notes (certificados burstiles) to refinance short-term debt incurred at the beginning of 2009 to acquire BFI, which offerings were added to the offerings during 2002. See Financial Information Report on Significant Debt. New Dual-Currency Committed Revolving Facility On April 26, 2010, the Company obtained a new dual-currency revolving credit line for an amount of up to 750 million U.S. dollars. The maturity date of this line is July 31, 2012. See Financial Information Report on Relevant Loans. New Mexican Peso Committed Revolving Facility On October 24, 2010, the Company obtained from Banco Inburso, a new revolving credit line in Mexican pesos for an amount of up to 5,200 million. The maturity date of this line is April, 2012. See Financial Information Report on Relevant Loans. Bank Loan On January 15, 2009, the Company contacted a long-term bank loan for an amount equivalent to US$1.7 billion. The loan consists of two tranches, the first maturing in January 2012 (Tranche A) and the second with semiannual maturities from July of 2012 to January of 2014 (Tranche B). During July, the Company used the proceeds from the International Bond offering to liquidate Tranche A. Of the outstanding amount, 869 billion U.S. dollars, 68% was denominated in Mexican pesos and the remaining 32% was denominated in U.S. dollars. Other Loans Some of the Groups subsidiaries have contracted loans to finance their own working capital needs. Liquidity Liquidity represents the ability of the Group to generate sufficient cash flows from operating activities to meet its obligations as well as its ability to obtain appropriate financing. Therefore, liquidity cannot be considered separately from capital resources that consist primarily of current and potentially available funds for use in achieving its objectives. Currently, the Groups liquidity needs arise primarily from working capital requirements, debt payments, capital expenditures and dividends. In order to satisfy its liquidity and capital requirements, the Group primarily relies on its own capital, including cash generated from operations, and committed credit facilities. The Group believes that its cash from operations, its existing credit facilities, and its long-term financing will provide sufficient liquidity to meet its working capital needs, planned capital expenditures, future contractual obligations and payment of dividends. As of December 31, the Company had a multi-currency revolving line-of-credit of $750 million dollars maturing in July 30, 2013 and another line for $5,200 million pesos maturing on April 27, 2012. Commitments At December 31, 2010, the Company and certain of its subsidiaries have guaranteed, through letters of credit, commercial obligations and contingent risks related to the labor obligations of certain subsidiaries. The value of such letters of credit rose to 98.2 million dollars, of which a liability of 113 million dollars has already been recorded for employment benefits in the United States (see note 19 to the Audited Financial Statements).

96

Likewise, the Company has guaranteed certain contingent obligations of associated companies for the amount of US$1.2 million at December 31, 2010. Similarly, the Company has issued guarantees for thirdparty obligations derived from the sale of assets in prior years, for the amount of US$14 million (see note 19 to the Audited Financial Statements). c. Treasury Policies The Company maintains treasury policies consistent with its financial obligations and operating requirements and maintains its financial resources invested in highly-liquid, non-speculative and low-risk instruments. The Company maintains several currencies in its treasury, specially currencies of such countries in which the Company operates. d. Material Committed Capital Expenditures As of the date of this Annual Report, the Company did not have any material committed capital expenditures. e. Changes in the Balance Sheet Below is information on the cash flows generated by the operations, investments and financing activities during 2010, 2009 and 2008. The table in Selected Financial Information includes certain financial ratios that show changes in the financial condition of the Company during such years. Cash Flows from Operating Activities Fiscal years ended December 31, 2010 and 2009 For the fiscal year ended on December 31, 2010, net cash flows from operating activities decreased by $2,074 Pesos to $11,375 Pesos in comparison with $13,449 Pesos in 2009, primarily as a result of the fall in operating utility in the United States. Fiscal years ended December 31, 2009 and 2008 For the fiscal year ended December 31, 2009, net cash flows from operating activities increased by Ps.5,062 million to Ps.13,912 million in 2009 as compared to Ps.8,850 million in 2008, primarily as a result of improvements in the operations in the United States. Net Cash Flows from Investing Activities Fiscal years ended December 31, 2010 and 2009 For the fiscal year ended December 31, 2010, the net cash flow used in investing activities decreased by $32,424 Pesos to $5,974 Pesos in comparison with $38,398 Pesos in 2009, principally as a result of the reduced application of resources to the acquisition of businesses, in comparison with the previous year when Grupo Bimbo acquired WFI. Fiscal years ended December 31, 2009 and 2008 For the fiscal year ended December 31, 2009, net cash used in investing activities increased by Ps.31,238 million to Ps.38,398 million as compared to Ps.7,160 million in 2008, primarily as a result of the resources used for the acquisition of WFI during 2009. Net Cash Flows from Financing Activities Fiscal years ended December 31, 2010 and 2009

97

For the fiscal year ended December 31, 2010, net cash from financing activities decreased by $(6,983) Pesos to $(29,589) Pesos compared to $22,606 Pesos in 2009, primarily as a result of less income obtained from loans compared to the previous year. During 2010, a dividend of $0.50 Pesos per share was payed, totaling $588 million Pesos. Fiscal years ended December 31, 2009 and 2008 For the fiscal year ended December 31, 2009, net cash from financing activities increased by Ps.20,409 million to Ps.22,143 million as compared to Ps.1,734 million in 2008, primarily as a result cash obtained under the credit facilities secured to finance the acquisition of WFI. During 2009, the Company paid a dividend of Ps.0.46 per share totaling Ps.541 million. f. Off-Balance Sheet Transactions As of December 31, 2010, the Company had no significant transaction that was not recorded in the Audited Financial Statements. iii) Internal Control The Company has an Audit Committee that performs the activities set forth in the LMV, as well as such other corporate practices activities set forth therein and by the Companys board of directors. The Audit Committee is comprised by 3 independent members appointed by the board of directors or the shareholders meeting. The chairman of the committee is appointed by the shareholders meeting. Likewise, the Company has a Corporate Practices Committee that performs the activities set forth in the LMV, except for those attributed to the Audit Committee or any other committee by the board of directors of the Company. The Corporate Practices Committee is comprised by 3 independent members appointed by the board of directors or the shareholders meeting. The chairman of the committee is appointed by the shareholders meeting. e) CRITICAL ACCOUNTING POLICIES

The Audited Financial Statements that form a part of this Annual Report comply with MFRS. Their preparation requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from such estimates. The Companys management believes that such estimates and assumptions were adequate considering the circumstances under which they were made. The notes to the Audited Financial Statements contain a description of the most significant accounting policies of the Company, including the following: 1. Cash and cash equivalents Consists maily of bank deposits in checking accounts and readily available daily investments of cash surpluses, easily convertible into cash, with maturity of less than three months after its acquisition date and subject to insignificant risk of change in value. The cash has nominal value and the cash equivalents are primarily represented by investments in government debt with daily maturity. 2. Inventories and cost of sales Inventories are stated at the lower of average cost or net realizable value for those entities operating in noninflationary economic environments. For those subsidiaries operating in inflationary economic environments, inventories are stated at average cost which is similar to their replacement value at year end, without exceeding net realizable value, and cost of sales is stated at latest production cost which is similar to replacement cost at the time goods are sold. 3. Property, plant and equipment Property, plant and equipment are recorded at acquisition cost for those entities operating in noninflationary economic environments. Balances from acquisitions made through December 31, 2007 for all entities were restated for the effects of inflation by applying factors derived from the NCPI through that date. Balances that arise from operations operating in an inflationary environment continue to restate their balances by applying the inflation indeces of the country.

98

Depreciation rates are calculated using the straight-line method based on the remaining useful lives of the related assets, as follows: Buildings Manufacturing equipment Vehicles Office furniture and fixtures Computers 5 8, 10 and 35 10 and 25 10 30

4. Investment in shares of associated companies and other permanent investments The permanent investments in entities in which the Company has significant influence are initially recognized based on the reasonable net fair value of the entities identifiable assets and liabilities as of the date of acquisition. Such value is subsequently adjusted for the portion related both to comprehensive income (loss) of the associated company and the distribution of earnings or capital reimbursements thereof. When the fair value of the consideration paid is greater than the value of the investment in the associated company, the difference represents goodwill, which is presented as part of the same investment. Otherwise, the value of the investment is adjusted to the fair value of the consideration paid. If impairment indicators are present, investment in shares of associated companies is subject to impairment testing. Permanent investments made by the Company in entities where it has no control, joint control, or significant influence, are initially recorded at acquisition cost, and any dividends received are recognized in current earnings, except when they are taken from earnings of periods prior to the acquisition, in which case, they are deducted from the permanent investment. Impairment of long-lived assets in use The Company reviews the carrying amounts of long-lived assets in use when an impairment indicator suggests that such amounts might not be recoverable, considering the greater of the present value of future net cash flows or the net sales price upon disposal. Impairment is recorded when the carrying amounts exceed the greater of the amounts mentioned above. Impairment indicators considered for these purposes are, among others, operating losses or negative cash flows in the period if they are combined with a history or projection of losses, depreciation and amortization charged to results, which in percentage terms in relation to revenues are substantially higher than that of previous years, obsolescence, reduction in the demand for the products manufactured, competition and other legal and economic factors. During 2009 the Company recognized animpairment in the Czech Republic subsidiary for $56. This subsidiary was sold in 2010 and the sale price is not representative for Grupo Bimbo. In 2010, the Cmpany recognized impairment in certain trademarks for $19. 5. Financial risk management policy The daily activities carried out by the Company expose it to a number of inherent risks from different variables of a financial nature, as well as variations in the price of certain materials traded in international markets. Fur such reason, the Company uses derivative financial instruments to mitigate the potential impact of fluctuations in such variables and prices on its financial results. The Company believes that these instruments provide flexibility that allows greater stability of income and better visibility and certainty with regard to costs and expenses to which it will be exposed in the future. The design and implementation of the strategy of derivative financial instruments is formally supervised by two committees: 1) The Financial Risk Committee, responsible for risk management of interest and exchange rates and 2) the Subcommittee of Risk Commodity Markets, which supervises commodity risk. Both committees continuously report their activities to the Corporate Business Risk Committee, who is responsible for issuing general guidelines for the risk management strategy of the Company, and for establishing limits and restrictions on the operations they can perform. Likewise, the Corporate Business Risk Committee reports the risk positions of the Company to the Audit and Executive Committees of the Board of Directors. The Companys policy is to enter into derivative financial instruments only for hedging purposes. Therefore, entering into a contract of a derivative financial instrument must necessarily be associated with a

99

primary position that represents a certain risk. Consequently, the notional amounts of one or all derivative financial instruments contracted to hedge a certain risk will be consistent with the amounts of the primary positions that represent the risk position. The Company does not enter into derivatives for speculative purposes. If the Company decides to undertake a hedging strategy where options are combined, the net payment of premiums associated must represent an expense for the Company. 6. Derivative financial instruments The Company states all derivatives at fair value in the balance sheet, regardless of the purpose for holding them. Fair value is determined using prices quoted on recognized markets. If such instruments are not traded, fair value is determined by applying recognized valuation techniques. Changes in the fair value of derivative instruments designated as hedges are recognized as follows; (1) for fair value hedges, changes in both the derivative instrument and the hedged item are recognized in current earnings; (2) for cash flow hedges, changes in fair value of the effective portion are temporarily recognized as a component of other comprehensive income and then reclassified to current earnings when affected by the hedged item; the ineffective portion is immediately recognized within results; (3) for hedges of an investment in a foreign subsidiary, the effective portion is recognized as a component of other comprehensive income as part of the cumulative translation adjustment. The ineffective portion of the gain or loss on the hedging instrument is recognized in current earnings, if it is a derivative financial instrument. If not, it is recognized as a component of other comprehensive income until the investment is sold or transferred. To manage its exposure to interest rate and foreign currency fluctuations, the Company principally uses interest rate swaps and foreign currency forward contracts, as well as futures to fix the purchase price of raw materials or inputs used in production. The derivatives are obtained for the purpose of covering risks and complying with all of the coverage requirements; accordingly, their designation is documented at the beginning of the coverage operation, describing the objective, strategy, characteristics, accounting recognition, and how the effectiveness of the derivative will be measured, as applicable to that operation. Derivative trading is performed only with institutions of recognized solvency, and limits have been established for each institution. The hedging derivative instruments are recorded as assets or liabilities without offsetting them against the hedged items. 7. Goodwill. Goodwill is recorded at acquisition cost, in the local currency of origin and is updated up until December 31, 2007, applying the inflation index of each country. In those entities operating in inflationary economic environments, goodwill will continue to be updated applying the corresponding inflation index. Goodwill is not amortized and, at least once a year, is subject to impairment tests. 8. Intangible assets. These are primarily comprised of trademarks, rights of use and customer relationships and are recorded at acquisition cost, in the local currency and updated until December 31 of 2007, applying the inflation index of each country. In those entities operating in inflationary economic environments, intangible assets will continue to be updated applying the applicable inflation index. . They are derived mainly from the acquisition of the business in the United States of America and certain trademarks in South America. Trademarks and rights of use are not amortized; however, the carrying values are subject to impairment tests at least annually. On December 31, 2010, the Company recognized an impairment on certain trademarks for $19. Customer relationships have an estimated useful life of 18 years and are amortized on a straight-line basis based on such useful life. As of December 31, 2010, the amortization recorded for the year related to intangible assets with finite lives was $258 and $257, respectively. 9. Provisions Provisions are recognized when there is a present obligation as the result of a past event that is likely to result in the use of economic resources and that can be reliably estimated.

100

10. Direct employee benefits Direct employee benefits are calculated based on the services rendered by employees, considering their current salaries. The liability is recognized as it accrues. These benefits include mainly statutory employee profit sharing (PTU) to be paid, compensated absences, such as vacation and vacation premiums, and incentives and are presented in the other accounts payable and accrued liabilities caption. 11. Employee benefits from termination, retirement and other The liability for seniority premiums, pensions and termination benefits is recorded as accrued and is calculated by independent actuaries using the projected unit credit method using nominal interest rates. The social security liability covers the medical costs of eligible employees in the U.S. which they incur after their retirement. Said liability for such program is determined using the Companys historical data according to actuarial calculations. 10. Statutory employee profit sharing The PTU is recorded in the results of the year in which it is incurred and presented under other expenses in the accompanying consolidated statements of income. Deferred PTU that is generated in the subsidiaries in Mxico is derived from temporary differences that in 2009 and in 2008 resulted from comparing the accounting and tax basis of assets and liabilities and in 2007 resulted from comparing the accounting result and income for PTU purposes. 13. Income taxes. The income tax (ISR) in each country and the business flat tax rate (IETU) in Mxico, if greater than the ISR, are recorded in the results of the year in which they are incurred. To recognize deferred income taxes of the Mexican operations, based on their financial projections, the Company determines whether it expects to incur ISR or IETU and accordingly recognizes deferred taxes based on that expectation. Deferred taxes are calculated by applying the corresponding tax rate to the applicable temporary differences resulting from comparing the accounting and tax bases of assets and liabilities and including, if any, future benefits from tax loss carry forwards and certain tax credits. Deferred tax assets are recorded only when there is a high probability of recovery. 14. Tax on assets. The tax on assets (IMPAC) incurred through December 31, 2007 that is expected to be recovered is recorded as a tax credit and is presented in the balance sheet under deferred taxes. 15. Foreign currency transactions. Foreign currency transactions are recorded at the applicable exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the applicable exchange rate in effect at the balance sheet date. Exchange fluctuations are recorded as a component of results of the period, except for those transactions that have been designated as a hedge of a foreign investment. 16. Revenue recognition. Revenues are recognized in the period in which the risks and rewards of the products are transferred to the customers who purchased them, which generally occurs when these products are delivered to the customer. The Company deducts certain discounts and promotional expenses from sales. 17. Earnings per share. Basic earnings per share is calculated by dividing consolidated net majority income of controlling stockholders by the weighted average number of shares outstanding during the year. See Audited Financial Statements and their notes, which accompany this Annual Report.

101

4) a) INDEPENDENT AUDITORS

ADMINISTRATION

The external auditor selection is entrusted to the Audit Committee, the retaining of which is recommended to the Board of Directors. The Board of Directors is the body that approves the retaining of the corporation that shall provide the external audit services and, as the case may be, of services additional or supplementary to the external audit services. The Audit Committee carries out a bid of the external audit services every 5 years, regardless of considering the possibility of doing it within a shorter periodicity. The Committee selects among the firms which due to their backgrounds, reputation, partners, international coverage, methodology and technology, better cover the expectations and needs of the Board of Directors, the Committee and the Companys Administration. In some cases, given the results on the services evaluation of the selected firm, the Audit Committee may consider sufficient to change the partner of the relevant firm, for which it requests a slate of three candidates and chooses the one that will be in charge of auditing the Companys Financial Statements, in which case the relevant bidding process will not be carried out. As of 2002, the firm GYRU, which firm is member of Deloitte Touche Tohmatsu, has been in charge of auditing the Companys Consolidated Financial Statements. Until 2007, it supported its opinion, through other independent auditors report. Likewise, as of 2008, GYRU carried out the Financial Statements audit without being based in other firms opinions. In the different reviews and reports which have been periodically made to the Groups Financial Statements, such auditors firm has issued no opinion with a qualification or a negative opinion, nor has it refrain from issuing an opinion in connection thereto. During 2008, the GYRU firm rendered to the Company services other than audit, consisting in surveys on transfer prices, preparation of statements for the VAT return and tax advisory services. For the rendering of such services, the Company paid $16 to GYRU, amount that represented 57% of the total disbursements made to such firm in Mexico. b) TRANSACTIONS WITH RELATED PERSONS AND CONFLICTS OF INTERESTS In the ordinary course of its activities, BIMBO carries out commercial transactions with some associate or affiliate corporations. BIMBO contemplates to continue carrying out transactions with its associate and affiliate companies in the future. Transactions with related companies are entered into on an arms length basis therefore the Group considers that the terms are not less favorable than those which may be obtained in a comparable transaction with an unrelated company (see Note 16 of the Audited Financial Statements). a. The operations with related parties performed in the Groups ordinary course of business were the following ones:

102

2010 Income for: Interests collected $77

2009 $76

2008 --

2010 Disbursements for: Purchase of raw materials Terminated products Office supplies, uniforms and others $4,705 $1,099 $467

2009 $4,403 $575 $312

2008 $5,158 $769 $473

b. Net balances payable to related parties are: 2010 295 27 80 159 20 6 48 4 24 35 21 64 19 $ 802 2009 89 18 14 29 14 5 13 1 21 22 4 5 3 238 2008 74 23 41 229 32 19 8 30 4 27 36 11 39 11 584

Beta San Miguel, S.A. de C.V. Efform, S.A. de C.V. Frexport, S.A. de C.V. Grupo Altex, S.A. de C.V. Industrial Molinera Montserrat, S.A. de C.V: Industrial Molinera San Vicente de Paul, S.A. de C.V. Makymat, S.A. de C.V. Ovoplus del Centro, S.A. de C.V. Pan-Glo de Mexico, S. De R.L. de C.V. Paniplus, S.A. de C.V. Proarce, S.A. de C.V. Fbrica de Galletas La Moderna, S.A. de C.V. Mundo Dulce, S.A. de C.V. Uniformes y Equipo Industrial, S.A. de C.V. Total

On May 28, 2010, Bimbo Foods repurchased the exclusive distribution rights in Florida, Georgia and Alabama for products sold under the Bimbo, Marinela and Tia Rosa brand names. Bimbo Foods, who had previously granted to BMB Foods exclusive distribution rights for such brands pursuant to a distribution agreement, exercised its buy-out right under such distribution agreement. The purchase price paid by Bimbo Foods was approximately $34 million Dollars. Also, as part of the transaction, an affiliate of Bimbo Foods, Orograin Bakeries Sales, Inc., assumed two facility leases, one in Dorazille, Georgia and another in Lakeland, Florida, from BMB Foods. The distribution agreement between BMB Foods and Bimbo Foods was terminated effective as of the closing date. Lorenzo Servitje Montull, brother of Grupo Bimbos Chief Executive Officer, holds approximately 10% of the outstanding shares of BMB Foods.

c)

ADMINISTRATORS AND SHAREHOLDERS

Board of Directors In accordance with the Corporate Bylaws, the Companys administration is in charge of a Board of Directors and a General Director (Chief Executive Officer) that shall perform the duties established by the Securities Market Law. The Board of Directors shall be comprised of minimum (5) and maximum twenty one (21) regular directors, from which at least twenty five percent (25%) shall be independent directors. For each regular director the respective alternate director may be appointed, it being understood that the

103

alternate Directors of the independent Directors shall have this same nature. The members of the Board of Directors may be shareholders or persons outside the Company. Independent Directors shall be those persons which are not impeded to perform their duties free from conflicts of interest and that satisfy the requirements set forth in the Securities Market Law to be considered as such, the provisions derived there from, and in the jurisdiction laws and regulations and stock exchanges or markets in which the Companys securities are traded, as the case may be. The Board of Directors appointed and ratified during the General Ordinary Shareholders Meeting held on April 15, 2011, shall be comprised of eighteen (18) regular directors, which shall remain in their positions until the persons appointed to substitute them take possession. The following table shows the names of the members of the Board of Directors and the period during which they have acted as directors: Regular Directors Roberto Servitje Sendra Henry Davis Signoret Jos Antonio Fernndez Carbajal Arturo Fernndez Prez Ricardo Guajardo Touch Agustn Irurita Prez Luis Jorba Servitje Mauricio Jorba Servitje Fernando Lerdo de Tejada Luna Nicols Mariscal Servitje Jos Ignacio Mariscal Torroella Mara Isabel Mata Torrallardona Ral Obregn del Corral Javier de Pedro Espnola Ignacio Prez Lizaur Alexis E. Rovzar de la Torre Lorenzo Sendra Mata Daniel Servitje Montull Luis Miguel Briola Clement(1)
(1)

Seniority in the Board 35 11 11 3 7 6 3 16 | 23 4 15 10 31 18 5

Position Director / Chairman Director Director Director Director Director Director Director Director Director Director Director Director Director Director Director / Alternate Chairman Secretary

The Secretary and alternate Secretary of BIMBO are not part of the Board of Directors.

Daniel Servitje Montull is nephew of Don Roberto Servitje Sendra and cousin of Luis and Mauricio Jorba Servitje. The latter are sons of Don Jaime Jorba Sendra (RIP). Lorenzo Sendra Mata is cousin of Don Roberto Servitje Sendra. Herein below are the companies where the Directors are working as key executives or as members of boards of directors: Roberto Servitje Sendra is member of the Board of Directors of Chrysler de Mexico, Fomento Econmico Mexicano (FEMSA), Grupo Altex, Escuela Bancaria y Comercial, Memorial Hermannn International Advisory Board (Houston, Texas) and Grupo Aeropuertario del Sureste. Henry Davis Signoret is the President of Promotora DAC. Is member of the Board of Directors of Grupo Financiero IXE, Grupo Aeropuertuario del Pacfico, Kansas City Southern and Telefnica Mviles Mexico.

104

Jos Antonio Fernndez Carbajal is Chairman of the Board of Directors and Chief Executive Officer of Fomento Econmico Mexicano (FEMSA), Chairman of the Board of Coca-Cola FEMSA, Vice-Chairman of the Board of Instituto Tecnolgico y de Estudios Superiores de Monterrey (ITESM) and Co-Chairman of the Board of Woodrow Wilson Center Mexico Institute. Is a member of the Board of Directors of Grupo Financiero BBVA Bancomer, Industrias Peoles, Grupo Televisa, Volaris and Xignux. Arturo Manuel Fernndez Prez is the Dean of Instituto Tecnolgico Autnomo de Mexico (ITAM) and member of the Board of Directors of Crdito Afianzador; Fomento Econmico Mexicano (FEMSA); Fresnillo, Grupo Financiero BBVA Bancomer; Grupo Nacional Provincial; Grupo Palacio de Hierro; Industrias Peoles; and Valores Mexicanos, Casa de Bolsa. Ricardo Guajardo Touch is member of the Board of Directors of Instituto Tecnolgico y de Estudios Superiores de Monterrey (ITESM), Fomento Econmico Mexicano (FEMSA), Coca-Cola FEMSA, Grupo Financiero BBVA Bancomer, Grupo Industrial Alfa, El Puerto de Liverpool, Grupo Aeroportuario del Sureste (ASUR), Grupo Coppel y Nacional Monte de Piedad. Is President of BBVA Holding U.S.A., SOLFI and Chairman of Fondo para la Paz. Agustn Irurita Prez is member of the Board of Directors of Grupo ADO. Is for life member of the Board of Directors of the Cmara Nacional de Autotransporte de Pasaje y Turismo, as well as member of the Board of Directors of Afianzadora Aserta, Fincomn Servicios Financieros Comunitarios, Grupo Comercial Chedraui and national director and member of the Executive Commission of the Confederacin Patronal de la Repblica Mexicana. Luis Jorba Servitje is Chief Executive Officer of Frialsa Frigorficos, Chairman of the Board of Directors of Efform and member of the Board of Directors of Texas Mexico Frozen Food Council, of International Association of Refrigerated Warehouses and of the World Food Logistics Organization. Mauricio Jorba Servitje is Chief Executive Officer of Operacin Europa and member of the Board of Directors of VIDAX. Fernando Lerdo de Tejada Luna is currently President and General Director of Asesora Estrategia Total, S.C. and member of the Board of Directors of Consultora Estratgica Primer Crculo, S.C., Get Digital, S.A. de C.V., Fundacin Mexicana para el Desarrollo Rural, A.C., and Club de Golf de Chapultepec, S.A. Nicols Mariscal Servitje is Chief Executive Officer of Grupo Marhnos. Is Vice-Chairman of Comit Empresarial Mexico-Guatemala - COMCE and member of the Board of Directors of Fundacin Mexicana para el Desarrollo Rural. Jos Ignacio Mariscal Torroella is President of Grupo Marhnos, Chairman of UNIAPAC Internacional, of Comit por Una Sola Economa del Consejo Coordinador Empresarial, Vice-Chairman of Fincomn Servicios Financieros Comunitarios. Is member of the Board of Directors of Sociedad de Inversin de Capital de Posadas de MxicoGrupo Calidra, Aserta and of the Executive Commission of Confederacin USEM. Mara Isabel Mata Torrallardona is General Director of Fundacin Jos T. Mata and member of the Board of Directors of Tepeyac. Ral Obregn del Corral is Managing Partner of Alianzas, Estrategia y Gobierno Corporativo, and the Managing Partner of Proxy Gobernanza Corporativa. Is member of the Board of Directors of Industrias Peoles; Grupo Palacio de Hierro, Envases y Laminados, Invermat, Altamira Unin de Crdito y Comercializadora Crculo CCK. Is an independent member of the sub-committee on evaluation and financing of Fondo Nacional de Infraestructura and member of the Government Board of Instituto Autnomo de Mexico.

105

Javier de Pedro Espnola is currently the Manager and Finance Director of MXO Trade S.A. de C.V. and is the President of the Board of Directors of Test Rite Mexico, S.A. de C.V. He is a member of the board of directors of Industrias Rampe, MXO Trade, S.A. de C.V. and Fundacion Jose T. Mata. Ignacio Prez Lizaur is currently a partner of Consultores Prez Lizaur, S.C. and is a member of the board of directors of Financiera Labor, S.A.P.I. DE C.V. and Chairman (Latin America) of Gold Buyers Inc. Alexis E. Rovzar de la Torre is member of Latin American Practice of White & Case based in New York, USA and member of the Board of Directors of Coca-Cola FEMSA, Fomento Econmico Mexicano (FEMSA), The Bank of Nova Scotia, Grupo Acir, Grupo Comex, Endeavor Mexico, Appleseed Mexico, Provivah, Council of the Americas, Procura and Qualitas of Life Foundation. Lorenzo Sendra Mata is Chairman of the Board of Directors of Proarce. Is member of the Board of Directors of Fundacin Ronald McDonald, Fomento de Nutricin y Salud, Fundacin Mexicana para el Desarrollo Rural and of Financiera Promotora para el Desarrollo Rural. Daniel Servitje Montull is member of the Board of Directors of Grupo Financiero Banamex, Coca-Cola FEMSA and Grocery Manufacturers of America (USA). In the ordinary course of business, the Company has entered into transaction with some of the companies in which the members of its Board of Directors work or in which its relevant officers work. Such transactions have been entered into on an arms length basis and the Company considers that none of them is relevant. Board of Directors Powers El Board of Directors is the Companys legal representative, and has the broadest powers for the administration of the Companys businesses, with general power of attorney for lawsuits and collections, administrate properties and exercise acts of ownership, without any limitation, in order to appoint and remove the General Director, directors, managers, officers and attorneys-in-fact, and to determine their attributions, work conditions, compensations and guaranties and, particularly, to grant powers to managers, officers, attorneys and any other persons in charge of the Companys labor relationships. Likewise, the Board of Directors has the power to approve the Companys budgets and any amendments to the budget taking into account the results being reported, as well as to authorize extraordinary entries. The Companys Board of Directors has also powers to approve any transfer of the Companys shares, when such transfer implies more than 3% of the voting shares. Likewise, for the performance of its duties, the Board of Directors shall be aided by an Audit Committee, a Corporate Practices Committee, an Evaluation of Results Committee and a Finance and Planning Committee, the duties and integration of which are described herein below. See Administration Intermediate Administration Bodies. Key Executive Officers The following table shows the names of the Groups key executive officers as of the date of this Annual Report, their current position and their seniority in the Company:

106

Name Roberto Servitje Sendra Daniel Servitje Montull Guillermo Quiroz Abed Reynaldo Reyna Rodrguez Javier Milln Dehesa Luis Rene Martnez S. Guillermo Snchez Arrieta Javier A. Gonzlez Franco Miguel Angel Espinoza Jos Rosalo Rodrguez Rosas Ricardo Padilla Anguiano Gary Prince Alfred Penny Pablo Elizondo Huerta Alberto Daz Rodrguez Alejandro Pintado Lpez Gabino Gmez Carbajal Jos Manuel Gonzlez Guzmn Jorge Zarate Lupercio Esteban Giraldo

Position Chairman of the Board of Directors Chief Executive Officer Grupo Bimbo Chief Financial and Administration Officer Vice President of Strategic Analysis and Information Chief Human Relations Officer Director Corporate Affairs Director of Auditing President of Bimbo, S.A. de C.V. Commercial Manager of Bimbo, S.A. de C.V. Director of Production Systems and Operations of Bimbo, S.A. de C.V. Admin. and Services Director of Bimbo, S.A. de C.V. President of BBU Executive Vice President BBU Assistant Chief Executive Officer Grupo Bimbo General Manager of OLA Assistant General Manager of OLA President of Barcel, S.A. de C.V. General Director of El Globo Organization Director Asia Organization Director Central America and Colombia

Age 83 52 58 56 63 45 57 56 54 58 58 59 55 58 55 44 52 45 46 58

Years in the Group 66 33 12 10 34 4 33 34 30 35 35 2 2 34 31 22 30 19 24 7

Roberto Servitje Sendra is Chairman of the Board of Directors of BIMBO since 1994. He joined the Company in 1945. He is an officer in the Group since 1956, serving as Bimbos General Manager in Guadalajara, Monterrey and Mexico City; and Bimbo Vice President during nine years. Daniel Servitje Montull serves as BIMBOS Chief Executive Officer since 1997. He holds a degree in Business Administration from Universidad Iberoamericana, in Mexico. In 1987 he obtained the Master of Business Administration degree from Stanford University, in California, USA. He is an officer of the Group since 1978, serving positions such as Executive Officer of Organizacin Bimbo, Chief Executive Officer of Organizacin Marinela and Vice-President of BIMBO. Guillermo Quiroz Abed is in charge of the Financial, Comptroller and Legal departments of BIMBO, since February 1999. He obtained a degree in Actuarial Studies from Universidad Anhuac, in Mexico, and an MBA degree from IPADE. He is a member of the Board of Directors of Grupo Altex. Reynaldo Reyna Rodrguez serves as Vice President of Strategic Analysis and Information since January 2010. He studied Industrial and Systems Engineering in ITESM and holds a masters degree in Operations, Analysis and Finance from Wharton, in the University of Pennsylvania, USA. In May 2001 he joined the Group and served as Corporate General Manager, BBUS General Manager and Executive Vice-President of BBU West. Javier Milln Dehesa serves as BIMBOS Chief Human Relations Officer since 1979. He holds a degree in Philosophy and Business Administration from Universidad Iberoamericana, in Mexico. He holds an MBA degree from IPADE. He is a member of the Board of Directors of Asociacin Mexicana en Direccin de Recursos Humanos. He is the Chairman of Reforestamos Mexico, created by the Group in 2002. He has

107

served in several positions in the Company, such as: Chief Development Officer, Personnel Manager in Productos Marinela and Development Corporate Manager. Luis Rene Martnez Souvervielle Gorozpe is Corporate Affairs Director since September 2007. He holds a law degree from Escuela Libre de Derecho in Mexico and a specialization in Political Theory and Analysis. Guillermo Snchez Arrieta serves as Director of Auditing since 1998. He holds a degree in Accounting from Universidad Autnoma de Hidalgo and studied an MBA in IPADE. He joined the Group in 1978, and among his main positions are the following ones: Productos Marinela Comptroller, Corporate Comptroller of Organizacin Bimbo and Barcel, and General Manager of Ricolino and Barcel Mexico. Javier Augusto Gonzlez Franco serves as President of Bimbo, S. A. de C.V. since January 2008. He holds a degree in Chemical Engineering from UNAM and an MBA from Universidad Diego Portales, in Chile. He joined the Group in 1977 and has served different positions, such as Assistant General Manager of OLA, Assistant General Manager of Organizacin Bimbo and president of Barcel, S.A. de C.V. Miguel ngel Espinoza Ramrez is Commercial Director of Bimbo, S.A. de C.V. since January 2002. He holds a degree in Industrial Engineering from Instituto Tecnolgico de Chihuahua, he studied the D-1 Business Administration program in IPADE and the Advanced Management Program in the University of Harvard. He joined the Group in 1981 and has served positions such as General Manager of Dulces y Chocolates Ricolino, General Manager of Barcel del Norte, Chief Administrative Officer of Organizacin Barcel and Chief Executive Officer of the same corporation. Jos Rosalo Rodrguez Rosas is Director of Productions Systems and Operations at Bimbo, S.A. de C.V., since March, 2010. He holds a degree in Biochemical Engineering from the Instituto Politcnico Nacional in Mxico. He has taken courses in Business Administration at Harvard Business School in the USA, in the IMD in Switzerland, and in the IPADE in Mxico, and has diplomas in Marketing from Kelloggs University, and in Administration and Financial Decisions from the Instituto de Estudios Superiores in Monterrey, and a course in the Science and Technology of Baking from the American Institute of Baking in Manhattan, Kansas. He joined Grupo Bimbo in 1976. During the years 2008 and 2009, he was elected General Comercial Director of Bimbo S.A. He has been Director of Organization Operations of Bimbo Mxico and Central America. He has occupied various positions in the Corporate Department and in the plants such as Manager of Research and Development, Production Manager, Training. Ricardo Padilla Anguiano is Services Director of Bimbo, S.A. de C.V. since December 2001. He holds a degree in Accounting from Universidad de Guadalajara and an MBA from IPADE. He joined the Group in 1981 and has served several positions such as: General Manager of Bimbo Noroeste, Bimbo Golfo and Bimbo San Luis. Gary Prince serves as President of Bimbo Bakeries USA since January 2009. Gary Prince joined George Weston Limited in July 1974. He served as President of Stroehman Bakeries, L.C. in USA until July 2001. He was appointed President of Weston Foods and George Weston Bakeries that year, after the acquisition made by such company of Best Foods Baking Company from Unilever. In January 2009, when Grupo Bimbo acquired Weston Foods Inc., he was appointed President of BBU. Fred Penny is Executive Vice-President of BBU since March 2010. From 1987 to 1997 he was part of Kraft Baking serving as Comptroller in North East USA, Strategic Planning and Productivity Manager, as well as General Manager of the Intermountain region. In 1997 he was appointed Vice-President and Chief Executive Officer of Entenmanns, Inc. In 2007, he was appointed Executive Vice-President of George Weston Bakeries Inc. In January 2009, when Grupo BIMBO acquired Weston Foods Inc., he was appointed Executive Vice-President of BBU. Pablo Elizondo Huerta serves as Assistant Chief Executive officer of Grupo Bimbo since January 2008. He holds a degree in Chemical Engineering from Universidad Nacional Autnoma de Mexico (UNAM). He joined the Group in 1977 and served several positions such as General Manager of Wonder in Mexico City, General Manager of Bimbo in Hermosillo, Director of Organizacin Latinoamrica, General Central

108

Corporate Manager, General Corporate Manager of Bimbo, S.A. de C.V. and General Director of Bimbo, S.A. de C.V. Alberto Daz Rodrguez serves as President of Organizacin Latinoamrica since January 2004. He holds a degree in Industrial Engineering and obtained a Master in Management from the University of Miami. He joined the Group in 1999 and has served as General Manager of Bimbo de Venezuela and Assistant Director of Organizacin Latinoamrica. Alejandro Pintado Lpez serves as Assistant Director of Organizacin Latinoamrica. He holds a degree in Business Administration from ITESM and holds a post-graduate degree in ADL School of Management (Boston College). He joined the Group in 1989. He was founder and General Manager of Bimbo de Per, as well as Sales Director in Mexico. Gabino Gmez Carbajal serves as President of Barcel, S.A. de C.V. since January 2008. He holds a degree in Marketing from ITESM, and MBA from IPADE and the University of Miami. He joined the Group in 1981, and among his previous positions are: Vice-President of the Business Development Division, Assistant General Manager of Organizacin Bimbo, General Manager of OLA and General Manager of Bimbo, S.A. de C.V. Jos Manuel Gonzlez Guzmn serves as General Director of El Globo since June 2010. He has degrees in Administration and Finance, as well as specialities in Advertising and Publicity from the Universidad Panamerica. He took a D1 at IPADE, as well as seminars on strategy and new trends in the market (CIES). He joined Bimbo in June of 1991, and has served in various positions such as Executive, Trademarks Manager, and Advertising Director. In the Area of Sales he held all positions until reaching Regional Commercial Director in Bajo, and prior to that, in Centro Sur. Jorge Zarate Lupercio serves as Director of Organizacin Asia since October 2006. He holds a degree in Biochemical Engineering from ITESM, Mexico; he holds a degree in Baking Science & Technology from AIP, USA, an MBA from IAE, Argentina; and a post-graduate degree in Strategic Marketing from UCA, Argentina. He joined the Group in 1987 and has served positions such as Manufacturing Manager in Bimbo del Noroeste, Operations Manager in Bimbo and Marinela, Planning Corporate Manager and General Manager of Bimbo in Argentina. Jorge Esteban Giraldo Arango serves as General Director of Organization for Central America and Colombia since July 2010. He holds a degree in Electrical Engineering. He took Courses in Upper-Level Management at the University of Chicago (London), Instituto de Empresa-IE (Madrid), and Inalde (Bogot). He joined Grupo Bimbo in June 2004 as General Manager of Bimbo of Colombia. The following is an organization chart of the Groups key officers, in effect as of the date of this Annual Report:

109

ROBERTO SERVITJE SENDRA Chairman of the Board of Directors DANIEL SERVITJE Chief Executive Officer of Grupo Bimbo
REYNALDO REYNA Vice President of Strategic Analysis and Information GUILLERMO QUIROZ Chief Financial and Administration Officer JAVIER MILLAN Chief Human Relations Officer LUIS RENE MARTINEZ Director of Corporate Affairs

GUILLERMO SANCHEZ Director of Auditing

PABLO ELIZONDO Assistant Chief Executive Officer

GARY PRINCE President of BBU

JAVIER GONZALEZ General Manager of Bimbo

GABINO GOMEZ President of Barcel

FRED PENNY Executive Vice President of Bimbo Bakeries USA

MIGUEL ANGEL ESPINOZA Commercial Manager (Canales y Marcas)

ALBERTO DIAZ RODRIGUEZ General Manager of Organizacin Latinoamrica

ROSALIO RODRIGUEZ Director of Production Systems and Operations

ALEJANDRO PINTADO Assistant General Manager of Organizacin Latinoamrica

RICARDO PADILLA Administration and Services Director

JORGE ZARATE Director of Organization for Asia

JOSE MANUEL GONZALEZ General Manager El Globo

ESTEBAN GIRALDO Director of Organization for Centroamrica y Colombia

Compensation Compensation to the Directors and members of the Companys Committees is determined by the General Ordinary Shareholders Meeting. Such compensation, as of the General Ordinary Shareholders Meeting held on April 15, 2011, is as follows: Directors receive $42,000 per meeting attended. The members of the Corporate Practices, Finance and Planning, and Evaluation and Results Committees receive $26,000 per meeting attended. Members of the Audit Committee receive 52,000. The Companys officers who are also Directors and/or members of any of the Committees shall not be entitled to receive any compensation. In 2010, the total amount corresponding to the compensation mentioned in this paragraph amounted approximately $4.5. Compensations paid to key officers for the fiscal year ended as of December 31, 2010 amounted approximately $210 million, which represented 0.42% of the Companys total consolidated general expenses. Such amount includes payments for salaries, vacation bonus, legal year-end bonus, bonus for goal achievement and annual results bonus. Bonuses paid by the Company are determined based on the individual performance of its collaborators, while the annual results bonus also contemplates a factor which is determined by the financial results achieved by the Company. The above mentioned amount includes the allocation of BIMBO shares made to the main officers for achieving the financial goal of the Economic Added Value. Likewise, the amount accrued by the Company and its subsidiaries for the key officers pension plans amounts the sum of $243.

110

Executives and Directors Share Plan As of 2004, the Share Plan (Plan Acciones por VEAB (Valor Econmico Agregado BIMBO)) for executive officers and directive officers is in effect. Based on this plan, an annual allocation of Grupo Bimbo shares is granted, which may fluctuate from 40 to 240 base salary-days of the executive officer or directive officer, depending on the position in the Company. Shares are acquired at their market value and remain deposited in a trust during 30 months and are released for their full disposal upon the expiration of such term. The allocation amount, which is made at market value, depends on the Companys financial results. Intermediate Administration Bodies The Company has the following committees, which are in charge of assisting the Board of Directors in the Companys administration: Audit Committee El Audit Committee is comprised of a minimum of three independent directors appointed by the Board of Directors or the Shareholders Meeting. The chairman of the Audit Committee shall be appointed and/or removed from his position, exclusively, by the General Shareholders Meeting. The Audit Committee performs the audit activities established by the Securities Market Law, as well as those corporate practices activities established by the same law and determined by the Board of Directors. The Audit Committee performs, among others, the following activities: a) provide an opinion to the Board of Directors on matters of its competence under the Securities Market Law; b) evaluate the performance of the corporation that renders the external audit services, as well as to analyze the report, opinions and information prepared and subscribed by the external auditor; c) discuss the Companys Financial Statements with the persons responsible for the preparation and review thereof, and based thereon, recommend or not the approval thereof to the Board of Directors; d) inform the Board of Directors the status of the Companys internal control and external audit or those of the corporations controlled by the Company; e) prepare the opinion referred to in Article 28, paragraph IV, clause c) of the Securities Market Law and submit it to the consideration of the Board of Directors for its subsequent presentation to the Shareholders Meeting; f) support the Board of Directors in the preparation of the reports referred to in Article 28, paragraph IV, clauses d) and e) of the Securities Market Law; g) overview that the transactions referred to in Articles 28, paragraph III and 47 of the Securities Market Law, are carried out in accordance with the provisions set forth to that effect in such articles, as well as to the policies derived therefrom; h) request the opinion from independent experts in the cases it deems it convenient, for the adequate performance of its duties or when requested under the law; i) request from the Companys key officers and other employees or from the corporations controlled thereby, reports regarding the preparation of financial information and of any other kind which it deems necessary for the performance of its duties; j) investigate the possible defaults of which it is aware, to the transactions, guidelines and operation policies, internal control system and internal audit and accounting recording, whether of the same Company or of the corporations controlled thereby; k) receive opinions from the shareholders, directors, key officers, employees and, generally, from any third party, in respect to the matters referred to in the preceding clause, as well as to carry out the actions deemed admissible at its judgment, in connection with such opinions; l) request periodical meetings with the relevant officers, as well as the delivery of any kind of information in connection with the Companys internal control and internal audit or of the corporations controlled by the Company; m) inform the Board of Directors of the relevant irregularities detected when performing its duties and, as the case may be, of the corrective actions adopted or to propose those to be applied; n) call Shareholders Meetings and request that the items deemed pertinent are included in such meetings agenda; o) overview that the General Director complies the resolutions of the Companys Shareholders Meetings and Board of Directors Meetings, in conformity with the instructions which, as the case may be, are issued by the relevant meeting; and p) overview that mechanisms and internal controls which allow to verify the Companys actions and transaction and those of the corporations controlled thereby established are aligned

111

to the applicable regulations, as well as to put in place methodologies which allow to review the fulfillment of the above mentioned. The General Ordinary Shareholders Meeting held on April 15, 2011, ratified the following persons as members of the Audit Committee: Arturo Fernndez Prez, Agustn Irurita Prez, Alexis E. Rovzar de la Torre, and Henry Davis Signoret as chairman. In this Meeting, Ignacio Prez Lizaur was also appointed as a member of such Committee. Based on the professional profiles of the members of the Audit Committee, the Company considers that such members can be deemed financial experts. Corporate Practices Committee El Corporate Practices Committee is comprised of a minimum of three independent directors appointed by the Board of Directors or the Shareholders Meeting. The chairman of the Corporate Practices Committee shall be appointed and/or removed from his position, exclusively, by the General Shareholders Meeting. El Corporate Practices Committee performs the corporate practices activities set forth in the Securities Market Law, except for the corporate practices activities which the Board of Directors grants to the Audit Committee or to the other committees that satisfy the requirements and obligations provided for in the Securities Market Law for the committees that perform duties regarding corporate practices. The Corporate Practices Committee performs, among others, the following activities: a) provide the Board of Directors with an opinion in connection with the matters of its competence under the Securities Market Law; b) grant waiver in order for a Director, relevant officer or person with command power, to take advantage of business opportunities for such person or in favor of third parties, that correspond to the Company or to its subsidiaries or in which such person has a significant influence, for transactions the amount of which does not exceed five percent (5%) of the Companys consolidated assets; c) support the Board of Directors when preparing the report on accounting policies and criteria, and the report on the activities and transactions in which the Board of Directors participated, in accordance with the provisions set forth in the Securities Market Law; d) request the independent experts opinion in the cases it deems convenient, for the adequate performance of its duties or when requested under the Securities Market Law or under general provisions; e) request from the Companys or its subsidiaries relevant officers and other collaborators, reports regarding the preparation of financial information and of any other kind which is deemed necessary for the performance of its duties; and f) call Shareholders Meetings and request that the items deemed pertinent are included in such meetings agenda. The General Ordinary Shareholders Meeting held on April 15, 2011 ratified the following persons as members of the Corporate Practices Committee: Henry Davis Signoret, Jos Antonio Fernndez Carbajal, and Ricardo Guajardo Touch as chairman. Based on the professional profiles of the members of the Corporate Practices Committee, the Company considers that several of such members may be deemed as financial experts. Evaluation and Results Committee The Evaluation and Results Committee is comprised by members of the Board of Directors, who are appointed by the Board of Directors or the Shareholders Meeting. This Committee is in charge of: a) analyzing and approving the structure and any form of compensation made to all the Companys and its subsidiaries officers and collaborators, as well as the general compensation policies for the Companys and its subsidiaries officers and collaborators, including increases, reductions or modifications to compensations, whether general or individual, except for the one corresponding to the General Director and its relevant directive officers, powers which are entrusted to the Board of Directors, with the Corporate Practices Committees prior opinion; b) evaluating the Companys and its subsidiaries results, as well as the repercussion thereof in the compensation to the Companys officers and collaborators; c) analyzing

112

and, as the case may be, issue an opinion in connection with wages tables applicable to the Companys and its subsidiaries officers and collaborators, including annual compensation and promotion plans, and criteria for the pension plans; d) requesting the independent experts opinion in the cases it deems it convenient, for the adequate performance of its duties; e) requesting to the Companys or its subsidiaries relevant directive officers and other collaborators, any kind of report deemed necessary for the performance of its duties; f) acting as consultation body for the Board of Directors in connection with everything pertaining to the Companys and its subsidiaries personnel; and g) coordinating activities related to the Companys other committees, when the case so requires. Through a Board of Directors meeting held on April 22, 2010 the following persons were ratified as members of the Evaluation and Results Committee and are currently serving in their positions: Roberto Servitje Sendra, Javier de Pedro Espnola, Jos Antonio Fernndez Carbajal, Daniel Servitje Montull, and Ral Obregn del Corral as chairman. Based on the professional profiles of the members of the Evaluation and Results Committee, the Company considers that several of such members may be deemed as financial experts. Finance and Planning Committee The Finance and Planning Committee is comprised of members of the Board of Directors, who are appointed by the Board of Directors or by the Shareholders Meeting. The Finance and Planning Committee has the following powers: a) to analyze and submit to the Board of Directors approval the evaluation of the long-term and budget strategies, as well as the Companys main investment and finance policies; b) by the Board of Directors express delegation, it may approve: (i) transactions which imply the acquisition or conveyance of properties with a value equal to or lower than three percent of the Companys consolidated assets; (ii) the granting of guaranties or the assumption of liabilities in an amount equal to or lower than three percent of the Companys consolidated assets; (iii) investments in debt securities or in banking instruments, exceeding three percent of the Companys consolidated assets, provided however that the same are made in conformity with the policies approved to that effect by the Board; c) propose and, as the case may be, evaluate and periodically review policies for the handling of the Companys and its subsidiaries treasury; d) request the opinion from independent experts in the cases it deems it convenient, for the adequate performance of its duties; e) request to the Companys or its subsidiaries relevant directive officers and other collaborators, reports regarding the preparation of the financial information and of any other kind deemed necessary for the performance of its duties; f) act as consultation body for the Board of Directors in everything pertaining to the above mentioned duties, including financial matters, as well as in connection with the review and recommendation of investment projects and/or diversification of the Company and its subsidiaries, observing their congruence and profitability. Likewise, it shall coordinate activities related to the Companys other committees, when the case so requires. Through a Board of Directors meeting held on April 22, 2010, the following persons were ratified as members of the Finance and Planning Committee: Ricardo Guajardo Touch, Mauricio Jorba Servitje, Ral Obregn del Corral, Guillermo Quiroz Abed, Lorenzo Sendra Mata, Daniel Servitje Montull, and Jos Ignacio Mariscal Torroella as chairman. Based on the professional profiles of the members of the Finance and Planning Committee, the Company considers that several of such members may be deemed as financial experts. Principal Shareholders As of the date of this Annual Report 4,703,200,000 Series A, ordinary, nominative, without expression of nominal value shares, representing the capital stock are authorized, and registered in the RNV (National Securities Registry) and listed on the BMV (Mexican Stock Exchange) since 1980 under the ticker symbol BIMBO.

113

Except for Mr. Roberto Servitje Sendra, none of the Companys shareholders or relevant directive officers has an individual direct interest in BIMBOS capital stock exceeding 1%. The companies mentioned herein below hold an interest of approximately 67% in BIMBOS capital stock. The following table shows the information referring to the Principal Shareholders interest, in accordance with the Companys Stock Transfer Book as of April 28, 2011: Name Normaciel, S.A. de C.V. Promociones Monser, S.A. de C.V. (b) Banco Nacional de Mexico, S.A. as trustee Philae, S.A. de C.V. Distribuidora Comercial Senda, S.A. de C.V. Marlupag, S.A. de C.V. Others Total
(a)

No. of shares 1,756,513,140 540,418,544 263,280,212 232,692,104 174,960,000 161,213,536 1,574,122,464 4,793,200,000

Capital stock % 37.3 11.5 5.6 5.0 3.7 3.4 33.5% 100%

a. Without being independently verified, to BIMBOS knowledge this is a company controlled by Mr. Daniel Servitje Montull, Chief Executive Officer of Grupo Bimbo, and his family members. b. Without being independently verified, to BIMBOS knowledge this is a company controlled by the Jorba Servitje family. To BIMBOS knowledge and based in the foregoing information, no person exercises control, significant influence or command power (as such concepts are defined in the Securities Market Law) in BIMBO, except for Roberto Servitje Sendra, Chairman of the Board of Directors, and Daniel Servitje Montull, Chief Executive Officer. d) CORPORATE BYLAWS AND OTHER AGREEMENTS As of December 30, 2005 the new Securities Market Law was published in the Official Gazette of the Federation (Diario Oficial de la Federacin), which became effective on June 28, 2006, and in accordance with which BIMBOS Corporate Bylaws were amended by virtue of an Extraordinary Shareholders Meeting held on November 14, 2006. Among other thing, in such meeting the total amendment to the Corporate Bylaws was approved, which was notarized by public deed No. 30,053 dated November 16, 2006, granted before Ana de Jess Jimnez Montaez, Public Notary number 146 of the Federal District, and filed in the Public Registry of Commerce of this city under mercantile folio No. 9506, dated December 6, 2006. With the amendment to the Corporate Bylaws, the Company adjusted to the securities law in effect. Among the most relevant amendments are the ones regarding the creation of a regime applicable to the sociedades annimas burstiles (the shares of which are traded in the BMV) to improve their organization and functioning, as well as their responsibilities regime. 1. Rights Granted by Shares

Holders of Series A shares are entitled to one vote in the General Ordinary and Extraordinary Shareholders Meetings. Without any shares of this kind existing as of this date, the Company may issue, under the Securities Market Law, non-voting and/or limited voting shares. As the case may be, holders of Series A shares may not attend the Special Meetings held by the holders of non-voting and/or limited voting shares and neither have they voting rights in the Special Meetings held by the holders of non-voting and/or limited voting shares.

114

As the case may be, the holders of limited voting shares, shall be entitled to attend and vote at a rate of one vote per each share, only and exclusively in the Special Meetings held by the holder of such shares and in the General Extraordinary Shareholders Meetings held to discuss any of the following matters: a) transformation of the Company; b) merger with another company or companies, when the Company is the merged party; c) cancellation of the limited voting shares filing in the RNV and in domestic and foreign stock exchanges in which the same are registered, except in quoting systems or other markets not organized as stock exchanges; and d) any other provided for in the Securities Market Law. As the case may be, holders of limited voting shares may not attend General Ordinary Meetings, except in the events expressly provided for in the Securities Market Law. Neither may they attend the General Extraordinary Shareholders Meetings held to discuss matters in which they have no voting rights. Additionally, shareholders holding limited or restricted voting shares, which individually or collectively hold ten percent (10%) of the Companys capital stock shall have the rights conferred in the Corporate Bylaws and the General Corporation and Partnership Law. Shareholders holding non-voting shares shall have the rights granted by the Securities Market Law. 2. Pre-emptive Rights and Capital Stock Increases

In capital stock increases, the Companys shareholders shall have, in proportion to the number of shares owned by such shareholders of a series in respect to the total number of shares issued and subscribed of such series prior to the increase, a pre-emptive right to subscribe a number of shares sufficient in order to keep their equity holding, except for: (i) share issues made under Article 53 of the Securities Market Law; (ii) own shares acquired which become treasury shares and are placed among the investing public under such Law; (iii) those resulting from the conversion of debentures or any other debt instruments, capital instruments or which have features of both issued by the Company in shares, with the General Extraordinary Shareholders Meetings prior approval; (iv) the Company merger; and (v) the event of any capital stock increase due to subscription and payment in cash or in kind or due to the capitalization of liabilities, in which the Company shall not be required to obtain that the shares or any series or kind, or any foreign securities which represent them, are registered before other than the securities authorities of the United Mexican States and, in that regard, the Company shall not be required to accept the subscription and payment made by shareholders if such acceptance results in any obligation to be discharged by the Company under the indicated terms. The pre-emptive right set forth in the preceding paragraph shall be exercised by the shareholders within a period not than 15 calendar days following the date when the Meetings resolution which decrees the capital stock increase is published in the Official Gazette of the Federation (Diario Oficial de la Federacin) and any other daily newspaper of major circulation in the corporate domicile. This preemptive right shall be exercised in accordance with the provisions established to that effect by the Board of Directors. The Company may not issue new shares until the preceding ones have not been fully paid, without prejudice of the provisions applicable to the issuance of shares which are not subscribed, and unless the previously issued shares are to be used, in terms of a resolution of the Meeting which approved the issuance thereof, to satisfy any obligations to be discharged by the Company and approved by the Shareholders. The Board of Directors is empowered to offer for subscription and payment to third parties shares which are not subscribed by the Shareholders after the expiration of the term set forth in the preceding paragraphs in order to exercise the pre-emptive right, in the capital stock increases decreed, it being understood that the Price at which such shares will be offered may not be lower than the one at which they have been offered to the Company Shareholders for their subscription and payment.

115

3.

Shareholders Meetings and Voting Rights

In terms of the Corporate Bylaws, the Shareholders Meetings may be Extraordinary, Ordinary and Special. The General Extraordinary Shareholders Meetings are those held to discuss any of the matters referred to in Article 182 of the General Corporation and Partnership Law or those held to discuss the cancellation of the Companys shares filing in the RNV and in other domestic or foreign stock exchanges in which they are quoted, except quoting systems or other markets not organized as stock exchanges. General Ordinary Meetings are all those held to discuss matters which are not of the General Extraordinary Meetings competence and specifically those held to discuss the matters referred to in Articles 180 and 181 of the General Corporation and Partnership Law. Special Meetings are those held to discuss matters which might affect the rights of one single share series and shall be subject to the provisions applicable to the General Extraordinary Meetings. General Ordinary Meetings, as well as, as the case may be, Special Shareholders meetings regarding limited voting shares, shall be held at least once annually, and in the case of Special Meetings, they shall be held prior to holding the Annual General Ordinary Shareholders Meeting. General Extraordinary Meetings shall be held whenever it is necessary to discuss any of the subject matters of such Meetings. In terms of the provisions set forth in the Corporate Bylaws and in the Mexican law, in order for a Ordinary Shareholders Meeting to be deemed as legally held upon first call, at least fifty percent (50%) of the ordinary shares shall be represented in the Meeting and resolutions thereof shall be valid if adopted by the majority vote of the shares represented in the Meeting. In case of second or subsequent call, the General Ordinary Shareholders Meetings may be validly held regardless of the number of ordinary shares represented in the Meeting and resolutions shall be valid when adopted by the majority vote of the shares represented in the Meeting. In order for General Extraordinary Shareholders Meetings held to discuss matters in which limited voting shares have no voting rights, to be validly held upon first call, at least seventy five percent (75%) of the ordinary shares shall be represented therein and resolutions shall be valid if adopted by the affirmative vote of shares representing at least fifty percent (50%) of the Companys ordinary shares. In case of second or subsequent call, Extraordinary Shareholders Meetings held to discuss matters in which the limited voting shares have no voting rights, may be validly held if at least fifty percent (50%) of the Companys ordinary shares is represented therein and resolutions shall be valid when adopted by the affirmative vote of the shares representing, at least, fifty percent (50%) of the Company ordinary shares. In order for, as the case may be, a Special Meeting called to discuss matters concerning to limited voting shares to be deemed legally held upon first call, at least seventy five percent (75%) of the limited voting shares shall be represented therein, and resolutions shall be valid when adopted by the affirmative vote of shares representing fifty percent (50%) of the limited voting shares. In case of second or subsequent call, Special Shareholders Meetings may be validly held if at least fifty percent (50%) of the limited voting shares is represented, and resolutions shall be valid when adopted by the affirmative vote of shares representing, at least fifty percent (50%) of the limited voting shares. Calls to the Shareholders Meetings shall be made by the Chairman of the Board of Directors or of the committees performing duties regarding corporate practices and audit, or by the Secretary of the Board of Directors or the substitute thereof. However, holders of shares with voting rights, even limited or restricted voting rights, representing at least ten percent (10%) of the capital stock may request that a General Shareholders Meeting is called under the terms set forth in Article 50 of the Securities Market Law. Any shareholder or share owner shall have the right to request in writing to the Board of Directors or to the chairmen of the committees that carry out audit and corporate practices duties, to call a General Shareholders Meeting in any of the events referred to in Article 185 of the General Corporation and Partnership Law. If the call is not made within 15 days following the request, such call shall be made by a competent judge of the Companys domicile, having previously notified the relevant request to the Board of Directors. The Shareholders or their representatives who, at least forty eight (48) hours prior to the date and time set for the Meeting, computed in business days, show their share certificates and/or evidences on the share

116

certificates deposited in a duly authorized institution for the deposit of securities, in terms of the Securities Market Law shall be admitted in the Meetings. Such evidences shall be exchanged for a certificate issued by the Company in which the name and number of shares represented by the Shareholder shall be indicated. Such certificates shall serve as admission cards for the Meetings. Members of the Board of Directors, the general director and the individual appointed by the corporation providing external audit services, may attend the Companys Shareholders Meetings. The Companys Shareholders may be represented in the Shareholders Meetings by persons evidencing their legal capacity through the proxy forms prepared by the Company and made available through the securities market intermediaries or in the same the Company, at least fifteen (15) calendar days prior to each Meeting. Such forms shall satisfy all the requirements determined by the Securities Market Law and the supplementary provisions thereof. 4. Minority Shareholders Rights

All minority holders shall have the rights which, as such, are conferred by the General Corporation and Partnership Law, the Securities Market Law and the Corporate Bylaws. Shareholders holding voting right shares, even limited or restricted voting rights, which individually or collectively own ten percent (10%) of the Company capital stock shall be entitled to: a) appoint one director in a General Shareholders Meeting and the respective alternate director thereof. Such appointment may only be revoked by the other Shareholders when at the same time the appointment of all other Directors is revoked, in which case the substituted persons may not be appointed with such capacity during twelve months subsequent to the revocation date; b) require the Chairman of the Board or of one of the committees carrying out the duties regarding corporate practices and audit, at any time, to call a General Shareholders Meeting, without the percentage set forth in Article 184 of the General Corporation and Partnership Law being applicable, c) request to adjourn the voting for three (3) calendar days of any matter in respect to which they are not sufficiently informed, observing the terms and conditions set forth in Article 50 of the Securities Market Law. 5. Limitation to acquire shares

The corporations controlled by BIMBO, in terms of the Securities Market Law, may not directly or indirectly acquire shares representing the Companys capital stock to which they are linked or negotiable instruments representing those shares. 6. Repurchase by BIMBO of its own shares

Under its Corporate Bylaws, BIMBO may acquire shares representing its own capital stock through the stock Exchange, at the current market price, in terms of Article 56 of the Securities Market Law. Own shares owned by the Company or, as the case may be, treasury shares, without prejudice of the provisions set forth in the General Corporation and Partnership Law, may be placed among the investing public, in this last case, without the capital stock increase corresponding to the Shareholders Meeting requiring a resolution of any kind, nor a resolution of the Board of Directors, regarding the placement thereof. 7. Cancellation of Shares Filing

Cancellation of the Companys shares filing in the RNV, whether request by the same Company or by resolution adopted by the CNBV, shall be carried out under the terms set forth in the Securities Market Law and the supplementary provisions thereof.

117

8. Administration Intermediate Bodies Under the Corporate Bylaws, the Company has four different administration intermediate bodies, which support the Board of Directors in the Companys administration. Such bodies are: the Audit Committee, the Corporate Practices Committee, the Finance and Planning Committee, and the Evaluation and Results Committee see Administration Administrators and Shareholders. 9. Other Contracts and Agreements In accordance with the Companys Corporate Bylaws, any transfer of shares representing three percent (3%) or more of voting shares issued by the Company intended to be carried out by a shareholder or in addition to previous transactions, or by a group of shareholders linked among them, may only be carried out with the Board of Directors prior approval. In case the Board of Directors denies such approval, it shall designate one or more purchasers for the shares, which shall pay to the interested party the price recorded in the BMV. In case the shares are not filed in the RNV, the price to be paid shall be determined in conformity with the market current price, in accordance with the General Corporation and Partnership Law . On April 9, 2008 the Company informed the investing public that it received a notice from its shareholders Normaciel, S.A. de C.V., Marlupag, S.A. de C.V., Promociones Monser, S.A. de C.V., Distribuidora Comercial Senda, S.A. de C.V., and Philae, S.A. de C.V., owners of approximately 61% of the Companys shares outstanding, reporting that Shareholders Agreements have been executed, through which the reciprocally grant to each other, during the subsequent seven years, the right of first refusal for the acquisition of Grupo Bimbo shares which they own. Likewise, Normaciel, S.A. de C.V., grants to the other above mentioned companies, the joint sale right, in the event of selling its shares to a third party. As of the date of this Annual Report among the shareholders there are no other agreements the effect of which is to delay, prevent, differ or making the Companys change of control more onerous, or agreements such as those set forth in Article 16, paragraph VI of the Securities Market Law, nor limiting the corporate rights conferred by the shares. Likewise, as of the date of this Annual Report, there are no corporate bylaws clauses or agreements among shareholders limiting or restricting the Companys Board of Directors or its shareholders.

118

5) a) SHARE HOLDING STRUCTURE

CAPITAL MARKET

As of the date of this Annual Report, shares representing the Companys capital stock are Series A common, ordinary, nominative, without expression of nominal value shares, which are filed in the RNV. Such shares began being quoted in the BMV in February 1980, when the Company carried out its initial public offer. Since February 1, 1999 BIMBO is part of the Price and Quotation Index (ndice de Precios y Cotizaciones) of the Mexican Stock Exchange (BMV). As of the date of this Annual Report, BIMBO share is classified as high trading volume, in accordance with the Trading Activity Index published by the Mexican Stock Exchange (BMV). b) SHARE BEHAVIOR IN THE SECURITIES MARKET The following tables show the maximum, minimum and closing adjusted quoting prices of BIMBOS Series A shares in the BMV, during the indicated periods. Pesos per Series A share Maximum 18.00 22.99 27.41 Minimum 12.45 9.98 20.56 Closing 14.58 21.64 26.36 Volume of Series A shares traded 461,177,200 571,582,400 606,156,400

Annual 2008 2009 2010

Quarterly 1T08 2T08 3T08 4T08 1T09 2T09 3T09 4T09 1T10 2T10 3T10 4T10

Pesos per Series A share Maximum 16.88 18.00 17.88 17.20 15.03 18.11 19.41 22.99 27.20 27.41 25.19 27.01 Minimum 13.80 15.75 15.25 12.45 9.98 13.00 16.00 18.22 20.56 22.20 22.40 23.04 Closing 16.00 16.80 17.18 14.58 13.15 17.49 18.76 21.64 27.20 22.99 23.08 26.36

Volume of Series A shares traded 104,418,400 123,115,200 78,271,200 155,372,400 221,587,600 203,339,600 186,764,800 228,156,000 198,866,400 212,834,00 176,609,600 286,156,800

119

Monthly

Pesos per Series A share Maximum Minimum Closing

Volume of Series A shares traded

December 2009 22.99 21.25 21.64 70,733,600 January 2010 22.87 20.56 20.56 66,915,200 February 2010 23.75 21.43 23.31 60,851,200 March 2010 27.20 23.88 27.20 71,100,000 April 2010 27.41 24.60 24.60 68,573,600 May 2010 24.95 22.52 22.97 81,436,400 June 2010 25.04 22.20 22.99 62,824,00 July 2010 25.19 22.71 23.84 62,430,000 August 2010 23.68 22.40 22.64 67,637,600 September 2010 23.53 22.77 23.08 46,542,000 October 2010 24.51 23.04 23.80 118,868,400 November 2010 25.48 23.47 25.41 84,328,000 December 2010 27.01 25.85 26.36 82,960,400 Source: Bloomberg. Figures adjusted for the 4:1 stock split carried out on April 20, 2011.

c)

MARKET MAKER

Beginning on March 2, 2011, Acciones y Valores S.A. de C.V., Casa de Bolsa operates as market maker with respecto to the shares under ticker symbol BIMBO, series A, code ISIN MXP495211262 listed on the Mexican Stock Exchange. The term of the agreement will be for six months beginning on the date of initiation of operations. The Market Maker agrees to maintain a continuing operative presence over the shares of BIMBO for the purpose of promoting the stability and continuity of their prices in the market. As of June 27, 2011, the Market Maker is in compliance with the terms established in the agreement.

120

6)

ATTACHMENTS

Attached to this Annual Report below please find the following documents: a) Opinion of the Audit Committee of the Report of the General Director regarding the fiscal year ended on December 31, 2010.

b) Audited Financial Statemetns for the fiscal years ending on December 31, 2010 and 2009. c) Report of the Audit Committee regarding the fiscal year ending on December 31, 2010.

122

Mexico City, March 17, 2011

To the Board of Directors of Grupo Bimbo, S.A.B. de C.V.

In my capacity as Chairman of the Audit Committee (the Committee) of Grupo Bimbo, S.A.B. de C.V. (the Company), and in accordance with point 3, section II of article 42 of the Securities Market Act, I hereby present to you the Committees opinion on the content of the Chief Executive Officers report on the financial position and results of the Company for the year ended December 31, 2010. In the opinion of the Committee, the accounting and information policies and standards followed by the Company and considered in the preparation of the consolidated financial information are appropriate and sufficient, and accordingly with Mexican financial reporting standards. Therefore, the consolidated financial information presented by the Chief Executive Officer reasonably reflects the financial position and results of the Company for the year ended December 31, 2010.

Sincerely,

Henry Davis Signoret Chairman of the Audit Committee Of Grupo Bimbo, S.A.B. de C.V.

123

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries Consolidated Financial Statements for the Years Ended December 31, 2010 and 2009, and Independent Auditors Report Dated March 14, 2011

124

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Independent Auditors Report and Consolidated Financial Statements for 2010 and 2009
Table of contents Page

Independent Auditors Report Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Stockholders Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements

1 2 3 4 5 6

125

Independent Auditors Report to the Board of Directors and Stockholders of Grupo Bimbo, S. A. B. de C. V.
We have audited the accompanying consolidated balance sheets of Grupo Bimbo, S. A. B. de C. V. and subsidiaries (the Company) as of December 31, 2010 and 2009, and the related consolidated statements of income, changes in stockholders equity and cash flows for the years then ended. These financial statements are the responsibility of the Companys 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and that they are prepared in accordance with Mexican Financial Reporting Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the financial reporting standards 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, such consolidated financial statements present fairly, in all material respects, the financial position of Grupo Bimbo, S. A. B. de C. V. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations, changes in their stockholders equity and their cash flows for the years then ended in conformity with Mexican Financial Reporting Standards.

The accompanying consolidated financial statements have been translated into English for the convenience of users.

Galaz, Yamazaki, Ruiz Urquiza, S. C. Member of Deloitte Touche Tohmatsu Limited

C. P. C. Jorge Alamillo Sotomayor March 14, 2011

126

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2010 and 2009 (In millions of Mexican pesos) Assets Current assets: Cash and cash equivalents Accounts and notes receivable- net Inventories- net Prepaid expenses Derivative financial instruments Total current assets Notes receivable from independent operators Property, plant and equipment- net Investment in shares of associated companies and other permanent investments Derivative financial instruments Deferred income taxes Intangible assets- net Goodwill Other assets- net Total Liabilities and stockholders equity Current liabilities: Current portion of long-term debt Trade accounts payable Other accounts payable and accrued liabilities Due to related parties Income taxes Statutory employee profit sharing Derivative financial instruments Total current liabilities Long-term debt Derivative financial instruments Employee labor obligations and workers compensation Deferred statutory employee profit sharing Deferred income taxes Other liabilities Total liabilities Stockholders equity: Capital stock Reserve for repurchase of shares Retained earnings Accumulated translation effects of foreign subsidiaries Valuation of financial instruments Controlling stockholders equity Noncontrolling interest in consolidated subsidiaries Total stockholders equity Total $ $ $
2010 2009

3,325 13,118 3,149 440 180 20,212 2,140 32,028 1,553 393 1,539 19,372 19,884 1,948 99,069

4,981 12,430 2,969 499 146 21,025 1,940 32,763 1,479 159 635 19,602 20,394 1,669

99,666

1,624 5,954 6,302 802 624 709 16,015 31,586 231 4,621 249 622 1,208 54,532 8,006 759 35,505 (541) (19) 43,710 827 44,537 99,069

4,656 5,341 6,228 238 3,272 637 74 20,446 32,084 54 4,644 290 266 925 58,709 8,006 759 30,698 675 (34) 40,104 853 40,957

99,666

See accompanying notes to consolidated financial statements.

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Consolidated Statements of Income

For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos, except basic earnings per common share)
2010 2009

Net sales Cost of sales Gross profit General expenses: Distribution and selling Administrative
Income after general expenses

117,163 55,317 61,846

116,353 54,933 61,420

42,933 7,520 50,453 11,393 950

41,724 7,642 49,366 12,054 1,176

Other expenses, net Net comprehensive financing cost: Interest expense, net Exchange loss (gain), net Monetary position gain

2,574 94 (45) 2,623 87 7,907 2,363 $ $ $ $ 5,544 5,395 149 4.59 1,175,800 $ $ $ $

2,318 (207) (99) 2,012 42 8,908 2,827 6,081 5,956 125 5.07 1,175,800

Equity in income of associated companies Income before income taxes Income tax expense Consolidated net income for the year Net income of controlling stockholders Net income of noncontrolling stockholders Basic earnings per common share Weighted average number of shares outstanding (000s)

See accompanying notes to consolidated financial statements.

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Consolidated Statements of Changes in Stockholders Equity

For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)

Capital stock

Reserve for repurchase of shares

Retained earnings

Accumulated translation effect

Valuation of financial instruments

Controlling stockholders equity

Noncontrolling interest in consolidated subsidiaries

Total stockholders equity

Balances, January 1, 2009 Increase of capital stock of noncontrolling interest Dividends declared Balances before comprehensive income Consolidated net income for the year Effect of valuation of financial instruments Translation effects of foreign subsidiaries Income tax effect due to 2010 tax reform on tax consolidation Comprehensive income Balances, December 31, 2009 Dividends declared Balances before comprehensive income Consolidated net income for the year Effect of valuation of financial instruments Translation effects of foreign subsidiaries Comprehensive income Balances, December 31, 2010

$ -

8,006

$ -

759

$ -

24,473

$ -

1,189

$ -

(163)

$ -

34,264

710 99 (78) 731 125 (3) 122 853 (126) 727 149 (49) 100

34,974 99 (619) 34,454 6,081 129 (517) 810 6,503 40,957 (714) 40,243 5,544 15 (1,265) 4,294

8,006 8,006 8,006 $ 8,006 $ -

759

(541) 23,932 5,956 810 6,766

1,189 (514) (514) 675 675 (1,216) (1,216) $ (541) $ -

(163)

(541) 33,723 5,956 129 (514) 810 6,381 40,104 (588) 39,516 5,395 15 (1,216) 4,194 $ 43,710 $

129 129 (34)

759

30,698 (588) 30,110 5,395 5,395

759

(34)

15 15 (19)

759

35,505

827

44,537

See accompanying notes to consolidated financial statements.

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos)
2010 2009

Operating activities: Income before income taxes Items related to investing activities: Depreciation and amortization Loss on sale of property, plant and equipment Equity in income of associated companies Impairment of long-lived assets Items related to financing activities: Interest expense Interest income Unrealized exchange loss on long-term debt Changes in current assets and liabilities: Accounts and notes receivable Inventories Prepaid expenses Trade accounts payable Other accounts payable and accrued liabilities Due to related parties Income tax paid Derivative financial instruments Statutory employee profit sharing Employee labor obligations and workers compensation Net cash flows from operating activities Investing activities: Acquisition of property, plant and equipment Proceeds from sale of property, plant and equipment Acquisition of trademarks and other assets Dividends received Investments in shares of associated companies Acquisition of business Net cash flows used in investing activities Excess cash to apply to (to be obtained from) financing activities Financing activities: Proceeds from long-term debt Payment of long-term debt Interest paid Payments of interest rate swaps Interest collected Dividends paid Net cash flows from (used in) financing activities Adjustments to cash flows due to exchange rate fluctuations and inflationary effects Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year See accompanying notes to consolidated financial statements.

7,907 3,729 175 (87) 19 3,558 (559) (1,195) (183) 4 914 878 564 (4,415) (143) 31 178 11,375 (4,091) 116 16 (3) (2,012) (5,974) 5,401 11,625 (14,826) (2,675) (853) 460 (714) (6,983)

8,908 3,783 183 (42) 56 3,269 (371) 198 (188) 39 (68) (361) (619) 134 (2,350) 155 52 671 13,449 (3,613) 457 (83) 10 (29) (35,140) (38,398) (24,949) 42,397 (16,262) (2,682) (523) 295 (619) 22,606 (15) (2,358) 7,339 4,981

(74 (1,656) 4,981

3,325

Grupo Bimbo, S. A. B. de C. V. and Subsidiaries

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009 (In millions of Mexican pesos) The Company Grupo Bimbo, S. A. B. de C. V. and subsidiaries (Grupo Bimbo or the Company) are engaged in the manufacture, distribution and sale of bread, cookies, cakes, candies, chocolates, snacks, tortillas and processed foods.
The Company operates in the following geographical areas: Mexico, the United States of America (USA), Central and South America (OLA), Europe and China. Due to its insignificance, the financial information of the European and Chinese regions is aggregated with Mexico in the disclosures that follow. In 2009, a significant business acquisition was made in the USA as detailed in Note 2. 2.

1.

Basis of presentation Explanation for translation into English - The accompanying consolidated financial statements have been translated from Spanish into English for use outside of Mexico. These consolidated financial statements are presented on the basis of Mexican Financial Reporting Standards (MFRS), with individual standards referred to as Normas de Informacin Financiera (NIF). Certain accounting practices applied by the Company that conform with MFRS may not conform with accounting principles generally accepted in the country of use. Monetary unit of the financial statements - The financial statements and notes as of December 31, 2010 and 2009 and for the years then ended include balances and transactions denominated in Mexican pesos of different purchasing power. Consolidation of financial statements - At December 31, 2010 and 2009, the consolidated financial statements include those of Grupo Bimbo, S. A. B. de C. V. and its subsidiaries, of which the more significant subsidiaries are shown below:
Subsidiary Ownership percentage Principal business

Bimbo, S. A. de C. V. Bimbo Bakeries USA, Inc. (BBU) Barcel, S. A. de C. V. Bimbo do Brasil, Ltda.

97 100 97 100

Bakery Bakery Candies and snacks Bakery

All significant intercompany balances and transactions have been eliminated in these consolidated financial statements. During 2010 and 2009, net sales of Bimbo, S. A. de C. V. and Barcel, S. A. de C. V. in Mexico represented approximately 47% and 45%, respectively, of consolidated net sales. Net sales of BBU in the USA during 2010 and 2009 represented 40% and 42%, respectively, of consolidated net sales.

Acquisitions - During 2010 and 2009, the Company acquired the following businesses:
Company 2010: Country Acquisition cost Date

Various businesses Business acquisitions

Mexico and China

2,012

Various

On December 2, 2010, Grupo Bimbo acquired the main operating assets of the business called "Dulces Vero". The acquisition of these assets strengthens the position of the Company in the confectionery market in Mexico through its subsidiary Barcel and supports the Companys strategy to reach all sociodemographic segments. As of December 31, 2010, the valuation of assets acquired and liabilities assumed is in process and will be completed in 2011. In 2010, the Company also acquired a business in China which is focused on package bread, pastries, cookies, sweet bread and ready-to-eat food, which expands its product portfolio in that country. Sara Lee On November 9, 2010, the Company announced an agreement to acquire the bakery business of Sara Lee Corporation in the USA (North American Fresh Bakery) for US$959 million. The closing of the transaction is subject to the resolution of regulatory approvals. If the transaction is not closed within one year, the Company could be exposed to a transaction cancellation fee up to US$100 million. The acquisition agreement includes the use of the license of the brand Sara Lee, free of royalties, for its use in bakery products in America, Asia, Africa and Eastern and Central Europe, as well as a list of regional brands with high recognition in their respective local markets.
Company 2009: Country Acquisition cost Date

Bimbo Foods, Inc. (previously Weston Foods, Inc. (WFI)) Other businesses and trademarks

USA Various

35,014 188

January 21 Various

$ Acquisition of Bimbo Foods, Inc.

35,202

On December 10, 2008, Grupo Bimbo entered into an agreement with Dunedin Holdings, S. A. R. L., Glendock Finance Company, and other legal entities, all subsidiaries of George Weston Limited, in which Grupo Bimbo agreed to acquire the common shares of WFI, as well as other assets, including trademarks and trade receivables related to the operations of WFI, which is a group of companies engaged in the production and distribution of bread in the eastern USA. The contract was settled on January 21, 2009, after

complying with certain requirements included therein. This transaction is aligned with Grupo Bimbos growth strategy to consolidate its global platform and its vision of becoming a global leader in the bakery segment and a relevant company in the global food segment. Goodwill generated by the acquisition, which has no income tax effects, amounted to $13,775 and is attributable to synergies that are expected to be obtained by combining WFI with Grupo Bimbos existing business in the USA. The agreement establishes certain indemnifications for both the buyer and the seller. Among those are a net working capital adjustment final settlement paid by the buyer to the seller for US$29 million and an indemnification from the seller to the buyer for up to US$42.5 million if certain contingencies materialize, of which a substantial amount of approximately US$15.5 million did not materialize and therefore has no effect on the Company. The purchase price of the shares and certain assets of WFI amounted to US$2,505 million. Sources of Financing For this acquisition, the Company obtained financing in the amount of US$2,300 million, which was structured with a one-year bridge loan for the equivalent of US$600 million that was paid in June 2009 with the proceeds from the issuance of local bonds on the Mexican Stock Exchange, and a longterm loan for the equivalent of US$1,700 million, comprised of US$900 and US$800 million that mature in three and five years, respectively (see Note 11, Long-term debt). The remainder of the purchase price of US$205 million was paid with available funds. The various contracts that formally document the financing include certain limitations on the incurrence of additional liabilities and other financial restrictions; additionally, the repayment obligations of Grupo Bimbo under such contracts are secured by the pledge of certain assets of its subsidiaries. Accounting for the Transaction The acquisition was recorded in conformity with NIF B-7, Business Acquisitions. The fair value determination of net assets acquired was concluded as of December 31, 2009, and incorporated in the consolidated financial statements ended on that date. Management of the Company engaged independent specialists to assist with the identification of intangible assets with finite and indefinite lives, as well as to determine the useful lives and fair values of acquired assets, considering the valuation rules of MFRS. Given that the acquisition of Bimbo Foods, Inc., was completed on January 21, 2009, Management believes that the financial statements are comparable in both years, as the 21 days not consolidated in 2009 are not considered material. Translation of financial statements of foreign subsidiaries - To consolidate the financial statements of foreign subsidiaries (located principally in the USA and other Latin American countries, which represent 52% and 55% of consolidated net sales and 64% and 65% of consolidated total assets in 2010 and 2009, respectively), the accounting policies of the foreign entities are converted to MFRS using the currency in which transactions are recorded, except for the application of NIF B-10

when the foreign entity operates in an inflationary environment. The financial statements are subsequently translated to Mexican pesos considering the following methodologies:
Foreign operations that operate in a non-inflationary environment whose functional currency is the same as the currency in which transactions are recorded translate their financial statements using the following exchange rates: 1) the closing exchange rate in effect at the balance sheet date for assets and liabilities; 2) historical exchange rates for stockholders equity and 3) the rate on the date of accrual of revenues, costs and expenses. Translation effects are recorded in stockholders equity. Foreign operations that operate in an inflationary environment whose functional currency is the same as the currency in which transactions are recorded first restate their financial statements in currency of purchasing power as of the date of the balance sheet, using the price index of their country for the functional currency, and subsequently translate those amounts to Mexican pesos using the closing exchange rate in effect at the balance sheet date for all items. Translation effects are recorded in stockholders equity.

The activity in the accumulated translation effect caption within stockholders equity and on the related income tax effects for the years ended December 31, 2010 and 2009 are as follows:
Amount 2010 Income taxes Net amount

Beginning balance Translation effect for the period Translation effect for hedge of net investment Ending balance

937 (3,214) 1,476

(262) 965 (443)

675 (2,249) 1,033

(801)
Amount

$
2009

260
Income taxes

(541)
Net amount

Beginning balance Translation effect for the period Translation effect for hedge of net investment

1,699 (1,754) 992

(510) 546 (298)

1,189 (1,208) 694 675

Ending balance $ 937 $ (262) $ The Companys functional currency is the Mexican peso. Since the Company has investments in foreign subsidiaries whose functional currencies are other than the Mexican peso, the Company is exposed to foreign currency translation risk. In addition, the Company has monetary assets and liabilities denominated in foreign currencies, mainly in US dollars; therefore, the Company is also exposed to foreign exchange risks arising from transactions entered into over the normal course of business. The Companys risk management policy regarding exchange risks consists of hedging expected cash flows, principally those associated with future purchases of raw materials. Those future purchases of raw materials meet the requirements to be considered exposures associated with highly probable forecasted transactions for purposes of hedge accounting. When the future purchase is made, the Company adjusts the amount of the non-financial element that was hedged. Hedging the exposure to this foreign currency translation risk is mitigated by designating one or more loans denominated in these non-functional currencies as exchange rate hedges, according to the hedge accounting model for net investments

in foreign subsidiaries. Comprehensive income - Comprehensive income presented in the accompanying statements of changes in stockholders equity represents the changes in stockholders equity during the year for items that are not distributions or movements of contributed capital and includes consolidated net income for the year plus other items that represent a gain or loss for the same period, which, in conformity with MFRS, are recorded directly in stockholders equity without affecting the results of operations. The items of other comprehensive income consist of the unrealized accrued effects of derivative instruments and the translation and restatement effects of foreign subsidiaries in 2010 and 2009, and the impact of tax effects related to the tax reform applicable to tax consolidation in 2009. When assets and liabilities included in other comprehensive income are realized, those amounts are reclassified to net income, except for the translation effect of the net investments. Classification of costs and expenses - Costs and expenses presented in the consolidated statements of income were classified according to their function because this is the practice of the sector to which the Company belongs. Income after general expenses - Income after general expenses is the result of subtracting cost of sales and general expenses from net sales. While NIF B-3, Statement of Income, does not require inclusion of this line item in the consolidated statements of income, it has been included for a better understanding of the Companys economic and financial performance. Reclassifications - Certain amounts in the consolidated financial statements as of and for the year ended December 31, 2009 have been reclassified to conform to the presentation of the 2010 consolidated financial statements. The only relevant reclassification is as follows: through December 31, 2009, the Company offset the majority of recoverable taxes with accrued taxes payable; however, beginning in 2010 the Company determined that in some cases, due to the different nature of the taxes and/or the inability to compensate one against the other, the balances will be independently paid and recovered, and accordingly in 2010 recoverable taxes and accrued taxes are presented separately. The effects of such reclassification were applied retroactively in the accompanying consolidated balance sheets as of December 31, 2009. The effects of the above-mentioned reclassifications is $2,825, increasing recoverable taxes within accounts receivable and other accounts payable and accrued expenses by the same amount.
3.

Summary of significant accounting policies The accompanying consolidated financial statements have been prepared in conformity with MFRS, which require that management make certain estimates and use certain assumptions that affect the amounts reported in the financial statements and their related disclosures; however, actual results may differ from such estimates. The Companys management, upon applying professional judgment, considers that the estimates made and assumptions used were adequate under the circumstances. The significant accounting policies of the Company are as follows:
c.

Accounting changes Beginning January 1, 2010, the Company adopted the following new NIFs:
NIF C-1, Cash and Cash Equivalents - This standard requires presentation of cash and restricted cash equivalents together within the caption cash and cash equivalents, as

opposed to Bulletin C-1, which required restricted cash to be presented separately. This standard also replaces the concept temporary investments payable on demand with readily available investments and permits their classification as cash equivalents only when they have a maturity within three months from the date of acquisition.

Improvements to NIF 2010 - The main improvements that generate accounting changes are as follows:
NIF B-1, Accounting Changes and Correction of Errors - This improvement requires expanded disclosures when the Company applies a new standard. NIF B-2, Statement of Cash Flows - This improvement requires that the impact of changes in value of cash and cash equivalents resulting from exchange rate fluctuations be presented separately within the caption Effects from exchange rate changes on cash, presented below financing activities. In addition, this caption includes the effects of converting the cash flows and balances of foreign operations to the reporting currency as well as the effects of inflation associated with the cash flows and balances of any entities within the consolidated group that operate in an inflationary economic environment. NIF B-7, Business Acquisitions - This improvement permits the recognition of intangible assets or provisions stemming from above- or below-market leases in a business acquisition only when the acquired business is the lessee of an operating lease . This accounting change may be recognized retroactively beginning January 1, 2010. NIF C-7, Investments in Associated Companies and Other Permanent Investments This improvement modifies the manner in which the effects of increases in an investment in an associated company are determined. It also requires that the effects of increases or decreases in an investment in an associated company be recognized in equity in income (loss) of associated companies, instead of under non-ordinary items in the statement of income. NIF C-13, Related Parties - This improvement requires that if the direct parent company or the ultimate parent company of the reporting entity does not issue financial statements for public use, the reporting entity should disclose the name of the direct parent company or the closest indirect parent company that does issue financial statements available for public use. d.

Recognition of the effects of inflation - The cumulative inflation in Mexico for the three fiscal years preceding 2010 and 2009 was less than 26%, and accordingly the economic environment is considered non-inflationary under MFRS. Effective January 1, 2008, the Company discontinued recognition of the effects of inflation in its financial statements, except for those foreign entities operating in inflationary economic environments; however, assets, liabilities and stockholders equity as of December 31, 2010 and 2009, include the restatement effects recognized through December 31, 2007 for all entities. The cumulative inflation in most countries where the Company operates other than Mexico for the three year preceding 2010 and 2009 is also lower than 26% and accordingly qualify as non-inflationary; however, there are countries in which the Company operates whose economic environments qualify as inflationary, for which the cumulative inflation rates of the three preceding years were as follows and for which inflationary effects were recognized in 2010 and 2009:
2010 2009

Argentina

26%

28%

Costa Rica Venezuela Nicaragua

31% 100% 34%

38% 87% 49%

The cumulative inflation for the three preceding fiscal years for those foreign entities operating in inflationary economic environments and which recognized the effects of inflation only in 2009 were as follows:
2009

Uruguay Guatemala Honduras Paraguay

26% 26% 27% 28%

Through December 31, 2007 for all entities and in 2010 and 2009 only for those foreign entities operating in inflationary economic environments, recognition of the effects of inflation resulted mainly in inflationary gains or losses on nonmonetary and monetary items. These effects are principally presented in the consolidated financial statements under the following line item: Monetary position result - Monetary position result, which represents the erosion of purchasing power of monetary items caused by inflation, is calculated by applying National Consumer Price Index (NCPI) factors to monthly net monetary position. Gains (losses) result from maintaining a net monetary liability (asset) position.
e.

Cash and cash equivalents - Cash and cash equivalents consist mainly of bank deposits in checking accounts and readily available daily investments of cash surpluses, maturing within three months as of their acquisition date with minimal risk of value fluctuation. Cash is stated at nominal value and cash equivalents are stated at fair value. Fluctuations in carrying value are recognized in comprehensive financing cost (CFC) as they accrue. Cash equivalents are primarily represented by investments in sovereign debt with daily maturities. Inventories and cost of sales - Inventories are stated at the lower of average cost or realizable value for those entities operating in non-inflationary economic environments. For those foreign entities operating in inflationary economic environments, inventories are stated at average cost which is similar to their replacement value at year end, without exceeding net realizable value, and cost of sales is stated at the latest production cost, which is similar to replacement cost at the time goods are sold. Property, plant and equipment - Property, plant and equipment are recorded at acquisition cost for those entities operating in non-inflationary economic environments. Balances from acquisitions made through December 31, 2007 for all entities were restated for the effects of inflation by applying factors derived from the NCPI through that date. Subsidiaries operating in an inflationary environment continue to restate their balances by applying the NCPI. Depreciation rates are calculated using the straight-line method based on the useful lives of the related assets, as follows: Buildings Manufacturing equipment Vehicles Office furniture and fixtures Computers 5 8, 10 and 35 10 and 25 10 30

f.

g.

h.

Investment in shares of associated companies and other permanent

investments - Permanent investments in entities where significant influence exists are initially recognized based on the net fair value of the entities identifiable assets and liabilities as of the date of acquisition. Such value is subsequently adjusted for the portion related both to comprehensive income (loss) of the associated company and the distribution of earnings or capital reimbursements thereof. When the fair value of the consideration paid is greater than the value of the investment in the associated company, the difference represents goodwill, which is presented as part of the same investment. When the fair value of the consideration paid is less than the value of the investment, the latter is adjusted to the fair value of the consideration paid. If impairment indicators are present, investment in shares of associated companies is subject to impairment testing. Permanent investments made by the Company in entities where it has no control, joint control, or significant influence, are initially recorded at acquisition cost, and any dividends received are recognized in current earnings, except when they are taken from earnings of periods prior to the acquisition, in which case they are deducted from the permanent investment.
i.

Impairment of long-lived assets in use - The Company reviews the carrying amounts of long-lived assets in use when an impairment indicator suggests that such amounts might not be recoverable, considering the greater of the present value of future net cash flows or the net sales price upon disposal. Impairment is recorded when the carrying amounts exceed the greater of the amounts mentioned above. Impairment indicators considered for these purposes are, among others, operating losses or negative cash flows in the period if they are combined with a history or projection of losses, depreciation and amortization charged to results, which in percentage terms in relation to revenues are substantially higher than that of previous years, obsolescence, reduction in the demand for the Companys products, competition and other legal and economic factors. During 2009, an impairment loss of $56 was recognized in the Czech Republic subsidiary. This subsidiary was sold in January 2010 and is not material to the Company as a whole. In 2010, an impairment loss of $19 on certain trademarks was also recognized. Financial risk management policy - The daily activities carried out by the Company expose it to a number of inherent risks of different variables of a financial nature, as well as variations in the price of certain materials traded in formal international markets. For such reason, the Company uses derivative financial instruments to mitigate the potential impact of fluctuations in such variables and prices on its financial results. The Company believes that these instruments provide flexibility that allows greater stability of income and better visibility and certainty with regard to costs and expenses to which it will be exposed in the future. The design and implementation of the strategy of derivative financial instruments is formally supervised by two committees: 1) The Financial Risk Committee, responsible for risk management of interest and exchange rates and 2) the Subcommittee of Risk Commodity Markets that supervises

j.

commodity risk. Both committees continuously report their activities to the Corporate Business Risk Committee, who is responsible for issuing general guidelines for the risk management strategy of the Company and for establishing limits and restrictions on the operations they can perform. The Corporate Business Risk Committee in turn reports the risk positions of the Company to the Audit and Executive Committees of the Board of Directors. The Companys policy is to enter into derivative financial instruments only for hedging purposes. Therefore, entering into a contract of a derivative financial instrument must necessarily be associated with a primary position that represents a specific risk. Consequently, the notional amounts of one or all derivative financial instruments contracted to hedge a specific risk will be consistent with the amounts of the primary positions that represent the risk position. The Company does not enter into transactions for which the objective is to benefit from premium income. If the Company decides to undertake a hedging strategy where options are combined, the net payment of associated premiums must represent an expenditure for the Company.
k.

Derivative financial instruments - The Company states all derivatives at fair value in the balance sheet, regardless of the purpose for holding them. Fair value is determined using prices quoted on recognized markets. If such instruments are not traded, fair value is determined by applying recognized valuation techniques. Changes in the fair value of derivative instruments designated as hedges are recognized as follows; (1) for fair value hedges, both the derivative instrument and the hedged item are stated at fair value and changes are recognized in current earnings: (2) for cash flow hedges, changes in the effective portion are temporarily recognized as a component of other comprehensive income and then reclassified to current earnings when affected by the hedged item; the ineffective portion is immediately recognized in current earnings; (3) for hedges of an investment in a foreign subsidiary, the effective portion is recognized as a component of other comprehensive income as part of the accumulated translation effect; the ineffective portion of the gain or loss on the hedging instrument is recognized in current earnings, if it is a derivative financial instrument. If not, it is recognized as a component of other comprehensive income until the investment is sold or transferred. To manage its exposure to interest rate and foreign currency fluctuations, the Company principally uses interest rate swaps and foreign currency forward contracts, as well as futures to fix the purchase price of raw materials. The Company formally documents all hedging relationships at the beginning of the transaction, including their objectives and risk management strategies to

carry out derivative transactions. Derivative trading is performed only with institutions of recognized solvency, and limits have been established for each institution. The hedging derivative instruments are recorded as assets or liabilities without offsetting them against the hedged items.
l.

Goodwill - Goodwill is recorded at acquisition cost in originating local currency and through December 31, 2007, was restated for the effects of inflation using the NCPI of the respective country. For subsidiaries operating in inflationary economic environments, goodwill continues to be restated using the applicable inflation rate. Goodwill is not amortized and, at least once a year, is subject to impairment tests. Intangible assets - These are primarily comprised of trademarks, rights of use and customer relationships and are recorded at acquisition cost and were restated through December 31, 2007 using the inflation rate of each country. For subsidiaries operating in inflationary economic environments, goodwill continues to be restated using the applicable inflation rate. They are derived mainly from the acquisition of the business in the USA and certain trademarks in South America. Trademarks and rights of use are not amortized; however, the carrying values are subject to impairment tests at least annually. As of December 31, 2010, the Company recognized impairment loss on certain trademarks of $19. Customer relationships have an estimated useful life of 18 years and are amortized on a straight-line basis based on such useful life. For the years ended December 31, 2010 and 2009, the amortization recorded for intangible assets with finite lives was $258 and $257, respectively. Provisions - Provisions are recognized when there is a present obligation as the result of a past event that is probable to result in the use of economic resources and that can be reliably estimated. Direct employee benefits - Direct employee benefits are calculated based on the services rendered by employees, considering their current salaries. The liability is recognized as it accrues. These benefits include mainly accrued statutory employee profit sharing, compensated absences, such as vacation and vacation premiums, and incentives and are presented in other accounts payable and accrued liabilities. Employee benefits from termination, retirement and other - The liability for seniority premiums, pensions and termination benefits is recorded as accrued and is calculated by independent actuaries based on the projected unit credit method using nominal interest rates. Other employee benefits relate to medical expenses for eligible employees in

m.

n.

o.

p.

the USA incurred after retirement. Such liability is determined using the Companys historical data according to actuarial calculations.
q.

Statutory employee profit sharing - Statutory employee profit sharing (PTU) is recorded in the results of the year in which it is incurred and presented in other expenses in the accompanying consolidated statements of income. Deferred PTU arising from Mexican subsidiaries is derived from temporary differences resulting from comparing the accounting and tax basis of assets and liabilities. Income taxes - Income taxes (ISR) of each country and the Business Flat Tax (IETU) in Mexico, if higher than ISR, are recorded in the results of the year in which they are incurred. To recognize deferred income taxes, based on its financial projections, the Company determines whether it expects to incur ISR or IETU and accordingly recognizes deferred taxes based on the tax it expects to pay. Deferred taxes are calculated by applying the corresponding tax rate to the applicable temporary differences resulting from comparing the accounting and tax bases of assets and liabilities and including, if any, future benefits from tax loss carryforwards and certain tax credits. Deferred tax assets are recorded only when there is a high probability of recovery. Tax on assets - The tax on assets (IMPAC) generated in Mexico through 2007 that is expected to be recovered is recorded as a tax credit and is presented in the balance sheet under deferred taxes. Foreign currency transactions - Foreign currency transactions are recorded at the applicable exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the applicable exchange rate in effect at the balance sheet date. Exchange fluctuations are recorded as a component of results of the period, except for those transactions that have been designated as a hedge of a foreign investment. Revenue recognition - Revenues are recognized in the period in which the risks and rewards of the products are transferred to the customers who purchased them, which generally occurs when these products are delivered to the customer. The Company deducts certain discounts and promotional expenses from sales. Earnings per share - Basic earnings per share are calculated by dividing net income attributable to the controlling interest by the weighted average number of shares outstanding during the year.

r.

s.

t.

u.

v.

4.

Accounts and notes receivable

2010 2009

Customers and agencies

7,249

7,059

Allowance for doubtful accounts

(310) 6,939 601 4,021 338 1,092 127 $ 13,118 $

(290) 6,769 513 3,434 393 1,178 143 12,430

Notes receivable Income, value-added and other recoverable taxes Sundry debtors Sanalp 2005, S. L., related party Madera, L. L. C., related party

5.

Inventories
2010 2009

Finished products Orders in-process Raw materials, containers and wrapping Other Allowance for slow-moving inventories

1,095 94 1,735 47 (1) 2,970 17 162

768 75 1,725 102 (3) 2,667 41 261

Advances to suppliers Raw materials in-transit $

3,149

2,969

6.

Long-term notes receivable from independent operators

The Company has sold certain equipment and distribution rights in the USA to former employees and certain third parties (collectively, the independent operators). The Company finances 90% of the distribution rights sold to certain independent operators. The notes bear an annual interest rate ranging from 9.75% to 10.75% and are payable in 120 monthly installments.

7.

Property, plant and equipment

2010 2009

Buildings Manufacturing equipment Vehicles Office furniture and fixtures Computers

11,221 29,488 8,430 638 2,044 51,821

12,893 28,915 8,070 593 1,815 52,286

Less- Accumulated depreciation

(25,298) 26,523 3,550 1,955 $ 32,028 $

(23,411) 28,875 2,717 1,171 32,763

Land Construction in-progress and machinery intransit

8.

Investment in shares of associated companies and other permanent investments

At December 31, 2010 and 2009, the investment in shares of associated companies and other permanent investments are as follows:
Associated companies % of ownership 2010 2009

Beta San Miguel, S. A. de C. V. Mundo Dulce, S. A. de C. V. Fbricas de Galletas La Moderna, S. A. de C. V. Grupo La Moderna, S. A. de C. V. Congelacin y Almacenaje del Centro, S. A. de C. V. Fin Comn, S. A. de C. V. Productos Rich, S. A. de C. V. Grupo Altex, S. A. de C. V. Ovoplus, S. A. de C. V. Innovacin en Alimentos, S. A. de C. V. Pierre, L. L. C. Other

8 50 50 3

378 291 255 156

327 320 261 140

15 30 18 11 25 50 30 Various $

83 79 78 70 52 28 14 69 1,553 $

79 71 72 70 54 25 15 45 1,479

9.

Intangible assets The following is an analysis of the balance of intangible assets by geographical area:
2010 2009

Mexico United States of America OLA

2,016 16,349 1,007

1,039 17,532 1,031

19,372

19,602

At December 31, 2010 and 2009, the breakdown of intangible assets is as follows:
Average life 2010 2009

Trademarks Rights of use

Undefined Undefined

15,779 36 15,815

15,533 38 15,571 4,009 261 18 4,288 (257) 4,031

Customer relationships Licensing agreements and software Non-compete agreements

18 years 8 and 2 years 5 years

3,794 247 17 4,058 (501) 3,557 $ 19,372 $

Accumulated amortization

19,602

During 2010 and 2009, changes in trademarks were as follows:

2010 2009

Balance as of January 1 Acquisitions Impairments Disposals Adjustments due to variations in exchange rates Balance as of December 31

15,533 1,001 (19) (736)

4,762 10,668 (6) 109

15,779

15,533

10.

Goodwill The following is an analysis of the balance of goodwill by geographical area:

2010 2009

Mexico United States of America OLA

1,258 16,919 1,707 19,884

753 17,871 1,770 20,394

During 2010 and 2009, the changes in goodwill were as follows:

2010 2009

Balance as of January 1 Acquisitions Adjustments due to variations in exchange rates Balance as of December 31
11.

20,394 517 (1,027)

6,488 13,775 131

19,884

20,394

Long-term debt
2010 2009

Committed Revolving (Multi-currency) Line-of-Credit On July 20, 2005, the Company entered into an agreement to amend its committed revolving line-of-credit dated May 21, 2004, increasing the line-of-credit up to the amount of US$600 million. The term of the debt was for five years with a maturity date July 2010; the balance due was paid in full as of December 31, 2010.

3,918

Local bonds - In addition to the local bonds issued in 2002, during 2009 the Company issued local bonds to refinance short-term liabilities contracted early in 2009 to acquire BFI. As of December 31, 2010, such bonds are as follows: Bimbo 09- Issued June 15, 2009, maturing in June 2014, with interest at the 28-day Mexican Interbank Equilibrium Offered rate (TIIE) plus 1.55%. Bimbo 09-2- Issued June 15, 2009, maturing in June 2016, with a fixed interest rate of 10.60%. Bimbo 09U- Issued June 15, 2009 in the amount of 706,302,200 Investment Units (UDIs), maturing in June 2016, with a fixed interest rate of 6.05%. The UDI value at December 31, 2010 and 2009 was $4.5263and $4.3401 Mexican pesos per UDI, respectively. Bimbo 02-2- Issued in May 17, 2002, maturing in May 2012, with a fixed interest rate of 10.15%. International bond - On June 30, 2010, the Company issued a bond under U.S. Securities and Exchange Commission Rule 144 Regulation S for US$800 million maturing on June 30, 2020. Such bond pays a fixed interest rate of 4.875% with semiannual payments. The proceeds from this issuance were used to the refinance Company debt, extending the average term of such debt. Bank loan - On January 15, 2009, the Company

5,000 2,000

5,000 2,000

3,197 750

3,066 750

9,886 10,736

21,250

entered into a long-term bank loan in the amount of the equivalent of US$1,700 million, in which BBVA Bancomer, S. A. Institucin de Banca Mltiple, Grupo Financiero BBVA Bancomer as lead agent, and a syndicate bank comprised of 8 institutions participate. The loan consists of two tranches, the first maturing in January 2012 (Tranche A) and the second with semiannual maturities from July 2012 to January 2014 (Tranche B). During the month of July 2010, the Company used the proceeds from the issuance of the International Bond, to settle Tranche A in full. The Company pays interest at the TIIE rate plus 1.00% for the portion denominated in Mexican pesos and the London Interbank Offered rate (LIBOR) plus 1.25% for the portion denominated in U.S. dollars. Up to 68% of the unpaid balance is denominated in Mexican pesos for the amount of $7,300 and 32% of the unpaid balance is denominated in U.S. dollars for the amount of $3,436. All proceeds obtained from this financing, plus those obtained from the multicurrency bridge loan, were used by Grupo Bimbo to partially pay for the acquisition of BFI.
2010 2009

Other - Certain subsidiaries have entered into other direct loans maturing from 2011 to 2012, at various interest rates. Less - Current portion of long-term debt Long-term debt
At December 31, 2010, long-term debt matures as follows:
Year

1,641 33,210 (1,624) $ 31,586 $

756 36,740 (4,656) 32,084

Amount

2012 2013 2014 2016 2020

3,451 5,368 7,684 5,197 9,886 31,586

The local bonds, international bond and the committed revolving line-of-credit are guaranteed by certain of the principal assets of the subsidiaries of Grupo Bimbo. The loan agreements establish certain covenants and also require that the Company maintain determined financial ratios based on consolidated financial statements. At December 31, 2010 and 2009, the Company has complied with all the obligations established in the loan agreements.

12.

Derivative financial instruments

As of December 31, derivative financial instruments were comprised as follows:
2010 2009

Assets: Forwards Future contracts Fair value of wheat and soybean oil Fair value of natural gas and diesel Forwards and options Total value of financial instruments Warranty account Total current portion Long-term swaps Liabilities:

6 131 8 145 35

2 6 58 11 77 69

$ $ $ -

180 393

$ $

146 159

Swaps Future contracts Fair value of wheat and natural gas Total current portion Swaps Forwards Total long-term portion Stockholders Equity: Total value of cash flow hedges Closed contracts for unused futures Deferred income taxes, net Cumulative other comprehensive income $ $ $ $

$ (230) (1) (231)

2010

(37) (37)

$ $ $
2009

(74) (54) (54)

$ -

(11) (8) (19) (19)

108 (149) (41) 7 (34)

Swaps - The Company entered into swaps to modify its debt profile in Mexico. The derivatives were designated as cash flow hedges and since their inception were assumed to have no ineffectiveness. As of December 31, 2010, the operating characteristics and the fair value of the hedging instruments were as follows:
Amounts as of December 31, 2010 Date of Notional Interest rate Fair Commencement Maturity amount Paid Collected Value Swaps that convert debt from Mexican pesos to U.S. dollars and modifies the interest rate of the Bimbo 02-2 and Bimbo 09-2 local bonds: 10.15% September 15, 2010 May 3, 2012 58.6 (*) 5.70% (U.S. dollars) (Mexican pesos) 38 10.60% September 13, 2010 June 6, 2016 155.5 (*) 6.35% (U.S. dollars) (Mexican pesos) 105 Swaps that modify the Bimbo 09U local bond currency and interest rate: 10.54% June 10, 2009 June 6, 2016 $1,000 (Mexican pesos) June 24, 2009 June 6, 2016 $2,000 10.60%

6.05% (UDI) 6.05% (UDI)

85 165

(Mexican pesos) Total long-term assets Swaps that fix the Bimbo 09 local bond rate: June 26, 2009 June 9, 2014 $ 393

$2,000

7.43%

4.87% (TIIE)

(87)

Swaps that fix the rate of the long-term bank loan in U.S. dollars: May 27, 2009 January 15, 2014 150 (*) 2.33% (LIBOR) May 29, 2009 January 13, 2012 25 (*) 1.66% (LIBOR) May 29, 2009 January 13, 2012 100 (*) 1.63% (LIBOR) Swaps that fix the rate of the long-term bank loan in Mexican pesos: June 5, 2009 January 13, 2012 $1,500 6.51% (TIIE) June 5, 2009 January 15, 2014 $1,500 7.01% (TIIE) Total long-term liabilities

0.26% (LIBOR) 0.26% (LIBOR) 0.26% (LIBOR)

(59) (3) (12)

4.87% (TIIE) 4.87% (TIIE) $

(23) (46) (230)

(*) Amounts in millions of U.S. dollars In connection with the issuance of the Bimbo 02-2 and the Bimbo 09-2 local bonds, in September 2010 the Company entered into a foreign currency swap and an interest rate swap for $750 and $2,000, respectively, which convert the debt from Mexican pesos to US dollars and modify the related interest rates. The applicable exchange rates were 12.79 and 12.88, and the interest rates to be paid are 5.70% and 6.35%, respectively. In connection with the issuance of the Bimbo 09U local bonds, between June 10 and 24, 2009, the Company entered into two foreign currency swaps for $1,000 and $2,000 that together cover the entire Bimbo 09U issue and convert the debt from UDIs to Mexican pesos at fixed rates of 10.54% and 10.60%, respectively. To cover the interest rate risk on the issuance of the Bimbo 09 local bonds, on June 26, 2009 the Company entered into an interest rate swap for $2,000 that converts the variable rate to a fixed rate of 7.43% effective July 13, 2009. To cover the interest rate risk on the dollar portion of Tranche A of the Bank Loan, between May 27 and 29, 2009, the Company entered into three swaps that totaled US$300 million and fix the one-month LIBOR to an average rate of 1.64%. On August 25, 2010 the Company prepaid US$175 million of Tranche A of the Bank Loan, so the remaining balance of the hedging instrument of US$125 million was assigned as hedge of the Tranche B Bank Loan. Additionally, to cover the interest rate risk on the U.S. dollar portion of Tranche B of the Bank Loan, on May 27, 2009, the Company entered into a swap for US$150 million that fixes the onemonth LIBOR rate at 2.33%. To cover the interest rate risk on the Mexican peso portion of Tranche A of the Bank Loan, on June 5, 2009, the Company entered into a swap for $1,500 that fixes the 28-day TIIE rate at 6.51%. Since the Company prepaid the portion of Tranche A on August 25, 2010, the related hedge was transferred to the Tranche B Bank Loan. Additionally, to cover the interest rate risk on the Mexican peso portion of Tranche B of the Bank Loan, on June 5, 2009, the Company entered into a swap for $1,500 that fixes the 28-day TIIE rate at 7.01%. As of December 31, 2009, the operating characteristics and the fair value of the above hedging instruments were as follows:
Amounts as of December 31, 2009 Date of Commencement Notional amount Interest rate Paid Collected Fair value Maturity

Swaps that fix the revolving credit line rate in U.S. dollars:

July 23, 2008

July 23, 2010

125 (*)

3.82%

0.95%

(37)

Swaps that modify local bond currency and interest rates: June 26, 2009 June 9, 2014 $ 2,000 June 10, 2009 June 6, 2016 $ 1,000 June 24, 2009 June 6, 2016 $ 2,000 Swaps that fix the rate of the long-term bank loan in U.S. dollars: May 27, 2009 January 13, 2012 100 (*) May 29, 2009 January 13, 2012 100 (*) May 29, 2009 January 13, 2012 100 (*) May 27, 2008 January 15, 2014 150 (*)

7.43% 10.54% 10.60%

4.90% 6.05% 6.05%

(8) 55 104

1.63% 1.66% 1.63% 2.33%

0.23% 0.23% 0.23% 0.23%

(6) (7) (6) (10)

Swaps that fix the rate of the long-term bank loan in Mexican pesos: June 5, 2009 January 13, 2012 $ 1,500 6.51% June 5, 2009 January 15, 2014 $ 1,500 7.01% Net fair value Total long-term assets Total current liabilities Total long-term liabilities

4.87% 4.87% $ $ $ $

(8) (9) 68 159 (37) (54)

(*) Amounts in millions of U.S. dollars Cross currency Forwards - As of December 31, 2010 and 2009, the Company had contracted forwards to hedge the cash flows of operating and financial liabilities denominated in foreign currency. These instruments cover a notional amount of 24.0 and 25.3 million Euros as of December 31, 2010 and 2009, respectively, which fix the exchange rate for the purchase of foreign currency at an average of $16.3261 and $18.6680 Mexican pesos per Euro, respectively. Their fair value is $6 and $2 at December 31, 2010 and 2009, respectively. Hedges of wheat, natural gas prices and other commodities - The Company enters into wheat, natural gas and other commodities futures contracts to minimize the risk of variation in international prices of both consumables. Wheat, which is the primary component of flour and is the main input used by the Company, together with natural gas are used in the manufacture of its products. The transactions are carried out in recognized commodity markets, and through their formal documentation are designated as cash flow hedges of forecasted transactions. The other comprehensive income at December 31, 2010 and 2009 includes closed contracts that have not been transferred to cost of sales due to the fact that the wheat under these contracts has not been used for flour consumption. As of December 31, 2010 and 2009, the characteristics of these hedging instruments and their fair value at the contract date were as follows:
Date of commencement Position Amounts as of December 31, 2010 Contracts Number Maturity Region Fair value

Futures contracts to fix the purchase price of wheat and soybean oil: November 2010 Long 1,132 March 2011 November 2010 Long 1,160 March 2011 November 2010 Long 14 March 2011 Various (soybean oil) Long 138 March and May 2010 Total current assets Futures contracts to fix the purchase price of natural gas: August through December Long 524 2010 August through October Long 315 2010 Total current assets

Mexico USA OLA USA

48 75 1 7 131

Between June 2011 and December 2012 Between March and December 2011

Mexico USA

$ $

Date of commencement

Position

Amounts as of December 31, 2009 Contracts Number Maturity

Region

Fair value

Futures contracts to fix the purchase price of wheat and soybean oil: August through November Between March and Long 814 2009 May 2010 June through September Long 1,196 March 2010 2009 July through November Long 170 March to July 2010 2009 Various (Soybean oil) Long 135 Various Net fair value Total current assets Total current liabilities Futures contracts to fix the purchase price of natural gas and diesel: Various (Natural gas) Long 170 Various Various (Diesel) Long 128 Various Various (Natural gas) Long 193 Various Net fair value Total current assets Total current liabilities

Mexico USA OLA USA

(11) (24) (1) 6

$ $ $ Mexico USA USA $

(30) 6 (36) 8 50 (1) 57 58 (1)

$ $ $

Hedges of currency Forwards for purchase of wheat - During 2010 and 2009, the Company entered into exchange rate call options, which were designated as hedges of possible exchange rate fluctuations of the U.S. dollar, the foreign currency in which the majority of purchases of wheat flour are made. The covered purchases in 2010 are from January and April of 2011 and in 2009 were from January to March of 2010.
Amounts as of December 31, 2010 Date of Commencement October through November 2010 Maturity Between January and April 2011 Amounts in U.S. dollars Contracted exchange rate (Mexican pesos) Between 12.3217 and 12.6117 Amount Fair value

60,000,000

745

(1)

Amounts as of December 31, 2009 Date of Commencement August through December 2009 Maturity Between January and March 2010 Amount in U.S. dollars Contracted exchange rate (Mexican pesos) Between 12.8295 and 13.2695 Amount Fair value

50,000,000

647

11

Embedded derivative instruments - At December 31, 2010 and 2009, the Company does not have any contracts with embedded derivatives.
13.

Long-term employee benefits Long-term net projected liabilities of employee and welfare benefits plan, by geographical area, are as follows:
2010 2009

Net projected liability in Mexico: $ Retirement Termination $ Net projected liability in USA and OLA: $ Retirement Termination Workers compensation in USA $
a.

1,008 $ 113 1,121 2,216 $ 200 1,084 3,500 $ 2,584 220 1,039 3,843 $ 745 56 801

Mexico The Company has a defined benefit pension and seniority premium plan; it is also subject to termination benefit obligations. The funding policy of the Company is to make discretionary contributions. During 2010 the Company did not make contributions, and during 2009 the Company made contributions of $200. Seniority premiums consist of a one-time payment of 12 days for each year worked based on the final salary, not exceeding double the minimum wage established by law for all its personnel, as stipulated in the respective employment contracts. Such benefits vest for employees with 15 or more years of service. Employment termination benefits primarily include the estimate for settlement payments equivalent to three months of salary per year of service worked, which are paid to all workers that are involuntarily terminated. The related liability and annual benefits costs are calculated by an independent actuary in conformity with the bases defined in the plans, using the projected unit credit method. The following table presents the amounts recognized for the pension, seniority and termination premium plans, as well as the status of the fund shown in the balance sheet at December 31, 2010 and 2009:
2010 2009

Vested benefit obligation Defined benefit obligation Less- Plan assets (funds in trust) Underfunded status Items to be amortized: Actuarial gain Transition liability Past service costs and changes to the plan Total items to be amortized Net projected liability Net period costs are as follows:

579 6,154 4,561 1,593 (550) 13 65 (472)

514 5,504 4,360 1,144 (451) 19 89 (343)

1,121
2010

$
2009

801

Cost of services for the year

346

329

Amortization of transition asset Amortization of past services and changes to the plan Actuarial gain Cost of financing for the year Less - yield on fund assets Net cost of the period $

(6) (21) (54) 443 (373) 335 $

(6) (12) (87) 408 (321) 311

The nominal rates used in the actuarial calculations are:

2010 2009

Discount of projected benefit obligation at present value Wage increases Yield on plan assets

7.64% 4.54% 8.67%

8.16% 5.05% 8.67%

The unamortized amounts of retirement obligations for the transition asset are applied to results over a period of five years and for past services and actuarial (gains) and losses are applied to results over the remaining labor life of employees expected to receive plan benefits. Changes in present value of the defined benefit obligation:
2010 2009

Present value of the defined benefit obligation as of January 1 Service cost Interest cost Actuarial loss (gain) on the obligation Benefits paid Present value of the defined benefit obligation as of December 31 Changes in fair value of plan assets:

5,504 346 443 52 (191) 6,154

5,069 329 408 (111) (191) 5,504

2010

2009

Plan assets at fair value as of January 1 Expected yield Actuarial gain Company contributions Benefits paid Plan assets at fair value as of December 31

4,360 373 4 (176) 4,561

3,753 321 240 200 (154) 4,360

Categories of plan assets:

Expected yield Actual yield

Equity instruments Debt instruments Amounts of the current and previous four years:
2010 2009

9.6% 6.1%

17.6% 8.0%

2008

2007

2006

Defined benefit obligation Less- Fair value of plan assets Underfunded status Actuarial (gain) loss for estimation of defined benefit obligation Actuarial gain (loss) for estimation of fund
b.

6,154 4,561 1,593

5,504 4,360 1,144

5,069 3,753 1,316

4,810 4,256 554

4,495 4,192 303

52 4

(111) 240

(248) (723)

(27) (72)

120 147

USA - The Company has established a defined benefit pension plan that covers eligible employees. Effective January 1, 2009, the benefits of the plan were frozen. The Companys funding policy is to make discretionary contributions. During 2010 and 2009, the Company made contributions to such plan of $471 in both years. The following table sets forth the amounts recognized for the pension plan and the status of the fund in the consolidated balance sheets, as well as the liability for workers compensation, as of December 31, 2010 and 2009:
2010 2009

Vested benefit obligation Defined benefit obligation Less- Plan assets Unfunded status Items to be amortized: Actuarial gain Past service costs and plan modifications

$ $

3,052 7,546 4,286 3,260

$ $

3,043 7,528 4,183 3,345

Total items to be amortized

Net projected liability Net pension cost includes the following components:

(1,058) 14 (1,044) $ 2,216 $

(770) 9 (761) 2,584

2010

2009

Cost of services for the year Financing cost of the year

132

139

392

403

Less- Return on plan assets Amortization of past services and plan modifications Effect on anticipated severance obligations Net cost of the period

(287)

(259)

16 $ 253 $

45 (84) 244

The nominal interest rates used in the actuarial calculations are:

2010 2009

Weighted average discount rates Rates of increase in compensation levels Expected long-term rate of return on plan assets

5.85% 3.75% 7.50%

5.75% 3.75% 7.50%

Changes in present value of the defined benefit obligation:

2010 2009

Present value of the defined benefit obligation as of January 1 Cost of services for the year Financing cost Actuarial loss (gain) on the obligation Past services for plan modifications Business acquisition Changes in exchange rates Benefits paid Present value of the defined benefit obligation as of December 31

7,528 132 392 346 (5) (405) (442)

2,248 139 403 (46) (3) 5,184 (397)

7,546

7,528

Changes in fair value of plan assets:

2010 2009

Plan assets at fair value as of January 1 Expected yield Actuarial gain Company contributions Business acquisition

4,183 287 1 471 (214) (442)

1,154 259 490 471 2,206 (397)

Changes in exchange rates

Benefits paid Plan assets at fair value as of December 31

4,286

4,183

Categories of plan assets:

Expected yield

Actual yield

Equity instruments Debt instruments

8.4% 5.0%

13.6% 9.2%

Amounts of the current and previous four years:

2010 2009 2008 2007 2006

Defined benefit obligations Less- Fair value of plan assets Underfunded status Actuarial (gain) loss for estimation of defined benefit obligation Actuarial gain (loss) for estimation of fund

7,546 4,286 3,260

7,528 4,183 3,345

2,248 1,154 1,094

1,631 1,254 377

1,640 1,191 449

346

(46)

570

(64)

490

(189)

10

(33)

Postretirement welfare benefit plans USA

The Company maintains a postretirement welfare benefit plan that covers certain eligible employees postretirement medical expenses. As of December 31, 2010 and 2009, these liabilities were $1,402 and $1,293 respectively, of which the following amounts are classified as long term:
2010 2009

Welfare benefit plans c.

1,084

1,039

OLA - The Company has liabilities for termination benefits in accordance with the local legislation of each country. The related liability and annual cost of the benefits is calculated by an independent actuary using the projected unit credit method. As of December 31, 2010 and 2009, the recorded liabilities are $200 and $220, respectively. Other disclosures required by MFRS were considered not significant in this geographical segment.

14.

Stockholders equity
a. At December 31, 2010, stockholders equity consists of the following:
Number of shares Par value Restatement / translation effect Total

Fixed capitalSeries A 1,175,800,0 00 $ 1,902 $ 6,104 $ 8,006

Reserve for repurchase of shares Retained earnings Accumulated translation effect Financial instruments Noncontrolling interest in consolidated subsidiaries
Total

600 27,630 (19)

159 7,876 (541) -

759 35,505 (541) (19)

693 $ 30,806 $

134 13,731 $

827 44,537

Capital stock is fully subscribed and paid-in and represents fixed capital. Variable capital cannot exceed 10 times the amount of minimum fixed capital without right of withdrawal and must be represented by Series B, ordinary, nominative, no-par shares and/or limited voting, nominative, no-par shares of the Series to be named when they are issued. Limited voting shares cannot represent more than 25% of non-voting capital stock. b. Dividends declared in 2010 and 2009 were:
Approved at the stockholders meeting of: Mexican pesos per share Value at December 31, 2010

April 15, 2010 April 9, 2009

$ $

0.50 0.46

$ $

588 541

During 2010 and 2009, the dividends paid to non-controlling shareholders were $126 and $78, respectively. c. Retained earnings include the statutory legal reserve. Mexican General Corporate Law requires that at least 5% of net income of the year be transferred to the legal reserve until the reserve equals 20% of capital stock at par value (historical Mexican pesos). The legal reserve may be capitalized but may not be distributed unless the entity is dissolved. The legal reserve must be replenished if it is reduced for any reason. At December 31, 2010 and 2009, the legal reserve, in historical Mexican pesos, was $500. Stockholders equity, except restated paid-in capital and tax retained earnings, will be subject to income taxes payable by the Company at the rate in effect upon distribution. Any tax paid on such distribution may be credited against annual and estimated income taxes of the year in which the tax on dividends is paid and the following two fiscal years. In a stockholders meeting held on August 19, 2010, the merger of the nearly wholly-owned subsidiary Tecebim, S. A. de C. V. with the Company was approved. As a result of the merger, the tax paid-in capital account increased substantially. Also, as a result of the tax deconsolidation effective in January 2010, the net after tax income account decreased substantially. Both effects are shown in paragraph f) below. The balances in the stockholders equity tax accounts at December 31 are:
2010 2009

d.

e.

f.

Paid-in capital Net after-tax income

24,473 18,253

8,132 32,830

Total
15.

42,726

40,962

Foreign currency balances and transactions a. At December 31, 2010 and 2009, the foreign currency monetary position in millions of U.S. dollars, for the Mexican entities only, is as follows:
2010 2009

Current assets LiabilitiesShort-term Long-term Total liabilities Liability position, net Mexican pesos equivalent b. c. $

77

67

(53) (1,076) (1,129) (1,052) (13,000) $

(342) (745) (1,087) (1,020) (13,320)

The Company has significant operations in the USA and OLA as indicated in Note 21. The transactions in millions of U.S. dollars, for the Mexican entities only, after elimination of the transactions between consolidated subsidiaries, were as follows:
2010 2009

Export sales Import purchases of raw materials Purchases of fixed assets from foreign countries d.

6 87 21

12 46 27

The exchange rates in effect at the dates of the balance sheets and of issuance of these consolidated financial statements were as follows:
December 31, 2010 2009 March 14, 2011

Mexican pesos per one U.S. dollar

16.

12.3571

13.0587

11.9441

Transactions and balances with related parties

a.

Transactions with related parties, carried out in the ordinary course of business, were as follows:
2010 2009

Interest income Expenses on purchases of:

77

76

Raw materials Finished products Supplies, uniforms and other

b.

$ $ $

4,705 1,099 467

$ $ $

4,403 575 312

The net balances due to related parties are:

2010 2009

Beta San Miguel, S. A. de C. V. Efform, S. A. de C. V. Fbrica de Galletas La Moderna, S. A. de C. V. Frexport, S. A. de C. V. Grupo Altex, S. A. de C. V. Industrial Molinera Montserrat, S. A. de C. V. Makymat, S. A. de C. V. Mundo Dulce, S. A. de C. V. Ovoplus del Centro, S. A. de C. V. Pan-Glo de Mxico, S. de R. L. de C. V. Paniplus, S. A. de C. V. Proarce, S. A. de C. V. Uniformes y Equipo Industrial, S. A. de C. V.

295 27 21 80 159 20 6 64 48 4 24 35 19

89 18 4 14 29 14 5 5 13 1 21 22 3

$
c.

802

238

Employee benefits granted to Company key management were as follows:

2010 2009

Short and long-term direct benefits Cash payments for purchase of shares Severance benefits
17.

305 45 408

290 71 368

Tax environment Income taxes in Mexico The Company is subject to ISR and IETU. ISR - The ISR rate is 30% for 2010 through 2012 and was 28% in 2009; it will be 29% for 2013 and 28% for 2014. The entity is subject to ISR on an individual basis. Until 2009, the Company paid ISR, together with subsidiaries on a consolidated basis. IETU - Revenues, as well as deductions and certain tax credits, are determined based on cash flows of each fiscal year. Beginning in 2010, the IETU rate is 17.5%, and it was 17% in 2009. The IMPAC Law was repealed upon enactment of the IETU Law; however, under certain circumstances, IMPAC paid in the ten years prior to the year in which ISR is paid may be recovered, according to the terms of the law. Income tax expense is the larger of ISR and IETU. Based on its financial projections, the Company determined that some of its Mexican subsidiaries will pay ISR in certain fiscal years, while in others they will pay IETU. Accordingly, the Company calculated both deferred ISR and deferred IETU and recognized the larger of the two liabilities in each subsidiary. In its other subsidiaries, based on its financial projections the Company determined that they will basically pay only ISR. Therefore, the enactment of IETU did not have any

effects on the financial information for those subsidiaries, since they continue to recognize deferred ISR. Due to changes in the tax law with respect to tax consolidation, the Company elected to deconsolidate for tax purposes beginning in 2010, recognizing the effects on the financial information of 2009 of such deconsolidation, applying some of the effects against retained earnings in accordance with the rules of Interpretations to Financial Information Standards (INIF) 18, Recognition of the Effects of the 2010 Tax Reform on Income Taxes. The effect of tax deconsolidation in the results of 2009 is minimal considering the effects on deferred taxes that result from the tax deconsolidation. Income taxes in other countries The foreign subsidiaries calculate income taxes on their individual results, in accordance with the regulations of each country. The subsidiaries in the USA have authorization to file a consolidated income tax return. The tax rates applicable in other countries where the Company operates and the period in which tax losses may be applied, are as follows:
Statutory income tax rate (%) 2010 2009 Period of expiration

Argentina Austria Brazil Colombia Costa Rica Chile China El Salvador Spain USA Guatemala Netherlands Honduras Hungary Luxembourg Nicaragua Panama Paraguay Peru Czech Republic Uruguay Venezuela
(a)

(e)

(h) (i) (j)

35.0 25.0 34.0 33.0 30.0 17.0 25.0 25.0 30.0 35.0 31.0 25.5 25.0 19.0 21.0 30.0 27.5 10.0 30.0 19.0 25.0 34.0

35.0 25.0 34.0 33.0 30.0 17.0 25.0 25.0 30.0 (h) 35.0 (i) 31.0 25.5 (j) 25.0 16.0 21.0 30.0 30.0 10.0 30.0 20.0 25.0 34.0

(a) 5 (b) (c) (d) 3 (f) 5 (g) 15 20 (g) 9 3 (f) (f) 3 5 (g) (k) (l) (m) (n)

(b)

(c) (d)

Tax losses from sale of shares or other equity investments may only be offset against income of the same nature. The same applies for the losses on derivatives. Foreign source tax losses may only be amortized with income from foreign sources. Losses generated after 1990 may be applied indefinitely but may only be offset each year up to an amount equal to 75% of the net taxable profit for the year. Tax losses may be applied indefinitely, but may only be offset each year up to an amount equivalent to 30% of the net taxable profit for the year. Tax losses generated in 2003, 2004, 2005 and 2006 may be amortized within

(e) (f) (g) (h)

(i)

(j)

the following eight years, but may only be up to 25% of the income tax of each year. Beginning 2007, tax losses may be amortized without limitation on the value or period. Income tax rate will be 20% in 2011 and 18.5% in 2012 and in 2013, will return to 17%. No expiration date. Operating losses are not amortizable. A state tax should be added to this percentage, which varies in each state of the USA. The weighted average combined statutory rate for 2010 and 2009 was 39.6% and 38.3%, respectively. The general tax rate is 5% but the tax base is calculated as follows: Total gross revenues less non- taxable revenues. The optional tax rate is 31% but the tax basis is different: Net income plus nondeductible expenses, less nontaxable revenues and other deductions. In the case of a taxable income greater than 1 million Lempiras, an additional 10% must be paid as temporary solidarity tax. There are two alternatives allowed for tax loss amortization: 1) four years or 2) unlimited amortization up to 50% of the net taxable profit of each year. Once made, an election may not be changed, until the accumulated losses of previous years are applied. Tax losses generated since 2004 may be amortized in the following five years. Tax losses prior to 2004 in the following seven years. Tax losses generated after 2007 may be amortized in the following five years. Based on their nature the amortization period can change: 1) Operating losses over the following three years, 2) Losses from the adjustment for inflation tax, one year; 3) Overseas, which can only be amortized against earnings from abroad, over the following three years and 4) Losses from jurisdictions with preferential tax regulations only applied to profits in such jurisdictions, over the following three years.

(k)

(l) (m) (n)

Operations in Argentina, Colombia, Guatemala and Nicaragua are subject to minimum payments of income tax or tax based on assets. Operations in Brazil and Venezuela are subject to profit sharing payments according to certain rules based on accounting income. During 2010 and 2009, there were no profit sharing payments in those countries. Detail of provisions, effective rate and deferred effects
a. Consolidated taxes on income are as follows:
2010 2009

ISR: Current Deferred

$ $

2,308 27 2,335

$ $

3,964 (1,203) 2,761

IETU: Current Deferred

1 27 28 2,363

77 (11) 66 2,827

$
b.

The reconciliation of the statutory and effective ISR rates expressed as a percentage of income before taxes on income for the years ended December 31, 2010 and 2009 is:
% 2010 % 2009

Statutory rate in Mexico Inflationary effects in the monetary balance sheet accounts for Mexican subsidiaries Nondeductible expenses, nontaxable revenues and other Difference in tax rates and currency of subsidiaries in different tax jurisdictions Inflationary tax effect of fixed assets IETU Reversal of allowance of deferred taxes Effects of increase in Mexican income tax rate in deferred taxes Effective rate
The main items originating a deferred ISR asset are:

30.0

28.0

6.3 0.1 2.2 (1.2) 0.3 (7.8) 29.9

5.3 1.6 5.5 (1.9) 0.7 (7.4) (0.1) 31.7

2010

2009

Advances from customers Allowance for doubtful accounts Inventories Property, plant and equipment Intangible assets Other reserves
Current and deferred PTU Tax loss carryforwards Valuation allowance of tax loss carryforwards

Changes in exchange rate Other items Deferred IETU

(3) (109) 9 2,358 3,812 (3,254) (287) (3,502) 173 (260) (59) 205

(8) (89) 52 2,894 3,803 (3,342) (278) (4,602) 788 262 (39) 190

Total asset, net

(917)

(369)

The net deferred income tax asset and liability has not been offset in the accompanying consolidated balance sheet as they result from different taxable entities and tax authorities. Gross amounts are as follows:
2010 2009

Deferred income tax asset Deferred income tax liability Total asset, net
c.

(1,539) 622 (917)

(635) 266 (369)

Certain tax losses will not be recoverable before their expiration date. Consequently, the Company has recognized a valuation allowance for a portion of such losses. Tax loss carryforwards for which the deferred ISR asset has been recorded may be recovered subject to certain conditions. Tax losses generated in countries and expiration dates are:
Years Amount

d.

2011 2012 2013 2014 2015 2016 and thereafter Tax losses included in the valuation allowance Total
18.

4,958 28 125 96 28 5,100 10,335 (576) 9,759

Other expenses, net a. Other expenses are comprised as follows:

2010 2009

PTU Prior year labor cost Tax incentives Loss on sale of fixed assets

$ -

653 (47) 175 169

Other $

563 150 (46) 183 326 1,176

950

b.

PTU is comprised as follows:

2010 2009

Current Deferred

694 (41) 653

624 (61) 563

19.

Commitments Guarantees and/or guarantors

a. At December 31, 2010, Grupo Bimbo, S. A. B. de C. V. and certain subsidiary companies have guaranteed bonded issued letters of credit to guarantee commercial obligations and contingent risks related to the labor obligations of certain subsidiaries. The value of such letters of credit totals US$98.2 million, of which a liability of US$113 million has already been recorded for employment benefits in the USA. The Company has guaranteed certain contingent obligations of associated companies for the amount of US$1.2 million at December 31, 2010. Similarly, the Company has issued guarantees for third-party obligations derived from the sale of assets in prior years, for the amount of US$14 million.

b.

Lease commitments
a. The Company has long-term commitments under operating leases, principally for the facilities used to produce, distribute and sell its products. These commitments vary from three to 14 years, with a renewal option of between one and five years. Certain leases require the Company to pay all related expenses, such as taxes, maintenance and insurance for the term of the contracts. Rental expense was $1,209 in 2010 and $1,500 in 2009. The total amount of lease commitments is as follows:
Year Amount

2011 2012 2013 2014 2015 2016 and thereafter Total

20.

1,333 962 747 599 495 947 $ 5,083

Contingencies Several significant contingencies exist, of varying nature, that have arisen in the normal course of business of the Company, for which management has evaluated the likelihood of loss as remote, probable or possible. Based on such evaluation, for those contingencies for which the Company believes it is probable it will be

required to use future resources to settle its obligations, the Company has accrued the following amounts within long-term liabilities:
Type Amount

Civil Criminal Labor Tax Total

171 22 100 426 719

Those contingencies for which management does not expect a material adverse effect are not accrued until other information becomes available to support the recognition of a liability.

21.

Information by geographical area

The following is the principal data by geographical area in which the Company operates for the years ended December 31, 2010 and 2009:

2 0 1 0 Mexico USA OLA Consolidation eliminations Total

Net sales Income after general expenses Net income of controlling stockholders Depreciation, amortization and other Income after general expenses, plus depreciation, amortization and other (EBITDA) Total assets Total liabilities

$ $ $ $ $ $ $

57,870 8,013 3,518 1,615 9,628 36,121 44,080

$ $ $ $ $ $ $

47,875 3,738 2,576 1,458 5,196 49,380 8,295

$ $ $ $ $ $ $

14,207 (340) (531) 1,002 662 16,045 5,679

$ $ $ $ $ $ $ -

(2,789) (18) (168)

$ $ $ $

117,163 11,393 5,395 4,075 15,468 99,069 54,532

(18) (2,477) (3,522)

$ $ $

2 0 0 9 Mexico USA OLA Consolidation eliminations Total

Net sales Income after general expenses Net income of controlling stockholders Depreciation and amortization Income after general expenses, plus depreciation and amortization (EBITDA) Total assets Total liabilities

$ $ $ $ $ $ $

55,388 7,499 2,184 1,667 9,166 36,709 50,515

$ $ $ $ $ $ $

49,850 4,261 3,889 1,466 5,727 53,361 10,069

$ $ $ $ $ $ $

13,606 301 (59) 650 951 13,563 3,259

$ $ $ $ $ $ $ -

(2,491) (7) (58)

$ $ $ $

116,353 12,054 5,956 3,783 15,837 99,666 58,709

(7) (3,967) (5,134)

$ $ $

New accounting principles

As part of its efforts to converge Mexican standards with international standards, in 2009 and 2010 the Mexican Board for Research and Development of Financial Information Standards (CINIF) issued the following NIFs, INIFs and improvements to NIFs, which become effective as follows: a. For fiscal years beginning January 1, 2011: B-5, Financial Segment Information B-9, Interim Financial Information C-4, Inventories C-5, Advance Payments and Other Assets C-6, Property, Plant and Equipment (certain paragraphs become effective beginning in 2012) C-18, Obligations Associated with the Retirement of Property, Plant and Equipment Improvements to Mexican Financial Reporting Standards 2011 Some of the most important changes established by these standards are: NIF B-5, Financial Segment Information - This standard establishes a management approach to identifying and disclosing segment information, as opposed to Bulletin B-5, which, considered a management approach but also required segment disclosures to be classified by economic segments, geographical areas or homogeneous groups of customers. This standard also differs from the previous bulletin in that it does not require that business areas be subject to different risks in order to separate them into different segments. Additionally, a component in the development or pre-operational stage may be classified as a segment. This standard also requires the separate disclosure of interest income, interest expense and liabilities, as well as disclosure of entity-wide information, including products, services, geographical areas, and major customers and suppliers. Similar to Bulletin B-5, this standard is only mandatory for public companies or entities in process of becoming public. NIF B-9, Interim Financial Information - Unlike Bulletin B-9, this standard requires the presentation of a condensed statement of changes in stockholders equity and statement of cash flows as part of interim financial information. The standard also requires, for comparative purposes, information presented at the close of an interim period be presented together with information of the corresponding period in the previous year, and in the case of the balance sheet, presentation of the closing balance sheet of the immediately preceding year. NIF C-4, Inventories - This standard eliminates direct costing as a permitted method of costing and eliminates the last-in first-out method as a technique for the measurement of cost. The standard also amended inventory valuation to be the lower of cost or market where market value is represented by net realizable value. This standard also sets rules for valuing inventory of service providers. This standard clarifies that, for inventory acquisitions in installments, the difference between the cost of inventory under normal credit terms and the actual amount paid, be recognized as a financial cost during the financing period. The standard also permits the reversal previous inventory impairment losses against current earnings of the period in which the change in estimate is determined. It also requires disclosure of the amount of inventories recognized in results of the period when cost of sales includes other elements, when a portion of cost of sales is included within discontinued operations, or when the statement of income is classified according to the nature of revenues and expenses, such that a cost of sales line item is not presented. The standard also requires disclosure of the amount of impairment losses on inventories recognized as a cost of the

period. It also requires that any change in the cost allocation method be treated as an accounting change. Additionally, it requires that advances to suppliers be recognized as inventories on upon the time when the risks and benefits of ownership are transferred to the Company. NIF C-5, Advance Payments and Other Assets - This standard establishes that a basic feature of advance payments is the fact that they do not transfer the risks and rewards of the ownership of goods and services to the Company. Therefore, advances for the purchase of inventories or property, plant and equipment, among others, must be presented separately from inventory or property, plant and equipment if the risks and rewards of ownership of those goods have not transferred to the Company. The standard requires that advance payments be impaired when they lose their ability to generate future economic benefits. This standard also requires classification of advance payments as current or noncurrent, depending on their nature. NIF C-6, Property, Plant and Equipment - This standard included within its scope property, plant and equipment used to develop or maintain biological assets as well as those of extractive industries. The standard also includes guidance with respect to the treatment of non-monetary exchanges with economic substance. The standard includes the basis for determining the residual value of a component, that being the amount that could be obtained currently from the disposal of the asset, assuming it is of the age and in the condition expected at the end of its useful life. The standard eliminates the requirement to record, at an appraised value, property, plant and equipment which was acquired at no cost or at a minimal cost that does not adequately represent the economic significance of the asset. The standard also establishes the obligation to separately depreciate significant components of an item of property, plant and equipment. This provision of the standard will be effective beginning January 1, 2012. Finally, the standard establishes a requirement to continue depreciating a component when it is not in use, except when depreciation methods are based on usage. NIF C-18, Obligations Associated with the Retirement of Property, Plant and Equipment This standard establishes specific guidance for the initial and subsequent recognition of provisions related to obligations associated with the retirement of components of property, plant and equipment and consequently eliminates the requirement to apply International Financial Reporting Interpretations Committee No. 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities, on a supplemental basis. Improvements to Mexican Financial Reporting Standards 2011:

NIF B-1, Accounting Changes and Error Corrections - The improvement to this standard requires that if the entity has implemented an accounting change or corrected an error, it should present a statement of financial position at the beginning of the earliest period for which comparative financial information is required, retroactively presenting the accounting change or error correction. The improvement also requires that each affected line item in the statement of changes in stockholders equity shows: a) initial balances previously reported, b) the related adjustment, segregating the effects of accounting changes and corrections of errors, and c) the retroactively adjusted beginning balances.
NIF B-2, Statement of Cash Flows - The improvement to this standard eliminates the requirement to present a total, between investing activities and financing activities, of the excess cash to be applied in or obtained from financing activities. Presentation of this total is now only a recommendation.

Bulletin C-3, Accounts Receivable - The improvement to this Bulletin includes standards for the recognition of interest income on accounts receivable, and clarifies that recognition of accrued interest income on receivables whose collection is doubtful is prohibited.

NIF C-10, Derivative Financial Instruments and Hedging Activities The improvement to this standard establishes specific criteria in order to exclude certain components of a derivative financial instrument from the determination of hedge effectiveness. The standard also requires that for valuation of options and currency forwards, certain components be excluded for purposes of determining effectiveness, thus resulting in the following recognition, presentation and related disclosure requirements: a) valuation of derivative financial instruments such as an option or a combination of options: changes in fair value attributable to changes in the intrinsic value of the options may be separated from changes attributable to their extrinsic value; only the change attributable to the options intrinsic value, and not the extrinsic component, may be designated as effective hedging; and b) valuation of currency exchange forwards: separation of the change in fair value attributable to differences between interest rates of the currencies to be exchanged from the change in fair value attributable to changes in the spot prices of the currencies involved is permitted; the effect attributable to the component that was excluded from the cash flow hedge may be recognized directly in current earnings. Hedge accounting is limited when a transaction is carried out with related parties who have different functional currencies. The standard requires that when a hedged position is a portion of a portfolio of financial assets or liabilities, the effect of the hedged risk relating to variances in the interest rate of the portion of such portfolio be presented as a supplement of the primary position, in a separate line item. It also states that contribution or margin accounts received, associated with transactions for trading or hedging with derivative financial instruments, be presented as a financial liability separately from the financial instruments line item when cash or marketable securities are received; additionally, only their fair value should be disclosed if securities in deposit or qualifying financial warranties are received that will not become the property of the entity. The standard also states that a proportion of the total amount of the hedging instrument, such as a percentage of its notional amount, may be designated as hedging instrument in a hedging relationship. However, a hedging relationship cannot be designated for only a portion of the term in which the instrument intended to be used as hedge is in effect. NIF C-13, Related Parties - The improvement to this standard incorporates a close family member within the definition of a related party.

Bulletin D-5, Leases - The improvement to this Bulletin removes the obligation to determine the incremental interest rate when the implicit rate is too low; consequently, it establishes that the discount rate to be used by the lessor to determine the present value of minimum lease payment should be the implicit interest rate of the lease agreement, if it can be easily determined. If the implicit rate cannot be easily determined, then the incremental interest rate should be used. The improvement also requires more detailed disclosures by both lessors and lessees. As well, the improvement requires that when a gain or loss on the sale in a sale and leaseback transaction is deferred, it should be amortized over the term of the agreement and not in proportion to the depreciation of the leased asset. The gain or loss on the sale in a sale and leaseback transaction involving an operating lease should be recognized in results at the time of sale, provided that the transaction is established at fair value. If the sale price is below the carrying value of the asset, the result should be recognized immediately in current earnings, unless the loss is offset by future payments that are below the market price of the lease, in which case the loss should be deferred and amortized over the term of the agreement. If the sale price is greater than the carrying value of the asset, the excess should be deferred and amortized over the term of agreement.
b. For fiscal years beginning January 1, 2012:

The provisions of standard NIF C-6, Property, plant and equipment that generate changes from the segregation of components of items of property, plant and equipment with different useful lives, will become effective on January 1, 2012.
At the date of issuance of these consolidated financial statements, the Company has not fully assessed the effects on its financial information of adopting these new standards. 22.

International Financial Reporting Standards In January 2009, the Mexican National Banking and Securities Commission published changes to the Issuers Official Bulletin to establish that beginning in 2012 all listed companies in Mexico will have to file their financial information under International Financial Reporting Standards, with early adoption allowed.

23.

Financial statement issuance authorization

The issuance of the consolidated financial statements was authorized by Lic. Daniel Servitje Montull, Chief Executive Officer, and the Board of Directors of the Company on March 14, 2011. These consolidated financial statements are subject to shareholders approval at the General Stockholders meeting, who may modify the financial statements, based on provisions set forth by Mexican General Corporate Law.

******

Mexico City, March 17, 2011.

To the Board of Directors of Grupo Bimbo, S.A.B. de C.V. In compliance with the provisions of the Securities Market Law, the bylaws of the Company and the Regulations of the Audit Committee, I hereby inform you of the activities undertaken by the Audit Committee during the year ended December 31, 2009. In carrying out our work, we have taken into consideration the recommendations established by the Code of Best Corporate Practices.

The Committee in full met on five sessions during the year and, as per our work plan, undertook the following activities:

EXTERNAL AUDIT As part of the negotiation that took place in 2008, the external auditor contracted to perform the audit of the financial statements for 2009 remains the same and is the only firm for all the operations and countries in which Grupo Bimbo has a presence. We verify and confirm that the contracted firm has maintained its independence. We also analyze their approach, work program and areas of interaction with Grupo Bimbos Internal Audit department. On an ongoing basis we maintained direct communication with the external auditors and they kept us informed periodically on the progress of their work and any observations they had; we took note of their comments on the quarterly and annual financial statements. We were informed in a timely manner about their conclusions and reports on the annual financial statements. After analyzing the time and fees incurred, we authorized payment to the external auditors for auditing and other approved services. We are assured that their independence from the Company was not compromised.

INTERNAL AUDIT We reviewed and approved the annual work plan and budgeted activities for the year. We received and approved the periodic reports on the state of progress of the approved work plan. We followed up on the comments and suggestions made, as well as on their implementation. We verified that there was an annual training program in place and verified that it was effective.

FINANCIAL INFORMATION AND ACCOUNTING POLICIES We reviewed the quarterly and annual financial statements of the Company with the personnel responsible for their preparation, recommended their approval by the Board of Directors, and authorized their publication. Throughout the process we took the opinions and comments issued by the external auditors into consideration. With the support of the internal and external auditors, in issuing our opinion on the financial statements we verified that the accounting policies and criteria and the information utilized by

management in the preparation of the financial statements was appropriate and sufficient and had been applied in a manner that was consistent with the prior year. As a result, the information presented by management fairly reflects the financial position, results of operations and cash flows of the Company. We approved the adoption of the new accounting procedures and standards that went into effect in 2009 which were issued by the organization responsible for accounting standards in Mexico.

INTERNAL CONTROLS We verified that management has established general guidelines for internal control, as well as the necessary procedures to implement and comply therewith. In addition, we followed up on the comments and observations made by the external and internal auditors in this regard during the course of their work.

COMPLIANCE WITH APPLICABLE REGULATORY STANDARDS AND LAWS; CONTINGENCIES With the support of the internal and external auditors, we confirmed the existence and reliability of the controls established by the Company to assure compliance with the various legal statutes to which it is subject, and assured that there was adequate disclosure in the financial information. We periodically reviewed the Companys numerous tax, legal and labor contingencies and confirmed that appropriate procedures were in place to identify and address such contingencies.

CODE OF ETHICS With the support of those responsible at the Company, we verified the existence of the Code of Ethics for associates as well as the instructions to be reviewed by everyone prior to signing their agreement to the document annually. In addition, we suggested to management that establishment of a communication or whistle-blower line for Grupo Bimbos associates, which will be implemented next year.

COMPLIANCE WITH OTHER OBLIGATIONS We held meetings with executives and officers as considered necessary to remain informed about the progress of the Company and any relevant or unusual activities and events. We obtained information about significant matters that could involve possible non-compliance with operating policies, the internal control system and policies on accounting records, and we were also informed of corrective measures taken in each such instance and found them satisfactory. We did not deem it necessary to request advice or opinions from independent experts, because the issues addressed in each meeting were duly supported by the necessary relevant information; as such the conclusions we reached were satisfactory to Committee members. In my capacity as Chairman of the Audit Committee, I reported quarterly to the Board of Directors on the activities conducted within the Committee. The work that we conducted was duly documented in minutes prepared for each meeting, which were reviewed and approved at the time by the members of the Committee.

Sincerely,

Henry Davis Chairman of the Audit Committee Grupo Bimbo, S.A.B. de C.V.