OFFERING MEMORANDUM US$250,000,000 SIGMA ALIMENTOS, S.A. DE C.V. (Incorporated in ) 6.875% Senior Notes due 2019

We are offering US$250,000,000 aggregate principal amount of our 6.875% Senior Notes due 2019. We will pay interest on the notes semi-annually in arrears on June 16 and December 16 of each year, commencing on June 16, 2010. The notes will mature on December 16, 2019.

We may redeem the notes, in whole or in part, at any time prior to their maturity by paying the greater of the outstanding principal amount of the notes and a “make-whole” amount, in each case plus accrued and unpaid interest, if any. In the event of certain developments affecting taxation, we may redeem all, but not part, of the notes. Upon the occurrence of a change of control triggering event, we will be required to offer to repurchase the notes at 101% of the principal amount thereof, plus accrued and unpaid interest, if any.

The notes will be our senior unsecured obligations and will rank equally in right of payment to all of our existing and future senior unsecured indebtedness. The notes will be guaranteed on a senior unsecured basis by certain of our subsidiaries.

We have applied to have the notes admitted to listing on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market.

Investing in the notes involves risks. See “Risk Factors” beginning on page 12.

Issue Price: 98.059%, plus accrued interest from December 16, 2009.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE NATIONAL SECURITIES REGISTRY (REGISTRO NACIONAL DE VALORES) MAINTAINED BY THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION (COMISIÓN NACIONAL BANCARIA Y DE VALORES), AND MAY NOT BE OFFERED OR SOLD PUBLICLY OR OTHERWISE BE THE SUBJECT OF BROKERAGE ACTIVITIES IN MEXICO, ABSENT AN AVAILABLE PRIVATE PLACEMENT EXEMPTION UNDER ARTICLE 8 OF THE MEXICAN SECURITIES MARKET LAW (LEY DEL MERCADO DE VALORES). THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION WILL BE NOTIFIED OF THE TERMS AND CONDITIONS OF THIS OFFERING TO COMPLY WITH LEGAL REQUIREMENTS AND FOR INFORMATIONAL PURPOSES ONLY, AND SUCH NOTICE DOES NOT CONSTITUTE A CERTIFICATION AS TO THE INVESTMENT VALUE OF THE NOTES OR OF OUR SOLVENCY, LIQUIDITY OR CREDIT QUALITY. THIS OFFERING MEMORANDUM IS SOLELY OUR RESPONSIBILITY AND HAS NOT BEEN REVIEWED OR AUTHORIZED BY THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION. IN MAKING AN INVESTMENT DECISION, ALL INVESTORS, INCLUDING ANY MEXICAN CITIZEN WHO MAY ACQUIRE NOTES FROM TIME TO TIME, MUST RELY ON THEIR OWN EXAMINATION OF US AND THE GUARANTORS.

The notes and the guarantees have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. We are offering the notes to qualified institutional buyers in reliance on Rule 144A under the Securities Act and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. You are hereby notified that sellers of the notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. See “Transfer Restrictions” for additional information about eligible offerees and transfer restrictions.

We expect that the notes will be delivered in book-entry form through The Depository Trust Company on or about December 16, 2009.

Joint Book-Running Managers Deutsche Bank Securities Santander

The date of this offering memorandum is December 9, 2009 To the best of our knowledge, the information contained in this offering memorandum is in accordance with the facts and contains no omissions likely to affect the import of this offering memorandum.

We accept responsibility for the information contained in this offering memorandum regarding Sigma Alimentos, S.A. de C.V., the subsidiary guarantors, the notes and the indenture governing the notes.

This offering memorandum is a prospectus for the purposes of the admission to listing on the Official List of the Luxembourg Stock Exchange and to trading of the notes on the Euro MTF Market in accordance with the rules and regulations of the Luxembourg Stock Exchange. The Euro MTF Market is not a “regulated market” in the sense of Article 36 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC. This document does not constitute a prospectus for the purposes of Article 3 of Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading, amending Directive 2001/34/EC.

Neither this offering memorandum, any accompanying documents nor any other marketing materials relating to the offer (together the “Offer Materials”) have been delivered for approval to the Commission de Surveillance du Secteur Financier in Luxembourg as competent authority in Luxembourg for the purposes of the Prospectus Directive as implemented by the Luxembourg law dated 10 July 2005 on Prospectuses (the “Prospectus Directive Law”). No approved prospectus within the meaning of articles 5 and 8 of the Prospectus Directive Law has been prepared or published or is intended to be prepared or published in relation to the offer referred to in this offering memorandum or any other offer materials. This offering memorandum does not constitute a prospectus for the purposes of the Prospectus Directive Law, and any offer performed hereunder is only made in accordance with the exemption provided for under article 5.2(d) of the Prospectus Directive Law considering that the notes to be issued in accordance with the provisions of this offering memorandum and any other Offer Materials have a nominal value of at least the U.S. dollar equivalent of 50,000 euros.

i In making your investment decision, you should rely on the information contained in this offering memorandum. We have not, and the initial purchasers have not, authorized any person to provide you with different information. If any person provides you with different or inconsistent information, you should not rely on it. You should assume that the information in this offering memorandum is accurate as of the date on the front cover of this offering memorandum only. Our business, properties, results of operations or financial condition may have changed since that date. Neither the delivery of this offering memorandum nor any sale made hereunder will under any circumstances imply that the information herein is correct as of any date subsequent to the date on the front cover of this offering memorandum. TABLE OF CONTENTS Page

Available Information ...... iv Cautionary Disclosure Regarding Forward-Looking Statements ...... iv Industry and Market Data ...... v Certain Definitions ...... vi Presentation of Financial Information ...... vi Summary ...... 1 The Offering ...... 6 Risk Factors ...... 12 Exchange Rates ...... 28 Use of Proceeds ...... 29 Capitalization ...... 30 Selected Consolidated Financial and Operating Data ...... 31 Management’s Discussion and Analysis of Financial Condition and Results of Operations ...... 34 Business ...... 53 Management ...... 68 Principal Shareholder and Related Party Transactions ...... 71 Description of Other Indebtedness ...... 73 Description of the Notes ...... 78 Book-Entry, Delivery and Form ...... 103 Transfer Restrictions ...... 108 Certain Material Income Tax Considerations ...... 110 Certain ERISA Considerations ...... 115 Plan of Distribution ...... 116 Enforcement of Civil Liabilities ...... 120 Legal Matters ...... 121 Independent Accountants ...... 121 Listing and General Information ...... 121 Index to Consolidated Financial Statements ...... F-1 Appendix A—Summary of Certain Differences Between MFRS and U.S. GAAP ...... A-1 This offering memorandum has been prepared by us solely for use in connection with the proposed offering of the notes described in this offering memorandum. This offering memorandum is personal to each offeree and does not constitute an offer to any other person or the public generally to subscribe for or otherwise acquire notes. We are not, and the initial purchasers are not, making an offer to sell the notes in any jurisdiction except where such an offer or sale is permitted. You must comply with all applicable laws and regulations in force in your jurisdiction and you must obtain any consent, approval or permission required of you for the purchase, offer or sale of the notes under the laws and regulations in force in your jurisdiction to which you are subject or in which you make such purchase, offer or sale, and neither we nor the initial purchasers will have any responsibility therefor. We are relying upon an exemption from registration under the Securities Act for an offer and sale of securities which do not involve a public offering. By purchasing notes, you will be deemed to have made certain acknowledgements, representations and warranties and agreements as set forth under “Transfer Restrictions” in this

ii offering memorandum. The notes are subject to restrictions on transfer and resale and may not be transferred or resold except as permitted under the Securities Act and applicable state securities laws pursuant to registration or exemption therefrom. As a prospective purchaser, you should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time. The initial purchasers make no representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained in this offering memorandum. Nothing contained in this offering memorandum is, or shall be relied upon as, a promise or representation by the initial purchasers as to the past or future. None of the U.S. Securities and Exchange Commission (the “SEC”), any state securities commission or any other regulatory authority has approved or disapproved of the notes nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of this offering memorandum. Any representation to the contrary is a criminal offense. In making an investment decision, prospective investors must rely on their own examination of our company and the terms of the offering, including the merits and risks involved. Prospective investors should not construe anything in this offering memorandum as legal, business or tax advice. Each prospective investor should consult its own advisors as needed to make its investment decision and to determine whether it is legally permitted to purchase the notes under applicable legal investment or similar laws or regulations. We and the initial purchasers may reject any offer to purchase the notes in whole or in part, sell less than the entire principal amount of the notes offered hereby or allocate to any investor less than all of the notes for which it has subscribed. Neither we nor the initial purchasers can assure you that our application for the admission of the notes to listing on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market will be approved as of the settlement date for the notes or at any time thereafter. The sale or purchase of the notes is not conditioned on obtaining this listing. We own or have rights to use the trademarks, service marks and trade names that we use in conjunction with the operation of our business. Some of the more important trademarks that we own or have rights to use that appear in this offering memorandum include: Tangamanga®, Oscar Mayer®, Guten®, Bernina®, San Rafael®, FUD®, Iberomex®, Nayar®, Viva®, San Antonio®, Galicia®, Noche Buena®, Chen®, La Villita®, Franja® and Yoplait®, each of which may be registered or trademarked in Mexico, the United States and other jurisdictions. Solely for convenience, we may refer to our trademarks, service marks and trade names in this offering memorandum without the ™ and ® symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted under applicable law, our rights to our trademarks, service marks and trade names. Each trademark, trade name or service mark of any other company appearing in this offering memorandum is, to our knowledge, owned by such other company. NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER CHAPTER 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

iii AVAILABLE INFORMATION

So long as any notes remain outstanding, we will make available, upon request, to any holder and any prospective purchaser of notes the information required pursuant to Rule 144(A)(d)(4)(i) under the Securities Act, during any period in which we are not subject to Section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).

You may obtain a copy of the indenture that governs the notes by requesting it in writing or by telephone at the address and phone number below.

Sigma Alimentos, S.A. de C.V. Attention: Ricardo Doehner or Javier Rios Ave. Gómez Morín 1111 Sur Col. Carrizalejo, San Pedro Garza García 66254 Nuevo León, México Telephone number (52-81) 8748-9000

In addition, for so long as the notes are listed on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market, you may also obtain a copy of the indenture at the office of the paying agent in Luxembourg set forth on the inside back cover of this offering memorandum.

CAUTIONARY DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This offering memorandum includes forward-looking statements. These statements relate to our future prospects, developments and business strategies and are identified by our use of terms and phrases such as “anticipate,” “believe,” “could,” “would,” “will,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “goals,” “target,” “strategy” and similar terms and phrases, and may include references to assumptions. These statements are contained in the sections entitled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and other sections of this offering memorandum.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global economic, business, market and regulatory conditions, without limitation, and the following:

• the effects of the global economic recession; • competition and loss of market shares; • our ability to implement our strategy; • the loss of one or more significant customers; • the performance of our customers which are retailers and any preference they give to products of our competitors; • changing consumer preferences; • the loss of our licensing and franchise agreements; • losses in connection with derivative financial instruments;

iv • risks related to fluctuations in interest rates;

• disruption of our supply chain;

• the buying power of our customers;

• increases in commodity or other raw material costs;

• the failure of our suppliers to perform in a timely manner;

• health and product liability risks related to the food industry;

• changes in health-related regulations;

• trade barriers;

• the imposition of price controls over our products;

• costs, difficulties, uncertainties and regulations related to mergers, acquisitions or joint ventures;

• risks inherent in international operations;

• health epidemics and other outbreaks in Mexico;

• compliance with environmental and other governmental laws and regulations;

• deterioration of labor relations with our employees or increase in labor costs;

• loss of key personnel;

• risks related to our control by our parent company, Alfa, S.A.B. de C.V., whose interest may not be aligned with yours;

• interruptions or failures in our information technology systems; and

• terrorist activities and geopolitical events.

Any forward-looking statements in this offering memorandum are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the current circumstances and only as of the date on which we make them. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Forward-looking statements are not a guarantee of future performance and actual results or developments may differ materially from expectations. For all the foregoing reasons, you are cautioned against relying on such forward-looking statements. Industry forecasts by third parties contained herein involve similar concerns and risks. While we continually review trends and uncertainties affecting our results of operations and financial condition, we do not intend to update any particular forward-looking statements contained in this offering memorandum, whether as a result of new information, future developments or otherwise.

INDUSTRY AND MARKET DATA

Statements in this offering memorandum with respect to market and other industry data are based on industry sources, such as The Nielsen Company (“Nielsen”) as well as our internal studies. Industry publications and forecasts may state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. Although we believe the information in this offering memorandum from third-party sources is reliable in all material respects, we have not independently verified such data or ascertained the underlying assumptions relied upon therein.

v CERTAIN DEFINITIONS

In this offering memorandum, except where indicated or the context otherwise requires, references to:

• “Sigma,” “our company,” “we,” “us,” or “our” mean Sigma Alimentos, S.A. de C.V., a corporation (sociedad anónima de capital variable) organized under the laws of Mexico, and all of its subsidiaries. • “tons” means metric tons (one metric ton is equal to 1,000 kilograms or 2,204.6 pounds). • “Alfa” means Alfa, S.A.B. de C.V., the parent company of Sigma. • “CNBV” means the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores). • “Free Exchange Rate” means the exchange rate calculated and published by Banco de México, Mexico’s central bank, in the Official Gazette of Mexico (Diario Oficial de la Federación) for the conversion of U.S. dollar-denominated amounts into pesos. • “GAAP” means generally accepted accounting principles in the United States. • “GDP” means the gross domestic product of the indicated country. • “IFRS” means International Financial Reporting Standards, as issued from time to time by the International Accounting Standards Board. • “MFRS” means Mexican Financial Reporting Standards, as issued from time to time by the Mexican Financial Reporting Standards Board (Consejo Mexicano para la Investigación de Normas de Información Financiera). • “NCPI” means the National Consumer Price Index (Índice Nacional de Precios al Consumidor), published from time to time by Banco de México, Mexico’s central bank, in the Official Gazette of Mexico or any index that may replace it. • “pesos” or “Ps.” means the lawful currency of Mexico. • “Sodima” means Sodima, S.A.S., a French company, which has granted us franchise rights to manufacture, market and distribute Yoplait® brand products. • “U.S. dollars” or “US$” means the lawful currency of the United States of America.

Certain capitalized terms used but not defined in this offering memorandum will be defined in the indenture governing the notes. See “Description of the Notes—Certain Definitions.”

PRESENTATION OF FINANCIAL INFORMATION

The financial statements and other financial information in this offering memorandum have been prepared in accordance with MFRS issued by the Mexican Financial Reporting Standards Board (Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera or “CINIF”). MFRS differ in certain significant respects from generally accepted accounting principles as applied in the United States (“U.S. GAAP”). For a description of certain differences between MFRS and U.S. GAAP, see Appendix A—“Summary of Certain Differences between MFRS and U.S. GAAP.” We have not prepared a reconciliation of our consolidated financial statements and notes thereto to U.S. GAAP and have not quantified such differences. Accordingly, we cannot assure you that the description of certain differences between MFRS and U.S. GAAP in Appendix A is complete. Alfa, our parent company, will be required by 2012 to prepare its financial statements in accordance with International Financial Reporting Standards (“IFRS”). As a result, we may elect to adopt IFRS in or before 2012.

vi MFRS B-10 “Inflation Effects” no longer requires us to recognize the effects of inflation unless the economic environment qualifies as “inflationary” as defined by MFRS (i.e., inflation exceeds 26% in the three most recent years). Because of the relatively low level of Mexican inflation in recent years (6.5% in 2008, 3.8% in 2007 and 4.1% in 2006), the cumulative inflation rate in Mexico over the three-year period ended December 31, 2008 does not qualify the Mexican economic environment as inflationary. As of December 31, 2008 and September 30, 2009, of the countries in which we have subsidiaries, only and qualified as “inflationary” for purposes of MFRS B-10. Accordingly, MFRS requires that all financial information as of December 31, 2007 and for prior periods be presented in pesos of purchasing power as of December 31, 2007 and financial information beginning January 1, 2008 and thereafter be presented in adjusted nominal pesos.

Our interim condensed consolidated financial statements included herein are unaudited but reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of these interim periods are not necessarily indicative of results for a full year. Our interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements.

This offering memorandum contains translations of certain peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These convenience translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the specified rate or at all. Furthermore, the exchange rate for purposes of the convenience translation is not necessarily the same rate we used in preparing our financial statements, which means that U.S. dollar- denominated items, including U.S. dollar-denominated expenses and liabilities, may have been translated into pesos using one exchange rate (or an average exchange rate) and have been retranslated into U.S. dollars for convenience of the reader using the convenience translation exchange rate. The exchange rate used for purposes of convenience translation is the Free Exchange Rate calculated and published by Banco de México in the Official Gazette of Mexico for the conversion of U.S. dollar-denominated amounts into pesos. At September 30, 2009, the Free Exchange Rate was 13.5042 pesos per U.S. dollar. See “Exchange Rates.”

We have made rounding adjustments to some amounts included in this offering memorandum. As a result, amounts shown as totals in some tables may not be arithmetic aggregations of the amounts that precede them.

Non-GAAP Financial Measures

A body of generally accepted accounting principles is commonly referred to as “GAAP.” A non-GAAP financial measure is generally defined as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable MFRS or U.S. GAAP measure. We present “Adjusted EBITDA” in this offering memorandum, which is a non-GAAP financial measure. We define Adjusted EBITDA to mean consolidated net income (loss) after adding back or subtracting, as the case may be: (1) depreciation and amortization; (2) comprehensive financing expense, net (which includes financial expense, financial income, exchange loss (gain), net, effect of derivative financial instruments, net and gain on monetary position); (3) other expenses, net (which typically consists of non-recurring items under MFRS); and (4) income tax.

In managing our business we rely on Adjusted EBITDA as a means of assessing our operating performance. We believe that Adjusted EBITDA enhances the understanding of our financial performance and our ability to satisfy principal and interest obligations with respect to our indebtedness as well as to fund capital expenditures and working capital requirements. We also believe Adjusted EBITDA is a useful basis of comparing our results with those of other companies because it presents operating results on a basis unaffected by capital structure and taxes. Adjusted EBITDA, however, is not a measure of financial performance under MFRS or U.S. GAAP and should not be considered as an alternative to net income or operating income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Adjusted EBITDA has material limitations that impair its value as a measure of our overall profitability since it does not address certain ongoing

vii costs of our business that could significantly affect profitability such as financial expenses, income taxes, depreciation, amortization and the impact of derivative instruments (except when designated as hedge accounting in accordance with MFRS). Our calculation of Adjusted EBITDA may not be comparable to other companies’ calculation of similarly titled measures. For a reconciliation of Adjusted EBITDA to consolidated net income (loss) under MFRS for 2006, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, see note 11 under “Summary—Summary Consolidated Financial and Operating Data” in this offering memorandum.

viii SUMMARY

You should read the following summary together with the more detailed information appearing elsewhere in this offering memorandum, including the consolidated financial statements and notes thereto. In this offering memorandum, references to “Sigma,” “our company,” “we,” “us” and “our” refer to the business of Sigma and its subsidiaries on a consolidated basis unless indicated or the context requires otherwise.

Overview

We are a leading producer, marketer and distributor of quality branded foods, including processed meats, , yogurt and prepared meals, throughout Mexico, our principal market, as well as to the Hispanic market in the United States and throughout Central America, the and . We estimate that in Mexico in 2008, based on annual tonnage, we had a 50% market share in the processed meats market, a 28% market share in the formal cheese market, both of which represent the leading market positions, and a 20% market share in the yogurt market.

Our extensive refrigerated distribution network of 31 plants, 144 distribution centers and over 3,200 active delivery routes reaches over 400,000 customer locations in the markets we serve. We believe that our distribution network in Mexico is one of the most extensive in the country and would be difficult to replicate.

We have developed a broad portfolio of brands that are among the most recognized brands across a diverse Mexican consumer base and that have resulted in leading market positions in the competitive Mexican food markets in which we operate. Our broad portfolio of brands — from premium to economy brands — are targeted to differentiated socioeconomic market segments, which allows us to capture sales across all such market segments.

Our customers include small family-owned stores, superstores, wholesalers and convenience stores. We have had relationships of over 30 years with six of our top ten customers, including our largest customer, Wal-Mart de Mexico S.A.B. de C.V. and its affiliated stores (together, “Wal-Mart de Mexico”). In 2008, we generated approximately 31.0% of our net sales from our ten largest customers, with Wal-Mart de Mexico accounting for over 13.2% of our net sales.

As a result of our growing operations in the United States, Central America, the Dominican Republic and Peru, we are generating an increasing percentage of our net sales from outside of Mexico. For the nine months ended September 30, 2009, we generated 19.6% of net sales outside of Mexico, compared to 16.1% of net sales outside of Mexico in 2008.

Our portfolio of brands, range of innovative products, focus on our production and distribution processes, and extensive distribution network have allowed us to continue to grow net sales and cash flow. We generated net sales of Ps. 26,101 million (US$1,933 million) and Adjusted EBITDA of Ps. 2,872 million (US$213 million) for the year ended December 31, 2008; and net sales of Ps. 22,153 million (US$1,640 million) and Adjusted EBITDA of Ps. 2,837 million (US$210 million) for the nine months ended September 30, 2009.

We are based in Monterrey, Mexico and are a wholly owned subsidiary of Alfa, S.A.B. de C.V., one of Mexico’s largest publicly traded conglomerates. We were incorporated in 1971 and acquired by Alfa in 1980.

1 Competitive Strengths

We believe our competitive position is enhanced by the following key strengths:

Strong Portfolio of Brands Targeted to Differentiated Market Segments

We have a portfolio of brands that are among the most recognized by consumers in Mexico and targeted to differentiated market segments across the diverse consumer base we serve. For example, we target the premium segments of the processed meat market with our Tangamanga® brand products, the high end of the market with our San Rafael® brand products, the middle of the market with our FUD® brand products, the economy segment with our Chimex® and Viva® brand products, and the low end of the market with our San Antonio® brand products. We own most of our brands, but also license and produce yogurt under the Yoplait® brand throughout Mexico, Central America and the Dominican Republic. For 2008, sales from brands we own constituted 88% of our net sales.

Leading Position in Key Markets

We have the leading market positions in both the processed meats and cheese markets in Mexico and a significant market share in the market for yogurt products, which allows us to capture margin benefits associated with economies of scale. We estimate that in Mexico in 2008, we had a 50% market share in the 740,000 annual ton processed meats market, a 28% market share in the 290,000 annual ton formal cheese market and a 20% market share in the 534,000 annual ton yogurt market. Over the last five years, we have strengthened our position in the processed meats and cheese markets through the acquisition and successful integration of small, regional companies. We have also leveraged our distribution and sales organization that services small family-owned stores by implementing more efficient operating procedures, such as presales of customer orders, to enhance our customer service and market presence. These efforts have allowed us to increase our customer base as well as the number of products sold to each customer.

Extensive Refrigerated Distribution Network

We operate one of the most extensive refrigerated distribution networks in Mexico, Central America and the Dominican Republic, which we have recently expanded to the United States and Peru. We believe that it would be difficult for a competitor to build a refrigerated distribution network similar in scope to ours in Mexico and Central America. Our network includes 144 strategically located distribution centers and approximately 5,000 vehicles that serve 16 processed meats plants, 12 dairy products plants, two other refrigerated meals plants and one beverage plant. With over 3,200 active delivery routes and over 5,000 sales representatives, we are able to reach over 400,000 customer locations, the vast majority of which are small family-owned stores that represent approximately one-third of our net sales.

Innovative Product and Process Development

We continuously seek to improve our products as well as the processes utilized to manufacture and distribute these products. For example, we developed a range of innovative products in the cheese market that target a variety of customer needs, such as ease of use and smaller volume packaging, by offering resealable packaging for shredded and sliced cheese, multi-pack packaging for our small family-owned customers and cheese dips and sauces. To enhance our offerings in the yogurt market, we receive marketing and technical assistance from Sodima and its network of world-wide Yoplait® franchisees. In our other refrigerated product line, we have developed new products such as refrigerated pizzas and precooked meals. In addition, we continue to develop our product pipeline, which we expect to contribute to future sales growth.

2 Strong Cash Flow

We have a history of generating consistent cash flow even during slowdowns affecting our industry or the overall economy of Mexico. Despite soft economic conditions in 2008 and 2009, we have continued to increase Adjusted EBITDA, which grew by 36.3% for the nine months ended September 30, 2009 compared to the same period in 2008. We have managed to reduce costs and maintain our Adjusted EBITDA margins (Adjusted EBITDA as a percentage of net sales) despite the higher prices in peso terms of our U.S. dollar-denominated raw material prices, which we have generally been able to pass on to our customers. Our operations also require relatively modest amounts of maintenance capital expenditures, such that free cash flow is available for investing in and growing our business.

Experienced Management Team

Our team of ten senior executives has an average of 17 years in the industry across a wide range of marketing, manufacturing and distribution functions, as well as a successful track record in integrating acquired businesses. Our senior management team is supported by the resources provided by our parent, Alfa, including development and training opportunities it offers our employees.

Business Strategy

Our objective is to become the leading refrigerated food company in Mexico, the U.S. Hispanic market, Central America, the Dominican Republic and Peru by leveraging our competitive advantages in those markets. The principal elements of our strategy are as follows:

• Strengthen our Leading Market Position in Mexico

We seek to consolidate our market leadership in Mexico. We reinforce our brands through advertising and promotion activity, and also create new alternatives for customers through constant innovation in new products, packaging and processes. We also seek to increase our customer base by further expanding our existing distribution channels.

• Promote Growth in the Mexican Cheese Market

We seek to transform the Mexican cheese market by introducing innovative products to a generally mature market, which is highly fragmented and consists mainly of small family-owned producers. We regularly launch new product and packaging offerings in this market. We are focused on satisfying the regional taste preferences of consumers within Mexico, as well as the needs of our different distribution channels. We also seek to drive demand by creating new products which offer consumers additional consumption opportunities.

• Further Develop Central American, Caribbean and South American Operations

The geographic diversification of end markets has been part of our strategy since 2002 when we started our Central American operations with the acquisition of food companies in Costa Rica. We seek to capitalize upon our substantial experience in Mexico by replicating our business model throughout Central America, the Dominican Republic and Peru. We plan to expand in these regions through consolidation and further expanding our product offerings. We plan to expand distribution into these areas with products from our existing portfolio that have proven successful in the Mexican market.

3 • Target the U.S. Hispanic Market

We seek to capitalize on our brand recognition along with the preference for our products among U.S. Hispanic consumers, who typically have a higher purchasing power than Mexican consumers. Besides leveraging “nostalgia” for Mexican products, our knowledge of purchasing patterns of U.S. Hispanics and our traditional flavors are playing a key role in penetrating this market. Through acquisitions, such as our recent acquisition of Mexican Cheese Producers, Inc. (“Mexican Cheese Producers”) in Wisconsin, or developing our own facilities, such as our processed meat plant in Oklahoma, we intend to further penetrate this market by satisfying the needs of the U.S. Hispanic consumer.

• Expand our Food Service Operations

We believe there is major opportunity in Mexico for continued growth in the food service business. Currently, our food service business has over 7,600 customers throughout Mexico, such as restaurants, hospitals, penitentiaries, schools, hotels and movie theaters. We have a separate and specialized sales organization to serve our food service customers and we are developing customized products and solutions to better serve this market. We are exploring opportunities to expand these offerings in the other markets in which we operate.

• Continue to Develop New Products

We believe that innovation is key to long-term growth. Through our research and development (“R&D”) staff, research collaboration arrangements with educational and governmental institutions, and an innovative product pipeline, we have become leaders in developing new refrigerated products. Most recently, our innovation initiative focused on two main categories: refrigerated pizzas; and precooked meals. Refrigerated pizzas became our first product extension of one of our pillar brands, San Rafael®. Additionally, in 2006, we launched our precooked meal product, Guten®, as a new category and brand in Mexico.

4 Corporate Organization

The following chart summarizes our corporate structure including all of our subsidiaries, which are directly or indirectly wholly owned by us. The subsidiaries identified by grey shading will guarantee the notes. The subsidiary guarantors (in addition to Sigma Alimentos, S.A. de C.V. on a stand-alone basis) represented in the aggregate 88.7% of our total consolidated assets and 92.7% of our consolidated Adjusted EBITDA as of and for the year ended December 31, 2008 and 92.3% of our total consolidated assets and 91.9% of our consolidated Adjusted EBITDA as of and for the nine months ended September 30, 2009.

Sigma Alimentos, S.A. de C.V. (1) (Mexico)

Sigma Alimentos Sigma Alimentos Sigma Alimentos Sigma Alimentos Distribuidora y Comercializadora de Comercializadora Comercializadora de Embutidos ICO, S.A. Corporativo, S.A. Centro, S.A. de Comercial, S.A. Lácteos, S.A. de (2) Láctica, S.A. de (4) (2) (3) (2) Lácteos del Norte, de C.V. (3) de C.V. C.V. de C.V. C.V. (3) C.V. S.A. de C.V. (Mexico) (Mexico) (Mexico) (Mexico) (Mexico) (Mexico) (Mexico)

Alimentos Finos Carnes Selectas Sigma Alimentos Sigma Alimentos Lácteos Finos de Occidente, Tangamanga, Congelados, S.A. Importaciones, Mexicanos, S.A. S.A. de C.V. (2) S.A. de C.V. (2) de C.V. (2) S.A. de C.V. (3) de C.V. (2) (Mexico) (Mexico) (Mexico) (Mexico) (Mexico)

Sigma Alimentos Empacadora de Sigma Processed Sigma Foods, Sigma Alimentos Sigma Alimentos Noreste, S.A. de Embutidos del Centro, Meats, Inc. (2) Inc. (3) Panamá, S.A. (4) Carnes Frías, S.A. (2) (2) (4) C.V. S.A. de C.V. (United States) (United States) () de C.V. (Mexico) (Mexico) (Mexico)

Sigma Alimentos Productos Cárnicos Bonanza Empacadora de Sigma Alimentos Sigma Alimentos Dominicana, de Occidente, S.A. Industrial, S.A. de Carnes Premium, Nicaragua, , S.A (2) (2) S.A. de C.V. C.V. (2) S.A. de C.V. (2) S.A. (3) de C.V. (3) (Dominican Republic) (Mexico) (Mexico) (Mexico) (Nicaragua) (Guatemala)

Productos Productos de Hacienda de Sigma Alimentos Granja Industrial Servilac, S.A. de Cárnicos S.A. de Importación, S.A. Cerdos, S.A. (3) International, Bonanza S.A. de C.V. (4) (2) (3) (3) (3) C.V. de C.V. (Dominican Inc. C.V. (Mexico) () () Republic) (United States) (El Salvador)

Sigma Alimentos Sigma Alimentos Transportación Costa Rica, Prom, S.A. de Aérea del Norte S.A. (2) C.V (4) S.A. de C.V (4) (Costa Rica) (Mexico) (Mexico)

Grupo Chen, Sigma Alimentos Lácteos Finos Industrias S. de R.L. de Exterior, S.L. (1) Holdings New Zealand Alimentarias del (1) Limited, S.A. de C.V. Sureste, S.A. C.V. () (4) (2) de C.V. (Mexico) (Mexico) (Mexico)

(2) Autotransportes Braedt, S.A. Mexican Cheese Lácteos Sigma Proyección Especializados de (Peru) Producers, Inc.(2) B.V.(5) Inmobiliaria Saltillo, S.A. de Yucateca, S.A (4) (United States) () (4) C.V. de C.V (Mexico) (Mexico)

Distribuidora de Sigma Europe (1) Holding company. Quesos B.V. (5) (3) (2) Production and distribution Mexicanos, Inc. (Netherlands) company. (United States) (3) Distribution company. (4) Services company. (5) Trademark holding company.

Our executive offices are located at Ave. Gomez Morin No. 1111 Sur, Col. Carrizalejo, San Pedro Garza Garcia, Nuevo Leon, 66254 México. Our telephone number is (52-81) 8748-9000.

5 THE OFFERING

The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The “Description of Notes” section of this offering memorandum contains a more detailed description of the terms and conditions of the notes.

Issuer ...... Sigma Alimentos, S.A. de C.V. Notes Offered ...... US$250million aggregate principal amount of 6.875% Senior Notes due 2019. Issue Price ...... 98.059%, plus accrued interest, if any, from December 16, 2009. Maturity Date ...... December 16, 2019. Interest Rate and Payment Dates .... Wewill pay interest on the notes on June 16 and December 16 of each year, beginning on June 16, 2010, at a rate of 6.875% per year. Interest will accrue from December 16, 2009. Guarantors ...... Thenotes will be fully and unconditionally guaranteed on a senior unsecured basis by certain of our subsidiaries identified under “Description of the Notes—Subsidiary Guarantees.” Our guarantor subsidiaries accounted for 88.7% of our total consolidated assets and 92.7% of our consolidated Adjusted EBITDA as of and for the year ended December 31, 2008 and 92.3% of our total consolidated assets and 91.9% of our consolidated Adjusted EBITDA as of and for the nine months ended September 30, 2009. Ranking ...... Thenotes and the guarantees will be senior unsecured obligations of us and the subsidiary guarantors and will rank: • equally with all of our and our subsidiary guarantors’ respective existing and future senior unsecured indebtedness (subject to certain labor and tax obligations for which preferential treatment is given under Mexican law); and • senior to all of our and our subsidiary guarantors’ respective future subordinated indebtedness. The notes and the guarantees will effectively rank junior to all of our and our subsidiary guarantors’ respective existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness. The notes and the guarantees will be structurally subordinated to all existing and future indebtedness and trade payables of our non-guarantor subsidiaries. As of September 30, 2009, we had consolidated total indebtedness of Ps. 8,386 million (US$621 million), of which Ps. 114 million (US$8 million) was secured indebtedness. As of the same date, after giving effect to the issuance and sale of the notes and the application of the net proceeds from this offering as described under “Use of Proceeds,” we would have had consolidated total indebtedness of Ps.8,540 million (US$632 million). As of September 30, 2009, approximately Ps. 360 million (US$27 million), or 4.3% of our total indebtedness, was indebtedness of non-guarantor subsidiaries (excluding guarantees and intercompany loans).

6 Optional Redemption ...... Wemayredeem the notes, in whole or in part, by paying the greater of the outstanding principal amount of the notes and a “make-whole” amount, plus accrued and unpaid interest to the date of redemption. See “Description of the Notes—Optional Redemption.” Additional Amounts ...... Paymentsofinterestonthenotestoinvestorsthatarenon-residents of Mexico will generally be subject to Mexican withholding taxes at a rate of 4.9% or, under certain circumstances, 10%. Subject to certain specified exceptions, we and each of our subsidiary guarantors will, jointly and severally, pay such additional amounts as may be required so that the net amount received by the holders of the notes in respect of principal, interest or other payments on the notes, after any such withholding or deduction, will not be less than the amount that each holder of the notes would have received in respect of the notes in the absence of any such withholding or deduction. See “Description of the Notes—Additional Amounts.” Tax Redemption ...... Intheevent that, as a result of certain changes in Mexican tax laws applicable to payments under the notes, we or the subsidiary guarantors become obligated to pay additional amounts in respect of interest (or amounts deemed interest) payable under the notes, in excess of those attributable to a Mexican withholding tax rate of 4.9%, the notes will be redeemable, in whole but not in part, at our option, at any time upon notice, at 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date. Change of Control ...... UpontheoccurrenceofaChangeofControlTriggeringEvent(as defined in “Description of the Notes”), we will be required to make an offer to purchase the notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the purchase date. See “Description of the Notes—Change of Control Triggering Event.” Certain Covenants ...... Theindenture governing the notes will, among other things, limit the ability of us and our subsidiaries: • to create or assume indebtedness for borrowed money that is secured by a lien; • to enter into sale and leaseback transactions; and • to engage in mergers, consolidations and transfers of substantially all of our assets. These covenants will, however, be subject to significant exceptions and qualifications. Use of Proceeds ...... Weintend to use the net proceeds from this offering to repay outstanding debt. Any remaining proceeds will be used for general corporate purposes. See “Use of Proceeds.” Book Entry; Form and Denominations ...... Thenotes will be issued in the form of one or more global notes without coupons, registered in the name of a nominee of The Depository Trust Company (“DTC”), as depositary for the accounts of its direct and indirect participants, including Clearstream Banking,

7 société anonyme (“Clearstream”) and Euroclear Bank S.A./N.V. (“Euroclear”). The notes will be issued in minimum denominations of US$100,000 and integral multiples of US$1,000 in excess thereof. Ratings ...... Thenotes are expected to be assigned a rating of “BBB-” by Standard & Poor’s Rating Service and “BBB-” by Fitch Inc. These ratings are not a recommendation to purchase, hold or sell notes, and they do not comment as to market price or suitability for a particular investor. The ratings may be changed, superseded or withdrawn as a result of changes in, or unavailability of, information about us. Transfer Restrictions ...... Wehave not registered the notes under the Securities Act or the securities laws of any other jurisdiction. The notes will be subject to restrictions on transfer and may only be offered in transactions exempt from or not subject to the registration requirements of the Securities Act. See “Transfer Restrictions.” Holders of the notes will not have the benefit of any exchange or registration rights. The notes will not be registered in the National Registry of Securities maintained by the CNBV and may not be offered, sold publicly or otherwise be subject to brokerage activities in Mexico, except pursuant to the private placement exemption set forth in Article 8 of the Mexican Securities Market Law. Taxation ...... Forasummary of Mexican and U.S. federal income tax consequences of an investment in the notes, see “Certain Material Income Tax Considerations.” Listing ...... Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market. Governing Law ...... State of New York. Trustee, Registar, Transfer Agent and Principal Paying Agent ...... TheBank of New York Mellon. Luxembourg Listing Agent, Transfer Agent and Paying Agent . . . The Bank of New York Mellon (Luxembourg) S.A. Risk Factors ...... Investing in the notes involves risks. See “Risk Factors” beginning on page 12 for a discussion of certain risks that you should consider in connection with an investment in the notes.

8 Summary Consolidated Financial and Operating Data The following table sets forth a summary of our historical consolidated financial information and other data for the periods presented. The summary financial information as of and for each of the three years in the period ended December 31, 2008 has been derived from our audited consolidated financial statements included in this offering memorandum. The summary financial information as of December 31, 2006 has been derived from our audited financial statements not included in this offering memorandum. The summary financial information as of and for the nine months ended September 30, 2008 and 2009 has been derived from our unaudited condensed consolidated financial statements included in this offering memorandum, which, in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of our operations and financial position for the periods and dates presented. The summary financial information as of September 30, 2008 has been derived from our unaudited condensed financial statements not included in this offering memorandum. The results of operations for any interim period are not necessarily indicative of results for the full year or any other period. This financial information has been prepared in accordance with MFRS, which differ in certain significant respects from U.S. GAAP. See Appendix A— “Summary of Certain Differences between MFRS and U.S. GAAP” for a description of the principal differences between MFRS and U.S. GAAP as they relate to us. See also “Presentation of Financial Information” in this offering memorandum. This financial information and other data should be read in conjunction with our audited and unaudited consolidated financial statements and notes thereto included in this offering memorandum. Nine Months Year Ended December 31, Ended September 30, 2006(1) 2007(1) 2008 2008 2008 2009 2009 (Ps.) (Ps.) (Ps.) (US$)(2) (Ps.) (Ps.) (US$)(2) (Unaudited) (in thousands) Income Statement Data: Net sales ...... 20,725,642 23,081,626 26,100,558 1,932,773 18,762,512 22,152,532 1,640,418 Cost of sales ...... (12,282,558) (14,098,462) (16,436,846) (1,217,165) (11,686,687) (13,935,188) (1,031,915) Gross margin ...... 8,443,084 8,983,164 9,663,712 715,608 7,075,825 8,217,344 608,503 Operating expenses ...... (6,287,245) (7,025,342) (7,619,178) (564,208) (5,616,668) (6,103,897) (452,000) Operating income ...... 2,155,839 1,957,822 2,044,534 151,400 1,459,157 2,113,447 156,503 Comprehensive financing expense, net: Financial expense ...... (464,808) (493,958) (604,055) (44,731) (401,145) (662,356) (49,048) Financial income ...... 86,839 48,780 83,928 6,215 55,784 86,302 6,391 Exchange loss (gain), net ..... 27,468 18,196 7,485 554 32,427 (25,525) (1,890) Effect of derivative financial instruments, net(3) ...... (19,539) 104,294 (2,351,913) (174,162) (221,368) (56,887) (4,213) Gain on monetary position(4) . . . 96,140 159,270 39,191 2,902 26,724 4,418 327 Total comprehensive financing expense, net ...... (273,900) (163,418) (2,825,364) (209,221) (507,578) (654,048) (48,433) Other expenses, net(5) ...... (167,581) (316,824) (271,292) (20,089) (186,463) (107,924) (7,992) Income (loss) before income tax ...... 1,714,358 1,477,580 (1,052,122) (77,911) 765,116 1,351,475 100,078 Income tax ...... (436,131) (406,921) 193,932 14,361 (288,299) (441,309) (32,679) Consolidated net income (loss) ...... 1,278,227 1,070,659 (858,190) (63,550) 476,817 910,166 67,399 Balance Sheet Data: Current assets: Cash and cash equivalents ..... 793,742 707,989 2,288,256 169,448 1,212,863 1,683,396 124,657 Restricted cash(6) ...... — — 75,114 5,562 206,809 5,341 396 Trade accounts receivable(7) . . . 1,626,759 1,484,923 2,174,184 161,001 1,962,674 2,153,978 159,504 Accounts receivable from related parties(8) ...... 125 — 162,034 11,999 — 174,674 12,935 Inventories ...... 1,578,469 1,987,158 2,102,450 155,689 1,701,785 1,901,072 140,776 Other current assets ...... 763,946 1,084,649 1,176,728 87,138 1,106,559 1,143,921 84,709 Total current assets ...... 4,763,041 5,264,719 7,978,766 590,836 6,190,689 7,062,382 522,977 Property, plant and equipment, net .... 6,844,373 8,081,011 8,530,862 631,719 8,156,109 8,328,982 616,770 Non-current derivative financial instruments ...... — — 75,187 5,568 30,270 — — Other non-current assets ...... 2,140,386 2,609,293 3,651,574 270,403 2,862,221 3,729,541 276,176 Total assets ...... 13,747,800 15,955,023 20,236,389 1,498,526 17,239,290 19,120,905 1,415,923 Footnotes on next page

9 Nine Months Year Ended December 31, Ended September 30, 2006(1) 2007(1) 2008 2008 2008 2009 2009 (Ps.) (Ps.) (Ps.) (US$)(2) (Ps.) (Ps.) (US$)(2) (Unaudited) (in thousands) Balance Sheet Data (cont’d): Current liabilities: Current portion of long-term debt ..... 140,530 1,201,542 193,842 14,354 96,821 394,602 29,221 Bank loans ...... 299,595 216,225 3,488,348 258,316 — 312,433 23,136 Suppliers ...... 1,803,466 2,211,545 2,484,976 184,015 2,032,146 2,131,468 157,837 Accounts payable to related parties .... 6,781 41,789 52,146 3,861 474,751 53,490 3,961 Derivative financial instruments ...... 21,402 24,351 — — — 4,280 317 Other current liabilities(9) ...... 524,647 436,391 1,083,157 80,209 1,033,644 1,193,498 88,380 Total current liabilities ...... 2,796,421 4,131,843 7,302,469 540,755 3,637,362 4,089,771 302,852 Long-term liabilities: Long-term debt ...... 3,636,657 3,777,917 5,319,417 393,908 5,296,199 7,515,818 556,554 Long-term derivative financial instruments ...... 176,182 59,679 802,440 59,422 573,607 617,178 45,703 Deferred income tax and other long- term liabilities(10) ...... 840,593 996,724 747,219 55,332 779,894 678,598 50,251 Total long-term liabilities ...... 4,653,432 4,834,320 6,869,076 508,662 6,649,700 8,811,594 652,508 Total liabilities ...... 7,449,853 8,966,163 14,171,545 1,049,418 10,287,062 12,901,365 955,360 Stockholders’ equity ...... 6,297,947 6,988,860 6,064,844 449,108 6,952,228 6,219,540 460,563

Cash Flow Data: Net cash provided by operating activities ..... 1,815,464 1,537,096 1,336,277 98,953 1,985,812 2,307,574 170,878 Net cash used in investing activities ...... (2,278,456) (2,297,745) (2,976,972) (220,448) (686,901) (710,515) (52,614) Net cash (used in) provided by financing activities ...... (1,459,894) 674,896 3,212,534 237,891 589,724 (2,269,521) (168,060) Other Financial Data: Adjusted EBITDA(11) ...... 2,733,125 2,673,301 2,872,111 212,683 2,081,043 2,837,103 210,090

(1) Because the accumulated inflation for 2006, 2007 and 2008 did not exceed 26% in the countries of the functional currency that we have adopted (except for Costa Rica and Nicaragua), the financial statements as of and for the year ended December 31, 2008 and the nine months ended September 30, 2008 and 2009 do not include the effects of inflation from January 1, 2008 and have been prepared on an adjusted nominal basis, except for the effects of inflation on our operations in Costa Rica and Nicaragua. Financial statements as of and for the years ended December 31, 2006 and 2007 are stated in constant pesos as of December 31, 2007. (2) Translated into U.S. dollars, solely for the convenience of the reader, using an exchange rate of Ps. 13.5042 per U.S. dollar, the Free Exchange Rate on September 30, 2009. These convenience translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the specified rate or at all. See “Exchange Rates.” (3) During 2008, we recorded losses relating to the fair market value of our derivative financial instruments primarily related to the mark-to-market losses associated with foreign currency exchange rate and interest rate derivative financial instruments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk—Derivative Financial Instruments.” (4) Gain on monetary position represents the effect of inflation, as measured by the NCPI, on our monthly net monetary assets or liabilities during the year expressed in pesos of the most recent year reported. Since January 1, 2008, we have only recorded inflation adjustments for our subsidiaries operating in Costa Rica and Nicaragua. Total net sales from operations in these countries were Ps. 789 million and Ps. 865 million for the nine months ended September 30, 2009 and 2008, respectively. (5) Other expenses, net, as of December 2007 and 2008 consisted of the following items: (i) loss on sales of fixed assets; (ii) employee profit sharing; (iii) loss on sale of containers, platforms and others; (iv) reorganization expenses; and (v) tax expenses and others. (6) In connection with our derivative financial instruments, we are required by agreements with counterparties to post collateral for margin calls if we exceed certain thresholds of potential liability. This collateral is reflected as restricted cash. (7) Allowance for doubtful accounts as of December 31, 2006, 2007 and 2008 consisted of Ps. 39 million, Ps. 45 million and Ps. 111 million, respectively, and as of September 30, 2009, was Ps. 98 million. (8) Reflects intercompany loan to Alfa Subsidiarias, S.A. de C.V. See “Principal Shareholder and Related Party Transactions.” (9) Other current liabilities as of September 30, 2009 and December 31, 2008 includes notes payable to Butterball, LLC, of Ps. 163 million and Ps. 270 million, respectively, in connection with our acquisition of the “Longmont” trademarks.

10 (10) Deferred income tax and other long-term liabilities includes notes payable relating to our acquisition of Braedt of Ps. 55 million and Ps. 52 million as of September 30, 2009 and December 31, 2008, respectively. (11) We define “Adjusted EBITDA” to mean consolidated net income (loss) after adding back or subtracting, as the case may be: (i) depreciation and amortization; (ii) comprehensive financing expense, net (which includes financial expense, financial income, exchange loss (gain), net, effect of derivative financial instruments, net and gain on monetary position); (iii) other expenses, net and (iv) income tax. Our calculation of Adjusted EBITDA may not be comparable to other companies’ calculation of similarly titled measures. See “Presentation of Financial Information—Non-GAAP Financial Measures.” The following table sets forth a reconciliation of Adjusted EBITDA to net income (loss) under MFRS for each of the periods presented:

Nine Months Year Ended December 31, Ended September 30, 2006(1) 2007(1) 2008 2008 2008 2009 2009 (Ps. ) (Ps. ) (Ps. ) (US$)(2) (Ps. ) (Ps. ) (US$)(2) (Unaudited) (in thousands) Consolidated net income (loss) ...... 1,278,227 1,070,659 (858,190) (63,550) 476,817 910,166 67,399 Depreciation and amortization ...... 577,286 715,479 827,577 61,283 621,886 723,656 53,587 Comprehensive financing expense, net ...... 273,900 163,418 2,825,364 209,221 507,578 654,048 48,433 Other expenses, net ...... 167,581 316,824 271,292 20,089 186,463 107,924 7,992 Provision (benefit) for income tax ...... 436,131 406,921 (193,932) (14,361) 288,299 441,309 32,679 Adjusted EBITDA ...... 2,733,125 2,673,301 2,872,111 212,683 2,081,043 2,837,103 210,090

11 RISK FACTORS

An investment in the notes is subject to risks and uncertainties. You should carefully consider the risks described below, in addition to the other information contained in this offering memorandum, before deciding whether to purchase the notes. Realization of any of these risks could have a material adverse effect on our business, financial condition, cash flows and results of operations or could materially affect the value or liquidity of the notes and result in the loss of all or part of your investment in the notes. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect us, which could also result in the loss of all or part of your investment in the notes.

Risks Relating to Sigma

The current global economic crisis may adversely affect our business and financial performance.

The current global economic crisis could negatively affect our business, results of operations or financial condition. When general economic conditions deteriorate, the end markets for our products may experience declines, and we may suffer reductions in our 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 our products, increases in uncollectable accounts receivable or non-performance by suppliers. We may also find it more costly or difficult to obtain financing to fund operations or investment or acquisition opportunities, or to refinance our debt in the future.

The Mexican economy is currently undergoing a recession that began in 2008 as a result of the impact of the global economic crisis. The Mexican economy is closely connected to the U.S. economy and, therefore, economic conditions in the United States may hinder any recovery in Mexico. The crisis has also negatively affected local credit markets and resulted in an increased cost of capital, which may negatively impact the ability of companies, including our customers, to meet their financial requirements. We cannot be certain that a more pronounced contraction of overall economic activity will not take place. If the global economy continues to deteriorate, our business and financial performance may be adversely affected.

The food industry is highly competitive, and we may lose market share to competitors which offer similar or substitute products or which have more efficient manufacturing processes.

The food industry is highly competitive, and increased competition could reduce our net sales due to loss of market share or the need to reduce prices to respond to competitive pressures. Competitive pressures may also restrict our ability to increase prices, including in response to commodity and other cost increases. Our profits could decrease if reduced prices or increased costs are not offset with increased sales volumes.

We compete with other major producers such as Qualtia Alimentos, S.A. de C.V. (“Qualtia”), Grupo Bafar Alimentos, S.A. de C.V. (“Bafar”), Grupo Industrial Lala, S.A. de C.V. (“Lala”) and Distribuidora de Lácteos Algil S.A. de C.V., producer of Esmeralda branded dairy products (“Esmeralda”), that have the ability to produce quality products at low cost, as well as with foreign producers such as Groupe Danone (“Danone”). To varying degrees, our competitors may have strengths in particular product lines and regions as well as greater financial resources. Our yogurt products, in particular, are highly sensitive to price competition and product substitution. We expect that we will continue to face strong competition in all of our markets and anticipate that existing or new competitors may broaden their product lines and extend their geographic scope. Our competitors may improve their competitive position by introducing new products, or products that can be substituted for ours, improving manufacturing processes or expanding the capacity of manufacturing facilities. If we are unable to keep pace with our competitors’ product and manufacturing process initiatives, our results of operations and financial condition could be materially adversely affected.

12 Loss of one or more significant customers could negatively impact our net sales and overall financial performance.

Our largest customer, Wal–Mart de Mexico, accounted for 13.2% of our consolidated net sales for 2008 and our top ten customers, together, accounted for approximately 31.0% of our consolidated net sales for 2008. The loss of any significant customer could negatively impact our net sales and profitability. We do not generally enter into sales agreements with our customers, and where such agreements exist, they are generally terminable at will by the customer. Because our profitability depends on our maintenance of a high capacity utilization rate, the loss of all or a substantial portion of the sales volume related to a significant customer would have an adverse effect on us. If any of our significant customers faces financial difficulties, our results and/or our ability to collect accounts receivable could also be adversely affected. In addition, the consolidation of our customer base could reduce our net sales and profitability, particularly if one of our significant customers is acquired by a company that has a relationship with one of our competitors.

We rely on our customers which are retailers; and if they perform poorly or give preference to products of our competitors, our financial performance could be negatively affected.

We derived approximately 96% of our operating revenues in Mexico from sales to retailers for 2008. We sell our products to modern retailers, such as supermarkets and hypermarkets, and to traditional retailers, such as small family-owned stores. These retailers, in turn, sell our products to end consumers. In 2008, net sales from customers in our modern and traditional distribution channels accounted for 39.2% and 60.8%, respectively, of our total net sales. Any significant deterioration in the sales performance of our customers could adversely affect the performance of our products. Our retail customers also carry products that directly compete with our products for retail space and consumer purchases. There is a risk that our retail customers may give higher priority to products of, or form alliances with, our competitors or their own private labels. If our retail customers fail to purchase our products, or provide our products with promotional support, our financial performance could be adversely affected.

The reputation of our brands and our intellectual property rights are key to our business.

Approximately 88% of our net sales for 2008 were derived from sales of products under brands that we own. Our brand names are a key asset of our business. Maintaining the reputation of our brands is essential to our future success. Loss of reputation could have a material adverse effect on our business, results of operations and financial condition. We cannot assure you that we will be able to maintain the value of our brands.

Our current principal trademarks are registered in Mexico and in the relevant countries in which we use such trademarks. While we intend to enforce our trademark rights against infringement by third parties, we cannot assure you that our actions to establish and protect our trademark rights are adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products on grounds that our products violate their trademarks and proprietary rights. If a competitor were to infringe on our trademarks, enforcing our rights would likely be costly and would divert resources that would otherwise be used to operate and develop our business. Although we intend to actively defend our brands and trademark rights, we cannot assure you that we will be successful in enforcing our intellectual property rights. See “Our Business—Intellectual Property.”

We must identify, develop and offer products to meet consumer preferences.

Consumer preferences change over time and the success of our products depends on our ability to identify the evolving tastes and dietary habits of consumers and to offer products that appeal to these tastes and habits. Introduction of new products and product extensions requires significant research and development as well as

13 marketing initiatives. In 2008, we invested Ps. 108 million (US$8.0 million) in research and development and marketing for new products. If our new products fail to meet consumers’ preferences, then the return on that investment will be less than anticipated and our strategy to grow net sales and profits may not be successful. The loss of rights granted pursuant to any of our franchise or distribution agreements could harm our business and competitive position. Through our franchise agreements with Sodima, we have the exclusive right to manufacture, market and distribute Yoplait® products in Mexico, Central America, the Dominican Republic and Haiti. We also have the right to use Sodima’s production and manufacturing processes, and to receive technical assistance from Sodima. In exchange for these exclusive rights, we have agreed to refrain from selling identical or substantially similar products to certain of the Yoplait® products. Because of the nature of franchising and our agreements with Sodima, our success in the yogurt industry is, to a large extent, directly related to the success of the Yoplait® products that we distribute. If we fail to maintain the Yoplait® brand as one of the top three brands in the Mexican yogurt market, Sodima after 2012 may grant rights to sell and distribute its products in Mexico to another party, despite our exclusive arrangement. We cannot assure you that the Yoplait® brand will be able to compete effectively with other brands in the yogurt market, and any failure of the Yoplait® brand to compete effectively would likely have a material adverse effect on our financial performance. Our franchise agreements with Sodima with respect to Mexico expire in 2012, after which time Sodima’s consent is required to renew the agreements. We cannot assure you that Sodima will grant our future requests for renewed franchise agreements, and any failure to renew these agreements could adversely affect our business. We have entered into a distribution agreement with Oscar Mayer Foods, a division of Kraft Foods, Inc., which grants us the exclusive right to distribute certain Oscar Mayer® products in Mexico, Costa Rica, Honduras and El Salvador, and with Kraft Foods de Mexico, S. de R.L. de C.V., which grants us the exclusive right to produce, sell and distribute Kraft’s Philadelphia® cream cheese within certain markets in Mexico. The distribution agreement with Oscar Mayer® has automatically renewing five-year terms unless either party elects to terminate the agreement and was most recently renewed in June 2005. The distribution agreement with Kraft Foods de Mexico will terminate in October 2010. There is no reason to believe the agreement will not be renewed. These agreements contain covenants restricting our ability to produce similar products to those covered under these agreements, or to use the Oscar Mayer® or Philadelphia® brands in an unauthorized manner. Failure to comply with the these provisions could result in an immediate termination of our agreements and exclusive relationship. We have incurred significant losses in connection with derivative financial instruments and may do so in the future. We use derivative financial instruments to manage the risk profile associated with interest rates and currency exposure, reduce financing costs and hedge some of our commodity and financial market risks. During 2008 and the nine months ended September 30, 2009, we recorded losses relating to the fair value of our derivative financial instruments under MFRS of Ps. 2,352 million (US$174 million) and Ps. 57 million (US$4 million), respectively, primarily related to mark-to-market losses associated with foreign currency exchange rate and interest rate derivative financial instruments. A substantial devaluation of the peso and a decrease in interest rates led to mark-to-market losses and a potential liability in connection with these instruments. We have recently established a policy not to enter into derivative financial instruments for speculative purposes; however, we may continue to enter into derivative financial instruments as an economic hedge against certain business risks, even if these instruments do not qualify for hedge accounting under MFRS. In addition, we may be required to record fair value losses in the future that could be material. The mark-to-market accounting for derivative financial instruments is reflected in our income statement and has resulted in volatility in our earnings, particularly in 2008. During the fourth quarter of 2008, we took steps to reduce the notional amount of our foreign currency exchange rate derivatives, thereby reducing our exposure to these instruments. This initiative included closing out a significant portion of notional amounts of derivative instruments related to foreign currency exchange rates; however, a substantial amount of our interest rate derivative transactions have not been closed out and remain in

14 effect, and we may incur additional losses in the future in connection with those transactions. As of September 30, 2009, the notional amount outstanding for our interest rate derivative transactions was Ps. 4,976 million (US$369 million) and we recorded a net liability with respect to derivative financial instruments of Ps. 622 million (US$46 million). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk—Derivative Financial Instruments.”

In addition, during 2008 and the nine months ended September 30, 2009, we made cash payments of Ps. 1,703 million (US$126 million) and Ps. 159 million (US$12 million), respectively, in connection with our derivative financial instruments.

Most of our derivative financial instruments are subject to margin calls in the event that the threshold or credit line set by the parties is exceeded. In several scenarios, the cash required to cover margin calls may be substantial and may reduce the funds available to us for our operations or other capital needs. At September 30, 2009, we had Ps. 5 million (US$0.4 million) posted as collateral in response to margin calls, presented as restricted cash in our financial statements.

We face the risk in the current global economic environment that the creditworthiness of counterparties to derivative financial instruments may deteriorate substantially. As a result, counterparties may fail to honor their obligations to us, which would deprive us of the protection against market risks we were seeking by using derivative financial instruments, and could have a material adverse effect on our financial condition.

We intend to continue using derivative financial instruments in the future for hedging, not speculative purposes in accordance with our recently established policies. Nevertheless, we cannot assure you that we will not incur additional net losses from, and may be required to make cash payments or post cash as collateral in connection with, our derivative financial instruments in the future.

We face risks related to fluctuations in interest rates which could adversely affect our results of operations and our ability to service our debt and other obligations, including the notes.

We are exposed to fluctuations in interest rates. As of September 30, 2009, approximately Ps. 5,725 million (US$545 million), or 68.3%, of our borrowings accrued interest at a variable rate. Changes in interest rates would affect the cost to us of these borrowings. If interest rates increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed would remain the same, and our net income and cash available for servicing our indebtedness, including the notes, would decrease. As a result, our financial condition, results of operations and liquidity could be materially adversely affected. Furthermore, our attempts to mitigate interest rate risk by financing long-term liabilities with fixed interest rates and using derivative financial instruments, such as floating-to-fixed interest rate swaps, in respect of our indebtedness could result in our failure to realize savings if interest rates fall and could adversely affect our results of operations and our ability to service our debt and other obligations, including the notes.

Disruption of our supply chain could adversely affect our operations.

Our operations depend on the continuous operation of our supply chain. Damage or disruption to our manufacturing or distribution capabilities due to weather, natural disaster, fire, electricity shortages, terrorism, pandemics, strikes, the financial and/or operational instability of key suppliers, distributors, warehousing and transportation providers, or other reasons could impair our ability to manufacture or distribute our products.

Our operations are vulnerable to power shortages that generally affect enterprises located in Mexico, Central America, the Dominican Republic and Peru. If the cities in which we have operations are affected by power outages or must ration power, our production volumes would decrease and our financial performance may be adversely affected. We cannot assure you that power shortages will not affect us in the future. We also cannot assure you that our electricity costs will not rise significantly or that we will be able to pass any such costs to our customers. Increases in electricity costs may adversely affect our profitability.

15 To the extent that we are unable, or it is not financially feasible, to mitigate interruptions in our supply chain or their potential consequences, there could be an adverse effect on our business and results of operations, and additional resources could be required to restore our supply chain.

Increases in commodity costs may have a negative impact on profits.

We use many different commodities including, among others, pork, poultry, fluid and dry milk, natural gas and motor fuel. Commodities are subject to price volatility caused by, among other things, commodity market fluctuations, supply and demand, currency fluctuations, and changes in governmental agricultural programs. Commodity price increases will result in increases in raw material costs and operating costs. We may not be able to increase our product prices and achieve cost savings that fully offset these increased costs; and increasing prices may result in reduced sales volume and profitability. We have experience in hedging against commodity price increases with respect to natural gas. Even so, these hedging initiatives do not completely eliminate the risk of a negative impact on profits from commodity price increases.

The prices of our raw materials normally fluctuate due to market conditions. We cannot assure you that these fluctuations will not have an adverse effect on our financial performance or that we will be able to pass along the effect of increased costs to our customers.

Our operations could be adversely affected if our suppliers fail to perform in a satisfactory manner.

We depend on the availability of raw materials, including, among others, pork, poultry, and fluid and dry milk, for the production of our products. If our major suppliers are unable or unwilling to continue providing us with raw materials, we may face delays in obtaining alternate suppliers, and such suppliers may be unwilling to supply our raw material needs on terms as favorable as those provided by our current suppliers. Any such event could result in delays in operations and diminished financial results. See “Business—Raw Materials and Suppliers.”

Health and product liability risks related to the food industry could adversely affect our 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 possible unavailability and expense of liability insurance and the potential cost and disruption of product recalls. In addition, in the past we have voluntarily recalled products because of their failure to meet our quality standards. Any actual or perceived health risks associated with our products, including any adverse publicity concerning these risks, could cause customers to lose confidence in the safety and quality of our products. Even if our own products are not affected by contamination, our industry may face adverse publicity if the products of other producers become contaminated, which could result in reduced consumer demand for our products in the affected category. We maintain systems designed to monitor food safety risks throughout all stages of the production process. However, our 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 our business, results of operations and financial condition.

Changes in health-related regulations could have a negative impact on our business.

Our 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 (Secretaría de Salud), the Secretary of Agriculture, Farming, Rural Growth, Fish and Food (Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación, or “SAGARPA”) and the Secretary of the Economy (Secretaría de Economía) and other local and foreign authorities regarding the processing, packaging, labeling, storage, distribution and advertising of our products.

16 Our U.S. food products and packaging materials are regulated by the U.S. Food and Drug Administration (“FDA”) or, for products containing meat or poultry, the Food Safety and Inspection Service of the U.S. Department of Agriculture (“USDA”). These agencies enact and enforce regulations relating to the manufacturing, distribution and labeling of food products. In addition, various states regulate our 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 dairy products and imposing their own labeling requirements on food products.

Our operations in the other countries in which we operate are subject to comparable hygiene and quality local laws and regulations.

Government policies in Mexico, the United States and our 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 our results of operations and financial condition. In addition, if we are required to comply with future material changes in food safety regulations, we 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 our operations. Increased governmental regulation of the food industry, such as proposed requirements designed to enhance food safety or to regulate imported ingredients, could increase our costs and adversely affect our profitability.

Our business may be negatively affected by trade barriers.

We import a significant amount of our raw materials, principally poultry, for processed meats from the United States. In the past, our international operations have been affected by various factors, including trade disputes and security concerns. For example, the Mexican government has imposed import restrictions in the past on poultry from the United States due to concerns about the H5N1 virus (avian flu). Events that affect international trade may restrict our ability to import poultry and other livestock products from the United States or any other country and could result in our inability to obtain sufficient raw materials for the production of our products.

The imposition of price controls over the products that we make could have an impact on our business.

The sale prices of our products currently are not subject to any government regulation and are mainly determined through demand and supply in our markets, which allows us to modify the prices of our products according to our own strategic decisions. We cannot assure you that the governments of the countries in which we operate will not impose price control mechanisms in the future. The imposition of price controls over the products we sell could have a negative effect on our results of operations and financial condition.

Our growth through mergers, acquisitions or joint ventures may be impacted by antitrust laws, access to capital resources, and challenges in integrating significant acquisitions.

We have made in the past, and may make in the future, significant acquisitions in order to continue our growth. Acquisitions involve risks, including, among others, the following: failure of acquired businesses to achieve expected results; inability to retain or hire key personnel of acquired businesses; and inability to achieve expected synergies and/or economies of scale. If we are unable to successfully integrate or manage our acquired businesses, we may not realize anticipated cost savings and revenue growth, which may result in reduced profitability or losses.

Our current capital resources are estimated to be sufficient to maintain our operations for the foreseeable future. If new expansion opportunities arise, we may not have sufficient resources to take advantage of these opportunities and additional financing may not be available to us on favorable terms, or at all, causing us to forfeit such opportunities.

17 Approval of the Mexican Antitrust Commission (Comisión Federal de Competencia) is required for us to acquire and sell significant businesses or enter into significant joint ventures. We cannot assure you that the Mexican Antitrust Commission will authorize our proposed joint ventures and acquisitions in the future, which may adversely affect our business strategy, financial condition and results of operations.

Our business and financial performance may be adversely affected by risks inherent in international operations.

We currently maintain production facilities and operations in Mexico, the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Peru, Nicaragua and Panama. Our ability to conduct and expand our business and our financial performance are subject to the risks inherent in international operations. Our 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 we conduct business, including changes to environmental laws that could affect our manufacturing facilities or to health safety laws that could affect our products. The governments of the countries in which we operate, or may operate in the future, could take actions that materially adversely affect us.

Health epidemics and other outbreaks in Mexico may affect our business and financial performance.

Our business could be adversely affected by the effects of the H5N1 virus (avian flu), severe acute respiratory syndrome (SARS), the H1N1 virus (swine flu) or any other epidemic or outbreak. In April 2009, an outbreak of swine flu occurred in Mexico and the United States and has spread to more than 70 countries, leading the World Health Organization to declare the first global flu pandemic in over 40 years. Any prolonged occurrence or recurrence of avian flu, SARS or swine flu or other adverse public health developments in Mexico could result in an adverse effect on the Mexican economy or discourage consumers from purchasing our products, which may have a material adverse effect on our business operations. Our operations may be impacted by a number of health-related factors, including, among others, quarantines or closures of our facilities and developments which could disrupt our operations or cause a general slowdown in the Mexican economy. Any of the foregoing events or other public health problems could adversely affect our business and financial performance.

Compliance with environmental and other governmental laws and regulations could result in added expenditures or liabilities.

Our operations in Mexico and our other markets are subject to federal, state and municipal laws, regulations and official standards (normas oficiales mexicanas), relating to the protection of the environment and natural resources.

In Mexico, the applicable fundamental environmental laws are the Mexican General Law of Ecological Balance and Environmental Protection and its regulations (Ley General del Equilibrio Ecológico y la Protección al Ambiente y sus reglamentos), the National Water Law and its regulations (Ley de Aguas Nacionales y su reglamento), and the General Law for the Prevention and Integral Management of Wastes and its regulations (Ley General para la Prevención y Gestión Integral de los Residuos y su reglamento, or the “Ecological Law”). The Ministry of Environment and Natural Resources (Secretaría del Medio Ambiente y Recursos Naturales, or “SEMARNAT”) oversees compliance with the federal environmental laws through the Attorney General for Environmental Protection (Procuraduria Federal de Protección al Ambiente, or “PROFEPA”), which has the authority to enforce federal environmental laws. As part of its enforcement powers, PROFEPA is empowered to bring administrative and criminal proceedings against companies that violate environmental laws and also has the power to close non-complying facilities.

In the United States, we are 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, the Resource Conservation and Recovery Act and Superfund, which imposes joint and several liability on each responsible

18 party. We have specific programs across our business units designed to meet applicable environmental compliance requirements. Based on information currently available, we believe that our compliance with environmental laws and regulations or liability for environmental contamination will not have a material effect on our results of operations or financial condition. However, we cannot quantify with certainty the potential impact of future compliance efforts and environmental remediation actions.

We cannot assure you that modifications of existing environmental laws and regulations or the adoption of more stringent environmental laws and regulations will not result in the need for investments that are not currently provided for in our capital expenditures program or will not otherwise result in a material adverse effect on our business, results of operations or financial condition.

Any deterioration of labor relations with our employees or increase in labor costs could adversely affect our business and financial performance.

Our operations are labor intensive, and we employ approximately 28,000 employees. Any significant increase in labor costs, deterioration of employee relations, slowdowns or work stoppages at any of our locations, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our business, financial condition or results of operations. A strike, work slowdown or other labor unrest could, in some cases, impair our ability to supply our products to customers, which could result in reduced net sales. Approximately 25% of our workforce is unionized. We generally negotiate collective bargaining agreements with these trade unions every two years, though salary increases are applied annually. We cannot predict the outcome of these negotiations and if any significant differences arise during these negotiations, or any other significant conflicts arise, our results of operations and financial condition could be adversely affected.

Any loss of key personnel may adversely affect our business.

Our success depends, in large measure, on the skills, experience and efforts of our senior management team and other key personnel. Although we believe that we have depth throughout our organization, the loss of the services of one or more members of our senior management or other employees with critical skills could have a negative effect on our business, financial condition and results of operations. If we are not able to attract or retain highly skilled, talented and committed senior managers or other key personnel, our ability to achieve our business objectives may be adversely affected.

We are controlled by Alfa, whose interests may not be aligned with ours or yours.

We are a wholly owned subsidiary of Alfa. As such, Alfa has the power to control our affairs and operations. Alfa also controls the election of our board of directors, the appointment of our senior management, and our entering into mergers, acquisitions and other extraordinary transactions. A majority of our directors are currently employees of Alfa. The interests of Alfa could materially conflict with your interests as a holder of the notes. So long as Alfa owns a majority of our capital stock, it will continue to be able to strongly influence or effectively control decisions by our board and senior management team.

We enter into transactions with Alfa and its affiliates, including contracts for administrative and corporate services. Many of these transactions occur in the ordinary course of business. Transactions with affiliates may create the potential for conflicts of interest. See “Principal Shareholder and Related Party Transactions.”

We are a holding company and depend on the results of operations of our subsidiaries.

We are a holding company with no independent operations or substantial assets other than the capital stock of our operating companies. Accordingly, we depend on the results of operations of our subsidiary companies, including the subsidiary guarantors. Our ability to service our debt and other obligations, including the notes, will depend on our guarantor and non-guarantor subsidiaries’ generation of cash flow and their ability to make such

19 cash available to us in the form of interest payments, debt repayment, dividends or otherwise. Each of our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. In addition, under Mexican law, our Mexican subsidiaries may only pay dividends out of retained earnings and after all losses from prior fiscal years have been satisfied. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the notes, or honor our other obligations, and you will have a claim only against our subsidiaries that guarantee the notes. Any adverse change in the financial condition or results of operations of our subsidiaries could affect our financial condition.

We may be subject to interruptions or failures in our information technology systems.

We rely on sophisticated information technology systems and infrastructure to support our 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 our information technology systems may cause disruptions in our operations, adversely affecting our net sales and profitability. We have business continuity plans in place to reduce the negative impact of information technology system failures on our operations, but we cannot assure you that these plans will be completely effective.

Terrorist activities and geopolitical events and their consequences could adversely affect our business operations.

Terrorist attacks or the continued threat of terrorism or organized crime within Mexico, the United States, the other countries in which we operate and elsewhere in the world and the potential for military action and heightened security measures in response to such threats may cause significant disruptions to commerce on a global basis, including restrictions on cross-border transport and trade. The consequences of terrorism and the responses thereto are unpredictable and could have an adverse effect on our business operations. In addition, related political events may cause periods of uncertainty that may adversely affect our business. Political and economic instability in the markets in which we operate could negatively impact our results of operations and financial condition.

Risks Relating to Mexico

Mexican federal governmental policies or regulations could adversely affect our results of operations and financial condition.

We are a Mexican corporation and a majority of our assets are located in Mexico, including many of our production facilities. As a result, we are subject to political, economic, legal and regulatory risks specific to Mexico. The Mexican federal government has exercised, and continues to exercise, significant influence over the Mexican economy. Accordingly, Mexican federal governmental actions, fiscal and monetary policy and regulation of private industry could have an impact on Mexican private sector entities, including our company, and on market conditions, prices and returns on Mexican securities, including our securities. We cannot predict the impact that political conditions will have on the Mexican economy. Furthermore, our business, financial condition and results of operations may be affected by currency fluctuations, price instability, inflation, interest rates, regulation, taxation, social instability and other political, social and economic developments in or affecting Mexico, over which we have no control. We cannot assure potential investors that changes in Mexican federal governmental policies will not adversely affect our business, results of operations and financial condition.

Economic, political and social developments in Mexico may adversely affect our business.

The Mexican government’s continued fiscal and monetary policy has not provided the flexibility necessary to support Mexico’s continued economic improvement. Reforms regarding fiscal and labor policies, oil, gas, electricity and social security have not been and may not be approved. As a result, new investment and growth in aggregate purchasing power have been marginal. Several factors could affect the growth of Mexico’s economy

20 and its industrial sector. These factors include the extent of economic growth in the United States and the participation of Mexico’s industrial sector in such growth; the Mexican government’s approval and implementation of fiscal and other structural reforms such as the evolution of energy prices, particularly natural gas, and the current political environment.

In addition, Mexico has experienced periods of violence in the past due to the activities of guerilla groups and drug cartels. In response, the Mexican government has implemented various security measures and has strengthened its police and military forces. Despite these efforts, guerilla activity and drug-related crime continue to exist in Mexico. These activities, their possible escalation and the violence associated with them may have a negative impact on the Mexican economy or on our operations in the future. The social and political situation in Mexico could adversely affect the Mexican economy, which in turn could have a material adverse effect on our business, financial condition and results of operation.

Mexico may experience high levels of inflation in the future, which could adversely affect our results of operations and financial condition.

Mexico has a history of high levels of inflation and may experience high inflation in the future. Historically, inflation in Mexico has led to higher interest rates, depreciation of the peso and the imposition of substantial government controls over exchange rates and prices, which at times has adversely affected our operating revenues and margins. The annual rate of inflation for the last three years, as measured by changes in the NCPI, as provided by Banco de México, was 4.1% in 2006, 3.8% in 2007 and 6.5% in 2008. Although inflation is less of an issue today than in past years, we cannot assure you that Mexico will not experience high inflation in the future, including in the event of a substantial increase in inflation in the United States. A substantial increase in the Mexican inflation rate could adversely affect consumer purchasing power, thereby negatively impacting demand for our products, and would increase some of our costs, which could adversely affect our results of operations and financial condition.

Depreciation of the peso against the U.S. dollar could adversely affect our financial condition, results of operations and cash flows.

Changes in the relative value of the peso to the U.S. dollar have an effect on our results of operations. In general, a real depreciation of the peso will likely result in a decrease in our operating margins and a real appreciation of the peso will likely result in an increase in our operating margins, in each case, when measured in pesos. This is because most of our sales occur in Mexico and are denominated in pesos while some of our raw materials are imported from the U.S. and are denominated in U.S. dollars. We usually adjust the price of our products to reflect changes in the peso-U.S. dollar exchange rate; however, we cannot assure you that such price increases in peso terms will not have a significant impact on the volume of our sales.

The peso declined by approximately 25% against the U.S. dollar in 2008 and has not recovered during 2009 to date. These foreign exchange rate movements have had, and could continue to have, a negative effect on the Mexican economy.

Currently, the peso-U.S. dollar exchange rate is determined on the basis of the free market float and published by Banco de México, the Mexican central bank. There is no guarantee that Banco de México will maintain the current exchange rate regimen. Any change in the regimen or in the exchange rate itself, as a result of market conditions over which we have no control, could have a considerable impact, either positive or negative, on our results of operations and financial condition.

In 2008 and 2009, as a result of the negative economic conditions in the United States and in other parts of the world, local and international markets experienced high volatility, which has contributed to the devaluation of the peso. The Mexican government has implemented a series of measures to limit the devaluation of the peso and stabilize the local economy. However, we cannot assure you that such measures will be effective or maintained or how such measures will impact the Mexican economy.

21 Severe devaluation or depreciation of the peso may result in government intervention or disruption of the international foreign exchange markets. While the Mexican government does not currently restrict or regulate the ability of Mexican or foreign persons or entities to convert pesos into U.S. dollars or other specified currencies, or to transfer other currencies outside of Mexico, it has done so in the past, and we cannot assure you that the Mexican government will not institute a restrictive currency exchange control policy in the future. Any such restrictive foreign currency exchange control policy could prevent or restrict access to U.S. dollars or other specified currencies, and may limit our ability to transfer or convert pesos into U.S. dollars and other currencies for the purpose of making timely payments of interest and principal on the notes and any other U.S. dollar- denominated debt that we may incur in the future.

In the course of our business, we may enter into financial derivatives to hedge our exposure to foreign currency exchange rate variations. However, we cannot assure you that these instruments will be available to us at favorable terms, if at all, or will fully hedge our exposure.

Recent changes in Mexican tax laws may adversely affect us.

The Mexican Congress recently approved several amendments to the tax laws with the objective of increasing public sector revenues. These amendments take effect on January 1, 2010. As a result of these changes, the corporate income tax rate will temporarily increase from 28% to 30% during the next three years and then decrease to 29% in 2013 and 28% in 2014. Although we cannot currently predict the impact of these amendments or calculate their effects on our tax liability for future years, these changes could increase our tax liabilities and cash tax payments, which could, in turn, affect our results of operations and financial condition.

We, like other Mexican companies, follow accounting standards that differ from those used by companies in other countries.

Currently, Mexican companies, like our company, must prepare their financial statements in accordance with MFRS. MFRS differ in certain significant respects from U.S. GAAP and generally accepted accounting principles in other countries. Therefore, the presentation of financial statements and reported earnings prepared in accordance with MFRS may differ materially from the presentation of financial statements and reported earnings prepared in accordance with U.S. GAAP. See Appendix A—“Summary of Certain Differences between MFRS and U.S. GAAP” for a description of the principal differences between MFRS and U.S. GAAP as they relate to us. We have not prepared a quantitative reconciliation of our financial information to U.S. GAAP. Any such reconciliation could reveal material differences, which may be positive or negative, in our results of operations and financial condition from the financial statements contained in this offering memorandum. Our parent company, Alfa, will be required in or before 2012 to prepare its financial statements in accordance with IFRS. As a result, we may elect to adopt IFRS.

Risks Relating to the Notes

Our level of indebtedness may affect our flexibility in operating and developing our business and our ability to satisfy our obligations.

As of September 30, 2009, we had total debt of Ps. 8,386 million (US$621 million), and after giving effect to this offering and the use of net proceeds therefrom, Ps. 2,400 million (US$178 million) would have been available for additional borrowing under our committed credit facilities. Our level of indebtedness may have important consequences to investors, including:

• limiting our ability to generate sufficient cash flow to satisfy our obligations with respect to the notes, particularly in the event of a default under one of our other debt instruments;

• limiting cash flow available to fund our working capital, capital expenditures or other general corporate requirements;

22 • increasing our vulnerability to adverse economic and industry conditions, including increases in interest rates, foreign currency exchange rate fluctuations and market volatility;

• limiting our ability to obtain additional financing to refinance debt or to fund future working capital, capital expenditures, other general corporate requirements and acquisitions on favorable terms or at all;

• limiting our ability to access cash from our subsidiaries and, thus, repay indebtedness or satisfy other obligations; and

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry.

The indenture governing the notes will not limit our ability to incur additional debt. To the extent that we incur additional indebtedness, the risks outlined above could increase. In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.

The agreements governing our existing indebtedness restrict our ability and the ability of our subsidiaries to engage in certain business and financial transactions.

We have debt outstanding under a number of agreements, most notably our revolving credit facilities and bonds issued under a local Mexican note program. These agreements contain certain restrictive covenants which, among other things, limit our and our subsidiaries’ ability to: • create liens on assets; • make investments outside the ordinary course of business; • sell any of our material assets; • acquire companies, equity interests and/or assets in other companies; and • reduce our net worth below Ps. 5,100 million.

In addition, our revolving credit facilities provide for maintenance covenants that require us to maintain certain financial ratios. These maintenance covenants include requirements that: (i) our leverage ratio not to exceed 3.0 to 1, and (ii) our interest coverage ratio be no less than 3.0 to 1, as of the last day of each fiscal quarter. A failure to comply with such covenants, if not cured within a certain specified time period, would allow the lenders to accelerate the outstanding amounts due under the facilities. See “Description of Other Indebtedness” for additional information regarding covenants and other terms of our other indebtedness.

Our failure to comply with obligations under the local bonds, our revolving credit facilities or other indebtedness may result in an event of default under the indenture and under the agreements governing that indebtedness. A default, if not cured or waived, may permit acceleration of our indebtedness. We cannot be certain that we will have funds available to remedy these defaults. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all.

Our credit ratings may not reflect all risks of an investment in the notes.

The notes are expected to be rated BBB- by each of Standard & Poor’s Ratings Service and Fitch Inc. The ratings are not a recommendation to purchase, sell or hold the notes. These ratings do not comment as to market price or suitability for a particular investor. In addition, ratings may at any time be lowered or withdrawn in their entirety. The ratings of the notes may not reflect the potential impact of all risks related to structure and other

23 factors on any trading market for, or trading value of, the notes. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under further review for a downgrade, could affect the market value of the notes and increase our corporate borrowing costs.

The notes will be structurally subordinated to the obligations of our subsidiaries that are not guarantors of the notes and effectively subordinated to all our and the subsidiary guarantors’ existing and future secured obligations.

As a result of our holding company structure, the notes will be effectively subordinated to all existing debt, trade payables and other liabilities, whether secured or unsecured, of our subsidiaries that are not guarantors of the notes. Some, but not all, of our subsidiaries will guarantee the notes. Holders of the notes will not have any claim against our subsidiaries that are not guarantors of the notes. Therefore, our non-guarantor subsidiaries will pay their debt and other obligations (including trade payables and tax obligations) as required, before they make any funds available to us for making payments under the notes. Moreover, the right of holders of the notes to receive assets of any non-guarantor subsidiaries upon liquidation or reorganization or to participate in the distribution of, or realize the proceeds of, those assets will be structurally subordinated to the claims of such subsidiary’s creditors (including tax authorities and trade creditors). As of and for the year ended December 31, 2008, our guarantor subsidiaries represented 88.7% of our consolidated total assets, 92.7% of our consolidated Adjusted EBITDA and 5.7% of our debt. As of and for the nine months ended September 30, 2009, our guarantor subsidiaries represented 92.3% of our consolidated total assets, 91.9% of our consolidated Adjusted EBITDA and 4.3% of our debt. As of September 30, 2009, our non-guarantor subsidiaries had Ps. 360 million (US$27 million) of debt outstanding (excluding guarantees and intercompany loans).

The notes will be effectively subordinated to all our existing and future secured indebtedness and all existing and future secured indebtedness of the subsidiary guarantors, to the extent of the assets that secure such indebtedness. The indenture governing the notes will limit our ability and that of our restricted subsidiaries to grant liens or otherwise secure our future obligations; however, these limitations will be subject to significant qualifications and exceptions. See “Description of the Notes—Certain Covenants—Limitation on Liens.”

Negative covenants in the indenture will have a limited effect.

The indenture governing the notes will contain certain limited negative covenants that apply to us and our subsidiaries. However, the indenture will not:

• require us to maintain any financial ratios or specific levels of net worth, revenues, income, cash flows or liquidity and, accordingly will not protect holders of the notes in the event that we experience significant adverse changes in our results of operations or financial condition;

• limit our ability to incur indebtedness that is equal in right of payment to the notes;

• restrict our ability to make investments or to repurchase or pay dividends or make other payments in respect of our common stock or other securities or indebtedness junior to the notes.

In addition, the covenant in the indenture that limits the ability of us and our subsidiaries to create or incur liens or other security interests contains exceptions that will allow us and our subsidiaries to create or incur liens or security interests to secure some indebtedness and other obligations without equally and ratably securing the notes. Because of these exceptions, holders of the notes may be structurally subordinated to new lenders.

We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the notes.

Under the indenture governing the notes, if a Change of Control Triggering Event (as defined in the indenture) occurs, we will be required to offer to purchase the notes for a price equal to 101% of the principal amount of the notes, plus any accrued and unpaid interest to the date of purchase. In the event of a Change of

24 Control Triggering Event, we may need to refinance large amounts of our debt, including the notes and indebtedness under certain of our credit facilities or other debt instruments. We may not have sufficient funds available to us to make any required repurchases of the notes upon a Change of Control Triggering Event. If we fail to repurchase the notes in those circumstances, we will be in default under the indenture, which default may, in turn, trigger cross-default provisions in our other debt instruments.

Any future debt incurred may contain restrictions on repurchasing the notes upon a Change of Control Triggering Event.

The change of control offer provisions of the indenture governing the notes would not be triggered by a change of control of our parent company Alfa, and, as a result, may fail to provide any protection to holders of the notes in such circumstances.

The change of control offer provisions of the indenture require us to offer to repurchase the notes in the event of a Change of Control Triggering Event. However, these provisions do not address a change of control of Alfa itself, which would indirectly affect control of our company. In the event of, for example, the sale by Alfa’s shareholders of a substantial portion of the share capital of Alfa or a significant merger or other transaction affecting the ownership of Alfa, the change of control offer provisions of the indenture would likely not be triggered, even though such event may result in a change of control under our other indebtedness. Accordingly, the change of control offer provisions of the indenture may fail to protect holders of the notes in the case of certain transactions that indirectly affect control of our company.

Our debt instruments, including the notes, contain cross-default provisions that may cause all of that debt to become immediately due and payable as a result of a default under an unrelated debt instrument.

The indenture governing the notes will contain certain covenants, and our other debt instruments contain covenants and, in some cases, require us and our subsidiaries to meet certain financial ratios and tests. Future debt instruments may impose additional covenants on us and our subsidiaries. Any failure to comply with these covenants could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which may not be available to us on favorable terms, on a timely basis or at all. Alternatively, any such default could require us to sell our assets or otherwise curtail operations in order to satisfy our obligations to our creditors.

The guarantees may not be enforceable under applicable laws.

The notes will be fully and unconditionally guaranteed by certain of our Mexican, U.S. and other subsidiaries. The guarantees provide a basis for a direct claim against the subsidiary guarantors; however, it is possible that the guarantees of these subsidiaries may not be enforceable under Mexican, U.S. or other applicable laws. While Mexican law does not prohibit the giving of guarantees and, as a result, does not prevent the guarantees of the notes from being valid, binding and enforceable against the subsidiary guarantors, in the event that a Mexican subsidiary guarantor becomes subject to a judicial reorganization proceeding (concurso mercantil) or to bankruptcy (quiebra), its guarantee may be deemed to have been a fraudulent transfer and declared void based upon the subsidiary guarantor being deemed not to have received fair consideration in exchange for such guarantee.

Under various fraudulent conveyance or fraudulent transfer laws (including under the laws of the United States), a court could subordinate or void the obligations of our subsidiaries under the guarantees. Generally, to the extent that a court were to find that at the time one of our subsidiaries entered into a guarantee either (a) the subsidiary guarantor incurred the guarantee with the intent to hinder, delay or defraud any present or future creditor or contemplated insolvency with a design to favor one or more creditors to the exclusion of others or (b) the subsidiary guarantor did not receive fair consideration or reasonably equivalent value for issuing the guarantee and, at the time it issued the guarantee, the subsidiary guarantor (i) was insolvent or became insolvent

25 as a result of issuing the guarantee, (ii) was engaged or about to engage in a business or transaction for which the remaining assets of the subsidiary guarantor constituted unreasonably small capital, (iii) intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they matured or (iv) was a defendant in an action for money damages, or had a judgment for money damages declared against such subsidiary guarantor if, after final judgment, the judgment is unsatisfied, then the court could void or subordinate the subsidiary’s obligations under the guarantee in favor of the issuer’s or the subsidiary guarantor’s other obligations. In addition, any payment by any subsidiary guarantor could be voided and required to be returned to such subsidiary guarantor, or to a fund for the benefit of its creditors.

Among other things, a legal challenge of a subsidiary’s obligations under a guarantee on fraudulent conveyance grounds could focus on the benefits, if any, realized by the subsidiary guarantors as a result of the issuance of the notes. To the extent a subsidiary guarantee is voided as a fraudulent conveyance or held unenforceable for any other reason, the holders of the notes would not have any claim against that subsidiary guarantor and would be creditors solely of our company and subsidiary guarantors, if any, whose obligations under the guarantees were not held unenforceable.

There are restrictions on your ability to transfer the notes.

The notes and the guarantees have not been, and will not be, registered, under the Securities Act or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. These exemptions include sales in compliance with Regulation S under the Securities Act and Rule 144A under the Securities Act. In addition, the notes have not been, and will not be, registered with the Mexican National Securities Registry and, therefore, the notes may not be offered or sold publicly, or otherwise be the subject of brokerage activities, in Mexico, except pursuant to a private placement exemption set forth under Article 8 of the Mexican Securities Market Law.

There is no established trading market for the notes, and holders of the notes may not be able to sell the notes at their purchase price or at all.

The notes will be a new issue of securities for which there is currently no active trading market. Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market. We cannot assure you that holders of the notes will be able to sell their notes at a particular time or that the prices that such holders receive when they sell the notes will be equal to or more than the prices they paid for the notes. The initial purchasers will not be under any obligation to make a market for the notes. If an active market does not develop or is not maintained, the market price and liquidity of the notes may be adversely affected.

Provisions of Mexican law may make it difficult for holders of the notes to convert payments they receive in pesos into U.S. dollars or to recognize the full value of payments to them.

We are required to make payments in respect of the notes in U.S. dollars. However, under the Mexican Monetary Law (Ley Monetaria de los Estados Unidos Mexicanos), obligations to make payments in Mexico in foreign currency, whether by agreement or upon enforcement of a judgment, may be discharged in pesos at the exchange rate for pesos prevailing at the time and place of the payment or judgment. Accordingly, we will be legally entitled to make payment of amounts due on the notes in pesos if payment of the notes is sought in Mexico through the enforcement of a non-Mexican judgment or otherwise. If we elect to make payments due on the notes in pesos in accordance with the Mexican Monetary Law, we cannot assure you that the amounts paid may be converted by the payee into U.S. dollars or that, if converted, such amounts would be sufficient to purchase U.S. dollars equal to the amount of principal, interest or additional amounts due on the notes.

26 You may not be able to effect service of process on us or to enforce judgments against us in Mexican courts.

We and certain of our subsidiary guarantors are companies organized under the laws of Mexico. Substantially all of the directors and executive officers of our company and of our subsidiary guarantors are Mexican residents. A majority of the assets of our company and certain of our subsidiary guarantors are located in Mexico, and a substantial portion of the net sales of our company and certain of our subsidiary guarantors are derived from sources in Mexico. As a result, it may not be possible for investors to effect service of process outside Mexico on us or our directors or executive officers or on these subsidiary guarantors, or to enforce against such parties judgments of courts located outside Mexico predicated on civil liabilities under the laws of jurisdictions other than Mexico, including judgments predicated on the civil liability provisions of the U.S. federal securities laws or other laws of the United States.

The collection of interest on interest may not be enforceable in Mexico.

Mexican law does not permit the collection of interest on interest. As a result, the accrual of default interest on past due ordinary interest accrued in respect of the notes may not be enforceable in Mexico.

The book-entry registration system of the notes may limit the exercise of rights by the beneficial owners of the notes.

Transfers of interest in the global notes representing the notes maybe be effected only through book entries at DTC and its direct and indirect participants (including Euroclear and Clearstream). Accordingly, the liquidity of any secondary market in the notes may be reduced to the extent that some investors are unwilling to hold notes in book-entry form in the name of a DTC direct or indirect participant. The ability to pledge interests in the global notes may be limited due to the lack of a physical certificate. In addition, beneficial owners of interests in global notes may, in certain cases, experience delays in the receipt of payments of principal and interest since the payments will generally be forwarded by the paying agent to DTC, which will then forward payment to its direct and indirect participants, which (if they are not themselves the beneficial owners) will then forward payments to the beneficial owners of the global notes. In the event of the insolvency of DTC or any of its direct and indirect participants in whose name interests in the global notes are recorded, the ability of beneficial owners to obtain timely or ultimate payment of principal and interest on global notes may be negatively affected.

A holder of beneficial interests in the global notes will not have a direct right under the notes to act upon any solicitations that we may request. Instead, holders will be permitted to act only to the extent they receive appropriate proxies to do so from DTC or, if applicable, DTC’s direct or indirect participants. Similarly, if we default on our obligations, under the notes, holders of beneficial interests in the global notes will be restricted to acting through DTC, or if applicable, DTC’s direct or indirect participants. We cannot assure holders that the procedures of DTC or DTC’s nominees or direct or indirect participants will be adequate to allow them to exercise their rights under the notes in a timely manner. However, if an event of default has occurred and is continuing and DTC makes a written request to the registrar to issue physical notes, beneficial owners will be entitled to exchange their beneficial interests in global notes for physical notes.

Developments in other countries may adversely affect the market value of the notes.

The market price of the notes may be adversely affected by developments in the international financial markets and world economic conditions. Mexican securities markets are influenced, to varying degrees, by economic and market conditions in other countries, especially those in Latin America and other emerging markets. Although economic conditions are different in each country, investor reaction to the developments in one country may affect the securities of issuers in other countries, including Mexico. We cannot assure you that the market for the securities of Mexican issuers will not be affected negatively by events elsewhere or that such developments will not have a negative impact on the market value of the notes.

27 EXCHANGE RATES On December 21, 1994, Banco de México implemented a floating foreign exchange rate regime under which the peso is allowed to float freely against the U.S. dollar and other foreign currencies. Banco de México typically intervenes directly in the foreign exchange market only to reduce what it deems to be excessive short- term volatility. Since mid-2003, Banco de México has been conducting auctions of U.S. dollars in an attempt to reduce the levels of its foreign reserves. Banco de México conducts open market operations on a regular basis to adjust the size of Mexico’s monetary base. Changes in Mexico’s monetary base have an impact on the exchange rate. Banco de México may increase or decrease the reserve of funds that financial institutions are required to maintain. If the reserve requirement is increased, financial institutions will be required to allocate more funds to their reserves, which will reduce the amount of funds available for operations. This causes the amount of available funds in the market to decrease and the cost, or interest rate, to obtain funds to increase. The opposite happens if reserve requirements are lowered. This mechanism, known as “corto” or “largo,” as the case may be, or more formally “the daily settlement balance target,” represents a device used by Banco de México to adjust the monetary base and the level of interest rates. We cannot assure you that Banco de México will maintain its current policies with respect to the peso or that the peso will not depreciate significantly in the future. Additionally, in the event of shortages of foreign currency, we cannot assure you that foreign currency would continue to be available to private-sector companies or that foreign currency needed by us to service foreign currency obligations, if any, would continue to be available without substantial additional cost. This offering memorandum contains translations of certain peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These convenience translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the specified rate or at all. The exchange rate used for purposes of convenience translations is the Free Exchange Rate calculated and published by Banco de México in the Official Gazette of Mexico for the conversion of U.S. dollar-denominated amounts into pesos. At September 30, 2009, the Free Exchange Rate was 13.5042 pesos per U.S. dollar. The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates, all expressed in nominal pesos per U.S. dollar. Peso to U.S. Dollar Exchange Rates High Low Average(1) Period-End Year Ended December 31, (pesos) 2004 ...... 11.63 10.82 11.29 11.26 2005 ...... 11.40 10.41 10.90 10.71 2006 ...... 11.48 10.43 10.90 10.88 2007 ...... 11.27 10.66 10.93 10.87 2008 ...... 13.92 9.92 11.14 13.54

2009 January ...... 14.22 13.35 13.86 14.20 February ...... 14.93 14.14 14.50 14.93 March ...... 15.37 14.05 14.72 14.33 April ...... 14.39 13.05 13.48 13.87 May ...... 13.84 12.87 13.25 13.23 June ...... 13.65 13.16 13.34 13.20 July ...... 13.81 13.10 13.37 13.26 August ...... 13.25 12.82 13.01 13.25 September ...... 13.64 13.23 13.41 13.50 October ...... 13.68 12.92 13.25 13.08 November ...... 13.38 12.87 13.13 12.95 December (through December 9, 2009) ...... 12.92 12.60 12.75 12.66

(1) The average rate means the daily average of the exchange rates on each day during the relevant period. Source: Banco de México Free Exchange Rate. On December 9, 2009, the Free Exchange Rate was Ps. 12.66 = US$1.00.

28 USE OF PROCEEDS

We estimate that we will receive net proceeds from the issuance of the notes of approximately Ps. 3,274 million (US$242 million) after deducting the initial purchasers’ discounts and commissions and the payment of estimated transaction expenses.

We intend to use the net proceeds from this offering primarily to refinance outstanding borrowings under existing revolving and term loan credit facilities maturing in 2010 through 2013. The debt to be repaid above currently bears interest at a weighted average rate of approximately 8.3% per year.

Any net proceeds that are not used to repay debt will be used for general corporate purposes.

29 CAPITALIZATION

The following table summarizes our cash and cash equivalents and capitalization as of September 30, 2009 on a historical basis, and as adjusted to give effect to this offering and the use of net proceeds therefrom.

Our cash and cash equivalents and capitalization set forth below were calculated in accordance with MFRS. The table should be read in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and notes thereto included in this offering memorandum.

As of September 30, 2009 Historical As Adjusted (Ps.) (US$)(1) (Ps.) (US$)(1) (Unaudited) (in thousands) Cash and cash equivalents ...... 1,683,396 124,657 1,735,030 128,481 Debt: Short-term debt: Short-term debt(2) ...... 475,639 35,221 — — Current portion of long-term debt ...... 394,602 29,221 141,667 10,491 Total short-term debt ...... 870,241 64,442 141,667 10,491 Long-term debt: Long-term debt and notes payable(3)(4) ...... 4,348,407 322,004 1,855,074 137,370 Local Bonds due 2014 ...... 1,635,000 121,073 1,635,000 121,073 Local Bonds due 2018 ...... 1,532,411 113,477 1,532,411 113,477 6.875% Senior Notes due 2019, offered hereby ...... — — 3,376,050 250,000 Total long-term debt ...... 7,515,818 556,554 8,398,535 621,920 Total debt ...... 8,386,059 620,996 8,540,202 632,411 Stockholders’ equity(5): Contributed capital ...... 1,487,320 110,139 1,487,320 110,138 Earned surplus ...... 4,732,220 350,426 4,732,220 350,426 Total stockholders’ equity ...... 6,219,540 460,563 6,219,540 460,563 Total capitalization (total debt and stockholders’ equity) .... 14,605,599 1,081,559 14,618,075 1,082,484

(1) Translated into U.S. dollars, solely for the convenience of the reader, using an exchange rate of Ps. 13.5042 per U.S. dollar, the Free Exchange Rate on September 30, 2009. These convenience translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the specified rate or at all. (2) Short-term debt includes notes payable to Butterball, LLC of Ps. 163 million (US$12 million) related to our acquisition of the “Longmont” trademarks. (3) After application of the net proceeds from this offering, we expect to have Ps. 2,400 million (US$178 million) of available borrowing capacity. (4) Long-term debt and notes payable includes notes related to our acquisition of Braedt of Ps. 55 million (US$5 million). (5) All of our issued and outstanding shares are held by Alfa and are fully paid.

30 SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA The following table sets forth selected consolidated financial information and other data for the periods presented. The selected financial information as of and for each of the three years in the period ended December 31, 2008 has been derived from our audited consolidated financial statements included in this offering memorandum. The selected financial information as of December 31, 2006 has been derived from our audited financial statements not included in this offering memorandum. The selected financial information as of and for the nine months ended September 30, 2008 and 2009 has been derived from our unaudited condensed consolidated financial statements included in this offering memorandum, which, in the opinion of our management, reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the results of our operations and financial position for the periods and dates presented. The selected financial information as of September 30, 2008 has been derived from our unaudited condensed financial statements not included in this offering memorandum. The results of operations for any interim period are not necessarily indicative of results for the full year or any other period. This financial information and other data should be read in conjunction with our audited and unaudited consolidated financial statements and notes thereto included in this offering memorandum. Nine Months Year Ended December 31, Ended September 30, 2006(1) 2007(1) 2008 2008 2008 2009 2009 (Ps. ) (Ps. ) (Ps. ) (US$)(2) (Ps. ) (Ps. ) (US$)(2) (Unaudited) (in thousands) Income Statement Data: Net sales ...... 20,725,642 23,081,626 26,100,558 1,932,773 18,762,512 22,152,532 1,640,418 Cost of sales ...... (12,282,558) (14,098,462) (16,436,846) (1,217,165) (11,686,687) (13,935,188) (1,031,915) Gross margin ...... 8,443,084 8,983,164 9,663,712 715,608 7,075,825 8,217,344 608,503 Operating expenses ...... (6,287,245) (7,025,342) (7,619,178) (564,208) (5,616,668) (6,103,897) (452,000) Operating income ...... 2,155,839 1,957,822 2,044,534 151,400 1,459,157 2,113,447 156,503 Comprehensive financing expense, net: Financial expense ...... (464,808) (493,958) (604,055) (44,731) (401,145) (662,356) (49,048) Financial income ...... 86,839 48,780 83,928 6,215 55,784 86,302 6,391 Exchange loss (gain), net ...... 27,468 18,196 7,485 554 32,427 (25,525) (1,890) Effect of derivative financial instruments, net(3) ...... (19,539) 104,294 (2,351,913) (174,162) (221,368) (56,887) (4,213) Gain on monetary position(4) ...... 96,140 159,270 39,191 2,902 26,724 4,418 327 Total comprehensive financing expense, net ...... (273,900) (163,418) (2,825,364) (209,221) (507,578) (654,048) (48,433) Other expenses, net(5) ...... (167,581) (316,824) (271,292) (20,089) (186,463) (107,924) (7,992) Income (loss) before income tax .... 1,714,358 1,477,580 (1,052,122) (77,911) 765,116 1,351,475 100,078 Income tax ...... (436,131) (406,921) 193,932 14,361 (288,299) (441,309) (32,679) Consolidated net income (loss) ..... 1,278,227 1,070,659 (858,190) (63,550) 476,817 910,166 67,399 Balance Sheet Data: Current assets: Cash and cash equivalents ..... 793,742 707,989 2,288,256 169,448 1,212,863 1,683,396 124,657 Restricted cash(6) ...... — — 75,114 5,562 206,809 5,341 396 Trade accounts receivable(7) . . . 1,626,759 1,484,923 2,174,184 161,001 1,962,674 2,153,978 159,504 Accounts receivable from related parties(8) ...... 125 — 162,034 11,999 — 174,674 12,935 Inventories ...... 1,578,469 1,987,158 2,102,450 155,689 1,701,785 1,901,072 140,776 Other current assets ...... 763,946 1,084,649 1,176,728 87,138 1,106,559 1,143,921 84,709 Total current assets ...... 4,763,041 5,264,719 7,978,766 590,836 6,190,689 7,062,382 522,977 Property, plant and equipment, net . . 6,844,373 8,081,011 8,530,862 631,719 8,156,109 8,328,982 616,770 Non-current derivative financial instruments ...... — — 75,187 5,568 30,270 — — Other non-current assets ...... 2,140,386 2,609,293 3,651,574 270,403 2,862,221 3,729,541 276,176 Total assets ...... 13,747,800 15,955,023 20,236,389 1,498,526 17,239,290 19,120,905 1,415,923 Footnotes on next page

31 Nine Months Year Ended December 31, Ended September 30, 2006(1) 2007(1) 2008 2008 2008 2009 2009 (Ps. ) (Ps. ) (Ps. ) (US$)(2) (Ps. ) (Ps. ) (US$)(2) (Unaudited) (in thousands) Balance Sheet Data (cont’d): Current liabilities: Current portion of long-term debt .... 140,530 1,201,542 193,842 14,354 96,821 394,602 29,221 Bank loans ...... 299,595 216,225 3,488,348 258,316 — 312,433 23,136 Suppliers ...... 1,803,466 2,211,545 2,484,976 184,015 2,032,146 2,131,468 157,837 Accounts payable to related parties . . . 6,781 41,789 52,146 3,861 474,751 53,490 3,961 Derivative financial instruments ..... 21,402 24,351 — — — 4,280 317 Other current liabilities(9) ...... 524,647 436,391 1,083,157 80,209 1,033,644 1,193,498 88,380 Total current liabilities ...... 2,796,421 4,131,843 7,302,469 540,755 3,637,362 4,089,771 302,852 Long-term liabilities: Long-term debt ...... 3,636,657 3,777,917 5,319,417 393,908 5,296,199 7,515,818 556,554 Long-term derivative financial instruments ...... 176,182 59,679 802,440 59,422 573,607 617,178 45,703 Deferred income tax and other long- term liabilities(10) ...... 840,593 996,724 747,219 55,332 779,894 678,598 50,251 Total long-term liabilities ...... 4,653,432 4,834,320 6,869,076 508,662 6,649,700 8,811,594 652,508 Total liabilities ...... 7,449,853 8,966,163 14,171,545 1,049,418 10,287,062 12,901,365 955,360 Stockholders’ equity...... 6,297,947 6,988,860 6,064,844 449,108 6,952,228 6,219,540 460,563 Cash Flow Data: Net cash provided by operating activities . . 1,815,464 1,537,096 1,336,277 98,953 1,985,812 2,307,574 170,878 Net cash used in investing activities ...... (2,278,456)(2,297,745) (2,976,972) (220,448) (686,901) (710,515) (52,614) Net cash (used in) provided by financing activities ...... (1,459,894) 674,896 3,212,534 237,891 (589,724) (2,269,521)(168,060) Other Financial Data: Adjusted EBITDA(11) ...... 2,733,125 2,673,301 2,872,111 212,683 2,081,043 2,837,103 210,090

(1) Because the accumulated inflation for 2006, 2007 and 2008 did not exceed 26% in the countries of the functional currency that we have adopted (except for Costa Rica and Nicaragua), the financial statements as of and for the periods ended December 31, 2008, and the nine months ended September 30, 2008 and 2009 do not include the effects of inflation from January 1, 2008 and have been prepared on an adjusted nominal basis, except for the effects of inflation on our operations in Costa Rica and Nicaragua. Financial statements as of and for the periods ended December 31, 2006 and 2007 are stated in constant pesos as of December 31, 2007. (2) Translated into U.S. dollars, solely for the convenience of the reader, using an exchange rate of Ps. 13.5042 per U.S. dollar, the Free Exchange Rate on September 30, 2009. These convenience translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the specified rate or at all. See “Exchange Rates.” (3) During 2008, we recorded losses relating to the fair market value of our derivative financial instruments primarily related to the mark-to-market losses associated with foreign currency exchange rate and interest rate derivative financial instruments. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Quantitative and Qualitative Disclosures about Market Risk—Derivative Financial Instruments.” (4) Gain on monetary position represents (for those periods prior to December 31, 2007 stated in constant pesos) the effects of inflation, as measured by the NCPI, on our monthly net monetary assets or liabilities during the period expressed in pesos of the most recent year reported. Since January 1, 2008, we have only recorded inflation adjustments for our subsidiaries operating in Costa Rica and Nicaragua. Total net sales from operations in these countries were Ps. 789 million and Ps. 865 million for the nine months ended September 30, 2009 and 2008, respectively. (5) Other expenses, net as of December 31, 2007 and 2008 consisted of the following items: (i) loss on sales of fixed assets, (ii) employee profit sharing, (iii) loss on sale of containers, platforms and others, (iv) reorganization expenses and (v) tax expenses and others.

32 (6) In connection with our derivative financial instruments, we are required by agreements with counterparties to post collateral for margin calls if we exceed certain thresholds of potential liability. This collateral is reflected as restricted cash. (7) Allowance for doubtful accounts as of December 31, 2006, 2007 and 2008 consisted of Ps. 39 million, Ps. 45 million, and Ps. 111 million respectively, and as of September 30, 2009, was Ps. 98 million. (8) Reflects intercompany loan to Alfa Subsidiarias, S.A. de C.V. See “Principal Shareholder and Related Party Transactions”. (9) Other current liabilities as of September 30, 2009 and December 31, 2008 includes notes payable to Butterball, LLC, of Ps. 163 million and Ps. 270 million, respectively, in connection with our acquisition of the “Longmont” trademarks. (10) Deferred income tax and other long-term liabilities as of September 30, 2009 and December 31, 2008 includes notes payable relating to our acquisition of Braedt of Ps. 55 million and Ps. 52 million, respectively. (11) We define “Adjusted EBITDA” to mean consolidated net income (loss) after adding back or subtracting, as the case may be: (i) depreciation and amortization; (ii) comprehensive financing expense, net (which includes financial expense, financial income, exchange loss (gain), net, effect of derivative financial instruments, net and gain on monetary position); (iii) other expenses, net and (iv) income tax. Our calculation of Adjusted EBITDA may not be comparable to other companies’ calculation of similarly titled measures. See “Presentation of Financial Information—Non-GAAP Financial Measures.” The following table sets forth a reconciliation of Adjusted EBITDA to net income (loss) under MFRS for each of the periods presented:

Nine Months Year Ended December 31, Ended September 30, 2006(1) 2007(1) 2008 2008 2008 2009 2009 (Ps. ) (Ps. ) (Ps. ) (US$)(2) (Ps. ) (Ps. ) (US$)(2) (in thousands) (Unaudited) Consolidated net income (loss) ...... 1,278,227 1,070,659 (858,190) (63,550) 476,817 910,166 67,399 Depreciation and amortization ...... 577,286 715,479 827,577 61,283 621,886 723,656 53,587 Comprehensive financing expense, net ...... 273,900 163,418 2,825,364 209,221 507,578 654,048 48,433 Other expenses, net ...... 167,581 316,824 271,292 20,089 186,463 107,924 7,992 Provision (benefit) for income tax ...... 436,131 406,921 (193,932) (14,361) 288,299 441,309 32,679 Adjusted EBITDA ...... 2,733,125 2,673,301 2,872,111 212,683 2,081,043 2,837,103 210,090

33 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read this discussion in conjunction with our consolidated financial statements, and related notes and the other financial information included in this offering memorandum. Our financial statements are prepared in accordance with MFRS, which differ in certain significant respects from U.S. GAAP. See Appendix A— “Summary of Certain Differences between MFRS and U.S. GAAP.” Our parent company, Alfa, will be required in or before 2012 to prepare its financial statements in accordance with IFRS. Accordingly, we may elect to adopt IFRS. MFRS B-10 “Inflation Effects” no longer requires us to recognize the effects of inflation unless the economic environment qualifies as “inflationary” as defined by MFRS (i.e., inflation exceeds 26% in the three most recent years). Because of the relatively low level of Mexican inflation in recent years (6.5% in 2008, 3.8% in 2007 and 4.1% in 2006), the cumulative inflation rate in Mexico over the three-year period ended December 31, 2008 does not qualify the Mexican economic environment as inflationary. As of December 31, 2008 and September 30, 2009, only Costa Rica and Nicaragua qualified as “inflationary” for purposes of MFRS B-10. Accordingly, MFRS requires that all financial information as of December 31, 2007 and for prior periods be presented in pesos of purchasing power as of December 31, 2007 and financial information beginning January 1, 2008 and thereafter be presented in adjusted nominal pesos. Our interim condensed consolidated financial statements included herein are unaudited but reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of these interim periods are not necessarily indicative of results for a full year. Our interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements. This section contains forward-looking statements that involve risks and uncertainties. Our actual results may vary materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in “Risk Factors,” as well as other matters described in this offering memorandum. See “Cautionary Disclosure Regarding Forward-Looking Statements.” Overview We are a leading producer, marketer and distributor of quality branded foods, including processed meats, cheese, yogurt and prepared meals, throughout Mexico, our principal market, as well as to the Hispanic market in the United States and throughout Central America, the Dominican Republic and Peru. We estimate that in Mexico in 2008, based on annual tonnage, we had a 50% market share in the processed meats market, a 28% market share in the formal cheese market, both of which represent the leading market positions, and a 20% market share in the yogurt market. Our portfolio of brands, range of innovative products, focus on production and distribution processes, and extensive distribution network have allowed us to continue to grow net sales and cash flow. We generated net sales of Ps. 26,101 million (US$1,933 million) and Adjusted EBITDA of Ps. 2,872 million (US$213 million) for the year ended December 31, 2008; and net sales of Ps. 22,153 million (US$1,640 million) and Adjusted EBITDA of Ps. 2,837 million (US$210 million), for the nine months ended September 30, 2009. Factors Affecting Our Results of Operations Net Sales Our net sales consist principally of revenue generated from sales of processed meats, dairy products and other refrigerated products and are a function of sales volumes, price (after reduction from rebates and invoice discounts) and product mix. The principal drivers of sales volumes of our products include: • available production capacity, including through the acquisition of new production facilities or the expansion of existing plant capacity (see “—Effect of Acquisitions, Capacity Expansion and Production Efficiencies” below);

34 • our capacity utilization rate and the existence or absence of operational disruptions;

• demand in Mexico for processed meats, dairy products and other refrigerated foods, as well as economic growth or contraction in Mexico and resilience to adverse economic scenarios;

• demand in the United States, Central America and the Dominican Republic for processed meats and dairy products, as well as demand in Peru for processed meat products;

• competition from substitute products; and

• our ability to develop new products and product characteristics that meet consumers’ changing needs and preferences.

The principal factors affecting the pricing of our products include:

• regional market conditions and the regional supply and demand for processed meats, dairy products and other refrigerated food products;

• the pricing strategies of our principal competitors;

• our product mix, ranging from premium to economic brands;

• changes in raw material prices and in other costs; and

• changes in the price of raw materials due to changes in the peso-U.S. dollar exchange rate.

Cost of Sales

Our cost of sales consists primarily of raw materials, particularly poultry, pork and fluid and dry milk, energy, including natural gas, motor fuel and electricity, labor costs other than reorganization costs, transportation costs and depreciation and amortization of our plant and equipment. The principal factors that affect our cost of sales include:

• raw material prices, particularly for pork and poultry, which are closely related to the cost of grains, such as corn, that comprise the majority of the cost of raising such animals, as well as for fluid and dry milk;

• changes in the price of raw materials, such as poultry, due to changes in the peso-U.S. dollar exchange rate;

• sales volumes;

• our product mix;

• our ability to streamline or create efficiencies in our production processes; and

• energy costs.

Gross Margin

Gross margin is defined as net sales less cost of sales. Gross margin as a percentage of net sales is not a meaningful measure of our financial performance.

Operating Expenses

Our operating expenses consist principally of selling expenses, including salaries and commissions paid to our sales force, as well as distribution, marketing and administrative expenses, including management fees paid to Alfa for corporate services provided by Alfa. See “Principal Shareholder and Related Party Transactions.”

35 Comprehensive Financing Expense, Net

The components of comprehensive financing expense, net are comprised of:

• valuation of derivative financial instruments, which reflects changes in the fair value of derivative financial instruments designated as held for trading because they do not satisfy the accounting requirements for hedge accounting, including instruments with respect to peso-U.S. dollar exchange rates, interest rates and natural gas prices and, if applicable, the ineffective portion of instruments qualified as hedge accounting;

• financial expense, including fixed and variable interest expense, which is primarily a function of the principal amount of debt outstanding and the interest rates in effect;

• financial income, which includes interest income earned on cash and cash equivalents;

• exchange loss (gain), net, which includes net gains or losses relating to foreign currency exchange rate movements, as further described below under “—Effects of Foreign Currency Exchange Rate Fluctuations”; and

• gain on monetary position, which represents the effect of inflation, as measured by the NCPI, on our monthly net monetary assets or liabilities during such year.

Changes in the fair value of our derivative financial instruments are recognized in comprehensive financing expense, except when designated as hedge accounting. Their designation as hedge accounting is documented at the inception of the transaction, specifying the related objective, initial position, risk to be hedged, type of relationship, characteristics, accounting recognition and how their effectiveness will be assessed.

We use derivative financial instruments to manage the risk profile associated with interest rates and currency exposure, reduce financing costs and hedge some of our commodity and financial market risks. During 2008 and the nine months ended September 30, 2009, we recorded losses relating to the fair value of our derivative financial instruments of Ps. 2,352 million (US$174 million) and Ps. 57 million (US$4 million), respectively, primarily related to mark-to-market losses associated with foreign currency exchange rate and interest rate derivative financial instruments. A substantial devaluation of the peso and a decrease in interest rates market led to mark-to-market losses and a potential liability in connection with these instruments. We have recently established a policy not to enter into derivative financial instruments for speculative purposes, however, we may enter into derivative financial instruments as an economic hedge against certain business risks, even if these instruments do not qualify for hedge accounting under MFRS. In addition, we may be required to record fair value losses in the future that could be material. The fair value accounting for derivative financial instruments is reflected in our income statement and has resulted in volatility in our earnings, particularly in 2008.

During the fourth quarter of 2008, we took steps to reduce the notional amount of our foreign currency exchange rate derivatives, thereby reducing our exposure to these instruments. This initiative included closing out a significant portion of notional amounts of derivative instruments related to foreign currency exchange rates; however, a substantial amount of our interest rate derivative transactions have not been closed out and remain in effect, and we may incur additional losses in the future in connection with those transactions. As of September 30, 2009, the notional amount outstanding for our interest rate derivative transactions was Ps. 4,976 million (US$369 million) and we recorded a net liability with respect to derivative financial instruments of Ps. 622 million (US$46 million). See “—Quantitative and Qualitative Disclosures about Market Risk—Derivative Financial Instruments.”

Effect of Acquisitions, Capacity Expansion and Production Efficiencies

Our financial results for the periods presented below were materially affected by acquisitions, capacity expansion and efficiency improvements.

36 Since August 2006, we have acquired three Mexican regional companies in our processed meat product line: Productos Carnicos de Occidente, S.A. de C.V. (“Nayar”) (June 2006); Empacadora Bernina, S.A. de C.V. (“Bernina”) (April 2007); and Industrias Alimenticias del Sureste, S.A. de C.V. (“IASSA”) (August 2007). Each of these acquisitions has contributed to the expansion of our production capacity in Mexico. In July 2007, we acquired Mexican Cheese Producers, a cheese production and distribution company based in Wisconsin, which enabled us to produce dairy products in the United States and expand our dairy products capacity. In July 2008, we acquired Braedt, S.A., a delicatessen processed meat company in Peru, which expanded our production into South America. As a result of these acquisitions, our financial results for a given period may not be directly comparable to prior periods.

In May 2008, we began operations at our processed meats plant in Seminole, Oklahoma, which was our first processed meats plant in the United States. In addition, our net overall financial performance has been affected by capacity expansion, which also resolved bottlenecks in some production lines, such as the hot dog product lines in our Xalostoc and Atitalaquia facilities and our ham production line in our Atitalaquia facility.

Effects of Foreign Currency Exchange Rate Fluctuations on Operating Margins

Because we operate in several countries, we are exposed to foreign exchange rate risk when we translate sales and expenses from foreign currencies, most notably the U.S. dollar. In order to report consolidated financial statements, we must effectively convert multiple currencies into a single reporting currency. As such, fluctuations in currency rates could affect our income statement, even if local currency results remain the same. In particular, changes in the relative value of the peso to the U.S. dollar have an effect on our results of operations. In general, real depreciation of the peso will likely result in a decrease in our operating margins and real appreciation of the peso will likely result in an increase in our operating margins, in each case, when measured in pesos. These effects occur because most of our sales are in Mexico and are denominated in pesos while most of the raw materials for our processed meats are imported from the United States and are denominated in U.S. dollars. We have historically been able to adjust the price of our products, at times with a lag, to generally reflect changes in the peso-U.S. dollar exchange rate.

Limited Seasonality

Our operating results are not materially affected by seasonality, though we have traditionally experienced higher sales of our products during the year-end holiday season.

Key Drivers of Profitability

The key drivers of our profitability include:

• Our ability to respond to economic conditions in our markets. In periods of recession when the GDP declines in any or all of our markets, consumers may switch from high to lower cost products. In order to maintain our profitability, we must continue to offer our broad portfolio of brands across the diverse consumer base we serve. In periods of economic growth, consumers are more willing to purchase premium or higher-end branded products and our challenge in such periods is to encourage consumers, through marketing and other initiatives, to switch to those products.

• Our ability to generally pass through increases in raw material prices to our customers. Our market position and the prominent status of our brands within the Mexican food market has historically allowed us to increase the prices of our products, at times with a lag, when raw material prices pressure our profitability, although there can be no assurance that we will be able to do so in the future.

• Our ability to understand and attend to consumer needs through innovation. We believe that enlarging our sales volume is critical for our profitability. By focusing our R&D activities on tailoring our products to the preferences and needs of consumers, we believe that we will increase sales volumes and improve profitability.

37 • Our ability to achieve efficiencies and economies of scale. The ability to grow our sales volume while maintaining our current cost structure is essential in order to achieve profitable results. In order to increase our productivity, we need to efficiently use our production and distribution facilities and control variable costs and expenses. In addition, within fixed costs and expenses we need to achieve economies of scale as we intend to increase our sales volumes without using increasingly more resources.

Critical Accounting Policies

We have identified certain key accounting estimates on which our consolidated financial condition and results of operations are dependent. These key accounting estimates most often involve complex matters or are based on subjective judgments or decisions that require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience, where applicable and other assumptions that we believe are reasonable under the circumstances.

Actual results may differ from our estimates under different assumptions or conditions. In addition, estimates routinely require adjustments based on changing circumstances and the receipt of new or better information. In the opinion of our management, our most critical accounting estimates under MFRS are those that require management to make estimates and assumptions that affect the reported amounts related to the accounting for fair value for financial instruments, valuation of long-lived assets, goodwill and other indefinite- lived intangible assets, deferred taxes and allowance for doubtful accounts receivable. For a full description of all of our accounting policies, see our annual consolidated financial statements and the notes thereto included in this offering memorandum.

There are certain critical estimates that we believe require significant judgment in the preparation of our consolidated financial statements. We consider an accounting estimate to be critical if:

• it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time we were making the estimate; and

• changes in the estimate or different estimates that we could have selected would have had a material impact on our financial condition or results of operations.

Financial Instruments Measured at Fair Value

The fair value of financial instruments is determined based upon liquid market prices evidenced by exchange traded prices, broker-dealer quotations or prices of other transactions with similarly rated counterparties. If available, quoted market prices provide the best indication of value. If quoted market prices are not available for fixed maturity securities and derivatives, we discount expected cash flows using market interest rates commensurate with the credit quality and maturity of the investment.

Derivative financial instruments used for hedging are designated either as cash-flow hedges or fair value hedges. The changes in the fair value of cash flow hedges are reported in other comprehensive income, while the changes in the fair value of fair value hedges (along with the change in the fair value of the hedged item) are recorded in earnings. Fair value amounts are based on either quoted market prices or estimated values derived by utilizing dealer quotes or internally generated modeling techniques.

As market conditions change, adjustments to the fair value of these derivatives are made to reflect those conditions. In addition, hedging effectiveness needs to be evaluated on a periodic basis and to the extent the hedge is not deemed effective, hedge accounting ceases to be applied. Actual settlements of these derivatives will reflect the market conditions at the time and may differ significantly from the estimated fair market value reflected on the balance sheet.

38 The degree of management’s judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices. When observable market prices and parameters do not exist, management’s judgment is necessary to estimate fair value, in terms of estimating the future cash flows, based on variable terms of the instruments and the credit risk and in defining the applicable interest rate to discount those cash flows.

Long-lived Assets

We review fixed, definite life intangible and other long-lived assets under NIF C-15, “Impairment of the Value of Long Lived Assets and their Disposal,” when events or circumstances suggest that the carrying value may not be recoverable. Impairment reviews require a comparison of the discounted cash flows to the carrying value of the asset for MFRS reporting purposes.

If the total of the discounted cash flows is less than the carrying value under MFRS, an impairment charge is recorded for the difference between the estimated fair value and the carrying value of the asset. In making such evaluations, we estimate the fair value of the long-lived assets as well as the discounted cash flows. In determining our discounted cash flows, we make significant assumptions and estimates in this process regarding matters that are inherently uncertain, such as estimating the remaining useful life of an asset and the possible impact that inflation may have on our ability to generate cash flow, as well as customer growth and the appropriate discount rate. Although we believe that our estimates are reasonable, different assumptions regarding such remaining useful life or future cash flows could materially affect the valuation of our long-lived assets.

We also evaluate the useful life used to depreciate our long-lived assets, periodically considering their operating and use conditions. As of September 30, 2009, no indicators of impairment existed; therefore we did not undertake any study to determine the value in use of such assets.

Goodwill and Other Indefinite-Life Intangible Assets

We assess our goodwill and other indefinite-lived intangible assets for impairment on an annual basis, using fair value measurement techniques under MFRS, which requires a direct comparison of fair value to carrying value in a one-step assessment process.

The identification and measurement of impairment to goodwill and intangible assets with indefinite lives involves the estimation of fair values. These estimates and assumptions could have a significant impact on whether or not an impairment charge is recognized and also the magnitude of any such charge. We perform valuation analyses with the assistance of third parties and consider relevant internal data, as well as other market information, that is publicly available. Estimates of fair value are primarily determined using discounted cash flows and market comparisons. These approaches use significant estimates and assumptions including projected future cash flows (including timing), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, determination of appropriate market comparables and the determination of whether a premium or discount should be applied to comparables. Inherent in these estimates and assumptions is a certain level of risk, which we believe we have considered in our valuations. Nevertheless, if future actual results differ from estimates, a possible impairment charge may be recognized in future periods related to the write-down of the carrying value of goodwill and other intangibles in addition to the amounts recognized previously.

Deferred Income Taxes

As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as allowance for doubtful accounts, deferred assets, inventories, property, machinery and equipment, accrued expenses and tax loss carryforwards, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our

39 consolidated balance sheet. We must then assess the likelihood that our deferred tax assets will be recovered and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must include an expense within the tax provision in the statement of operations.

Significant management judgment is required in determining our provision for income taxes, our deferred income tax assets and deferred income tax liabilities and any valuation allowance recorded against our net deferred income tax. The valuation allowance is based on management projections of future financial results. If actual results differ from these estimates or we adjust the projections in future periods, we may need to materially adjust the valuation allowance, which may materially impact our results of operations in future periods.

Allowance for Doubtful Accounts

The allowance for doubtful accounts represents our estimate of losses resulting from the failure or inability of our customers to make required payments. Determining our allowance for doubtful accounts receivable requires significant estimates. We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer’s current creditworthiness, as determined by our review of their current credit information. In addition, we consider a number of factors in determining the proper size and timing for the recognition of and the amount of the allowance, including historical collection experience, customer base, current economic trends and the aging of the accounts receivable portfolio.

While we believe that our estimates are reasonable, changes in customer trends or any of the factors mentioned above could materially affect our allowance for doubtful accounts. As of September 30, 2009, our allowance for doubtful accounts was Ps. 98 million compared to Ps. 111 million as of December 31, 2008. We consider this allowance sufficient to cover the potential risk of uncollectible accounts; however, we cannot assure you that we will not be required to increase the amount of this allowance in the future.

Results of Operations

Nine Months Ended September 30, 2008 Compared with Nine Months Ended September 30, 2009

The following financial information has been derived from our unaudited consolidated financial statements: Nine Months Ended September 30, Percent of Percent of Percentage 2008 Net Sales 2009 Net Sales Change (in thousands, except percentages) Net sales ...... Ps.18,762,512 100.0% Ps. 22,152,532 100.0% 18.1% Cost of sales ...... (11,686,687) (62.3) (13,935,188) (62.9) 19.2 Gross margin ...... 7,075,825 37.7 8,217,344 37.1 16.1 Operating expenses ...... (5,616,668) (29.9) (6,103,897) (27.6) 8.7 Operating income ...... 1,459,157 7.8 2,113,447 9.5 44.8 Comprehensive financing expense, net: Financial expense ...... (401,145) (2.1) (662,356) (2.9) 65.1 Financial income ...... 55,784 0.3 86,302 0.4 54.7 Exchange loss (gain), net ...... 32,427 0.2 (25,525) (0.1) (178.7) Effect of derivative financial instruments ...... (221,368) (1.2) (56,887) (0.3) (74.3) Gain on monetary position ...... 26,724 0.1 4,418 — (83.5) Total comprehensive financing expense, net...... (507,578) (2.7) (654,048) (2.9) 28.9 Other expenses, net ...... (186,463) (1.0) (107,924) (0.5) (42.1) Income tax ...... (288,299) (1.5) (441,309) (2.0) 53.1 Consolidated net income ...... 476,817 2.5 910,166 4.1 90.9 Adjusted EBITDA ...... 2,081,043 11.1 2,837,103 12.8 36.3

40 The following table provides a breakdown of net sales by product lines for the nine months ended September 30, 2009, as compared with the nine months ended September 30, 2008:

Nine Months Ended September 30, Percent of Percent of Percentage 2008 Net Sales 2009 Net Sales Change (in thousands, except percentages) Product Lines: Processed meat products ...... Ps.10,834,991 57.7% Ps. 13,264,259 59.9% 22.4% Dairy products ...... 6,784,051 36.2 7,529,107 34.0 11.0 Other refrigerated products(1) ...... 1,143,469 6.1 1,359,166 6.1 18.9 Total ...... 18,762,512 100.0 22,152,532 100.0 18.1

(1) Includes San Rafael® pizzas, Guten® precooked meals and other prepared meals and beverages.

The following table provides a breakdown of net sales by geographic region for the nine months ended September 30, 2009 compared with the nine months ended September 30, 2008:

Nine Months Ended September 30, Percent of Percent of Percentage 2008 Net Sales 2009 Net Sales Change (in thousands, except percentages) Geographic Region: Mexico ...... Ps.15,896,721 84.7% Ps. 17,807,858 80.4% 12.0% International ...... 2,865,790 15.3 4,344,674 19.6 51.6 Total ...... 18,762,512 100.0 22,152,532 100.0 18.1

Net Sales by Product Lines

Net sales of processed meats for nine months ended September 30, 2009 were Ps. 13,264 million, an increase of 22.4% from the Ps. 10,835 million reported for the same period in 2008. This increase was primarily due to a 9.1% pricing increases and a 6.2% increase in organic sales volumes in 2009 compared with the same period in 2008, with the balance of the increase being primarily attributable to the full period impact of acquisitions completed in 2008. Our broad portfolio of brands enabled us to continue to capture sales as consumers shifted purchases to more economic brands during the economic recession.

Net sales of dairy products for the nine months ended September 30, 2009 were Ps. 7,529 million, an increase of 11.0% from Ps. 6,784 million for the same period in 2008. This increase was primarily due to an increase in the sales volume of all of our dairy products, including yogurt, cheese, butter, margarine and cream.

Net sales of other refrigerated products for the nine months ended September 30, 2009 were Ps. 1,359 million, an increase of 18.9% from Ps. 1,143 million for the same period in 2008. This increase was primarily due to the growth in sales of our products, such as refrigerated pizzas and Guten® precooked meals, which recorded increased sales volumes in 2009 of 25% and 30%, respectively, compared with the same period in 2008.

Net Sales by Geographic Region

Net sales in Mexico for the nine months ended September 30, 2009 were Ps. 17,808 million, an increase of 12.0% from Ps. 15,897 million for the same period in 2008. This increase was primarily due to an increase in sales volume of our principal product lines. In 2009, we were also able to pass through increases in costs related to our processed meats product line to our customers.

41 Net sales from international operations for nine months ended September 30, 2009 were Ps. 4,345 million, an increase of 51.6% from the Ps. 2,866 million for nine months ended September 30, 2008. This increase was primarily due to a 20% increase in volume sold by our U.S. operations. Also, the increase in sales from our international operations was positively influenced by our successful acquisition and integration of the Longmont® hot dog brand, which is produced in the United States and primarily sold in northwestern Mexico, and the Braedt delicatessen meat company based in Peru. Both acquisitions were made in the second quarter of 2008.

General

Net sales for the nine months ended September 30, 2009 were Ps. 22,153 million, an increase of 18.1% from Ps. 18,763 million for the same period in 2008. This increase was primarily due to a 7.5% increase in sales volume of our processed meats and dairy products in the nine months ended September 30, 2009, compared with the same period of 2008, as well as a 9.1% increase in prices for processed meats. In 2009, international sales achieved their highest percentage of our total net sales since the inception of our international operations. During the nine months ended September 30, 2009, international sales constituted 19.6% of total net sales revenues. Our growth through acquisitions constituted approximately one-fourth of the total growth in total sales volume for the nine months ended September 30, 2009.

Cost of sales for the nine months ended September 30, 2009 was Ps. 13,935 million, an increase of 19.2 % from Ps. 11,687 million for the same period of 2008. This increase was primarily due to increased sales volumes and the impact of foreign exchange translation, partially offset by prices of the primary raw materials, such as poultry, pork and milk, being lower in the nine months ended September 30, 2009 than in the same period of 2008.

Gross margin, defined as the difference between net sales and cost of sales, for the nine months ended September 30, 2009 was Ps. 8,217 million, an increase of 16.1% from Ps. 7,076 million for the same period in 2008. This increase was primarily due to our ability to increase prices in our processed meats product line, which is our largest product line.

Operating expenses for nine months ended September 30, 2009 were Ps. 6,104 million, an increase of 8.7% from Ps. 5,617 million for the same period in 2008. This increase was primarily due to higher sales volumes, which generated higher sales and distribution expenses. Despite the increase in our operating expenses, our Mexican operations experienced efficiencies in selling expenses.

Operating income for the nine months ended September 30, 2009 was Ps. 2,113 million, an increase of 44.8% from Ps. 1,459 million for the same period in 2008. This increase was due to the factors discussed above.

Comprehensive financing expense, net for the nine months ended September 30, 2009 was Ps. 654 million, an increase of 28.9% from Ps. 508 million for the same period in 2008. This increase was primarily due to an increase in financial expenses as a result of an increase in debt to fund working capital and losses associated with our derivative financial instruments. See “—Quantitative and Qualitative Disclosures about Market Risk.”

Other expenses, net for the nine months ended September 30, 2009 were Ps. 108 million, a decrease of 42.1% from Ps. 187 million for the same period in 2008, primarily due to a decrease in the loss generated by the sale of obsolete and worn fixed assets, such as obsolete machinery from production facilities, and a decrease in reorganizational expenses associated with fewer headcount reductions incurred in that period compared with 2008.

Provision for income tax for the nine months ended in September 30, 2009 was Ps. 441, an increase of 53.1% from Ps. 288 million for the same period in 2008, primarily due to an increase in taxable income. For the nine months ended September 30, 2009, our effective tax rate was 32.5% as compared to 37.4% for the same period in 2008.

Consolidated net income for the nine months ended September 30, 2009 was Ps. 910 million, an increase of 90.9% from Ps. 477 million for the same period in 2008, due to the factors discussed above.

42 Results of Operations for 2006, 2007 and 2008

The following financial information has been derived from our audited consolidated financial statements:

Year Ended December 31, Percentage Change Percent of Percent of Percent of 2007 vs. 2008 vs. 2006 Net Sales 2007 Net Sales 2008 Net Sales 2006 2007 (in thousands, except percentages) Net sales ...... Ps.20,725,642 100.0% 23,081,626 100.0% Ps.26,100,558 100.0% 11.4% 13.1% Cost of sales ...... (12,282,558) (59.3) (14,098,462) (61.1) (16,436,846) (63.0) 14.8 16.6 Gross margin ...... 8,443,084 40.7 8,983,164 38.9 9,663,712 37.0 6.4 7.6 Operating expenses ...... (6,287,245) (30.3) (7,025,342) (30.4) (7,619,178) (29.2) 11.7 8.5 Operating income ...... 2,155,839 10.4 1,957,822 8.5 2,044,534 7.8 (9.2) 4.4 Comprehensive financing expense: Financial expense ...... (464,808) (2.2) (493,958) (2.1) (604,055) (2.3) (6.3) 22.2 Financial income ...... 86,839 0.4 48,780 0.2 83,928 0.3 (43.8) 72.1 Exchange loss, net ...... 27,468 0.1 18,196 0.1 7,485 — (33.8) (58.9) Effect of derivative financial instruments . . (19,539) (0.1) 104,294 0.5 (2,351,913) (9.0) (633.8) (2,355.1) Gain on monetary position ...... 96,140 0.5 159,270 0.7 39,191 0.2 65.7 (75.4) Total comprehensive financing expense, net . . . (273,900) (1.3) (163,418) (0.7) (2,825,364) (10.8) (40.3) (1,628) Other expenses, net ...... (167,581) (0.8) (316,824) (1.4) (271,292) (1.0) 89.1 (14.4) Income tax ...... (436,131) (2.1) (406,921) (1.8) 193,932 0.7 (6.7) (147.7) Consolidated net income (loss) ...... 1,278,227 6.2 1,070,659 4.6 (858,190) (3.3) (16.2) (180.2) Adjusted EBITDA ...... 2,733,125 13.2 2,673,301 11.6 2,872,111 11.0 (2.2) 7.4

The following table provides a breakdown of net sales by product line for 2006, 2007 and 2008:

Year Ended December 31, Percentage Change Percent of Percent of Percent of 2007 vs. 2008 vs. 2006 Net Sales 2007 Net Sales 2008 Net Sales 2006 2007 (in thousands, except percentages) Product lines: Processed meats .... Ps.12,532,350 60.5% Ps.13,583,604 58.9% Ps.15,244,227 58.4% 8.4% 12.2% Dairy products ..... 7,222,980 34.9 8,304,831 36.0 9,275,122 35.5 15.0 11.7 Other refrigerated products ...... 970,312 4.7 1,193,191 5.2 1,581,209 6.1 23.0 32.5 Total ...... 20,725,642 100.0 23,081,626 100.0 26,100,558 100.0 11.4 13.1

The following table provides a breakdown of net sales by geographic region for 2006, 2007 and 2008:

Year Ended December 31, Percentage Change Percent Percent Percent of Net of Net of Net 2007 vs. 2008 vs. 2006 Sales 2007 Sales 2008 Sales 2006 2007 (in thousands, except percentages) Geographic region: Mexico ...... Ps.18,364,821 88.6% Ps.19,995,226 86.6% Ps.21,908,190 83.9% 8.9% 9.6% International ...... 2,360,821 11.4 3,086,400 13.4 4,192,368 16.1 30.7 35.8 Total ...... 20,725,642 100.0 23,081,626 100.0 26,100,558 100.0 11.4 13.1

43 2007 compared with 2008

Net Sales by Product Line

Net sales of processed meats for 2008 were Ps. 15,244 million, an increase of 12.2% from the Ps. 13,584 million reported for 2007. This increase was primarily due to an 7.5% increase in sales volume in 2008, as well as price increase in line with inflation. Our net sales of processed meats benefited from the consolidation of the sales volume from the two companies acquired in 2007: Bernina in April; and IASSA in August. Bernina is a delicatessen products company primarily operating in the central region of Mexico, and IASSA is a processed meat company operating in southeastern Mexico.

Net sales of dairy products for 2008 were Ps. 9,275 million, an increase of 11.7% from Ps. 8,305 million for 2007. This increase was primarily due to 7.3% and 3.0% increases in sales volume in the yogurt and cheese product lines, respectively. 2008 net sales also included the total annual sales of Mexican Cheese Producers, a U.S. dairy products company acquired in July 2007.

Net sales of other refrigerated products for 2008 were Ps. 1,581 million, an increase of 32.5% from Ps. 1,193 million for 2007. This increase was primarily due to the successful national roll-out of new product lines, such as Guten® precooked meals and refrigerated pizzas. In 2008, the sales volume of these product lines was almost two times greater than in 2007, the year of their launch.

Net Sales by Geographic Region

Net sales in Mexico for 2008 were Ps. 21,908 million, an increase of 9.6% from Ps. 19,995 million for 2007. This increase was primarily due to increases in sales volume of our principal products lines. Our 2008 sales in Mexico were also enhanced by the integration of companies acquired in 2007, including Bernina and IASSA.

Net sales outside of Mexico for 2008 were Ps. 4,192 million, an increase of 35.8% from Ps. 3,086 million for 2007. This increase was primarily due to higher sales volume in our Central American, Dominican Republic and U.S. operations. In 2008, the sales volume of our international operations was 28.2% higher than compared with 2007. In addition, our integration of Mexican Cheese Producers, acquired in 2007, strengthened 2008 sales volumes in the United States, which were 49.4% greater than in 2007.

General

Net sales for 2008 were Ps. 26,101 million, an increase of 13.1% from Ps. 23,082 million for 2007. This increase was primarily due to strong sales performances of our processed meats, yogurt and cheese products, as well as price increases in line with inflation. Our 2008 sales volume was 7.1% higher than in 2007, reflecting both organic and acquisition-based growth. International net sales continue to represent a sizeable amount of our total sales. During 2008, international net sales constituted 16.1% of total net sales, an increase of 2.6% over our international net sales of 13.4% in 2007. Our growth through acquisitions consisted of approximately one-fourth of our total growth in sales volume for 2008.

Cost of sales for 2008 was Ps. 16,437 million, an increase of 16.6% from Ps. 14,098 million for 2007. This increase was primarily due to an increase in the volume of our sales and U.S. dollar increases in prices of our primary raw materials, such as poultry. In 2008, prices of certain poultry derivatives, such as mechanically deboned meat, increased 28.4% compared with 2007.

Gross margin, defined as the difference between net sales and cost of sales, was Ps. 9,664 million for 2008, an increase of 7.6% from Ps. 8,983 million for 2007. This increase was primarily due to our efforts to pass through to our customers the effect of both the peso depreciation and increases in U.S. dollar raw material prices, without hurting our market share. Average selling price trends in 2008 increased 6.2% compared to 2007.

44 Operating expenses for 2008 were Ps. 7,619 million, an increase of 8.5% from Ps. 7,025 million for 2007. This increase was primarily due to higher sales and distribution expenses, which resulted from the higher sales volume in our major product lines in both our Mexican and international operations.

Operating income for 2008 was Ps. 2,045 million, an increase of 4.4% from Ps. 1,958 million for 2007. This increase was primarily due to the combination of higher sales volumes, higher prices and savings in costs and expenses.

Comprehensive financing expense, net for 2008 was Ps. 2,825 million, a substantial increase compared with Ps. 163 million reported for 2007. This increase was primarily due to mark-to-market losses of certain of our derivative financial instruments and an increase in financial expenses as a result of an increase in debt balances related to borrowings made in connection with cash payments made with respect to our derivative financial instruments and completed acquisitions. During 2008, we recorded losses relating to the fair value of our derivative financial instruments by MFRS of Ps. 2,352 million (US$174 million) primarily related to the mark-to-market losses associated with foreign currency exchange rate and interest derivative financial instruments. See “—Quantitative and Qualitative Disclosures about Market Risk–Derivative Financial Instruments”.

Other expenses, net for 2008 were Ps. 271 million, a decrease of 14.4% from Ps. 317 million for 2007. This increase was primarily due to a decrease in the loss generated by the sale of obsolete and worn fixed assets, such as obsolete machinery from production facilities, and a decrease in reorganizational expenses associated with headcount reductions incurred in that period compared with 2007.

Income tax for 2008 was a tax benefit of Ps. 194 million compared to a tax expense of Ps. 407 million for 2007. This change was primarily due to the losses on derivative transactions, which resulted in a decrease in our current tax liability. In 2008, our effective tax rate was 19% as compared to 34% in 2007.

Consolidated net loss for 2008 was Ps. 858 million, a decrease of 180.2% from net income of Ps. 1,071 million for 2007, principally as a result of losses in comprehensive financing expense, net.

2006 compared with 2007

Net Sales by Product Line

Net sales of processed meats for 2007 were Ps. 13,584 million, an increase of 8.4% from Ps. 12,532 million for 2006. This increase was primarily due to a 9% higher sales volume of processed meats in 2007 compared to 2006. Our successful integration of Nayar, a regional processed meat company in Mexico which we acquired in June 2006, also contributed to the increase.

Net sales of dairy products for 2007 were Ps. 8,305 million, an increase of 15.0% from Ps. 7,223 million for 2006. This increase was primarily due to strong sales volume in our cheese product lines, which achieved a 12% increase in total sales volume compared to 2006.

Net sales of other refrigerated products for 2007 were Ps. 1,193 million, an increase of 23.0% from Ps. 970 million for 2006. This increase was primarily due to the successful launch of a new refrigerated product, Guten® precooked meals.

Net Sales by Geographic Region

Net sales from Mexico for 2007 were Ps. 19,995 million, an increase of 8.9% from Ps. 18,365 million for 2006. This increase was primarily due to solid growth in the sales volumes of our processed meats and cheese products. The total sales volume of refrigerated food in Mexico in 2007 was 631,000 tons, which represented a 6% increase compared to the sales volume in 2006.

45 Net sales from international operations for 2007 were Ps. 3,086 million, an increase of 30.7% from Ps. 2,361 million for 2006. This increase was primarily due to the increase in sales volumes of our U.S. and Central American operations. In our U.S. operations, sales in the second half of 2007 were enhanced by the sales of Mexican Cheese Producers, which we acquired in 2007. International operations had a total sales volume in 2007 of 76,000 tons of refrigerated food, which represented a 31% increase compared to the sales volume of 2006.

General

Net sales for 2007 were Ps. 23,082 million, an increase of 11.4% over Ps. 20,726 million for 2006. This increase was primarily due to the growth in sales volume of processed meat and cheese products in our domestic operations. Also, our net sales from international operations were positively impacted by the enhancement of our United States operations through the acquisition of Mexican Cheese Producers in 2007 and the continued growth of our Central American operations. Our growth through acquisitions accounted for approximately one-fifth of our total growth in sales volume in 2007.

Cost of sales for 2007 was Ps. 14,098 million, an increase of 14.8% over Ps. 12,283 million for 2006. This increase was primarily due to increases in U.S. dollar prices of raw materials such as poultry and milk.

Gross margin, defined as the difference between net sales and cost of sales, for 2007 was Ps. 8,983 million, an increase of 6.4% over Ps. 8,443 million for 2006. This increase was primarily due to higher sales volumes attributable to both organic and acquisition-related growth.

Operating expenses for 2007 were Ps. 7,025 million, an increase of 11.7% over Ps. 6,287 million for 2006. This increase was primarily due to increased sale volumes and the development and introduction of our new refrigerated food products, such as pizzas and Guten® precooked meals, as well as increased expenses associated with acquired companies.

Operating income for 2007 was Ps. 1,958 million, a decrease of 9.2% from Ps. 2,156 million for 2006. This decrease was primarily due to an increase in raw material prices.

Comprehensive financing expense, net for 2007 was Ps. 163 million, a decrease of 40.3% compared to Ps. 274 million for 2006. This decrease was primarily due to a positive valuation of our derivative financial instruments and to an increase in our monetary position related to the effects of inflation.

Other expenses, net for 2007 were Ps. 317 million, an increase of 89.1% over Ps. 168 million for 2006. This increase was primarily due to an increase in the loss generated by sales of obsolete and worn fixed assets, such as obsolete machinery from production facilities, and reorganization expenses primarily associated with employee severance costs.

Income tax for 2007 was a tax expense of Ps. 407 million compared to tax expense of Ps. 436 million reported for 2006. This decrease was primarily due to a decrease in the income tax rate, which represented a decrease in tax payments. Our effective tax rate for 2007 was 34% compared to 28% for 2006.

Consolidated net (loss) income for 2007 was Ps. 1,071 million, a decrease of 16.2% over Ps. 1,278 million for 2006.

New Accounting Policies The following MFRS, which were effective January 1, 2009, except for INIF 14, were issued by the Mexican Financial Reporting Standards Board (“CINIF”). Management considers that these MFRS will have no significant effect on the financial information presented.

46 MFRS B-7, Business acquisitions, stipulates generation valuation and disclosure standards for the initial recognition at the date of acquisition of the net assets acquired in a business acquisition as well as for the minority interest and other items that might result from it, such as goodwill and the gain on acquisitions. This standard supersedes Statement B-7 “Business acquisitions,” which was in force until December 31, 2008.

MFRS B-8, Combined and consolidated financial statements, sets forth the general standards for the preparation and presentation of combined and consolidated financial statements and notes thereto. This MFRS supersedes Statement B-8 “Combined and consolidated financial statements and valuation of permanent investments in shares,” which was in force until December 31, 2008.

MFRS C-7, Investments in associated companies and other permanent investments, sets forth the standards for the accounting recognition of the investments in associated companies, and other permanent investments in which there is no control, joint control or significant influence.

MFRS C-8, Intangible assets, sets forth the valuation, presentation and disclosure standards for the initial and subsequent recognition of the intangible assets acquired on an individual basis or through a business acquisition, or internally generated in the normal course of business. This MFRS supersedes Statement C-8 “Intangible assets,” which was effective until December 31, 2008.

MFRS D-8, Share-based payments, stipulates the standards for the recognition of share-based payments. This MFRS supersedes IFRS-2 “Share-based payments” issued by the International Financial Reporting Standards Board applicable on a supplementary basis in Mexico.

INIF 14, Contracts on construction, sale and rendering of services related to real estate, issued by the CINIF, contemplates the regulation in Statement D-7 “Contracts on construction and manufacturing” of some capital goods. This interpretation will become effective as of January 1, 2010 for all of the entities celebrating contracts on construction, sale and rendering of services related to real estate.

Liquidity and Capital Resources

Overview

Historically, we have generated and expect to continue to generate positive cash flow from operations. Cash flow from operations primarily represents inflows from net earnings (adjusted for depreciation and other non-cash items) and outflows from increases in working capital needed to grow our business. Cash flow used in investing activities represents our investment in property and capital equipment required for our growth, as well as our acquisition activity. Cash flow from financing activities is primarily related to changes in indebtedness borrowed to grow the business or indebtedness repaid with cash from operations or refinancing transactions as well as dividends paid.

Our principal capital needs are for working capital, capital expenditures related to maintenance, expansion and acquisitions and debt service. Our ability to fund our capital needs depends on our ongoing ability to generate cash from operations, overall capacity and terms of financing arrangements and our access to the capital markets. We believe that our future cash from operations together with our access to funds available under such financing arrangements and the capital markets will provide adequate resources to fund both short-term and long- term operating requirements, capital expenditures, acquisitions and new business development activities.

Liquidity

We are a holding company and, as such, have no operations of our own. Our ability to meet our obligations is primarily dependent on the earnings and cash flows of our subsidiaries and the ability of those subsidiaries to pay us interest or principal payments on intercompany loans, dividends or other amounts or to make intercompany loans to us.

47 The following table provides the generation and use of cash in 2006, 2007 and 2008 and in the nine months ended September 30, 2009. As a result of MFRS B-2, Statement of Cash Flows, effective January 1, 2008, we have included the statement of cash flows for the year ended December 31, 2008. For prior years, we included the statement of changes in financial position. As a result, the cash flow figures for 2008 and the nine months ended September 30, 2009 may not be directly comparable to those presented for the previous years. Nine months ended Year Ended December 31, September 30, 2006 2007 2008 2009 (in thousands) Net resources provided by operating activities ...... Ps.1,815,464 Ps.1,537,096 Ps.1,336,277 Ps.2,307,574 Net resources used in investing activities ...... (2,278,456) (2,297,745) (2,976,972) (710,515) Net resources (used in) provided by financing activities ...... (1,459,894) 674,896 212,534 (2,269,521) Certain specific uses: Payment of debt ...... (1,794,470) (3,053,969) (1,867,000) (3,358,815) Incurrence of debt ...... 826,565 4,127,326 5,672,924 2,445,367 Dividends paid ...... (50,192) (398,461) (385,153) (509,328) Other(1) ...... (441,797) — (530,238) (794,065) (1) Other includes changes in minority stockholder’s equity and increases in capital. Net resources provided by operating activities were Ps. 1,336 million in 2008, compared to Ps. 1,537 million in 2007 and Ps. 1,815 million in 2006. In 2008, our net resources provided by operating activities were primarily affected by our higher working capital needs, including by an increase in accounts receivables due to higher sales volumes placed through our modern retail distribution channel. In 2007, net resources provided by operating activities were affected by increased working capital needs associated with higher inventory levels built up in anticipation of further increases in raw material prices. In the first nine months of 2009, the increases in net resources provided by operating activities were primarily due to increased sales volume and our ability to pass through raw material increases to customers with better pricing. On September 30, 2009, cash and cash equivalents were Ps. 1,689 million on a consolidated basis, of which Ps. 5 million was restricted cash held in connection with margin calls related to definitive financial instruments. On December 31, 2008, cash and cash equivalents were Ps. 2,363 million on a consolidated basis, of which Ps. 75 million was restricted cash held in connection with margin calls related to definitive financial instruments. At December 31, 2007, cash and cash equivalents were Ps. 708 million. On December 31, 2006, cash and cash equivalents were Ps. 794 million. For the nine months ended September 30, 2009, we paid dividends to Alfa of Ps. 509 million. We paid dividends to Alfa of Ps. 50 million, Ps. 399 million and Ps. 385 million in 2006, 2007 and 2008, respectively. In 2008, net resources used in investing activities were Ps. 2,977 million in connection with the acquisitions of Braedt® and Longmont®, maintenance and replacement of productive assets and payment of derivative financial instruments. In 2007, net resources used in investing activities were Ps. 2,298 million for the acquisitions of Mexican Cheese Producers, IASSA and Bernina and maintenance and replacement of productive assets. In 2006, net resources used in investing activities were Ps. 2,278 million in connection with the acquisition of Nayar and maintenance and replacement of productive assets. In the first nine months of 2009, net resources used in investing activities were Ps. 711 million used primarily for maintenance and replacement of productive assets. In 2008, net resources provided by financing activities of Ps. 213 million were borrowings used to primarily finance derivative financial instrument losses (unwinds, settlements and margin calls mainly in the last three

48 months of 2008). In 2007, net resources provided by financing activities of Ps. 675 million represented debt incurred in connection with our growth strategy. In 2006, net resources used in financing activities of Ps. 1,460 million represented a reduction of our debt levels and the acquisition of our minority interest in Grupo Chen, S. de R.L. de C.V., a regional cheese producer in Mexico.

In the first nine months of 2009, net resources used in financing activities of Ps. 2,270 million represented a reduction of our debt levels.

As a holding company, we finance the operations of our subsidiaries through our normal internal cash management and treasury functions. To the extent our subsidiaries are not able to satisfy their financing needs through internal cash generations, we provide centralized financing through intercompany loans.

Capital Resources

Existing Indebtedness

At September 30, 2009, we had total indebtedness of Ps. 8,386 million (US$621 million), of which Ps. 7,774 million (US$578 million) was denominated in pesos (including UDIs), Ps. 465 million (US$34 million) was denominated in U.S. dollars and Ps. 114 million (US$8 million) was denominated in Peruvian soles. Of this total amount, Ps. 476 million (US$35 million) constituted short-term debt and Ps. 7,855 million (US$586 million) constituted long-term debt. UDIs (Unidad de Inversion) are instruments denominated in pesos that automatically adjust the principal amount of an obligation to the inflation rate officially recognized by Banco de México. The primary use of our debt has been to fund acquisitions and capital expenditures. Following this offering, we anticipate having credit facilities available under which we may borrow up to Ps. 2,400 million (US$178 million) to fund working capital and other requirements. See “Description of Other Indebtedness.”

Capital Expenditures

In 2006, 2007, 2008 and the nine months ended September 30, 2009, we made capital expenditures of Ps. 1,476 million (US$109 million), Ps. 1,785 million (US$132 million), Ps. 1,081 million (US$80 million) and Ps. 435 million (US$32 million) respectively. These capital expenditures were primarily used for maintenance and replacement of productive assets, such as maintenance of production facilities and replacement of delivery vehicles.

We have intentionally deferred a portion of our planned capital expenditures for 2009 into 2010. We estimate that our capital expenditures for 2009 as a whole and for 2010 will be approximately Ps. 945 million (US$70 million) and Ps. 1,215 million (US$90 million), respectively, and will be used primarily for replacement of distribution equipment and new product launches.

Research and Development

For the nine months ended September 30, 2009, we spent Ps. 94 million (US$7 million) on research and development. In 2006, 2007 and 2008, we spent Ps. 120 million (US$9 million), Ps. 107 million (US$8 million) and Ps. 108 million (US$8 million), respectively, on research and development. See “Business — Research and Development.”

49 Tabular Disclosure of Contractual Obligations

The following is a summary of our contractual obligations (other than operating leases) as of September, 30, 2009, without giving effect to this offering:

Payments Due By Period Less than 1-3 3-5 More than Total 1 year years years 5 years (in thousands) Contractual Obligations(1) Short-term debt obligations ..... Ps. 475,639 Ps. 475,639 Ps. — Ps. — Ps. — Long-term debt obligations(1) . . . 7,883,099 388,878 3,858,722 467,970 3,167,529 Capital lease obligations ...... 27,321 5,724 10,014 7,278 4,305 Total ...... 8,386,059 870,240 3,868,736 475,248 3,171,834

(1) Operating lease expense was Ps. 135 million (US$10 million) for the nine months ended September 30, 2009. (2) After giving effect to the issuance and sale of the notes and the application of the net proceeds therefrom as described herein, our long-term debt obligations due within 1 to 3 years and after more than 5 years would be Ps. 1,365 million (US$101 million) and Ps. 6,544 million (US$485 million), respectively.

Quantitative and Qualitative Disclosures about Market Risk

Derivative Financial Instruments

Because we obtain financing in pesos, we have entered into foreign exchange rate and interest rate derivatives for purposes of reducing the overall cost of such financing and the volatility associated with interest rates. In addition, due to our consumption of energy, we have entered into hedging contracts covering natural gas.

From an economic point of view, derivative financial instruments are entered into for hedging purposes; however, for accounting purposes, some of our derivative financial instruments have not been designated as hedges because they do not meet all the accounting requirements established by MFRS and, therefore, have been classified as trading instruments. Derivative financial instruments employed by us are obtained in the over-the-counter market with international financial institutions. The main characteristics of the transactions refer to the obligation to buy or sell a certain underlying asset given certain criteria such as fixed rate, spread and strike price, among others.

During the fourth quarter of 2008, we took steps to reduce the notional amount of our foreign currency exchange rate derivatives, thereby reducing our exposure to these instruments. This initiative included closing out a significant portion of notional amounts of derivative instruments related to foreign currency exchange rates; however, a significant amount of our interest rate derivative transactions have not been closed out and remain in effect, and we may incur additional losses in the future in connection with those transactions. As of September 30, 2009, the notional amount outstanding for our interest derivative transactions was Ps. 4,976 million (US$369 million) and we recorded a net liability with respect to derivative financial instruments of Ps. 622 million (US$46 million).

During 2008 and the nine months ended September 30, 2009, we recorded losses relating to the fair value of our derivative financial instruments under MFRS of Ps. 2,352 million (US$174 million) and Ps. 57 million (US$4 million), respectively, primarily related to mark-to-market losses associated with foreign currency exchange rate and interest rate derivative financial instruments which is reflected in “Comprehensive financing expense, net”.

50 Interest Rate Risk

We entered into interest rate swap agreements with the objective of limiting our exposure to increases in interest rates. At September 30, 2009, the position of our interest rate swaps was summarized as follows (millions of pesos):

Type of derivative, Notional Underlying Asset Fair Maturity value or contract amount Unit Reference value 2009 2010 2011+ Collateral Hedge accounting: Over TIIE Rate(1) Ps. 425.0 % per year 4.93 (Ps. 3.3) (Ps. 3.3) Ps. — Ps. — — Non-hedge accounting: Over LIBOR 4,051.3 % per year 1.88 (312.2) (47.6) (168.2) (96.4) 1.7 Over TIIE Rate 500.0 % per year 4.93 (6.4) (6.4) — — — (Ps. 321.8) (Ps. 57.2) (Ps. 168.2) (Ps. 96.4) Ps. 1.7

(1) TIIE Rate means the Interbank Equilibrium Interest Rate calculated by Banco de México and published in the Official Gazette of Mexico (Diario Oficial de la Federación) or any index that may replace it.

Foreign Currency Exchange Rate Risk

We entered into foreign exchange rate derivatives with the objective of limiting our exposure to fluctuations in the peso to U.S. dollar foreign currency exchange rate. At September 30, 2009, the position of our exchange rate derivatives was as follows (millions of pesos):

Type of derivative, Notional Underlying Asset Fair Maturity value or contract amount Unit Reference value 2009 2010 2011+ Collateral USD/MXN (CCS(1)) Ps. 496.6 Pesos/U.S. dollars 13.50 (Ps. 111.0) (Ps. 22.5) (Ps. 15.6) (Ps. 72.9) — USD/MXN (FX) Ps. 13.2 Pesos/U.S. dollars 13.50 (167.2) (167.2) — — — (Ps. 278.2) (Ps. 189.7) (Ps. 15.6) (Ps. 72.9) —

(1) Cross currency swaps.

Natural Gas

We entered into different derivative agreements with several counterparties to protect ourselves against increases in the prices of natural gas. Because energy markets have been experiencing significant volatility in recent periods, hedging strategies for commodities were designed to mitigate the impact of potential price increases.

At September 30, 2009, the position of our derivative financial instruments for natural gas was summarized as follows (millions of pesos):

Type of derivative, Notional Underlying Asset Fair Maturity value or contract amount Unit Reference value 2009 2010 2011+ Collateral Non-hedge accounting: Natural gas Ps. 18.9 U.S. dollars/BTU 2.65 (Ps. 21.5) (Ps. 4.3) — (Ps. 17.2) Ps. 3.6

The effectiveness of financial derivative instruments classified as hedge instruments is assessed on a periodic basis. At December 31, 2008, we assessed the effectiveness of our hedges and estimated that they are effective for hedge accounting purposes.

51 Credit Lines, Margins and Collateral Policies

In order to manage the obligation to post collateral, we have agreed to a credit line with each counterparty that has a derivative transaction. In cases where the agreed credit line is less than the absolute mark-to-market value, we have the obligation, from time to time, to post the corresponding collateral to the counterparty. Additionally, if such obligation is not fulfilled, the counterparty has the right, but not the obligation, to declare such obligation as prematurely expired and to demand the corresponding reasonable value in accordance with the agreed terms. At September 30, 2009, we had Ps. 5 million in restricted cash as collateral required for margin calls related to financial derivative instruments. This cash collateral consists of temporary investments and cash in broker accounts.

We have met all margin calls to date.

Internal Control Procedures to Manage Liquidity and Market Risk Exposure

We maintain a system of internal control over derivative financial instruments. The negotiation, authorization, contracting, operating, monitoring and recording of derivative financial instruments are subject to internal control procedures overseen by our treasury, legal, accounting and auditing departments.

Risk Committee

Alfa’s management has recently formed a Risk Management Committee, which supervises each hedging and derivative transaction proposed to be entered into by Alfa’s subsidiaries, including us, and reports directly to Alfa’s Chairman and Chief Executive Officer. All new hedging and derivative transactions into which we propose to enter into, as well as the renewal or cancellation of existing hedging and derivative arrangements, are required to be approved by senior management of both Sigma and Alfa, including Alfa’s Chairman and Chief Executive Officer. Proposed transactions are required to satisfy certain criteria, including that they be entered into for non-speculative purposes in the ordinary course of business, based on fundamental analysis and after a sensitivity analysis and other risk analysis techniques have been performed. In addition, proposed transactions with a notional amount in excess of Ps. 405 million (US$30 million) are required to be approved by the finance` committee of Alfa’s board of directors and, in the case of amounts in excess of Ps. 1,350 million (US$100 million), by Alfa’s full board of directors.

52 BUSINESS

Overview

We are a leading producer, marketer and distributor of quality branded foods, including processed meats, cheese, yogurt and prepared meals throughout Mexico, our principal market, as well as to the Hispanic market in the United States and throughout Central America, the Dominican Republic and Peru. We estimate that in Mexico in 2008, based on annual tonnage, we had a 50% market share in the processed meats market, a 28% market share in the formal cheese market, both of which represent the leading market positions, and a 20% market share in the yogurt market.

Our extensive refrigerated distribution network of 31 plants, 144 distribution centers and over 3,200 active delivery routes reaches over 400,000 customer locations in the markets we serve. We believe that our distribution network in Mexico is one of the most extensive in the country and would be difficult to replicate.

We have developed a broad portfolio of brands that are among the most recognized brands across a diverse Mexican consumer base and that have resulted in leading market positions in the competitive Mexican food markets in which we operate. Our broad portfolio of brands — from premium to economy brands — are targeted to differentiated socioeconomic market segments, which allows us to capture sales across all such market segments.

Our customers include small family-owned stores, superstores, wholesalers and convenience stores. We have had relationships of over 30 years with six of our top ten customers, including our largest customer, Wal-Mart de Mexico S.A.B. de C.V. and its affiliated stores (together, “Wal-Mart de Mexico”). In 2008, we generated approximately 31.0% of our net sales from our ten largest customers, with Wal-Mart de Mexico accounting for over 13.2% of our net sales.

As a result of our growing operations in the United States, Central America, the Dominican Republic and Peru, we are generating an increasing percentage of our net sales from outside of Mexico. For the nine months ended September 30, 2009, we generated 19.6% of net sales outside of Mexico, compared to 16.1% of net sales outside of Mexico in 2008.

Our portfolio of brands, range of innovative products, focus on production and distribution processes, and extensive distribution network have allowed us to continue to grow net sales and cash flow. We generated net sales of Ps. 26,101 million (US$1,933 million) and Adjusted EBITDA of Ps. 2,872 million (US$213 million) for the year ended December 31, 2008; and net sales of Ps. 22,153 million (US$1,640 million) and Adjusted EBITDA of Ps. 2,837 million (US$210 million) for the nine months ended September 30, 2009.

We are based in Monterrey, Mexico and are a wholly owned subsidiary of Alfa, one of Mexico’s largest publicly traded conglomerates. We were incorporated in 1971 and acquired by Alfa in 1980.

53 The following chart sets forth significant milestones in the development of our company and our current operations:

Year Development 1980 Alfa acquires Sigma 1992 Enter into franchise agreement with Sodima for production and distribution of Yoplait® brands 1993 Enter into cheese market 1997-2007 Consolidate position through acquisitions of regional processed meats and dairy products producers in Mexico 2002-2004 Expand geographically through acquisitions of processed meats and dairy products producers in Central America and the Dominican Republic 2005-2006 Expand product offerings through introduction of refrigerated pizzas and precooked meals 2007 Continue geographic expansion into the United States through acquisition of Mexican Cheese Producers, a Wisconsin dairy products producer, and construction of processed meats plant in Oklahoma 2008 Expand geographically through acquisition of processed meats producer in Peru

Industry

Traditionally, we have focused on the Mexican market, which accounted for 84% of our total sales in 2008. In recent years, we have expanded outside of Mexico; however, since sales in Mexico continue to represent a substantial majority of our total sales, the following discussion of our industry primarily focuses on the Mexican market.

Processed Meats

We estimate that the Mexican processed meats market grew at a rate of 3% to 4% annually from 2004 through 2008, reaching a volume of over 740,000 tons in 2008. In 2008, per capita consumption of processed meats in Mexico was approximately 7 kilograms per year, as compared to per capita consumption rates of 20 kilograms in the United States, 15 kilograms in Chile, 12 kilograms in Brazil and 8 kilograms in Argentina. We expect future growth of this market to be similar to Mexican GDP growth rates.

Dairy Products

The Mexican cheese market is mature and highly fragmented, with over 600 producers participating in the formal, or industrial, market. Although difficult to quantify, we believe there is substantial additional cheese production coming from micro-producers across the country. We estimate that the cheese market has grown at a rate of approximately 2% annually from 2004 through 2008, reaching a volume of approximately 290,000 tons in 2008. In 2008, per capita consumption of cheese in Mexico was approximately 3 kilograms, as compared to per capita consumption rates of 14 kilograms in the United States, 11 kilograms in Argentina, 5 kilograms in Chile and 3 kilograms in Brazil. We expect future growth of this market to be half of Mexican GDP growth rates.

Based on information provided by Nielsen, the yogurt market reached a size of approximately 534,000 tons in 2008. This market had been growing rapidly at rates of approximately 12% per year from 2004 to 2007, largely due to market innovations, however, since then growth has slowed. In 2008, per capita consumption of

54 yogurt in Mexico was approximately 5 kilograms, as compared to per capita consumption rates of 6 kilograms in the United States, Chile and Argentina, and 3.4 kilograms in Brazil. We expect future growth rates of this market to be similar to Mexican GDP growth rates.

Competitive Strengths

We believe our competitive position is enhanced by the following key strengths:

Strong Portfolio of Brands Targeted to Differentiated Market Segments

We have a portfolio of brands that are among the most recognized by consumers in Mexico and targeted to differentiated market segments across the diverse consumer base we serve. For example, we target the premium segments of the processed meat market with our Tangamanga® brand products, the high end of the market with our San Rafael® brand products, the middle of the market with our FUD® brand products, the economy segment with our Chimex® and Viva® brand products, and the low end of the market with our San Antonio® brand products. We own most of our brands, but also license and produce yogurt under the Yoplait® brand throughout Mexico, Central America and the Dominican Republic. For 2008, sales from brands we own constituted 88% of our net sales.

Leading Position in Key Markets

We have the leading market positions in Mexico in both the processed meats and cheese markets in Mexico and a significant market share in the market for yogurt products, which allows us to capture margin benefits associated with economies of scale. We estimate that in Mexico in 2008, we had a 50% market share in the 740,000 annual ton processed meats market, a 28% market share in the 290,000 annual ton formal cheese market and a 20% market share in the 534,000 annual ton yogurt market. Over the last five years, we have strengthened our position in the processed meats and cheese markets through the acquisition and successful integration of small, regional companies. We have also leveraged our distribution and sales organization that services small family-owned stores by implementing more efficient operating procedures, such as presales of customer orders, to enhance our customer service and market presence. These efforts have allowed us to increase our customer base as well as the number of products sold to each customer.

Extensive Refrigerated Distribution Network

We operate one of the most extensive refrigerated distribution networks in Mexico, Central America and the Dominican Republic, which we have recently expanded to the United States and Peru. We believe that it would be difficult for a competitor to build a refrigerated distribution network similar in scope to ours in Mexico and Central America. Our network includes 144 strategically located distribution centers and approximately 5,000 vehicles that serve 16 processed meats plants, 12 dairy products plants, two other refrigerated meals plants and one beverage plant. With over 3,200 active delivery routes and over 5,000 sales representatives, we are able to reach over 400,000 customer locations, the vast majority of which are small family-owned stores that represent approximately one-third of our net sales.

Innovative Product and Process Development

We continuously seek to improve our products as well as the processes utilized to manufacture and distribute these products. For example, we developed a range of innovative products in the cheese market that target a variety of customer needs, such as ease of use and smaller volume packaging, by offering resealable packaging for shredded and sliced cheese, multi-pack packaging for our small family-owned customers and cheese dips and sauces. To enhance our offerings in the yogurt market, we receive marketing and technical assistance from Sodima and its network of world-wide Yoplait® franchisees. In our other refrigerated product line, we have developed new products such as refrigerated pizzas and precooked meals. In addition we continue to develop our product pipeline which we expect to contribute to future sales growth.

55 Strong Cash Flow

We have a history of generating consistent cash flow even during slowdowns affecting our industry or the overall economy of Mexico. Despite soft economic conditions in 2008 and 2009, we have continued to increase Adjusted EBITDA, which grew by 36.3% for the nine months ended September 30, 2009 compared to the same period in 2008. We have managed to reduce costs and maintain our Adjusted EBITDA margins (Adjusted EBITDA as a percentage of net sales) despite the higher prices in peso terms of our U.S. dollar-denominated raw material prices, which we have generally been able to pass on to our customers. Our operations also require relatively modest amounts of maintenance capital expenditures, such that free cash flow is available for investing in and growing our business.

Experienced Management Team

Our team of ten senior executives has an average of 17 years in the industry across a wide range of marketing, manufacturing and distribution functions, as well as a successful track record in integrating acquired businesses. Our senior management team is supported by the resources provided by our parent, Alfa, including development and training opportunities it offers to our employees.

Business Strategy

Our objective is to become the leading refrigerated food company in Mexico, the U.S. Hispanic market, Central America, the Dominican Republic and Peru by leveraging our competitive advantages in those markets. The principal elements of our strategy are as follows:

• Strengthen our Leading Market Position in Mexico

We seek to consolidate our market leadership in Mexico. We reinforce our brands through advertising and promotion activity, and also create new alternatives for customers through constant innovation in new products, packaging and processes. We also seek to increase our customer base by further expanding our existing distribution channels.

• Promote Growth in the Mexican Cheese Market

We seek to transform the Mexican cheese market by introducing innovative products to a generally mature market, which is highly fragmented and consists mainly of small family-owned producers. We regularly launch new product and packaging offerings in this market. We are focused on satisfying the regional taste preferences of consumers within Mexico, as well as the needs of our different distribution channels. We also seek to drive demand by creating new products which offer consumers additional consumption opportunities.

• Further Develop Central American, Caribbean and South American Operations

The geographic diversification of end markets has been part of our strategy since 2002 when we started our Central American operations with the acquisition of food companies in Costa Rica. We seek to capitalize upon our substantial experience in Mexico by replicating our business model throughout Central America, the Dominican Republic and Peru. We plan to expand in these regions through consolidation and further expanding our product offerings. We plan to expand distribution into these areas with products from our existing portfolio that have proven successful in the Mexican market.

• Target the U.S. Hispanic Market

We seek to capitalize on our brand recognition along with the preference for our products among U.S. Hispanic consumers, who typically have a higher purchasing power than Mexican consumers. Besides leveraging “nostalgia” for Mexican products, our knowledge of purchasing patterns of U.S. Hispanics and our traditional

56 flavors are playing a key role in penetrating this market. Through acquisitions, such as our recent acquisition of Mexican Cheese Producers in Wisconsin, or developing our own facilities, such as our processed meat plant in Oklahoma, we intend to further penetrate this market by satisfying the needs of the U.S. Hispanic consumer.

• Expand our Food Service Operations

We believe there is major opportunity in Mexico for continued growth in the food service business. Currently, our food service business has over 7,600 customers throughout Mexico, such as restaurants, hospitals, penitentiaries, schools, hotels and movie theaters. We have a separate and specialized sales organization to serve our food service customers and we are developing customized products and solutions to better serve this market. We are exploring opportunities to expand these offerings in the other markets in which we operate.

• Continue to Develop New Products

We believe that innovation is key to long-term growth. Through our research and development (“R&D”) staff, research collaboration arrangements with educational and governmental institutions, and an innovative product pipeline, we have become leaders in developing new refrigerated products. Most recently, our innovation initiative focused on two main categories: refrigerated pizzas; and precooked meals. Refrigerated pizzas became our first product extension of one of our pillar brands, San Rafael®. Additionally, in 2006, we launched our precooked meal product, Guten®, as a new category and brand in Mexico.

Key Products

We are a leading producer of branded refrigerated foods, including processed meats, cheese, yogurt, prepared meals and beverages, in Mexico. For the year ended December 31, 2008, our sales were comprised as follows: 58.4% from processed meats, 35.5% from dairy products, and 6.1% from other refrigerated products.

Over the past ten years, we have diversified our product mix, as is illustrated in the table below reflecting the contribution to consolidated net sales from each segment:

0.4% Other Refrigerated Products 7.6% 6.1% 15.8% Dairy Products 24.3% 35.5%

Processed Meats 83.7% 68.1% 58.4%

1999 2004 2008

57 Processed Meats

We produce, market and distribute a wide range of quality branded processed meat products in Mexico, the United States, Central America, the Dominican Republic and Peru, including:

• ham;

• sliced cold cuts;

• hot dogs;

• bologna; and

• bacon.

We differentiate our processed meats products from those of our competitors by offering innovative products, such as our Balance® product line, targeted to health-minded consumers, and the Power Dog®, a flat hot dog appealing to children. We also offer innovative packaging options that address consumer demand for easier to use and store packaging, such as semi-rigid and resealable containers. In our international markets, we customize our product offerings to the local taste preferences of consumers. In the Dominican Republic, for example, our principal processed meats product is salami, a popular bologna-type product. Sales of processed meats accounted for 58.4% of our net sales for 2008 and 59.9% for the nine months ended September 30, 2009.

Dairy Products

We produce quality branded dairy products in two categories: cheese and yogurt. Sales of dairy products accounted for 35.5% of our net sales for 2008 and 34.0% for the nine months ended September 30, 2009.

Cheese

We produce, market and distribute branded cheese products, including processed, fresh, string and aged designed to appeal to both domestic and foreign tastes. Due to the highly fragmented nature of the cheese market in Mexico, we offer customized products for each region, such as Menonita cheese for northern Mexico and Daysi cheese for southeastern Mexico, which successfully compete with regional brands. We market fresh cheese in the U.S. under the FUD® and La Chona® brands. In addition, we customize our products based on the needs of our customers—for example, by offering single and small serving packaging for customers in our traditional distribution channel and grated cheese for our food service customers.

Yogurt

We produce, market and distribute yogurt in a variety of types and flavors, such as stirred, drinkable, functional, light, “petit suisse” and dessert, under the Yoplait® brand through our exclusive licensing arrangement with Sodima. We customize our yogurt products to the local taste preferences of the consumers in each of our markets. The yogurt market is characterized by intense price competition, extensive marketing efforts and constant product innovation. As a result, we have consolidated our Yoplait® brand offerings in order to optimize our marketing exposure, and have strengthened our product offerings in the stirred, drinkable and functional segments. We have also increased our product differentiation to fit the economic needs and preferences of our consumers by offering products targeted to specific audiences, such as kids, teens and once-a-day shoppers and by offering a variety of packaging options.

Other Refrigerated Products

We produce, market and distribute other refrigerated products, including refrigerated pizzas and precooked meals. We entered this market in 1995 with prepared foods, primarily under the brands El Cazo Mexicano®, and

58 more recently FUD®, San Rafael® and Guten®. Sales of these products accounted for 6.1% of our net sales for each of 2008 and the nine months ended September 30, 2009.

Our Brands

Our brands are well-recognized by consumers, and brands such as FUD® and San Rafael® hold the highest levels of consumer recognition in market surveys we conducted in Mexico asking consumers to list processed meats. Our FUD® brand has been in the market for more than 50 years. The Yoplait® brand is a leading brand in dairy products world-wide, and has a prominent position in Mexico.

We seek to manage our exposure to macroeconomic downturns, and to take advantage of economic opportunities by targeting our brands in the full range of socioeconomic markets, as shown in the following table: Processed Meats Cheese Yogurt Premium 2%

High 8%

Middle (1) 34%

Economy/Low-end 56%

Total Market

(1) Pursuant to our franchise agreements with Sodima, we have the exclusive right to manufacture and market Yoplait® in Mexico, Central America, the Dominican Republic and Haiti.

In the United States we use the FUD® and La Chona® brands to reach the Hispanic market. In Central America and the Dominican Republic, we also sell our products through well known brands in those local markets, which also span across the full range of socioeconomic markets.

Intellectual Property

We have registered the “Sigma Alimentos” brand and its distinctive logo. Additionally, we have registered 763 brands and 156 commercial advertisements and have pending 131 brands and ten pending commercial advertisement registrations before the Mexican Institute of Intellectual Property (Instituto Mexicano de la Propiedad Industrial, or “IMPI”). Most of our registered brands and commercial advertisements relate to our principal brands. Internationally, we have registered approximately 673 brands and 97 commercial advertisements and have pending 115 brands and ten commercial advertisement registrations. Some of these brands have been registered since 1958, and all of them are up-to-date, and have a 10-year renewable term.

We have two patents registered abroad and 45 pending patent applications (ten in Mexico and 35 abroad). We have seven registered industrial designs and six pending applications in Mexico.

59 License, Franchise and Distribution Contracts

In 1992, we developed a strategic alliance with the French company Sodima International S.A. through a franchise contract which gave us the exclusive right to manufacture and market Yoplait® in Mexico. In 2002, we signed a new franchise contract with Sodima (Sodima International S.A.’s successor) which gave us the right to use Sodima’s production and manufacturing processes, as well as the Yoplait® brands. In 2005 and 2009, we entered into new franchise contracts with Sodima that extended our exclusive rights over the Yoplait® brands to the Dominican Republic, Haiti and Central America. In addition, we obtained the right to receive technical assistance from Sodima. Under our franchise agreements, we pay license fees to Sodima based on a percentage of our net sales. Our franchise agreements have ten-year terms, with automatically renewing ten-year terms unless either party elects to terminate the agreement.

Through our distribution agreement with Oscar Mayer Foods, a division of Kraft Foods, Inc., we have the right to distribute and market in Mexico, El Salvador, Costa Rica and Honduras certain products manufactured, marketed or distributed by Oscar Mayer®. This agreement commenced on June 30, 1999, and was scheduled to expire five years from such date, but has automatically renewing five-year terms unless either party elects to terminate the agreement.

We also have a distribution agreement with Kraft Foods de México, S. de R.L. de C.V. for the exclusive distribution of Philadelphia® brand products in small retailers throughout Mexico’s largest cities (with certain exceptions for previous clients of Kraft Foods). This distribution agreement expires in October 2010.

We believe our relationships with Sodima, Oscar Mayer Foods and Kraft to be good, and we have no reason to believe that our agreements with each of them will not be renewed.

Customers

We distribute our products to more than 400,000 customer locations throughout the countries in which we have operations. We believe we have a healthy balance of customers between our traditional and modern distribution channels. During 2008, our sales were segmented as follows: 60.8% from small family-owned stores, wholesalers and food service customers (traditional distribution channel); and 39.2% from supermarkets and convenience stores (modern distribution channel).

We have established and maintained stable and long-term relationships with our customers, including the most important supermarket stores of Mexico. We have had relationships of over 30 years with six of our top ten customers, including our largest customer, Wal-Mart de Mexico. In 2008, we generated approximately 31.0% of our net sales from our ten largest customers, with Wal-Mart de Mexico accounting for over 13.2% of our net sales.

In the ordinary course of our business, we do not enter into agreements with our customers. Instead, our customers place orders for our products through purchase orders or inventory replacement systems or on a spot market basis.

Raw Materials and Suppliers

We acquire our primary raw materials, such as pork, poultry and milk, from suppliers in Mexico and international suppliers. In some cases we establish supply contracts to guaranty our supply. It is our policy to maintain at least two suppliers for any input in our production such as meat, packaging materials or dry ingredients. We do not believe that the termination of a supply arrangement by any single supplier would have a material adverse effect on our business or financial performance.

60 Our suppliers are leading companies, both in Mexico and internationally. These suppliers are certified by SAGARPA or the USDA and include companies such as Tyson Foods Inc., Carolina Turkeys Company and Keken Alimentos Kowi. We receive competitive prices from our suppliers due to our high volume needs. The primary raw materials used by us in processed meats manufacturing are pork, poultry and beef. These raw materials are sold, whether to our suppliers or directly to us, through a commodities market and thus are subject to market fluctuations in price.

For our dairy products line, most of the raw materials, such as milk, fruit and additives, are purchased from suppliers in Mexico. Our milk producers are diverse groups composed of over 500 local producers. In addition, we have programs to promote the development of regional milk producers. Some of the raw materials we use to manufacture dairy products come from international markets. Our primary dairy products suppliers are Fonterra Limited, Schreiber Inc., Dairy America, Lactoprot and PS International. We are not dependent on any single dairy product supplier.

The prices of the packaging materials we use fluctuate in accordance with global prices, even though some of these materials are provided by national suppliers in Mexico.

Manufacturing Processes

Processed Meats

Our processed meats segment is comprised of two main product lines: hams, which are manufactured from pork and turkey thighs; and hot dogs and other meats, which are primarily manufactured from pork and poultry.

The processed meats production process generally involves injecting the raw material with brine to obtain the protein contained in the meat, which is used to form a moldable mix. In the case of sausage and other products, the raw material is mixed with other dry ingredients in order to obtain the moldable mix. Synthetic covers are then filled with the raw material mix, which undergo a cooking process; in some cases, the products also undergo a slicing process afterwards. Finally, the cooked and sliced products are packaged and sent to our distribution centers where they are sold to our customers.

Dairy Products

Our dairy products product line is comprised of two main categories: cheese and yogurt. We also produce and sell other spreadable dairy goods, such as margarine, butter and cream.

To produce yogurt, we start by pasteurizing and skimming milk. Once the milk has been pasteurized and skimmed, it is mixed with lactic cultures to begin the fermentation process. It is then mixed with fruit and other ingredients. The final product is packaged and sent to our distribution centers where it is shipped for sale to our customers.

Our cheese production process also starts with the pasteurization and skimming of milk. Once the milk has been pasteurized and skimmed, it is mixed with rennet and other ingredients. The product is then curdled and drained. Finally, the product is molded, packaged and sent to the distribution centers where it is shipped for sale to our customers.

Sales and Distribution Network

Distribution Channels

The retail sector in Mexico is highly fragmented between traditional and modern retail distribution channels. We consider the traditional distribution channel our most important distribution channel, which primarily includes small family-owned stores, wholesalers and food service customers. In 2008, the traditional distribution

61 channel represented 60.8% of our net sales. The modern distribution channel includes national, regional and convenience stores. In 2008, the modern distribution channel accounted for 39.2% of net sales. Consequently, we, like other processed meats and dairy products producers, must design strategies to distribute in both channels in order to maintain our market positions.

The underdeveloped merchandise transportation infrastructure in Mexico, Central America, the Dominican Republic and Peru necessarily affects our distribution operations. Moreover, retailers do not have sufficient space to store large inventories, especially in the case of products that require refrigeration. As a result, producers must have their own refrigerated vehicles network and deliver products frequently, visiting customers at least once a week.

The difficulties posed by serving the small family-owned stores in our traditional distribution channel have encouraged the development of one of our key competitive advantages – our efficient distribution network comprised of 31 plants, 144 distribution centers and approximately 5,000 vehicles, reaching more than 400,000 customer locations. Our distribution network is designed for refrigerated products and assures product freshness at the time of delivery. We have also installed over 80,000 refrigerators in small family-owned stores throughout Mexico. This investment allows us to enhance our brands in an attractive station with minimal competition and at the proper temperature.

We invest considerable economic resources each year in our distribution network, enabling us to maintain our significant presence in the traditional distribution channel.

Sales Force

We have over 4,220 salespersons who visit each of our customers in the traditional distribution channel, at least once a week. We also have over 7,550 salespersons who focus on the modern distribution channel and typically are generally located at these customer locations. Our sales force is comprised of both employees and independent contractors.

Marketing

The food sector is one of the most saturated advertising markets in Mexico and the other countries in which we conduct business. We have diversified and enriched our media mix (national and cable TV, radio, outdoor advertising, magazines and others) in search of greater efficiency when addressing the different segments to whom our products are directed (housewives, teenagers, children and different socioeconomic levels). We enter into pre-paid marketing contracts for approximately 70% of our advertising expenditures, while the remainder of our advertising expenditures are made as spot purchases.

Product innovation and brand extension to other product categories have played an important role as a platform for growth and diversification of our product portfolio.

Products launched in 2008 included, among others, the flat Power Dog® sausage, cheese sauces and grated cheese under the La Villita® brand, and removable packing panela cheese under the Noche Buena® brand. In the beverages line, we introduced natural yogurt and YOP® directed to teenagers; and in the San Rafael® pizzas line, we introduced a whole wheat turkey pizza.

In 2007, we launched a diverse line of products under the brand Balance®, which includes a low-fat and low-sodium processed-meats line, and Mexican and light cheese, margarine and cream. In the prepared foods sector, we launched Guten®, an innovative and highly nutritious precooked meal product.

Competitors and Market Position

We operate in a highly-competitive environment, primarily comprised of other Mexican companies. The presence in Mexico of imported products is relatively low and is concentrated in higher-priced, niche market

62 segments. However, we expect competitive imported products to gradually enter other market segments. In the U.S. Hispanic market, we face competition from diverse well-capitalized competitors, including El Mexicano and Bafar. Based on industry data and our own estimates, we believe have achieved a strong presence in each of our markets.

Processed Meats

We are the leader in the processed meats market in Mexico in both supermarkets and small family-owned stores, and based on our estimates, had a market share in 2008 of approximately 49%. Significant competitors are Qualtia Alimentos S.A. de C.V. and Grupo Bafar S.A. de C.V.

We sell more than 500 meat products including ham, hot dogs, bologna, and bacon, which we produce from pork, turkey, and chicken. Our brands are well-recognized by consumers due to product quality, which is designed for the needs of each market segment.

We distribute some of our products nationally, and others on a regional basis. We believe that we have the leading production and distribution capacity in Mexico, and as a result, that we are the only company in the industry able to compete nationally in all market segments. We believe we are well-positioned to maintain our growth, even after taking into account the highly-competitive nature of our market.

Dairy Products

The consumption of cheese in Mexico is widespread and is influenced by regional tastes and preferences. We estimate that we have achieved market leadership, and based on our estimates, had a market share in 2008 of approximately 28%. Other significant competitors include Chilchota Alimentos S.A. de C.V., Distribuidora de Lácteos Algil S.A. de C.V., a producer of Esmeralda dairy products, and Grupo Industrial Lala S.A. de C.V. The Mexican cheese market is highly fragmented, and there is no single company that has full coverage in both geography and product offering. Because Mexican consumers prefer fresh cheese over aged cheese, durability is an important characteristic impacting national distribution. Most sales take place in small family-owned stores, and not in supermarkets. Through acquisitions, we have consolidated some of the market and expanded our brand and product offerings.

The yogurt market in Mexico is highly competitive and characterized by continuous innovation and extensive marketing efforts. Danone is the market leader, and based on information provided by Nielsen, we had a market share of approximately 19.6% in 2008. Other market participants include Grupo Industrial Lala S.A. de C.V., Alpura S.A. de C.V. and Nestlé, S.A. de C.V. We produce yogurt in a variety of types and flavors, such as shakes and drinks, natural and with fruit, light, pro-digestive, “petit suisse,” and desserts, among others, and we have developed different presentations that fit the varying economic capacities and preferences of our consumers. We have the exclusive right to produce and distribute Yoplait®, one of the three global brand leaders, in Mexico, Central America, the Dominican Republic and Haiti. We believe our national distribution capacity gives us an advantage over our competitors, particularly in our service of small family-owned stores.

Research and Development

We continuously conduct R&D activities to develop new products and to improve our existing products and processes. We maintain an R&D center with over 100 employees who monitor and respond to changes in consumer trends and technology. We have established a knowledge management process to share key insights, best practices and research results. Our R&D team also has research arrangements with educational and governmental institutions, which allow us to use their facilities and research capabilities. In addition, under our franchise agreement with Sodima, we have the right to receive technical assistance from Sodima until 2012.

We have developed and launched a broad variety of products into the market, designed to respond to the preferences and needs of our consumers. We recognize the value of innovation and know how important it is for the evolution of our brands.

63 Facilities

We own 31 refrigerated-foods manufacturing plants and own or lease 144 distribution centers. The following chart lists the locations of our manufacturing plants:

Product Products Square Line Site(1) Manufactured Age (years)(2) Footage

Processed Xalostoc, Mexico Ham, hot dogs, 56 86,197 Meats Atitalaquia, Mexico and processed 16 98,996 Monterrey, Mexico meats 26 25,327 Guadalajara facility 1, Mexico 46 31,474 Guadalajara facility 2, Mexico 27 112,009 Guadalajara facility 3, Mexico 8 25,295 Chihuahua, Mexico 56 25,489 San Luis Potosi, Mexico 26 35,758 Estado de Mexico, Mexico 18 60,235 Distrito Federal, Mexico 11 18,718 Merida, Mexico 8 51,742 Costa Rica 27 66,951 El Salvador 25 35,844 Dominican Republic 27 105,863 Peru 36 50,709 Oklahoma, United States 1 111,503 Dairy Jalisco facility 1, Mexico Yogurt, cheese 15 226,139 Products Jalisco facility 2, Mexico Cheese 10 21,162 Nuevo Leon facility 1, Mexico Cheese, others 36 97,241 Nuevo León facility 2, Mexico Cheese 37 16,146 Coahuila facility 1, Mexico Cheese, others 31 73,840 Coahuila facility 2, Mexico Cheese 30 59,524 Estado de Mexico, Mexico Cheese 9 32,346 Guanajuato, Mexico Cheese, others 32 87,812 Costa Rica facility 1 Cheese 13 29,364 Costa Rica facility 2 Yogurt 1 26,372 Dominican Republic Cheese, yogurt 10 56,414 Darlington, Wisconsin Cheese, others 11 49,998 Prepared Nuevo Leon, Mexico Refrigerated 12 132,450 Foods Hidalgo, Mexico prepared foods 5 70,966 Beverages Jalisco, Mexico Coffee 5 12,917 (1) All the manufacturing plants above are owned by us and are insured as we consider necessary. Braedt is the only facility subject to a lien and represents a small percentage of our total assets. The other facilities listed above are free of liens. (2) Age reflects the date on which the manufacturing plant initiated operations.

Information Technology

We use information technology provided by SAP AG, Microsoft Corporation, Symantec Corporation and others for processing plant maintenance, distribution and picking center operations and sales force activities. Our systems integrate sales data, generate stock replenishment orders and design efficient sourcing and delivery routes. We believe that our systems infrastructure supports our various business operations and is secure and robust. We have back-up and disaster recovery plans in place, which are reviewed on a periodic basis. Our

64 information systems and technology staff are experienced and many have been working for us for several years, providing a depth of system knowledge.

To better serve our traditional distribution channel (small family-owned stores and wholesalers) efficiently, we have invested in route optimization programs, such as the Territory Planner used by UPS. We also have access to satellite monitoring via GPRS which allows us to pinpoint our vehicles at any time, help our drivers locate customers and process orders in real time. Hand-held devices and SAP-based software, such as Customer Relationship Management and Business Intelligence, are other technological tools we use in order to provide better service to our customers.

We have outsourcing contracts with IBM (Mexico) and Alestra, which continue until March 2014, which provide for the following services:

• IBM (Mexico) – operation and administration of central computing, distributed computing, help desk, Basis and Soptec; and

• Alestra – operation and administration of telecommunications (voice, data and video).

Environmental and Other Government Regulation

Like other participants in the industry, we are subject to various laws and regulations administered by local, national and other governmental entities and agencies in the countries in which we operate, including regulations regarding: the environment, health and safety, food and drugs, transportation, anti-corruption, customs, export controls and trade sanctions, employment and labor, government contracts and intellectual property. Failure to comply with these requirements may result in fines, penalties and liability for damages resulting from noncompliance.

Environmental

Our operations are subject to the federal, state and local laws and regulations of Mexico, Costa Rica, the Dominican Republic, El Salvador, Peru and the United States relating to the protection of the environment.

The primary federal environmental law in Mexico is the Mexican Federal Law of Ecological Balance and Environmental Protection (Ley General de Equilibrio Ecológico y Protección al Ambiente) pursuant to which rules have been promulgated concerning water, air and noise pollution and hazardous substances. Other laws that apply or may apply to our operations are the General Law for Prevention and Integral Management of Residues (Ley General para la Prevención y Gestión Integral de los Residuos), which regulates the generation, handling, transportation, storage and final disposal of hazardous waste, as well as imports and exports of hazardous materials and hazardous wastes, and the National Water Law (Ley de Aguas Nacionales) and regulations thereunder, which govern the prevention and control of water pollution.

The Mexican federal authority in charge of overseeing compliance with the federal environmental laws is the Ministry of Environment and Natural Resources (Secretaría del Medio Ambiente y Recursos Naturales,or SEMARNAT). An agency of SEMARNAT, PROFEPA, has the authority to enforce the Mexican federal environmental laws. As part of its enforcement authority, PROFEPA can bring civil, administrative and criminal proceedings against companies and individuals that violate environmental laws and has the power to close facilities not in compliance with federal environmental laws. PROFEPA can issue sanctions that include monetary fines, revocation of authorizations, concessions, licenses, permits or registries, administrative arrests, seizure of contaminating equipment and, in certain cases, temporary or permanent closure of facilities. Furthermore, in special situations or certain areas where federal jurisdiction is not applicable or appropriate, the state and municipal authorities can regulate and enforce certain environmental regulations, as long as they are consistent with federal law.

65 In the United States, we are subject to various 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, the Resource Conservation and Recovery Act and Superfund, which imposes joint and severable liability on each responsible party. The U.S. federal authority with primary jurisdiction over environmental matters is the U.S. Environmental Protection Agency; however, other federal, state, and local agencies, as well as private parties, can use various legal means to enforce environmental laws.

We believe we are in compliance, in all material respects, with the environmental laws of Mexico applicable to our operations. We have fulfilled all environmental requirements necessary to obtain PROFEPA’s Clean Industry certification (Industria Limpia), which certifies our compliance with certain environmental laws with respect to most of our production facilities. We believe we are in compliance, in all material respects, with the environmental laws of the United States and other jurisdictions outside of Mexico where we operate.

Safety and Quality Control

Our operations are subject to the federal and state laws and regulations of the countries in which we operate relating to the protection of our employees and contractors. We believe we are in compliance with all such laws and regulations. We are committed to promoting the health and safety of our workers and others involved in or affected by our operations and have developed and implemented an integrated health and safety management system. As part of this system, each of our Mexican facilities is equipped with a permit administration system, an accident prevention program, a comprehensive emergency response program with emergency equipment and trained safety crews and a risk analysis and management program. Regular external audits are conducted to assess the effectiveness of our internal health and safety practices. We have been in compliance in all material respects with such audits in the past. In addition, we are committed to protecting the environment and the health and safety of the communities in which we operate. Accordingly, we collaborate with local governments, advocacy organizations and industry and public interest groups to promote a culture of continuous improvement in environment, safety and health. We believe we are in compliance, in all material respects, with the food safety laws of Mexico.

Our quality procedures are internationally validated through certifications such as IS0 9002 and HACCP (Hazard Analysis and Critical Control Point). Also, three of our Mexican facilities are USDA certified, enabling them to export product to the United States. Our Darlington, Wisconsin, facility is an FDA-registered establishment and our Seminole, Oklahoma, facility has on-site USDA inspectors. We believe we are in compliance, in all material respects, with the food safety laws of the United States and other jurisdictions outside of Mexico where we operate.

Insurance

We are insured with coverage against four key categories of risk: assets and business interruption; third party damage and product liability; transportation; and director and officer liability. Our insurance policies are negotiated on our behalf by Alfa and apply to our operations in Mexico, the United States, the Caribbean, Central America and Peru.

Our all-risk policy insures assets and protects us against business interruptions caused by hurricanes and other weather conditions, earthquakes, equipment malfunctions and other catastrophic events. Our general and product liability policies provide coverage for bodily injury and property damage liability, personal injury, medical payments, contingent and excess automobile liability, pollution and products liability. Our transportation policies provide coverage for all import and export merchandise, such as raw materials, inventories and products, whether shipped by air, land or sea. We also maintain a directors and officers policy that provides coverage for our directors and officers for claims arising from the carrying out of their managerial duties, including claims related to securities law violations, pollution, crisis management and professional indemnity for failure to supervise. In addition, each subsidiary maintains other insurance policies as necessary to comply with local regulations or specific needs, such as commercial auto, workers compensation, environmental liability and employee practices.

66 We believe that our insurance coverage is reasonable in amount and consistent with industry standards, and do not anticipate being unable to renew any of our insurance policies.

Legal Proceedings

In the ordinary course of our business, we are involved in disputes and litigation. While the outcomes of disputes cannot be predicted, we do not believe that there are any pending or threatened actions, suits or proceedings against or affecting us which, if determined adversely to us, would individually or in the aggregate, materially harm our business, results of operations or financial condition.

Employees

As of December 31, 2008, we employed 27,620 people throughout our production and management facilities, consisting of 244 executives, 20,494 management and sales employees, and 6,882 trade-union employees.

Our trade-union employees are affiliated with the main trade unions of each country where we have operations. Generally, collective bargaining agreements with these trade unions are negotiated every two years, though salary increases are applied annually. Labor relationships have historically developed on mutually acceptable terms, which has resulted in a positive labor climate and the absence of strikes or production stoppages.

67 MANAGEMENT

Our Board of Directors is responsible for the management of our business. The Board of Directors is comprised of a number of permanent and alternate members, as determined from time to time at the shareholders’ meeting. Directors serve in their positions for a term of one year and may be re-elected.

Our current Board of Directors was appointed at the shareholders’ meeting held on June 10, 2009. The address for each of our directors and executive officers is Ave. Gomez Morin No. 1111 Sur, Col. Carrizalejo, San Pedro Garza Garcia, Nuevo Leon, 66254 Mexico.

Directors and Executive Officers

Board of Directors

The current members of our Board of Directors and Examiners, their ages, positions and period of service are as follows:

Name Age Position Period of Service Alvaro Fernández Garza 41 Chairman 4 months Mario Humberto Páez González 59 Board Member 3 years Alejandro Elizondo Barragán 56 Board Member 3 years Ricardo Gerardo Sada Villarreal 63 Board Member 6 months Angel Jesús Casán Marcos 54 Board Member 3 years Carlos Jiménez Barrera 54 Board Member, Secretary 3 years Alejandro Paredes Guerra 55 Alternate Member, Assistant Secretary 3 years Juan Gerardo Pérez Lara 42 Examiner 2 years Juan Manuel Gallardo Olivares 47 Assistant Examiner 3 years

Executive Officers

Our current executive officers, their ages, principal positions and period of service are as follows:

Name Age Position Period of Service Alvaro Fernández Garza 41 Chief Executive Officer 18 years Juan José López Tamez 39 Sales Director 20 years Ricardo Doehner Cobián 37 Chief Financial Officer 13 years Sergio Javier Ramos Santos 44 International Operations Director 21 years Luis Fernando Orozco Curiel 55 Innovation Director 30 years Paulino José Rodríguez Mendívil 58 Human Resources Director 5 years Rodrigo Fernández Martínez 31 New Businesses Director 11 years Javier Guajardo Touché 53 Chief Operating Officer 18 years Sandra Guzmán Salazar 37 Marketing Director 4 years Gregorio de Haene Rosique 50 Technology Director 27 years

Board of Directors

Álvaro Fernández Garza joined Alfa in 1991. He is currently serving as the Chief Executive Officer of Sigma. He previously held the positions of Sales and Marketing Director as well as Foodservice Director at Sigma. He served as Chief Executive Officer at Terza Ingeniería con Estilo® and has held several executive positions at Alestra. Mr. Fernández holds Master’s degrees in Business Administration from Instituto Tecnológico y de Estudios Superiores de Monterrey (“ITESM”) and Georgetown University, and a Bachelor’s degree in economics from the University of Notre Dame.

68 Mario Humberto Paez González joined Alfa in 1974 and is currently serving as its Chief Financial Officer. He previously held the position of Chief Executive Officer at Sigma. He also served as the Chief Executive Officer of Total Home S.A. de C.V. and Empaques de Carton Titan, S.A. de C.V. Mr. Paez holds Master’s degrees in Business Administration from Tulane University and ITESM, and a Bachelor’s degree in public accounting from ITESM.

Alejandro Elizondo Barragán joined Alfa in 1976 and has served as President of the petrochemical division of Alfa and Chief Executive Officer of Petrotemex since June 2009. He previously served as Chief Financial Officer of Alfa. Prior to that, he served as President and Chief Executive Officer of Hylsamex and has held numerous other positions in his more than 30-year career with Alfa. He was also President of the Mexican Iron and Steel Producers Association and Vice President of the American Steel Institute. He serves on the board of Banco Regional de Monterrey and Embotelladora Arca S.A. de C.V. He has a Master’s degree in Business Administration from Harvard University and a Bachelor’s degree in mechanical engineering from ITESM.

Ricardo Gerardo Sada Villarreal joined Alfa in 1982 and is currently the Financial Projects Director. He was Treasury Director of Alfa from 2008 to 2009, human resources Global Manager at Nemak, S.A., a division of Alfa, from 2007 to 2008 and was Treasury Director for Hylsamex, S.A. de C.V. (the former steel division of Alfa) from 1990 to 2006. He also served as Administrative Vice President of Hylsamex from 1986 to 1990. He holds a Master’s degree in Business Administration from the University of Texas and a Bachelor’s degree in business from ITESM.

Angel Jesús Casán Marcos joined Alfa in 1979 and is currently its Human Resources Director. He previously held the position of Chief Executive Officer at Indelpro S.A. de C.V., Tejin-Akra, S.A. de C.V. (the former steel division of Alfa) (today Akra-Polyester S.A. de C.V.) and Nylon de Mexico, S.A. de C.V. He was Vice President of the North American Organizational and Management Council/Conference Board and a board member of the American Fiber Manufacturers Association. Mr. Casán holds a Bachelor’s degree in actuarial science from Universidad Anáhuac.

Carlos Jiménez Barrera joined Alfa in 1976 and since 2005 has served as the General Counsel of Alfa. From 1986 to 1988 he was associated with Canales y Jiménez, S.C. He has a Master of Laws degree from New York University and a Bachelor of Laws degree from Universidad de Monterrey.

Alejandro Paredes Guerra joined Alfa in 1977 and is currently serving as its Assistant Secretary. Mr. Paredes holds a law degree from Universidad Autónoma de Nuevo León and a Master’s degree in Business Administration from Cornell University.

Examiners

Pursuant to our by-laws and Mexican law, our shareholders elect our statutory examiner (comisario) at the annual general shareholders’ meeting. The statutory examiner is primarily responsible for reviewing our affairs and reporting to the shareholders with regard to the adequacy and accuracy of the financial information presented to shareholders by the board of directors. Statutory examiners may, among other things: • request monthly reports from the board of directors, including a statement of financial condition and income; • audit our operations, documents and records; • call ordinary or extraordinary shareholders’ meetings and place items on the agenda and attend these meetings (although a statutory examiner does not have the right to vote); and • attend meetings of our board of directors (although a statutory examiner does not have the right to vote).

Juan Gerardo Pérez Lara is currently serving as Examiner at Sigma. He has been a Partner of the Audit practice at PricewaterhouseCoopers México since 2005 and has more than 21 years of professional experience advising companies of the industrial and consumer products industries. Mr. Pérez holds a degree in public accounting from the Universidad Autónoma de Nuevo León.

69 Juan Manuel Gallardo Olivares joined Alfa in 1998 and is currently its Corporate Chief Comptroller and is currently serving as Assistant Examiner at Sigma. He previously held the position of Administrative Vice President of the Packaging Division of Cydsa, S.A.B. de C.V. He holds a Master’s degree in Business Administration from ITESM and a Bachelor’s degree in public accounting from ITESM.

Executive Officers

Álvaro Fernández Garza. See “Board of Directors.”

Juan José López Tamez joined Alfa in 1989 and is Sales Director at Sigma. Previously he held the position of Key Accounts Director and was also in charge of the Distribution and Logistics Department. He holds a degree in accounting from Universidad Autónoma de Nuevo León and a Master’s degree in Business Administration from ITESM.

Ricardo Doehner Cobián is currently serving as Chief Financial Officer at Sigma. He joined Alfa in 1996. He previously held the position of Chief Executive Officer at Alliax S.A. de C.V., and Planning and Development Director. Mr. Doehner holds a degree in mechanical engineering from ITESM and a Master’s degree in Business Administration from the University of Michigan.

Sergio Javier Ramos Santos joined Alfa in 1988 and is International Operations Director at Sigma. He previously held the post of Director of US Operations at Sigma and Marketing Director of Processed Meats. Mr. Ramos holds a degree in industrial engineering from ITESM and a Master’s degree in Business Administration from the University of Texas.

Luis Fernando Orozco Curiel joined Alfa in 1979 and is Innovation Director at Sigma. He previously held the position of Marketing Director and several other executive posts at Sigma. Mr. Orozco holds a degree in industrial engineering from ITESM.

Paulino José Rodríguez Mendívil joined Alfa in 2004 and is the Human Resources Director of Sigma. He previously held the position of Food Service Director. He holds a degree in industrial engineering from Universidad del País Vasco-Bilbao.

Rodrigo Fernández Martinez joined Alfa in 1998 and is New Businesses Director at Sigma. He previously held the position of Prepared Meals General Manager. Mr. Fernández holds a degree in economics from ITESM and a Master’s degree in Business Administration from the University of Pennsylvania, Wharton School.

Javier Guajardo Touché is Chief Operating Officer at Sigma. He joined Alfa in 1991. He previously held the position of Dairy Products Director and was in charge of Sigma operations in Central America and the Caribbean. Mr. Guajardo holds a degree in mechanical engineering from ITESM.

Sandra Guzmán Salazar is serving as Marketing Director at Sigma. She joined Alfa in 2005. She previously held the position of Marketing Director of Dairy Products at Sigma. Mrs. Guzman holds a Bachelor’s degree in international business from ITESM.

Gregorio de Haene Rosique is currently serving as Technology Director at Sigma. He joined Alfa in 1982. He previously held the position of Technology Manager at Sigma. Mr. de Haene holds a Bachelor’s degree in biochemical engineering from ITESM and holds a Master’s in Business Administration from ITESM.

Compensation of Directors and Executive Officers

For 2008, the aggregate compensation of all of our executive officers as a group that was paid or accrued by us was Ps. 99 million (US$7 million). This group includes 22 executive officers, one of whom also served as a director. Because all of our directors are employees of us or Alfa, they do not receive compensation for serving as directors (other than reimbursement of travel-related expenses for meetings held outside our headquarters).

70 PRINCIPAL SHAREHOLDER AND RELATED PARTY TRANSACTIONS

Principal Shareholder

Our company is wholly-owned by Alfa, S.A.B. de C.V. Recently, Alfa publicly disclosed that, based on information derived from the shareholders’ request for inscriptions in Alfa’s share registry book, maintained as provided in article 128 of the Mexican General Law of Business Corporations (Ley General de Sociedades Mercantiles), as well as from other information provided to Alfa, the following individuals, together with members of their respective immediate families, in the aggregate hold, as of September 2009, an equity participation equivalent to approximately 45% of all of Alfa’s issued and outstanding shares: Mrs. Margarita Garza Sada; heirs of Mr. Dionisio Garza Sada; Mr. Armando Garza Sada; heirs of Mr. José Calderón Ayala; Mr. Roberto Garza Sada; heirs of Mr. Lorenzo Garza Sepúlveda; and Mr. Rafael R. Paez Garza. Alfa has stated publicly that, to the best of its knowledge, none of the foregoing persons is, on an individual basis, a controlling shareholder (as defined under Mexican securities laws). Additionally, Alfa has stated that, to the best of its knowledge, all of the foregoing persons maintain their shares on a separate and independent basis, and are not part of any agreement or understanding of any nature through which the voting rights of their respective shares are exercised.

Related Party Transactions

From time to time, we may enter into transactions with parties that have relationships with Alfa, officers, directors or entities in which we have an ownership interest. It is our policy to conduct all of these transactions on an arms-length basis.

Amounts representing significant related party transactions for 2006, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009 are as follows:

Nine Months Year Ended December 31, Ended September 30, 2006 2007 2008 2008 2008 2009 2009 (Ps.) (Ps.) (Ps.) (US$) (Ps.) (Ps.) (US$) (Unaudited) (in thousands) Income: Alfa Subsidiarias, S.A. de C.V. . . . . — — 1,769 131 — 10,991 814 Expense: Alfa, S.A.B. de C.V...... — 233,430 255,870 18,947 189,150 222,970 16,511 Alliax, S.A. de C.V...... 36,972 35,902 69,901 5,176 40,341 107,059 7,928 Dinámica, S.A. de C.V...... 6,309 7,811 6,396 474 4,718 4,987 369 Gentium, S.A. de C.V...... 79,960 87,232 57,424 4,252 43,539 — — Transportación Aérea del Norte, S.A. deC.V...... 61 5,186 8,340 618 4,409 5,827 431 Alfa Subsidiarias, S.A. de C.V...... 208,834 (2,777) — — — — — Alfa Corporativo, S.A. de C.V...... 35,449 38,049 45,671 3,382 27,663 34,849 2,581 Total ...... 367,585 404,833 443,603 32,849 309,820 375,692 27,820

Services Provided by Affiliates

In the ordinary course of our business, we obtain administrative and corporate services from Alfa and several subsidiaries, including, among others, Alliax, S.A. de C.V., Alfa Corporativo, S.A. de C.V. and Alestra, S.A. de C.V. In 2008, we paid Alfa a fixed corporate fee of Ps. 256 million (US$19 million) for a range of administrative and support services, including: government and institutional lobbying, human resources planning, financial and treasury planning, legal and tax advice, strategic planning, investor relations and communication. In

71 2009, we will pay Alfa Ps. 300 million (US$22 million) for these services. Through Alliax, we outsource certain administrative services, including accounts payable, travel expense processing, payroll and other corporate, administrative and accounting services. In 2008, Sigma Alimentos Corporativo, S.A. de C.V., our subsidiary, paid Alfa Corporativo, S.A. de C.V. a fixed corporate fee of Ps. 21 million (US$2 million) for certain personnel services. In 2009, Sigma Alimentos Corporativo, S.A. de C.V. will pay Alfa Corporativo, S.A. de C.V. Ps. 28 million (US$2 million) for these services. We also lease office space for our headquarters from Alfa Corporativo, S.A. de C.V. Alestra, S.A. de C.V. provides us with telecommunications (voice, data and video) services. Additionally, some of our affiliates provide certain services, to us and our subsidiaries such as air transportation, security services, leases and other corporate and administrative services.

Affiliates Outstanding Balances

As of December 31, 2006, 2007 and 2008, we had amounts due to affiliates of Ps. 7 million, Ps. 42 million and Ps. 52 million, respectively. The amount due to affiliates as of September 30, 2009 was Ps. 53 million. On November 28, 2008, we entered into a loan agreement with Alfa Subsidiarias, S.A. de C.V. under which we lent Alfa Subsidiarias, S.A. de C.V. Ps. 160 million (US$11.9 million), which represents substantially all of the amounts due to us from affiliates.

72 DESCRIPTION OF OTHER INDEBTEDNESS

The following description briefly summarizes material terms of certain of our credit arrangements, including credit arrangements of our subsidiaries. The description is only a summary and does not purport to describe all of the terms of the credit arrangements that may be important.

Committed Credit Lines

March 2009 Revolving Credit Facility

At September 30, 2009, we and certain of our subsidiaries had Ps. 2,400 million (US$178 million) outstanding under our revolving credit facility with Banco Inbursa S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa, as lender. These amounts were issued pursuant to a credit agreement entered into by us and the lender, dated March 20, 2009, which provides for a Ps. 2,400 million (US$178 million) senior revolving line of credit at a maximum rate of the TIIE Rate, plus 6.5% (the current interest rate is TIIE Rate plus 4.0%). This facility will mature on March 20, 2011. We intend to use a portion of the net proceeds of this offering to repay approximately Ps. 2,400 million (US$178 million) of indebtedness under this facility, and following such repayment the facility will remain available to us for future borrowing. We may be subject to an early repayment penalty of 1% of the prepaid amount under this agreement.

This revolving credit facility contains certain restrictive covenants which, among other things, limit our ability to: • reduce our net worth below Ps. 5,100 million; • acquire companies, shares, equity interests and/or assets in other companies; • create liens on assets; • enter into transactions with affiliates, except for transactions on an arms-length-basis; • enter into sale-leaseback transactions; • sell any of our material assets; • enter into agreements that would limit our subsidiaries’ ability to pay dividends; • amend our by-laws; • guarantee third party obligations, except for obligations assumed by our subsidiaries up to an amount of US$25 million; and • conduct our business outside the ordinary course or our corporate purpose.

This revolving credit facility also provides for maintenance covenants that require us to maintain certain financial ratios. These maintenance covenants include requirements that: (i) our leverage ratio not exceed 3.0 to 1, and (ii) our interest coverage ratio be no less than 3.0 to 1, as of the last day of each fiscal quarter. A failure to comply with such covenants, if not cured within a certain specified time period, would allow the lender to accelerate the outstanding amounts due under the loan and such amounts would become becoming immediately due and payable.

In addition, this revolving credit facility contains certain customary event of default provisions, including a direct or indirect change of control at the Alfa level, as well as cross-default provisions.

73 Local Bonds

In December 2007, we established a Ps. 5,000 million (US$370 million) local bonds program (the “Local Bonds Program”). As of September 30, 2009, we had local bonds of Ps. 3,167 million (US$235 million) outstanding. The local bonds contain certain restrictive covenants which, among other things, limit our and our subsidiaries’ ability to:

• enter into transactions with affiliates, except for transactions in the ordinary course of business and on an arms-length basis;

• effect a consolidation, merger or purchase of all or substantially all of our assets;

• create liens on assets;

• make investments outside the ordinary course of business; and

• enter into any agreements that would limit the ability of subsidiaries to pay dividends.

In addition, the local bonds contain standard default provisions, including a change of control provision at the Alfa level, as well as cross- default provisions.

2014 Local Bonds

In December 2007, we issued local bonds of Ps. 1,635 million (US$121 million) aggregate principal amount in two tranches under the Local Bonds Program. The first tranche consisted of local bonds of Ps. 1,000 million (US$74 million) aggregate principal amount bearing interest at the TIIE Rate plus 0.2%. The second tranche consisted of local bonds of Ps. 635 million (US$47 million) aggregate principal amount bearing interest at an 8.7% fixed rate per year. Both tranches will mature on December 8, 2014.

2018 Local Bonds

In July 2008, we issued two additional tranches of local bonds under Local Bonds Program. The first tranche consisted of local bonds of Ps. 1,000 million (US$74 million) aggregate principal amount bearing interest at a 10.25% fixed rate. The second tranche consisted of local bonds of 124 million UDIs (equivalent, at the time to Ps. 500 million) (US$39 million) bearing interest at a 5.3% fixed rate per year. UDIs (Unidad de Inversion) are instruments denominated in pesos that automatically adjust the principal amount of an obligation to the inflation rate officially recognized by the Banco de México. Both tranches will mature on July 12, 2018.

Syndicated Credit Facility

As of September 30, 2009, we had Ps. 1,700 million (US$126 million) outstanding under these syndicated bank loans.

On April 26, 2006, we and certain of our subsidiaries entered into a credit agreement with Banco Nacional de México (“Banamex”), as administrative agent, and the other lenders party thereto (the “Syndicated Credit Agreement”), which provides for a Ps. 1,700 million (US$126 million) credit facility. This facility matures on

74 April 26, 2013, with twelve equal quarterly amortizations of Ps. 142 million (US$11 million) starting in July 26, 2010. To date, our cost for the interest rate under this credit facility has been the TIIE Rate plus an applicable margin of 2%. The applicable margin changes in accordance with 12 month periods specified in the Syndicated Credit Agreement.

Our obligations under the Syndicated Credit Agreement are guaranteed by Alimentos Finos de Occidente, S.A. de C.V., Sigma Alimentos Centro, S.A. de C.V., Sigma Alimentos Comercial, S.A. de C.V., Sigma Alimentos Lácteos, S.A. de C.V., Sigma Alimentos Noreste, S.A. de C.V., and as of May 2009, Sigma Alimentos Congelados, S.A. de C.V., Distribuidora y Comercializadora de Lácteos del Norte, S.A. de C.V. and Lácteos Finos Mexicanos, S.A. de C.V.

We are not subject to any penalties for early prepayment of debt under the Syndicated Credit Agreement. The Syndicated Credit Agreement contains certain restrictive covenants which, among other things, limit our and our subsidiaries’ ability to:

• enter into transactions with affiliates, except for transactions on an arms-length basis;

• effect a consolidation, merger, purchase or lease of all or substantially all of our assets;

• create liens on assets;

• conduct our business outside the ordinary course;

• enter into agreements that limit our subsidiaries’ ability to pay dividends;

• enter into sale leaseback transactions; or

• sell any of our material assets.

There are also maintenance covenants that require us to maintain certain financial ratios. The failure to comply with such covenants, if not cured within a certain specified time period, can lead, at the option of the administrative agent, to the outstanding amounts due under the loan becoming immediately due and payable. These maintenance covenants include requirements that: (i) our leverage ratio not exceed 3.5 to 1 and (ii) our interest coverage ratio not be less than 2.85 to 1, as of the last day of each fiscal quarter. The Syndicated Credit Agreement also contains certain customary events of default, including a change of control at the Alfa level, as well as cross-default provisions.

Bilateral Bank Loans

As of September 30, 2009, we had Ps. 540 million (US$40 million) outstanding of amortizing bilateral bank loans. These bilateral bank loans contain maintenance covenants that require us to maintain certain financial ratios. The failure to comply with such covenants, if not cured within a certain specified time period, can lead, at the option of the lender, to the outstanding amounts due under the loan becoming immediately due and payable. These maintenance covenants include requirements that: (i) our leverage ratio not exceed 3.5 to 1, and (ii) our interest coverage ratio not be less than 2.85 to 1, as of the last day of each fiscal quarter. In addition, the bilateral bank loans contain certain restrictive covenants similar to those in the Syndicated Credit Facility. The bilateral bank loans also contains certain customary events of default, including a change of control at the Alfa level, as well as cross-default provisions.

Banorte

On December 8, 2004, Sigma Alimentos Lácteos, S.A. de C.V. entered into a credit agreement with Banco Mercantil del Norte, Sociedad Anónima, Institución de Banca Multiple, Grupo Financiero Banorte (“Banorte”),

75 as lender, which provided for a Ps. 100 million (US$7 million) credit facility, bearing interest at a 10.5% fixed rate. As of September 30, 2009, we had Ps. 89 million (US$7 million) outstanding under this facility. This facility matured on October 31, 2009, and was paid in full and was not extended.

HSBC

On November 27, 2008, we and certain of our subsidiaries entered into a credit agreement with HSBC Mexico, S.A., Institución de Banca Multiple, Grupo Financiero HSBC (“HSBC”), as lender, which provides for a Ps. 160 million (US$12 million) credit facility bearing interest at the TIIE Rate plus 3.0%. As of September 30, 2009, we had Ps. 160 million (US$12 million) outstanding under this credit facility. This facility matures on November 28, 2011, with twenty four equal monthly amortizations of Ps. 7 million (US$0.5 million) starting in December 2009.

Our obligations under the bilateral credit agreement with HSBC are guaranteed by Alimentos Finos de Occidente, Sigma Alimentos Centro, S.A. de C.V., Sigma Alimentos Comercial, S.A. de C.V., Sigma Alimentos Lácteos, S.A. de C.V., Sigma Alimentos Noreste, S.A. de C.V., Sigma Alimentos Congelados, S.A. de C.V. and Distribuidora y Comercializadora de Lácteos del Norte, S.A. de C.V., and as of May 2009, Lácteos Finos Mexicanos, S.A. de C.V.

Banamex

On February 25, 2005, we and certain of our subsidiaries entered into a credit agreement with Banco Nacional de México, S.A. (“Banamex”), as lender, which provides for a Ps. 500 million (US$37 million) credit facility. As of September 30, 2009, we had Ps. 292 million (US$22 million) outstanding under this facility. This facility matures on February 28, 2013, with twenty-four equal quarterly amortization payments of Ps. 21 million (US$2 million), which began in May 2007. Interest on borrowings under this credit facility accrues at a 10.5% fixed rate.

Our obligations under the bilateral credit agreement with Banamex are guaranteed by Alimentos Finos de Occidente, Sigma Alimentos Centro, S.A. de C.V., Sigma Alimentos Comercial, S.A. de C.V., Sigma Alimentos Lácteos, S.A. de C.V., Sigma Alimentos Noreste, S.A. de C.V. and, as of May 2009, Sigma Alimentos Congelados, S.A. de C.V., Distribuidora y Comercializadora de Lácteos del Norte, S.A. de C.V. and Lácteos Finos Mexicanos, S.A. de C.V.

Short-Term Indebtedness

From time to time, we and certain of our subsidiaries enter into revolving credit lines with institutional lenders to provide short-term working capital.

At September 30, 2009, Sigma Alimentos Costa Rica, S.A. had Ps. 208 million (US$15 million) outstanding owed to Mercantil Commercebank, N.A. (“Commercebank”). This uncommitted credit line was issued pursuant to a promissory note, dated July 24, 2009, at an interest rate of LIBOR plus 3.5%. The promissory note originally matured on November 3, 2009, and was extended to December 18, 2009.

The obligations of Sigma Alimentos Costa Rica, S.A., under the promissory note with Commercebank are guaranteed by Sigma Alimentos Centro, S.A. de C.V. and Sigma Alimentos Noreste, S.A. de C.V.

At September 30, 2009, Sigma Alimentos Dominicana, S.A. had Ps. 38 million (US$3 million) outstanding owed to Commercebank. This uncommitted credit line was issued pursuant to a promissory note, dated July 24, 2009, at an interest rate of LIBOR plus 3.5%. The promissory note originally matured on November 3, 2009, and was extended to December 18, 2009.

The obligations of Sigma Alimentos Dominicana, S.A., under the promissory note with Commercebank are guaranteed by Sigma Alimentos Centro, S.A. de C.V. and Sigma Alimentos Noreste, S.A. de C.V.

76 Seller Financing

On October 29, 2008, we entered into an asset purchase agreement with Butterball, LLC, as seller. As of September 30, 2009, we had Ps. 164 million (US$12 million) outstanding under this agreement. We are required to pay the purchase price no later than December 31, 2009. To date, interest on amounts outstanding under this agreement has accrued at a rate of LIBOR plus 8.0%.

On July 31, 2008, we entered into an agreement relating to our acquisition of Braedt. As of September 30, 2009, we had Ps. 55 million (US$4 million) outstanding under this agreement accruing at an interest rate of LIBOR plus 3.0% The obligations of Sigma Alimentos Exterior under the agreement are secured by 15% of the Braedt stock acquired by Sigma Alimentos Exterior in the acquisition.

Indebtedness of Braedt

Braedt is party to several credit and financial leasing agreements, which as of September 30, 2009 totaled approximately Ps. 114 million (US$8 million), primarily denominated in Peruvian soles. Of Braedt’s total borrowings, Ps. 66 million (US$5 million) constituted short-term loans and Ps. 48 million (US$4 million) constituted long-term loans. All such credit and financial leasing agreements bear interest at fixed rates. As of September 30, 2009, Ps. 104 million (US$8 million) was secured debt.

77 DESCRIPTION OF THE NOTES

We will issue the Notes under an indenture (the “Indenture”) to be entered into among us, the Subsidiary Guarantors, The Bank of New York Mellon, as trustee (the “Trustee”), and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg paying agent. We summarize below certain provisions of the Indenture, but do not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, defines your rights. You may obtain a copy of the Indenture in the manner described under “Available Information,” and, for so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, at the office of the Luxembourg paying agent.

You can find the definition of capitalized terms used in this section of this offering memorandum under “—Certain Definitions.” In this section:

• the “Company” means Sigma Alimentos, S.A. de C.V. (parent company only) and not its Subsidiaries;

• the “Subsidiary Guarantors” means the existing and future Subsidiaries of the Company that will issue guarantees of the Notes, which initially are those Subsidiaries identified under “—Subsidiary Guarantees”; and

• the “Notes” means the Notes offered pursuant to this offering memorandum and, unless the context otherwise requires, any Additional Notes, as described under “—General.”

General

The Notes will:

• be senior unsecured obligations of the Company;

• rank equally in right of payment with all other existing and future senior unsecured indebtedness of the Company (subject to certain labor and tax obligations for which preferential treatment is given under the Mexican laws);

• rank senior in right of payment to all existing and future subordinated indebtedness of the Company, if any;

• be unconditionally guaranteed on a senior unsecured basis by the Subsidiary Guarantors, as described under “—Subsidiary Guarantees”; and

• be effectively subordinated to all existing and future secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness of the Company’s non-guarantor Subsidiaries.

As of September 30, 2009, the Company had consolidated total indebtedness of Ps. 8,386 million (US$621 million), of which Ps. 114 million (US$8 million) was secured indebtedness. As of the same date, after giving effect to the issuance and sale of the Notes and the application of the net proceeds from this offering as described under “Use of Proceeds,” the Company would have had consolidated total indebtedness of Ps. 8,540 million (US$632 million). Of this amount, Ps. 34 million (US$3 million) would have been indebtedness of non-guarantor Subsidiaries (excluding guarantees and intercompany loans).

The Company will initially issue US$250,000,000 aggregate principal amount of Notes, but may issue an unlimited principal amount of debt securities under the Indenture. The Company may, without your consent, issue additional Notes (“Additional Notes”) in one or more transactions, which have substantially identical terms

78 (other than issue price, issue date and date from which the interest will accrue) as the Notes issued on the Issue Date. Any Additional Notes will be consolidated and form a single class with the Notes issued on the Issue Date, so that, among other things, Holders of any Additional Notes will have the right to vote together with Holders of Notes issued on the Issue Date as one class.

The Notes will be issued in the form of one or more global securities without coupons, registered in the name of a nominee of DTC, as depositary. The Notes will be issued in minimum denominations of US$100,000 and integral multiples of US$1,000 in excess thereof. See “Book-Entry, Delivery and Form.”

Holding Company Structure

The Company is a holding company and its principal assets are shares that it holds in its Subsidiaries. The Notes will not be secured by any of the Company’s assets. As a result, by owning the Notes, you will be one of the Company’s unsecured creditors. The Notes will not be subordinated to any of the Company’s other unsecured debt obligations, except for certain obligations given priority under applicable law. In the event of a bankruptcy or liquidation proceeding against the Company, the Notes would rank equally in right of payment with all the Company’s other unsecured and unsubordinated debt.

Subsidiary Guarantees

Each Subsidiary Guarantor will unconditionally guarantee the full and prompt payment of all obligations of the Company under the Indenture and the Notes. The Obligations of each Subsidiary Guarantor in respect of its Subsidiary Guarantee will be limited to the maximum amount as will result in the Obligations not constituting a fraudulent conveyance, fraudulent transfer or similar illegal transfer under applicable law. See “Risk Factors— Risks Relating to the Notes—The guarantees may not be enforceable under applicable laws.”

Initially, the Subsidiary Guarantors will be: Sigma Alimentos Corporativo, S.A. de C.V., Sigma Alimentos Centro, S.A. de C.V., Sigma Alimentos Comercial, S.A. de C.V., Sigma Alimentos Lácteos, S.A. de C.V., Distribuidora y Comercializadora de Lácteos del Norte, S.A. de C.V., Comercializadora de Embutidos ICO, S.A. de C.V., Alimentos Finos de Occidente, S.A. de C.V., Carnes Selectas Tangamanga, S.A. de C.V., Sigma Alimentos Congelados, S.A. de C.V., Sigma Alimentos Importaciones, S.A. de C.V., Lácteos Finos Mexicanos, S.A. de C.V., Comercializadora Láctica, S.A. de C.V., Sigma Alimentos Noreste, S.A. de C.V., Empacadora de Embutidos del Centro, S.A. de C.V., Grupo Chen, S. de R.L. de C.V., Sigma Alimentos Exterior, S.L., Sigma Processed Meats, Inc., Sigma Foods, Inc. and Mexican Cheese Producers, Inc. These Subsidiary Guarantors (in addition to the Company on a stand alone basis) collectively represented 88.7% of the consolidated total assets, 88.3% of the consolidated net sales and 92.7% of the consolidated Adjusted EBITDA of the Company and its Subsidiaries as of and for the year ended December 31, 2008, and 92.3% of the consolidated total assets, 87.1% of the consolidated net sales and 91.9% of the consolidated Adjusted EBITDA of the Company and its Subsidiaries as of and for the nine months ended September 30, 2009.

Each Subsidiary Guarantor will be released and relieved of its obligations under its respective Subsidiary Guarantee in the event that:

(1) there is a sale or other disposition of such Subsidiary Guarantor (whether by merger, consolidation, the sale of all or a majority of its Capital Stock or the sale of all or substantially all of its assets), following which such Subsidiary Guarantor is no longer a direct or indirect Subsidiary of the Company; or

(2) there is a Legal Defeasance of the Notes or upon satisfaction and discharge of the Indenture; provided that such transaction is carried out pursuant to, and in accordance with, the applicable provisions of the Indenture.

79 Not all of the Company’s Subsidiaries will guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of a non-guarantor Subsidiary, such non-guarantor Subsidiary will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to the Company and the Subsidiary Guarantors. See “Risk Factors—Risk Factors Relating to the Notes.” Principal, Maturity and Interest The Notes will mature on December 16, 2019 and be repaid on such date at 100% of the principal amount outstanding, unless earlier redeemed in accordance with the terms of the Notes. See “—Optional Redemption.” The Notes will not be entitled to the benefit of any mandatory sinking fund. Interest on the Notes will accrue at the rate of 6.875% per year and will be payable semi-annually in arrears on June 16 and December 16 of each year, beginning on June 16, 2010. Payments will be made to the persons who are registered Holders at the close of business on the June 1 and December 1, as the case may be, immediately preceding the applicable interest payment date. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Initially, the Trustee will act as registrar, transfer agent and paying agent for the Notes. The Company may change the registrar, transfer agent and paying agent, without notice to Holders. If a Holder of Notes in an aggregate principal amount of at least US$1,000,000 has given wire transfer instructions to the Company or a paying agent, the Company or the paying agent, as applicable, will make all principal, premium, if any, and interest payments in respect of those Notes in accordance with those instructions. All other payments on the Notes will be made at the office or agency of the paying agent in New York City unless the company elects to make interest payments by check mailed to the registered Holders at their registered addresses. The Company will, as long as the Notes are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, maintain a transfer agent and a paying agent in Luxembourg. To the extent the paying agent in Luxembourg is obliged to withhold or deduct tax on payments of interest or other similar income, the Company will, to the extent permitted by law, maintain an additional paying agent in a Member State of the European Union that is not obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the European Union Council of Economic and Finance (“ECOFIN”) council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive. Additional Amounts The Company is required by Mexican law to deduct Mexican withholding taxes at a rate of 4.9% (subject to certain exceptions) from payments of interest to investors who are not residents of Mexico for tax purposes (see “Certain Material Income Tax Considerations—Mexican Tax Considerations”), and the Company will pay additional amounts on those payments (and certain other payments) to the extent described below (“Additional Amounts”). Subject to the limitations and exceptions described below, the Company and the Subsidiary Guarantors will pay to Holders of the Notes such Additional Amounts as may be necessary so that every net payment of interest (including any premium paid upon redemption of the Notes and any discount deemed interest under Mexican law) or principal to the Holders will not be less than the amount provided for in the Notes. The term “net payment,” as used in the preceding sentence, means the amount that the Company or its paying agent pays any Holder after deducting or withholding an amount for or on account of any present or future taxes, duties, assessments or other governmental charges imposed with respect to that payment by Mexico or any political subdivision or taxing authority thereof or therein. The Company’s and the Subsidiary Guarantors’ obligations to pay Additional Amounts are subject to several important exceptions. The Company and the Subsidiary Guarantors will not be required to pay Additional Amounts to any Holder for or on account of any of the following: (1) any taxes, duties, assessments or other governmental charges imposed solely because at any time there is or was a connection between the Holder and Mexico (other than the mere receipt of a payment or the ownership or holding of a Note);

80 (2) any estate, inheritance, gift, sales, personal property or similar tax, assessment or other governmental charge imposed with respect to the Notes;

(3) any taxes, duties, assessments or other governmental charges imposed (or imposed at a higher rate) solely because the Holder or any other Person fails to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with Mexico, for tax purposes, of the Holder or any beneficial owner of the Note if compliance is required by law, regulation or by an applicable income tax treaty to which Mexico is a party, as a precondition to exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and the Company has given the Holders at least 30 days’ notice that Holders will be required to provide such information and identification;

(4) any tax, duty, assessment or other governmental charge payable otherwise than by deduction or withholding from payments on the Notes;

(5) any taxes, duties, assessments or other governmental charges with respect to a Note presented for payment more than 20 days after the date on which the payment became due and payable or the date on which payment thereof is duly provided for and notice thereof given to Holders, whichever occurs later, except to the extent that the Holder of such Note would have been entitled to such Additional Amounts on presenting such Note for payment on any date during such 20-day period;

(6) any taxes, duties, assessments or other governmental charges imposed in connection with a Note presented for payment by or on behalf of a Holder or beneficial owner thereof that would have been able to avoid such tax, duty, assessment or other governmental charge by presenting the relevant Note to another paying agent;

(7) any payment on the Note to a Holder that is a fiduciary or partnership or a person other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or the beneficial owner of the payment would not have been entitled to the Additional Amounts had the beneficiary, settlor, member or beneficial owner been the Holder of the Note;

(8) any withholding or deduction imposed on a payment to or for the benefit of an individual that is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive on the taxation of savings implementing the conclusion of the ECOFIN council meeting on November 26-27, 2000, or any law implementing or complying with, or introduced in order to conform to, such Directive; and

(9) any combination of the foregoing clauses (1) through (8).

The limitations on the Company’s and the Subsidiary Guarantors’ obligations to pay Additional Amounts stated in clause (3) above will not apply even in the absence of the provision of information, documentation or other evidence if the provision of information, documentation or other evidence described in such clause (3) would be materially more onerous, in form, in procedure or in the substance of information disclosed, to a Holder or beneficial owner of a Note (taking into account any relevant differences between U.S. and Mexican law, rules, regulations or administrative practice) than comparable information or other reporting requirements imposed under U.S. tax law (including the United States-Mexico Income Tax Treaty), regulations and administrative practice (such as IRS Forms W-8BEN and W-9).

The limitations on the Company’s and the Subsidiary Guarantors’ obligations to pay Additional Amounts stated in clause (3) above also will not apply if, with respect to taxes imposed by Mexico or any political subdivision or taxing authority thereof, Article 195, Section II, of the Mexican income tax law (or a substantially

81 similar successor of such Article) is in effect, unless (a) the provision of the information, documentation or other evidence described in that clause (3) is expressly required by statute, regulation, rule, ruling or published administrative practice of general applicability in order to apply Article 195, Section II, of the Mexican income tax law (or a substantially similar successor of such Article), (b) the Company cannot obtain the information, documentation or other evidence necessary to comply with the applicable laws and regulations on its own through reasonable diligence and (c) the Company otherwise would meet the requirements for application of Article 195, Section II, of the Mexican income tax law (or a substantially similar successor of such Article).

In addition, clause (3) above does not and will not be construed to require that any Person, including any non-Mexican pension fund, retirement fund or financial institution, register with the Mexican Ministry of Finance and Public Credit to establish eligibility for an exemption from, or a reduction of, Mexican withholding tax.

The Company and the Subsidiary Guarantors will provide the Trustee with documentation satisfactory to the Trustee evidencing the payment of taxes in respect of which they have paid any Additional Amounts. The Company will make copies of such documentation available to the Holders of the Notes or the relevant paying agent upon request.

Any reference in this offering memorandum, the Indenture or the Notes to principal, premium, interest or any other amount payable in respect of the Notes by the Company or any Subsidiary Guarantor (including in the case of any redemption described under “—Optional Redemption”) will be deemed also to refer to, and include, any Additional Amounts that may be payable with respect to that amount under the obligations referred to in this “Additional Amounts” section.

In the event of any merger or other transaction described as permitted under “—Limitation on Consolidation, Merger, Sale or Conveyance,” in which the surviving entity is a corporation organized and validly existing under the laws of a country that is a member of the European Union, all references to Mexico, Mexican law or regulations, and Mexican political subdivisions or taxing authorities under this “Additional Amounts” section (other than the fifth and sixth paragraphs of this “Additional Amounts” section) and under “—Optional Redemption—Optional Redemption Upon Tax Event” will be deemed to also include such country and any political subdivision therein or thereof, law or regulations of such country, and any taxing authority of such country or any political subdivision therein or thereof, respectively.

Optional Redemption

Optional Make-Whole Redemption

The Company will have the right, at its option, to redeem any of the Notes, in whole or in part, at any time or from time to time prior to their maturity at a redemption price equal to the greater of (1) 100% of the principal amount of such Notes and (2) the sum of the present value of each remaining scheduled payment of principal and interest thereon (exclusive of interest accrued to the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points (the “Make-Whole Amount”), plus, in each case, any accrued and unpaid interest on the principal amount of the Notes to (but not including) the redemption date.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such Notes.

82 “Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company.

“Comparable Treasury Price” means, with respect to any redemption date (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotation or (2) if fewer than four such Reference Treasury Dealer Quotations are obtained, the average of all such quotations.

“Reference Treasury Dealer” means Deutsche Bank Securities Inc. and a primary U.S. government securities dealer in New York (a “Primary Treasury Dealer”) designated by Santander Investment Securities, Inc., or their affiliates which are primary United States government securities dealers, and not less than two other leading primary United States government securities dealers in New York City reasonably designated by the Company; provided that if any of the foregoing cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer.

“Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by an Independent Investment Banker, of the bid and asked price for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m. (New York City time) on the third Business Day preceding such redemption date.

Optional Redemption Upon Tax Event

If, as a result of any amendment to, or change in, the laws (or any rules or regulations thereunder) of Mexico or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official interpretation or application of such laws, rules or regulations, which amendment to or change of such laws, rules or regulations becomes effective on or after the date of this offering memorandum, the Company would be obligated, after taking all reasonable measures to avoid this requirement, to pay any Additional Amounts in excess of those attributable to a Mexican withholding tax rate of 4.9% with respect to the Notes (see “—Additional Amounts” and “Certain Material Income Tax Considerations—Mexican Tax Considerations”), then, at the Company’s option, all, but not less than all, of the Notes may be redeemed at any time at a redemption price equal to 100% of the outstanding principal amount, plus any accrued and unpaid interest on the principal amount of the Notes to (but not including) the redemption date; provided that (1) no notice of redemption for tax reasons may be given earlier than 60 days prior to the earliest date on which the Company would be obligated to pay these Additional Amounts if a payment on the Notes were then due and (2) at the time such notice of redemption is given such obligation to pay such Additional Amounts remains in effect.

Prior to the publication of any notice of redemption pursuant to this provision, the Company will deliver to the Trustee:

• an Officers’ Certificate stating that the Company is entitled to effect the redemption and setting forth a statement of facts showing that the conditions precedent to the Company’s right to redeem the Notes have occurred; and

• an Opinion of Counsel from Mexican legal counsel (which may be the Company’s counsel) of recognized standing to the effect that the Company has or will become obligated to pay such Additional Amounts as a result of such change or amendment.

The Company will give notice of any redemption to the Trustee to enable the Trustee to provide notice to Holders of Notes as described under “—Notices” at least 30 days (but not more than 60 days) before the redemption date. The Company will also give notice to the Luxembourg Stock Exchange. This notice, once delivered by the Company to the Trustee, will be irrevocable.

83 Optional Redemption Procedures

In the event that less than all of the Notes are to be redeemed at any time, selection of Notes for redemption will be made by the Trustee in compliance with the requirements governing redemptions of the principal securities exchange, if any, on which Notes are listed or if such securities exchange has no requirement governing redemption or the Notes are not then listed on a securities exchange, on a pro rata basis, by lot or by any other method as the Trustee deems fair and appropriate. No Notes of a principal amount of US$100,000 or less may be redeemed in part and Notes of a principal amount in excess of US$100,000 may be redeemed in part in multiples of US$1,000 only.

Notice of any redemption will be mailed by first-class mail, postage prepaid, at least 30 but not more than 60 days before the redemption date to Holders of Notes to be redeemed at their respective registered addresses. If Notes are to be redeemed in part only, the notice of redemption will state the portion of the principal amount thereof to be redeemed. For so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market and the rules of the exchange require, the Company will cause notices of redemption to also be published as described under “—Notices.” A new Note in a principal amount equal to the unredeemed portion thereof, if any, will be issued in the name of the Holder thereof upon cancellation of the original Note (or appropriate adjustments to the amount and beneficial interests in a global Note will be made, as appropriate).

Notes called for redemption will become due on the date fixed for redemption. The Company will pay the redemption price for any Note together with accrued and unpaid interest thereon to (but not including) the redemption date. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption as long as the Company has deposited with a paying agent funds in satisfaction of the applicable redemption price pursuant to the Indenture. Upon redemption of any Notes by the Company, such redeemed Notes will be cancelled.

Change of Control Triggering Event

Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised its right to redeem the Notes as described above under “—Optional Redemption,” each Holder will have the right to require that the Company purchase all or a portion (in integral multiples of US$1,000, provided that the principal amount of such Holder’s Note will not be less than US$100,000) of the Holder’s Notes at a purchase price equal to 101% of the principal amount thereof, plus any accrued and unpaid interest thereon through the purchase date (the “Change of Control Payment”).

Within 30 days following the date upon which the Change of Control Triggering Event occurs, the Company will send, by first-class mail, a notice to each Holder, with a copy to the Trustee, offering to purchase the Notes as described above (a “Change of Control Offer”) and, for so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market and the rules of the exchange require, publish such notice as described under “—Notices.” The Change of Control Offer will state, among other things, the purchase date, which must be at least 30 days but not more than 60 days from the date the notice is mailed, other than as may be required by law (the “Change of Control Payment Date”).

On the Business Day preceding the Change of Control Payment Date, the Company will deposit with a paying agent funds in an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered.

On the Change of Control Payment Date, the Company will, to the extent lawful:

(1) accept for payment all Notes or portions thereof properly tendered and not withdrawn pursuant to the Change of Control Offer; and

84 (2) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

If only a portion of a Note is purchased pursuant to a Change of Control Offer, a new Note in a principal amount equal to the portion thereof not purchased will be issued in the name of the Holder thereof upon cancellation of the original Note (or appropriate adjustments to the amount and beneficial interests in a global Note will be made, as appropriate). Notes (or portions thereof) purchased pursuant to a Change of Control Offer will be cancelled and cannot be reissued.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other applicable securities laws and regulations in connection with the purchase of Notes in connection with a Change of Control Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with this “Change of Control Triggering Event” provision, the Company will comply with such securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by doing so.

The Company will not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company, and such third party purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

Other existing and future indebtedness of the Company may contain prohibitions on the occurrence of events that would constitute a Change of Control Triggering Event or require that Indebtedness be purchased upon a Change of Control Triggering Event. Moreover, the exercise by the Holders of their right to require the Company to repurchase the Notes upon a Change of Control Triggering Event may cause a default under such indebtedness even if the Change of Control Triggering Event itself does not.

If a Change of Control Offer occurs, the Company may not have available funds sufficient to make the Change of Control Payment for all the Notes that might be delivered by Holders seeking to accept the Change of Control Offer. In the event the Company is required to purchase outstanding Notes pursuant to a Change of Control Offer, the Company expects that it would seek third-party financing to the extent it does not have available funds to meet its purchase obligations and any other obligations in respect of senior Indebtedness. However, there can be no assurance that the Company would be able to obtain necessary financing, and the terms of the Indenture may restrict the ability of the Company to obtain such financing. See “Risk Factors—Risks Relating to the Notes—We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the notes.”

Holders will not be entitled to require the Company to purchase their Notes in the event of a takeover, recapitalization, leveraged buyout or similar transaction which is not a Change of Control Triggering Event.

One of the events that constitutes a Change of Control, which is one of the components of a Change of Control Triggering Event, under the Indenture is the disposition of “all or substantially all” of the Company’s assets under certain circumstances. This term varies based upon the facts and circumstances of the subject transaction and has not been interpreted under New York State law (which is the governing law of the Indenture) to represent a specific quantitative test. As a consequence, in certain circumstances there may be uncertainty in ascertaining whether a particular transaction involved a disposition of “all or substantially all” of the assets of a Person. In the event that Holders elect to require the Company to purchase the Notes and the Company contests such election, there can be no assurance as to how a court interpreting New York State law would interpret the phrase under certain circumstances.

Covenants

The Indenture provides that the following restrictive covenants will be applicable to the Company and its Subsidiaries.

85 Limitation on Liens

The Company will not, nor will it permit any Subsidiary to, issue, assume or suffer to exist any Indebtedness or Guarantee, if such Indebtedness or Guarantee is secured by a Lien upon any Operating Property of the Company or any Subsidiary, unless, concurrently with the issuance or assumption of such Indebtedness or Guarantee or the creation of such Lien, the Notes are secured equally and ratably with (or prior to) such Indebtedness or Guarantee; provided, however, that the foregoing restriction will not apply to:

(1) any Lien on (a) any Operating Property acquired, constructed, developed, extended or improved by the Company or any Subsidiary (individually or together with other Persons) after the date of the Indenture or any property reasonably incidental to the use or operation of such Operating Property, or (b) any shares or other ownership interest in, or any Indebtedness of, any Person which holds, owns or is entitled to such property, products, revenue or profits, in each of clauses (a) and (b) to the extent such Lien is created, incurred or assumed (x) during the period such Operating Property was being constructed, developed, extended or improved, or (y) contemporaneously with, or within 180 days after, such acquisition or the completion of such construction, development, extension or improvement in order to secure or provide for the payment of all or any part of the purchase price or other consideration of such Operating Property or the other costs of such acquisition, construction, development, extension or improvement (including costs such as escalation, interest during construction and financing and refinancing costs);

(2) any Lien on any Operating Property existing at the time of acquisition thereof and which (a) is not created as a result of or in connection with or in anticipation of such acquisition and (b) does not attach to any other Operating Property other than the Operating Property so acquired;

(3) any Lien on any Operating Property acquired from a Person which is merged with or into the Company or any Subsidiary or any Lien existing on Operating Property of any Person at the time such Person becomes a Subsidiary, in either such case which (a) is not created as a result of or in connection with or in anticipation of any such transaction and (b) does not attach to any other Operating Property other than the Operating Property so acquired;

(4) any Lien which secures Indebtedness or a Guarantee owing by a Subsidiary to the Company or any other Subsidiary;

(5) any Lien existing on the date of the Indenture;

(6) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the foregoing clauses (1) through (5); provided, however, that the principal amount of Indebtedness or Guarantee secured thereby will not exceed the principal amount of Indebtedness or Guarantee so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement will be limited to all or a part of the property which secured the Lien so extended, renewed or replaced (plus improvements on such property).

Notwithstanding the foregoing, the Company or any Subsidiary may issue or assume Indebtedness or a Guarantee secured by a Lien which would otherwise be prohibited under the provisions of the Indenture described in this “Limitation on Liens” section; provided, however, that the aggregate amount of such Indebtedness or Guarantee of the Company and its Subsidiaries measured at the time of its incurrence (without duplication) together with the aggregate amount (without duplication) of Indebtedness and Guarantees outstanding at such time previously incurred pursuant to this paragraph by the Company and its Subsidiaries and the Attributable Value of Sale and Leaseback Transactions entered into (without duplication) pursuant to the second paragraph under “—Limitation on Sale and Leaseback Transactions” outstanding at such time, will not exceed 15% of Consolidated Tangible Assets.

86 Limitation on Sale and Leaseback Transactions

The Company will not, nor will it permit any Subsidiary to, enter into any Sale and Leaseback Transactions with respect to any Operating Property of the Company or any Subsidiary, unless, concurrently with such Sale and Leaseback Transaction, the Notes are secured equally and ratably with (or prior to) such Sale and Leaseback Transaction, unless after giving effect thereto:

(1) the Company or such Subsidiary would be entitled pursuant to the provisions of the Indenture described under “—Limitation on Liens” to issue or assume Indebtedness or a Guarantee (in an amount equal to the Attributable Value with respect to such Sale and Leaseback Transactions) secured by a Lien on such Operating Property without equally and ratably securing the Notes; or

(2) the Company or such Subsidiary applies or causes to be applied, in the case of a sale or transfer for cash, an amount equal to the net cash proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the Fair Market Value of the Operating Property so leased, (a) to the retirement, within 12 months after the effective date of such Sale and Leaseback Transaction, of (i) Indebtedness of the Company ranking at least on a parity with the Notes or (ii) Indebtedness of any Subsidiary, in each case owing to a Person other than the Company of any Affiliate of the Company, or (b) to the acquisition, purchase, construction, development, extension or improvement of any fixed or capital assets or other real and tangible property, plant or equipment of the Company or that of any Subsidiary to be used by or for the benefit of the Company or any Subsidiary, in each case, in the ordinary course of business.

Notwithstanding the foregoing, the Company or any Subsidiary may enter into a Sale and Leaseback Transaction which would otherwise be prohibited under the provisions of the Indenture described in this “Limitation on Sale and Leaseback Transactions” section; provided, however, that the Attributable Value of such Sale and Leaseback Transaction (without duplication) of the Company and its Subsidiaries measured at the closing date of such Sale and Leaseback Transaction together with the Attributable Value of Sale and Leaseback Transactions previously incurred (without duplication) pursuant to this paragraph by the Company and its Subsidiaries and the aggregate amount (without duplication) of Indebtedness and Guarantees incurred pursuant to the second paragraph under “—Limitation on Liens” outstanding at such time, will not exceed 15% of Consolidated Tangible Assets.

Limitation on Consolidation, Merger, Sale or Conveyance

The Company and each Subsidiary Guarantor will not, and the Company will not cause or permit any Subsidiary Guarantor to, consolidate with or merge into, or sell, convey or transfer all or substantially all of its properties and assets to, any Person other than the Company or a Subsidiary Guarantor, unless:

(1) the successor Person (the “Surviving Entity”) is a corporation or limited liability company or similar entity organized and existing under the laws of Mexico or the United States (or any State thereof or the District of Columbia) or any country that is a member of the European Union and expressly assumes, by a supplemental indenture, the due and punctual payment of the principal of and interest on all the Notes or obligations under the Subsidiary Guarantee as applicable, and the performance of every covenant in the Indenture on the part of the Company or the Subsidiary Guarantor, as the case may be, to be performed or observed;

(2) in the case of a Surviving Entity that is a corporation organized and validly existing under the laws of a country that is a member of the European Union, such Surviving Entity expressly assumes the obligation to pay Additional Amounts on account of any taxes, duties, assessments or other governmental charges imposed with respect to payments on the Notes by that country (or any political subdivision or taxing authority thereof or therein) as described in, and subject to the limitations set forth in, “—Additional Amounts” (substituting that country for Mexico where appropriate);

87 (3) the Surviving Entity confirms by supplemental indenture its obligations in respect of the Indenture and the Notes or the Subsidiary Guarantee, as applicable;

(4) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, has occurred and is continuing; and

(5) the Company delivers to the Trustee an Officers’ Certificate and Opinion of Counsel from United States and Mexican counsels stating that such consolidation, merger, sale, conveyance or transfer and such supplemental indenture comply with the provisions in the Indenture relating to such transaction.

In case of any such consolidation, merger, sale, conveyance or transfer, such successor Person will succeed to and be substituted for the Company or the Subsidiary Guarantor, as the case may be, as obligor on the Notes or the Subsidiary Guarantee, as the case may be, with the same effect as if it had been named in the Indenture as the Company or Subsidiary Guarantor.

For purposes of this “Limitation on Consolidation, Merger, Sale or Conveyance” covenant, the sale, conveyance or transfer of all the property of one or more Subsidiaries of the Company which property, if held by the Company instead of such Subsidiaries, would constitute all or substantially all the property of the Company on a consolidated basis, will be deemed to be the transfer of all or substantially all the property of the Company.

Reporting Requirements

The Company will provide the Trustee and the Trustee will provide the Holders with:

(1) annual financial statements audited by an internationally recognized firm of independent public accountants within 135 days after the end of each fiscal year and quarterly financial statements (including a balance sheet, income statement and cash flow statement for the fiscal quarter then ended and the corresponding fiscal quarter from the prior year) within 60 days of the end of each of the first three fiscal quarters of each fiscal year, in each case for the Company and its consolidated Subsidiaries. These annual and quarterly financial statements will be prepared in accordance with MFRS and such annual financial statements will be accompanied by a management discussion and analysis of the results of operations and liquidity and capital resources of the Company and its consolidated Subsidiaries for the periods presented in a level of detail comparable to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this offering memorandum (English translations of any of the foregoing documents prepared in another language will be provided);

(2) copies (including English translations of documents in other languages) of all public filings made by the Company with any securities exchange or securities regulatory agency within ten days after filing (including, if publicly available in English on the website of Alfa, any filings made by Alfa to the extent they contain material financial information of or relating to the Company or any of its consolidated subsidiaries); provided that such copies of such filings shall only be required to the extent that the information contained therein is materially different than the information provided pursuant to clause (1) above; and

(3) so long as the Company is not subject to Section 13 or Section 15(d) of the Exchange Act and exempt from reporting pursuant to Rule 12g3-2(b) of the Exchange Act, upon request, to any Holder and any prospective purchaser of the Notes, the information required pursuant to Rule 144A(d)(4) under the Securities Act.

88 The Company will maintain a non-public website or electronic distribution system to which the beneficial owners of the Notes, prospective investors and security analysts will be given access and on which the reports and information referred to in clauses (1), (2) and (3) above are posted; provided, however, that the Company may, in its discretion, exclude direct competitors, customers and suppliers from access to such website or electronic distribution system.

In addition, so long as the Notes are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, the Company will make available the information specified in the foregoing clauses (1) and (2) at the specified office of the Luxembourg paying agent.

Delivery of such reports and information to the Trustee is for informational purposes only and the Trustee’s receipt thereof will not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants under the Indenture (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

Other Covenants

The Indenture will contain certain other covenants relating to, among other things, the maintenance of corporate existence and maintenance of books and records. Copies of the Indenture will be available at the offices of the Company, the Trustee and the Luxembourg paying agent.

Notices

Notices to Holders of Notes will be mailed to them at their registered addresses.

In addition, from and after the date the Notes are listed on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market and so long as it is required by the rules of such exchange, all notices to Holders of Notes will be published in English:

(1) in a leading newspaper having a general circulation in Luxembourg (which currently is expected to be Luxemburger Wort); or

(2) on the website of the Luxembourg Stock Exchange at http://www.bourse.lu.

Notices will be deemed to have been given on the date of mailing or of publication as aforesaid or, if published on different dates, on the date of the first such publication. If publication as provided above is not practicable, notices will be given in such other manner, and will be deemed to have been given on such date, as the Trustee may approve.

Events of Default

The following are “Events of Default” with respect to the Notes:

(1) default in the payment when due of the principal of or premium, if any, on (including, in each case, any related Additional Amounts) any Notes, including the failure to make a required payment to purchase Notes tendered pursuant to a redemption or Change of Control Offer;

(2) default for 30 days or more in the payment when due of interest (including any related Additional Amounts) on any Notes;

(3) the failure to perform or comply with any of the provisions described under “—Covenants— Limitation on Consolidation, Merger, Sale or Conveyance”;

89 (4) the failure by the Company or any Subsidiary to comply with any other covenant or agreement contained in the Indenture, the Notes or the Subsidiary Guarantees for 60 days or more after written notice to the Company from the Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Notes;

(5) default by the Company or any Subsidiary under any Indebtedness which:

(a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of any applicable grace period provided in such Indebtedness on the date of such default; or

(b) results in the acceleration of such Indebtedness prior to its Stated Maturity;

and the principal or accreted amount of Indebtedness covered by clause (a) or (b) at the relevant time, aggregates US$25,000,000 (or the equivalent in other currencies) or more;

(6) failure by the Company or any Material Subsidiary to pay one or more final judgments against any of them, aggregating US$25,000,000 (or the equivalent in other currencies) or more, which are not paid, discharged or stayed for a period of 60 days or more (to the extent not covered by a reputable and creditworthy insurance company that has acknowledged liability therefor in writing);

(7) certain events of bankruptcy affecting the Company or any Material Subsidiary or group of Subsidiaries that, taken together, would constitute a Material Subsidiary; or

(8) except as permitted by the Indenture, any Subsidiary Guarantee is held to be unenforceable or invalid in a judicial proceeding or ceases for any reason to be in full force and effect or any Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee.

If an Event of Default (other than an Event of Default specified in the foregoing clause (7)) has occurred and is continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes may declare the unpaid principal of and premium, if any, and accrued and unpaid interest on all the Notes to be immediately due and payable by notice in writing to the Company and the Trustee specifying the Event of Default and that it is a “notice of acceleration.” If an Event of Default specified in the foregoing clause (7) occurs, then the unpaid principal of and premium, if any, and accrued and unpaid interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

At any time after a declaration of acceleration with respect to the Notes as described in the preceding paragraph, the Holders of a majority in principal amount of the Notes may rescind and cancel such declaration and its consequences:

(i) if the rescission would not conflict with any judgment or decree;

(ii) if all existing Events of Default have been cured or waived, except nonpayment of principal or interest that has become due solely because of the acceleration;

(iii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

(iv) if the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its reasonable expenses, disbursements and advances.

90 No rescission will affect any subsequent Default or impair any rights relating thereto.

The Holders of a majority in principal amount of the Notes may waive any existing Default or Event of Default under the Indenture, and its consequences, except a default in the payment of the principal of, premium, if any, or interest on any Notes.

In the event of a declaration of acceleration of the Notes because an Event of Default described in the foregoing clause (5) has occurred and is continuing, the declaration of acceleration of the Notes will be automatically annulled if the default triggering such Event of Default pursuant to clause (5) is remedied or cured by the Company or a Material Subsidiary or waived by the holders of the relevant Indebtedness within 20 days after the declaration of acceleration with respect thereto and if:

(i) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and

(ii) all existing Events of Default, except nonpayment of principal of or premium, if any, or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

Subject to the provisions of the Indenture relating to the duties of the Trustee, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee indemnity reasonably satisfactory to it. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.

No Holder of any Notes will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless:

(1) such Holder gives to the Trustee written notice of a continuing Event of Default;

(2) Holders of at least 25% in principal amount of the then outstanding Notes make a written request to pursue the remedy;

(3) the Holders of the Notes provide to the Trustee satisfactory indemnity;

(4) the Trustee does not comply within 60 days; and

(5) during such 60-day period the Holders of a majority in principal amount of the outstanding Notes do not give the Trustee a written direction which, in the opinion of the Trustee, is inconsistent with the request; provided that a Holder of a Note may institute suit for enforcement of payment of the principal of and premium, if any, or interest on such Note on or after the respective due dates expressed in such Note.

The Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee written notice of such Default or Event of Default, the status thereof and what action the Company is taking or proposes to take in respect thereof. In addition, the Company is required to deliver to the Trustee, within 135 days after the end of each fiscal year, an Officers’ Certificate indicating whether the signers thereof know of any Default or Event of Default that occurred during the previous fiscal year. The Indenture provides that if a Default or Event of Default occurs, is continuing and is actually known to the Trustee, the Trustee must mail to each Holder notice of the Default or Event of Default within 60 days after the occurrence thereof. Except

91 in the case of a Default or Event of Default in the payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold notice if and so long as a committee of its trust officers in good faith determines that withholding notice is in the interests of the Holders.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have its obligations and the obligations of the Subsidiary Guarantors discharged with respect to the outstanding Notes (“Legal Defeasance”). Legal Defeasance means that the Company will be deemed to have paid and discharged the entire indebtedness represented by the outstanding Notes on the 91st day after the deposit specified in clause (1) of the second following paragraph, except for:

(1) the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on, the Notes (including any Additional Amounts) when such payments are due;

(2) the Company’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payments;

(3) the rights, powers, trust, duties, indemnities and immunities of the Trustee and the Company’s obligations in connection therewith; and

(4) the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have its obligations released with respect to the covenants that are described under “—Covenants” (other than that described under “—Limitation on Consolidation, Merger, Sale or Conveyance”) (“Covenant Defeasance”) and thereafter any omission to comply with such obligations will not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (other than non-payment and bankruptcy, receivership, reorganization and insolvency events) described under “—Events of Default” will no longer constitute an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders cash in U.S. dollars, certain direct non-callable obligations of, or guaranteed by, the United States, or a combination thereof, in such amounts as will be sufficient without reinvestment, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest (including Additional Amounts) on the Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be;

(2) in the case of Legal Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from U.S. counsel reasonably acceptable to the Trustee and independent of the Company to the effect that:

(a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

(b) since the Issue Date, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon such Opinion of Counsel states that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

92 (3) in the case of Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from U.S. counsel reasonably acceptable to the Trustee and independent of the Company to the effect that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) in the case of Legal Defeasance or Covenant Defeasance, the Company has delivered to the Trustee (a) an Opinion of Counsel from Mexican counsel reasonably acceptable to the Trustee and independent of the Company to the effect that, based upon Mexican law then in effect, Holders will not recognize income, gain or loss for Mexican tax purposes, including withholding tax except for withholding tax then payable on interest payments due, as a result of such Legal Defeasance or Covenant Defeasance, as the case may be, and will be subject to Mexican taxes on the same amounts and in the same manner and at the same times as would have been the case if such Legal Defeasance or Covenant Defeasance, as the case may be, had not occurred or (b) a ruling directed to the Trustee received from tax authorities of Mexico to the same effect as the Opinion of Counsel described in clause (4)(a);

(5) no Default or Event of Default has occurred and is continuing on the date of the deposit pursuant to clause (1) of this paragraph;

(6) the Company has delivered to the Trustee an Officers’ Certificate stating that such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any of its Subsidiaries is bound;

(7) the Company has delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or any Subsidiary or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others; and

(8) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel from U.S. counsel reasonably acceptable to the Trustee and independent of the Company, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the Notes, as expressly provided for in the Indenture) as to all outstanding Notes when:

(1) either:

(a) all the Notes theretofor authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofor been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or

(b) all Notes not theretofor delivered to the Trustee for cancellation (i) have become due and payable or will become due and payable within one year or (ii) are to be called for redemption within one year under irrevocable arrangements satisfactory to the Trustee for the

93 giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and, in each case, the Company has irrevocably deposited or caused to be deposited with the Trustee funds or certain direct, non-callable obligations of, or guaranteed by, the United States sufficient without reinvestment to pay and discharge the entire Indebtedness on the Notes not theretofor delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit (in the case of Notes that have become due and payable) or to the maturity or redemption date, as the case may be, together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment;

(2) the Company has paid all other sums payable under the Indenture and the Notes by it; and

(3) the Company has delivered to the Trustee an Officers’ Certificate stating that all conditions precedent under the Indenture relating to the satisfaction and discharge of the Indenture have been complied with.

Modification of the Indenture

From time to time, the Company, the Subsidiary Guarantors and the Trustee, without the consent of the Holders, may amend, modify or supplement the Indenture, the Notes and the Subsidiary Guarantees for the following purposes:

(1) to cure any ambiguity, defect or inconsistency contained therein;

(2) to provide for the assumption by a successor Person of the obligations of the Company or a Subsidiary Guarantor under the Indenture;

(3) to add additional Guarantees with respect to the Notes or release the Subsidiary Guarantee of a Subsidiary Guarantor in accordance with the terms of the Indenture;

(4) to secure the Notes;

(5) to add to the covenants of the Company for the benefit of the Holders or surrender any right or power conferred upon the Company;

(6) to provide for the issuance of Additional Notes in accordance with the Indenture;

(7) to evidence the replacement of the Trustee as provided for under the Indenture;

(8) if necessary, in connection with any release of any security permitted under the Indenture;

(9) to comply with the covenant described under “—Covenants—Limitation on Consolidation, Merger, Sale or Conveyance”;

(10) to conform the terms of the Indenture, the Notes or the Subsidiary Guarantees with the description thereof set forth in this “Description of the Notes” to the extent that such description was intended to be a verbatim recitation of a provision of the Indenture, the Notes or the Subsidiary Guarantees; or

(11) to make any other change that does not adversely affect the rights of Holders of the Notes in any material respect.

94 In formulating its opinion on the foregoing, the Trustee will be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an Opinion of Counsel and an Officers’ Certificate.

Other modifications to, amendments of, and supplements to, the Indenture, the Notes or the Subsidiary Guarantees may be made with the consent of the Holders of a majority in principal amount of the then outstanding Notes, except that, without the consent of each Holder affected thereby, no amendment may:

(1) reduce the percentage of the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the rate of or change or have the effect of changing the time for payment of interest on any Notes;

(3) reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption, or reduce the redemption price therefor;

(4) make any Notes payable in money other than that stated in the Notes;

(5) make any change in provisions of the Indenture entitling each Holder to receive payment of principal of, premium, if any, and interest on such Notes on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Notes to waive Defaults or Events of Default;

(6) amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control Offer in respect of a Change of Control that has occurred;

(7) eliminate or modify in any manner a Subsidiary Guarantor’s obligations with respect to its Subsidiary Guarantee which adversely affects Holders in any material respect, except in accordance with the terms of the Indenture;

(8) make any change in the provisions of the Indenture described under “—Additional Amounts” that adversely affects the rights of Holders or amend the terms of the Notes in a way that would result in a loss of exemption from any applicable taxes; and

(9) make any change to the provisions of the Indenture or the Notes that adversely affect the ranking of the Notes.

Governing Law; Jurisdiction

The Indenture, the Notes and the Subsidiary Guarantees will be governed by, and construed in accordance with, the law of the State of New York.

Each of the Company and the Subsidiary Guarantors will submit to the jurisdiction of the U.S. federal and New York state courts located in the Borough of Manhattan in New York City and will appoint an agent for service of process with respect to any actions brought in these courts arising out of or based on the Indenture, the Notes or the Subsidiary Guarantees.

The Trustee

The Bank of New York Mellon is the Trustee under the Indenture. Its address is 101 Barclay Street, 4th Floor East, New York, New York 10286.

95 Except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indenture. During the existence of an Event of Default, the Trustee will exercise such rights and powers vested in it by the Indenture, and use the same degree of care and skill in its exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

No Personal Liability

No past, present or future incorporator, director, officer, employee, shareholder or controlling person, as such, of the Company or any Subsidiary Guarantor will have any liability for any obligations of the Company or such Subsidiary Guarantor under the Notes (including the Subsidiary Guarantees) or the Indenture or for any claims based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the U.S. federal securities laws or under Mexican corporate law, and it is the view of the SEC that such a waiver may be contrary to public policy.

Currency Indemnity

The Company and each Subsidiary Guarantor will pay all sums payable under the Indenture, the Notes and the Subsidiary Guarantees solely in U.S. dollars. Any amount that you receive or recover in a currency other than U.S. dollars in respect of any sum expressed to be due to you from the Company or any Subsidiary Guarantor will only constitute a discharge to the Company and the Subsidiary Guarantors to the extent of the U.S. dollar amount which you are able to purchase with the amount received or recovered in that other currency on the date of the receipt or recovery or, if it is not practicable to make the purchase on that date, on the first date on which you are able to do so. If the U.S. dollar amount is less than the U.S. dollar amount expressed to be due to you under any Note, the Company and the Subsidiary Guarantors will jointly and severally indemnify you against any loss you sustain as a result. In any event, the Company and the Subsidiary Guarantors will jointly and severally indemnify you against the cost of making any purchase of U.S. dollars. For the purposes of this paragraph, it will be sufficient for you to certify in a satisfactory manner that you would have suffered a loss had an actual purchase of U.S. dollars been made with the amount received in that other currency on the date of receipt or recovery or, if it was not practicable to make the purchase on that date, on the first date on which you were able to do so. In addition, you will also be required to certify in a satisfactory manner the need for a change of the purchase date.

The indemnities described above:

• constitute a separate and independent obligation from the other obligations of the Company and the Subsidiary Guarantors;

• will give rise to a separate and independent cause of action;

• will apply irrespective of any indulgence granted by any Holder; and

• will continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note.

Listing

In the event that the Notes are listed as anticipated on the Official List of the Luxembourg Stock Exchange for trading on the Euro MTF Market, the Company will use its reasonable best efforts to maintain such listing; provided that if, as a result of the European Union regulated market amended Directive 2004/109/EC (the “Transparency Directive”) or any legislation implementing the Transparency Directive or other directives or legislation, the Company could be required to publish financial information either more regularly than it

96 otherwise would be required to or according to accounting principles which are materially different from the accounting principles which the Company would otherwise use to prepare its published financial information, the Company may delist the Notes from the Luxembourg Stock Exchange in accordance with the rules of that Exchange and seek an alternative admission to listing, trading and/or quotation for the Notes on a different section of the Luxembourg Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside or outside the European Union as the Company’s Board of Directors may decide.

Certain Definitions

The following sets forth certain of the defined terms used in the Indenture. Reference is made to the Indenture for full disclosure of all such terms, as well as any other terms used herein for which no definition is provided.

“Additional Amounts” has the meaning set forth under “—Additional Amounts.”

“Additional Notes” has the meaning set forth under “—General.”

“Affiliate” means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. Solely for purposes of this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

“Alfa” means Alfa, S.A.B. de C.V., the parent company of the Company.

“Attributable Value” as to any particular lease under which the Company or any Subsidiary is at any time liable as lessee and any date as of which the amount thereof is to be determined, the total net obligation of the lessee for rental payments during the remaining term of the lease (including any period for which such lease has been extended or may, at the option of the lessor, be extended) discounted from the respective due dates thereof to such date at a rate per annum equivalent to the interest rate inherent in such lease (as determined in good faith by the Company in accordance with generally accepted financial practice).

“Board of Directors” means, with respect to any Person, the board of directors or similar governing body of such Person.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means a day other than a Saturday, Sunday or any day on which banking institutions are authorized or required by law to close in New York City, United States or in Mexico City (Distrito Federal), Mexico.

“Capital Stock” means:

(1) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person;

(2) with respect to any Person that is not a corporation, any and all partnership or other equity or ownership interests of such Person; and

(3) any warrants, rights or options to purchase any of the instruments or interests referred to in the foregoing clauses (1) or (2), but excluding any debt securities convertible into such equity.

97 “Change of Control” means the occurrence of one or more of the following events:

(1) prior to an Initial Public Offering, (a) Alfa and its Affiliates cease to collectively beneficially own more than 50% of the Voting Stock of the Company, unless as a result of such transaction, the ultimate direct or indirect ownership of the Company is substantially the same immediately after such transaction as it was immediately prior to such transaction or (b) individuals appointed by Alfa cease for any reason to constitute a majority of the members of the Board of Directors of the Company;

(2) after an Initial Public Offering, (a) the consummation of any transaction (including without limitation any merger or consolidation) the result of which is that any “person” (as defined in Section 13d and 14d under the Exchange Act), other than Alfa and its Affiliates, becomes the beneficial owner, directly or indirectly, or more than 35% of the Voting Stock of the Company and (b) Alfa and its Affiliates beneficially own, directly or indirectly, in the aggregate, a lesser percentage of the total Voting Stock of the Company than such other person and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board of Directors of the Company, unless, as a result of such transaction, the ultimate direct or indirect ownership of the Company is substantially the same immediately after such transaction as it was immediately prior to such transaction;

(3) the sale, conveyance, assignment, transfer, lease or other disposition of all or substantially all of the assets of the Company, determined on a consolidated basis, to any “person” (as defined in Sections 13d and 14d under the Exchange Act) other than Alfa, or any subsidiary of Alfa that is a holding company for Alfa’s interest in the Company (or one or more of the Subsidiary Guarantors), whether or not otherwise in compliance with the Indenture; and

(4) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company, whether or not otherwise in compliance with the Indenture.

Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (i)(A) the Company becomes a wholly-owned Subsidiary of a holding company and (B) the holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction, (ii) pursuant to a transaction in which the shares of the Company’s Voting Stock outstanding immediately prior to the transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person immediately after giving effect to such transaction or (iii) the “person” referenced in clause (2) or (3) of the preceding sentence previously became the beneficial owner of the Company’s Voting Stock so as to have constituted a Change of Control in respect of which a Change of Control Offer was made (or otherwise would have required a Change of Control Offer in the absence of the waiver of such requirement by the Holders of the Notes).

“Change of Control Payment” has the meaning set forth under “—Change of Control Triggering Event.”

“Change of Control Payment Date” has the meaning set forth under “—Change of Control Triggering Event.”

“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Rating Event.

“Consolidated Tangible Assets” means, as of any date of determination, the total amount of assets of the Company and its consolidated Subsidiaries less Intangible Assets of the Company and its consolidated Subsidiaries, according to MFRS, as of the end of the fiscal year immediately preceding such date.

98 “Common Stock” means, with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common equity interests, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common equity interests.

“Covenant Defeasance” has the meaning set forth under “—Legal Defeasance and Covenant Defeasance.”

“Default” means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

“Event of Default” has the meaning set forth under “—Events of Default.”

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

“Fair Market Value” means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction. The Fair Market Value of any such asset or assets will be determined conclusively by the Board of Directors of the Company acting in good faith, and will be evidenced by a Board Resolution; provided that, with respect to a value of less than US$2,000,000 (or the equivalent in other currencies), such determination may be made by two or more Officers of the Company and only an Officers’ Certificate will be required.

“Fitch” means Fitch Inc., or any successor thereto.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person:

(1) to purchase or pay, or advance or supply funds for the purchase or payment of, such Indebtedness of such other Person, whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise; or

(2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in part; provided that “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. “Guarantee,” when used as a verb, has a corresponding meaning. The term “Guarantee” will not apply to a guarantee of intercompany Indebtedness among the Company and the Subsidiaries or among the Subsidiaries.

“Holder” means the Person in whose name a Note is registered in the note register pursuant to the terms of the Indenture.

“Indebtedness” means, with respect to any Person (without duplication):

(1) any obligation of such Person (a) for borrowed money, under any reimbursement obligation relating to a letter of credit (other than letters of credit payable to suppliers in the ordinary course of business), under any reimbursement obligation relating to a financial bond or under any reimbursement obligation relating to a similar instrument or agreement, (b) for the payment of money relating to any obligations under any capital lease of real or personal property or (c) under any agreement or instrument in respect of an interest rate or currency swap, exchange or hedging

99 transaction or other financial derivatives transaction (other than (i) any such agreements or instruments directly related to Indebtedness otherwise incurred in compliance with the Indenture and (ii) any such agreements as are entered into in the ordinary course of business and are not for speculative purposes or the obtaining of credit); and

(2) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clause (1).

The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date.

“Initial Public Offering” means the issuance and sale for cash of Common Stock of the Company to any Person other than an Affiliate of the Company pursuant to (1) a public offering in accordance with U.S. or Mexican laws, rules or regulations, or (ii) a private offering in accordance with Rule 144A and Regulation S under the Securities Act.

“Intangible Assets” means, with respect to the Company and its consolidated Subsidiaries, unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, write-ups of assets over their carrying value at the end of each fiscal year, and all other items which would be treated as intangibles on the balance sheet of the Company and its consolidated Subsidiaries (except unamortized debt discount and expense), according to MFRS.

“Investment Grade Rating” means a rating equal to or higher than Baa3 by Moody’s (or the equivalent under any successor rating categories of Moody’s), BBB- by S&P (or the equivalent under any successor rating categories of S&P) or BBB- by Fitch (or the equivalent under any successor rating categories of Fitch), and the equivalent investment grade credit rating from any additional rating agency or Rating Agencies selected by the Company.

“Issue Date” means the original date of issuance of Notes under the Indenture.

“Legal Defeasance” has the meaning set forth under “—Legal Defeasance and Covenant Defeasance.”

“Lien” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest); provided that the lessee in respect of a Sale and Leaseback Transaction will be deemed to have incurred a Lien on the property leased thereunder.

“Material Subsidiary” means a Subsidiary that represented 5% or more of the Company’s consolidated assets or net sales in the preceding fiscal year.

“MFRS” means Financial Reporting Standards in Mexico that are in effect from time to time; provided that, if at any time after the Issue Date the Company prepares its financial statements in accordance with International Financial Reporting Standards in lieu of Financial Reporting Standards in Mexico, the Company may, by giving written notice thereof to the Trustee, elect to apply International Financial Reporting Standards in lieu of MFRS under the Indenture and, upon any such election, references herein to “MFRS” will thereafter be construed to mean International Financial Reporting Standards as in effect from time to time.

“Moody’s” means Moody’s Investors Service, Inc., or any successor thereto.

100 “Obligations” means, with respect to any Indebtedness, any principal, premium, interest (including, without limitation, Post-Petition Interest), Additional Amounts, penalties, fees, indemnifications, reimbursements, damages, and other liabilities payable under the documentation governing such Indebtedness, including in the case of the Notes and the Subsidiary Guarantees, the Indenture.

“Officer” means, when used in connection with any action to be taken by the Company, the Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, any Vice President, the Treasurer, the Controller or the Secretary of the Company (or, in each case, the officers of the Company with equivalent positions).

“Officers’ Certificate” means, when used in connection with any action to be taken by the Company, a certificate signed by two Officers or by an Officer and either the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee.

“Operating Property” means, as of any date of determination, any real and tangible property owned by the Company or any Subsidiary that constitutes all or any part of any plant, processing facility, manufacturing facility, warehouse, distribution center or research and development facility and is used in the ordinary course of its business, the gross book value (without duplication of any depreciation reserves) of which piece of real or tangible property exceeds US$2 million.

“Opinion of Counsel” means a written opinion of counsel, who may be an employee of or counsel for the Company (except as otherwise provided in the Indenture) and who is reasonably acceptable to the Trustee.

“Person” means an individual, partnership, limited partnership, corporation, company, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

“Post-Petition Interest” means all interest accrued or accruing after the commencement of any insolvency or liquidation proceeding (and interest that would accrue but for the commencement of any insolvency or liquidation proceeding) in accordance with and at the contract rate (including, without limitation, any rate applicable upon default) specified in the agreement or instrument creating, evidencing or governing any Indebtedness, whether or not, pursuant to applicable law or otherwise, the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.

“Rating Agencies” means each of Moody’s, S&P and Fitch and, if any of Moody’s, S&P and Fitch ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-l(c)(2)(vi)(F) under the Exchange Act selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s, S&P or Fitch, or any of them, as the case may be.

“Rating Event” means the rating on the Notes is lowered by (i) at least one of the Rating Agencies (in the event that only two Rating Agencies provide ratings on the Notes) or (ii) at least two of three Rating Agencies (in the event that three Rating Agencies provide ratings on the Notes) to a rating that is below an Investment Grade Rating on any day during the period commencing on the earlier of the date of the first public notice of the occurrence of a Change of Control or the Company’s intention to effect a Change of Control and ending 60 days following consummation of such Change of Control (which period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the Rating Agencies).

“Sale and Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired by the Company or any Subsidiary whereby the Company or such Subsidiary transfers such property with the intention of taking back a lease pursuant to which rental payments are calculated to amortize the

101 purchase price of such property substantially over the useful life thereof and the Company or such Subsidiary leases for a period greater than three years from such Person, other than leases between the Company and a Subsidiary or between Subsidiaries.

“SEC” means the U.S. Securities and Exchange Commission.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“Subsidiary” means any Person of which the Company owns, directly or indirectly, more than 50% of the voting power of the other Person’s outstanding Voting Stock.

“Subsidiary Guarantee” means any guarantee of the Company’s Obligations under the Notes and the Indenture provided by a Subsidiary pursuant to the Indenture.

“Subsidiary Guarantor” means each Subsidiary that provides a Subsidiary Guarantee in accordance with the terms and conditions described under “—Subsidiary Guarantees.”

“S&P” means Standard & Poor’s Rating Service, or any successor thereto.

“Voting Stock” means, with respect to any Person, securities of any class of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the Board of Directors (or equivalent governing body) of such Person.

102 BOOK-ENTRY, DELIVERY AND FORM

The notes will be issued in the form of fully registered global securities which will be deposited with, or on behalf of, The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., which is DTC’s nominee. The notes will be accepted for clearance by DTC. Beneficial interests in the global securities will be shown on, and transfers thereof will be effected only through, book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC. Investors may elect to hold interests in the global securities through either DTC in the United States, or Clearstream Banking, S.A. or Euroclear Bank S.A./ N.V., as operator of the Euroclear System in Europe (“Clearstream” and “Euroclear,” respectively), if they are participants in those systems, or, indirectly, through organizations that are participants in those systems. Owners of beneficial interests in the notes will receive all payments relating to their notes in U.S. dollars. One or more fully registered global security certificates, representing the aggregate principal amount of debt securities issued, will be issued and will be deposited with DTC and will bear a legend regarding the restrictions on exchanges and registration of transfer referred to below.

The laws of some jurisdictions may require that some purchasers of securities take physical delivery of securities in definitive form. These laws may impair the ability to transfer beneficial interests in the notes, so long as the notes are represented by global security certificates.

DTC is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments that DTC’s direct participants deposit with DTC. DTC also facilitates the post-trade settlement among direct participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between direct participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations.

DTC is a wholly owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others, who we refer to as indirect participants, such as U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a direct or indirect custodial relationship with a direct participant. The rules applicable to DTC and its participants are on file with the SEC.

Purchases of the notes under the DTC system must be made by or through direct participants, who will receive a credit for the notes on DTC’s records. The ownership interest of each actual purchaser of notes, (a “beneficial owner”) is in turn to be recorded on the direct or indirect participants’ records. Beneficial owners will not receive written confirmation from DTC of their purchase. Beneficial owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect participant through which the beneficial owner entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of direct and indirect participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in notes, except as described below. Under a book-entry format, holders may experience some delay in their receipt of payments, as such payments will be forwarded by the trustee to Cede & Co., as nominee for DTC. DTC will forward the payments to its participants, who will then forward them to indirect participants or holders. Beneficial owners of the notes other than DTC or its nominees will not be recognized by the registrar and transfer agent as registered holders of the notes entitled to the rights of holders thereof. Beneficial owners that are not participants will be permitted to exercise their rights only indirectly through and according to the procedures of participants and, if applicable, indirect participants.

103 To facilitate subsequent transfers, all notes deposited by direct participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the notes; DTC’s records reflect only the identity of the direct participants to whose accounts the notes are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices will be sent to DTC. If less than all of the notes within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participant in such issue to be redeemed.

Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to the notes unless authorized by a direct participant in accordance with DTC’s MMI procedures. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct participants to whose accounts notes are credited on the record date (identified in a listing attached to the omnibus proxy).

The global securities are exchangeable for certificated securities in definitive, fully registered form without interest coupons only in the following limited circumstances:

• DTC notifies us that it is unwilling or unable to continue as depositary for the global securities or DTC ceases to be a clearing agency registered under the Exchange Act, at a time when DTC is required to be so registered in order to act as depositary, and in each case Sigma fails to appoint a successor depositary within 90 days of such notice;

• Sigma notifies the trustee in writing that the global securities will be so exchangeable; or

• if an Event of Default with respect to the securities has occurred and is continuing.

In all cases, certificated securities delivered in exchange for any global note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures) and will bear the applicable restrictive legend referred to in “Transfer Restrictions” unless we determine otherwise in accordance with the indenture and in compliance with applicable law.

As long as DTC or its nominee is the registered owner of the global security certificates, DTC or its nominee, as the case may be, will be considered the sole owner and holder of the global security certificates and all notes represented by these certificates for all purposes under the instruments governing the rights and obligations of holders of notes. Except in the limited circumstances referred to above, owners of beneficial interests in global security certificates:

• will not be entitled to have such global security certificates or the notes represented by these certificates registered in their names;

• will not receive or be entitled to receive physical delivery of securities certificates in exchange for beneficial interests in global security certificates; and

• will not be considered to be owners or holders of the global security certificates or the notes represented by these certificates for any purpose under the instruments governing the rights and obligations of holders of notes.

104 Payments with respect to the notes represented by the global security certificates and all transfers and deliveries of the notes will be made to DTC or its nominee, as the case may be, as the registered holder of the notes. DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of that participant and not of us, any of our agents, DTC or the trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC are the responsibility of us or our agent, disbursement of such payments to direct participants will be the responsibility of DTC, and disbursement of such payments to the beneficial owners will be the responsibility of direct and indirect participants.

Ownership of beneficial interests in the global security certificates will be limited to participants or persons that may hold beneficial interests through institutions that have accounts with DTC or its nominee. Ownership of beneficial interests in global security certificates will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by DTC or its nominee, with respect to participants’ interests, or any participant, with respect to interests of persons held by the participant on their behalf. Payments, transfers, deliveries, exchanges, and other matters relating to beneficial interests in global security certificates may be subject to various policies and procedures adopted by DTC from time to time. Neither we nor any of our agents will have any responsibility or liability for any aspect of DTC’s or any direct or indirect participant’s records relating to, or for payments made on account of, beneficial interests in global security certificates, or for maintaining, supervising or reviewing any of DTC’s records or any direct or indirect participant’s records relating to these beneficial ownership interests.

Although DTC has agreed to the foregoing procedures in order to facilitate transfer of interests in the global security certificates among participants, DTC is under no obligation to perform or continue to perform these procedures, and these procedures may be discontinued at any time. We will not have any responsibility for the performance by DTC or its direct or indirect participants under the rules and procedures governing DTC.

Because DTC can act only on behalf of direct participants, who in turn act only on behalf of direct or indirect participants, and certain banks, trust companies and other persons approved by it, the ability of a beneficial owner of notes to pledge the notes to persons or entities that do not participate in the DTC system may be limited due to the unavailability of physical certificates for the notes.

DTC has advised us that it will take any action permitted to be taken by a registered holder of any notes under the indenture only at the direction of one or more participants to whose accounts with DTC the notes are credited.

Clearstream and Euroclear will hold interests on behalf of their participants through customers’ securities accounts in Clearstream’s and Euroclear’s names on the books of their respective depositaries, which in turn will hold interests in customers’ securities accounts in the depositaries’ names on the books of DTC.

Clearstream holds securities for its participating organizations, (“Clearstream Participants”) and facilitates the clearance and settlement of securities transactions between Clearstream Participants through electronic book- entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to Clearstream Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in several countries.

Clearstream is registered as a bank in Luxembourg, and as such is subject to regulation by the Commission de Surveillance du Secteur Financier and the Banque Centrale du Luxembourg, which supervise and oversee the activities of Luxembourg banks. Clearstream Participants are world-wide financial institutions including

105 underwriters, securities brokers and dealers, banks, trust companies and clearing corporations, and may include the underwriters or their affiliates. Indirect access to Clearstream is available to other institutions that clear through or maintain a custodial relationship with a Clearstream Participant. Clearstream has established an electronic bridge with Euroclear as the operator of the Euroclear System, (the “Euroclear Operator”) in Brussels to facilitate settlement of trades between Clearstream and the Euroclear Operator.

Euroclear holds securities and book-entry interests in securities for participating organizations, (the “Euroclear Participants”) and facilitates the clearance and settlement of securities transactions between Euroclear Participants, and between Euroclear Participants and participants of certain other securities intermediaries through electronic book-entry changes in accounts of such participants or other securities intermediaries. Euroclear provides Euroclear Participants, among other things, with safekeeping, administration, clearance and settlement, securities lending and borrowing, and related services. Euroclear Participants are investment banks, securities brokers and dealers, banks, central banks, supranationals, custodians, investment managers, corporations, trust companies and certain other organizations, and may include the underwriters or their affiliates. Non-participants in Euroclear may hold and transfer beneficial interests in a global security through accounts with a Euroclear Participant or any other securities intermediary that holds a book-entry interest in a global security through one or more securities intermediaries standing between such other securities intermediary and Euroclear.

Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law, which we collectively refer to as the “Terms and Conditions.” The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants, and has no record of or relationship with persons holding through Euroclear Participants.

Distributions with respect to notes of a series held beneficially through Clearstream or Euroclear will be credited to the cash accounts of Clearstream Participants or Euroclear Participants, as the case may be, in accordance with their respective procedures, to the extent received by the U.S. depositary for Clearstream or Euroclear, as the case may be. Transfers between Euroclear Participants and Clearstream Participants will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Cross-market transfers between DTC’s participating organizations, (“DTC Participants”), on the one hand, and Euroclear Participants or Clearstream Participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its U.S. depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its U.S. depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the global security in DTC, and making or receiving payment in accordance with normal procedures for same-day fund settlement applicable to DTC. Euroclear Participants and Clearstream Participants may not deliver instructions directly to their respective U.S. depositaries. Due to time zone differences, the securities accounts of a Euroclear Participant or Clearstream Participant purchasing an interest in a global security from a DTC Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear Participant or Clearstream Participant, during the securities settlement processing day, which must be a business day for Euroclear or Clearstream, immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of sales of interests in a global security related to a series of debt securities by or through a Euroclear Participant or Clearstream Participant to a DTC Participant will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

106 Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of securities among participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no obligation to perform or continue to perform such procedures and they may discontinue the procedures at any time. None of us, any of the initial purchasers or the trustee will have any responsibility for the performance by Clearstream or Euroclear or their respective participants of their respective obligations under the rules and procedures governing their operations. In addition, the information in this section concerning DTC and its book-entry system has been obtained from sources that we believe to be accurate, but we assume no responsibility for the accuracy thereof.

107 TRANSFER RESTRICTIONS

The notes have not been registered, and will not be registered, under the Securities Act or any state securities laws, and the notes may not be offered or sold except pursuant to an effective registration statement or pursuant to transactions exempt from, or not subject to, registration under the Securities Act. Accordingly, the notes are being offered and sold only:

• in the United States to qualified institutional buyers (as defined in Rule 144A) pursuant to Rule 144A under the Securities Act; and

• outside of the United States, to certain persons, other than U.S. persons, in offshore transactions meeting the requirements of Rule 903 of Regulation S under the Securities Act.

Purchasers’ Representations and Restrictions on Resale and Transfer

Each purchaser of notes (other than the initial purchasers in connection with the initial issuance and sale of notes) and each owner of any beneficial interest therein will be deemed, by its acceptance or purchase thereof, to have represented and agreed as follows:

• it is purchasing the notes for its own account or an account with respect to which it exercises sole investment discretion and it and any such account is either (a) a qualified institutional buyer and is aware that the sale to it is being made pursuant to Rule 144A or (b) a non-U.S. person that is outside the United States;

• it acknowledges that the notes have not been registered under the Securities Act or with any securities regulatory authority of any state and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except as set forth below;

• it understands and agrees that notes initially offered in the United States to qualified institutional buyers will be represented by a global note and that notes offered outside the United States pursuant to Regulation S will also be represented by a global note;

• it will not resell or otherwise transfer any of such notes except (a) to us, (b) within the United States to a qualified institutional buyer in a transaction complying with Rule 144A under the Securities Act, (c) outside the United States in compliance with Rule 903 or 904 under the Securities Act, (d) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available) or (e) pursuant to an effective registration statement under the Securities Act;

• it agrees that it will give to each person to whom it transfers the notes notice of any restrictions on transfer of such notes;

• it acknowledges that prior to any proposed transfer of notes (other than pursuant to an effective registration statement or in respect of notes sold or transferred either pursuant to (a) Rule 144A or (b) Regulation S) the holder of such notes may be required to provide certifications relating to the manner of such transfer as provided in the indenture;

• it acknowledges that the trustee, registrar or transfer agent for the notes will not be required to accept for registration transfer of any notes acquired by it, except upon presentation of evidence satisfactory to us that the restrictions set forth herein have been complied with;

• it acknowledges that we, the initial purchasers and other persons will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that if any of the

108 acknowledgements, representations and agreements deemed to have been made by its purchase of the notes are no longer accurate, it will promptly notify us and the initial purchasers; and

• if it is acquiring the notes as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each account.

Legends

The following is the form of restrictive legend which will appear on the face of the Rule 144A global note and which will be used to notify transferees of the foregoing restrictions on transfer:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF SIGMA ALIMENTOS S.A. DE C.V. (THE “COMPANY”) THAT THIS NOTE OR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) IN ACCORDANCE WITH RULE 144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER APPLICABLE JURISDICTION. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES THAT IT SHALL NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN.”

The following is the form of restrictive legend which will appear on the face of the Regulation S global note and which will be used to notify transferees of the foregoing restrictions on transfer:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY OTHER APPLICABLE JURISDICTION.

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN.”

109 CERTAIN MATERIAL INCOME TAX CONSIDERATIONS

Mexican Tax Considerations

General

The following is a general summary of the principal Mexican federal income tax consequences of the purchase, ownership and disposition of the notes by holders that are not residents of Mexico for tax purposes and that do not hold the notes through a permanent establishment in Mexico to which the holding of the notes is attributable for tax purposes. For purposes of this summary, each such holder is a “foreign holder”. This summary is based upon the provisions of the Mexican Federal Income Tax Law (Ley del Impuesto Sobre la Renta,orthe “Mexican Income Tax Law”) in effect on the date of this offering memorandum, all of which are subject to change or to new or different interpretations, which could affect the continued validity of this summary. This summary does not address all of the Mexican tax consequences that may be applicable to specific holders of the notes and does not purport to be a comprehensive description of all the Mexican tax considerations that may be relevant to a decision to purchase, own or dispose of the notes. This summary does not describe any tax consequences arising under the laws of any state, municipality or taxing jurisdiction other than the Mexican Income Tax Law.

POTENTIAL PURCHASERS OF THE NOTES SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES UNDER THE LAWS OF MEXICO AND ANY OTHER JURISDICTION OR UNDER ANY APPLICABLE DOUBLE TAXATION TREATY.

For purposes of Mexican taxation, an individual or corporation that does not satisfy the requirements to be considered a resident of Mexico for tax purposes, as described below, is deemed a non-resident of Mexico for tax purposes.

An individual is a resident of Mexico for tax purposes, if such person has established his or her domicile in Mexico. When such person has a home in another country, the individual will be considered a resident of Mexico for tax purposes if his/her center of vital interests is located in Mexico, which is deemed to occur if (i) more than 50% of such individual’s total income, in any calendar year, is from a Mexican source, or (ii) such individual’s principal center of professional activities is located in Mexico. Mexican nationals that are employed by the Mexican government are deemed residents of Mexico, even if his/her center of vital interests is located outside of Mexico. Mexican nationals who filed a change of tax residence to a country or jurisdiction that does not have a comprehensive exchange of information agreement with Mexico and who have income subject to a preferred tax regime as defined in the Mexican Income Tax Law, will be considered Mexican residents for tax purposes during the year of the filing of the notice of such residence change and during the following three years. Unless otherwise proven, Mexican nationals are deemed residents of Mexico for tax purposes.

A legal entity is a resident of Mexico if it maintains the principal administration of its business or the effective location of its management in Mexico.

A permanent establishment in Mexico of a foreign person will be required to pay taxes in Mexico in accordance with applicable tax laws, for income attributable to such permanent establishment.

Taxation of Payments of Interest

Under the Mexican Income Tax Law, payments of interest (including original issue discount and premiums, which are deemed interest under the Mexican Income Tax Law) made by us or the subsidiary guarantors that are residents in Mexico for tax purposes in respect of the notes to a foreign holder will generally be subject to a Mexican withholding tax assessed at a rate of 4.9%, if, as expected, the following requirements are met:

• the notes are placed outside Mexico through banks or broker-dealers, in a country with which Mexico has a treaty for the avoidance of double taxation in effect;

110 • a notice is filed before the CNBV describing the main characteristics of the notes offering pursuant to Article 7 of the Mexican Securities Market Law (Ley del Mercado de Valores); and

• the information requirements specified from time to time by the Mexican Ministry of Finance and Public Credit under its general rules, including, after completion of the offering of the notes, the filing of certain information related to the notes offering and this offering memorandum are duly complied with.

If any of such requirements is not met, the applicable withholding tax rate will be 10% or higher.

In addition, if the effective beneficiaries, whether directly or indirectly, severally or jointly with related parties, receiving more than 5% of the aggregate amount of each interest payment under the notes are (i) shareholders holding more than 10% of our voting stock, directly or indirectly, severally or jointly with related parties, or (ii) corporations or other entities having more than 20% of their stock owned, directly or indirectly, jointly or severally, by persons related to us, the Mexican withholding tax will be applied at a rate of 28% or higher.

Payments of interest made by us or any subsidiary guarantor that is a resident of Mexico for tax purposes in respect of the notes to non-Mexican pension or retirement funds will be exempt from Mexican withholding taxes if:

• such fund is organized pursuant to the laws of its country of residence and is the effective beneficiary of the interest payment;

• such income is exempt from income taxes in such country; and

• such fund is registered with the Mexican Ministry of Finance and Public Credit for these purposes.

Holders or beneficial owners of the notes may be requested, subject to specified exemptions and limitations, to provide certain information or documentation necessary to enable us to apply the appropriate Mexican withholding tax rate on interest payments under the notes made by us to such holders or beneficial owners. In the event that the specified information or documentation concerning the holder or beneficial owner, if requested, is not timely or completely provided at all, we may withhold Mexican tax from that interest payment on the notes to that holder or beneficial owner at the maximum applicable rate, and our obligation to pay Additional Amounts relating to those withholding taxes would be limited as described under “Description of the Notes – Additional Amounts.”

Taxation of Principal Payments

Under the Mexican Income Tax Law, payments of principal made by us or any subsidiary guarantor in respect of the notes to a foreign holder will not be subject to Mexican withholding tax.

Taxation of Dispositions and Acquisitions of the Notes

Under the Mexican Income Tax Law, gains resulting from the sale or disposition of the notes by a foreign holder to another foreign holder are not taxable in Mexico. Gains resulting from the sale of the notes by a foreign holder to a purchaser who is a Mexican resident for tax purposes or to a foreign holder deemed to have a permanent establishment in Mexico for tax purposes will be subject to Mexican federal income or other taxes pursuant to the rules described above in respect of interest payments. The acquisition of the notes at a discount by a foreign holder will be deemed interest income, and subject to Mexican withholding taxes, if the seller is a Mexican resident or a foreign resident deemed to have a permanent establishment in Mexico.

111 Other Mexican Taxes

Under current Mexican tax laws, there are no estate, inheritance, succession or gift taxes generally applicable to the purchase, ownership or disposition of the notes by a foreign holder. Gratuitous transfers of the notes in certain circumstances may result in the imposition of Mexican income taxes upon the recipient. There are no Mexican stamp, issuer registration or similar taxes or duties payable by foreign holders of the notes with respect to the notes.

U.S. Tax Considerations

General

The following is a discussion of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of the notes to U.S. Holders (as defined below) that acquire the notes for cash in the initial offering at the price set forth on the cover page. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), and administrative pronouncements, judicial decisions and existing and proposed Treasury Regulations, together with related interpretations, as of the date hereof, changes to any of which subsequent to the date of this offering memorandum may affect the tax consequences described below, possibly with retroactive effect. We cannot assure you that the Internal Revenue Service (“IRS”) will not challenge one or more of the tax consequences described in this discussion, and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of counsel with respect to the U.S. federal tax consequences of acquiring, holding or disposing of the notes.

The following discusses only notes held as capital assets within the meaning of Section 1221 of the Code. It does not discuss all of the tax consequences that may be relevant to a holder in light of that holder’s particular circumstances (including the potential application of the U.S. alternative minimum tax) or to holders subject to special rules, such as (but not limited to) insurance companies; banks, thrifts or financial institutions; tax-exempt investors; dealers in securities or foreign currencies; traders in securities that elect to use the mark-to-market method of accounting for their securities holdings; persons holding the notes in connection with a hedging transaction, “straddle,” conversion transaction or other integrated transaction; partnerships or other flow-through entities (or investors in such entities); or U.S. Holders that have a functional currency other than the U.S. dollar. Prospective investors should consult their tax advisors with regard to the application of U.S. federal income, estate and gift tax laws to their particular situations, as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

As used in the following discussion, the term “U.S. Holder” means a beneficial owner of a note that is, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence test under Section 7701(b) of the Code;

• a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (B) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

112 The U.S. federal income tax treatment of a partner in a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) that holds the notes generally will depend on such partner’s particular circumstances and on the activities of the partnership. Partners in such partnerships should consult their own tax advisors.

In certain circumstances, the notes provide for the payment of certain amounts in excess of the stated interest and principal. Because of this, the notes could be subject to rules relating to debt instruments that provide for one or more contingent payments, referred to as the “Contingent Payment Regulations.” Under the Contingent Payment Regulations, the possibility, as of the issue date, of such excess amounts being paid will not cause the notes to be treated as contingent payment debt instruments if there is only a “remote” chance that these contingencies will occur or if such contingencies are considered to be “incidental.” We intend to take the position that any such contingencies should be considered “remote” or “incidental” and, therefore, should not cause the notes to be treated as contingent payment debt instruments. Our determination that the notes will not be treated as contingent payment debt instruments will be binding on a holder unless such holder explicitly discloses its contrary position to the IRS in the manner required by applicable Treasury Regulations. Our determination, however, is not binding on the IRS and if the IRS successfully challenged this position, the tax consequences of holding and disposing of a note would differ materially from the consequences described herein (e.g., a holder may be required to accrue interest at a higher rate and any gain on the disposition of a note may be treated as ordinary interest income, rather than capital gain). The remainder of this discussion assumes that the notes will not be treated as contingent payment debt instruments.

TO COMPLY WITH INTERNAL REVENUE SERVICE CIRCULAR 230, PROSPECTIVE INVESTORS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES CONTAINED OR REFERRED TO IN THIS OFFERING MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY YOU, FOR THE PURPOSES OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU UNDER THE CODE; (B) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE PROMOTION AND MARKETING OF THE NOTES; AND (C) PROSPECTIVE INVESTORS SHOULD SEEK ADVICE BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

Stated Interest

Payments of stated interest, including Additional Amounts, if any, on notes generally will be taxable to a U.S. Holder as ordinary interest income at the time such payments are accrued or are received (in accordance with the holder’s regular method of tax accounting). The amount of income taxable to a U.S. Holder will include the amount of all Mexican taxes that we withhold (as described above under “—Mexican Tax Considerations”) from payments of interest on the notes. Thus, a U.S. Holder will have to report income in an amount that is greater than the amount of cash it receives from these interest payments on its notes. For purposes of the following discussion, references to interest include any Additional Amounts paid in respect of interest payments on the notes.

A U.S. Holder may, subject to certain limitations, be eligible to claim any Mexican income taxes withheld from interest payments as a credit or deduction for purposes of computing its U.S. federal income tax liability. Interest paid on the notes will constitute income from sources without the United States for U.S. foreign tax credit purposes and will generally be treated for U.S. foreign tax credit purposes as “passive category income.”

A U.S. Holder will not be allowed to claim foreign tax credits (but would instead be allowed a deduction) for foreign taxes imposed on income with respect to the notes unless the U.S. Holder (i) holds such notes for more than 15 days during the 31-day period beginning on the date that is 15 days before the right to receive payment arises (disregarding any period during which the U.S. Holder has, by reason of certain specified transactions, a diminished risk of loss with respect to such notes) and (ii) is not under an obligation to make related payments with respect to positions in substantially similar or related property. The calculation of foreign tax credits involves the application of complex rules that depend on a U.S. Holder’s particular circumstances. Accordingly, investors are urged to consult their tax advisors regarding their ability to claim a credit for any foreign withholding taxes paid with respect to the notes.

113 Sale, Exchange, Redemption or Retirement of the Notes

A U.S. Holder will generally recognize taxable gain or loss equal to the difference between the amount of cash received plus the fair market value of any property received on the sale, exchange, redemption, retirement or other taxable disposition of the notes (less any portion allocable to accrued and unpaid stated interest, which will be taxable as ordinary income as described above) and (ii) the U.S. Holder’s adjusted tax basis in the notes. A U.S. Holder’s adjusted tax basis in the notes generally will be the initial purchase price paid. Such gain or loss will generally be capital gain or loss and will be long-term capital gain or loss provided the U.S. Holder’s holding period for the notes exceeds one year. In the case of a U.S. Holder other than a corporation a preferential tax rate currently applies to long-term capital gains. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for U.S. federal income tax purposes. Any capital gains or losses that arise when the U.S. Holder sells or disposes of the notes will generally be treated as U.S. source capital gain or loss for foreign tax credit purposes; therefore, if any gain is subject to Mexican income tax, a U.S. Holder may not be able to credit the Mexican income tax against its U.S. federal income tax liability. U.S. Holders should consult their own tax advisors regarding the foreign tax credit implications of a disposition of the notes.

Information Reporting and Backup Withholding Tax

In general, information reporting requirements will apply to payments of interest on the notes (including OID, if any) and payments of the proceeds of the sale or other disposition of the notes (including a redemption or retirement), unless the U.S. Holder is an exempt recipient (such as a corporation). In addition, backup withholding tax (currently at a rate of 28%) may apply to those payments if:

• the U.S. Holder fails to furnish or to certify its correct taxpayer identification number in the manner required or fails to establish that it is exempt from backup withholding; or

• the U.S. Holder is notified by the IRS that the U.S. Holder is subject to backup withholding because the U.S. Holder previously failed to report payments of interest and dividends properly.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is timely furnished to the IRS.

European Union Savings Directive

The European Union has adopted a Prospectus Directive (as defined under “Plan of Distribution”) regarding the taxation of savings income. Member states of the European Union (“Member States”) are required to provide to the tax authorities of other Member States details of payments of interest and other similar income paid by a person to an individual in another Member State, except that Austria, and Luxembourg will instead impose a withholding system for a transitional period unless during such period they elect otherwise.

114 CERTAIN ERISA CONSIDERATIONS

The notes may be acquired and held by, or with the assets of, an employee benefit plan that is subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or an individual retirement account or other plan, account or arrangement that is subject to Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (each, an “ERISA Plan”). A fiduciary of an ERISA Plan must determine that the acquisition and holding of the notes is consistent with its fiduciary duties under ERISA and that the acquisition and holding of the notes will not result in a non-exempt prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the Code. In addition, each prospective investor acquiring or holding the notes with the assets of any plan, account or other arrangement that is subject to any laws or regulations which are similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code (collectively, “Similar Laws”) must also determine that its purchase and holding of the notes will not result in a violation of any applicable Similar Law. Each purchaser and subsequent transferee which is acquiring or holding our notes with the assets of an ERISA Plan or a plan, account or other arrangement which is subject to Similar Law (each, a “Plan Investor”) will be deemed to have represented by its acquisition and holding of the notes that its acquisition and holding of the notes will not constitute or give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of any applicable Similar Law. The sale of any notes to any Plan Investor is in no respect a representation by us, the initial purchasers, or any of our or their affiliates or representatives that such an investment meets all relevant legal requirements with respect to investments by Plan Investors generally or any particular Plan Investor, or that such an investment is appropriate for Plan Investors generally or any particular Plan Investor.

The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing or holding the notes on behalf of, or with the assets of, any ERISA Plan or plan, account or other arrangement which is subject to Similar Law, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code any Similar Laws to such investment.

115 PLAN OF DISTRIBUTION

Subject to the terms and conditions contained in a purchase agreement among us, the subsidiary guarantors and the initial purchasers, we have agreed to sell to the initial purchasers, and each of the initial purchasers has, severally and not jointly, agreed to purchase from us, the principal amount of the notes that appears opposite its name in the table below:

Initial Purchasers Principal Amount Deutsche Bank Securities Inc...... US$125,000,000 Santander Investment Securities Inc...... 125,000,000 Total ...... US$250,000,000

The purchase agreement provides that the obligation of the initial purchasers to purchase the notes is subject to certain conditions precedent and that the initial purchasers will purchase all of the notes if any of the notes are purchased.

We and the subsidiary guarantors have agreed to indemnify the initial purchasers against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the initial purchasers may be required to make in respect of any of these liabilities.

The notes have not been registered under the Securities Act. The initial purchasers have agreed that they will offer or sell the notes in the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act. See “Transfer Restrictions.”

New Issue of Securities

The notes are a new issue of securities with no established trading market. Application has been made to list the notes on the Official List of the Luxembourg Stock Exchange and for trading on the Euro MTF Market. The initial purchasers may make a market in the notes after completion of the offering, but will not be obligated to do so, and may discontinue any market-making activities at any time without notice. Neither we nor the initial purchasers can provide any assurance as to the liquidity of the trading market for the notes or that an active public market for the notes will develop. If an active public trading market for the notes does not develop, the market price and liquidity of the notes may be adversely affected.

Stabilization Transactions

In connection with the offering of the notes, the initial purchasers may engage in over-allotment and stabilizing transactions. Over-allotment involves sales in excess of the offering size, which creates a short position for the initial purchaser. Stabilizing transactions involve bids to purchase the notes in the open market for the purpose of pegging, fixing or maintaining the price of the notes. Stabilizing transactions may cause the price of the notes to be higher than it would otherwise be in the absence of those transactions. If the initial purchasers engage in stabilizing covering transactions, they may discontinue them at any time.

Sales Outside the United States

Neither we nor the initial purchasers are making an offer to sell, or seeking offers to buy, the notes in any jurisdiction where the offer and sale is not permitted. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the notes or possess or distribute this offering memorandum, and you must obtain any consent, approval or permission required for your purchase, offer or sale of the notes under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchases, offers or sales. Neither we nor the initial purchasers will have any responsibility therefor.

116 Mexico

The notes have not been and will not be registered in Mexico with the National Securities Registry (Registro Nacional de Valores) maintained by the CNBV. Accordingly, the notes may not be offered or sold publicly in Mexico, absent an available private placement exemption under Article 8 of the Mexican Securities Market Law (Ley del Mercado de Valores).

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), the initial purchasers have represented and agreed that, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), it has not made and will not make an offer of the notes to the public in that Relevant Member State prior to the publication of a prospectus in relation to the notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of the notes to the public in that Relevant Member State at any time:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year, (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or

(c) in any other circumstances which do not require the publication by the issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of the notes to the public” in relation to any notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the notes so as to enable an investor to decide to purchase or subscribe the notes, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State; and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

United Kingdom

The initial purchasers have represented, warranted and agreed that:

(a) they have only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the United Kingdom Financial Services and Markets Act of 2000 (“FSMA”) received by it in connection with the issue or sale of such notes in circumstances in which Section 21(1) of the FSMA does not, or would not, apply to us; and

(b) they have complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any notes in, from or otherwise involving the United Kingdom.

Italy

The offering of the notes has not been registered pursuant to the Italian securities legislation and, accordingly, each initial purchase has represented, warranted and agreed that it has not offered or sold, and will

117 not offer or sell, any notes in the Republic of in a solicitation to the public, and that sales of the notes in the Republic of Italy shall be effected in accordance with all Italian securities, tax and exchange control and other applicable laws and regulations.

Each of the initial purchasers has represented, warranted and agreed that it will not offer, sell or deliver any notes or distribute copies of this offering memorandum or any other document relating to the notes in the Republic of Italy except:

(a) to “Professional Investors,” as defined in Article 31.2 of CONSOB Regulation No. 11522 of July 2, 1998, as amended (“Regulation No. 11522”), pursuant to Article 30.2 and 100 of Legislative Decree No. 58 of February 24, 1998, as amended (“Decree No. 58”), or in any other circumstances where an expressed exemption to comply with the solicitation restrictions provided by Decree No. 58 or Regulation No. 11971 of May 14, 1999, as amended, applies, provided, however, that any such offer, sale or delivery of the notes or distribution of copies of this offering memorandum or any other document relating to the notes in the Republic of Italy must be:

(i) made by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative Decree No. 385 of September 1, 1993, as amended (“Decree No. 385”), Decree No. 58, CONSOB Regulation No. 11522 and any other applicable laws and regulations;

(ii) in compliance with Article 129 of Decree No. 385 and the implementing instructions of the Bank of Italy (Istruzioni di Vigilanza della Banca d’Italia), pursuant to which the issue, offer, sale, trading or placement of securities in Italy is subject to a prior notification to the Bank of Italy, unless an exemption, depending, inter alia, on the aggregate amount and the characteristics of the notes issued, offered, sold, traded or placed in the Republic of Italy, applies; and

(iii) in compliance with any other applicable notification requirement or limitation that may be imposed by CONSOB or the Bank of Italy.

Hong Kong

The notes may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), and no advertisement, invitation or document relating to the notes may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Japan

The notes have not been and will not be registered under the Securities and Exchange Law of Japan (the Securities and Exchange Law) and each initial purchaser has represented and agreed that it will not offer or sell any notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

118 Singapore

This offering memorandum has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this offering memorandum and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the notes may not be circulated or distributed, nor may the notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where the notes are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the notes under Section 275 except (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA, (2) where no consideration is given for the transfer or (3) by operation of law.

Relationships with Initial Purchasers

In the ordinary course of business, the initial purchasers and their affiliates have provided, and may in the future provide, investment banking, commercial banking, cash management, foreign exchange or other financial services to us and our affiliates for which they have received customary compensation and may receive compensation in the future. Certain affiliates of the initial purchasers are lenders under certain of our debt instruments and counterparties under certain of our derivative financial transactions.

Settlement

Delivery of the notes is expected on or about December 16, 2009, which will be the fifth business day following the date of pricing of the notes. Under Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes on the date of pricing or the next succeeding business day will be required, by virtue of the fact that the notes initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the notes who wish to trade the notes on the pricing date or the next succeeding business day should consult their own advisor.

119 ENFORCEMENT OF CIVIL LIABILITIES

We and certain of our subsidiary guarantors are companies organized under the laws of Mexico. Almost all of our directors and executive officers, and the directors and executive officers of most of our subsidiary guarantors named in this offering memorandum, reside outside the United States. A majority of our assets and the assets of most of our subsidiary guarantors are located, and a majority of our revenues and the revenues of most of our subsidiary guarantors are derived from sources, outside the United States. As a result, it may not be possible for investors to effect service of process outside Mexico on us or our directors or executive officers or on those subsidiary guarantors, or to enforce against such parties judgments of courts located outside Mexico predicated on civil liabilities under the laws of jurisdictions other than Mexico, including judgments predicated on the civil liability provisions of the U.S. federal securities laws or other laws of the United States. We have appointed CT Corporation System, New York, New York, as our agent to receive service of process with respect to any action brought against us in any federal or state court in the State of New York arising from the offering and issuance of the notes.

No treaty exists between the United States and Mexico for the reciprocal enforcement of judgments issued in the other country. Generally, Mexican courts would enforce final judgments rendered in the United States if certain requirements were met, including the review in Mexico of the U.S. judgment to ascertain compliance with certain basic principles of due process and the non-violation of Mexican law or public policy, provided that U.S. courts would grant reciprocal treatment to Mexican judgments. Additionally, there is doubt as to the enforceability, in original actions in Mexican courts, of liabilities predicated, in whole or in part, on U.S. federal securities laws and as to the enforceability in Mexican courts of judgments of U.S. courts obtained in actions predicated on the civil liability provisions of U.S. federal securities laws.

In the event that proceedings are brought in Mexico seeking to enforce our or our subsidiary guarantors’ obligations in respect of the notes, we would not be required to discharge such obligations in a currency other than the Mexican peso. Pursuant to Mexican law, an obligation in a currency other than the Mexican peso, which is payable in Mexico, may be satisfied in Mexican currency at the rate of exchange in effect on the date on which payment is made. Such rate of exchange is currently determined by Banco de México each business day in Mexico and published the following business banking day in the Official Gazette of Mexico.

Upon declaration of insolvency (concurso mercantil), payment obligations under our outstanding debt (i) would be converted into pesos and then from pesos into UDIs and would not be adjusted to take into account any devaluation of the peso relative to the U.S. dollar occurring after such conversion, (ii) would be satisfied at the time claims of all our creditors are satisfied, (iii) would be subject to the outcome of, and priorities recognized in, the relevant proceedings, (iv) would cease to accrue interest from the date a concurso mercantil is declared and (v) would be subject to certain statutory preferences, including tax, social security and labor claims, and claims of secured creditors. UDIs are instruments denominated in pesos that automatically adjust the principal amount of an obligation to the inflation rate officially recognized by Banco de México.

120 LEGAL MATTERS The validity of the notes will be passed upon for us by Weil, Gotshal & Manges LLP, New York, New York. The validity of the notes will be passed upon for the initial purchasers by Simpson Thacher & Bartlett LLP, New York, New York, and by Mijares, Angoitia, Cortés y Fuentes, S.C., Mexico. INDEPENDENT ACCOUNTANTS The consolidated financial statements as of December 31, 2007 and 2008 and for each of the three years in the period ended December 31, 2008 included in this offering memorandum have been audited by PricewaterhouseCoopers, S.C., independent accountants, as stated in their report appearing herein. LISTING AND GENERAL INFORMATION 1. We were incorporated on December 18, 1971 pursuant to public instrument number 18,238, granted before Mr. Eleazar Gutierrez Chavarria, Notary Public No. 1 of Mexico, Distrito Federal, Mexico. 2. The issuance of the notes was authorized by resolution of our board of directors duly adopted on November 20, 2009. The obligations of the subsidiary guarantors under their respective guarantees were authorized by resolutions of their respective boards of directors duly adopted, in the case of Sigma Alimentos Centro, S.A. de C.V., Sigma Alimentos Lácteos, S.A. de C.V., Sigma Alimentos Comercial, S.A. de C.V., Sigma Alimentos Noreste, S.A. de C.V., on November 20, 2009, in the case of Lácteos Finos Mexicanos, S.A. de C.V., Alimentos Finos de Occidente, S.A. de C.V., Distribuidora y Comercializadora de Lácteos del Norte, S.A. de C.V., Sigma Alimentos Importaciones, S.A. de C.V., Sigma Alimentos Congelados, S.A. de C.V., Grupo Chen, S. de R. L. de C.V., Comercializadora de Embutidos ICO, S.A. de C.V., on November 23, 2009 and in the case of Carnes Selectas Tangamanga, S.A. de C.V., Sigma Alimentos Corporativo, S.A. de C.V., Empacadora de Embutidos del Centro, S.A. de C.V., Comercializadora Láctica, S.A. de C.V., on November 24, 2009 and Sigma Alimentos Exterior, S.L., Sigma Foods, Inc., Sigma Processed Meats, Inc and Mexican Cheese Producers, Inc., on November 25, 2009. 3. The addresses of the subsidiary guarantors are as follows: Sigma Alimentos Centro, S.A. de C.V., Ernesto Pugibet # 2 Xalostoc, Estado de México 55340; Sigma Alimentos Lácteos, S.A. de C.V., Camino a Fertimex #666 Predio San Agustín Carretera Unión San Antonio de León, Lagos de Moreno, Jalisco 47480; Sigma Alimentos Comercial, S.A. de C.V., Avenida Gomez Morin 1111, Colonia Carrizalejo, San Pedro Garza Garcia, Nuevo León, México; Sigma Alimentos Noreste, S.A. de C.V., J. Cantu Leal 1320, Monterrey, Nuevo León, México 64800; Lácteos Finos Mexicanos, S.A. de C.V., Parque Industrial Guadalajara Ave. Exportación #205 El Salto, Jalisco 44690, México; Alimentos Finos de Occidente, S.A. de C.V., Avenida 8 de Julio # 2714, Guadalajara, Jalisco, México 6900; Distribuidora y Comercializadora de Lácteos del Norte, S.A. de C.V., Avenida Gomez Morin 1111, Colonia Carrizalejo, San Pedro Garza Garcia, Nuevo León, México; Sigma Alimentos Importaciones, S.A. de C.V., Avenida Gomez Morin 1111, Colonia Carrizalejo, San Pedro Garza Garcia, Nuevo León, México; Sigma Alimentos Congelados, S.A. de C.V., Avenida Gomez Morin 1111, Colonia Carrizalejo, San Pedro Garza Garcia, Nuevo León, México; Grupo Chen, S. de R. L. de C.V., Monterrey, Nuevo León, México; Comercializadora de Embutidos ICO, S.A. de C.V., Ave. Guinea #110 Col. Tetlan, Guadalajara, Jalisco, México 44820; Comercializadora Láctica, S.A. de C.V., Avenida Gomez Morin 1111, Colonia Carrizalejo, San Pedro Garza Garcia, Nuevo León, México; Carnes Selectas Tangamanga, S.A. de C.V., Ave. Industria # 805-1, Col. Valle Dorado, 78390 San Luis Potosi, México; Sigma Alimentos Corporativo, S.A. de C.V. Avenida Gomez Morin 1111, Colonia Carrizalejo, San Pedro Garza Garcia, Nuevo León, México; Empacadora de Embutidos del Centro, S.A. de C.V., Calle de Bravo #3 Col. Parque Industrial Izcalli Ciudad Nezahualcóyotl, Estado de México, México 57819; Sigma Alimentos Exterior, S.L., C/ Caléndula 95-Edificio M, Oficina 5, MINIPARC II, 28109 El Soto de la Moraleja, Alcobendas-Madrid, España; Mexican Cheese Producers, Inc., 1625 10th Street Suite 205, Monroe, WI 53566; and in the case of Sigma Foods, Inc. and Sigma Processed Meats, Inc., 110 Cypress Station Drive, Suite 200, Houston, TX 77090 c/o Sigma Foods, Inc. 4. While the results of any disputes cannot be predicted with certainty, we do not believe that there are any pending or threatened actions, suits or proceedings against or affecting us or any of our subsidiary guarantors which, if determined adversely to us, would in our view, individually or in the aggregate, materially harm our business, financing condition or results of operations.

121 5. For so long as any of the notes remain outstanding, copies of the indenture, the notes, the guarantees and our future annual audited consolidated financial statements and quarterly unaudited condensed financial statements will be available and may be inspected during normal business hours at our executive offices, at the offices of the trustee or (for so long as the notes are listed on the Official List of the Luxembourg Stock Exchange) at the offices of the Luxembourg paying agent for the notes.

For so long as any of the notes remain outstanding, copies of our and the subsidiary guarantors’ current bylaws or estatutos sociales, as the case may be (including any amendments or modifications thereof), will be available and may be inspected during normal business hours at our executive offices or (for so long as the notes are listed on the Official List of the Luxembourg Stock Exchange) at the offices of the Luxembourg paying agent for the notes.

6. There is no expiration date for validity of claims to payment of interest and principal provided for in the indenture.

7. The notes have been accepted for clearance and settlement through the facilities of DTC and its direct and indirect participants (including Clearstream and Euroclear). The ISIN number and CUSIP number for the global notes sold pursuant to Rule 144A are US82655AAA16 and 82655A AA1, respectively. The common code for these notes is 047432693. The ISIN number and the CUSIP number for the global notes sold pursuant to Regulation S are USP8674JAB54 and P8674J AB5, respectively. The common code for these notes is 047414288.

122 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page Independent Accountants’ Report ...... F-2 Consolidated Balance Sheets at December 31, 2007 and 2008 ...... F-3 Statements of Consolidated Income for the years ended December 31, 2006, 2007 and 2008 ...... F-4 Statements of Consolidated Stockholders’ Equity at December 31, 2006, 2007 and 2008 ...... F-5 Statements of Consolidated Cash Flows for the year ended December 31, 2008 ...... F-6 Statements of Consolidated Changes in the Financial Situation for the year ended December 31, 2006 and 2007 ...... F-7 Notes to Consolidated Financial Statements ...... F-8 Unaudited Interim Condensed Consolidated Balance Sheets at December 31, 2008 and September 30, 2009 ...... F-33 Unaudited Interim Condensed Consolidated Statements of Income for the nine months ended September 30, 2008 and 2009 ...... F-34 Statements of Unaudited Interim Condensed Consolidated Cash Flows for the nine months ended September 30, 2008 and 2009 ...... F-35 Notes to Unaudited Interim Condensed Consolidated Financial Statements ...... F-36

F-1 Independent Accountants’ Report

To the Stockholders of Sigma Alimentos, S.A. de C.V.

Monterrey, N. L., November 30, 2009

We have audited the accompanying consolidated balance sheets of Sigma Alimentos, S. A. de C.V. and subsidiaries (the “Company”), as of December 31, 2008 and 2007, and the related consolidated statements of income and of changes in stockholders’ equity for each of the three years in the period ended December 31, 2008. We have also audited the consolidated statement of cash flows for the year ended December 31, 2008 and the consolidated statements of changes in financial position for the years ended December 31, 2007 and 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards 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 misstatements and that they were 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.

As described in Note 3, the following Mexican Financial Reporting Standards became effective on January 1, 2008: (a) B-10 “Effects of inflation”; (b) B-2 “Statement of cash flows”; (c) B-15 “Translation of foreign currency”; (d) D-3 “Employee benefits” and (e) D-4 “Income tax”. The related characteristics and prospective adoption effects are described in such Note.

In our opinion, the aforementioned consolidated financial statements present fairly, in all material respects, the consolidated financial position of Sigma Alimentos, S. A. de C. V. and subsidiaries, as of December 31, 2008 and 2007, and the consolidated results of their operations and changes in their stockholders’ equity for each of the three years in the period ended December 31, 2008, their consolidated cash flows for the year ended December 31, 2008 and the changes in their consolidated financial position for the years ended December 31, 2007 and 2006, in conformity with Mexican Financial Reporting Standards.

PricewaterhouseCoopers, S. C.

Alejandro Moreno Anaya Assurance Partner

F-2 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B., de C. V.) CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2008 AND 2007 Thousands of Mexican Pesos (see Note 3)

2008 2007 2008 2007 Assets Liabilities and Stockholders’ Equity CURRENT ASSETS: CURRENT LIABILITIES: Cash and cash equivalents Ps 2,288,256 Ps 707,989 Current portion of long-term debt (Note 8) Ps 193,842 Ps 1,201,542 Restricted cash (Note 9) 75,114 Unsecured bank loans (Note 8) 3,488,348 216,225 Trade accounts receivable, less allowance for doubtful Notes payable 270,474 accounts of Ps111,483 in 2008 and Ps 44,771 in 2007 2,174,184 1,484,923 Suppliers 2,484,976 2,211,545 Other accounts receivable 1,176,728 1,084,649 Accounts payable to affiliated companies (Note 15) 52,146 41,789 Accounts receivable from affiliated companies (Note 15) 162,034 Other accounts payable and accrued expenses 812,683 436,391 Inventories (Note 4) 2,102,450 1,987,158 Derivative financial instruments (Note 9) 24,351

Total current assets 7,978,766 5,264,719 Total current liabilities 7,302,469 4,131,843 LONG-TERM LIABILITIES: Long-term debt (Note 8) 5,319,417 3,777,917 F-3 Derivative financial instruments (Note 9) 75,187 Notes payable 51,528 Deferred income tax (Note 14) 571,139 697,754 Estimated liability for labor benefits (Note 10) 124,552 298,970 PROPERTY, PLANT AND EQUIPMENT (Note 5) 8,530,862 8,081,011 Derivative financial instruments (Note 9) 802,440 59,679

Total long-term liabilities 6,869,076 4,834,320

DEFERRED CHARGES (Note 6) 1,389,806 1,105,350 Total liabilities 14,171,545 8,966,163

GOODWILL (Note 3. f) 1,656,200 1,336,653 STOCKHOLDERS’ EQUITY (Note 11): Capital stock 1,200,333 1,200,333 INTANGIBLE ASSET RELATED TO Premium on issuance of capital stock 1,303,657 1,303,657

EMPLOYEE BENEFITS (Note 10) 144,217 Contributed capital 2,503,990 2,503,990 Earned surplus 3,381,055 4,243,096

DEFERRED INCOME TAX (Note 14) 605,568 23,073 Majority stockholder’s equity 5,885,045 6,747,086 Minority interest 179,799 241,774

Total stockholders’ equity 6,064,844 6,988,860

Total assets Ps 20,236,389 Ps 15,955,023 Total liabilities and stockholders’ equity Ps 20,236,389 Ps 15,955,023

The accompanying notes are an integral part of these consolidated financial statements. SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (see Note 3)

2008 2007 2006 Net sales Ps 26,100,558 Ps 23,081,626 Ps 20,725,642 Cost of sales (16,436,846) (14,098,462) (12,282,558) Gross margin 9,663,712 8,983,164 8,443,084 Operating expenses (7,619,178) (7,025,342) (6,287,245) Operating income 2,044,534 1,957,822 2,155,839 Comprehensive financing expense, net (Note 12) (2,825,364) (163,418) (273,900) Other expense, net (Note 13) (271,292) (316,824) (167,581) (Loss) income before income tax (1,052,122) 1,477,580 1,714,358 Income tax (Note 14) 193,932 (406,921) (436,131) Net (loss) income (Ps 858,190) Ps 1,070,659 Ps 1,278,227

Net income (loss) corresponding to minority stockholder’s equity Ps 14,654 Ps (2,024) Ps 28,391

Net (loss) income corresponding to majority stockholder’s equity (Ps 872,844) Ps 1,072,683 Ps 1,249,836

(Loss) earnings per share (Note 3. r.) (Ps 0.66) Ps 0.83 Ps 4.59

Weighted average number of outstanding shares 1,290,654,555 1,290,654,555 272,325,508

The accompanying notes are an integral part of these consolidated financial statements.

F-4 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (see Note 3)

Contributed capital Earned surplus Deficit on Premium on restatement from Cumulative Derivative Total majority Minority Capital issuance of Retained holding non translation financial stockholder’s stockholder’s Total stock capital stock earnings monetary assets adjustment instruments equity equity stockholder’s Balances at December 31, 2005 Ps 1,176,148 Ps 1,303,657 Ps 4,281,326 (Ps 1,798,174) (Ps 59,390) (Ps 142,106) Ps 4,761,461 Ps 709,346 Ps 5,470,807 Changes in 2006: Net income for the year 1,249,836 1,249,836 28,391 1,278,227 Cumulative translation adjustment 22,684 22,684 22,684 Loss from holding nonmonetary assets (461,384) (461,384) (251) (461,635) Effect of valuation changes in hedging instruments 13,871 13,871 13,871

Comprehensive income 1,249,836 (461,384) 22,684 13,871 825,007 28,140 853,147 Increase in capital stock 24,185 24,185 24,185 Dividends declared (50,192) (50,192) (50,192) Changes in minority interest 648,854 648,854 (648,854)

F-5 Balances at December 31, 2006 1,200,333 1,303,657 6,129,824 (2,259,558) (36,706) (128,235) 6,209,315 88,632 6,297,947 Changes in 2007: Net income for the year 1,072,683 1,072,683 (2,024) 1,070,659 Cumulative translation adjustment 68,271 68,271 68,271 (Loss) gain from holding nonmonetary assets (287,581) (287,581) 155,166 (132,415) Effect of valuation changes in hedging instruments 82,859 82,859 82,859

Comprehensive income 1,072,683 (287,581) 68,271 82,859 936,232 153,142 1,089,374 Dividends declared (398,461) (398,461) (398,461)

Balances at December 31, 2007 1,200,333 1,303,657 6,804,046 (2,547,139) 31,565 (45,376) 6,747,086 241,774 6,988,860 Changes in 2008: Net loss for the year (872,844) (872,844) 14,654 (858,190) Cumulative translation adjustment 495,394 495,394 495,394 Loss from holding nonmonetary assets (105,584) (105,584) (76,629) (182,213) Effect of valuation changes in hedging instruments 6,146 6,146 6,146

Comprehensive (loss) income (872,844) 389,810 6,146 (476,888) (61,975) (538,863)

Dividends declared (385,153) (385,153) (385,153) Reclassification of the deficit on restatement from holding nonmonetary assets to retained earnings (Note 11) (2,547,139) 2,547,139

Balances at December 31, 2008 (Note 11) Ps 1,200,333 Ps 1,303,657 Ps 2,998,910 Ps - Ps 421,375 (Ps 39,230) Ps 5,885,045 Ps 179,799 Ps 6,064,844

The accompanying notes are an integral part of these consolidated financial statements. SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2008 Thousands of Mexican Pesos (see Note 3)

2008 Operations Loss before income tax (Ps 1,052,122) Items relating to investing activities: Depreciation and amortization 827,577 Employee benefits cost 22,109 Loss on sale of property, plant and equipment 9,904 Loss on sale of containers and platforms 41,973 Effect of derivative financial instruments 2,351,913 Exchange gain (7,485) Interest income (83,928) Other, net 28,908 Dividends received (107) 2,138,742 Items relating to financing activities:

Interest expense 604,055 Increase in accounts receivable (781,340) Affiliated companies, net (151,677) Increase in inventories (285,395) Decrease in suppliers (17,779) Income tax paid (487,478) Increase in other accounts payable and accrued expenses 317,149

Net resources provided by operating activities 1,336,277 Investment Net assets of subsidiaries acquired, less cash (319,546) Interests received 80,741 Charged dividends 107 Acquisition of property, plant and equipment (764,055) Payments derived from derivative financial instruments (1,702,546) Deferred charges (271,673) Net resources used in investing activities (2,976,972) Cash deficit (1,640,695) Financing Short-term debt and bank loans 2,264,423 Long-term loans and debt certificates 3,408,501 Payment of loan (1,867,000) Interest paid (530,238) Notes payable 322,001 Dividends paid (385,153) Net resources provided by financing activities 3,212,534 Increase in net cash and temporary investments 1,571,839 Adjustments to cash flow as a result of changes in exchange rates 83,542 Cash, cash equivalents and restricted cash at beginning of year 707,989 Composed of: Cash and cash equivalents 2,288,256 Restricted cash 75,114 Cash, cash equivalents and restricted cash at end of year Ps 2,363,370

The accompanying notes are an integral part of these consolidated financial statements.

F-6 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 Thousands of Mexican Pesos (see Nota 3)

2007 2006 Operations Consolidated net income Ps 1,070,659 Ps 1,278,227 Items not affecting resources: Depreciation and amortization 715,479 577,286 Employee benefit costs (64,858) (58,010) Deferred income tax 101,299 53,242 Other, net (65,723) 13,811

1,756,856 1,864,556 Changes in working capital other than financing: Trade accounts receivable 206,109 (314,909) Inventories (424,317) (64,606) Suppliers 355,571 102,091 Affiliated companies, net 35,215 (20,202) Other accounts receivable and payable, net (392,338) 248,534

(219,760) (49,092)

Resources provided by operations 1,537,096 1,815,464

Investment Property, plant and equipment, net (1,722,449) (1,375,851) Deferred charges (638,040) (832,907) Other assets, net 62,744 (69,698)

Resources used in investment activities (2,297,745) (2,278,456)

Financing Short-term loans 2,490,044 759,931 Long-term loans 1,637,282 66,634 Repayment of loans (3,053,969) (1,794,470)

Increase (decrease) in bank financing, net 1,073,357 (967,905) Dividends declared (398,461) (50,192) Increase in capital — 24,185 Changes in minority interest — (465,982)

Resources provided by (used in) financing activities 674,896 (1,459,894)

Decrease in cash and cash equivalents (85,753) (1,922,886) Cash and cash equivalents at beginning of year 793,742 2,716,628

Cash and cash equivalents at end of year Ps 707,989 Ps 793,742

The accompanying notes are an integral part of these consolidated financial statements.

F-7 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

1. ACTIVITIES OF SIGMA ALIMENTOS COMPANIES

Sigma Alimentos, S. A. de C. V. (“SIGMA” or the “Company”), a subsidiary of Alfa, S. A. B. de C. V. (“ALFA”), is a company engaged in the production, commercialization and distribution of processed meat, dairy products, and other refrigerated and frozen foods. Its activities are carried out through various subsidiary companies.

2. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS a) The Company is in the process of refinancing certain of its debt through the issuance of a cross border senior notes offering. The notes may not be offered or sold within the United States of America (“U.S.”) or to, or for the account or benefit of, U.S. persons, except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the U.S. Securities Act of 1933 and to certain persons outside the U.S. in reliance on Regulation S under such Securities Act. As a result of this transaction, the Company has made certain reclassifications and expanded its disclosures in the footnotes previously published in the Mexican market to be consistent with what is customary for international offerings. These reclassifications and additional disclosures do not have any impact on the financial position or results of operations of the Company. b) Loss on derivative financial instruments

From September 2008 onwards, Mexico experienced a depreciation of the peso against the US dollar, which led SIGMA to implement various strategies that substantially modified its derivative position related to exchange rates and natural gas prices by canceling or neutralizing its derivative positions. For the year ended December 31, 2008, SIGMA recognized a loss on valuation of derivative financial instruments amounting Ps2,351,913. In addition, this depreciation gave rise to exchange losses in view of the net dollar debt position maintained by the Company. c) Acquisition of Braedt, S. A.

In July 2008, the Company entered into an agreement to acquire the outstanding shares of Braedt, S. A., a Peruvian company engaged in the production and commercialization of cold cuts. This acquisition involved a plant located in the city of Lima. SIGMA consolidated the financial information of this company from August 2008.

The excess of the purchase price over the fair value of the net assets acquired amounted to Ps197,782. Condensed financial information at the date of acquisition, in thousands of Mexican pesos, is as follows:

(Unaudited) July 1, 2008 Balance sheet: Total assets Ps 203,057 Total liabilities 150,511 Stockholders’ equity Ps 52,546

F-8 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) d) Acquisition of Longmont brand

In addition, on October 30, 2008, the Company acquired the “Longmont” brand from Butterball, LLC, a large producer of turkey products in the United States. The products of the “Longmont” brand are marketed principally in the northwest of Mexico where this brand has a high recognition and a leadership position, particularly in the states of Baja California, Sonora and Sinaloa. The acquisition of this brand is presented as part of the deferred charges caption. e) Acquisition of Mexican Cheese Producers, Inc.

In July 2007, the Company and Sigma Exterior, S. A. entered into an agreement to acquire the outstanding shares of Mexican Cheese Producers, Inc., a U.S. company engaged in the production of cheese and other dairy products. This acquisition involved a plant located in Darlington, Wisconsin, United States, and distribution centers in Chicago, Houston and Atlanta, from which the products are marketed in various areas of the U.S.A. The annual production capacity is approximately 10,000 tons. SIGMA consolidated the financial information of Mexican Cheese Producers beginning August 2007.

The excess of the purchase price over the fair value of the net assets acquired amounted to Ps375,264. Condensed financial information at the date of acquisition, in thousands of Mexican pesos, is as follows:

(Unaudited) July 13, 2007 Balance sheet: Total assets Ps 221,383 Total liabilities 73,980 Stockholders’ equity Ps 147,403 f) Acquisition of Industrias Alimentarias del Sureste, S. A. de C. V.

In August 2007, SIGMA acquired Industrias Alimentarias del Sureste, S. A. de C. V., a company mainly engaged in the production of cold cuts in the southeast of Mexico.

The excess of the purchase price over the fair value of the net assets acquired amounted to Ps45,445. Condensed financial information at the date of acquisition, in thousands of Mexican pesos, is as follows:

(Unaudited) August 29, 2007 Balance sheet: Total assets Ps 69,900 Total liabilities 59,193 Stockholders’ equity Ps 10,707

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

On November 30, 2009, the Company’s officers authorized the issuance of these consolidated financial statements and accompanying notes.

F-9 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

The accompanying consolidated financial statements at December 31, 2008 and 2007 have been prepared in accordance with Mexican Financial Reporting Standards (MFRS).

Beginning on January 1, 2008, the following MFRS issued by the Mexican board of research and development of financial reporting standards (CINIF by its Spanish acronym), have been adopted by the Company for the preparation of these financial statements:

In accordance with the new provisions of the MFRS B-10, the Mexican economy is not an inflationary environment in 2008, since there has been a cumulative inflation below 26% in the last three years (the established limit to define an economy as inflationary). Therefore, as of January 1, 2008, the Company is required to discontinue the recognition of the inflation effects in the financial information of the Mexican subsidiaries. Consequently, the figures of the financial statements at December 31, 2008 are stated in adjusted nominal Mexican pesos as they include cumulative inflation effects on the financial information recognized up to December 31, 2007.

The yearly inflation percentages are indicated as follows:

For the year ended December 31, 2007 2008 Year inflation ...... 3.76% 6.53% Cumulative inflation in the last three years ...... 11.56% 15.01%

On January 1, 2008, MFRS B-2 “Statement of cash flows” became effective; therefore, management included as part of the basic financial statements the statement of cash flows for the year ended December 31, 2008. This statement reports the cash inflows and cash outflows of the business, representing the resources provided or used during the year, determined by the indirect method; Mexican FRS B-2 must be applied prospectively. Therefore, the statement of changes in financial position for the years ended December 31, 2007 and 2006, are presented separately and in accordance with Statement B-12, which was in effect at that date.

On January 1, 2008 the standards contained in MFRS D-3 “Employee benefits” became effective. These standards require, among other things, a reduction in the amortization period of the items relating to prior service cost, the incorporation of the effects of salary growth in the calculation of the defined benefit obligation, as well as the elimination of the additional liability and corresponding intangible asset, and if applicable, of the amount recorded in stockholders’ equity.

On January 1, 2007, SIGMA and its subsidiaries adopted the standards contained in MFRS B-3, which stipulates a new structure for the statement of income, eliminating the presentation of extraordinary and special items and classifying income and expense as ordinary or non-ordinary, and modifies the general presentation and disclosure criteria for this statement. As a result of applying this new standard, management adopted the criteria of presenting the statement of income based on function, since grouping costs and expenses on this basis allows the various levels of income to be presented. For a better analysis of the income statement and to adhere to the common disclosure practice of the Company’s industry, the operating income was included as a separate line item in the income statement. The adoption of the standard required reclassifying the employees’ profit sharing to other income, in the amount of Ps 90,851 in December 2006.

F-10 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

Following is a summary of the most significant accounting policies followed by SIGMA and its subsidiaries, which have been applied on a consistent basis in the preparation of their financial information for the years presented, unless otherwise indicated: a. Basis for presentation and disclosure

The financial statements of foreign subsidiaries are prepared in accordance with MFRS. Until December 31, 2007, the financial statements of the foreign subsidiaries classified as foreign entities included in the consolidation were restated by using the Consumer Price Index (“CPI”) of the country of origin, and were subsequently translated by applying the exchange rate prevailing at the end of the period. From January 1, 2008 onwards, foreign operations whose functional currency is the same as the currency in which transactions are recorded in a non-inflationary economy 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; and 2) historical exchange rates for stockholders’ equity, revenues, costs and expenses. If transactions are recorded in a inflationary environment: 1) restate their financial statements in the currency in purchasing power as of the date of the balance sheet, using the price index of their country, and 2) translate those amounts to Mexican pesos using the closing exchange rate in effect at the balance sheet date for all items. Translation adjustment is recorded in the comprehensive income (loss) in stockholders’ equity under the caption “Cumulative translation adjustment”.

The preparation of financial statements in conformity with MFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-11 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) b. Bases for consolidation The accompanying consolidated financial statements include those of the Company and its subsidiaries, in which it direct or indirectly holds more than 50% of their shares and in which exercise it controls operating and financial activities. All significant balances and transactions among the consolidated companies have been eliminated. As of December 31, 2008, the principal subsidiaries of SIGMA and their ownership interest were:

Country (1) Ownership (%) Alimentos Finos de Occidente, S. A. de C. V. 100 Bonanza Industrial, S. A. de C. V. 100 Braedt, S. A. (Note 2.c.) Peru 100 Carnes Selectas Tangamanga, S. A. de C. V. 100 Comercial Hacienda de Cerdos, S. A. Dominican Republic 100 Comercializadora de Embutidos ICO, S. A. de C. V. 100 Distribuidora y Comercializadora de Lácteos del Norte, S. A. de C. V. 100 Empacadora de Embutidos del Centro, S. A. de C. V. 100 Grupo Chen, S. de R. L. de C. V. and subsidiaries 100 Industrias Alimentarias del Sureste, S. A. de C. V. (Note 2.e.) 100 Lácteos Finos Holdings New Zealand Limited, S. A. de C. V. 100 Mexican Cheese Producers, Inc. (Note 2.d.) United States 100 Productos Cárnicos, S. A. de C. V. El Salvador 100 Productos de Importación, S. A. de C. V. Honduras 100 Servilac, S. A. de C. V. 100 Sigma Alimentos Centro, S. A. de C. V. 100 Sigma Alimentos Costa Rica, S. A. Costa Rica 100 Sigma Alimentos Comercial, S. A. de C. V. 100 Sigma Alimentos Congelados, S. A. de C. V. 100 Sigma Alimentos Corporativo, S. A. de C. V. 100 Sigma Alimentos Dominicana, S. A. Dominican Republic 100 Sigma Alimentos Importaciones, S. A. de C. V. 100 Sigma Alimentos Lácteos, S. A. de C. V. 100 Sigma Alimentos Noreste, S. A. de C. V. 100 Sigma Alimentos Nicaragua, S. A. Nicaragua 100 Sigma Alimentos El Salvador, S. A. El Salvador 100 Sigma Alimentos Guatemala, S. A. Guatemala 100 Sigma Alimentos International, Inc. United States 100 Sigma Alimentos Prom, S. A de C. V. 100 Sigma Foods, Inc. United States 100 Sigma Processed Meats, Inc. United States 100 (1) Companies incorporated in Mexico, except as mentioned. c. Cash and cash equivalents The Company considers all highly liquid temporary cash investments with original maturities of three months or less, consisting primary of short-term deposits and money markets accounts, as cash equivalents investments.

F-12 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) d. Inventories and cost of sales

In 2008, inventories are stated at their nominal cost, determined by the average cost method. Values thus determined do not exceed market value. Likewise, the cost of sales is determined based on the nominal purchase prices and production costs of the inventories produced and sold during 2008, plus the restated value (replacement cost) of final 2007 inventories sold during the year. Consequently, at December 31, 2008, the cost of sales was stated at the adjusted nominal cost.

At December 31, 2007, inventories and related cost of sales were originally recorded at average cost and were subsequently restated at the estimated replacement cost, at the latest purchase prices and production costs of the year. Values thus determined do not exceed market value.

The allowance for obsolete and/or slow-moving inventories is determined in accordance with studies carried out by the Company’s management and considered sufficient to absorb any losses of this type. e. Property, plant and equipment and depreciation

From January 1, 2008 onwards, new acquisitions of property, plant and equipment are stated at nominal cost; until December 31, 2007, property, plant and equipment and related accumulated depreciation were stated at cost restated by applying factors derived from the National Consumer Price Index (“NCPI”) to the historical cost, except for machinery and equipment of foreign origin, which were stated at cost restated by applying factors derived from the CPI of the country of origin to the corresponding foreign currency amounts and translating those amounts to pesos at the exchange rate prevailing at the end of 2007. Consequently, at December 31, 2008, property, plant and equipment are stated at adjusted nominal cost.

MFRS permits the capitalization of comprehensive financing result, including net interest costs, gains or losses from monetary position (if applicable) and foreign exchange gains or losses, on qualifying assets under construction.

Depreciation is calculated by the straight-line method based on the estimated useful lives of the assets as determined by the Company.

Property, plant and equipment are subject to recognition of impairment, as well as the reversal of such impairment, when appropriate. As of December 31, 2008 and 2007, property, plant and equipment show no signs of impairment. f. Business acquisitions and goodwill

SIGMA has adopted the following accounting guidelines: (a) all acquisitions are accounted for as purchases when Sigma acquires control or has significant influence; (b) the purchase price of assets acquired and related liabilities is allocated based on their fair value at the date of acquisition; (c) goodwill is not amortized and is subject to periodic testing for impairment; and (d) intangible assets acquired are subject to identification, valuation and recognition.

Goodwill represents the excess in the cost paid for the shares over the fair value of identifiable assets and liabilities acquired. At December 31, 2007, goodwill is expressed at restated values, determined by applying NCPI factors to original values, net of the corresponding accrued amortization and/or impairment losses.

F-13 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

Goodwill is not amortized and its value is subject to annual tests for impairment. g. Deferred charges

Intangible assets are recognized when the following characteristics exist: a) they can be identified, b) they provide future economic benefits, and c) when the company has control over such benefits.

At December 31, 2008, the intangible assets acquired or developed are expressed as follows: i) acquisitions or developments subsequent to January 1, 2008, at their adjusted nominal cost, and ii) acquisitions or developments up to December 31, 2007 at their restated value determined through the application of their acquisition or development costs, factors derived from the NCPI up to December 31, 2007.

Intangible assets having definite useful lives are amortized by applying the straight-line method based on the remaining useful live of the related assets, comprising principally costs relative to development and implementation of integral computer systems, patents and brands. Intangible assets having indefinite useful lives are not amortized.

Preoperating costs are recorded directly in results of the period in which they are incurred. Preoperating expenses incurred and capitalized up to December 31, 2002 are amortized using the straight-line method over a ten year period.

Deferred charges are subject to recognition of impairment, as well as to its reversal, when so required. At December 31, 2007 and 2008, these assets show no signs of impairment. h. Long lived assets impairment

The Company performs impairment tests for its property, plant and equipment and intangible assets with definite lives when certain events or circumstances suggest that the carrying value of these assets might not be recovered.

For goodwill and indefinite lives intangible assets, the Company reviews their carrying amounts annually or earlier when an impairment indicator suggests that such amounts might not be recoverable, considering the greater of the present value of future net cash flows using an appropriate discount rate, or the net sale price upon disposal.

Impairment is recorded when the carrying amounts exceed the greater of the present value of future net cash flows using an appropriate discount rate, or the net sale price upon disposal. i. Transactions in foreign currency and exchange differences

Monetary assets and liabilities in foreign currencies, mainly U.S. dollars (US$), are stated in Mexican currency at the rates of exchange in effect at the balance-sheet date. Exchange differences arising from changes in exchange rates between the transaction and settlement dates or the balance-sheet date are charged or credited to comprehensive financing income (expense).

F-14 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) j. Estimated liability for labor benefits

The employee retirement plans (pensions, health-care expenses and seniority premiums), both formal and informal, as well as the benefits at termination of employment for causes other than from restructuring, are recognized as a cost in the years in which the services are rendered in accordance with actuarial studies made by independent actuaries.

Actuarial gains and losses arising from retirement benefits in excess of the greater of 10% of the value of defined benefit obligation and 10% of the value of plan assets are amortized over the expected average remaining service lives of the employees expected to receive the benefits.

From January 1, 2008 onwards the transition liability is amortized over the lesser of the period pending to be amortized or five years. Until December 31, 2007, the items pending to be amortized, the actuarial gains and losses and transition liability captions subject to amortization were amortized on the basis of the average estimated service lives of the employees.

Furthermore, the elimination of the additional minimum liability and the balancing entries of intangible assets amounted to Ps144,217 for 2007. k. Absorption (dilution) of control in subsidiary companies

The effect of absorption (dilution) of control in subsidiary companies, reflecting an increase (decrease) in the percentage of control, is recorded in stockholders’ equity, directly in the retained earnings account, in the period in which the transactions that cause such effects occur. The effect of absorption (dilution) of control is determined by comparing the book value of the investment based on the equity before the absorption (dilution) of control against the book value after the relevant event.

In 2006, the Company entered into an agreement to acquire the minority interest held in Grupo Chen, S. de R.L. de C.V. This acquisition was accounted as mentioned above. From the date of acquisition onwards, the Company owns 100% of this subsidiary. l. Derivative financial instruments

All derivative financial instruments entered into and identified and classified as held for trading or as hedge instruments are included in the balance sheet as assets and/or liabilities at fair value. The fair value is determined based on the prices of recognized markets; when no quoted market prices are available, it is determined based on valuation techniques accepted in the financial sector.

The changes in the fair value of derivative financial instruments are recognized in the comprehensive financing income (expense), except when entered into to hedge against risks and comply with all related requirements under MFRS. Their designation as a hedge is documented at the inception of the transaction, specifying the related objective, initial position, risks to be hedged, type of hedge relationship, characteristics, accounting recognition and how their effectiveness will be assessed. Fair value hedges are stated at fair value and changes in valuation are recorded in income under the same caption as the hedged item. In the case of cash flow hedges, the effective portion is temporarily included in comprehensive income in stockholders’ equity and is reclassified to income when the hedged item affects income. Any ineffective portion is recognized immediately in income.

F-15 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

Financial risk factors The derivative financial instruments were privately negotiated with various counterparties whose sound financial condition was supported by high ratings assigned by securities and credit risk rating agencies. The documentation used to formalize the operations entered into was that commonly used; in general terms, it follows the “Master Agreement” generated by the “International Swaps & Derivatives Association” (“ISDA”), and is accompanied by the annexes commonly known as “Schedule” and “Confirmation”. The fair value of the financial derivative instruments reflected in the Company’s financial statements represents a mathematical estimate of its fair value. It is determined using models belonging to independent experts involving assumptions based on past and current market conditions and future expectations at the corresponding closing date. Some valuations are based on confirmations requested from independent experts and others on confirmations from the counterparties involved. Risk Management Committee ALFA has recently created a Risk Management Committee composed of senior executives both from its corporate staff and from its operating subsidiaries. This Committee is responsible for authorizing all derivative operations based on the guidelines set by the Board of Directors. The Risk Management Committee will report to the Finance Committee and to the Audit and Corporate Practices Committee of ALFA, as well as to the Board of Directors. m. Revenue recognition The Company recognizes revenues in the period in which the risks and rewards of ownership of the merchandise are transferred to the customers, which generally coincides when the inventories are delivered and billed to customers. Revenues and accounts receivable are recorded net of allowances for returns and doubtful accounts, respectively. The only customer to whom sales exceeded 10% of consolidated net sales for any of the periods presented was Wal-Mart de Mexico. n. Comprehensive financing income (expense) This item is determined by grouping in the statement of income all interest, the effect of derivative financial instruments, exchange gains and losses, and the gain or loss on monetary position and others. Until December 31, 2007, it was necessary to calculate the gain or loss on monetary position, which represented the effect of inflation, as measured by the NCPI, on the Company’s monthly net monetary assets and liabilities during the year expressed in pesos of the most recent year reported on. In accordance with the standards of MFRS B-10 its recognition is not required beginning as of January 1, 2008. o. Income tax SIGMA and its Mexican subsidiaries file consolidated income tax returns in accordance with the applicable regulations. The income tax included in the consolidated statement of income represents the income tax currently payable for the year as well as the effect of the deferred income tax, determined in each subsidiary by the comprehensive asset and liability method applying the income tax rate in effect to total temporary

F-16 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

differences resulting from comparing the book and tax amounts of all assets and liabilities, and if applicable, considering tax loss carryforwards expected to be recoverable. The effect of the change in current income tax rates is recognized in income of the year in which the rate change is enacted.

On October 1, 2007, the Flat Tax Law was published, and was effective from January 1, 2008 onwards. This law is applicable to individuals and corporations having a permanent establishment in Mexico. The flat tax for the period is calculated by applying to income determined on a cash flow basis a 16.5% rate in 2008, a 17% in 2009 and a 17.5% in 2010 and subsequent periods. This tax is applicable only in the event the flat tax exceeds the income tax for the same period. In accordance with an interpretation published by the CINIF on December 21, 2007, with respect to the accounting effects of the IETU, and based on financial and tax projections, SIGMA and its subsidiaries in Mexico determined that they will continue paying income tax rather than flat tax in the future. As a result, no deferred flat tax was recorded at December 31, 2008 and 2007.

In accordance with the current law, beginning as of January 1, 2008 the Asset Tax Law is no longer in effect. However, the new law sets forth the methodology applicable to the recovery of asset tax paid in prior years, which was available for recovery in the following ten years to the extent income tax exceeded asset tax in those years.

The statutory income tax rates applicable to foreign subsidiaries were as follows:

Costa Rica 30% Republica Dominicana 25% El Salvador 25% Honduras 25% Guatemala 31% Nicaragua 30% Perú 30% Estados Unidos 35% p. Comprehensive income

The transactions recorded in the various captions relating to earned surplus for the year, other than those carried out with the stockholders, are included in the statement of changes in stockholders’ equity under the caption “comprehensive income (loss)”. q. Deficit on restatement from holding non monetary assets

As of December 31, 2007, the deficit from restatement from holding non-monetary assets is comprised primarily of the initial cumulative effects of initial monetary position and the gain or loss from withholding non-monetary assets stated in Mexican pesos as of the end of the period. Since it was not practical to identify the effects of the non-monetary assets leading to the deficit from restatement from holding non-monetary assets in realized and non-realized concepts, the net amount of Ps2,547,139 was transferred to retained earnings according to the provisions of Mexican FRS B-10.

F-17 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) r. Earnings per share

Earnings per share are computed on the basis of the weighted average number of common shares outstanding during the year. There are no effects arising from potentially dilutive shares. s. Stockholders equity

From January 1, 2008 onwards the capital stock, legal reserve and contributions for future increase in capital and retained earnings are stated in adjusted nominal Mexican pesos. Until December 31, 2007, capital stock, legal reserve, contributions for future increase in capital and retained earnings were stated at restated cost determined by applying factors derived from the NCPI. t. New Financial Reporting Standards

The Mexican Financial Reporting Standards Board (CINIF) issued the following MFRS in 2008 effective January 1, 2009. The Company’s management considers that these MFRS will have no significant effect on the financial information presented:

MFRS B-7 “Business acquisitions” - Stipulates general valuation and disclosure standards for the initial recognition at the date of acquisition of the net assets acquired in a business acquisition as well as for the minority interest and other items that might result from it, such as goodwill and the gain on acquisition. This standard replaces Statement B-7 “Business acquisitions”, in force until December 31, 2008.

MFRS B-8 “Combined and consolidated financial statements” - Sets forth the general standards for the preparation and presentation of combined and consolidated financial statements and notes thereon. This FRS supersedes Statement B-8 “Combined and consolidated financial statements and valuation of permanent investments in shares”, in force until December 31, 2008.

MFRS C-7 “Investments in associated companies and other permanent investments” - Sets forth the standards for the accounting recognition of the investments in associated companies, and other permanent investments in which there is no control, joint control or significant influence.

MFRS C-8 “Intangible assets” - Sets forth the valuation, presentation and disclosure standards for the initial and subsequent recognition of the intangible assets acquired on an individual basis or through a business acquisition, or internally generated in the normal course of business. This FRS supersedes Statement C-8 “Intangible assets”, effective until December 31, 2008.

MFRS D-8 “Share-based payments” - Stipulates the standards for the recognition of share-based payments. This FRS supersedes IFRS-2 “Share-based-payments” issued by the International Financial Reporting Standards Board applicable on a supplementary basis in Mexico.

F-18 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

4. INVENTORIES

At December 31 of the years presented, inventories were recorded as follows:

2008 2007 Finished goods Ps 654,228 Ps 587,331 Raw materials and work in process 1,127,872 1,125,625 Spare parts, tools and other 330,807 293,154

2,112,907 2,006,110 Allowance for obsolete inventories (10,457) (18,952)

Total Ps 2,102,450 Ps 1,987,158

5. PROPERTY, PLANT AND EQUIPMENT

At December 31 of the years presented, this caption was comprised of the following:

2008 2007 Rate Land Ps 807,266 Ps 735,512 Building 3,016,538 2,287,509 5% Office furniture and equipment 169,565 149,897 10% Transportation equipment 1,839,040 1,742,489 14% Computer equipment 680,093 635,486 25% Machinery and equipment 5,723,078 5,389,022 7% Other depreciable assets 1,448,658 1,192,998 Construction in progress 520,758 974,577

14,204,996 13,107,490 Accumulated depreciation (5,674,134) (5,026,479)

Total Ps 8,530,862 Ps 8,081,011

Depreciation expense for the years ended December 31, 2008, 2007 and 2006 was Ps765,246, Ps676,630, and Ps541,656, respectively.

At December 31, 2008 and 2007, the cost of property, plant and equipment included Ps41,606 and Ps8,521 of comprehensive financing cost capitalized.

At December 31, 2008, property, plant and equipment of US$3,358 were pledged to guarantee liabilities totaling Ps55,687. No assets were pledged in 2007.

F-19 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

6. DEFERRED CHARGES

At December 31 of the years presented, this caption was comprised of the following:

2008 2007 Development cost Ps 470,946 Ps 492,161 Preoperative cost 133,391 129,978 Franchises 1,181,577 907,483 Other 96,045 28,342

1,881,959 1,557,964 Accrued amortization (492,153) (452,614)

Ps 1,389,806 Ps 1,105,350

Amortization expense for the years ended December 31, 2008, 2007 and 2006 was Ps62,331, Ps38,849, and Ps35,627, respectively.

7. FOREIGN CURRENCY POSITION

At December 31, 2008 and 2007, the exchange rates were 13.54 and 10.90 nominal pesos to the U.S. dollar, respectively. At November 30, 2009, date of issuance of these audited financial statements, the exchange rate was 12.91 nominal pesos to the dollar.

Amounts shown below are expressed in thousands of U.S. dollars (US$), since this is the currency in which most of the companies’ foreign currency transactions are carried out.

At December 31, 2008 the companies had the following foreign currency assets and liabilities:

Mexican Foreign subsidiaries subsidiaries Total Monetary assets US$ 27,204 US$ 66,435 US$ 93,639 Current liabilities (86,976) (92,823) (179,799) Long-term liabilities (2,998) (2,998) (86,976) (95,821) (182,797) Foreign currency monetary position (US$ 59,772) (US$ 29,386) (US$ 89,158)

F-20 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

Following is a consolidated summary of the transactions in foreign currency carried out by the Mexican subsidiaries:

2008 2007 2006 Goods and services: Exports US$ 22,069 US$ 31,759 US$ 23,651 Imports (471,181) (562,165) (437,125) (449,112) (530,406) (413,474) Interest: Income 341 92 1,686 Expense (2,495) (7,944) (1,829) (2,154) (7,852) (143) Net outflow (US$ 451,266) (US$ 538,258) (US$ 413,617) Imports of machinery and equipment (US$ 17,976) (US$ 22,439) (US$ 48,686)

Following is a summary of the combined financial position and results of operations of the foreign subsidiaries located in the United States, Central America, the Dominican Republic and Peru in thousands of U.S. dollars:

Assets 2008 2007 Current assets US$ 153,779 US$ 92,069 Property, plant and equipment 152,818 136,765 Other assets 5,067 10,240 Total assets US$ 311,664 US$ 239,074 Liabilities and stockholders’ equity Current liabilities US$ 118,973 US$ 75,177 Long-term liabilities 4,264 3,023 Total liabilities 123,237 78,200 Total stockholders’ equity 188,427 160,874 Total liabilities and stockholders’ equity US$ 311,664 US$ 239,074

2008 2007 2006 Statement of income Net sales US$ 332,910 US$ 277,983 US$ 203,954 Cost of sales and operating expenses (336,855) (278,429) (189,776) Operating loss (3,945) (446) 14,178 Comprehensive financing income (expense), net 8,279 1,310 (1,011) Other expense, net (2,356) (4,325) (1,960) Income (loss) before the following provision 1,978 (3,461) 11,207 Provision for income tax (1,557) (1,670) (2,915) Net income (loss) US$ 421 (US$ 5,131) US$ 8,292

F-21 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

8. SHORT-TERM AND LONG-TERM DEBT a. Short-term debt

At December 31, 2008 and 2007, short-term debt was comprised of the following:

2008 2007 Interest Interest Amount rate (*) Amount rate (*) Loans in Peruvian soles Secured by the assets acquired Ps 67,638 8.69% — — Loans in U.S. dollars: Unsecured 614,730 4.84% Ps187,372 5.45% Loans in Mexican currency: Unsecured (1) 2,805,980 11.13% 28,853 8.4% Total Short-term debt Ps3,488,348 Ps216,225

(*) Average annual interest rate at December 31, 2008 and 2007.

(1) During 2008, the Company entered into various promissory notes with different banks bearing interest at market rates ranging from 9.26% to 12.75%. b. Long-term debt

At December 31, 2008 and 2007, long-term debt was comprised of the following:

Interest rate (*) 2008 2007 2008 Loans in Peruvian soles: Secured by the assets acquired Ps 55,687 — 7.58% Loans in U.S. dollars: Unsecured — Ps 54,331 6.08% Loans in Mexican currency: Unsecured 2,302,917 2,290,128 8.77% Debt certificates 3,154,655 2,635,000 8.71% 5,513,259 4,979,459 Less - Current maturities 193,842 1,201,542 Long-term debt Ps5,319,417 Ps3,777,917

On December 17, 2007, SIGMA issued debt certificates of Ps1,000,000 and Ps635,000 TIIE plus 20 basis points monthly interest rate and a fixed biannual rate of 8.75%, respectively, maturing in the year 2014. They were issued primarily to liquidate short-term debt.

F-22 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

On April 26, 2006, the Company entered into a Ps 1,700 million syndicated credit agreement. The syndicated loan bears interest at 9.75%, maturing on April 26, 2013.

On July 24, 2008, SIGMA issued debt certificates of Ps1,000,000 and 500,000 (the latter stated in UDI’s) at a fixed interest rates of 10.25% and 5.32%, respectively, maturing in the year 2018.

On November 27, 2008, SIGMA entered into a loan of Ps160,000 at a TIIE plus 300 basis points monthly interest rate maturing in the year 2011.

(*) The liabilities mentioned above bear interest at variable rates; the interest rates shown are the average nominal rates at December 31, 2008.

At December 31, 2008 long-term debt maturities were as follows:

2010 Ps 530,838 2011 661,389 2012 655,255 2013 307,255 2013 onwards 3,164,680 Ps 5,319,417

The current loan agreements contain certain covenants, such as compliance with certain financial ratios. At December 31, 2008 and 2007, SIGMA and its subsidiaries had complied with such restrictions and covenants.

9. DERIVATIVE FINANCIAL INSTRUMENTS a) Exchange rate derivatives

At December 31, 2008, the position of exchange rate derivatives held for trading purposes was summarized as follows:

Underlying Type of derivative, Notional asset Fair Maturity value or contract amount Unit Reference value 2009 2010 2011+ Collateral USD/Ps (CCS) Ps 580,986 Peso / Dollar 13.54 (Ps 151,750) (Ps 86,669) (Ps 37,595) (Ps 27,486) — USD/Ps 1,741,901 Peso /Dollar 13.54 (148,824) (148,824) — — Ps 33,346 (Ps 300,574) (Ps235,493) (Ps 37,595) (Ps 27,486) Ps 33,346

F-23 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) b) Interest rate swaps

At December 31, 2008, the position of interest rate swaps was summarized as follows:

Underlying Type of derivative, Notional asset Fair Maturity value or contract amount Unit Reference value 2009 2010 2011+ Collateral Hedging purposes: TIIE Ps 850,000 annual% 8.70 (Ps 8,326) (Ps 8,326) — — — Trading purposes: Libor Ps5,415,320 annual% 1.75 (375,469) (193,726) (Ps 146,418) (Ps 35,325) Ps 34,871 TIIE 660,400 annual% 8.70 (11,998) (11,998) — — — (Ps395,793) (Ps214,050) (Ps 146,418) (Ps 35,325) Ps 34,871 c) Commodities

At December 31, 2008, the position of derivative financial instruments for natural gas was summarized as follows:

Underlying Type of derivative, Notional asset Fair Maturity value or contract amount Unit Reference value 2009 2010 2011+ Collateral Trading purposes: Natural gas Ps 18,821 Dollar /BTU 6.94 (Ps 30,886) (Ps 14,024) — (Ps 16,862) Ps 6,897

(Ps 30,886) (Ps 14,024) — (Ps 16,862) Ps 6,897

The effectiveness of financial derivative instruments classified as hedge instruments is assessed on a periodical basis. At December 31, 2008, the Company’s management had assessed the effectiveness of hedges and estimated that they are highly effective.

Collaterals required for the above-mentioned financial derivative instruments amounted to Ps75,114; they are recorded in the caption “Restricted cash” under current assets, and represent the settlement guarantee for each instrument. They comprise cash and cash equivalent in broker accounts.

10. ESTIMATED LIABILITY FOR LABOR BENEFITS

The valuation of the liabilities for employee retirement plans, both formal (covering 71.3% of the companies’ employees in 2008 and 2007) and informal, covers all of the companies’ employees and is based primarily on their years of service, their present age and their remuneration at date of retirement.

Certain SIGMA companies have defined contribution schemes. In accordance with the structure of these plans, the reduction in labor liabilities is reflected progressively.

The principal subsidiaries of SIGMA have established irrevocable trust funds for payment of pensions and seniority premiums. Contributions amounted to Ps69,917 in 2008 (Ps66,343 in 2007).

F-24 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) a. Reconciliation between the initial and final balances of the defined benefit obligations (OBD by its Spanish acronym) present value for the period 2008:

Other Seniority Pension Termination retirement premium plan benefits benefits Total Defined benefit obligation at January 1, 2008 Ps 34,144 Ps 422,896 Ps 149,397 (Ps 1,793) Ps 604,644 Current service cost 4,565 30,529 29,074 — 64,168 Interest cost 2,764 35,285 9,735 — 47,784 Variation in the exchange rate by inflation — 1,264 1,192 — 2,456 Early settlements — (14,606) (30,756) — (45,362) Payments (255) (19,600) (47,978) 3,783 (64,050) Reductions (1,583) (22,968) 2,361 — (22,190) Actuarial losses (gains) generated in the period (2,065) (21,820) 41,818 — 17,933 Other — — — 2,016 2,016 Defined benefit obligation at December 31, 2008 Ps 37,570 Ps 410,980 Ps 154,843 Ps 4,006 Ps 607,399 b. Reconciliation between the initial and final balances of 2008, on the fair value of the employees’ benefit plan assets is shown as follows:

Pensions and Indemnities retirement Total Assets Plan at January 1, 2008 Ps 51,676 Ps 241,808 Ps 293,484 More (less): Labor cost of the current service 5,684 26,599 32,283 Actuarial losses (earnings) generated in the period (15,736) (56,078) (71,814) Company’s payments — 69,917 69,917 Assets Plan at December 31, 2008 Ps 41,624 Ps 282,246 Ps 323,870

F-25 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) c. Following is a summary of the principal consolidated financial data relative to these obligations:

2008 2007 Accumulated benefit obligation Ps 562,072 Unfunded accumulated benefit obligation Ps 312,961 Projected benefit obligation Ps 607,399 604,645 Plan assets at market value (323,870) (293,484) Unamortized prior service costs (transition liability) (91,592) (177,810) Unamortized actuarial gains and losses, net (67,385) (30,908) Unfunded accrued labor cost 124,552 102,443 Additional liability — 196,527 Estimated liability for labor benefits Ps 124,552 Ps 298,970 Net cost for the year (Ps 228,135) (Ps 113,117) d. Net periodic pension cost

An analysis of the net periodic pension cost by plan type is presented as follows:

Seniority Premium Pension Plan Termination Benefits Other retirement benefits December 31, December 31, December 31, December 31, Total 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 Net cost of the period: Current service cost Ps 4,565 Ps 5,694 Ps 30,529 Ps 30,377 Ps 29,074 Ps 24,183 — — Ps 64,168 Ps 60,254 Interest cost 2,764 2,030 35,285 18,851 9,735 4,229 — — 47,784 25,110 Plan assets expected yield (5,684) (2,743) (26,599) (14,035) — — — — (32,283) (16,778) Amortization of actuarial (gains) losses 958 521 (499) (575) 79,960 (242)(Ps 1,530) — 78,889 (296) Amortization of transition obligation 1,329 536 10,593 4,314 16,292 10,013 — — 28,214 14,863 Amortization of prior service — — 3,564 2,231 — — — — 3,564 2,231 Reductions and early Settlements — 1,696 (195) (12,793) 2,361 9,891 — — 2,166 (1,206) Curtailments and settlements — 204 29,479 24,666 6,154 4,069 — — 35,633 28,939

Total Ps 3,932 Ps 7,938 Ps 82,157 Ps 28,370 Ps 143,576 Ps 52,143 (Ps 1,530)Ps — Ps 228,135 Ps 113,117

F-26 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

Prior service cost, plan amendment costs and actuarial gains and losses are recorded through charges to income by the straight-line method over the average remaining service life of the employees expected to receive the benefits. From January 2008 onwards, prior service cost is amortized over a maximum five-year period.

2008 2007 Amortization period: Transition liability and plan amendment costs (years) 6 7 Unamortized actuarial gains and losses (years) 20 1 Weighted discount rate (in nominal terms in 2008 and in real terms in 2007) 8.5% 4.7% Estimated return at long term on plan assets (in nominal terms in 2008 and in real terms in 2007) 11% 7.5%

11. STOCKHOLDERS’ EQUITY

The capital stock at December 31, 2008 was comprised of the following:

Shares (*) Description Amount 1,290,654,555 Series “B” representing the fixed portion of the capital stock Ps 27,081 Acumulated inflation restatement up to December 31, 2007 1,173,252 Capital stock at December 31, 2008 Ps 1,200,333

(*) Ordinary nominative shares with a par value of one Mexican peso, fully subscribed and paid.

At December 31, 2008 and 2007, the fixed minimum capital stock without right of withdrawal, fully subscribed and paid-in amounted to Ps27,081, and was represented by 1,290,654,555 Series “B” common nominative shares, without par value.

Retained earnings include Ps5,416 in 2008, appropriated to the legal reserve.

Dividends paid from retained earnings which have not previously been taxed are subject to an income tax payable by the Company, which may be credited against the normal income tax payable by the Company in the year in which the dividends are paid and in the two following years.

12. COMPREHENSIVE FINANCING EXPENSE, NET

At December 31 of the years presented, this caption was analyzed as follows:

2008 2007 2006 Financial expense (Ps 604,055) (Ps 493,958) (Ps 464,808) Financial income 83,928 48,780 86,839 Exchange (loss) gain, net 7,485 18,196 27,468 Effect of derivative financial instruments (2,351,913) 104,294 (19,539) Gain on monetary position 39,191 159,270 96,140 (Ps 2,825,364) (Ps 163,418) (Ps 273,900)

F-27 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

13. OTHER EXPENSE, NET

For the years ended December 31 presented below, this caption was comprised of the following:

2008 2007 2006 Loss on sale of fixed assets (Ps 9,904) (Ps 60,015) (Ps 3,184) Employees’ profit sharing (1) (59,143) (68,094) (90,851) Loss on sale of containers, platforms and others (41,593) (51,224) (38,236) Operating computer systems expense — — (8,159) Reorganization expenses and other (135,229) (128,880) (27,151) Tax expense (25,423) (8,611) (Ps271,292) (Ps 316,824) (Ps167,581)

(1) Employees’ profit sharing is determined separately in each Mexican subsidiary at the rate of 10% of the taxable income adjusted as prescribed by the Income Tax Law.

14. INCOME TAX

For the years ended December 31 presented below, the net credit (charge) to income for income tax was as follows:

2008 2007 2006 Currently payable (Ps 507,045) (Ps 404,383) (Ps 431,889) Deferred 703,292 (101,299) (53,242) 196,247 (505,682) (485,131) Adjustment to provision for income tax of prior years derived from gain contingencies (2,315) 98,761 49,000 Ps 193,932 (Ps 406,921) (Ps 436,131)

F-28 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

For the years ended December 31 presented below, the reconciliation between the statutory and effective income tax rates is shown below: 2008 2007 2006 (Loss) income before income tax (Ps 1,052,122) Ps 1,477,580 Ps 1,714,358 Income tax at statutory rate (28% in 2008 and 2007 and 29% in 2006) Ps 294,594 (Ps 413,722) (Ps 497,164) Add (deduct) effect of income tax on: Nondeductible expenses (7,474) (8,696) (5,029) Inflationary adjustment (48,120) 1,640 5,644 Employees’ profit sharing 19,027 20,283 22,208 Tax surcharges 2,340 2,351 1,680 Taxable income of subsidiaries not subject to income tax (54,664) (67,139) — Dividends received — (36,410) — Other, net (5,455) (3,989) (10,574) Benefit (provision) for income tax credited (charged) to income, before effect of reduction in statutory income tax rate 200,248 (505,682) (483,235) Effect on deferred income tax of reduction in statutory income tax rate — — (1,896) Ps 200,248 (Ps 505,682) (Ps 485,131) Effective income tax rate 19% 34% 28%

At December 31, 2008 and 2007 the main temporary differences requiring recognition of deferred income tax were as follows: 2008 2007 Inventories Ps 37,046 Ps 277,005 Property, plant and equipment, net 2,383,918 2,392,248 Estimated liability for labor obligations (124,552) (154,753) Trade accounts receivable (96,235) (28,899) Down payment 38,382 49,915 Derivative financial instruments (727,252) (84,031) Deferred Charges 517,504 445,175 Liability provisions, net (380,533) (135,994) Other, net 23,714 (5,348) Tax loss carryforwards (1,576,782) (149,279) 95,210 2,606,039 Income tax at statutory rate applicable to temporary differences 28% 28% Deferred income tax 26,659 729,691 Recoverable asset tax (61,088) (55,010) Deferred income tax asset 605,568 23,073 Deferred income tax, liability Ps 571,139 Ps 697,754

F-29 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

The unused tax loss carryforwards, which may be restated for inflation through the date they are applied against future taxable profits, expire in the following years:

2011 Ps 9,025 2012 55,283 2013 2,696 2014 19,971 2015 onwards 1,489,807 Ps1,576,782

The foregoing amounts include the effect of restatement through December 31, 2008.

Asset tax is payable at the rate of 1.25% on the net amount of certain assets and liabilities, but only when the amount of asset tax exceeds the income tax due. Asset tax paid may be recovered in the following ten years to the extent income tax exceeds asset tax in those years.

Asset tax recoverable as mentioned above expires as follows:

2008 Ps 784 2009 821 2010 2,402 2011 3,662 2012 9,332 2013 onwards 44,087 Ps61,088

15. TRANSACTIONS WITH AFFILIATED COMPANIES

At December 31 of the years presented, the balances with related parties are shown below:

2008 2007 Receivables: Alfa Subsidiarias, S. A. de C. V. Ps 162,034 —

Payable: Alfa S. A. B. de C. V. Ps 25,576 Ps 23,396 Alliax, S. A. de C. V. 11,481 2,526 Alfa Corporativo, S. A. de C. V. 9,727 3,583 Dinámica, S. A. de C. V. 717 965 Gentium, S. A. de C. V. 1,044 10,267 Inmobiliaria y Desarrollo de Energía Alfa, S. A. de C. V. 292 — Transportación Aérea del Norte, S. A. de C. V. 3,309 1,052 PS 52,146 Ps 41,789

F-30 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated)

The Company entered into a loan agreement with Alfa Subsidiarias, S. A. de C. V. on November 28, 2008 in which the Company loaned Alfa Subsidiarias Ps160,000 at an annual interest rate of TIIE plus 300 basis points, maturing in 1 year.

The most significant transactions with affiliated companies were as follows:

Years ended December, 31 2008 2007 2006 Income: Interests Ps 1,769 - - Expenses: Corporative services Ps 288,556 Ps 247,569 Ps 223,054 Administrative services 100,367 111,374 106,208 Leases 15,626 15,598 15,333 Air transportation services 8,340 5,185 - Security services 30,714 25,107 22,990 Ps 443,603 Ps 404,833 Ps 367,585

16. INFORMATION BY BUSINESS SEGMENT

The reported segments of the Company represent the specific types of products that the Company offers and internally analyzes.

The Company has three main line products: processed meats, dairy products and other refrigerated products. The Company’s management uses the information by segment to evaluate performance, make general operations decisions and assign resources.

The Company controls and evaluates its continuing operations on a consolidated basis. Its activities are carried out through its subsidiary companies.

Year ended December 31, 2008 2007 2006 a. By line of product: Net sales of Processed Meats Ps 15,244,227 Ps 13,583,604 Ps 12,532,350 Net sales of Dairy Products 9,275,122 8,304,831 7,222,980 Net sales of Other Refrigerated Products 1,581,209 1,193,191 970,312 Total Ps 26,100,558 Ps 23,081,626 Ps 20,725,642

F-31 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2008, 2007 AND 2006 Thousands of Mexican Pesos (except where otherwise indicated) b. By geographic area:

2008 (Ps) Outside Mexico Mexico Total assets Ps 16,744,902 Ps 3,491,487 Net sales 21,908,190 4,192,368 Operating income (loss) 2,112,026 (67,492) 2007 (Ps) Total assets Ps 13,601,234 Ps 2,353,789 Net sales 19,995,226 3,086,400 Operating income (loss) 1,975,289 (17,467) 2006 (Ps) Total assets Ps 11,849,817 Ps 1,399,919 Net sales 18,364,821 2,360,821 Operating income 2,021,252 134,587

17. CONTINGENCIES

In the ordinary course of its business, the Company is involved in disputes and litigation. While the outcomes of disputes cannot be predicted, the Company does not believe that there are any pending or threatened actions, suits or proceedings against or affecting the Company which, if determined adversely to it, would individually or in the aggregate, materially harm its business, results of operations or financial condition.

F-32 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Thousands of Mexican Pesos)

September 30, December 31, 2009 2008 Assets CURRENT ASSETS: Cash and cash equivalents Ps 1,683,396 Ps 2,288,256 Restricted cash (Note 9) 5,341 75,114 Trade accounts receivable, less allowance for doubtful accounts of Ps98,415 as of September 30, 2009 and Ps111,483 in 2008 2,153,978 2,174,184 Other accounts receivable 1,143,921 1,176,728 Accounts receivable from related companies 174,674 162,034 Inventories (Note 5) 1,901,072 2,102,450 Total current assets 7,062,382 7,978,766 DERIVATIVES FINANCIAL INSTRUMENTS (Note 9) - 75,187 PROPERTY, PLANT AND EQUIPMENT (Note 6) 8,328,982 8,530,862 DEFERRED CHARGES (Note 7) 1,324,692 1,389,806 GOODWILL (Note 2) 1,678,563 1,656,200 DEFERRED INCOME TAX (Note 14) 726,286 605,568 Total assets Ps 19,120,905 Ps 20,236,389 Liabilities and Stockholders’ Equity CURRENT LIABILITIES: Current portion of long-term debt (Note 8) Ps 394,602 Ps 193,842 Bank loans (Note 8) 312,433 3,488,348 Notes payable 163,206 270,474 Suppliers 2,131,468 2,484,976 Accounts payable to related companies 53,490 52,146 Other accounts and accrued expenses payable 1,030,292 812,683 Derivative financial instruments (Note 9) 4,280 Total current liabilities 4,089,771 7,302,469 LONG-TERM LIABILITIES: Long-term debt (Note 8) 7,461,230 5,319,417 Notes payable 54,588 51,528 Deferred income tax (Note 14) 529,874 571,139 Estimated liability for labor benefits (Note 10) 148,724 124,552 Derivative financial instruments (Note 9) 617,178 802,440 Total long-term liabilities 8,811,594 6,869,076 Total liabilities 12,901,365 14,171,545 STOCKHOLDERS’ EQUITY: Capital stock 183,663 1,200,333 Premium on issuance of capital stock 1,303,657 1,303,657 Contributed capital 1,487,320 2,503,990 Earned surplus 4,732,293 3,381,055 Majority stockholder’s equity 6,219,613 5,885,045

Minority interest (73) 179,799 Total stockholders’ equity 6,219,540 6,064,844

Total liabilities and stockholders’ equity Ps 19,120,905 Ps 20,236,389

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-33 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Thousands of Mexican Pesos)

September 30, September 30, 2009 2008 Net sales Ps 22,152,532 Ps 18,762,512 Cost of sales (13,935,188) (11,686,687) Gross margin 8,217,344 7,075,825 Operating expenses (6,103,897) (5,616,668) Operating income 2,113,447 1,459,157 Comprehensive financing expense, net (Note 12) (654,048) (507,578) Other expense, net (Note 13) (107,924) (186,463) Income before income tax 1,351,475 765,116 Income tax (Note 14) (441,309) (288,299) Net income Ps 910,166 Ps 476,817

Net income (loss) corresponding to minority Ps 1,717 (Ps 4,616)

Net income corresponding to majority stockholders’ equity Ps 908,449 Ps 481,433

Earnings per share (Note 3. r.) Ps 0.70 Ps 0.37

Weighted average number of outstanding shares 1,290,654,555 1,290,654,555

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-34 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Thousands of Mexican Pesos)

September 30, 2009 2008 Cash flows from operating activities: Income before income taxes Ps 1,351,475 Ps 765,116 Items related to investing activities: Depreciation and amortization 723,656 621,886 Estimated liability for labor benefits 24,676 37,962 Loss on sale of property, plant and equipment 1,897 10,480 Loss on sale of containers and platforms 27,083 27,624 Effect of derivative financial instruments 56,888 221,368 Exchange gain 25,525 (32,427) Interest income (86,302) (55,784) 2,124,898 1,596,225 Items relating to financing activities: Interest expense 662,356 401,145 Other, net 72,473 25,230 Increase in accounts receivable (48,338) (530,594) Increase in related companies, net (11,296) 432,962 Decrease in inventories 174,295 257,749 Decrease in notes and accounts payable to suppliers (353,508) (247,338) Increase in other accounts payables and accrued expenses 125,699 366,817 Income tax paid (439,005) (316,384) 182,676 389,587 Net resources provided by operating activities 2,307,574 1,985,812 Cash flows form investing activities: Acquisitions of property, plant and equipment (449,835) (587,854) Acquisitions of subsidiary, net of cash acquired (22,363) (319,546) Interests received 83,693 53,321 Derivative financial instruments and hedge transactions (159,239) 260,552 Acquisitions other assets (162,771) (93,374) Net resources used in investing activities (710,515) (686,901) Increase in cash to apply to financing activities 1,597,059 1,298,911 Cash flow from financing activities: Short-term debt and bank loans (3,003,733) (1,320,946) Long-term loans 5,449,100 3,326,172 Payment of long-term and short-term loans (3,358,815) (1,844,917) Interest paid (794,065) (401,906) Notes payable (52,680) 37,026 Dividends paid (509,328) (385,153) Net resources provided by financing activities (2,269,521) (589,724) Increase in net cash and temporary investments (672,462) 709,187 Adjustments to cash flow as a result of changes in exchange rates (2,171) 2,496 Cash, cash equivalents and restricted cash at beginning of year 2,363,370 707,989 September 30, 2009 2008 Cash and cash equivalents Ps 1,683,396 Ps 1,212,863 Restricted cash 5,341 206,809 Cash, cash equivalents and restricted cash at end of year Ps 1,688,737 Ps 1,419,672

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

F-35 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

1. ACTIVITIES OF SIGMA ALIMENTOS COMPANIES

Sigma Alimentos, S. A. de C. V. (“SIGMA” or the “Company”), subsidiary of Alfa, S. A. B. de C. V. (ALFA), is a company engaged in the production, commercialization and distribution of processed meat, dairy products, and other refrigerated and frozen foods. Its activities are carried out through various subsidiary companies.

2. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS a) Acquisition of Braedt, S. A.

In July 2008, Sigma Alimentos, S. A. de C. V. and Sigma Exterior, S. A. entered into an agreement to acquire the outstanding shares of Braedt, S. A., a Peruvian company engaged in the production and commercialization of cold cuts. This acquisition involved a plant located in the city of Lima. SIGMA consolidated the financial information of this company from August 2008 onwards.

The excess of the purchase price over the fair value of the net assets acquired amounted to Ps 319,547. Condensed financial information at the date of acquisition, in thousands of Mexican pesos, is as follows:

July 31, 2008 Balance sheet: Total assets Ps 203,057 Total liabilities 150,511 Stockholders’ equity 52,546 b) Acquisition of Longmont brand

In addition, on October 30, 2008, the Company acquired the “Longmont” brand which belonged to Butterball, LLC, a large producer of turkey products in the United States. The products of the “Longmont” brand are marketed principally in the northwest of Mexico where this brand has a high recognition and a leadership position, particularly in the states of Baja California, Sonora and Sinaloa. The acquisition of this brand is presented as part of the deferred charges caption.

3. BASIS OF PRESENTATION

Interim consolidated financial information

The interim consolidated financial statements of the Company have been prepared in accordance with Financial Reporting Standards applicable in Mexico (“MFRS”) as promulgated by the Mexican Financial Reporting Standards Board (“CINIF”). Certain accounting practices applied by the Company that conform with MFRS may not conform with accounting principles generally accepted in the country of use.

F-36 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

The consolidated financial statements are expressed in Mexican Pesos (reporting currency), denoted by the symbol “Ps”. The year-end consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by MFRS.

The information included in the interim consolidated financial statements is unaudited but reflects all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of these interim periods are not necessarily indicative of results for the entire year. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes as of December 31, 2008.

The interim financial statements include balances and transactions denominated in Mexican pesos of different purchasing power due to the Company consolidates subsidiaries that operates in inflationary and non inflationary environments, in accordance with the provisions of MFRS B-15 “Translation of Foreign Currencies” (NIF B-15).

The provisions of the Mexican FRS B-10 specify that as of 2008, the Mexican economy is not considered an inflationary environment, since there has been a cumulative inflation below 26% in the last six years (established limit to define an economy as inflationary). Therefore, as of January 1, 2008, the Mexican subsidiaries of the Company were required to discontinue the recognition of the inflation effects in the financial information. Consequently, figures from these subsidiaries as of September 30, 2008 and 2009 are stated in adjusted nominal Mexican pesos as they include cumulative inflation effects on the financial information recognized up to December 31, 2007.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

The accompanying consolidated financial statements include those of the Company and its subsidiaries, in which it direct or indirectly holds more than 50% of their shares and in which exercise it controls operating and financial activities. All significant balances and transactions among the consolidated companies have been eliminated. The consolidation was carried out on the basis of audited financial statements of the subsidiaries.

The preparation of financial statements in conformity with MFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-37 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

As of September 30, 2009 and 2008, the principal subsidiaries of SIGMA and their ownership interest were:

Country (1) Ownership (%) Alimentos Finos de Occidente, S. A. de C. V. 100 Bonanza Industrial, S. A. de C. V. 100 Braedt, S. A. (Note 2.c.) Peru 100 Carnes Selectas Tangamanga, S. A. de C. V. 100 Comercial Hacienda de Cerdos, S. A. Dominican Republic 100 Comercializadora de Embutidos ICO, S. A. de C. V. 100 Distribuidora y Comercializadora de Lácteos del Norte, S. A. de C. V. 100 Empacadora de Embutidos del Centro, S. A. de C. V. 100 Grupo Chen, S. de R. L. de C. V. and subsidiaries 100 Industrias Alimentarias del Sureste, S. A. de C. V. (Note 2.e.) 100 Lácteos Finos Holdings New Zealand Limited, S. A. de C. V. 100 Mexican Cheese Producers, Inc. (Note 2.d.) United States 100 Productos Cárnicos, S. A. de C. V. El Salvador 100 Productos de Importación, S. A. de C. V. Honduras 100 Servilac, S. A. de C. V. 100 Sigma Alimentos Centro, S. A. de C. V. 100 Sigma Alimentos Costa Rica, S. A. Costa Rica 100 Sigma Alimentos Comercial, S. A. de C. V. 100 Sigma Alimentos Congelados, S. A. de C. V. 100 Sigma Alimentos Corporativo, S. A. de C. V. 100 Sigma Alimentos Dominicana, S. A. Dominican Republic 100 Sigma Alimentos Importaciones, S. A. de C. V. 100 Sigma Alimentos Lácteos, S. A. de C. V. 100 Sigma Alimentos Noreste, S. A. de C. V. 100 Sigma Alimentos Nicaragua, S. A. Nicaragua 100 Sigma Alimentos El Salvador, S. A. El Salvador 100 Sigma Alimentos Guatemala, S. A. Guatemala 100 Sigma Alimentos International, Inc. United States 100 Sigma Alimentos Prom, S. A de C. V. 100 Sigma Foods, Inc. United States 100 Sigma Processed Meats, Inc. United States 100

(1) Companies incorporated in Mexico, except as mentioned.

F-38 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated) a) Adoption of new standards.

In 2008, the Mexican Financial Reporting Standards Board (“CINIF”) by its Spanish acronym issued the following MFRS effective January 1, 2009. These MFRS did not have significant effect on the financial information presented:

MFRS B-7 “Business acquisitions” which establishes the general standards for valuation and disclosure in the initial recognition of the net assets acquired in a business acquisition at acquisition date as well as for the minority interest and other items that may arise in them, such as goodwill. This standard replaces Statement B-7 “Business acquisitions”, in force until December 31, 2008.

MFRS B-8 “Consolidated and combined financial statements” which establishes the general standards for the preparation and presentation of the consolidated and combined financial statements; as well as for the disclosures accompanying such financial statements. This MFRS supersedes Statement B-8 “Combined and consolidated financial statements and valuation of permanent investments in shares”, in force until December 31, 2008.

MFRS C-7 “Investments in associated companies and other permanent investments” which sets forth the standards for the accounting recognition of the investments in associates, and other permanent investments in which there is no control, joint control or significant influence.

NIF C-8 “Intangible assets” which sets forth the valuation, presentation and disclosure standards for the initial and subsequent recognition of the intangible assets acquired individually or through a business acquisition, or internally generated in the normal course of business. This MFRS supersedes Statements “Intangible assets” effective until December 31, 2008.

NIF D-8 “Share-based payments” which stipulates the standards for the recognition of share-based payments in the financial information. This Mexican FRS supersedes IFRS- 2 “Share-based-payments” issued by the International Financial Reporting Standards Board applicable on a supplementary basis in Mexico. b) There were no changes in the determination of functional currencies of the Company and its subsidiaries.

5. INVENTORIES

At September 30, 2009 and December 31, 2008, inventories were analyzed as follows:

September 30, December 31, 2009 2008

Finished goods Ps 589,778 Ps 654,228 Raw materials and work in process 1,006,115 1,127,872 Spare parts, tools and other 315,008 330,807

1,910,901 2,112,907 Allowance for obsolete inventories (9,829) (10,457)

Total Ps 1,901,072 Ps 2,102,450

F-39 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

6. PROPERTY, PLANT AND EQUIPMENT At September 30, 2009 and December 31, 2008, this caption was comprised of the following: September 30, December 31, 2009 2008 Rate

Land Ps 808,583 Ps 807,266 Building 3,069,504 3,016,538 5% Office furniture and equipment 171,244 169,565 10% Transportation equipment 1,852,311 1,839,040 14% Computer equipment 714,927 680,093 25% Machinery and equipment 5,763,380 5,723,078 7% Other depreciable assets 1,550,775 1,448,658 Construction in progress 639,598 520,758

14,570,322 14,204,996 Accumulated depreciation (6,241,340) (5,674,134)

Total Ps 8,328,982 Ps 8,530,862 Depreciation expense for the nine months ended at September 30, 2009 and 2008 amounted Ps 663,382, and Ps 580,694, respectively. As of September 30, 2009 and December 31, 2008, the cost of property, plant and equipment included Ps 48, 515 and Ps 41,606, respectively of comprehensive financing cost capitalized. At September 30, 2009 and December 31, 2008, property, plant and equipment amounting US$ 3,158 and US$ 3,358, respectively, were pledged to guarantee liabilities.

7. DEFERRED CHARGES At September 30 of the periods presented, this caption was comprised of the following: September 30, September 30, 2009 2008

Development cost Ps 472,496 Ps 470,946 Preoperative cost — 133,391 Franchises 1,181,577 1,181,577 Other 68,990 96,045

1,723,063 1,881,959 Accrued amortization (398,371) (492,153)

Ps 1,324,692 Ps 1,389,806

Amortization expense for the nine months ended at September 30, 2009 and 2008 amounted Ps60,273, and Ps41,192, respectively.

F-40 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

8. SHORT-TERM AND LONG-TERM DEBT a. Short-term debt

At September 30, 2009 and December 31, 2008 short-term debt was comprised of the following:

September 30, December 31, 2009 2008 Interest Interest Amount rate (*) Amount rate (*) Loans in Peruvian soles Secured by the assets acquired Ps 65,596 3.72% Ps 67,638 8.69% Loans in U.S. dollars: Unsecured 246,837 4.00% 614,730 4.84% Loans in Mexican currency: Unsecured (1) — — 2,805,980 11.08% Total Short-term debt Ps 312,433 Ps 3,488,348

(*) Average annual interest rate at September 30, 2009 and December 31, 2008.

(1) During 2008, the Company entered into various promissory notes with different banks bearing interest at market rates ranging from 9.26% to 12.75%. b. Long-term debt

At September 30, 2009 and December 31, 2008 long-term debt was comprised of the following:

Interest September 30, December 31, rate (*) 2009 2008 2008 Loans in Peruvian soles: Secured by the assets acquired Ps 48,004 Ps 55,687 7.58% Loans in Mexican currency: Unsecured (1) 4,640,417 2,302,917 8.77% Debt certificates 3,167,411 3,154,655 8.71% 7,855,832 5,513,259 Less-Current maturities 394,602 193,842 Long-term debt Ps 7,461,230 Ps 5,319,417

On July 24, 2008, SIGMA subscribed debt certificates of Ps1, 000,000 and 500,000 (the latter stated in UDIs) at fixed interest rates of 10.25% and 5.32%, respectively, maturing in 2018.

F-41 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

On November 27, 2008, SIGMA entered into a loan agreement of Ps160, 000 at a TIE + 3.00% monthly interest rate maturing in 2011.

On April 26, 2006, the Company entered into a Ps 1,700 million syndicated credit agreement. The syndicated loan bears interest at 9.75% maturing on April 26, 2013.

On March 20, 2009, SIGMA entered into a loan agreement of Ps2, 400 million bearing an interest rate of 8.9325%, maturing in two years. The proceeds were used primarily to pay short term bank loans and derivative financial instruments settlement.

(*) The liabilities mentioned above bear interest at variable rates; the interest rates shown are the average nominal rates at September 30, 2009.

At September 30, 2009 long-term debt maturities were as follows:

2011 Ps 3,141,568 2012 672,580 2013 470,805 2014 1,639,443 2013 onwards 1,536,834 Ps 7,461,230

The current loan agreements contain the usual covenants, such as compliance with certain financial ratios. At September 30, 2009, SIGMA and its subsidiaries had satisfactorily complied with such restrictions and covenants.

9. DERIVATIVE FINANCIAL INSTRUMENTS a) Exchange rate derivatives

At September 30, 2009, the position of exchange rate derivatives held for trading purposes was summarized as follows:

Underlying Dec. 31, Type of derivative, value Notional asset Fair Maturity Collateral / 2008 Fair or contract amount Unit Reference value 2009 2010 2011+ guarantee value USD/Ps (CCS) Ps 496,556 Peso /Dollar 13.50 (Ps 110,967) (Ps 22,480)(Ps 15,607)(Ps 72,879) — (Ps 151,750) USD/Ps (FX) 13,195 Peso /Dollar 13.50 (167,216) (167,216) — — — (148,824) (Ps 278,183)(Ps 189,696)(Ps 15,607)(Ps 72,879) — (Ps 300,574)

F-42 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated) b) Interest rate swaps

At September 30, 2009, the position of interest rate swaps was summarized as follows:

Underlying Type of derivative, Notional asset Fair Maturity Collateral / Dec. 31, value or contract amount Unit Reference value 2009 2010 2011+ guarantee Fair value Hedging purposes: TIIE (i) Ps 425,000 annual% 4.93 (Ps 3,324) (Ps 3,324) — — — (Ps 8,326) Trading purposes: Libor Ps 4,051,260 annual% 1.88 (312,033) (47,425) (Ps 168,226) (Ps 96,383) Ps 1,742 (Ps 375,469) TIIE 500,000 annual% 4.93 (6,408) (6,408) — — — (11,998) (Ps 321,765) (Ps 57,157) (Ps 168,226) (Ps 96,383) Ps 1,742 (Ps 395,793) c) Commodities

At September 30, 2009, the position of derivative financial instruments for natural gas was summarized as follows:

Underlying asset Dec. 31, Type of derivative, Notional Fair Maturity Collateral / 2008 Fair value or contract amount Unit Reference value 2009 2010 2011+ guarantee value Trading purposes: Natural gas Ps 18,935 Dollar /BTU 2.65 (Ps 21,508) (Ps 4,280) — (Ps 17,228) Ps 3,599 (Ps 30,886) (Ps 21,508) (Ps 4,280) — (Ps 17,228) Ps 3,599 (Ps 30,886)

The effectiveness of financial derivative instruments classified as hedge instruments is assessed on a periodical basis. At September 30, 2009, the Company’s management had assessed the effectiveness of hedges and estimated that they are highly effective.

Collaterals required for the above-mentioned financial derivative instruments amounted to Ps 5,341; they are recorded in the caption “Restricted cash” under current assets, and represent the settlement guarantee for each instrument. They comprise temporary investments and cash in broker accounts.

10. ESTIMATED LIABILITY FOR LABOR BENEFITS

Net periodic pension costs for the nine months ended September 30 of the periods presented, were as follows:

September 30, 2009 2008 Service costs (Ps 69,336) (Ps 78,884) Interest costs (38,419) (35,848) Expected yield on plan assets 26,112 24,212 Initial transition asset (14,815) (17,669) Past service costs (2,469) (2,673) Actuarial gains and losses - Net (743) (28,951) Net period cost (Ps 99,670) (Ps 139,813)

F-43 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

11. STOCKHOLDERS’ EQUITY

Pursuant to resolutions at a general extraordinary stockholders’ meetings held on March 25, 2009, it was agreed to absorb losses amounting Ps1,016,669 generated in 2008 by transferring these losses from retained earnings included in the earned surplus caption to the restatement of capital stock included in the contributed capital caption.

12. COMPREHENSIVE FINANCING EXPENSE, NET

At September 30 this caption was analyzed as follows:

September 30, 2009 2008 Financial expense (Ps 662,356) (Ps 401,145) Financial income 86,302 55,784 Exchange (loss) gain, net (25,525) 32,427 Effect of financial derivative instruments (56,887) (221,368) Gain on monetary position 4,418 26,724 (Ps 654,048) (Ps 507,578)

13. OTHER EXPENSE, NET

At September 30, this caption was comprised of the following:

September 30, 2009 2008 Loss on sale of fixed assets (Ps 1,897) (Ps 10,480) Employees’ profit sharing (1) (47,162) (47,500) Loss on sale of containers, platforms and others (37,740) (26,839) Reorganization expenses, other (27,664) (99,489) Tax expense 6,539 (2,155) Total (Ps 107,924) (Ps 186,463)

F-44 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

14. INCOME TAX

The reconciliation of the statutory and effective ISR rates expressed as a percentage of income before ISR is:

September 30, 2009 2008 Statutory rate Ps 378,413 Ps 214,232 Add the effect of permanent differences, mainly Non-deductible expenses 4,605 3,967 Less: effect of inflation 45,611 55,042 Employees´ profit sharing (1,795) (1,820) Tax Update — 3,120 Gain on stock sale 16,322 16,495 Other, net (3,963) (5,052) Ps 439,193 Ps 285,984 Effective rate 32.50% 37.38%

15. TRANSACTIONS WITH AFFILIATED COMPANIES

Balances with affiliated companies included in the balance sheet arise from the above-mentioned transactions.

At September 30, 2009 and December 31, 2008 the balances with related parties are shown below:

September 30, December 31, 2009 2008 Receivables: Alfa Subsidiarias, S. A. de C. V. Ps 174,674 Ps 162,034 Payable: Alfa S. A. B. de C. V. Ps 29,627 Ps 25,576 Alliax, S. A. de C. V. 18,706 11,481 Alfa Corporativo, S. A. de C. V. 4,500 9,727 Dinámica, S. A. de C. V. 657 717 Gentium, S. A. de C. V. — 1,044 Inmobiliaria y Desarrollo de Energía Alfa, S. A. de C. V. — 292 Transportación Aérea del Norte, S. A. de C. V. — 3,309 Ps 53,490 Ps 52,146

The Company entered into a loan agreement with ALFA Subsidiarias, S. A. de C. V. on November 28, 2008 in which the Company loaned Alfa Subsidiarias a total amount of Ps160,000 at an annual interest rate of TIIE plus 300 basis points, maturing in 1 year.

F-45 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated)

The most significant transactions with affiliated companies were as follows:

Nine months ended September, 30 2009 2008 Income: Interest Ps 10,991 Ps - Expenses: Corporative services Ps 244,803 Ps 288,556 Administrative services 95,178 103,566 Leases 12,586 12,427 Air transportation services 5,827 8,340 Security services 17,298 30,714 Ps 375,692 Ps 443,603

16. INFORMATION BY BUSINESS SEGMENT

The reported segment of the Company represents the specific types of products that the Company offers and internally analyzes.

The Company has three main line products: processed meats, dairy products and other refrigerated products. The Company’s management uses the information by segment to evaluate performance, make general operations decisions and assign resources.

The Company controls and evaluates its continuing operations on a consolidated basis. Its activities are carried out through its subsidiary companies.

Nine months ended September 30, 2009 2008 a. By line of product: Net sales of Processed Meats Ps 13,264,259 Ps 10,834,992 Net sales of Dairy Products 7,529,107 6,784,051 Net sales of Other Refrigerated Products 1,359,166 1,143,469 Total Ps 22,152,532 Ps 18,762,512

F-46 SIGMA ALIMENTOS, S. A. DE C. V. AND SUBSIDIARIES (subsidiaries of Alfa, S. A. B. de C. V.) NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Thousands of Mexican Pesos (except where otherwise indicated) b. By geographic area:

Nine months ended September 30, 2009 Outside Mexico Mexico Total assets Ps 15,692,290 Ps 3,428,615 Net sales 17,807,858 4,344,674 Operating income 1,944,671 168,776

For the year ended December 31, 2008 Total assets Ps 16,744,902 Ps 3,491,487

Nine months ended September 30, 2008 Net sales Ps 15,896,722 Ps 2,865,790 Operating income 1,515,914 (56,757)

17. CONTINGENCIES:

In the ordinary course of their business, the Company is involved in disputes and litigation. While the outcomes of disputes cannot be predicted, the Company does not believe that there are any pending or threatened actions, suits or proceedings against or affecting the Company which, if determined adversely to them, would individually or in the aggregate, materially harm their business, results of operations or financial condition.

F-47 APPENDIX A

SUMMARY OF CERTAIN DIFFERENCES BETWEEN MFRS AND U.S. GAAP

Our financial statements are prepared and presented in accordance with Mexican Financial Reporting Standards (“MFRS”) issued by the Mexican Financial Reporting Standards Board (Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera or “CINIF”). MFRS differ in certain significant respects from generally accepted accounting principles as applied in the United States (“U.S. GAAP”), which might be material to the financial information contained herein. We have not prepared a reconciliation of our financial statements and related notes appearing in the offering memorandum, from MFRS to U.S. GAAP, and we have not quantified those differences. The matters described below summarize certain differences between MFRS and U.S. GAAP that may be material. Accordingly, no assurance is provided that the following summary of differences between MFRS and U.S. GAAP is complete. In making an investment decision, investors must rely upon their own examination of our company, the terms of the offering and the financial information included in the offering memorandum. In addition, no attempt has been made to identify future differences between MFRS and U.S. GAAP that may affect the financial statements as a result of transactions or events that may occur in the future, including the issuance of new accounting standards either in the United States or Mexico. Potential investors should consult their professional advisors for an understanding of the differences between MFRS and U.S. GAAP, and how those differences might affect the financial information included in this offering memorandum. The Company is responsible for preparing the summary below.

Accounting for the Effects of Inflation

Mexico

Through December 31, 2007, MFRS required that the comprehensive effects of price level changes due to inflation be recorded in the basic financial statements for all non-monetary and monetary items. MFRS required the recognition of the effects of inflation on non-monetary assets and expenses including inventories, cost of sales, property, plant and equipment, accumulated depreciation and depreciation, and other non-monetary assets, as well as stockholders’ equity.

Non-monetary assets and stockholders’ equity were generally restated for inflation using factors derived from the NCPI, except that inventory and cost of sales may be adjusted to their replacement cost, not to exceed net realizable value. MFRS also required the determination of an inflationary gain or loss arising from a company’s net monetary asset or liability position, and the adjustment or restatement of income statement amounts for the year in constant pesos of purchasing power as of the date of the most recent balance sheet presented, as well as the presentation of financial statement amounts from prior years in constant pesos of purchasing power as of the date of the most recent balance sheet presented. Accounting for the effects of inflation under MFRS was considered a more meaningful presentation than historical cost based financial reporting for Mexican companies.

Through December 31, 2007, under MFRS, equipment of non-Mexican origin could be restated by applying the inflation rate of the country of origin, and then translated at the year-end exchange rate of the Mexican peso.

Beginning January 1, 2008, MFRS established new standards for recognizing the effects of inflation in an entity’s financial statements as measured by changes in a general price index only. MFRS provides criteria for identifying both inflationary and non-inflationary environments, and provides guidelines to cease or start recognizing the effects of inflation in financial statements when the general price index in a cumulative three- year period exceeds 26% in the countries of the functional currency where the company and subsidiaries operate. Restatement of financial statements for earlier periods presented is not permitted by MFRS.

A-1 United States

Under U.S. GAAP, companies are generally required to prepare financial statements using historical costs that are not subsequently adjusted for inflation. However, the application of MFRS B-10 represents a comprehensive measure of the effects of price level changes in the inflationary Mexican economy and, as such, is considered a more meaningful presentation than historical, cost-based financial reporting for both Mexican and U.S. accounting purposes.

Under U.S. GAAP, the effect of applying the option provided by the MFRS B-10, “Recognition of the Effects of Inflation on Financial Information,” for the restatement of equipment of non-Mexican origin does not meet the consistent reporting currency requirement of Regulation S-X of the Securities and Exchange Commission (“SEC”).

Functional Currency and Reporting Currency

Mexico

Through December 31, 2007, MFRS did not incorporate the concept of functional currency, and, therefore, entities were allowed to have a reporting and accounting currency different from the functional currency, without the need to perform a translation process.

Beginning January 1, 2008, MFRS incorporates the concepts of accounting currency, functional currency and reporting currency and establishes the procedures to translate the financial information, similar to U.S. GAAP except for example, if an inflationary environment is identified.

United States

Under U.S. GAAP, historically, if an entity’s books of record are not maintained in its functional currency, re-measurement into the functional currency is required. That re-measurement is required before translation into the reporting currency. The re-measurement process is intended to produce the same result as if the entity’s books of record had been maintained in the functional currency. To accomplish that result, it is necessary to use historical exchange rates between the functional currency and another currency in the re-measurement process for certain accounts. The re-measurement effects are recognized in earnings.

Consolidation Criteria

Mexico

Through December 31, 2007, MFRS required consolidation of all subsidiaries over which a company has control or significant influence, despite not holding a majority of the voting common stock of the subsidiary. Control over another company is considered to exist when more than 50% of a company’s outstanding shares, with voting rights, are held directly or indirectly through a subsidiary, unless the holder can demonstrate that control to govern the company has been yielded.

Effective January 1, 2009, MFRS incorporated the concept of special purpose entities and, addressed how such entities should be identified and consolidated, potential voting rights and possible impact over control, and established the basis for reporting and accounting in the case of losing control of a subsidiary.

United States

U.S. GAAP generally only requires consolidation when a company has a controlling financial interest, either through a majority voting interest or through the existence of other control factors. Additionally, it requires consolidation of variable interest entities for which the company is the primary beneficiary, will absorb a majority of the investee’s expected losses, and is entitled to receive a majority of the entity’s expected residual returns or both.

A-2 Minority Interest

Mexico

Under MFRS, minority interest in consolidated subsidiaries is presented as a separate component of stockholders’ equity in the balance sheet. In the statement of income, minority interest is included in consolidated net income, and the distribution between majority and minority interests is presented below consolidated net income.

Effective January 1, 2009, MFRS established new accounting and measurement rules regarding a noncontrolling interest in a subsidiary, which are consistent with U.S. GAAP.

United States

In the past, under U.S. GAAP, minority interest was excluded from stockholders’ equity and it was presented between liabilities and equity in the balance sheet. In the statement of income, it was presented as a reduction of consolidated net income.

Beginning on or after December 15, 2008, U.S. GAAP prescribes new guidelines that (a) to establish accounting and reporting standards for the noncontrolling interest in a subsidiary (previously referred to as “minority interest”) and the deconsolidation of a subsidiary; (b) change the way the consolidated income statement is presented as the noncontrolling interest will be presented within equity; (c) establish a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation; (d) require that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated; and (e) require expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary.

Capitalized Comprehensive Financing Cost

Mexico

Through December 31, 2006, under MFRS an entity was allowed, but not required, to capitalize certain comprehensive financing costs on assets under construction. Effective January 1, 2007, MFRS requires certain comprehensive financing costs to be capitalized on qualifying assets (assets that require a period of time to be ready to use). Comprehensive financial results to be capitalized include interest expense, foreign currency exchange gains and losses, and inflationary monetary gain or loss related to financial liabilities.

United States

Under U.S. GAAP, interest expense incurred during the construction (development) period on qualifying assets must be considered as an additional cost to be capitalized. In all instances, foreign exchange and inflationary monetary gains and losses (if applicable) are excluded.

Impairment of Long-Lived Assets

Mexico

MFRS requires that all long-lived assets be evaluated periodically in order to determine whether there is an indication of potential impairment. The calculation of impairment losses requires the determination of the recoverable value of such assets, which is defined as the greater of the net selling price of a cash-generating unit and its value in use, which is the present value of discounted future net cash flows. In addition, under certain limited circumstances, the reversal of previously recognized impairment losses is permitted. Any recorded impairment losses are presented in other expenses.

A-3 United States

U.S. GAAP requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Assets are considered impaired when the fair value is less than the carrying value of the asset. An impairment loss is to be recorded only when the recoverable amount of the asset, defined as the estimated future undiscounted cash flows expected to result from the use of the asset, is less than the carrying value of the asset, and is measured by the difference between the carrying value of the asset and its fair value. Any impairment loss recorded for an asset to be held and used establishes a new cost basis and, therefore, cannot be reversed in the future. Any recorded impairment losses are presented in operating expenses.

Deferred Income Tax

Mexico

Under MFRS, deferred tax assets and liabilities are recognized for all significant temporary differences between the carrying amounts of existing assets and liabilities as of the balance sheet date and their respective tax bases. MFRS is similar to U.S. GAAP with respect to accounting for current and deferred income taxes, except that MFRS establishes that any deferred tax assets recorded must be reduced by a valuation allowance if it is “highly probable” that all or a portion of the deferred tax assets will not be realized.

United States

Under U.S. GAAP, deferred income taxes are accounted for under the balance sheet method. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as the recognition of operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recognized if, based on the weight of available evidence, it is “more likely than not” that all or a portion of the deferred tax asset will not be realized. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. U.S. GAAP requires separate presentation of current and non-current income tax assets or liabilities, depending on the classification of the asset or liability to which the deferred tax item relates.

U.S. GAAP also prescribes a comprehensive model for the recognition, measurement, financial statement presentation and disclosure of uncertain tax positions taken or expected to be taken in a tax return. FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

United States

U.S. GAAP requires a statement of cash flows describing the cash flows provided by or used in operating, investing and financing activities. Non-cash transactions are excluded from the statement of cash flows.

Fair Value Measurements

Mexico

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. The use of either an exit or entry price is not specified. Mexico has no definition of what constitutes a principal (or most advantageous) market. There is no guidance as to the use of a fair value measurement within a bid-ask spread, but it does not preclude its use.

A-4 United States

U.S. GAAP clarifies that fair value is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. This Statement also emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

Labor Obligations

Mexico

Through December 31, 2007, companies were required to account for an additional liability, and their corresponding intangible assets and separate equity component when an unfunded accumulated benefit obligation existed.

Beginning January 1, 2008, accounting for labor obligations was amended. The most important changes are the reduction to a maximum five-year period to amortize prior year items, the effects of the salary growth in the calculation of the Obligation for Defined Benefits (formerly known as Obligations for Projected Benefits) and the elimination of the accounting treatment for the additional liability and its corresponding intangible asset and separate equity component. Companies are required to present the full funded status only within the footnotes.

United States

Under U.S. GAAP, an employer is required to accrue a liability and recognize an expense during the period in which the employee earns paid absences. In addition, under U.S. GAAP entities must apply the provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. This statement requires companies to (i) fully recognize, as an asset or liability, the overfunded or underfunded status of defined pension and other postretirement benefit plans; (ii) recognize changes in the funded status through other comprehensive income in the year in which the changes occur; (iii) measure the funded status of defined pension and other postretirement benefit plans as of the date of the company’s fiscal year-end; and (iv) provide enhanced disclosures. In addition, a company must now measure the fair value of its plan assets and benefit obligations as of the date of its year-end balance sheet.

Statement of Cash Flows

Mexico and the United States

Through December 31, 2007, MFRS specified the appropriate presentation of the statement of changes in financial position be based on financial statements restated in constant Mexican pesos. MFRS identifies the sources and applications of resources representing differences between beginning and ending financial statement balances in constant Mexican pesos. Monetary and foreign exchange gains and losses are not treated as non-cash items in the determination of resources provided by operations.

Beginning January 1, 2008 MFRS requires entities to present a cash flow statement describing the cash flow provided by or used in operating, investing and financing activities similar to U.S. GAAP. Under MFRS, restricted cash is part of cash and cash equivalents, with a separate disclosure of restricted cash. Entities are required to classify interest paid as cash outflows for financing activities. Interest expense of the period is reconciled from the Net Income before taxes and Interest paid during the period is included as financing activities. MFRS requires classifying interest received within the same group of activity as the operation to which they are associated.

A-5 REGISTERED OFFICE OF SIGMA ALIMENTOS, S.A DE C.V. Ave. Gómez Morín 1111 Sur Col. Carrizalejo, San Pedro Garza García 66254 Nuevo León, México

TRUSTEE, REGISTRAR, TRANSFER AGENT AND PRINCIPAL PAYING AGENT

The Bank of New York Mellon 101 Barclay Street, 4th Floor East New York, New York 10286 United States

LUXEMBOURG LISTING AGENT, TRANSFER AGENT AND PAYING AGENT

The Bank of New York Mellon (Luxembourg) S.A. Corporate Trust Services Aerogolf Center, 1A Hoehenhof, L-1736 Senningerberg, Luxembourg

LEGAL ADVISOR TO SIGMA ALIMENTOS, S.A. DE C.V.

As to U.S. law Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153-0119 United States

LEGAL ADVISORS TO THE INITIAL PURCHASERS

As to U.S. law As to Mexican law Simpson Thacher & Bartlett LLP Mijares, Angoitia, Cortés y Fuentes, S.C. 425 Lexington Avenue Montes Urales 505, 3rd Floor New York, New York 10017-3954 Lomas de Chapultepec United States Mexico, D.F., Mexico 11000

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers, S.C. Mariano Escobedo No. 573 Col. Rincon del Bosque, C.P. México, D.F., México 11580 OFFERING MEMORANDUM

SIGMA ALIMENTOS, S.A. DE C.V.

US$250,000,000

6.875% Senior Notes due 2019

Joint Book-Running Managers

Deutsche Bank Securities Santander

The date of this offering memorandum is December 9, 2009