SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

---

Form 20-F

|o                                                                | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|---------------------------------------------------------------- | ----------------------------------------------------------------------------------------------
|OR                                                              
|ý                                                                | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|For the fiscal year ended December 31, 2004                     
|OR                                                              
|o                                                                | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|for the transition period
from                                to

Commission File Number: 1-13032

Grupo Industrial Maseca, S.A. de C.V.(Exact name of Registrant as specified in its charter)

|N/A                                                                                                                                                  |  | United Mexican States                          
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------
|(Translation of Registrant's name into English)                                                                                                      |  | (Jurisdiction of incorporation or organization)
|                                                                                                                                                     |  |                                                
|Avenida Enrique Herrera 2307
Torre Martel
Col. Valle Oriente
San Pedro Garza García, Nuevo León
66290 México(Address of principal executive offices)
|                                                                                                                                                     |  |                                                
|Securities registered or to be registered pursuant to Section 12(b) of the Act:                                                                     
|                                                                                                                                                     |  |                                                
|
|Class B Common Shares, without par value                                                                                                             |  | New York Stock Exchange*                       
|American Depositary Shares, each representing                                                                                                        |  | New York Stock Exchange                        
|15 Class B Common Shares, without par value                                                                                                          |  |                                                

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered
by the annual report:

504,150,300 Class A Common Shares, without par value
414,254,700 Class B Common Shares, without par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past
90 days.

Yes ý No o

Indicate by check mark which financial statement item the registrant has elected to follow:

Item 17 o Item 18 ý

---



---





TABLE OF CONTENTS

|PART I.   |  | 2                                                                            
|--------- |  | -----------------------------------------------------------------------------
|ITEM 1.   |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.                       
|ITEM 2.   |  | OFFER STATISTICS AND EXPECTED TIMETABLE.                                     
|ITEM 3.   |  | KEY INFORMATION.                                                             
|ITEM 4.   |  | INFORMATION ON THE COMPANY.                                                  
|ITEM 5.   |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS.                                
|ITEM 6.   |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.                                  
|ITEM 7.   |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.                           
|ITEM 8.   |  | FINANCIAL INFORMATION.                                                       
|ITEM 9.   |  | THE OFFER AND LISTING.                                                       
|ITEM 10.  |  | ADDITIONAL INFORMATION.                                                      
|ITEM 11.  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                  
|ITEM 12.  |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.                      
|PART II.  |  | 61                                                                           
|ITEM 13.  |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.                             
|ITEM 14.  |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.
|ITEM 15.  |  | CONTROLS AND PROCEDURES.                                                     
|ITEM 16A. |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             
|ITEM 16B. |  | CODE OF ETHICS                                                               
|ITEM 16C. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       
|ITEM 16D. |  | NOT APPLICABLE                                                               
|ITEM 16E. |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       
|PART III. |  | 63                                                                           
|ITEM 17.  |  | FINANCIAL STATEMENTS.                                                        
|ITEM 18.  |  | FINANCIAL STATEMENTS.                                                        
|ITEM 19.  |  | EXHIBITS.                                                                    

i

---





PRESENTATION OF FINANCIAL INFORMATION

Grupo Industrial Maseca, S.A. de C.V., or GIMSA, is a corporation (sociedad anónima de capital
variable) organized under the laws of the United Mexican States, or Mexico.

In
this Annual Report on Form 20-F, references to "pesos" or "Ps." are to Mexican pesos, and references to "U.S. dollars," "U.S.$," "dollars" or "$" are to United
States dollars. "We," "our," "us," "our company," "GIMSA" and similar expressions refer to Grupo Industrial Maseca, S.A. de C.V. and its consolidated subsidiaries, except when the reference is
specifically to Grupo Industrial Maseca, S.A. de C.V. (parent company only) or the context otherwise requires.

This
Annual Report contains our audited consolidated financial statements as of December 31, 2003 and 2004 and for the years ended December 31, 2002, 2003 and 2004. The
financial statements have been audited by PricewaterhouseCoopers, an independent registered public accounting firm.

We
publish our financial statements in pesos and prepare our consolidated financial statements in accordance with accounting principles generally accepted in Mexico, commonly referred to
as "Mexican GAAP." Mexican GAAP differs in certain significant respects from accounting principles generally accepted in the United States of America, commonly referred to as "U.S. GAAP." See
Note 15 to our audited consolidated financial statements for information relating to the nature and effect of such differences and for a quantitative reconciliation of our consolidated net
income and stockholders' equity to U.S. GAAP.

As
the Mexican economy has experienced significant levels of inflation in the past, although in recent years inflation has declined significantly, we are required under Mexican GAAP to
recognize the effects of inflation in our financial statements. Under Bulletin B-10, issued by the Mexican Institute of Public Accountants, we are required to present our financial
information in inflation-adjusted monetary units to allow for more accurate comparisons of financial line items over time and to mitigate the distortive effects of inflation on our financial
statements. Unless otherwise indicated, all financial information in this Annual Report has been restated in pesos of constant purchasing power as of December 31, 2004.

We
are required to determine our monetary position gain/loss to reflect the effect of inflation on our monetary assets and liabilities. We determine our net monetary position by
subtracting our monetary liabilities from our monetary assets and then the resulting net monetary position is multiplied by the appropriate inflation rate for the period with the resulting monetary
gain or loss reflected in earnings. In so doing, we can reflect the effect inflation is having on our monetary items.

MARKET SHARE AND OTHER INFORMATION

The information contained in this Annual Report regarding our market position in Mexico is based on our own estimates. While we believe our internal research and
estimates are reliable, they have not been verified by any independent source and we cannot assure you as to their accuracy. All references to "tons" in this Annual Report refer to metric tons. One
metric ton equals 2,204 pounds. Estimates of production capacity contained herein assume operation of the relevant facilities on the basis of 24 hours a day, 360 days a year on three
shifts and assume only regular intervals for required maintenance.

FORWARD LOOKING STATEMENTS

This Annual Report includes "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act, as amended, including the statements about our plans, strategies and prospects under "Item 4. Information on the Company" and "Item 5. Operating
and Financial Review and Prospects." Some of these statements contain words such as "believe," "expect," "intend," "anticipate," "estimate,"

1

---



"strategy,"
"plans" and other similar words. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors that could cause our
actual results to be materially different from those projected. These risks, uncertainties and factors include: general economic and business conditions, including changes in the Mexican peso/U.S.
dollar exchange rate and conditions that affect the price of corn; potential changes in demand for corn flour or tortillas; price and product competition; and other factors discussed herein.

PART I.

Item 1.    Identity of Directors, Senior Management and Advisors.



Item 2.    Offer Statistics and Expected Timetable.



Item 3.    Key Information.

SELECTED FINANCIAL DATA

The selected consolidated balance sheet data as of December 31, 2003 and 2004 and the selected consolidated statements of income data for the three years
ended December 31, 2002, 2003 and 2004 and notes thereto set forth below have been derived from our consolidated financial statements. Such data should be read in conjunction with, and is
qualified in its entirety by reference to, our consolidated financial statements, including the notes thereto, included elsewhere in this Form 20-F.

Our
consolidated financial statements are prepared in accordance with Mexican GAAP, which differs in certain significant respects from accounting principles generally accepted in the
United States of America. Note 15 to our consolidated financial statements provides information relating to the nature and effect of such differences, as they relate to us, and provides a
reconciliation to U.S. GAAP of net income and total stockholders' equity.

Pursuant
to Mexican GAAP, the consolidated financial statements and the selected consolidated financial data set forth below restate the components of stockholders' equity using the
Mexican National Consumer Price Index, or NCPI, and record gains and losses in purchasing power from holding monetary assets or liabilities. Under Mexican GAAP, non-monetary assets, with
the exception of inventories and fixed assets of non-Mexican origin, are restated using the NCPI factors. Inventories are restated at current replacement costs, while fixed assets of
foreign origin are restated by the inflation rate of the country of origin prior to translation to pesos at the period-end exchange rate. Mexican GAAP also requires restatement of all
financial statements to pesos of constant purchasing power as of the date of the most recent balance sheet presented, and accordingly all data in the consolidated financial statements and in the
selected consolidated financial data set forth below have been restated in pesos of constant purchasing power as of December 31, 2004. The effects of inflation accounting under Mexican GAAP,
other than for the use of a specific index for the restatement of fixed assets of foreign origin, have not been reversed in the reconciliation to U.S. GAAP. See Note 15 to our consolidated
financial statements.

2

---





Year ended December 31,2000

2001

2002

2003

2004(Thousands of pesos of constant purchasing power as of December 31, 2004, except share and per share amounts)Income Statement DataMexican GAAP:Net sales

Ps.
5,765,254

Ps.
5,410,466

Ps.
5,209,159

Ps.
5,470,775

Ps.
5,786,792Cost of sales


(4,106,072
)

(3,781,312
)

(3,665,999
)

(4,038,877
)

(4,263,907
)Gross profit


1,659,182


1,629,154


1,543,160


1,431,898


1,522,885Selling, general and administrative expenses


(1,025,496
)

(1,018,529
)

(988,181
)

(1,017,612
)

(1,072,103
)Operating income


633,686


610,625


554,979


414,286


450,782Comprehensive financing income (cost), net(1)


28,395


24,884


(29,258
)

(4,995
)

(478
)Other (expense) income, net:


(5,331
)

(21,933
)

(7,203
)

8,392


(47,194
)Income before income taxes, employees' statutory profit sharing and minority interest


656,750


613,575


518,518


417,683


403,110Income tax (current and deferred)


(196,113
)

(180,024
)

(75,194
)

(65,662
)

24,818Net income


443,808


407,718


397,098


328,168


405,922Earnings per share(2)


0.48


0.44


0.43


0.36


0.44Dividends per share(3)


0.16


0.95


0.14


0.24


0.33Weighted average number of shares outstanding (000s)


918,405


918,405


918,405


918,405


918,405U.S. GAAP(4):Net sales

Ps.
5,765,254

Ps.
5,410,466

Ps.
5,209,159

Ps.
5,470,775

Ps.
5,786,792Operating income


593,184


552,425


493,215


374,314


406,436Income before income taxes, employees' statutory profit sharing and minority interest


619,180


561,030


461,174


382,760


422,040Net income


443,083


373,662


388,279


307,914


412,499Earnings per share(2)


0.48


0.40


0.42


0.34


0.45Dividends per share(3)


0.16


0.95


0.14


0.24


0.33Weighted average number of shares outstanding (000s)


918,405


918,405


918,405


918,405


918,405


3

---



Year ended December 31,2000

2001

2002

2003

2004(Thousands of pesos of constant purchasing power as of December 31, 2004)Balance Sheet Data (Mexican GAAP):Inventories

Ps.
1,009,010

Ps.
978,563

Ps.
1,098,786

Ps.
1,227,084

Ps.
1,154,745Property, plant and equipment, net


4,807,876


4,533,379


4,306,556


4,098,580


3,802,267Total assets


8,159,888


7,379,493


7,636,346


7,491,949


7,468,491Short-term debt














Long-term debt














Deferred income taxes(5)


1,129,108


1,117,074


1,040,108


1,000,107


854,978Capital stock


3,507,928


3,507,928


3,507,928


3,507,928


3,507,928Total stockholders' equity


6,390,869


5,850,410


6,062,794


6,103,686


6,104,253Balance Sheet Data (U.S. GAAP)(4):Inventories

Ps.
1,009,010

Ps.
978,563

Ps.
1,098,786

Ps.
1,227,084

Ps.
1,154,745Property, plant and equipment, net


5,052,100


4,790,129


4,534,887


4,314,747


4,083,326Total assets


8,381,281


7,617,454


7,854,419


7,706,989


7,751,879Short-term debt














Long-term debt














Deferred income taxes(5)


1,206,594


1,200,362


1,108,447


1,065,844


932,732Capital stock


3,507,928


3,507,928


3,507,928


3,507,928


3,507,928Total stockholders' equity


6,201,942


5,671,820


5,878,127


5,909,508


5,962,047


---

Dividends

Our ability to pay dividends is limited by Mexican law and our bylaws (estatutos sociales). Because we are a
holding company with no significant operations of our own, we have distributable profits to pay dividends to the extent that we receive dividends from our subsidiaries. The ability of our subsidiaries
to make distributions to us is also limited by their bylaws and Mexican law. Accordingly, there can be
no assurance that we will pay dividends, and should we pay dividends, we cannot guarantee that they will be comparable to prior years.

Pursuant
to Mexican law and our bylaws the declaration, amount and payment of dividends are determined by a majority vote of the holders of the outstanding shares represented at a duly
convened

4

---



annual
shareholders' meeting. The amount of any future dividend would depend on, among other things, operating results, financial condition, cash requirements, losses for prior fiscal years, future
prospects and other factors deemed relevant by the board of directors and the shareholders.

In
addition, under Mexican law, companies may only pay dividends:



Holders
of our American Depositary Receipts, or ADRs, on the applicable record date are entitled to receive dividends declared on the shares contained in the units represented by
American Depositary Shares, or ADSs, evidenced by such ADRs. The depositary will fix a record date for the holders of ADRs in respect of each dividend distribution. We pay dividends in pesos and
holders of ADSs will receive dividends in U.S. dollars (after conversion by the depositary from pesos, if not then restricted
under applicable law) net of the fees, expenses, taxes and governmental charges payable by holders under the laws of Mexico and the terms of the deposit agreement.

During
2005, GIMSA resolved to pay dividends of Ps.303 million, stated in nominal terms, to be distributed to the shareholders in May 2005. During 2004, 2003 and 2002,
GIMSA paid dividends to its shareholders, in nominal terms, of Ps.294 million, Ps.202 million and Ps.110 million, respectively. In pesos of constant purchasing power as of
December 31, 2004, the dividends paid or payable to shareholders in 2004, 2003 and 2002 amounted to Ps.303 million, Ps.219 million and Ps.125 million.

Exchange Rate Information

Mexico has had a free market for foreign exchange since 1991. Prior to December 1994, the Mexican central bank (Banco de
México) kept the peso-U.S. dollar exchange rate within a range prescribed by the government through intervention in the foreign exchange market. In
December 1994, the government suspended intervention byBanco de Méxicoand allowed the peso to float freely against the U.S.
dollar. The peso declined during the period from 1994 through 1998, at times in response to events outside of Mexico, but was relatively stable in 1999, 2000 and 2001. In late 2001 and early 2002, the
Mexican peso appreciated considerably against the U.S. dollar and, more strongly, against other foreign currencies. From the second quarter of 2002 and until the end of 2003, the Mexican peso
depreciated in value. From the beginning of 2004 to date in 2005, the foreign exchange markets have been volatile due to international developments, especially the war in the Middle East, a weaker
U.S. dollar, and rising international oil prices. There can be no assurance that the government will maintain its current policies with regard to the peso or that the peso will not depreciate or
appreciate in the future.

The
following table sets forth, for the periods indicated, the high, low, average and period-end noon buying rate in New York City for cable transfers in pesos published by
the Federal Reserve Bank

5

---



of
New York, expressed in pesos per U.S. dollar. The rates have not been restated in constant currency units.

Noon Buying Rate (Ps. Per U.S.$)YearHigh(1)

Low(1)

Average(2)

Period End2000

Ps.
10.0870

Ps.
9.1825

Ps.
9.4716

Ps.
9.61802001


9.9720


8.9460


9.3255


9.15602002


10.4250


9.0005


9.7458


10.42502003


11.4063


10.1130


10.8460


11.24202004


11.6350


10.8050


11.2900


11.15402005 (through June 15)


11.4110


10.8125


11.0495


10.8305December 2004


11.3285


11.1150


11.2010


11.1540January 2005


11.4110


11.1715


11.2630


11.2065February 2005


11.2060


11.0430


11.1370


11.0885March 2005


11.3295


10.9755


11.1550


11.1770April 2005


11.2998


11.0360


11.1120


11.0820May 2005


11.0330


10.8850


10.9760


10.9125June 2005(3)


10.8825


10.8125


10.8500


10.8305


---

On
June 15, 2005, the noon buying rate for pesos was Ps.10.8305 to U.S.$1.00.

6

---





RISK FACTORS

Risks Relating to Mexico

Our Business Operations Could Be Affected by Economic Conditions in Mexico

We are a Mexican company with all our consolidated assets located in Mexico and basically all our consolidated net sales derived from Mexico. In
December 1994, Mexico experienced an economic crisis characterized by exchange rate instability and significant devaluation of the peso, increased inflation, high domestic interest rates, a
substantial outflow of capital, negative economic growth, reduced consumer purchasing power and high unemployment. In addition, the financial crises in 1998 and early 1999 in Asia, Russia and Latin
America resulted in instability in the foreign exchange markets and international financial markets. These events resulted in limited liquidity for the Mexican government and for local corporations as
well as an increase in interest rates in Mexico. Civil and political unrest in Venezuela or elsewhere could produce similar results. See "Adverse Developments in Other Emerging Market
Countries May Affect Mexico or the Price of Our Securities." The Mexican economy grew by 0.8% in 2002, 1.4% in 2003, 4.4% in 2004 and by an annualized rate of 2.4% in the first quarter of 2005.

Our Business Operations Could Be Affected by Government Policies in Mexico

The Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. Mexican governmental actions concerning the
economy could have a significant effect on Mexican private sector entities, as well as on market conditions, prices and returns on securities of Mexican issuers, including our securities.

On
December 1, 2000, Vicente Fox of thePartido Acción Nacional(National Action Party, or PAN) was inaugurated as
president of Mexico, ending more than 70 years of presidential rule by thePartido Revolucionario Institucional(Institutional Revolutionary
Party, or PRI). Neither the PRI nor the PAN succeeded in securing a majority in the Congress or Senate. In elections held in July 2003 the PAN lost additional seats in the Congress and state
governorships. The resulting gridlock, which is expected to continue at least until the Mexican presidential elections in 2006, has impeded the process of structural reform in Mexico which may
adversely affect economic conditions in Mexico, and consequently, our business, results of operation and financial condition. It is not clear what effect the presidential elections of 2006 and their
outcome will have on economic conditions and on our business, results of operations and financial condition.

In
the case of our sales of corn flour, governmental policies have affected us negatively in the past and may do so in the future. The elimination of the tortilla subsidy for consumers,
coupled with certain government's decisions reduced sales and hurt profits in 1999. Currently, the Mexican government issues corn import permits to various parties, including corn traders, typically
based upon the availability of domestic corn, which contributes to the stability of domestic corn prices. However, in the past, particularly during election years, the Mexican government has increased
the number of corn import permits, which had the effect of driving down the price of domestic corn, and consequently, reducing sales of corn flour. We currently depend on corn import permits to ensure
an adequate supply of corn in non-corn producing regions of the country. We believe that a shortage of corn import permits would currently have a greater adverse impact on our results of
operations than an increase in the number of corn imports. In the past, we have been able to obtain sufficient corn import permits to satisfy our corn requirements. Nevertheless, we cannot assure you
that the Mexican government will not take actions that could adversely affect us. See "Item 4. Information on the CompanyBusiness OverviewRegulations."

The
level of environmental regulation and enforcement in Mexico has increased in recent years. TheComisión Nacional del
Agua("National Water Commission" or "CNA") has brought enforcement

7

---



proceedings
against us for fees arising from our alleged water discharges from five of our facilities. While we are vigorously defending this action, we cannot assure you that we will succeed or that
further actions of this type will not be brought against us. We expect the trend toward greater environmental regulation and enforcement to continue and to be accelerated by international agreements
between Mexico and the United States. The promulgation of new environmental regulations or higher levels of enforcement may adversely affect us.

High Levels of Inflation and High Interest Rates in Mexico Could Adversely Affect the Business Climate in Mexico and Our Financial Condition and Results
of Operations

Mexico has experienced high levels of inflation in the past although in recent years inflation has declined significantly. The annual rate of inflation, as
measured by changes in the National Consumer Price Index, was 5.70% for 2002, 3.98% for 2003 and 5.19% for 2004. The annual average of the 28-day CETES rate was 7.09% in 2002, 6.21% in
2003 and 6.84% in 2004. From January through May 2005, the inflation rate was 0.89%. On June 14, 2005, the 28-day CETES rate was 9.62%. While we have no outstanding debt at
this time, high interest rates in Mexico may adversely affect the business climate in Mexico generally and our financing costs in the future and thus our financial condition and results of operations.

Developments in Other Countries Could Adversely Affect the Mexican Economy, the Market Value of Our Securities and Our Results of Operations

The Mexican economy may be, to varying degrees, affected by economic and market conditions in other countries. Although economic conditions in other countries may
differ significantly from economic conditions in Mexico, investors' reactions to adverse developments in other countries may have an adverse effect on the market value of securities of Mexican
issuers. In recent years, economic conditions in Mexico have become increasingly correlated to economic conditions in the United States. Therefore, adverse economic conditions in the United States
could have a significant adverse effect on the Mexican economy. In addition, in the past, economic crises in Asia, Russia, Brazil, Argentina and other emerging market countries adversely affected the
Mexican economy.

We
cannot assure you that the events in other emerging market countries, in the United States or elsewhere will not adversely affect our business, financial condition and results of
operations.

You May Be Unable to Enforce Judgments Against Us in Mexican Courts

We are a Mexican corporation (sociedad anónima de capital variable). Our directors and executive
officers are residents of Mexico, and a significant portion of the assets of our directors and executive officers, and our assets, are located in Mexico. You may experience difficulty in effecting
service of process upon our company or our directors and executive officers in the United States, or, more generally, outside of Mexico, and in enforcing civil judgments of non-Mexican
courts in Mexico, including judgments predicated on civil liability under U.S. federal securities laws, against us, or our directors and executive officers. We have been advised by our General
Counsel, that there is doubt as to the enforceability in original actions in Mexican courts of liabilities predicated solely on the U.S. federal securities laws.

Differences Between Mexican GAAP and U.S. GAAP May Have an Impact on the Presentation of Our Financial Information

Our annual audited consolidated financial statements are prepared in accordance with Mexican GAAP, which differ in some significant respects from U.S. GAAP.
Financial results reported using Mexican GAAP may differ substantially from those results that would have been obtained using U.S. GAAP. We are required, however, to file an annual report on
Form 20-F containing financial

8

---



statements
reconciled to U.S. GAAP, although this filing only contains year-end financial statements reconciled to U.S. GAAP for our three most recent fiscal years. See Note 15 to
our audited consolidated statements.

Risks Relating to Our Company

Fluctuations in the Cost and Availability of Corn May Affect Our Financial Performance

Our financial performance may depend upon the price and availability of corn as it represented 68% of our cost of sales for 2004. Mexican and world markets have
experienced periods of over-supply and shortage of corn, some of which have caused adverse effects on our results of operations. We cannot always predict whether or when shortages or
over-supply of corn will occur. In addition, future Mexican or other governmental actions could affect the price and availability of corn. In 2004, the price of corn we purchased increased
1% from 2003. Any adverse developments in domestic and international corn markets could have a material adverse effect upon our business, financial condition, results of operations and prospects.

The Presence of Genetically Altered Corn in Our Products May Have a Negative Impact on Our Sales, Profits or Stock Price

As we do not grow our own corn, we are required to buy these items from various producers in the United States, Mexico and elsewhere. Although we only buy corn
from farmers and grain elevators who
agree to supply us with approved varieties of grain and we have developed a protocol to test and monitor our grain for certain strains of bacteria and chemicals that have not been approved for human
consumption, we may unwittingly buy genetically modified corn that is not approved for human consumption. This may result in costly recalls and subject us to lawsuits which may have a negative impact
on our sales, profits or stock price.

Adverse Developments at Our Parent Company, GRUMA, May Increase Our Financing Costs or Otherwise Adversely Affect Us or Our Stock Price

Gruma, S.A. de C.V., or GRUMA, our parent company is currently rated BBB- by Standard & Poor's and by Fitch, and Ba1 by Moody's. Future
downgrades or changes in outlook, if any, could cause GRUMA's or our costs with respect to new debt to increase which could ultimately affect GRUMA's stock price as well as ours.

Risks Relating to Our Controlling Shareholders and Capital Structure

Holders of ADSs May Not Be Able to Vote at Our Shareholders' Meetings

Our shares are traded on the New York Stock Exchange in the form of ADSs. There can be no assurance that holders of our shares through ADSs will receive notices
of shareholder meetings from our ADS depositary with sufficient time to enable such holders to return voting instructions to our ADS depositary in a timely manner.

Holders of ADSs Are Not Entitled to Attend Shareholder Meetings, and They May Only Vote Through the Depositary

Under Mexican law, a shareholder is required to deposit its shares with a Mexican custodian in order to attend a shareholders' meeting. A holder of ADSs will not
be able to meet this requirement, and accordingly is not entitled to attend shareholders' meetings. A holder of ADSs is entitled to instruct the depositary as to how to vote the shares represented by
ADSs, in accordance with procedures provided for in the deposit agreement, but a holder of ADSs will not be able to vote its shares directly at a shareholders' meeting or to appoint a proxy to do so.
In addition, such voting

9

---



instructions
may be limited to matters enumerated in the agenda contained in the notice to shareholders and with respect to which information is available prior to the shareholders' meeting.

Holders of ADSs May Not Be Able to Participate in Any Future Preemptive Rights Offering and as a Result May Be Subject to a Dilution of Equity Interest

Under Mexican law, if we issue new shares for cash as a part of a capital increase, we must generally grant our shareholders the right to purchase a sufficient
number of shares to maintain their existing ownership percentage. Rights to purchase shares in these circumstances are known as preemptive rights. We are not legally permitted to allow holders of our
shares through ADSs in the United States to exercise any preemptive rights in any future capital increases unless (i) we file a registration statement with the U.S. Securities and
Exchange Commission, or SEC, with respect to that future issuance of shares or (ii) the offering qualifies for an exemption from the registration requirements of the Securities Act. At the time
of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC, as well as the benefits of preemptive rights to
holders of our shares through ADSs in the United States and any other factors that we consider important in determining whether to file a registration statement.

We
are under no obligation to, and there can be no assurance that we will, file a registration statement with the SEC to allow holders of our shares through ADSs in the United
States to participate in a preemptive rights offering. In addition, under current Mexican law, sales by the ADS depositary of preemptive rights and distribution of the proceeds from such sales to the
holders of our shares through ADSs is not possible. As a result, the equity interest of holders of our shares through ADSs would be diluted proportionately and such holders may not receive any
economic compensation. See "Item 10. Additional InformationBylawsPreemptive Rights."

The Protections Afforded to Minority Shareholders in Mexico Are Different From Those in the United States

Under Mexican law, the protections afforded to minority shareholders are different from those in the United States. In particular, the law concerning fiduciary
duties of directors and controlling shareholders is not well developed and there are different procedural requirements for bringing shareholder lawsuits. As a result, in practice it maybe more
difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholders than it would be for shareholders of a U.S. company.

Our Antitakeover Protections May Deter Potential Acquirors

Certain provisions of our bylaws could make it substantially more difficult for a third party to acquire control of us. These provisions in our bylaws may
discourage certain types of transactions involving the acquisition of our securities. These provisions could discourage transactions in which our shareholders might otherwise receive a premium for
their shares over the then current market price. Holders of our securities who acquire shares in violation of these provisions will not be able to vote, or receive dividends, distributions or other
rights in respect of, these securities and would be obligated to pay us a penalty. For a description of these provisions, see "Additional InformationBylawsAntitakeover
Protections."

We Have Significant Transactions With Our Parent Company GRUMA and Other Affiliates That Could Create Potential Conflicts of Interest

In the ordinary course of business, we and certain of our subsidiaries enter into agreements with GRUMA, our parent company, and other affiliates, including
agreements pertaining to the sharing of intellectual property, and providing technical and advisory support services. We also periodically provide loans to GRUMA, which owed us Ps.1,259 million
(in nominal terms) as of June 15, 2005.

10

---



Transactions
with affiliates may create the potential for conflicts of interest. See "Item 7. Major Shareholders and Related Party TransactionsRelated Party Transactions."

Exchange Rate Fluctuations May Affect the Value of Our Shares

Fluctuations in the exchange rate between the Peso and the U.S. Dollar will affect the U.S. Dollar value of an investment in our shares and of dividend and other
distribution payments on those shares. See "Item 3. Key InformationExchange Rate Information."

Our Bylaws Restrict the Ability of Non-Mexican Shareholders to Invoke the Protection of Their Governments With Respect to Their Rights as
Shareholders

As required by Mexican law, our bylaws provide that non-Mexican shareholders shall be considered as Mexican in respect of their ownership interests in
us and shall be deemed to have agreed not to invoke the protection of their governments in certain circumstances. Under this provision, a non-Mexican shareholder is deemed to have agreed
not to invoke the protection of its own government by asking such government to interpose a diplomatic claim against the Mexican government with respect to the shareholder's rights as a shareholder,
but is not deemed to have waived any other rights it may have, including any rights under the U.S. securities laws, with respect to its investment in us. If you invoke such governmental protection in
violation of this agreement, your shares could be forfeited to the Mexican government.

Our Controlling Shareholder Can Exert Substantial Control Over Our Company

As of April 29, 2005, Mr. Roberto González Barrera controlled, directly and indirectly, approximately 52.4% of the outstanding shares
of GRUMA, our parent company. GRUMA owns 83.2% of our outstanding shares. Consequently, Mr. González Barrera has the power to elect the majority of our directors and to determine
the outcome of most actions requiring approval of our stockholders, including the declaration of dividends.

Mr. González
Barrera has pledged part of his shares in GRUMA to secure some of his borrowings. If there is a default and the lenders enforce their rights against
any or all of these shares, Mr. González Barrera could lose control over GRUMA and a change of control could result. In addition, this could trigger a default in one of GRUMA's
credit agreements and have a material adverse effect upon our business, financial condition, results of operations and prospects.

We Are a Holding Company and Depend Upon Dividends and Other Funds From Subsidiaries to Service Our Debt

We are a holding company with no significant assets other than the shares of our subsidiaries. As a result, our ability to meet any debt service obligations
depends primarily upon our receiving sufficient funds from our subsidiaries. As of June 15, 2005, we have no debt. Under Mexican law, companies may only pay dividends:



11

---





Item 4. Information on the Company.

HISTORY AND DEVELOPMENT

Grupo Industrial Maseca, S.A. de C.V. is a corporation (sociedad anónima de capital variable)
registered in Monterrey, Mexico under the Mexican Companies Law (Ley General de Sociedades Mercantiles) on March 12, 1981 with a corporate life
of 99 years. Our full legal name is Grupo Industrial Maseca, S.A. de C.V., but we are also known as GIMSA and Maseca. The address of our principal executive office is located at Enrique Herrera
2307, Torre Martel, Col. Valle Oriente, San Pedro Garza García, Nuevo León, 66290 México, and our telephone number is
(52) 818-3-99-33-00. Our legal domicile is Monterrey, Nuevo León, México.

We
were founded in 1949, when Roberto González Barrera, the Chairman of our board of directors and Chief Executive Officer, started producing and selling corn flour in
Northeastern Mexico as an alternative ingredient in producing tortillas. Prior to our founding, all corn tortillas were made using a wet corn dough method. We believe that the preparation of tortillas
using the corn flour method presents major advantages including greater efficiency and higher quality.

We
believe we are one of the largest corn flour producers in Mexico and that the gradual transition to the dry corn flour method offers significant opportunities for further growth.

Operations and Capital Expenditures

We currently own 17 corn flour mills, all of which are located throughout Mexico, typically within corn growing regions and those of large tortilla consumption.
One of the plants (Chalco) is temporarily closed. The Chalco plant has been inactive since October 1999. We have temporarily shifted production to other plants to achieve savings in overhead
costs. These idled assets are not being depreciated since the carrying value is expected to be recovered and the remaining useful life is maintained. During 2004 we decided to delay the use of these
assets, which was planned for the fourth quarter of 2004, and instead increased the utilization of existing capacity at our other plants as part of our programs for production efficiency.

In
recent years, our capital expenditures for our plants were primarily used to update technology and corn flour production process. We spent U.S.$2.9 million,
U.S.$7.2 million and U.S.$5.4 million for these purposes in 2002, 2003 and 2004, respectively. Although no assurances can be given as to future levels of capital expenditures, during the
first quarter of 2005 we spent U.S.$1.7 million on investments in fixed assets of GIMSA in 2005, and currently project total investments in fixed assets during 2005 of approximately
U.S.$10.0 million, which will be used primarily for upgrading production equipment, acquisition of transportation equipment and information technology upgrades.

BUSINESS OVERVIEW

Principal Products

We produce, market and sell corn flour in Mexico, which is then used in the preparation of tortillas and other related products. In 2004, we had net sales of
Ps.5,787 million. We believe we are one of the largest corn flour producers in Mexico. We estimate that our corn flour is used in one third of the corn tortillas consumed in Mexico. We sell
corn flour in Mexico under the brand name MASECA®. MASECA® flour is a ready-mixed corn flour that becomes dough when water is added. This corn dough can then be pressed to an
appropriate thickness, cut to shape and cooked to produce tortillas and similar food products.

12

---



We
produce over 40 varieties of corn flour for the manufacture of different food products. We sell corn flour to tortilla and tortilla chip manufacturers as well as in the retail market.
Our principal corn flour product is a standard fine-textured, white flour used to manufacture tortillas.

We
also produce and sell tortillas through several small tortilla shops mainly located in central Mexico. Our tortilla sales represent approximately 1% of our total sales volume and
approximately 2% of our net sales.

Sales and Marketing

We sell packaged corn flour in bulk principally to thousands of tortilla and tortilla chip manufacturers who purchase in 20-kilogram sacks and in the
retail market which purchases in one-kilogram packages. To a lesser extent, we also produce and sell tortillas to the end consumer.

The
following table sets forth our bulk and retail sales volumes of corn flour in Mexico and our tortilla sales volume for the periods indicated.

|           |        | Year Ended December 31,
|---------- | ------ | -----------------------
|
|
|Corn Flour |        |                        
|           | Bulk   |                        
|           | Retail |                        
|           |        |                        
|Tortillas  |        | 23,856                 
|           |        |                        
|Total      |        | 1,397,237              
|           |        |                        

Our
corn flour customer base is comprised primarily of bulk sales to small tortilla producers, ortortillerías, which
purchase corn flour in 20-kilogram sacks and produce tortillas on their premises, which are then sold locally. Retail sales of corn flour are channeled to two distinct markets: urban
centers and rural areas. Sales to urban consumers are made mostly through supermarket chains that use their own distribution networks to distribute MASECA® flour or through wholesalers who
sell the product to smaller grocery stores throughout Mexico. Sales to rural consumers are made principally through the Mexican government's social and distribution program Distribuidora Conasupo, S.A.,
or DICONSA, which consists of a network of small government-owned stores and which supplies rural areas with basic food
products. Our sales representatives are mainly concerned with promoting the dry corn flour method to tortilla producers. Mexico's tortilla industry is highly fragmented, consisting mostly of tortillerías,many of which continue to utilize, what is in our opinion, the relatively inefficient wet corn dough method of tortilla
production. We estimate that the traditional wet corn dough method accounts for approximately half of all tortillas produced in Mexico. Tortilla producers that do not utilize corn flour buy the wet
dough from dough producers or buy and mill their own corn and produce the wet dough themselves.

This
traditional method is a rudimentary practice requiring more energy, time and labor because it involves cooking the corn in water and with lime, milling the cooked corn, creating and
shaping the dough, and then making tortillas from that dough. We pioneered the dry corn flour method in which we mill the raw corn in our facilities into corn flour. Tortilla producers and consumers,
once they acquire the corn flour, may then simply add water to transform the flour into wet dough to produce tortillas. We believe the preparation of tortillas using the dry corn flour method
possesses several advantages over the traditional method. Our internal studies show that the dry corn flour method consumes less water, electricity, fuel and labor. We estimate that one kilogram of
corn processed through the corn flour method yields more tortillas on average than a similar amount of corn processed using the traditional method. Corn flour is also transported more easily than wet
corn dough and has a

13

---



shelf
life of approximately three months, compared with one or two days for wet corn dough. The market for wet corn dough is limited due to the perishable nature of the product, restricting sales of
most wet corn dough producers to their immediate geographic areas. Additionally, the corn flour's longer shelf life makes it easier for consumers in rural areas, where tortilleríasare relatively
scarce, to produce their own tortillas.

We
believe in the benefits of our dry corn flour method and, thus also, believe that we have substantial opportunities for growth by encouraging a transition to our method. Corn flour is
primarily used to produce corn tortillas, a principal staple of the Mexican diet. The tortilla industry is one of the largest industries in Mexico as tortillas constitute the single largest component
of Mexico's food industry. However, there is still reluctance to abandon traditional practice, particularly in central and southern Mexico, because corn dough producers and/or tortilla producers using
the traditional method incur lower expenses by working in an underground economy. Additionally, generally, such producers are not required to comply with environmental regulations, which also
represent savings for them. To the extent regulations in Mexico are enforced and we and our competitors are on the same footing, we expect to benefit from these developments.

We
have embarked on several programs to promote corn flour sales to tortilla producers and consumers. We offer incentives to potential customers, such as small independent tortillerías, to convert
to the corn flour method from the traditional wet corn dough method. The incentives we offer include new, easy
to use equipment designed specifically for small-volume users, financing, and individualized training. For example, in order to assist traditional tortilla producers in making the transition to corn
flour, we sell specially designed mixers made by Tecnomaíz, S.A. de C.V., or Tecnomaíz, one of GRUMA's research and development subsidiaries. We also help our tortilleríacustomers
to improve sales by directing consumer promotions to heighten the desirability of their products and increase
consumption, which, in turn, should increase corn flour sales. These efforts to improve sales include prime time advertising on television as well as radio, magazine and billboard advertising. In
2005, we intend to have our specialized sales teams continue their efforts to provide better and more individualized service to different types of customers.

During
2004 we implemented initiatives focused on developing a successful business model for our customers to increase the consumption of corn-flour based products generally
and our products specifically. Our strategy was based on a comprehensive business proposal that included the following product, service and marketing objectives:

14

---







During
2004 we implemented a national marketing campaign to emphasize the benefits and nutritional value of tortillas made with 100% MASECA® corn flour. This campaign
targeted both consumption of tortillas made by our customers and consumption of our retail corn flour packages sold directly to consumers by repositioning the use of corn flour not only for making
tortillas but for a wide variety of foods which are part of the Mexican diet. We believe this campaign has helped to increase the recognition of the MASECA® brand, created a greater
awareness about tortillas made with 100% MASECA® corn flour and created a greater awareness of the nutritional value of tortillas made of natural ingredients. We believe this campaign has
also helped us to position MASECA® corn flour as a nutritional product which can be used in the production of tortillas and other foods. In addition, we believe that this campaign has
helped contribute to the perception that tortillas are a healthy alternative to other food products.

Competition and Market Share

We face competition on three levelsfrom other corn flour producers, from sellers of wet corn dough and from the many tortilleríasthat produce their own wet corn dough on their premises. Our estimates indicate that about half of tortilla producers
continue to use the traditional wet corn dough method.

Our
biggest challenge in increasing the use of corn flour is the prevalence of the traditional method (cooked-corn method). In the corn flour industry, our principal
competitors are Grupo Minsa, S.A. de C.V. and regional corn flour producers. We compete against other corn flour manufacturers on the basis of quality, brand recognition, technology, customer service
and nationwide coverage. We believe that we have certain competitive advantages resulting from our proprietary technology, greater economies of scale and broad geographic coverage, which may afford us
opportunities to more effectively source raw materials and reduce transportation costs.

Seasonality

The demand for corn flour varies slightly with the seasons. After the May/June and December harvests, when corn is more abundant and thus less expensive, tortilla
producers are more inclined to purchase corn and use the traditional method. In the months immediately preceding such harvests, corn is more costly and in shorter supply and more tortilla producers
then employ the corn flour method of production.

Raw Materials

Corn is the principal raw material required for the production of corn flour, and constituted approximately 68% of our cost of sales for 2004. We believe we have
the most extensive nationwide corn purchasing capabilities of any corn flour producer in Mexico, providing us with a competitive advantage. We purchase corn primarily from Mexican growers and grain
elevators, and from world

15

---



markets
at international prices under import permits granted by the Mexican government. All of our domestic corn purchases are made on a spot basis pursuant to short-term contractual
arrangements, some of them in the form of oral agreements entered into at the beginning of the harvest. Compañía Nacional Almacenadora, S.A. de C.V., our subsidiary,
contracts for and purchases the corn, and also monitors, selects, handles and ships the corn.

We
believe that the diverse geographic locations of our production facilities in Mexico enables us to achieve savings in raw material transportation and handling. In addition, by
sourcing corn locally for our plants, we are better able to communicate with local growers concerning the size and quality of the corn crop and are better able to maintain quality control. In Mexico,
we purchase corn on delivery in order to strengthen our ability to obtain the highest quality corn on the best terms.

Traditionally,
domestic corn prices in Mexico tend to be higher than those abroad, and typically follow trends in the international market only when corn prices are increasing. During
most periods, the price at which we purchase corn depends on the international corn market. As a result, corn prices are sometimes unstable and volatile. For more information regarding the
government's effect on corn prices, see "Item 4. Information on the CompanyBusiness OverviewRegulations."

In
addition to corn, the other principal materials and resources used in the production of corn flour are packaging materials, water, lime and energy. We believe that our sources of
supply for these materials and resources are adequate, although energy and packaging costs tend to be volatile.

Distribution

Our products are distributed through independent transport firms contracted by us. Most of our sales are made free-on-board at our plants,
in particular those to tortilla manufacturers. With respect to other sales, in particular retail sales (one-kilogram packages), sales to the Mexican government and sales to large
supermarket chains, we pay the freight cost.

Regulations

Corn Commercialization Program

Since December 1996, ASERCA, a Mexican government agency, has administered a program designed to promote the purchase of corn in certain regions of Mexico.
This program supports Mexican corn growers exclusively. The ASERCA program has the following guidelines:



Environmental Regulations

Our Mexican operations are subject to Mexican federal, state and municipal laws and regulations relating to the protection of the environment. The principal
federal environmental laws are theLey General de Equilibrio Ecológico y Protección al Ambiente(the General Law of
Ecological Equilibrium and Protection of the Environment, or the Mexican Environmental Law), which is enforced by theSecretaría de Medio Ambiente y Recursos
Naturales(the Ministry of the Environment and Natural

16

---



Resources,
or SEMARNAT) and theLey Federal de Derechos(the Mexican Federal Law of Governmental Fees). Under the Mexican Environmental Law, each of our
facilities engaged in the production of corn flour is required to obtain an operating license from SEMARNAT upon initiating operations, and then annually submit a certificate of operation to maintain
the operating license. Furthermore, the Mexican Federal Law of Governmental Fees requires that Mexican manufacturing plants pay a fee for the discharge of residual waste water to drainage. Rules have
been promulgated concerning hazardous substances and water, air and noise pollution. In particular, Mexican environmental laws and regulations require that Mexican companies file periodic reports with
respect to air and water emissions and hazardous wastes. They establish standards for waste water discharge. We must also comply with zoning regulations as well and rules regarding health, working
conditions and commercial matters. SEMARNAT and the Federal Bureau of Environmental Protection can bring administrative and criminal proceedings against companies that violate environmental laws, as
well as close non-complying facilities.

We
believe we are currently in compliance in all material respects with all applicable Mexican environmental regulations. The level of environmental regulation and enforcement in Mexico
has increased in recent years. We expect this trend to continue and to be accelerated by international agreements between Mexico and the United States. To the extent that new environmental regulations
are promulgated in Mexico, we may be required to incur additional remedial capital expenditures to comply. Management is not aware of any pending regulatory changes that would require additional
remedial capital expenditures in a significant amount.

Competition Regulations

TheLey Federal de Competencia Económica(the Federal Economic Competition Law, or the Mexican
Competition Law), was approved by the Mexican Congress and published in theDiario Oficial de la Federaciónon December 24, 1992
and became effective on June 22, 1993. The Mexican Competition Law and theReglamento de la Ley Federal de Competencia Económica(the Regulations of the Mexican Competition Law), effective as of March 5, 1998, regulate monopolies and monopolistic practices and require Mexican government approval of certain mergers and
acquisitions. The Mexican Competition Law grants government the authority to establish price controls for products and services of national
interest qualified as such by Presidential decree, and established theComisión Federal de Competencia, or Federal Competition
Commission, to enforce the law. Mergers and acquisitions and other transactions that may restrain trade or that may result in monopolistic or anti-competitive practices or combinations
must be approved by the Federal Competition Commission. The Mexican Competition Law may potentially limit our business combinations, mergers and acquisitions and may subject us to greater scrutiny in
the future in light of our market presence, although it has had little effect on our operations, and we do not believe that this legislation will have a material adverse effect on our existing or
developing business operations.

ORGANIZATIONAL STRUCTURE

We are a subsidiary of GRUMA, a Mexican holding company with operations in Mexico, the United States, Venezuela, Central America, United Kingdom, the Netherlands
and Italy. Our sister companies produce corn flour in other countries as well as packaged tortillas, other tortilla-related products and wheat flour. In 2004 our sales comprised 22% of GRUMA's total
sales.

We
are also currently the parent of the following wholly-owned and majority-owned subsidiaries, all incorporated in Mexico. They all engage in the production of corn flour and related
activities including arranging for the purchase of corn and other raw materials. In addition, to enhance our

17

---



presence
in particular geographic areas, we have transferred a minority interest in certain subsidiaries to local investors, unions and development agencies.

Percentage of
ownershipCorn flour manufacturing subsidiaries:Molinos Azteca, S.A. de C.V.(1)(2)

100.00
%Harinera de Veracruz, S.A. de C.V.

100.00
%Molinos Azteca de Jalisco, S.A. de C.V.

100.00
%Molinos Azteca de Chalco, S.A. de C.V.

57.40
%Harinera de Maíz de Jalisco, S.A. de C.V.

100.00
%Harinera de Yucatán, S.A. de C.V.

88.57
%Harinera de Maíz de Mexicali, S.A. de C.V.

85.00
%Molinos Azteca de Chiapas, S.A. de C.V.

90.00
%Molinos Azteca de Veracruz, S.A. de C.V.

100.00
%Service and other subsidiaries:Compañía Nacional Almacenadora, S.A. de C.V.

100.00
%Servicios Administrativos y Financieros Gimsa, S.A. de C.V.(2)

100.00
%Industria Tortilladora Azteca, S.A. de C.V.

100.00
%Arrendadora de Maquinaria de Chihuahua, S.A. de C.V.

100.00
%


---

18

---



PROPERTY, PLANTS AND EQUIPMENT

As of December 31, 2004, we owned 17 corn flour mills throughout Mexico, with a total annual installed capacity of approximately 2,408 thousand
tons. The table below summarizes the location, size, installed capacity, and percentage utilization of our corn flour manufacturing facilities:

|Corn Flour Manufacturing Facility |  | Location                   |  | Approx. Size
(square
meters) |  | Installed Capacity
(thousands of tons) |  | % Utilization
(annualized rate) |  
|--------------------------------- |  | -------------------------- |  | ---------------------------- |  | -------------------------------------- |  | ------------------------------- | -
|Chihuahua                         |  | Chihuahua, Chih.           |  | 18,400                       |  | 126                                    |  | 51                              | %
|Nuevo León                        |  | Guadalupe, N.L.            |  | 25,200                       |  | 246                                    |  | 66                              | %
|Tampico                           |  | Altamira, Tamps.           |  | 9,800                        |  | 84                                     |  | 57                              | %
|Río Bravo                         |  | Río Bravo, Tamps.          |  | 20,800                       |  | 84                                     |  | 65                              | %
|Chiapas                           |  | Ocozocuzutla, Chis.        |  | 25,900                       |  | 162                                    |  | 80                              | %
|Obregón                           |  | Obregón, Son.              |  | 10,200                       |  | 84                                     |  | 64                              | %
|Mexicali                          |  | Mexicali, B.C.             |  | 19,300                       |  | 81                                     |  | 71                              | %
|La Paz                            |  | Cd. Constitución, B.C.S.   |  | 8,800                        |  | 19                                     |  | 92                              | %
|Nayarit                           |  | Acaponeta, Nay.            |  | 14,100                       |  | 126                                    |  | 66                              | %
|Culiacán                          |  | Culiacán, Sin.             |  | 7,500                        |  | 49                                     |  | 91                              | %
|Bajío                             |  | Silao, Gto.                |  | 34,100                       |  | 243                                    |  | 54                              | %
|Jalisco                           |  | Guadalajara, Jal.          |  | 31,000                       |  | 162                                    |  | 63                              | %
|México                            |  | Teotihuacan, Edo.de México |  | 31,700                       |  | 288                                    |  | 69                              | %
|Chinameca                         |  | Chinameca, Ver.            |  | 18,600                       |  | 168                                    |  | 72                              | %
|Veracruz                          |  | Veracruz, Ver.             |  | 28,800                       |  | 162                                    |  | 61                              | %
|Mérida                            |  | Mérida, Yuc.               |  | 25,900                       |  | 81                                     |  | 95                              | %
|Chalco                            |  | Chalco, Edo. de México     |  | 25,600                       |  | 243                                    |  | 0                               | %

For
information regarding environmental issues affecting our utilization of the corn flour mills, see "Item 4. Business OverviewRegulationsEnvironmental
Regulations" and for information regarding our capital expenditure plans, see "Item 4. Information on the CompanyHistory and DevelopmentOperations and Capital Expenditures."

Item 5.    Operating and Financial Review and Prospects.

MANAGEMENT'S DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our consolidated financial statements and the notes thereto included
elsewhere herein. Our consolidated financial statements have been prepared in accordance with Mexican GAAP, which differ from U.S. GAAP in certain significant respects. See Note 15 to the
consolidated financial statements for information related to the nature and effect of such differences, as they relate to us and a quantitative reconciliation to U.S. GAAP of our consolidated net
income and stockholders' equity.

Inflation Accounting

Mexican GAAP requires that financial statements recognize the effect of inflation in accordance with Bulletin B-10 of the Mexican Institute of Public
Accountants, as amended. The intended effect of such recognition is to present all information in comparable monetary units and thereby eliminate the distorting effect of inflation in the financial
statements. Unless otherwise stated herein, financial

19

---



information
in the financial statements and throughout this Form 20-F has been restated in pesos of constant purchasing power as of December 31, 2004.

Mexican
inflation accounting requires, among other considerations, the determination of comprehensive financing cost, which is composed of interest expense, interest income, foreign
exchange gains or losses and an item called monetary position gain or loss. The monetary position gain or loss account is used to reflect the effect of inflation on a company's monetary assets and
liabilities. By determining a company's net monetary position (monetary assets minus monetary liabilities) and applying inflation indices for the period under consideration, the impact of inflation on
a company's monetary items may be quantified and reflected in earnings. Thus, if monetary liabilities are larger than monetary assets, the company will recognize a gain from inflation as its
liabilities will be worth less upon repayment due to the reduced value of the currency from inflation. If monetary assets exceed monetary liabilities, on the other hand, the company will recognize a
loss as its monetary assets will be worth less in terms of purchasing power.

Critical Accounting Policies

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses certain financial information included in our consolidated
financial statements, which have been prepared in accordance with Mexican GAAP as promulgated by the Mexican Institute of Public Accountants. A reconciliation from Mexican GAAP to U.S. GAAP of net
income and total stockholders' equity is included in Note 15 to our consolidated financial statements. The preparation of these financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts
of revenues and expenses during the reporting period.

We
have identified the most critical accounting principles that involve a higher degree of judgment and complexity and that management believes are important to a more complete
understanding of our financial position and results of operations. These policies are outlined below.

Additional
accounting policies that are also used in the preparation of our consolidated financial statements are outlined in the notes to our consolidated financial statements included
in this Annual Report. See Note 2 to our consolidated financial statements.

20

---





Property, Plant and Equipment

We depreciate our property, plant and equipment over their respective estimated useful lives. Useful lives are based on management's estimates of the period that
the assets will continue to support production requirements or generate sales of our products and are adjusted when those estimates change. Estimates are based on the nature of the asset, historical
usage with consideration given to technological changes, our current strategy, as well as internal engineering studies. To the extent that our estimates are incorrect, our periodic depreciation
expense or carrying value of our assets may be impacted.

We
evaluate, at least annually, any event or change in circumstances that indicate that the book value of our property, plant and equipment will not be recovered. When applicable, we
perform impairment tests as follows:

Fair
value of assets held for use is determined using the higher between the discounted net cash flows expected from the assets and the market price; an impairment loss is recorded to
the extent that the net book value exceeds the fair value of the assets. Market price is determined using market values or transactions with similar assets less costs to sell and can be based on
third-party valuations. Fair value of assets held for use that are temporarily idle is also based on market price less costs to sell.

Fair
value of assets to be disposed of is determined using the lower between book value and market price; an impairment loss is recognized for the excess of book value over market price.
These assets are subsequently restated using NCPI factors and are no longer depreciated or amortized.

The
estimates of undiscounted cash flows take into consideration expectations of future macroeconomic conditions as well as our internal strategic plans. Therefore, inherent in the
estimated future cash flows is a certain level of risk which we have considered in our valuation; nevertheless, actual future results may differ.

Primarily
as a result of plant rationalization, certain facilities and equipment are not currently in use in operations. We have recorded impairment losses related to certain unused
assets and additional losses may potentially occur in the future if our estimates are not accurate.

Goodwill

Until December 31, 2003, goodwill was amortized on a straight-line basis over estimated useful lives. Starting January 1, 2004 we
adopted the provisions of Bulletin B-7 "Business Combinations" and consequently, ceased the amortization of goodwill and started to perform annual impairment tests.

The
identification and measure of goodwill impairment involves the estimation of fair value of the reporting units. A reporting unit is constituted by a group of one or more cash
generating units. Estimates of fair value are primarily determined using discounted cash flows. Cash flows are discounted at present value and an impairment loss is recognized if such discounted cash
flows are lower than the net book value of the reporting unit.

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 internal
valuation analyses and consider relevant internal data as well as other market information that is publicly available.

This
approach uses significant estimates and assumptions including projected future cash flows (including timing), a discount rate reflecting the risk inherent in future cash flows and a
perpetual growth rate. Inherent in these estimates and assumptions is a certain level of risk which we believe we have considered in our valuation. 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.

21

---



Deferred Income Taxes

Under both Mexican and U.S. GAAP, we record deferred income tax assets and liabilities using enacted tax rates for the effect of temporary differences between the
book and tax basis of assets and liabilities. If enacted tax rates change, we adjust the deferred tax assets and liabilities through the provision for income taxes in the period of change, to reflect
the enacted tax rate expected to be in effect when the deferred tax items reverse. We also record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to
be realized. While we have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation
allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, an adjustment to the deferred tax asset would
increase income in the period such determination was made. Should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the
deferred tax asset would be charged to income in the period such determination was made.

Factors Affecting Financial Condition and Results of Operations

General

In recent years, our financial condition and results of operations have been significantly influenced by some or all of the following factors:



RESULTS OF OPERATIONS

We believe we are the leading Mexican producer of corn flour. Corn flour is used primarily to make tortillas, one of the principal staples of the Mexican diet. We
estimate that our corn flour is used in
one third of the corn tortillas consumed in Mexico. We believe that the overall increase in corn flour industry sales since 1989 has resulted primarily from the substitution of the corn flour method
for the traditional method in the production of tortillas.

The
following table sets forth certain income statement and operating data for our company for each of the periods indicated, expressed as a percentage of total sales and based on data
expressed in pesos of constant purchasing power as of December 31, 2004:

Year Ended December 31,2002

2003

2004Net Sales

100.0
%
100.0
%
100.0
%Cost of Sales

70.4

73.8

73.7Gross Profit

29.6

26.2

26.3Selling, General and Administrative Expenses

19.0

18.6

18.5Operating Income

10.7

7.6

7.8Comprehensive Financing Income (Cost), net

(0.6
)
(0.1
)
0Income Taxes

(1.4
)
(1.2
)
0.4Net Income

7.6

6.0

7.0


22

---



Fiscal Year Ended December 31, 2004 Compared to Fiscal Year Ended December 31, 2003

Net Sales

Our net sales increased by 6% to Ps.5,787 million in 2004 compared with Ps.5,471 million in 2003. The increase in net sales resulted from higher
sales volume and higher corn flour prices. We selectively and gradually implemented price increases throughout 2004, especially during the fourth quarter, to offset higher energy and corn costs. In
constant peso terms, the average price of corn flour increased 3% in 2004 compared to 2003. Our sales volume increased 3.0% in 2004 to 1,447,843 tons from 1,406,065 tons in 2003 due to (1) the
development of new types of corn flour, which prompted some of our corporate customers to use us as their preferred supplier, (2) sales volume growth of our supermarket clients, and
(3) export sales to our sister company, Gruma Corporation, a wholly owned subsidiary of GRUMA.

Cost of Sales

Our cost of sales as a percentage of net sales decreased slightly to 73.7% in 2004 from 73.8% in 2003 as a result of the aforementioned price increases which more
than offset cost increases. In constant peso terms, our cost of sales increased 6% to Ps.4,264 million in 2004 from Ps.4,039 million in 2003 in connection with sales volume growth and
cost increases, especially with regard to energy and corn.

Gross Profit

Our gross profit increased 6% in 2004 to Ps.1,523 million compared to Ps.1,432 million in 2003. Our gross profit margin increased to 26.3% in 2004
compared to 26.2% in 2003.

Selling, General and Administrative Expenses

Selling, general and administrative expenses, or SG&A expenses, as a percentage of net sales decreased slightly to 18.5% in 2004 from 18.6% in 2003 due to better
expense absorption reflecting higher corn flour prices. In constant peso terms, SG&A expenses increased 5% to Ps.1,072 million in 2004 from Ps.1,018 million in 2003 as a result of higher
selling expenses stemming from our national marketing campaign launched at the end of 2003.

Operating Income

Operating income increased 9% to Ps.451 million in 2004 compared to Ps.414 million in 2003 due to higher sales volumes and higher prices. Our
operating margin increased to 7.8% in 2004 compared to 7.6% in 2003.

23

---



Comprehensive Financing Cost (Income), Net

Net comprehensive financing cost decreased 90% to Ps.0.5 million in 2004 compared to Ps.5 million in 2003. The components of comprehensive financing
cost, together with an explanation of the significant changes, are detailed in the following chart:

|Items                         |  | 2004 |     | 2003 |     | Change |   | Comments
|----------------------------- |  | ---- | --- | ---- | --- | ------ | - | --------
|
|Interest expense              |  | Ps.  | 8.5 |      | Ps. | 7      |   | Ps.     
|Interest income               |  |      | (90 | )    |     | (70    | ) |         
|Foreign Exchange Loss (Gain)  |  |      | (3  | )    |     | 4      |   |         
|Monetary Position Loss (Gain) |  |      | 85  |      |     | 64     |   |         
|                              |  |      |     |      |     |        |   |         
|Total                         |  | Ps.  | 0.5 |      | Ps. | 5      |   | Ps.     
|                              |  |      |     |      |     |        |   |         

Income Taxes and Employees' Statutory Profit Sharing

The provision for income taxes and employees' statutory profit sharing decreased 125% to an income of Ps.17 million in 2004 compared to a
Ps.68 million charge in 2003 due to a reduction in deferred liabilities, partially caused by a reduction in the statutory income tax rates enacted in 2004.

Our
effective tax rate (income tax and employees' statutory profit sharing) for 2004 was (4.3)% as compared to 16.4% in 2003.

Net Income

Our net income increased 24% to Ps.406 million in 2004 compared to Ps.328 million in 2003, and our net margin improved to 7.0% in 2004 from 6.0% in
2003.

Fiscal Year Ended December 31, 2003 Compared to Fiscal Year Ended December 31, 2002

Net Sales

Our net sales increased by 5% to Ps.5,471 million in 2003 compared with Ps.5,209 million in 2002. The increase in net sales resulted primarily from
corn flour price increases related to higher corn costs and was also due to higher sales volume. We gradually implemented price increases throughout 2003 to offset higher corn costs although we were
not able to do so to an extent to fully reflect higher corn costs. In constant peso terms, the average price of corn flour increased 4% in 2003 compared to 2002. Our sales volume increased 1% in 2003
to 1,406,065 tons from 1,397,237 tons in 2002 due to higher sales volume to DICONSA resulting from a modification in our sales structure.

Cost of Sales

Our cost of sales as a percentage of net sales increased to 73.8% in 2003 from 70.4% in 2002 due primarily to higher corn costs and, to a lesser extent, higher
fuel, electricity and additive costs which were only partially off-set by our gradual price increases during the year. In constant peso terms, our cost of sales increased 10% to
Ps.4,039 million in 2003 from Ps.3,666 million in 2002.

24

---



Gross Profit

Our gross profit decreased 7% in 2003 to Ps.1,432 million compared to Ps.1,543 million in 2002. Our gross profit margin decreased to 26.2% in 2003
compared to 29.6% in 2002.

Selling, General and Administrative Expenses

Selling, general and administrative expenses, or SG&A expenses, as a percentage of net sales decreased to 18.6% in 2003 from 19.0% in 2002 due to better expense
absorption related to higher corn flour prices. In constant peso terms, SG&A expenses increased 3% to Ps.1,018 million in 2003 from Ps.988 million in 2002, mainly as a result of higher
selling expenses due to improvements in the commercialization and customer-service infrastructure.

Operating Income

Operating income decreased 25% to Ps.414 million in 2003 compared to Ps.555 million in 2002. Our operating margin declined to 7.6% in 2003 compared
to 10.7% in 2002.

Comprehensive Financing Cost (Income), Net

Net comprehensive financing cost decreased 83% to Ps.5 million in 2003 compared to Ps.29 million in 2002. The components of comprehensive financing
cost, together with an explanation of the significant changes, are detailed in the following chart:

|Items                         |  | 2004 |     | 2003 |     | Change |   | Comments
|----------------------------- |  | ---- | --- | ---- | --- | ------ | - | --------
|
|Interest expense              |  | Ps.  | 7   |      | Ps. | 14     |   | Ps.     
|Interest income               |  |      | (70 | )    |     | (81    | ) |         
|Foreign Exchange Loss (Gain)  |  |      | 4   |      |     | 5      |   |         
|Monetary Position Loss (Gain) |  |      | 64  |      |     | 91     |   |         
|                              |  |      |     |      |     |        |   |         
|Total                         |  | Ps.  | 5   |      | Ps. | 29     |   | Ps.     
|                              |  |      |     |      |     |        |   |         

Income Taxes and Employees' Statutory Profit Sharing

The provision for income taxes and employees' statutory profit sharing decreased 32% to Ps.68 million in 2003 compared to Ps.100 million in 2002 due
to changes to the statutory income tax rate, which will be reduced gradually from 35% to 32% beginning in 2003 (34%) and continuing through 2005 (32%). To a lesser extent, the decrease also resulted
from lower pre-tax income.

Our
effective tax rate (income tax and employees' statutory profit sharing) for 2003 was 16.4% as compared to 19.4% in 2002.

Net Income

Our net income decreased 17% to Ps.328 million in 2003 compared to Ps.397 million in 2002, and our net margin declined to 6.0% in 2003 from 7.6% in
2002.

25

---



LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resource requirements in recent years reflect capital expenditures used for upgrades of our equipment, working capital requirements and
the payment of dividends. Although no assurances can be given as to future levels of capital expenditures, during the first quarter of 2005 we invested U.S.$1.7 million in fixed assets, and
currently project total investments in fixed assets during 2005 of approximately U.S.$10.0 million, which will be used primarily for upgrading production equipment, acquisition of
transportation equipment and information technology upgrades.

We
fund our liquidity and capital resource requirements through cash generated from operations. Funds generated from operations were Ps.606.7 million in 2004,
Ps.583.1 million in 2003 and Ps.681.9 million in 2002. Our current general policy is to fund our inventory purchases with either cash or short-term borrowings through
uncommitted lines of credit with various Mexican and foreign financial institutions, the terms and conditions of which we negotiate at the time of purchase.

We
believe that our cash reserves and cash generated from operations will be sufficient during the next 12 months to meet our liquidity requirements. Because we rely on cash
generated from operations to fund our liquidity and capital resource requirements, factors that cause our revenues and net income to increase or decrease could also cause our sources of liquidity to
increase or decrease. These factors include fluctuations in the demand for, or price of, our products, as well as fluctuations in the price of corn and tortillas. Approximately 6.93%, 4.06% and 4.29%
of our net sales were to a major customer in 2002, 2003 and 2004, respectively.

On
December 31, 2004, we had cash and cash equivalents of Ps.206.3 million (U.S. $18.5 million), none of which was denominated in U.S. dollars. See Note 12 to
the consolidated financial statements for a discussion of foreign currency balances.

Our
sources of liquidity are similarly affected by transactions that we enter into in the ordinary course of business with GRUMA and other affiliates, including agreements pertaining to
the sharing of intellectual property, and providing technical and advisory support services. GRUMA periodically enters into short-term credit arrangements with us, where we provide GRUMA
with funds for working capital at market interest rates. These transactions are made in the ordinary course of business since GRUMA operates as the central treasurer for its subsidiaries. GRUMA owed
us Ps.1,259 million as of June 15, 2005 at an average interest rate for this year up to such date of 10.9%. For more information regarding these transactions, see "Item 7. Major
Shareholders and Related Party TransactionsRelated Party Transactions."

We
intend to mitigate potential liquidity risks by using available uncommitted lines of credit that we have with various Mexican and foreign financial institutions. Should we elect to
utilize the uncommitted lines of credit, we would have to negotiate the terms and conditions at that time. We cannot assure you that we will succeed in this regard.

As
of December 31, 2004, we had no outstanding debt.

We
and our subsidiaries had net working capital, defined as current assets (excluding cash and cash equivalents) minus current liabilities, of Ps.2,839 million and
Ps.2,690 million as of December 31, 2004 and 2003, respectively.

RESEARCH AND DEVELOPMENT

We do not conduct our own research and development activities in connection with corn flour production equipment. Instead, our operating subsidiaries contract for
certain technology and maintenance services with our sister company INTASA, a wholly-owned subsidiary of GRUMA. Pursuant to these agreements, each operating subsidiary pays INTASA 0.5% of consolidated
net sales (subject to certain adjustments), which amounted to Ps.27 million, Ps.26 million and Ps.24 million as of

26

---



December 31,
2004, 2003 and 2002, respectively in exchange for technology and maintenance services. Each of our corn flour facilities use proprietary technology developed by INTASA.

TREND INFORMATION

Our financial results will likely continue to be influenced by factors such as changes in the level of consumer demand for tortillas and corn flour, government
policies regarding the Mexican tortilla and corn flour industry, the cost of corn, and energy, among others.

OFF-BALANCE SHEET ARRANGEMENTS

We currently have no off-balance sheet arrangements outstanding although we may enter into such arrangements in the future.

27

---





CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

At December 31, 2004, material contractual obligations and commercial commitments were as follows:

|Contractual Obligations and
Commercial Commitments |  | Total |  | Less than 1 Year |  | From 1 to 3 Years |  | Over 3 Years
|-------------------------------------------------- |  | ----- |  | ---------------- |  | ----------------- |  | ------------
|
|Operating lease obligations                        |  | 0.758 |  | 0.417            |  | 0.341             |  |            
|                                                   |  |       |  |                  |  |                   |  |             
|Total                                              |  | 0.758 |  | 0.417            |  | 0.341             |  |            
|                                                   |  |       |  |                  |  |                   |  |             

RESULTS UNDER U.S. GAAP

Our consolidated financial statements are prepared in accordance with Mexican GAAP, which differ in certain significant respects from U.S. GAAP. See
Note 15 to our audited consolidated financial statements for information relating to the nature and effect of such differences. Mexican GAAP financial statements recognize the effects of
inflation, whereas financial statements prepared under U.S. GAAP are presented on a historical cost basis. We are not required to reverse many of the Mexican inflation accounting adjustments when
reconciling Mexican GAAP to U.S. GAAP, because these adjustments provide a means of measuring the effects of price-level changes in the inflationary Mexican economy. Inflation-adjusted figures are
considered a more meaningful presentation than historical cost-based financial reporting for both Mexican and United States accounting purposes.

Net
income under U.S. GAAP amounted to Ps.412.5 million in 2004, Ps.307.9 million in 2003 and Ps.388.3 million in 2002, compared with net income under Mexican GAAP
of Ps.405.9 million in 2004, Ps.328.2 million in 2003 and Ps.397.1 million in 2002.

Stockholders'
equity under U.S. GAAP amounted to Ps.5,962.0 million in 2004 and Ps.5,909.5 million in 2003, compared with stockholders' equity under Mexican GAAP
of Ps.6,104.3 million in 2004 and Ps.6,103.7 million in 2003.

See
Note 15 to the consolidated financial statements for a discussion of the adjustments under U.S. GAAP.

NEW ACCOUNTING STANDARDS

New Accounting Pronouncements under Mexican GAAP

In December 2003, the Mexican Institute of Public Accountants issued Bulletin D-3, "Labor Liabilities" ("Bulletin D-3"), which is
effective as of January 1, 2005. Bulletin D-3 establishes rules for the calculation of the cost and liability for retirement benefit plans, as well as guides for the valuation of
liabilities for early reduction or extinction of benefits in a retirement plan. Additionally, this bulletin provides the requirements of valuation, presentation and disclosure for other
post-retirement benefits and for severance payments. The
Company's management estimates that the adoption of this bulletin in 2005 will require the recognition of a liability of approximately Ps 28,715 which will be charged to income.

Recently Issued U.S. Accounting Standards

In December 2004, the Financial Accounting Standards Board ("FASB") issued a revision to Statement of Financial Accounting Standards No. 123 ("SFAS
No. 123R), "Share-Based Payment". SFAS No. 123R supersedes Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees". SFAS No. 123R requires
that all stock-based compensation, including options, be expensed at fair value as of the grant date over the vesting period. Companies will be required to use

28

---



an
option pricing model to determine compensation expense, consistent with the model used in the already required disclosures of SFAS No. 148 "Accounting for Stock-Based Compensation-Transition
and Disclosure". SFAS No. 123R is effective for interim and fiscal periods beginning after June 15, 2005. The Company does not expect the adoption of this standard to have a significant
impact on its financial condition or results of operations.

In
November 2004, the FASB issued SFAS No. 151 "Amendment of ARB No. 43, Chapter 4". This statement amends the guidance in Accounting Research Bulletin No. 43
"Inventory Pricing", to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This statement requires that those items be
recognized as current-period charges regardless of whether they meet the criterion of "so abnormal". In addition, this statement requires that allocation of fixed production overhead to the costs of
conversion be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The
Company does not expect the adoption of this standard to have a significant impact on its financial condition or results of operations.

Item 6.    Directors, Senior Management and Employees.

DIRECTORS AND EXECUTIVE OFFICERS

Directors

Our bylaws require that our board of directors be composed of a minimum of five and maximum of twenty directors as decided by our Shareholders at the Ordinary
General Shareholders' Meeting. Pursuant to Mexican law, at least 25% of the members of the board of directors must be independent.

The
board of directors, which was elected at the Ordinary General Shareholders' Meeting held on April 29, 2005, currently consists of 12 directors, each one having its
corresponding alternate director. The following table sets forth the current members of our board of directors, their ages, their years of service, their principal occupations and directorships, the
terms of expiration of their positions as directors, their directorship classifications as defined in the Code of Best Corporate Practices promulgated by a committee formed by the Mexican Entrepreneur
Coordinating Board (Consejo Coordinador Empresarial), and their alternates.

|Roberto González Barrera   |  | Age:                                                   |  | 74                                                                                                                                                                                                         
|-------------------------- |  | ------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |  | Years as Director:                                     |  | 24                                                                                                                                                                                                         
|                           |  | Principal occupation and previous business experience: |  | Chief Executive Officer and Chairman of the Board of GIMSA and GRUMA Chairman of the Board of Directors of Grupo Financiero Banorte, S.A. de C.V., Banco Mercantil del Norte, S.A and Banco del Centro S.A.
|                           |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                       
|                           |  | Directorship Type:
Alternate:                          |  | Shareholder, related
Juan A. Quiroga García                                                                                                                                                                
|Alejandro Álvarez Guerrero |  | Age:
Years as Director:                                |  | 79
15                                                                                                                                                                                                      
|                           |  | Principal occupation and previous business experience: |  | Member of the Board of Cablemás, S.A. de C.V., former Member of the Board of Korn Ferry International                                                                                                      
|                           |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                       
|                           |  |                                                        |  |                                                                                                                                                                                                            

29

---



|                              |  | Directorship Type:                                     |  | Independent                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------------- |  | ------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                              |  | Alternate:                                             |  | Javier A. Álvarez Figueroa                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Rodolfo F. Barrera Villarreal |  | Age:
Years as Director:                                |  | 77
16                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                              |  | Principal occupation and previous business experience: |  | Chairman of the Board of Grupo Quimmco Member of the Consulting Board of Grupo Financiero BBVA Bancomer, S.A. de C.V. Vice President of the Board of Directors of Grupo Financiero Banorte S.A. de C.V.,, Banco Mercantil del
Norte, S.A. and Banco del Centro, S.A., First Vice President of the Executive Committee of Grupo Financiero Banorte, S.A. de C.V.                                                                                                   
|                              |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                              |  | Directorship Type:                                     |  | Independent                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                              |  | Alternate:                                             |  | Jésus L. Barrera Lozano                                                                                                                                                                                                                                                                                                                                                                                                                                           
|José de la Peña y Angelini    |  | Age:                                                   |  | 56                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                              |  | Years as Director:                                     |  | 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                              |  | Principal occupation and previous business experience: |  | President of GRUMA's Latin American Operations, former Executive Vice President of Sales and Marketing of GRUMA, top management positions at Colgate-Palmolive, senior positions at Chrysler de México, President of
the Mexico office of FBC Worldwide                                                                                                                                                                                                           
|                              |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                              |  | Directorship Type:                                     |  | Related                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                              |  | Alternate:                                             |  | Homero Huerta Moreno                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Juan Diez-Canedo Ruiz         |  | Age:                                                   |  | 54                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                              |  | Years as Director:                                     |  | Since April 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                              |  | Principal occupation and previous business experience: |  | President of Fomento y Desarrollo Comercial, S.A. de C.V., alternate Member of the Board of Grupo Financiero Banorte S.A. de C.V., Banco Mercantil del Norte S.A., and Banco del Centro, S.A., member of the Board of
Deportes Martí, S.A. de C.V., former CEO of Cintra S.A. de C.V., Executive Vice President of Grupo Financiero Banorte S.A. de C.V., Banking Director of Grupo Financiero Probursa. Alternate Chief Executive Officer of Banco
Internacional.
|                              |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                              |  | Directorship Type:                                     |  | Independent                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                              |  | Alternate:                                             |  | Felipe Diez-Canedo Ruiz                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Ernesto Enríquez Uso          |  | Age:                                                   |  | 73                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                              |  | Years as Director:                                     |  | 4                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                              |  |                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

30

---



|                        |  | Principal occupation and previous business experience: |  | Member of the Board of Molinos Azteca de Chalco, S.A. de C.V. and President of GRUEN, S.A. Chairman of the Board of Directors of Grupo Enríquez, S.A. de C.V.                                                                                                                                                                                                                                                                                                                                                                                                                
|----------------------- |  | ------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                        |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                        |  | Directorship Type:                                     |  | Independent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                        |  | Alternate:                                             |  | Alejandro Enríquez Larrondo                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Roberto González Moreno |  | Age:                                                   |  | 53                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                        |  | Years as Director:                                     |  | 20                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                        |  | Principal occupation and previous business experience: |  | Chairman and President of Corporación Noble, S.A. de C.V., Member of the Board of GIMSA and alternate member of Grupo Financiero Banorte, S.A. de C.V, Banco Mercantil del Norte, S.A. and Banco del Centro, S.A. He
had several management positions within GRUMA, including COO of GIMSA and Director of GRUMA's former Fast Food Division, President of RGM Inc., Exportaciones El Parián, S.A.                                                                                                                                                                           
|                        |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                        |  | Directorship Type:                                     |  | Related                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                        |  | Alternate:                                             |  | Ricardo Gonzalez Valdés                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Juan B. Guichard Michel |  | Age:                                                   |  | 51                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                        |  | Years as Director:                                     |  | 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                        |  | Principal occupation and previous business experience: |  | Chairman of the Board of Directors and CEO of Invex, Grupo Financiero, S.A. de C.V., several positions within Grupo Internacional de Empresarios, S.A. de C.V., InverMéxico, S.A. de C.V. and Banco Nacional de
México among others.                                                                                                                                                                                                                                                                                                                                         
|                        |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                        |  | Directorship Type:                                     |  | Shareholder, independent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                        |  | Alternate:                                             |  | Juan David Michel                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Eduardo Livas Cantú     |  | Age:                                                   |  | 62                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                        |  | Years as Director:                                     |  | 19                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                        |  | Principal occupation and previous business experience: |  | Consultant on financial and strategic issues and mergers and acquisitions, member of the Board of GRUMA, Chairman and member of the audit committee of GRUMA and member of the audit committee and risk policy committee of
Grupo Financiero Banorte, S.A. de C.V.,, Member of the board of directors of Grupo Financiero Banorte, S.A. de C.V., and Banco Mercantil del Norte, S.A., Bancentro, S.A. de C.V. and GRUMA. He had several positions within GRUMA including Chief
Financial Officer, President of Gruma Corporation, Chief Executive Officer of GRUMA and GIMSA.
|                        |  |                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

31

---



|                      |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------------- |  | ------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                      |  | Directorship Type:                                     |  | Independent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                      |  | Alternate:                                             |  | Alfredo Livas Cantú                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Raúl A. Peláez Cano   |  | Age:                                                   |  | 44                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                      |  | Years as Director:                                     |  | Since April 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                      |  | Principal occupation and previous business experience: |  | Chief Financial Officer of GRUMA, several executive positions with companies including Industrias Resistol, General Electric de México, and Banco Nacional de México, S.A., member of Grupo Financiero
Banamex.                                                                                                                                                                                                                                                                                                                                                                        
|                      |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                      |  | Directorship Type:                                     |  | Related                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                      |  | Alternate:                                             |  | Raúl Cavazos Morales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Héctor Rangel Domene  |  | Age:                                                   |  | 57                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                      |  | Years as Director:                                     |  | 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                      |  | Principal occupation and previous business experience: |  | Chairman of the Board of Directors of Grupo Financiero BBVA-Bancomer, S.A. de C.V. member of the Board of Directors of Bancomer, S.A. Seguros Bancomer, S.A., Afore Bancomer, S.A., Casa de Bolsa Bancomer, S.A., Cintra,
Alestra, and Universidad Iberoamericana, A.C. He was chairman of Consejo Coordinador Empresarial (Mexican Entrepreneur Coordinating Board)                                                                                                                                                                                                                   
|                      |  | Term Expires:                                          |  | 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                      |  | Directorship Type:                                     |  | Independent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                      |  | Alternate:                                             |  | Jaime Alatorre Córdoba                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Javier Vélez Bautista |  | Age:                                                   |  | 48                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                      |  | Years as Director:                                     |  | 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                      |  | Principal occupation and previous business experience: |  | Chief Executive Officer of Nacional Monte de Piedad, Member of the board of directors of GRUMA, member of the board of directors of Grupo Financiero Banorte, S.A. de C.V. and Banco Mercantil del Norte, S.A., member of the
audit committees of GRUMA, GIMSA and Grupo Financiero Banorte, S.A. de C.V.,member of the risk management committee of Grupo Financiero Banorte, S.A. de C.V., business consultant on strategic and financial issues, former Executive VP and CFO of GRUMA,
 former Chief Financial Officer of Gruma Corporation, project director Booz Allen & Hamilton.
|                      |  |                                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

32

---



| |  | Term Expires:      |  | 2005                 
| |  | ------------------ |  | ---------------------
| |  | Directorship Type: |  | Independent          
| |  | Alternate:         |  | Roberto Ramos Arteaga

Mr. Roberto
González Moreno, a member of our board of directors, is the son of Mr. Roberto González Barrera, the Chairman of our board of
directors. Additionally, Mr. Ricardo González Valdés, an alternate member of our board of directors, is the son of Mr. Roberto González
Moreno and the grandson of Mr. Roberto González Barrera.

The
board of directors has regularly scheduled quarterly meetings. The directors were elected for a one-year term by our shareholders at the Annual Meeting held in
April 2005.

Secretary

The secretary of the board of directors is Mr. Salvador Vargas Guajardo, our General Counsel, and his alternate is Mr. Guillermo Elizondo
Ríos. Mr. Vargas Guajardo is not a member of the board of directors.

Statutory Auditor

Under Mexican law, a statutory auditor must be elected by our shareholders at the annual ordinary general shareholders meeting for a term of one year. At the
subsequent annual ordinary general shareholders meeting, the statutory auditor is required to review our affairs and report as to the accuracy of the financial information as presented to shareholders
by the board of directors. The statutory auditor is also authorized (i) to call ordinary general shareholders meetings, extraordinary general shareholders meetings and board of directors
meetings; (ii) to place items on the agenda for general shareholders meetings and meetings of the board of directors; and (iii) to attend general shareholders meetings, meetings of the
board of directors, meetings of the audit committee, and any other meetings of intermediate committees to which the board of directors delegates any activities (without the right to vote). At the
Ordinary General Shareholders' Meeting held on April 29, 2005, Hugo Lara Silva was elected to serve as our statutory auditor and Carlos Arreola Enríquez was elected as alternate
statutory auditor.

Mr. Hugo
Lara Silva is 65 years old. He is a retired co-director of and partner in PricewaterhouseCoopers and was a member of the board of directors, the
international executive audit committee and the general partner counsel of that firm. Mr. Hugo Lara Silva has experience with a wide variety of businesses in the public and private sectors and
has been the statutory auditor for companies such as Grupo Modelo, S.A. de C.V., Ciba-Geigy Mexicana, S.A. de C.V., El Puerto de Liverpool, S.A. de C.V., Grupo Financiero Bancomer, S.A. de
C.V., Grupo Mexicano Somex, S.N.C. and Aseguradora Cuauhtémoc, S.A., among others.

Audit Committee

In accordance with amendments to the Mexican Securities Law promulgated on April 30, 2001, an audit committee was appointed at the Ordinary General
Shareholders' Meeting held on April 29, 2005. Members of the audit committee were selected from members of the board of directors. The current audit committee is comprised of three members, all
independent within the meaning of the Mexican

33

---



Securities
Law and applicable New York Stock Exchange listing standards. Set forth below are the names of our audit committee members, their positions within the committee, and their directorship
type:

|Eduardo Livas Cantú   |  | Position:          |  | Chairman of the Audit Committee        
|--------------------- |  | ------------------ |  | ---------------------------------------
|                      |  | Directorship Type: |  | Independent                            
|Javier Vélez Bautista |  | Position:          |  | Financial Expert of the Audit Committee
|                      |  | Directorship Type: |  | Independent                            
|Juan Diez-Canedo Ruiz |  | Position:          |  | Member of the Audit Committee          
|                      |  | Directorship Type: |  | Independent                            

For
further information regarding our audit committee, see "Item 10. Additional InformationDirectors."

Senior Management

Set forth below are the names of our executive officers, their ages, years of service and current positions as our Executive Officers:

|Roberto González Barrera        |  | Age:
Years as Executive Officer:
Current Position:
Other Positions:              |  | 74
24
Chief Executive Officer
Chief Executive Officer of GRUMA and Chairman of the board of directors of GIMSA and GRUMA. Chairman of the board of directors of Grupo Financiero Banorte, S.A. de C.V.                                        
|------------------------------- |  | -------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Guillermo Arteaga MacKinney     |  | Age:
Years as Executive Officer:
Current Position:                               |  | 43
6
Vice President, New Product Development                                                                                                                                                                                                  
|                                |  | Previous Business Experience:                                                    |  | Vice President, Quality Assurance. Technology Operations Manager of GIMSA. Banco de México and the University of British Columbia.                                                                                                            
|Guillermo Nicolás Cubas Cordero |  | Age:
Years as Executive Officer:
Current Position:
Previous Business Experience: |  | 50
3
Vice President, Marketing Human Development at GRUMA corporate services, marketing at GRUMA's Central American operations, training at PRODISA (GRUMA's packaged tortilla operations in México), marketing at Industria Lactea Los
Pinos.
|                                |  |                                                                                  |  |                                                                                                                                                                                                                                               

34

---



|Rafael Angel Gárate Muñoz |  | Age:
Years as Executive Officer:
Current Position:                               |  | 48
Since March 2005
Senior Vice President of Institutional Relations                                                                                                                                                                         
|------------------------- |  | -------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |  | Previous Business Experience:                                                    |  | Senior Vice President of Commercial Operations of GIMSA, Chief Operating Officer of Molinera de México (a GRUMA subsidiary and our affiliate), SECOFI, CONASUPO and Agroinsa.                                                                
|Luis Lauro Garza Villezca |  | Age:
Years as Executive Officer:
Current Position:
Previous Business Experience: |  | 59
12
Vice President, Human ResourcesLabor Relations Manager and Human Resources employee at GIMSA, Grupo Alfa and Coca-Cola.                                                                                                                
|Roberto González Alcalá   |  | Age:
Years as Executive Officer:
Current Position:                               |  | 41
3
Chief Operating Officer. Mr. González is also President of GRUMA's Mexican Operations.                                                                                                                                                  
|                          |  | Previous Business Experience:                                                    |  | Several positions within GRUMA's Central American Operations, including Chief Operating Officer, President of the tortilla division and President of the corn flour division. He also worked in the marketing, sales and
manufacturing areas.
|Ramiro Martínez Guerra    |  | Age:
Years as Executive Officer:
Current Position:
Previous Business Experience: |  | 61
14
Vice President, Administration Administration Manager of GIMSA. He has been working in the administration at GIMSA for more than 30 years.                                                                                             
|Moisés Morales Portilla   |  | Age:
Years as Executive Officer:
Current Position:                               |  | 44
Since March 2005
Senior Vice President of Commercial Operations                                                                                                                                                                           
|                          |  |                                                                                  |  |                                                                                                                                                                                                                                              

35

---



|                            |  | Previous Business Experience:                                                                     |  | President and Chief Executive Officer of the Venezuelan division of Panamerican Beverages. Chief Executive Officer of Grupo Fomento Queretano.                                                                                         
|--------------------------- |  | ------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Raúl A. Peláez Cano         |  | Age:
Years as Executive Officer:
Current Position:                                                |  | 44
Since August 2004
Chief Financial Officer                                                                                                                                                                                           
|                            |  | Previous Business Experience:                                                                     |  | Several executive positions with companies including Industrias Resistol, General Electric de México, and Banco Nacional de México, S.A., a member of Grupo Financiero Banamex.                                                        
|Juan Antonio Quiroga García |  | Age:
Years as Executive Officer:
Current Position:
Other Positions:                               |  | 55
7
Senior Corporate Controller Chief Corporate Officer of GRUMA.                                                                                                                                                                     
|                            |  | Previous Business Experience:                                                                     |  | Vice President of Administration of Gruma Corporation. Chief Administrative and Internal Auditing Officer of GRUMA.                                                                                                                    
|Joaquín Rubio Lamas         |  | Age:
Years as Executive Officer:
Current Position:                                                |  | 44
5
Senior Vice President of Manufacturing and Procurement                                                                                                                                                                            
|                            |  | Previous Business Experience:                                                                     |  | Director of supply chain management in GRUMA, Chief Operating Officer of GIMSA. Several executive positions within the Company including Chief Executive Officer of Electra Foods Machinery, Chief Executive Officer of
Azteca Milling.
|Salvador Vargas Guajardo    |  | Age:
Years as Executive Officer:
Current Position:
Other Positions:
Previous Business Experience: |  | 52
9
General Counsel
General Counsel of GRUMA Positions at Grupo Alfa, Protexa and Proeza. Senior partner of two law firms, including Rojas-González-Vargas-De la Garza y Asociados.                                                   

Mr. Roberto
González Alcalá, our Chief Operating Officer, is the son of Mr. Roberto González Barrera, the Chairman of our board
of directors and CEO.

36

---



COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT

The aggregate amount of compensation paid by our company during the year ended December 31, 2004 to the executive officers mentioned above was
Ps.31.3 million, in nominal terms, and to the directors, Ps.508,500 in nominal terms. The contingent or deferred compensation reserved as of December 2004 is Ps.5.8 million, in
nominal terms. Members of our board of directors are paid a fee of Ps.14,500 for each meeting attended as a member. José de la Peña y Angelini, a member of our board of
directors, is also an employee of GRUMA. Under his service contract with GRUMA, if he is terminated without cause before September 1, 2005, he is entitled to receive as severance, an amount not
lower than 50% of his base annual salary, including his holiday bonus. No other members of our board of directors have service contracts providing for benefits upon termination of employment.

We
offer an Executive Bonus Plan that applies to managers, vice presidents, and executive officers. The variable compensation under this plan can range from 15% to 50% of annual base
compensation, depending upon the employee's level, his individual performance and the results of our operations.

37

---





EMPLOYEES

On December 31, 2004, we had 2,799 employees, of whom 1,098 were members of labor unions. Workers at each of our 17 plants are covered by a separate labor
contract, although most of the plants belong to the major workers' confederations such as Confederación Revolucionaria de Obreros Mexicanos (CROM), Confederación
Revolucionaria de Obreros y Campesinos (CROC) and Confederación de Trabajadores Mexicanos (CTM). Most salary revisions take place annually, usually in January or February. We believe
that our relations with our employees are good. Of our total employees as of December 31, 2004, approximately 61% were white-collar and 39% were blue-collar. Total employees for
2003 and 2002 were 2,875 and 2,949, respectively.

Share Ownership

The following directors own shares of GIMSA, with each individual's ownership representing no more than 1% of our capital stock: Mr. Roberto
González Barrera, Mr. Rodolfo F. Barrera Villarreal, Mr. Juan David Michel and Mr. Juan Antonio Quiroga García. In addition, Mr. Juan B.
Guichard Michel owns directly and indirectly 54,527,700 shares of GIMSA representing approximately 5.9% of our capital stock.

CORPORATE GOVERNANCE PRACTICES

The significant differences between our corporate governance practices and the New York Stock Exchange standards can be found on our website, www.gimsa.com. The
information found at this website is not incorporated by reference into this document.

Item 7.    Major Shareholders and Related Party Transactions.

MAJOR SHAREHOLDERS

As of April 29, 2005, there were 504,150,300 Class A Common Shares, or A Shares, and 414,254,700 Class B Common Shares, or B Shares, issued
and outstanding. As of April 29, 2005, 890,133,360 of these shares were held in Mexico by 203 record holders. The remaining 28,271,640 shares were held in the United States by 29 record
holders. See "Item 9. The Offer and Listing" for fuller discussion of our capital stock.

The
table below sets forth information concerning the percentage of each class of our capital stock owned by any person known to us to be the owner of more than 5% of any class of our
voting securities, our directors and officers as a group and our other shareholders as of April 29, 2005. The company's major shareholders do not have different voting rights with respect to
the shares they own.

|                                  |  | Shares Owned | 
|--------------------------------- |  | ------------ | 
|
|GRUMA(1)                          |  | 504,150,300  | 
|Juan B. Guichard Michel           |  |              | 
|Directors and officers as a group |  |              | 
|Other shareholders                |  |              | 
|                                  |  |              | 
|Total                             |  | 507,150,300  | 

---

On December 31, 2004, 890,133,360 shares were held in Mexico. The remaining 28,271,640 shares were held in the United States by 29 record
holders. Because certain of the B Shares and ADSs are

38

---



held
by nominees, the number of record holders may not be representative of the number of beneficial owners.

Mr. González
Barrera has pledged or has been required to pledge part of his shares in GRUMA as collateral for loans made to him. In the event of a default, should
the lenders enforce their rights with respect to these shares, Mr. Gonzalez Barrera could lose his controlling interest in GRUMA, and consequently, in us. In addition,
Mr. González Barrera must give Archer-Daniels-Midland a right of first refusal on any sale of his GRUMA shares if at the time of the sale, he owns, or as a result of the sale
will own, less than 30% of GRUMA's outstanding shares. Should Archer-Daniels-Midland exercise its right, then it could control GRUMA, and consequently, us.

RELATED PARTY TRANSACTIONS

In the ordinary course of business, we and certain of our subsidiaries enter into agreements with GRUMA and other affiliates, including agreements pertaining to
the sharing of intellectual property, and providing technical and advisory support services. We believe that our transactions with related parties are generally conducted on terms no less favorable to
the Company that could be obtained from unrelated third parties. The following is a summary of the principal agreements between these parties.

We
do not conduct our own research and development activities in connection with corn flour production equipment. Instead, our operating subsidiaries contract for certain technology and
maintenance services with our sister company INTASA, a wholly-owned subsidiary of GRUMA. Pursuant to these agreements, each operating subsidiarypaysINTASA 0.5% of consolidated net sales
(subject to certain adjustments), which amounted to Ps.27 million, Ps.26 million and Ps.24 million as of December 31, 2004, 2003 and 2002, respectively in exchange for
technology and maintenance services. Each of our corn flour facilities use proprietary technology developed by INTASA.

In
June 1990, GRUMA entered into a licensing contract with us regarding our non-exclusive use of the MASECA® brand name in Mexico. We are currently the
only licensee of GRUMA for the MASECA® brand name in Mexico. MASECA® is a registered trademark in Mexico. The license currently allows for us and our subsidiaries to use the
MASECA® brand name on a royalty-free basis. The license agreement has been renewed for an indefinite term.

Our
operating subsidiaries also contract for services from Asesoría de Empresas, S.A. de C.V., or AESA, a wholly-owned GRUMA subsidiary. AESA provides various
administrative and operational advisory services in the areas of finance, planning and design, audit controls, human resources, tax advice and legal affairs. Pursuant to the terms of such agreements,
each operating subsidiary, on a monthly basis, pays AESA 2.5% of its net sales in addition to related direct expenses.

Our
operating subsidiaries also contract for services from Dinámica Azteca, S.A. de C.V., or DASA, a wholly-owned GRUMA subsidiary. DASA provides various administrative
and operational advisory services in the areas of planning, marketing, human resources, information technology and logistic and transportation. Pursuant to the terms of such agreements, each operating
subsidiary, on a monthly basis, pays DASA 0.5% of its net sales.

GIMSA
contracts aircraft services from TATESA, S.A. de C.V., or TATESA, a 54.7%-owned GRUMA subsidiary.

GRUMA
periodically enters into short-term credit arrangements with us, where we provide GRUMA with funds for working capital at market interest rates. These transactions are
made in the ordinary course of business since GRUMA operates as the central treasurer for its subsidiaries. At their peak on May 17, 2005, loans to GRUMA reached the amount of
Ps.1,531 million in nominal terms. As of June 15, 2005, GRUMA owed GIMSA Ps.1,345 million. The weighted average interest rate from January 1 to June 15, 2005 was
10.6%.

39

---



Financial
information with respect to GIMSA includes sales of Ps.32 million, Ps.41 million and Ps.181 million in 2002, 2003 and 2004, respectively, in corn flour to
Gruma Corporation and PRODISA. During 2003 GIMSA started to export corn flour to Gruma Corporation in order to satisfy the increasing demand for corn flour in the U.S. market.

Item 8.    Financial Information.

See "Item 18. Financial Statements" and pages F-1 through F-37.

LEGAL PROCEEDINGS

We are involved in various legal proceedings in the ordinary course of business. We do not expect that such proceedings, individually or in the aggregate, will
have a material adverse effect on our results of operations or financial condition

Water Discharges Assessments

Certain of our subsidiaries have been notified by the National Water Commission of fee assessments due from different years amounting to Ps.24.9 million
plus related penalties and surcharges. These fees arise from our alleged discharge of sewage water on public property through the sprinkler systems on the grounds of some of our subsidiaries. The
current status of these fee assessments is as follows: (a) we have obtained final favorable court decisions to annul fee assessments for Ps.6.9 million; (b) we have obtained
favorable court decisions to annul fee assessments for Ps.14.2 million and such decisions were appealed by the CNA (the resolutions of such appeals are currently pending); and (c) we
have obtained favorable court decisions to annul fee assessments for Ps.3.8 million, however, such decisions may still be appealed by the CNA. According to our legal counsel, we have a
reasonable basis to believe that we have been and are in compliance with the applicable regulations because we believe the discharged water is neither sewage water nor has it been discharged on public
grounds and accordingly we believe all matters will be resolved in our favor. We will continue to vigorously defend against these fees assessments.

DIVIDEND POLICY

For a discussion of our dividend policy, see "Item 3. Key InformationDividends."

SIGNIFICANT CHANGES

Except as disclosed herein, no significant changes have occurred since the date of the annual financial statements included in this annual report.

Item 9.    The Offer And Listing.

TRADING HISTORY

Our B Shares are listed on the Mexican Stock Exchange, and ADSs, each representing 15 B Shares, are listed on the New York Stock Exchange. As of
December 31, 2004, approximately 6.8% of the publicly traded B Shares were held in the form of ADSs. The ADSs are evidenced by ADRs issued by Citibank, N.A., as Depositary under a Deposit
Agreement, dated as of May 17, 1994 between us, Citibank, N.A., and all registered holders from time to time of the ADRs evidencing the ADSs. As of December 31, 2004, 414,254,700 B
Shares were outstanding (of which 28,271,640 shares, represented by 1,884,776 ADSs, were held by 29 record holders in the United States). Because certain of the B Shares and ADSs are held by nominees,
the number of record holders may not be representative of the number of beneficial owners.

40

---



PRICE HISTORY

The following table sets forth, for the periods indicated, the annual high and low closing sale prices for the B Shares and the ADSs as reported by the Mexican
Stock Exchange and the New York Stock Exchange, respectively.

|                        |  | Mexican Stock Exchange |  | NYSE
|----------------------- |  | ---------------------- |  | ----
|
|
|
|Annual Price History    |  |                        |  |     
|2000                    |  | 6.16                   |  | 1.85
|2001                    |  | 3.05                   |  | 1.50
|2002                    |  | 4.83                   |  | 3.09
|2003                    |  | 4.80                   |  | 3.30
|2004                    |  | 5.80                   |  | 4.90
|Quarterly Price History |  |                        |  |     
|2003                    |  |                        |  |     
|1st Quarter             |  | 3.60                   |  | 3.30
|2nd Quarter             |  | 4.00                   |  | 3.40
|3rd Quarter             |  | 4.50                   |  | 4.00
|4th Quarter             |  | 4.80                   |  | 4.26
|2004                    |  |                        |  |     
|1st Quarter             |  | 5.50                   |  | 4.90
|2nd Quarter             |  | 5.50                   |  | 5.00
|3rd Quarter             |  | 5.35                   |  | 5.00
|4th Quarter             |  | 5.80                   |  | 5.10
|2005                    |  |                        |  |     
|1st Quarter             |  | 6.55                   |  | 5.80
|2nd Quarter(3)          |  | 6.35                   |  | 5.95
|Monthly Price History   |  |                        |  |     
|December 2004           |  | 5.80                   |  | 5.40
|January 2005            |  | 6.40                   |  | 5.80
|February 2005           |  | 6.55                   |  | 6.30
|March 2005              |  | 6.55                   |  | 6.10
|April 2005              |  | 6.13                   |  | 5.98
|May 2005                |  | 6.35                   |  | 6.19
|June 2005(3)            |  | 6.16                   |  | 5.95

---

On
June 15, 2005, the reported last sale price of the B Shares on the Mexican Stock Exchange was Ps.6.16 per B Share and the reported last sale price of the ADSs on the New York
Stock Exchange was U.S.$8.56 per ADS.

MEXICAN STOCK EXCHANGE

The Mexican Stock Exchange, theBolsa Mexicana de Valores, S.A. de C. V., located in Mexico City, is the only
stock exchange in Mexico. Founded in 1907, it is organized as a corporation whose shares are held by brokerage firms, which are exclusively authorized to trade on the exchange. Trading on the

41

---



Mexican
Stock Exchange takes place principally through automated systems and is open between the hours of 8:30 a.m. and 3:00 p.m., Mexico City time, each business day. Trades in
securities listed on the Mexican Stock Exchange can also be effected off the exchange. The Mexican Stock Exchange operates a system of automatic suspension of trading in shares of a particular issuer
as a means of controlling excessive price volatility, but under current regulations this system does not apply to securities such as the B Shares that are directly or indirectly (for example, through
ADSs) quoted on a stock exchange (including for these purposes the New York Stock Exchange) outside Mexico.

Each
day a price band is established for each security with upper and lower limits usually set at 15% above and below a reference price, which is initially the day's opening price. If
during the day a binding bid to purchase or offer to sell is made at a price outside this band, trading is automatically suspended. When trading resumes, the high point of the previous band becomes
the new reference price in the event of an increase in the price of a security and the low point of the previous band becomes the new reference price in the event of a decrease in the price of a
security.

On
April 20, 2001, a binding bid was made to purchase B Shares for a price that exceeded the reference price by 20.51% and trading was suspended on the Mexican Stock Exchange from
9:02 a.m. through 9:48 a.m. On April 26, 2001, the price per B Share increased 38.89%, causing trading to be suspended on the Mexican Stock Exchange from 7:38 a.m. through
8:04 a.m. Later that morning, a binding bid was made to purchase B Shares for a price that was 25.70% below the reference price, causing trading to be suspended on the Mexican Stock Exchange
from 8:34 a.m. through 8:36 a.m. On September 17, 2001, the price per B Share decreased 15.56% and trading was suspended on the Mexican Stock Exchange from 12:32 p.m.
through 12:34 p.m. On September 26, 2001, a binding offer to sell B Shares was made for a price that was 17.21% below the reference price and trading was suspended on the Mexican Stock
Exchange from 10:03 a.m. through 10:38 a.m.

Settlement
is effected two business days after a share transaction on the Mexican Stock Exchange. Deferred settlement, even by mutual agreement, is not permitted without the approval of
theComisión Nacional Bancaria y de Valores(the Mexican National Banking and Securities Commission, or CNBV). Most securities traded on
the Mexican Stock Exchange, including ours, are on deposit withS.D. Indeval, S.A. de C.V., or Indeval, a privately owned securities depositary that
acts as a clearinghouse for Mexican Stock Exchange transactions.

As
of June 1, 2001, the Mexican Securities Law requires issuers to increase the protections offered to minority shareholders and to impose corporate governance controls on Mexican
listed companies in line with international standards. The Mexican Securities Law expressly permits Mexican listed companies, with prior authorization from the CNBV, to include in their bylaws
antitakeover defenses such as shareholder rights plans, or poison pills. Our bylaws include certain of these protections. See "Additional InformationBylawsAntitakeover
Protections."

Item 10.    Additional Information.

BYLAWS

Set forth below is a brief summary of certain significant provisions of (1) our bylaws, as amended by our Extraordinary Shareholders' Meeting held on
December 2, 2003 to comply with recent changes to Mexican Securities regulations, and (2) Mexican law. This description does not purport to be complete and is qualified by reference to
our bylaws, which are incorporated by reference as an exhibit to this registration statement.

42

---



Organization and Register

We are asociedad anónima de capital variable(a corporation) organized in Mexico under the Ley General de
Sociedades Mercantiles, or the Mexican Companies Law. We were incorporated on March 12, 1981 and have a corporate life of
99 years, starting April 2, 1981. We were registered in the Public Registry of Property and Commerce of Monterrey on April 3, 1981 under mercantile number 365, folio 169, volume
243, book 3. Our corporate purpose, as fully described in Article 2 of our bylaws, is to act as a holding company. As such, our bylaws grant us the power to engage in various activities, which
allow us to function as a holding company. These powers include, but are not limited to, the ability to (1) acquire, sell, import, export, and manufacture all types of goods and products,
(2) issue securities and take all actions with respect to securities of any kind, (3) create, organize and manage all types of companies, (4) act as an agent or representative,
(5) acquire, sell and maintain real property, (6) perform or receive professional, technical or consulting services, (7) establish branches, agencies or representative offices,
(8) acquire, license or use intellectual property, (9) grant and receive loans,
(10) subscribe, issue and negotiate all types of credit instruments, and (11) perform any acts necessary to accomplish the foregoing.

Directors

Our bylaws provide that our management shall be vested in the board of directors. Each director is elected by a simple majority of the shares and there are no
provisions for cumulative voting. Under Mexican law and our bylaws, any holder or group of holders of shares representing 10% or more of our capital stock may elect one director and its corresponding
alternate. The board of directors shall be comprised of a minimum of five and a maximum of twenty directors, as determined by the shareholders at the annual ordinary general shareholders' meeting.
Under Mexican law, at least 25% of the members of the board of directors must be independent as determined under Mexican law. Currently, our board of directors consists of 12 members.

The
board of directors shall meet at least once every three months. These meetings can be called by the Chairman of the Board of Directors, by 25% of the members of the board of
directors, or by our statutory auditors. The directors serve for a one year term, or until their successors have taken office. Directors receive compensation as determined by the shareholders at the
annual ordinary general shareholders' meeting. A majority of directors is needed to constitute a quorum and board resolutions must be passed by a majority of the votes present at any validly
constituted meeting or by unanimous consent if no meeting is convened.

Under
Mexican law, any member of the board of directors who has a conflict of interest with the corporation in any transaction must disclose such fact to the other directors and abstain
from voting on that transaction. Any member of the board of directors who violates this provision may be liable for the resulting damages incurred by the company. Members of the board of directors may
not represent shareholders at any shareholders' meeting.

Our
bylaws provide that the board of directors is required to approve: (i) related party transactions other than those occurring in the ordinary course of business;
(ii) purchases of 10% or more of our corporate assets; (iii) guarantees for more than 30% of our corporate assets; (iv) any of the aforementioned transactions when they are to be
carried out by any of our subsidiaries; and (v) any other transaction, different from the aforementioned, the value of which represents more than 1% of our corporate assets. This approval is
non-delegable.

Under
Mexican law, shareholders can initiate actions for civil liabilities against directors through resolutions passed by a majority of the shareholders at a general ordinary
shareholders' meeting. In the event the majority of the shareholders decide to bring such action, the director against whom such action is brought will immediately cease to be a member of the board of
directors. Additionally, shareholders representing not less than 15% of our outstanding shares may directly bring such action

43

---



against
directors. Any recovery of damages with respect to such action will be for our benefit and not for the benefit of the shareholders bringing the action.

Under
our bylaws and in accordance with applicable law, we are required to have an audit committee comprised of directors, of which at least the majority of whom must be independent
directors, including the Chairman. Members are appointed at the annual ordinary general shareholders' meeting, hold office for one year and will continue their duties until their successors take their
positions. Members shall receive such compensation set at the ordinary general shareholders' meeting. The audit committee is empowered to: (i) prepare an annual report of its activities and
render it to the board of directors; (ii) issue opinions with respect to related party transactions that the Company intends to carry out outside of its ordinary course of business; as well as
to issue opinions with respect to (a) related party transactions that the subsidiaries of the Company intend to carry out that are outside their ordinary course of business or
(b) transactions that may imply a commitment of its assets under the terms of section IV, paragraph (d) of Article 14-Bis-3 of the Mexican
Securities Law; (iii) make proposals relating to the hiring of independent experts, if necessary, so that such experts can issue their opinions with respect to related party transactions;
(iv) propose to the board of directors candidates for the external auditor position and the conditions pursuant to which they will be hired; (v) revise our financial information and
arrange the issuance process for the same; (vi) contribute to the definition of the general guidelines of the internal control system, assess its effectiveness, as well as coordinate and
evaluate the annual internal audits and the activities performed by our internal and external auditors and the statutory auditors; (vii) verify that we have the necessary mechanisms to ensure
that we are in compliance with applicable laws and inform the board of directors in this respect; and (viii) perform other functions as set forth or deriving from applicable legal provisions to
which the Company may be subject. Our statutory auditors will be called to all meetings held by the audit committee.

According
to our bylaws, the board of directors is empowered to execute and negotiate any of our credit instruments and agreements. The board of directors may delegate such power to any
individual.

See
also "Item 6. Directors, Senior Management and Employees" for further information about the board of directors.

44

---



Voting Rights and Shareholders' Meetings

Each share, regardless of the series held, entitles the holder thereof to one vote at any general meeting of our shareholders. Shareholders may vote by proxy. At
the ordinary general shareholders' meeting, any shareholder or group of shareholders representing 10% or more of the outstanding common stock has the right to appoint one director and its
corresponding alternate, with the remaining directors being elected by majority vote. Shareholders do not have cumulative voting rights.

General
shareholders' meetings may be ordinary meetings or extraordinary meetings. Extraordinary general shareholders' meetings are called to consider matters specified in
Article 182 of the Mexican Companies Law, including, principally, changes in the authorized fixed share capital and other amendments to the bylaws, the issuance of preferred stock, liquidation,
mergers and spin-offs, changes in the rights of security holders and transformation from one corporate form to another. All other matters may be considered at ordinary general
shareholders' meetings. Ordinary general shareholders' meetings must be called to consider and approve matters specified in Article 181 of the Mexican Companies Law, including, principally, the
appointment of the members of the board of directors and the statutory auditor, the compensation paid to the directors and statutory auditor, the distribution of our profits for the previous year, and
the annual reports presented by the board of directors and the statutory auditor.

A
general ordinary shareholders' meeting must be held during the first four months after the end of each fiscal year. In order to attend a general shareholders' meeting, the day before
the meeting shareholders must deposit the certificates representing their common stock or other appropriate evidence of ownership either with the secretary of our board of directors, with a credit
institution, or with Indeval. The secretary, credit institution or Indeval will hold the certificates until after the general shareholders' meeting has taken place.

Our
shareholders establish the number of members that will serve on our board of directors at the ordinary general shareholders' meeting. Under our bylaws, the board of directors shall
be comprised of a minimum of five and a maximum of twenty directors. Pursuant to Mexican law, at least 25% of the members of the board of directors must be independent.

Under
our bylaws, the quorum for an ordinary general shareholders' meeting is at least 50% of the outstanding common stock, and action may be taken by the affirmative vote of holders
representing a majority of the shares present. If a quorum is not present, a subsequent meeting may be called at
which the shareholders present, whatever their number, will constitute a quorum and action may be taken by a majority of the shares present. A quorum for extraordinary general shareholders' meetings
is at least 75% of the outstanding common stock, but if a quorum is not present, a subsequent meeting may be called. A quorum for the subsequent meeting is at least 50% of the outstanding shares.
Action at an extraordinary general shareholders' meeting may only be taken by a vote of holders representing at least 50% of the outstanding shares.

Shareholders'
meetings may be called by the board of directors, the statutory auditor or a court. The board of directors or the statutory auditor may be required to call a shareholders'
meeting if holders of at least 10% of our outstanding share capital request a meeting in writing, at the written request of any shareholder if no shareholders' meeting has been held for two
consecutive years, or if, during a period of two consecutive years, the board of directors' annual report for the previous year and the company's financial statements were not presented to the
shareholders, or if the shareholders did not elect directors and the statutory auditor.

Notice
of shareholders' meetings must be published in the Official Gazette of the State of Nuevo Leon or in a newspaper of general circulation in Monterrey at least 15 days prior
to the meeting. Shareholders' meetings may be held without such publication provided that 100% of the outstanding shares are represented. Shareholders' meetings must be held in Monterrey, Mexico.

45

---



Under
Mexican law, holders of 10% of shares may have any shareholder action set aside by filing a complaint with a Mexican court of competent jurisdiction within 15 days after the
close of the meeting at which such action was taken, by showing that the challenged action violates Mexican law or our bylaws. Relief under these provisions is only available to holders who were
entitled to vote on the challenged shareholder action and whose shares were not represented when the action was taken or, if represented, were voted against it.

Dividend Rights and Distribution

Within the first four months of each year, the board of directors must submit our company's financial statements for the preceding fiscal year to the shareholders
for their approval at the ordinary general shareholders' meeting. They are required by law to allocate five percent of any new profits to a legal reserve which is not thereafter available for
distribution until the amount of the legal reserve equals 20% of our historical capital stock (before adjusting for inflation). Amounts in excess of those allocated to the legal reserve fund may be
allocated to other reserve funds as the shareholders determine, including a reserve for the repurchase of our shares. The remaining balance of new profits, if any, is available for distribution as
dividends. Cash dividends on the shares held through Indeval will be distributed by us through Indeval. Cash dividends on the shares evidenced by physical certificates will
be paid when the relevant dividend coupon registered in the name of its holder is delivered to us. No dividends may be paid, however, unless losses for prior fiscal years have been paid up or
absorbed. See "Item 3. Key InformationDividends."

Liquidation

Upon our dissolution, one or more liquidators must be appointed by an extraordinary shareholders' general meeting to wind up its affairs. If the extraordinary
general shareholders' meeting does not make said appointment, a Civil or District Judge of the Federation can do so at the request of any shareholder. All fully paid and outstanding common stock will
be entitled to participate equally in any distribution upon liquidation after the payment of the company's debts, taxes and the expenses of the liquidation. Common stock that has not been paid in full
will be entitled to these proceeds in proportion to the paid-in amount.

If
the extraordinary general shareholders' meeting does not give express instructions on liquidation, the bylaws stipulate that the liquidators will (i) conclude all pending
matters in such a way to avoid damage to the interests of creditors and shareholders, (ii) prepare a general balance and inventory, (iii) collect all credits and pay all debts by selling
assets necessary to accomplish this task, (iv) sell assets and distribute income, and (v) distribute the remnant, if any, pro rata among the shareholders.

Changes in Capital Stock

Our bylaws currently permit our capital stock to consist of a fixed and a variable portion. The fixed portion of our capital stock is divided into Class A
and Class B shares and has no par value. The fixed portion of our capital stock cannot be redeemed. The variable portion of our capital stock has no par value. The issuance of variable capital
shares, unlike the issuance of fixed capital shares, does not require an amendment of the bylaws, although it does require approval at an ordinary general shareholders' meeting. The fixed portion of
our capital stock may only be increased or decreased by resolution of an extraordinary general shareholders' meeting and an amendment to our bylaws, whereas the variable portion of our capital stock
may be increased or decreased by resolution of an ordinary general shareholders' meeting. Currently, our outstanding capital stock consists only of fixed capital.

An
increase of capital stock may generally be effected through the issuance of new shares for payment in cash or in kind, by capitalization of indebtedness or by capitalization of
certain items of shareholders' equity. An increase of capital stock generally may not be effected until all previously

46

---



issued
and subscribed shares of capital stock have been fully paid. A reduction of capital stock may be effected to absorb losses, to redeem shares, to repurchase shares in the open market or to
release shareholders from payments not made.

Preemptive Rights

Except in certain limited circumstances, in the event of a capital increase through the issuance of shares for payment in cash or in kind, a holder of existing
shares of a given series at the time of the capital increase has a preferential right to subscribe for a sufficient number of new shares of the same series to maintain the holder's existing
proportionate holdings of shares of that series. Preemptive rights must be exercised within the period and under the conditions established for such purpose by the shareholders at the corresponding
shareholders' meeting. Under Mexican law and our bylaws, the exercise period may not be less than 15 days following the publication of notice of the capital increase in the Official Gazette of
the State of Nuevo Leon or following the date of the shareholders' meeting at which the capital increase was approved if all shareholders were represented; otherwise such rights will lapse.

Shareholders
will not have preemptive rights to subscribe for common stock issued in connection with mergers, upon the conversion of convertible debentures, in a public offering (if the
majority of shareholders at a general extraordinary meeting approve the issuance of shares and waive their preemptive rights in accordance with the Mexican Securities Law and our bylaws) or in a
resale of common stock held in our treasury as a result of repurchases on the Mexican Stock Exchange.

Under
Mexican law, preemptive rights may not be waived in advance by a shareholder, except under limited circumstances, and cannot be represented by an instrument that is negotiable
separately from the corresponding share. Holders of ADRs may be restricted in their ability to participate in the exercise of preemptive rights. See "Item 3. Key InformationRisk
FactorsRisks Relating to Our Controlling Shareholders and Capital StructureHolders of ADSs May Not Be Able to Participate in Any Future Preemptive Rights Offering and as a
Result May Be Subject to a Dilution of Equity Interest."

Restrictions Affecting Non-Mexican Shareholders

Foreign investment in capital stock of Mexican corporations is regulated by the 1993 Foreign Investment Law and by the 1998 Foreign Investment Regulations to the
extent they are not inconsistent with the Foreign Investment Law. The Ministry of Economy and the National Commission on Foreign Investment are responsible for the administration of the Foreign
Investment Law and the Foreign Investment Regulations.

Our
bylaws do not restrict the participation of non-Mexican investors in our capital stock. However, approval of the National Foreign Investment Commission must be obtained
for foreign investors to acquire a direct or indirect participation in excess of 49% of the capital stock of a Mexican company that has an aggregate asset value that exceeds, at the time of filing the
corresponding notice of acquisition, an amount determined annually by the National Foreign Investment Commission.

As
required by Mexican law, our bylaws provide that any non-Mexicans who acquire an interest or participation in our capital at any time will be treated as having Mexican
nationality for purposes of their interest in us, and with respect to the property, rights, concessions, participations or interests that we may own or rights and obligations that are based on
contracts to which we are a party with the Mexican authorities. Such shareholders cannot invoke the protection of their government under penalty of forfeiting to the Mexican State the ownership
interest that they may have acquired. See "Item 3. Key InformationRisk FactorsRisks Relating to Our Controlling Shareholders and Capital StructureOur Bylaws
Restrict the Ability of Non-Mexican Shareholders to Invoke the Protection of Their Governments with Respect to Their Rights as Shareholders."

47

---



Under
this provision, a non-Mexican shareholder is deemed to have agreed not to invoke the protection of his own government with respect to his rights as a shareholder, but
is not deemed to have waived any other rights it may have with respect to its investment in us, including any rights under U.S. securities laws. If a shareholder should invoke governmental protection
in violation of this provision, its shares could be forfeited to the Mexican government. Mexican law requires that such a provision be included in the bylaws of all Mexican companies unless such
bylaws prohibit ownership of shares by non-Mexicans.

Registration and Transfer

Our shares are evidenced by certificates in registered form. We maintain a stock registry and, in accordance with Mexican law, only those persons whose names
appear on the stock registry are recognized as owners of the shares.

Other Provisions

Redemption Rights

Outstanding variable capital shares, if any, may be fully or partially redeemed by the holders thereof. The minimum fixed portion of our capital stock cannot be
redeemed. Currently, we have no outstanding variable capital shares. A holder of variable capital stock that wishes to effect a total or partial redemption of such stock is required to notify us in an
authenticated written notice to that effect. If notice of redemption is received prior to the last quarter of the fiscal year, the redemption becomes effective at the end of the fiscal year in which
the shareholder gives notice. Otherwise, the redemption becomes effective at the end of the following fiscal year.

Redemption
of our variable capital stock is made at the lower of (i) 95% of the weighted average share price as quoted on the Mexican Stock Exchange for the last 30 days in
which our shares were traded, in a period not greater than six months, prior to the effective date of the redemption, or (ii) the book value per variable capital share, calculated from our
balance sheet (as approved at an ordinary general shareholders' meeting) for the fiscal year immediately prior to the fiscal year in which the redemption is to become effective. If the number of days
in which our shares have traded during the period referred to above is less than 30, then only the actual number of days in which our shares have traded during such period will be taken into account.
If shares have not been exchanged during such period, then the tender offer shall be made at a price equal to at least the book value of the shares. Any such amount to be paid by us would become due
on the day following the ordinary general shareholders' meeting referred to in clause (ii) above.

Appraisal Rights

Under Mexican law, whenever the shareholders approve a change of corporate purpose, change of our nationality or transformation from one type of corporate form to
another, any shareholder entitled to vote on such change or transformation who has voted against it has the right to tender its shares and receive the amount attributable to its shares, provided such
shareholder exercises its right to withdraw within 15 days following the adjournment of the meeting at which the change or transformation was approved. Under Mexican law, the amount which a
withdrawing shareholder is entitled to receive is equal to its proportionate interest in our capital stock according to our most recent balance sheet approved by an ordinary general shareholders'
meeting. The reimbursement may have certain tax consequences.

Share Repurchases

We may repurchase our common stock on the Mexican Stock Exchange at any time at the then prevailing market price. The repurchase of shares will be made at the
expense of our equity if the

48

---



repurchased
shares remain outstanding; or at the expense of our capital stock if the repurchased shares are placed in our treasury. At the ordinary general shareholders' meeting, shareholders shall
determine the maximum amount of funds to be allocated to the repurchase of shares, which amount shall not exceed our total net profits, including retained earnings.

Repurchased
common stock will either be held by us or kept in our treasury, pending future sales thereof on the Mexican Stock Exchange. If the repurchased shares are kept in our
treasury, we may not exercise the economic and voting rights corresponding to them, and such shares are not deemed to be outstanding for purposes of calculating any quorum or vote at any shareholders'
meeting. Repurchased shares held by us as outstanding shares may not be represented at any shareholder meeting. The decrease or increase of the capital stock as a consequence of the repurchase and
sale by the company of its shares does not require the approval of a shareholders' meeting or of the board of directors.

Under
Mexican securities regulation, our directors, officers, statutory auditors, external auditors and the secretary of the board of directors and holders of 10% or more of our
outstanding common stock may not sell common stock to us, or purchase repurchased common stock from us, unless the sale or purchase is made through a tender offer. Mexican securities regulations
require that if we decide to repurchase common stock representing three percent or more of our outstanding share capital in any 20 trading-day period, these repurchases must be conducted
by means of a public tender offer.

Repurchase in the Event of Delisting

If the registration of our common shares in the Securities Section of theRegistro Nacional de Valores(National
Registry of Securities, or RNV) is canceled, whether at our request or by the CNBV, under our bylaws and CNBV regulations the shareholders holding the majority of our common shares or who are
otherwise able to impose, by any means, decisions at the general shareholders' meetings or able to appoint the majority of the directors of our board of directors, shall be obligated to make a tender
offer to purchase all of our shares prior to the cancellation. Such tender offer shall be made at a minimum in price equal to the higher of: (i) the closing sale price of such shares on the
Mexican Stock Exchange, under the terms of the following paragraph, and (ii) the book value of the shares according to the most recent quarterly report submitted to the CNBV and to the Mexican
Stock Exchange prior to the commencement of the offer. As set forth in the last paragraph of this subsection below, the tendering shareholder(s) may request approval from the CNBV to use different
criteria to determine the price of the shares, in which case, the most recent financial information of the Company shall be taken into account.

The
quoted share price on the Mexican Stock Market referred to in the preceding paragraph shall be the weighted average share price as quoted on the Mexican Stock Exchange for the last
30 days in which our shares were traded, in a period not greater than six months, prior to the date of the offer. If the number of days in which our shares have traded during the period
referred to above is less than 30, then only the actual number of days in which our shares have traded during such period will be taken into account. If shares have not been exchanged during such
period, then the tender offer shall be made at a price equal to at least the book value of the shares.

If
the tender offer refers to more than one series of stock, the weighted average price referred to in the preceding paragraph shall be calculated for each series of stock to be
cancelled, and the price for the tender offer of all of the series shall be the greatest of such averages.

Within
five business days of the commencement of the tender offer, the board of directors shall disclose its opinion in connection with the reasonableness of the price of such offer,
taking into consideration (i) the interests of the minority shareholders in order to comply with the terms of the second paragraph of Article 16 of the Mexican Securities Law, and
(ii) an opinion of the audit committee. If the board of directors' and audit committee's opinions are conflicting, then the audit committee's opinion shall be disclosed. If the board of
directors has a potential conflict of interest, then

49

---



the
opinion of the board of directors shall be accompanied with an opinion issued by an independent expert selected by the audit committee in which special emphasis is to be made to protect the
interests of the minority shareholders.

The
holders of the majority of our common shares, or whoever is otherwise able to, by any means, (i) impose resolutions at the general shareholders' meetings, or
(ii) appoint the majority of the directors of our board of directors, shall be under no obligation to make the tender offer to purchase all of our shares prior to the cancellation of the
registry if: (i) they have the consent of the holders of at least 95% of our outstanding common shares, by a resolution at a shareholders' meeting, and (ii) the aggregate amount offered
for the securities in the market is less than 300,000 investment units (UDIs); provided, however that, in order to obtain the cancellation from the RNV, (x) the trust referred to in the
following paragraph must be executed, and (y) notice of such cancellation and of the execution of the trust shall be made through the appropriate means established by the CNBV.

In
the event the shareholders making the tender offer are not able to purchase 100% of our outstanding common shares, then prior to the cancellation of our common shares in the
Securities Section of the RNV, they shall execute a trust, for a minimum term of six months, in order to provide sufficient monetary resources to purchase the remaining outstanding common shares at
the same tender offer price.

The
shareholders required to make the tender offer referred to above may request the approval from the CNBV to use different criteria to determine the price of the shares. The CNBV would
be required to take into account our financial situation in considering whether to grant such approval. In requesting such approval, the following must be submitted to the CNBV: (i) a
resolution of the board of directors approving such request, (ii) a favorable opinion of the audit committee addressing the reasons why it deems the use of a different price to be appropriate,
and (iii) a report from an independent expert indicating that the price is consistent with the terms of Article 16 of the Mexican Securities Law.

50

---





Rights of Shareholders

The protections afforded to minority shareholders under Mexican law are different from those in the United States and many other jurisdictions. The substantive
law concerning duties of directors and controlling shareholders has not been the subject of extensive judicial interpretation in Mexico, unlike many states in the United States where duties of care
and loyalty elaborated by judicial decisions help to shape the rights of minority shareholders. Mexican civil procedure does not contemplate class actions or shareholder derivative actions, which
permit shareholders in U.S. courts to bring actions on behalf of other shareholders or to enforce rights of the corporation itself. Shareholders cannot challenge corporate action taken at a
shareholders' meeting unless they meet certain procedural requirements.

As
a result of these factors, in practice it may be more difficult for our minority shareholders to enforce rights against us or our directors or controlling shareholders than it would
be for shareholders of a U.S. company. See "Item 3. Key InformationRisk FactorsRisks Relating to Our Controlling Shareholders and Capital StructureThe
Protections Afforded to Minority Shareholders in Mexico Are Different From Those in the United States."

In
addition, under the U.S. securities laws, as a foreign private issuer we are exempt from certain rules that apply to domestic U.S. issuers with equity securities registered under the
U.S. Securities Exchange Act of 1934, including the proxy solicitation rules, the rules requiring disclosure of share ownership by directors, officers and certain shareholders. We are also exempt from
certain of the corporate governance requirements of the New York Stock Exchange, including certain requirements concerning audit committees and independent directors. A summary of significant ways in
which our corporate governance standards differ from the those followed by U.S. domestic companies under NYSE listing standards is available on our website at www.gimsa.com.

Antitakeover Protections

Our bylaws provide that, subject to certain exceptions as explained below, prior written approval from the board of directors shall be required for any person (as
defined hereunder), or group of persons to acquire, directly or indirectly, any of our common shares or rights to our common shares, by any means or under any title whether in a single event or in a
set of consecutive events, such that its total shares or rights to shares would represent 5% or more of our outstanding shares.

Prior
approval from the board of directors must be obtained each time such ownership threshold (and multiples thereof) is intended to be exceeded, except for persons who, directly or
indirectly, are competitors (as such term is defined below) of the Company or of any of its subsidiaries, who must obtain the prior approval of the board of directors for future acquisitions where a
threshold of 2% (or multiples thereof) of our common shares is intended to be exceeded.

Pursuant
to our bylaws, a "person" is defined as any natural person, corporate entity, trust or similar form of venture, vehicle, entity, corporation or economic or mercantile
association or any subsidiaries or affiliates of any of the former or, as determined by the board of directors, any group of persons who may be acting jointly, coordinated or as a whole; and a
"competitor" is defined as any person engaged, directly or indirectly, in (i) the business of production and/or marketing of corn or wheat flour, and/or (ii) any other activity carried
on by the Company or by any of its subsidiaries or affiliates.

Persons
that acquire our common shares in violation of these requirements will not be considered the beneficial owners of such shares under our bylaws and will not be able to vote such
shares or receive any dividends, distributions or other rights in respect of these shares. In addition, pursuant to our bylaws, these holders will be obligated to pay us a penalty in an amount equal
to the greater of

51

---



(i) the
market value of the shares such party acquired without obtaining the prior approval of the board of directors and (ii) the market value of shares representing 5% of our capital
stock.

Board Notices, Meetings, Quorum Requirements and Approvals.To obtain the prior approval of our board
of directors, a potential acquiror must properly deliver a written application complying with the applicable requirements set forth in our bylaws. Such application shall state, among other things:
(i) the number and class of our shares the person beneficially owns or to which such person has any right, either directly or through a related party, (ii) the number and class of shares
the Person intends to acquire, either directly or through a related party, (iii) the number and class of shares with respect to which such Person intends to acquire any right, (iv) the
percentage that the shares referred to in (i) represent of our total outstanding shares and of the class or series to which such shares belong, (v) the percentage that the shares
referred to in (ii) and (iii) represent of our total outstanding shares and of the class or series to which such shares belong, (vi) the person's identity, or in the case of an
acquiror which is a corporation, trust or legal entity, its shareholders, partners or beneficiaries as well as the identity and nationality of each person effectively controlling such corporation,
trust or legal entity, (vii) the reasons and purpose behind such acquisition, (viii) if such person is, directly or indirectly, a competitor of the Company or any of its subsidiaries or
affiliates, and if such person has the authority to legally acquire the shares pursuant to our bylaws and Mexican law, (ix) its source of financing the intended acquisition, (x) if the
Person is part of an economic group, formed by one or more of its related parties, which intends to acquire shares of our common stock or rights to such shares, (xi) if the person has obtained
any financing from one of its related parties for the payment of the shares, (xii) the identity and nationality of the financial institution, if any, that will act as the underwriter or broker
in connection with any tender offer, and (xiii) the person's address for receiving notices.

Either
the Chairman, the Secretary or the Alternate Secretary of our board of directors must call a meeting of the board of directors within 10 business days following the receipt of the
written application. The notices for the meeting of the board of directors shall be in writing and sent to each of the directors and their alternates at least 45 calendar days prior to the meeting.
Action by unanimous written consent is not permitted.

Any
acquisition of common shares representing at least 2% or 5%, as the case may be, of our outstanding capital stock, must be approved by at least the majority of the members of our
board of directors present at a meeting at which at least the majority of the members is present. Such acquisitions must be resolved by our board of directors within 60 calendar days following the
receipt of the written application described above, unless the board of directors determines that it does not have sufficient information upon which to base its decision. In such case, the board of
directors shall deliver a written request to the potential acquiror for any additional information that it deems necessary to make its determination. The 60 calendar days referred to above will
commence following the receipt of the additional information from the potential acquiror.

Mandatory Tender Offers in the Case of Certain Acquisitions.If our board of directors authorizes an
acquisition of common shares which increases the acquirer's ownership to 30% or more, but not more than 50%, of our capital stock, then the acquiror must effect its acquisition by way of a cash tender
offer for a specified number of shares equal to the greater of (i) the percentage of common shares intended to be acquired or (ii) 10% of our outstanding capital stock, in accordance
with the applicable Mexican securities regulations.

No
approval of the board of directors will be required if the acquisition would increase the acquirer's ownership to more than 50% of our capital stock or results in a change of control,
in which case the acquiror must effect its acquisition by way of a tender offer for 100% minus one of our total outstanding capital stock, which tender shall be made pursuant to applicable Mexican
laws.

52

---



The
aforementioned tender offers must be made simultaneously in the Mexican and US stock markets. Furthermore, an opinion issued by the board of directors regarding any such tender offer
must be made available to the public through the authorized means of communication within 10 days after commencement of the tender offer. In the event of any tender offer, the shareholders
shall have the right to hear more competitive offers.

Notices.In addition to the aforementioned approvals, if a person increases its beneficial ownership
by 1% in the case of competitors, or 2% in the case of non-competitors, written notice must be submitted to the board of directors within five days of reaching or exceeding such
thresholds.

Exceptions.The provisions of our bylaws summarized above will not apply to (a) transfers of
shares by operation of the laws of succession; (b) acquisitions of shares by (i) any person who, directly or indirectly, has the authority or possibility of appointing the majority of
the directors of our board of directors, (ii) any company, trusts or similar form of venture, vehicle, entity, corporation or economic or mercantile association, which may be under the control
of the aforementioned person; (iii) the heirs of the aforementioned person, (iv) the aforementioned person when such person is repurchasing the shares of any corporation, trust or
similar form of venture, vehicle, entity, corporation or economic or mercantile association referred to in the item (ii) above; and (v) the Company or by trusts created by the Company;
(c) any person(s) that as of December 2, 2003 hold(s), directly or indirectly, more than 20% of the shares representing the Company's capital stock; and (d) any other exceptions
provided for in the Mexican Securities Law and other legal dispositions derived from said law.

Shareholder Conflicts of Interest

Under Mexican law, any shareholder that has a direct or indirect conflict of interest with respect to any transaction must abstain from voting thereon at the
relevant shareholders' meeting. A shareholder that votes on a business transaction in which its interest conflicts with ours may be liable for damages if the transaction would not have been approved
without such shareholder's vote.

MATERIAL CONTRACTS

For a description of our material contracts, see "Item 7. Major Shareholders and Related Party TransactionsRelated Party Transactions."

EXCHANGE CONTROLS

Mexican law does not restrict our ability to remit dividends and interest payments, if any, to non-Mexican holders of our securities. Payments of
dividends to equity-holders generally will not be subject to Mexican withholding tax. See "TaxationMexican Tax ConsiderationsPayment of Dividends."

Mexico
has had a free market for foreign exchange since 1991, and the government has allowed the peso to float freely against the U.S. dollar since December 1994.

TAXATION

The following summary contains a description of certain Mexican federal and U.S. federal income tax consequences of the acquisition, ownership and disposition of
B Shares or B Share ADSs (which are evidenced by ADRs), but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase or
hold shares or ADSs, such as the tax treatment of holders that are dealers or that own (actually or constructively under rules prescribed in the Internal Revenue Code of 1986, as amended, or the Code)
10% or more of our voting shares.

The
Convention for the Avoidance of Double Taxation and a Protocol thereto, or the Tax Treaty, between the United States and Mexico entered into force on January 1, 1994. The
United States and

53

---



Mexico
have also entered into an agreement concerning the exchange of information with respect to tax matters.

The
summary is based upon tax laws of the United States and Mexico as in effect on the date of this document, which are subject to change, including changes that may have a retroactive
effect. Holders of shares or ADSs should consult their own tax advisers as to the Mexican, U.S. or other tax consequences of the purchase, ownership and disposition of shares or ADSs, including, in
particular, the effect of any foreign, state or local tax laws.

Mexican Tax Considerations

The following is a general summary of the principal consequences under theLey del Impuesto sobre la Renta, or the
Mexican Income Tax Law, and rules and regulations thereunder, as currently in effect, of an investment in Shares or ADSs by a holder that is not a resident of Mexico and that will not hold shares or
ADSs or a beneficial interest therein in connection with the conduct of a trade or business through a permanent establishment or fixed base in Mexico.

For
purposes of Mexican taxation, a natural person is a resident of Mexico for tax purposes if he has established his home in Mexico, unless he has resided in another country for more
than 183 days, whether consecutive or not, in any one calendar year and can demonstrate that he has become a resident of that country for tax purposes, and a legal entity is a resident of
Mexico if it was incorporated in Mexico or maintains the principal administration of its business or the effective location of its management in Mexico. A Mexican citizen is presumed to be a resident
of Mexico unless
such person can demonstrate the contrary. If a non-resident of Mexico is deemed to have a permanent establishment or fixed base in Mexico for tax purposes, all income attributable to such
permanent establishment or fixed base will be subject to Mexican taxes, in accordance with applicable tax laws.

Tax Treaties

Provisions of the Tax Treaty that may affect the taxation of certain U.S. holders are summarized below. The United States and Mexico have also entered into an
agreement that covers the exchange of information with respect to tax matters.

Mexico
has also entered into and is negotiating several other tax treaties that may reduce the amount of Mexican withholding tax to which payment of dividends on shares or ADSs may be
subject. Holders of shares or ADSs should consult their own tax advisors as to the tax consequences, if any, of such treaties.

Under
the Mexican Income Tax Law, in order for any benefits from the Tax Treaty or any other tax treaties to be applicable, residence for tax purposes must be demonstrated.

Payment of Dividends

Under the Mexican Income Tax Law, dividends, either in cash or in kind, paid with respect to shares represented by ADSs are not subject to Mexican withholding
tax. A Mexican corporation will not be subject to any tax if the amount of dividends does not exceed the net tax profit account (cuenta de utilidad fiscal
neta,or CUFIN).

If
we had paid a dividend in 2005 in an amount greater than our CUFIN balance (which may occur in a year when net profits exceed the balance in such accounts), then we will be required
to pay an income tax of 30% for 2005, 29% for 2006, and 28% for 2007 and thereafter on an amount equal to the product of the portion of the grossed-up amount which exceeds such balance
multiplied by the factor 1.4286 for 2005, 1.4085 for 2006 and 1.3889 for 2007 and thereafter.

54

---



Taxation of Dispositions

The sale or other disposition of ADSs by a non-resident holder will not be subject to Mexican tax. Deposits of shares in exchange for ADSs and
withdrawals of shares in exchange for ADSs will not give rise to Mexican tax or transfer duties.

The
sale of shares by a non-resident holder will not be subject to any Mexican tax if the transaction is carried out through the Mexican Stock Exchange or other securities
markets approved by the Mexican Ministry of Finance. Sales or other dispositions of shares made in other circumstances generally would be subject to Mexican tax, regardless of the nationality or
residence of the transferor.

Under
the Mexican Income Tax Law, gains realized by a nonresident holder of shares on the sale or disposition of shares not conducted through a recognized stock exchange generally are
subject to a Mexican tax at a rate of 20% of the gross sale price. However, if the holder is a resident of a country which is not considered to be a low tax rate country (by reference to a list of low
rate countries published by the Mexican Ministry of Finance and Public Credit), the holder may elect to designate a resident of Mexico as its representative, in which case taxes would be payable at a
30% rate on the gain on such disposition of shares in 2005 (29% in 2006 and 28% in 2007 and thereafter).

Pursuant
to the Tax Treaty, gains realized by qualifying U.S. holders from the sale or other disposition of shares, even if the sale is not conducted through a recognized stock exchange,
will not be subject to Mexican income tax except that Mexican taxes may apply if:



Other Mexican Taxes

A non-resident holder will not be liable for estate, inheritance or similar taxes with respect to its holdings of shares or ADSs; provided, however,
that gratuitous transfers of shares may in certain circumstances result in imposition of a Mexican tax upon the recipient. There are no Mexican stamp, issue registration or similar taxes payable by a
non-resident holder with respect to shares or ADSs.

Reimbursement
of capital pursuant to a redemption of shares will be tax exempt up to an amount equivalent to the adjusted contributed capital corresponding to the shares that will be
redeemed. Any excess distribution pursuant to a redemption will be considered a dividend for tax purposes and we may be taxed as described above.

U.S. Federal Income Tax Considerations

The following is a summary of certain U.S. federal income tax consequences to U.S. holders (as defined below) of the acquisition, ownership and disposition of B
Shares or ADSs. This summary is based upon the federal income tax laws of the United States as in effect on the date of this Annual Report, including the provisions of the Tax Treaty, all of which are
subject to change, possibly with retroactive effect in the case of U.S. federal income tax law.

The
summary does not purport to be a comprehensive description of all of the tax consequences of the acquisition, ownership or disposition of B Shares or ADSs. The summary applies only
to U.S. holders that will beneficially own their shares or ADSs as capital assets and does not apply to special classes of holders such as dealers in securities or currencies, holders with a
functional currency other than the U.S. dollar, holders of 10% or more of our voting shares (whether held directly or through ADSs or both), tax-exempt organizations, financial
institutions, holders liable for the alternative

55

---



minimum
tax, securities traders electing to account for their investment in their shares or ADSs on a mark-to-market basis, and persons holding their shares or ADSs in a
hedging transaction or as part of a straddle or conversion transaction.

For
purposes of this discussion, a "U.S. holder" is a beneficial owner of B Shares or ADSs that is:



A
holder of B Shares or ADSs that is a partnership, and partners in such partnership, should consult their tax advisors about the U.S. federal income tax consequences of holding and
disposing of the B Shares or ADSs, as the case may be.

56

---





Prospective investors in the B Shares or ADSs should consult their own tax advisors as to the U.S. federal, Mexican or other tax consequences of the purchase, ownership and disposition
of the B Shares or ADSs, including, in particular, the effect of any foreign, state or local tax laws and their entitlement to the benefits, if any, afforded by the Tax Treaty.

Treatment of ADSs

In general, a U.S. holder of ADSs will be treated as the beneficial owner of the B Shares represented by those ADSs for U.S. federal income tax purposes. Deposits
or withdrawals of B Shares by U.S. holders in exchange for the ADSs they represent will not result in the realization of gain or loss for U.S. federal income tax purposes. U.S. holders that withdraw
any B Shares should consult their own tax advisors regarding the treatment of any foreign currency gain or loss on any pesos received in respect of such B Shares.

Taxation of Distributions

In this discussion, the term "dividends" is used to mean distributions paid out of our current or accumulated earnings and profits (calculated for U.S. federal
income tax purposes) with respect to B Shares or ADSs. In general, the gross amount of any dividends will be includible in the gross income of a U.S. holder as ordinary income on the day on which the
dividends are received by the U.S. holder in the case of B Shares, or by the depositary in the case of ADSs. Dividends paid by us will not be eligible for the dividends-received deduction allowed to
corporations under the Code. To the extent that a distribution exceeds the amount of our earnings and profits (calculated for U.S. federal income tax purposes), it will be treated as a
non-taxable return of capital to the extent of the U.S. holder's basis in the B Shares or ADSs, and thereafter as capital gain (provided that the B Shares or ADSs are held as capital
assets). Distributions will be paid in pesos and will be includible in the income of a U.S. holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day that they
are received by the U.S. holder in the case of B Shares, or by the depositary in the case of ADSs. U.S. holders should consult their own tax advisors regarding the treatment of foreign currency gain
or loss, if any, on any pesos received by a U.S. holder or depositary that are converted into U.S. dollars on a date subsequent to receipt.

Distributions
of additional shares or ADSs to U.S. holders with respect to their shares or ADSs that are made as part of a pro rata distribution to all of our shareholders generally will
not be subject to U.S. federal income tax.

Dividends
paid on shares or ADSs generally will be treated for U.S. foreign tax credit purposes as foreign source passive category income. In the event Mexican withholding taxes are
imposed on such dividends, any such withheld taxes would be treated as part of the gross amount of the dividend includible in income of a U.S. holder for U.S. federal income tax purposes (to the
extent current or accumulated earnings and profits), and such taxes may be treated as a foreign income tax eligible, subject to generally applicable limitations and conditions under U.S. federal
income tax law, for credit against a U.S. holder's U.S. federal income tax liability or, at the U.S. holder's election, for deduction from gross income in computing the U.S. holder's taxable income.
The calculation and availability of foreign tax credits and, in the case of a U.S. holder that elects to deduct foreign taxes, the availability of deductions, involves the application of rules that
depend on a U.S. holder's particular circumstances. In the event Mexican withholding taxes are imposed, U.S. holders should consult their own tax advisors regarding the availability of foreign tax
credits.

Qualified Dividend Income

Notwithstanding the foregoing, certain dividends received by individual U.S. holders that constitute "qualified dividend income" will be subject to a reduced
maximum marginal U.S. federal income tax

57

---



rate.
Qualified dividend income generally includes, among other dividends, dividends received during the taxable year from "qualified foreign corporations." In general, the term "qualified foreign
corporation" includes a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States which the U.S. Treasury Department determines to be
satisfactory, and which includes an exchange of information program. In addition, a foreign corporation is treated as a qualified foreign corporation with respect to any dividend paid by the
corporation with respect to stock of the corporation that is readily tradable on an established securities market in the United States. For this purpose, a share is treated as readily tradable on an
established securities market in the United States if an ADR backed by such share is so traded.

Notwithstanding
the previous rule, dividends received from a foreign corporation that is a passive foreign investment company (as defined in section 1297 of the Code) will not
constitute qualified dividend income. In addition, the term "qualified dividend income" will not include, among other dividends, any (i) dividends on any share of stock or ADS which is held by
a taxpayer for 60 days or less during the 120-day period beginning on the date which is 60 days before the date on which such share or the shares backing the ADS become
ex-dividend with respect to such dividends (as measured under section 246(c) of the Code) or (ii) dividends to the extent that the taxpayer is under an obligation (whether
pursuant to a short sale or otherwise) to make related payments with respects to positions in substantially similar or related property. Moreover, special rules
apply in determining a taxpayer's foreign tax credit limitation under section 904 of the Code in the case of qualified dividend income.

Individual
U.S. holders should consult their own tax advisors to determine whether or not amounts received as dividends from us will constitute qualified dividend income subject to a
reduced maximum marginal U.S. federal income tax rate and, in such case, the effect, if any, on the individual U.S. holder's foreign tax credit.

Taxation of Dispositions

Gain or loss realized by a U.S. holder on the sale, redemption or other disposition of B Shares or ADSs will be subject to U.S. federal income taxation as capital
gain or loss in an amount equal to the difference between such U.S. holder's adjusted basis in the B Shares or the ADSs and the amount realized on the disposition (including any amounts withheld in
respect of Mexican withholding tax). Gain (including gain that arises because the U.S. holder's basis in the B Shares or ADSs has been reduced because a distribution is treated as a return of capital
rather than as a dividend) and loss realized by a U.S. holder on a sale, redemption or other disposition of B Shares or ADSs generally will be treated as U.S. source income or loss for U.S. foreign
tax credit purposes.

The
availability of U.S. foreign tax credits or any deduction from gross income for any Mexican taxes imposed on the sale, redemption or other disposition is subject to certain
limitations and involves the application of rules that depend on a U.S. holder's particular circumstances. U.S. holders should consult their own tax advisors regarding the application of the foreign
tax credit rules to their investment in, and disposition of, B Shares or ADSs.

Tax Return Disclosure Regulations

Pursuant to U.S. Treasury regulations (the "Disclosure Regulations"), any taxpayer that has participated in a "reportable transaction" and who is required to
file a U.S. Federal income tax return must generally attach a disclosure statement disclosing such taxpayer's participation in the reportable transaction to the taxpayer's tax return for each
taxable year for which the taxpayer participates in the reportable transaction. The Disclosure Regulations provide that, in addition to certain other transactions, "loss transactions" and
"transactions involving a brief asset holding period" constitute "reportable transactions." "Loss transactions" include transactions that produce a foreign currency

58

---



exchange
loss in an amount equal to or in excess of certain threshold amounts. "Transactions involving a brief asset holding period" are generally transactions resulting in the taxpayer claiming a tax
credit in excess of $250,000 if the underlying asset giving rise to the credit is held by the taxpayer for 45 days or less. U.S. holders should consult their own advisors concerning the
implications of the tax return disclosure requirements in light of their particular circumstances.

Information Reporting and Backup Withholding

Dividends on, and proceeds from the sale or other disposition of, the B Shares or ADSs paid to a U.S. holder generally may be subject to the information reporting
requirements of the Code and may be subject to backup withholding at the applicable rate unless the holder:



The
amount of any backup withholding from a payment to a holder will be allowed as a credit against the U.S. holder's U.S. federal income tax liability and may entitle such holder to a
refund, provided that certain required information is furnished to the Internal Revenue Service.

U.S. Tax Consequences for Non-U.S. Holders

Distributions.A holder of B Shares or ADSs that is, with respect to the United States, a foreign corporation or a
non-resident alien individual (a "non-U.S. holder") generally will not be subject to U.S. federal income or withholding tax on dividends received on B Shares or ADSs, unless
such income is effectively connected with the conduct by the holder of a U.S. trade or business.

Dispositions.A non-U.S. holder of B Shares or ADSs will not be subject to U.S. federal income or withholding tax
on gain realized on the sale of B Shares or ADSs, unless:



Information Reporting and Backup Withholding.Although non-U.S. holders generally are exempt from backup
withholding, a non-U.S. holder may be required to comply with certification and identification procedures in order to establish its exemption from information reporting and backup
withholding.

DOCUMENTS ON DISPLAY

We are subject to the information requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, we are required to file reports
and other information with the SEC. These materials, including this Form 20-F and the exhibits thereto, may be inspected and copied at the SEC's Public Reference Room at 450 Fifth
Street, NW, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Item 11.    Quantitative And Qualitative Disclosures About Market Risk.

The following discussion of the effects on us of changes in interest rates, foreign exchange rates and commodity prices is not necessarily indicative of our
actual results in the future. Future gains and losses will be affected by actual changes in interest rates, foreign exchange rates, commodity prices and other market exposures, as well as changes in
any actual derivative instruments employed during any

59

---



period.
All information below is presented on a Mexican GAAP basis in pesos of constant purchasing power as of December 31, 2004.

INTEREST RATE RISKS

Although we had no outstanding debt as of December 31, 2004, from time to time we depend upon debt financing, including credit facilities and leases, to
finance our operations. These transactions expose us to interest rate risk, with the primary interest-rate risk exposure resulting from changes in the relevant base rates (CETES, TIIE, and
LIBOR rate) which are used to determine the interest rates that are applicable to borrowings under our credit facilities.

In
the case of our cash and short-term investments, declines in interest rates decrease the interest return on floating rate cash deposits and short-term
investments. A hypothetical 100 basis point (1.0%) decrease in interest rates would not have a significant effect on our results of operations.

We
have not used any derivative financial instruments to hedge our interest rate exposures.

FOREIGN EXCHANGE RATE RISKS

Our net sales are denominated in Mexican pesos, while our operations, including imports of corn, are financed, in case we need financing, through Mexican peso and
U.S. dollar-denominated debt. As of December 31, 2004, 2.2% of our total monetary assets was denominated in U.S. dollars and 11.0% of our total liabilities was denominated in U.S. dollars. See
Note 12 to our consolidated financial statements for a description of our foreign currency exposure.

Fluctuations
in exchange rates relative to the Mexican peso expose us to foreign-currency exchange rate risk. Our primary foreign exchange rate risk relates to our debt portfolio. As of
December 31, 2004, we had no outstanding debt.

A
hypothetical 10% change in the Peso-Dollar exchange rate would not have a significant effect on our exchange rate risk with respect to our dollar-denominated obligations.

COMMODITY PRICE RISKS

The Company has entered into commodity futures contracts and swap operations to hedge a portion of its key production requirements like natural gas and corn, in
order to reduce the risk of price fluctuations. These contracts are short term and do not exceed the maximum production requirements for a one-year period. The gain or loss on these
futures contracts (mark to market value) is recognized in income when settled. As of December 31, 2004, the nominal value of our outstanding swap contracts for natural gas was U.S.$890,000 and
their mark to market value as of that date was U.S.$(75,514). As of December 31, 2004, the mark to market value of corn futures was U.S.$(533,300). As of June 15, 2005, the nominal value
of our outstanding swap contracts for natural gas was U.S.$4,140,800 and the mark to market value as of that date was U.S$711,450.

The
availability and price of corn and other agricultural commodities are subject to wide fluctuations due to factors outside our control, such as weather, crop developments, plantings,
government (domestic and foreign) farm programs and policies, changes in global demand created by population growth and global production of similar and competitive crops. In 2004,
Ps.2,898 million of our Ps.4,264 million costs of sales related to the cost of corn. A hypothetical 10% increase in corn prices, relative to corn prices during 2004, implies a
Ps.289 million increase in our costs of sales, and a corresponding decrease in gross profit assuming that we were unable to increase the price we charge for our products to offset the
hypothetical increase in corn prices.

60

---



COUNTERPARTY RISKS

Liquid assets are invested primarily in GRUMA, Mexican government bonds and short-term debt instruments of Mexican issuers with a minimum "AAA"
rating. Substantially all of these financial instruments are unsecured. We face credit risk from the potential
non-performance by the counterparties in respect of the financial instruments in which we invest. We do not, however, anticipate non-performance by the counterparties which are
primarily GRUMA, the Mexican government and "AAA" rated private issuers.

Item 12.    Description of Securities other than Equity Securities.

Not applicable.

PART II.

Item 13.    Defaults, Dividend Arrearages and Delinquencies.

None.

Item 14.    Material Modifications to the Rights of Security Holders and Use of Proceeds.

None.

Item 15.    Controls and Procedures.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The conclusions of our Chief Executive Officer and Senior Corporate Controller about the effectiveness of our disclosure controls and procedures based on their
evaluation of these controls and procedures as of December 31, 2004 are as follows:

Our
disclosure controls and procedures are designed to ensure that information required to be disclosed by us is recorded, processed, summarized and reported within required timeframes.
Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to our management, including our
Chief Executive Officer and Senior Corporate Controller, as appropriate to allow timely decisions regarding required disclosure. Based on their assessments of our disclosure controls and procedures,
our Chief Executive Officer and Senior Corporate Controller have concluded that the disclosure controls and procedures have functioned effectively and that the consolidated financial statements fairly
present our consolidated financial position and the results of our operations for the periods presented.

CHANGES IN INTERNAL CONTROLS

There has been no change in our internal control over financial reporting during 2004 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.

Item 16A.    Audit Committee Financial Expert

At our annual ordinary shareholders' meeting in April 2005, our shareholders elected the following three members of the Audit Committee: Eduardo Livas
Cantú, Javier Vélez Bautista and Juan Diez-Canedo Ruiz, and designated Javier Vélez Bautista as an "audit
committee financial expert" within the meaning of this Item 16A. Although under Mexican law the determination of the shareholders is binding on our company, our board of directors will confirm this
designation at its next board meeting.

61

---



Item 16B.    Code of Ethics

We have adopted a code of ethics, as defined in Item 16B of Form 20-F under the Securities Exchange Act of 1934, as amended. Our code of ethics
applies to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions as well as to our directors and other officers and employees. Our code of ethics is available
on our web site at www.gimsa.com. If we amend the provisions of our code of ethics that apply to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions, or if we
grant any waiver of such provisions, we will disclose such amendment or waive on our web site at the same address.

Item 16C.    Principal Accountant Fees and Services

Audit and Non-Audit Fees

The following table summarizes the aggregate fees billed to us by PricewaterhouseCoopers, S.C. during the fiscal years ended December 31, 2003 and 2004:

|                   |            | Year ended December 31,
|------------------ | ---------- | -----------------------
|
|
|Audit fees         |            | Ps.3,430               
|Audit-related fees |            | 0                      
|Tax fees           |            | 875                    
|Other fees         |            | 153                    
|                   |            |                        
|                   | Total fees |                        

Audit fees.Audit fees in the above table are the aggregate fees billed by PricewaterhouseCoopers, S.C. in connection with
the audit of our annual financial statements and statutory and regulatory audits.

Audit-related Fees.Audit-related fees in the above table are the aggregate fees billed by PricewaterhouseCoopers, S.C. for
financial accounting and reporting consultations.

Tax Fees.Tax fees in the above table are fees billed by PricewaterhouseCoopers, S.C. for services related to tax filings
such as value-added tax return assistance, transfer pricing and requests for technical advice from taxing authorities.

Other Fees.Other fees in the above table are fees billed by PricewaterhouseCoopers, S.C. for non-audit services.
As a percentage of total fees billed to GIMSA, other fees represent 3.4% and 3.7% for 2004 and 2003, respectively.

Audit Committee Pre-Approval Policies and Procedures

We have adopted pre-approval policies and procedures under which all audit and non-audit services provided by our external auditors must
be pre-approved by the audit committee. Any service proposals submitted by external auditors need to be discussed and pre-approved by the audit committee during its meetings,
which take place at least four times a year. Once the proposed service is approved, we or our subsidiaries formalize the engagement of services. The approval of any audit and non-audit
services to be provided by our external auditors is specified in the minutes of our audit committee. In addition, the members of our board of directors are briefed on matters discussed by the audit
committee.

62

---



Item 16D.    Not Applicable

Item 16E.    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

PART III.

Item 17.    Financial Statements.

Not Applicable.

Item 18.    Financial Statements.

See pages F-1 through F-34, incorporated herein by reference.

Item 19.    Exhibits.

|Exhibit No. |  |                                                                                                                                                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1           |  | Our bylaws (estatutos sociales) as amended through December 2, 2003, together with an English translation.*                                                                                                                                                             
|2(a)(1)     |  | Deposit Agreement, dated as of May 17, 1994 between us, Citibank, N.A., as Depositary, all registered holders from time to time and all owners from time to time of any beneficial interest in any American Depository
Receipts evidencing American Depository Shares.**
|7           |  | Statement of Computation of Ratio of Earnings to Fixed Changes (Mexican GAAP and U.S. GAAP).                                                                                                                                                                            
|8           |  | List of Principal Subsidiaries.                                                                                                                                                                                                                                         
|12(a)(1)    |  | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 30, 2005.                                                                                                                                                                       
|12(a)(2)    |  | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 30, 2005.                                                                                                                                                                       
|13          |  | Officer Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 30, 2005.                                                                                                                                                                  

---

63

---





SIGNATURE

The registrant, Grupo Industrial Maseca, S.A. de C.V., hereby certifies that it meets all of the requirements for filing on Form 20-F and that
it has duly caused and authorized the undersigned to sign this annual report on its behalf.

| |  | GRUPO INDUSTRIAL MASECA, S.A. de C.V.                                                                 
| |  | ------------------------------------------------------------------------------------------------------
| |  | /s/JUAN ANTONIO QUIROGA GARCÍAName:  Juan Antonio Quiroga García
Title:    Senior Corporate Controller

Dated:
June 30, 2005

64

---





GRUPO INDUSTRIAL MASECA, S.A. DE C.V. AND SUBSIDIARIES        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                |  | Page
|--------------------------------------------------------------------------------------------------------------- |  | ----
|Report of Independent Registered Public Accounting Firm                                                         |  | F-2 
|Consolidated Balance Sheets as of December 31, 2004 and 2003                                                    |  | F-3 
|Consolidated Statements of Income for the Years Ended December 31, 2004, 2003 and 2002                          |  | F-4 
|Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2004, 2003 and 2002 |  | F-5 
|Consolidated Statements of Changes in Financial Position for the Years Ended December 31, 2004, 2003 and 2002   |  | F-6 
|Notes to Consolidated Financial Statements                                                                      |  | F-7 

F-1

---





Report of Independent Registered Public Accounting Firm

To
the Stockholders of Grupo Industrial Maseca, S.A. de C.V.:

In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, changes in stockholders' equity and changes in financial position present
fairly, in all material respects, the financial position of Grupo Industrial Maseca, S.A. de C.V. and subsidiaries (collectively "the Company") at December 31, 2004 and 2003, and the results of
their operations and changes in their financial position for each of the three years ended December 31, 2004, in conformity with accounting principles generally accepted in Mexico. These
consolidated financial statements are the responsibility of the management of Grupo Industrial Maseca, S.A. de C.V.; our responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and generally accepted auditing standards in
Mexico, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

Accounting
principles generally accepted in Mexico vary in certain significant respects from accounting principles generally accepted in the United States of America. The application of
the latter would have affected the determination of consolidated net income and comprehensive income for each of the three years in the period ended December 31, 2004 and the determination of
consolidated stockholders' equity at December 31, 2004 and 2003 to the extent summarized in Note 15 to the consolidated financial statements.

PricewaterhouseCoopers S.C.

January 19,
2005
Monterrey, N.L., Mexico

F-2

---





GRUPO INDUSTRIAL MASECA, S.A. DE C.V. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS  as of December 31, 2004 and 2003  (Expressed in thousands of Mexican pesos in purchasing power as of
December 31, 2004)  (Notes 1 and 2)

|                                                       |                                                                                                                            | 2004                            |                                            | 2003        |             
|------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------------------ | ----------- | ------------
|ASSETS                                                 |                                                                                                                            |                                 |                                            |             |             
|Current:                                               |                                                                                                                            |                                 |                                            |             |             
|                                                       | Cash and cash equivalents                                                                                                  |                                 |                                            | Ps  206,252 |             
|                                                       | Notes and accounts receivable, net (Note 3)                                                                                |                                 |                                            | 990,881     |             
|                                                       | Refundable taxes (Note 3)                                                                                                  |                                 |                                            | 160,471     |             
|                                                       | Receivables from affiliated companies (Note 4)                                                                             |                                 |                                            | 935,396     |             
|                                                       | Inventories (Note 5)                                                                                                       |                                 |                                            | 1,154,745   |             
|                                                       | Prepaid expenses                                                                                                           |                                 |                                            | 85,009      |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            | Total current assets            |                                            |             | 3,532,754   
|Property, plant and equipment, net (Note 6)            |                                                                                                                            |                                 | 3,802,267                                  |             |             
|Other assets, net (Note 7)                             |                                                                                                                            |                                 | 133,470                                    |             |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            | Total assets                    |                                            |             | Ps 7,468,491
|                                                       |                                                                                                                            |                                 |                                            |             |             
|LIABILITIES                                            |                                                                                                                            |                                 |                                            |             |             
|Current:                                               |                                                                                                                            |                                 |                                            |             |             
|                                                       | Trade accounts payable                                                                                                     |                                 |                                            | Ps  208,584 |             
|                                                       | Payables to affiliated companies (Note 4)                                                                                  |                                 |                                            | 66,450      |             
|                                                       | Accrued liabilities and other payables                                                                                     |                                 |                                            | 195,939     |             
|                                                       | Income tax payable                                                                                                         |                                 |                                            | 3,597       |             
|                                                       | Employees' statutory profit sharing payable                                                                                |                                 |                                            | 13,078      |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            | Total current liabilities       |                                            |             | 487,648     
|Deferred income taxes (Note 11)                        |                                                                                                                            |                                 | 854,978                                    |             |             
|Deferred employees' statutory profit sharing (Note 11) |                                                                                                                            |                                 | 21,612                                     |             |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            | Total liabilities               |                                            |             | 1,364,238   
|                                                       |                                                                                                                            |                                 |                                            |             |             
|Commitments and contingencies (Note 9)                 |                                                                                                                            |                                 |                                            |             |             
|Stockholders' Equity                                   |                                                                                                                            |                                 |                                            |             |             
|Majority interest (Note 10):                           |                                                                                                                            |                                 |                                            |             |             
|                                                       | Common stock                                                                                                               |                                 |                                            | 183,681     |             
|                                                       | Restatement of common stock                                                                                                |                                 |                                            | 1,688,621   |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            |                                 | 1,872,302                                  |             |             
|                                                       | Additional paid-in capital                                                                                                 |                                 |                                            | 1,635,626   |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            |                                 |                                            | 3,507,928   |             
|                                                       | Deficit from restatement                                                                                                   |                                 |                                            | (3,107,387  | )           
|                                                       | Hedging financial instruments                                                                                              |                                 |                                            | 6,422       |             
|                                                       | Cumulative effect of a change in an accounting principle for deferred income taxes and employees' statutory profit sharing |                                 |                                            | (755,996    | )           
|                                                       | Retained earnings:                                                                                                         |                                 |                                            |             |             
|                                                       |                                                                                                                            | Prior years                     |                                            |             | 5,693,512   
|                                                       |                                                                                                                            | Net income for the current year |                                            |             | 405,922     
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            |                                 | Total majority interest                    |             |             
|Minority interest                                      |                                                                                                                            |                                 | 353,852                                    |             |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            |                                 | Total stockholders' equity                 |             |             
|                                                       |                                                                                                                            |                                 |                                            |             |             
|                                                       |                                                                                                                            |                                 | Total liabilities and stockholders' equity |             |             
|                                                       |                                                                                                                            |                                 |                                            |             |             

The
accompanying notes are an integral part of these consolidated financial statements.

F-3

---





GRUPO INDUSTRIAL MASECA, S.A. DE C.V. AND SUBSIDIARIES    CONSOLIDATED STATEMENTS OF INCOME  For the Years Ended December 31, 2004, 2003 and 2002  (Expressed in thousands of Mexican pesos in
purchasing power as of  December 31, 2004, except share and per share amounts)  (Notes 1 and 2)

|                                                |                                     | 2004                                                                                   |            | 2003     |           | 2002       |        
|----------------------------------------------- | ----------------------------------- | -------------------------------------------------------------------------------------- | ---------- | -------- | --------- | ---------- | -------
|Net sales                                       |                                     | Ps                                                                                     | 5,786,792  |          | Ps        | 5,470,775  |        
|Cost of sales                                   |                                     |                                                                                        | (4,263,907 | )        |           | (4,038,877 | )      
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     | Gross profit                                                                           |            |          | 1,522,885 |            |        
|Selling, general and administrative expenses    |                                     |                                                                                        | (1,072,103 | )        |           | (1,017,612 | )      
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     | Operating income                                                                       |            |          | 450,782   |            |        
|                                                |                                     |                                                                                        |            |          |           |            |        
|Comprehensive financing (cost) income, net:     |                                     |                                                                                        |            |          |           |            |        
|                                                | Interest expense                    |                                                                                        |            | (8,534   | )         |            | (7,378 
|                                                | Interest income                     |                                                                                        |            | 89,832   |           |            | 70,471 
|                                                | Monetary position loss, net         |                                                                                        |            | (84,591  | )         |            | (64,060
|                                                | Foreign exchange income (loss), net |                                                                                        |            | 2,815    |           |            | (4,028 
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     |                                                                                        | (478       | )        |           | (4,995     | )      
|                                                |                                     |                                                                                        |            |          |           |            |        
|Other (expense) income, net                     |                                     |                                                                                        | (47,194    | )        |           | 8,392      |        
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     | Income before income taxes, employees' statutory profit sharing, and minority interest |            |          | 403,110   |            |        
|                                                |                                     |                                                                                        |            |          |           |            |        
|Income taxes (Note 11):                         |                                     |                                                                                        |            |          |           |            |        
|                                                | Current provision                   |                                                                                        |            | (101,037 | )         |            | (96,322
|                                                | Deferred benefit                    |                                                                                        |            | 125,855  |           |            | 30,660 
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     |                                                                                        | 24,818     |          |           | (65,662    | )      
|                                                |                                     |                                                                                        |            |          |           |            |        
|Employees' statutory profit sharing (Note 11):  |                                     |                                                                                        |            |          |           |            |        
|                                                | Current provision                   |                                                                                        |            | (13,602  | )         |            | (13,192
|                                                | Deferred benefit (provision)        |                                                                                        |            | 6,075    |           |            | 10,397 
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     |                                                                                        | (7,527     | )        |           | (2,795     | )      
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     | Income before minority interest                                                        |            |          | 420,401   |            |        
|Minority interest                               |                                     |                                                                                        | (14,479    | )        |           | (21,058    | )      
|                                                |                                     |                                                                                        |            |          |           |            |        
|                                                |                                     | Net income (Note 10-B)                                                                 |            | Ps       | 405,922   |            | Ps     
|                                                |                                     |                                                                                        |            |          |           |            |        
|Earnings per share                              |                                     | Ps                                                                                     | 0.44       |          | Ps        | 0.36       |        
|                                                |                                     |                                                                                        |            |          |           |            |        
|Weighted average shares outstanding (thousands) |                                     |                                                                                        | 918,405    |          |           | 918,405    |        
|                                                |                                     |                                                                                        |            |          |           |            |        

The accompanying notes are an integral part of these consolidated financial statements.

F-4

---





GRUPO INDUSTRIAL MASECA, S.A. DE C.V. AND SUBSIDIARIES    CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY  For the Years Ended December 31, 2004, 2003 and 2002  (Expressed in thousands of
Mexican pesos in purchasing power as of December 31, 2004, except number of shares)  (Notes 1 and 2)

|                                              |  | Common stock (Note 10-A) |  |              |  |              |  |               |   | Cumulative effect
of deferred
income taxes and
employee's
statutory
profit sharing |  | Retained earnings (Note 10-B) |   |              |   |            |   |               |  
|--------------------------------------------- |  | ------------------------ |  | ------------ |  | ------------ |  | ------------- | - | ---------------------------------------------------------------------------------- |  | ----------------------------- | - | ------------ | - | ---------- | - | ------------- | -
|
|Balances at December 31, 2001                 |  | 918,405                  |  | Ps 1,872,302 |  | Ps 1,635,626 |  | Ps (2,859,507 | ) | Ps                                                                                |  | Ps (755,996                   | ) | Ps 5,207,125 |   | Ps 407,718 |   | Ps 5,507,268  |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Appropriation of prior year net income        |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | 407,718      |   | (407,718   | ) |               |  
|Dividends paid (Ps 0.14 per share)            |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | (124,751     | ) |            |   | (124,751      | )
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | 282,967      |   | (407,718   | ) | (124,751      | )
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Comprehensive income (loss):                  |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Recognition of inflation effects for the year |  |                          |  |              |  |              |  | (72,412       | ) |                                                                                    |  |                               |   |              |   |            |   | (72,412       | )
|Net income for the current year               |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   | 397,098    |   | 397,098       |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|                                              |  |                          |  |              |  |              |  | (72,412       | ) |                                                                                    |  |                               |   |              |   | 397,098    |   | 324,686       |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Balances at December 31, 2002                 |  | 918,405                  |  | 1,872,302    |  | 1,635,626    |  | (2,931,919    | ) |                                                                                    |  | (755,996                      | ) | 5,490,092    |   | 397,098    |   | 5,707,203     |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Appropriation of prior year net income        |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | 397,098      |   | (397,098   | ) |               |  
|Dividends paid (Ps 0.24 per share)            |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | (218,446     | ) |            |   | (218,446      | )
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | 178,652      |   | (397,098   | ) | (218,446      | )
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Comprehensive income (loss):                  |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Recognition of inflation effects for the year |  |                          |  |              |  |              |  | (80,343       | ) |                                                                                    |  |                               |   |              |   |            |   | (80,343       | )
|Net income for the current year               |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   | 328,168    |   | 328,168       |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|                                              |  |                          |  |              |  |              |  | (80,343       | ) |                                                                                    |  |                               |   |              |   | 328,168    |   | 247,825       |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Balances at December 31, 2003                 |  | 918,405                  |  | 1,872,302    |  | 1,635,626    |  | (3,012,262    | ) |                                                                                    |  | (755,996                      | ) | 5,668,744    |   | 328,168    |   | 5,736,582     |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Appropriation of prior year net income        |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | 328,168      |   | (328,168   | ) |               |  
|Dividends paid (Ps 0.33 per share)            |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | (303,400     | ) |            |   | (303,400      | )
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   | 24,768       |   | (328,168   | ) | (303,400      | )
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Comprehensive income (loss):                  |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Recognition of inflation effects for the year |  |                          |  |              |  |              |  | (95,125       | ) |                                                                                    |  |                               |   |              |   |            |   | (95,125       | )
|Hedging financial instruments                 |  |                          |  |              |  |              |  |               |   | 6,422                                                                              |  |                               |   |              |   |            |   | 6,422         |  
|Net income for the current year               |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   | 405,922    |   | 405,922       |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|                                              |  |                          |  |              |  |              |  | (95,125       | ) | 6,422                                                                              |  |                               |   |              |   | 405,922    |   | 317,219       |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  
|Balances at December 31, 2004                 |  | 918,405                  |  | Ps 1,872,302 |  | Ps 1,635,626 |  | Ps (3,107,387 | ) | Ps 6,422                                                                           |  | Ps (755,996                   | ) | Ps 5,693,512 |   | Ps 405,922 |   | Ps. 5,750,401 |  
|                                              |  |                          |  |              |  |              |  |               |   |                                                                                    |  |                               |   |              |   |            |   |               |  

The accompanying notes are an integral part of these consolidated financial statements.

F-5

---





GRUPO INDUSTRIAL MASECA, S.A. DE C.V. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION  For the Years Ended December 31, 2004, 2003 and 2002  (Expressed in thousands
of Mexican pesos in purchasing power as of December 31, 2004)  (Notes 1 and 2)

|                                                     |                                                                                        | 2004                                                          |         | 2003     |          | 2002     |         
|---------------------------------------------------- | -------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ------- | -------- | -------- | -------- | --------
|Operating activities:                                |                                                                                        |                                                               |         |          |          |          |         
|                                                     | Net income                                                                             |                                                               | Ps      | 405,922  |          | Ps       | 328,168 
|                                                     | Minority interest                                                                      |                                                               |         | 14,479   |          |          | 21,058  
|                                                     | Adjustments to reconcile net income to net resources provided by operating activities: |                                                               |         |          |          |          |         
|                                                     |                                                                                        | Depreciation and amortization                                 |         |          | 254,914  |          |         
|                                                     |                                                                                        | Impairment in long-lived assets                               |         |          | 63,321   |          |         
|                                                     |                                                                                        | Deferred income taxes and employees' statutory profit sharing |         |          | (131,930 | )        |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|                                                     |                                                                                        |                                                               | 606,706 |          |          | 583,109  |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|Changes in working capital:                          |                                                                                        |                                                               |         |          |          |          |         
|                                                     | Notes and accounts receivable, net                                                     |                                                               |         | (175,018 | )        |          | 70,010  
|                                                     | Refundable taxes                                                                       |                                                               |         | 6,153    |          |          | 51,029  
|                                                     | Receivables from and payables to affiliated companies, net                             |                                                               |         | 49,233   |          |          | (14,067 
|                                                     | Inventories                                                                            |                                                               |         | (10,856  | )        |          | (169,283
|                                                     | Prepaid expenses                                                                       |                                                               |         | 9,018    |          |          | (91,705 
|                                                     | Trade accounts payable                                                                 |                                                               |         | 26,117   |          |          | (101,310
|                                                     | Accrued liabilities and other payables                                                 |                                                               |         | 52,024   |          |          | (17,172 
|                                                     | Income taxes and employees' statutory profit sharing                                   |                                                               |         | 3,291    |          |          | 416     
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|                                                     |                                                                                        |                                                               | (40,038 | )        |          | (272,082 | )       
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|                                                     |                                                                                        | Net resources provided by operating activities                |         |          | 566,668  |          |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|Financing activities:                                |                                                                                        |                                                               |         |          |          |          |         
|                                                     | Dividends paid                                                                         |                                                               |         | (304,867 | )        |          | (220,293
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|                                                     |                                                                                        | Net resources used in financing activities                    |         |          | (304,867 | )        |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|Investing activities:                                |                                                                                        |                                                               |         |          |          |          |         
|                                                     | Acquisition of property, plant and equipment                                           |                                                               |         | (60,132  | )        |          | (85,208 
|                                                     | Net decrease of technological research and development fund                            |                                                               |         |         |          |          | 224,808 
|                                                     | Loan to Gruma                                                                          |                                                               |         | (185,311 | )        |          | (86,264 
|                                                     | Other assets                                                                           |                                                               |         | (8,071   | )        |          | (8,102  
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|                                                     |                                                                                        | Net resources (used in) provided by investing activities      |         |          | (253,514 | )        |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|Net increase (decrease) in cash and cash equivalents |                                                                                        |                                                               | 8,287   |          |          | 135,968  |         
|Cash and cash equivalents at beginning of year       |                                                                                        |                                                               | 197,965 |          |          | 61,997   |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         
|Cash and cash equivalents at end of year             |                                                                                        | Ps                                                            | 206,252 |          | Ps       | 197,965  |         
|                                                     |                                                                                        |                                                               |         |          |          |          |         

The
accompanying notes are an integral part of these consolidated financial statements.

F-6

---





GRUPO INDUSTRIAL MASECA, S.A. DE C.V. AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        For the Years Ended December 31, 2004, 2003 and 2002  (Amounts expressed in
thousands of Mexican pesos in purchasing power  as of December 31, 2004, except where otherwise indicated)

1.    ENTITY AND NATURE OF BUSINESS

Grupo Industrial Maseca, S.A. de C.V. ("Gimsa"), a Mexican corporation, is a holding company whose subsidiaries are primarily engaged in manufacturing and
distributing corn flour in Mexico. Gimsa's corn flour is used mainly in the preparation of tortillas and other related products. Gimsa and its subsidiaries are herein collectively referred to as "the
Company". The Company is majority owned by Gruma, S.A. de C.V. ("Gruma").

2.    SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Mexico ("Mexican GAAP") as promulgated by
the Mexican Institute of Public Accountants ("MIPA"). A reconciliation from Mexican GAAP to United States generally accepted accounting principles ("US GAAP") is included in Note 15.



% of ownership as of December 31,2004

2003Corn flour manufacturing facilities:Molinos Azteca, S.A. de C.V.(1)

100.00

100.00Industrias de Río Bravo, S.A. de C.V.(1)



98.34Harinera de Veracruz, S.A. de C.V.

100.00

100.00Molinos Azteca de Jalisco, S.A. de C.V.

100.00

100.00Molinos Azteca de Chalco, S.A. de C.V.

57.40

57.40Harinera de Maíz de Jalisco, S.A. de C.V.

100.00

100.00Harinera de Yucatán, S.A. de C.V.

88.57

88.57Harinera de Maíz de Mexicali, S.A. de C.V.

85.00

85.00Molinos Azteca de Chiapas, S.A. de C.V.

90.00

90.00Molinos Azteca de Veracruz, S.A. de C.V.

100.00

100.00Service and other entities:Compañía Nacional Almacenadora, S.A. de C.V.

100.00

100.00Servicios Administrativos y Financieros Gimsa, S.A. de C.V.

100.00

100.00Industria Tortilladora Azteca, S.A. de C.V.

100.00

100.00Arrendadora de Maquinaria de Chihuahua, S.A. de C.V.

100.00

100.00


---

F-7

---







Year

Factor2004

5.19
%2003

3.98
%2002

5.70
%








F-8

---















YearsBuildings

27Machinery and equipment

13Software

2


F-9

---









F-10

---











F-11

---









3.    NOTES AND ACCOUNTS RECEIVABLE, NET AND REFUNDABLE TAXES



2004

2003Trade accounts receivables

Ps
834,491

Ps
703,767Trade notes receivable from sales of tortilla producing machines


61,482


70,684Allowance for doubtful accounts


(43,402
)

(44,356
)852,571


730,095Employees


10,388


10,443Other debtors


127,922


75,325Ps
990,881

Ps
815,863




2004

2003Value-added tax

Ps
94,202

Ps
70,577Income tax


52,283


56,930Asset tax


6,773


Production and services tax


7,213


39,117Ps
160,471

Ps
166,624


4.    BALANCES AND TRANSACTIONS WITH AFFILIATED COMPANIES



F-12

---





2004

2003

2002Revenues:Corn flour sales

Ps
177,629

Ps
40,980

Ps
31,841Interest income


60,908


45,609


41,706Other


7,654


9,538


4,526Ps
246,191

Ps
96,127

Ps
78,073Costs, expenses and other:Purchases of equipment

Ps
220

Ps
13

Ps
22Purchases of tortilla producing machines


92,377


95,673


109,608Administrative services


159,548


154,138


133,734Technical services


26,591


25,692


24,321Transportation services and other


13,935


13,492


12,546Ps
292,671

Ps
289,008

Ps
280,231




F-13

---





5.    INVENTORIES

Inventories consist of the following as of December 31:

2004

2003Corn

Ps
969,586

Ps
1,014,314Finished products


33,170


31,012Tortilla producing machines and related spare parts


50,192


58,983Spare parts for corn flour machinery and equipment and other


101,797


122,775Ps
1,154,745

Ps
1,227,084


6.    PROPERTY, PLANT AND EQUIPMENT, NET



2004

2003Land

Ps
213,312

Ps
217,246Buildings


1,410,030


1,481,000Machinery and equipment


5,909,986


6,179,888Projects in progress


40,001


69,5317,573,329


7,947,665Accumulated depreciation


(3,771,062
)

(3,849,085
)Ps
3,802,267

Ps
4,098,580




F-14

---





7.    OTHER ASSETS, NET



2004

2003Pre-operating expenses

Ps
46,588

Ps
47,255Accumulated amortization


(39,306
)

(36,517
)7,282


10,738Excess of cost over book value of subsidiaries acquired, net


76,374


80,338Guaranty deposits


25,879


26,102Long-term receivables from sales of tortilla producing machines


13,690


9,492Other


10,245


17,987Ps
133,470

Ps
144,657




8.    EMPLOYEE RETIREMENT BENEFITS



2004

2003

2002Service cost

Ps
1,827

Ps
1,711

Ps
1,634Interest cost


650


590


612Return on plan assets


(3,358
)

(1,942
)

(1,650
)Net amortization


2,164


1,121


1,085Net cost

Ps
1,283

Ps
1,480

Ps
1,681


F-16

---





2004

2003Actuarial present value of benefit obligations:Vested benefit obligation

Ps
(10,687
)
Ps
(8,633
)Non-vested benefit obligation


(6,535
)

(5,773
)Accumulated benefit obligation


(17,222
)

(14,406
)Excess of projected benefit obligation over accumulated benefit obligation


(3,957
)

(5,579
)Projected benefit obligation


(21,179
)

(19,985
)Plan assets at fair value


20,991


19,517Plan assets insufficiency of projected benefit obligation


(188
)

(468
)Unrecognized amounts to be amortized over 13 years:Cumulative net (loss) gain


(1,824
)

(228
)Net transition liability


(1,176
)

(1,059
)Prior service cost


(222
)

(279
)Seniority premium liability

Ps
(3,410
)
Ps
(2,034
)




2004

2003Projected benefit obligation at beginning of the year

Ps
19,985

Ps
18,004Service cost


1,827


1,711Interest cost


650


590Benefits paid


(1,884
)

(843
)Actuarial loss


601


523Projected benefit obligation at end of the year

Ps
21,179

Ps
19,985Fair value of plan assets at beginning of the year

Ps
19,517

Ps
18,418Return on plan assets


3,358


1,942Benefits paid


(1,884
)

(843
)Fair value of plan assets at end of the year

Ps
20,991

Ps
19,517


F-17

---





2004

2003Discount rate

3.5
%
3.5
%Rate of increase in future compensation levels

1.5
%
1.5
%




2004

2003

2002Discount rate

3.5
%
3.5
%
3.5
%Rate of increase in future compensation levels

1.5
%
1.5
%
1.5
%Expected long-term rate of return on plan assets

4.0
%
4.0
%
4.0
%




2004

2003Equity securities

36
%
30
%Fixed rate instruments

64
%
70
%Total

100
%
100
%




F-18

---





Year

Amount2005

Ps
1,7892006


9482007


1,0462008


7682009


968Thereafter


91,947


9.    COMMITMENTS AND CONTINGENCIES



Year

Thousands
of U.S. Dollars2005

U.S.$
4172006


2332007


108U.S.$
758


F-19

---





10.    STOCKHOLDERS' EQUITY









F-20

---







Nominal

Restatement

TotalCommon stock

Ps
183,681

Ps
1,688,621

Ps
1,872,302Additional paid-in capital


333,734


1,301,892


1,635,626Deficit from restatement





(3,107,387
)

(3,107,387
)Hedging financial instruments


6,422





6,422Cumulative effect of a change in an accounting principle for deferred income taxes and employees' statutory profit sharing


(582,561
)

(173,435
)

(755,996
)Prior years' retained earnings


2,293,438


3,400,074


5,693,512Net income for the current year


399,579


6,343


405,922Ps
2,634,293

Ps
3,116,108

Ps
5,750,401






F-21

---







11.    INCOME TAXES, ASSET TAX AND EMPLOYEES' STATUTORY PROFIT SHARING





2004

2003

2002Statutory income tax rate

33
%
34
%
35
%Differences between tax and financial accounting for:Financing cost, net and other income statement effects related to inflation

(8
)%
(4
)%
(5
)%Restatement effects of deferred tax liability items

7
%
4
%
5
%Effect due to change in statutory tax rate

(40
)%


(20
)%Effect due to withdrawal of investment in others assets.



(17
)%
Other permanent differences

2
%
(1
)%
Effective income tax rate

(6
)%
16
%
15
%




F-22

---





2004

2003Income tax

Employees'
statutory
profit
sharing

Income tax

Employees'
statutory
profit
sharingAccrued liabilities

Ps
44,215

Ps
12,481

Ps
46,578

Ps
11,123Tax loss carryforwards


18,856


2,536


51,869


347Deferred tax assets


63,071


15,017


98,447


11,470Inventories


344,061


33,677


406,673


35,423Property, plant and equipment, net


645,302


1,753


743,731


1,576Other assets


3,358


1,199


3,548


2,158Deferred tax liabilities


992,721


36,629


1,153,952


39,157Net deferred tax liability


929,650


21,612


1,055,505


27,687Recoverable asset tax


74,672





55,398


Ps
854,978

Ps
21,612

Ps
1,000,107

Ps
27,687




Expiration year

Amount2005

Ps
39,7232006


26,4392007


18,2272008


9,7802009


18,9492010


19,8942011


22,7882012


4,6402013


20,6122014


11,056Ps
192,108


F-23

---







12.    FOREIGN CURRENCY BALANCES AND TRANSACTIONS

As of December 31, monetary assets and liabilities held or payable in U.S. dollars are:

Thousands of U.S. dollars2004

2003Current assets

U.S.$
4,737

U.S.$
2,351Total liabilities


(13,474
)

(8,410
)U.S.$
(8,737
)
U.S.$
(6,059
)




Thousands of U.S. dollars2004

2003

2002Corn purchases

U.S.$
33,650

U.S.$
26,423

U.S.$
32,270Computer equipment leasing


847


532


321Equipment purchases


133


206


186U.S.$
34,630

U.S.$
27,161

U.S.$
32,777




2004

2003Foreign currency
(thousands)

Exchange rate at
year-end
(Pesos per currency)

Foreign currency
(thousands)

Exchange rate at
year-end
(Pesos per currency)U.S. dollars

8,628

11.1500

11,473

11.2400Swiss francs

233

9.7600

522

8.8717Euros

9,053

15.1071

10,095

14.1645


F-24

---



13.    FINANCIAL INSTRUMENTS





14.    RECENT ACCOUNTING PRONOUNCEMENTS



15.    DIFFERENCES BETWEEN MEXICAN GAAP AND US GAAP



F-25

---





Year ended December 31,2004

2003

2002Net income under Mexican GAAP

Ps
405,922

Ps
328,168

Ps
397,098US GAAP adjustments:Depreciation expense (See B)


(40,581
)

(41,267
)

(40,661
)Pre-operating expenses (See C)


3,737


4,117


4,190Comprehensive financing costs (See D)


326


326


326Amortization of excess of cost over book value (See E)





5,100


4,512Impairment loss in the carrying value of idle assets (See B)


63,321





Deferred income taxes (See F)


(12,016
)

2,602


14,946Deferred ESPS (See F)


(301
)

(353
)

(308
)Monetary position loss resulting from US GAAP adjustments


(45
)

(49
)

(94
)Total US GAAP adjustments


14,441


(29,524
)

(17,089
)Minority interest (See A)


(7,864
)

9,270


8,270Net income under US GAAP

Ps
412,499

Ps
307,914

Ps
388,279Basic and diluted earnings per share under US GAAP

Ps
0.45

Ps
0.34

Ps
0.42Weighted average shares outstanding (000's)


918,405


918,405


918,405


F-26

---





December 31,2004

2003Total stockholders' equity under Mexican GAAP

Ps
6,104,253

Ps
6,103,686US GAAP adjustments:Property, plant and equipment (See B)


282,364


217,799Pre-operating expenses (See C)


(7,282
)

(10,738
)Comprehensive financing cost (See D)


(1,305
)

(1,632
)Excess of cost over book value (See E)


9,611


9,611Deferred income taxes (See F)


(77,754
)

(65,737
)Deferred ESPS (See F)


728


1,074US GAAP adjustments attributable to minority interest.


5,284


22,549Minority interest under Mexican GAAP (See A)


(353,852
)

(367,104
)Total US GAAP adjustments


(142,206
)

(194,178
)Total stockholders' equity under US GAAP

Ps
5,962,047

Ps
5,909,508




Balance at December 31, 2003

Ps
5,909,508Dividends paid


(303,400
)Recognition of inflationary effects for the year


(62,982
)Hedging financial instruments


6,422Net income for the year


412,499Balance at December 31, 2004

Ps
5,962,047




2004

2003Capital stock

Ps
1,872,302

Ps
1,872,302Additional paid-in capital


1,635,626


1,635,626Retained earnings


6,299,887


6,190,788Accumulated other comprehensive loss


(3,845,768
)

(3,789,208
)Total stockholders' equity under US GAAP

Ps
5,962,047

Ps
5,909,508


F-27

---











F-28

---















F-29

---





The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2004 and 2003 are presented below:

2004

2003Deferred tax assets:Tax loss carryforwards and other tax credits

Ps
93,528

Ps
107,267Other


44,215


46,578Total deferred tax assets


137,743


153,845Deferred tax liabilities:Property, plant and equipment, net


725,207


812,905Inventories


344,061


406,673Other assets


1,207


111Total deferred tax liabilities


1,070,475


1,219,689Net deferred tax liability under US GAAP


932,732


1,065,844Less: Net deferred tax liability under Mexican GAAP


(854,978
)

(1,000,107
)Adjustment for US GAAP

Ps
77,754

Ps
65,737


A
summary of the deferred tax liability (asset) balances on a US GAAP basis are as follows:

2004

2003Current:Deferred tax asset

Ps
(44,215
)
Ps
(46,578
)Deferred tax liability


344,061


406,673299,846


360,095Non-current:Deferred tax asset


(93,528
)

(107,267
)Deferred tax liability


726,414


813,016632,886


705,749Total

Ps
932,732

Ps
1,065,844


The
benefit (provision) for income taxes on a US GAAP basis is as follows:

2004

2003

2002Current

Ps
(101,037
)
Ps
(96,322
)
Ps
(106,103
)Deferred


113,839


33,262


45,855Ps
12,802

Ps
(63,060
)
Ps
(60,248
)




F-30

---











F-31

---





Year ended December 31,2004

2003

2002Operating activities:Net income for the current year

Ps
412,499

Ps
307,914

Ps
388,279Minority interest


22,343


11,788


12,649Adjustments to reconcile net income to net cash provided by operating activities:Allowance for doubtful accounts


1,379


6,023


4,037Loss from monetary position


84,636


64,109


91,325Depreciation and amortization


291,433


306,664


314,131Deferred income taxes and employees' statutory profit sharing


(119,613
)

(43,306
)

(33,201
)692,677


653,192


777,220Changes in working capital:Accounts receivable


(220,373
)

28,661


(108,352
)Refundable taxes


(466
)

44,132


(76,239
)Receivables from and payable to affiliates, net


49,233


(14,067
)

(8,640
)Inventories


(10,856
)

(169,283
)

(162,768
)Prepaid expenses


9,018


(91,705
)

12,097Trade accounts payable


29,715


(97,374
)

155,669Accrued liabilities and other payables


62,842


(11,140
)

(1,435
)Income taxes and employees' statutory profit sharing


4,970


2,189


(72,206
)(75,917
)

(308,587
)

(261,874
)Net cash provided by operating activities


616,760


344,605


515,346


F-32

---





Year ended December 31,2004

2003

2002Investing activities:Purchases of property, plant and equipment


(60,132
)

(85,208
)

(32,825
)Net decrease (contribution) to technological research and development fund





221,340


(4,786
)Loan to Gruma


(221,707
)

(109,729
)

(442,324
)Other assets


(8,811
)

(8,930
)

24,301Net cash (used in) provided by investing activities


(290,650
)

17,473


(455,634
)Financing activities:Dividends paid


(304,867
)

(220,293
)

(127,738
)Net cash used in financing activities


(304,867
)

(220,293
)

(127,738
)Effect of inflation on cash and cash equivalents


(12,956
)

(5,817
)

(9,834
)Net (decrease) increase in cash and cash equivalents


8,287


135,968


(77,860
)Cash and cash equivalents at beginning of year


197,965


61,997


139,857Cash and cash equivalents at end of year

Ps
206,252

Ps
197,965

Ps
61,997


Supplementary
cash flow disclosure:

Net
cash flow from operating activities reflects cash payments and receipts for interest, and income taxes, as follows:

Year ended December 31,2004

2003

2002Interest incurred

Ps
8,534

Ps
7,378

Ps
13,695Interest paid


8,303


6,483


5,340Interest received


78,569


49,956


50,383Income taxes paid


121,207


95,760


118,224


A
summary of the Company's comprehensive income under US GAAP is as follows:

Year ended December 31,2004

2003

2002Net income under US GAAP

Ps
412,499

Ps
307,914

Ps
388,279Other comprehensive loss:Deficit from restatement


(62,982
)

(58,084
)

(61,760
)Hedging financial instrument


6,422





Deferred loss on hedge activity








4,534Comprehensive income under US GAAP

Ps
355,939

Ps
249,830

Ps
331,053


Taxes
were not recorded for the deficit from restatement for the years ended December 31, 2004, 2003, and 2002.

F-33

---



The
changes in accumulated other comprehensive loss as of December 31, 2004 and 2003 are as follows:

Deficit from
restatement

Hedging
financial
instruments

Accumulated other
comprehensive lossBalance at December 31, 2002

Ps
(3,731,124
)
Ps


Ps
(3,731,124
)Current year changes


(58,084
)




(58,084
)Balance at December 31, 2003


(3,789,208
)




(3,789,208
)Current year changes


(62,982
)

6,422


(56,560
)Balance at December 31, 2004

Ps
(3,852,190
)
Ps
6,422

Ps
(3,845,768
)




The
activity in the allowance for doubtful accounts for the years ended December 31, 2004, 2003 and 2002 is as follows:

Description

Balance at
beginning of
year

Additions

Deductions

Balance at
year-endAllowance for doubtful accounts:Year ended December 31, 2004

Ps
44,356

Ps
1,379

Ps
2,333

Ps
43,402Year ended December 31, 2003


40,185


6,023


1,852


44,356Year ended December 31, 2002


38,427


4,037


2,279


40,185


F-34

---



QuickLinks