**FORM
      10-K/A**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549


T
              **ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
**ACT
                  OF 1934****





For
                the fiscal year ended
            Commission
                file number:**December
                31, 2004**
            **0-27992**




**ELAMEX,
      S.A. DE C.V.**


(Exact
      name of Registrant as specified in its charter)





**Mexico**
            **Not
                Applicable**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)**1800
                Northwestern Dr.**
            **79912**EL
                PASO, TX
            (zip
                code)(Address
                of principal executive offices)





**(915)
      298-3061**


(Registrant's
      telephone number including area code, in El Paso, TX)





Securities
      registered pursuant to Section 12(b) of the Act:


**None**





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





Title
                of each class
            Name
                of exchange on which registeredClass
                I Common Stock, No Par Value
            NASDAQ
                National Market








Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in Rule
      405 of the
      Securities Act. Yes * No T





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Securities Act.     Yes T No *





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 T No *





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. T |





Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Act). Yes * No T


The
      aggregate market value of the voting stock (based upon the closing price of
      the
      NASDAQ National Market on July 2, 2004 of $2.25) held by non-affiliates of
      the
      registrant on that date was approximately $7,146,205.





The
      number of shares of Class I Common Stock of the registrant outstanding as of
      March 8, 2005 was: 7,502,561.





**DOCUMENTS
      INCORPORATED BY REFERENCE**


*The
      Proxy Statement for the registrant’s 2005 Annual Meeting of Stockholders is
      incorporated by reference into Part III of this Form 10-K*









**EXPLANATORY
      NOTE**





This
      Annual Report on Form 10-K/A is being filed as an amendment to our Annual
      Report on Form 10-K for the fiscal year ended December
      31 ,
      200 4 to
      revise certain disclosures contained in the original
      Form 10-K.





This
      amendment corrects Part II, Item 8 - Financial Statements and Supplementary
      Data, Note 1, second table and paragraph eight of “Principles of
      Consolidation” .





Elamex
      has a 50.1% investment in Qualcore, S. de R.L. de C.V. (“Qualcore”), a joint
      venture company with GE de Mexico, which is recorded under the equity method.
      In
      its original Form 10-K, the Company did not present Qualcore as a significant
      subsidiary as set forth in Rule 3-09 of Regulation S-X and only included a
      summary of unaudited financial information in a footnote disclosure instead
      of
      including separate financial statements for this significant unconsolidated
      subsidiary as an exhibit. This amended Form 10-K corrects the summary of
      financial information of Qualcore to include audited amounts and to attach
      separate audited financial statements of Qualcore.





Qualcore’s
      operations ceased in the third quarter of 2005, and as of the date of this
      amendment most of the machinery and equipment have been sold, the majority
      of
      the employees have been terminated and the building has been substantially
      vacated. The Company wrote down its investment in Qualcore to zero as of
      December 31, 2004, as such management does not believe that any additional
      adjustments are required in its previously issued financial statements. In
      the
      third quarter of 2005, the Company recognized a $2.0 million liability equal
      to
      50.1% in recognition of its guarantee of a portion of the Qualcore plant lease,
      stated at the estimated fair value of the remaining life of the lease
      agreement.





Except
      as
      otherwise expressly noted herein, this Amendment to Annual Report on Form 10-K/A
      does not reflect events occurring after the March 31, 2005 filing of our
      original annual Report on Form 10-K in any way, except to reflect the changes
      discussed in the amendment. Accordingly, this amendment should be read in
      conjunction with the original filing.





**PART
      II**








**ITEM
      8. FINANCIAL STATEMENTS AND SUPLEMENTARY DATA.**




**Qualcore,
      S. de R. L. de C. V. and Subsidiaries**


**(50.1%
        owned by Elamex, S. A. de C. V., and 49.9% owned by General Electric Mexico,
        S.
        A. de C. V.)**
 
 Consolidated
        Financial Statements
 for
        the
        Years Ended December 31, 2004, 2003 and 2002, and Report of Independent
        Registered Public Accounting Firm Dated May 24, 2005, November 21, 2005 with
        respect to Note 12
  
  Qualcore,
        S. de R.L. de C.V. and Subsidiaries
 
 **Report
        of Independent Registered Public**
 **Accounting
        Firm and Consolidated Financial**
 **Statements
        2004, 2003 and 2002**
  **Table
                  of contents**
              **Page**Independent
                  Auditors’ Report
              1Consolidated
                  Balance Sheets
              3Consolidated
                  Statements of Operations
              4Consolidated
                  Statements of Partners’
                  Deficit
              5Consolidated
                  Statements of Cash Flows
              6Notes
                  to Consolidated Financial
                  Statements
              7
  
  **Reportof
        Independent Registered Public**
 **Accounting
        Firm to the Board of Directors**
 **and
        Partners of Qualcore, S. de R.L. de C.V.**
 
 We
        have
        audited the accompanying consolidated balance sheets of Qualcore, S. de R.
        L. de
        C. V. and subsidiaries (the “Joint Venture”) as of December 31, 2004 and 2003,
        and the related consolidated statements of operations, partners’ deficit, and
        cash flows for each of the three years then in the period ended December
        31,
        2004 (all expressed in thousands of U.S. dollars). These financial statements
        are the responsibility of the Joint Venture’s management. Our responsibility is
        to express an opinion on these financial statements based on our audits.
 
 We
        conducted our audits in accordance with auditing standards generally accepted
        in
        the United States of America. Those standards require that we plan and perform
        the audit to obtain reasonable assurance about whether the financial statements
        are free of material misstatement. An audit includes consideration of internal
        control over financial reporting as a basis for designing audit procedures
        that
        are appropriate in the circumstances, but not for the purpose of expressing
        an
        opinion on the effectiveness of the Joint Venture’s internal control over
        financial reporting. Accordingly, we express no such opinion. An audit also
        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, as well as evaluating
        the
        overall financial statement presentation. We believe that our audits provide
        a
        reasonable basis for our opinion.
 
 In
        our
        report dated May 24, 2005, we issued a qualified opinion on the 2004
        consolidated financial statements because the Joint Venture had not recorded
        an
        impairment related to its long-lived assets when impairment indicators existed.
        As discussed in Note 12 to the accompanying amended consolidated financial
        statements, the Joint Venture subsequently recognized an impairment loss
        on such
        long-lived assets and included the loss in the accompanying amended 2004
        consolidated financial statements. Accordingly, our present opinion on the
        amended 2004 consolidated financial statements, as expressed herein, is
        different from the report we previously issued dated May 24, 2005.
  In
        our
        opinion, the consolidated financial statements present fairly, in all material
        respects, the financial position of the Joint Venture as of December 31,
        2004
        and 2003, and the results of their operations and their cash flows for each
        of
        the three years in the period ended December 31, 2004 in conformity with
        accounting principles generally accepted in the United States of
        America.


**3**


As
        of
        December 31, 2004 and 2003, the Joint Venture has an accumulated deficit
        in
        excess of 100% of its total paid-in capital. Under Mexican law, this condition
        allows the Joint Venture’s partners, creditors or other interested parties to
        force the Joint Venture into dissolution. In addition, the Joint Venture
        i) has
        a working capital deficiency of $11,572 and $8,709 as of December 31, 2004
        and
        2003, respectively, ii) incurred a net loss of $6,805, $3,958 and $2,249
        for the
        years ended December 31, 2004, 2003 and 2002, respectively, iii) has a history
        of recurring losses and iv) has a total partners’ deficit of $7,679, and $874 as
        of December 31, 2004 and 2003, respectively. These factors raise substantial
        doubt about the Joint Venture’s ability to continue as a going concern.
        Initially, the Company had decided upon the sale of its stock. However, as
        discussed in Note 12 to the accompanying consolidated financial statements,
        as
        of September 2005, the Joint Venture’s operations were suspended, which resulted
        in the termination of a majority of the Joint Venture’s employees and the sale
        of the majority of the Joint Venture’s machinery and equipment. Management is
        deciding upon the future operating plans for the Joint Venture.
  Galaz,
          Yamazaki, Ruiz Urquiza, S. C.
 Member
          of
          Deloitte Touche Tohmatsu
 
  Jorge
          Jaramillo Elías
 
 May
          24,
          2005,
 November
          21, 2005 with respect to Note 12
 
 Celaya,
          Guanajuato, Mexico
  4
  **Qualcore,
          S. de R.L. de C.V. and
          Subsidiaries**
 **(****50.1%
          owned by Elamex, S.A. de C.V., and 49.9% owned by General Electric Mexico,
          S.A.
          de C.V.)**
 
 **Consolidated
          Balance Sheets**
 **As
          of December 31, 2004 and 2003**
 **(Thousands
          of U.S. Dollars)**
 
 **Assets****2004**
              
              **2003**Current
                  assets:Cash
                  and cash equivalents
              
              $
              1,381
              
              $
              339Accounts
                  receivable - net
              
              
              2,606
              
              
              1,998Inventories
                  - net
              
              
              1,982
              
              
              1,076Prepaid
                  expenses
              
              
              81
              
              
              60Total
                  current assets
              
              
              6,050
              
              
              3,473Plant
                  and equipment - net
              
              
              3,903
              
              
              9,228Deferred
                  income taxes
              
              
              
              
              
              294Other
                  assets
              
              
              5
              
              
              4Total
              
              $
              9,958
              
              $
              12,999**Liabilities
                  and partners’ deficit**Current
                  liabilities:Accounts
                  payable
              
              $
              3,962
              
              $
              5,145Notes
                  payable to joint venture partners
              
              
              7,715
              
              
              4,650Customer
                  advances
              
              
              2,000
              
              
              -Current
                  portion of long-term debt
              
              
              3,460
              
              
              1,680Accrued
                  liabilities
              
              
              485
              
              
              413Deferred
                  income taxes
              
              
              -
              
              
              294Total
                  current liabilities
              
              
              17,622
              
              
              12,182Long-term
                  debt
              
              
              -
              
              
              1,682Labor
                  obligations
              
              
              15
              
              
              9Total
                  liabilities
              
              
              17,637
              
              
              13,873Commitments
                  and contingencies (Note 10)Partners’
                  deficit:******Partnership
                  capital, 44,834 partnership units issued and outstanding at par
                  value of 1
                  Mexican peso
              
              
              5,007
              
              
              5,007Additional
                  paid-in capital
              
              
              24,746
              
              
              24,746Accumulated
                  deficit
              
              
              (37,432
              )
              
              (30,627
              )Total
                  partners’ deficit
              
              
              (7,679
              )
              
              (874
              )Total
              
              $
              9,958
              
              $
              12,999
 
 See
        accompanying notes to consolidated financial statements.
  **5**


**Qualcore,
        S. de R.L. de C.V. and
        Subsidiaries**
 **(** **50.1%
        owned by Elamex, S.A. de C.V., and 49.9% owned by General Electric Mexico,
        S.A.
        de C.V.)**
 
 **Consolidated
        Statements of Operations**
 **For
        the years ended December 31, 2004, 2003 and 2002**
 **(Thousands
        of U.S. Dollars)**
 **2004**
              
              **2003**
              
              **2002**Revenues:Net
                  sales
              
              $
              21,797
              
              $
              18,798
              
              $
              15,422Other
              
              
              2,329
              
              
              -Total
                  revenues
              
              
              24,126
              
              
              18,798
              
              
              15,422Costs
                  and expenses:Cost
                  of sales
              
              
              25,079
              
              
              20,865
              
              
              16,409Selling,
                  general and administrative expenses
              
              
              1,014
              
              
              902
              
              
              952Impairment
                  of long-lived assets
              
              
              4,155
              
              
              -
              
              
              -Total
                  costs and expenses
              
              
              30,248
              
              
              21,767
              
              
              17,361Operating
                  loss
              
              
              (6,122
              )
              
              (2,969
              )
              
              (1,939
              )Other
                  expenses:Interest
                  expense
              
              
              512
              
              
              91
              
              
              401Other
                  expense (income) - net
              
              
              47
              
              
              867
              
              
              (91
              )Total
                  other expenses
              
              
              559
              
              
              958
              
              
              310Loss
                  before income taxes
              
              
              (6,681
              )
              
              (3,927
              )
              
              (2,249
              )Income
                  tax expense
              
              
              124
              
              
              31Net
                  loss
              
              $
              (6,805
              )
              $
              (3,958
              )
              $
              (2,249
              )
 
 See
        accompanying notes to consolidated financial statements.
  **6**





**Qualcore,
      S. de R.L. de C.V. and
      Subsidiaries**


**(** **50.1%
      owned by Elamex, S.A. de C.V., and 49.9% owned by General Electric Mexico,
      S.A.
      de C.V.)**





**Consolidated
      Statements of Partners’ Deficit**


**For
      the years ended December 31, 2004, 2003 and 2002**


**(Thousands
      of U.S. Dollars)**




**Partnership
                Capital**
            
            **Additional**
            
            
            
            **Total****Units**
            
            **Amount**
            
            **Paid-in**
              **Capital**
            
            **Accumulated**
              **Deficit**
            
            **Partners’**
              **Deficit**Balance,
                January 1, 2002
            
            
            44,834
            
            $
            5,007
            
            $
            24,746
            
            $
            (24,420
            )
            $
            5,333Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            (2,249
            )
            
            (2,249
            )Balance,
                December 31, 2002
            
            
            44,834
            
            
            5,007
            
            
            24,746
            
            
            (26,669
            )
            
            3,084Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            (3,958
            )
            
            (3,958
            )Balance,
                December 31, 2003
            
            
            44,834
            
            
            5,007
            
            
            24,746
            
            
            (30,627
            )
            
            (874
            )Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            (6,805
            )
            
            (6,805
            )Balance,
                December 31, 2004
            
            
            44,834
            
            $
            5,007
            
            $
            24,746
            
            $
            (37,432
            )
            $
            (7,679
            )





See
      accompanying notes to consolidated financial statements.





**7**





**Qualcore,
      S. de R.L. de C.V. and
      Subsidiaries**


**(** **50.1%
      owned by Elamex, S.A. de C.V., and 49.9% owned by General Electric Mexico,
      S.A.
      de C.V.)**





**Consolidated
      Statements of Cash Flows**


**For
      the years ended December 31, 2004, 2003 and 2002**


**(Thousands
      of U.S. Dollars)**





**2004**
            
            **2003**
            
            **2002**Cash
                flows from operating activities:Net
                loss
            
            $
            (6,805
            )
            $
            (3,958
            )
            $
            (2,249
            )Adjustments
                to reconcile net loss to net cash provided by (used in) operating
                activities:Depreciation
                and amortization
            
            
            1,248
            
            
            1,217
            
            
            1,167Loss
                on sale of machinery and equipment
            
            
            -
            
            
            5
            
            
            -Loss
                on disposal of machinery andequipment
            
            
            -
            
            
            169
            
            
            -Labor
                obligations
            
            
            3
            
            
            5
            
            
            -Impairment
                loss
            
            
            4,155
            
            
            -
            
            
            -Changes
                in operating assets and liabilities:Accounts
                receivable - net
            
            
            (608
            )
            
            2,329
            
            
            670Inventories
                - net
            
            
            (906
            )
            
            (337
            )
            
            277Due
                from related parties
            
            
            
            
            
            
            
            
            12Prepaid
                expenses and other assets
            
            
            (22
            )
            
            (60
            )
            
            332Accounts
                payable
            
            
            (1,183
            )
            
            1,227
            
            
            (143
            )Customer
                advances
            
            
            2,000
            
            
            -
            
            
            -Accrued
                liabilities and labor obligations
            
            
            75
            
            
            275
            
            
            (1,431
            )Due
                to related parties
            
            
            -
            
            
            (107
            )
            
            107Net
                cash (used in) provided by operating activities
            
            
            (2,043
            )
            
            765
            
            
            (1,258
            )Cash
                flows from investing activities:Acquisitions
                of plant and equipment
            
            
            (78
            )
            
            (347
            )
            
            (472
            )Proceeds
                from the sale of plant and equipment
            
            
            -
            
            
            10
            
            
            -Net
                cash used in investing activities
            
            
            (78
            )
            
            (337
            )
            
            (472
            )Cash
                flows from financing activities:Proceeds
                from notes payable to Joint Venturepartners
            
            
            3,163
            
            
            2,050
            
            
            3,100Payments
                of notes payable
            
            
            -
            
            
            (900
            )
            
            -Payments
                of long-term debt
            
            
            -
            
            
            (1,678
            )
            
            (1,680
            )Net
                cash provided by (used in) financing activities
            
            
            3,163
            
            
            (528
            )
            
            1,420Cash
                and cash equivalents:Net
                increase (decrease) for the year
            
            
            1,042
            
            
            (100
            )
            
            (310
            )Beginning
                of year
            
            
            339
            
            
            439
            
            
            749End
                of year
            
            $
            1,381
            
            $
            339
            
            $
            439Supplemental
                disclosure of cash flow information:Cash
                paid during the year for:Interest
            
            $
            -
            
            $
            169
            
            $
            401Income
                taxes
            
            $
            124
            
            $
            31
            
            $
            -





See
      accompanying notes to consolidated financial statements.





1





**Qualcore,
      S. de R.L. de C.V. and
      Subsidiaries**


**(** **50.1%
      owned by Elamex, S.A. de C.V., and 49.9% owned by General Electric Mexico,
      S.A.
      de C.V.)**





**Notes
      to Consolidated Financial Statements**


**December
      31, 2004, 2003 and 2002**


**(Thousands
      of U.S. Dollars)**








**1.**
            **Nature
                of business and basis of presentation**





***Nature
      of business,*** -
      Qualcore, S. de R.L. de C.V. and subsidiaries (the “Joint Venture”) consists of
      Mexican companies incorporated under the laws of Mexico on August 17, 1998.
      The
      Joint Venture was formed between Elamex, S.A. de C.V. (Elamex), General Electric
      International Mexico, S.A. de C.V. and General Electric Mexico, S.A. de C.V.
      (jointly referred to as GE Mexico) to produce plastic molding and stamped metal
      components primarily for companies located in the United States of America
      (U.S.), except for Elamex, which has operations located in Mexico. Elamex
      contributed its plastic molding and stamped metal operations to the Joint
      Venture in exchange for a 50.1% interest. GE Mexico contributed approximately
      $3,500 in exchange for its 49.9% interest. All manufacturing and administrative
      services, as well as other professional services, are provided by Plásticos y
      Troquelados, S.A. de C.V. (PYTSA), a subsidiary of the Joint Venture. All of
      the
      Joint Venture manufacturing machinery and equipment are located in facilities
      in
      Mexico.





The
      Joint
      Venture is a limited liability company, which combines the aspects of a
      partnership and a corporation. Joint venture partners are liable only to the
      extent of their capital contributions, but participatory interests are
      represented by participation units that are not freely negotiable.





***Basis
      of presentation*** - At
      December 31, 2004 and 2003, the Joint Venture has an accumulated deficit in
      excess of 100% of its total paid-in capital. Under Mexican law, this condition
      allows the Joint Venture’s partners, creditors or other interested parties to
      force the Joint Venture into dissolution. In addition, the Joint Venture i)
      has
      a working capital deficiency of $11,572 and $8,709 at December 31, 2004 and
      2003, respectively, ii) incurred a net loss of $6,805, $3,958 and $2,249 for
      the
      years ended December 31, 2004, 2003 and 2002, respectively, iii) has a history
      of recurring net losses and iv) has a partners’ deficit of $7,679 and $874 at
      December 31, 2004 and 2003, respectively. These factors raise substantial doubt
      about the Joint Venture’s ability to continue as a going concern. Initially,
      management was discussing plans to sell the Joint Venture’s stock. However, as
      of September 2005, the Joint Venture’s operations were suspended, which resulted
      in the termination of a majority of the Joint Venture’s employees and the sale
      of the majority of the Joint Venture’s machinery and equipment. See further
      discussion in Note 12. Management is currently deciding upon the future
      operating plans for the Joint Venture. The financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty.





The
      Joint
      Venture maintains its books and records in U.S. dollars and prepares financial
      statements in accordance with accounting principles generally accepted in the
      United States of America (U.S. GAAP) for the application of the equity method
      by
      the Joint Venture partners.





***Principles
      of consolidation*** **** -
      The
      accompanying consolidated financial statements are prepared in accordance with
      accounting principles generally accepted in the United States. The consolidated
      financial statements include those of Qualcore, S. de R.L. de C.V. and its
      99%
      owned subsidiary Plasticos y Troquelados de Celaya, S.A. de C.V. All material
      intercompany balances and transactions have been eliminated in
      consolidation.








**2.**
            **Significant
                accounting policies**





A
      summary
      of the significant accounting policies used in the preparation of the
      accompanying financial statements follows:





***Cash
      equivalents*** - The
      Joint Venture considers all highly-liquid debt instruments purchased with a
      maturity of three months or less to be cash equivalents.





2





***Accounts
      receivable*** - The
      Joint Venture reviews accounts receivable balances and determines whether an
      allowance for potential uncollectible accounts is necessary.





***Foreign
      currency translation*** -
      Transactions denominated in foreign currencies are recorded at the rate of
      exchange in effect at the date of the transactions. Monetary assets and
      liabilities denominated in foreign currencies are converted into U.S. dollars,
      the functional currency of the Joint Venture, at the rate of exchange in effect
      at the balance sheet date; the effect of changes in exchange rates is recorded
      in the results of operations.





***Inventories*** -
      Inventories are stated at the lower of cost or market value. Cost is determined
      using the first-in, first-out (FIFO) method.





***Concentration
      of credit risk -*** For the
      years ended December 31, 2004, 2003 and 2002, the Joint Venture has one major
      customer that accounted for 83%, 86% and 76%, respectively of total sales and
      50% and 60% of its accounts receivable at December 31, 2004 and 2003,
      respectively. However, the Joint Venture typically receives payment on a timely
      basis from this customer. The Joint Venture believes that any other potential
      credit risk is adequately covered by the allowance for doubtful
      accounts.





***Plant
      and equipment*** - Plant
      and equipment are recorded at acquisition cost, net of accumulated depreciation
      and amortization. Cost includes major expenditures for improvements and
      replacements, which extend useful lives or increase capacity and interest costs
      associated with significant capital additions. Routine maintenance costs are
      expensed as incurred. Depreciation and amortization are calculated using the
      straight-line method, based on the estimated useful lives of the related assets,
      as follows:





**Useful**
                **Life**
              **(Years)**Leasehold
                improvements
            
            
            4Machinery
                and equipment
            
            
            3-10





***Valuation
      of long-lived assets -*** The
      Joint
      Venture periodically evaluates the carrying value of long-lived assets held
      for
      use when events or circumstances indicate that the carrying amount of the asset
      may not be recoverable. The carrying value of a long-lived asset held for use
      is
      considered to not be recoverable when the anticipated separately identified
      undiscounted cash flows from the asset are less than the carrying value of
      the
      asset. In that event, an impairment loss is recognized based on the amount
      by
      which the carrying value exceeds the fair value of the long-lived asset.





During
      the four quarter of 2004, the Joint Venture identified certain conditions as
      indicators of asset impairment, including a substantial decline in its
      operations and evidence of a decrease in the market value of such long-lived
      assets, based on the Joint Venture’s consideration of the sale of such
      long-lived assets, which ultimately took place during 2005 at a market value
      below the carrying value of the assets at December 31, 2004. Accordingly, the
      Joint Venture assessed the recoverability of such assets using undiscounted
      cash
      flow projections, which indicated that such long-lived assets were not
      recoverable. The Joint Venture recorded ****** an
      impairment loss of $4,155 during the fourth quarter of 2004. Management
      determined the asset impairment charges by comparing the actual market price
      of
      the equipment against the carrying values of the long-lived assets.





***Income
      taxes*** -
      The
      Joint Venture recognizes deferred income tax and statutory employee
      profit-sharing assets and liabilities for the future consequences of temporary
      differences between the financial statement carrying amounts of assets and
      liabilities and their respective income tax or employee statutory profit-sharing
      bases, measured using enacted rates. The effects of changes in the statutory
      rates are accounted for in the period that includes the enactment date. Deferred
      income tax assets are also recognized for the estimated future effects of tax
      loss carryforwards and asset tax credit carryforwards. Deferred income tax
      and
      statutory employee profit-sharing assets are reduced by any benefits that,
      in
      the opinion of the management, more likely than not will not be realized.





***Labor
      obligations*** - In
      accordance with Mexican Labor Law, the Joint Venture provides seniority premium
      benefits to its employees under certain circumstances. These benefits consist
      of
      a one-time payment equivalent to 12 days wages for each year of service (at
      the
      employee’s most recent salary, but not to exceed twice the legal minimum wage),
      payable to all employees with 15 or more years of service, as well as to certain
      employees terminated involuntarily prior to the vesting of their seniority
      premium benefit.





3





The
      Joint
      Venture also provides statutorily mandated severance benefits to its employees
      terminated under certain circumstances. Such benefits consist of a one-time
      payment of three months wages plus 20 days wages for each year of service
      payable upon involuntary termination without just cause.





Costs
      associated with these benefits are provided for based on actuarial computations
      using the projected unit credit method.





***Revenue
      recognition*** -
      Revenues and related costs are recognized upon transfer of ownership, which
      generally coincides with the shipment of products to customers in satisfaction
      of orders.





***Use
      of estimates*** - The
      preparation of financial statements in conformity with U.S. GAAP requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities and disclosure of contingent assets and liabilities
      at
      the date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Although management believes the estimates
      and assumptions used in the preparation of these financial statements were
      appropriate in the circumstances, actual results could differ from those
      estimates and assumptions.




***New
      accounting standards*** -In
      December 2004, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 153, "Exchanges of
      Nonmonetary Assets - an amendment of APB Opinion No. 29", to eliminate the
      exception for nonmonetary exchanges of similar productive assets and replaces
      it
      with a general exception for exchanges of nonmonetary assets that do not have
      commercial substance. SFAS No. 153 is effective for nonmonetary assets exchanges
      occurring in fiscal periods beginning after June 15, 2005. The Joint Venture
      does not anticipate that the adoption of this statement will have a material
      effect on its consolidated financial position or results of operations.




In
      May
      2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial
      Instruments with Characteristics of both Liabilities and Equity”. SFAS No. 150
      establishes standards for how an issuer classifies and measures certain
      financial instruments with characteristics of both liabilities and equity.
      SFAS
      No. 150 requires that certain financial instruments be classified as liabilities
      that were previously considered equity. The provisions of SFAS No. 150 are
      effective for financial instruments entered into or modified after May 31,
      2003,
      and for pre-existing instruments, was effective beginning January 1, 2004,
      except for mandatorily redeemable financial instruments. For mandatorily
      redeemable financial instruments, this statement is effective for new or
      existing contracts for fiscal periods beginning after December 15, 2004. The
      adoption of SFAS No. 150 did not have a material impact on the Joint Venture’s
      financial position, results of operations or cash flows, and as the Joint
      Venture does not have any mandatorily redeemable financial instruments, it
      does
      not anticipate that the adoption of that provision of SFAS No. 150 will have
      a
      material impact on the Joint Venture’s financial position, results of operations
      or cash flows.





In
      December 2003, the FASB revised SFAS No. 132(R), “Employers’ Disclosures about
      Pensions and Other Postretirement Benefits”. SFAS No. 132(R) retain the
      disclosure requirements contained in the original standard but requires
      additional disclosures describing the types of plan assets, investment strategy,
      measurement dates, plan obligations, cash flows and net periodic benefit cost
      of
      defined benefit pension plans and other defined benefit postretirement plans.
      The additional disclosure requirements were applicable for these 2004 financial
      statements. The adoption of this statement did not materially affect the
      disclosures in the accompanying consolidated financial statements.





In
      January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable
      Interest Entities” (“FIN 46”). In December 2003, FIN 46 was replaced by FASB
      Interpretation No. 46 (revised December 2003), “Consolidation of Variable
      Interest Entities” or FIN 46(R). FIN 46(R) clarifies the application of
      Accounting Research Bulletin No. 51, “Consolidated Financial Statements”, to
      certain entities in which equity investors do not have the characteristics
      of a
      controlling financial interest or do not have sufficient equity at risk for
      the
      entity to finance its activities without additional subordinated financial
      support from other parties. FIN46(R) requires an enterprise to consolidate
      a
      variable interest entity if that enterprise will absorb a majority of the
      entity’s expected losses, is entitled to receive a majority of the entity’s
      expected residual returns or both. The Joint Venture has immediately applied
      the
      provisions of FIN 46(R) to all variable interest entities created after December
      31, 2003. For all other entities, the Joint Venture will begin to apply the
      provisions of FIN 46(R) as of January 1, 2005. The Joint Venture did not have
      any variable interest entities created after December 31, 2003 and does not
      anticipate that the adoption of FIN 46(R) will have a material impact on its
      financial position, results or operations or cash flows.





4





In
      March
      2004, the Emerging Issues Task Force (“EITF”) confirmed as a consensus EITF
      Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its
      Application to Certain Investments” (“EITF 03-1”). The objective of this Issue
      is to provide guidance on determining when an investment is considered impaired,
      whether that impairment is other-than-temporary, and the measurement of an
      impairment loss. The guidance also includes accounting considerations subsequent
      to the recognition of another-than-temporary impairment and requires certain
      disclosures about unrealized losses that have not been recognized as
      other-than-temporary impairments. In September 2004, the FASB issued FASB Staff
      Position (“FSP”) EITF Issue 03-1-1 that delays the effective date for the
      measurement and recognition guidance included in EITF 03-1. The disclosures
      required by EITF 03-1 have not been deferred and were effective as of December
      31, 2004.





In
      November 2003, the EITF confirmed as a consensus EITF Issue No. 03-10,
“Application of EITF Issue No. 02-16 by Resellers to Sales Incentives Offered
      to
      Consumers by Manufacturers” (“EITF 03-10”). EITF 03-10 addresses the accounting
      for manufacturer sales incentives offered directly to consumers, including
      manufacturer coupons. The Joint Venture’s accounting policies related to vendor
      coupons and reimbursements are in accordance with the requirements of EITF
      03-10. The adoption of this pronouncement had no material impact on the Joint
      Venture’s results of operations, financial position or cash flows in the
      reported periods.





In
      November 2004, the FASB issued SFAS No. 151, “Inventory Costs - an amendment of
      ARB No. 43, Chapter 4”, or SFAS No. 151. SFAS No. 151 amends the guidance in ARB
      No. 43, Chapter 4, “Inventory Pricing” to clarify the accounting for abnormal
      amounts of idle facility expense, freight, handling costs, and wasted material
      (spoilage). Among other provisions, the new rule requires that items such as
      idle facility expense, excessive spoilage, double freight, and re-handling
      costs
      be recognized as current-period charges regardless of whether they meet the
      criterion of "so abnormal" as stated in ARB No. 43. Additionally, SFAS 151
      requires that the allocation of fixed production overhead to the costs of
      conversion be based on the normal capacity of the production facilities. The
      Joint Venture does not believe that the adoption of this pronouncement will
      have
      a material impact on the Joint Venture’s results of operations, financial
      position or cash flows.








**3.**
            **Accounts
                receivable**





**2004**
            
            **2003**Trade
            
            $
            1,857
            
            $
            1,680Recoverable
                value-added taxes
            
            
            764
            
            
            3362,621
            
            
            2,016Less
                - allowance for doubtful accounts
            
            
            (15
            )
            
            (18
            )$
            2,606
            
            $
            1,998








5




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





**2004**
            
            **2003**
            
            **2002**Beginning
                balance
            
            $
            18
            
            $
            30
            
            $
            -Additions
                charged to expense
            
            
            -
            
            
            -
            
            
            30Write-off
                of unrecoverable accounts
            
            
            (3
            )
            
            (12
            )Ending
                balance
            
            $
            15
            
            $
            18
            
            $
            30








**4.**
            **Inventories**





**2004**
            
            **2003**Finished
                goods
            
            $
            409
            
            $
            231Raw
                materials
            
            
            1,585
            
            
            9291,994
            
            
            1,160Less
                - reserve for obsolescence
            
            
            (12
            )
            
            (84
            )$
            1,982
            
            $
            1,076





The
      provision for excess and obsolete inventory is charged against cost of sales.
      An
      analysis of the changes to the reserve for obsolescence on inventory for the
      years ended December 31, 2004, 2003 and 2002 is as follows:





**2004**
            
            **2003**
            
            **2002**Beginning
                balance
            
            $
            84
            
            $
            84
            
            $
            238Additions
                charged to expense
            
            
            -
            
            
            -
            
            
            -Inventory
                disposed of during the year
            
            
            (72
            )
            
            -
            
            
            (154
            )Ending
                balance
            
            $
            12
            
            $
            84
            
            $
            84








**5.**
            **Plant
                and equipment**





**2004**
            
            **2003**Leasehold
                improvements
            
            $
            136
            
            $
            136Machinery
                and equipment
            
            
            8,379
            
            
            12,4578,515
            
            
            12,593Less
                - accumulated depreciation and amortization
            
            
            (4,612
            )
            
            (3,365
            )$
            3,903
            
            $
            9,228





Depreciation
      expense was $1,248, $1,217 and $1,167 for the years ended December 31, 2004,
      2003 and 2002, respectively.





**6.**
              **Notes
                  payable and long-term
                  debt**





At
      December 31, 2004 and 2003, the Joint Venture had the following bank loans
      to
      third parties and U.S. dollar denominated notes payable to Joint Venture
      partners:





6




**2004**
            
            **2003**Bank
                loans, bearing interest at 1.625% over six-month LIBOR (4.4% and
                1.4% at
                December 31, 2004 and 2003, respectively), principal and interest
                payable
                in semiannual payments of $840, guaranteed by the Joint Venture
                partners
            
            $
            3,460
            
            $
            3,362Notes
                payable to Joint Venture partners
            
            
            7,715
            
            
            4,650Total
                debt
            
            
            11,175
            
            
            8,012Less
                - Current portion of long-term debt
            
            
            (3,362
            )
            
            (1,680
            )Interest
                payable to bank loans
            
            
            (98
            )
            
            -Notes
                payable to Joint Venture partners due on demand
            
            
            (7,550
            )
            
            (4,650
            )Interest
                payable to Joint Venture partners
            
            
            (165
            )
            
            -Long-term
                debt
            
            $
            -
            
            $
            1,680





The
      bank
      loans referred to above contain restrictive covenants, which require the Joint
      Venture to maintain certain financial ratios and restricts the payment of
      dividends, granting of loans and obtaining additional financings. As of December
      31, 2004 the Joint Venture was not in compliance with these covenants and was
      in
      default under the loan agreement.





On
      January 1, 2005 Wells Fargo HSBC Trade Bank, N.A. (“Wells Fargo”) executed a
      forbearance agreement with the Joint Venture. The forbearance agreement provides
      the Joint Venture with a period of 120 days in which Wells Fargo will not issue
      a demand for payment of any or all of the outstanding debt. However, Wells
      Fargo
      did not waive the existing default. Should the Joint Venture not be able to
      make
      the payments within the forbearance period, Wells Fargo will require the
      guarantors to pay the debt. Accordingly, the debt has been classified as current
      in the accompanying 2004 consolidated balance sheet.








**7.**
            **Labor
                obligations**





Net
      periodic expenses associated with labor obligations was $3 in 2004 and $5 in
      2003. The associated accrued liability was $15 at December 31, 2004 and $9
      at
      December 31, 2003.








**8.**
            **Partners’
                deficit**





Under
      the
      bylaws of the Joint Venture and Mexican law, the partners’ capital of the Joint
      Venture must consist of fixed capital and may have, in addition thereto,
      variable capital. Partners holding shares representing variable capital may
      require the Joint Venture, with a notice of at least three months prior to
      December 31 of the prior year, to redeem those shares at a price equal to the
      lesser of either (i) 95% of the market price, based on the average of trading
      prices in the stock exchange where it is listed during the thirty trading days
      preceding the end of the fiscal year in which the redemption is to become
      effective or (ii) the book value of the Joint Venture’s shares as approved by
      the board of directors for the latest fiscal year prior to the redemption date.
      At December 31, 2004 and 2003, the Joint Venture has not issued any of its
      authorized variable capital. Although the variable capital is redeemable by
      the
      terms described above, such shares would be classified as a component of
      partners’ equity in the consolidated balance sheet.





Management
      believes the variable capital represents permanent capital because the timing
      and pricing mechanisms through which a partner would exercise the option to
      redeem are such that a partner, from an economic standpoint, would not exercise
      this option. At the time a partner is required to give notice of redemption,
      the
      partner will not be able to know at what price the shares would be redeemed
      and
      would not expect the present value of the future redemption payment to equal
      or
      exceed the amount which would be received by the partner in an immediate public
      sale.





7




Mexican
      law requires that at least 5% of the Joint Venture’s net income each year (after
      profit sharing and other deductions required by law) be allocated to a legal
      reserve fund, which is not thereafter available for distribution, except as
      a
      capital dividend, until the amount of such fund equals 20% of the Joint
      Venture’s historical capital. No legal reserve fund allocation is required due
      to the net losses incurred by the Joint Venture.








**9.**
            **Balances
                and transactions with related
                parties**





Transactions
      with related parties for the years ended December 31, 2004, 2003 and 2002 are
      as
      follows:





**2004**
            
            **2003**
            
            **2002**Interest
                expense
            
            $
            165
            
            $
            20
            
            $
            90Notes
                payable
            
            
            2,900
            
            
            2,050
            
            
            2,600Due
                to Joint Venture partners
            
            
            -
            
            
            111
            
            
            90





At
      December 31, 2004 and 2003, the Joint Venture had U.S. dollar denominated notes
      payable to its Joint Venture partners, as discussed in Note 6.








**10.**
            **Commitments
                and contingencies**





***Leases*** - The
      Joint Venture leases a building under an operating lease that expires in 2012.
      Minimum rentals due under the lease are adjusted annually based on the Mexican
      inflation rate and are as follows:





Year
                ending December 31:2005
            
            $
            1,1352006
            
            
            1,1352007
            
            
            1,1352008
            
            
            1,1352009
            
            
            1,135Thereafter
            
            
            3,410Total
                minimum lease payments required
            
            $
            9,085





Rent
      expense for the years ended December 31, 2004, 2003 and 2002 was $1,135 for
      each
      year.





The
      monthly lease payments are guaranteed by both of the Joint Venture partners.





***Litigation*** - The
      Ministry of Finance and Public Credit, in exercise of its rights, carried out
      a
      review of the Joint Venture to verify its compliance with foreign trade tax
      obligations. As a result of this review, on September 9, 2004 the tax
      authorities assessed taxes of Ps. $22,457 against the Joint Venture. However,
      the Joint Venture filed a motion for reversal of such resolution. On February
      14, 2005, the Local Legal Office of Celaya issued a resolution annulling the
      above tax assessment and ordering the Local Tax Audit Office of Celaya to issue
      a properly supported resolution. As of May 24, 2005, this resolution had not
      yet
      been issued by the Local Tax Audit Office.





**11.**
            **Income
                and asset taxes**





Current
      income tax expense for the year ended December 31, 2004 was $37, and deferred
      income tax expense, represented by the change in the valuation allowance for
      recoverable tax on assets paid, for the years ended December 31, 2004 and 2003,
      was $87 and $31, respectively. The Joint Venture generated a net tax loss
      carryforward for the year ended December 31, 2002, and recorded a full valuation
      allowance for the value of the net deferred tax asset, resulting in no current
      or deferred income tax expense for the Joint Venture.





8





At
      December 31, 2004 and 2003, the components of deferred income tax assets and
      liabilities were as follows:





**2004**
            
            **2003**Current
                deferred tax assets:Accrued
                liabilities
            
            $
            613
            
            $
            61Valuation
                allowance
            
            
            (19
            )
            
            -Total
                current deferred tax assets
            
            
            594
            
            
            61Current
                deferred tax liabilities:Inventories
            
            
            (594
            )
            
            (355
            )Total
                current deferred tax liabilities
            
            
            (594
            )
            
            (355
            )Net
                current deferred tax liability
            
            $
            -
            
            $
            (294
            )Noncurrent
                deferred tax assets:Net
                operating loss carryforwards
            
            $
            7,535
            
            $
            8,329Asset
                tax
            
            
            128
            
            
            -Plant
                and equipment
            
            
            45Valuation
                allowance
            
            
            (7,708
            )
            
            (7,599
            )Total
                noncurrent deferred tax assets
            
            
            -
            
            
            730Noncurrent
                deferred tax liabilities:Plant
                and equipment
            
            
            -
            
            
            (436
            )Net
                deferred tax liabilities
            
            
            -
            
            
            (436
            )Net
                noncurrent deferred tax asset
            
            $
            -
            
            $
            294





A
      valuation allowance is provided when it is more likely than not that some
      portion or all of the deferred tax assets will not be realized in the future.
      The valuation allowance as of December 31, 2004, 2003 and 2002 was $7,727,
      $7,599 and $7,268, respectively, and relates primarily to the lack of evidence
      regarding the future utilization of net operating losses and recoverable tax
      on
      assets paid.





An
      analysis of the activity of the valuation allowance for the years ended December
      31, 2004, 2003 and 2002 is as follows:





**2004**
            
            **2003**
            
            **2002**Beginning
                balance
            
            $
            7,599
            
            $
            7,268
            
            $
            8,160Additions
                charged to income tax expense
            
            
            128
            
            
            331Decreases
                charged against income tax expense
            
            
            
            
            
            
            
            
            (892
            )Ending
                balance
            
            $
            7,727
            
            $
            7,599
            
            $
            7,268





The
      effective rate for the years ended December 31, 2004, 2003, and 2002 differs
      from the Mexican statutory income tax rate as follows:





**2004**
            
            **2003**
            
            **2002**Statutory
                rate
            
            
            33.0
            %
            
            34.0
            %
            
            35.0
            %Effect
                of permanent differences, mainlynon-deductible
                expenses
            
            
            -0.7
            %
            
            -4.8
            %
            
            0.0
            %Impairment
                of long-lived assets
            
            
            -20.5
            %
            
            0.0
            %
            
            0.0
            %Inflationary
                effects
            
            
            -3.1
            %
            
            -6.4
            %
            
            -1.6
            %Change
                in valuation allowance
            
            
            -7.7
            %
            
            -15.5
            %
            
            -33.4
            %Other
            
            
            -2.9
            %
            
            -8.1
            %
            
            0.0
            %-1.9
            %
            
            -0.8
            %
            
            0.0
            %




9




***Dividend
      tax*** -
      Partners’ equity, except restated paid-in capital and tax retained earnings,
      will be subject to a dividend tax, payable by the Joint Venture, in the event
      of
      distribution. In 2004, 2003 and 2002, the rate was 33%, 34% and 35%,
      respectively; it will decrease to 30% in 2005 and subsequently one percentage
      point each year until reaching 28% in 2007. Any income tax paid on such
      distribution may be credited against future income tax payable by the Joint
      Venture in the year in which the dividend tax is paid and in the following
      two
      years.





***Statutory
      income tax rate*** - On
      December 1, 2004, certain amendments to the ISR and IMPAC Laws were enacted
      and
      are effective as of 2005. The most significant amendments are as follows: (a)
      the ISR rate will be reduced to 30% in 2005, 29% in 2006, and 28% in 2007 and
      thereafter; (b) for ISR purposes, cost
      of
      sales will be deducted instead of inventory purchases in the period and,
      if
      applicable, related conversion costs ;
      (c)
      companies may elect in 2005 to ratably increase
      taxable income over a
      period from four to 12 years by
      the
      tax value of inventories on hand as of December 31, 2004 determined in conformity with the respective tax rules, which include deducting
      any previous tax basis of inventories and any unamortized tax loss
      carryforwards, and the
      tax basis of such inventories may be deducted as sold ;
      (d) as
      of 2006, paid employee statutory profit sharing will be fully deductible for
      ISR
      purposes; (e) bank liabilities and liabilities with foreign entities are now
      included in the determination of the IMPAC taxable base.





***Asset
      tax*** - The
      Joint Venture is also subject to an asset tax, which is similar to an
      alternative minimum tax, under Mexican tax law. The asset tax is calculated
      by
      applying 1.8% to the Joint Venture asset position, as defined in the law, and
      is
      payable to the extent it exceeds income taxes payable for the same period.
      Asset
      taxes paid may be used to offset future income taxes payable in the following
      10
      years if certain conditions in the tax law are met.





***Carryforwards*** - At
      December 31, 2004, the Joint Venture has net operating loss carryforwards,
      which
      are available to offset future taxable income, and asset tax credits, which
      are
      available to offset future income taxes payable, as follows:





**Year**
            
            **Net**
              **Operating**
              **Loss**
              **Carryforwards**
            
            **Asset**
              **Tax**
              **Credits**
            
            **Year
                of**
              **Expiration**1998
            
            $
            1,512
            
            $
            -
            
            
            20081999
            
            
            373
            
            
            -
            
            
            20092000
            
            
            6,021
            
            
            -
            
            
            20102001
            
            
            13,838
            
            
            -
            
            
            20112002
            
            
            1,685
            
            
            -
            
            
            20122003
            
            
            3,482
            
            
            41
            
            
            20132004
            
            
            -
            
            
            87
            
            
            2014$
            26,911
            
            $
            128





The
      amounts presented above have been adjusted for Mexican inflation as permitted
      by
      Mexican tax law.





***Statutory
      employee profit sharing*** -
      Statutory employee profit sharing was determined by applying the statutory
      rate
      of 10% to the profit sharing base determined in accordance with the applicable
      law.





**12.**
            **Subsequent
                events**





a.
            As
                of September 2005, the Joint Venture’s management approved the decision to
                cease the Joint Venture’s operations. In October 2005, most of its
                employees were terminated, except for three individuals that will
                complete
                the final administrative activities of the Joint Venture. The Company
                is
                still quantifying the termination expenses. The Joint Venture also
                sold
                most of its machinery and equipment, except for certain low-value
                assets.
                Management is discussing the future operations of the Joint
                Venture.





b.
            In
                September 2005, the tax authorities, in full exercise of their rights,
                reassessed the tax mentioned in Note 10 for the amount of Ps. $23,227.
                Management and legal counsel believes that the Joint Venture has
                meritorious defenses against the assertion of the
                claim.





10





c.
            As
                of June 15, 2005, GE Mexico purchased the outstanding debt of the
                Joint
                Venture with Wells Fargo, on which the Joint Venture had defaulted,
                as
                discussed in Note 6. The debt was purchased at a discounted price
                of
                approximately $2.5 million. The Joint Venture will pay GE with the
                proceeds of the sale of long-lived assets as discussed in 12.a
                above.





d.
            On
                May 24, 2005, the Joint Venture previously issued consolidated financial
                statements as of and for the year ended December 31, 2004, which
                did not
                include the recognition of impairment losses on its long-lived assets
                for
                which impairment indicators existed. The accompanying consolidated
                financial statements represent the reissuance of the previous consolidated
                financial statements in order to recognize such impairment, which
                amounted
                to $4,155 and is included in the results for the year ended December
                31,
                2004.




*
      * * *
      *




11




**ELAMEX,
      S.A. DE C.V. AND SUBSIDIARIES**





NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2004, 2003
      AND 2002


(IN
      THOUSANDS OF U.S. DOLLARS)








1.
      ORGANIZATION AND BASIS OF PRESENTATION





COMPANY
      BACKGROUND - Elamex, S.A. de C.V. and its subsidiaries (“Elamex” or the
“Company”) are a group of Companies in Mexico and the United States that provide
      manufacturing, packaging and distribution services. The Company provides
      customized manufacturing services in the candy and nut industry. The Company's
      manufacturing machinery and equipment are located in facilities in Ciudad
      Juarez, in Mexico, and in El Paso, Texas in the United States.





On
      December 19, 2003 the Metal Stamping segment, a wholly owned subsidiary,
      Precision Tool, Die and Machine Company ("Precision"), voluntarily filed for
      protection under Chapter 11 of the Federal Bankruptcy Code in the U.S.
      Bankruptcy Court to implement a restructuring of its debt. Also, in December
      2003 the Company’s Board of Directors authorized the sale of Precision. As a
      consequence of seeking protection under bankruptcy laws, the Company no longer
      controls Precision’s operations as of December 19, 2003. The Company’s
      investment in Precision was deconsolidated and was recognized in accordance
      with
      the equity method of accounting in 2003. Due to the bankruptcy activity during
      2004, the Company had no significant influence on Precision’s operations and
      changed from the equity method to the cost method with no effect on net
      loss.





In
      July
      2002, the Company acquired the new Food Products segment, which is Mt. Franklin
      Holdings LLC and subsidiaries (“Franklin”). Franklin operates a retail nut and
      foodservice nut packaging and marketing company located in El Paso, Texas,
      and a
      candy manufacturing and packaging facility located in Ciudad Juarez, Mexico
      (see
      Note 3).





The
      Company is a subsidiary of Accel, S.A. de C.V. (Accel), which owns approximately
      57.7% of the Company's issued and outstanding common shares at December 31,
      2004.





BASIS
      OF
      PRESENTATION - These consolidated financial statements and the accompanying
      notes are prepared in U.S. dollars, the functional and reporting currency of
      Elamex.





PRINCIPLES
      OF CONSOLIDATION - The consolidated financial statements are prepared in
      accordance with accounting principles generally accepted in the United States
      of
      America (U.S.) and include the accounts of the Company and its wholly-owned
      and
      majority-owned, controlled subsidiaries. All significant intercompany balances
      and transactions are eliminated in consolidation.





Effective
      December 19, 2003, the results of operations of Precision, (Metal Stamping
      Segment) which was previously consolidated are being reported on the cost
      method. This was due to the voluntary petition for reorganization under Chapter
      11 of the U.S. Bankruptcy code.





Unaudited
      financial information for Precision as of and for the years ended December
      31,
      2004 and 2003 is as follows:





2004
            
            2003(In
                Thousands of U.S. Dollars)Current
                assets
            
            $
            9,052
            
            $
            13,188Non
                current assets
            
            
            15,476
            
            
            17,860Current
                liabilities
            
            
            29,067
            
            
            32,547Net
                sales
            
            
            65,406
            
            
            72,019Gross
                margin
            
            
            1,899
            
            
            (1,861
            )Net
                loss
            
            
            (2,246
            )
            
            (16,709
            )







During
      the fourth quarter of 2003 Precision encountered circumstances that indicated
      that its carrying value may not be recoverable, as such, the Company engaged
      an
      independent company to assist in the valuation of long-lived assets for
      impairment. Based on the analysis of future cash flows of the assets group
      the
      Company reported an impairment of Precision’s long-lived assets of $13.2 million
      in December 2003. This impairment is recorded in the statement of operations
      as
      impairment of long-lived assets.





During
      2003 the Company loaned Precision $1.5 million in the form of a note receivable,
      to meet working capital needs. At December 31, 2004, the Company had notes
      receivable from Precision of $1.5 million.





The
      Company’s share of undistributed equity net of amounts receivable from Precision
      at December 31, 2004 and 2003 was $0.





Elamex
      also has a 50.1% investment in Qualcore, S. de R.L. de C.V., a joint venture
      company, which manufactures plastics parts and metal parts with GE de Mexico.
      Qualcore is jointly managed with GE de Mexico and the investment in the joint
      venture is recorded under the equity method.





Audited
      financial information for Qualcore as of and for the years ended December 31,
      2004 and 2003 is as follows:





(In
                Thousands of U.S. Dollars)2004
            
            2003Current
                assets
            
            $
            6,050
            
            $
            3,473Non
                current assets
            
            
            3,908
            
            
            9,232Current
                liabilities
            
            
            17,622
            
            
            11,888Net
                sales
            
            
            24,126
            
            
            18,798Gross
                margin
            
            
            (953
            )
            
            (2,067
            )Net
                loss
            
            
            (6,805
            )
            
            (3,958
            )





During
      2004 and 2003 the Company loaned Qualcore $425 thousand and $1.0 million,
      respectively, in the form of a note receivable to meet working capital needs.
      At
      December 31, 2004 and 2003, the Company had notes receivable from Qualcore
      of
      $2.7 million and $2.3 million, respectively.





The
      Company’s share of undistributed equity (deficiency) net of amounts receivable
      from Qualcore at December 31, 2004 and 2003 was $(19) thousand and $864
      thousand, respectively.





MANAGEMENT
      ESTIMATES - The preparation of financial statements in conformity with
      accounting principles generally accepted in the U.S. requires management to
      make
      certain estimates that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from these estimates.




******










**PART
      IV**





**ITEM
      15. EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES**




(a)
            1.*Financial
                Statements*





The
      following financial statements are included herein at Item 8.





Consolidated
      Balance Sheets as of December 31, 2004 and 2003.





Consolidated
      Statements of Operations and comprehensive loss for the years ended December
      31,
      2004, 2003, and 2002.





Consolidated
      Statements of Stockholders’ Equity for the years ended December 31, 2004, 2003,
      and 2002.





Consolidated
      Statements of Cash Flows for the years ended December 31, 2004, 2003, and 2002.





Notes
      to
      Consolidated Financial Statements.





Independent
      Auditors’ Report.





2.
            *Financial
                Statements Schedules*





The
      financial statement schedules required to be included pursuant to this Item
      are
      not included herein because they are not applicable or the required information
      is shown in the financial statements or notes thereto which are incorporated
      by
      reference at subsection 1 of this Item, above.





3.
            *Exhibits*





Audited
      financial statements of Qualcore, S. de R.L. de C.V. for the years ended
      December 31, 2004, 2003 and 2002.





**SIGNATURES**
 
 Pursuant
        to the requirements Section 13 or 15(d) of the Securities Exchange Act of
        1934,
        the registrant has duly caused this report to be signed on its behalf by
        the
        undersigned, thereunto duly authorized.
 
 
 ELAMEX,
                  S.A. DE C.V.December
                  08, 2005Date
              Richard
                  R. Harshman, President andChief
                  Executive Officer
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed below by the following persons on behalf of the registrant and in
        the
        capacities and on the dates indicated.
 
 December
                  08, 2005Date
              Eloy
                  S. Vallina, Chairman of theBoard
                  of DirectorsDecember
                  08, 2005Date
              Richard
                  R. Harshman, President andChief
                  Executive(Principal
                  Executive Officer)December
                  08, 2005Date
              Sam
                  L. Henry, Senior Vice-Presidentand
                  Chief Financial Officer(Principal
                  Financial Officer)(Principal
                  Accounting Officer)December
                  08, 2005Date
              Eloy
                  Vallina Garza, DirectorDecember
                  08, 2005Date
              Richard
                  P. Spencer, DirectorDecember
                  08, 2005Date
              Martin
                  W. Pitts, DirectorDecember
                  08, 2005Date
              Keith
                  Cannon, DirectorDecember
                  08, 2005Date
              Benito
                  Bucay, DirectorDecember
                  08, 2005Date
              Carlos
                  Hernandez, DirectorDecember
                  08, 2005Date
              Manuel
                  Muñoz, DirectorDecember
                  08, 2005Date
              Fernando
                  Todd, Director