<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
1997 ANNUAL REPORT
OCTOBER 31, 1997
HIGHLIGHTS
.. The Fund's fiscal year 1997 ended October 31, 1997.
.. The Fund achieved positive results during this fiscal year, with total in-
vestment returns based on market price and net asset value (NAV) per share
of 35.1% and 37.7%, respectively.
.. The Fund's per share discount between market price and NAV per share ended
this fiscal year at a level of 20.4%, while the ratio of expenses to average
net assets was 0.91%, the lowest ever achieved by the Fund.
.. The Fund's Board of Directors has declared a stock dividend of $29,625,602,
which is equivalent to approximately 59.59 cents per share, payable on Janu-
ary 30, 1998, to shareholders of record on December 22, 1997. Fund share-
holders will receive the dividend in additional shares of common stock of
the Fund (Common Stock) unless they elect to receive a cash payment instead
of Common Stock.
.. The Annual Meeting of Shareholders of the Fund will be held on February 27,
1998 in New York City. Shareholders of record on December 22, 1997, will be
entitled to vote at and attend the meeting.
.. The Fund has created an Internet page to improve communications with share-
holders and the investing public. The Fund's Web Site is located at
WWW.THEMEXICOFUND.COM
.. The Mexican Stock Exchange (Bolsa) and the Fund were adversely impacted dur-
ing the last days of October 1997 as a consequence of the declines experi-
enced by several Asian and South American stock markets.
.. The positive performance of the Mexican economy continued in the last quarter
of fiscal 1997 and has helped to mitigate the negative effects of the recent
decline of world financial markets.
.. During the third quarter of calendar year 1997, Mexico's gross domestic
product (GDP) increased 8.1% in real terms, compared with the same period
one year earlier.
.. Mexico's inflation rate for the 12-month period ended October 31, 1997 was
18.2%, compared with 27.7% registered at the end of 1996.
.. The rate of exchange of the Mexican peso against the US dollar increased 5%
during this 1997 fiscal year to end at Ps. 8.394.
.. Interest rates of the 28-day Cetes (treasury bills) ended October 1997 at a
level of 20.9%, compared with 29.3% one year earlier.
<PAGE>
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THE MEXICO FUND, INC
TO OUR SHAREHOLDERS:
- -------------------------------------------------------------------------------
THE BOLSA AND THE FUND'S PERFORMANCE
During the last days of October 1997, world financial markets began to expe-
rience a general negative trend that has been accompanied by significant vola-
tility. The declines experienced by several Asian and Latin American stock
markets, notably Brazil, have been the main contributors to this market trend.
On October 27, 1997 the Mexican Bolsa index lost 18% in dollar terms. On the
same day the Dow Jones Industrial Average lost more than 7%, and trading on
the New York Stock Exchange (NYSE) halted twice. The rate of exchange of the
Mexican peso against the dollar, which had remained stable at levels of around
Ps. 7.80, increased to Ps. 8.39 at the end of this fiscal year. Much of this
increase was triggered by the events of October 27.
The positive performance and fundamentals of the Mexican economy, discussed
below, have helped to mitigate the effects of this negative trend. The Mexican
current account deficit represents less than 1% of GDP, compared with around
5% in Brazil. Mexico's financial system, which suffered a significant negative
impact after the 1994 devaluation of the peso, is now more stable as a result
of the program to support the banking system. In the case of some Asian coun-
tries, the financial systems have evidenced serious problems and several firms
have collapsed. In Mexico, the approval of the 1998 Government Budget, Tax Law
and the appointment of the country's central bank governor, which were causes
of concern among investors, have been perceived favorably. It is important to
note that, as the following table indicates, notwithstanding recent market
volatility and the decline of the Bolsa at the end of October, the medium- and
long-term performance of the Fund and the Bolsa have been positive.
<TABLE>
<CAPTION>
DOLLAR-TERM MXF MXF BOLSA
VARIATIONS* DURING: MARKET PRICE NAV INDEX
<S> <C> <C> <C>
First ten months of calendar 1997 27.0% 28.6% 29.5%
- -------------------------------------------------------------
Fiscal year 1997 35.1% 37.7% 37.8%
- -------------------------------------------------------------
</TABLE>
SOURCES: Lipper Analytical Services, Inc. and Mexican Stock Exchange.
* Total Investment Returns
The Fund's portfolio continued to reflect a high level of equity investments
during the last fiscal quarter, equivalent to almost 97% of the Fund's total
net assets. The Fund's recent investment strategy has focused on companies
that have benefited from the dynamic recovery of the domestic economy. The
Fund has invested in companies in the consumer goods and retail sectors, which
are likely to grow together with the reemergence of purchasing power of the
population. The Fund has also invested in companies involved in the cement,
housing and construction industries, as well as in several export companies
involved in the iron, steel, petrochemical and automotive component indus-
tries. Other investments made by the Fund include a group of attractive
"small-cap" companies recently listed on the Bolsa.
Total Fund net assets at the end of this fiscal year were $1.17 billion and
averaged $1.11 billion during the same period. The Fund's ratio of expenses to
average net assets reached a historical low of 0.91% at the end of the last
fiscal year, one of the lowest expense ratios among comparable funds listed on
the NYSE.
The Fund's market price per share ended fiscal year 1997 at $18 11/16, while
the NAV closed at $23.49, equivalent to a market discount of 20.4%. Fund
shares continued to show high levels of liquidity. The total volume of Fund
shares traded on all U.S. consolidated markets during fiscal year 1997
amounted to 63.87 million shares, equivalent to 1.3 times the total number of
shares outstanding.
ECONOMIC COMMENTS
The Mexican economy has continued to show clear signs of recovery, exceeding
the estimates of authorities and private firms. During the first nine months
of calendar 1997, the Mexican GDP increased 7.3% and all sectors of the econ-
omy registered positive results. Among the most dynamic sectors of the GDP
were machinery and equipment (16.9%), paper and printing (13.8%), textile and
leather (10.9%), construction (10.6%) and commerce, restaurants and hotels
(10.0%). Recent estimates announced by the Mexican authorities suggest that
the 1997 and 1998 GDP growth levels will be approximately 7.0% and 5.2%,
respectively.
Domestic consumption, which was significantly affected by reduced levels of
employment and higher inflation rates after the 1994 devaluation of the peso,
is now recovering and is expected to continue doing so. According to figures
published by the Mexican authorities, domestic consumption increased 5.16% in
real terms during the first nine months of calendar 1997.
<PAGE>
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The Mexican peso showed a relatively stable performance during most of the
1997 fiscal year. The rate of exchange of the peso against the dollar fluctu-
ated most of this period at around levels of Ps. 7.80, but increased to Ps.
8.394 at the end of October. The total increase of the rate of exchange during
fiscal year 1997 was 5%, significantly lower than the 18% inflation rate reg-
istered during the same period, discussed below. Several projections made by
the Mexican authorities contemplate an average rate of exchange of Ps. 8.745
per dollar for calendar 1998.
The Mexican trade account continued to experience an accumulated surplus but
with a declining trend, as consecutive monthly deficits have occurred since
July 1997. The two main reasons for these negative balances are the strong
performance of the Mexican peso and the dynamic recovery of the economy, which
together have resulted in higher growth rates of imports compared to exports.
The Mexican trade balance registered a preliminary surplus of $1.64 billion
during the first ten months of calendar 1997. Total exports increased 15% to
$90.91 billion, and total imports grew 22% to $89.27 billion.
According to preliminary figures published by the Mexican authorities, total
foreign investment into Mexico amounted to $16.54 billion during the first
nine months of calendar 1997. Direct foreign investment amounted to $9.95 bil-
lion during this period, more than 56% of which was from the United States,
while the remaining $6.58 billion was portfolio investment. The current ac-
count deficit amounted to $4 billion during this nine-month period, equivalent
to less than 1% of the country's GDP, which was more than offset by a capital
account surplus of $10.57 billion. Net international reserves at Banco de Mex-
ico (central bank) increased $6.93 billion during this period to approximately
$18 billion.
Mexico's inflation rate, measured by the increase of the consumer price index
(CPI), continued to show a declining trend. During fiscal year 1997, the in-
flation rate was approximately 18%, compared with 52% and 28% during calendar
1995 and 1996, respectively. The annual inflation target set by the Mexican
authorities for 1998 is approximately 12%.
The interest rate for 28-day Cetes (treasury bills) ended fiscal year 1997 at
a level of 20.94%, significantly lower than the 29.34% registered one year
earlier. At the end of August 1997, the interest rate paid on this instrument
registered 17.5%, the lowest level since the 1994 devaluation of the peso.
DECLARATION OF DIVIDEND
The Board of Directors has declared a stock dividend equivalent to approxi-
mately 59.59 cents per share to shareholders of record on December 22, 1997,
payable on January 30, 1998. Fund shareholders will receive the dividend in
additional shares of Common Stock unless they elect to receive the dividend in
cash. This dividend is entirely comprised of net long-term capital gains. No
Mexican withholding tax is applicable to this dividend. A separate notice has
been sent to shareholders with details regarding the stock dividend, which
should be reviewed carefully. Shareholders not desiring to receive this divi-
dend in additional shares of Common Stock must notify the Fund's transfer
agent, American Stock Transfer & Trust Company, not later than January 19,
1998. ALTHOUGH THE FUND HAS ENACTED A DIVIDEND REINVESTMENT PLAN (THE "PLAN"),
DESCRIBED BELOW, THE TERMS OF THE PLAN DO NOT APPLY TO STOCK DIVIDENDS LIKE
THE ONE TO BE PAID IN JANUARY 1998.
DIVIDEND REINVESTMENT PLAN
The Fund's Plan provides a convenient way to increase your holdings in the
Common Stock of the Fund through the reinvestment of net investment income and
capital gain distributions. UNDER THE TERMS OF THE PLAN, FUND SHAREHOLDERS ARE
AUTOMATICALLY ENROLLED AS PARTICIPANTS IN THE PLAN. IF YOU DO NOT WISH TO PAR-
TICIPATE IN THE PLAN, PLEASE CONTACT THE PLAN AGENT. Upon any termination of
participation under the Plan, the Plan Agent will cause a share certificate
for the appropriate number of full shares to be delivered to the participant,
and a cash adjustment for any fractional share. At a shareholder's request,
the Plan Agent will sell the participant's shares and remit any proceeds to
the participant, net of brokerage commissions. Shareholders who do not partic-
ipate in the Plan will receive all distributions in cash. The Plan provides a
convenient way to increase your holdings in the Common Stock through the rein-
vestment of distributions.
Under the terms of the Plan, whenever the Fund declares a distribution, Plan
participants will receive their distribution entirely in shares of Common
Stock purchased either in the open market or from the Fund. If, on the date a
distribution becomes payable or such other date as may be specified by the
Fund's Board of
<PAGE>
- -------------------------------------------------------------------------------
Directors (the "valuation date"), the market price of the Common Stock plus
estimated brokerage commission is equal to or exceeds the NAV per share of
Common Stock, the Plan Agent will invest the distribution in newly issued
shares of Common Stock, which will be priced at NAV. If on the valuation date,
the market price of the Common Stock plus estimated brokerage commission is
lower than the NAV per share, the Plan Agent will buy Common Stock in the open
market. As a participant in the Plan, you will be charged a pro rata portion
of brokerage commissions on all open market purchases.
If your shares are registered in the name of a broker-dealer or any other
nominee, you must contact the broker-dealer or other nominee regarding his or
her status under the Plan, including whether such broker-dealer or nominee
will participate in the Plan on your behalf. Generally, shareholders receiving
Common Stock under the Plan will be treated as having received a distribution
equal to the amount payable to them in cash as a distribution had the share-
holder not participated in the Plan.
If you have any questions concerning the Plan or would like a copy of the
Plan brochure, please contact the Plan Agent:
AMERICAN STOCK TRANSFER & TRUST COMPANY
Attention: Dividend Reinvestment Department
40 Wall Street
New York, NY 10005
(212) 936-5100
DESIGNATION OF DIVIDEND
With regard to the distribution of $11,931,818 paid to shareholders on Octo-
ber 31, 1997, the Fund has designated $996,424 as a capital gain dividend, in
accordance with Section 852(b)(3) of the Internal Revenue Code of 1986, as
amended.
ANNUAL SHAREHOLDER MEETING
The Fund's Annual Meeting of Shareholders will be held on February 27, 1998
at 2:00 p.m. at the law office of Dechert Price & Rhoads, located at 30 Rocke-
feller Plaza, 23rd Floor, New York, NY 10112. Accompanying this 1997 Annual
Report is the notice of the meeting together with the corresponding proxy ma-
terials. We encourage all Fund shareholders who do not plan to attend the
meeting to vote by proxy and in this way help reduce the Fund's expenses of
solicitation.
COMMUNICATIONS WITH SHAREHOLDERS
For the benefit of the Fund's shareholders and the investing public, the Fund
has created a Web Site that contains, among other information, a daily update
of the Fund's NAV per share, market price, discount or premium, and total net
asset level. We invite shareholders and individuals interested in information
about the Fund to consult the Fund's Web Site at the following Internet
address:
WWW.THEMEXICOFUND.COM
The Adviser prepares a Monthly Summary Report with information relating to
the Fund, as well as other indicators of the Mexican economy and the Bolsa.
This report is available, free of charge, on the Fund's Web Site, or by mail,
if requested by writing to the Adviser at:
IMPULSORA DEL FONDO MEXICO, SA DE CV.
77 Aristoteles St., 3rd Floor
11560, Mexico, D.F.
MEXICO
Additionally, the Fund has made arrangements to improve communications with
Fund shareholders and the investing public through a toll free telephone num-
ber and a liaison office. Upon request, this office will be pleased to provide
you with the Fund's current NAV, quarterly reports and other materials avail-
able from the Fund. The office will also be able to direct your inquiries re-
garding other Fund matters to the appropriate firms or individuals. Please re-
fer your information requests to:
GEORGESON & COMPANY INC.
Manor Complex--Suite 1300
564 Forbes Avenue
Pittsburgh, PA 15219
(800) 224-4134
The Fund's Board of Directors and Counselors and Officers extend to all of
you their best wishes for the Holiday Season and for a very prosperous 1998.
Sincerely yours,
/s/ Jose Luis Gomez Pimienta /s/ Juan Gallardo T.
JOSE LUIS GOMEZ PIMIENTA JUAN GALLARDO T.
President Chairman of the Board
December 15, 1997.
<PAGE>
- --------------------------------------------------------------------------------
GERMAN INVESTORS ARE ADVISED THAT BEGINNING JANUARY 1, 1998, THE FUND'S GERMAN
DOMESTIC TAX REPRESENTATIVE WILL BE:
ARTHUR ANDERSEN
Wirtschaftsprufungsgesellschaft
Steuerberatungsgesellschaft mbH
Mergenthalerallec 10-12
65760 Eschborn/Frankfurt/M.
Postfach 53 23
65728 Eschborn/Frankfurt/M.
Germany
Telefon 06196-99-6264
Telefax 06196-99-6419
SHAREHOLDER INFORMATION
Daily NAV and market price for the Fund's shares are available on the
Fund's Web Site at:
WWW.THEMEXICOFUND.COM
Weekly comparative NAV and market price information about the Fund's
shares is published in The Wall Street Journal, The New York Times and
other newspapers in a table called "Closed-End Funds". Daily market price
for the Fund's shares is published in the New York Stock Exchange Composite
Transactions under the designations "MexFd" or "MexicoFd". The Fund's New
York Stock Exchange trading symbol is MXF. The Fund's shares are also
listed and traded on the Third Section ("Freiverkehr") of the Stuttgart
Stock Exchange.
For current NAV information or copies of reports, call (800) 224-4134.
For information about dividends and shareholder accounts, call Shareholder
Services (212) 936-5100.
<PAGE>
THE MEXICO FUND
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of The Mexico Fund, Inc., a Maryland
corporation (the "Fund"), hereby appoints Jose Luis Gomez Pimienta and Sander M.
Bieber and each of them proxies of the undersigned, with full power of
substitution, to vote and act in the name and stead of the undersigned at the
Annual Meeting of Shareholders of the Fund, to be held at 30 Rockefeller Plaza,
23rd Floor, New York, New York 10112, on February 27, 1998 at 2:00 P.M., New
York City time, and at any and all adjournments thereof, according to the number
of votes the undersigned would be entitled to cast if personally present.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
INSTRUCTIONS GIVEN BY THE SHAREHOLDER, BUT IF NO INSTRUCTIONS ARE GIVEN, THIS
PROXY WILL BE VOTED IN FAVOR OF PROPOSALS 1 THROUGH 5 AS SET FORTH IN THIS
PROXY.
The undersigned hereby revokes any and all proxies with respect to such
shares heretofore given by the undersigned. The undersigned acknowledges receipt
of the Proxy Statement dated December 26, 1997.
<PAGE>
PLEASE SIGN, DATE AND RETURN THE PROXY CARD BELOW IN THE WHITE ENVELOPE
-----
WITH RED STRIPE.
Please Detach and Mail in the White Envelope with Red Stripe Provided
A [X] Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS OF THE FUND RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF
THE FOLLOWING PROPOSALS.
1. Election of the nominees listed at right to serve as members of the
Fund's Board of Directors, as Class II Directors, for a term expiring
in 2001 and until their successors are elected and qualified.
FOR WITHHELD NOMINEES:
[_] [_] Claudio X. Gonzalez
Jose Luis Gomez Pimienta
Robert L. Knauses
For, except as marked to the contrary below:
____________________________________________________
FOR AGAINST ABSTAIN
2. Ratification of the selection of Arthur Andersen [_] [_] [_]
LLP as independent public accountants of the
Fund for the fiscal year ending October 31, 1998.
3. Approval of Amended and Restated Articles of [_] [_] [_]
Incorporation.
4. Approval of amendment to the fundamental [_] [_] [_]
policy on making loans.
5. In their discretion of the above named proxies, such other business as may
properly come before the Meeting or any adjournment thereof.
SIGNATURE(S)_________________________________________ DATED____________________
Note: Please sign, date and return promptly. Signature(s) should be exactly as
name or names appear on proxy. If shares are held jointly, each holder should
sign. If signing as attorney, executor, administrator, trustee or guardian,
please give full name.
<PAGE>
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- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of The Mexico Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of The
Mexico Fund, Inc. (a Maryland corporation), including the schedule of
investments, as of October 31, 1997, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights for each
of the six years in the period ended October 31, 1997. These financial
statements and the financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Mexico Fund, Inc. as of October 31, 1997, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the six years in
the period ended October 31, 1997, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
New York, N.Y.
November 19, 1997
<PAGE>
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THE MEXICO FUND, INC.
SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
INDUSTRIES DIV SHARES HELD COMMON STOCK (96.88%) SERIES (NOTE 1) ASSETS
- -------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
CEMENT
INDUSTRY 7,327,000 Apasco, S.A. de C.V. ... * $ 44,517,155 3.81%
(a) 13,331,958 Cemex, S.A. de C.V. .... CPO 52,730,642 4.52
Corporacion Moctezuma,
(a) 4,840,000 S.A. de C.V. .......... B2 5,477,722 0.47
-------------- -----
102,725,519 8.80
- -------------------------------------------------------------------------------------------
Carso Global Telecom,
COMMUNICATIONS 10,036,994 S.A. de C.V. .......... A1 32,763,121 2.81
(a) 1,268,200 Grupo Televisa, S.A. ... CPO 19,792,018 1.70
Telefonos de Mexico,
10,000,000 S.A. de C.V. .......... A 21,658,327 1.85
Telefonos de Mexico,
10,000,000 S.A. de C.V. .......... L 21,753,634 1.86
-------------- -----
95,967,100 8.22
- -------------------------------------------------------------------------------------------
Consorcio ARA, S.A. de
CONSTRUCTION (a) 1,550,000 C.V. .................. * 5,687,396 0.49
Consorcio Hogar, S.A. de
(a) 2,100,000 C.V. .................. B 3,877,770 0.33
Corporacion Geo, S.A. de
(a) 1,900,000 C.V. .................. B 10,231,117 0.88
Empresas ICA, Sociedad
Controladora, S.A. de
10,747,992 C.V. .................. * 24,097,833 2.06
-------------- -----
43,894,116 3.76
- -------------------------------------------------------------------------------------------
Coca-Cola Femsa, S.A. de
CONSUMER GOODS 3,430,000 C.V. .................. L 14,914,820 1.28
Pasteleria Francesa,
(a) 5,000,000 S.A. de C.V. .......... * 1,667,858 0.14
Fomento Economico
Mexicano, S.A. de
8,182,000 C.V. .................. B 57,509,888 4.92
Grupo Azucarero Mexico,
(a) 2,930,000 S.A. de C.V. .......... B 1,877,937 0.16
Grupo BAFAR, S.A. de
(a) 940,000 C.V. .................. B 1,332,618 0.11
Grupo Continental,
7,453,000 S.A. .................. * 20,421,611 1.75
Grupo Industrial Bimbo,
8,103,000 S.A de C.V. ........... A 60,912,473 5.22
Grupo Industrial Maseca,
17,097,000 S.A. de C.V. .......... B 16,498,177 1.41
Grupo Modelo, S.A. de
9,275,000 C.V. .................. C 68,507,267 5.87
Industrias Bachoco, S.A.
(a) 1,383,000 de C.V. ............... UBL 3,855,397 0.33
Jugos del Valle, S.A. de
(a) 818,000 C.V. .................. B 1,184,999 0.10
6,275,000 Sistema Argos, S.A. .... B 9,120,205 0.78
-------------- -----
257,803,250 22.07
- -------------------------------------------------------------------------------------------
FINANCIAL Grupo Financiero Banamex
GROUPS (a) 7,483,000 Accival, S.A. de C.V. . B 14,798,404 1.26
Grupo Financiero Banamex
(a) 500,000 Accival, S.A. de C.V. . L 912,556 0.08
Grupo Financiero
(a) 25,240,000 Bancomer, S.A de C.V. . B 11,877,293 1.02
Grupo Financiero
(a) 600,000 Bancomer, S.A de C.V. . L 236,598 0.02
Grupo Financiero BBV-
Probursa, S.A. de
(a) 10,736,561 C.V. .................. B 3,453,504 0.30
Grupo Financiero
4,077,000 Inbursa, S.A. de C.V. . B 14,328,270 1.23
Grupo Financiero
Inverlat Recovery
(a)(b) -- Trust.................. -- 0.00
Grupo Financiero
Santander Mexicano,
(a) 993,448 S.A. de C.V. .......... B 946,817 0.08
-------------- -----
46,553,442 3.99
- -------------------------------------------------------------------------------------------
HOLDINGS 10,000,001 Alfa, S.A. de C.V. ..... A 72,909,228 6.24
Corporacion
Interamericana de
(a) 1,100,000 Entretenimiento, S.A. . B 6,368,835 0.54
3,895,000 Cydsa, S.A. ............ A 9,883,667 0.85
1,789,190 Desc, S.A. de C.V. ..... A 15,346,876 1.31
6,506,190 Desc, S.A. de C.V. ..... B 55,807,205 4.78
Grupo Carso, S.A. de
8,320,000 C.V. .................. A1 52,631,880 4.51
Grupo Imsa, S.A. de
3,519,000 C.V. .................. UBC 9,306,862 0.80
Sanluis Corporacion,
3,100,000 S.A. de C.V. .......... CPO 23,931,380 2.05
4,496,237 Vitro, S.A. ............ * 17,676,414 1.51
-------------- -----
263,862,347 22.59
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
THE MEXICO FUND, INC.
SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 1997 -- (CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
INDUSTRIES DIV SHARES HELD COMMON STOCK (CONTINUED) SERIES (NOTE 1) ASSETS
- -----------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
IRON & STEEL Altos Hornos de Mexico,
INDUSTRY (a) 5,000,000 S.A. de C.V. .......... * $ 12,806,767 1.10%
Grupo Simec, S.A. de
(a) 4,500,000 C.V. .................. B 1,581,487 0.13
3,837,000 Hylsamex, S.A. de C.V. . BCP 24,684,060 2.11
Industrias CH, S.A. de
(a) 1,640,000 C.V. .................. B 8,401,239 0.72
Tubos de Acero de
(a) 889,000 Mexico, S.A. .......... * 18,163,391 1.56
-------------- ------
65,636,944 5.62
- -----------------------------------------------------------------------------------------
MINING Grupo Mexico, S.A. de
INDUSTRY 7,160,000 C.V. .................. B 27,722,182 2.37
Industrias Penoles, S.A
4,000,000 de C.V. ............... * 15,844,651 1.36
-------------- ------
43,566,833 3.73
- -----------------------------------------------------------------------------------------
Kimberly-Clark de
PAPER 21,000,000 Mexico, S.A. de C.V. .. A 92,065,761 7.88
- -----------------------------------------------------------------------------------------
ACER Computec Latino
RETAIL TRADE (a) 2,120,000 America, S.A. de C.V. . * 6,566,595 0.56
6,718,501 Cifra, S.A. de C.V. .... A 12,310,048 1.05
25,377,382 Cifra, S.A. de C.V. .... B 50,428,250 4.32
16,232,807 Cifra, S.A. de C.V. .... C 28,040,946 2.40
Controladora Comercial
Mexicana, S.A. de
16,300,000 C.V. .................. UBC 16,117,465 1.38
(a) 1,747,000 ECE, S.A. de C.V. ...... * 1,873,124 0.16
Grupo Corvi, S.A. de
(a) 3,000,000 C.V. .................. UBL 1,501,072 0.13
-------------- ------
116,837,500 10.00
- -----------------------------------------------------------------------------------------
Corporacion Mexicana de
Restaurantes, S.A. de
SERVICE (a) 7,822,000 C.V. .................. B 2,534,649 0.22
- -----------------------------------------------------------------------------------------
TOTAL COMMON STOCK
(Identified Cost --
$599,294,242)......... 1,131,447,461 96.88
- -----------------------------------------------------------------------------------------
<CAPTION>
PERCENT
FACE SHORT-TERM SECURITIES VALUE OF NET
SECURITIES VALUE (3.15%) (NOTE 1) ASSETS
- -----------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C> <C>
$36,763,813 Bancomer, S.A., 18.10%,
dated 10/31/97, due
11/03/97, repurchase
price $36,819,265,
REPURCHASE collateralized by
AGREEMENTS Bondes................. $ 36,763,813 3.15%
- -----------------------------------------------------------------------------------------
TOTAL SHORT-TERM
SECURITIES (Identified
Cost -- $36,763,813)... 36,763,813 3.15
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Identified Cost --
$636,058,055)......... 1,168,211,274 100.03
LIABILITIES IN EXCESS OF
OTHER ASSETS........... (318,766) (0.03)
-------------- ------
NET ASSETS (Equivalent
to $23.49 Per Share on
49,715,907 Shares of
Capital Stock
Outstanding)........... $1,167,892,508 100.00%
-------------- ------
</TABLE>
(a) Shares of these securities are currently non-income producing. Equity
investments that have not paid dividends within the last twelve months are
considered to be non-income producing.
(b) See Note 8 to Financial Statements.
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
Investments:
Mexican securities, at value (Note 1):
Common stock (identified cost -- $599,294,242).. $1,131,447,461
Short-term securities (identified cost --
$36,763,813).................................. 36,763,813
--------------
Total investments (identified cost --
$636,058,055)................................ $1,168,211,274
Receivables from securities sold................. 1,120,630
Interest receivable.............................. 18,484
--------------
Total assets................................... 1,169,350,388
--------------
LIABILITIES:
Payables:
Investment adviser (Note 2)..................... 921,754
Trustee (Note 4)................................ 10,576
--------------
Total payables................................. 932,330
Accrued expenses and other liabilities........... 525,550
--------------
Total liabilities.............................. 1,457,880
--------------
NET ASSETS -- Equivalent to $23.49 Per Share on
49,715,907 shares of capital stock outstanding
(Note 6)........................................ $1,167,892,508
==============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME:
Income (Note 1):
Dividends.......................................... $ 20,615,256
Interest and discount earned....................... 9,497,296
------------
Total income....................................... $ 30,112,552
Expenses:
Investment advisory fee (Note 2)................... 7,367,220
Administrative services (Note 3)................... 350,000
Trustee fee (Note 4)............................... 109,671
Value-added taxes (Note 1)......................... 1,192,461
Printing, distribution and mailing of shareholder
reports........................................... 318,938
Legal fees......................................... 143,197
Directors' fees.................................... 140,000
Directors' expenses................................ 24,201
Accounting and audit fees.......................... 96,717
Custodian fees..................................... 45,553
Transfer agent and dividend disbursing fees........ 21,000
Shareholders' information.......................... 43,586
Stock exchange fees................................ 33,183
Miscellaneous...................................... 214,512
------------
Operating expenses................................. 10,100,239
------------
Net investment income (Note 1)..................... 20,012,313
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Realized gain (loss) on investments and foreign
currency transactions (Notes 1 and 5):
Proceeds from sales................................ 80,849,418
Cost of securities sold............................ 29,277,126
------------
Net realized gain on investments................... 51,572,292
Net realized loss from foreign currency
transactions...................................... (1,122,375)
------------
Net realized gain on investments and foreign
currency transactions............................. 50,449,917
Net increase (decrease) in unrealized gain (loss) on
investments and translation of assets and
liabilities in foreign currency:
INVESTMENTS:
End of period (Note 5)............................. 532,153,219
Beginning of period................................ 276,165,119
------------
Net increase in unrealized gain on investments..... 255,988,100
TRANSLATION OF ASSETS AND LIABILITIES IN FOREIGN
CURRENCY:
End of period...................................... (2,763,362)
Beginning of period................................ (2,342,250)
------------
Net increase in unrealized loss on translation of
assets and liabilities in foreign currency........ (421,112)
Net increase in unrealized gain on investments and
translation of assets and liabilities in foreign
currency.......................................... 255,566,988
------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................... $326,029,218
============
</TABLE>
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE
YEAR ENDED FOR THE
OCTOBER 31, YEAR ENDED
1997 OCTOBER 31, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS
Net investment income.................... $ 20,012,313 $ 24,968,180
Net realized gain (loss) on investments
and foreign currency transactions....... 50,449,917 (722,805)
Net increase in unrealized gain on
investments and translation of assets
and liabilities in foreign currency..... 255,566,988 172,950,648
-------------- ------------
Net increase in net assets resulting from
operations.............................. 326,029,218 197,196,023
Dividends to shareholders from net
investment income....................... (18,889,938) (21,342,679)
Dividends to shareholders from net
realized gain on investments............ (996,424) --
-------------- ------------
Total increase in net assets............ 306,142,856 175,853,344
NET ASSETS:
Beginning of period...................... 861,749,652 685,896,308
-------------- ------------
End of period............................ $1,167,892,508 (A) $861,749,652 (A)
============== ============
</TABLE>
See Notes to Financial Statements.
(A) Including accumulated net investment loss of $(7,160,623) as of October 31,
1997 and 1996.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
THE MEXICO FUND, INC. --------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of period.... $ 17.33 $ 13.80 $ 33.48** $ 28.88** $ 24.91** $ 25.60**
---------- -------- -------- ---------- ---------- --------
Net investment income
(Note 1).............. 0.40 0.50 0.59** 0.21** 0.58** 0.50**
Net gain (loss) on
investments and
translation of foreign
currency (Note 1)..... 6.16 3.46 (19.21)** 4.89** 8.77** 3.85**
---------- -------- -------- ---------- ---------- --------
Total from investments
operations............. 6.56 3.96 (18.62)** 5.10** 9.35** 4.35**
---------- -------- -------- ---------- ---------- --------
Less dividends and
distributions:
Dividends to common
shareholders from net
investment income..... (0.38) (0.43) -- (0.27) (0.49) (0.48)
Distributions to common
shareholders from net
capital gains......... (0.02) -- (0.01) (0.23) (2.48) (1.03)
---------- -------- -------- ---------- ---------- --------
Total dividends and
distributions......... (0.40) (0.43) (0.01) (0.50) (2.97) (1.51)
---------- -------- -------- ---------- ---------- --------
Tax return of capital.. -- -- (0.05) -- -- --
---------- -------- -------- ---------- ---------- --------
Capital charge
resulting from
issuance of fund
shares................ -- -- (1.00) -- (2.41) (3.53)
---------- -------- -------- ---------- ---------- --------
Net asset value, end of
period................ $ 23.49 $ 17.33 $ 13.80 $ 33.48 $ 28.88 $ 24.91
========== ======== ======== ========== ========== ========
Market value per share,
end of period......... $ 18.69 $ 14.13 $ 12.25 $ 31.38 $ 27.00 $ 23.25
========== ======== ======== ========== ========== ========
TOTAL INVESTMENT RETURN
BASED ON MARKET VALUE
PER SHARE.............. 35.03% 18.77% (60.79%) 15.39% 27.41% 8.12%
RATIOS TO AVERAGE NET
ASSETS:
Expenses............... 0.91% 1.00% 1.14% 0.92% 1.08% 1.08%
Net investment income.. 1.80% 2.93% 3.24% 0.63% 2.27% 1.89%
SUPPLEMENTAL DATA:
Net assets at end of
period (in 000's)..... $1,167,893 $861,750 $685,896 $1,248,094 $1,075,948 $654,917
Portfolio turnover
rate.................. 7.58% 9.57% 10.61% 3.89% 5.14% 15.59%
Average Commission Rate
Paid.................. $ 0.0034 $ 0.0026
</TABLE>
- --------
*Annualized
**Amounts were computed based on average shares outstanding during the period.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
SELECTED QUARTERLY FINANCIAL DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
-----------------------------------------------------------------------------------
QUARTER ENDED QUARTER ENDED QUARTER ENDED QUARTER ENDED
10/31/1997 07/31/1997 04/30/1997 01/31/1997
--------------------- --------------------- ------------------- -------------------
TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE
---------- --------- ---------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income....... $ 3,322 $ 0.07 $ 14,801 $ 0.30 $ 8,205 $ 0.16 $ 3,785 $ 0.08
Net Investment Income... $ 356 $ 0.00 $ 12,230 $ 0.25 $ 5,913 $ 0.12 $ 1,513 $ 0.03
Net realized gain on
investments............ $ 24,946 $ 0.50 $ 16,622 $ 0.34 $ 2,127 $ 0.04 $ 7,877 $ 0.16
Net realized gain (loss)
from foreign currency
transactions........... $ (1,632) $(0.03) $ (220) $(0.00) $ (276) $(0.01) $ 1,006 $ 0.02
Net increase (decrease)
in unrealized gain on
investments............ $ (193,666) $(3.90) $ 329,266 $ 6.62 $ 9,760 $ 0.20 $110,628 $ 2.23
Net increase (decrease)
in unrealized gain
(loss) on translation
of assets and
liabilities in foreign
currency............... $ (957) $(0.02) $ 1,018 $ 0.02 $ (403) $(0.01) $ (79) $(0.00)
Net asset value......... $1,167,893 $23.49 $1,350,778 $27.17 $997,828 $20.07 $980,706 $19.73
</TABLE>
- --------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
THE MEXICO FUND, INC.
NOTES TO FINANCIAL STATEMENTS--
OCTOBER 31, 1997
- -------------------------------------------------------------------------------
1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 as a diversi-
fied, closed-end management investment company. The investment objective of
the Fund is to seek long term capital appreciation through investment in secu-
rities, primarily equity but also fixed income securities, listed on the Mexi-
can Stock Exchange. On July 17, 1991, the Board of Directors voted to change
the year-end of the Fund from May 31 to October 31.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses for the
period. Actual results could differ from those estimates. The following is a
summary of significant accounting policies followed by the Fund. Certain
amounts in the 1996 financial statements have been reclassified to conform
with the 1997 presentation.
Valuation of investments -- Investments traded on the Mexican Stock Exchange
are valued at the last sale price. Short-term securities are carried at cost,
plus accrued interest, which approximates market value.
Foreign Currency -- The Fund has adopted the provisions of Statement of Posi-
tion 93-4, Foreign Currency Accounting and Financial Statement Presentation
for Investment Companies ("SOP") effective for the period ended October 31,
1995. The Fund has elected not to restate prior periods. The adoption of this
SOP results in the reclassification of net realized gain (loss) from foreign
currency transactions, previously included as a component of net investment
income, to net realized gain (loss) on investments and foreign currency trans-
actions, and the inclusion of unrealized gain (loss) on translation of cur-
rency into unrealized appreciation (depreciation) of investments and transla-
tion of assets and liabilities in foreign currencies.
The market value of Mexican securities, currency holdings and other assets
and liabilities denominated in "Peso (Ps.)" were recorded in the financial
statements after translation into U.S. dollars based on the open market ex-
change rate prevailing in Mexico City at the end of the period. The open mar-
ket exchange rate at October 31, 1997, was Ps. 8.394 to $1.00.
The identified cost of portfolio holdings is translated at approximate rates
prevailing when acquired. Income and expense amounts are translated at approx-
imate rates prevailing when earned or incurred.
Since the net assets of the Fund are determined based on the currency ex-
change rate and market values at the close of each business day, it is not
practicable to isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities during the year. Accordingly,
the net realized and unrealized gain on investments presented in the accompa-
nying financial statements include the effects of both such changes.
Reported net realized foreign exchange gains or losses arise from sales of
short-term securities in exchange of property, payment of services or func-
tional currency denominated assets, currency gains or losses realized between
the trade and settlement dates on securities transactions, the difference be-
tween the amounts of dividends, interest, and foreign withholding taxes re-
corded on the Fund's books, and the U.S. dollar equivalent of the amount actu-
ally received or paid.
Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in common stocks at
fiscal year end, resulting from changes in the exchange rate.
Security transactions and investment income --Security transactions are re-
corded on the date which the transactions are entered into (the trade date).
Dividend income is recorded on the ex-dividend date and interest income is re-
corded as it is earned.
<PAGE>
- -------------------------------------------------------------------------------
Repurchase Agreements -- The repurchase agreements are traded with approved
institutions, and are collateralized by Mexican Government securities. The
Fund takes possession of the collateral and monitors the credit standing of
counterparties with whom it enters repurchase agreements.
Realized gains and losses on investments -- Realized gains and losses on in-
vestments are determined on the identified cost basis.
Taxes -- No provision has been made for U.S. income taxes for the year ended
October 31, 1997, on net investment company taxable income or net long-term
capital gains as defined by the Internal Revenue Code (the "Code"), since the
Fund intends to comply with the requirements of the Code applicable to regu-
lated investment companies and to distribute substantially all of such income
to its shareholders.
The Fund is not subject to Mexican income taxes. The provision for value-
added taxes represents Mexican value-added tax on certain services rendered by
Mexican corporations to the Fund.
Dividends to shareholders -- Cash dividends are recorded by the Fund on the
ex-dividend date. Dividends paid to shareholders are subject to Mexican with-
holding taxes if applicable.
2. INVESTMENT ADVISORY AGREEMENT:
The Fund has a management contract with Impulsora del Fondo Mexico, S.A. de
C.V. (the "Adviser"), a Mexican corporation registered under the U.S. Invest-
ment Advisers Act of 1940. The Adviser furnishes investment research and port-
folio management services consistent with the Fund's stated investment poli-
cies. The Fund pays to the Adviser a monthly fee at the annual rate of 0.85%
on the first $200 million of average daily net assets, 0.70% on the excess
over $200 million up to $400 million and 0.60% on the excess over $400 mil-
lion.
3. ADMINISTRATIVE SERVICES AGREEMENT:
Effective April 1, 1994, the Fund entered into an Administrative Services
Agreement with the Adviser, which provides for certain administrative services
to be performed by the Adviser, including the determination and publication of
the net asset value of the Fund, the maintenance of the Fund's books and rec-
ords in accordance with applicable U.S. and Mexican Laws and the provision of
assistance to the Fund's auditors in the preparation and filing of annual re-
ports and tax returns. The term of this agreement was renewed until August 31,
1998. The annual fee payable to the Adviser under this agreement is $350,000.
4. TRUST AGREEMENT AND TRUSTEE:
At its June 7, 1995 meeting, the Board of Directors approved the appointment
of Bancomer, S.A. ("Bancomer") as the trustee for the Mexican Trust through
which the Fund invests. The Fund also obtained the approval of the Comision
Nacional Bancaria y de Valores and the Mexican Foreign Investment Commission
to permit Bancomer to become the trustee. Under this new arrangement, effec-
tive October 5, 1995, Bancomer receives an amount denominated in Mexican pesos
for three years, subject to a monthly increase linked to the Mexican Consumer
Price Index, payed monthly on a cumulative basis, which amounted to $109,671
in 1997.
5. PURCHASES AND SALES OF INVESTMENTS:
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 1997, were as follows:
<TABLE>
<S> <C>
Purchases
- -------------------------------------------------------------------------------
Common Stock....................................................... $79,281,867
-----------
Total Purchases.................................................. $79,281,867
===========
Proceeds from Investments Sold
- -------------------------------------------------------------------------------
Common Stock....................................................... $80,849,418
-----------
Total Sales...................................................... $80,849,418
===========
</TABLE>
As of October 31, 1997, net unrealized gain on investments for Federal income
tax purposes aggregated to approximately $532 million, of which approximately
$594 million related to appreciated securities and approximately $62 million
related to depreciated securities. The aggregate cost of investments at Octo-
ber 31, 1997, for Federal income tax purposes was approximately $636 million.
<PAGE>
- --------------------------------------------------------------------------------
6. CAPITAL STOCK:
At October 31, 1997, there were 150,000,000 shares of $1.00 par value common
stock authorized, of which 49,967,732 shares were issued, 49,715,907 shares
were outstanding and 251,825 shares were held in treasury.
Starting with the distribution made to shareholders on July 30, 1993, the Fund
offered a Dividend Reinvestment Plan ("Plan"). Under this Plan, the Company
sold, in fiscal year 1995, 4,571 shares of common stock held in treasury which
amounted to $89,706.
The Plan was amended by the Board of Directors at the December 7, 1994, Board
Meeting. The new Plan became effective April 1, 1995. Under the terms of the
amended Plan, Fund shareholders automatically will be enrolled as participants
in the Plan unless they notify the Fund otherwise.
As of October 31, 1997, net assets were comprised of the following:
<TABLE>
<S> <C>
Common Stock................................................. $ 49,715,907
Additional paid-in capital................................... 562,178,531
Accumulated net investment loss.............................. (7,160,623)
Undistributed net realized gain on investments............... 33,768,836(A)
Unrealized appreciation of investments and depreciation on
translation of assets and liabilities in foreign currency... 529,389,857
--------------
$1,167,892,508
==============
</TABLE>
(A) Including $4,143,234 of capital gains, net of income taxes paid in 1991,
which will not be distributed.
Accumulated net realized gains (losses) from foreign currency transactions
have been netted against undistributed net investment income to be consistent
with the tax treatment for distributions from net investment income per the
Code.
7. CAPITAL GAINS:
Net realized gains from security transactions, if any, are distributed annu-
ally to shareholders. Capital loss carryforwards will be used to offset future
capital gains available for distribution.
8. INVESTMENTS:
As a result of significant losses incurred by Grupo Financiero Inverlat, S.A.
de C.V. ("Inverlat"), certain significant shareholders, together with the fi-
nancial authorities, developed a recapitalization program. On July 23, 1996,
after the absorption of accumulated losses through the total reduction of capi-
tal stock, shareholders of Inverlat approved a cash contribution by FOBAPROA
(Banking Fund for Savings Protection) to cover such losses. As a consequence,
all shares outstanding prior to July 23, 1996, were cancelled. The Fund has re-
ceived an interest in a Recovery Trust set up to manage the recovery assets of
Inverlat. Through the trust agreement the Fund may receive shares equal to 9%
and up to 36% of their ownership interest. Management has assigned the market
value of the Fund's holdings in the Recovery Trust at $0 as of October 31,
1997, due to the uncertainty regarding its ultimate realization.
<PAGE>
- --------------------------------------------------------------------------------
THE MEXICO FUND, INC.
- --------------------------------------------------------------------------------
DIRECTORS:
Juan Gallardo T. -- Chairman
Philip Caldwell
Jose Luis Gomez Pimienta
Claudio X. Gonzalez
Robert L. Knauss
Agustin Santamarina V.
Jaime Serra-Puche
OFFICERS:
Jose Luis Gomez Pimienta -- President
Samuel Garcia-Cuellar -- Secretary
Allan S. Mostoff -- Assistant Secretary
Sander M. Bieber -- Assistant Secretary
Carlos H. Woodworth -- Treasurer
INVESTMENT ADVISER--
Impulsora del Fondo Mexico, S.A. de C.V.
CUSTODIAN AND TRUSTEE--
Bancomer, S.A.
TRANSFER AGENT AND REGISTRAR--
American Stock Transfer & Trust Company
COUNSEL--
Dechert Price & Rhoads
Creel, Garcia-Cuellar y Muggenburg, S.C.
AUDITORS--
Arthur Andersen LLP
This report, including the financial statements herein, is transmitted to
shareholders of The Mexico Fund, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report.
- --------------------------------------------------------------------------------
---------------------------------
------------------------------
----------------------------
[LOGO OF THE MEXICO FUND, INC. APPEARS HERE]
THE MEXICO
FUND, INC.
----------------------
Annual Report
October 31, 1997
----------------------------
------------------------------
WWW.THEMEXICOFUND.COM
---------------------------------
- --------------------------------------------------------------------------------
