<PAGE>
Dear Shareholder:
A few days ago the Hong Kong stock market came down with pneumonia, then most of
the world caught the Asian flu. We, on the other hand, appear to have
contracted only the 24 hour variety.
U.S. money is a world commodity because the U.S. dollar, aided by computers, can
give us the value of every country's currency in seconds. Switzerland has
finally joined the rest of the world and will not use gold as a currency
reserve. Thus, the U.S. dollar has become the world's currency. In mere
seconds, a currency can be converted from one country's stocks and bonds into
cash and then moved to another nation's stocks, bonds, real estate, or cash
equivalents. All of this can be done in a moment with modern electronics and
computers and has resulted in our living in a truly international world.
Because of the problems facing Malaysia, Thailand, and other Southeast Asia
nations, most economists have reduced their estimates for next year's growth in
those countries, but they would still be growing faster than the United States
or Europe. More important is the fact that all Southeast Asia is only two or
three percent of our gross domestic product. Our economy will not be damaged.
Our economy is in very good shape (even Mr. Greenspan said so) and I see no
recession for at least the next two years. Globalization and technology will
drive us for a long time. I believe the stock market had another correction,
which could continue for a while before we start up again. Stocks continue to
be the best long-term investment.
The events of the past several days again spotlight the folly inherent in market
timing and other short-term judgments. We have always said that a successful
investor is a patient, long-term investor and our Funds are designed with that
philosophy in mind.
Warmest regards,
L. Roy Papp, Chairman
October 29, 1997
<PAGE>
PAPP AMERICA-PACIFIC RIM FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
Common Stocks of Shares Value
- ------------------------------------------------------------------------- ---------- ---------
<S> <C> <C>
Computers and Software (13.4%)
American Power Conversion *
(Leading producer of uninterruptible power supply products designed
for use with PCs, workstations, and other electronic devices) 20,000 $ 562,500
Hewlett-Packard Company
(Manufacturer of printers, computers, and medical
electronic equipment) 8,050 559,978
Intel Corporation
(Manufacturer of microprocessors, microcontrollers,
and memory chips) 6,500 600,031
----------
1,722,509
----------
Financial Services (13.3%)
American International Group
(Major international insurance holding company) 5,300 546,894
Pacific Century Financial Corp.
(Provider of financial services in the U.S. and Pacific Island Nations) 9,500 512,406
State Street Corporation
(Provider of U.S. and global securities custodial services) 10,500 639,844
----------
1,699,144
----------
Telecommunications (11.9%)
L. M. Ericsson Telephone
(Manufacturer of telecom systems and cellular handsets) 11,500 551,281
Hong Kong Telecommunications Ltd.
(International telecommunications services) 21,000 469,875
Motorola, Inc.
(Manufacturer of electronic equipment) 7,000 503,125
----------
1,524,281
----------
Industrial Services (10.7%)
Air Express International
(Air freight forwarding) 18,000 657,000
Interpublic Group of Companies, Inc.
(Worldwide advertising agencies) 14,000 718,375
----------
1,375,375
----------
Industrial Components (7.9%)
Millipore Corporation
(Leading supplier of purification products) 11,000 540,375
Minnesota Mining and Manufacturing Co.
(Diversified manufacturer) 5,100 471,750
----------
1,012,125
----------
Medical Devices (7.6%)
Medtronic, Inc.
(Manufacturer of implantable biomedical devices) 10,400 488,800
Stryker Corp.
(Developer and manufacturer of surgical and medical devices) 11,000 480,563
----------
969,363
----------
</TABLE>
*Non-income producing security.
<PAGE>
PAPP AMERICA-PACIFIC RIM FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number Market
Common Stocks (continued) of Shares Value
- ---------------------------------------------------------------- --------- -----------
<S> <C> <C>
Pharmaceutical (6.3%)
Eli Lilly and Co.
(Healthcare products) 4,000 $ 481,750
Warner-Lambert Company
(Pharmaceutical and consumer products) 2,400 323,850
-----------
805,600
-----------
Consumer Products (5.4%)
Colgate-Palmolive Company
(Household and personal care products) 5,600 390,250
Unilever Group
(Producer and marketer of branded and packaged consumer goods) 1,400 297,675
-----------
687,925
-----------
Industrial Services (4.9%)
G & K Services, Inc. Class A
(Uniform rental service) 18,000 625,500
-----------
Direct Marketing (3.4%)
Amway Asia Pacific, Ltd.
(Direct marketing of household and personal items in Asia) 15,000 439,688
-----------
Restaurants (3.3%)
McDonald's Corporation
(Fast food restaurants and franchising) 9,000 428,625
-----------
Electrical Equipment (3.1%)
General Electric Co.
(Diversified industrial company) 5,800 394,762
-----------
Miscellaneous (8.4%)
Callaway Golf Company
(Manufacturer of golf clubs) 17,000 592,875
Mattel, Inc.
(Toy manufacturer) 14,500 480,312
-----------
1,073,187
-----------
Total Common Stocks - 99.6% 12,758,084
Cash and Other Assets, Less Liabilities - 0.4% 49,058
-----------
Net Assets - 100.0% $12,807,142
===========
Net Asset Value Per Share
(Based on 983,716 shares outstanding at September 30, 1997) $ 13.02
===========
</TABLE>
<PAGE>
PAPP AMERICA-PACIFIC RIM FUND, INC.
Directors
James K. Ballinger Harry A. Papp
Amy S. Clague L. Roy Papp
Robert L. Mueller Rosellen C. Papp
Carolyn P. O'Malley Bruce C. Williams
Officers
Chairman - L. Roy Papp President - Harry A. Papp
Vice Presidents
Victoria S. Cavallero Robert L. Mueller
George D. Clark, Jr. Rosellen C. Papp
Jeffrey N. Edwards Bruce C. Williams
Robert L. Hawley
Secretary - Robert L. Mueller
Assistant Secretary - Barbara D. Perleberg
Treasurer - Rosellen C. Papp
Assistant Treasurer - Julie A. Hein
Investment Adviser
L. Roy Papp & Associates
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
Telephone: (602) 956-1115
E-mail: invest@roypapp
Web: http://www.roypapp.com
Custodian
Founders Bank of Arizona
7335 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
Shareholder Services and Transfer Agent
L. Roy Papp & Associates
4400 North 32nd Street, Suite 280
Phoenix, Arizona 85018
Telephone: (602) 956-1115
(800) 421-4004
Independent Public Accountants
Arthur Andersen LLP
2 North Central Avenue, Suite 1000
Phoenix, Arizona 85004
Legal Counsel
Bell, Boyd & Lloyd
70 West Madison Street
Chicago, Illinois 60602
This report is submitted for the general information of the shareholders of the
Fund. The report is not authorized for distribution to prospective investors in
the Fund unless it is accompanied or preceded by a currently effective
prospectus of the Fund. No sales charge to the shareholder or to the new
investor is made in offering the shares of the Fund.
