UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-17f-2 OMB APPROVAL
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Certificate of Accounting of Securities and Similar OMB Number: 3235-0360
Investments in the Custody of Expires: June 30, 1997
Management Investment Companies Extimated average burden
hours per response: 0.05
Pursuant to Rule 17f-2 [17 CFR 270.17f-2] -------------------------
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1. Investment Company Act File Number: Date examination completed:
811-5103 December 17, 2003
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2. State Identification Number
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in registration statement:
Frankin Capital Corporation
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4. Address of principal executive office (number, street, city, state, zip
code):
450 Park Avenue, 20th Floor, New York, New York 10022
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INSTRUCTIONS
This Form must be completed by investment companies that have custody of
securities of similar investments.
INVESTMENT COMPANY
1. All items must be completed by the investment company.
2. Give this Form to the independent public accountant who, in compliance with
Rule 17f-2 under the Act and applicable state law, examines securities and
similar investments in the custody of the investment company.
ACCOUNTANT
3. Submit this Form to the Securities and Exchange Commission and appropriate
state securities administrators when filing the certificate of accounting
required by Rule 17f-2 under the Act and applicable state law. File the
original and one copy with the Securities and Exchange Commission's
principal office in Washington, D.C., one copy with the regional office for
the region in which the investment company's principal business operations
are conducted, and one copy with the appropriate state administrator(s), if
applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
SEC 2198 (8-95)
[ERNST & YOUNG LOGO] o Ernst & Young LLP o Phone; (212) 773-3000
5 Times Square www.ey.com
New York, New York 10036-6530
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
of Franklin Capital Corporation
We have examined management's assertion, about Franklin Capital Corporation's
(the "Company") compliance with the requirements of subsections (b) and (c) of
Rule 17f-2 of the Investment Company Act of 1940 ("the Act") as of December 17,
2003, with respect to securities and similar investments reflected in the
investment account of the Company, included in the accompanying Management
Statement Regarding Compliance with Certain Provisions of the Investment
Company Act of 1940. Management is responsible for the Company's compliance
with those requirements. Our responsibility is to express an opinion on
management's assertion about the company's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and accordingly, included
examining, on a test basis, evidence about the Company's compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. Included among our procedures were the following tests
performed as of December 17, 2003, and with respect to agreement of security and
similar investments purchases and sales, for the period from November 26, 2003
(the date of the last examination) through December 17, 2003;
Count and inspection of all securities and similar investments located in the
vault of The Bank of New York in New York, with prior notice to management;
Confirmations of all securities and similar investments held by institutions in
book entry form) (i.e., First New York Securities and Credit Suisse First
Boston);
Reconciliation of confirmation results as to all such securities and similar
investments to the books and records of the company and The Bank of New York;
Confirmation of all repurchase agreements, if any, with brokers/banks any
agreement of underlying collateral with The Bank of New York's records;
Agreement of investment purchases and sales or maturities since our last
examination from the books and records of the Company to broker confirmations.
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Company's compliance
with the requirements of the Act. In our opinion, management's assertion that
Franklin Capital Corporation maintained effective internal control, including
the appropriate segregation of responsibilities and duties, over the transfer
agent and registrar functions, and that no material inadequacies existed as
defined by the requirements of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940, as of December 17, 2003, is fairly stated, in
all material respects, based on the criteria established by the requirements of
subsections (b) and (c) of Rule 17f-2 of the Investment Company Act of 1940.
A Member Practice of Ernst & Young Global
[ERNST & YOUNG LOGO] o Ernst & Young LLP
This report is intended solely for the information and use of management and the
Board of Directors of Franklin Capital Corporation and the Securities and
Exchange Commission and is not intended to be and should not be used by anyone
other than these specified parties.
/s/ Ernst & Young LLP