O01LakeForestBlvd.,Suite404~NewOrleans,LA70127~Te1:C504)24-940~Fax:C504)

Transcription

1 9~o O01LakeForestBlvd.,Suite404~NewOrleans,LA70127~Te1:C504)24-940~Fax:C504)

2 FRENCIMARKETCORPORATION TABLEOFCONTENTS 1NDEPENDENTAUDITOR'SREPORT BALANCESHETS STATEMENTSOFREVENUE,EXPENSESANDCHANGESIN STATEMENTSOFCASHFLOWS RETAINEDEARNINGS NOTESTOTHEFINANCIALSTATEMENTS SUPLEMENTARYINFORMATION: SCHEDULEOFRENTALINCOME SCHEDULEOFOTHERINCOME SCHEDULEOFOPERATINGEXPENSES SCHEDULEOFACOUNTSRECEIVABLE-TRADE SCHEDULEOFACOUNTSRECEIVABLE-OTHER SCHEDULEOFACOUNTSRECEIVABLE-TENANTADVERTISING SCHEDULEOFCASHRECEIPTSANDISBURSEMENTS RESTRICTEDASETS 23 INDEPENDENTAUDITOR'SREPORTONINTERNALCONTROL STRUCTUREBASEDONANAUDITOFINANCIALSTATEMENTS PERFORMEDINACORDANCEWITHGOVERNMENT AUDITINGSTANDARDS INDEPENDENTAUDITOR'SREPORTONCOMPLIANCEBASEDONAN AUDITOFINANCIALSTATEMENTSPERFORMED1N ACORDANCEWITHGOVERNMENTAUDITINGSTANDARDS

3 LUTHERC.SPEIGHT&COMPANY ACorporationofCertifiedPublicAcountants INDEPENDENTAUDITOR'SREPORT ToTheBoardofDirectorsof TheFrenchMarketCorporation,lnc WehaveauditedtheacompanyingbalanceshetsoftheFrenchMarketCorporation,Inc.(the Market),anenterprisefundoftheCityofNewOrleans,asofDecember31,195and194,and therelatedstatementsofrevenue,expensesandchangesinretainedearningsanditscashflowsfor theyearsthenended.thesefinancialstatementsaretheresponsibilityof"themarket's management.ouresponsibilityistoexpresanopiniononthesefinancialstatementsbasedon ouraudits. Weconductedourauditsinacordancewithgeneralyaceptedauditingstandardsand GovernmentAuditingStandards,isuedbytheComptrolerGeneraloftheUnitedSlates.Those standardsrequirethatweplanandperformtheauditoobtainreasonableasuranceabout whetherthefinancialstatementsarefreofmaterialmistatement.anauditincludesasesingthe acountingprinciplesusedandsignificantestimatesmadebymanagement,aswelasevaluating theoveralfinancialstatementpresentation.webelievethatourauditsprovideuswitha reasonablebasisforouropinion. AsdiscusedinNOTEI,thefinancialstatementspresentonlytheactivitiesoftheFrenchMarket Corporationandarenotintendedtopresentfairlythefinancialposition,resultsofoperationsand cashflowsofthecityofneworleansinconformitywithgeneralyaceptedacounting principles. Inouropinion,thefinancialstatementsreferedtoabovepresentfairly,inalmaterialrespects, thefinancialpositionofthefrenchmarketcorporation,inc.,asofdecember31,195and194, andtheresultsofitsoperationsandchangesinitscashflowsforthe),earsthenendedin conformitywithgeneralyaceptedacountingprinciples. Ourauditswereperformedforthepurposeoforminganopiniononthebasicfinancialstatements takenasawhole.theacompanyingsuplementaryinformationonpages15through23is presentedforpurposesofaditionalanalysesandisnotarequiredpartofthebasicfinancial statements.suchinformationhasbensubjectedtotheauditingproceduresapliedintheaudits ofthebasicfinancialstatementsand,inouropinion,isfairlystatedinalmaterialrespectsin relationtothebasicfinancialstatementstakenasawhole. March21, LakeForestBlvd.,Suite404~NewOrleans,LA70127~Tel:(504)24-940~Fax:(504)

4 FRENCHMARKETCORPORATION,INC BALANCESHETS ASOFDECEMBER31,195AND194 ASETS CurentAsets: Cash(Note2) Investments(Note3) Receivables: Trade(Net) Other TenantAdvertising PrepaidExpenses TotalCurentAsets RestrictedBondFundInvestments(Note3 BondRevenue DebtService OperationAndMaintenance DebtServiceReserve MaintenanceReserve BondRedemption CapitalImprovements TotalRestrictedAsets Property,Plant,AndEquipment,NetOf AcumulatedDepreciation(Note4) OtherAsets: UtilityDeposits Inventory AdvancesToTheCapitalImprovement Fund(Note8) Other TOTAL TotalOtherAsets SeAecompanyingNotestotheFinancialStatements ,061 17,872 9,634 89,509 12, , ,96 13,480 17,062 41,24 646,018 1,513, ,585 1,427, ,0 50, ,479 31, ,0 50,197 9, ,234 2,464, ,792 7,292,856 5, , ,743 4,176 9, , ,292 10,42,789$

5 FRENCHMARKETCORPORATION,INC BALANCESHETS(CONTINUED) ASOFDECEMBER31,195AND194 LIABILITIESANDFUNDEQUITY LIABILITIES CurentLiabilities: AcountsPayable AcruedExpenses OtherLiabilities RentalDeposits DueToCityAgencies-Net(Note7 DeferedRevenues AcruedInterestPayable CurentPortionOfRevenueBonds Payable(Note5) TotalCurentLiabilities Long-TermDebt: RevenueBondsPayable(Note5 TotalLiabilities FUNDEQUITY: ContributedCapita RetainedEarnings: ReservePerBondIndenture AditionalReserveForBond Indenture(Note9) TOTAL TotalReservePerBondIndenture Unreserved TotalFundEquity SeAcompanyingNotestotheFinancialStatements ,12 165,471 1,827 59, ,454 8,397 4,60 329,89 165,321 7,61 38,74 315,318 3,964 5, ,0 15, ,0 1,780,48 2,897,720 2,464, ,021, , ,285,14 642, ,208 2,464, ,280,49 3,69,246 8,642, $10,42,789$7.970,62

6 FRENCHMARKETCORPORATION,INC. STATEMENTSOFREVENUE,EXPENSES,AND CHANGESINRETAINEDEARNINGS FORTHEYEARENDEDECEMBER31,195AND194 OperatingRevenues RentalIncome OtherIncome Tota$OperatingRevenues OperatingExpenses: GeneralAndAdministrative ShopingCenter Farmers'/FleaMarket ParkingLots TenantAdvertising Visitor'sCenter Depreciation BadDebtExpense TotalOperatingExpenses OperatingIncome NonoperatingRevenue/(Expenses InterestIncome InterestExpense TotalNonoperating[ncome(Expenses NetIncome,BeforeExtraordinaryItem ExtraordinaryRein(LosFromSetlement OfPendingLawsuit)(Note10] NetIncome ncreaseinreserved RetainedEarningsPerBondIndenture NetChangeInUnreservedRetainedEarnings RetainedEarnings-Unreserved BeginingOfYear RetainedEarnings-Unreserved EndO1Year SeAcompanyingNotestotheFinancialStatements 195 4,87, , ,602 1,025, , ,2 60, , , $4,403, ,02 5,030,064 1,1, , , , , , ,690 68,453 2,763 1,0, ,823 0 (13,0 1, ,823 1,389,172) (392,232 38,797) 90,591 3, ,578,65 3,280,49$3,69,246

7 FRENCHMARKETCORPORATION STATEMENTSOFCASHFLOWS FORTHEYEARENDEDECEMBER31,195AND194 CASHFLOWSFROMOPERATINGACTIVITIES OperatingIncome Reconciliationo1NetCashFlowFrom OperatingActivities: ExtraordinaryLos Depreciation ChangesInAsetsandLiabilities: NetReceivables NotesReceivable PrepaidExpenses UtilityDeposits Inventory OtberAsets AcountsPayable AcruedExpenses ContingentLiabilities OtherLiabilities RetaiagePayable RentalDeposits DeferedRevenues DueToOtherAgencies AcruedInterestPayable NetCashProvidedFromOperatingActivities CASHFLOWSFROMINVESTINGACTIVITIES PaymentsForCapitalAquisitions InterestOnInvestments PurchaseOfInvestments SaleOfInvestments NetCash(Used}ProvidedInInvestingActivities CASHFLOWSFROMFINANCINGACTIVITIES BondPrincipalRepayments InterestPaid AdvancesToOtherFunds NetCashUsedInFinancingActivities Net(Oecrease~IncreaseInCash Cash,BeginingofYear Cash,EndofYear SeAcompanyingNotestotheFinancialStatements $959,858$638, , ,834 (5,30 1, , (47 4,263 20,843 4,43 170,136 ( ,247 2,59,03 9,724 4,591,231 3,213,031 (1,121, ,0 ( (802,943 13,0 435,695 (613] 2,596 1,8350 1,013 (4,565 59,676 (1,823 10,0 (34,7150 (2,72 (2,72 81,326( ,817 (840,513 45,690 4,18,147 3,275, ,0 (69, , , ,805) 315, ,86 324,713 $230,061$639,86

8 FRENCItMARKETCORPORATION,INC NOTESTOTIlEFINANCIALSTATEMENTS FORTili,]YEARENDEDECEMBER31,195 SUMARYOFSIGNIFICANTACOUNTINGPOLICIES General-TheFrenchMarketCorporation,Inc.(theMarket)wasformedJanuary1, ofthel,'renchmarketpropertiesownedbythecityofneworleans.theseproperties includefivebuildingsandthefarmersmarket.themarketisanon-profitcorporation 1972,bytheCityofNewOrleans,(CNO)toprovidefortheoperationandmaintenance thatisownedbythecityofneworleansandadministeredbyaboardofl)irectors consistingoftwelvemembersapointedbythemayorofneworleans. BasisofAcounting-TheMarketfalsunderthenterprisefundacountingmethodas describedbygovernmentalacounting,auditingandfinancialreporting(gafr) principleswhichutilizestheacrualbasisofacountingforfinancialstatementpurposes ThefinancialslatementsoftheMarketarenotintended1oandonolpresenteithertile financialposition,oresultsofoperationsof/hecityofneworleans. Restrictedhtvestments-Pursuantotheoficialbondindenture,certainspecialacounts werestablishedtosegregatethereceipt,invcstrneniandisbursementofundslegaly restrictedforthespecificpurposeofeachspecialacount. BondRevenuel~_t_t AlfundscolectedbytheMarketaredepositedintheRevenueFund.The fundsoudep6sitintherevenuefundaretransferedtotheotherspecial ~1)eblServiceAc~ acountsasrequiredbythebondindenture. Fundsheldfortirecreditofthisfundareusedforthepaymentofbond principalandinterestonthepaymentdatesestablishedbytheindenture ~OPerationandMainlenanceAcecmn agrement. FundsheldforthecreditoftireOperationandMaintenanceFundareused topaytheoperatingexpensesofthemarket.

9 Property,plantandequipmentisdepreciatedonastraight-linebasisoverthefolowing estimatedusefulivesoftheasets: Buildingandlmprovenaents Furniture,Fixtures,andEquipment Vehicles 10-50years 5-10years 5years AcountsReceivable-1isthepracticeofmanagementowovidcanalowanceforany acountwhichinmanagement'sopinionmaynotbecolectablebaseduponareviewof thecurentstatusofexistingreceivables. VacationandSickLeave-Alful-timeclasifiedemployesoftheMarkethiredpriorto January1,1979,arepermitedtoacrueamaxinmof90daysofvacation(anual leavc)andanunlimitednumberofdaysofsickleave(acumulatedatamaximumof24 daysperyear).employeshiredafterdecember31,1978,canacrueamaximumof45 daysofanualeavcmadanunlimitednumberofdaysofsickleavẹuponterminationof employment,anemployeispaidforacruedanualeavebaseduponcurenthourlyrate ofpayandforacruedsickleaveusingtheformulasdescribed.ifterminationisthe resultofretirement,themployechastheoptionofconvertingacruedsickleaveto aditionalyearsofservice. hwometaxes-themarketisownedbythecityofneworleansand,asuch,no federalorstateincometaxesareasesed. Reclasifications-Certainanmuntshavebenreclasifiedforcomparativepurposes Suchreclasificationshadnoefectonetincomeforthercspectiveyearṣ CASlt Asofl)ecember31,195,/lieMarkethadthefolowingcashacountsandrelatedFI)IC insuranceorothertypesofcolateraltosecurethemarket'sacounts. 1NSTI'I'UTION AND ACOAL~ FNBC $ CASIONHAND BOK BALANCE 141,049$ 87,612 1,40 BANK BALANCE 12, ,893 AMOUNTOF DEPOSITORY INSURANCE OR ~I.I,ATI'LRAI. 12, ,893 $ 230,061$376,971$ 376,971

10 FundsheldtbrthecreditoftheDebtServiceReserveFudshalbc transfen'edbythetrustetothedebtservicefundinsuchalnountasmay benecesarytopaytheprincipalandinterestonthebondsasthesame respectivelybecomedueandpayablewheneverlhefundsheldforthe creditofthedebtservicefundareinsuficient. ~MaintenanceReserveAceou FundsheldforlhecreditoftheMaimenaneReserveFundshalbeheldas areserveforthepurposeofpayingthecostofemergencyormaiorepairs, renewalsandreplacementswithrespectothemarket.suchcostsare necesaryforthesafeoreficientoperationofthemarketo1"toprevent losofrevenue. FundsheldforthecreditoftheBondRedemptionFundshalbcusedfor theredemptionofbonds. FundsheldforthecreditoftheCapitalhnprovemenlFundshalbeusedto paythecostofcapitalimprovementprojectsn'~adetotilemarket's properties. htvesouents-alinvestments,restrictedandunrestricted,arestatedatcost,w,hich aproximatesmarket. TenantAdvertising-Theleaseagrementwithmostenantsprovidesthatasumequalto 2%ofgrosaleshalbcpaidbythetenantstotheMarketforthepurposeofproviding ProperO,PlantandEquipment-Property,plantandequipmentarerecordedatcost. advertising,publicityandgeneralbusinespromotionofilemarket. Maintenanceandrepairsarechargedtoperationsasincured,whereasignificant renewalsaudbetermentsarecapitalized.deductionsaremadefromproperty,plantand equiplncntforetirements.

11 INVESTMENTS TheinvestmentsoftheMarketatI)ecember31,195,consistofthefolowing Qieneral;undIlve~stnlents RestrictedBondFundhavestments 2,464,172 17,872 2,642,04 TheMarket'sinvestmentsarecategorizedbelow1ogiveanindicationofthelevelofrisk asumedbythemarketatyearend.category1includesinvestmentsthatareinsuredor registeredorforwhichthesecuritiesareheldbythemarketoritsagentinthemarket's name.category2includesuninsuredandunregisteredinvestmentsforwhichthe securitiesareheldbythefinancialinstitution'strustdepartmentoragentinthemarket's name.category3includesuninsuredandunregistercdinvestmentsforwhichthe securitiesareheldbythefinancialinstitutionorbyitstrustdeparhnenl,oragent,butnot inthemarket'snamẹ CARYING VALUI" MARKI'71 VALUI; GovelnlrlCIl[ Shorl-ten Securities $~642,04$0$ 0$.2~_642,04$2~642,04

12 4.Pi,~OPEI/TY,PLANT,ANDEQUIPMENT Property,plant,andequipmentconsistofthefolowing DECEMBER31, Buildingandhnprovcments MarketandStalEquipment ParkingLol 8,976,904 Oficel'quipment 323,541 FurnitureandFixtures 578,724 6,67,978 Vehicles 132, ,127 VisitorsCenterEquipment 60,261 UrsulineFlodwalGate 62, ,964 50,02 ConstructioninProgres 472,398 54,517 62,50 6O,894 40, ,398 54,517 5,898 AcumulaledDepreciation NetProperty,Plant,and (3,409,170) 0,702,02 (2,910,765) 8,132,298 Equipment 7,292,852 $5,21,53 Depreciationchargedtoexpensewas$521,815and$435,695for195and194 respectively. I/EVENUEBONDSPAYABLE RevenueBondPayableconsistsofthefolowingatDecember3 _Curen!Lo~_ng-Term.Qu~rentLong-Terna %Firstlcascholdmortgage revenuebonds,datedjtme1, 1973,dueinanual principalinstalhnents rangingfrom$90,0lo JuneI,20 $205,0beginingJune1, 197,finalpaymentdue $175,0$735,0$15,0$

13 Mitlinmfuturerentalsdonotincludetheserviceofanyoptionsflintmaybeavai lhcvarioustenants. 7.DUETOTHERAGENCIES ThisacountconsistsofthefolowingasofDecember31 I)UEFROMOTItERAGENCIES Care'ComisionforSickand AnualLeaveExpcndilures ReimbursementfromtheVieux ReimbursementfromtheUper Ponlalbaforsalariesexpenditures 37,48$ 36,404 TolalDueFromOtherAgencies 4,60 5,054 DUI,;3"0THI~RAGENCIES 82,08 41,458 ~ReimbursementoIheCityofNew Orleans(CNO)forfundsused tomethemarket'spayrol ~Rentpaymentasrequiredintheleaseand obligations franchiseagrement,withthecno (246,837)(19,62) TotalDueToOtherAgencics (320,705)(237,14) NI';TDUETOTtJERAGENCIES (567,542)(356,76) (485,454)$(315,318) 12

14 8.ADVANCETOTIlECAPITALIMPROVEMENTSFUND TheMarketadvancedfundstotheCityofNewOrleans'(CNO)Capitalhnprovemcnt FundforenovationtoBuildingD,abuildingleasedtotheMarketfromtheCNO.The aforementionedadvancewastoserveasamatchingcontributiontotheamountpledged bythecnofortherenovationproject.atdecember31,195,therenovationproject wascompletedatatotalcostofaproximately$2,30,0ofwhich,thecityofnew Orleanscontributedaproximately$1,60,0.Theremainingportionwaspaidbythe Market. 9.DEBTCOVENANTS TheMarket'sBondIndentureAgrementcontainscovenantsregardingthemaintenance ofspecifiedamountsinvariousfunds.section5.03(c)oftheindentureofmortgage andpledge,suplement1,requiresthatanamountequaltone-fourthoftheamount alocatedforoperatingexpensesremainintheoperationandmaintenancel:und.asof December31,195,theMarketwasincompliancewithalaplicabledebtcovenants. ltowever,atdecember31,194,themarketwasnotincompliance.therefore,an adjushnentof$432,208wasrecordedin194toilustratethefectofthisnoncompliance. 10.LOSFROMSETLEMENTOFPENDINGLAWSUIT OnSeptember9,1987anindividualfiledsuitagainstheMarke!andothersclaiming damagesforpersonalinjuriesthatalegedlyweresustainedonseptember20,1986 whilealhcfleamarket.theaforementionedcasewasetledwithlheplaintifon December1,194,for$23,0.AsofDecember31,194,theliabilityforthis setlementwasacruedandthexpensewasreducedbythe$10,0contingent 1,iabilityestablishedinprioryearsforthesetlementofthiscase;thereforc,only $13,0wasrecognizedasanexpenseduringfiscalyear194. SubscquentoDcember31,194,theMarketpaidthe$23,0totheplaintif; however,themarketcontendsthathecityofneworleanshouldreimbursethemfi)r thepaymentsrelatedtothiscasesincethecnowasthedirectinsureroftheplaintif's alegedinjuries.themarketisatemptingtoresolvethismaterwiththecityofnew Orleans;however,thereisomeuncertaintytothecolectabilityofthisreceivablc.Due tothisuncertainty,noreceivablewasrecordedbythemarketat1)ecmber31,194,or

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19 FRENCHMARKETCORPORATION,INC. SCHEDULEOFOTHERINCOME FORTHEYEARENDEDECEMBER31,195AND194 COMONAREASESMENTS DE~,~CRIPTI~. TENANTADVERTISINGCHARGES KIOSK VISITORSCENTERSALES MISCELANEOUS TOTALOTHERINCOME , ,294 34,50 38,890 83,894 61,89 1~q94 246, ,O27 30,0 15,21 4,54 627,02 SETHEACOMPANYINGINDEPENDENTAUDITOR'SREPORTONSUPLEMENTARYINCOME 18

20 FRENCHMARKETCORPORATION,INC. SCHEDULEOFOPERATINGEXPENSES FORTHEYEARENDEDECEMBER31,195AND194 _DESCRIPTION GENERALANDADMINISTRATIVE PERSONALSERVICES CONTRACTUALSERVICES SUPLIESANDMATERIALS TOTALGENERALANDADMINISTRATIVE SHOPINGCENTER: PERSONALSERVICES CONTRACTUALSERVICES SUPLIESANDMATERIALS TOTALSHOPINGCENTER FARMERS/FLEAMARKET: PERSONALSERVICES CONTRACTUALSERVICES SUPLIESANDMATERIALS TOTALFARMERS/FLEAMARKET MONWALK/ELYSIANFIELDPARKINGLOTS CONTRACTUALSERVICES TOTALPARKINGLOTS TENANTADVERTISING: PERSONALSERVICES CONTRACTUALSERVICES TOTALTENANTADVERTISING VISITORSCENTER: CONTRACTUALSERVICES SUPLIESANDMATERIALS TOTALVISITORSCENTER DEPRECIATION BADEBTEXPENSE TOTALOPERATINGEXPENSES!9~9~ 370, ,393 7, , , , ,742 1,025, ,792 24,192 28, , ,2 623,2 51, ,212 60, ,267 43, , ,815 4, ,82 705, ,1,163 37, ,753 63, , ,04 284,174 21, , , ,649 59, , ,230 74, ,69 435,695 7,585 4,529,768 $4.391,478 SETHEACOMPANYINGINDEPENDENTAUDITOR'SREPORTONSUPLEMENTARYINFORMATION 19

21 FRENCHMARKETCORPORATION,INC. SCHEDULEOFACOUNTSRECEIVABLE-TRADE ASOFDECEMBER31,195AND194 ARTOWEAR ENA_B~ ~_ENTAL.~ COMON AUNTSALY'SPRALINES 0$ AREA CAFEDUMONDE FRENCHMARKETCANDLESHOP 15,491 8, $ 195 TOTALS 4,20 COKERYN'ORLEANSTYLE LITLETOYSHOP 1,419 5, $ ,946 21,415 BELALUNARESTAURANT GAZEBO , ,465 10,9 19,868 1,412 1,745 EVAN'SCREOLECANDY MERYCHRISTMAS/ALTHATJAZ FISHMARKETRESTAURANT 14, ,256 1,842 6,963 3,345 TICKLEDPINK 3,3510 3,652 21,04 2,531 1,189 3,345 4,707 2,765 3,652 CARIBEANCORNER MEDITERANEANCAFE (71o) 3, ,540 17,960 3,783 3,148 HEADTOTOE IT'SOURSECRET OLDCRAFTCOTAGE 1, , ,35 4,846 4, JOUTERIE NATIONALPARKSERVICE 0 ESKEWVOGT 302 3, ,17 3,159 1, FARMER'SMARKET 4,035 LATINHANDS ICECREAMACHINE 0 1, , , ,035 3,781 1,7O 4,030 COTONCABANACLUB 7390 ARTATACK AFRICANART 52 1, ,29 1, ,4270 1,812 1, , TOTALACOUNTSRECEIVABLE- TRADE $52,872$ 46,762$9,634$ 97,96 SETHEACOMPANYINGINDEPENDENTAUDITOR'SREPORTONSUPLEMENTARYINFORMATION 20

22 FRENCHMARKETCORPORATION,INC. SCHEDULEOFACOUNTSRECEIVABLE-OTHER ASOFDECEMBER31,195AND194 PARKINGLOT _DESC~RIPṬION KIOSK TENANTS FRENCHQUARTERFESTIVAL FARMERSMARKET DISPUTEDBILINGS MISCELANEOUS TOTALACOUNTSRECEIVABLE-OTHER _1~95 87, ,01 2,50 1, ,80 5,6O ,480 SE]"HEACOMPANYINGINDEPENDENTAUDITOR'SREPORTONSUPLEMENTARYINFORMATION 21

23 FRENCHMARKETCORPORATION,INC. SCHEDULEOFACOUNTSRECEIVABLE-TENANTADVERTISING ASOFDECEMBER31,195AND194 AUNTSALY'SPRALINES TENANT 19~q5 CAFEDUMONDE 1,724 FRENCHMARKETCANDLESHOP 3,210 COKERYN'ORLEANSTYLE LITLETOYSHOP 490 BELALUNARESTAURANT GAZEBO EVAN'SCREOLECANDY MERYCHRISTMAS/ALTHATJAZ FISKMARKETRESTAURANT CARIBEANCORNER MEDITERANEANCAFE HEADTOTOE IT'SOURSECRET 3, OLDCRAFTCOTAGE ARTOWEAR BIJOUTERIE LATINHANDS ICECREAMACHINE COTONCABANACLUB TOIALACOUNTSRECEIVABLE IENANTADVERTISING , ,487 1, , ,421 1, SE[HEACOMPANYINGINDEPENDENTAUDITOR'SREPORTONSUPLEMENTARYINFORMATION 2

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25 LUTHERC.SPEIGHT&COMPANY ACorporationofCertifiedPublicAcountants INDEPENDENTAUDITOR'SREPORTONINTERNALCONTROL STRUCTUREBASEDONANAUDITOFINANCIAL STATEMENTSPERFORMEDINACORDANCE WITHGOVERNMENTAUDITINGSTANDARDS ToTheBoardofDirectorsof TheFrenchMarketCorporation,Inc WehaveauditedthefinancialstatementsoftheFrenchMarketCorporation,lnc.(theMarket),as ofandfortheyearsendeddecember31,195and194,andhaveisuedoureporthereon datedmarch21,196. Wehaveconductedourauditinacordancewithgeneralyaceptedauditingstandardsand GovernmentAuditingStandards,isuedbytheComptrolerGeneraloftheUnitedStates.Those standardsrequirethatweplanandperformtheauditobtainreasonableasuranceabout whetherthefinancialstatementsarefreofmaterialmistatement. asesthexpectedbenefitsandrelatedcostsofinternalcontrolstructurepoliciesandprocedures. ThemanagementoftheMarket,isresponsibleforestablishingandmaintaininganinternalcontrol structure.infulfilingthisresponsibility,estimatesandjudgmentsbymanagementarerequiredto Theobjectivesofaninternalcontrolstructurearetoprovidemanagementwithreasonable,but notabsolute,asurancethatasetsaresafeguardedagainstlosfromunauthorizeduseor disposition,andthatransactionsarexecutedinacordancewithmanagement'sauthorization andrecordedproperlytopermithepreparationofinancialstatementsinacordancewith generalyaceptedacountingprinciples.becauseofinherentlimitationsinanyinternalcontrol structure,erorsoriregularitiesmayneverthelesocurandnotbedetected.also,projectionof ofpoliciesandproceduresmaydeteriorate. anyevaluationofthestructuretofutureperiodsisubjectotheriskthatproceduresmaybecome inadequatebecauseofchangesinconditionsorthathefectivenesofthedesignandoperation InplaningandperformingourauditofthefinancialstatementsoftheMarket,fortheyearended December31,195and194,weobtainedanunderstandingoftheinternalcontrolstructure. Withrespectotheinternalcontrolstructure,weobtainedanunderstandingofthedesignof relevantpoliciesandproceduresandwhethertheyhavebenplacedinoperation,andweasesed controlriskinordertodetermineourauditingproceduresforthepurposeofexpresingour opiniononthefinancialstatementsandnotoprovideanopinionontheinternalcontrolstructure. Acordingly,wedonotexpresuchanopinion. 101LakeForestBird,Suite404~NewOrleans,LA70127~Tel:(504)24-940~Fax:(504)

26 Forthepurposeofthisreport,wehaveclasifiedthesignificantinternalcontrolstructurepolicies andproceduresinthefolowingcategories: Acountjn~gControls: Revenue,AcountsReceivable,andCashReceiptsCycle Purchases,AcountsPayable,andCashDisbursementsCycle Property,Plant,andEquipment GeneralLedgerandFinancialReporting CompliancewithLawsandRegulations Foralofthecontrolcategorieslistedabove,weobtainedanunderstandingofthedesignof relevantpoliciesandproceduresandwhethertheyhavebenplacedinoperation,andweasesed controlrisk. Ourconsiderationoftheinternalcontrolstructurewouldnotnecesarilydisclosealmatersinthe internalcontrolstructurethatmightbereportableconditionsand,acordingly,wouldnot necesarilydisclosealreportableconditionsthatarealsoconsideredtobematerialweakneses underthestandardsestablishedbytheamericaninstituteofcertifiedpublicacountants. Amaterialweaknesisareportableconditioninwhichthedesignoroperationofoneormoreof theinternalcontrolstructurelementsdoesnotreducetoarelativelylowleveltheriskthaterors oriregularitiesinamountsthatwouldbematerialinrelationtothefinancialstatementsbeing auditedmayocurandnotbedetectedwithinatimelyperiodbyemployesinthenormalcourse ofperformingtheirasignedfunctions.wenotednomatersinvolvingtheinternalcontrol structureanditsoperationsthatweconsidertobematerialweaknesesasdefinedabove. However,wenotedmatersinvolvingtheinternalcontrolstructureandilsoperationthatwehave reportedtothemanagementofthefrenchmarketcorporation,inc.,inaseparateleterdated March21,196. ThisreportisintendedfortheinformationoftheBoardofDirectors,management,andtheCityof NewOrleans.However,thisreportismaterofpublicrecord,anditsdistributionisnotlimited. March21,196 25

27 LUTHERC.SPEIGHT&COMPANY ACorporationofCertifiedPublicAcountants INDEPENDENTAUDITOR'SREPORTONCOMPLIANCE BASEDONANAUDITOFINANCIALSTATEMENTS PERFORMEDINACORDANCEWITH GOVERNMENTAUDITINGSTANDARDS ToTheBoardofDirectorsof TheFrenchMarketCorporation,Ine WehaveauditedthefinancialstatementsoftheFrenchMarketCorporation,Inc.(theMarket),as ofandfortheyearsendeddecember3l,195and194,andhaveisuedoureporthereon datedmarch21,196. Weconductedourauditinacordancewith~,eneralyaceptedauditingstandardsand GovernmentAuditingStandards,isuedbytheComptrolerGeneraloftheUnitedStates.Those standardsrequire~tha'tweplanandperformtheauditobtainreasonableasuranceabout whetherthefinancialstatementsarefreofmaterialmistatement. Compliancewithlaws,regulations,contracts,andgrantsaplicabletotheFrenchMarket Corporation,Inc.,istheresponsibilityoftheMarket'smanagement.Aspartofobtaining reasonableasuranceaboutwhetherthefinancialstalementsarefreofmaterialmistatement,we performedtestsofthemarket'scompliancewithcertainprovisionsoflaws,regulations, contracts,andgrants.however,theobjectiveofourauditofthefinancialstatementswasnoto provideanopiniononoveralcompliancewithsuchprovisions.acordingly,wedonotexpres suchanopinion. Theresultsofourtestsdisclosednoinstancesofnoncompliancethatarerequiredtobereported undergovernmentauditingstandards. ThisreportisintendedsolelyfortheinformationoftheBoardofDirectors,management,andthe CityofNewOrleans.However,thisreportisamaterofpublicrecordanditsdistributionisnot NewOrleans,Louisiana March21,196 10lLakeForestBlvd.,Suite404~NewOrleans,LA70127~Tel:(504)24-940~Fax:(504)