SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of
The Securities Exchange Act of 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934. *
For the fiscal year ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from ____________ to ___________
Commission File Number 0-18516 (Artesian Resources Corporation)
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Artesian Retirement Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
ARTESIAN RESOURCES CORPORATION
664 Churchmans Road
Newark, Delaware 19702
* This report is being filed pursuant to General Instruction A(2)(ii) of
Form S-8.
ARTESIAN RETIREMENT PLAN
Index to Financial Statements and Schedules
Page
Independent Accountant's Report F-2
Financial Statements:
Statement of Net Assets Available for Plan Benefits at
December 31, 1996 F-3
Statement of Net Assets Available for Plan Benefits at
December 31, 1995 F-4
Statement of Changes in Net Assets Available for Plan
Benefits for the year ended December 31, 1996 F-5
Notes to Financial Statements F-6
Additional Information:
Schedule of Investments at December 31, 1996 F-9
Schedule of Reportable Transactions (series of
transactions in one issue aggregating 5 percent
or more of net assets) for the year ended
December 31, 1996 F-10
Independent Accountant's Report
May 27, 1997
Participants and Administrator
of the Artesian Resources Corporation
Retirement Plan
We have audited the accompanying statement of net assets available for plan
benefits of Artesian Resources Corporation Retirement Plan as of December 31,
1996 and 1995, and the related statement of changes in net assets available
for plan benefits for the year ended December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements 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 are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
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 referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
investments and reportable transactions are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
SIEGFRIED SCHIEFFER & SEITZ, LLP
<PAGE>
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Net Assets Available
For Plan Benefits at December 31, 1996
CoreFund Family of Funds
Special SEI Stable
Equity Equity Balanced Fixed Asset
Assets:
Investments, at fair value:
Mutual funds $2,163,358 $1,358,497 $469,873 $697,588 $548,038
Funds held in insurance companies'
general accounts
Participant loans
Total investments 2,163,358 1,358,497 469,873 697,588 548,038
Amounts due from employer 47,429
Total assets 2,163,358 1,405,926 469,873 697,588 548,038
Liabilities:
Benefits payable 36,754 13,304 4,747
Net assets available
for plan benefits $2,126,604 $1,405,926 $456,569 $697,588 $543,291
Appreciation Participant
Plus Diversifier II Loans Total
Assets:
Investments, at fair value:
Mutual funds $5,237,354
Funds held in insurance companies'
general accounts $232,379 $255,019 487,398
Participant loans $241,512 241,512
Total investments 232,379 255,019 241,512 5,966,264
Amounts due from employer 47,429
Total assets 232,379 255,019 241,512 6,013,693
Liabilities:
Benefits payable 54,805
Net assets available
for plan benefits $232,379 $255,019 $241,512 $5,958,888
See accompanying notes.
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Net Assets Available
For Plan Benefits at December 31, 1995
Conestoga Mutual Funds
Special SEI Stable
Equity Equity Balanced Fixed Asset
Assets:
Investments, at fair value:
Mutual funds $1,797,878 $965,253 $397,338 $626,350 $481,875
Funds held in
insurance companies'
Participant loans
Total investments 1,797,878 965,253 397,338 626,350 481,875
Amounts due from
employer 1,790 26,670
Net assets
available for
plan benefits $1,799,668 $991,923 $397,338 $626,350 $481,875
Appreciation Participant
Plus Diversifier II Loans Total
Assets:
Investments, at fair value:
Mutual funds $4,268,694
Funds held in insurance companies'
general accounts $284,820 $375,001 659,821
Participant loans $102,645 102,645
Total investments 284,820 375,001 102,645 5,031,160
Amounts due from employer 28,460
Net assets available
for plan benefits $284,820 $375,001 $102,645 $5,059,620
See accompanying notes.
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Changes in Net Assets
Available for Plan Benefits for the Year Ended December 31, 1996
Special SEI
Equity Equity Balanced Fixed Stable Asset
Additions to net assets attributed to:
Contributions:
Employee $144,738 $145,125 $37,833 $31,757 $33,131
Employer 46,928 115,062 12,354 47,946 12,130
Investment Income:
Dividends 182,857 9,807 33,036 44,349 30,591
Interest 368 298 31 36 26
Net realized/unrealized
appreciation(depreciation)
of investments 305,058 271,735 20,681 (18,524) 4
Transfers from
other funds 376,987 84,800 14,155 57,793 11,189
Total additions 1,056,936 626,827 118,090 163,357 87,071
Deductions from net assets attributed to:
Participant
distributions 557,927 13,304 4,747
Transfers to
other funds 212,824 45,555 92,119 20,908
Expenses
New loans 172,073
Total deductions 730,000 212,824 58,859 92,119 25,655
Net increase
(decrease) in
plan assets 326,936 414,003 59,231 71,238 61,416
Net assets available
for Plan benefits-
beginning of year 1,799,668 991,923 397,338 626,350 481,875
Net assets available
for Plan benefits-
end of year $2,126,604 $1,405,926 $456,569 $697,588 $543,291
Appreciation Participant
Plus Diversifier II Loans Total
Additions to net assets attributed to:
Contributions:
Employee $392,584
Employer 234,420
Investment Income:
Dividends 300,640
Interest $15,979 $19,723 36,461
Net realized/unrealized
appreciation(depreciation)
of investments 578,954
Transfers from
other funds 544,924
Total additions 15,979 19,723 2,087,983
Deductions from net assets attributed to:
Participant
distributions 914 12,769 589,661
Transfers to
other funds 60,968 112,550 544,924
Expenses 5,249
New loans 1,289 14,386 ($138,867) 48,881
Total deductions 68,420 139,705 (138,867) 1,183,466
Net increase
(decrease) in
plan assets (52,441) (119,982) 138,867 899,268
Net assets available
for Plan benefits-
beginning of year 284,820 375,001 102,645 5,059,620
Net assets available
for Plan benefits-
end of year $232,379 $255,019 $241,512 $5,958,888
See accompanying notes.
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
GENERAL
Effective July 1, 1984, Artesian Resources Corporation (the "Company")
established the Artesian Resources Corporation Retirement Plan (the "Plan")
as a defined contribution savings plan for its employees. Pursuant to
Internal Revenue Code ("IRC") Section 401(k), the Plan permits employees to
exclude contributions to the Plan from their current taxable income, subject
to certain limits. The Plan is administered by a Committee of Trustees which
consists of four members appointed by the Company's Board of Directors. Plan
expenses may be paid out of the Plan unless paid by the Company. The Company
has paid or will pay all such expenses incurred through December 31, 1996.
PARTICIPATION, VESTING AND WITHDRAWALS
Generally, all employees are eligible for Plan participation after attaining
age 21 and completing 1,000 hours of service during a one-year period.
Employees may elect to make tax deductible contributions up to a maximum of
12 percent of their compensation, however, such contributions may not exceed
the IRC limitation of $9,500 for all deferrals under all plans in 1996
("basic contribution"). For every dollar an employee contributes up to 6
percent of compensation, the Company will provide a 50 percent "matching
contribution". In each Plan year, the Company may make a "discretionary
contribution" to the Plan based on up to 2 percent of compensation for all
employees eligible to participate in the Plan. The full "discretionary
contribution" was made for 1996. Also, the Company's Board of Directors,
at its sole discretion, may make an "additional discretionary contribution"
of up to 3 percent of eligible compensation. No "additional discretionary
contribution" was made for 1996.
Participant contributions, and the related earnings thereon, are fully
vested at all times. Company contributions, and the related earnings thereon,
vest as follows:
Years Vested
of Service Percentage
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 years or more 100%
Any forfeitures of non-vested contributions are offset against required
Company contributions. Withdrawals may generally commence without penalty
upon attaining age 59-1/2 or for situations involving hardship, as defined
in the Plan and the IRC.
INVESTMENT ELECTIONS
Participants may allocate basic and matching contributions among the various
CoreFund Family of Funds, the SEI Stable Asset Fund or contracts with
specified insurance companies provided as investment options by the Plan.
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
Participants may elect an allocation among one or more investment funds in
multiples of 5 percent with a minimum investment of 10 percent in any
selected fund. Discretionary Company contributions are invested by the
Trustee in a uniform manner for all participants.
Effective in May 1995, shares in the Meridian Trust Company Employee Benefit
Funds were sold and the proceeds were reinvested in similar fund types
provided through Conestoga Mutual Funds. Also, in December 1995 shares in
the Laughlan GIC Fund were sold and the proceeds were reinvested in a similar
fund, the SEI Stable Asset Fund. Since the fund types provided during the
year were the same, even though provided by different mutual fund groups,
activity for each fund type provided has been combined for presentation
purposes in the accompanying statement of changes in net assets.
Effective in September 1996, shares in the Conestoga Mutual Funds were
merged into similar fund types provided through the CoreFund Family of Funds.
Since the fund types provided during the year were the same, even though
provided by different mutual fund groups, activity for each fund type
provided has been combined for presentation purposes in the accompanying
statement of changes in net assets.
LOANS
Participants may borrow from the Plan under the following guidelines:
A participant may borrow as much as 50 percent of his account balance,
subject to certain minimum and maximum limitations as defined in the Plan.
Loans are repaid over a period not to exceed five years, unless the loan
is to buy, build or substantially rehabilitate the borrower's principal
residence.
Interest on loans is set at current market rates.
As disclosed in the Statement of Changes in Net Assets, the net change
in participant loans for the year ended December 31, 1996 was an increase of
$138,867. This increase is the result of new loans of $187,748 and loan
repayments of $48,881.
BENEFITS
Participants are entitled to a benefit payment equal to the amount credited
to their accounts upon retirement; upon permanent disability; at age 59-1/2;
or upon termination of employment or death. In the event of death of a
participant, a death benefit payment is made to the participant's beneficiary.
In the event of termination, distributions of less than $3,500 must be made
in a lump sum. All other distributions may be made in the form of a joint
and survivor annuity, installments or in a lump-sum subject to certain
restrictions as defined in the Plan.
TERMINATION
The Company may amend or terminate the Plan. In the event of Plan
termination, the accounts of all participants affected shall become fully
vested and nonforfeitable. Assets remaining in the Plan may be immediately
distributed to the participants, inactive participants and beneficiaries in
proportion to their respective account balances; or the trust may be continued
with distributions made at such time and in such manner as though the Plan
had not been terminated.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT AND RELATED TRANSACTIONS
For financial reporting purposes, the assets and liabilities of the Plan are
reflected on the accrual basis of accounting.
Plan assets held in the CoreFund Family of Funds and the SEI Stable Asset
Fund are valued at fair value based on quoted market prices. In accordance
with the policy of stating investments at fair value, net unrealized
appreciation (depreciation) for the year is included in the statement of
changes in net assets available for Plan benefits. Funds held in insurance
companies' general accounts are stated at their contract value.
INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated April 6, 1995, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of
the Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Code. Therefore, they believe that the Plan
was qualified and the related trust was tax-exempt as of the financial
statement date.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principals 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.
Actual results could differ from those estimates.
NOTE 3 - SUBSEQUENT EVENTS
Effective January 1, 1997, Fidelity Institutional Retirement Services Company
became the custodian of the Plan's assets and Johnson & Farago became the new
recordkeepers.
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Schedule of Investments at December 31, 1996
Current Market/Contract
Description % Rate Maturity Cost Value
Penn Mutual Life Insurance Co.
Fixed Accounts -
Diversifier II $255,019 $255,019
New England Mutual Life Insurance Co.:
Appreciation Plus
group annuity
policy - 5159:
1990 Contract 6.20 Various 232,379 232,379
Total funds held in insurance
companies' general accounts 487,398 487,398
CoreFund Family of Funds:
Equity Fund 1,930,910 2,163,358*
Special Equity Fund 1,359,117 1,358,497*
Balanced Fund 455,791 469,873*
Intermediate Term Fixed
Income Fund 701,480 697,588*
SEI Stable Asset Fund 548,338 548,038*
Total mutual funds 4,995,636 5,237,354
Participant loans 241,512 241,512
Total Investments $5,724,546 $5,966,264
* Investment represents more than 5% of total plan assets
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Schedule of Reportable Transactions
For the Year Ended December 31, 1996
(Series of transactions in one issue
aggregating 5 percent or more of net assets)
Aggregate Realized
Number of Cost of Net Value Net Gain
Transactions Purchases of Sales on Sales
CoreFund Family of Funds:
Equity Fund 53,16 $323,962 $378,778 $14,440
Special Equity
Fund 57,11 487,353 195,341 25,986
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
ARTESIAN RETIREMENT PLAN
(Name of Plan)
By: Artesian Resources Corporation
Plan Administrator
By: /s/ Dian C. Taylor
Dian C. Taylor
Chief Executive Officer
and President
Dated: July 11, 1997
Exhibit Index
EXHIBIT
23.1 Consent of Siegfried Schieffer & Seitz, LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of our report dated May 27, 1997 appearing on page F-2 of the
Annual Report of the Artesian Resources Corporation Retirement Plan on
Form 11-K for the year ended December 31, 1996.
SIEGFRIED SCHIEFFER & SEITZ, LLP
Wilmington, DE
July 11, 1997
