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 Supplemental 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 SUPPLEMENTAL 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
Supplemental Retirement Plan
We have audited the accompanying statement of net assets available for plan
benefits of Artesian Resources Corporation Supplemental 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
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL RETIREMENT PLAN
Statement of Net Assets Available
For Plan Benefits at December 31, 1996
CoreFund Family of Funds
SPECIAL
EQUITY EQUITY BALANCED FIXED
Assets:
Investments, at fair value:
Mutual funds $238,523 $108,051 $22,698 $117,392
Total investments 238,523 108,051 22,698 117,392
Amounts due from employer 16,673 9,780 13,635
Net assets available for
plan benefits $255,196 $117,831 $22,698 $131,027
SEI
STABLE ASSET TOTAL
Assets:
Investments, at fair value:
Mutual funds $47,159 $533,823
Total investments 47,159 533,823
Amounts due from employer 5,298 45,386
Net assets available for
plan benefits $52,457 $579,209
See accompanying notes.
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL RETIREMENT PLAN
Statement of Net Assets Available
For Plan Benefits at December 31, 1995
Conestoga Mutual Funds
SPECIAL
EQUITY EQUITY BALANCED FIXED
Assets:
Investments, at fair value:
Mutual funds $ 93,918 $ 53,516 $11,812 $ 60,275
Total investments 93,918 53,516 11,812 60,275
Amounts due from employer 30,000
Net assets available for
plan benefits $123,918 $ 53,516 $11,812 $ 60,275
SEI
STABLE ASSET TOTAL
Assets:
Investments, at fair value:
Mutual funds $28,518 $248,039
Total investments 28,518 248,039
Amounts due from employer 9,929 39,929
Net assets available for
plan benefits $38,447 $287,968
See accompanying notes.
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL RETIREMENT PLAN
Statement of Changes in Net Assets
Available for Plan Benefits for the Year Ended December 31, 1996
SPECIAL
EQUITY EQUITY BALANCED FIXED
Additions to net assets
attributed to:
Contributions:
Employee $4,359 $3,583 $2,077 $1,826
Employer 86,488 43,640 6,808 67,113
Investment Income:
Dividends 13,325 776 1,230 5,703
Interest 29 17 19
Net unrealized/realized
appreciation (depreciation)
of investments 31,302 18,122 771 (1,610)
Transfers from other funds 5,342
Total additions 140,845 66,138 10,886 73,051
Deductions from net assets attributed to:
Participant distributions 9,567
Transfers to other funds 1,823 2,299
Total deductions 9,567 1,823 2,299
Net increase in plan assets 131,278 64,315 10,886 70,752
Net assets available for
Plan benefits-
beginning of year 123,918 53,516 11,812 60,275
Net assets available
for Plan benefits-
end of year $255,196 $117,831 $22,698 $131,027
SEI
STABLE ASSET TOTAL
Additions to net assets attributed to:
Contributions:
Employee $1,331 $13,176
Employer 11,373 215,422
Investment Income:
Dividends 2,526 23,560
Interest 65
Net unrealized/realized
appreciation (depreciation)
of investments 48,585
Transfers form other funds 5,342
Total additions 15,230 306,150
Deductions from net assets attributed to:
Participant distributions 9,567
Transfers to other funds 1,220 5,342
Total deductions 1,220 14,909
Net increase in plan assets 14,010 291,241
Net assets available for Plan
benefits- beginning of year 38,447 287,968
Net assets available for Plan
benefits- end of year $52,457 $579,209
See accompanying notes.
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL RETIREMENT PLAN
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF THE PLAN
GENERAL
Effective October 1, 1994, Artesian Resources Corporation (the "Company")
established the Artesian Resources Corporation Supplemental 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
certain eligible 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 five 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 as of April 26, 1994 are eligible for Plan
participation.
A service contribution is made by the Company to the Plan for all eligible
participants each year based upon each employee's years of service and
current compensation in accordance with the following schedule:
Years of Service % of Compensation
1-5 2%
6-10 4%
11-20 5%
over 20 6%
Employees aged 50 to 59 on January 1, 1994 ("Transition Group"), may elect
to make tax deductible contributions up to a maximum of 3 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 in the Transition Group contributes, the Company
will provide a "matching contribution" based on the following schedule:
Years of Service Company Match for
Each Participants' $1
1-20 $3
21-30 $4
over 30 $5
NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED)
Participant contributions, and the related earnings thereon, are fully
vested at all times. Company contributions, and the related earnings
thereon, vest as follows:
Years of Service Vested 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%
Forfeitures are offset against required Company contributions. Any
participant who separates from the Company for any reason, shall be entitled
to receive the vested interest in his account.
INVESTMENT ELECTIONS
Participants in the transition group may allocate basic and matching
contributions among the various CoreFund Family of Funds and the SEI Stable
Asset Fund provided as investment options by the Plan. Participants in the
transition group 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. Service 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
The plan does not allow participants to obtain loans.
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.
All benefit payments are made in a single lump-sum cash payment.
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) is included in the statement of changes in net
assets available for Plan benefits.
INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated March 31, 1996, 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
SUPPLEMENTAL RETIREMENT PLAN
Schedule of Investments at December 31, 1996
Description Cost Market Value
CoreFund Family of Funds:
Equity Fund $222,676 $238,523*
Special Equity Fund 113,844 108,051*
Balanced Fund 22,559 22,698
Intermediate Term Fixed
Income Fund 117,541 117,392*
SEI Stable Asset Fund 46,918 47,159*
Total investments $523,538 $533,823
* Investment represents more than 5% of total plan assets
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL 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 Net Net Gain/
Number of Cost of Value (Loss) on
Transactions Purchases of Sales Sales
Conestoga Mutual Funds:
Equity Fund 22,2 $46,565 $219 $16
SEI Stable Asset Fund 66,6 19,747 1,220
CoreFund Family of Funds:
Equity Fund 52,6 88,269 4,940 221
Special Equity Fund 51,6 45,993 1,755 204
Intermediate Term Fixed
Income Fund 55,6 56,621 2,145 (43)
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 SUPPLEMENTAL RETIREMENT PLAN
(Name of Plan)
By: Artesian Water Company, Inc.
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 Supplemental Retirement
Plan on Form 11-K for the year ended December 31, 1996.
SIEGFRIED SCHIEFFER & SEITZ, LLP
Wilmington, DE
July 11, 1997
