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, 1997
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
ARTESIAN SUPPLEMENTAL RETIREMENT PLAN
Index to Financial Statements and Schedules
Page
Independent Accountants' Report 1
Financial Statements:
Statement of Net Assets Available for Plan Benefits at
December 31, 1997 2
Statement of Net Assets Available for Plan Benefits at
December 31, 1996 3
Statement of Changes in Net Assets Available for Plan
Benefits for the year ended December 31, 1997 4-5
Notes to Financial Statements 6-9
Additional Information:
Schedule of Investments at December 31, 1997 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, 1997 10
Independent Accountants' Report
July 9, 1998
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, 1997 and 1996, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1997. 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, 1997 and 1996, and the changes in net assets available for plan
benefits for the year ended December 31, 1997 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 Fund Information in the
statements of net assets available for plan benefits and the statement of
changes in net assets available for plan benefits is presented for purposes
of additional analysis rather than to present the net assets available for
plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information 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, LLP
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL RETIREMENT PLAN
Statement of Net Assets Available
For Plan Benefits at December 31, 1997
Fidelity Family of Funds
MANAGED
EQUITY EMERGING INCOME INTERMEDIATE
INCOME II GROWTH PURITAN PORTFOLIO BOND
Assets:
Investments, at fair value:
Common/Collective Trusts $ 17,124
Registered Investment
Companies $381,896 $249,126 $52,694 $132,697
Employer Securities
Total investments 381,896 249,126 52,694 17,124 132,697
Amounts due from employer 136 237 111 122 33
Net assets available for
plan benefits $382,032 $249,363 $52,805 $ 17,246 $132,730
ARTESIAN A TOTAL
Assets:
Investments, at fair value:
Common/Collective Trusts $ 17,124
Registered Investment
Companies 816,413
Employer Securities $ 62,413 62,413
Total investments 62,413 895,950
Amounts due from employer 48,395 49,034
Net assets available for
plan benefits $110,808 $944,984
See accompanying notes.
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 Changes in Net Assets
Available for Plan Benefits for the Year Ended December 31, 1997
Fidelity Family of Funds
MANAGED
EQUITY EMERGING INCOME INTERMEDIATE
INCOME II GROWTH PURITAN PORTFOLIO BOND
Additions to net assets
attributed to:
Contributions:
Employee $ 4,748 $ 4,144 $ 2,620 $ 1,568 $ 859
Employer 53,370 94,674 9,213 22,459 3,437
Investment Income:
Dividends 3,967 1,266 3,061 5,529
Interest
Net unrealized/realized
appreciation (depreciation)
of investments 74,905 32,447 6,103 2,781
Transfers from other funds 257,478 121,393 33,603 122,508 122,878
Total additions 394,468 252,658 52,805 149,596 135,484
Deductions from net assets attributed to:
Participant distributions 6,476 3,295 471 2,754
Transfers to other funds 5,960 131,879
Total deductions 12,436 3,295 0 132,350 2,754
Net increase (decrease)
in plan assets 382,032 249,363 52,805 17,246 132,730
Net assets available for
Plan benefits-
beginning of year
Net assets available
for Plan benefits-
end of year $382,032 $249,363 $52,805 $ 17,246 $132,730
Statement of Changes in Net Assets
Available for Plan Benefits for the Year Ended December 31, 1997 (Continued)
CoreFund Family of Funds
SPECIAL
EQUITY EQUITY BALANCED FIXED
Additions to net assets
attributed to:
Contributions:
Employee
Employer
Investment Income:
Dividends $ 60 $ 152 $ 22 $ 1,772
Interest
Net unrealized/realized
appreciation (depreciation)
of investments 4,861 (2,229) 331 (1,706)
Transfers from other funds
Total additions 4,921 (2,077) 353 66
Deductions from net assets attributed to:
Participant distributions 934 568
Transfers to other funds 259,183 115,754 23,051 130,525
Total deductions 260,117 115,754 23,051 131,093
Net increase (decrease)
in plan assets (255,196) (117,831) (22,698) (131,027)
Net assets available for
Plan benefits-
beginning of year 255,196 117,831 22,698 131,027
Net assets available
for Plan benefits-
end of year $ 0 $ 0 $ 0 $ 0
Statement of Changes in Net Assets
Available for Plan Benefits for the Year Ended December 31, 1997 (Continued)
Artesian SEI
A STABLE ASSET TOTAL
Additions to net assets attributed to:
Contributions:
Employee $ 13,939
Employer $ 48,395 231,548
Investment Income:
Dividends 765 16,594
Interest
Net unrealized/realized
appreciation (depreciation)
of investments 870 $ 467 118,830
Transfers form other funds 61,416 719,276
Total additions 111,446 467 1,100,187
Deductions from net assets attributed to:
Participant distributions 638 15,136
Transfers to other funds 52,924 719,276
Total deductions 638 52,924 734,412
Net increase (decrease)
in plan assets 110,808 (52,457) 365,775
Net assets available for Plan
benefits- beginning of year 52,457 579,209
Net assets available for Plan
benefits- end of year $110,808 $ 0 $ 944,984
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, 1997.
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 1997 ("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 Fidelity Family of Funds and Artesian
Resources Class A non-voting common stock 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 September 1996, shares in the Conestoga Mutual Funds were
merged into similar fund types provided through the CoreFund Family of Funds.
Effective in January 1997, new contributions were invested in the Fidelity
Family of Funds. In March 1997, shares in the CoreFund Family of Funds were
sold and were reinvested in similar fund types provided through Fidelity
Investments.
Effective July 1, 1997, participants may direct the investment of their
account balances into Artesian Class A non-voting common stock.
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 Fidelity Family of Funds and in the Artesian
Resources Class A non-voting common stock 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.
ADDITIONAL INFORMATION
ARTESIAN RESOURCES CORPORATION
SUPPLEMENTAL RETIREMENT PLAN
Schedule of Investments at December 31, 1997
Description Cost Market Value
Fidelity Family of Funds:
Equity Income II $342,561 $381,896*
Emerging Growth 264,733 249,126*
Puritan 49,331 52,694*
Managed Income Portfolio 17,124 17,124
Intermediate Bond 130,257 132,697*
Artesian A Stock 61,538 62,413*
Total investments $865,544 $895,950
* 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, 1997
(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
Fidelity Family of Funds:
Equity Income II 60,8 $353,380 $ 12,583 $ 1,764
Emerging Growth 57,9 270,949 6,969 753
Puritan 61,1 49,402 77 6
Managed Income Portfolio 73,13 162,346 145,222
Intermediate Bond 65,8 138,701 8,509 65
Artesian A Stock 3,3 62,222 684 1
CoreFund Family of Funds:
Equity 1 242,510 19,834
Special Equity 1 105,974 (7,870)
Balanced 1 23,051 492
Fixed 1 116,890 (651)
SEI Stable Asset 1 47,626 708
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 15, 1998
