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Previous: UNIROYAL CHEMICAL CO INC, 11-K, 1999-06-30 |
Next: ARTESIAN RESOURCES CORP, 11-K, 1999-06-30 |
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1998
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1998
INDEX
Page
Independent Auditors' Report 1-2
FINANCIAL STATEMENTS
Statement of Net Assets Available for
Benefits at December 31, 1998 3
Statement of Net Assets Available for
Benefits at December 31, 1997 4
Statement of Changes in Net Assets
Available for Benefits for the Year
Ended December 31, 1998 5
Notes to the Financial Statements 6-12
SUPPLEMENTAL SCHEDULES
Schedule of Assets Held for Investment Purposes 13
Schedule of Reportable Transactions (Series
of Transactions in One Issue Aggregating
5 Percent or More of Net Assets) for the
Year Ended December 31, 1998 14
Independent Accountants' Report
Participants, Board of Trustees and Administrator
of Artesian Resources Corporation Retirement Plan
We have audited the accompanying statement of net assets available for
benefits with fund information of Artesian Resources Corporation Retirement
Plan as of December 31, 1998, and the related statement of changes in net
assets available for benefits with fund information for the year ended
December 31, 1998. 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 audit. The statement of net assets
available for benefits with fund information of Artesian Resources
Corporation Retirement Plan as of December 31, 1997 was audited by other
auditors whose report dated July 9, 1998 expressed an unqualified opinion
on that statement.
We conducted our audit 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 audit provides 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
Artesian Resources Corporation Retirement Plan as of December 31, 1998, and
the changes in net assets available for plan benefits for the year then ended
in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules 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 audit 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.
Wilmington, Delaware
June 17, 1999
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Changes in Net Assets
Available for Benefits with Fund Information
Year Ended December 31, 1998
Participant Directed Non-Participant Directed
Fidelity Family of Funds
Managed
Equity Emerging Income Intermediat Artesian Participant Artesian Appreciation
Income II Growth Puritan Portfolio Bond A Loans B Plus Diversifier Total
Additions to Net Assets attributed to:
Investment Income:
Net appreciation of invest $642,454 $927,703 $76,466 $0.00 $4,706 $112,873 $0.00 $1,412 $0.00 $0.00 $1,765,614
Dividends 37,398 0 21,409 0 29,462 14,450 0 2,564 0 0 105,283
Interest 0 0 0 48,813 0 0 25,840 0 12,456 2,712 89,821
Contributions:
Participants' 240,312 259,244 67,294 15,875 25,280 27,805 0 0 0 0 635,810
Employer 32,462 120,953 15,263 0 7,407 1,394 0 0 0 0 177,479
Total additions 952,626 *1,307,900 * 180,432 * 64,688 * 66,855 * 156,522 * 25,840 * 3,976 * 12,456 * 2,712 * 2,774,007
Deductions from Net Assets attributed to:
Participant distributions 49,910 82,309 5,981 40,836 4,941 4,555 8,866 0 599 0 197,997
Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total deductions 49,910 82,309 5,981 40,836 4,941 4,555 8,866 0.00 599 0.00 197,997
Net increase prior to interfund 902,716 *1,225,591 * 174,451 * 23,852 * 61,914 * 151,967 * 16,974 * 3,976 * 11,857 * 2,712 * 2,576,010
Interfund Transfers (19,647) (24,598) (33,461) 410,013 (5,918) 64,933 48,763 (193,485) (2,405) (244,195) 0.00
Net increase (decrease) in plan 883,069 1,200,993 140,990 433,865 55,996 216,900 65,737 (189,509) 9,452 (241,483) 2,576,010
Net assets available for benefits -
beginning of year 2,915,492 2,064,262 564,335 318,559 456,959 202,860 286,172 189,509 235,914 241,483 7,475,545
Net assets available for benefits -
end of year ********** ********** $705,325 $752,424 $512,955 $419,760 $351,909 $0 $245,366 $0 ***********
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Net Assets Available
for Benefits with Fund Information
********
Participant Directed Non-Participant Directed
Fidelity Family of Funds
Managed
Equity Emerging Income Intermediat Artesian Participant Artesian Appreciation
Income II Growth Puritan Portfolio Bond A Loans B Plus Diversifier Total
Assets:
Investments, at fair value -
Common/Collective Trusts $0.00 $0.00 $0.00 $318,311 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $318,311
Registered Investment Comp2,914,247 2,048,575 563,836 0 456,878 0 0 0 0 0 5,983,536
Employer Securities 0 0 0 0 0 188,769 0 189,509 0 0 378,278
Funds held in insurance companies'
general accounts, at contr 0 0 0 0 0 0 0 0 235,914 241,483 477,397
Participant Loans 0 0 0 0 0 0 286,172 0 0 0 286,172
Total investments 2,914,247 2,048,575 563,836 318,311 456,878 188,769 286,172 189,509 235,914 241,483 7,443,694
Amounts due from employer 1,245 15,687 499 248 81 14,091 0 0 0 0 31,851
Net assets available for benefit********** ********** $564,335 $318,559 $456,959 $202,860 $286,172 $189,509 $235,914 $241,483 $7,475,545
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Net Assets Available
for Benefits with Fund Information
********
Non-Participant
Participant Directed Directed
Fidelity Family of Funds
Managed
Equity Emerging Income Intermediat Artesian ParticipantAppreciation
Income II Growth Puritan Portfolio Bond A Loans Plus Total
Assets:
Investments, at fair value -
Common/Collective Trusts $0.00 $-0.00 $0.00 $724,540 $0.00 $0.00 $0.00 $0.00 $724,540
Registered Investment Comp3,798,561 3,265,255 705,324 0 512,955 0 0 0 8,282,095
Employer Securities 0 0 0 0 0 419,761 0 0 419,761
Funds held in insurance companies'
general accounts, at contr 0 0 0 0 0 0 0 245,366 245,366
Participant Loans 0 0 0 0 0 0 351,909 0 351,909
Total investments 3,798,561 3,265,255 705,324 724,540 512,955 419,761 351,909 245,366 10,023,671
Amounts due from employer 0 0 0 27,884 0 0 0 0 27,884
Net assets available for benefit********** ********** $705,324 $752,424 $512,955 $419,761 $351,909 $245,366 ***********
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
Statement of Net Assets Available
for Plan Benefits at December 31, 1997
Assets:
Investments, at fair value -
Common/Collective Trusts
Registered Investments Companies
Employer Securities
Funds held in insurance companies'
general accounts
Participant Loans
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
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 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 all such expenses incurred during 1998.
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
15 percent of their compensation, however, such contributions may not exceed
the IRC limitation of $10,000 for all deferrals under all plans in 1998
(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 1998.
Also, the Company's Board of Directors, at its sole discretion, may make an
additional discretionary contribution. No additional discretionary
contribution was made for 1998.
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, 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
Fidelity Family of Funds or Artesian Resources Class A non-voting common
stock. Contracts with specified insurance companies and Artesian Resources
Class B voting common stock do not allow additional contributions provided as
investment options by the Plan.
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 March 31, 1998, Penn Mutual Diversifier II and Artesian Resources
Class B voting common stock were eliminated as investment options. All funds
were transferred to the Fidelity "Managed Income Portfolio Fund" where
participants could then redirect their investments if they chose to do so.
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 5 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 Available
for Benefits, the net interfund transfer into Participant Loans for
the year ended December 31, 1998 was made up of:
New loans $101,603
Loan repayments (28,270)
Transfer of interest income (24,570)
$ 48,763
Benefits
Participants are entitled to a benefit payment equal to the amount credited
to their accounts upon retirement; upon permanent disability; at age 59, 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
Basis of Accounting
For financial reporting purposes, the assets and liabilities of the Plan are
reflected on the accrual basis of accounting.
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.
Investment Valuation and Income Recognition
Plan assets held in the Fidelity Family of Funds, Artesian Resources Class A
non-voting common stock and Artesian Resources Class B 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) for the year is included in the statement of changes in net
assets available for benefits. Funds held in insurance companies' general
accounts are stated at their contract value. Participant loans are valued at
cost which approximates market. Purchases and sales of securities are
recorded on a trade-date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
Participant Distributions
Participant distributions are recorded when paid.
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.
NOTE 3 EXCESS CONTRIBUTIONS
During the years 1995 through 1998, contributions were made to the Plan in
excess of the limitation imposed on the total annual additions to each
participants account by section 415(c) of the Internal Revenue Code. These
excess contributions of $242,746 will be refunded to the participants during
1999.
NOTE 4 INVESTMENTS REPRESENTING 5% OR MORE OF NET ASSETS
AVAILABLE FOR BENEFITS
The following investments each represent 5% or more of the net assets
available for benefits at December 31, 1998:
Fidelity Family of Funds
Equity Income II
Emerging Growth
Puritan
Managed Income Portfolio
Intermediate Bond
NOTE 5 PARTICIPANTS' CONTRIBUTIONS
Included in participants' contributions for 1998 is $233,230 in rollover
contributions from other plans.
SUPPLEMENTAL SCHEDULES
RTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
EIN: 51-0002090, PLAN NO.: 003
LINE 27a: SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(a) (b) Identity of issue, (d)Cost (c)Description of
borrower, investment including rate of interest, (e)Current
maturity date, lessor or collateral, par or
similar party maturity value Value
New England Mutual Life Appreciation Plus,
Insurance Company group annuity policy -
5159; 6.2% guaranteed,
expires 12/31/99 $ 245,366 $ 245,366
Fidelity Family of Mutual Equity Income II 3,185,701 3,798,561
Funds Emerging Growth 2,563,949 3,265,255
Puritan 631,846 705,324
Managed Income Portfolio 724,540 724,540
Intermediate Bond 497,742 512,955
Total mutual funds 7,603,778 9,006,635
* Artesian Resources
Corporation Class A non-voting
common stock 301,464 419,761
Participant Loans Interest rates range
from 7.00% to 9.50%,
can borrow up to 50% of
account balance,
repayment terms range
from 5 to 15 years - 351,909
Secured by account
balance $ 8,150,608$10,023,671
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
EIN: 51-0002090, PLAN NO.: 003
LINE 27d SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
(Series of transactions in one issue
aggregating 5 percent or more of net assets)
(a)Identity of (b)Description (c)Purchase (d)Selling(g)Cost of (i)Net
gain
Party Involved of asset Price Price asset or (loss)
Fidelity Family Managed Income $ 542,144 $ 136,123 $ 136,123 $ -
of Funds: Equity Income II $ 663,659 $ 117,508 $ 104,592 $ 12,916
Emerging Growth $ 651,377 $ 165,744 $ 159,740 $ 6,004
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