ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2004
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2004
INDEX
Page
INDEPENDENT AUDITORS' REPORT 1-2
FINANCIAL STATEMENTS
Statement of Net Assets Available for
Benefits, December 31, 2004 3-4
Statement of Net Assets Available for
Benefits, December 31, 2003 5-6
Statement of Changes in Net Assets
Available for Benefits, Year
Ended December 31, 2004 7-8
Notes to the Financial Statements 9-18
SUPPLEMENTAL SCHEDULE
Schedule of Assets Held for Investment Purposes 19
Independent Auditors' Report
Participants, Board of Trustees and
Administrator of Artesian Resources Corporation
Retirement Plan
We have audited the accompanying statements of net assets available for benefits
of Artesian Resources Corporation Retirement Plan as of December 31, 2004 and
2003, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2004. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform an 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 Artesian
Resources Corporation Retirement Plan as of December 31, 2004 and 2003, and the
changes in net assets available for plan benefits for the year ended December
31, 2004 in conformity with accounting principles generally accepted in the
United States of America.
Independent Auditors' Report (Cont'd.)
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements but is 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
schedule 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.
McBride Shopa and Company, P.A.
Wilmington, Delaware
June 17, 2005
-2-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
STATEMENT OF NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31, 2004
Participant Directed
------------------------------------------------------------------------------------------------------------
Gartmore Lord Abbett
Columbia Growth Fund Columbia Mid Calamos Dodge & Cox Dodge & Cox Morley Stable Mid-Cap
Acorn Z of America A Cap Value A Growth A Balanced Stock Adv Value A
--------- ---------- ------------ --------- ----------- ---------- ------------ -----------
Assets:
Cash $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Investments, at fair
value--Common/
Collective Trusts -- -- -- -- -- -- 1,256,301 --
Registered Investment
Companies 398,494 3,714,650 31,596 355,514 50,520 2,563,932 -- 234,438
Employer Securities -- -- -- -- -- -- -- --
Participant Loans -- -- -- -- -- -- -- --
--------- ---------- -------- --------- -------- ---------- ---------- ---------
Total Investments 398,494 3,714,650 31,596 355,514 50,520 2,563,932 1,256,301 234,438
Amount due from employer -- 20,000 -- -- -- -- 20,000 5,000
--------- ---------- -------- --------- -------- ---------- ---------- ---------
Net assets available
for benefits $ 398,494 $3,734,650 $ 31,596 $ 355,514 $ 50,520 $2,563,932 $1,276,301 $ 239,438
========= ========== ======== ========= ======== ========== ========== =========
See accompanying notes to the financial statements.
-3-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
STATEMENT OF NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31, 2004
Participant Directed
------------------------------------------------------------------------------------------------
Fidelity
Royce Managed Artesian
Davis NY PIMCO Total Low-Priced Templeton Liquidity Income Resources Participant
Venture A Return Admin Stock Foreign R Fund Portfolio Corp. A Loans Total
----------- ------------ ---------- --------- --------- --------- --------- ---------- -----
Assets:
Cash $ -- $ -- $ -- $ -- $ 2,960 $ -- $ -- $ -- $ 2,960
Investments, at fair
value--Common/
Collective Trusts -- -- -- -- -- -- -- -- 1,256,301
Registered Investment
Investment
Companies 4,056,245 1,288,337 311,642 989,095 -- -- -- -- 13,994,463
Employer Securities
Securities -- -- -- -- -- -- 1,995,789 -- 1,995,789
Participant Loans -- -- -- -- -- -- -- 253,113 253,113
---------- ---------- --------- ---------- ------- -------- ----------- -------- -----------
Total Investments 4,056,245 1,288,337 311,642 989,095 2,960 -- 1,995,789 253,113 17,502,626
Amount due from employer -- 9,540 -- 34,373 -- -- 34,373 -- 123,286
---------- ---------- --------- ---------- ------- -------- ----------- -------- -----------
Net assets available
for benefits $4,056,245 $1,297,877 $ 311,642 $1,023,468 $ 2,960 $ -- $ 2,030,162 $253,113 $17,625,912
========== ========== ========= ========== ======= ======== =========== ======== ===========
See accompanying notes to the financial statements.
-4-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
STATEMENT OF NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31, 2003
Participant Directed
-----------------------------------------------------------------------------------------------------------
Gartmore Lord Abbett
Columbia Growth Fund Columbia Mid Calamos Dodge & Cox Dodge & Cox Morley Stable Mid-Cap
Acorn Z of America A Cap Value A Growth A Balanced Stock Adv Value A
---------- ------------ ----------- ---------- ----------- ----------- ------------- ----------
Assets:
Cash $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Investments, at fair
value--Common/
Collective Trusts -- -- -- -- -- -- 1,078,085 --
Registered Investment
Investment
Companies 284,331 3,322,330 27,782 234,059 28,946 2,018,405 -- 157,086
Employer Securities
Securities -- -- -- -- -- -- -- --
Participant Loans -- -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Investments 284,331 3,322,330 27,782 234,059 28,946 2,018,405 1,078,085 157,086
Amount due from employer -- 43,794 -- -- -- 15,264 -- --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets available
for benefits $ 284,331 $3,366,124 $ 27,782 $ 234,059 $ 28,946 $2,033,669 $1,078,085 $ 157,086
========== ========== ========== ========== ========== ========== ========== ==========
See accompanying notes to the financial statements.
-5-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
STATEMENT OF NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31, 2003
Participant Directed
------------------------------------------------------------------------------------------------
Fidelity
Royce Managed Artesian
Davis NY PIMCO Total Low-Priced Templeton Liquidity Income Resources Participant
Venture A Return Admin Stock Foreign R Fund Portfolio Corp. A Loans Total
----------- ------------ ---------- --------- --------- --------- --------- ---------- -----
Assets:
Cash $ -- $ -- $ -- $ -- $ 14,691 $ 8,833 $ -- $ -- $ 23,524
Investments, at fair
value--Common/
Collective Trusts -- -- -- -- -- -- -- -- 1,078,085
Registered Investment
Investment
Companies 3,602,722 988,513 222,538 735,866 -- -- -- -- 11,622,578
Employer Securities
Securities -- -- -- -- -- -- 1,776,875 -- 1,776,875
Participant Loans -- -- -- -- -- -- -- 333,577 333,577
---------- --------- -------- -------- -------- ------- ---------- -------- -----------
Total Investments 3,602,722 988,513 222,538 735,866 14,691 8,833 1,776,875 333,577 14,834,639
Amount due from employer -- -- -- 43,793 31,725 -- -- -- 134,576
---------- --------- -------- -------- -------- ------- ---------- -------- -----------
Net assets available
for benefits $3,602,722 $ 988,513 $222,538 $779,659 $ 46,416 $ 8,833 $1,776,875 $333,577 $14,969,215
========== ========= ======== ======== ======== ======= ========== ======== ===========
See accompanying notes to the financial statements.
-6-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2004
Participant Directed
-----------------------------------------------------------------------------------------------------------
Gartmore Lord Abbett
Columbia Growth Fund Columbia Mid Calamos Dodge & Cox Dodge & Cox Morley Stable Mid-Cap
Acorn Z of America A Cap Value A Growth A Balanced Stock Adv Value A
---------- ------------ ----------- ---------- ----------- ----------- ------------- ----------
Additions to Net Assets
attributed to:
Investment income: Net
appreciation
(depreciation) of
investments $ 53,759 $ 389,497 $ 2,603 $ 51,891 $ 3,400 $ 309,781 $ 36,066 $ 35,930
Dividends 13,498 12,494 1,212 944 1,857 97,636 -- 7,257
Interest -- -- -- -- -- -- -- --
Contributions
Participants 28,665 205,009 8,930 36,784 13,160 109,008 61,232 20,349
Employer 8,558 102,722 3,193 11,965 4,257 54,700 104,283 11,669
---------- ----------- --------- --------- --------- ----------- ----------- -----------
104,480 709,722 15,938 101,584 22,674 571,125 201,581 75,205
Deductions from Net
Assets attributed to:
Administrative expenses -- -- -- -- -- -- -- --
Participant distributions 9,286 192,987 1,125 6,456 262 73,851 26,002 6,771
---------- ----------- --------- --------- --------- ----------- ----------- -----------
Total deductions 9,286 192,987 1,125 6,456 262 73,851 26,002 6,771
---------- ----------- --------- --------- --------- ----------- ----------- -----------
Net increase (decrease)
prior to inter-fund
transfers 95,194 516,735 14,813 95,128 22,412 497,274 175,579 68,434
Inter-fund transfers 18,969 (148,209) (10,999) 26,327 (838) 32,989 22,637 13,918
---------- ----------- --------- --------- --------- ----------- ----------- -----------
Net increase (decrease)
in plan assets 114,163 368,526 3,814 121,455 21,574 530,263 198,216 82,352
Net assets available for
benefits-beginning of
year 284,331 3,366,124 27,782 234,059 28,946 2,033,669 1,078,085 157,086
---------- ----------- --------- --------- --------- ----------- ----------- -----------
Net assets available for
benefits-end of year $ 398,494 $ 3,734,650 $ 31,596 $ 355,514 $ 50,520 $ 2,563,932 $ 1,276,301 $ 239,438
========== =========== ========= ========= ========= =========== =========== ===========
See accompanying notes to the financial statements.
-7-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2004
Participant Directed
------------------------------------------------------------------------------
Fidelity
PIMCO Total Royce Low- Managed
Davis NY Return Priced Templeton Liquidity Income
Venture A Admin Stock Foreign R Fund Portfolio
--------- ----------- ---------- --------- --------- ---------
Additions to Net Assets
attributed to:
Investment income: Net
appreciation
(depreciation) of
investments $ 415,351 $ (7,613) $ 24,549 $ 128,822 $ -- $ --
Dividends 30,400 65,145 10,792 17,844 55,762 --
Interest -- -- -- -- -- --
Contributions
Participants 126,710 85,170 25,561 39,844 58,023 --
Employer 40,412 184,492 7,601 48,016 46,921 (8,833)
---------- ---------- -------- ---------- -------- --------
612,873 327,194 68,503 234,526 160,706 (8,833)
Deductions from Net
Assets attributed to:
Administrative expenses -- -- -- -- -- --
---------- ---------- -------- ---------- -------- --------
Participant distributions 146,565 30,809 8,881 29,121 114 --
---------- ---------- -------- ---------- -------- --------
Total deductions 146,565 30,809 8,881 29,121 114 --
Net increase
(decrease) prior and
inter-fund transfers 466,308 296,385 59,622 205,405 160,592 (8,833)
Inter-fund transfers (12,785) 12,979 29,482 38,404 (204,048) --
---------- ---------- -------- ---------- -------- --------
Net increase (decrease)
in plan assets 453,523 309,364 89,104 243,809 (43,456) (8,833)
Net assets available for
benefits-beginning of
year 3,602,722 988,513 222,538 779,659 46,416 8,833
---------- ---------- -------- ---------- -------- --------
Net assets available for
benefits-end of year $4,056,245 $1,297,877 $311,642 $1,023,468 $ 2,960 $ --
========== ========== ======== ========== ======== ========
[RESTUBBED TABLE]
Artesian
Resources Participant Low-Priced
Corp. A Loans Total
--------- ----------- -----------
Additions to Net Assets
attributed to:
Investment income: Net
appreciation
(depreciation) of
investments $ 27,408 $ -- $ 1,471,444
Dividends -- -- 314,841
Interest -- 20,323 20,323
Contributions
Participants -- -- 818,445
Employer 33,627 -- 653,583
---------- -------- -----------
61,035 20,323 3,278,636
Deductions from Net
Assets attributed to:
Administrative expenses -- -- --
---------- -------- -----------
Participant distributions 64,708 25,001 621,939
---------- -------- -----------
Total deductions 64,708 25,001 621,939
Net increase
(decrease) prior and
inter-fund transfers (3,673) (4,678) 2,656,697
Inter-fund transfers 256,960 (75,786) --
---------- -------- -----------
Net increase (decrease)
in plan assets 253,287 (80,464) 2,656,697
Net assets available for
benefits-beginning of
year 1,776,875 333,577 14,969,215
---------- -------- -----------
Net assets available for
benefits-end of year $2,030,162 $253,113 $17,625,912
========== ======== ===========
See accompanying notes to the financial statements.
-8-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
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
retirement 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 administration expenses may be paid out of the plan
unless paid by the Company. The Company paid all such expenses
incurred during 2004.
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 $13,000 ($16,000 for participants age 50
and older) for all deferrals under all plans in 2004 (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 2004.
-9-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
DESCRIPTION OF THE PLAN (CONT'D.)
PARTICIPATION, VESTING AND WITHDRAWALS (CONT'D.)
The Company's Board of Directors, at its sole discretion, may
make an additional discretionary contribution. No additional
discretionary contributions were made for 2004.
Participant contributions, and the related earnings, are fully
vested. Company contributions, and the related earnings, 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%
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.
The Company also sponsored another defined contribution plan
for its employees, the Supplemental Plan, which was merged
into the Plan on March 31, 2000. The contribution and vesting
guidelines for the participants of the Supplemental Plan
continued and consist of the following:
-10-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
DESCRIPTION OF THE PLAN (CONT'D.)
PARTICIPATION, VESTING AND WITHDRAWALS (CONT'D.)
o Only employees as of April 26, 1994 are eligible for
participation.
o A service contribution is made by the Company to the
Plan for all eligible participants each quarter 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%
o 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%
o 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 their account.
-11-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
DESCRIPTION OF THE PLAN (CONT'D.)
INVESTMENT ELECTIONS
Participants may allocate basic and matching contributions
among the various mutual fund investments and/or Artesian
Resources Class A non-voting common stock.
Participants may elect an allocation among one or more of the
investment funds in multiples of one (1) percent with a
minimum investment of one (1) percent in any selected fund.
Discretionary Company contributions are invested by the
Trustee in a uniform manner for all participants.
LOANS
Participants may borrow from the Plan under the following
guidelines:
- A participant may borrow as much as 50 percent of
his or her 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.
- The participant's account balance is secured as
collateral when the loan is executed. If a
participant defaults on a loan, the loan is
treated as a distribution from the plan to the
participant.
-12-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
DESCRIPTION OF THE PLAN (CONT'D.)
LOANS (CONT'D.)
- Interest rates on loans are prime plus one percent
at the date of the loan.
- As loans are repaid to the plan, the total payment,
principal plus interest, is credited back to the
participants account.
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, 2004 was
made up of:
New loans $ 1,094
Loan repayments (56,557)
Transfer of interest income (20,323)
--------
$ 75,786
========
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 $5,000 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.
-13-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
DESCRIPTION OF THE PLAN (CONT'D.)
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.
CHANGE IN AVAILABLE FUNDS AND RECORDKEEPERS
During 2002, the Plan's Committee of Trustees unanimously
approved changing the investment funds and third-party
administrators (TPA). On January 7, 2003, the funds were sold,
and most of the cash was transferred to the new TPA as of
December 31, 2003, $8,833 remained in Fidelity Cash Reserves
of the Fidelity Managed Income Portfolio (the former TPA). The
remaining $8,833 was transferred to Reliance Trust Company in
2004 and characterized as forfeitures, reducing employer
contributions in 2004.
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.
-14-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)
USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America 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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain collective trusts in the prior year financial
statements have been reclassified for comparative purposes to
conform with presentation in the current year financial
statements.
INVESTMENT VALUATION AND INCOME RECOGNITION
Plan assets held in mutual fund investments and Artesian
Resources Corp. Class A non-voting common stock are unsecured
and 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. Participant loans are valued at cost
which approximates fair value.
-15-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)
INVESTMENT VALUATION AND INCOME RECOGNITION (CONT'D.)
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 March 19, 2002, that the original
Plan plus amendments is qualified and the trust established
under the Plan is tax-exempt, under the appropriate sections
of the Internal Revenue Code.
NOTE 3 PLAN ADMINISTRATION EXPENSES
Plan administration fees are charged to the plan based on
asset value and number of participants. The Plan invests in
various mutual funds with revenue-sharing agreements that help
to offset fees. The Company paid the following net plan
expenses in 2004:
Fees charged to the Plan $ 64,704
Revenue-sharing offsets (58,784)
---------
Net plan expenses $ 5,921
=========
-16-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 4 CREDIT RISK
The Plan has $2,960 in mutual fund money market accounts at
December 31, 2004 ($23,524 in 2003). These funds are fully
insured by the Securities Investor Protection Corporation
(SIPC).
NOTE 5 MARKET RISK
All investments in the Plan, including holdings in Artesian
"A" Common Stock, are subject to market risk.
NOTE 6 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, 2004:
American Funds Growth Fund of America A
Dodge & Cox Stock
Gartmore Morley Stable Adv
Davis NY Venture
PIMCO Total Return Admin
Templeton Foreign R
Artesian "A" Common Stock
Amounts allocated to withdrawing participants are reported on
the Schedule H of Form 5500 for benefit claims that have been
processed and approved for payment prior to December 31st but
not yet paid as of that date.
-17-
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2004
NOTE 7 RECONCILIATION OF FINANCIAL STATEMENTS TO SCHEDULE H
OF FORM 5500
The following is a reconciliation of net assets available for
benefits per the financial statements at December 31, 2004 and
2003 to Schedule H of Form 5500:
2004 2003
----------- ------------
Net assets available
for benefits per the
financial statements $17,625,912 $14,969,215
Amounts allocated to
withdrawing participants - (5,044)
----------- ------------
Net assets available for
benefits per Schedule H
to the Form 5500 $17,625,912 $14,964,171
=========== ===========
The following is a reconciliation of benefits paid to
participants per the financial statements for the year ended
December 31, 2004 to Schedule H of Form 5500:
Benefits paid to participants
per the financial statements $ 621,939
Add: Amounts allocated to
withdrawing participants at
December 31, 2004 -
Less: Amounts allocated to
withdrawing participants at
December 31, 2003 (5,044)
----------
Benefits paid to participants
per Schedule H of Form 5500 $ 616,895
==========
-18-
SUPPLEMENTAL SCHEDULE
* Identifies the party as a "Party in Interest".
ARTESIAN RESOURCES CORPORATION
RETIREMENT PLAN
EIN: 51-0002090, PLAN NO.: 003
SCHEDULE H, PART IV, LINE 4i: SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AT END OF YEAR
AS OF DECEMBER 31, 2004
(a) (b) Identity of issue, borrower, (c) Description of investment including maturity date, (e)Current
lessor or similar party rate of interest, collateral, par or maturity value (d) Cost Value
---------------------------- --------------------------------------------------- -------- -----------
Invesmart Mutual Fund Columbia Acorn Z $283,516 $ 398,494
Selections Growth Fund of America A 2,692,426 3,714,650
Columbia Mid Cap Value A 27,014 31,596
Calamos Growth A 258,448 355,514
Dodge & Cox Balanced 44,706 50,520
Dodge & Cox Stock 1,852,229 2,563,932
Gartmore Morley Stable Adv 1,192,626 1,256,301
Lord Abbett Mid-Cap Value A 171,175 234,438
Davis NY Venture 2,899,549 4,056,245
PIMCO Total Return Admin 1,295,932 1,288,337
Royce Low-Priced Stock 230,745 311,642
Templeton Foreign R 715,315 989,095
Invesmart Liquidity Fund 2,960 2,960
----------- -----------
Total mutual funds 11,666,641 15,253,724
* Artesian Resources Corporation Class A non-voting common stock 1,547,749 1,995,789
Participant Loans Interest rates range
from 5.00% to 10.50%,
can borrow up to
50% of account
balance, repayment
terms range from 5
to 15 years,
secured by account balance - 253,113
----------- -----------
$13,214,390 $17,502,626
=========== ===========
* Identifies the party as a "Party in Interest".