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Registration number: 01436865

G.H. Sheldon Wholesale Bakers Limited

Annual Report and Financial Statements

for the Year Ended 28 February 2023

 

G.H. Sheldon Wholesale Bakers Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 5

Statement of Directors' Responsibilities

6

Independent Auditor's Report

7 to 11

Profit and Loss Account

12

Statement of Comprehensive Income

13

Balance Sheet

14

Statement of Changes in Equity

15

Statement of Cash Flows

16

Notes to the Financial Statements

17 to 31

 

G.H. Sheldon Wholesale Bakers Limited

Company Information

Directors

Mr Graham Sheldon

Mrs Barbara Sheldon

Mr Lee Sheldon

Mrs Sarah Sheldon

Company secretary

Mrs Sarah Sheldon

Registered office

10 Stainburn Road
Openshaw
Manchester
M11 2GW

Auditors

The Moffatts Partnership LLP
Suite 1.1, First Floor
Jackson House
Sibson Road
Sale
M33 7RR

 

G.H. Sheldon Wholesale Bakers Limited

Strategic Report for the Year Ended 28 February 2023

The directors present their strategic report for the year ended 28 February 2023.

Principal activity

The principal activity of the company is that of a wholesale baker.

Fair review of the business

The year to 28th February 2023 again showed good progress. Sales increased by £4.5M as our own brand products became better known throughout the country. We invested just under £236K in new plant and commercial vehicles on top of the £3.1M invested in the previous two years. This made the total investment in fixed assets over three years almost £3.3M. It was important for us to do this so that we could meet the requirements of our customers at busy times of the year without compromising our quality of product and reliability for delivery on time. We believe we have a very enviable reputation among our customers for these particular attributes.

The year to 28th February 2023 was very difficult, as it would have been for everyone in the trade. After a good start, by August we were suffering from huge increases in the price of ingredients and specifically where the cost of our main ingredient increased by around 75%. At the same time there were large increases in the cost of gas and electricity and in transportation. This hit profits significantly as it took time to pass on these increases to customers, In this situation we did well to report a profit before tax of £727,942 albeit well down on the previous years £1,842,667.

In the period after the year end of 28th February 2023 costs continued to rise. The company has negotiated sales price rises and whilst there is a time lag before the new prices take effect the company is confident that trading figures for the coming year will show acceptable levels of profitability. The company continues to deliver what can be variable orders on time and with a high standard of product. This along with other factors enable the company to show a significant increase in turnover whilst maintaining the goodwill to our many satisfied customers.

The company's key financial and other performance indicators during the year were as follows:

Unit

2023

2022

Turnover growth

%

14.88

15.64

Gross profit margin

%

8.40

13.21

Profit before tax

£

727,942

1,842,667

 

G.H. Sheldon Wholesale Bakers Limited

Strategic Report for the Year Ended 28 February 2023

Principal risks and uncertainties

G.H.Sheldon Wholesale Bakers Limited operates in the very competitive Great British grocery market. In order to manage this we continue to develop our brand and strengthen our management expertise.

The company is exposed to commodity markets, principally wheat and energy. The level of volatility remains significant within these cost areas and, with the consumer environment remaining challenging, cost recovery is difficult. The directors consider the processes we have in place for managing risk in these areas to be appropriate.

The remaining principal risks and uncertainties faced by the business in the next 12 months include:

- changes in the retailer landscape and consumer behaviour
- delivery of capital investment projects and the impact of competitor activity.

Given the current economic environment the directors continue to ensure that a full risk assessment is a key part of all decision making.

Engagement with employees

The company provides employees with information on matters of concern to them as employees and consult employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests.

Approved and authorised by the Board on 4 September 2023 and signed on its behalf by:
 

.........................................
Mrs Sarah Sheldon
Company secretary and director

 

G.H. Sheldon Wholesale Bakers Limited

Directors' Report for the Year Ended 28 February 2023

The directors present their report and the financial statements for the year ended 28 February 2023.

Directors of the company

The directors who held office during the year were as follows:

Mr Graham Sheldon

Mrs Barbara Sheldon

Mr Lee Sheldon

Mrs Sarah Sheldon - Company secretary and director

Financial instruments

Objectives and policies

The company uses various financial instruments. These include finance lease agreements and cash. Items such as trade debtors and trade creditors that arise directly from its operations are also used. The main purpose of these financial instruments is to raise finance for the company's operations.

The main risks arising from the company's financial instruments are liquidity risk, interest rate risk, and credit risk.

- Liquidity risk is managed by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short term flexibility is managed by using overdraft facilities.

- Interest rate risk is managed by using fixed rate facilities, therefore reducing exposure to rate fluctuations.

- The company's principal financial asset, and therefore its principal credit risk, is trade debtors. Trade debts are monitored closely and the company does not have a history of impairments.

Price risk, credit risk, liquidity risk and cash flow risk

The business' principal financial statements comprise bank balances, bank overdrafts, trade debtors, trade creditors and finance lease agreements. The main purpose of these instruments are to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity
of funding and flexibility through the use of overdrafts at floating rates of interest.

Trade debtors are managed in respect of credit and cash flow by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debts.

Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

The business is a lessee in respect of finance leased assets. The liquidity risk in respect of these is managed
by ensuring that there are sufficient funds to meet the payments.

 

G.H. Sheldon Wholesale Bakers Limited

Directors' Report for the Year Ended 28 February 2023

Employment of disabled persons

Applications for employment by disabled persons are always fully considered and it is the policy of the Company that training, career development and promotion of disabled persons should, as far as practicable, be identical to that of other employees.

Employee involvement

The Company is an equal opportunities employer and consults and discusses with employees on matters that are likely to affect the employee's interests.

Future developments

The company have various plans to increase production but they require substantial expenditure on buildings and plant. Due to the ongoing economic circumstances and the increases in interest rates affecting both our company and our customers it is not considered the time to enter into large scale expansion projects. We will continue to do what we do well in producing high quality products, whose sales regularly increase from year to year.

Research and development

The company is currently undertaking research and development to improve production techniques and introduce new products. Costs are written off to the profit and loss account or capitalised as plant and equipment.

Going concern

The directors have a reasonable expectation that the company will have adequate resources to continue for the foreseeable future and the company therefore continues to adopt the going concern basis in preparing its financial statements.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

The auditors The Moffatts Partnership LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 4 September 2023 and signed on its behalf by:
 

.........................................
Mrs Sarah Sheldon
Company secretary and director

 

G.H. Sheldon Wholesale Bakers Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

G.H. Sheldon Wholesale Bakers Limited

Independent Auditor's Report to the Members of G.H. Sheldon Wholesale Bakers Limited

Opinion

We have audited the financial statements of G.H. Sheldon Wholesale Bakers Limited (the 'company') for the year ended 28 February 2023, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 28 February 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

G.H. Sheldon Wholesale Bakers Limited

Independent Auditor's Report to the Members of G.H. Sheldon Wholesale Bakers Limited

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 6], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

 

G.H. Sheldon Wholesale Bakers Limited

Independent Auditor's Report to the Members of G.H. Sheldon Wholesale Bakers Limited

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

Based on our understanding of the company, we identified that the principle risks of non-compliance with laws and regulations related to breaches of the legal and regulatory framework that the company operates in. We considered the extent to which non-compliance might have a material effect on the financial statements. The key laws and regulations we considered in this context included UK Companies Act 2006, employment law, health and safety and tax legislation.

 

G.H. Sheldon Wholesale Bakers Limited

Independent Auditor's Report to the Members of G.H. Sheldon Wholesale Bakers Limited

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
• enquiring of management as to actual and potential litigation and claims.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
• Discussions with management and those charged with governance in relation to known or suspected instances of non-compliance with laws and regulations and fraud;
• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and
• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:
• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
• investigated the rationale behind significant or unusual transactions.

There are inherent limitations in our audit procedures described above. The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control systems, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned in accordance with ISAs (UK).

We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors.

 

G.H. Sheldon Wholesale Bakers Limited

Independent Auditor's Report to the Members of G.H. Sheldon Wholesale Bakers Limited

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Mr John Saxon (Senior Statutory Auditor)
For and on behalf of The Moffatts Partnership LLP, Statutory Auditor

Suite 1.1, First Floor
Jackson House
Sibson Road
Sale
M33 7RR

4 September 2023

 

G.H. Sheldon Wholesale Bakers Limited

Profit and Loss Account for the Year Ended 28 February 2023

Note

2023
£

2022
£

Turnover

3

35,082,106

30,506,315

Cost of sales

 

(32,134,740)

(26,475,206)

Gross profit

 

2,947,366

4,031,109

Administrative expenses

 

(2,145,758)

(2,113,333)

Other operating income

4

4,759

31,673

Operating profit

7

806,367

1,949,449

Other interest receivable and similar income

-

290

Interest payable and similar expenses

8

(78,425)

(107,072)

   

(78,425)

(106,782)

Profit before tax

 

727,942

1,842,667

Tax on profit

12

(109,991)

(498,124)

Profit for the financial year

 

617,951

1,344,543

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

G.H. Sheldon Wholesale Bakers Limited

Statement of Comprehensive Income for the Year Ended 28 February 2023

2023
£

2022
£

Profit for the year

617,951

1,344,543

Total comprehensive income for the year

617,951

1,344,543

 

G.H. Sheldon Wholesale Bakers Limited

(Registration number: 01436865)
Balance Sheet as at 28 February 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

13

20,200

40,400

Tangible assets

14

4,346,682

5,102,984

 

4,366,882

5,143,384

Current assets

 

Stocks

15

1,024,101

796,213

Debtors

16

4,974,311

3,868,394

Cash at bank and in hand

 

2,273,866

1,851,255

 

8,272,278

6,515,862

Creditors: Amounts falling due within one year

18

(5,261,710)

(4,242,066)

Net current assets

 

3,010,568

2,273,796

Total assets less current liabilities

 

7,377,450

7,417,180

Creditors: Amounts falling due after more than one year

18

(374,047)

(757,155)

Provisions for liabilities

19

(734,316)

(846,889)

Net assets

 

6,269,087

5,813,136

Capital and reserves

 

Called up share capital

1,000

1,000

Retained earnings

22

6,268,087

5,812,136

Shareholders' funds

 

6,269,087

5,813,136

Approved and authorised by the Board on 4 September 2023 and signed on its behalf by:
 

.........................................
Mrs Sarah Sheldon
Company secretary and director

 

G.H. Sheldon Wholesale Bakers Limited

Statement of Changes in Equity for the Year Ended 28 February 2023

Share capital
£

Retained earnings
£

Total
£

At 1 March 2022

1,000

5,812,136

5,813,136

Profit for the year

-

617,951

617,951

Dividends

-

(162,000)

(162,000)

At 28 February 2023

1,000

6,268,087

6,269,087

Share capital
£

Retained earnings
£

Total
£

At 1 March 2021

1,000

4,677,093

4,678,093

Profit for the year

-

1,344,543

1,344,543

Dividends

-

(209,500)

(209,500)

At 28 February 2022

1,000

5,812,136

5,813,136

 

G.H. Sheldon Wholesale Bakers Limited

Statement of Cash Flows for the Year Ended 28 February 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

617,951

1,344,543

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

7

1,012,489

958,798

Loss on disposal of tangible assets

6

-

18,640

Finance income

-

(290)

Finance costs

8

78,425

107,072

Income tax expense

12

109,991

498,124

 

1,818,856

2,926,887

Working capital adjustments

 

Increase in stocks

15

(227,888)

(84,976)

Increase in trade debtors

16

(1,105,917)

(400,003)

Increase in trade creditors

18

1,101,485

187,530

Cash generated from operations

 

1,586,536

2,629,438

Income taxes paid

12

(200,935)

(161,598)

Net cash flow from operating activities

 

1,385,601

2,467,840

Cash flows from investing activities

 

Interest received

-

290

Acquisitions of tangible assets

(235,987)

(1,302,074)

Proceeds from sale of tangible assets

 

-

21,001

Net cash flows from investing activities

 

(235,987)

(1,280,783)

Cash flows from financing activities

 

Interest paid

8

(78,425)

(107,072)

Payments to finance lease creditors

 

(486,578)

(201,521)

Dividends paid

25

(162,000)

(209,500)

Net cash flows from financing activities

 

(727,003)

(518,093)

Net increase in cash and cash equivalents

 

422,611

668,964

Cash and cash equivalents at 1 March

 

1,851,255

1,182,291

Cash and cash equivalents at 28 February

 

2,273,866

1,851,255

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

1

General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
10 Stainburn Road
Openshaw
Manchester
M11 2GW
United Kingdom

These financial statements were authorised for issue by the Board on 4 September 2023.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Going concern

At the time of approving the financial statements the directors have a reasonable expectation that the company will have adequate resources to continue for the foreseeable future and the company therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements

In the course of preparing the financial statements, no judgements have been made in the process of applying the accounting policies, other than those involving estimations, that have had a significant effect on the amounts recognised in the financial statements.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when goods are delivered and accepted by customers, when the risks and rewards of ownership of the goods have passed to the buyer and the amount can be measured reliably.

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

Government grants

Government grants are recognised under the accrual model. Income is recognised in the same period that the related expenditure the grant is intended to compensate is incurred.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and Machinery

20% reducing balance basis

Plant and Machinery

10% straight line basis

Furniture and Equipment

25% reducing balance basis

Computer Equipment

25% reducing balance basis

Motor Vehicles

25% reducing balance basis

Buildings

10% straight line basis

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

10% straight line basis

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated over their estimated useful life. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.


 Recognition and measurement
Basic financial assets, including trade and other receivables, cash and bank balances and investments in commercial paper, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method.


 Impairment
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss. If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
 £

2022
 £

Sale of goods

35,082,106

30,506,315

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
 £

2022
 £

Government grants

4,759

31,673

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

5

Government grants

Government grants recognised in the financial statements are in relation to the now closed Kickstarter Scheme, a programme launched by the government to deliver funding for employers offering new job roles for 16-24 years olds who were in receipt of Universal Credit. The programme was aimed at preventing young people who were currently unemployed facing long term unemployment.

The amount of grants recognised in the financial statements was £4,759 (2022 - £31,673).

6

Other gains and losses

The analysis of the company's other gains and losses for the year is as follows:

2023
 £

2022
 £

Gain/loss on disposal of property, plant and equipment

-

(18,640)

7

Operating profit

Arrived at after charging/(crediting)

2023
 £

2022
 £

Depreciation expense

992,290

938,598

Amortisation expense

20,200

20,200

Loss on disposal of property, plant and equipment

-

18,640

8

Interest payable and similar expenses

2023
 £

2022
 £

Interest on bank overdrafts and borrowings

38,000

48,000

Interest on obligations under finance leases and hire purchase contracts

40,425

59,072

78,425

107,072

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

12,309,606

10,607,352

Social security costs

990,163

815,597

Pension costs, defined contribution scheme

200,794

177,385

Other employee expense

7,895

7,802

13,508,458

11,608,136

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

383

371

Administration and support

20

20

Distribution

44

45

447

436

10

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
 £

2022
 £

Remuneration

422,346

421,874

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
 No.

2022
 No.

Accruing benefits under money purchase pension scheme

4

4

In respect of the highest paid director:

2023
 £

2022
 £

Remuneration

204,760

204,306

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

11

Auditors' remuneration

2023
 £

2022
 £

Audit of the financial statements

16,500

15,000

Other fees to auditors

All other non-audit services

38,400

37,700


 

12

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

222,564

168,833

Deferred taxation

Arising from origination and reversal of timing differences

(112,573)

329,291

Tax expense in the income statement

109,991

498,124

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 19% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

727,942

1,842,667

Corporation tax at standard rate

138,308

350,107

Effect of expense not deductible in determining taxable profit (tax loss)

270

257

Deferred tax (credit)/expense from unrecognised tax loss or credit

(112,573)

329,291

Tax increase/(decrease) from effect of capital allowances and depreciation

83,986

(148,939)

Tax decrease from effect of adjustment in research and development tax credit

-

(33,885)

Other tax effects for reconciliation between accounting profit and tax expense (income)

-

1,293

Total tax charge

109,991

498,124

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

Deferred tax

Deferred tax assets and liabilities

2023

Liability
£

734,316

734,316

2022

Liability
£

846,889

846,889

The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £333,062 (2022 - £384,986).

13

Intangible assets

Goodwill
 £

Total
£

Cost or valuation

At 1 March 2022

202,000

202,000

At 28 February 2023

202,000

202,000

Amortisation

At 1 March 2022

161,600

161,600

Amortisation charge

20,200

20,200

At 28 February 2023

181,800

181,800

Carrying amount

At 28 February 2023

20,200

20,200

At 28 February 2022

40,400

40,400

Amortisation expense of intangible fixed assets for the year and last year are included in administrative expenses.

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

14

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost or valuation

At 1 March 2022

839,781

12,379,399

1,756,388

14,975,568

Additions

-

107,337

128,650

235,987

At 28 February 2023

839,781

12,486,736

1,885,038

15,211,555

Depreciation

At 1 March 2022

625,576

8,249,457

997,551

9,872,584

Charge for the year

42,302

745,630

204,357

992,289

At 28 February 2023

667,878

8,995,087

1,201,908

10,864,873

Carrying amount

At 28 February 2023

171,903

3,491,649

683,130

4,346,682

At 28 February 2022

214,205

4,129,942

758,837

5,102,984

Included within the net book value of land and buildings above is £171,902 (2022 - £214,205) in respect of freehold land and buildings.
 

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2023
£

2022
£

Other property, plant and equipment

1,371,670

1,848,240

Motor vehicles

271,631

531,937

 

1,643,301

2,380,177

15

Stocks

2023
 £

2022
 £

Raw materials and consumables

1,024,101

796,213

The cost of stocks recognised as an expense in the year amounted to £12,725,061 (2022 - £9,980,577).

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

16

Debtors

Current

2023
£

2022
£

Trade debtors

4,449,252

3,457,331

Other debtors

473,284

369,063

Prepayments

51,775

42,000

 

4,974,311

3,868,394

17

Cash and cash equivalents

2023
 £

2022
 £

Cash on hand

705

652

Cash at bank

2,273,161

1,850,603

2,273,866

1,851,255

18

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

23

383,108

486,578

Trade creditors

 

3,359,730

2,151,949

Amounts due to related parties

27

350,170

444,425

Social security and other taxes

 

115,508

199,648

Outstanding defined contribution pension costs

 

27,669

24,996

Other payables

 

172,722

140,852

Accrued expenses

 

663,635

626,079

Income tax liability

12

189,168

167,539

 

5,261,710

4,242,066

Due after one year

 

Loans and borrowings

23

374,047

757,155

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

19

Provisions for liabilities

Deferred tax
£

Total
£

At 1 March 2022

846,889

846,889

Increase (decrease) in existing provisions

(112,573)

(112,573)

At 28 February 2023

734,316

734,316

20

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £200,794 (2022 - £177,385).

Contributions totalling £27,669 (2022 - £24,996) were payable to the scheme at the end of the year and are included in creditors.

21

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary Shares of £1 each

1,000

1,000

1,000

1,000

         

Rights, preferences and restrictions

Ordinary Shares have the following rights, preferences and restrictions:
These shares have full voting rights and entitlement on all matters.

22

Reserves

Share capital

Represents the nominal value of shares that have been issued.

Profit and loss account

Includes all current and prior period retained profits and losses.

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

23

Loans and borrowings

2023
 £

2022
 £

Non-current loans and borrowings

HP and finance lease liabilities

374,047

757,155

2023
 £

2022
 £

Current loans and borrowings

HP and finance lease liabilities

383,108

486,578

Bank overdraft

The bank overdraft is renewed annually and has a variable interest rate. It is repayable on demand.

The bank overdraft is secured by a debenture over the assets of the company and a legal charge over the business property.

24

Obligations under leases and hire purchase contracts

Finance leases

Finance leases relate to plant and equipment as well as motor vehicles. The lease agreements generally have fixed lease payments and include the option to purchase the equipment at the conclusion of the lease agreement. The finance leases are secured by the lessor's title to the leased assets.

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

383,108

486,578

Later than one year and not later than five years

374,047

757,155

757,155

1,243,733

25

Dividends

Interim dividends paid

   

2023
£

 

2022
£

Interim dividend of £162.00 (2022 - £209.50) per each ordinary share

 

162,000

 

209,500

         
 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

26

Analysis of changes in net debt

At 1 March 2022
£

Financing cash flows
£

Other non-cash changes
£

At 28 February 2023
£

Cash and cash equivalents

Cash

1,851,255

422,611

-

2,273,866

Borrowings

Long term borrowings

(757,155)

-

374,047

(383,108)

Short term borrowings

(486,578)

486,578

(374,047)

(374,047)

(1,243,733)

486,578

-

(757,155)

 

607,522

909,189

-

1,516,711

27

Related party transactions

Key management personnel

The company considers the directors of the company to be the only key management personnel of the business.

Transactions with directors

2023

At 1 March 2022
£

Advances to director
£

Repayments by director
£

Other payments made to company by director
£

At 28 February 2023
£

Mr Lee Sheldon

Mr Lee Sheldon

4,270

76,034

-

-

80,304

           

Mrs Sarah Sheldon

Mrs Sarah Sheldon

(8,344)

1,648

-

-

(6,696)

           

Mr Graham Sheldon

Mr Graham and Mrs Barbara Sheldon

(436,081)

177,247

(54,000)

(30,640)

(343,474)

           

 

G.H. Sheldon Wholesale Bakers Limited

Notes to the Financial Statements for the Year Ended 28 February 2023

2022

At 1 March 2021
£

Advances to director
£

Repayments by director
£

Other payments made to company by director
£

At 28 February 2022
£

Mr Lee Sheldon

Mr Lee Sheldon

2,923

80,831

(79,484)

-

4,270

           
         

Mrs Sarah Sheldon

Mrs Sarah Sheldon

(5,860)

68,516

(71,000)

-

(8,344)

           
         

Mr Graham Sheldon

Mr Graham and Mrs Barbara Sheldon

(586,746)

256,565

(67,500)

(38,400)

(436,081)

           
         

 

Other transactions with directors

Director's loan accounts are repayable on demand.

During the year, dividends of £162,000 (2022 - £209,500) were paid to directors of the company.

During the year, rent was paid to Mr Graham and Mrs Barbara Sheldon of £120,000 (2022: £120,000) by the company.

Summary of transactions with other related parties

G.H. Sheldon Pension Scheme

This is the directors pension scheme and during the year rent was paid to it of £54,000 (2022 - £54,000). At the balance sheet date the amount due to GH Sheldon Pension Scheme was £nil (2022 - £nil).

 

28

Ultimate controlling party

The ultimate controlling party is Graham and Barbara Sheldon, directors and shareholders of the company.