annual report, page-59

Still not sure about that kens. Here's a definition I get from the web:

http://www.investopedia.com/terms/c/cogs.asp#axzz1soknPjoD

There are several ways to calculate COGS but one of the more basic ways is to start with the beginning inventory for the period and add the total amount of purchases made during the period then deducting the ending inventory. This calculation gives the total amount of inventory or, more specifically, the cost of this inventory, sold by the company during the period.

This tends to indicate that the percentage profit for initial inventory would be lower than once fully running.

I would have thought if removing production costs (whether that be initial or otherwise) it is misrepresenting the true cost of the goods. As mentioned it is often impossible to calculate the exact cost per unit.

Regardless if this is not the case then what would be the explanation for such a low profit%? It doesn't really make sense since POHs production f goods is pretty straight forward.