Ann: Appendix 4C Commentary, page-240

The factor of increase is based on herd size and applied throughout the dairy expense related items. It can be argued that as there has been a significant increase in herd size, then economies of scale can be applied and feed cost in particular can be purchased at a more competitive cost with bulk purchases. In the absence of detailed cost breakdowns, your table is a good indication that expenses are indeed overstated based on assumptions made and in reality the P/L figure should be in the black. The other non dairy related cost also need scrutiny and Directors will have a tough time explaining why losses not profits.