Consolidated Income Statement - on a Reported Basis

	March 2005 € m	March 2004 € m
Operating profit	505	296
Exceptional item	81	-
Profit before net investment income	586	296
Net investment income	2	6
Profit before taxation	588	302
Taxation	(92)	(64)
Profit after taxation	496	238
Minority interests	(2)	-
Net profit of the parent and its subsidiaries	494	238
Share of net profit of associated company	491	82
Share of net profit on an adjusted basis	468	422
Goodwill amortisation	(222)	(196)
Share of exceptional items reported by associate company	245	(144)
Net profit of the Group on a reported basis	985	320
A summary of the effects of goodwill amortisation and exceptional items on unitholders' net profit is shown below:
Net profit of the Group on a reported basis	985	320
Elimination of goodwill amortisation - associated company	222	196
Elimination of exceptional items	(326)	144
Gain arising on BAT ordinary shares	(81)	-
Share of exceptional items reported by associated company	(245)	144
Net profit on an adjusted basis	881	660

After taking into account goodwill amortisation in respect of the Group's interest in BAT and exceptional items, net profit on a reported basis increased from € 320 million to € 985 million. Reflecting the accounting policy adopted by the Group in the previous financial year, goodwill arising from the acquisition of subsidiary companies is deducted immediately from unitholders' funds. All goodwill amortisation thus relates to the Group's interest in BAT, the Group's associated company.

During the year under review, Richemont disposed of a 0.6 per cent effective interest in BAT to its joint venture partner, Remgro Limited ('Remgro'). This followed an approach from Remgro, which wished to increase its effective interest in BAT to 10 per cent but was precluded from buying shares in the market by the terms of the Standstill Agreement entered into between BAT, Remgro and Richemont in 1999. The disposal was completed on 4 March 2005 and the Group realised an exceptional gain of € 81 million on the transaction. As a consequence of the disposal, the Group's effective interest in BAT declined from 18.8 per cent at the time of the transaction to 18.2 per cent.

Exceptional items reported in the Group's share of BAT's results amounted to € 245 million. The items primarily related to gains on the disposal of subsidiaries and the Reynolds American transaction. In the prior year, the exceptional items reported by BAT primarily related to restructuring costs in the UK and Canada, the Group's share of these costs amounting to € 144 million.

Richemont's net profit for the year, before exceptional items and goodwill amortisation in respect of the investment in BAT, amounted to € 881 million, an increase of 33 per cent. After taking into account goodwill amortisation and exceptional items, net profit for the year on a reported basis in accordance with Swiss generally accepted accounting principles increased to € 985 million from € 320 million in the prior year.