INTRODUCTION OF ITC GROUP OF HOTELS

ITC Hotels Limited (ITCHL) was originally incorporated

as Rama Hotels Pvt. Ltd. in 1972. The Company was
renamed as Vishwarama hotels in 1973 and acquired by
Vazir Sultan Tobacco Co. Ltd. (VST) in 1980-81. ITC Ltd.
and its associates bought the entire equity capital from VST
in 1984. The company's name was changed to the current
name in 1986.
ITC Hotels is the third largest hotel chain in the
country. ITC holds 71 per cent equity in ITC Hotels. It
consists of 44 hotels across India, which include five star
deluxe business hotels, heritage palaces and havelis and full
service budget hotels. These hotels are managed by ITC's
subsidiary, ITC Hotels Limited. ITC - Welcomgroup hotels
are marketed worldwide by the Sheraton Corporation, which
is part of Starwood Hotels and Resorts, the well-known
global hospitality chain.

AITC Hotels owns, manages and operates under

three distinctive brands: Welcomgroup is the brand name for
a range of exclusive luxury hotels in strategic business and
leisure locations; WelcomHeritage includes palaces, forts
and havelis; while the Fortune Hotels brand defines
accommodation in the midlevel full-service segment. ITC
Hotels manages Maurya Sheraton, the flagship hotel of the
Welcomgroup in Delhi under a management contract with its
holding company ITC. In March 1999, ITC Hotels took over
Bay Island Hotels at the Andaman and Nicobar Islands. In
April 1999, it acquired 37.55 per cent share in a joint
venture with Ansal Hotels. This project involves building of a
five-star deluxe hotel at Saket, near New Delhi.

Recent Developments
ITC Ltd is planning to merge ITCHL with itself. ITC chairman
YC Deveshwar said, `No decision on the merger has been
taken. But it can happen.` Earlier in the day, Deveshwar
told company shareholders at the annual general meeting,
`hotels are going through a bad period. However, it will be a
valuable business and asset value will not depreciate.`

WelcomHeritage, a division of the ITCHL which operates

places, havelis, forts and resorts, is all set to become the
first domestic hotel company to foray abroad in the heritage
segment. Besides taking up more properties in some
southern states and Gujrat, the company is eyeing some
heritage properties in Sri Lanka and Nepal to bring under its
umbrella within next two years. Though the company is
planning to expand in Tamil Nadu and Kerala too, there are
no convertible properties available there.
ITCHL is contemplating a five-star hotel in Bangalore.
However, it has not yet decided whether the Bangalore hotel
will be a five-star or a five-star deluxe property. The
construction of the proposed hotel is likely to start next year
and will be complete in the next 2-3 years. The company
has already announced plans to build a five-star deluxe hotel
in Chennai. At present, two five-star hotels are being built at
Kolkata and Parel in Mumbai.

Future Plans
As part of its growth plans, construction of two more
business hotels, one at Mumbai and one at Kolkata, has
already commenced. When they open, the Grand Towers at
Mumbai and the ITC Hotel Sonar Bangla at Kolkata will add
500 more rooms to the ITC - Welcomgroup chain. The 400-
room ITC Hotel Grand Maratha which opened for guests in
February 2001 is being perceived as the finest property in
Mumbai. The company has planned investments to augment
the total room capacity of the chain by building hotels at
Kolkata, Jaisalmer and other locations.

It has added 80 rooms to ITC Maurya Sheraton, Delhi. It has

opened up a new Hotel Welcome in Saket with a capacity of
220 rooms. Other projects at Bangalore and Hyderabad are
in pipeline. It is also looking at Chennai seriously. The
company is planning to invest Rs15bn in the next three
years starting FY02. The investment in Mumbai and Kolkata
is expected to be Rs5bn (Rs2.5bn in each project).

The company's strategy at present is to concentrate on India

and after expanding in all major locations of India, it will
look at the international market. Similar projects such as the
Hyderabad golf project are not likely to happen in the near
future.

FINANCIAL STATEMENT OF COMPANY

Brief Financials (in Rs. Mn.) Detailed Quarterly
Period ending (months) 31-Dec-2004(9) 31-Mar-2004 (12) 31-Mar-2003 (12)
Net sales 1467.50 1577.42 1217.19
Other Income 33.60 5.75 4.93
Total Income 1501.10 1583.17 1222.12
Cost of goods sold 946.20 1212.19 1088.55
OPBDIT 554.90 370.98 133.57
PAT 292.50 201.56 5.71
Gross Block - 2064.04 2027.17
Equity capital 302.10 302.10 302.10
EPS (Rs.) 9.68 6.67 0.19
DPS (Rs.) - 2.00 0.00
BV (Rs.) - 74.27 69.86
P/E range (x) 7.60 - 13.33 6.09 - 23.34 189.74 - 321.05
Debt / Equity (x) - 0.00 0.11
Operating margin (% of OI) 37.0 23.4 10.9
Net margin (% of OI) 19.5 12.7 0.5

Latest Quarterly/Halfyearly
Board Of Directors
Director K Jayabharath Reddy
Director Krishan Lal Thapar
Director Krishnamoorthy Vaidyanath
Managing Director Nakul Anand
Director Ramanathan Subramanian
Director Rangarajan Vasudevan
Non-Executive Director Sahibzada Syed Habib-Ur-Rehman
Director Serajul Haq Khan
Executive Director Subrahmoneyan Chandra Sekhar
Chairman and Non-Executive Director Yogesh Chander Deveshwar