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ITC plans new hotels

Our Special Correspondent

KOLKATA, JULY 30. The Chairman of ITC, Y. C. Deveshwar, today said that the company planned to set up one new hotel each in Bangalore and Chennai. A second hotel was also being planned in Hyderabad, he said.

Addressing the shareholders, he said that while the company already owned eight acres of land in Mount Road in Chennai, in Bangalore it planned to a construct hotel on a plot now being used to house officers. He linked these plans to the increased flow of tourists to India.

Responding to shareholders' suggestions on issuing bonus shares out of growing reserves, the Chairman said, "There was a need to take a balanced view of the assets." The value of the legal cases against the company stood at Rs. 2,200 crores, he said adding that it was important to build a `war chest'.

ITC was also in several sunrise areas and was awaiting opportunities for making proper investments, Mr. Deveshwar observed during the AGM for which equity holders had come from tobacco-growing areas in Andhra Pradesh, Mysore and Karnataka.

To another suggestion from a shareholder on real estate entry, he said the company did not have expertise in this area and was trying to exit from the assets (mainly on account of ITC Classic Finance) that it had. He commented that the company's endeavour was to become leader in each of its area of operations.

Leveraging IT

In his speech, he said that ITC's e-choupal model seeks to address the issues relating to last mile connectivity by leveraging IT to build capability at the grassroots level through empowerment of the small farmer. This model seeks to enhance farm productivity and income by aligning output with market demand through connectivity.

In 2003-04, ITC recorded a sales turnover of Rs. 11,815 crores, on which a net profit of Rs. 1,592 crores was made. The company recommended a 20 per cent dividend. At a press meet later, he said the proposed hotels would be in the premium segment. However he refused to divulge any further details.

Net up 16 p.c.

ITC increased its post-tax profit by 16.3 per cent in the first quarter of 2004-05 to Rs. 461.9 crores on a net turnover of Rs. 1,775 crores. The turnover increased by 24 per cent on the back of higher cigarette sales, ramp-up of FMCG businesses and improved performance of hotels, paperboards, paper and packaging materials.

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