The company's operating profit margins also improved to 11.8 per cent from 7.28 per cent. With stabilisation of new production facilities and higher sales, the company has been able to partially neutralise the high interest and depreciation costs.

Interest charges have also come down by 25 per cent to Rs 12.66 crore from Rs 16.73 crore in the first quarter of 1998. Depreciation and amortisation costs were marginally higher at Rs 10 crore against Rs 9.99 crore.

The net loss for the quarter has been reduced by 40 per cent, quarter on quarter, to Rs 13.09 crore from Rs 21.95 crore. The loss for the full year of 1998-99 was Rs 97.92 crore.

In 1998, the company had sold 63,000 tonnes of premium coated boards from thenew machine. Its operations are now focussed on higher value addition and improvements in operational efficiency.

The company has also started exporting to the Middle Eastern and East African markets. It is now targeting premium segments of the international markets for its coated boards.

The company's interest burden has been reduced as a result of reschedulement of project loans and part of the other long-term debts. The interest rates have been reset to progressively increasing rates keeping the negotiated yield to maturity of the lenders unaffected.

The cash accommodation provided by the lenders over the three-year period to March 31, 2001, amounts to about Rs 150 crore. As is known, ITC group's holding in the company has increased from 37 per cent to 51 per cent.