CHAPTER - VI

E. Bharat Gold Mines Limited

Note : The company was reffered to BIFR in 1992 when its net worth became negative. BIFR in its final order dated 12/06/2000 has concluded that the company is not likely to make its net worth exceed its accumulated losses within a reasonable time while meeting its financial obligations and hence, not likely to be viable in future. Therefore, it is just, equitable and in public interest to wind up BGML under section 20(1) of SICA, 1985. BIFR has forwarded its opinion on 30.06.2000 to High Court of at Banglore. Besides this, the company stands closed w.e.f. 1.3.2001 under section 25(0) of Industrial Disputes Act, 1947. However, the employees of the company have challenged the BIFR's order and the order of the Ministry of Labour in the High Court of Karnataka where the case is subjudice.

1. Introduction

1.1 Bharat Gold Mines Limited (BGML) became a Public Sector Undertaking under the Department of Mines in 1972. It is primarily engaged in mining in its captive mines in Gold Fields (KGF) [located in Karnataka] and and production of gold in KGF. As a diversification measure, the Company also undertakes mine construction, shaft sinking, manufacture of mining machinery and other fabricated items for outside clients for which it has set up a Mine Construction and Engineering Division.

2 Present Scenario

2.1 BGML is a sick Company and is before the Board for Industrial and Financial Reconstruction (BIFR) since 1992. During June, 1997 the Government decided, interalia, to explore the possibility of rehabilitating BGML through joint venture route by induction of a private co-promoter(s). Accordingly a Committee was constituted, which has since given its report. The future of BGML will be decided as per the provisions of Sick Industrial Companies (Special Provisions) Act, 1985.

3 Production Performance

3.1 The quantity of ore milled, gold and silver extracted during last two year and 1999-2000 (April-December 1999) are given below :

Actual Actual1998- Target for the April- 1997- 1999 year1999-2000 Dec. 1999 1998 (Revised) (Actual)

Ore Milled 151381 155535 165000 108025 (Tonnes) Gold 514.16 531.28 500.00 340.78 Extracted (kg)

Extraction 3.24 3.27 2.86 3.06 Grade (g/t)

Silver 43.89 43.00 - 27.06 Extracted (by-product) (kg)

4 Financial Performance

4.1 The authorised share capital of the Company is Rs. 60 crores and paid-up share capital is Rs. 51.06 crores as on 31 March, 1999. The profit/loss of the Company for the last two years and the anticipated results for the current year show the following position.

Net Loss(Rs. in Lakhs)

1997-98 .. 3983.40

1998-99 .. 6531.29

1999-2000 .. 7301.64 (RE)

5 Sources of funding for capital schemes

5.1 As the Company is continuously incurring cash losses and is unable to generate any internal resource, the investment on the capital schemes is met by the Government through budget support in the form of plan loan. The Government has approved an outlay of Rs. 5 crores for the year 1999-2000.

6 Diversification

6.1 The Company has diversified its activities to the field of Shaft Sinking and Mine Construction and Manufacture of Mining Equipment and fabrication and machining of components.

6.2 Shaft Sinking and Mine Construction

6.2.1 The Projects and Contracts Division established in 1973 has been taking contract jobs in shaft sinking and mine construction activities for various mining companies in both coal and metal mines in the country. 6.2.2 The Division has so far completed 68 jobs valued at Rs. 107.74 crores for its customer companies spread all over the country. During 1998-99, the turnover of the Division was Rs. 5.08 crores. Three contracts valued at Rs. 13.54 crores are under execution.

6.2.3 This Division endeavours to maximise its revenue by better control and improving the quality of services to the clients. The operating costs of high value contracts are being cut down by sub-contracting to local contractors wherever possible. The Order Book position as on October 1999 was Rs. 13.54 crores, against which actual sale was Rs. 97 lakhs. The contracts of the remaining Order Book value are in various stages of completion.

6.3 Manufacture of Mining Equipment and Fabrication of Components

6.3.1 As part of diversification activity and to generate additional revenue from the workshops, various engineering jobs are undertaken. Such work include manufacture and sale of mining machinery and equipment like winders, suspension gears, head gears, manriding systems, skips, ore-bins, various safety gadgets, battery operated loco-motives, mine car circuit systems, Material handling systems, CIP and electro-winning cells, "Gold Drill" TCT rods, etc., besides job work like fabrication and machining to other major industries.

6.3.2 The Company has also set up facility for manufacture of BOXN type Wagons for the Indian Railways and received a development order for manufacture and supply of forty-two BOXN Wagons valued at Rs. 211.37 lakhs. Three proto-type wagons manufactured by the Company have been approved by the RDSO, Lucknow for commercial production.

6.3.3 The Division achieved production valued at Rs. 213.41 lakhs during 1998- 99, besides catering to the captive needs of metallurgical and mining operations at KGF and other project sites all over .

6.3.4 The Workshops Engineering Division had secured orders aggregating to Rs. 410.00 lakhs during 1998-99 from reputed industrial companies like Bharat Earth Movers Limited, Wheel & Axle Plant, etc., as well as mining companies in the Public and Private sector like Hindustan Zinc Limited, Manganese Ore India Limited, Subsidiaries of Coal India Ltd., viz., ECL and SECD, , M/s. Tata Iron & Steel Co. Limited. Pyrites, Phosphates and Chemicals Ltd., Ferro Alloys Corporation Ltd., etc., amidst stiff competition.

6.4 Achievement During 1999-2000

6.4.1 The sales and orders position on hand by end of December 1999 are as follows :

(Rupees in Lakhs)

Description Quantity Orders Sales Work in (Numbers) on hand progress

T.C.T. 409 7.11 31.30 1.00 Drill Rods

Workshop 754.40 188.57 4.27 Sales

7 Exploration Activities

7.1 Chigargunta Mine, , AP

7.1.1 Exploratory mine developments works were carried out in the 4th level and 5th level of South on E-2 lode of Chigargunta Mine No. 1. Ore body delineation stripping was also carried out on E-2 lode of the Mine.

7.2 Old Bisanatham Mine, Chittoor District, AP

7.2.1 In addition to the stoping of ore, the stope preparatory mine development works were carried out in 260'L 325 and 425' levels on Main Lode.

7.3 Nundydroog Mine, , Karnataka

7.3.1 Underground mine development works relating to stope prepartion were carried out in Nundydroog Mine only on Oriental and Mct. West Lode.

8 Geological services

8.1 Geological services were extended to sampling in Nundydroog Mill, metal balance studies and updating the status of ore reserves of the mines.

9 Environmental protection

9.1 The tailing sands which are dumped near Heap Leaching Plant and Nundydroog Mill are prevented from being washed away by making bunds every day. In addition to this, gravel was spread over the Kennedy's tailing sand dump to prevent air pollution.

10 Pollution control

10.1 Domestic Water Treatment

10.1.1 The sludge and effluent water generated from the residential houses are collected in three condition points located at strategic points. These works have been carried out as per recommendations of Karnataka State Pollution Control Board and National Environmental Engineering Research Institute.

10.2 Industrial Effluent Treatment 10.2.1 The Metallurgical Plant at Mine is not generating any effluent since the plant is closed. The Effluent from Metallurgical plant at Nundyroog Mine is now deposited at a lower level and hence no effluent is being allowed to flow after settlement water is recovered from the effluent.

11 Industrial relations

11.1 Welfare of SC/ST and Minorities

11.1.1 There are directives/guidelines from the Ministry of Welfare with regard to preparation of sub-component plan for Schedule Caste and Tribal Sub-plan for Schedule Tribes. BGML has been scrupulously following the directives. Rehabilitation of tribals needs to be done on account of land acquired for projects. BGML has not acquired any land causing displacement of tribals for the construction of projects and hence no plan for rehabilitation has been drawn.

11.1.2 Minority group members have been nominated to represent in recruitment and promotion committees to safeguard the interest of minority group. Their grievances are promptly attended to and settled.

11.2 Recruitment of Minorities and SC/ST in the Public Sector Enterprises

11.2.1 The following Statement shows the position as on 31 December, 1999 :

Group Total SC % ST % Employees

A 118 27 22.88 4 3.39

B 27 8 29.63 - -

C 2302 911 39.57 18 0.78

D 1859 1099 59.12 23 1.24

Total 4306 2045 47.49 45 1.05

12 Power Consumption

12.1 The details of power consumption during 1999-2000 as compared to 1998- 1999 is given below :

Year Units Anticipated Consumed Savings during (in lakhs) 1999-2000

1998-1999 395.28 (April-March)

1999-2000 420.21 3.95* (April-March)*

*Actual consumption from April to January 2000, and estimate for Febuary 2000 and March 2000

13 Progress made in the use of Hindi in the enterprise

13.1 The Company has made satisfactory progress in the propagation of Hindi as per the provisions of Official Language Act and Rules made thereunder during the year 1999-2000. All incentives granted by the Government of India have been implemented. The employee who have done official work in Hindi were awarded special incentives under Hindi Incentive Scheme. A Quarterly Hindi Typewriting Incentive Scheme was introduced with a view to encourage the employees to take up day-to-day Hindi Typewriting work of their Department. To popularise Hindi among employees competitions in Noting and Drafting, Translation, Comprehension, Hindi Typewriting, Hindi Shorthand, Essay and Letter writing were conducted.

13.2 The Hindi Diwas was celebrated with a colourful cultural programme on the 14th September, 1999 which was preceded by a month long programme consisting of Hindi Typewriting, Hindi Shorthand, Hindi Incentive and Hindi Speech competitions and other attractive programmes, viz., Hindi Vocabulary, Katha Suman and Sangeeth Sandhya. The Annual Inter-departmental Hindi Competition for the year 1999 has been conducted in December 1999.