Ann: Surda expansion project, page-2

Another disaster.
Over the 12 month period 1st July 2013 to 30th June 2014 the Surda Expansion contract didn't made money or possibly SEPC haven't paid IRL, but this has never been explained to shareholders. During this 12 month period IRL completed the following development .

Excavation of horizontal drive 495.7 m
Excavation of raise 82.8 m
Sinking shaft 45.1 m
Shaft Lining RCC 97.40 m3

I asked Arvind Misra at the time "So where is the money?"
The Quarterly Report September 2013 stated “ Equipment valued at $1.4 million has been placed under order by Shriram EPC (SEPC) for the purposes of progressing the Surda expansion project.”
The June 2014 Quarterly Report some 9 months later it was stated
"Progress is slower than planned as the sub-contracting agreement with SEPC requires SEPC to immediately supply 80M INR (A$1.4 million) in development equipment with only approximately half having been provided to date. Similarly the shaft sinking work has been slow as SEPC has not promptly fulfilled its contractual obligations. Accordingly IRL is protecting its commercial position by progressing this work within the limitations of SEPC’s actions. "
In the next breath IRL states
"India Resources Limited (IRL) provided a corporate guarantee to Shriram EPC (SEPC) for work to be carried out by its wholly owned subsidiary company, IRL Copper Mining Private Limited (ICMPL), in relation to the Surda Shaft Sinking and Excavation development contract up to a value of 139,419,557 INR (around A$2.5 million)."

What a joke, 9 months later and only part of the equipment is supplied but Shriram EPC expects IRL to provide a corporate guarantee of A$2.5m for a hand-me-down contract.
Please tell me who does business like this????

When I asked Arvind ....... "If the value of the Contract is “1,394M INR (24.46M AUD)” when will we see the money?"
As you can already guess, I never got an answer.
Thats until the above announcement on the 30th March 2015.
Still there has been no explanation about who will pay for “ recruited manpower of 62 workers and required senior technical personnel.” ???

There is just one bright spot in all of this, HCL has lost AUD$7 million in profit during the past six months while the Surda Mine has been shut down.
PLUS
Shriram EPC will either have to pull up their socks and carry out their responsibilities under the contract or do all the work themselves.

As a shareholder I agree with the stand taken by IRL management, if Shriram EPC aren't carrying out their part of the contract and if equipment isn’t provided on time and payments NOT made on time then give the contract the flick. It isn't worth the distraction, I'd rather see the effort going into the Aravalli project.