To the Members of the Neueon Towers Limited, Hyderabad Report on the Audit of the Standalone Financial Statements Qualified Opinion
We have audited the accompanying standalone financial statements of Neueon Towers Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including the Statement of Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information. (hereinafter referred to as "the standalone financial statements"
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion section, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS"), and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its loss including other comprehensive income, its changes in equity and its cash flows for the year then ended.
Basis for Qualified Opinion
A. Non-conduct of Impairment Testing [Ind AS 36 – Impairment of Assets] As required under Ind AS 36, the Company has not performed impairment testing of Property, Plant and Equipment (PPE), investments, and other financial assets despite the presence of impairment indicators such as:
Significant accumulated losses and erosion of net worth,
Assets lying underutilized or non-operational.
In the absence of an impairment assessment or external valuation, we are unable to determine the potential adjustments, if any, required to the carrying value of these assets.
B. Implementation of status of the Resolution plan
The Company was admitted into Corporate Insolvency Resolution Process (CIRP) under the provisions of the Insolvency and Bankruptcy Code, 2016 ("IBC"), by an order dated November 21, 2018, of the Honble National Company Law Tribunal (NCLT), Hyderabad Bench. The Resolution Plan submitted by a consortium led by M/s Preca Solutions India Private Limited was approved by the Honble NCLT on October 23, 2024. A new Board was reconstituted on November 6, 2024.
As on the balance sheet date, only 50% of the settlement obligations under the Resolution Plan have been fulfilled. The remaining implementation milestones are pending and critical to ensure the Companys operational revival and going concern assumption. Although not a material misstatement, this has significant implications for stakeholders.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. We are independent of the Company in accordance with the Code of Ethics issued by ICAI, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Emphasis of Matter
We draw attention to Note 1 of the financial statements, which describes the implementation of the resolution plan of M/s. Neueon Towers Limited ("the Company") under the provisions of the Insolvency and Bankruptcy Code, 2016 ("IBC"). Pursuant to the Honble National Company Law Tribunal (NCLT), Hyderabad Bench order dated October 23, 2024, a resolution plan submitted by a consortium led by PRECA Solutions India Private Limited was approved. Subsequently, a Special Purpose Vehicle (SPV), PRECA Structures Private Limited, has been incorporated for the implementation of the resolution plan.
In accordance with the resolution plan:
A Monitoring Committee was constituted on November 04, 2024;
The Board of Directors and committees of the Company were reconstituted on December 02, 2024;
Capital reduction has been effected, reducing the face value of shares from 10 to 1;
The Company has filed an application with BSE and NSE for relisting of the reduced share capital and is awaiting in-principal approvals.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit. In addition to the matters described in the "Basis for Qualified Opinion," we have determined that no other matters required to be communicated as key audit matters.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial Statements and our auditors report thereon. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of these standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Companys Board of Directors is responsible for:
the preparation of these standalone financial statements that give a true and fair view in accordance with Ind AS and accounting principles generally accepted in India,
the design, implementation, and maintenance of internal control to ensure accuracy and completeness of the financial statements.
In accordance with Section 134(5) of the Act, the Board is also responsible for assessing the Companys ability to continue as a going concern and using the going concern basis unless liquidation is intended or no realistic alternative exists.
Auditors Responsibilities for the Audit of the Standalone Ind AS financial statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
1. Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
4. Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the Standalone Ind AS financial statements, including the disclosures, and whether the Standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Audit Trail
Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (Tally edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. The audit trail has been preserved by the company as per the statutory requirements for record retention. Our examination of the audit trail was in the context of an audit of financial statements carried out in accordance with the Standard of Auditing and only to the extent required by Rule 11(g) of the Companies (Audit and Auditors) Rules,2014.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that: a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account. d. In our opinion, the aforesaid standalone financial statements comply with the "Ind AS" specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015, as amended. e. On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025, from being appointed as a director in terms of Section 164 (2) of the Act. f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". g. According to the information and explanation given to us by the management, no managerial remuneration has been paid/provided to any director of the Company during the year. h. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: (i) The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements Further, the company is under CIRP and Moratorium is applicable as per the terms of Section 14 of IBC, 2016.. (ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. (iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. (iv) No dividend is declared or paid by the Company during the year and hence, compliance with section 123 of the Companies Act,2013 is not applicable to the Company.
2. As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For R P S V & Co., Chartered Accountants
Firms Registration Number: 0013151S
Murali Krishna M Partner Membership no.: 238030
ICAI UDIN: 25238030BMLDBO3540 Place: Hyderabad Dated: 17-05-2025
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
(Refer to paragraph 1(f) of Report on Other Legal and Regulatory Requirements section of our report to the Members of Neueon Towers Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act")
Qualified opinion
We have audited the internal financial controls over financial reporting of Neueon Towers Limited ("the Company") as of March 31, 2025 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Basis for Qualified Opinion
The Company has not established a formal system for periodic impairment testing of assets, particularly in relation to Property, Plant and Equipment, and other financial assets as required under Ind AS 36. This indicates a material weakness in internal controls over assessment of impairment of assets.
Managements Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable Financial information, as required under the Companies Act,2013.
Auditors Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over the financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with, generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company generally, in all material respect has an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2025, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For R P S V & Co., Chartered Accountants
Firms Registration Number: 0013151S
Murali Krishna M Partner Membership no.: 238030
ICAI UDIN: 25238030BMLDBO3540 Place: Hyderabad Dated: 17/05/2025
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
(Refer to paragraph 2 of Report on Other Legal and Regulatory Requirements section of our report to the Members of Neueon Towers limited at even date)
We report that – i) a) The Company has maintained proper records showing full particulars, including quantitative details and the situation of the Property Plant and Equipment.
b) The Company has maintained proper records showing full particulars of intangible assets. Due to CIRP-related restructuring, several assets remain idle or underutilized Due to CIRP-related restructuring, several assets remain idle or underutilized
c) The Company has the program of physical verification of all Property Plant and Equipment. In accordance with the program, all assets are physically verified once within the period of three years block. In our opinion, the reasonableness of the frequency of such physical verification is commensurate to the size of the Company and the nature of the assets. d) According to the information and explanations given to us, the Company has not revalued any of its Property, Plant and Equipment (including Right of Use assets) or intangible assets during the year.
e) According to the information and explanations given to us, the Company is not holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, the disclosure requirement is not applicable to the Company. ii) a) As informed, the management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion, the coverage and procedure of such verification are appropriate
b) According to information and explanation given to us, the Company has not been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets at any point of time during the year. Hence, filings of returns or statements to Banks or Financial Institution are not applicable to Company.
iii) According to the information and explanations given to us, the Company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties. Hence, the disclosure of clause 3(iii) (a) to (f) is not applicable to the Company.
iv) According to the information and explanations given to us, the Company has not made any loans, investments, guarantees and securities, where provisions of sections 185 and 186 of the Companies Act have to be complied with. Hence, the disclosure of clause 3 (iv) is not applicable to the Company. v) The Company has not accepted any deposits or amounts which are deemed to be deposited during the year. Hence, the provisions of clause 3 (v) of the Order are not applicable to the Company.
vi) The Central Government under sub section (1) of section 148 of the Companies Act has specified the maintenance of Cost Records as applicable to the Company. On the basis of the information and explanations provided to us, the Company has generally maintained cost records in accordance with the rules made by Central Government under Sub-section (1) of section 148 of the Companies Act, 2013.
vii) According to the information and explanations given to us:
a) The statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Services Tax, Value Added Tax, Cess and other material statutory dues, to the extent applicable to the Company, have generally been regularly deposited with the appropriate authorities up to the commencement of Corporate Insolvency Resolution Process (CIRP).
b) Subsequent to the initiation of CIRP on November 21, 2018, nd approval of the Resolution Plan on October 23, 2024, by the Honble NCLT, all existing statutory dues were dealt with in accordance with the approved Resolution Plan and treated as CIRP costs wherever applicable. These statutory liabilities have either been paid, settled, or written back as per the terms of the Plan.
c) As a result, no disputed statutory dues are outstanding as at March 31, 2025, other than those disclosed as contingent liabilities in Note 15 of the standalone financial statements.
viii) According to the information and explanations given to us, the Company has not surrendered or disclosed any transactions not recorded in the books of accounts as income during the year in the tax assessments under the Income Tax Act, 196l
ix) According to the information and explanations given to us:
i. As per the approved Resolution Plan, the obligations towards financial creditors have been partially settled and/or written back based on the terms specified in the Plan. Accordingly, the Company has accounted for the settlement of liabilities and derecognition of written-back debt in its financial statements for the year ended March 31, 2025, in the payment of interest thereon to any lender.
x) According to the information and explanations given to us:
a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. Hence, reporting under clause 3 (x) (a) of the Order is not applicable to the Company. b) The Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures during the year. Hence, reporting under clause 3 (x) (b) of the Order is not applicable to the Company.
xi) According to the information and explanations given to us:
a) No fraud on or by the Company has been noticed or reported during the year.
b) No report under sub-section (12) of Section 143 of the Companies Act has been filed by the auditors in Form ADT- 4 as prescribed under rule 13 of the Companies (Audit and Auditors) Rules,2014 with the Central Government. c) The Company has not received any whistle-blower complaints during the year.
xii) The Company is not a Nidhi Company and hence clause 3 (xii) of the Order is not applicable to the Company. xiii) According to the information and explanations given to us, all the related party transactions are in compliance with section 177 and 188 of the Companies Act, where applicable and the details of such transactions have been disclosed in Note No.12 to the Financial Statements etc., as required, by the applicable accounting standards. xiv) According to the information and explanations given to us: a) The Company has an internal audit system commensurate with the size and nature of its business. b) The report of the Internal Auditor for the period under Audit was duly considered for the Statutory Audit purpose.
xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors during the year. Hence, the requirement to report on clause 3(xv) of the order is not applicable to the Company.
xvi) According to the information and explanations and representation given to us:
a) The Company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934. Accordingly, reporting under clause 3(xvi)(a) of the Order is not applicable to the Company.
b) The Company has not conducted any Non-Banking Financial or Housing Finance activities without a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act 1934.
c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, reporting under clause 3(xvi)(c) of the Order is not applicable to the Company. 122 d) According to the information and explanations given to us, the Group of Companies does not have any Core Investment Company as a part of the Group as per the definition of the Group contained in the Core Investment Company (Reserve Bank) Directions 2016. Accordingly, reporting under clause 3(xvi)(d) of the Order is not applicable to the Company.
xvii) The Company has incurred cash losses of 9,073 lakhs during the current financial year and 9,369.77 lakhs in the immediately preceding financial year.
xviii) According to the information and explanations given to us, the statutory auditors have resigned during the year. We have taken into consideration the issues, objections, or concerns raised by the outgoing auditors.. xix) a) According to the information and explanations given to us and based on our audit procedures, we report that a Resolution Plan for the Company under the Insolvency and Bankruptcy Code, 2016 has been approved by the Honble NCLT, Hyderabad Bench on October 23, 2024. As per the terms of the approved Plan, the Company has commenced settlement of its obligations and has discharged approximately 50% of its dues as on March 31, 2025 b) The ability of the Company to continue as a going concern is dependent upon the successful and timely implementation of the remaining terms of the Resolution Plan and revival of its operational and financial performance. In view of these circumstances, there exists a material uncertainty that may cast significant doubt on the Companys ability to continue as a going concern. c) The management and the new Board of Directors are actively monitoring the implementation and have confirmed their commitment to fulfill all obligations in a timely manner. xx) According to the information and explanations given to us, there are no unspent amounts towards Corporate Social Responsibility ("CSR") on requiring a transfer to a Fund specified in Schedule VII to the Companies Act, 2013 in compliance with second proviso to sub-section (5) of Section 135 of the said Act.
For R P S V & Co., Chartered Accountants
Firms Registration Number: 0013151S
Murali Krishna M Partner Membership no.: 238030
ICAI UDIN: 25238030BMLDBO3540 Place: Hyderabad
Dated: 17-05-2025
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2025, IIFL Capital Services Ltd. All Rights Reserved
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.