Byju’s to announce FY22 results in the second week of October
Think and Learn Pvt Ltd, the company behind the popular edtech firm Byju’s, has taken a significant step by issuing a notice to convene a board meeting in the second week of October. The purpose of this meeting is to seek approval and adoption of its financial results for fiscal year 2022.
This development is noteworthy because the delay in reporting financials had been a point of concern for various stakeholders. Byju’s, being a unicorn in the education technology sector, has attracted considerable attention from investors, regulators, and the public.
Byju’s stated in a press release that the board of directors, along with the advisory council and certain invitees, will come together to formally adopt the audited financial accounts. Currently, the company’s board comprises its founder and their family members, including Byju Raveendran, Divya Gokulnath, and Riju Raveendran, as investor board members have previously stepped down. To compensate for this, the company established an advisory council featuring industry veterans such as Mohandas Pai and Rajnish Kumar.
This move to convene a board meeting and address financial reporting issues demonstrates Byju’s commitment to transparency and corporate governance. It aims to address concerns and provide clarity to stakeholders regarding the company’s financial performance and prospects. The involvement of industry experts in the advisory council also signifies an effort to leverage their experience and expertise for the benefit of the company’s growth and strategic direction.
The completion of the standalone audit by the recently appointed auditor, BDO, and its presentation to the management is a crucial step for Byju’s. However, the formal adoption and approval of these audit results are scheduled to take place at the expanded board meeting in the second week of October. This meeting is expected to include special invitees, and sources suggest that representatives from some of the company’s major investors will be among them.
The fact that Byju’s is issuing a statement on its FY22 financial numbers comes several months after its previous auditor, Deloitte, resigned from its role. Deloitte’s decision to step down was attributed to the prolonged delay in finalizing and releasing the financial statements for the fiscal year ending on March 31, 2022.
By providing an update on its financial performance for FY22 and involving representatives from significant investors in the board meeting, Byju’s appears to be addressing concerns and taking steps to regain investor trust and confidence. The engagement of a new auditor and the commitment to transparently resolve financial reporting issues indicate the company’s dedication to improving its governance and financial reporting practices.
Deloitte’s resignation from its role as the auditor for Byju’s was accompanied by concerns regarding the audit process. In their statement at the time, Deloitte mentioned that they had not received any communication regarding the resolution of audit report modifications for the fiscal year ending on March 31, 2021. Additionally, they expressed uncertainty about the status of audit readiness for the financial statements and the underlying books and records for the fiscal year ending on March 31, 2022. As a result, Deloitte stated that they had not been able to commence the audit for FY22 as of that date.
It’s important to note that Deloitte’s resignation came in the wake of resignations by key board members, who represented investors such as Peak XV, Prosus, and Chan Zuckerberg, within the company. These resignations were reportedly due to differences with Byju Raveendran, the founder of Byju’s, on critical operational matters.
The combination of these factors raised concerns about governance, transparency, and financial reporting at Byju’s and likely contributed to the company’s decision to appoint a new auditor (BDO) and take steps to address these issues, as mentioned in previous statements and board meeting plans.
Byju’s, in response to a series of challenges and concerns surrounding its financial reporting and operational performance, has taken several significant steps to address these issues and reshape its organizational structure. One of the key moves made by the company was the appointment of BDO (MSKA & Associates) as the statutory auditors, replacing Deloitte. This decision was pivotal in ensuring that the audit process continues smoothly and that the financial statements for the fiscal year commencing from FY22 are prepared and reviewed in a timely and reliable manner.
Moreover, BDO’s expanded role goes beyond being the statutory auditor for Byju’s alone. They have also been entrusted with auditing the consolidated group and will be responsible for auditing the upcoming IPO-bound Aakash Educational Services. This demonstrates Byju’s commitment to maintaining rigorous financial scrutiny and transparency across all aspects of its operations.
In addition to changes in auditing, Byju’s appointed Ajay Goel, a seasoned professional with experience at Vedanta, as the company’s Chief Financial Officer (CFO). Mr. Goel has been actively involved in streamlining the audit process, underscoring the company’s determination to promptly resolve financial reporting issues and enhance financial governance.
Beyond financial management, Byju’s has made organizational changes by appointing Arjun Mohan as the CEO of its India operations. Alongside this, they have unveiled a restructuring exercise that is set to impact over 4,000 employees. These moves reflect the company’s strategic focus on optimizing its operations, enhancing efficiency, and aligning its workforce with its evolving business priorities.
These steps come at a critical juncture for Byju’s as it seeks to resolve disputes with its lenders and secure funds to address liquidity challenges. The release of its FY22 financials will provide a clearer picture of the company’s operations and business health, at a time when it is also exploring the sale of some of its subsidiaries to raise much-needed funds. Byju’s appears committed to overcoming its current challenges and ensuring a more stable and transparent financial future.
