Edtech company Byju’s calls for AGM to approve audited FY22 financials


Beleaguered edtech company Byju’s has called for an annual general meeting (AGM) at a time when the firm battles challenges that include securing fresh capital, delays in financial reporting, and legal disputes with lenders.


Byju’s informed its shareholders about the meeting scheduled on December 20 at 6 pm in a letter, a copy of which Business Standard has reviewed. This would be done through video conferencing or other audio-visual means.


The company plans to receive, consider, approve and adopt the audited standalone and consolidated financial statements of the company for the financial year ended 31st March 2022, according to the letter. This would be done together with the report of the board of directors and auditors thereon.


It also plans to consider and approve the appointment of MSKA & ASSOCIATES as the statutory auditors of the company. The firm also plans to approve the remuneration of B Y & ASSOCIATES, the cost accountants and the cost auditors of the company for FY 2021-22, FY 2022-23, and FY 2023-24.


Byju’s confirmed that it has sent the letter to the shareholders.


Byju’s is grappling with the need to significantly reduce its losses in order to establish a sustainable business for the long term, according to industry insiders and analysts. The company recently announced FY22 financials which only represented its core operations. This came even after a delay of almost a year.


Think and Learn Private Limited (TLPL), Byju’s parent company, reported a 2.3-fold increase in its core business, reaching a total income of Rs 3,569 crore for 2021-22, up from Rs 1,552 crore in the previous year. The Ebitda loss of the core business decreased from Rs 2,406 crore to Rs 2,253 crore, accompanied by a margin improvement from -155 per cent to -63 per cent, from FY21 to FY22. The financials announced by the company are based on an “unqualified FY22 audit”, indicating the auditor’s satisfaction with its financial reporting.


Previously, the company aimed to turn profitable by March 2023. Instead, it reported losses of Rs 4,588 crore for FY21, 19 times more than the previous year. WhiteHat Junior, a coding startup acquired by Byju’s in 2020 for approximately $300 million, reportedly contributed 26.73 per cent to the total loss.


In an internal email to employees, Byju Raveendran, founder and group CEO of TLPL, stated the company is “becoming more sustainable” and expanding. “We have faced many challenges recently, but together, we are overcoming them step by step,” he said in the email, a copy of which was reviewed by Business Standard.


In a meeting with investors, Byju’s had previously agreed to release its FY23 results by the end of December 2023. Raveendran has informed employees that the audit process for FY23 will begin soon and be completed in the coming months.


Byju’s has delayed the submission of its FY22 results to the MCA, trailing other edtech unicorns like Unacademy, upGrad, and Vedantu. This delay has raised concerns among investors and lenders who have extended a $1.2 billion term loan B to the company.


On June 22, Byju’s auditor, Deloitte Haskins & Sells, resigned due to the company’s delay in filing financial results. Following the auditor’s resignation, representatives from the firm’s top three investors — Prosus, Peak XV Partners, and the Chan Zuckerberg Initiative — also resigned. Recently, Byju’s appointed BDO as its statutory auditor for the next five years and formed an advisory council.


Byju’s chief financial officer Ajay Goel recently quit to return to his previous company Vedanta Limited. The seasoned global finance professional was hired in April to strengthen the company’s financial operations, long-term business strategies, and path to profitability.


Netherlands-based tech investor Prosus NV has marked down Byju’s valuation to under $3 billion. This is 86 per cent less than its peak valuation of $22 billion last year.


The disclosure was made by interim chief executive officer (CEO) Ervin Tu during Prosus earnings call recently. This is Byju’s latest and most significant valuation markdown.


This is the second time Prosus has marked down Byju’s valuation. Last year in November, Prosus had cut down Byju’s valuation to $5.9 billion.


In June, a director of Prosus stepped down from Byju’s board. Lifting the veil on what prompted the resignation of its director from Byju’s board, Prosus, one of the earliest and largest investors in the edtech company, later said that the Indian firm’s executive leadership “regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters” despite repeated efforts.


The Enforcement Directorate (ED) recently also issued a showcause notice of Rs 9,362 crore to Think & Learn, and its founder Byju Raveendran for alleged violations of forex rules while attracting foreign investments from 2011 to 2023.


The firm is also locked in a dispute with lenders in the US over a missed interest payment on a $1.2 billion term loan B (TLB). Byju’s has decided to put two of its key assets — Epic and Great Learning — on the block to generate $800 million-$1 billion in cash to address various financial challenges, according to sources.


Byju Raveendran, the founder of the company, has reportedly pledged his home as well as those owned by his family members to raise money for paying employees as the company battles a cash crunch, according to a Bloomberg report.