According to multiple sources, Byju Raveendran, the co-founder and CEO of ed-tech unicorn Byju’s, has informed shareholders and board members about the disparity between its expected revenue and audited data. According to officials with insight into the situation, the differences resulted from a change in how the company recognises its earnings. They also stated that the lower revenue figure would shortly appear in its annual report.
“They (Byju’s) have had to move parts of their revenue for it to be approved as per Indian Accounting Standard (Ind-AS) 115 rules… For example, revenue projected in one financial year for a multi-year fee can’t be used as that year’s revenue alone,” officials stated.
According to a report by ET, three sources with direct knowledge stated that, the online tutoring company would likely hold its annual general meeting (AGM) during the next few days and will publish its audited financials for FY21 to all interested parties.
The board has accepted the findings but the financials have not yet been disclosed to all investors. They stated that it will subsequently be submitted with the Registrar of Companies.
The company’s official accountant is Deloitte. Byju’s accounts had previously been rejected by the accounting department of the consulting firm, raising questions about how the business handles revenue recognition. The term “revenue recognition” in accounting describes the precise circumstances in which revenue is recognised.
Read More: BYJU’s is (almost) bankrupt
Byju’s Revenue going down despite sales
The Andhra Pradesh government announced on Monday that it would spend a total of 512 crores to buy over 5 lakh tablet computers (tabs) with Byju’s e-learning content pre-loaded, to be given to students of state-run schools, as well as over 72,000 TV sets, which would be gradually installed in classrooms.
Senior officials attended a meeting with the Chief Minister YS Jagan Mohan Reddy to discuss “Nadu Nedu” (our school: then and now). In addition to smart TVs and interactive TVs, the government would be purchasing 5,18,740 tablets with Byju’s material already loaded on them.
Reddy categorically stated that a monthly assessment of facilities and other factors should be done at schools which are being renovated under the “Nadu Nedu” initiative. He stated that the utilisation of funds should be included in the audit’s purview, and a phone number should be posted for complaints, if any.
BYJUs’ past comes to haunt it
BYJU’s purchased dozens of businesses during and after COVID in an effort to become the largest edu-tech company in the world. They believed that the education market will now entirely move to virtual mode as a result of the total lockdown and popularisation of online education programmes. After the easing of lockdown limitations, the firm strategist’s initial prediction was proven to be inaccurate. Nearly every firm went back to operating offline as the pandemic wave subsided, and the education sector had a similar situation. As a result, the company’s sources of income were reduced as most of its money dried up in acquisitions and operations moved to the offline mode.
According to reports, BYJU’s corporate management has resorted to fraud to market its online educational offerings. They first go after middle-class and lower-class parents who will do anything to improve their children’s prospects. Salesmen lure parents by promising a bright future for their kids and get them ready for the loan application process. Poor and illiterate parents agree to take out loans without understanding how EMIs and interest work. The damage is already done by the time they understand the purchase’s additional costs. Afterwards, t hey block the parent’s phone number and move on to the next victim. Many underprivileged families have been ruined by this online Ponzi scheme. They become involved in an expensive BYJU’s course out of love for their kids and end up spending their life savings.
The failure of BYJUs clearly shows that if you don’t abide by basic business principles of maintaining steady cashflow and consistent profit, the buisiness is destined to fail. No matter how lucrative the sector of your operations is.
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