Edtech major Byju’s has earmarked ₹18.87 crore in its FY22 financial statements towards expected penal liabilities for no-compliance to norms, as per auditor MSKA & Associates. These are provisions for potential penalties for glaringly flouting the Companies Act.
“The Holding Company has not complied with the provisions of sections 42, 92, 96, 137, 185, 188, 134, 88, 135, 179, 129, 144 and 148 of the Companies Act…. In line with the provisions of the Act, the holding company has recognised an amount totalling to ₹ 18.87 cr… towards expected penal liabilities…,” said an auditor’s note in statements.
in the dock
The start-up’s other subsidiaries are also potentially in the dock for not complying with other provisions of the Act. In a note, the auditor said that Byju’s three subsidiaries – Aakash Edutech, Aakash Educational Services and Whitehat Education Technology — were in contravention of the companies’ rules.
The three verticals are not compliant with Section 96, Section 137 and Section 92 of the Companies Act, 2013, as per the auditor. These provisions pertain to conducting the annual general meeting (AGM) of the company within the prescribed timelines, filing of the financial statements and the filing of the annual returns respectively.
Byju’s filed its FY22 financials with the Ministry of Corporate Affairs, and has said that losses ballooned to ₹8,245 crore in FY22 from ₹4,564 crore in FY21, while its consolidated revenue jumped 118 per cent to ₹5,298 crore in FY22 (₹2,428 crore).
Byju’s FY22 financials showed that 69 per cent or ₹3,464 crore of the company’s operating revenue of ₹5,014 crore came from domestic sales, whereas the rest came from exports.