Initially, the Company was formed to engage in the manufacturing activity, and therefore, it was heavily capitalized. Due to compelling reasons, the Group took strategic decision to cease manufacturing activity and continue the service activity by supporting Group mostly on a cost-plus model. However, the manufacturing operation by then incurred huge losses and the Company was heavily capitalized. But due to accumulated losses, the Company’s capital was not represented by the available assets. Furthermore, heavy capital also triggered certain compliances for the Company as per Indian company law.
