Ina Malhotra, Member - (1.) The Counsel for the Applicants states that the present Scheme is an Amalgamation of Arshiya Industrial & Distribution Hub Limited ("The First Transferor Company") and Arshiya Transport and Handling Limited ("The Second Transferor Company") with Arshiya Rail Infrastructure Limited ("The Transferee Company") and their respective Shareholders.
(2.) The Counsel for the Applicants further submit that the First Transferor Company is engaged in the business of providing facility of warehousing including temperature controlled storage and other cargo/logistics related activities through Inland Container Depot (ICD) and to build, operate, setup, manage & maintain Special Economic Zone (SEZ). The Second Transferor Company is engaged in the business of transport and handling of containers/goods within India including movement of containers, cargo, goods train using Indian Railway Network and also to acquire, procure obtain on lease/license or otherwise container trains, rakes, wagon, bogies and create, develop or obtain on lease/license basis Railway sidings, rail yards and warehouse required for business of the Company and to build, operate, setup, manage & maintain Special Economic Zone (SEZ). The Transferee Company is engaged in the business of developing, operating and maintaining infrastructure facilities - Rail System, which consist of Pan India Rail Freight and allied Operations. ARIL holds Category I Private Container Train Operator (PCTO) license which allows the company to operate on Indian rail network on pan India basis catering to both Domestic and Exim traffic.
(3.) The Rationale of the Scheme is that the First Transferor Company, Second Transferor Company and Transferee Company are fellow subsidiaries and their businesses are related to each other. ARIL offers rail infrastructure, including modem rakes, customised containers, new sidings, pan-India network connectivity. AIDHL is engaged in providing facility of warehousing including temperature controlled storage and other cargo/logistics related services through Inland Container Depot ("ICD") and ATHL is into transport and handling business of cargo/containers. The businesses of all the companies complement each other. In the industry, there are other companies who are doing consolidated business of offering rail infrastructure, cargo/container handling services and providing ICD services. The demand in the market for the entities providing consolidated services is higher than the entities providing individual services. In order to earn higher revenue and to cater to the needs of the market, the management intends to consolidate the rail infrastructure, transport handling business and ICD business. Pursuant to the consolidation, the management intends to have better synergy of the businesses, avail other common benefits and to widen the market reach of the rail and container businesses. Thus with a view to rationalize the holding structure and have a single consolidated entity, AIDHL and ATHL are proposed to be amalgamated with ARIL. This would lead to achieve operational synergy by better administration and reduction in costs from more focused operation efforts, rationalization, standardisation and simplification of business processes. It would eliminate duplication of administrative expenses and simplify the management structure. Further, it would also result in financial and tax efficiencies.;