S.L. 386.28 Art. 7Directors’ report. 

(1) The board of directors of the Maltese merging company or companies shall draw up a report for members and employees, explaining and justifying the legal and economic aspects of the cross-border merger, as well as explaining the implications of the cross‐border merger for employees. It shall, in particular, explain the implications of the cross-border merger for the future business of the company.

(2) The report shall also include a section for members and a section for employees. The company may decide either to draw up one report containing those two sections or to draw up separate reports for members and employees, respectively, containing the relevant section.

(3) The section of the report for members shall, in particular, explain the following:

(a) the cash compensation and the method used to determine the cash compensation;

(b) the share exchange ratio and the method or methods used to arrive at the share exchange ratio, where applicable;

(c) the implications of the cross-border merger for members;

(d) the rights and remedies available to members in accordance with regulation 12.

(4) The section of the report for members shall not be required where all the members of a Maltese merging company have agreed to waive that requirement in writing or where the Maltese merging company is a single-member company.

(5) The section of the report for employees shall, in particular, explain the following:

(a) the implications of the cross-border merger for employment relationships, as well as, where applicable, any measures for safeguarding those relationships;

(b) any material changes to the applicable conditions of employment or to the location of the company’s places of business;

(c) how the factors set out in paragraphs (a) and (b) affect any subsidiaries of the company.

(6) The reports shall be made available in any case electronically, together with the common draft terms of the cross-border merger, if available, to the members and to the representatives of the employees or, where there are no such representatives, to the employees themselves, not less than six (6) weeks before the date of the general meeting referred to in regulation 11:

Provided that where the approval of the cross-border merger is not required by the general meeting of the acquiring company in accordance with the proviso to regulation 11(1), the report shall be made available at least six (6) weeks before the date of the general meeting of the other merging company or companies.

(7) Where the Board of Directors of the Maltese merging company or companies receives an opinion on the information referred to in sub-regulations (1) and (5) in good time from the representatives of the employees or, where there are no such representatives, from the employees themselves, the members shall be informed thereof and that opinion shall be appended to the report.

(8) The section of the report for employees shall not be required where a Maltese merging company or companies and its COMPANIES

subsidiaries, if any, have no employees other than those who form part of the said Board or other administrative or management bodies of the Maltese merging company or companies or those of their subsidiaries.

(9) Where the section of the report for members referred to in sub-regulation (3) is waived or not required in accordance with sub-regulation (4) and the section for employees referred to in sub-regulation (5) is not required in accordance with sub-regulation (8), the report shall not be required.

(10) Sub-regulations (1) to (9) shall be without prejudice to the provisions of any other law applicable in Malta regarding the applicable information and consultation rights and procedures pursuant to Directives 2002/14/EC and 2009/38/EC.

(11) A report drawn-up in accordance with this regulation shall be signed by one (1) director if the company has a sole director or by two (2) directors if the company has two (2) or more directors. Furthermore, the directors’ report may be signed in counterparts and such counterparts together shall constitute one and the same document.