S.L. 386.26 Art. 7BoardofDirectors’ report. 

(1) The Board of Directors of the Maltese company being divided shall draw up a report for members and employees, explaining and justifying the legal and economic aspects of the cross-

border division, as well as explaining the implications of the cross‐border division for employees. It shall, in particular, explain the implications of the cross-border division for the future business of the dividing companies.

(2) The report shall also include a section for members and a section for employees. The company may decide either to draw up one

(1) report containing those two (2) 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 methods used to arrive at the share exchange ratio, where applicable;

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

(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 the company have agreed to waive that requirement in writing or where the company being divided 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 division 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; and

(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 draft terms of the cross-border division, if available, to the members and 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.

(7) Where the Board of Directors of the company 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 company being divided and its subsidiaries, if any, have no employees other than those who form part of the said Board or or other administrative or management bodies of the company or those of its 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 under 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 COMPANIES

shall be signed by one (1) director if the company has a sole (1) 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 (1) and the same document.