(1) Subject to paragraph (4), a separate written report ("the explanatory report") shall be drawn up in respect of each of the merging companies by the directors of each such company.
(2) The explanatory report shall at least detail and explain -
(a) the draft terms of merger;
(b) the legal and economic grounds for and implications of the draft terms of merger with particular reference to the proposed share exchange ratio, organisation and management structures, recent and future commercial activities and the financial interests of the holders of the shares and other securities in the company;
(c) the methods used to arrive at the proposed share exchange ratio and the reasons for the use of these methods;
(d) any special valuation difficulties which have arisen.
(3) The explanatory report shall be signed and dated on behalf of each of the merging companies by two directors of each such company.
(4) This Regulation shall not apply where all of the holders of shares and other securi