(1) Subject to paragraphs (5) and (6), a separate written report ("the explanatory report") shall be drawn up in respect of each of the companies involved in the division by the directors of each such company.
(2) The explanatory report shall at least detail and explain -
(a) the draft terms of division;
(b) the legal and economic grounds for and implications of the draft terms of division with particular reference to the proposed share exchange ratio, organisation and management structures, recent and future commercial activities and the financial interests of 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) Where it is proposed that any of the acquiring companies will allot shares for a consideration other than in cash, the explanatory report shall state that the report required by section 30 of