FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of May, 2007
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt about this document or as to the action you should take, you should
consult a stockbroker, solicitor, accountant or other appropriate independent
professional adviser.
If you sold or transferred all or some of your ordinary shares on or before 15
May 2007, but those shares are included in the number shown in box 1 on the
accompanying Form of Election or Entitlement Advice, you should, without delay,
consult the stockbroker or other agent through whom the sale or transfer was
effected for advice on the action you should take.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this document. The
ordinary shares of HSBC Holdings plc trade under stock symbol 5 on The Stock
Exchange of Hong Kong.
HSBC
30 May 2007
Dear Shareholder
SCRIP DIVIDEND SCHEME AND PAYMENT OF DIVIDENDS IN UNITED STATES DOLLARS,
STERLING OR HONG KONG DOLLARS
On 30 April 2007, your Directors declared a third interim dividend for 2007 of
US$0.17 per ordinary share, payable on 5 July 2007. You may elect to receive:
1. a scrip dividend of new shares at a 'Market Value' of US$18.4375 (GBP9.352)
per share;
2. a cash dividend in United States dollars, sterling, or Hong Kong dollars; or
3. a combination of cash and scrip dividend.
For illustration, using the exchange rates on 22 May 2007, the first interim
dividend in sterling and Hong Kong dollars would have been approximately
GBP0.086 and HK$1.33. The precise amounts which will be payable per ordinary
share in either sterling or Hong Kong dollars on 5 July 2007 will be converted
from United States dollars using the exchange rates on 25 June 2007 as explained
on page 2. Please read this letter carefully.
1. Scrip dividend
If you have already given standing instructions to receive new shares under the
Scrip Dividend Scheme, you will find an Entitlement Advice enclosed with this
letter. You need take no further action if you wish to receive the number of new
shares shown on the Entitlement Advice. If you do not wish to receive the
maximum entitlement to new shares, a letter revoking your standing instructions
must be received by the appropriate Registrars, at the address given on page 8,
by close of business on 20 June 2007. If you wish to receive new shares in
respect of only part of this dividend, or if you wish to receive your cash
dividend in any combination of United States dollars, sterling and Hong Kong
dollars, please also ask the Registrars for a Form of Election in time to return
it to them by 20 June 2007.
If you have not previously given standing instructions to receive new shares
under the Scrip Dividend Scheme and you wish to receive new shares in lieu of
the cash dividend, you should complete and sign the Form of Election enclosed
with this letter and return it to the appropriate Registrars, at the address
given on page 8, by 20 June 2007. If you take no action, you will receive the
dividend in cash in the currency indicated on the Form of Election.
We will calculate your entitlement to new shares using a 'Market Value' of
US$18.4375 (GBP9.352) for each new share. An explanation of the calculation of
'Market Value' and the basis of allotment of new shares is set out in paragraphs
2 and 3 of the Appendix to this letter.
Since fractions of shares cannot be issued, if you have elected to receive the
maximum entitlement to new shares, any residual dividend entitlement will be
carried forward in United States dollars. This will be added to the next
dividend to determine the number of new shares to be received on that occasion.
Residual dividend entitlements carried forward will not bear interest.
HSBC Holdings plc
Registered Office and Group Head Office:
8 Canada Square, London E14 5HQ, United Kingdom
Web: www.hsbc.com
Incorporated in England with limited liability. Registered in England: number 617987
11CU0E
The scrip dividend alternative will enable shareholders to increase their
holdings of shares without incurring dealing costs or stamp duty. However, the
scrip dividend on shares held through the American Depositary Receipt programme
or Euroclear France, the settlement and central depositary system in France,
will be subject to Stamp Duty Reserve Tax, currently 1.5 per cent of the Market
Value. To the extent that shareholders elect to receive new shares, the Company
will benefit by retaining cash which would otherwise be payable by way of
dividend. The Appendix to this letter sets out details of the Scrip Dividend
Scheme and provides a general outline of the tax considerations in the United
Kingdom and overseas.
Please read the next section regarding the payment of dividends in cash, even if
you wish to receive your dividend in the form of new shares.
2. Cash dividend
If your shares were recorded on the Principal Register at close of business on
18 May 2007, you will automatically receive any dividends payable to you in cash
in sterling, unless you have previously elected to receive payment in United
States dollars or Hong Kong dollars. However, if your address is in the United
States you will automatically receive any dividends payable to you in cash in
United States dollars, unless you have previously elected to receive payment in
Hong Kong dollars or sterling.
If your shares were recorded on the Hong Kong Overseas Branch Register at close
of business on 18 May 2007, you will automatically receive any dividends payable
to you in cash in Hong Kong dollars, unless you have previously elected to
receive payment in United States dollars or sterling.
If your shares were recorded on the Bermuda Overseas Branch Register at close of
business on 18 May 2007, you will automatically receive any dividends payable to
you in cash in United States dollars, unless you have previously elected to
receive payment in Hong Kong dollars or sterling.
The currency in which any dividends payable to you in cash are to be paid is
stated on the accompanying Form of Election or Entitlement Advice. If you wish
to give standing instructions to receive such dividends in one of the other
available currencies (United States dollars, sterling or Hong Kong dollars), you
should complete the One Currency Election on page 2 of the Form of Election or
Entitlement Advice. Completion of the One Currency Election will not revoke a
standing instruction to receive the maximum entitlement to new shares under the
Scrip Dividend Scheme.
3. Combination of cash and scrip dividend
If you wish to receive this dividend in a combination of the available
currencies or in a combination of cash and new shares, you must complete Section
B on page 1 of the Form of Election. If you have received an Entitlement Advice
with this letter and not a Form of Election, and you wish to receive your
dividend in cash, in any combination of the available currencies, or in a
combination of cash and new shares, you should write to the appropriate
Registrars, at the address given on page 8, to revoke your standing instructions
for scrip dividends and to request a Form of Election in time to return it to
them by 20 June 2007.
Dividends payable in sterling or Hong Kong dollars on 5 July 2007 will be
converted from United States dollars at the forward exchange rates quoted by
HSBC Bank plc in London at or about 11.00 am on 25 June 2007. The exchange rates
will be announced to the London, Hong Kong, New York, Paris and Bermuda stock
exchanges.
Dividend warrants and, where applicable, new share certificates are expected to
be mailed to shareholders on or about 5 June 2007.
Whether you elect to receive your dividends in cash or in shares, it is
recommended that you complete and return the Dividend Payment Instruction on
page 2 of the accompanying Form of Election or Entitlement Advice so that any
dividends payable to you in cash can be sent to your bank account(s) as you
require. It is not necessary for you to complete the Dividend Payment
Instruction if you have already given instructions for cash dividends to be sent
direct to your bank account and you do not wish to change those instructions.
Yours sincerely
R G Barber
Group Company Secretary
APPENDIX
SCRIP DIVIDEND SCHEME ('THE SCHEME')
1. Terms
The Scheme, authority for which shareholders renewed at the Annual General
Meeting on 25 May 2007 for a further five-year period, will apply in respect of
the second interim dividend for 2007.
Holders of ordinary shares on the Principal Register as at the close of business
in England on 18 may 2007 or on the Hong Kong Overseas Branch Register as at the
close of business in Hong Kong on 18 May 2007 or on the Bermuda Overseas Branch
Register as at close of business in Bermuda on 18 May 2007 (other than those
shareholders referred to below) will be able to elect to receive new shares in
respect of all or part of their holdings of shares (see paragraph 3 below) as an
alternative to receiving the second interim dividend for 2007 of US$0.17 per
share in cash.
The new ordinary shares will be issued subject to the Memorandum and Articles of
Association of the Company and will rank equally with the existing issued
ordinary shares in all respects.
2. Market Value
The 'Market Value' is the average of the middle market quotations for the
ordinary shares on the London Stock Exchange, as derived from the Daily Official
List, for the five business days beginning on 16 May 2007 (the day on which the
shares were first quoted ex-dividend). Since the dividend is declared in United
States dollars, the average of the middle market quotations of GBP9.352 was then
converted into United States dollars using the exchange rate quoted by HSBC Bank
plc in London at 11.00 am on 22 may 2007, giving the Market Value of US$18.4375
for each new share.
3. Basis of allotment and examples
Your entitlement to new shares is based on:
(a) the Market Value (as defined in paragraph 2 above) of US$18.4375 per share;
(b) the cash dividend of US$0.17 per share; and
(c) the number of shares held by you on 18 May 2007 ('the record date').
The formula used for calculating your entitlement is as follows:
Number of shares held at the record date x cash dividend per share + any
residual dividend entitlement brought forward = maximum dividend available for
share election
____________________________
Maximum dividend available = maximum number of new shares (rounded to the
nearest whole number)
Market Value
You may elect to receive new shares in respect of all or part of your holding of
ordinary shares. No fraction of a share will be issued.
If you elect to receive the maximum number of new shares in lieu of your
dividend, a residual dividend entitlement may arise, representing the difference
between the total Market Value of the new shares and the maximum dividend
available on your shareholding. This residual dividend entitlement will be
carried forward in United States dollars (without interest) to the next dividend
(see Example 1).
If you choose to take only part of your dividend as new shares, you will receive
the balance in cash (see Example 2).
Example 1
If you have 1,000 ordinary shares, your maximum entitlement will be calculated
as follows:
Your cash dividend (1,000 x US$0.17) US$170.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
_________
Maximum dividend available US$174.00
_________
US$174.00
Number of new shares = _________ = 9.4373 = 9 new shares
US18.4375
Total Market Value of 9 new shares = 9 x US$18.4375 US$165.94
Plus residual dividend entitlement carried forward
(US$174.00 - US$165.94) US$ 8.06
_________
US$174.00
_________
Example 2
If you have 1,000 ordinary shares and a residual dividend entitlement brought
forward of, say, US$4.00, your maximum entitlement will be 9 new shares, as
shown in Example 1. Should you wish to receive only 5 new shares, you should
insert this number in the appropriate box in Section B (i) on the Form of
Election. The cash balance due to you would then be calculated as follows:
Your cash dividend (1,000 x US$0.17) US$170.00
Plus residual dividend entitlement brought forward (say) US$ 4.00
_________
Maximum dividend available US$174.00
_________
Total Market Value of 5 new shares = 5 x US$18.4375 US$ 92.19
Plus cash balance (US$174.00 - US$92.19) US$ 81.81
_________
US$174.00
_________
In addition to the 5 new ordinary shares, you will receive a cash balance of
US$81.81. The cash balance will be paid to you in the currency indicated in box
4 on the Form of Election, unless you give instructions to the contrary by
indicating the currency/currencies you wish to receive in the boxes in Sections
B (iii) to B (v). An example of how Section B of a Form of Election might be
completed is given below.
--------------------------------------------------------------------------------
Section B - Complete this section if you wish to receive your dividend in cash
in a combination of the available currencies or in a combination of cash and new
shares
I/We wish to receive my/our dividend in shares and/or in cash as follows:
in shares
(i) please insert the number of new shares you wish to receive 5 Shares
(see box 3 above for maximum)
(ii) total value of new shares you wish to receive US$ 92.19
(number of new shares in (i) above x US$18.4375)
in cash
(iii)in US$ US$ 27.27
(iv) in sterling, the equivalent of (please insert US$ amount) US$ 27.27
(v) in HK$, the equivalent of (please insert US$ amount) US$ 27.27
Maximum dividend available (the sum of (ii) + (iii) + (iv) + (v)) US$ 174.00
--------------------------------------------------------------------------------
4. Payment of residual dividend entitlements
Residual dividend entitlements will be payable in cash (without interest) if, at
any time, you:
o dispose of your entire holding; or
o make an election in respect of part only of your holding; or
o receive the full cash dividend on the whole of your holding; or
o revoke your standing instructions to receive scrip dividends; or
o so request in writing to the appropriate Registrars.
5. How to participate in the Scheme
(a)If you have already given standing instructions to receive new shares under
the Scheme, you will find an Entitlement Advice enclosed with this letter. You
need take no further action unless you wish to revoke your standing instructions
or to elect to receive a smaller number of new shares. If you do not formally
revoke your standing instructions by 20 June 2007, you will receive the number
of new ordinary shares shown in box 2 on the accompanying Entitlement Advice.
If you do not wish to receive new shares, a letter revoking the standing
instructions to receive scrip dividends must be received by the appropriate
Registrars at the address given on the Entitlement Advice by close of business
on 20 June 2007. A cash dividend will then be paid on your entire holding in the
currency shown in box 5 on the Entitlement Advice. If, however, you wish to
receive new shares in respect of only part of this dividend or if you wish to
receive any dividend payable to you in cash in a currency/currencies other than
that shown in box 5 on the Entitlement Advice, please also ask the Registrars
for a Form of Election in time to return it to them by 20 June 2007. In any
event, if you revoke your standing instructions you will receive a Form of
Election for any future dividends to which the Scheme applies.
(b)If you have not previously given standing instructions to receive new shares
under the Scheme and you wish to receive new shares in lieu of a cash dividend
on this occasion only, an election to participate in the Scheme must be made on
the accompanying Form of Election. The Form is issued to shareholders registered
as at 18 May 2007 and should be read in conjunction with this letter. If you
wish to elect to receive the maximum entitlement to new shares for this
dividend, you may do so by inserting a 'X' in the box in Section A (i) of the
Form of Election. If you wish to elect to receive a smaller number of shares
than the maximum entitlement, you should complete Section B of the Form. To be
valid in respect of the dividend payable on 5 July 2007, a Form of Election must
be completed correctly, signed and received by the Registrars at the address
given on page 2 of the Form by close of business on 20 June 2007.
(c)If you have not previously given standing instructions to receive new shares
under the Scheme and you wish to receive the maximum entitlement to new shares
automatically for this and for subsequent dividends to which the Scheme applies,
you may do so by inserting a 'X' in the box in Section A (ii) of the
accompanying Form of Election and then signing and returning the Form to the
Registrars at the address given on page 2 of the Form.
Completion of Section A (ii) of the Form will ensure that you receive your
maximum entitlement to new shares offered in lieu of the third interim dividend
for 2007 payable on 5 July 2007 and for subsequent dividends. Your standing
instructions may be revoked at any time by giving signed notice in writing to
the appropriate Registrars. However, such revocation will take effect in respect
of an offer of shares in lieu of a cash dividend only if the notice is received
on or before the final date for receipt of Forms of Election in respect of that
dividend. Your standing instructions will lapse automatically if at any time you
cease to hold any ordinary shares.
ON THE ASSUMPTION THAT NO RESIDUAL DIVIDEND ENTITLEMENT IS BROUGHT FORWARD,
SHAREHOLDERS WITH A HOLDING AS AT 18 MAY 2007 OF FEWER THAN 109 ORDINARY SHARES
WHO HAVE GIVEN STANDING INSTRUCTIONS TO RECEIVE SCRIP DIVIDENDS, OR WHO MAKE AN
ELECTION TO RECEIVE SCRIP DIVIDENDS, WILL NOT RECEIVE ANY NEW SHARES ON THIS
OCCASION AND WILL HAVE THEIR DIVIDEND ENTITLEMENT CARRIED FORWARD IN UNITED
STATES DOLLARS (WITHOUT INTEREST) AS DESCRIBED ON PAGE 1.
6. Overseas shareholders
No person receiving a copy of this document or a Form of Election in any
jurisdiction outside the United Kingdom ('UK') or Hong Kong may treat the same
as offering a right to elect to receive new shares unless such offer could
lawfully be made to such person without the Company being required to comply
with any governmental or regulatory procedures or any similar formalities. It is
the responsibility of any person outside the UK and Hong Kong who wishes to
receive new shares under the Scheme to comply with the laws of the relevant
jurisdiction(s), including the obtaining of any governmental or other consents
and compliance with all other formalities. It is also the responsibility of any
person who receives new shares in lieu of a cash dividend to comply with any
restrictions on the resale of the shares which may apply outside the UK and Hong
Kong. For example, shareholders in Ontario who have scrip dividend shares
allotted to them must ensure that the first trade of their scrip dividend shares
is executed on a stock exchange outside Canada.
7. Issue of share certificates and listing of new shares
Application will be made to the UK Listing Authority and to the London Stock
Exchange for the new shares to be admitted to the Official List and to trading
respectively, to the Stock Exchange of Hong Kong for listing of, and permission
to deal in, the new shares, and to the New York, Paris and Bermuda stock
exchanges for listing of the new shares.
Existing ordinary shares on the Principal Register may be held either in
certificated form, or in uncertificated form through CREST. Where a shareholder
has holdings of ordinary shares in both certificated and uncertificated form,
each holding will be treated separately for the purpose of calculating
entitlements to new shares.
Definitive share certificates for the new shares issued under the Scheme in
respect of holdings in certificated form are expected to be mailed to
shareholders entitled thereto at their risk on 5 July 2007, at the same time as
warrants in respect of the cash dividend are mailed. New shares issued under the
Scheme in respect of holdings of shares which are in uncertificated form will
also be issued in uncertificated form. The Company will arrange for the relevant
shareholders' stock accounts in CREST to be credited with the appropriate
numbers of new shares on 5 July 2007.
Dealings in the new shares in London, Hong Kong, Paris and Bermuda, and in the
American Depositary Shares in New York, are expected to begin on 5 July 2007.
8. If you have sold or transferred your shares
If you sold or transferred all or some of your ordinary shares on or before 15
may 2007 (the date on which the shares eligible for the third interim dividend
for 2007 were last quoted cum-dividend on the London, Hong Kong and Bermuda
stock exchanges), but those shares are nevertheless included in the number shown
in box 1 on the accompanying Form of Election or Entitlement Advice, you should,
without delay, consult the stockbroker or other agent through whom the sale or
transfer was effected for advice on the action you should take.
9. General
If all shareholders were to elect to take up their entitlements to new shares
under the Scheme in respect of the third interim dividend for 2007, 107,975,625
new shares would be issued, representing an increase of 0.92 per cent in the
issued ordinary share capital of the Company as at 22 May 2007.
The total cost of the third interim dividend for 2007, ignoring any elections
for the scrip alternative, is approximately US$1,991 million. The applicable tax
credit is the sterling equivalent of approximately US$221 million.
Whether or not it is to your advantage to elect to receive new ordinary shares
in lieu of a cash dividend or to elect to receive payment in United States
dollars, sterling or Hong Kong dollars is a matter for individual decision by
each shareholder. HSBC Holdings cannot accept any responsibility for your
decision. The effect on the tax position of any shareholder will depend on that
shareholder's particular circumstances. If you are in any doubt as to what to
do, you should consult your professional advisers.
No acknowledgement of receipt of a Form of Election will be issued.
10. Tax return
To assist shareholders who receive a scrip dividend, we will send a Notional Tax
Voucher which may be needed for tax returns. This will contain the following
particulars:
o number of ordinary shares held at close of business on 18 May 2007
o number of new ordinary shares allotted
o total dividend payable
o residual dividend entitlement (if any) brought forward from previous dividend
o residual dividend entitlement (if any) carried forward to the next dividend
o cash equivalent of the new shares allotted
o amount of UK income tax treated as paid on the new shares.
11. Taxation
The precise tax consequences for a shareholder receiving a cash dividend or
electing to receive new shares in lieu of a cash dividend will depend upon the
shareholder's own individual circumstances. The following is a general outline
of the tax consequences in the UK and overseas, based on current law and
practice.
No tax is currently withheld from dividends paid by the Company. Such dividends
carry a tax credit equal to one-ninth of the dividend.
(i) Cash dividends
UK resident individuals
Individual shareholders, who are resident in the UK for tax purposes, will
generally be subject to income tax on the aggregate amount of the dividend and
associated tax credit. For example, on a cash dividend of US$90 an individual
would be treated as having received dividend income equal to the sterling
equivalent of both the US$90 dividend received and the associated tax credit of
US$10 and as having paid income tax equal to the sterling equivalent of US$10
(the associated tax credit).
Individual shareholders who are liable to income tax at the starting rate or
basic rate only will have no further tax to pay, as the tax liability will be
fully extinguished by the associated tax credit.
Individual shareholders who are not liable to income tax are not able to recover
the tax credit.
Individual shareholders subject to income tax at the higher rate will be liable
to tax at a rate of 32.5 per cent on the aggregate of the dividend and the
associated tax credit. For example, if a higher rate tax payer were to receive a
dividend of US$90, he/she would for income tax purposes be treated as receiving
dividend income equal to the sterling equivalent of both the US$90 dividend
received and the associated tax credit of US$10. The related tax liability would
be the sterling equivalent of US$32.50. However, the associated tax credit equal
to the sterling equivalent of US$10 would be set against the tax liability,
leaving the individual with net tax to pay of the sterling equivalent of
US$22.50.
UK resident trustees
Trustees of discretionary trusts, which are usually liable to pay income tax at
the rate of 40 per cent, may be required to account for additional tax on UK
dividend income at 32.5 per cent of the aggregate amount of dividend received
and the associated tax credit, against which the effective 10 per cent tax
credit may be offset.
UK resident companies
Corporate shareholders (other than certain insurance companies and companies
which hold shares on trading account) are not liable to corporation tax or
income tax in respect of dividends received from the Company.
UK resident gross funds/charities
There is no entitlement, for either a gross fund or charity, to a tax credit and
consequently no claim to recover the tax credit will be possible.
Non-UK residents
Generally, non-UK residents will not be subject to any UK taxation in respect of
UK dividend income nor will they be able to recover the associated tax credit.
Non-UK resident shareholders may be subject to tax on UK dividend income under
any law to which that person is subject outside the UK. Non-UK resident
shareholders should consult their own tax advisers with regard to their
liability to taxation in respect of the cash dividend.
There are special rules which apply to non-UK resident discretionary trusts in
receipt of UK dividends.
(ii) Scrip dividends
UK resident individuals
The tax consequences of electing to receive new shares in lieu of a dividend are
similar to those of receiving cash dividends.
Individual shareholders who elect to receive new shares in lieu of a cash
dividend will be treated as having received income of an amount which, when
reduced by income tax at the starting rate (currently 10 per cent) is equal to
the 'cash equivalent' which would have been received had they not elected to
receive new shares. For example if a shareholder elected to receive new shares
in lieu of a US$90 cash dividend, they would for UK tax purposes be treated as
receiving income of US$100 and as having paid tax equivalent to US$10.
Individual shareholders who are liable to income tax at the starting rate or
basic rate only will have no further tax to pay. Individual shareholders liable
to tax at the higher rate will be liable to pay additional tax at the rate of
22.5 per cent of the aggregate of the cash equivalent and associated tax credit
(which equates to the sterling equivalent of US$22.50 in the example above).
For income tax purposes, HM Revenue & Customs will substitute the market value
of the shares on the first day they are dealt in on the London Stock Exchange
for the 'cash equivalent' if the difference between the cash dividend and the
market value equals or exceeds 15 per cent of the market value.
For capital gains tax purposes the new shares will be treated as a separate
holding. The base cost of these shares will equal the 'cash equivalent' or, if
substantially different, the market value on the first day of dealing.
UK resident trustees
Trustees of discretionary trusts liable to account for income tax on the income
of the trust will be treated as having received gross income equal to the 'cash
equivalent' as described above. Any tax liability will be calculated in line
with the cash dividend treatment described above (tax at a rate of 32.5 per cent
being partially offset by the effective 10 per cent tax credit).
UK resident companies
Corporate shareholders will not be liable to corporation tax on the receipt of
new shares. For capital gains tax purposes the base cost of these shares will be
nil.
UK resident gross funds/charities
There is no entitlement, for either a gross fund or charity, to a tax credit and
consequently no claim to recover the tax credit will be possible.
Non-UK residents
Individual shareholders will be treated for UK tax purposes as having received
income of an amount which, when reduced by income tax at the starting rate
(currently 10 per cent) is equal to the 'cash equivalent' which would have been
received had they not elected to receive new shares. No UK tax assessment will
be made on such individuals, but the tax credit cannot be recovered.
However, a non-UK resident shareholder may be subject to tax on the new shares
received under any law to which that person is subject outside the UK. Non-UK
resident shareholders should consult their own tax advisers with regard to their
liability to taxation in respect of the new shares.
Residual dividend entitlement
Under current legislation, a UK resident shareholder will not be subject to UK
tax on any amount carried forward as a residual dividend entitlement until
either a new share or cash is received. The tax treatment of the new ordinary
share will be the same as that of any other new ordinary share issued at the
same time as a scrip dividend. Any payment in cash will be taxed as a cash
dividend.
Timetable of events
American Depositary Shares quoted ex-dividend in New York 16 May 2007
Shares quoted ex-dividend in London, Hong Kong and Bermuda 16 May 2007
Record date for the first interim dividend for 2007 18 May 2007
Shares quoted ex-dividend in Paris 21 May 2007
FINAL DATE FOR RECEIPT BY REGISTRARS OF FORMS OF ELECTION
AND REVOCATIONS OF STANDING INSTRUCTIONS FOR SCRIP DIVIDENDS 20 June 2007
Exchange rate determined for payment of dividends in sterling and Hong Kong dollars 25 June 2007
Payment date - dividend warrants mailed; new share certificates or Bermuda Overseas
Branch Register Transaction Advices and Notional Tax Vouchers mailed; shares
credited to stock accounts in CREST 5 July 2006
Expected first day of dealings in new shares in London, Hong Kong, Paris and Bermuda; and
in American Depositary Shares in New York 5 July 2007
Further copies of this letter, replacement Forms of Election and a Chinese
translation of this and future documents may be obtained from the Registrars
Principal Register Hong Kong Overseas Branch Register
Computershare Investor Services PLC Computershare Hong Kong Investor Services Limited
PO Box 1064 Hopewell Centre, 46th Floor
The Pavilions 183 Queen's Road East
Bridgwater Road Wan Chai
Bristol Hong Kong SAR
BS99 3FA
United Kingdom
Telephone: (44) 0870 702 0137 (calls cost from 8p/min) Telephone: 2862 8555
Email: web.queries@computershare.co.uk Email: hkinfo@computershare.com.hk
Bermuda Overseas Branch Register US Shareholder helpline
Corporate Shareholder Services Telephone: 1 866 299 4242
The Bank of Bermuda Limited
6 Front Street
Hamilton HM 11
Telephone: 299 6737
Within this document the Hong Kong Special Administrative Region of the People's
Republic of China has been referred to as 'Hong Kong'.
The Directors of HSBC Holdings plc are S K Green, Baroness Dunn*, Sir Brian
Moffat+, M F Geoghegan, Lord Butler+, R K F Ch'ien+, J D Coombe+, R A Fairhead+,
D J Flint, W K L Fung+, S Hintze+, J W J Hughes-Hallett+, Sir Mark
Moody-Stuart+, G Morgan+, S W Newton+, S M Robertson+, H Sohmen* and Sir Brian
Williamson+.
* Non-executive Director
+ Independent non-executive Director
Printed by: Computershare Communication Services, a division of Computershare
Investor Services PLC, Bristol, UK
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 31 May 2007