3rd Apr 2007 17:20
HSBC Holdings PLC03 April 2007 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any aspect of the proposals referred to in thisdocument or as to the action you should take, you should consult a stockbroker,solicitor, accountant or other appropriate independent professional adviser. If you have sold or transferred all your shares in HSBC Holdings plc (the "Company"), you should at once forward this document and the accompanying Form of Proxy to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. This document should be read in conjunction with the Annual Report and Accountsand/or Annual Review in respect of the year ended 31 December 2006. The Stock Exchange of Hong Kong Limited takes no responsibility for the contentsof this document, makes no representation as to its accuracy or completeness andexpressly disclaims any liability whatsoever for any loss howsoever arising fromor in reliance upon the whole or any part of the contents of this document. Theordinary shares of HSBC Holdings plc trade under stock code 5 on The StockExchange of Hong Kong Limited. Shareholders may at any time choose to receive corporate communications inprinted form or electronically. To register online to receive electroniccommunications, or revoke or amend an instruction to receive electroniccommunications, go to www.hsbc.com/ecomms. If you received this documentelectronically and would like to receive a printed copy or would like to receivefuture shareholder communications in printed form, please write to theappropriate Registrar at the address given below. Printed copies will beprovided without charge. Further copies of this document and a Chinesetranslation of this and future documents may be obtained from the Registrars:Computershare Hong Kong Investor Services Limited, Hopewell Centre, Rooms1806-1807, 18th Floor, 183 Queen's Road East, Wan Chai, Hong Kong SAR;Computershare Investor Services PLC, PO Box 1064, The Pavilions, BridgwaterRoad, Bristol BS99 3FA, United Kingdom; or Corporate Shareholder Services, TheBank of Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda. HSBC Holdings plc Notice of Annual General Meeting to be held on 25 May 2007 Notice of the Annual General Meeting to be held at Barbican Hall, BarbicanCentre, London EC2 at 11.00 am on Friday 25 May 2007 is set out on pages 8 to19. The action to be taken by Shareholders is set out on page 4. Whether or not youpropose to attend the Annual General Meeting you are requested to complete andsubmit a Form of Proxy in accordance with the instructions printed on theenclosed Form. Submission of a Form of Proxy will not preclude a shareholderfrom attending and voting in person. The Form of Proxy must be received not lessthan 48 hours before the time of the holding of the Annual General Meeting. 3 April 2007 Access to the Meeting The Barbican Centre is wheelchair accessible, the auditorium is fitted with aninduction loop, and parking spaces are available for disabled drivers. To helpus ensure the Annual General Meeting is fully accessible to all Shareholders,please contact Surinder Gill (telephone +44 (0)20 7992 1385, fax +44 (0)20 79924631, e-mail [email protected]) if you have any particular access or otherneeds. This Notice of Annual General Meeting and the Annual Report and Accounts and/orAnnual Review are available on our web site, www.hsbc.com. The Annual General Meeting can be viewed live on the internet at www.hsbc.com/agmwebcast. A recording of the Annual General Meeting will also be availableafter the conclusion of the meeting until 30 June 2007. 3 April 2007 Dear Shareholder Special Business at the Annual General Meeting The purpose of this letter is to give you details of the proposals which will beconsidered as special business at the Annual General Meeting of the Company tobe held on Friday 25 May 2007. The Notice of Annual General Meeting is set outon pages 8 to 19 of this document. 1 Resolutions 5 and 6 (Authority to Directors to allot shares anddisapplication of pre-emption rights) At last year's Annual General Meeting the Directors were again given generalauthorities to allot shares. The general purpose of these authorities is to enable the Directors to issue newshares without having first to obtain the consent of Shareholders in generalmeeting. The need for such an issue of shares could arise, for example, in thecontext of a transaction (such as the acquisition of a company) which had to becompleted speedily. The granting of such authorities is now commonplace, andyour Board takes the view that it would be in the interests of the Company ifthe authorities were renewed. In addition to the Ordinary Shares reserved for issue pursuant to the exerciseof options previously granted under the employee share plans, the Directorswould have authority to allot new Ordinary Shares up to a maximum amount (innominal value) of US$1,158,660,000, equivalent to 20 per cent of the OrdinaryShares in issue on 22 March 2007, being the latest practicable date prior to theprinting of this document. Within this amount, the Directors would have authority to allot Ordinary Shares(and, in addition, to sell any Ordinary Shares which may be held in treasury)wholly for cash to persons other than existing Shareholders up to a maximumamount (in nominal value) of US$289,665,000. This is equivalent to approximately5 per cent of the Ordinary Shares in issue on 22 March 2007. The Company doesnot currently hold any of its shares in treasury. Other than on the exercise of options granted under the employee share plans orpursuant to the Company's scrip dividend scheme your Board has no presentintention of issuing any further Ordinary Shares, and no issue will be madewhich would effectively change the control of the Company or the nature of itsbusiness without the prior approval of Shareholders in general meeting. The Board is again seeking authority to issue sterling, United States dollar andeuro preference shares. These preference shares were created to underpin issuesof preferred securities, which are tax efficient regulatory capital, and withthe intention that they may be used for the purpose of raising furtherregulatory capital. If any of the preference shares were to be issued theywould, subject to regulatory approval, be redeemable at the Company's option andcarry no voting rights except in exceptional circumstances but would rank inpriority to the Company's Ordinary Shares with respect to participation in anyreturn of capital. The Board has no present intention of exercising thisauthority. It is proposed that these general authorities be extended until the AnnualGeneral Meeting in 2008. HSBC Holdings plc Incorporated in England with limited liability. Registered in England: number617987Registered Office and Group Head Office:8 Canada Square, London E14 5HQ, United Kingdom 2 Resolution 7 (Purchase of Ordinary Shares by the Company) The Company has power under its Articles of Association to purchase its ownshares. The Directors consider that it is appropriate to seek renewal of themandate giving authority for the Company to make market purchases of up to 10per cent of its own Ordinary Shares in issue. It is emphasised that it remainsthe Directors' policy to maintain a strong capital base, a policy which has beenone of the Group's strengths over the years. Having this authority will,however, give added flexibility if the Directors consider it in the interests ofthe Company and its Shareholders to purchase Ordinary Shares in the market inappropriate circumstances. The UK Companies Act 1985 (as amended) permits the Company to elect to hold intreasury any Ordinary Shares it may repurchase, rather than automaticallycancelling those shares. Approval has been received from the relevant regulatoryauthorities in Hong Kong to enable the Company to hold repurchased shares intreasury. The conditional waiver granted by the Hong Kong Stock Exchange on 19December 2005 was granted on the basis of certain agreed modifications to theHong Kong Stock Exchange's Listing Rules applicable to the Company, details ofwhich can be found on the Company's website, www.hsbc.com and the Hong KongStock Exchange's website, www.hkex.com.hk. Copies of the modifications are alsoavailable from the Group Company Secretary, HSBC Holdings plc, 8 Canada Square,London E14 5HQ and the Corporation Secretary, The Hongkong and Shanghai BankingCorporation Limited, 1 Queen's Road Central, Hong Kong. Further details regarding the proposed authority to be given to the Company topurchase its own shares and the waiver granted by the Hong Kong Stock Exchangeare set out in Appendix I. 3 Resolution 8 (Scrip dividend) The authority for the Directors to offer a scrip dividend alternative, wherebyShareholders may elect to receive new Ordinary Shares instead of dividends incash, will expire on payment of the fourth interim dividend for 2006.Shareholders' approval is therefore sought to renew the authority for theDirectors to offer a scrip dividend alternative for a further five-year periodto the Annual General Meeting in 2012. 4 Resolutions 9 and 10 (Political donations and expenditure) The authorities for the Company and HSBC Bank plc to make donations to EUpolitical organisations and to incur EU political expenditure up to a maximumaggregate of £250,000 and £50,000 respectively expire at the conclusion of thisMeeting. These authorities have not been used and it is not proposed to changeHSBC's long-standing policy of not making contributions to any political party.The authorities were sought only as a precautionary measure because of theuncertainty as to what might unexpectedly fall within the very broad scope ofwhat are defined as political donations or expenditure in the UK Companies Act1985 as amended by the Political Parties, Elections and Referendums Act 2000. Itis proposed therefore to ask Shareholders to renew these authorities for afurther period. The UK Companies Act 2006 contains provisions relating to political donationsand expenditure that will replace the existing provisions in the UK CompaniesAct 1985. Whilst the UK Companies Act 2006 will not remove all of theuncertainties relating to political donations and expenditure it will, incontrast to the existing provisions in the UK Companies Act 1985, enable theDirectors to seek relief from liability and ratification by Shareholders for anyinadvertent unauthorised political donation or expenditure. On that basis, it isproposed that the new authorities to be granted pursuant to the passing ofResolutions 9 and 10 should expire on the earlier of the date on which the lastof the sections of the UK Companies Act 2006 relating to ratification byshareholders and political donations and expenditure come into force (which isexpected to be in October 2007) and the conclusion of the Company's AnnualGeneral Meeting in 2008. 5 Resolution 11 (Electronic communications) Certain provisions of the UK Companies Act 2006 have already come into effect.New provisions have been introduced with effect from 20 January 2007 dealingwith, inter alia, company communications to shareholders and other provisionswhich facilitate communications in electronic form and by means of a website.Similar amendments to facilitate communications with shareholders in electronicform and by means of a website have been introduced into the UK Disclosure andTransparency Rules. The shareholder electronic communications provisions in the UK Companies Act2006 and the UK Disclosure and Transparency Rules are intended to make it easierand cheaper for UK companies to communicate with their shareholders. Inparticular, the new Act and the UK Disclosure and Transparency Rules extend theprovisions of the UK Companies Act 1985 by enabling a company, subject tocertain conditions, to treat its shareholders as having deemed to agree tocommunication by means of a website. The deemed agreement procedure for electronic communications by means of awebsite works as follows. For a Shareholder to be deemed to have agreed toreceive communications by means of a website, in addition to the passing ofResolution 11, Shareholders must also be asked individually to agree that HSBCHoldings can communicate with them by way of its website. In the event that aShareholder does not respond with an objection to the Company's request tocommunicate by means of a website within 28 days from the date of the request,the Shareholder will be deemed to have agreed to receive notices, documents orinformation from HSBC Holdings by means of a website. Any Shareholder mayindicate a wish to continue to receive printed documents at any time and anyagreement to receive documents or information electronically or by means of awebsite can be revoked at any time. Every Shareholder who has agreed to receivecommunications by website will be notified when a document is available on awebsite. If a Shareholder has provided HSBC Holdings with an email address forthe purpose of receiving communications in electronic form that notificationwill be sent by email. If a Shareholder's email address is not held by theCompany, a printed notice will be sent advising that a document is available onHSBC Holding's website. As the Hong Kong Listing Rules do not provide for the deemed agreement procedurefor electronic communications by means of a website contained in the UKCompanies Act 2006 and the UK Disclosure and Transparency Rules, a waiver hasbeen sought and obtained to permit HSBC Holdings to take advantage of the newprovisions for electronic communications with Shareholders. The waiver isconditional on obtaining Shareholder approval by the passing of Resolution 11. In the event that Resolution 11 is passed, Shareholders will be contacted inwriting to request their consent for the use of electronic communications bymeans of a website for conveying information. We expect the 2007 Interim Reportwill be the first document to be available under the new procedures. The effect of sending printed financial reports and other information to onlythose who wish to receive information in that way will avoid unnecessary wasteand, accordingly, reduce the detrimental impact on the environment of suchwaste. The Company would reduce its consumption of paper, ink and relatedchemicals and its consumption of energy both for the production of the reportsand their transportation and distribution to some 200 countries and territories.At the same time HSBC Holdings will be achieving cost savings for the benefit ofShareholders, many of whom are telling us they do not want to receive theprinted documents that we distribute. 6 Resolution 12 (Alterations to the Articles) To reflect the provisions of the UK Companies Act 2006 brought into force on 1January 2007 and 20 January 2007, and additional provisions which will come intoeffect on 6 April 2007, it is proposed that certain alterations be made to theArticles of Association. Further information in relation to the proposedalterations is set out in Appendix II. The remaining provisions of the UK Companies Act 2006 are expected to come intoforce later this year and/or during 2008. In addition, various regulations thatrelate to certain of these provisions have yet to be finalised. Consequently, itwill be necessary for the Company to undertake a further review of its Articlesof Association in due course in order to reflect these other provisions. Asthese further changes to the Articles of Association will be reasonablysubstantial in number, it is expected that the Company will adopt new Articlesof Association at its Annual General Meeting in 2008. 7 Recommendation Your Board considers that the proposals described in this document are in thebest interests of HSBC Holdings plc and its Shareholders and recommends that youshould vote in favour of the resolutions relating thereto. The Directors intendto do so in respect of their own beneficial holdings. 8 Action to be taken A Form of Proxy is enclosed for use at the Annual General Meeting. Whether ornot you propose to attend the Annual General Meeting, you are requested tocomplete and submit a Form of Proxy in accordance with the instructions printedon the enclosed Form. The Form of Proxy must be received not less than 48 hoursbefore the time of the holding of the Annual General Meeting. The completion andsubmission of a Form of Proxy will not preclude a Shareholder from attending andvoting in person at the Annual General Meeting. Shareholders with internetaccess may submit their Form of Proxy electronically at www.hsbc.com/proxy byentering the Shareholder Reference and Personal Identification numbers printedon their Form of Proxy. For shares held through CREST, proxy appointments may besubmitted via the CREST proxy voting system. If you would like a question or questions to be addressed at the Annual GeneralMeeting please complete and return the form on page 21 or send your question viaemail to [email protected]. We will endeavour to address any questions raised when the item of business towhich the questions relate is under consideration by the Annual General Meeting.Any questions submitted that are not relevant to the business of the AnnualGeneral Meeting will be forwarded for the attention of an appropriate executive.Submitting a question in advance of the Annual General Meeting does not affectyour rights as a Shareholder to attend and speak at the Annual General Meeting. Yours sincerely S K GreenGroup Chairman APPENDIX I PURCHASE OF ORDINARY SHARES BY THE COMPANY Set out below is information concerning the proposed general mandate for thepurchase of shares by the Company (Resolution 7), which incorporates theExplanatory Statement required to be sent to Shareholders in accordance with theListing Rules of the Hong Kong Stock Exchange as well as details of theconditional waiver granted by the Hong Kong Stock Exchange to enable the Companyto hold in treasury any shares it may repurchase. (a) It is proposed that the Company be given authority topurchase up to 1,158,660,000 Ordinary Shares (which represent 10 per cent of theOrdinary Shares in issue on 22 March 2007, the latest practicable date prior tothe printing of this document). Purchases of shares will be at prices not belowthe nominal value of each Ordinary Share, US$0.50 (or the equivalent in therelevant currency in which the purchase is effected), and at not more than 105per cent of the average of the middle market quotations for the Ordinary Shareson the London Stock Exchange for the five dealing days before the relevantpurchase or 105 per cent of the average of the closing prices of the OrdinaryShares on the Hong Kong Stock Exchange for the five dealing days before therelevant purchase, whichever is the lower. (b) The Directors believe that it is in the best interests of theCompany and its Shareholders to have a general authority from Shareholders toenable the Company to purchase Ordinary Shares in the market and to give powerto the Directors to exercise such authority. The Directors intend that purchasesof shares should only be made if they consider that the purchase would operatefor the benefit of the Company and Shareholders taking into account relevantfactors and circumstances at that time, for example the effect on earnings pershare. The Directors have no immediate plans to make any purchases under theproposed authority. (c) It is expected that purchases will be funded from theCompany's available cash flow or liquid resources and will, in any event, bemade out of funds legally available for the purchase in accordance with theMemorandum and Articles of Association of the Company and the applicable laws ofEngland and Wales. (d) The Directors do not propose to execute purchases incircumstances where to do so would have a material adverse effect on the capitalrequirements of the Company or the liquidity levels which, in the opinion of theDirectors, are from time to time appropriate for the Company. If the power tomake purchases were to be carried out in full (equivalent to 10 per cent of theOrdinary Shares in issue on 22 March 2007, being the latest practicable dateprior to the printing of this document) there might be a material adverse impacton the capital or liquidity position of the Company (as compared with theposition disclosed in its published audited accounts for the year ended 31December 2006). (e) None of the Directors, nor, to the best of the knowledge ofthe Directors having made all reasonable enquiries, any associates (as definedin the Listing Rules of the Hong Kong Stock Exchange) of the Directors, has apresent intention, in the event that Resolution 7 is approved by Shareholders,to sell any Ordinary Shares to the Company. No connected persons (as defined inthe Listing Rules of the Hong Kong Stock Exchange) of the Company have notifiedthe Company that they have a present intention to sell shares in the Company tothe Company or have undertaken not to sell any of the shares in the Company heldby them to the Company, in the event that Resolution 7 is approved. (f) Under the provisions of the UK Companies Act 1985 (asamended) the Company is permitted, following any repurchase of Ordinary Shares,to retain and hold such shares in treasury, provided that the number of suchshares held in treasury does not exceed 10 per cent of its total number ofissued shares, rather than automatically cancelling them. On 19 December 2005,the Hong Kong Stock Exchange granted a conditional waiver to the Company toenable it to hold shares which it may repurchase in treasury (the "Waiver"). TheWaiver is subject to certain conditions, including compliance by the Companywith all applicable laws and regulations in the United Kingdom in relation tothe holding of shares in treasury. As part of the Waiver, the Company has agreedwith the Hong Kong Stock Exchange a set of modifications to the Hong Kong StockExchange's Listing Rules necessary to enable the Company to hold treasuryshares. The modifications also reflect various consequential matters to dealwith the fact that the Company may hold treasury shares in the future. A fullversion of the modifications is available on the Company's website,www.hsbc.com, and the Hong Kong Stock Exchange's website, www.hkex.com.hk.Copies of the modifications are also available from the Group Company Secretary,HSBC Holdings plc, 8 Canada Square, London E14 5HQ and the CorporationSecretary, The Hongkong and Shanghai Banking Corporation Limited, 1 Queen's RoadCentral, Hong Kong. In accordance with the terms of the Waiver, the Companyconfirms that it will comply with the applicable law and regulation in theUnited Kingdom in relation to the holding of any shares in treasury and with theconditions of the Waiver in connection with any shares which it may hold intreasury. (g) The Directors have undertaken to the Hong Kong Stock Exchangethat, if they exercise any power of the Company to make purchases pursuant toResolution 7, they will do so in accordance with the Listing Rules of the HongKong Stock Exchange (as modified in accordance with the terms of the Waiver toenable the Company to hold in treasury any shares it may repurchase) and theapplicable laws of England and Wales. (h) The Directors are not aware of any consequences which wouldarise under any applicable Takeover Code as a result of any purchases made bythe Company pursuant to Resolution 7, if approved. (i) The Company has not purchased any of its own shares whetheron the Hong Kong Stock Exchange or otherwise in the six months prior to the dateof this document. (j) The highest and lowest prices at which Ordinary Shares or,in the case of the New York Stock Exchange, American Depositary Shares ("ADS"),have traded on the Hong Kong, London, New York, Paris and Bermuda StockExchanges during each of the twelve months prior to 22 March 2007 (the latestpracticable date prior to the printing of this document) were as follows: Hong Kong London New York Euronext Paris Bermuda Stock Exchange Stock Exchange Stock Exchange Stock Exchange Stock Exchange ---- ---- (ADS1) ---- ---- ---- Lowest Highest Lowest Highest Lowest Highest Lowest Highest Lowest Highest (HK$) (HK$) (£) (£) (US$) (US$) (•) (•) (BD$) (BD$)March 2006 129.00 134.30 9.54 9.98 83.11 87.11 13.80 14.60 16.70 17.35April 2006 129.90 134.00 9.41 9.82 84.00 86.93 13.55 14.17 17.00 17.20May 2006 133.40 142.40 9.06 9.92 85.85 92.35 13.23 14.49 17.35 18.05June 2006 131.60 136.30 9.14 9.62 84.00 88.69 13.30 13.92 16.95 17.30July 2006 134.40 141.00 9.35 9.86 85.83 91.49 13.50 14.44 17.25 18.25August 2006 137.90 142.80 9.38 9.72 89.00 92.35 13.85 14.36 18.00 18.35September 137.80 142.50 9.47 9.82 88.64 91.86 13.91 14.48 17.90 18.202006October 141.20 147.60 9.60 10.21 90.95 95.83 14.20 15.17 18.65 19.052006November 142.70 152.00 9.35 10.29 92.34 98.56 13.91 15.75 18.65 19.552006December 140.00 144.80 9.10 9.46 89.96 93.59 13.55 14.74 18.10 18.352006January 138.80 145.80 9.09 9.53 89.27 93.36 13.78 14.49 17.95 18.752007February 135.40 144.20 8.86 9.40 85.45 92.68 13.20 14.38 17.75 18.302007 ----1 Each ADS represents five Ordinary Shares. APPENDIX II SUMMARY OF ALTERATIONS TO THE ARTICLES OF ASSOCIATION To reflect certain of the provisions of the UK Companies Act 2006 brought intoforce on 1 January 2007 and 20 January 2007, and certain additional provisionswhich will come into effect on 6 April 2007, it is proposed that alterations bemade to the Articles of Association. The principal alterations to the Articlesof Association, which are proposed to be made by Resolution 12 in the Notice ofAnnual General Meeting, are summarised below: 1 To add a definition for the UK Companies Act 2006 (Article2.1). 2 To delete the definition of "communication" and replace thedefinition of "electronic communication" with a definition of "electronic form"to conform with the definitions in the UK Companies Act 2006. The new definitionof "electronic form" will include making any information or document availableon a website and references in the Articles of Association to electronic copy,electronic communication and electronic means shall be construed accordingly. Inaddition a new definition of "hard copy" will be introduced to distinguish hardcopy documents from those in electronic form where required in the Articles ofAssociation, which is principally in connection with authentication of documentssent to the Company as set out in the new Article 159A (Article 2.1). 3 To add references to the UK Companies Act 2006 whererequired to reflect the changes in UK law brought into force by the UK CompaniesAct 2006 and replace existing references to the UK Companies Act 1985 (asamended) where these have been repealed and, where appropriate, replaced withnew sections in the UK Companies Act 2006 (Articles 2.4, 79A.1, 81, 132.1(d) and163.1). 4 To reflect the change in the UK law relating to agediscrimination and the repeal of section 293 of the UK Companies Act 2006 sothat a Director of the Company may continue as a Director notwithstanding he orshe has reached the age of 70 (Article 95). 5 To amend the company communication provisions to reflect thechanges being introduced as a result of the UK Companies Act 2006 and, inparticular, subject to the passing of Resolution 11, allowing the Company totake advantage of the deemed agreement provisions in relation to the use of awebsite for the supply of notices, documents or other information introduced inPart 4 of Schedule 5 to the UK Companies Act 2006. This latter change willenable the Company to treat a Shareholder as having consented to the supply ofnotices, documents or information by making them available on the Company'swebsite where such Shareholder has been asked individually by the Company toagree to the supply of notices, documents or other information in this mannerand such Shareholder has not responded to the Company's request within 28 daysfrom when such request was sent (Article 159). 6 To set out the Company's authentication procedures inrelation to authenticating documents sent to the Company. In particular, inrelation to documents sent in electronic form, allowing the Board to retaindiscretion to determine the manner in which it will treat a document received bythe Company as sufficiently authenticated and giving the Board the power torequest reasonable evidence of authority where a document is supplied by aperson on another's behalf (Article 159A). 7 To reflect the provisions in the UK Companies Act 2006relating to deemed delivery of documents or information where such documents orinformation have been sent or supplied by the Company by means of a website sothat any notice, document or other information sent or supplied by means of awebsite is deemed to have been received by the intended recipient (i) when thematerial was first made available on the Company's website, or (ii) if later,when the recipient received (or is deemed to have received) notice of the factthe material was available on the Company's website (Article 162.4). HSBC Holdings plc Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of the Company will beheld at the Barbican Hall, Barbican Centre, London EC2 on Friday 25 May 2007 at11.00 am to transact the following ordinary business: 1 to receive and consider the Annual Accounts and Reports ofthe Directors and of the Auditor for the year ended 31 December 2006; 2 to approve the Directors' Remuneration Report for the yearended 31 December 2006; 3 to re-elect Directors: (a) The Lord Butler;(b) The Baroness Dunn;(c) R A Fairhead;(d) W K L Fung;(e) Sir Brian Moffat; and(f) G Morgan; 4 to reappoint KPMG Audit Plc as Auditor at remuneration to bedetermined by the Group Audit Committee; and by way of special business to consider and (if thought fit) pass thefollowing Resolutions of which Resolutions 5, 7, 8, 9, 10 and 11 will beproposed as Ordinary Resolutions and Resolutions 6 and 12 will be proposed asSpecial Resolutions: 5 THAT the Directors be and they are hereby generally andunconditionally authorised pursuant to and for the purposes of section 80 of theCompanies Act 1985 ("the Act") to exercise all the powers of the Company toallot relevant securities (within the meaning of that section) up to anaggregate nominal amount of £100,000 and $100,000 (in each such case in the formof 10,000,000 non-cumulative preference shares), US$85,500 (in the form of8,550,000 non-cumulative preference shares) and US$1,158,660,000 (in the form ofOrdinary Shares of US$0.50 each ("Ordinary Shares")) provided that thisauthority shall be limited so that, otherwise than pursuant to: (a) a rights issue or other issue the subject of an offer orinvitation, open for acceptance for a period fixed by the Directors, to: (i) Ordinary Shareholders where the relevant securitiesrespectively attributable to the interests of all Ordinary Shareholders areproportionate (or as nearly as may be) to the respective number of OrdinaryShares held by them; and (ii) holders of securities, bonds, debentures or warrants which,in accordance with the rights attaching thereto, are entitled to participate insuch a rights issue or other issue, but subject to such exclusions or other arrangements as the Directors may deemnecessary or expedient in relation to fractional entitlements or securitiesrepresented by depositary receipts or having regard to any restrictions,obligations or legal problems under the laws of or the requirements of anyregulatory body or stock exchange in any territory or otherwise howsoever; or (b) the terms of any share plan for employees of the Company orany of its subsidiary undertakings; or (c) any scrip dividend scheme or similar arrangementsimplemented in accordance with the Articles of Association of the Company; or (d) the allotment of up to 10,000,000 non-cumulative preferenceshares of £0.01 each, 10,000,000 non-cumulative preference shares of €0.01 eachand 8,550,000 non-cumulative preference shares of US$0.01 each in the capital ofthe Company, the nominal amount of relevant securities to be allotted by the Directorspursuant to this authority wholly for cash shall not in aggregate, together withany allotment of other equity securities authorised by sub-paragraph (b) ofResolution 6 set out in the Notice convening this Meeting, exceed US$289,665,000(being equal to approximately 5 per cent of the nominal amount of OrdinaryShares of the Company in issue at the latest practicable date prior to theprinting of the Notice of this Meeting) and such authority shall expire at theconclusion of the Annual General Meeting of the Company to be held in 2008 savethat this authority shall allow the Company before the expiry of this authorityto make offers or agreements which would or might require relevant securities tobe allotted after such expiry and the Directors may allot relevant securities inpursuance of such offers or agreements as if the authority conferred hereby hadnot expired. 6 THAT the Directors be and are hereby empowered pursuant tosection 95 of the Companies Act 1985 ("the Act"): (a) subject to the passing of Resolution 5 set out in the Noticeconvening this Meeting, to allot equity securities (as defined by section 94 ofthe Act) the subject of the authority granted by Resolution 5; and (b) to allot any other equity securities (as defined by section94 of the Act) which are held by the Company in treasury, in each case as if section 89(1) of the Act did not apply to any such allotment,provided that this power shall expire at the conclusion of the Annual GeneralMeeting of the Company to be held in 2008 save that this power shall enable theCompany before the expiry of this power to make offers or agreements which wouldor might require equity securities to be allotted after such expiry and theDirectors may allot equity securities in pursuance of such offers or agreementsas if the power conferred hereby had not expired. 7 THAT the Company be and is hereby generally andunconditionally authorised to make market purchases (within the meaning ofsection 163 of the Companies Act 1985) of Ordinary Shares of US$0.50 each in thecapital of the Company ("Ordinary Shares") and the Directors are authorised toexercise such authority provided that: (a) the maximum number of Ordinary Shares hereby authorised tobe purchased is 1,158,660,000 Ordinary Shares; (b) the minimum price (exclusive of expenses) which may be paidfor each Ordinary Share is US$0.50 (or the equivalent in the relevant currencyin which the purchase is effected calculated by reference to the spot rate ofexchange for the purchase of United States dollars with such other currency asquoted by HSBC Bank plc in the London Foreign Exchange Market at or about 11.00am (London time) on the business day (being a day on which banks are ordinarilyopen for the transaction of normal banking business in London) prior to the dateon which the Ordinary Share is contracted to be purchased, in each case suchrate to be the rate as conclusively certified by an officer of HSBC Bank plc); (c) the maximum price (exclusive of expenses) which may be paidfor each Ordinary Share is the lower of (i) 105 per cent of the average of themiddle market quotations for the Ordinary Shares (as derived from the DailyOfficial List of London Stock Exchange plc) for the five dealing daysimmediately preceding the day on which the Ordinary Share is contracted to bepurchased or (ii) 105 per cent of the average of the closing prices of theOrdinary Shares on The Stock Exchange of Hong Kong Limited for the five dealingdays immediately preceding the day on which the Ordinary Share is contracted tobe purchased, in each case converted (where relevant) into the relevant currencyin which the purchase is effected calculated by reference to the spot rate ofexchange for the purchase of such currency with the currency in which thequotation and/or price is given as quoted by HSBC Bank plc in the London ForeignExchange Market at or about 11.00 am (London time) on the business day prior tothe date on which the Ordinary Share is contracted to be purchased, in each casesuch rate to be the rate as conclusively certified by an officer of HSBC Bankplc; (d) unless previously revoked or varied this authority shallexpire at the conclusion of the Annual General Meeting of the Company to be heldin 2008; and (e) the Company may prior to the expiry of this authority make acontract to purchase Ordinary Shares under this authority which will or may beexecuted wholly or partly after such expiry and may make a purchase of OrdinaryShares pursuant to any such contract. 8 THAT the Directors be and are hereby empowered: (a) to exercise the power conferred upon them by Article 151 ofthe Articles of Association of the Company (as from time to time varied) sothat, to the extent and in the manner determined by the Directors, the holdersof Ordinary Shares of US$0.50 each in the Company ("Ordinary Shares") bepermitted to elect to receive new Ordinary Shares, credited as fully paidinstead of all or part of any dividend (including interim dividends) payable upto the conclusion of the Annual General Meeting in 2012; (b) to capitalise from time to time the appropriate nominalamount or amounts of new shares of the Company falling to be allotted pursuantto elections made under the Company's scrip dividend scheme out of the amount oramounts standing to the credit of any reserve account or fund of the Company, asthe Directors may determine, to apply that sum in paying up in full the relevantnumber of such new shares and to allot such new shares pursuant to suchelections; and (c) generally to implement the Company's scrip dividend schemeon such terms and conditions as the Directors may from time to time determineand to take such other actions as the Directors may deem necessary or desirablefrom time to time in respect of the Company's scrip dividend scheme. 9 THAT the Company be and is hereby generally andunconditionally authorised for the purposes of Part XA of the Companies Act 1985(as amended) ("the Act") to make donations to EU political organisations and toincur EU political expenditure (as such terms are defined in section 347A of theAct) up to a maximum aggregate amount of £250,000 provided that such authorityshall expire on the earlier of the conclusion of the Annual General Meeting ofthe Company to be held in 2008 and the date on which the last of sections 239and 362 to 379 (inclusive) of the Companies Act 2006 come into force. 10 THAT HSBC Bank plc be and is hereby generally andunconditionally authorised for the purposes of Part XA of the Companies Act 1985(as amended) ("the Act") to make donations to EU political organisations and toincur EU political expenditure (as such terms are defined in section 347A of theAct) up to a maximum aggregate amount of £50,000 provided that such authorityshall expire on the earlier of the conclusion of the Annual General Meeting ofthe Company to be held in 2008 and the date on which the last of sections 239and 362 to 379 (inclusive) of the Companies Act 2006 come into force. 11 THAT the Company be authorised, subject to and in accordancewith the provisions of the Companies Act 2006 and the Articles of Association ofthe Company (as from time to time varied), to send, convey or supply all typesof notices, documents or information to the members by means of electronicequipment for the processing (including by means of digital compression),storage and transmission of data, using wires, radio optical technologies, orany other electromagnetic means, including by making such notices, documents orinformation available on a website. 12 THAT the Articles of Association of the Company be and arehereby altered as follows: (a) by inserting into Article 2.1 the following words: "2006 Act subject to paragraph 2.3 of thisArticle, the Companies Act 2006"; (b) by deleting from Article 2.1 the following words: "communication has the meaning given to it in theElectronic Communications Act 2000"; (c) by deleting from Article 2.1 the following words: "electronic communication has the meaning given to it in the ElectronicCommunications Act 2000 and "electronic communications" shall be construedaccordingly", and substituting therefor the words: "electronic form has the meaning given in section 1168of the 2006 Act, and shall include provision of any information or document on awebsite, and references to "electronic copy", "electronic communication" and "electronic means" shall be construed accordingly"; (d) by inserting into Article 2.1 the following words: "hard copy any document sent or supplied in apaper copy or similar form capable of being read by the recipient"; (e) by inserting into Article 2.4 the words "or the 2006 Act, asappropriate" so that Article 2.4 reads as follows: "Save as aforesaid, and unless the context otherwise requires, words orexpressions contained in these Articles shall bear the same meaning as in theAct or the 2006 Act, as appropriate."; (f) by inserting into Article 79A.1 the words ", the 2006 Act"so that the introductory words of Article 79A.1 begin as follows: "From time to time the Directors may (consistently with the Act, the 2006 Actand these Articles) make such regulations and establish such procedures as theyconsider appropriate to receive and verify the appointment or revocation of aproxy. Any such regulations may be general or specific to a particular meeting."; (g) by deleting from Article 81.1, 81.3, 81.4(a), 81.5 and 81.6the words "section 212 of the Act" and substituting therefor the words "section793 of the 2006 Act", by deleting from Article 81.4(b) the words "section 212 of the Act" andsubstituting therefor the words "sections 820 to 825 of the 2006 Act", by deleting from Article 81.4(e)(i) the words "section 428 of the Act" andsubstituting therefor the words "section 974 of the 2006 Act", by deleting from Article 81.4(e)(ii) the words "section 207 of the FinancialServices Act 1986" and substituting therefor the words "section 285 of theFinancial Services and Markets Act 2000", and by deleting from Article 81.7 the words "section 216 of the Act" andsubstituting therefor the words "section 794 of the 2006 Act"; (h) by deleting Article 95; (i) by deleting from Article 132.1(d) the words "Part VI of theAct" and substituting therefor the words "Part 22 of the 2006 Act"; (j) by deleting the existing Article 159 and substitutingtherefor the following new Article 159: "159 Form of Notices 159.1 Notwithstanding anything to the contrary in these Articles, anynotice, document or information to be given, sent, issued, deposited, served ordelivered (or the equivalent) to or by any person pursuant to these Articles(other than a notice calling a meeting of the Directors) shall be in writingand, if the Board in its absolute discretion considers appropriate for anypurpose or purposes under these Articles, any such notice, document orinformation shall be deemed given, sent, issued, deposited, served or delivered(or the equivalent) where it is sent in electronic form to an address for thetime being notified for that purpose to the person giving such notice, documentor information, but subject always to the provisions of Article 162. In the caseof notices or other documents or information sent in electronic form the Boardmay make this subject to such terms and conditions as it shall in its absolutediscretion consider appropriate, subject to and in accordance with theprovisions of the 2006 Act. Nothing in these Articles shall affect anyrequirement of the Act and the 2006 Act that any particular offer, notice orother document or information be served in any particular manner. 159.2 For the purposes of these Articles, notices, documents orinformation may be sent in electronic form by the Company to a person where (i)such person has agreed (generally or specifically) that the notice, document orinformation may be sent or supplied in that form (and has not revoked thatagreement), including on a website (ii) the notice, document or information (asthe case may be) is a notice, document or information to which that agreementapplies and (iii) in the case of a notice, document or information being madeavailable on a website, a notice is sent to the person, in a manner for the timebeing agreed for that purpose between that person and the Company notifying suchperson, of (a) the publication of that notice, document or information on thewebsite (b) the address of the website and (c) the place on that website wherethe notice, document or information may be accessed, and how it may be accessed,and in any such case the notification referred to in this Article 159.2 shall betreated as the relevant notice for the purposes of these Articles. 159.3 Subject to the 2006 Act, any notice, document or information isvalidly sent or supplied by the Company if it is made available on a website. 159.4 Subject to the members having resolved that the Company maysend or supply notices, documents or information to members by making themavailable on a website, where the Company requests the agreement of a person toreceive specified notices, documents or information by means of a website andthe Company does not receive a response within the period of 28 days (or suchshorter period as may be required by statute) from the date the Company'srequest was sent, such person shall be deemed to have agreed to receive suchnotices, documents or information by the means specified in the request. 159.5 The Company shall, at the request of a member, also providesuch member, within 21 days of the receipt by the Company of the request, with ahard copy of any document sent in electronic form in accordance with theseArticles. 159.6 Any amendment or revocation of a notification given to theCompany under this Article 159 shall only take effect if it is delivered to theCompany in writing, signed by the member and on actual receipt by the Companythereof."; (k) by inserting the following new Article 159A: "159A Authentication 159A.1 For the purposes of these Articles, the Company shall treat anydocument received by it as sufficiently authenticated if: (a) where the document is sent in hard copy form, it is signedby the person who sent it; or (b) where the document is sent in electronic form, it has beenauthenticated in such manner as the Board may, in its absolute discretion, fromtime to time, determine, provided that, where a document is sent or supplied to the Company by a personon behalf of another, the Board may, in its absolute discretion, request thatthe sender also provide such reasonable evidence of their authority to act onsuch other's behalf as the Board may specify before the document may be treatedas sufficiently authenticated."; (l) by inserting the following new Article 162.4: "162.4 Any notice, document or other information sent or supplied to amember by means of the Company's website, in accordance with Article 159, shallbe deemed to have been received by the intended recipient when the material wasfirst made available on the website or, if later, at the time the intendedrecipient received (or is deemed to have received) notice of the fact thematerial was available on the Company's website."; and (m) by deleting from Article 163.1 the words "section 212 of theAct" and substituting therefor the words "section 793 of the 2006 Act". By Order of the Board R G BarberGroup Company Secretary 3 April 2007 HSBC Holdings plc Incorporated in England with limited liability. Registered in England: number617987Registered Office and Group Head Office:8 Canada Square, London E14 5HQ, United Kingdom Notes: (1) Voting at the Meeting may be decided on a show of hands,unless a poll is directed by the Chairman of the Meeting or a poll is demandedby: (a) at least five members present in person or by proxy andentitled to vote at the Meeting; or (b) a member or members present in person or by proxyrepresenting not less than one-tenth of the total voting rights of all themembers having the right to vote at the Meeting; or (c) a member or members present in person or by proxy holdingshares conferring a right to vote at the Meeting, being shares on which anaggregate sum has been paid up equal to not less than one-tenth of the total sumpaid up on all the shares conferring that right. It is again intended that a poll will be conducted on each resolution set out inthis Notice of Annual General Meeting. The issued share capital of the company with voting rights on 22 March 2007,being the latest practicable date prior to the printing of this document, was11,586,628,706 ordinary shares of US$0.50. (2) A member entitled to attend and vote at the Meeting isentitled to appoint one or more proxies to attend and vote instead of themember. A proxy need not be a member. Completion and submission of an instrumentappointing a proxy will not preclude a member from attending and voting inperson at the Meeting. (3) In order to be valid, the instrument appointing a proxy andthe power of attorney or other authority (if any) under which it is signed, or acopy of such authority certified notarially or in some other way approved by theBoard, must be deposited at: the offices of Computershare Investor Services PLC,PO Box 1064, The Pavilions, Bridgwater Road, Bristol BS99 3FA, United Kingdom;the offices of Computershare Hong Kong Investor Services Limited, HopewellCentre, Rooms 1806-1807, 18th Floor, 183 Queen's Road East, Wan Chai, Hong KongSAR; or Corporate Shareholder Services, The Bank of Bermuda Limited, 6 FrontStreet, Hamilton HM 11, Bermuda, not less than 48 hours before the time of theholding of the Meeting (or any adjourned meeting). In the case of an appointmentof a proxy submitted in electronic form, such appointment must be received notless than 48 hours before the time of the holding of the Meeting (or anyadjourned meeting). It should be noted, however, that any power of attorney orother authority relating to an appointment of a proxy cannot be submittedelectronically and must be deposited as referred to above for the appointment tobe valid. (4) Pursuant to the Uncertificated Securities Regulations 2001,changes to entries on the principal register of members of the Companymaintained in England (the 'Principal Register') after midnight (London time) onthe day prior to the day immediately before the Meeting or any adjourned meeting(as the case may be) shall be disregarded in determining the rights of a memberto attend or vote at the Meeting or any adjourned meeting (as the case may be).Accordingly, a member entered on the Principal Register at midnight on the dayprior to the day immediately before the Meeting or any adjourned meeting (as thecase may be) shall be entitled to attend and vote at the Meeting or anyadjourned meeting (as the case may be) in respect of the number of such sharesentered against the member's name at that time. (5) CREST members who wish to appoint a proxy or proxies byusing the CREST electronic proxy appointment service may do so for the Meetingor any adjourned meeting by following the procedures described in the CRESTmanual. CREST personal members or other CREST sponsored members, and those CRESTmembers who have appointed a voting service provider, should refer to theirCREST sponsor or voting service provider, who will be able to take theappropriate action on their behalf. In order for a proxy appointment made by means of CREST to be valid, theappropriate CREST message (a 'CREST Proxy Instruction') must be properlyauthenticated in accordance with CRESTCo's specifications and must contain theinformation required for such instructions, as described in the CREST manual.The message must be transmitted so as to be received by the issuer's agent (ID3RA50) by the latest time for receipt of proxy appointments specified in Note(3) above. For this purpose, the time of receipt will be taken to be the time(as determined by the timestamp applied to the message by the CREST ApplicationsHost) from which the issuer's agent is able to retrieve the message by enquiryto CREST in the manner prescribed by CREST. CREST members and, where applicable, their CREST sponsor or voting serviceproviders should note that CRESTCo does not make available special procedures inCREST for any particular messages. Normal system timings and limitations willtherefore apply in relation to the input of CREST Proxy Instructions. It is theresponsibility of the CREST member concerned to take (or, if the CREST member isa CREST personal member or sponsored member or has appointed a voting serviceprovider, to procure that his CREST sponsor or voting service provider takes)such action as shall be necessary to ensure that a message is transmitted bymeans of the CREST system by any particular time. In this connection, CRESTmembers and, where applicable, their CREST sponsors or voting service providersare referred, in particular, to those sections of the CREST manual concerningpractical limitations of the CREST system and timings. Pursuant to Regulation 35(5)(a) of the Uncertificated Securities Regulations2001 the Company may treat as invalid a CREST Proxy Instruction if the Companyhas actual notice that: - the information in the instruction is incorrect; - the person expressed to have sent the instruction did not in fact send it; or - the person sending the instruction on behalf of the relevant shareholder did not have the authority to do so. (6) In the case of joint registered holders of any share, thevote of the senior who tenders a vote, whether in person or by proxy, shall beaccepted to the exclusion of the votes of the other joint holders. For thispurpose seniority shall be determined by the order in which the names of theholders stand in the Principal Register or either the Hong Kong or BermudaOverseas Branch Registers of the Company, as appropriate. (7) The Directors are Lord Butler+, R K F Ch'ien+ (who willretire as a Director on 25 May 2007), J D Coombe+, Baroness Dunn*, R A Fairhead+, D J Flint, W K L Fung+, M F Geoghegan, S K Green, S Hintze+ (who will retireas a Director on 25 May 2007), J W J Hughes-Hallett+, Sir Brian Moffat+, SirMark Moody-Stuart+, G Morgan+, S W Newton+, S M Robertson+, H Sohmen* (who willretire as a Director on 25 May 2007) and Sir Brian Williamson+. The GroupChairman has confirmed that, following performance evaluation, the Directorsstanding for re-election under Resolution 3 continue to perform effectively anddemonstrate commitment to their roles. The particulars required to be disclosed,pursuant to Rule 13.51(2) of the Rules Governing the Listing of Securities onthe Stock Exchange of Hong Kong Limited, of the Directors standing forre-election are: +Frederick Edward Robin Butler, The Rt Hon the Lord Butler of Brockwell, KG,GCB, CVO, MA Age 69. Master, University College, Oxford. A non-executive Director since 1998.Chairman of the Corporate Responsibility Committee and the HSBC Global EducationTrust. A member of the Nomination Committee until the conclusion of the AnnualGeneral Meeting in 2007. A non-executive Director of Imperial ChemicalIndustries plc. A member of the International Advisory Board of Marsh McLennanInc. Chaired the UK Government Review of Intelligence on Weapons of MassDestruction in 2004. Secretary of the Cabinet and Head of the Home Civil Servicein the United Kingdom from 1988 to 1998. \* The Baroness Lydia Selina Dunn, DBE, Deputy Chairman and senior non-executiveDirector Age 67. An executive Director of John Swire & Sons Limited and a Director ofSwire Pacific Limited. A non-executive Director since 1990 and a non-executiveDeputy Chairman since 1992. A member of the Nomination Committee. Anon-executive Director of The Hongkong and Shanghai Banking Corporation Limitedfrom 1981 to 1996. A Patron of the UK Foundation of the University of BritishColumbia, a registered charity. A member of the Asia Task Force. A former SeniorMember of the Hong Kong Executive Council and Legislative Council. +Rona Alison Fairhead, MA, MBA Age 45. Chief Executive Officer and Director of the Financial Times GroupLimited and a Director of Pearson plc. A non-executive Director since 2004. Amember, and from the conclusion of the Annual General Meeting in 2007, Chairmanof the Group Audit Committee. A non-executive Director of The EconomistNewspaper Limited. Finance Director of Pearson plc until 12 June 2006. FormerExecutive Vice President, Strategy and Group Control of Imperial ChemicalIndustries plc. +Dr William Kwok Lun Fung, OBE, BA, BSE, MBA Age 58. Group Managing Director of Li & Fung Limited. A non-executive Directorsince 1998. A member of the Corporate Responsibility Committee and, until theconclusion of the Annual General Meeting in 2007, of the Remuneration Committee.A non-executive Director and, since May 2005, Deputy Chairman of The Hongkongand Shanghai Banking Corporation Limited. A non-executive Director of CLPHoldings Limited, Integrated Distribution Services Group Limited, ConvenienceRetail Asia Limited, Shui On Land Limited and VTech Holdings Limited. A memberof the Hong Kong Trade Development Council. A former non-executive Director ofBank of Communications Co. Ltd. Former Chairman of the Hong Kong General Chamberof Commerce, the Hong Kong Exporters' Association and the Hong Kong Committeefor the Pacific Economic Co-operation Council. +Sir Brian Scott Moffat, OBE, FCA, Deputy Chairman and senior independentnon-executive Director Age 68. A non-executive Director since 1998 and a non-executive Deputy Chairmansince 2001. Chairman of the Group Audit Committee and of the NominationCommittee. From the conclusion of the Annual General Meeting in 2007, will ceaseto be the senior independent non-executive Director, a member and Chairman ofthe Group Audit Committee and the Chairman of the Nomination Committee. Anon-executive Director of Macsteel Global BV. Former Chairman of Corus Group plcand a former member of the Court of the Bank of England. +Gwyn Morgan, BSc, FCAE Age 61. A non-executive Director since 1 October 2006 and, from the conclusionof the Annual General Meeting in 2007, a member of the Remuneration Committee. ADirector of SNC-Lavalin Group Inc., and Alcan Inc. A member of the Board ofTrustees of The Fraser Institute and the Energy Advisory Board of AccentureLimited. A non-executive Director of HSBC Bank Canada until 18 April 2006.Founding President and Chief Executive Officer of EnCana Corporation untilDecember 2005 and Vice Chairman from December 2005 to 24 October 2006. G Morgan brings to the Board as a non-executive Director a background intechnical, operational, financial and management positions which arecomplimentary to the skills and expertise of other Directors. It is the beliefof the Board that G Morgan is fully able to discharge his duties as anindependent non-executive Director. *Non-executive Director+Independent non-executive Director None of the Directors standing for re-election has any material relationshipwith another Director, member of Senior Management or substantial or controllingshareholder. According to the registers of Directors' interests maintained by HSBC Holdingsplc pursuant to section 325 of the Companies Act 1985 and section 352 of theSecurities and Futures Ordinance of Hong Kong, the Directors standing forre-election had the following interests in the shares and loan capital of HSBCat 5 March 2007 (the date of the Report of the Directors), all beneficial unlessotherwise stated. Lord Butler, R A Fairhead and G Morgan had no interests in theshares and loan capital of HSBC at 5 March 2007. Changes in Directors' interestssince 5 March 2007 are shown in note (15) below. ---- HSBC Holdings Beneficial Trustee Jointly with Total Percentage of ordinary shares of owner another interests ordinary US$0.50 person shares in issue Baroness Dunn 147,875 28,6501 - 176,525 0.00 W K L Fung 328,000 - - 328,000 0.00 Sir Brian Moffat - - 12,149 12,149 0.00 ---- 1 Non-beneficial Lord Butler, Baroness Dunn, R A Fairhead, W K L Fung, Sir Brian Moffat and GMorgan, non-executive Directors who are standing for re-election, each receive aDirector's fee of £65,000 per annum. Directors' fees, which are regularlyreviewed and compared with other large international companies, were lastauthorised by Shareholders at the 2006 Annual General Meeting, following acomprehensive review of fees paid in other major UK companies. In addition, LordButler receives fees totalling £50,000 per annum as Chairman of the CorporateResponsibility Committee and a member of the Nomination Committee. Baroness Dunnreceives a fee of £20,000 per annum as a member of the Nomination Committee. R AFairhead receives a fee of £20,000 per annum as a member of the Group AuditCommittee. W K L Fung receives fees totalling £40,000 per annum as a member ofthe Corporate Responsibility Committee and the Remuneration Committee. He alsoreceives a fee of HK$45,000 (£31,470) per annum as a director of The Hongkongand Shanghai Banking Corporation Limited. Sir Brian Moffat receives feestotalling £80,000 per annum as Chairman of the Group Audit Committee and theNomination Committee. At the conclusion of the Annual General Meeting LordButler will cease to be a member of the Nomination Committee, W K L Fung willcease to be a member of the Remuneration Committee and Sir Brian Moffat willcease to be a member and Chairman of the Group Audit Committee and Chairman ofthe Nomination Committee. At the conclusion of the Annual General MeetingRAFairhead will become Chairman of the Group Audit Committee. Committee fees aredetermined by the Board. Those Directors to whom fees are payable do notparticipate in that determination. Non-executive Directors do not have service contracts with HSBC Holdings plc.The terms of appointment for the non-executive Directors standing forre-election will expire: in 2008 in respect of Lord Butler, Baroness Dunn, W K LFung and Sir Brian Moffat; and in 2010 in respect of R A Fairhead and G Morgan. Save as disclosed above there are no further matters or particulars required tobe disclosed pursuant to Rule 13.51(2) of the Rules Governing the Listing ofSecurities on The Stock Exchange of Hong Kong Limited. (8) The general purpose of the authorities to be conferred onthe Directors by Resolutions 5 and 6 is to enable the Directors to allot shares(or sell shares held by the Company in treasury following an own share purchase)up to a specified number without having first to obtain the consent of OrdinaryShareholders in general meeting. The Directors have undertaken that no capitalwill be issued which would effectively change the control of the Company or thenature of its business without the prior approval of Ordinary Shareholders ingeneral meeting. (9) The purpose of the authority to be conferred by Resolution 7is to enable the Company to make market purchases of its own shares. The totalnumber of options to subscribe for Ordinary Shares outstanding on 22 March 2007(the latest practicable date prior to printing of this document) was 300,866,008which represented 2.6 per cent of the issued ordinary share capital as at thatdate. If the Company were to purchase the maximum number of Ordinary Sharespermitted by this Resolution, the options outstanding on 22 March 2007 wouldrepresent 2.89 per cent of the issued ordinary share capital. (10) The purpose of the authority to be conferred by Resolution 8is to enable the Directors to continue to offer Shareholders a scrip dividendalternative. (11) The purpose of the authorities to be conferred by Resolutions9 and 10 is to permit the Company and HSBC Bank plc to make political donationsand incur political expenditure up to a maximum aggregate amount of £250,000 (inrespect of the Company) and £50,000 (in respect of HSBC Bank plc) for a furtherperiod where such authorities will expire on the earlier of the date on whichthe last of the sections of the UK Companies Act 2006 relating to ratificationby shareholders and political donations and expenditure come into force (whichis expected to be in October 2007) and the conclusion of the Company's AnnualGeneral Meeting in 2008. It is not proposed that the Company's long-standingpolicy of not making contributions to any political party be changed. Theauthorities are sought only as a precautionary measure because of theuncertainty as to what might unexpectedly fall within the very broad scope ofwhat are defined as political donations or expenditure in the UK Companies Act1985 as amended by the Political Parties, Elections and Referendums Act 2000. (12) The purpose of the authority to be conferred by Resolution 11is to enable the Company to take advantage of the shareholder electroniccommunication provisions of the UK Companies Act 2006, which includes the deemedagreement procedure. Further details are contained in paragraph 5 of AppendixII. (13) The purpose of Resolution 12 is to make alterations to theArticles of Association to reflect certain of the provisions of the UK CompaniesAct 2006 which have come into force on 1 January 2007 and 20 January 2007 andwhich will come into force on 6 April 2007, further details of which arecontained in Appendix II. Copies of the Articles of Association of the Company and the Articles ofAssociation of the Company as proposed to be amended by the provisions ofResolution 12 will be available for inspection at the registered office of theCompany in London and at 1 Queen's Road Central, Hong Kong during usual businesshours from the date of this Notice until the date of the Meeting and at theplace and on the date of the Meeting from at least 15 minutes before the Meetingbegins until the conclusion of the Meeting. (14) For safety reasons, security checks will be carried out onentry to the Meeting. Shareholders are reminded that briefcases, cameras andtape-recorders will not be allowed in the Meeting and that all mobile telephonesmust be switched off. (15) According to the registers of Directors' interests maintainedby the Company pursuant to section 325 of the Companies Act 1985 and section 352of the Securities and Futures Ordinance of Hong Kong, the following changes inthe Directors' interests, all beneficial unless otherwise stated, in the sharesand loan capital of HSBC Holdings plc and its subsidiaries or associatedcorporations have occurred during the period from 5 March 2007 (the date of theReport of the Directors) to 22 March 2007 (the latest practicable date prior tothe printing of this document): (a) The undernamed Directors were granted conditional awards ofPerformance Shares under The HSBC Share Plan which give rise to additionalinterests as beneficiaries of a trust in the number of HSBC Holdings OrdinaryShares of US$0.50 shown below: D J Flint 246,185 M F Geoghegan 559,513 S K Green 419,635 The awards are subject to the vesting arrangements set out on pages 281 to 283of the Annual Report and Accounts. (b) S W Newton acquired 50,000 HSBC Holdings ordinary shares ofUS$0.50 as beneficial owner; (c) H Sohmen acquired a corporate interest in 50,000 HSBCHoldings ordinary shares of US$0.50; (d) Sir Brian Williamson acquired 5,000 HSBC Holdings ordinaryshares of US$0.50 as beneficial owner; (e) J D Coombe acquired 6,000 HSBC Holdings ordinary shares ofUS$0.50 as beneficial owner; (f) The performance conditions for the awards made in 2002 underthe HSBC Holdings Restricted Share Plan 2000 have been met and the awards havevested. Upon vesting, the Trustee of the Restricted Share Plan, unless otherwiserequested, sold sufficient HSBC Holdings Ordinary Shares of US$0.50 to meet thetax liability arising on the vesting and sold additional shares as instructed bythe participant. The Trustee transferred any remaining entitlements to shares tothe participants. As a consequence, the interests of the undernamed Directors inthe HSBC Holdings Ordinary Shares of US$0.50 as beneficiaries of a trust havereduced and their interests as beneficial owners have increased by the number ofshares shown below: Reduction in interest as Increase in beneficiary interest as of a trust beneficial owner ---- ---- D J Flint 90,897 - M F Geoghegan 45,449 45,448 S K Green 113,621 113,620 (16) No disclosures of major shareholdings have been received bythe Company pursuant to the requirements of UK Financial Services AuthorityDisclosure and Transparency Rule 5. (17) In the event of a conflict between any translation and theEnglish text hereof, the English text will prevail. Annual General Meeting - 25 May 2007 If there is a question or questions you would like to have addressed at theAnnual General Meeting on 25 May 2007, please write your question(s) here andreturn this form as indicated below. Alternatively, please send your question byemail to [email protected]. Questions We will endeavour to address any issues raised when the item of business towhich the question relates is under consideration by the Meeting. Any questionssubmitted that are not relevant to the business of the Meeting will be forwardedfor the attention of an appropriate executive. These might include mattersrelating to a shareholder's bank account or affairs, which are unlikely to berelevant to the business of the Meeting. Submitting a question in advance of the Meeting does not affect your rights as ashareholder to attend and speak at the Meeting. Signed: Name: Shareholder Reference Number: Please return this form to the Registrars: Computershare Investor Services PLC,PO Box 1064, The Pavilions, Bridgwater Road, Bristol BS99 3FA, United Kingdom;Computershare Hong Kong Investor Services Limited, Hopewell Centre, Rooms1806-1807, 18th Floor, 183 Queen's Road East, Wan Chai, Hong Kong SAR; orCorporate Shareholder Services, The Bank of Bermuda Limited, 6 Front Street,Hamilton HM 11, Bermuda. Printed by St Ives Direct Edenbridge Limited, Edenbridge, UK, on Revive SpecialSilk paper using vegetable oil-based inks. Made in Spain, the paper comprises60% virgin fibre, 30% de-inked post-consumer waste and 10% mill broke. Pulpsused are elemental chlorine-free. The FSC logo identifies products which contain wood from well-managed forestscertified in accordance with the rules of the Forest Stewardship Council. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HSBC Holdings