EX-99.1 2 exh_991.htm EXHIBIT 99.1 exh_991.htm
EXHIBIT 99.1
 
CHINA FINANCE ONLINE CO. LIMITED
 
REPORT OF THE DIRECTORS
 
The directors of China Finance Online Co. Limited, or the Company, present their report and the audited financial statements for the year ended December 31, 2013, or the Financial Statements, which can be accessed through the SEC website at http:///www.sec.gov or through the Company’s website at http://ir.chinafinanceonline.com/phoenix.zhtml?c=183451&p=irol-reportsannual beginning April 29, 2013. The Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States.
 
PRINCIPAL ACTIVITIES
 
The Company acts as an investment holding company and provides corporate management services. The activities of its principal subsidiaries including its variable interest entities ("VIEs") and its VIEs' subsidiaries are set out in note 1 to the Financial Statements.
 
RESULTS
 
The results of the Company and its subsidiaries including its variable interest entities ("VIEs") and its VIEs' subsidiaries for the year ended December 31, 2013 are set out in the consolidated statements of comprehensive income on page F-5 of the Financial Statements.
 
The directors do not recommend the payment of a dividend and propose that the profit for the year be retained.
 
PROPERTY AND EQUIPMENT
 
Details of the movements during the year in property and equipment of the Company and its subsidiaries including its variable interest entities ("VIEs") and its VIEs' subsidiaries are set out in note 12 to the Financial Statements.
 
SHARE CAPITAL
 
In 2013, the Company issued 190,250 shares to employees under the Company’s 2004 Stock Incentive Plan. In addition, the Company granted share options to purchase 14,000,000 ordinary shares pursuant to the 2004 Stock Incentive Plan during 2013.

Other than the foregoing, the Company did not issue any share capital for the year ended December 31, 2013.
 
DIRECTORS
 
The directors of the Company up to the date of this report were as follows:
 
As of the date of this report:
Mr. Zhiwei Zhao
Mr. Kheng Nam Lee
Mr. Rongquan Leng
Mr. Neo Chee Beng
Mr. Jun Wang
 
 
 
 
We have a staggered board of directors, which means half the number of our directors (excluding our chief executive officer) shall retire from office by rotation at every annual general meeting. The directors to retire at each annual general meeting shall be those who have been longest in office since their last election. Any director appointed by the board of directors since the last annual general meeting shall hold office only until the next following annual general meeting and shall then be eligible for re-election but shall not be taken into account in determining the number of directors who are to retire by rotation. Our chief executive officer will at all times be a director, and will not retire as a director, so long as he remains as the chief executive officer. Our board of directors is currently comprised of five members. Excluding our chief executive officer, Rongquan Leng and Jun Wang are required to stand for re-election at the 2014 annual general meeting.
 
MANAGEMENT CONTRACTS
 
No substantial contracts concerning the management and administration of the Company were entered into or existed during 2013.
 
ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES
 
As of the date of this report, the Company granted the directors options to purchase 3,850,000 ordinary shares of the Company pursuant to 2004 Stock Incentive Plan, of which 23,000 shares were exercised by the directors. Details of directors’ share options at the date of this report were as follows:
 
     
Number of
  
Name of director
Capacity
  
underlying
shares under
2004 Stock
Incentive Plan
 
 
Zhiwei Zhao
Director
     4,150,000  
Kheng Nam Lee
Independent director
     1,400,000  
Neo Chee Beng*
Independent director
     227,000  
Jun Wang*
Director
     2,550,000  
Rongquan Leng
Independent director
     200,000  
        8,527,000  
 
*Mr. Neo Chee Beng was granted options to purchase 50,000 shares of the Company under the 2004 Stock Incentive Plan prior to his appointment as a director of the Company, of which 23,000 shares were exercised before he was appointed as a director of the Company; and Mr. Jun Wang was granted options to purchase 1,050,000 shares of the Company under the 2004 Stock Incentive Plan prior to his appointment as a director of the Company.
 
Particulars of the Company’s 2007 performance-based equity incentive plan are set out in note 18 to the Financial Statements.
 
Other than as disclosed above, at no time during 2013 was the Company or any of its subsidiaries a party to any arrangements to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
 
 
 
 
AUDITORS
 
A resolution will be proposed to the forthcoming Annual General Meeting of the Company to appoint Grant Thornton China as auditors of the Company.
 
On behalf of the Board
 
/s/ Zhiwei Zhao                                    
 
Zhiwei Zhao
CHAIRMAN
May 30, 2014