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, 2006, or the Financial
Statements, which can be accessed through the SEC website at
http:///www.sec.gov or on through Company¡¯s website at
http://www.chinafinanceonline.com/investor/annual_rep.asp starting on
May 29, 2007. 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 entity
are set out in note 1 to the Financial Statements.
RESULTS
The results of the
Company and its subsidiaries for the year ended December 31, 2006 are set
out in the consolidated income statement on page F-4 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 are set out in note 6 to the Financial Statements.
SHARE CAPITAL
In 2006, the Company
issued 3,000,000 ordinary shares to its American Depositary Receipt bank and in
exchange received 600,000 ADSs for purposes of future exercise of share options
by employees. In addition, the Company issued 55,000 ordinary shares to Gainer
Capital Inc. in satisfaction of an option exercise commitment issued outside of
the Company¡¯s 2004 Stock Incentive Plan. The Company also issued share options
to purchase 700,000 ordinary shares pursuant to the 2004 Stock Incentive Plan
during 2006. Other than the foregoing, the Company did not issue any share
capital in the year ended December 31, 2006.
DIRECTORS
The directors of the
Company during the year and up to the date of this report were:
Mr. Zhao Zhiwei
Mr. Hugo Shong
Mr. Lee Kheng
Nam
Mr. Wang Ling
Mr. Guo Fansheng
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In accordance with
Article 8 of the Company¡¯s Articles of Association, all remaining directors
retire at the forthcoming annual general meeting and, being eligible, offer
themselves for re-election.
MANAGEMENT CONTRACTS
No substantial
contracts concerning the management and administration of the Company were
entered into or existed during the year.
ARRANGEMENTS TO
PURCHASE SHARES OR DEBENTURES
During the year,
directors were granted options to purchase 400,000 shares of the Company. None
of the directors exercised any options during the year. Details of directors¡¯
share options at 31 December 2006 were as follows:
| |
|
|
|
|
|
|
| |
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Number of |
| Name of
director |
|
Capacity |
|
underlying shares |
|
Zhao Zhiwei |
|
Director |
|
|
800,000 |
|
|
Hugo Shong |
|
Director |
|
|
160,000 |
|
|
Lee Kheng Nam |
|
Independent director |
|
|
220,000 |
|
|
Guo Fansheng |
|
Independent director |
|
|
140,000 |
|
|
Wang Ling |
|
Independent director |
|
|
140,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,460,000 |
|
|
|
|
|
|
|
|
|
Particulars of the
Company¡¯s stock incentive plan are set out in note 9 to the Financial
Statements.
Other than as disclosed
above, at no time during the year 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 re-appoint
Deloitte Touche Tohmatsu as auditors of the Company.
On behalf of the Board
/s/ Hugo
Shong
Hugo
Shong
CHAIRMAN
May 29, 2007
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