GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
GREE ELECTRIC APPLIANCES, INC.
OF ZHUHAI
Annual Report 2013
April 2014
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
Section I Important Notice, Table of Contents and Paraphrase
The Board of Directors, Board of Supervisors, all directors, supervisors
and officers of the Company hereby guarantee that there are not any false
records, misleading representations or material omissions in the Report, and
shall take all the joint and several responsibilities for the authenticity,
accuracy and completeness of the contents hereof.
Dong Mingzhu, the Company's responsible person, Wang Jingdong,
responsible person in charge of accounting work and Liao Jianxiong,
in-charge person of accounting institution hereby declare and warrant that
the financial report in the Report is authentic, accurate and complete.
All directors personally attended the meeting of the Board of Directors in
respect of deliberation of the Report.
The profit distribution proposal passed upon deliberation at the meeting
of the Board of Directors is set out as below: based on total stock capital of
the Company at the end of the year 2013, all directors were distributed a
cash dividend of RMB 15 (tax included) per 10 stocks without bonus shares
(tax included) and without capitalization from public reserve funds.
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
Table of Contents
Section I Important Notice, Table of Contents and Paraphrase ................................................. 1
Section II Company Profile ........................................................................................................ 4
Section III Summary of Accounting Data and Financial Indices ............................................... 5
Section IV Report of the Board of Directors .............................................................................. 6
Section V Important Events ..................................................................................................... 30
Section VI Changes in Stock Capital & Information of Shareholders ..................................... 32
Section VII Directors, Supervisors, Senior Management Personnel and Employees .............. 35
Section VIII Corporate Governance ......................................................................................... 45
Section IX Internal Control ...................................................................................................... 50
Section X Financial Report ...................................................................................................... 52
Section XI Index of Documents ............................................................................................. 174
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
Paraphrase
Items Means Contents
Company, the Company, GREE ELECTRIC
Means GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI
APPLIANCES or GREE
GREE GROUP Means ZHUHAI GREE GROUP CORP.
Finance Company Means Zhuhai Gree Group Finance Company Limited
Jinghai Guaranteed Means Hebei Jinghai Guaranteed Investment Co. , Ltd.
CSRC Means China Securities Regulatory Commission
Guangdong Securities Regulatory Bureau Means Guangdong Regulatory Bureau of CSRC
Report Period Means the period from 1 January 2013 to 31 December 2013
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
Section II Company Profile
1. Company information
Stock Abbreviation GREE ELECTRIC APPLIANCES Stock Code
Stock Exchange Shenzhen Stock Exchange
Name in Chinese 珠海格力电器股份有限公司 Name Abbreviation in Chinese 格力电器
Name in Foreign GREE ELECTRIC APPLIANCES, INC. Name Abbreviation in foreign
GREE
Language OF ZHUHAI language
Legal Representative Dong Mingzhu
Registered Address and Jinji West Road, Qianshan, Zhuhai City,
Post Code
Office Address Guangdong Province
Website http: //www.gree.com.cn Email gree0651@cn.gree.com
2. Contacts and contact information
Securities Affairs
Board Secretary Wang Jingdong Yang Yongxing
Representative
Jinji West Road, Qianshan, Zhuhai City,
Address Tel 0756-8669232
Guangdong Province
Fax 0756-8622581 Email gree0651@gree.com.cn
3. Information disclosure and place of the report
Newspaper designated by the Company for information China Securities Journal, Securities Times, Shanghai Securities
disclosure News and Securities Daily
Website specified by CSRC for release of the Annual
http: //www.cninfo.com.cn
Report
Place where the Annual Report is available for
Securities Legal Affairs Department of the Company
inspection
4. Alteration of registration
Registration Registration Registration Registration number of Tax registration Organization
description date place corporate business license number code
13 December Zhuhai Municipal
Initial 4400001008614 440401192548256 19254825-6
1989 Administration of
Industry and
At the end of Commerce of
the Report 20 June 2012 Guangdong 440000000040686 440401192548256 19254825-6
Period Province
5. Accounting firm engaged by the Company
Name of Accountant as
Name of the Accounting Firm Office Address
Signatory
China Audit Asia Pacific Certified 22-23/F, Tianxingjian Building, No.47 Fuxing Rd, Han Zhenping, Gong
Public Accountants Co., Ltd. Haidian District, Beijing Jingwei
6. Sponsor institution engaged by the Company responsible for continuous supervision
during the report period
Name of sponsor Period of continuous
Name of sponsor institution Office address
representative supervision
China Merchants Securities Co., 38-45/F, Jiangsu Building, Yitian Road, Wang Suwang, 6 February 2012 to 31
Ltd. Futian District, Shenzhen Liu Lihua December 2013
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
Section III Summary of Accounting Data and Financial Indices
1. Main accounting data and financial indices:
Increase/Decrease
Item 2013 2012 over the previous
year (%)
Operating Revenue
118,627,948,208.59 99,316,196,265.19 19.44% 83,155,474,504.59
(Yuan)
Net profit attributable to
shareholders of listed 10,870,672,842.47 7,379,666,345.09 47.31% 5,236,938,608.43
Company (Yuan)
Net profit attributable to
shareholders of listed
Company less 8,907,843,107.98 6,995,208,275.30 27.34% 5,106,435,132.83
non-recurring gains and
losses (Yuan)
Net cash flow generated
from operating activities 12,969,837,129.83 18,408,746,271.56 -29.55% 3,356,159,992.13
(Yuan)
Basic earnings per share
3.61 2.47 46.15% 1.86
(Yuan per Share)
Diluted earnings per
3.61 2.47 46.15% 1.86
share(Yuan per Share)
Weighted average return
35.77% 31.38% 4.39% 34%
on net assets (%)
Increase/Decrease
Item At the end of 2013 At the end of 2012 over the end of At the end of 2011
previous year (%)
Total asset (Yuan) 133,702,103,359.54 107,566,899,919.95 24.3% 85,211,594,207.30
Net asset attributable to
shareholders of listed 34,582,810,312.23 26,743,134,404.77 29.31% 17,606,865,814.24
Company (Yuan)
2. Non-recurring gains and losses and the amount thereof
Unit: RMB YUAN
Item Amount of 2013 Amount of 2012 Amount of 2011
Gains and losses from disposal of non-current assets (including the
-1,760,280.69 -12,332,978.15 -7,015,131.03
provision for asset impairment write -off part)
Governmental subsidies recorded into the current gains and
losses (excluding the governmental subsidies closely relating
660,482,277.34 252,844,637.88 145,384,688.32
to the business of the enterprise and enjoyed by a fixed quota
or a fixed amount in accordance with the state policies)
Gains and losses of the fair value change of the trading
financial asset and liability held by the Company, investment
income from the disposal of the trading financial asset and
1,705,045,054.92 217,676,678.03 38,495,870.93
liability and available-for-sale financial asset, except for the
effective hedging business in relation to the normal operation
of Company
Non-operating incomes and expenditures other than the above
-29,808,150.26 16,485,229.47 -27,002,909.26
items
Minus: Influence amount of income tax 367,611,287.10 86,905,123.66 20,861,729.40
Influence amount of minority interests (After tax) 3,517,879.72 3,310,373.78 -1,502,686.04
Total 1,962,829,734.49 384,458,069.79 130,503,475.60
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
Section IV Report of the Board of Directors
1. Overview
In 2013, under the environment of domestic economy staying at a low level toward being
stable and industry recession, influenced by real estate control, exiting of energy saving
subsidy policy and climate, domestic market grew weakly; overseas market demands were
comparatively fatigued under influence of factors such as political situation, economic and
exchange rate. Adhering to the market-oriented, the Company made scientific decisions with
composure and achieved good economic returns. The total operating income is RMB 120.043
billion, an increase of 19.91% compared with the previous year; the total profit is RMB
12.892 billion, an increase of 47.12% compared with the previous year; the net profit
attributable to shareholders of listed company was RMB 10.871 billion, an increase of
47.31% compared with the previous year; the basic earnings per share was RMB 3.61 per
share, an increase of 46.15% compared with the previous year.
According to the statistics of HVAC Information, Gree central air conditioner occupied
15.7% of domestic market in 2013, exceeding 4.5 percent than the second and ranked first
two years in row. According to the statistics of Industry On-line, Gree residential air
conditioner production and sales ranked first for years. Of which production of 2013 is 11.99
million above the second and sales is 11.865 million above to improve on market shares while
consolidating the top position.
2. Key works of the Company in 2013
The Company will internally keep practicing the management policy of \"Be fair; Be
open; Be dedicated\", require the leading cadres to have a sense of crisis, sense of urgency and
awareness of unexpected development and to live up to \"not to abuse their power to seek
personal gains and benefits or to bully others\", encourage the staff to fulfill the code of
conduct of \"Be truthful, work for real; Be principled, work for good; Be committed, work for
success\", insist on doing work in strict accordance with any laws, regulations, systems and
standards, effectively eliminate effects on work from selfish departmentalism and
bureaucratism, build a fair and impartial working environment, and utilize rules and systems
to create a space for fair development and a sharing platform so as to build an enterprise in
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
which everyone is willing to work hard, everyone is given equal opportunities and everyone
has a wish.
By adhering to the above management concept, the Company completed the
following key works in 2013:
1. By deepening management such as integration of operational module, informatization,
collectivize control and joint management mode, the Company combined flat management
and delicacy management to promote the level of management.
2. Persisting in the idea of “technology and innovation come first”, the Company listed
the \"Crown\" series which adopts the pioneering two-stage compressor inverter technology.
The photovoltaic direct-driven inverter centrifugal system called “Central Air Conditioner
without Electric Charge” originated by GREE was unanimously appraised as \"World Leading
Technology\" by the expert team. High quality water purifiers and air purifier which can
dislodge PM 2.5 effectively were launched.
Core technologies in 2013:
(1) Photovoltaic direct-driven inverter centrifugal system
By development of the project, we have mastered core technology and patents of
photovoltaic direct-driven inverter centrifugal technology, ternary converter, dynamic
capacity load tracking MPPT and high-power permanent magnet synchronous motor
high-speed drive based on PAWM interleaving modulation, combined photovoltaic power
generation system and urban power grid in unit, achieved perfect energy-saving effect, as well
as promoted application of photovoltaic power generation in air conditioners and national
emission reduction policy, and got recognition by certifying commission.
(2) Magnetic suspension inverter centrifugal cooling compressor and water chiller
In this project, we developed the magnetic inverter centrifugal cooling compressor with
the largest stand-alone capacity in the world, which was applied into water chiller with good
performance. By breaking international monopoly, we promoted an improvement upon
air-conditioning technique, which was valuable to national energy saving cause and got
recognition by certifying commission.
(3) Study in twin-stage enthalpy-adding rotor type inverter compressor and the
application in air conditioner and heat-pump water heater
GREE ELECTRIC APPLIANCES, INC. OF ZHUHAI Annual Report 2013
By resolving multiple technological difficulties of the project, we have mastered multiple
core technologies and patents, such as efficient two-stage compressor technology of wide
temperature, high reliability engineering, efficient shoot enhanced vapor and EER automatic
optimization, realized application of product and reached high energy efficiency level.
3. The Company set up departments for production automation management, equipment
manufacture and administration to promote mechanization and automation of R&D, automatic
reform in whole production chain and automation skills training of staff.
4. The Company set an informatization committee directed by Dong Mingzhu, Chairman
and President of the Company, optimized business management process with informatization
method, quickened the informatization planning and construction, as well as combination of
informatization and automation, to develop business management level efficiently on low
operational risk.
5. The Company upgraded marketing channels by setting flagship stores in major cities
and setting updated image stores to build high-end oriented of product group, and also
supplied stereoscopic services from model selection, design, and installation to maintain in
profession, specification and humanization.
3. Analysis on change of principal business
(1) Revenues
1) The physical sales revenue of the Company is more than the service revenue.
2) Sales conditions of Top 5 clients
Percentage to annual sales revenue of the
Client ranking Sales revenue (Yuan)
