Fengzhu Textile (600493.SH) announced that Shanghai Xingye Venture Capital Co., Ltd. ("Xingye Venture Capital"), a shareholding company, was established on June 4, 2008. it is mainly engaged in the investment and venture capital business of growth enterprises. As of December 31, 2020, the registered capital is 40 million yuan. The company and its related person, Fujian Dongrun Investment Co., Ltd. ("Dongrun Investment") both hold 10% of Xingye Venture Capital.
On June 24, 2021, Xingye Venture Capital held the first interim shareholders' meeting in 2021 to examine and approve the "profit Distribution and Capital reduction Plan of Shanghai Xingye Venture Capital Co., Ltd. 2021". The proposed allocation amount of Xingye Venture Capital is 32 million, and the company can get 3.2 million yuan according to the proportion of 10% shareholding. This time, it is proposed to reduce the registered capital by 30 million yuan, and all shareholders will reduce their capital according to the proportion of their contributions. through this reduction, the registered capital of Xingye Venture Capital will be reduced from 40 million yuan to 10 million yuan, and the company will recover the capital reduction of 3 million yuan in the same proportion as Dongrun Investment, a related person.
The above dividend payment of 3.2 million yuan was allocated to the company's account on June 24, 2021. As of June 24, 2021, the company has received a total of 3.2 million yuan in cash dividends from Xingye Venture Capital in 2021. According to the relevant provisions of the Accounting Standards for Enterprises, such as the cash dividends are included in the investment income items of the company in 2021 and included in the profit and loss of 2021, which will have a positive impact on the company's operating performance in 2021.
3 million of the above capital reduction items will be allocated to the company's account after Xingye Venture Capital has completed the industrial and commercial changes and other related procedures. Through this capital reduction, the company's capital contribution to Xingye Venture Capital has been reduced from 4 million to 1 million, still accounting for 10% of its capital contribution; the company's related person Dongrun Investment has been reduced from 4 million to 1 million, still accounting for 10% of its capital contribution; this capital reduction has no significant impact on the production and operation of the company.