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31. Basis of consolidation

The consolidated financial statements comprise the financial statements of Precious Woods Holding Ltd and its subsidiaries. Control is achieved when Precious Woods Holding Ltd. is exposed, or has rights, to variable returns from its direct or indirect involvement with the investee and has the ability to affect those returns through its power over the investee. Usually control is achieved through a majority of voting rights. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is lost.

The following subsidiaries are included in the consolidated financial statements:

Subsidiary   Country   Ownership   Ownership
        2020   2019
Mil Madeiras Preciosas Ltda.   Brazil   100%   100%
Monte Verde Manejo Florestal Ltda. (Ex Carolina Indústria Ltda.)   Brazil   100%   100%
Precious Woods Manejo Florestal Ltda.   Brazil   100%   100%
Precious Woods - Compagnie Equatoriale des Bois S.A.   Gabon   99%   99%
Precious Woods - Tropical Gabon Industrie S.A.   Gabon   100%   100%
Precious Woods Europe B.V.   Netherlands   100%   100%
Lastour & Co. S.A.   Luxembourg   100%   100%
Unio Holding S.A.   Luxembourg   100%   100%

In November 2019, the structure of the subsidiaries in Brazil was optimized. The two existing sub-holdings with a total of 6 entities were reduced to three entities. On the one hand, Madeiras Preciosas da Amazônia Manejo Ltda. was merged into MIL Madeiras Preciosas Ltda. On the other hand, Carolina Indústria Ltda., Precious Woods do Pará S.A. as well as Monte Verde Madeiras Ltda. were merged and form together the legal entity Monte Verde Manejo Florestal Ltda.

Further information about the associated entities of the Group are disclosed in Note 13.

Accounting policies

For purchases of non-controlling interests, the difference between any consideration paid and the relevant share of non-controlling interest acquired is deducted from equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.