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Annual Report 2021
Annual Report 2021
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Annual Report 2021
  • Annual Report 2024
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  • Annual Report 2022
  • Half-Year Report 2022
  • Annual Report 2021
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Table of contents for the Annual Report 2021 report

Operational review
Key FiguresTo our shareholdersAbout Precious Woods / Sustainability
VisionProducts and marketsGoal of sustainable growthManagement organization with strong market orientationSustainable forestry in all dimensionsMarket opportunities thanks to sustainability certificatesContribution to the UN Sustainable Development GoalsPrecious Woods Amazon: Close ties with the local populationPrecious Woods in Gabon – Projects for the protection of flora, fauna, and biodiversitySounding BoardInstitutional framework as opportunity and challengeIllegal logging threatens certified timber trade and sustainable developmentCarbon FootprintThe role of forestry in the current climate change debateMilestones Precious Woods
Group results
Income statementBalance sheet
Brazil
Reduced harvest volume, increased production volumes, higher yieldNew concessions to secure our activitiesSummary of further activitiesSocial and environmental sustainability continues to be at high levelOutlook for 2022
Gabon
Operational successes despite difficultiesIncrease in working capital due to delivery delaysMany projects and activitiesOutlook for 2022
TradingCarbon & Energy
Emission certificates thanks to residual wood in BrazilianEmission trading together with myclimatePrecious Woods Carbon & Energy
Veneer
Veneer production
Corporate Governance
1. Group structure and shareholders2. Capital structure3. Board of Directors4. Group Management5. Compensation, shareholdings, loans6. Shareholders’ rights of participation7. Changes of control and defense measures8. Auditor9. Information policy
Shareholder information
Share capitalEquivalent to 100 sharesStock market listingShare register informationCompany headquartersStock price development
Financial Report
Precious Woods Group financial statements
Consolidated statement of profit or lossConsolidated statement of comprehensive incomeConsolidated statement of financial positionConsolidated statement of changes in equityConsolidated statement of cash flowsNotes to the consolidated financial statements
1. Basis of presentation, consolidation and general accounting policies2. Financial risk management3. Financial information by segment4. Revenue from contracts with customers5. Consumables used and other production costs6. Labour costs7. Other operating income and expenses8. Depreciation, amortization and impairment9. Financial income and expenses10. Property, plant and equipment11. Biological assets12. Intangible assets and goodwill13. Investment in associates14. Non current loans and investments15. Inventories16. Prepayments17. Trade and other receivables18. Trade and other payables19. Financial liabilities, other than trade and other payables20. Financial instruments by category and fair value hierarchy21. Leasing22. Share capital23. Major shareholders24. Earnings per share25. Related party balances and transactions26. Provisions27. Contingencies28. Income taxes29. Employee benefits30. Currency translation rates31. Basis of consolidation32. Increase of investment in MIL Energia Renovável Ltda.33. Subsequent events34. Approval of financial statements and dividends
Report of the statutory auditor on the consolidated financial statements
Precious Woods Holding Ltd financial statements
Balance sheets as of 31 December 2021 and 2020Statements of income 2021 and 2020Notes to the financial statements of Precious Woods Holding Ltd
Essential accounting and valuation principles1. General2. Authorized share capital3. Conditional share capital4. Investments in subsidiaries5. Financial assets to Group6. Other short term interest bearing liabilities7. Long term interest bearing liabilities8. Board and Executive compensation9. Depreciation, amortization and impairment10. Major shareholders11. Pledged assets / other securities12. Other note / Full time employment13. Other note / Lease liabilities14. Other note / Other short term liabilities15. Other note / Significant events after the reporting date
Report of the statutory auditor on the financial statements
Additional information
Contact addresses
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10. Property, plant and equipment

The carrying amounts of all assets summarized in property, plant and equipment, are as follows:

in thousand EUR   2021   2020
Land   42 332   42 178
Forest roads   3 916   4 280
Buildings and improvements   6 765   4 952
Machinery and vehicles   6 858   3 235
Furniture and fixtures   241   286
Construction in progress   887   6 065
Advanced payments for PPE   887   604
Total carrying amounts   61 885   61 600

The Group uses different valuation methods for its assets. Beside the land in Brazil and Gabon, which is presented at fair value according to the revaluation model of IAS 16 Property, Plant and Equipment, the assets are held at cost.

The forests in Brazil are presented separately as biological assets, according to IAS 41 Agriculture and are further detailed in Note 11; as well as the leased assets, presented separately according to IFRS 16 Leases in Note 21.

a. Land at fair value

Precious Woods applies the revaluation model according to IAS 16 Property, Plant and Equipment for all its land assets. Independent valuators performed in 2019 a revaluation of the land in Brazil and Gabon according to the revaluation model of IAS 16.31. The carrying amount for those assets, if the cost model had been applied, would have been EUR 12.1 million (2020: EUR 12.2 million).

Reconciliation of carrying amount of level 2 land revaluation
in thousand EUR   2021
at Fair Value
  2020
at Fair Value
At 1 January   42 178   56 331
Reclassification to advanced payments for PPE   –129   –
Currency effects   283   –14 153
At 31 December   42 332   42 178
Accounting policies

The land value is measured at fair value with any changes in value recognized in other comprehensive income under revaluation surplus.

Land revaluation Brazil and Gabon

The revaluations in 2019 were performed by BDO Brazil for the land assets in Brazil and by A.N. Dengue for the land assets in Gabon. These valuators are not related to the Group and have recent experience in location and category of the land being valued. The valuation was based on the market value. The sales comparison approach is used to determine market value. This approach consists of comparing the subject land to similar land sold in the recent past in an open market situation, and adjusting the value for market trends. This results in a market value for the land. For 2021, land prices and their fluctuations were reviewed. No major fluctuations were detected, so no new assessments were made.

The fair value measurement for the land has been categorized as a level 2 fair value based on the inputs to the valuation technique used.

b. Other assets at cost

Beside the land, all other asset categories in property, plant and equipment are held at cost.

in thousand EUR   Forest roads
  Buildings
and
improve-
ments
  Machinery
and vehicles
  Furniture
and fixtures
  Construction
in progress
  Advanced
payments for
PPE
  Total
PPE at cost
Cost
At 1 January 2020   11 528   21 326   28 841   2 340   4 451   2 538   71 024
Additions   –   431   695   102   2 766   –   3 994
Disposals 1   –   –8 632   –8 617   –1 358   –43   –   –18 650
Reclassifications   –   366   673   48   –1 087   –   –
Currency effects   –1 277   –633   –1 634   –81   –22   –741   –4 388
At 31 December 2020   10 252   12 858   19 957   1 051   6 065   1 797   51 980
 
Additions   –   136   672   59   568   169   1 604
Disposals   –   –   –31   –1   –   –   –32
Change in consolidation scope - addition 2   –   227   2 357   61   –   –   2 645
Reclassifications 3   399   2 124   5 684   14   –5 747   129   2 603
Currency effects   25   16   58   9   1   17   126
At 31 December 2021   10 676   15 361   28 697   1 193   887   2 112   58 926
 
Accumulated depreciation and impairment
At 1 January 2020   6 068   15 562   25 138   1 817   –   1 685   50 272
Charge for the year   529   618   818   150   –   –   2 116
Reversal of impairment   –40   –   –   –   –   –   –40
Disposals 1   –   –7 881   –7 934   –1 133   –   –   –16 948
Currency effects   –586   –393   –1 300   –69   –   –492   –2 841
At 31 December 2020   5 971   7 906   16 722   765   –   1 193   32 558
 
Charge for the year   784   509   1 107   125   –   –   2 525
Impairment charge   –   –   –   –   –   22   22
Reversal of impairment   –10   –   –   –   –   –   –10
Disposals   –   –   –31   –   –   –   –31
Change in consolidation scope - addition 2   –   170   2 354   53   –   –   2 577
Reclassifications 3   –   –   1 637   –   –   –   1 637
Currency effects   15   11   50   8   –   10   94
At 31 December 2021   6 760   8 596   21 839   952   –   1 225   39 372
 
Carrying amount
At 31 December 2020   4 280   4 952   3 235   286   6 065   604   19 422
At 31 December 2021   3 916   6 765   6 858   241   887   887   19 554
1 Please refer to note 13 for further details about the disposal on PP&E contributed in an associate
2 Please refer to note 32 for further details about the investment in a subsidiary
3 The reclassifications contain also reclassifications from/to land, and from leasing (Note 21)

For certain land acquired by Precious Woods in Brazil, the land title registration is not yet finalized. These transactions are disclosed as advanced payments for property, plant and equipment at historical cost. For advanced payments for land titles with a certain risk of losing the land, an allowance is recorded based on Management’s estimate of the probability of not being able to prove the ownership of the land. Despite the continued efforts to clean the land titles from legal issues, Precious Woods had on the one hand to reclassify additional land of EUR 0.1 million (2020: EUR 0) as advanced payments for property, plant and equipment as new information on potential claims became available. On the other hand, it was not possible in 2021 to reverse any advanced payments for property, plant and equipment to land (2020: EUR 0).

Accounting policies

In general, assets in property, plant and equipment are recorded at cost less accumulated depreciation and any impairment in value. Depreciation is applied using the straight-line method over the estimated useful life of the assets as follows:

  • Permanent forest roads 25 years
  • Buildings and improvements 3 to 25 years
  • Machinery and vehicles 4 to 10 years
  • Furniture and fixtures 5 to 10 years

The assets’ residual values and useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate. Gains and losses on disposals are determined by comparing proceeds with carrying amounts. These are included in the consolidated statement of profit or loss.