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
        2021   2020
MIL Madeiras Preciosas Ltda.   Brazil   100%   100%
MIL Energia Renovável Ltda. (ex BK Energia Itacoatiara Ltda.) 1   Brazil   100%   40%
Monte Verde Manejo Florestal 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%
1 Associated company until 31 May 2021; as of 1st June 2021 100% investment and fully consolidated subsidiary

On 31 May 2021 MIL Madeiras Preciosas Ltda., acquired the remaining 60 % of the ordinary shares outstanding, and obtained 100 % ownership of the renewable power plant. BK Energia Itacoatiara Ltda. was renamed MIL Energia Renovável Ltda. afterwards. Note 32 contains the details of this purchase.

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.