Pallet-Management-Services - AFM

| ANNUAL REPORT 2006 | IFCO SYSTEMS N.V. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(US $ in thousands, except per share amounts or unless
otherwise stated)
1. Business, organization, and basis of presentation
The consolidated financial statements of IFCO SYSTEMS N.V.
(IFCO SYSTEMS or the Company) for the year ended December
31, 2006 were authorized by the Board of Managing Directors
and the Executive Management on February 16, 2007.
IFCO SYSTEMS N.V. is a Netherlands holding company for
the following operating companies: IFCO SYSTEMS GmbH,
its subsidiaries (IFCO SYSTEMS Europe), IFCO SYSTEMS
North America, Inc. and its subsidiaries (IFCO SYSTEMS
North America). The Company’s headquarter is located in
Strawinskylaan 3051, 1077 ZX Amsterdam, the Netherlands.
Its European operations headquarters are in Munich, Germany,
and its North American operations headquarters are in Houston,
Texas.
IFCO SYSTEMS Europe is involved in the organization and
administration of the rental, distribution and purchase of
reusable plastic containers (RPC) RPC-Management-Services
systems in Germany and other European countries. After the
Company has collected, sanitized and cleaned the RPCs, they
are rented primarily to producers of fresh fruit and vegetables in
exchange for a one-time usage fee. The producers’ goods are
transported in the RPCs to various intermediaries and ultimately
to retailers for sale to consumers. IFCO SYSTEMS Europe
delivers the empty RPCs to customers’ bulk warehouses and
collects the empty RPCs from regional service points again.
IFCO SYSTEMS North America, through one of its subsidiaries,
operates the Company’s RPC-Management-Services system in
the United States.
Aside from the RPC-Management-Services business in the
United States, IFCO SYSTEMS North America principally
offers Pallet-Management-Services. The wide range of Pallet-
Management-Services offerings range from consultancy
services and comprehensive pallet services programs including,
on or off site sort/repair of pallets, reverse logistics services to
web-based tracking/data management services.
The primary functional currency of the North American
operations is the US Dollar and the primary functional currency
of IFCO SYSTEMS N.V. and for most of the European operations
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is the Euro, the currency of their primary economic environment
in which they operate. Those functional currencies reflect the
respective regional currency influence on sales prices for goods
and services, influences on labor, material and other costs
and the currency in which funds from financing activities are
generated.
The Company’s presentation currency is the US Dollar, because
the main portion of the revenues and associated expenses do
occur in US Dollar. Therefore, our assets, liabilities, revenues,
and expenses are subject to exchange rate fluctuations between
the US Dollar, which is our group level presentation currency,
and the Euro. Exchange rate fluctuations occur, to a lesser
extent, as a result of certain subsidiaries operating in other
countries and using other functional currencies.
2. Summary of signifi cant accounting policies
Statement of compliance
The consolidated financial statements of the Company and
all its subsidiaries have been prepared in accordance with all
International Financial Reporting Standards (IFRS) as adopted
by the European Union.
Changes in accounting policies
The accounting policies adopted are consistent with those of
the previous year.
The group has adopted the following amended IFRS standards
and IFRIC interpretation during the year. Adoption of these
revised standards and this interpretation did not have any effect
on the financial statements of the Group.
IAS 21 Amendments – The Effects of Changes in Foreign
Exchange Rates
IAS 39 Financial Instruments: Recognition and Measurement
IFRIC 4 Determining whether an Arrangement contains a Lease
Future changes in accounting policies
IAS 1 Amendment – Presentation of Financial Statements that
has been issued but is effective as of January 1, 2007 and will
not be applied before that date. IAS 1 will require the Company
to make new disclosures to enable users of the fi nancial
statements to evaluate objectives, policies and processes for
managing capital.
IFRS 7 Financial Instruments that has been issued but is
effective as of January 1, 2007 and will not be applied before
that date. IFRS 7 will require additional disclosures to enable