Panalpina Annual Report 2006

Notes to the Consolidated Financial
Statements
1 General
Consolidated and Annual Financial Statements 2006
The consolidated financial statements of Panalpina World Transport (Holding) Ltd. (“the Company”) were authorized for
issuance in accordance with a resolution of the Board of Directors on 14 March 2007.
Panalpina World Transport (Holding) Ltd. is a limited company incorporated and domiciled in Basel. The registered address is
Viaduktstrasse 42, 4002 Basel, Switzerland.
The Company shares are publicly traded and its primary listing is on the SWX Swiss Exchange in Zurich.
The Company and its subsidiaries (together “the Group”), are one of the world’s leading logistics and forwarding companies
specialized in international air and ocean transports.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are listed below.
These policies have been consistently applied to all the years, unless stated otherwise.
Basis of preparation of the consolidated financial statements
The consolidated financial statements of the Group are based on the accounts of the individual subsidiaries on 31 December,
which have been drawn up according to uniform Group accounting principles. The consolidated financial statements for
2006 and 2005 are presented in Swiss francs (CHF). All values are rounded to the nearest thousand CHF except where
otherwise indicated. The consolidated accounts have been prepared in accordance with the International Financial Reporting
Standards (IFRS) and interpretation thereof adopted by the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared under the historical cost convention. Exceptions, if any, are
disclosed in the accounting policies below. Certain items, including derivatives financial instruments and available-for-sale
investments, are recorded at fair value.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires the management to exercise its judgment in the process of applying the Company’s accounting policies. The
areas involving a higher degree of judgment or complexity, or areas in which assumptions and estimates are significant to
the consolidated financial statements, are disclosed in note 4.
Changes in accounting policies
Apart from IAS 19 Employee Benefits, which the Group decided to early adopt in 2004, the following new standards,
amendments to standards and interpretations are published by the International Accounting Standards Board (IASB) and
adopted by the Group. A description of changes in 2006 and their effect on the consolidated financial statements is
provided below.
IAS 21 (amendment) The Effects of Changes in Foreign Exchange Rates
As of 1 January 2006, the Group adopted the amendments of IAS 21. As a result, all exchange differences arising from a
monetary item that forms part of the Group’s net investment in a foreign operation are recognized in a separate component
of equity in the consolidated financial statements regardless of the currency in which the monetary item is denominated.
This change has had no significant impact as of 31 December 2006 or 31 December 2005.
IAS 39 Financial Instruments: Recognition and Measurement
Amendment for financial guarantee contracts (issued August 2005), amended the scope of IAS 39 to require financial
guarantee contracts that are not considered to be insurance contracts to be recognized initially at fair value and to
be remeasured at the higher of the amount determined in accordance with IAS 37 Provision, Contingent Liabilities and
Contingent Assets and the amount initially recognized less, when appropriate, cumulative amortization recognized in
accordance with IAS 18 Revenue. This amendment did not have an effect on the financial statements.
Amendment for hedges of forecast intra-group transactions (issued April 2005). This amendment to IAS 39 permits the
foreign currency risk of a highly probable intra-group forecast transaction to qualify as the hedged item in a cash flow hedge,
provided that the transaction is denominated in a currency other than the functional currency of the entity entering into that
transaction and that the foreign currency risk will affect the consolidated income statement. As the Group currently has
no such transactions, the amendment did not have an effect on the financial statements.
Amendment for the fair value option (issued June 2005). This amendment changes the definition of financial instruments
classified as fair value through profit or loss and restricts the ability to designate financial instruments as part of this
category. The Group believes that this amendment should not have a significant impact on the classification of financial
instruments as the Group should be able to comply with the amended criteria for the designation of financial instruments
at fair value through profit and loss.
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