Mercedes-Benz Australia/Pacific Pty Ltd
ABN 23 004 411 410
ANNUAL FINANCIAL REPORT
31 DECEMBER 2024
Mercedes-Benz Australia/Pacific Pty Ltd
Year ended 31 December 2024
Contents
Page
Directors' Report
1 - 5
Independent Audit Report
6 - 9
Lead Auditor's Independence Declaration
10
Directors' Declaration
11
Statement of Financial Position
12
Statement of Profit or Loss & Other Comprehensive Income
13
Statement of Changes in Equity
14
Statement of Cash Flows
15
Notes to the Financial Statements
16 - 70
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2024
The directors present their report together with the financial report of Mercedes-Benz Australia/Pacific Pty Ltd ("the
Company") for the year ended 31 December 2024 and the auditor's report thereon.
Directors
Mr. Jamie Cohen CEO & Director since 1 April 2024
Mr. Florian Seidler CEO & Director since 1 January 2021 - 29 February 2024
Mr. Stephan Schmid CFO & Director since 1 July 2024
Mr. Volker Malzahn CFO & Director since 1 August 2018 - 30 June 2024
Ms. Diane Tarr Director since 1 January 2019
Mr. Steve McHutchon Director since 1 January 2019
Officers who were previously partners of the audit firm
There were no officers of the Company during the financial year who were previously partners of the current audit
firm, PwC, at a time when PwC undertook an audit of the Company.
Principal activities
The principal activities of the Company during the course of the financial year were the importation, marketing and
distribution of passenger and light commercial vehicles and their component parts.
Significant changes in the nature of the Company’s activities during the year are noted below.
1
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2024
(continued)
Operating and financial review
The Company delivered a profit, after income tax, for the year ended 31 December 2024 of $117.320 million (2023:
$71.665 million). During the full year, the Company continued its focus on the Agency business model for the sale of
its passenger cars which contributed to 84% share of total passenger cars sold. Additionally, the income tax expense
reported by the Company for the 31 December 2024 year includes prior year adjustments in relation to the 2015 and
2016 income years that resulted in an income tax refund of $53.625 million from the Australian Taxation Office. This
income tax refund was received from the Australian Taxation Office in March 2025.
The Company sold 20,929 new & demonstrator passenger cars (2023: 23,128) & 4,935 new light commercial
vehicles (2023: 4,013). The Company maintained a strong year to date relative market share of 32.4% for new
passenger cars (2023: 34.9%) and 10.4% for light commercial vehicles (2023: 12%).
The highest selling new passenger car product lines in 2024 were the GLA-Class selling 4,097 units, followed by the
GLC-class selling 3,013 units, followed by the C-Class selling 2,460 units.
The highest selling new passenger car product lines in 2023 were the GLC-class selling 5,807 units, followed by the
C-class selling 3,345 units, followed by the A-class (including the CLA) selling 3,342 units.
The highest selling new light commercial vehicle product lines in 2024 were the Sprinter selling 4,226 units (2023:
3,239 units) and the Vito van selling 409 units (2023: 1,206 units).
Many factors could directly or indirectly affect the Company's business, financial position, financial performance and
cash flows. These factors include, but are not limited to, changes in economic and market conditions, climate change,
interest rate risk, credit risk and currency risk.The Company considers these factors and associated potential impacts
on consumer behaviour and supply chains when making future plans. Further to this, interruptions in global supply
chains can delay vehicle shipment arrivals causing bottlenecks in the automotive industry. This has had a direct
impact on the production and stock levels of the Company.
The systematically pursued digitisation strategy as well as the transition to the agency business model creates
extensive changes in the existing information technology landscape and brings risks to business processes.
However, the level of information technology risk is managed by the Company's internal framework for IT security
which applies protective measures based on industry standards and good practice. The Company also continues to
be exposed to legal and tax risks. Provisions are recognised in accordance with the relevant accounting standards for
those risks if and insofar as they are likely to be utilised and the amounts of the obligations can be reasonably
estimated.
2
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2024
(continued)
Dividends - Mercedes-Benz Australia/Pacific Pty Ltd
Dividends totalling $91.696 million were declared and paid in February 2024 for the year ended 31 December 2022.
Dividends totalling $71.665 million were declared and paid in December 2024 for the year ended 31 December 2023.
Cents per
Total amount
Franked/
Date of
share
$'000
unfranked
payment
Final 2022 ordinary dividend
$261.99
$91,696
Unfranked
28.02.2024
Final 2023 ordinary dividend
$204.76
$71,665
Unfranked
12.12.2024
Significant changes in the state of affairs
In the opinion of the Directors there were no significant changes in the state of affairs of the Company that occurred
during the financial year under review.
Environmental regulation
The Company’s operations are not subject to any significant environmental regulations under either Commonwealth
or State legislation. However, the Board believes that the Company has adequate systems in place for the
management of its environmental requirements and is not aware of any breach of those environmental requirements
that are material in nature as they apply to the Company.
Events subsequent to reporting date
There has not arisen a transaction or event of an unusual nature likely to affect significantly the operations of the
business, the results of those operations or the state of affairs of the Company in future financial years from the end
of the financial year to the date of this report.
Likely developments
Operations
The Company will continue to pursue its policy of increasing its key market share as well as maintaining its
contribution to the Mercedes-Benz Group global organisation.
The Company’s financing activities for other related parties of the local Mercedes-Benz group are expected to
continue depending on the requirements of these related parties.
Indemnification and insurance of officers and auditors
Indemnification
The Company has agreed to indemnify all directors and officers of the Company against all liabilities to another
person (other than the Company or a related party) that may arise from their positions as directors or officers of the
Company, except where the liability arises out of conduct involving a liability owed to the Company or a Related Body
Corporate, a liability for a pecuniary penalty order under section 1317G, a compensation order under section 1317H
of the Law, or a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such
liabilities, including all costs and expenses as permitted by law.
The Company has not indemnified or made any agreements to indemnify any person for a liability who is or has been
an auditor of the Company.
3
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2024
(continued)
Indemnification and insurance of officers and auditors (continued)
Insurance premiums
For the period 1 April 2024 to 1 April 2025, the Company has paid insurance premiums of $11,086 (2023: $10,864) in
respect of directors’ and officers’ liability and legal expenses insurance. This insurance was renewed in April 2023 to
provide coverage until 1 April 2025.
The insurance contracts insure against certain liability (subject to specific exclusions) persons who are or have been
directors or executive officers of the Company.
4
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Report
31 December 2024
(continued)
Lead auditor's independence declaration
The lead auditor’s independence declaration is set out on page 10 and forms part of the Directors’ report for the
financial year ended 31 December 2024.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument
2016/191 and in accordance with that, amounts in the financial report and directors’ report have been rounded off to
the nearest thousand dollars, unless otherwise stated.
Signed in accordance with a resolution of the directors:
Mr. Steve McHutchon
Mr. Jaime Cohen
Director
CEO and Director
Melbourne
Melbourne
Mr. Stephan Schmid
CFO and Director
Melbourne
5
Independent auditor’s report
To the members of Mercedes-Benz Australia/Pacific Pty Ltd
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Mercedes-Benz Australia/Pacific Pty Ltd (the Company) is in
accordance with the Corporations Act 2001, including:
1. giving a true and fair view of the Company's financial position as at 31 December 2024 and of
its financial performance for the year then ended
2. complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
the statement of financial position as at 31 December 2024
the statement of changes in equity for the year then ended
the statement of cash flows for the year then ended
the statement of profit or loss and other comprehensive income for the year then ended
the notes to the financial statements, including material accounting policy information and other
explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Company in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
6
Liability limited by a scheme approved under Professional Standards Legislation.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Company, its accounting processes and controls and the industry in which it operates.
Audit Scope
Our audit focused on where the Company made subjective judgements; for example, significant
accounting estimates involving assumptions and inherently uncertain future events.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Valuation of provision for warranty claims
We performed the following procedures, amongst
(Refer to note 21) $227.2m
others:
Evaluated the Group’s valuation methodology
The Company grants product warranties which
guarantee the performance of a vehicle for a five year
against the requirements of Australian
period. When a vehicle is sold, management
Accounting Standards
recognises a provision for estimated future warranty
costs.
Assessed the mathematical accuracy of key
formulas in the valuation calculations
The valuation of the provision for warranty claims is a
key audit matter due:
Compared the key inputs and assumptions,
including actual claims and expected future
The financial significance of the balance.
costs, in the calculation on a sample basis to
source data and other relevant evidence
The judgement exercised by management in
obtained throughout the course of the audit
estimating the cost of future warranty claims.
This estimate is based on experience of past
Considered the reasonableness of associated
actual claims and expected future costs.
disclosures in the financial report in light of the
requirements of the Australian Accounting
Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2024, but does not include
the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
7
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This description forms part of our
auditor's report.
Report on compliance with relevant requirements set out in the Delegated Regulation
2019/815 on European Single Electronic Format
Our opinion
We have checked the compliance of the accompanying financial statements of the Company as at 31
December 2024 with the relevant requirements set out in the Delegated Regulation 2019/815 on
European Single Electronic Format (“ESEF Regulation”) that are applicable to the accompanying
financial statements of the Company.
For the Company, it relates to the requirement that:
the accompanying financial statements are prepared in a valid XHTML format.
In our opinion, the accompanying financial statements of Mercedes-Benz Australia/Pacific Pty Ltd as
at 31 December 2024, identified as MBAUP_Annual_Report_2025.xhtml, have been prepared, in all
material respects, in compliance with the requirements laid down in the ESEF Regulation.
Responsibilities of the directors
In addition to the responsibilities described above in the Responsibilities of the directors for the
financial report section to our Report on the audit of the financial report, the directors are responsible
for presenting the Company financial statements in compliance with the requirements set out in the
ESEF Regulation.
8
Auditor’s responsibilities
In conjunction with our responsibilities described above in the Auditor’s responsibilities for the audit of
the financial report section to our Report on the audit of the financial report, our responsibility is to
assess whether the accompanying Company financial statements have been prepared, in all material
respects, in compliance with the requirements laid down in the ESEF Regulation.
PricewaterhouseCoopers
Brad Peake
Melbourne
Partner
29 April 2025
9
Auditor’s Independence Declaration
As lead auditor for the audit of Mercedes-Benz Australia/Pacific Pty Ltd for the year ended 31
December 2024, I declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
Brad Peake
Melbourne
Partner
29 April 2025
PricewaterhouseCoopers
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
10
Liability limited by a scheme approved under Professional Standards Legislation.
Mercedes-Benz Australia/Pacific Pty Ltd
Directors' Declaration
31 December 2024
1.
The directors of the Company certify to the best of their knowledge that:
(a) the financial statements and notes set out on pages 12 to 70 are in accordance with the Corporations
Act 2001 (Cth), including:
(i) giving a true and fair view of the Company’s financial position as at 31 December 2024 and of
its performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the Company directors' report (where necessary read together with the financial report and notes to
the financial statements which accompany the directors' report) provides a fair review of the
development and performance of the business and the position of the Company for the financial year
ended 31 December 2024, together with a description of the principal opportunities and risks
associated with the expected development of the Company; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
The directors draw attention to Note 2(a) to the financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Mr. Steve McHutchon
Mr. Jaime Cohen
Director
CEO and Director
Melbourne
Melbourne
Mr. Stephan Schmid
CFO and Director
Melbourne
11
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Financial Position
As at 31 December 2024
2023
2024
Notes
$'000
$'000
Current assets
Cash and cash equivalents
12
53,348
126,406
Trade and other receivables
13
611,912
1,195,556
Inventories
14
1,294,869
1,332,455
Total current assets
2,033,187
2,581,359
Non-current assets
Trade and other receivables
13
675,576
545,635
Deferred tax assets
16
139,097
121,401
Intangible assets
1
24
Property, plant and equipment
15
85,067
93,206
899,741
760,266
Total non-current assets
Total assets
2,932,928
3,341,625
Liabilities
Current liabilities
Trade and other liabilities
17
604,724
680,014
Loans and borrowings
18
600,878
1,027,090
Employee benefits
20
15,418
17,588
Provisions
21
101,006
97,957
1,933
Deferred income
22
1,114
Total current liabilities
1,323,140
1,824,582
Non-current liabilities
Trade and other liabilities
17
41,831
43,309
Loans and borrowings
18
650,434
550,409
Employee benefits
20
1,334
908
Provisions
21
138,345
98,015
Deferred income
22
1,225
890
Total non-current liabilities
832,743
693,957
Total liabilities
2,155,883
2,518,539
777,045
823,086
Net assets
Equity
Share capital
23
70,000
70,000
Retained earnings
707,045
753,086
777,045
823,086
Total equity
The notes on pages 16 to 70 are an integral part of these financial statements.
12
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Profit or Loss & Other Comprehensive Income
For the year ended 31 December 2024
2023
2024
Notes
$'000
$'000
Revenue
5
2,861,325
2,698,215
Cost of sales
8(a)
(2,309,218)
(2,441,023)
Gross Profit
388,997
420,302
Other income
6
25,108
28,901
Employee expenses
7
(54,146)
(54,463)
Amortisation
(24)
(136)
Depreciation expense
15
(7,657)
(9,930)
(273,739)
Other expenses
8(b)
(257,093)
Result from operating activities
95,185
110,935
Finance income
10
59,196
37,827
(47,659)
Finance costs
10
(67,979)
(9,832)
Net finance income / (cost)
10
(8,783)
101,103
Profit before income tax
86,402
Income Tax (Expense)/Benefit
Income tax (expense)/benefit
11
30,918
(29,438)
Profit for the period
117,320
71,665
Other comprehensive income/(loss)
Blank
-
Other comprehensive income/(loss) for the period, net of tax
-
Total comprehensive income/(loss) for the period
117,320
71,665
The notes on pages 16 to 70 are an integral part of these financial statements.
13
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Changes in Equity
For the year ended 31 December 2024
Retained
Share capital earnings
Total
$'000
$'000
$'000
Balance at 1 January 2023
70,000
681,421
751,421
Profit for the period
-
71,665
71,665
Total comprehensive income/(loss) for the period
-
71,665
71,665
70,000
753,086
823,086
Balance at 31 December 2023
Balance at 1 January 2024
70,000
753,086
823,086
-
117,320
117,320
Profit for the period
Total comprehensive income/(loss) for the period
-
117,320
117,320
Dividends to owners of the Company
-
(163,361) (163,361)
Balance at 31 December 2024
70,000
707,045 777,045
The notes on pages 16 to 70 are an integral part of these financial statements.
14
Mercedes-Benz Australia/Pacific Pty Ltd
Statement of Cash Flows
For the year ended 31 December 2024
2023
2024
Notes
$'000
$'000
Cash flows from operating activities
Cash receipts from customers
2,840,481
3,175,189
Cash paid to suppliers and employees
(2,809,121)
(2,983,989)
Cash generated from operations
31,360
191,200
Interest received
52,603
24,565
Interest paid
(55,082)
(30,253)
Income taxes paid
(55,628)
(50,728)
Net cash (outflow)/inflow from operating activities
24(b)
(26,747)
134,784
Cash flows (used in)/from investing activities
Payment for acquisition of intangibles and property, plant and equipment
(7,280)
(1,372)
Loans to other related entities
(3,260,279)
(3,608,988)
Loans repaid by other related entities
3,899,945
3,092,361
Net cash inflow (outflow) from investing activities
638,294
(523,907)
Cash flows (used in)/from financing activities
Proceeds from borrowings
4,458,050
3,529,975
Repayment of borrowings
(4,830,354)
(3,265,461)
Proceeds from borrowings from other related entities
675
721
Repayment of borrowings from other related entities
(721)
(897)
Dividends paid
(163,361)
-
Payment of lease liabilities
(2,778)
(2,497)
Net cash (outflow) inflow from financing activities
(538,489)
261,841
Net (decrease)/increase in cash and cash equivalents
73,058
(127,282)
Cash and cash equivalents at the beginning of the year
53,348
180,630
Cash and cash equivalents at end of year
126,406
53,348
The notes on pages 16 to 70 are an integral part of these financial statements.
15
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
1
REPORTING ENTITY
Mercedes-Benz Australia/Pacific Pty Ltd (“the Company”) is a for-profit company domiciled in Australia. The address
of the Company’s registered office is 44 Lexia Place, Mulgrave, Victoria 3170.
The Company is primarily involved in the importation, marketing and distribution of passenger and light commercial
vehicles and their component parts.
2
BASIS OF PREPARATION
(a) Statement of compliance
The financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The financial statements of the Company comply with International Financial Reporting
Standards (IFRS) adopted by the International Accounting Standards Board (IASB).
Certain prior year amounts have been reclassified for consistency with the current year presentation. These
reclassifications had no effect on the reported profit of the Company.
The financial statements were authorised for issue by the Board of Directors on 29 April 2025.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following material items in the
statement of financial position:
• derivative financial instruments are measured at fair value;
• liabilities for cash-settled share-based payment arrangements are measured at fair value.
• certain classes of property, plant and equipment and right-of-use assets are measured at historical cost less
depreciation and impairment.
The methods used to measure fair value are discussed further in Note 4.
The financial report of the Company has been prepared on a going concern basis.
16
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
2
BASIS OF PREPARATION (CONTINUED)
(b) Basis of measurement (continued)
New and amended standards adopted by the Company
The Company has adopted all relevant new and amended standards and interpretations issued by the AASB and
IASB which are effective for annual reporting periods beginning on 1 January 2024. The new standards and
amendments did not have any impact on the amounts recognised in the current and prior periods.
New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December
2024 reporting periods and have not been early adopted by the Company. AASB 18 Presentation and Disclosure in
Financial Statements (effective for annual periods beginning on or after 1 January 2027) will replace AASB 101
Presentation of financial statements, introducing new requirements that will help to achieve comparability of the
financial performance of similar entities and provide more relevant information and transparency to users. Even
though AASB 18 will not impact the recognition or measurement of items in the financial statements, its impacts on
presentation and disclosure are expected to be pervasive, in particular those related to the consolidated statement of
comprehensive income or loss and providing management-defined performance measures within the financial
statements. Management is currently assessing the detailed implications of applying the new standard on the
Company's financial statements.
(c) Functional and presentation currency
The financial statements are presented in Australian dollars which is the Company’s functional currency.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument
2016/191 and in accordance with that, all financial information presented in Australian dollars has been rounded to
the nearest thousand, unless otherwise stated.
17
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
2
BASIS OF PREPARATION (CONTINUED)
(d) Use of estimates and judgements
The preparation of financial statements in conformity with AASBs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the
amounts recognised in the financial statements is included in the following notes:
•
Note 14 - Inventories
•
Note 16 - Tax assets and liabilities
•
Note 21 - Provisions
•
Note 26 - Leases - Leases as lessor
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements.
(a) Foreign currencies
Transactions
Transactions in foreign currencies are translated to the Company’s functional currency at the foreign exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting
date are retranslated to Australian dollars at the foreign exchange rate at that date. The foreign currency gain or loss
on monetary items is the difference between amortised cost in functional currency at the beginning of the period,
adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated
at the exchange rate at the end of the period. Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Foreign exchange differences arising on retranslation are recognised in profit or loss except for qualifying cash flow
hedges which are recognised directly in other comprehensive income to the extent the hedge is effective.
(b) Financial instruments
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Financial instruments in the form of financial assets and financial liabilities are generally
presented separately. Financial instruments are recognised as soon as the Company becomes a party to the
contractual provisions of the financial instrument.
Upon initial recognition, financial assets are measured at fair value. For the purpose of subsequent measurement,
financial assets are allocated to one of the categories mentioned in AASB 9 Financial Instruments (financial assets
measured at amortized cost, financial assets measured at fair value through other comprehensive income and
financial assets measured at fair value through profit or loss). Transaction costs directly attributable to acquisition or
issuance are considered by determining the carrying amount if the financial instruments are not measured at fair
value through profit or loss.
18
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(b) Financial instruments (continued)
Financial Instruments (continued)
Non-derivative financial assets
Financial assets primarily comprise trade receivables. A trade receivable without a significant financing component is
initially measured at the transaction price. The classification of financial instruments is based on the business model
in which these instruments are held and on their contractual cash flows. The determination of the business model is
made at the portfolio level and is based on management’s intention and past transaction patterns. Assessments of
the contractual cash flows are made on an instrument by instrument basis.
Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial assets with contractual cash flows that consist solely of
payments of principal and interest on the nominal amount outstanding and which are held with the aim of collecting
the contractual cash flows, such as trade receivables or cash and cash equivalents. Cash and cash equivalents
consist primarily of cash on hand, demand deposits at banks, as well as certificates of deposits with a remaining term
when acquired of up to three months, which are not subject to any material value fluctuations. Cash and cash
equivalents correspond with the classification in the Statement of Cash Flows.
Non-derivative financial liabilities
The Company initially recognises debt securities issued and subordinated liabilities on the date that they are
originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are initially
recognised on the trade date at which the Company becomes a party to the contractual provisions of the instrument.
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.
The Company has the following non-derivative financial liabilities: loans and borrowings and trade and other liabilities.
Loans, borrowings and other liabilities due within 12 months are classified as current. All other loans, borrowings and
liabilities are classified as non-current.
Financial liabilities measured at amortised cost
The non-derivative financial liabilities are initially recognised at fair value less directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are stated at amortised cost using the effective interest rate
method.
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity, net of any tax effects.
Dividends
Dividends are recognised as a liability in the period in which they are declared.
19
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(c) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a
working condition for its intended use, and the costs of dismantling and removing items and restoring the site on
which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised
as part of that equipment.
In respect of borrowing costs relating to qualifying assets for which the commencement date for capitalisation is on or
after 1 January 2009, the Company capitalises borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset as part of the cost of that asset.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognised gross within other
income in profit or loss.
20
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(c) Property, plant and equipment (continued)
Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for
cost, less its residual value.
Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of each part of an
item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the
future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term
and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease
term. Land is not depreciated.
The estimated useful lives in the current and comparative periods are as follows:
Motor vehicles subject to operating leases, the
Company as lessor
0-5 years
Office furniture, fittings, plant & equipment
3-23 years
Freehold land and improvements
12-25 years
Buildings
20-40 years
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its
cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day to day
servicing of property, plant and equipment are recognised in profit or loss as incurred.
(d) Leasing
Leases include all contracts that transfer the right to use a specified asset for a stated period of time in exchange for
consideration, even if the right to use such asset is not explicitly described in the contract. The Company is a lessee
mainly of real estate properties used for the purposes of parts warehousing, regional training offices and hospitality.
The Company as lessee
The Company as a lessee recognises for generally all lease contracts right-of-use assets as well as leasing liabilities
for the outstanding lease payments.
Right-of-use assets, which are included under property, plant and equipment, are initially measured at cost. The cost
of a right-of-use asset comprises the amount of the initial measurement of the lease liability, any lease payments
made at or before the commencement date less any lease incentives received from the lessor, any initial direct costs
and an estimate of costs to be incurred in dismantling or removing the underlying asset.
A right-of-use asset is subsequently measured at cost less any accumulated depreciation and, if necessary, any
accumulated impairment. The right-of-use asset is depreciated to the end of the lease term.
21
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(d) Leasing (continued)
The lease liabilities include the following lease payments:
•
fixed payments including de facto fixed payments, less lease incentives receivables from the lessor;
•
variable lease payments linked to an index or interest rate;
•
amounts expected to be payable by the lessee under residual value guarantees;
•
the exercise price of purchase options, when exercise is estimated to be reasonably certain; and
•
contractual penalties for the termination of a lease if the lease term reflects the exercise of a termination option.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate
as the discount rate. The Company determines its incremental borrowing rate by obtaining interest rates from various
external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset
leased.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and
short-term leases, including IT equipment and office furniture. The Company recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
The Company as lessor
Based on the risk and rewards associated with a leased asset, it is assessed whether economic ownership of the
leased asset is transferred to the lessee (so-called finance leases) or remains with the lessor (so-called operating
leases). Operating leases, i.e. by which the economic ownership of the vehicle remains with the Company, relate to
vehicles that the Company acquires and leases to third parties. Additionally, sales of vehicles where the Company
also has a repurchase obligation are accounted for as an operating lease:
•
Sales of vehicles that include a forward (an entity’s obligation to repurchase the asset) or a call option (an entity’s
right to repurchase the asset) are accounted for as operating leases.
•
Sales of vehicles including a put option (an entity’s obligation to repurchase the asset at the customer’s request)
are accounted for as operating leases if the customer has a significant economic incentive to exercise that right.
Otherwise a sale with a right of return is reported. The Company considers several factors when assessing
whether a customer has a significant economic incentive to exercise their right at contract inception. Amongst
others these are the relationship between repurchase price and the expected future market value (at the time of
repurchase) of the asset or historical return rates.
As part of the established residual-value management process, especially for operating lease contracts, certain
assumptions are regularly made at local and corporate levels regarding the expected level of prices, based upon
which the cars to be returned in the leasing business are evaluated. If changing market developments lead to a
negative deviation from assumptions, there is a risk of lower residual values of used vehicles. Depending on the
region and the current market situation, the measures taken generally include continuous market monitoring as well
as, if required, price-setting strategies or sales-promotion measures designed to regulate vehicle inventories. The
quality of market forecasts is verified by regular comparisons of internal and external sources, and, if required, the
determination of residual values is adjusted and further developed with regard to methods, processes and systems.
22
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(d) Leasing (continued)
In the case of accounting as an operating lease, these vehicles are recorded at cost under property, plant and
equipment and are depreciated over the contract term on a straight-line basis with consideration of the expected
residual values. Changes in the expected residual values lead either to prospective adjustments of the scheduled
depreciation or to an impairment loss if necessary.
(e) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in
first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and
other costs incurred in bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
(f) Impairment
As required under AASB 9, an annual assessment of the expected credit loss has been performed using the
simplified method. This has been applied on the trade receivable balance to arrive at the bad debt provision created
during the year. There has been no instance of credit loss on Intercompany balances in the past and hence no
expected credit losses has been created on Intercompany balances.
(g) Employee benefits
Other long-term employee benefit obligations
The Company’s net obligation in respect of long-term employee benefits, other than defined benefit plans, is the
amount of future benefit that employees have earned in return for their service in the current and prior periods. The
obligation is calculated using expected future increases in wage and salary rates including related on-costs and
expected settlement dates, and is discounted to its present value using the rates attached to the corporate bonds at
the reporting date which have maturity dates approximating to the terms of the Company’s obligations.
Termination benefits
Termination benefits are recognised as an expense when the Company is demonstrably committed, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date,
or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination
benefits for voluntary redundancies are recognised as an expense if the Company has made an offer of voluntary
redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If
benefits are payable more than 12 months after the reporting period, then they are discounted to their present value.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions
The Performance Phantom Share Plan allows the Company to arrange the issue of shares or the equivalent value of
shares of the ultimate parent, Mercedes-Benz Group AG, to employees of the Company.
In 2006, the former Daimler AG adopted the “Performance Phantom Share Plan” under which virtual shares
(phantom shares) are granted to eligible employees entitling them to receive cash payment after four years of
service.
23
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(g) Employee benefits (continued)
Share-based payment transactions (continued)
The fair value of the amounts payable to employees in respect of the Performance Phantom Share Plan, which are
settled in cash, are recognised as an employee expense, with a corresponding increase in liabilities over the period in
which the employees become unconditionally entitled to the payment. The liabilities are re-measured at each
reporting date and at settlement date. Any changes in the fair value of the liability are recognised as an employee
expense in profit or loss.
Fair value is measured with reference to the quoted price of one ordinary share in Mercedes-Benz Group AG and the
estimated target achievement grades as of reporting date.
(h) Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability. The unwinding of the discount is recognised as a finance cost.
Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on
historical warranty data and a weighting of all possible outcomes against their associated probabilities.
Some claims are recoverable from the parent company, the provision represents the full amount and the
corresponding receivable has been recognised.
Agent Remuneration
A provision is recognised for the future payments to Agents in connection with the sale of new vehicles. The provision
is recognised at the time the vehicle is sold and is based on the fixed and variable rates per the Agent Agreement.
Legal
Provisions for legal costs are only recognised when the Company has or probable outflow or a legal obligation to pay
a legal settlement and legal costs to parties subject to litigation. The provision is a best estimate of the present value
of the expenditure required to settle these legal commitments at the reporting date.
(i) Revenue
Goods sold
Revenue from sales of vehicles, service parts and other related products is recognised when control of the goods is
transferred to the customer. This generally occurs at the time the customer takes possession of the products.
Generally, payment from sales of vehicles, service parts and other related products are made when the customer
obtains control of these products.
The Company also enters into sale agreements which include a repurchase obligation in the form of a put option (an
entity's obligation to repurchase the asset at the customer's request). Where the customer does not have a significant
economic incentive to exercise that right, these arrangements are accounted for as a sale with a right of return. The
Company considers several factors when assessing whether the customer has a significant economic incentive to
exercise this right. Amongst others, these are the relationship between repurchase price and the expected future
market value (at the time of repurchase) of the asset, or historical return rates.
24
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(i) Revenue (continued)
Goods sold (continued)
The Company uses a variety of sales promotion programs dependent on various market conditions as well as the
respective product life cycles and product-related factors (such as amounts of discounts offered by competitors,
excess industry production capacity, the intensity of market competition and consumer demand for the products).
Revenue is recognised net of sales reductions such as cash discounts and sales incentives granted.
The Company offers extended, separately priced warranties for certain products as well as service and maintenance
contracts. Revenue from these contracts is deferred insofar as a customer has made an advance payment and is
generally recognised over the contract period in proportion to the costs expected to be incurred based on historical
information. A loss on these contracts is recognised in the current period if the sum of the expected costs for services
under the contract exceeds unearned revenue. Usually those contracts are paid in advance or in equal instalments
over the contract term.
Rental income
Where the Company has agreed to provide residual value guarantees for operating leases entered into between
Mercedes-Benz Financial Services Australia Pty Ltd and their external customers, rental income from these leases is
recognised as other income on a straight-line basis over the term of the lease. Lease income prepaid by
Mercedes-Benz Financial Services Australia Pty Ltd is classified as deferred income.
Services income
Where the Company has agreed to provide services to certain external and other related parties, income from these
agreements is recognised over the period when the services are provided.
Income from these agreements is recognised as other income when the services are provided.
(j) Finance income and expenses
Finance income comprises interest income on funds invested, dividend income and changes in fair value of financial
assets at fair value through profit or loss. Interest income is recognised in profit or loss as it accrues, using the
effective interest rate method. Dividend income is recognised in profit or loss on the date the entity’s right to receive
payment is established.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the
fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and
losses on hedging instruments that are recognised in profit or loss. All borrowing costs that are not directly
attributable to acquisition, construction or production of a qualifying asset are recognised in profit or loss using the
effective interest method.
Foreign currency gains and losses are reported on a net basis.
(k) Taxation
Tax Consolidation
The Company is a member of a multiple entry consolidated (MEC) Group, whereby the group of Australian entities
(being the Company, Mercedes-Benz Group Australia/Pacific Pty Ltd, Mercedes-Benz Vans Australia/Pacific Pty Ltd,
Mercedes-Benz Mobility Australia Pty Ltd and Mercedes-Benz Financial Services Australia Pty Ltd) are all wholly
foreign owned by a common non-resident company, but do not have a common Australian resident parent company.
As a result, these entities form part of a MEC Group that are consolidated and taxed as a single entity for Australian
tax purposes. The provisional head entity of the Australian tax consolidated group is Mercedes-Benz Group
Australia/Pacific Pty Ltd.
25
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(k) Taxation (continued)
Tax Consolidation (continued)
Current and deferred tax expense / income, deferred tax liabilities and deferred tax assets arising from temporary
differences of the members of the tax-consolidated group are recognised in the separate financial statements of the
members of the tax-consolidated group using the “separate taxpayer within group” approach by reference to the
carrying amounts of assets and liabilities in the separate financial statements of each entity and the tax values
applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the members of the
tax-consolidated group are assumed by the provisional head entity and are recognised by the Company as amounts
payable (receivable) to (from) the provisional head entity in conjunction with any tax funding arrangement amounts
(refer below). Any difference between these amounts is recognised as an equity contribution or distribution.
Income tax
Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss
except to the extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the
extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
Nature of tax funding and sharing arrangements
The Company and the provisional head entity, in conjunction with other members of the tax-consolidated group, have
entered into a tax funding agreement which sets out the funding obligations of members of the tax-consolidated group
in respect of tax amounts. The tax funding arrangements require payments to / (from) the provisional head entity
equal to the current tax liability / (asset) and any tax-loss deferred tax asset assumed by the provisional head entity,
resulting in the provisional head entity recognising an inter-entity receivable / (payable) equal in amount to the tax
liability / (asset) assumed. The inter-entity payable / (receivable) is at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement, and reflect the timing
of the provisional head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The provisional head entity and other members of the tax-consolidated group have also entered into a tax sharing
agreement. The tax sharing agreement provides for the determination of the allocation of income tax liabilities
between the entities should the provisional head entity default on its tax payment obligations. No amounts have been
recognised in the financial statements in respect of this agreement as payment of any amounts under the tax sharing
agreement is considered remote.
26
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
3
STATEMENT OF MATERIAL ACCOUNTING POLICIES (CONTINUED)
(l) Segment reporting
Determination and presentation of operating segments
An operating segment is a component of the Company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s
other components. All operating segments’ operating results are regularly reviewed by the Company’s CEO to make
decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and
intangible assets other than goodwill.
(m) Goods and Services Tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the ATO is included as a current asset or liability in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising
from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating
cash flows.
4
DETERMINATION OF FAIR VALUES
A number of the Company’s accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or
disclosure purposes based on the following methods. Where applicable, further information about the assumptions
made in determining fair values is disclosed in Note 4 or the notes specific to that asset or liability.
(a) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the
market rate of interest at the reporting date. These fair values are based on Level 2 inputs.
(b) Loans and borrowings
Fair value of loans and borrowings is determined for disclosure purposes (Note 18). The fair value of loans and
borrowings that are readily traded are revalued at reporting date to market value using quoted market prices (Level 1
inputs) or, if not readily traded, are measured based on present value of future expected principal and interest cash
flows, discounted at the market rate of interest at the reporting date (Level 2 inputs).
(c) Derivatives
The fair value of forward exchange contracts is estimated by discounting the difference between the contractual
forward price and the current forward price for the residual maturity of the contract using a market rate of interest at
the reporting date.
27
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
4
DETERMINATION OF FAIR VALUES (CONTINUED)
(c) Derivatives (continued)
The fair value of interest rate and cross currency swaps are based on market values which approximate estimated
future cash flows based on the terms of maturity of each contract and using observable market interest and foreign
exchange rates at the reporting date.
Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the
entity and counterparty when appropriate. Refer to Note 19 for more information.
Fair values are based on level 2 inputs which requires inputs, other than quoted prices in active markets for identical
assets and liabilities, that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
28
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
5
REVENUE
Revenue disclosed in the Statement of Profit or Loss includes revenue from contracts with customers and other
revenue not in the scope of AASB 15. Other revenue primarily comprises revenue from the rental and leasing
business.
Revenue according to AASB 15 includes revenue that was deferred and included in contract liabilities at 31
December 2024 amounting to $33.749 million (2023: $33.675 million).
Revenue that is expected to be recognised within three years related to performance obligations that are unsatisfied
(or partially unsatisfied) amounted to $75.199 million at 31 December 2024 (2023: $69.564 million) and revenue from
performance obligations partially satisfied in previous periods amounted to $39.245 million (2023: $42.230 million).
This revenue is mainly derived from long-term service and maintenance contracts and extended warranties. It does
not include performance obligations from customer contracts that have initial expected durations of one year or less.
Long-term performance obligations of minor importance to the overall contract value of a bundled contract are not
considered in assessing the initial duration of the bundled contract. Contract liabilities are included as part of Note 17
- Trade and other liabilities.
The below table discloses revenue from contracts with customers and is disaggregated by major products and
service lines. The table also includes a reconciliation of the disaggregated revenue with the Company's reportable
segments.
Cars
Vans
Total
2024
$'000
$'000
$'000
Timing of Revenue:
At a point in time
2,254,321
394,119
2,648,440
45,826
3,949
49,775
Over time
Total revenue
2,300,147
398,068
2,698,215
Cars
Vans
Total
2023
$'000
$'000
$'000
Timing of Revenue
At a point in time
2,509,580
295,296
2,804,877
Over time
51,182
5,266
56,448
Total revenue
2,560,762
300,562
2,861,325
29
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
6
OTHER INCOME
2023
2024
Notes
$'000
$'000
Rental income
Employee lease program
372
1,125
Other
From other related parties
31(b), 31(c), 31(d)
8,919
19,440
External parties
15,817
8,336
Total other income
25,108
28,901
Rental Income
: The Company earns income from employees entering into lease arrangements with Mercedes-Benz
Financial Services Australia Pty Ltd (a related party) for the Company's products under the employee vehicle lease
program.
Other:
The Company earns income from other related and external parties in relation to recharged costs for shared
services including building rents, IT and warehouse costs.
7
EMPLOYEE EXPENSES
2024
2023
$'000
$'000
Wages and salaries
(38,614)
(38,616)
Other associated personnel expenses
(5,934)
(6,558)
Contributions to defined contribution plans
(4,440)
(4,508)
Long service leave expense
(2,766)
(2,911)
Annual leave expense
(1,077)
(1,025)
Termination benefits
(1,367)
(793)
(54,146)
(54,463)
Total employee expenses
30
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
8
EXPENSES
(a) Cost of sales
2024
2023
$'000
$'000
Total cost of sales
(2,309,218)
(2,441,023)
Cost of sales comprises the expenses of vehicles and parts sold such as the purchase costs and importation costs
(including import duties, freight charges and insurance). Cost of sales also includes expenses relating to inland
transport, storage, pre-delivery inspection costs, net write-down of inventories and sole distribution rights fee.
(b) Other expenses:
Vehicle related selling expenses
(149,917)
(180,070)
Marketing expenses
(37,738)
(43,144)
IT expenses
(19,997)
(17,200)
Other overheads
(14,378)
(14,709)
Miscellaneous other expenses & other selling costs
(602)
(6,342)
Demo vehicles & warehouse service costs
(12,795)
(15,984)
Roadside assistance
(10,363)
(7,395)
(157)
(41)
Loss on disposal of property, plant and equipment
(257,093)
(273,739)
Total other expenses
9
AUDITORS' REMUNERATION
2023
2024
$
$
Audit services
Auditors of the Company - PwC Australia (2023: KPMG Australia)
Audit and review of financial statements
(375,300)
(428,415)
(375,300)
(428,415)
31
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
10 NET FINANCING COSTS
2023
2024
Notes
$'000
$'000
Recognised in profit or loss
Interest income from:
Related parties
46,676
32,573
External parties
10,524
3,226
Guarantee fee income from:
Related parties
1,652
1,424
Net foreign exchange gain
146
-
Impairment reversals on trade receivables
13
198
604
Finance income
59,196
37,827
Interest expense from:
Related parties
(6,207)
(5,511)
External parties
(32,701)
(50,908)
Guarantee fee expense from:
Related parties
(1,704)
(1,959)
Net foreign exchange loss
-
(173)
Net unwind of discounting on provisions and employee benefits
(9,086)
(7,208)
(107)
Interest expense on lease liability
(74)
Finance cost
(67,979)
(47,659)
Net finance (costs)/income
(8,783)
(9,832)
32
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
11 INCOME TAX EXPENSE/(BENEFIT)
2023
2024
$'000
$'000
Current tax benefit/(expense)
Current year
(41,971)
(41,544)
Adjustments for prior years
55,193
(199)
13,222
(41,743)
Deferred tax benefit/(expense)
Origination and reversal of temporary differences
16,494
11,398
Adjustments for prior years
1,202
907
17,696
12,305
Total income tax benefit/(expense)
30,918
(29,438)
Numerical reconciliation between tax expense and pre-tax net
profit
Profit for the period
117,320
71,665
29,438
Total income tax expense
(30,918)
Profit before income tax
101,103
86,402
Income tax expense using the Company's domestic tax rate of 30% (2023 - 30%)
(25,921)
(30,331)
(Increase)/decrease in income tax benefit/(expense) due to:
Non-deductible expenses
185
444
Income tax over/(under) provided in prior year
55,193
(199)
Sundry items
1,202
907
Income tax expense on pre-tax net profit
30,918
(29,438)
The income tax expense reported by the Company for the 31 December 2024 year includes prior year adjustments in
relation to the 2015 and 2016 income years that resulted in an income tax refund of $53.625 million from the
Australian Taxation Office. This income tax refund was received from the Australian Taxation Office in March 2025.
12 CASH AND CASH EQUIVALENTS
2023
2024
Notes
$'000
$'000
Bank balances
Bank balances
126,406
53,348
The Company’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed
in Note 19. Call deposits relate to funds with maturities of less than 3 months from inception.
33
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
13 TRADE AND OTHER RECEIVABLES
2023
2024
Notes
$'000
$'000
Current
Non-interest bearing
Net trade receivables
132,218
74,102
Receivables due from ultimate parent entity
31(a)
35,184
20,216
Receivables due from intermediate parent entity
31(b)
-
3,609
Receivables due from immediate parent entity
31(c)
64,115
12,925
Receivables due from other related entities
31(d)
45,413
46,975
Prepayments and other assets
1,540
6,698
278,470
164,525
Interest bearing
Loans due from other related entities
31(d)
333,442
1,031,031
333,442
1,031,031
611,912
1,195,556
Non-current
Non-interest bearing
Receivables due from ultimate parent entity
31(a)
27,500
-
27,500
-
Interest bearing
Loans due from other related entities
31(d)
648,076
545,635
648,076
545,635
675,576
545,635
Trade receivables are shown net of impairments. Impairment reversal were recognised on trade receivables in the
current year amounting to $0.198 million (2023: $0.604 million impairment loss) (refer Note 10).
The Company’s exposure to credit risk for financial assets is disclosed in Note 19.
34
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
14 INVENTORIES
2023
2024
$'000
$'000
Finished goods
794,704
951,080
Goods in transit
343,789
537,751
1,294,869
1,332,455
Finished goods – at cost
510,398
577,033
Finished goods - at net realisable value
Finished goods - at cost
501,650
251,921
Impairment loss
(60,968)
(34,250)
440,682
217,671
Total finished goods
951,080
794,704
Goods in transit - at cost
301,706
509,644
Goods in transit - at net realisable value
Goods in transit - at cost
50,831
31,945
Impairment loss
(8,748)
(3,838)
42,083
28,107
Total goods in transit
343,789
537,751
Estimates and Judgements
The provision for impairment of inventories ("Impairment loss") assessment requires a degree of estimation and
judgement. The level of the provision is assessed by taking into account recent sales experience, the ageing of
inventories, damaged, obsolete, slow moving inventories and other factors that affect inventory obsolescence.
35
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
15 PROPERTY, PLANT AND EQUIPMENT
Space
Land and
Buildings
Plant and equipment
Assets
Right-of-use
Total
improvements
under
assets
construction
Space
Assets subject to
All others
operating lease
Space
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Cost
Balance at 1 January 2023
2,101
35,714
78,482
8,974
5,005
14,312
144,588
Acquisitions
-
3,015
65,094
4,236
22
1,219
73,586
Transfers
-
3,093
-
1,911
(5,004)
-
-
-
-
(82,673)
(103)
-
-
(82,776)
Disposals
2,101
41,822
60,903
15,018
23
15,531
135,398
Balance at 31 December 2023
Balance at 1 January 2024
2,101
41,822
60,903
15,018
23
15,531
135,398
Acquisitions
-
286
54,800
1,093
-
-
56,179
Transfers
-
-
-
-
-
-
-
Disposals
-
-
(60,558)
(168)
-
-
(60,726)
2,101
42,108
55,145
15,943
23
15,531
130,851
Balance at 31 December 2024
Space
Depreciation
(87)
(21,779)
(3,142)
(5,568)
-
(5,423)
Balance at 1 January 2023
(35,999)
Depreciation charge for the year
-
(1,207)
(4,998)
(930)
-
(2,795)
(9,930)
Transfers
-
-
-
-
-
-
-
-
-
3,657
63
-
-
3,720
Disposals
(87)
(22,986)
(4,483)
(6,435)
-
(8,218)
Balance at 31 December 2023
(42,210)
(87)
(22,986)
(4,483)
(6,435)
-
(8,218)
Balance at 1 January 2024
(42,209)
Depreciation charge for the year
-
(1,277)
(2,341)
(1,246)
-
(2,793)
(7,657)
Disposals
-
-
4,075
7
-
-
4,082
Balance at 31 December 2024
(87)
(24,263)
(2,749)
(7,674)
-
(11,011)
(45,783)
36
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
15 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Space
Land and
Buildings
Plant and equipment
Assets
Right-of-use
Total
improvements
under
assets
construction
Space
Assets subject to
All others
operating lease
Space
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Carrying amounts
2,014
13,935
75,340
3,406
5,005
8,889
108,589
Balance at 1 January 2023
2,014
18,837
56,438
8,582
22
7,313
93,206
Balance at 31 December 2023
2,014
18,837
56,438
8,582
22
7,313
Balance at 1 January 2024
93,206
2,014
17,845
52,396
8,269
23
4,520
85,067
Balance at 31 December 2024
37
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
16 TAX ASSETS AND LIABILITIES
Recognised deferred tax assets
Net deferred tax assets are attributable to the following:
2024
2023
$'000
$'000
Recognised deferred tax assets
Provisions and contract liabilities
95,887
97,256
Employee benefits
5,081
4,513
Payable to other related entities
13,409
15,098
Lease liabilities
1,432
2,266
Provision for impairment losses
139
210
Provision for inventory obsolesence
20,986
11,489
Depreciation timing differences
3,691
4,903
Other payables
12,496
3,811
153,765
138,902
Total deferred tax assets
Recognised deferred tax liabilities
Vehicles subject to operating lease
(12,444)
(13,355)
Right-of-use assets
(1,356)
(2,194)
Prepayments
61
(748)
(1,204)
Profit deferral for tax purposes
(929)
Total deferred tax liabilities
(14,668)
(17,501)
121,401
Net deferred tax assets
139,097
38
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
16 TAX ASSETS AND LIABILITIES (CONTINUED)
Recognised deferred tax assets (continued)
In accordance with the tax consolidation legislation, Mercedes-Benz Group Australia/Pacific Pty Ltd (the provisional
head company) has assumed the current tax liability or asset initially recognised by the Company which is a member
of the tax consolidated group.
The Company is a member of a tax-consolidated group (‘the Group’) and is jointly and severally liable for the income
tax of that group in the event that the provisional head entity defaults in its payment obligations to the Australian Tax
Office. The provisional head entity has not been in default of its payment obligations and the directors are of the
opinion that the probability of default is remote.
Under the tax funding arrangement the Company and the provisional head company recognise an inter-entity payable
or receivable equal in amount to the current tax liability or asset assumed. The Company continues to recognise
income tax expense or benefit even though it has derecognised its current tax liability or asset.
At 31 December 2024 the Company had an intercompany receivable of $50.25 million (2023: $1.804 million payable)
relating to a current tax receivable assumed by the provisional head company which is included in Trade and other
receivables (refer to Note 13) .
Estimates and Judgements
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount
and timing of future taxable income. The calculation of income taxes has therefore been done with the best possible
judgement based on past experiences, pending an assessment by the taxable authorities here in Australia.
39
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
16 TAX ASSETS AND LIABILITIES (CONTINUED)
Recognised deferred tax assets (continued)
Movement in temporary differences during the year
2024
Balance at 31
Balance at 1 Recognised in
December
January 2024
income
2024
$'000
$'000
$'000
Deferred tax assets
Provisions and contract liabilities
97,256
(1,369)
95,887
Employee benefits
5,081
(568)
4,513
Payable to other related entities
15,098
(1,689)
13,409
Lease liabilities
2,266
(834)
1,432
Provision for impairment losses
210
(71)
139
Provision for inventory obsolescence
11,489
9,497
20,986
Depreciation timing differences
3,691
1,212
4,903
Other payables
3,811
8,685
12,496
138,902
14,863
153,765
Total deferred tax assets
Deferred tax liabilities
Vehicles subject to operating lease
(13,355)
911
(12,444)
Right-of-use assets
(2,194)
838
(1,356)
Prepayments
(748)
809
61
(1,204)
275
(929)
Profit deferral for tax purposes
(17,501)
2,833
(14,668)
Total deferred tax liabilities
121,401
17,696
139,097
Net deferred tax assets
40
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
16 TAX ASSETS AND LIABILITIES (CONTINUED)
Recognised deferred tax assets (continued)
Movement in temporary differences during the year (continued)
2023
Balance at 31
Balance at 1 Recognised in
December
January 2023
income
2023
$'000
$'000
$'000
Deferred tax assets
Provisions and contract liabilities
90,257
6,999
97,256
Employee benefits
4,938
143
5,081
Payable to other related entities
23,702
(8,604)
15,098
Lease liabilities
2,688
(422)
2,266
Provision for impairment losses
418
(208)
210
Provision for inventory obsolescence
10,382
1,107
11,489
Depreciation timing differences
2,773
918
3,691
Other payables
2,306
1,505
3,811
137,464
1,438
138,902
Total deferred tax assets
Deferred tax liabilities
Vehicles subject to operating lease
(21,823)
8,468
(13,355)
Right-of-use assets
(2,666)
472
(2,194)
Prepayments
7
(755)
(748)
(3,885)
2,681
(1,204)
Profit deferral for tax purposes
(28,367)
10,866
(17,501)
Total deferred tax liabilities
109,097
12,304
121,401
Net deferred tax assets
41
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
17 TRADE AND OTHER LIABILITIES
2023
2024
Notes
$'000
$'000
Current
Trade payables
59,029
55,427
Payable to ultimate parent entity
31(a)
1,945
2,268
Payable to intermediate entity
31(b)
242,979
364,397
Payable to immediate parent entity
31(c)
14,348
8,295
Payable to other related entities
31(d)
63,542
68,457
Other payables
99,980
66,241
Contract liabilities
5
122,901
114,929
604,724
680,014
Non-current
Payable to other related entities
31(d)
6,221
3,673
Contract liabilities
5
38,158
37,088
41,831
43,309
Trade and other liabilities are non-interest bearing and current trade and other liabilities are due and payable within
30 days from receipt of invoice.
The Company’s exposure to liquidity and currency risks related to trade and other liabilities are disclosed in Note 19.
Contract liabilities
Contract liabilities primarily relate to prepaid service and maintenance contracts & the deferral of revenue from
obligations from sales transactions in the scope of AASB 15.
18 LOANS AND BORROWINGS
2024
2023
Notes
$'000
$'000
Current
Bank loans (secured)
18(b)
180,000
-
Notes (secured)
18(c)
575,538
100,626
Commercial papers (secured)
18(d)
175,588
306,480
Loan from immediate parent entity
18(e), 31(c)
141,573
141,573
Loans from other related entity
18(f), 31(d)
721
675
Lease liabilities
18(g)
2,416
2,778
600,878
1,027,090
Non-current
Notes (secured)
18(c)
545,635
648,076
2,358
4,774
Lease liabilities
18(g)
650,434
550,409
42
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
18 LOANS AND BORROWINGS (CONTINUED)
2023
2024
Notes
$'000
$'000
The Company has access to the following lines of credit:
Bank overdraft (unsecured)
50,000
50,000
Bank loans (secured)
1,018,400
640,758
Notes (secured)
748,702
1,121,173
Commercial papers (secured)
175,588
306,480
1,992,690
2,118,411
2024
2023
Notes
$'000
$'000
Facilities utilised at reporting date
Notes (secured)
1,121,173
748,702
Bank loans (secured)
180,000
-
Commercial papers (secured)
175,588
306,480
1,104,290
1,427,653
2024
2023
$'000
$'000
Facilities not utilised at reporting date
Bank overdraft (unsecured)
50,000
50,000
Bank loans (secured)
838,400
640,758
888,400
690,758
The proceeds from interest bearing loans and borrowings have been used predominantly to finance the activities of
related parties and to meet the Company’s working capital needs. Interest payable on loans and borrowings and
interest receivable from related parties have been included in profit or loss as finance costs and income respectively.
Current portion of notes, commercial papers and loans from the immediate parent and other related entities are
payable within one year from the reporting date.
Non-current portion of Notes are payable on or before 20 January 2026, but after one year from the reporting date of
these financial statements.
The Company’s exposure to credit, liquidity and market rate risks and a sensitivity analysis for financial assets and
liabilities are disclosed in Note 19.
(a) Bank overdraft (unsecured)
The Company’s bank overdraft is denominated in AUD and is payable on demand and subject to annual review.
Interest is charged at prevailing market rates.
(b) Bank loans (secured)
The Company’s bank loans are denominated in AUD and are secured by the ultimate parent entity guarantee. The
Company has access to credit facilities which are subject to annual renewal. Interest is charged at prevailing market
rates. The Company has $180m bank loans (secured) outstanding balance as at 31 December 2024.
43
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
18 LOANS AND BORROWINGS (CONTINUED)
(c) Notes (secured)
The Company has authorised the following note issues outstanding at 31 December 2024 denominated in EUR and
AUD which are guaranteed by the ultimate parent entity:
Currency Value of Notes Due Date
On-lending
Interest
re-pricing
EUR
60,000,000
Jan-25
EUR
On Maturity
AUD
125,000,000
Jan-26
AUD
On Maturity
AUD
25,000,000
Jan-26
AUD
On Maturity
AUD
125,000,000
Jun-26
AUD
On maturity
AUD
50,000,000
Oct-26
AUD
On maturity
AUD
125,000,000
Sept-26
AUD
On maturity
AUD
200,000,000
Jan-27
AUD
On maturity
All issues are listed on the Luxembourg Stock Exchange and guaranteed by Mercedes-Benz Group AG. Interest
rates on AUD fixed interest notes are agreed at the inception of the notes. Interest rates on EUR floating interest
notes are agreed at the inception of the notes and re-priced on a quarterly or yearly basis. Average interest rates are
set out in Note 19.
(d) Commercial papers (secured)
The Company’s commercial papers are denominated in AUD and are secured by the ultimate parent entity
guarantee. The Company has the following commercial papers (secured) outstanding balance as at 31 December
2024.
Currency
Value of Commercial
Due Date
Interest
Papers
re-pricing
AUD
46,000,000
Jan-25
On maturity
AUD
130,000,000
Jan-25
On maturity
Commercial papers that have matured since reporting date have been subsequently refinanced on similar terms.
(e) Loans from immediate parent entity
The Company has authorised the following loans outstanding at 31 December 2024 denominated in AUD from the
immediate parent entity:
Currency
Value of Loan
Due Date
AUD
141,573,352
Jan-25
Loans from immediate parent entity are related to the cash pool balance outstanding as of 31 December 2024.
Interest is charged at prevailing market rates.
(f) Loans from other related entity
The Company has authorised the following loans from other related entities outstanding at 31 December 2024
denominated in AUD:
Currency
Value of Loan
Due Date
AUD
675,457
Jan-25
Loans from other related entities is related to the cash pool balance with parties within the tax group under the cash
pooling arrangements with the Company. Interest is charged at prevailing market rates.
44
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
18 LOANS AND BORROWINGS (CONTINUED)
(g) Lease liabilities
The Company has the below outstanding lease liabilities at 31 December 2024 denominated in AUD:
2024
2023
$'000
$'000
Not later than one year
2,416
2,778
Later than one year but not later than five years
2,358
4,774
4,774
7,552
45
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS
The Company has exposure to credit, liquidity and market risks from its use of financial instruments.
This note presents information about the Company’s exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are also
included in this note and throughout this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework and is also responsible for developing and monitoring risk management policies.
Risk management policies are established to identify and analyse the risks faced by the Company to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its
training and management standards and procedures, aims to develop a disciplined and constructive control
environment in which all employees understand their roles and obligations.
The Board oversees how management monitors compliance with the Company’s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the
Company.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit
evaluations are performed on all customers and certain key suppliers. Credit risk represents the loss that would be
recognised if counterparties failed to perform as contracted.
Swap and foreign exchange contracts are subject to credit risk in relation to the relevant counterparties, which is
principally Mercedes-Benz Group AG. At 31 December 2024 the long-term credit rating of Mercedes-Benz Group AG
was as follows:
Standard & Poor's
A
Moody's
A2
DBRS
A
The Company’s ultimate parent Mercedes-Benz Group AG determines which counterparties are contracted with.
Typically this will only be with A rated external counterparties.
The maximum credit risk exposure on foreign currency contracts is the full amount of the foreign currency the
Company pays when settlement occurs, should the counterparty fail to pay the amount which it is committed to pay
the Company.
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The Company’s
maximum exposure to credit risk at the reporting date was:
2024
2023
Notes
$'000
$'000
Trade and other receivables
1,285,948
1,734,493
Cash and cash equivalents
12
126,406
53,348
1,412,354
1,787,841
46
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk (continued)
Exposure to credit risk (continued)
The Company minimises concentration of credit risk by undertaking transactions with a large number of customers
and counterparties, and is not materially exposed to any individual third party customer as at the reporting date.
At reporting date 88% (2023: 92%) of trade and other receivables related to a related party, Mercedes-Benz Financial
Services Australia Pty Ltd. Other than this, there were no significant concentrations of credit risk relating to the
Company’s trade and other receivables.
The Company’s maximum exposure to credit risk for trade and other receivables at the reporting date by geographic
region was:
2024
2023
$'000
$'000
Australia
1,187,173
1,724,070
Europe
3,386
18,192
New Zealand
2,437
2,281
Asia
3
19
1,192,843
1,744,718
The Company’s maximum exposure to credit risk for trade and other receivables at the reporting date by type of
customer was:
2024
2023
$'000
$'000
Wholesale customers
1,155,816
1,715,486
Retail customers
37,027
29,232
1,192,843
1,744,718
Impairment losses
The provision relates to lifetime expected credit losses on short term trade receivables.
The movement in the allowance for impairment in respect of the trade and other receivables during the year was:
2024
2023
$'000
$'000
Balance at 1 January
701
1,393
Impairment losses recognised / (reversed)
(198)
604
(39)
(1,296)
Allowance (utilised) / amount recovered
464
701
Balance at 31 December
Impairment losses recognised in respect of trade and other receivables for the reporting period primarily related to a
high probability of not collecting debts from external customers (refer Note 13).
47
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Credit risk (continued)
Impairment losses (continued)
The ageing of the Company’s trade and other receivables at the reporting date was:
2024
2023
Gross
Impairment
Gross
Impairment
$'000
$'000
$'000
$'000
Not past due
1,605,968
(166)
1,679,166
(103)
Past due 1-30 days
49,081
(147)
49,339
(148)
Past due 30-60 days
2,246
(56)
2,358
(59)
Past due 60-90 days
1,145
(34)
1,390
(42)
Past due 90-120 days
2,088
(115)
979
(54)
Past due 120+ days
521
55
1,961
(295)
1,661,049
(463)
1,735,193
(701)
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation. The Company monitors cash flow requirements to ensure that it has
sufficient cash on demand to meet expected operational expenses on an on-going basis.
Mercedes-Benz Group AG applies a cash concentration method for cash and asset management throughout the
global Mercedes-Benz group. The overriding principle of cash management is to concentrate cash at the highest
possible level to maximise investment returns and to minimise borrowing costs.
Mercedes-Benz Group AG Group treasury develops proposals concerning the allocation of financial assets on the
basis of the global Mercedes-Benz group’s liquidity planning; they also determine the final asset allocation.
48
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk (continued)
The following are the contractual maturities of financial assets and liabilities, including estimated interest receipts or payments:
Carrying Contractual
More than 5
2024
Notes
amount
cash flows 1 year or less 1 to 2 years 2 to 5 years
years
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non derivative financial assets
Trade and other receivables
1,233,439
1,178,529
528,529
450,000
200,000
-
Non derivative financial liabilities
Bank loans (secured)
18
(180,000)
(180,000)
(180,000)
-
-
-
Notes issued (secured)
18
(748,702)
(750,609)
(100,609)
(450,000)
(200,000)
-
Commercial papers (secured)
18
(175,588)
(176,000)
(176,000)
-
-
-
Loans from immediate parent entity
18
(141,573)
(141,573)
(141,573)
-
-
-
Loans from other related entities
18
(675)
(675)
(675)
-
-
-
Lease liabilities
18
(4,774)
(4,820)
(2,451)
(2,369)
-
-
(452,193)
(452,194)
(448,521)
(3,673)
-
-
Trade and other liabilities
17
(1,703,505)
(1,705,871)
(1,049,829)
(456,042)
(200,000)
-
49
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk (continued)
Carrying
Contractual
More than 5
2023
Notes
amount
cash flows 1 year or less
1 to 2 years
2-5 years
years
$'000
$'000
$'000
$'000
$'000
$'000
$'000
Non derivative financial assets
Trade and other receivables
1,734,493
1,662,542
1,114,976
97,565
450,000
-
Non derivative financial liabilities
Notes issued (secured)
18
(1,121,173)
(1,122,857)
(575,291)
(97,565)
(450,000)
-
Commercial papers (secured)
18
(306,480)
(307,500)
(307,500)
-
-
-
Loans from immediate parent entity*
18
(141,573)
(141,573)
(141,573)
-
-
-
Loans from other related entities
18
(721)
(721)
(721)
-
-
-
Lease liabilities
18
(7,552)
(14,956)
(3,713)
(3,620)
(7,623)
-
Trade and other liabilities
17
(537,447)
(537,448)
(531,226)
(6,221)
-
-
(2,114,946)
(2,125,055)
(1,560,024)
(107,406)
(457,623)
-
50
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Currency risk
The Company is exposed to foreign currency risk on purchases and funding transactions that are denominated in a
currency other than AUD. The currencies giving rise to this risk are EUR (loans and borrowings, spare parts and
vehicle purchases or specific contracts).
The Company’s exposure to foreign currency risk at reporting date was based on notional amounts as set out in the
tables below. Note the only material net currency exposure is with EUR and SGD. As mentioned above these
exposures are taken to hedge against foreign currency firm purchase commitments. The effect of movements in
foreign exchange rates on the Company’s net currency exposure is disclosed in the Sensitivity Analysis below.
2024
AUD
EURO
USD
SGD
NZD
$'000
€'000
$'000
$'000
$'000
Non derivative financial assets
Cash and cash equivalents
126,406
-
-
-
-
Trade receivables
132,222
-
-
-
-
Receivables due from ultimate parent
entity
7,449
140
-
-
-
Receivables due from immediate
parent entity
16,355
-
-
-
-
Loans and other receivables due from
other related entities
976,552
-
-
-
-
1,258,984
140
-
-
-
Non derivative financial liabilities
Bank loans (secured)
(180,000)
-
-
-
-
Notes issued (secured)
(648,076)
(60,000)
-
-
-
Commercial papers (secured)
(175,588)
-
-
-
-
Loans from immediate parent entity
(141,573)
-
-
-
-
Loans from other related parties
(675)
-
-
-
-
Lease liabilities
(4,774)
-
-
-
-
Trade and other liabilities
(448,665)
(1,531)
(27)
(773)
1
(1,599,351)
(61,531)
(27)
(773)
1
Net Currency Exposure
(340,367)
(61,391)
(27)
(773)
1
51
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Currency risk (continued)
2023
AUD
EURO
USD
SGD
NZD
$'000
€'000
$'000
$'000
$'000
Non derivative financial assets
Cash and cash equivalents
53,348
-
-
-
-
Trade receivables
74,102
-
-
-
-
Receivables due from ultimate parent
entity
14,376
123
-
-
-
Receivables due from intermediate
parent entity
3,609
-
-
-
-
Receivables due from immediate
parent entity
12,925
-
-
-
-
Loans and other receivables due from
other related entities
1,200,601
60,000
-
-
-
1,358,961
60,123
-
-
-
Non derivative financial liabilities
Notes issued (secured)
(698,133)
(60,000)
-
-
-
Commercial papers (secured)
(306,480)
-
-
-
-
Loans from immediate parent entity
(141,573)
-
-
-
-
Loans from other related parties
(721)
-
-
-
-
Lease liabilities
(7,552)
-
-
-
-
Trade and other liabilities
(535,522)
(32)
(27)
(491)
1
(1,689,981)
(60,032)
(27)
(491)
1
.
.
Net Currency Exposure
(331,020)
91
(27)
(491)
1
The following significant exchange rates were applied during and at the end of the year:
Average rate
Reporting date spot rate
2024
2023
2024
2023
AUD:EURO
0.615
0.614
0.596
0.615
AUD:NZD
1.090
1.082
1.105
1.076
AUD:USD
0.660
0.664
0.619
0.679
AUD:SGD
0.882
0.892
0.845
0.897
Sensitivity analysis
A 10 percent strengthening or weakening of the Australian dollar against the following currencies at 31 December
2024 would have increased / (decreased) profit or loss by the amounts shown below. This analysis assumes that all
other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2023.
52
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Currency risk (continued)
Sensitivity analysis (continued)
2024
2023
Profit or loss
Profit or loss
$'000
$'000
$'000
$'000
10% increase 10% decrease
10% increase 10% decrease
AUD:EURO
(13)
16
9,080
(11,098)
AUD:USD
4
(5)
4
(5)
AUD:SGD
80
(97)
50
(61)
Interest Rate Risk
Interest sensitivity analysis
As part of its risk management control systems, Mercedes-Benz Group AG (the new ultimate parent entity) employs
value-at-risk analysis as recommended by the Bank for International Settlements. In performing these analyses, the
market risk exposure to changes in foreign currency exchange rates, interest rates and equity prices are quantified on
a continuous basis by predicting the maximum loss over a target time horizon (holding period) and confidence level.
The value-at-risk calculations employed express potential losses in fair values, and are based on the
variance-covariance approach, assuming a 99% confidence level and a holding period of five days.
The value-at-risk calculation is performed by Mercedes-Benz Group AG for the Company. When the value-at-risk of
the Company’s portfolio of financial instruments is calculated, the current fair value of these financial instruments is
first computed. Then, the sensitivity of the Company’s portfolio value to changes in relevant market risk factors is
quantified. Based on expected volatilities and correlations of these market risk factors (obtained from the
RiskMetricsTM dataset), potential changes of the portfolio value are computed by applying the variance-covariance
approach. The variance-covariance approach is a statistical method used to quantify the total impact of all relevant
major risk factors on the portfolio’s present value. Through these calculations and by assuming a 99% confidence
level and the five day holding period, the Company’s value-at-risk is obtained. The 99% confidence level and the five
day holding period indicate that there is only a 1% statistical probability that the value-at-risk will be exceeded by
losses at the end of the five day holding period.
The following table shows the period-end high, low and average value-at-risk (“VaR”) figures for the 2024 and 2023
portfolio of interest rate sensitive financial instruments. VaR numbers reflect the quantified net fair value movements
on the hedged loan payables balances. Average exposure has been computed on an end of quarter basis:
Period-end
High
Low
Average
$'000
$'000
$'000
$'000
Interest rate risk
2024
2,413
3,776
2,413
2,935
2023
3,148
4,149
2,694
3,444
Cash flow exposures arising from significant portions of the loans payable to related parties are economically hedged
by amounts receivable from other related parties.
53
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Hedging
The Company hedges at least 90% of all receivables and payables denominated in foreign currency.
The Company uses foreign currency loan receivable instrument to hedge its foreign currency risk. Most of these
contracts have maturities that are on the same dates as the loans are due for repayment.
In regard to the Company’s EUR denominated notes and loans, the Company classifies related hedge contracts as
fair value hedges.
Gains and losses on revaluation of fair value hedges and their related notes or receivables are recorded in profit or
loss as part of net financing costs (Note 10).
Changes in the fair value of hedge contracts, that economically hedge forecasted transactions in foreign currencies,
and for which no hedge accounting is applied, are recognised in profit or loss. Both the changes in fair value of these
hedge contracts and the foreign exchange gains and losses relating to the monetary items are recognised as part of
net financing costs (Note 10).
The Company has EUR denominated notes and loans (Note 18). The Company has fully hedged the principal
amounts using foreign currency deposits (Loans and other receivables due from other related entities) that mature on
the same dates as the loans are due for repayment.
Fair values
Fair value versus carrying amounts
Except for derivative financial assets and liabilities which are carried at fair values, all other monetary assets and
liabilities are carried at amortised cost. The carrying values of foreign currency borrowings are determined by
translating them into AUD using exchange rates prevailing at reporting date. For receivables and payables expected
to be recovered or settled no more than twelve months after the reporting date, the carrying value is deemed to
reflect the fair value.
All financial assets and liabilities carried at fair value are based on level 2 inputs which requires inputs, other than
quoted prices in active markets for identical assets and liabilities, that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Interest rates used for determining fair value
The entity uses the implied zero coupon yield curve as of 31 December 2024 to discount financial instruments. The
interest rates used have been consistently applied using rates between 3.79% and 4.42% (2023: between 3.79% and
4.34%).
54
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
19 FINANCIAL INSTRUMENTS (CONTINUED)
Fair values (continued)
Interest rates used for determining fair value (continued)
2024
2023
Carrying
Carrying
amount
Fair value
amount
Fair value
$'000
$'000
$'000
$'000
Non derivative financial assets
Loans due from other related entities
981,519
983,838
1,576,666
1,579,369
Non derivative financial liabilities
Bank loans (secured)
(180,000)
(180,000)
-
-
Notes (secured)
(748,702)
(750,609)
(1,121,173)
(1,122,857)
Commercial papers (secured)
(306,480)
(307,500)
(175,588)
(176,000)
Loans from immediate parent entity
(141,573)
(141,573)
(141,573)
(141,573)
Loans from other related entity
(675)
(675)
(721)
(721)
Lease liabilities
(9,202)
(9,202)
(4,774)
(4,774)
The basis of determining fair values is disclosed in Note 4.
Capital management
The Company’s policy is to maintain a strong capital base so as to sustain future development of the business. The
Board of Management actively monitor the financial performance of the Company to ensure adequate financial
returns are generated. The Board of Management also monitors the level of dividends to ordinary shareholders.
The Board of Management seeks to maintain a balance between the higher returns that might be possible with higher
levels of borrowings and the advantages and security afforded by a sound capital position.
The Company’s debt-to-adjusted capital ratio at the end of the reporting period was as follows:
2024
2023
$'000
$'000
Total liabilities
2,155,883
2,518,539
(53,348)
Less: cash and cash equivalents
(126,406)
2,465,191
Net debt
2,029,477
823,088
Total equity
777,045
823,088
Adjusted capital
777,045
2.6
3.00
Debt-to-adjusted capital ratio
There were no changes in the Company’s approach to capital management during the year.
The Company is not subject to any externally imposed capital requirements.
55
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
20 EMPLOYEE BENEFITS
2023
2024
$'000
$'000
Current
Liability for annual leave
3,119
3,261
Liability for long service leave
6,355
6,534
Cash settled share-based payment liability
569
1,339
Short term employee benefits
5,375
6,454
15,418
17,588
Non-current
Liability for long service leave
515
420
Cash settled share-based payment liability
488
819
908
1,334
Share based payments
Performance Phantom Share Plan
In 2006 the former Daimler AG adopted the “2005-2007 Performance Phantom Share Plan” under which virtual
shares (phantom shares) are granted to eligible employees entitling them to receive cash payment after four years of
service. Total cash payments made to entitled employees in 2024 was NIL (2023: $0.639m). The amount of cash
paid to eligible employees is based on the number of phantom shares that vest (determined over a three year
performance period) times the quoted price of Ordinary Shares of Mercedes-Benz Group AG (determined as an
average price over a specified period at the end of the four-year service). The number of phantom shares that vest
will depend on the achievement of Mercedes-Benz Group AG performance goals as compared with competitive and
internal benchmarks (return on net assets and return on sales). Mercedes-Benz Group AG will no longer issue any
common shares in connection with the Performance Phantom Share Plan.
As at 31 December 2024, the carrying amount of the liability recognised for the entitlements granted is $1.057m
(2023: $2.158m).
The number of phantom shares on-issue by Mercedes-Benz Group AG to key management personnel of the
Company as at 31 December 2024 was 28,284 (2023: 26,428).
56
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
21 PROVISIONS
Warranty
Legal
Other
Total
Space
$'000
$'000
$'000
$'000
Space
Space
Space
Space
Space
Balance at 1 January 2024
169,722
211
26,039
195,972
Adjustment*
55,000
55,000
Provisions made during the year
59,780
42
9,608
69,430
Provisions used during the year
(64,475)
(6)
(24,464)
(88,945)
Provisions reversed during the year
-
-
(463)
(463)
7,188
9
1,159
8,356
Net unwind of discount
227,215
256
11,879
239,351
Balance at 31 December 2024
Space
Space
Space
Space
Space
Current
88,870
256
11,879
101,005
Non-current
138,345
-
138,345
Total
227,215
256
11,879
239,350
Warranties
The Company issues various types of product warranties, under which it generally guarantees the performance of
products delivered and services rendered for a certain period. The provision for warranties relates primarily to
vehicles sold during the five years to 31 December 2024. The provision is based on estimates made from historical
warranty data associated with similar products and services. The provision for these warranties covers expected
costs for contractual warranty claims as well as expected costs for goodwill concessions and recall campaigns. The
Company expects to pay out the liability over the next five years. During the year, $4.683 million was recognised as
an expense in cost of sales (2023: $3.895 million) (refer to Note 8).
* Some claims are recoverable from the parent company, the provision represents the full amount and the
corresponding receivable from the ultimate parent has been recognised. The opening balance includes an uplift to
reflect the portion of the provision which is funded by the ultimate parent entity.
Legal
The legal provision comprises costs for various legal proceedings, claims and governmental investigations which can
lead to lengthy and costly investigations, legal proceedings and/or penalties. Litigation and government investigations
often involve complex legal issues and are connected with a high degree of uncertainty. Accordingly, the assessment
of whether an obligation exists on the reporting date as a result of an event in the past, and whether a future cash
outflow is likely and the obligation can be reliably estimated largely depends on the estimations by management. The
Company regularly evaluates the current stage of legal proceedings, also with the involvement of in-house and
external legal counsel. The provisions for litigations will as such be reassessed periodically and adjusted based on
the evaluations made by management.
Other provisions
Other provisions as at 31 December 2024 includes $10.5 million of sales expense provisions to cover the estimated
outstanding variable future payments to Agents in connection to the sale of new vehicles. Other provisions are
calculated based on assessments by management of the likely future costs to be incurred in relation to the past event
giving rise to the other provisions.
57
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
22 DEFERRED INCOME
2023
2024
Notes
$'000
$'000
Current
Deferred income attributable to other related entities
31(d)
1,071
1,811
Other deferred income
43
122
1,114
1,933
Non-current
Deferred income attributable to other related entities
31(d)
893
691
Other deferred income
332
199
1,225
890
23 CAPITAL AND RESERVES
Share capital
2024
2023
$'000
$'000
Issued and paid-up share capital 35,000,000 fully paid ordinary shares of $2 par
value each (2023: 35,000,000 ordinary shares of $2 par value each)
70,000
70,000
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings.
In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any
proceeds of liquidation.
Dividends
As the Company is a wholly-owned subsidiary in a tax-consolidated group, the franking credits reside with the
provisional head entity in the tax-consolidated group in accordance with the tax funding and sharing agreements.
Hence, the dividends recognised are unfranked.
Dividends totalling $91.696 million were declared and paid in February 2024 for the year ended 31 December 2022.
Dividends totalling $71.665 million were declared and paid in December 2024 for the year ended 31 December 2023.
Of the total dividend disclosed, $163.361 million was a cash distribution to its immediate parent.
Cents per Total amount
Franked/
Date of
share
$'000
unfranked
payment
Final 2022 ordinary dividend
$261.99
$91,696
Unfranked
28.02.2024
Final 2023 ordinary dividend
$204.76
$71,665
Unfranked
12.12.2024
58
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
24 NOTES TO THE STATEMENT OF CASHFLOWS
(a) Reconciliation of cash
For the purposes of the Statement of Cash Flows, cash includes cash on hand and at bank and short term deposits
at call, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the Statement of Cash
Flows is reconciled to the related items in the statement of financial position as follows:
2024
2023
Notes
$'000
$'000
Cash and cash equivalents
12
126,406
53,348
(b) Reconciliation of cash flows from operating activities
Profit for the period
117,320
71,665
Adjustments for
(Gain)/loss on sale of property, plant and equipment
6, 8(b)
157
41
Amortisation
24
135
Depreciation expenses
15
9,930
7,657
Impairment loss/(reversal)
8, 10
-
3,038
Foreign exchange (gains)/losses
10
(146)
173
(30,918)
29,438
Income tax expense
11
Operating profit before changes in working capital
114,420
94,094
Change in assets and liabilities during the financial year
(Increase)/decrease in trade and other receivables
(134,853)
214
(Increase)/decrease in inventories
37,585
100,637
Increase/(decrease) in trade and other liabilities
(6,253)
(51,735)
Increase/(decrease) in provisions
40,783
27,664
Net cash/(used in) from operating activities
31,356
191,200
Net interest paid
(2,477)
(5,688)
Income taxes received / (paid)
(55,626)
(50,728)
Net cash inflow/(outflow) from operating activities
(26,747)
134,784
59
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
25 SEGMENT INFORMATION
The Company comprises the following main business segments:
•
Passenger
The importation, marketing and distribution of passenger motor vehicles and their components.
Cars:
•
Vans:
The importation, marketing and distribution of light commercial motor vehicles and their
components.
•
Corporate
Includes functions and services not allocated to the business segments (Passenger Cars & Vans).
Items:
The principal activities of the Company are based in Australia.
Segment information is presented in respect of the Company’s business segments which are based on the
Company’s management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected
to be used for more than one period.
Passenger cars
Vans
Corporate items
Total
2024
$'000
$'000
$'000
$'000
Revenue
2,295,765
397,957
-
2,693,722
4,382
110
-
4,492
Other income
Total revenue and other income
2,300,147
398,067
-
2,698,214
Gross Profit
340,625
48,372
-
388,997
Depreciation & amortisation
(7,215)
(466)
-
(7,681)
Reportable segment profit/(loss) before tax
66,997
11,952
7,453
86,402
Reportable segment assets
1,328,805
216,677
1,332,446
2,877,928
Reportable segment liabilities
1,042,567
249,684
808,632
2,100,883
Capital expenditure
(1,372)
-
-
(1,372)
Income tax (expense)/benefit
-
-
30,918
30,918
60
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
25 SEGMENT INFORMATION (CONTINUED)
Passenger cars
Vans Corporate items
Total
2023
$'000
$'000
$'000
$'000
Revenue
2,553,786
300,495
-
2,854,281
6,976
67
-
7,043
Other income
Total revenue and other income
2,560,762
300,562
-
2,861,324
Gross Profit
388,136
32,166
-
420,302
Depreciation & amortisation
(9,625)
(440)
-
(10,065)
Reportable segment profit/(loss) before tax
94,069
7,034
-
101,103
Reportable segment assets
1,377,007
181,265
1,783,354
3,341,626
Reportable segment liabilities
1,025,732
142,425
1,350,381
2,518,538
Capital expenditure
(7,280)
-
-
(7,280)
Income tax (expense)/benefit
-
-
(29,438)
(29,438)
26 LEASES
Leases as lessee
The Company leases a number of sites for the purposes of parts warehousing & training offices. The leases typically
run for a period of five years, with an option to renew the lease after that date. The leases do not include any
contingent or variable rental.
Leases of property generally provide the Company with the right of renewal at which time all terms are renegotiated.
Information about the leases for which the Company is a lessee is presented below.
(a) Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
2024
2023
$'000
$'000
Right-of-use assets*
Balance at January 1
8,889
7,313
Lease modification
-
1,220
Depreciation charge for the year
(2,793)
(2,795)
Balance at 31 December
4,520
7,314
61
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
26 LEASES (CONTINUED)
(a) Amounts recognised in the statement of financial position (continued)
Judgements and Estimates:
The application of AASB16 requires the Company to make judgements that affect the valuation of lease liabilities and the
valuation of right-of-use assets. These include determining the contracts in scope of AASB16, determining the contract term
and determining the interest rate used for discounting of future cash flows. The lease term determined by the Company
comprises non-cancellable period of lease contracts, periods covered by an option to extend the lease if the Company is
reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is
reasonably certain to not exercise that option.
2023
2024
Notes
$'000
$'000
Lease liabilities
Current
18
2,416
2,778
Non-current
18
2,358
4,774
4,774
7,552
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
2024
2023
$'000
$'000
Leases under AASB 16
Interest on lease liabilities
107
74
Depreciation charge of right-of-use assets
2,793
2,795
Expenses relating to leases of low-value assets (included in other expenses)
2,886
2,391
Total impact on profit or loss
5,753
5,293
(c) Amounts recognised in the statement of cash flows
The statement of cash flows shows the following amounts relating to leases:
2024
2023
$'000
$'000
Cash flow under AASB 16
Cash outflow from operating activities
(74)
(107)
Cash outflow from financing activities
(2,778)
(2,496)
(2,852)
(2,603)
Total cash outflow for leases
62
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
26 LEASES (CONTINUED)
Leases as lessor
Operating lease transactions
Vehicles that are subject to operating leases between a related party, Mercedes-Benz Financial Services Australia
Pty Ltd (“MBFSAu”) and their external customers for passenger vehicles and light commercial vehicles, and where
the Company has agreed to provide residual value guarantees, are accounted for as Plant and equipment and
presented in the Property, plant and equipment note disclosure as "Assets subject to operating lease" and
depreciated over a straight-line basis. Additions for these plant & equipment are reflected as non-cash acquisitions as
prior to the operating lease arrangements being entered into, these vehicles have been purchased as inventory as
part of the normal operating activities of the Company. Upon expiry of the operating lease arrangements, these
vehicles are transferred to inventory of the Company. These disposals are reflected as non-cash disposals. These
operating leases have an average term of three years.
Residual value guarantees for operating leases
The Company agreed to provide residual value guarantees to MBFSAu, for the operating leases entered into
between MBFSAu and their external customers described above.
The Company regularly reviews the factors determining the values of its leased vehicles. In particular, it is necessary
to estimate the residual values of vehicles at the end of their leases, which constitute a substantial part of the
expected future cash flows from leased assets. In this context, assumptions are made regarding major influencing
factors, such as expected number of returned vehicles, and the latest remarketing results. Those assumptions are
determined either by qualified estimates (based on external data) or publications provided by expert third parties.
Current and non-current liabilities for residual value guarantees have been recorded by the Company consistent with
the provision of the guarantees at the end of the lease terms.
Deferred income, representing the excess of the amount financed over the amount guaranteed, is recorded by the
Company and amortised over a straight line basis over the term of the leases.
(a) Amounts recognised in the statement of financial position
The statement of financial position shows the following amounts relating to leases:
2024
2023
$'000
$'000
Liabilities for residual value guarantee*
Current
39,060
41,602
Non-current
3,673
6,221
42,733
47,823
* Included in "Payable to other related entities" in Note 17.
63
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
26 LEASES (CONTINUED)
Leases as lessor (continued)
(a) Amounts recognised in the statement of financial position (continued)
2024
2023
$'000
$'000
Deferred income*
Current
1,071
1,811
691
Non-current
893
2,502
1,964
* Included in "Deferred income attributable to other related entities" in Note 22.
64
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
26 LEASES (CONTINUED)
Leases as lessor (continued)
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to operating lease:
2024
2023
$'000
$'000
Operating leases
Depreciation charge of assets subject to operating lease
3,109
4,964
Income attributable to operating leases
(2,288)
(5,343)
Total impact on profit or loss
821
(379)
27 CONTINGENCIES
(a)
The Company has arranged for its bankers to guarantee its obligation to third parties. The used portion of the
guarantee is $0.246 million (2023: $0.246 million) and the maximum amount of the guarantee available is
$0.246 million (2023: $0.246 million). The Company has also arranged for its ultimate parent entity to
guarantee its obligation to certain customers to a maximum of $7.8 million (2023: $7.8 million). This facility is
fully available and not used at the reporting date (2023: nil).
(b)
The Company is involved in a number of legal actions relating to product liability and other contractual
matters in the ordinary course of business. These are being contested and where it is probable that a liability
will arise, a provision has been made in these accounts for estimated legal costs and settlements of potential
claims.
(c)
In October 2021 a number of Australian Mercedes-Benz dealers lodged a claim against the Company with
the Federal Court of Australia. They alleged that the Company forced the dealers to accept a change in their
business model from a dealership model to an agency model and thus deprived them of the goodwill they
created through their investments in the Australian Mercedes-Benz dealership network. They sought
reinstatement of the dealership model or, alternatively, compensation for the damage they allegedly incurred.
In August 2023, the Federal Court of Australia found in favour of the company. In January 2024, certain
dealers filed an appeal with the Full Court of the Federal Court of Australia. As legal proceedings are actively
under way, no further details can be disclosed in the Company's financial statements so as not to prejudice
the Company's legal position on this matter. Please refer to Note 21.
28 PARENT ENTITY
As at, and throughout, the financial year ended 31 December 2024 the immediate parent entity of the Company is
Mercedes-Benz Group Australia/Pacific Pty Ltd, a company incorporated in Australia. The ultimate parent entity of the
Company is Mercedes-Benz Group AG. The immediate parent entity of Mercedes-Benz Group Australia/Pacific Pty
Ltd is Mercedes-Benz AG (incorporated in the Federal Republic of Germany) wholly owned by Mercedes-Benz Group
AG. This entity is reported as the intermediate parent entity of the Company.
29 ECONOMIC DEPENDENCY
The Company is economically dependent on the ultimate parent entity for the supply of passenger vehicle and light
commercial vehicle stock for resale and financial guarantees.
65
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
30 KEY MANAGEMENT PERSONNEL
The names of each person holding the position of director of the Company during the financial year are Mr J. Cohen,
Mr S. Schmid, Mr F. Seidler, Mr V. Malzahn, Mr S. McHutchon & Ms D. Tarr. Apart from the Company’s directors, the
Company’s key management personnel during the year include Mr P. Grogan, Director of Human Resources and Mr
S. Trakilovic, General Counsel & Company Secretary. For the period 29th February 2024 - 31 March 2024, Mr J
Nomikos acted as CEO.
In addition to their salaries, the Company provides non-cash benefits to key management personnel and share-based
payment benefits. The key management personnel compensation included in employee expenses (refer Note 7) are
as follows:
2024
2023
$
$
Short-term employee benefits
2,979,759
2,980,304
Other long-term benefits
22,373
21,031
Post-employment benefits
186,650
219,465
Share-based payments
215,199
135,133
3,436,796
3,323,118
31 OTHER RELATED PARTY TRANSACTIONS
The Company transacts with its ultimate parent entity, its intermediate parent entity, its immediate parent entity and
other related parties as disclosed below. All of the transactions are in the normal course of business and on normal
terms and conditions.
(a) Transactions with ultimate parent entity
The aggregate amount due and receivable from and payable to the ultimate parent entity by the Company at
reporting date:
2024
2023
Notes
$'000
$'000
Current assets
20,216
Trade and other receivables
13
35,184
20,216
Total current assets
35,184
Non-current assets
Trade and other receivables
13
27,500
-
Total non-current assets
27,500
-
Total assets
62,684
20,216
Current liabilities
Trade and other liabilities
17
1,945
2,268
Total current liabilities
1,945
2,268
2,268
Total liabilities
1,945
66
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
31 OTHER RELATED PARTY TRANSACTIONS (CONTINUED)
(a) Transactions with ultimate parent entity (continued)
2024
2023
Notes
$'000
$'000
Net interest income/(expense)
10
529
29
Net guarantee fee expense
10
(1,704)
(1,959)
The ultimate parent entity provides guarantees on Euro Medium-Term Notes issued by Mercedes-Benz
Australia/Pacific Pty Ltd. The face value of these guarantees as at 31 December 2024 was $650 million and €60
million (2023: $700 million and €260 million).
The ultimate parent entity also provides guarantees on Commercial Papers issued by Mercedes-Benz
Australia/Pacific Pty Ltd. The face value of these guarantees as at 31 December 2024 was $176 million (2023: $308
million).
(b) Transactions with intermediate parent entity
The aggregate amount due and receivable from and payable to the intermediate parent entity by the Company at
reporting date:
2024
2023
Notes
$'000
$'000
Current assets
3,609
Trade and other receivables
13
-
3,609
Total current assets
-
Current liabilities
Trade and other liabilities
17
242,979
364,397
Total current liabilities
242,979
364,397
Total liabilities
242,979
364,397
Warranty recoveries
1,252
1,164
The Company also acquires inventory from the intermediate parent entity. The cost of inventory sold during the year
that was purchased from the intermediate parent entity totalled $1,637 million (2023: $1,862 million).
(c) Transactions with immediate parent entity
The aggregate amount due and receivable from and payable to the immediate parent entity by the Company at
reporting date:
2024
2023
Notes
$'000
$'000
Current assets
12,925
Trade and other receivables
13
64,115
Total current assets
64,115
12,925
67
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
31 OTHER RELATED PARTY TRANSACTIONS (CONTINUED)
(c) Transactions with immediate parent entity (continued)
2024
2023
Notes
$'000
$'000
Total assets
64,115
12,925
Current liabilities
Trade and other liabilities
17
14,348
8,295
141,573
Loans and borrowings
18
141,573
149,868
Total current liabilities
155,921
155,921
149,868
Total liabilities
Net interest income/(expense)
10
(5,277)
(6,053)
Other income
6
82
133
The Company is a wholly-owned subsidiary in a tax-consolidated group with its immediate parent entity,
Mercedes-Benz Group Australia/Pacific Pty Ltd, as the provisional head entity. The Company, in conjunction with
other members of the tax-consolidated group, has entered into a tax funding agreement that sets out the funding
obligations of members of the tax-consolidated group in respect of tax amounts. The Company, in conjunction with
other members of the tax-consolidated group, has also entered into a tax funding and sharing agreement.
At 31 December 2024 the Company had an intercompany receivable of $50.25 million (2023: $1.804 million
payable) relating to current tax receivable assumed by the provisional head entity of the tax consolidated group.
For further details regarding tax consolidation and the nature of the tax funding and sharing agreements, refer to
accounting policy Note 3 and Note 16.
(d) Transactions with other related parties
The aggregate amount due and receivable from and payable to other related parties by the Company at reporting
date:
2024
2023
Notes
$'000
$'000
Current assets
Trade and other receivables
13
45,413
46,975
333,442
1,031,031
Loans due from other related entities
1,078,006
Total current assets
378,855
Non-current assets
Loans due from other related entities
13
648,076
545,635
Total non-current assets
648,076
545,635
Total assets
1,026,931
1,623,641
68
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
31 OTHER RELATED PARTY TRANSACTIONS (CONTINUED)
(d) Transactions with other related parties (continued)
2024
2023
Notes
$'000
$'000
Current liabilities
Trade and other liabilities
17
63,542
68,457
Loans and borrowings
18
675
721
Deferred income
22
1,071
1,811
Total current liabilities
65,288
70,989
Non-current liabilities
Trade and other liabilities
17
6,221
3,673
Deferred income
22
893
691
Total non-current liabilities
4,566
6,912
Total liabilities
69,854
77,901
2024
2023
Notes
$'000
$'000
Net interest income
10
46,139
32,310
Net guarantee fee income
10
1,652
1,425
Other revenue
5
2,288
5,343
Other income
6
8,837
19,307
Depreciation on leased assets with related parties
15
(2,341)
(4,998)
Other related parties are deemed to be other companies within the ultimate parent's wholly owned group or under the
significant influence of the ultimate parent entity. The Company transacts with other related parties in the normal
course of business including the activities described further below.
The Company also acquires inventory from other related parties. The cost of inventory sold during the year that was
purchased from other related entities totalled $187 million (2023: $296 million).
The Company undertakes borrowings from external parties and on-lends the proceeds to other related parties.
Interest is charged to the related parties at rates consistent with bank rates in the countries of the currencies
transacted.
The Company has agreed to provide residual value guarantees for operating leases entered into between
Mercedes-Benz Financial Services Australia Pty Ltd and their external customers. Rental income from these leases is
recognised on a straight line basis over the term of the lease. Lease income prepaid by Mercedes-Benz Financial
Services Australia Pty Ltd is classified as a financial liability, in deferred income and liabilities for residual value
guarantees are recognised in trade and other liabilities. Vehicles subject to operating leases where the Company has
provided a residual value guarantee are accounted for by the Company as plant and equipment and depreciated over
a straight-line basis.
The Company has agreed to provide services to certain other related parties, income from these agreements is
recognised on a straight-line basis over the term of the agreement. The Company has also agreed to pay for services
provided by external parties that is shared between the Company and other related parties. Income from these
agreements is recognised as other income when the services are provided and are recharged to the other related
parties.
69
Mercedes-Benz Australia/Pacific Pty Ltd
Notes to the Financial Statements
31 December 2024
(continued)
32 EVENTS OCCURRING AFTER THE REPORTING PERIOD
The following occurred subsequent to 31 December 2024:
• The income tax expense reported by the Company for the 31 December 2024 year includes prior year adjustments
in relation to the 2015 and 2016 income years that resulted in an income tax refund of $53.625 million from the
Australian Taxation Office. This income tax refund was received from the Australian Taxation Office in March 2025.
Other than what is noted above, there has not arisen a transaction or event of an unusual nature likely to affect
significantly the operations of the business, the results of those operations or the state of affairs of the Company in
future financial years from the end of the financial year to the date of this report.
70