Financial Statements 2024-2025

- 2025

Cumberland City Council

GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2025

Statement by Councillors and Management

Primary Financial Statements: Income Statement

Notes to the Financial Statements Independent Auditor’s Reports:

Cumberland City Council

General

Purpose Financial Statements for the yearended 30 June2025

Statement by Councillors and Management made pursuant to Section 413(2)(c) ofthe Local Government Act 1993 (NSW)

The attached General Purpose Financial Statements have been prepared in accordance with:

• the Local Government Act 1993 (NSW) and the regulationsmade thereunder,

• the AustralianAccounting Standards and other pronouncements of the AustralianAccounting Standards Board

• the Local Government Code ofAccounting Practice and Financial Reporting.

To the best of our knowledgeand belief, these statements:

• presentfairly the Council's operatingresult and financial position for the year

• accord with Council's accounting and other records.

Wearenot aware of anymatter that would render these statements false or misleading in any way.

Signed in accordance with aresolutionof Councilmade on 29 October2025.

Ola Hamed

Peter

J Fitzgerald General Manager

29 October 2025

Nadima Kafrouni-Saba Deputy Mayor

29 October2025

Tony Chahine Responsible Accounting Officer 29 October2025

Cumberland City Council Income Statement for the year ended 30 June 2025

The above Income Statement should be read in conjunction with the accompanying notes.

Cumberland City Council Statement of Comprehensive Income for the year ended 30 June 2025

Cumberland City Council

Statement of Financial Position as at 30 June 2025

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

3,406,554 3,323,965

Cumberland City Council

Statement of Changes in Equity

for the year ended 30 June 2025

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Cumberland City Council

Statement of Cash Flows for the year ended 30 June 2025

The above Statement of Cash Flows should be

A About Council and these financial statements

A1-1 Basis of preparation

B Financial Performance

B1 Functions or activities

B1-1 Functions or activities – income, expenses and assets

B1-2 Components of functions or activities

B2 Sources of income

B2-1 Rates and annual charges

B2-2 User charges and fees

B2-3 Grants and contributions

B3 Costs of providing services

B3-1 Employee benefits and on-costs

B3-2 Materials and services

B3-3 Depreciation, amortisation and impairment of non-financial assets

B4 Performance against budget

B4-1 Material budget variations

C Financial position

C1 Assets we manage

C1-1 Cash and cash equivalents

C1-2 Financial investments

C1-3 Restricted and allocated cash, cash equivalents and investments

C1-4 Receivables

C1-5 Non-current assets classified as held for sale

C1-6 Infrastructure, property, plant and equipment

C1-7 Investment properties

C2 Liabilities of Council

C2-1 Payables

C2-2

C2-3

C2-4

C3

D Risks

C3-1

D1-1 Risks

D2-1 Fair

D3-1 Contingencies

E People and relationships

E2 Other relationships Cumberland City Council

E1 Related party disclosures

E1-1 Key management personnel (KMP)

E1-2 Councillor and Mayoral fees and associated expenses

E2-1 Audit fees

F Other matters

F1-1 Statement of Cash Flows information

F2-1 Commitments

F3-1 Events occurring after the reporting date

F4 Statement of developer contributions

F4-1 Summary of developer contributions

F4-2 Developer contributions by plan

G Additional Council disclosures (unaudited)

G1-1 Financial review

A About Council and these financial statements

A1-1 Basis of preparation

These financial statements were authorised for issue by Council on 29 October 2025 Council has the power to amend and reissue these financial statements in cases where critical information is received from public submissions or where the OLG directs Council to amend the financial statements.

The material accounting policy information adopted in the preparation of these financial statements are set out below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Australian Accounting Interpretations, the Local Government Act 1993 (NSW) and Local Government (General) Regulation 2021 (Regulation)', and the Local Government Code of Accounting Practice and Financial Reporting.

Council is a not-for-profit entity.

The financial statements are presented in Australian dollars and are rounded to the nearest thousand dollars.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial investments at fair value through profit and loss, infrastructure, property, plant and equipment and investment property.

Significant accounting estimates and judgements

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Council's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Council and that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

Council makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:

(i) fair values of infrastructure, property, plant and equipment – refer C1-6.

(ii) fair values of investment properties– refer C1-7.

(iii) employee benefit provisions – refer C3-4.

Significant judgements in applying the Council's accounting policies

(i) Determination of whether performance obligations are sufficiently specific and whether the contract is within the scope of AASB 15 Revenue from Contracts with Customers and / or AASB 1058 Income of Not-for-Profit Entities – refer to Notes B2-2 – B2-4.

A1-1 Basis of preparation (continued)

Monies and other assets received by Council

The Consolidated Fund

In accordance with the provisions of Section 409(1) of the Local Government Act 1993 (NSW), all money and property received by Council is held in the Council’s Consolidated Fund unless it is required to be held in the Council’s Trust Fund.

The Consolidated Fund has been included in the financial statements of the Council.

Cash and other assets of the following activities have been included as part of the Consolidated Fund:

◾ General purpose operations

Volunteer services

Council has volunteers working in various areas.

These volunteer services have not been recognised as income as per AASB 1058.18.

This is because the fair value of such services cannot be reliably measured and it would not have been purchased if they were not donated

New accounting standards and interpretations issued but not yet effective

Certainnewaccountingstandardsandinterpretations (i.e.pronouncements)havebeenpublishedbytheAustralianAccounting Standards Board that are not mandatory for the 30 June 2025 reporting period.

Council has not applied any pronouncements before its operative date in the annual reporting period beginning 1 July 2024. Council's assessment of the impact of the new standards, and interpretations relevant to them, is set out below.

Pronouncement AASB 18 Presentation and Disclosure in Financial Statements

Nature of change in accounting policy

Effective date

Expected

impact on Council financial statements

This standard replaces AASB 101 Presentation of Financial Statements and sets out the requirements for the structure of the financial statements, including the application of fundamental concepts such as materiality. AASB 18 introduces additional subtotals into the Statement of Profit or Loss as well as restructuring the statement into operating, investing and financing elements. Management performance measures are also required to be disclosed.

Annual reporting periods beginning on or after 1 January 2028, i.e., Council's financial statements for the year ended 30 June 2029.

The presentation of Council's primary statements will be changed along with some additional disclosures, however there will be no effect on Council's reported position or performance.

New accounting standards adopted during the year

During the year, the Council adopted all standards which were mandatorily effective for the first time at 30 June 2025.

The key standard was AASB 2022-10 Amendments to Australian Accounting Standards – Fair Value Measurement of NonFinancial Assets ofNot-for-Profit PublicSector Entities, howevertheimpactofimplementing thisnewstandardwasnotmaterial on the Council's reported financial position.

B Financial Performance

B1 Functions or activities

B1-1 Functions or activities – income, expenses and assets

Income, expenses and assets have been directly attributed to the following functions or activities. Details of those functions or activities are provided in Note B1-2.

B1-1 Functions or activities – income, expenses and assets (continued)

Income, expenses and assets have been directly attributed to the following functions or activities. Details of those functions or activities are provided in Note B1-2.

B1-2 Components of functions or activities

Details relating to the Council’s functions or activities as reported in B1-1 are as follows:

Accounting

Accounting has multiple responsibilities including payroll, accounts payable, treasury and financial accounting. This service provides relevant financial information, tools, analysis and insight to support budget owners to make informed decisions while driving business strategy.

The Business Analyst process is pivotal in keeping Council financially sound.

Arts and Culture

Arts is responsible for fostering access to arts and culture programs and initiatives for Cumberland.

Asset Management and Asset System Support

The Asset Management and Asset System Support service undertakes long term Asset Management Planning to strategically manage Council’s infrastructure assets along with maintaining the asset data and valuations to meet the expectations of the community.

This service facilitates projects, captures and assesses street lighting requests and is responsible for managing grant programs and safety management of the CSIRO Retarding Basin.

Audit, Safety and Risk

Audit, Safety and Risk is responsible for monitoring, reviewing, implementing and delivering internal controls in relation to Council’s Internal Audit Program, Insurance Portfolio, Work Health and Safety Management System and Enterprise Risk Management Framework in accordance with legislative requirements and best practice.

Bookings and Community Centres

Bookings and Community Centres operates Council’s three staffed community centres located in Auburn, Berala and Guildford providing residents and visitors with a welcoming place to meet for a range of activities.

This service is also responsible for the day-to-day management of bookings for non-staffed community halls, passive parks, sports fields and tennis courts in addition to managing the event and filming application process.

Buildings Maintenance

Buildings Maintenance provides maintenance, safety, security, compliance and cleanliness to Council’s buildings, properties and facilities, including the aquatic centres, community facilities, administration buildings, childcare centres, libraries and public amenities.

This service is responsible for cleaning, fire safety, electrical, plumbing, hygiene, pest servicing, heating, ventilation and air conditioning (HVAC), vertical transport and security.

Business Improvement

Business Improvement coordinates Council’s Continuous Service Improvement (CSI) Program which ensures Council is continually reviewing its services to be as efficient and effective as they can be.

This service also leads Council’s Business Process Management (BPM) Program that provides consistency and transparency throughout Council’s processes and allows for effective process review and improvement. This service also delivers a range of innovative project and training aimed at maximising Council’s return on investment in corporate systems.

Capital Works and Assets Renewal

The Capital Works and Assets Renewal service manages the construction of new infrastructure assets and the renewal of Council’s existing assets, including roads, buildings, open space and stormwater. Construction works are undertaken in accordance with the annual Renewal Program and the construction of any new asset is undertaken as per the needs of the community.

Children and Youth Development

Children and Youth Development is responsible for developing and implementing community development initiatives and projects that support expectant parents, children (0-12 years), youth (12-25 years) and families across the Cumberland area. This service also oversees Council’s internal and external child protection functions.

B1-2 Components of functions or activities (continued)

City Maintenance

City Maintenance is responsible for the maintenance and presentation of Cumberland City’s public domain areas. This service focuses on providing a clean and safe public area for the enjoyment of the community by providing maintenance and cleaning services across Cumberland City including the verge, footpaths, stormwater and road networks.

Community Development

Community Development is responsible for the planning and implementation of community capacity building initiatives, as well as strengthening the community sector across the Cumberland area.

Corporate Strategy and Performance

Corporate Strategy, Planning and Performance delivers Council’s Integrated Planning and Reporting (IP&R) requirements, corporate planning, performance management and strategic business support to the wider organisation. This service partners with businesses to build capacity within the organisation to achieve best practice planning and performance outcomes.

Councillor and Executive Support

Councillor and Executive Support is responsible for providing executive support and administration services with respect to the elected Mayor and Councillors, with a focus on providing effective leadership and administration.

Customer Service

Customer Service is responsible for managing and operating Council’s customer service centres, contact centre, webchat, after hours service and other Council contact channels including Records Management. This service oversees Council’s Compliments and Complaints function and it includes a system for reporting customer satisfaction as well as compliments and complaints.

Depot Operations

Depots are responsible for managing and providing maintenance of Council’s two main Depot sites. This is an internal service supporting the delivery of frontline services. Depots cover; Mechanical Workshop, Fleet Management, Stores and the Signshop.

Development Management

The Development Management service undertakes building assessment, development assessment, development programs, engineering assessment, local infrastructure contribution plan administration, planning agreements, certificates and proposals.

Education and Care

Education and Care provides high quality and inclusive programs for children aged 0 to 12 years. The programs offer a range of flexible and inclusive service options for families including Long Day Care, Out of School Hours Care, School Holiday programs and Family Day Care.

Environment Programs

Environment Programs provides a range of environmental, planning and waste related programs and services across Cumberland City, which ensures public spaces are clean and well maintained.

Events and Culture

Events is responsible for the developing and delivering Council’s Events Program designed to increase social cohesion in the community and enhance civic participation.

Governance and Executive Support

Governance and Procurement oversees the operations of Council to ensure that decision-making is transparent, accountable and underpinned by good ethics and organisational activities are free from fraud and corruption with a focus on providing effective leadership and administration.

This service is responsible for the oversight and delivery of Council’s procurement activities in accordance with endorsed procedures and requirements under the Local Government Act 1993 and Local Government (General) Regulation 2021. This service is also responsible for planning and hosting citizenship ceremonies.

B1-2 Components of functions or activities (continued)

Human Resources

Human Resources is an internal service provider delivering a range of services which relate to the full employment lifecycle of staff including recruitment, onboarding, learning and development, health and wellbeing, performance management and offboarding.

The service is responsible for improving the organisational culture and developing strategies to address identified areas of improvement.

Information Technology

Information Technology (IT) offers sustainable, robust and easily expandable network infrastructure and desktop hardware. IT also includes service desk support and disaster recovery services, along with the management of the TPG private cloud infrastructure.

The service is also tasked with overseeing all corporate information systems across Council, encompassing various data sets. Additionally, it provides support for Geographical Information Systems (GIS) and aids in the implementation of corporate system initiatives.

Infrastructure Planning and Design

Infrastructure Planning and Design provides a range of planning and design services aimed at improving Cumberland’s public space quality, amenity and access.

Internal Services

This service oversees the provision of Cumberland Executive team, General Counsel, Internal Ombudsman and Special Projects to ensure the effective delivery of all Council services.

Libraries

Libraries provide a network of eight modern, lively and well-resourced community spaces that provide community connections, study areas, informational, educational, recreational and lifelong learning programs and services.

Libraries also provide residents and visitors across Cumberland with face-to-face and online resources, information, events, programs and access to technology.

Open Spaces

Open Spaces provides maintenance for Council’s extensive network of parks, sportsgrounds, playgrounds, bushland, habitat corridors and recreation areas.

This service manages and operates approximately 327 passive parks and premium gardens including Auburn Botanic Gardens, Holroyd Gardens and Central Gardens, 47 sportsgrounds, 37 tennis courts, 226 playgrounds, two golf courses, 200 hectares of bushland, extensive walkways and bicycle paths, BBQs, picnic shelters and park furniture.

Place and Economy

Place and Economy actively works with local businesses and the community to gather feedback and insights to inform decision making and promotes economic development and vibrant town centres.

Property Services

Property Services is responsible for strategically managing Council’s property portfolio, which encompasses Council-owned freehold land, physical assets and Crown land under Council management. This includes overseeing outdoor dining and goods on display agreements, road closures and easements affecting Council properties and property acquisitions and disposals stemming from development applications and planning strategies.

Ranger Services

Ranger Services regulates environmental and safety standards across Cumberland City by providing a range of community focused regulatory services, management of companion animals and illegal parking enforcement.

Rates

Rates are Council’s main source of income which are used to provide essential infrastructure, services, facilities, programs, activities and capital works for the community.

B1-2 Components of functions or activities

Seniors and Disability

Seniors and Disability Services aims to improve the lives of seniors, people living with a disability and carers in our community. This is achieved through the provision of services including transportation, meals and social programs, events and implementation of Council’s Disability Inclusion Action Plan (DIAP).

This service supports Council services and operations through the recruitment and retention of volunteers, while providing residents the opportunity to give back to their community or enhance their pathways to employment.

Strategic Communications

Strategic Communications plans and delivers two-way communications, engagement and media initiatives across Council with a high degree of professionalism and initiative while executing priority projects and campaigns in a fast-paced environment.

Strategic Planning

Strategic Planning is responsible for Cumberland City’s strategic land use planning for vibrant and liveable neighbourhoods that meet housing and job needs. This service includes district, regional and local planning policies, key centres planning and strategic corridors and advocating for key issues, such as affordable housing, infrastructure delivery and responding to NSW State Government initiatives.

Swimming Pools

Aquatics and Leisure provides premium aquatic and leisure facilities for the community. These include Granville Swim Centre and Gym, Wentworthville Memorial Swim Centre, Merrylands Swim Centre, Guildford Swim Centre and Auburn Ruth Everuss Aquatic Centre (externally managed).

Venues

Venues provides premium spaces for the community to hire, including The Holroyd Centre, The Holroyd Gardens Wedding Rotunda, The Eric Tweedale Stadium and The Granville Centre.

This service provides venue spaces so that recreational services and programs can be held. Professional support is also provided for hirers of these spaces.

Waste Services

Waste Services provides a sustainable, best value residential, commercial and public place waste collection service, including collection of waste bins, booked bulky household waste clean-up services and the removal of illegally dumped rubbish, across Cumberland City.

B2 Sources of income

B2-1 Rates and annual charges

(pursuant to s496, 496A, 496B, 501 & 611)

Council has used 2022 year valuations provided by the NSW Valuer General in calculating its rates.

Material accounting policy information

Rates and annual charges are recognised as revenue at the beginning of the rating period to which they relate. Prepaid rates are recognised as a financial liability until the beginning of the rating period.

Pensioner rebates relate to reductions in rates and certain annual charges for eligible pensioners’ place of residence in the local government council area.

Pensioner rate subsidies are received from the NSW Government to provide a contribution towards the pensioner rebates and are recognised within the underlying revenue item based on their substance.

B2-2 User charges and fees

The timing column notation (above) identifies the revenue recognition pattern for material items of Council's revenue:

(1) indicates income recognised under AASB 15 or AASB 1058 “over time”, (2) indicates income recognised under AASB 15 or AASB 1058 “at a point in time”.

Material accounting policy information

Revenue arising from user charges and fees is recognised when or as the performance obligation is completed and the customer receives the benefit of the goods / services being provided.

The performance obligation relates to the specific services which are provided to the customers and generally the payment terms are within 30 days of the provision of the service or in some cases such as caravan parks, the customer is required to pay on arrival or a deposit in advance. There is no material obligation for Council in relation to refunds or returns.

Where an upfront fee is charged such as joining fees for the leisure centre the fee is recognised on a straight-line basis over the expected life of the membership.

Licences granted by Council are all either short-term or low value and all revenue from licences is recognised at the time that the licence is granted rather than over the term of the licence.

Developer contributions

Developer contributions: (s7.4 & s7.11 - EP&A Act, s64 of the LGA):

B2-3 Grants and contributions (continued)

Unspent grants and contributions

Certain grants and contributions are obtained by Council on the condition they be spent in a specified manner or in a future period but which are not yet spent in accordance with those conditions are as follows:

Unspent grants and contributions

Unexpended Grants at the close of the previous reporting period

Add: Funds recognised as revenue in the reporting year but not yet spent in accordance with the conditions

Less: Funds recognised as revenue in previous years that have been spent during the reporting year

funds at 30 June

Contributions

Unexpended Contributions at the close of the previous reporting period

Add: contributions received and not recognised as revenue in the current year

Less: contributions recognised as revenue in previous years that have been spent during the reporting year

at 30 June 1

(1) Unspent contributions were incorrectly displayed under the operating heading in 2024 and have been moved in the 2024/25 statements along with comparative figures.

Material accounting policy information

Grants and contributions – enforceable agreement with sufficiently specific performance obligations

Grant and contribution revenue from an agreement which is enforceable and contains sufficiently specific performance obligations is recognised as or when control of each performance obligations is transferred.

The performance obligations vary according to the agreement. Payment terms vary depending on the terms of the grant, cash is received upfront for some grants and on the achievement of certain payment milestones for others.

Performance obligations may be satisfied either at a point in time or over time and this is reflected in the revenue recognition pattern. Point in time recognition occurs when the beneficiary obtains control of the goods / services at a single time (e.g. completion of the project when a report / outcome is provided), whereas over time recognition is where the control of the services is ongoing throughout the project (e.g. provision of community health services through the year).

Where control is transferred over time, generally the input methods being either costs or time incurred are deemed to be the most appropriate methods to reflect the transfer of benefit.

Capital grants

Capital grants received by Council under an enforceable contract for the acquisition or construction of infrastructure, property, plant and equipment to identified specifications which will be under Council’s control on completion are recognised as revenue as and when the obligation to construct or purchase is completed.

For construction projects, this is generally as the construction progresses in accordance with costs incurred since this is deemed to be the most appropriate measure of the completeness of the construction project.

For acquisitions of assets, the revenue is recognised when the asset is acquired and controlled by the Council.

Developer contributions

B2-3 Grants and contributions (continued)

Council has obligations to provide facilities from contribution revenues levied on developers under the provisions of sections 7.4, 7.11 and 7.12 of the Environmental Planning and Assessment Act 1979 (EP&A Act).

While Council generally incorporates these amounts as part of a Development Consents Order, such developer contributions are only recognised as income upon receipt by Council, due to the possibility that individual development consents may not be acted upon by the applicant and, accordingly, would not be payable to Council.

Developer contributions may only be expended for the purposes for which the contributions were required, but Council may apply contributions according to the priorities established in work schedules for the contribution plan.

Other grants and contributions

Assets, including cash, received from other grants and contributions are recognised at fair value when the asset is received. Council considers whether there are any related liability or equity items associated with the asset which are recognised in accordance with the relevant accounting standard.

Once the assets and liabilities have been recognised then income is recognised for any remaining asset value at the time that the asset is received.

B3 Costs of providing services

Material accounting policy information

Employee benefit expenses are recorded when the service has been provided by the employee.

Retirement benefit obligations

All employees of the Council are entitled to benefits on retirement, disability or death. Council contributes to various defined benefit plans and defined contribution plans on behalf of its employees.

Superannuation plans

Contributions to defined contribution plans are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Council participates in a defined benefit plan under the Local Government Superannuation Scheme, however, sufficient information to account for the plan as a defined benefit is not available and therefore Council accounts for its obligations to defined benefit plans on the same basis as its obligations to defined contribution plans, i.e. as an expense when it becomes payable – refer to Note D3-1 for more information.

B3-3

Material accounting policy information

Depreciation and amortisation

Depreciation and amortisation are calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives. Useful lives are included in Note C1-6 for IPPE assets and Note C1-8 for intangible assets. Depreciation is capitalised where in-house assets have contributed to new assets.

Impairment of non-financial assets

Council assets held at fair value that are not held primarily for their ability to generate net cash flow, and that are deemed to be specialised, are not tested for impairment since these assets are assessed on an annual basis to ensure that the carrying amount is not materially different from fair value and therefore an impairment loss would be captured during this assessment.

Intangible assets not yet available for use, are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets that do not meet the criteria above are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

Impairment losses for revalued assets are firstly offset against the amount in the revaluation surplus for the class of asset, with only the excess to be recognised in the Income Statement.

B4 Performance against budget

Material budget variations

Council’s original budget was adopted by the Council on 19/06/2024 and is not required to be audited. The original projections on which the budget was based have been affected by a number of factors. These include state and federal government decisions, including new grant programs, changing economic activity, environmental factors, and by decisions made by Council.

While these General Purpose Financial Statements include the original budget adopted by Council, the Act requires Council to review its financial budget on a quarterly basis, so it is able to manage the variation between actuals and budget that invariably occur during the year.

Material variations of more than 10% between original budget and actual results or where the variance is considered material by nature are explained below.

Variation Key: F = Favourable budget variation, U = Unfavourable budget variation.

2025 2025 2025

$ '000 Budget Actual -------- Variance --------

Revenues

Other revenues 7,786

18% F Other revenue for the 2024/25 period was 18% higher than the original budget mainly due to additional income received for workers compensation claims, sale of small plant items and sundry sales income.

Operating grants and contributions

Operating grants and contributions were 14% below the original budget mainly attributable to council receiving only 65% of an annual financial assistance grant during the period. This was offset by additional smaller grants received for specific environmental and community programs.

Interest and investment revenue was 54% higher than the original budget due to a higher cash and investment balance held and higher interest rates achieved than originally forecast.

Net gains from disposal of assets

(100)% U Council did not achieve its small gain on asset sale target due to the disposal of a number of park assets with no sales return. Other income

Other income exceeded the original budget allocation due to unbudgeted non-cash income recognised for council’s share of profit in Civic Risk and Fair value increment on investment properties. These amounts are unable to be forecast at the time of budget setting.

*In council's operational plan adopted in June 2024 Other Income and Other Revenue were displayed under a single line. Budgets have split as appropriate in the financial statements.

Expenses

Borrowing costs 518 1,043 (525) (101)% U Council exceeded the original budget for borrowing costs due to interest expense recognised for leased fleet items exceeding the original forecast from leasing more vehicles.

Other expenses

Other expenses were 11% lower than the original budget during the 2024/25 financial year mainly due to council's contribution towards the NSW Fire and SES services being lower than forecast.

Net losses from disposal of assets – 261 (261) ∞ U Council incurred a net loss on the disposal of assets due to the disposal of a number of park assets with no sales return.

B4-1 Material budget variations

Council exceeded the original budget for cash flows from financing activites as the cashflows for lease payments for council's fleet had been included within the operating cashflows budget.

C Financial position

Material accounting policy information

Financial instruments are recognised initially on the date that the Council becomes party to the contractual provisions of the instrument.

On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).

Financial assets

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Classification

On initial recognition, Council classifies its financial assets into the following categories – those measured at:

• amortised cost

• fair value through profit and loss (FVTPL)

• fair value through other comprehensive income – equity instrument (FVOCI-equity)

Financial assets are not reclassified subsequent to their initial recognition.

Amortised cost

Assets measured at amortised cost are financial assets where:

• the business model is to hold assets to collect contractual cash flows, and

• the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Council’s financial assets measured at amortised cost comprise trade and other receivables, term deposits and cash and cash equivalents in the Statement of Financial Position. Term deposits with an initial term of more than 3 months are classified as investments rather than cash and cash equivalents.

Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate method less provision for impairment.

Interest income, impairment and gains or loss on de-recognition are recognised in the Income Statement.

Financial assets through profit or loss

Allfinancialassetsnotclassifiedasmeasuredatamortisedcostorfairvaluethroughothercomprehensiveincomeasdescribed above are measured at fair value through profit or loss.

Net gains or losses, including any interest or dividend income, are recognised in the Income Statement.

Council’s financial assets measured at fair value through profit or loss comprise investments in Managed funds, FRNs, fixed rate bonds and investments in CivikRisk Mutual in the Statement of Financial Position.

C1-3

(a) Externally restricted cash, cash equivalents and investments

External restrictions

External restrictions included in cash, cash equivalents and investments above comprise:

cash equivalents and investments subject to external restrictions are those which are only available for specific use by Council due to a restriction placed by legislation or third-party contractual agreement.

(b) Internal allocations

and investments not

C1-4 Receivables

$

Movement in provision for impairment of receivables

Material accounting policy information

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Receivables are generally due for settlement within 30 days.

Impairment

Impairment of financial assets measured at amortised cost is recognised on an expected credit loss (ECL) basis.

When estimating ECL, the Council considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on Council’s historical experience and informed credit assessment, and including forward-looking information.

When considering the ECL for rates and annual charges, Council takes into account that unpaid rates represent a charge against the rateable property that will be recovered when the property is next sold.

The Council uses the presentation that a financial asset is in default when:

• the other party is unlikely to pay its credit obligations to the Council in full, without recourse by the Council to actions such as realising security (if any is held) or

• the financial assets (for non-rates debtors) are more than 90 days past due.

Credit losses are measured at the present value of the difference between the cash flows due to the entity in accordance with the contract, and the cash flows expected to be received. This is applied using a probability weighted approach.

Council uses the simplified approach for trade receivables where the expected lifetime credit losses are recognised on day 1.

There has been no change in the estimation techniques or significant assumptions made during the current reporting period.

The Council writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery.

C1-5 Non-current assets classified as held for sale

Non-current assets held for sale Land

assets held for sale

Details of assets

Held for sale assets includes one land parcel in McFarlane Street Merrylands, which was put to market for expressions of interest in April 2025. The valuation of this item reflects the market evaluation provided prior to being placed on the market. Sale is expected within 12 months of the date of classification as held for sale.

Material accounting policy information

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use and are measured at the lower of their carrying amount and fair value less costs to sell.

Non-current assets are not depreciated or amortised while they are classified as held for sale.

C1-6 Infrastructure, property, plant and equipment

(1) Renewals ($36.2m) are defined as the replacement of existing assets (as opposed to the acquisition of new assets).

(2) Community Land includes Crown land value of $86.3m.

C1-6 Infrastructure, property, plant and equipment (continued)

(1) Renewals ($29.5m) are defined as the replacement of existing assets (as opposed to the acquisition of new assets).

(2) Community Land includes Crown land valued at $87m.

Material accounting policy information

Revaluation Model

Infrastructure, property, plant and equipment are held at fair value. Independent comprehensive valuations are performed at least every five years, however the carrying amount of assets is assessed by Council at each reporting date to confirm that it is not materially different from current fair value.

Increases in the carrying amounts arising on revaluation are credited to the revaluation reserve. To the extent that the increase reverses a decrease previously recognising profit or loss relating to that asset class, the increase is first recognised as profit or loss. Decreases that reverse previous increases of assets in the same class are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the class; all other decreases are charged to the Income Statement.

Useful Lives of IPPE

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their carrying amount, net of their residual values, over their estimated remaining useful lives as follows:

During 2024/25 Councils Asset engineers in consultation with Finance have performed a detailed review of useful lives based on engineering estimates as well as benchmarking against other local government organisations. From this review the useful lives of some sub-classes of assets have been reassessed. The applicable useful life ranges are disclosed above.

Land under roads

Land under roads is land under roadways and road reserves including land under footpaths, nature strips and median strips. Council has elected not to recognise land under roads acquired before 1 July 2008 in accordance with AASB1051. Land under roads acquired after 1 July 2008 is recognised in accordance with AASB116 Property, Plant and Equipment.

Crown reserves

Crown reserves under Council's care and control are recognised as assets of the Council. While ownership of the reserves remains with the Crown, Council retains operational control of the reserves and is responsible for their maintenance and use in accordance with the specific purposes to which the reserves are dedicated. Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Council and revenues relating to the reserves are recognised within Council's Income Statement.

Owned investment property

Material accounting policy information

Investment property, comprises leased assets held for long-term rental yields and vacant land held for capital appreciation purposes and is not occupied by the Council.

C2 Liabilities of Council

C2-1 Payables

Current payables not anticipated to be settled within the next twelve months

$

The following liabilities, even though classified as current, are not expected to be settled in the next 12 months.

Material accounting policy information

The financial liabilities of the Council comprise trade payables and borrowings.

Payables

Payables represent liabilities for goods and services provided to Council prior to the end of financial year that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

C2-2 Contract Liabilities

Grants and contributions received in advance:

Unexpended capital grants (to construct Council

Unexpended

grants (received

(i)

Notes

(i) The funds received are under an enforceable contract which require Council to construct an identified asset which will be under Council’s control on completion. The revenue is recognised as Council constructs the asset and the contract liability reflects the funding received which cannot yet be recognised as revenue. The revenue is expected to be recognised in the next 12 months.

(ii) The contract liability relates to grants received prior to the revenue recognition criteria in AASB 15 being satisfied since the performance obligations are ongoing.

Revenue recognised that was included in the contract

C2-3 Borrowings

(1) Loans are secured over the general rating income of Council.

Disclosures on liability interest rate risk exposures, fair value disclosures and security can be found in D1-1. There are no covenants relating to these loans.

(a) Changes in liabilities arising from financing activities

(b) Financing arrangements $ '000

Total facilities Total

Drawn facilities

Financing facilities drawn down at the reporting date are nil. Undrawn

the reporting date are:

Additional financing arrangements information

Breaches and defaults

During the current and prior year, there were no defaults, breaches or covenants on any of the loans.

Security over loans

Lease liabilities are secured by the underlying leased assets.

(1) The bank overdraft facility may be drawn at any time and may be terminated by the bank without notice.

Current employee benefit provisions not anticipated to be settled within the next twelve

The following provisions, even though classified as current, are not expected to be settled in the next 12 months.

Material accounting policy information

Other long-term employee benefit obligations

The liability for long-service leave and annual leave that is not expected to be wholly settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

C3 Reserves

C3-1 Nature and purpose of reserves

IPPE Revaluation Surplus

The infrastructure, property, plant and equipment (IPPE) revaluation surplus is used to record increments and decrements in the revaluation of infrastructure, property, plant and equipment.

D Risks and accounting uncertainties

D1-1 Risks relating to financial instruments held

Council’s activities expose it to a variety of financial risks including (1) price risk, (2) credit risk, (3) liquidity risk and (4) interest rate risk.

The Council’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Council.

Council does not engage in transactions expressed in foreign currencies and is therefore not subject to foreign currency risk.

Financial risk management is carried out by Council’s finance team under policies approved by the Council.

Investments

– 'Financial assets at amortised cost' / 'held to maturity'

– Financial assets at fair value through profit or loss -

Fair value is determined as follows:

• Cash and cash equivalents, receivables, payables – are estimated to be the carrying value that approximates market value.

• Borrowings and investments at amortised cost – are based upon estimated future cash flows discounted by the current market interest rates applicable to assets and liabilities with similar risk profiles, unless quoted market prices are available. The fair value of fixed rate borrowings and fixed rate investments at amortised cost will not approximate to carrying value.

• Financial assets classified (i) at fair value through profit and loss – are based upon quoted market prices (in active markets for identical investments) at the reporting date or independent valuation.

Council’s objective is to maximise its return on cash and investments whilst maintaining an adequate level of liquidity and preserving capital.

Council has an investment policy which complies with the Local Government Act 1993 and Minister’s investment order 625. This policy is regularly reviewed by Council and it’s staff and an investment report is tabled before Council on a monthly basis setting out the portfolio breakup and its performance as required by Local Government regulations.

The risks associated with the instruments held are:

• Price risk – the risk that the capital value of Investments may fluctuate due to changes in market prices, whether the changes are caused by factors specific to individual financial instruments or their issuers or are caused by factors affecting similar instruments traded in a market.

• Interest rate risk – the risk that movements in interest rates could affect returns and income.

• Liquidity risk – the risk that Council will not be able to pay its debts as and when they fall due.

• Credit risk – the risk that the investment counterparty will not complete their obligations particular to a financial instrument, resulting in a financial loss to Council – be it of a capital or income nature.

D1-1 Risks relating to financial instruments held (continued)

Council manages these risks (amongst other measures) by diversifying its portfolio and only purchasing investments with high credit ratings or capital guarantees.

Council also seeks advice from independent advisers before placing any funds in cash equivalents and investments.

(a) Market risk – interest rate and price risk

$ '000 2025 2024

The impact on the result for the year and equity of a reasonably possible movement in the price of investments held and interest rates is shown below. The reasonably possible movements were determined based on historical movements and economic conditions in place at the reporting date.

(b) Credit risk

Council’s major receivables comprise (i) rates and annual charges and (ii) user charges and fees.

Council manages the credit risk associated with these receivables by monitoring outstanding debt and employing stringent debt recovery procedures.

The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions.

The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored for acceptable collection performance.

Council makes suitable provision for doubtful receivables as required and carries out credit checks on most non-rate debtors.

There are no material receivables that have been subjected to a re-negotiation of repayment terms.

Credit risk profile

Receivables – rates and annual charges

Credit risk on rates and annual charges is minimised by the ability of Council to recover these debts as a secured charge over the land; that is, the land can be sold to recover the debt. Council is also able to charge interest on overdue rates and annual charges at higher than market rates which further encourages payment.

D1-1 Risks relating to financial instruments held (continued)

Receivables - non-rates and annual charges and contract assets

Council applies the simplified approach for non-rates and annual charges debtors and contract assets to provide for expected credit losses, which permits the use of the lifetime expected loss provision at inception. To measure the expected credit losses, non-rates and annual charges debtors and contract assets have been grouped based on shared credit risk characteristics and the days past due.

The loss allowance provision is determined as follows. The expected credit losses incorporate forward-looking information.

D1-1 Risks relating to financial instruments held

(c) Liquidity risk

Payables, lease liabilities and borrowings are subject to liquidity risk; that is, the risk that insufficient funds may be on hand to meet payment obligations as and when they fall due.

Council manages this risk by monitoring its cash flow requirements and liquidity levels, and by maintaining an adequate cash buffer. Payment terms can be extended, and overdraft facilities drawn upon in extenuating circumstances.

Borrowings are also subject to interest rate risk: the risk that movements in interest rates could adversely affect funding costs. Council manages this risk through diversification of borrowing types, maturities and interest rate structures.

The finance team regularly reviews interest rate movements to determine if it would be advantageous to refinance or renegotiate part or all of the loan portfolio.

The timing of cash flows presented in the table below to settle financial liabilities reflects the earliest contractual settlement dates. The timing of expected outflows is not expected to be materially different from contracted cashflows.

The amounts disclosed in the table are the undiscounted contracted cash flows for non-lease liabilities and therefore the balances in the table may not equal the balances in the Statement of Financial Position due to the effect of discounting.

D2-1 Fair value measurement

The Council measures the following asset classes at fair value on a recurring basis:

- Infrastructure, property, plant and equipment

- Investment Property - Financial investment at fair value through profit and loss

The fair value of assets and liabilities must be estimated in accordance with various accounting standards for either recognition and measurement requirements or for disclosure purposes.

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a ‘level’ in the fair value hierarchy as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The table below shows the assigned level for each asset held at fair value by the Council.

Recurring fair value measurements

D2-1 Fair value measurement (continued)

Valuation techniques

Where Council is unable to derive fair valuations using quoted market prices of identical assets (ie. level 1 inputs) Council instead utilises a spread of both observable inputs (level 2 inputs) and unobservable inputs (level 3 inputs).

The fair valuation techniques Council has employed while utilising level 2 and level 3 inputs are as follows:

Financial Assets

At fair value through profit and loss are represented by managed funds, Floating rate notes, Fixed rate bonds and investment in CivicRisk mutual fund. Council obtains valuations from its Investment Advisor on a monthly basis and at the end of each accounting period to ensure the financial statements reflect the most up to date valuation. The value of council interest in Civic Risk is sourced from the audited accounts of Civic Risk Mutual as at 30 June of each year. The valuations of Floating Rate Notes are sourced from Reuters based on mid-market prices. That is, valuations are marked at the mid-point of the bid and ask prices in the secondary market. This price represents a general market value for the asset. There has been no change to the valuation techniques during the reporting period. Managed funds investments valuations are sourced directly from those funds.

Investment property

A revaluation of Council’s investment properties by an external valuer was performed for 30 June 2025. Land values have been determined by direct comparison to development sites in the surrounding areas. The value of buildings has been determined using the market approach (capitalisation of income, or direct comparison). This asset class is categorised as level 2 in the fair value hierarchy as the inputs used in the valuation of these assets are observable.

Infrastructure, property, plant and equipment (IPPE)

Operational Land

A comprehensive revaluation of Council's operational land by an external valuer was performed for 30 June 2024 and has been determined by referencing it to current prices in an active market for similar properties. A desktop valuation has been applied as at 30 June 2025. This asset class is categorised as level 2 in the fair value hierarchy as the inputs used in the valuation of these assets are observable.

Community Land

Council's community land was valued based on the Land Value (LV) provided by the Valuer-General as at 1 July 2024.

Land Under Roads Council has elected not to recognise land under roads acquired before 1 July 2008 in accordance with AASB 1051. Land under roads acquired after 1 July 2008 is recognised in accordance with AASB 116 – Property, Plant and Equipment. Values were determined by valuation of road segments at the average land value of properties adjoining the relevant road segment, using land valuation rates provided by the Valuer-General as at 1 July 2024.

Buildings - Non specialised and Specialised Council's buildings were valued by an external valuer as at 30/6/2024. Cumberland City Council assets were valued based on their Depreciated Replacement Cost (2024). The Depreciated Replacement Cost was calculated by the gross replacement cost of all components for each building multiplied by the depreciation % value. A desktop valuation has been applied at 30/6/2025.

Roads, Bridges and Footpaths

The roads asset class includes roads, defined as the trafficable portion of a road, between but not including the kerb and gutter. Other road assets including Bridges, Carparks, Kerb and Gutter, Traffic facilities and Footpaths are also included. The cost approach was utilised with inputs such as estimates pattern of consumption, residual value, asset condition and useful life requiring extensive professional judgement which impacted significantly on the final determination of fair value. Road and carpark assets within this category have been comprehensively revalued at 30/6/2025 using the current replacement cost approach adjusted by obselescence. All other assets in this category have had a desktop valuation completed at 30/6/2025.

Stormwater Drainage

Assets within this class comprise pits, pipes, open channels, and various types of water quality devices. The Level of componentisation adopted by Council is in accordance with OLG Circular 09-09 and the Institute of Public Works Engineers Australia’s International Infrastructure Management Manual (IIMM). The ‘Cost Approach’ estimated the replacement cost for each asset by componentising the assets into significant parts with different useful lives and taking into account a range of factors. Inputs such as estimates of the pattern of consumption, residual value, asset condition and useful life required extensive professional judgement.

Swimming Pools

Council's swimming pool assets were last comprehensively valued by an external valuer as at 30/6/2024. While some elements of gross replacement values could be supported from market evidence other inputs (such as estimates of pattern

of consumption, residual value, asset condition and useful life) required extensive professional judgement and impacted significantly on the final determination of fair value.

Open Space Assets

Council's open space assets were last comprehensively valued by an external valuer as at 30/6/2024. This valuation included asset data capture, attribution, condition assessment, estimates of remaining life, estimated replacement costs and valuation. Assets within this class comprise Tennis Courts, Synthetic Surfaces, BBQs, Regional Sporting Facilities and Playgrounds. While some elements of gross replacement values could be supported from market evidence (Level 2 input) other inputs (such as estimates of pattern of consumption, residual value, asset condition and useful life) required extensive professional judgement and impacted significantly on the final determination of fair value.

Plant & Equipment, Office Equipment and Furniture & Fittings

Plant and equipment, office equipment and furniture & fittings assets are recognised and valued at cost. Council assumes that the carrying amount reflects the fair value of the assets due to the nature of the items, therefore these assets are disclosed at fair value in the notes.

These asset categories include:

• Plant and fleet – trucks, tractors, street sweepers, trailers, commercial and passenger vehicles, minor plant and equipment items

• Office equipment – computer hardware, communications equipment, digital cameras and photocopiers

• Furniture & fittings – work stations, storage cabinets, tables and chairs. There has been no change in the valuation process during the reporting period.

Library Books

Assets included in this asset category consist of library books, e-books, online journals, magazines, CDs and DVDs which are recognised and valued at cost. Council assumes that the carrying amount reflects the fair value of the assets due to the nature of the items. There are no major variances between the fair value and carrying amount of these assets. Therefore these assets are disclosed at fair value in the notes. Whilst these assets are recognised at cost with supporting supplier invoices (observable input) the remaining significant inputs (useful life, pattern of consumption, asset condition and residual values) are unobservable and therefore categorised as level 3. There has been no change in the valuation process during the reporting period.

Fair value measurements using significant unobservable inputs (level 3)

The valuation process for level 3 fair value measurements

The valuation process for each asset class that uses level 3 fair value measurements are discussed above in section 3.

Themainunobservable(level3)inputsofusefullife,patternofconsumptionandassetconditionarebasedonindustryaverages and historical patterns, as well as physical inspections for asset condition, and we ensure that any assets that are impaired outside of these assumptions are written off and replaced as required.

The valuations for Road surfaces have been comprehensively assessed externally in 2025, with the other valuations a desktop review has been conducted externally and reviewed internally.

The external valuations are reviewed by both the Asset Management team and Finance to determine if there are any concerns that need to be addressed or clarifications made.

Significant unobservable valuation inputs used (for level 3 asset classes) and their relationship to fair value.

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various level 3 asset class fair values.

Valuation technique/s

Infrastructure, property, plant and equipment

Community Land

Market approach. Land values obtained from the NSW Valuer-General.

Land under Roads (post 30/6/08) Surrounding land values obtained from the NSW Valuer-General.

Buildings

Cost approach

Unobservable inputs

Land value, land area.

Land value, land area.

Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value

D2-1 Fair value measurement (continued)

Valuation technique/s

Roads Cost approach

Bridges Cost approach

Footpaths Cost approach

Stormwater drainage Cost approach

Pools and open space recreational Cost approach

Plant, equipment, office equipment, furniture, fittings and library books Cost approach

Unobservable inputs

Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value

Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value

Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value

Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value

Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value

Current replacement cost of modern equivalent asset, asset condition, useful life and residual value

A reconciliation of the movements in recurring fair value measurements allocated to Level 3 of the hierarchy by class of assets is provided below:

Highest and best use

All of Council’s non-financial assets are considered as being utilised for their highest and best use.

D3-1 Contingencies

The following assets and liabilities do not qualify for recognition in the Statement of Financial Position, but their knowledge and disclosure is considered relevant to the users of Council’s financial report.

LIABILITIES NOT RECOGNISED

1. Guarantees

(i) Defined benefit superannuation contribution plans

Council is party to an Industry Defined Benefit Plan (Active Super Defined Benefit - Pool B) under Vision Super Fund (The Fund). The Fund is formed following the merger of Local Government Superannuation Fund and Local Authorities Superannuation Fund during 2025. Active Super Defined Benefit - Pool B is deemed to be a ‘multi-employer fund’ for purposes of AASB119 Employee Benefits for the following reasons:

– Assets are not segregated within the sub-group according to the employees of each sponsoring employer.

– The contribution rates have been the same for all sponsoring employers. That is, contribution rates have not varied for each sponsoring employer according to the experience relating to the employees of that sponsoring employer.

– Benefits for employees of all sponsoring employers are determined according to the same formulae and without regard to the sponsoring employer.

– The same actuarial assumptions are currently used in respect of the employees of each sponsoring employer.

Given the factors above, each sponsoring employer is exposed to the actuarial risks associated with current and former employees of other sponsoring employers, and hence shares in the associated gains and losses (to the extent that they are not borne by members).

Description of the funding arrangements

Pooledemployersarerequiredtopayfutureserviceemployercontributionsandpastserviceemployercontributionstothefund.

The future employer contributions were determined using the new entrant rate method under which a contribution rate sufficient to fund the total benefits over the working life-time of a typical new entrant is calculated. The current standard employer contribution rates are:

Division B 1.9 times employee contributions for non-180Point Members; Nil for 180 point members*

Division C 2.5% salaries

Division D 1.64 times employee contributions

* For 180 Point Members, Employers are required to contribute 9.5% from 1 July 2025 of salaries to these members' accumulation accounts in line with the current level of SG contributions, which are paid in additional to members' defined benefits.

The past service contribution for each Pooled Employer is a share of the total past service contributions of $20.0 million per annum for 1 January 2022 to 31 December 2024, apportioned according to each employer's share of the accrued liabilities as at 30 June. Given the funding position of the Fund as at 30 June 2024, it was recommended to cease these past service contributions effective 1 January 2025.

The adequacy of contributions is assessed at each actuarial investigation which will be conducted annually, the next of which is due effective 30 June 2025.

Description of the extent to which Council can be liable to the plan for other Council’s obligations under the terms and conditions of the multi-employer plan:

As stated above, each sponsoring employer (Council) is exposed to the actuarial risks associated with current and former employees of other sponsoring employers and hence shares in the associated gains and losses.

However, there is no relief under the Fund's trust deed for employers to walk away from their defined benefit obligations. Under limited circumstances, an employer may withdraw from the plan when there are no active members, on full payment of outstanding additional contributions. There is no provision for allocation of any surplus which may be present at the date of withdrawal of the Council.

There are no specific provisions under the Fund's trust deed dealing with deficits or surplus on wind-up.

D3-1 Contingencies (continued)

The amount of Council employer contributions to the Active Super defined benefit section inLocal Government Superannuation and Vision Super recognised as an expense for the year ending 30 June 2025 was $495,414.63. The last valuation of the Scheme was performed by Fund Actuary Richard Boyfield, FIAA as at 30 June 2025.

The amount of additional contributions included in the total employer contribution advised above is $146,478.57. Council’s expected contribution to the plan for the next annual reporting period is $157,930.83.

The estimated employer reserves financial position for the Pooled Employers at 30 June 2025 is:

* excluding member accounts and reserves in both assets and liabilities.

The share of this deficit that is broadly attributed to Council is estimated to be in the order of $112.41 as at 30 June 2025.

Council’s share of that deficiency cannot be accurately calculated as the Scheme is a mutual arrangement where assets and liabilities are pooled together for all member councils. For this reason, no liability for the deficiency has been recognised in Council’s accounts. Council has a possible obligation that may arise should the Scheme require immediate payment to correct the deficiency.

The key economic long term assumptions used to calculate the present value of accrued benefits are:

Investment return 6.0% per annum

Salary inflation * 3.5% per annum

Increase in CPI 3.5% for FY24/25 2.5% per annum thereafter

* Plus promotional increases

The contribution requirements may vary from the current rates if the overall sub-group experience is not in line with the actuarial assumptions in determining the funding program; however, any adjustment to the funding program would be the same for all sponsoring employers in the Pooled Employers group.

(ii) Statewide Limited

Council is a member of Statewide Mutual, a mutual pool scheme providing liability insurance to local government.

Membership includes the potential to share in either the net assets or liabilities of the fund depending on its past performance. Council’s share of the net assets or liabilities reflects Council’s contributions to the pool and the result of insurance claims within each of the fund years.

The future realisation and finalisation of claims incurred but not reported to 30 June this year may result in future liabilities or benefits as a result of past events that Council will be required to fund or share in respectively.

(iii)

StateCover Limited

Council is a member of StateCover Mutual Limited and holds a partly paid share in the entity.

StateCover is a company providing workers compensation insurance cover to the NSW local government industry and specifically Council.

Council has a contingent liability to contribute further equity in the event of the erosion of the company’s capital base as a result of the company’s past performance and/or claims experience or as a result of any increased prudential requirements from APRA.

These future equity contributions would be required to maintain the company’s minimum level of net assets in accordance with its licence requirements.

(iv)

Other guarantees

Council has provided no other guarantees other than those listed above.

2. Other liabilities

(i) Third party claims

The Council is involved from time to time in various claims incidental to the ordinary course of business including claims for damages relating to its services.

Council believes that it is appropriately covered for all claims through its insurance coverage and does not expect any material liabilities to eventuate.

E People and relationships

E1 Related party disclosures

E1-1

Key management personnel (KMP)

Key management personnel (KMP) of the council are those persons having the authority and responsibility for planning, directing and controlling the activities of the council, directly or indirectly.

The aggregate amount of KMP compensation included in the Income Statement is: $ '000 2025 2024

1

(1) Council has determined that transactions at arm’s length between KMP and Council as part of KMP using Council services (e.g. access to library or Council swimming pool) will not be disclosed.

The aggregate amount of Councillor and Mayoral fees and associated expenses included in materials and services expenses in the Income Statement are:

(1) Council has determined that transactions at arm's length between KMP and Council as part of KMP using Council service. (e.g. access to library or Council swimming pools) will not be disclosed.

F Other matters

Statement of Cash Flows information

(a) Reconciliation of Net Operating Result to Cash Provided From

(b) Non-cash investing and financing activities

Council does not have Non-cash investing and financing activities.

commitments (exclusive of GST) $ '000

Capital expenditure committed for at the reporting date but not recognised in the financial statements as liabilities:

as follows:

Council is aware of the following ‘non-adjusting events’ that merit disclosure:

Held For Sale Asset

Included in the 2024/25 financial statements is a separate disclosure for a held for sale asset, the property know as 28-36 McFarlane Street Merrylands. Council was actively pursuing the sale of this asset at 30 June 2025.

Council at the ordinary council meeting held on 27 August 2025 formally resolved to proceed with sale of this asset for $25 million and authorised the General Manager to execute a contract for sale.

At the time of preparing these statements a draft contract has been prepared is awaiting signature.

F4 Statement of developer contributions

F4-1 Summary of developer contributions

Under the Environmental Planning and Assessment Act 1979, local infrastructure contributions, also known as developer contributions, are charged by councils when new development occurs. They help fund infrastructure like parks, community facilities, local roads, footpaths, stormwater drainage and traffic management. It is possible that the funds contributed may be less than the cost of this infrastructure, requiring Council to borrow or use general revenue to fund the difference.

F4-2 Developer contributions by plan

S7.11 contributions – under a plan

G Additional Council disclosures (unaudited)

Unbudgeted or One-Off Adjustment Considerations in Council’s Financial Result

The below items included in the 2024/25 operating result of Cumberland Council are unbudgeted or one off/non recurring in nature.

Unbudgeted or One off/non-recurring items 2024/25 $ '000 Profit(loss) on sale of assets

Reportable net operating result before grants and contributions provided for capital purposes 8,389

Net result excluding unbudgeted/one off/nonrecurring items 10,318

INDEPENDENT AUDITOR’S REPORT

Report on the general purpose financial statements

Cumberland City Council

To the Councillors of Cumberland City Council

Opinion

I have audited the accompanying financial statements of Cumberland City Council (the Council), which comprise the Statement by Councillors and Management, the Income Statement and Statement of Comprehensive Income for the year ended 30 June 2025, the Statement of Financial Position as at 30 June 2025, the Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including material accounting policy information and other explanatory information.

In my opinion:

• the Council’s accounting records have been kept in accordance with the requirements of the Local Government Act 1993, Chapter 13, Part 3, Division 2 (the Division)

• the financial statements: - have been prepared, in all material respects, in accordance with the requirements of the Division - are, in all material respects, consistent with the Council’s accounting records - present fairly, in all material respects, the financial position of the Council as at 30 June 2025, and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards

• all information relevant to the conduct of the audit has been obtained

• no material deficiencies in the accounting records or financial statements have come to light during the audit.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section of my report.

I am independent of the Council in accordance with the requirements of the:

• Australian Auditing Standards

• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants (including Independence Standards)’ (APES 110).

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of New South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an Auditor-General

• mandating the Auditor-General as auditor of councils

• precluding the Auditor-General from providing non-audit services.

I have fulfilled my other ethical responsibilities in accordance with APES 110.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Other Information

The Council’s annual report for the year ended 30 June 2025 includes other information in addition to the financial statements and my Independent Auditor’s Report thereon. The Councillors are responsible for the other information. At the date of this Independent Auditor’s Report, the other information I have received comprise Note G Additional Council disclosures (unaudited), the special purpose financial statements and Special Schedules (the Schedules)

My opinion on the financial statements does not cover the other information. Accordingly, I do not express any form of assurance conclusion on the other information. However, as required by the Local Government Act 1993, I have separately expressed an opinion on the special purpose financial statements and Special Schedule - Permissible income for general rates.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed, I conclude there is a material misstatement of the other information, I must report that fact.

I have nothing to report in this regard.

The Councillors’ Responsibilities for the Financial Statements

The Councillors are responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the Local Government Act 1993, and for such internal control as the Councillors determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Councillors are responsible for assessing the Council’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to:

• obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

• issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements.

A description of my responsibilities for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The description forms part of my auditor’s report.

The scope of my audit does not include, nor provide assurance:

• that the Council carried out its activities effectively, efficiently and economically

• on the Original Budget information included in the Income Statement, Statement of Cash Flows, and Note B4-1 'Material budget variations'

• on the Special Schedules. A separate opinion has been provided on Special Schedule - Permissible income for general rates

• about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

• about any other information which may have been hyperlinked to/from the financial statements

Nicky Rajani

Delegate of the Auditor-General for New South Wales

31 October 2025

SYDNEY

Cr Ola Hamed Mayor

Cumberland City Council

16 Memorial Ave

MERRYLANDS NSW 2160

Dear Mayor

Contact: Nicky Rajani

Phone no: 0403 743 080

Our ref: R008-1981756498-6343

31 October 2025

Report on the Conduct of the Audit for the year ended 30 June 2025

Cumberland City Council

I have audited the general purpose financial statements (GPFS) of the Cumberland City Council (the Council) for the year ended 30 June 2025 as required by section 415 of the Local Government Act 1993 (the Act).

I expressed an unmodified opinion on the Council’s GPFS.

My audit procedures did not identify any instances of material non-compliance with the financial reporting requirements in Chapter 13, Part 3, Division 2 of the LG Act and the associated regulation or a material deficiency in the Council’s accounting records or financial statements. The Council’s:

• accounting records were maintained in a manner and form to allow the GPFS to be prepared and effectively audited

• staff provided all accounting records and information relevant to the audit.

This Report on the Conduct of the Audit (the Report) for the Council for the year ended 30 June 2025 is issued in accordance with section 417 of the Act. The Report:

• must address the specific matters outlined in the Local Government Code of Accounting Practice and Financial Reporting 2024-25

• may include statements, comments and recommendations that I consider to be appropriate based on the conduct of the audit of the GPFS.

This Report should be read in conjunction with my audit opinion on the GPFS issued under section 417(2) of the Act.

INCOME STATEMENT Financial performance

Operating result from continuing operations

This graph shows the operating result from continuing operations for the current and prior two financial years.

Council’s operating result from continuing operations for the year was $20 5 million lower than the 2023–24 result.

In 2024-25:

• Council revenue excluding grants and contributions ($234 7 million) increased by $10 6 million. Refer to 'Council revenue' below for details

• Council’s grants and contributions revenue ($42 4 million) decreased by $22 8 million. Refer to ‘Grants and contributions revenue’ below for details.

• Council’s total expenses from continuing operations including depreciation, amortisation and impairment of non-financial assets increased by $8.3 million mainly due to an increase in employee benefits and on-costs of

$6.6 million This was primarily driven by the annual award increase of 3.5 per cent as well as the increase in the superannuation guarantee of 0.5 per cent

Income Council revenue

This graph shows the composition of Council’s revenue recognised for the current and prior two financial years. Council revenue ($277.1 million) decreased by $12 2 million (4 2 per cent) in 2024–25 primarily due to a decrease in grants and contributions revenue by $22.8 million (35.0 per cent) – see additional details below. This decrease was partially offset by the increases in:

• rates and annual charges revenue ($172.6 million) which increased by $8 9 million (5 5 per cent) due to the rate peg increase of 5.0 per cent; and

• user charges and fees revenue ($34 5 million) which increased by $1.4 million (4.3 per cent) mainly due to a $1.4 million increase in revenue from restoration charges

Composition of Council Revenue

Year ended 30 June

Rates and annual charges User charges and fees

Grants and contributions Other revenue

Grants and contributions revenue

This graph shows the amount of grants and contributions revenue recognised for the current and prior two financial years.

Grants and contributions revenue

($42.4 million) decreased by $22 8 million (35 0 per cent) in 2024–25 primarily due to:

• a decrease of $11.6 million of capital grants recognised for recreation and culture and roads and bridges;

• a decrease of $7.2 million of developer contributions recognised during the year; and

• receiving 50 per cent of the financial assistance grants for 2025-26 in advance (85 per cent for 2024-25) resulting in a decrease of $3.0 million

CASH FLOWS

Statement of cash flows

The Statement of Cash Flows details the Council’s inflows and outflows of cash over a specific period. It helps in assessing the Council's ability to generate cash to fund its operations, pay off debts, and support future projects. It also aids in identifying any pressures or issues in the Council operating in a financially sustainable manner

This graph shows the net cash flows for the current and prior two financial years.

The net cash flows for the year were negative $4 9 million (positive $6 0 million in 2023-24).

In 2024-25 the net cashflows:

• from operating activities decreased by $19 6 million, mainly due to a decrease in cash receipts from grants and contributions during the year

• used in investing activities decreased by $9 2 million, mainly due to a decrease in payments for infrastructure, property, plant and equipment during the year

• used in financing activities increased by $0.5 million, mainly due to an increase in lease payments.

FINANCIAL POSITION

Cash, cash equivalents and investments

This section of the Report provides details of the amount of cash, cash equivalents and investments recorded by the Council at 30 June 2025.

Externally restricted funds are the cash, cash equivalents and investments that can only be used for specific purposes due to legal or contractual restrictions.

Cash, cash equivalents, and investments without external restrictions can be allocated internally by the elected Council's resolution or policy. These allocations are matters of Council policy and can be changed or removed by a Council resolution.

Restricted and allocated cash, cash equivalents and investments:

This graph shows the sources of externally restricted cash, cash equivalents and investments.

As at 30 June 2025, the Council’s main sources of externally restricted cash, cash equivalents and investments include:

• developer contributions of $144.7 million, which increased by $14 7 million, mainly due to the cash contributions received during the year and the interest and investment income earned on the restricted cash, offset by the monies expended during the year

• domestic waste management related balances of $15 4 million which increased by $4 7 million

Other externally restricted cash, cash equivalents and investments comprise

Externally restricted balances are those which are only available for specific use due to a restriction placed by legislation or third-party contract. A breakdown of the sources of externally restricted balances is included in the graph below.

Internal allocations are determined by Council policies or decisions, which are subject to change.

Cash and investment balances increased primarily as a result of higher balances in term deposits and floating rate notes

Source of externally restricted cash, cash equivalents and investments

of $14.4 million of specific purpose unexpended grants, $4.6 million of stormwater management related balances and $5.4 million of Voluntary Planning Agreement balances. The balances remained largely consistent to prior year, with no significant movements

Council liquidity

This graph shows the Council’s unrestricted current ratio for the current and prior two financial years.

The unrestricted current ratio is specific to local government and represents Council’s ability to meet its short-term obligations as they fall due. It measures the ratio of unrestricted current assets to current liabilities less specific purpose liabilities.

As at 30 June 2024, the average unrestricted current ratio was an average of 3.7 for metropolitan councils.

As at 30 June 2025, the Council’s unrestricted current ratio of 3.5 was lower than the average unrestricted current ratio for metropolitan councils. The ratio increased in 2024–25 compared to 2023–24, primarily due to assets held for sale of $24.8 million which were classified as current assets as at 30 June 2025

This graph shows the number of months of general fund expenses (excluding depreciation and borrowing costs), Council can fund from its available cash, cash equivalents and investments (not subject to external restrictions).

Further details on cash, cash equivalents and investments including the sources of external restrictions are included in the section above.

In 2023–24, the available cash to cover expenses was an average of 8 months for metropolitan councils.

During the year, the Council’s available cash to cover expenses being 4 4 months is below the average available cash to cover expenses for metropolitan councils.

As at 30 June

Year ended 30 June Available cash to cover

Months of expenses met by available cash, cash equivalents and investments

Linear (Months of expenses met by available cash, cash equivalents and investments)

The downward trend is driven by the decrease in Council's available cash, cash equivalents and investments (not subject to external restrictions), combined with an increase in total expense over the period from 2023 to 2025.

Infrastructure, property, plant and equipment

This graph shows how much the Council spent on renewing and purchasing assets in 2024-25. Council renewed $36 2 million of infrastructure, property, plant and equipment during the 2024-25 financial year. This was mainly spent on roads. A further $19 2 million was spent on new assets primarily relating to buildings, open space / recreational assets and capital work in progress

The table below provides an overview of the Council’s loans and committed borrowing facilities. Committed borrowing facilities are an element of liquidity management and include bank overdrafts, and credit cards

in borrowings represents the principal repayments made throughout the year in line with the loan repayment schedule.

Debt service cover

This graph shows the Council’s debt service cover ratio for the current and prior two financial years.

The debt service cover ratio measures the operating cash to service debt including interest, principal and lease payments.

The ratio decreased during the year primarily due to the reduction in the Council’s operating cash flows.

Nicky Rajani Director, Financial Audit

Delegate

Cumberland

City Council

SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2025

Cumberland City Council

Special Purpose Financial Statements

forthe yearended 30 June 2025

Statement by Councillors and Management made pursuant to the Local Government Code of Accounting Practice and Financial Reporting

The attached Special Purpose Financial Statements have been prepared in accordance with:

• the NSWGovernment Policy Statement 'Application ofNational Competition Policyto Local Government',

• the Division of Local Government Guidelines 'Pricing and Costing for Council Businesses - A Guide to Competitive Neutrality',

• the Local Government Code ofAccounting Practice and Financial Reporting,

To the bestofour knowledge and belief, these statements:

• presentfairlytheoperatingresultandfinancialpositionforeachofCouncil'sdeclaredbusinessactivitiesfortheyear, and

• accordwith Council's accounting and otherrecords.

We are not aware of any matterthat would render these statements false or misleading in any way.

Signed in accordance with a resolution of Councilmade on 29 October 2025.

Ola Hamed Mayor

29 October2025

Peter J Fitzgerald General Manager

29 October2025

JNadima Kafrouni-Saba Deputy Mayor 29 October2025

Tony Chahine ResponsibleAccounting Officer

29 October2025

Cumberland City Council

Income Statement of Golf Course for the year ended 30 June 2025

Cumberland City Council

Income Statement of Aged Care Units

for the year ended 30 June 2025

Cumberland City Council

Income Statement of Function Centres

for the year ended 30 June 2025

Cumberland City Council

Income Statement of Swim Centres for the year ended 30 June 2025

Potential dividend calculated from surplus

Cumberland City Council

Income Statement of Long Day Care

for the year ended 30 June 2025

City Council Statement of Financial Position of Golf Course as at 30 June 2025

Statement of Financial Position of Aged Care Units as at 30 June 2025

Cumberland City Council

Statement of Financial Position of Function Centres as at 30 June 2025

Cumberland

City Council Statement of Financial Position of Swim Centres as at 30 June 2025

Cumberland City Council

Statement of Financial Position of Long Day Care

as at 30 June 2025

Note – Material accounting policy information

A statement summarising the supplemental accounting policies adopted in the preparation of the special purpose financial statements (SPFS) for National Competition Policy (NCP) reporting purposes follows.

These financial statements are SPFS prepared for use by Council and the Office of Local Government. For the purposes of these statements, the Council is a non-reporting not-for-profit entity.

The figures presented in these special purpose financial statements have been prepared in accordance with the recognition and measurement criteria of relevant Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and Australian Accounting Interpretations.

The disclosures in these special purpose financial statements have been prepared in accordance with the Local Government Act 1993 (Act), the Local Government (General) Regulation 2021 (Regulation) and the Local Government Code of Accounting Practice and Financial Reporting.

The statements are prepared on an accruals basis. They are based on historic costs and do not take into account changing money values or, except where specifically stated, fair value of non-current assets. Certain taxes and other costs, appropriately described, have been imputed for the purposes of the National Competition Policy.

TheStatementofFinancialPositionincludesnotionalassets/liabilitiesreceivablefrom/payabletoCouncil'sgeneralfund.These balances reflect a notional intra-entity funding arrangement with the declared business activities.

National Competition Policy

Council has adopted the principle of ‘competitive neutrality’ in its business activities as part of the National Competition Policy which is being applied throughout Australia at all levels of government. The framework for its application is set out in the June 1996 NSW Government Policy statement titled 'Application of National Competition Policy to Local Government'. The Pricing and Costing for Council Businesses – A Guide to Competitive Neutrality issued by the Office of Local Government in July 1997 has also been adopted.

The pricing and costing guidelines outline the process for identifying and allocating costs to activities and provide a standard for disclosure requirements. These disclosures are reflected in Council’s pricing and/or financial reporting systems and include taxation equivalents, Council subsidies, and returns on investments (rate of return and dividends paid).

Declared business activities

In accordance with Pricing and Costing for Council Businesses – A Guide to Competitive Neutrality, Council has declared that the following are to be considered as business activities:

Category 1

(where gross operating turnover is over $2 million)

a. Child Care

Provision of Child Long Day Care Service

b. Swimming Centres

Provision of Swimming Centre Activities

Category 2

(where gross operating turnover is less than $2 million)

a. Golf Course

Provision for generating income through the operation of a Golf Course

b. Aged Care Units

Provision of accommodation for aged services

c. Function Centres

Hall Hire for functions, including catering

Taxation equivalent charges

Council is liable to pay various taxes and financial duties. Where this is the case, they are disclosed as a cost of operations just like all other costs.

Note – Material accounting policy information

However, where Council does not pay some taxes which are generally paid by private sector businesses, such as income tax, these equivalent tax payments have been applied to all Council-nominated business activities and are reflected in Special Purpose Financial Statements.

For the purposes of disclosing comparative information relevant to the private sector equivalent, the following taxation equivalents have been applied to all Council-nominated business activities (this does not include Council’s non-business activities):

Notional rate applied (%)

Corporate income tax rate – 25%

Land tax – the first $1,075,000 of combined land values attracts 0%. For the combined land values in excess of $1,075,000 up to $6,571,000 the rate is $100 + 1.6%. For the remaining combined land value that exceeds $6,571,000 a premium marginal rate of 2.0% applies.

Payroll tax – 5.45% on the value of taxable salaries and wages in excess of $1,200,000.

Income tax

An income tax equivalent has been applied on the profits of the business activities.

Whilst income tax is not a specific cost for the purpose of pricing a good or service, it needs to be taken into account in terms of assessing the rate of return required on capital invested.

Accordingly, the return on capital invested is set at a pre-tax level - gain/(loss) from ordinary activities before capital amounts, as would be applied by a private sector competitor. That is, it should include a provision equivalent to the corporate income tax rate, currently 25%.

Income tax is only applied where a gain from ordinary activities before capital amounts has been achieved.

Since the taxation equivalent is notional – that is, it is payable to Council as the ‘owner’ of business operations - it represents an internal payment and has no effect on the operations of the Council. Accordingly, there is no need for disclosure of internal charges in the SPFS.

The rate applied of 25% is the equivalent company tax rate prevalent at reporting date.

Local government rates and charges

A calculation of the equivalent rates and charges for all Category 1 businesses has been applied to all assets owned, or exclusively used by the business activity.

Loan and debt guarantee fees

The debt guarantee fee is designed to ensure that Council business activities face ‘true’ commercial borrowing costs in line with private sector competitors. In order to calculate a debt guarantee fee, Council has determined what the differential borrowing rate would have been between the commercial rate and Council’s borrowing rate for its business activities.

(i) Subsidies

Government policy requires that subsidies provided to customers, and the funding of those subsidies, must be explicitly disclosed. Subsidies occur where Council provides services on a less than cost recovery basis. This option is exercised on a range of services in order for Council to meet its community service obligations. The overall effect of subsidies is contained within the Income Statements of business activities.

(ii) Return on investments (rate of return)

The NCP policy statement requires that councils with Category 1 businesses ‘would be expected to generate a return on capital funds employed that is comparable to rates of return for private businesses operating in a similar field’.

Funds are subsequently available for meeting commitments or financing future investment strategies. The rate of return is disclosed for each of Council’s business activities on the Income Statement.

The rate of return is calculated as follows:

Operating result before capital income + interest expense

Written down value of I,PP&E as at 30 June

As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 4.166% at 30/6/25.

(iii) Dividends

Council is not required to pay dividends to either itself (as owner of a range of businesses) or to any external entities.

INDEPENDENT AUDITOR’S REPORT

Report on the special purpose financial statements

Cumberland City Council

To

the Councillors of Cumberland City Council

Opinion

I have audited the accompanying special purpose financial statements (the financial statements) of Cumberland City Council’s (the Council) Declared Business Activities, which comprise the Statement by Councillors and Management, the Income Statement of each Declared Business Activity for the year ended 30 June 2025, the Statement of Financial Position of each Declared Business Activity as at 30 June 2025 and the Material accounting policy information note.

The Declared Business Activities of the Council are:

• Golf Course

• Aged Care Units

• Function Centres

• Swim Centres

• Long Day Care

In my opinion, the financial statements present fairly, in all material respects, the financial position of the Council’s Declared Business Activities as at 30 June 2025, and their financial performance for the year then ended, in accordance with the Australian Accounting Standards described in the Material accounting policy information note and the Local Government Code of Accounting Practice and Financial Reporting 2024–25 (LG Code).

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Statements’ section of my report.

I am independent of the Council in accordance with the requirements of the:

• Australian Auditing Standards

• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants (including Independence Standards)’ (APES 110).

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of New South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an Auditor-General

• mandating the Auditor-General as the auditor of councils

• precluding the Auditor-General from providing non-audit services.

I have fulfilled my other ethical responsibilities in accordance with APES 110

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Emphasis of Matter - Basis of Accounting

Without modifying my opinion, I draw attention to the Material accounting policy information note to the financial statements which describes the basis of accounting. The financial statements have been prepared for the purpose of fulfilling the Council’s financial reporting responsibilities under the LG Code. As a result, the financial statements may not be suitable for another purpose.

Other Information

The Council’s annual report for the year ended 30 June 2025 includes other information in addition to the financial statements and my Independent Auditor’s Report thereon. The Councillors are responsible for the other information. At the date of this Independent Auditor’s Report, the other information I have received comprise the general purpose financial statements and Special Schedules (the Schedules)

My opinion on the financial statements does not cover the other information. Accordingly, I do not express any form of assurance conclusion on the other information. However, as required by the Local Government Act 1993, I have separately expressed an opinion on the general purpose financial statements and Special Schedule ‘Permissible income for general rates’.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed, I conclude there is a material misstatement of the other information, I must report that fact.

I have nothing to report in this regard.

The Councillors’ Responsibilities for the Financial Statements

The Councillors are responsible for the preparation and fair presentation of the financial statements and for determining that the accounting policies, described in the Material accounting policy information note to the financial statements, are appropriate to meet the requirements in the LG Code. The Councillors’ responsibility also includes such internal control as the Councillors determine is necessary to enable the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Councillors are responsible for assessing the Council’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to:

• obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

• issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the financial statements

A description of my responsibilities for the audit of the financial statements is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf The description forms part of my auditor’s report.

The scope of my audit does not include, nor provide assurance:

• that the Council carried out its activities effectively, efficiently and economically

• about the security and controls over the electronic publication of the audited financial statements on any website where they may be presented

• about any other information which may have been hyperlinked to/from the financial statements

Nicky Rajani Delegate of the Auditor-General for New South Wales

31 October 2025

SYDNEY

Cumberland City Council SPECIAL SCHEDULES

for the year ended 30 June 2025

Cumberland City Council Permissible income for general rates

(1) The notional general income will not reconcile with rate income in the financial statements in the corresponding year. The statements are reported on an accrual accounting basis which include amounts that relate to prior years’ rates income.

(2) Adjustments account for changes in the number of assessments and any increase or decrease in land value occurring during the year. The adjustments are called ‘supplementary valuations’ as defined in the Valuation of Land Act 1916 (NSW).

(3) The ‘percentage increase’ is inclusive of the rate-peg percentage, and/or special variation and/or Crown land adjustment (where applicable).

(6) Carry-forward amounts which are in excess (an amount that exceeds the permissible income) require Ministerial approval by order published in the NSW Government Gazette in accordance with section 512 of the Act. The OLG will extract these amounts from Council’s Permissible income for general rates Statement in the financial data return (FDR) to administer this process.

INDEPENDENT AUDITOR’S REPORT

Special Schedule – Permissible income for general rates

Cumberland City Council

To the Councillors of Cumberland City Council

Opinion

I have audited the accompanying Special Schedule – Permissible income for general rates (the Schedule) of Cumberland City Council (the Council) for the year ending 30 June 2026

In my opinion, the Schedule is prepared, in all material respects in accordance with the requirements of the Local Government Code of Accounting Practice and Financial Reporting 2024–25 (LG Code) and is in accordance with the books and records of the Council.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the standards are described in the ‘Auditor’s Responsibilities for the Audit of the Schedule’ section of my report.

I am independent of the Council in accordance with the requirements of the:

• Australian Auditing Standards

• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for Professional Accountants (including Independence Standards)’ (APES 110).

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of New South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an Auditor-General

• mandating the Auditor-General as auditor of councils

• precluding the Auditor-General from providing non-audit services.

I have fulfilled my other ethical responsibilities in accordance with APES 110.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Emphasis of Matter - Basis of Accounting

Without modifying my opinion, I draw attention to the special purpose framework used to prepare the Schedule. The Schedule has been prepared for the purpose of fulfilling the Council’s reporting obligations under the LG Code. As a result, the Schedule may not be suitable for another purpose.

Other Information

The Council’s annual report for the year ended 30 June 2025 includes other information in addition to the Schedule and my Independent Auditor’s Report thereon. The Councillors are responsible for the other information. At the date of this Independent Auditor’s Report, the other information I have received comprise the general purpose financial statements, special purpose financial statements and Special Schedule ‘Report on infrastructure assets as at 30 June 2025’

My opinion on the Schedule does not cover the other information. Accordingly, I do not express any form of assurance conclusion on the other information. However, as required by the Local Government Act 1993, I have separately expressed an opinion on the general purpose financial statements and the special purpose financial statements

In connection with my audit of the Schedule, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Schedule or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed, I conclude there is a material misstatement of the other information, I must report that fact.

I have nothing to report in this regard.

The Councillors’ Responsibilities for the Schedule

The Councillors are responsible for the preparation of the Schedule in accordance with the LG Code. The Councillors’ responsibility also includes such internal control as the Councillors determine is necessary to enable the preparation of the Schedule that is free from material misstatement, whether due to fraud or error.

In preparing the Schedule, the Councillors are responsible for assessing the Council’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting

Auditor’s Responsibilities for the Audit of the Schedule

My objectives are to:

• obtain reasonable assurance whether the Schedule as a whole is free from material misstatement, whether due to fraud or error

• issue an Independent Auditor’s Report including my opinion.

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in accordance with Australian Auditing Standards will always detect material misstatements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions users take based on the Schedule.

A description of my responsibilities for the audit of the Schedule is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar8.pdf. The description forms part of my auditor’s report.

Cumberland City Council | Permissible income for general rates | for the year ended 30 June 2025

The scope of my audit does not include, nor provide assurance:

• that the Council carried out its activities effectively, efficiently and economically

• about the security and controls over the electronic publication of the audited Schedule on any website where it may be presented

• about any other information which may have been hyperlinked to/from the Schedule.

Nicky Rajani

Delegate of the Auditor-General for New South Wales

31 October 2025

SYDNEY

Cumberland City Council

Report on infrastructure assets as at 30 June 2025

(a) Required maintenance is the amount identified in Council’s asset management plans.

Cumberland City Council

Report on infrastructure assets as at 30 June 2025

Infrastructure asset performance indicators (consolidated) *

Cost to bring assets to agreed service level

(*) All asset performance indicators are calculated using classes identified in the previous table.

(1) Asset renewals represent the replacement and/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) that increases capacity/performance.