DGL GROUP LIMITED

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ASX RELEASE

25 February 2022

DGL reports strong first half FY22 result and highlights growth

Key highlights of the first half included:

DGL has delivered strong growth in revenue, EBITDA and NPAT with results exceeding expectations, as pre-announced on 9 February 2022
$143 million of sales revenue (up 55% on pro-forma prior comparable period[1] )
Normalised[2] EBITDA of $23 million achieved, (up 77% on pro-forma prior comparable period))
Statutory NPAT of $8.5 million (up 70% on pro-forma prior comparable period) (includes $2.3m of acquisition costs)
Delivered a significant increase in scale and diversified earnings in the first half of FY22 through acquisitions and organic growth
Successfully delivering on our strategy of investing for growth
7 acquisitions successfully integrated to expand and diversify DGL’s scale, geographies, expertise and offerings
Stronger than anticipated quarter 2 growth across all 3 operating segments
This momentum is forecast to continue into the second half
Financial position with flexibility to support continued growth
Net debt of $35 million
Outlook: reconfirm earnings guidance for FY22 with forecast revenue of ~$343 million and forecast EBITDA of ~$54 million (before acquisition costs); revenue and earnings guidance is significantly better than Prospectus forecasts.

Melbourne, Australia - DGL Group Limited (ASX:DGL) (NZX:DGC), (“DGL” or the “Company”), a specialist chemicals business that manufactures, transports, stores and processes chemicals and hazardous waste, today confirmed the strong result for the first half of the 2022 financial year, including material earnings growth.

In commenting on today’s results announcement, DGL Chief Executive Officer, Simon Henry, said:

“Our first half FY22 results are excellent. The results are evidence of DGL’s ability to successfully execute our strategy to sustainably grow through organic growth and acquisitions of strategically positioned businesses.

“All three operating segments performed exceedingly well and is a testament to the efforts of our employees across the entire DGL Group. Despite the number of pandemic-related

1 Prior comparable period is Jul-Dec20 pro-forma results as presented in the Prospectus historical and forecast pro-forma income statements.

2 Normalised EBITDA excludes acquisition costs incurred in the first half of $2.3m

DGL Warehousing and Distribution DGL Environmental Solutions DGL Chemical Manufacturing 739 Progress Road 201 Five Islands Road 120 Fulton Drive Wacol, QLD 4076 Unanderra, NSW 2526 Derrimut, VIC 3026 Brisbane, Australia Wollongong, Australia Melbourne, Australia p +61 7 3548 7905 p +61 2 4247 2100 p +61 3 8369 9999

DGL Group Ltd Level 4, 91 William Street Melbourne, VIC 3000 Melbourne, Australia p +64 9 309 9254

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challenges faced, including disrupted supply chains and lock downs, we are navigating them well. Worker safety is always paramount to our activities, and we have a COVID-19 safe plan implemented across all operations. All staff have responded in outstanding fashion helping DGL to prosper over the last six months.

“The continuing trend in onshoring of international supply in response to the pandemic, is benefiting DGL. We are seeing customers forward ordering and implementing long-term supply planning. This highlights the benefit of being a locally operated, vertically integrated speciality chemicals and dangerous goods Company that can assist across the supply chain.

“We expect DGL’s Q2 momentum to carry into Q3 and Q4 with greater contributions from completed acquisitions. DGL is well positioned to continue to take advantage of opportunities across the speciality chemicals and dangerous goods value chain to continue to deliver growth in shareholder value.”

Group Revenue and EBITDA

DGL delivered $143 million of sales revenue and $23 million of normalised EBITDA in the first six months of FY22. All 3 operating segments contributed to the Group’s revenue and EBITDA growth.

Manufacturing

Since June 2021, DGL has acquired and integrated into the Manufacturing segment six strategically positioned businesses (Labels Connect, Opal, Profill, Aquapac, Austech and Ausblue) expanding the Chemical Manufacturing segment’s manufacturing capabilities further into Agricultural, Automotive and Industrial sectors. These businesses have been successfully integrated into the DGL Group and are performing in line with management’s expectations. With the knowledge, experience and intellectual property gained, the wider manufacturing segment is now able to offer additional turn-key solutions across more industries and markets.

Continued organic growth is an ongoing focus as we realise synergies from the acquisitions and further develop the business to meet the needs of our customers. Selling to our customers our expanded products, capabilities and processes will help maximise our manufacturing plant utilisation throughout Australia and New Zealand. In addition, we are continuing to see increased onshoring of chemical manufacturing in response to global supply chain issues including shipping delays, packaging constraints and various other challenges.

Warehousing and Distribution

Significant demand for DGL’s warehousing and distribution services continues. In response to issues around supply chain including shipping delays, we have seen an increase in the stock holdings of DGL’s customers.

In addition to the ongoing high utilisation of our existing assets, DGL successfully integrated the acquisition of Shackells Transport into the Group in December. As part of the purchase, we grew our fleet of trucks and tankers as well as our bulk liquid expertise across the

DGL Warehousing and Distribution 739 Progress Road Wacol, QLD 4076 Brisbane, Australia p +61 7 3548 7905

DGL Environmental Solutions DGL Chemical Manufacturing 201 Five Islands Road 120 Fulton Drive Unanderra, NSW 2526 Derrimut, VIC 3026 Wollongong, Australia Melbourne, Australia p +61 2 4247 2100 p +61 3 8369 9999

DGL Group Ltd Level 4, 91 William Street Melbourne, VIC 3000 Melbourne, Australia p +64 9 309 9254

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Group. A customs clearance service is being developed which aligns with DGL’s strategy to increase our offering of services.

Environmental

DGL successfully commissioned the Victoria lead smelter in June 21. This has enabled DGL to convert intermediate lead materials into high value end products. The lead smelter was in operation throughout the first half.

Despite experiencing shipping and logistical challenges in the dispatch of battery materials to offshore customers, the segment recorded strong conversion of finished goods to sales.

Balance Sheet and Cash

The strong result has delivered an underlying operating cashflow of $15 million (down 8% on prior comparable period). There has been a considerable build in net working capital requirements. Inventory values have increased with seasonal inventory growth and the general trading environment. The strong trailing quarter also contributing to an increase in receivables at the end of December.

$41 million of cash investment in the 7 acquisitions and $21 million of property acquisitions have resulted in DGL having a net debt position of $35 million at the end of the first half of FY22 (compared to a net cash position of $23 million at June 21).

Trading Outlook

We expect the momentum from Q2 to carry into the second half of FY22. We reconfirm our upgraded earnings guidance of:

FY22 revenue forecast at ~$343 million
FY22 EBITDA forecast at ~$54 million (before deducting acquisition costs).

This guidance is significantly better than Prospectus forecasts.

Live Webcast

As previously announced, Founder and CEO, Simon Henry, will be joined by CFO, Ben Halsey, to present the 1H FY2022 results via a live webcast.

When: Friday, 25 February 2022 Time: 11:30am - 12:30pm AEDT

To attend the video briefing, please register via the following link https://webcast1.boardroom.media/watch_broadcast.php?id=620c6f9248e20

Registered participants will receive a calendar invite and a link to the event.

There will be a live Q&A function where investors can submit their questions. Questions will be moderated.

DGL Group Ltd Level 4, 91 William Street Melbourne, VIC 3000 Melbourne, Australia p +64 9 309 9254

DGL Warehousing and Distribution 739 Progress Road Wacol, QLD 4076 Brisbane, Australia p +61 7 3548 7905

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ENDS -

Approved for release by the Board of DGL.

CONTACT

Barbara Furci DGL Group Limited +64 9 309 9254 or [email protected]

MEDIA ENQUIRIES

Kylie FitzGerald Cannings Strategic Communications +61 401 895 894 or [email protected]

ABOUT DGL GROUP LIMITED

DGL is a long-established, founder-led, end to end chemicals business that manufactures, transports, stores and manages the processing of chemicals and hazardous waste. The Company operates a network of 54 sites, both owned and leased, across Australia and New Zealand. The Company has a strong track record of revenue and earnings growth.

DGL Warehousing and Distribution 739 Progress Road Wacol, QLD 4076 Brisbane, Australia p +61 7 3548 7905

DGL Group Ltd Level 4, 91 William Street Melbourne, VIC 3000 Melbourne, Australia p +64 9 309 9254

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646 APPENDIX 4D HALF‐YEAR REPORT FOR THE PERIOD ENDED 31 DECEMBER 2021

1. Details of the reporting period and the prior corresponding period

Current period: 1 July 2021 ‐ 31 December 2021 Prior corresponding period: 1 July 2020 ‐ 31 December 2020

2.	Up/Down Change (%) Half‐year ended 31 December 2020 ($'000) Half‐year ended 31 December 2021 ($'000) Results for announcement to the market
	Revenue from ordinary activities Up 182% Up 185% Down ‐64% Total comprehensive income for the period attributable to members 9,102 25,235 143,040 50,662 Profit from ordinary activities after tax attributable to members 2,999 8,546

No dividend has been paid during the financial period or in the previous corresponding period. No dividend has been proposed or declared since the end of the reporting period.

Net tangible Assets	Half‐year ended 31	30 June 2021
	December 2021
Net tangible assets per security (with the	1.15	0.65
comparative figures for the previous
corresponding period)

3. Net tangible Assets

4. Details of entities over which control has been gained

Name of entity:	Opal Australasia Pty Ltd
Date of control:	1 September 2021
Name of entity:	Austech Chemicals Australasia Pty Ltd
Date of control:	1 December 2021

5. Attachment

The Half Year Report of DGL Group Limited for the half‐year ended 31 December 2021 is attached.

6. Audit qualification or review

The financial statements were subject to a review by the auditors and the review report is attached as part of the Half Year Report.

DGL GROUP LIMITED AND CONTROLLED ENTITIES

ABN: 71 002 802 646

Financial Report For The Half-Year Ended 31 December 2021

DGL GROUP LIMITED AND CONTROLLED ENTITIES

ABN: 71 002 802 646

Financial Report For The Half-Year Ended 31 December 2021

Financial Report For The Half-Year Ended 31 December 2021
CONTENTS	Page
Directors' Report	1
Auditor's Independence Declaration	3
Consolidated Statement of Profit or Loss and Other Comprehensive Income	4
Consolidated Statement of Financial Position	5
Consolidated Statement of Changes in Equity	6
Consolidated Statement of Cash Flows	7
Notes to the Financial Statements	8
Directors' Declaration	27
Independent Auditor's Report	28
Corporate Directory	30

DGL GROUP LIMITED AND CONTROLLED ENTITIES DIRECTORS' REPORT

The directors present their report on the consolidated entity (referred to herein as the Group), consisting of DGL Group Limited and its controlled entities for the half-year ended 31 December 2021.

Directors

The following persons were directors of DGL Group Limited during the half-year, and at the date of this report, unless otherwise stated.

Peter Lowe Chairman and Non-Executive Director Simon Henry Founder, Executive Director and Chief Executive Officer Denise Brotherton Non-Executive Director Robert McKinnon Non-Executive Director Robert Sushames Executive Director, General Manager - DGL Manufacturing Australia Pty Ltd

Principal Activities and Significant Changes in Nature of Activities

The DGL business was established in 1999 by current CEO and Founder, Simon Henry. Mr Henry's vision for the DGL Group was to address a gap in the market for a fully integrated end to end specialty chemicals and dangerous goods business.

DGL has now established itself as an integrated, trans-Tasman business that offers a wide range of services to its diverse customer base. Its service offering includes chemical formulation and manufacturing, warehousing and distribution, and waste management and recycling.

The Company's vision is to leverage its asset base, customer relationships, and trusted brand to further expand services offered across the full chemical lifecycle and, ultimately, develop itself as a one stop shop for its customers.

In 1H FY22, DGL delivered a significant increase in scale and further diversified earnings through the acquisition of seven businesses as well as through organic growth. All three operating segments delivered strong results in the half year.

DGL is navigating COVID-related challenges well. All of DGL’s sites have COVID-19 safe plans in place, and DGL is well positioned to take advantage of the continuing trend in onshoring of international supply and from customers forward ordering and implementing long-term supply planning.

DGL operates in three interconnected industries:

(a) Manufacturing of specialised chemicals in Australia and New Zealand

The chemicals manufacturing industry is large and diverse. It provides materials and formulations to a range of industries, as well as supplying products to end-user consumer and industrial companies.
The total basic chemical and chemical products manufacturing sector in Australia and New Zealand is projected to grow from $37.26 billion in 2016 to $40.82 billion in 2026.[1]

(b) Logistics and storage of dangerous goods and specialised chemicals

Services include logistics, transportation and freight management, inventory management, packaging and warehousing. Dangerous goods, being substances that potentially pose a risk to life and health, require specialist skills and appropriate licences as incorrect storage and handling of dangerous goods and chemicals can result in spills, contamination, explosions, fires, burns, corrosive action and release of toxic fumes/gases.
The integrated general logistics (excluding postal and courier services) service market in Australia and New Zealand is projected to grow from $90.39 billion in 2016 to $111.65 billion in 2026. Within this market, it is estimated that dangerous goods logistics accounted for approximately $880 million of the Australian and New Zealand market value in 2019 (approximately 10% of the total market) and that this will grow to $1,238 million by 2026.[1]
(c) Hazardous waste management market in Australia
The waste management industry provides services across multiple sectors including waste collection, waste transport, processing, recycling, recovery and disposal. DGL currently processes used lead acid batteries and liquid waste.
Hazardous waste comprises approximately 10% of the total $15 billion waste management industry and are classified as wastes deemed to be potentially harmful to human health or the environment.

Dividends Paid or Declared

No dividends have been paid or declared during the half-year ended 31 December 2021, or at the date of this report.

1 Frost & Sullivan, Market report on Dangerous Goods Logistics, Contract Manufacturing of Chemicals and Hazardous Waste Management/Recycling Services Markets in Australia and New Zealand, 29 March 2021, commissioned by the Company, as disclosed in the IPO Prospectus.

DGL GROUP LIMITED AND CONTROLLED ENTITIES DIRECTORS' REPORT

Review of Operations

The Group comprises three operating segments: Chemical Manufacturing, Warehousing and Distribution and Environmental Solutions. A description of the operating segments is set out below.

Review of Operations The Group comprises three operating segments: Chemical Manufacturing, Warehousing and Distribution and Environmental Solutions. A description of the operating segments is set out below.	Review of Operations The Group comprises three operating segments: Chemical Manufacturing, Warehousing and Distribution and Environmental Solutions. A description of the operating segments is set out below.
Chemical Manufacturing
Segment description	DGL’s Chemical Manufacturing segment produces its own range of specialty chemicals and undertakes advanced formulation and contract manufacturing on behalf of third parties. The segment provides a versatile, end to end solution for its customers. Operations are focused on deriving chemicals from complex reactions in controlled environments.
Key activities	Since June 21, DGL has acquired Opal, Profill, Aquapac, Austech and Ausblue, expanding the Chemical Manufacturing segment’s manufacturing capabilities further into Agricultural, Automotive and Industrial sectors. These businesses have been successfully integrated into the DGL Group and are performing in line with management’s expectations. DGL continues to focus on organic growth in the manufacturing segment through the expansion in the range of products, services and geographies, cross selling to existing and acquired customers, and through the development of capital projects.
Warehousing and Distribution
Segment description	The Warehousing and Distribution segment offers transport, logistics and warehousing services focusing on hazardous goods across Australia and New Zealand. Key components of the services provided by the segment include freight forwarding, inventorymanagement, warehousing, and transport.
Key activities	DGL’s Warehousing and Distribution segment has experienced significant demand for its services. In response to issues around supply chain including shipping delays, DGL’s customers have been increasing their stock holdings, resulting in a high utilisation of warehousing and distribution assets. DGL successfully integrated the acquisition of Shackells Transport into the Warehousing and Distribution segment and the acquired business is performing in line with management’s expectations. An inhouse customs clearance service has commenced increasing our international freight capabilities which aligns with DGL’s strategy to cross- sell services.
Environmental Solutions
Segment description	The Environmental Solutions segment undertakes resource recovery and hazardous waste management activities. Its core activities comprise liquid waste treatment, ULAB recycling, lead smelting and refining.
Key activities	The Victoria lead smelter was commissioned in June 21. The smelter’s performance has exceeded management’s expectations. The other principal activities of the Environmental Solutions segment in 1H FY22 were end-of-life battery recycling and liquid waste treatment. Work continues on the new liquid waste treatment plant in NSW.

Matters Subsequent to the End of the Half-Year

On 17 January 2022, 946,403 fully paid ordinary shares were released from voluntary escrow. The shares, issued to vendors as part consideration for the acquisition of Labels Connect, which were subject to a voluntary escrow period of 6 months.

On 7 February 2022, the Company announced it had acquired an industrial property located at 57 Ashover Road, Rocklea, Queensland for a total consideration of $11 million.

On 9 February 2022, the Company issued 511,190 fully paid ordinary shares as part settlement of the final working capital adjustment in accordance with the Share Purchase Agreement in relation to the acquisition of Austech Chemicals Pty Ltd. The shares issued are escrowed for 6 months from the date of issue.

On 17 February 2022, the Company announced it was acquiring the business and assets of Australian Logistics Management Pty Ltd. The total purchase consideration is $1,250,000 and comprises of cash payment of $833,333.33 and issuance of fully paid ordinary shares in the Company with a value of $416,666.67. The shares will be issued following completion of the transaction on 28 February 2022.

On 17 February 2022, the Company announced it was acquiring the land and buildings at 7 and 7a Silicon Place, Tullamarine, Australia for $2,400,000 cash.

Likely Developments and Expected Results of Operations

The Company expects to continue to execute its business plan, in line with its strategic objectives as outlined in its 2021 Annual Report.

Auditor's Independence Declaration

A copy of the auditor's independence declaration, as required under section 307C of the Corporations Act 2001 , is set out on page 3.

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Mr Peter Lowe Chairman Dated: 24 February 2022

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AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF DGL GROUP LIMITED

In relation to our review of the financial report of DGL Group Limited for the half-year ended 31 December 2021, I declare to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 ; and
(b) no contraventions of any applicable code of professional conduct.

This declaration is made in respect of DGL Group Limited and the entities it controlled during the financial period.

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PKF Melbourne, 24 February 2022

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Kenneth Weldin Partner

PKF Melbourne Audit & Assurance Pty Ltd ABN 75 600 749 184 Level 12, 440 Collins Street, Melbourne, Victoria 3000 T: +61 3 9679 2222 F: +61 3 9679 2288 www.pkf.com.au Liability limited by a scheme approved under Professional Standards Legislation PKF Melbourne Audit & Assurance Pty Ltd is a member firm of the PKF International Limited family of separately owned firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note Sales revenue 2 Cost of sales Other income 2 Covid-19 stimulus Acquisition costs relating to business combinations Employee benefits expense Administration and general expenses Legal and professional fees Occupancy expense Depreciation and amortisation expense Finance costs Profit before income tax Tax expense Net profit for the half-year Other comprehensive income: Items that may be reclassified subsequently to profit or loss: Gain on derivative contract held as hedging instruments Exchange differences on translating foreign operations, net of tax Items that will not be reclassified subsequently to profit or loss: Revaluation gain on land and buildings, net of tax Total other comprehensive income for the half-year Total comprehensive income for the half-year Net profit attributable to: Owners of the parent entity Total comprehensive income attributable to: Owners of the parent entity Earnings per share Basic earnings per share (cents) 4	31 December 2021 31 December 2020 $000 $000 143,040 50,662 (89,563) (26,943) Group
	53,477 23,719 295 214 19 78 (2,341) - (19,466) (9,188) (7,125) (2,893) (1,413) (709) (2,863) (1,690) (7,240) (4,350) (799) (992)
	12,544 4,189 (3,998) (1,190)
	8,546 2,999
	63 - 493 574 - 21,662
	556 22,236
	9,102 25,235
	8,546 2,999
	8,546 2,999
	9,102 25,235
	9,102 25,235
	3.25 N/A

The accompanying notes form part of these financial statements.

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021

Note Assets Current Assets Cash and cash equivalents Trade and other receivables 5 Inventories Other financial assets Other assets Total Current Assets Non-Current Assets Property, plant and equipment 7 Deferred tax assets Intangible assets 8 Right-of-use assets 9 Total Non-Current Assets Total Assets Liabilities CURRENT LIABILITIES Trade and other payables 10 Lease liabilities 9 Borrowings 11 Other financial liabilities Current tax liabilities Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Other financial liabilities Borrowings 11 Lease liabilities 9 Deferred tax liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 12 Reserves 16 Retained earnings TOTAL EQUITY	31 December 2021 30 June 2021 $000 $000 16,148 43,830 50,464 22,528 32,149 14,420 1,497 1,634 6,973 3,937 Group
	107,231 86,349
	178,032 133,221 10,274 7,270 86,251 27,979 34,844 22,719
	309,401 191,189
	416,632 277,538
	50,521 17,139 8,704 7,105 7,504 21,062 - 100 4,225 2,345 5,728 3,051
	76,682 50,802
	- 8,481 43,345 - 27,246 16,754 10,485 5,864 319 366
	81,395 31,465
	158,077 82,267

	258,555 195,271
	246,431 192,249 (31,176) (31,732) 43,300 34,754
	258,555 195,271

The accompanying notes form part of these financial statements.

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Balance at 1 July 2020 Consolidated Group Other comprehensive income for the half-year Balance at 31 December 2020 Profit for the half-year Balance at 31 December 2021 Total comprehensive income for the half-year Transactions with owners, in their capacity as owners, and other transfers Shares issued during the half-year Comprehensive income Transactions with owners, in their capacity as owners, and other transfers Total comprehensive income for the half-year Capital reduction as per Section 258F of the Corporations Act 2001 Total transactions with owners and other transfers Total transactions with owners and other transfers Balance at 1 July 2021 Comprehensive income Profit for the half-year Other comprehensive income for the half-year Transaction costs net of tax	Share Capital Retained Earnings Asset Realisation Reserve Cash Flow Hedge Reserve Merger Acquisition Reserve Foreign Currency Translation Reserve Subtotal $000 $000 $000 $000 $000 $000 $000 130,615 (56,466) 933 - (54,230) 307 21,159 - 2,999 - - - - 2,999 21,662 574 22,236 Reserves
	- 2,999 21,662 - - 574 25,235
	(44,055) 44,055 - - - - -
	(44,055) 44,055 - - - - -
	86,560 (9,412) 22,595 - (54,230) 881 46,394
	192,249 34,754 22,477 66 (54,230) (45) 195,271 - 8,546 - - - - 8,546 - - - 63 - 493 556
	- 8,546 - 63 - 493 9,102

	54,259 - - - - - 54,259 (77) - - - - - (77)
	54,182 - - - - - 54,182
	246,431 43,300 22,477 129 (54,230) 448 258,555

The accompanying notes form part of these financial statements.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received/ other income Finance costs Income tax paid Net cash generated by operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of intangibles Purchase of subsidiary Purchase of business and assets Cash acquired from acquisition of subsidiary Net cash (used in) investing activities Cash flows from financing activities Payments of capital raising costs Repayment of borrowings - other Loans from related parties - net amount (repaid)/received Proceeds from borrowings Repayment of lease liabilities Net cash provided by/(used in) financing activities Net increase in cash held Cash and cash equivalents at beginning of financial year Effect of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at end of financial period	31 December 2021 31 December 2020 $000 $000 118,659 52,151 (101,857) (43,670) 249 289 (449) (249) (1,536) - Group
	15,066 8,521
	(25,810) (2,580) (73) (35) (21,269) (5,050) (21,542) - 2,082 -
	(66,612) (7,665)
	(77) - - (35) (1,526) 2,520 29,709 - (4,244) (3,500)
	23,862 (1,015)
	(27,684) (159) 43,830 1,719 2 (3)
	16,148 1,557

The accompanying notes form part of these financial statements.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

These consolidated financial statements and notes represent those of DGL Group Limited and Controlled Entities (the “consolidated group” or “group”).

The financial statements were authorised for issue on 24 February 2022 by the directors of the company.

Note 1 Summary of Significant Accounting Policies

These general purpose financial statements for the interim half-year reporting period ended 31 December 2021 have been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 , as appropriate for 'for profit' entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting.

The interim financial reporting does not include all the notes of the type usually included in the annual financial report. It is therefore recommended that this financial report be read in conjunction with the financial report for the year ended 30 June 2021 and any public announcements made by the Company since 30 June 2021 in accordance with continuous disclosure obligations arising under the Corporations Act 2001 .

Basis of Preparation

The financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

Any new, revised or amending Accounting Standards and Interpretations that are not yet mandatory have not been adopted early.

Amendments to Accounting Standards and new Interpretations that are mandatory, effective from the current reporting period

The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current reporting period.

New Accounting Standards and Interpretations published but not yet adopted

There have been no new standards published but not yet adopted that would have a material impact upon either the Company's reported financial performance or its financial position.

Critical Accounting Estimates and Judgements

The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.

Key Estimates and Judgements

Performance obligations under AASB 15

To identify a performance obligation under AASB 15, the promise must be sufficiently specific to be able to determine when the obligation is satisfied. Management exercises judgement to determine whether the promise is sufficiently specific by taking into account any conditions specified in the arrangement, explicit or implicit, regarding the promised goods or services. In making this assessment, Management includes the nature/type, cost/value, quantity and the period of transfer related to the goods or services promised.

Lease term and option to extend under AASB 16

The lease term is defined as the non-cancellable period of a lease together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option; and also periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option. The options that are reasonably certain of being exercised is a key Management judgement that the Group will make. The Group determines the likeliness to exercise on a lease-by-lease basis, looking at various factors such as which assets are strategic and which are key to the future strategy of the Group.

Impairment

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

All impairment losses are recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, Management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group's assets within the next financial year.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustments to market risk and the appropriate adjustment to asset-specific risk factors.

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Actual results, however, may vary due to technical obsolescence, particularly relating to software and IT equipment.

Long service leave

The liability for long service leave is recognised and measured as the present value of the estimated cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, attrition rates and pay increases through promotion and inflation have been taken into account.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 1: Summary of Significant Accounting Policies (continued)

Income tax

The Group is subject to income taxes in which jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable amounts will be available.

Note 2

Revenue and Other Income

The Group has recognised the following amounts relating to revenue in the statement of profit or loss.

Note Continued operations 2a Total sales revenue Other income - Miscellaneous income - Interest received - Administration revenue - Fuel tax credits income - Discount on Purchase Total other income (a) Revenue disaggregation - Environmental Solutions - Chemical Manufacturing - Warehousing & Distribution The revenue is disaggregated by the following divisions: Revenue from contracts with customers Other sources of revenue	31 December 2021 31 December 2020 $000 $000 140,556 49,568 2,484 1,094 Group
	143,040 50,662
	11 205 8 9 144 - 63 - 69 -
	295 214
	45,163 26,994 73,887 5,780 21,506 16,794
	140,556 49,568

Timing of income recognition of products and services transferred to customers is at a point in time.

Note 3 Dividends

No dividends have been paid, declared or recommended for payment during the reporting period.

Note 4 Earnings per Share

(a) (b) Basic earnings per share from continuing operations Reconciliation of earnings to profit or loss Profit Earnings used to calculate basic EPS Weighted average number of ordinary shares outstanding during the reporting period used in calculating basic EPS Weighted average number of ordinary shares outstanding during the reporting period used in calculating dilutive EPS	31 December 2021 31 December 2020 $000 $000 8,546 2,999 Group
	8,546 2,999
	No. No. 263,333 -
	263,333 -
	3.25 N/A

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Trade and Other Receivables Note 5
Other receivables Provision for impairment Total current trade and other receivables CURRENT Trade receivables	31 December 2021 30 June 2021 $000 $000 50,443 22,368 (121) - 50,322 22,368 142 160 50,464 22,528 Group

The Group applies the general approach to providing for expected credit losses prescribed by AASB 9. Under the general approach, at each reporting period, the entity would assess whether the financial instruments are credit impaired and if:

the credit risk of the financial instrument increased significantly since initial recognition, the entity measures the loss allowance of the financial instrument at an amount equal to the lifetime expected credit losses; and
there was no significant increase in credit risk since initial recognition, the entity measures the loss allowance of the financial instrument at an amount equal to 12-month expected credit losses.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

The balances of receivables that remain within initial trade terms (as detailed in the table below) are considered to be of high credit quality.

	Current	>30 days past	>60 days past	>90 days past	Total
		due	due	due
31 December 2021	$000	$000	$000	$000	$000
Expected loss rate	-	-	18%	100%	0.2%
Gross carrying amount	42,091	7,737	605	10	50,443
Loss allowing provision	-	-	(111)	(10)	(121)
2020
Expected loss rate	-	-	-	-	-
Gross carrying amount	15,757	6,292	188	131	22,368
Loss allowing provision	-	-	-	-	-
			Group
			31 December	30 June 2021
			2021
(a) Financial Assets Measured at Amortised Cost			$000	$000
Trade and other Receivables
— Total current			50,464	22,528
— Total non-current			-	-
Total financial assets measured at amortised cost			50,464	22,528

(b) Collateral Pledged

Bank loans are secured over registered fixed and floating charges over all assets of the Group.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 6 Interests in Subsidiaries

(a) Information about Principal Subsidiaries

The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of ownership interests held equals the voting rights held by the Group. Each subsidiary’s principal place of business is also its country of incorporation.

		Ownership interest held by	Ownership interest held by
		the Group
Name of subsidiary	Principal place of business	31 December	30 June 2021
		2021
DGL Manufacturing Pty Ltd	Australia	100%	100%
DGL Warehousing & Distribution Pty Ltd	Australia	100%	100%
DGL Industries Pty Ltd	Australia	100%	100%
DGL Manufacturing Australia Pty Ltd (formerly	Australia	100%	100%
Chem Pack Pty Ltd)
Labels Connect Pty Ltd	Australia	100%	-
DGL (NZ) Limited	New Zealand	100%	100%
DGL Manufacturing Limited	New Zealand	100%	100%
DGL Warehousing NZ Limited	New Zealand	100%	100%
DGL Ausblue Pty Ltd	Australia	100%	-
Opal Australasia Pty Ltd	Australia	100%	-
Austech Chemicals Australasia Pty Ltd	Australia	100%	-

Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same reporting date as the Group’s financial statements.

(b) Significant Restrictions

Other than the following, there are no significant restrictions over the Group’s ability to access or use assets, and settle liabilities, of the Group.

Westpac Banking Corporation holds a cross guarantee on DGL Industries Pty Ltd in relation to the guarantees provided by Westpac Banking Corporation relating to 6 warehousing leases that the Group owns.

Note 7 Property, Plant and Equipment

Total land and buildings Total buildings Freehold land at: — independent valuation 2021 — at cost — independent valuation 2021 Buildings at: LAND AND BUILDINGS Accumulated depreciation — at cost Total land	31 December 2021 30 June 2021 $000 $000 50,256 17,746 26,674 13,513 Group
	76,930 31,259
	35,256 65,267 7,680 - (1,698) (1,158)
	41,238 64,109

	118,168 95,368

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 7: Property, Plant and Equipment (continued)

Plant under construction Motor Vehicles Total plant and equipment Accumulated depreciation Total property, plant and equipment Accumulated depreciation At cost At cost Accumulated depreciation Leasehold improvements Plant and equipment At cost PLANT AND EQUIPMENT Accumulated depreciation At cost	31 December 2021 30 June 2021 $000 $000 633 589 (51) (38) Group
	582 551
	56,590 43,968 (23,368) (18,731)
	33,222 25,237
	13,407 4,016 (1,653) (1,340)
	11,754 2,676
	14,309 9,391 (3) (2)
	14,306 9,389

	59,864 37,853
	178,032 133,221

The Group’s land and buildings were revalued at 30 June 2021 by independent valuers. At the date of this report, site works are being undertaken as required by an EPA Prevention Notice on the Tomago site and the prospective purchaser is occupying the site with an option to purchase once the Prevention Notice is lifted.

(a) Movements in Carrying Amounts

Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current reporting period.

Movement in foreign currency Additions Acquisitions through business combinations Transfer (to)/from Right-of-use assets Balance at 1 July 2020 Additions Disposals Reclassification Movement in foreign currency Revaluation increments / (decrements) Depreciation expense Depreciation expense Expensed Balance at 31 December 2021 Acquisitions through business combinations(ii) Balance at 1 July 2021 Group Balance at 30 June 2021 Disposals Reclassification(i)	Land Buildings Leasehold Improvement Plant and Equipment Motor Vehicles Plant under construction Total $000 $000 $000 $000 $000 $000 $000 24,133 41,308 276 20,408 471 8,918 95,514 34 5,371 31 3,567 1,276 749 11,028 - 5 - (104) (70) - (169) - - - 3,928 281 - 4,209 - - - (93) 1,053 - 960 - - 263 - - (263) - 7,092 17,969 - (289) (67) - 24,705 - (399) (19) (2,171) (266) (1) (2,856) - (145) - (9) (2) (14) (170)
	31,259 64,109 551 25,237 2,676 9,389 133,221
	31,259 64,109 551 25,237 2,676 9,389 133,221 10,696 7,680 44 1,376 1,054 5,232 26,082 32,513 (32,495) - 60 - (70) 8 2,465 1,836 - 9,000 8,432 21,733 - - (41) (111) (152) - - (258) (258) (3) (531) (13) (2,351) (303) (1) (3,202) - 639 - (59) 6 14 600
	76,930 41,238 582 33,222 11,754 14,306 178,032

(i) The reclassification between Land and Buildings relates to the land element of the Group's New Zealand properties that were previously recorded under Buildings in the previous reporting period. Land is not depreciated by the Group.

(ii) Refer to Note 17: Business Combinations for further information.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 8 Intangible Assets

Acquisitions through business combinations(i) Additions Accumulated amortisation and impairment losses Net carrying amount Year ended 30 June 2021 Accumulated amortisation and impairment losses Balance at the beginning of the year Total intangible assets Disposals Net carrying amount Goodwill Cost Cost Software Net carrying amount Cost Cost Accumulated impairment losses Net carrying amount Amortisation charge Hydroproc Process Net carrying amount Cost Amortisation charge Disposals Consolidated Group: Acquisitions through business combinations Registrations Accumulated amortisation and impairment losses Movement in foreign currency Closing value at 31 December 2021 Balance at the beginning of the year Six months ended 31 December 2021 Movement in foreign currency Additions Reallocations Accumulated amortisation and impairment losses Trademarks and licences	31 December 2021 30 June 2021 $000 $000 83,763 27,231 - (845) 83,763 26,386 354 345 (90) (80) 264 265 1,408 1,303 (719) (638) 689 665 2,217 2,217 (1,554) (1,554) 663 663 872 - - - 872 - 86,251 27,979 Goodwill Trademarks & Licences Software Hydroproc Process Registrations Total $000 $000 $000 $000 $000 $000 2,302 267 770 663 - 4,002 - 19 190 - - 209 - - (8) - - (8) 24,084 - - - - 24,084 - (21) (285) - - (306) - - (2) - - (2) Group
	26,386 265 665 663 - 27,979
	26,386 265 665 663 - 27,979 - - 90 - - 90 - - 57,969 9 20 - 280 58,278 (592) 41 - 592 41 - (10) (110) - - (120) (17) - (17)
	83,763 264 689 663 872 86,251

Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense as per the statement of profit or loss.

(i) Refer to Note 17: Business Combinations for further information.

Goodwill impairment testing

The Board is not aware of any indicators of potential impairment, determining that no impairment is required to the carrying amount of goodwill at 31 December 2021.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 9 Right-of-use Assets and Lease Liabilities

The Group's lease portfolio includes buildings, plant and equipment. These leases have an average of 3.6 years as their lease term.

Options to extend or terminate

Options to extend or terminate are contained in several of the property leases of the Group. There were no extension options for equipment leases. These clauses provide the Group opportunities to manage leases in order to align with its strategies. All of the extension or termination options are only exercisable by the Group. The extension options or termination options which were probable to be exercised have been included in the calculation of the right-of-use asset.

(i) AASB 16 related amounts recognised in the balance sheet

Right-of-use assets Leased building Accumulated depreciation Total right-of-use asset Lease liabilities Current Lease liabilities Non-Current Lease liabilities Total lease liabilities Movements in carrying amounts Leased buildings: Opening net carrying amount Addition to right-of-use asset Acquisitions through business combinations(i) Depreciation expense Movement in foreign exchange Net carrying amount (ii) AASB 16 related amounts recognised in the statement of profit or loss Depreciation charge related to right-of-use assets Interest expense on lease liabilities (i)Refer to Note 17: Business Combinations for further information. Total cash outflows for leases	31 December 2021 30 June 2021 $000 $000 52,055 36,191 (17,211) (13,472)
	34,844 22,719

	34,844 22,719
	31 December 2021 30 June 2021 $000 $000 8,704 7,105 27,246 16,754
	35,950 23,859
	22,719 25,166 10,448 4,450 5,655 - (3,937) (6,894) (41) (3)
	34,844 22,719
	31 December 2021 31 December 2020 $000 $000 3,937 2,944 350 243 31 December 2021 31 December 2020 $000 $000 4,244 3,500

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 10 Trade and Other Payables

CURRENT Unsecured liabilities Sundry payables and accrued expenses Trade payables Secured liabilities Trade payables	31 December 2021 30 June 2021 $000 $000 23,549 12,692 14,586 4,447 12,386 - Group
	50,521 17,139

DGL has a secured trade finance facility in place. The drawn down facility is classified as secured trade payables above. The facility involves providing security over the future cash flows of specific trade receivables and inventories, which meet certain criteria, in return for cash finance on a contracted percentage of the security provided.

(a) Financial liabilities at amortised cost classified as trade and other payables Trade and other payables — Total current — Total non-current Financial liabilities as trade and other payables	31 December 2021 30 June 2021 $000 $000 50,521 17,139 - - Group
	50,521 17,139

Note 11 Borrowings
Note 11a,b 11a,b 11a,b (a) Bank loans Secured liabilities at amortised cost: Bank loans Other loans Other loans Total current and non-current secured liabilities: Total borrowings Total non-current borrowings NON-CURRENT Secured liabilities at amortised cost: Bank loans CURRENT Total current borrowings	31 December 2021 30 June 2021 $000 $000 3,509 16,130 3,995 4,932 Group
	7,504 21,062

	7,504 21,062
	43,345 -
	43,345 -

	43,345 -
	50,849 21,062
	31 December 2021 30 June 2021 $000 $000 46,854 16,130 3,995 4,932 Group
	50,849 21,062

The bank loan carries an effective interest rate of 1.96% p.a.

In November 2021, the Group entered into a new secured term debt facility. This facility has been utilised to undertake business acquisitions, property acquisitions and developments, and to fund working capital requirements.

DGL is in full compliance with its debt facility financial covenants. All bank loans, including the trade finance facility, are secured by a charge over the assets of DGL.

(b) Collateral provided of the Group

ANZ Bank Limited has a charge over all assets of the Group.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 12 Issued Capital

Note 12 Issued Capital
		Group
		31 December	30	June 2021
		2021
		$000		$000
278,090,059 fully paid ordinary shares (30 June 2021: 257,000,000 fully paid ordinary shares)		246,431		192,249
		246,431		192,249
The Group has authorised share capital amounting to 278,090,059 ordinary shares.
		Group
Ordinary Shares	31 December 2021			30 June	2021
	No.	$'000		No.	$'000
At the beginning of the reporting period	257,000,000	192,249	52,037,860		130,615
Shares issued during the reporting period	21,090,059	54,259	109,800,000		109,800
Less: capital raising costs	-	(77)		-	(4,111)
Share split during the reporting period	-	-	95,162,140		-
Capital reduction as per Section 258F of Corporations Act 2001	-	-		-	(44,055)
At the end of the reporting period	278,090,059	246,431	257,000,000		192,249

On 1 September 2021, 1,366,906 fully paid ordinary shares were issued at $2.30 per share. The share issuance was to settle the share acquisition of Opal Australasia Pty Ltd. No cash was raised.

On 1 October 2021, 909,090 fully paid ordinary shares were issued at $1.34 per share. The share issuance was to settle the acquisition of the business and assets of AA Hitech Printers Pty Ltd. No cash was raised.

On 1 October 2021, 1,428,571 fully paid ordinary shares were issued at $2.84 per share. The share issuance was to settle the acquisition of the business and assets of Aquapac Pty Ltd. No cash was raised.

On 1 October 2021, 164,688 fully paid ordinary shares were issued at $1.80 per share. The share issuance was to settle a sign on bonus and employee bonus for staff of the Company. No cash was raised.

On 1 November 2021, 3,928,571 fully paid ordinary shares were issued at $2.93 per share. The share issuance was to settle the acquisition of the business and assets of Profill Industries Pty Ltd. No cash was raised.

On 1 November 2021, 4,539,470 fully paid ordinary shares were issued at $2.93 per share. The share issuance was to settle the acquisition of the business and assets of Ausblue Group Pty Ltd. No cash was raised.

On 29 November 2021, 506,912 fully paid ordinary shares were issued at $2.38 per share. The share issuance was to settle the acquisition of the business and assets of Shackell Transport Pty Ltd. No cash was raised.

On 1 December 2021, 5,306,122 fully paid ordinary shares were issued at $2.35 per share. The share issuance was to settle the share acquisition of Austech Chemicals Australasia Pty Ltd. No cash was raised.

On 3 December 2021, 2,939,729 fully paid ordinary shares were issued at $2.40 per share. The share issuance was to settle the loan of Simon Henry post shareholders approval. No cash was raised.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 13 Operating Segments

General Information

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Group is managed primarily on the basis of product category and service offerings as the diversification of the Group's operations inherently have notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

the products sold and/or services provided by the segment; and
the type or class of customer for the products or service.

Types of products and services by segment

(i) Environmental Solutions

The Group's Environmental Solutions segment is focused on resource recovery and waste management. Its core activities comprise liquid waste treatment, end-of-life lead acid battery ("ULAB") recycling and lead smelting and refining.

ULAB recycling is undertaken at two EPA licensed recycling facilities located in New South Wales and Victoria. The division relies on an established and mature collection network of suppliers located throughout Australia. ULABs are recycled in state-of-the-art recycling facilities which are highly automated. The primary outputs from the ULAB recycling process are lead products, scrap plastic and waste.

The segment operates a waste water treatment plant at its New South Wales ULAB recycling plant to process liquid waste generated from its own plant and from external customers.

The segment's lead smelter in Laverton North, Victoria has lead smelting and refining capabilities. This is to allow the conversion of intermediate lead material into valuable end products, which are sold to a wider global market.

(ii) Chemical Manufacturing

The Group's Chemical Manufacturing segment produces its own range of speciality chemicals and undertaken advanced formulation and contract manufacturing on behalf of third parties. The Company believes the segment provides a versatile, end to end solution for its customers.

Operations are focused on deriving chemicals from complex reactions in controlled environments. Using internally developed intellectual property, the division manufactures trademark brands including the Hardman water treatment range, Alset and AdBlue.

(iii) Warehousing and Distribution

The Group's Warehousing and Distribution segment offers transport, logistics and warehousing services focusing on dangerous and hazardous goods across Australia and New Zealand. The segment also manages logistics and distribution for other goods including food, pharmaceutical products, agricultural products, security sensitive goods and temperature-controlled products.

Key components of the services provided by the Warehousing and Distribution segment include freight forwarding, inventory management, warehousing, and transport.

(iv) Corporate costs The Group's Corporate Costs segment represents costs incurred by the Group not allocated to the operating segments. This classification was created as of 1 July 2021. Prior year comparatives have not been reclassified.

Basis of accounting for purposes of reporting by operating segments

(a) Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to operating segments, are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

(b) Intersegment transactions

An internally determined transfer price is set for all intersegment sales. This price is reset biannually and is based on what would be realised in the event the sale was made to an external party at arm’s length. All such transactions are eliminated on consolidation of the Group's financial statements.

Intersegment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If intersegment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial statements.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 13: Operating Segments (continued)

(c) Segment assets

Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the economic value from the asset. In most instances, segment assets are clearly identifiable on the basis of their nature and physical location.

(d) Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

(e) Segment information

(i) Segment performance

Segment performance
Six months ending 31 December 2021	Environmental Solutions Chemical Manufacturing Warehousing and Distribution Corporate Costs Total $000 $000 $000 $000 $000
REVENUE External customers 45,495 75,010 22,496 39 143,040 Inter-company revenue 1,167 1,686 3,470 49 6,372 Intersegment elimination (6,372) Total segment revenue 46,662 76,696 25,966 88 143,040 Depreciation and amortisation (1,348) (2,366) (4,485) (95) Segment result from continuing operations before tax 7,337 8,620 1,567 (4,867) 12,657 Reconciliation of segment result to group net profit/loss before tax Intersegment elimination (113) Net profit before tax from continuing operations 12,544 Environmental Solutions Chemical Manufacturing Warehousing and Distribution Total Six months ending 31 December 2020 $000 $000 $000 $000	45,495 75,010 22,496 39 143,040 1,167 1,686 3,470 49 6,372 (6,372)
	46,662 76,696 25,966 88 143,040
	(1,348) (2,366) (4,485) (95) 7,337 8,620 1,567 (4,867) 12,657
		Environmental Solutions Chemical Manufacturing Warehousing and Distribution $000 $000 $000	(113)
			12,544
			Total $000
REVENUE External customers Inter-company revenue Intersegment elimination Total segment revenue Depreciation and amortisation Reconciliation of segment result to group net profit/loss before tax Intersegment elimination Net profit before tax from continuing operations Segment assets Environmental Solutions 31 December 2021 $000 Segment result from continuing operations before tax		27,178 5,963 17,521 1,020 54 1,595	50,662 2,669 (2,669)
		28,198 6,017 19,116	50,662
		(595) (591) (4,048) 1,910 588 1,700 4,198 (9) 4,189 Chemical Manufacturing Warehousing and Distribution Corporate Costs Total $000 $000 $000 $000
		Chemical Manufacturing Warehousing and Distribution Corporate Costs $000 $000 $000
			4,189
			Total $000
Segment assets 56,767 Segment assets include: - 772 Reconciliation of segment assets to group assets Intersegment eliminations Unallocated assets: — Goodwill on consolidation Total group assets Additions to non-current assets (other than financial assets and deferred tax)		160,399 94,571 199,069 72,783 15,727 17,719	510,806 107,001 (144,474) 50,300
			416,632

(ii) Segment assets

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 13: Operating Segments (continued)

(iii)	Environmental Solutions Chemical Manufacturing Warehousing and Distribution 30 June 2021 $000 $000 $000	Total $000
	Segment assets 211,688 50,638 92,586 Segment assets include: - 1,914 1,425 7,748 Reconciliation of segment assets to group assets Intersegment eliminations Unallocated assets: — Goodwill on consolidation Total group assets Segment liabilities Environmental Solutions Chemical Manufacturing Warehousing and Distribution Corporate Costs 31 December 2021 $000 $000 $000 $000 Additions to non-current assets (other than financial assets and deferred tax)	354,912 11,087 (101,285) 23,911
		277,538
		Total $000
	Segment liabilities 22,523 62,004 37,165 50,846 Reconciliation of segment liabilities to group liabilities Intersegment eliminations Total group liabilities Environmental Solutions Chemical Manufacturing Warehousing and Distribution 30 June 2021 $000 $000 $000	172,538 (14,461)
		158,077
		Total $000
	Segment liabilities 36,277 24,646 26,861 Reconciliation of segment liabilities to group liabilities Intersegment eliminations Total group liabilities	87,784 (5,517)
		82,267

(iv) Revenue by geographical region

Revenue, including revenue from discontinued operations, attributable to external customers is disclosed below, based on the location of the external customer:

	31 December 2021 31 December 2020 $000 $000
Australia New Zealand Total revenue	135,249 43,737 7,791 6,925
	143,040 50,662

(v) Assets by geographical region

The location of segment assets by geographical location of the assets is disclosed below:

Assets by geographical region The location of segment assets by geographical location of the assets is disclosed below:
	31 December 2021 30 June 2021 $000 $000
Australia New Zealand Total Assets	445,433 296,229 65,373 58,683
	510,806 354,912

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 14 Events After the Reporting Period

Other than the following, the directors are not aware of any significant events since the end of the reporting period.

On 7 February 2022, the Company announced it had acquired an industrial property located at 57 Ashover Road, Rocklea, Queensland for a total consideration of $11 million.

On 17 February 2022, the Company announced it was acquiring the land and buildings at 7 and 7a Silicon Place, Tullamarine, Australia for $2,400,000 cash.

Note 15 Related Party Transactions

Related Parties

(a) The Group's main related parties are as follows:

i. Key Management Personnel:

Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel.

ii. Other Related Parties

Other related parties include entities controlled by the ultimate parent entity and ultimate controlling party and entities over which key management personnel have joint control.

(b) Transactions with related parties:

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following transactions occurred with related parties:

i. ii. iii. End of the reporting period *Loans from Simon Henry* Loans advanced Loan converted to shares (See Note 12) *Loans from Simon Henry and his controlled entities* *Transactions with Simon Henry and his controlled entities* Interest charged End of the reporting period Administration revenue charged to Simon Henry and his controlled entities Loan repayment made Foreign exchange movement Beginning of the reporting period Loans advanced Loan repayment made Loan forgiven Beginning of the reporting period Rental and related expenses charged by Simon Henry and his controlled entities	31 December 2021 30 June 2021 $000 $000 - 64,089 - 3,405 - (27,138) - (40,104) - (252) Group
	- -
	8,481 4,646 - 3,543 (1,498) (88) (7,055) - 72 380
	- 8,481
	144 - 89 -

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 16 Reserves

a. Foreign Currency Translation Reserve

The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.

Balance at the beginning of the period Foreign currency movements during the reporting period Asset Revaluation Reserve The asset revaluation reserve records revaluations of land and buildings. Balance at the beginning of the period Asset revaluation movement during the reporting period	31 December 2021 30 June 2021 $000 $000 (45) 307 493 (352) Group
	448 (45)
	31 December 2021 30 June 2021 $000 $000 22,477 933 - 21,544 Group
	22,477 22,477

b. Asset Revaluation Reserve

c. Cash Flow Hedge Reserve

The asset revaluation reserve records revaluations of hedging instruments

Balance at the beginning of the period Asset revaluation movement during the reporting period	31 December 2021 30 June 2021 $000 $000 66 - 63 66 Group
	129 66

d. Merger Acquisition Reserve

When the Company acquired DGL Manufacturing Pty Ltd, DGL Warehousing & Distribution Pty Ltd, DGL (NZ) Limited, DGL Manufacturing Limited and DGL Warehousing NZ Limited, the transactions were assessed as a transaction involving entities under common control.

In accordance with the accounting policy adopted, all assets and liabilities will be recorded at their book value at the date of acquisition. The remaining difference between the fair value of the consideration paid and the book value of the net assets acquired is allocated to equity.

Balance at the beginning of the period Total Reserves Foreign Currency Translation Reserve Asset Revaluation Reserve Cash Flow Hedge Reserve Merger Acquisition Reserve	31 December 2021 30 June 2021 $000 $000 (54,230) (54,230) Group
	(54,230) (54,230)
	31 December 2021 30 June 2021 $000 $000 448 (45) 22,477 22,477 129 66 (54,230) (54,230) Group
	(31,176) (31,732)

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 17 Business Combinations

Finalisation of acquisition of DGL Manufacturing Australia Pty Ltd (formerly known as Chem Pack Pty Ltd)

At 30 June 2021, provisionally determined values were reported. Subsequent to 30 June 2021, the final fair values for the business combination were determined. The final fair value of the identifiable assets and liabilities as at the date of acquisition were:

Assets Cash and cash equivalents Receivables Inventories Other current assets Property, plant and equipment Deferred tax assets Right-of-use assets Intangible assets Liabilities Trade and other payables Borrowings Current tax liabilities Deferred tax liabilities Provisions Total identifiable net assets at fair value Goodwill arising on acquisition	Provisional Fair Value at 30 June 2021 Adjustments to Provisional Fair Value Final Fair Value $'000 $'000 $'000 2,090 - 2,090 12,536 - 12,536 6,233 - 6,233 180 - 180 4,474 - 4,474 461 - 461 4,970 - 4,970 174 592 766
	31,118 592 31,710
	Provisional Fair Value at 30 June 2021 Adjustments to Provisional Fair Value Final Fair Value $'000 $'000 $'000 8,846 - 8,846 5,407 - 5,407 517 - 517 526 - 526 1,298 - 1,298
	16,594 - 16,594

	14,524 592 15,116
	23,911 (592) 23,319

Summary of Business Combinations during the reporting period

During the financial reporting period, the Group acquired 100% of the share capital of two companies as well as the business and assets of a further five companies.

Purchase consideration - Cash - Contingent consideration - Ordinary Shares Settled via cash and shares post year end Less: - Cash and cash equivalents - Receivables - Inventories - Other current assets - Prepayments - Consumables - Other assets - Bond deposit - Right-of-use assets (see note 9) - Property, plant and equipment (see note 7) - Deferred tax assets - Intangible assets (see note 8) - Trade and other payables - Provisions - Deferred tax liabilities - Income in advance - Lease liability Identifiable assets acquired and liabilities assumed Goodwill/(bargain purchase) provisionally accounted for	Fair Value $'000 42,806 500 46,906 2,977
	93,189
	2,082 3,563 9,102 273 1,236 363 504 224 5,655 21,733 141 309 (1,358) (2,771) (102) (7) (5,655)
	35,292

	57,897

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 17: Business Combinations (continued)

(a) Acquisition of Opal Australasia Pty Ltd

On 1 September 2021, the Company acquired 100% of Opal Australasia Pty Ltd. Opal is a well-regarded independent chemical manufacturer operating in Western Australia.

The total acquisition price was $11,409,886, of which $8,266,002 was settled with cash and $3,143,884 settled via shares.

Purchase consideration - Cash - Ordinary Shares(i) Less: - Cash and cash equivalents - Receivables(ii) - Inventories - Other current assets - Property, plant and equipment - Deferred tax assets - Intangible assets - Trade and other payables - Provisions Identifiable assets acquired and liabilities assumed Goodwill(iii) provisionally accounted for	Fair Value $'000 8,266 3,144
	11,410
	1,548 40 167 90 5,289 80 280 (206) (208)
	7,080

	4,330

(i) The consideration paid to acquire Opal Australasia Pty Ltd includes 1,366,906 fully paid ordinary shares issued in the Group. The fair value of the shares in the Group has been determined based on the current market price of the shares at the date of acquisition.

At 31 December 2021, there were no outstanding amounts to the vendors of Opal Australasia Pty Ltd.

(ii) The directors believe the receivables are fully recoverable and no provision for impairment is required.

(iii) The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the Group's acquisition of Opal Australasia Pty Ltd.

No amount of goodwill is deductible for tax purposes.

(b) Acquisition of Austech

On 1 December 2021, the Company acquired 100% of Austech Chemicals Australasia Pty Ltd. Austech supplies an extensive range of nonoil automotive chemicals and the company also offers toll blending and chemical manufacturing services to industrial, agricultural, water treatment chemical customers.

The total acquisition price was $28,272,837, of which $13,000,000 has already been settled with cash and $12,469,387 settled via shares. The remaining $2,803,450 is to be settled via cash and shares once all completion adjustments have been finalised as noted in the Austech share purchase agreement. The final settlement is expected to be paid prior to 30 June 2022.

Purchase consideration - Cash - Ordinary Shares(i) Settled via cash and shares post year end Less: - Cash and cash equivalents - Receivables(ii) - Inventories - Other current assets - Property, plant and equipment - Deferred tax assets - Right-of-use assets - Lease liability - Trade and other payables - Provisions - Deferred tax liabilities Identifiable assets acquired and liabilities assumed Goodwill(iv) provisionally accounted for	Fair Value $'000 13,000 12,469 2,803
	28,272
	534 3,523 2,509 183 1,730 61 5,655 (5,655) (1,149) (896) (101)
	6,394

	21,878

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 17: Business Combinations (continued)

(i) The consideration paid to acquire Austech Chemicals Pty Ltd includes 5,306,122 fully paid ordinary shares issued in the Group on 1 December 2021 and a further 511,190 fully paid paid ordinary shares issued in the Group on 9 February 2022.
(ii) As at 31 December 2021, there was $2,803,450 that remains payable to the vendors of Austech Chemicals Australasia Pty Ltd, as noted above.
(iii) The directors believe the receivables are fully recoverable and no provision for impairment is required.
(iv) The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the Group's acquisition of Austech Chemicals Australasia Pty Ltd.

No amount of goodwill is deductible for tax purposes.

(c) Acquisition of business and assets from AA Hitech Printers Pty Ltd

On 1 July 2021, DGL Manufacturing Australia Pty Ltd acquired the business and assets of AA Hitech Printers Pty Ltd (Labels Connect). Labels Connect has a history in label production and with its acquisition, the Group has acquired an assembled workforce which have a deep understanding of label production, from procurement, licenses, design, customer requirements and production.

The total acquisition price was $1,765,213, of which $547,032 was settled with cash and $1,218,181 settled via shares.

Purchase consideration - Cash - Ordinary Shares(i) Less: Assets Inventories Prepayments Property, plant and equipment Intangible assets Right-of-use assets Liabilities Provisions Goodwill(ii) provisionally accounted for	Fair Value $'000 547 1,218
	1,765
	10 8 120 20 55
	213
	(15)
	(70)

	1,622

(i) The consideration paid to acquire the business and assets of AA Hitech Printers Pty Ltd includes 909,090 fully paid ordinary shares issued in the Group. The fair value of the shares in the Group has been determined based on the current market price of the shares at the date of acquisition.

(ii) The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the Group's acquisition of the business and assets of AA Hitech Printers Pty Ltd.

No amount of goodwill is deductible for tax purposes.

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 17: Business Combinations (continued)

(d) Acquisition of business and assets from Aquapac Pty Ltd

On 1 October 2021, DGL Manufacturing Pty Limited acquired the business and assets of Aquapac Pty Ltd (Aquapac). Aquapac manufactures and supplies a wide range of quality chemicals to bother International and Australian markets, with specific focus on water treatment chemicals to industry and local government across Australia. Aquapac has manufacturing facilities in both Queensland and New South Wales and offers a full chemical blending and packing service for many of its clients, they also manufacture a wide range of products to customer specifications.

The total acquisition price was $7,935,920, of which $3,878,778 was settled with cash and $4,057,142 settled via shares.

Purchase consideration - Cash - Ordinary Shares(i) Less: Assets Inventories Prepayments Property, plant and equipment Liabilities Payables Provisions Goodwill(ii) provisionally accounted for	Fair Value $'000 3,879 4,057
	7,936
	1,416 11 910
	2,337
	(3) (164)
	(167)

	5,766

(i) The consideration paid to acquire the business and assets of Aquapac Pty Ltd includes 1,425,571 fully paid ordinary shares issued in the Group. The fair value of the shares in the Group has been determined based on the current market price of the shares at the date of acquisition.

No amount of goodwill is deductible for tax purposes.

(e) Acquisition of business and assets from Ausblue Group Pty Ltd, Ausblue Pty Ltd and AdBlue Transport Pty Ltd (Ausblue)

On 1 October 2021, DGL Ausblue Pty Ltd acquired the business and assets of Ausblue Group Pty Ltd, Ausblue Pty Ltd and AdBlue Transport Pty Ltd, collectively known as Ausblue. Ausblue is the market leader in AdBlue distribution in Australia and is currently expanding into the coolant market.

The total acquisition price was $19,956,080, of which $6,655,433 was settled with cash and $13,300,647 settled via shares.

Purchase consideration - Cash - Ordinary Shares(i) Less: Assets Inventories Consumables Prepayments Bond deposits Other assets Property, plant and equipment Intangible assets Liabilities Income in advance Provisions Goodwill(ii) provisionally accounted for	Fair Value $'000 6,655 13,301
	19,956
	3,106 363 1,217 224 135 3,331 10
	8,386
	(7) (610)
	(617)

	12,187

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Note 17: Business Combinations (continued)

(i) The consideration paid to acquire the business and assets of Profill Industries Pty Ltd includes 4,539,470 fully paid ordinary shares issued in the Group. The fair value of the shares in the Group has been determined based on the current market price of the shares at the date of acquisition.
(ii) The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the Group's acquisition of the business and assets of Ausblue Group Pty Ltd, Ausblue Pty Ltd and AdBlue Transport Pty Ltd.

No amount of goodwill is deductible for tax purposes.

(f) Acquisition of business and assets from Profill Industries Pty Ltd

On 1 November 2021, DGL Manufacturing Australia Pty Ltd (formerly known as Chem Pack Pty Ltd) acquired the business and assets of Profill Industries Pty Ltd (Profill). Profill deals in chemical manufacturing with specific focus on contract manufacturing, blending and packing of home & garden, fertiliser, agricultural and industrial chemicals to both International and Australian markets.

The total acquisition price was $14,616,530, of which $2,605,817 was settled with cash and $11,510,713 settled via shares. $500,000 is still owing as deferred consideration to be paid as cash and based on certain conditions as stipulated in the agreement.

Purchase consideration - Cash - Contingent consideration - Ordinary Shares(i) Less: Assets Inventories Property, plant and equipment Liabilities Provisions Goodwill(ii) provisionally accounted for	Fair Value $'000 2,606 500 11,511
	14,617
	1,411 1,408
	2,819
	(385)
	(385)
	12,183

(i) The consideration paid to acquire the business and assets of Profill Industries Pty Ltd includes 3,928,571 fully paid ordinary shares issued in the Group. The fair value of the shares in the Group has been determined based on the current market price of the shares at the date of acquisition.
(ii) The goodwill is attributable to the high profitability of the acquired business and the significant synergies expected to arise after the Group's acquisition of the business and assets of Profill Industries Pty Ltd.

No amount of goodwill is deductible for tax purposes.

(g) Acquisition of business and assets from Shackell

On 1 November 2021, DGL Warehousing and Distribution Pty Ltd acquired the business and assets of Shackell Transport Pty Ltd (Shackell). Shackell operates a fleet of 28 Kenworth & Volvo prime movers, 22 bulk liquid tankers and 31 trailers.

The total acquisition price was $9,233,196, of which $8,026,745 was settled with cash and $1,206,451 settled via shares. The remaining $173,598 is to be settled via cash once all completion adjustments have been finalised as noted in the Shackell Business Asset Sale Agreement. The final settlement is expected to be paid prior to 30 June 2022.

Purchase consideration - Cash - Ordinary Shares(i) Settled via cash and shares post year end Less: Assets Inventories Other assets Property, plant and equipment Liabilities Provisions Bargain Purchase provisionally accounted for	Fair Value $'000 7,853 1,206 174
	9,233
	483 369 8,943
	9,795
	(493)
	(493)
	(69)

(i) The consideration paid to acquire the business and assets of Shackell Transport Pty Ltd includes 506,912 fully paid ordinary shares issued in the Group. The fair value of the shares in the Group has been determined based on the current market price of the shares at the date of acquisition.
(ii) At 31 December 2021, $173,598 remains payable to the vendors of Shackell Transport Pty Ltd, as noted above.

DGL GROUP LIMITED AND CONSOLIDATED ENTITIES ABN: 71 002 802 646 DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of DGL Group Limited, the directors of the company declare that:

the financial statements and notes, as set out on pages 4 to 26, are in accordance with the Corporations Act 2001 and:
(a) comply with the Corporations Act 2001, Accounting Standard (AASB) 134 "Interim Financial Reporting", the Corporations Regulations 2001 and other mandatory professional reporting requirements.
(b) give a true and fair view of the Group's financial position as at 31 December 2021 and of its performance for the half-year ended on that date;
in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and

Signed in accordance with a resolution of Directors made pursuant to section 303(5)(a) of the Corporations Act 2001.

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Director Mr Peter Lowe

Dated this 24 February 2022

CORPORATE DIRECTORY

Directors Peter Lowe Chairman and Non-Executive Director Simon Henry Founder, Executive Director and Chief Executive Officer Denise Brotherton Non-Executive Director Robert McKinnon Non-Executive Director Robert Sushames Executive Director, General Manager - DGL Manufacturing Australia Pty Ltd Company Secretary Andrew Draffin Registered Office DGL Group Limited Level 4, 91 William Street Melbourne Vic 3000 Principal Place of Business DGL Group Head Office Level 4, 91 William Street Melbourne Vic 3000 DGL Warehousing and Distribution DGL Environmental Solutions DGL Chemical Manufacturing 739 Progress Road 201 Five Islands Road 120 Fulton Drive Wacol, QLD 4076 Unanderra NSW 2526 Derrimut VIC 3026 Brisbane, Australia Wollongong, Australia Melbourne, Australia Share Registry Link Market Services Limited Level 12, 680 George Street Sydney, NSW 2000 Auditor

PKF Melbourne Audit & Assurance Pty Ltd Level 12, 440 Collins Street Melbourne Vic 3000

Stock Exchange Listing

Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Limited and NZX Limited.

Website

Http://www.dglgroup.com/

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF DGL GROUP LIMITED

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of DGL Group Limited (the Company) and its subsidiaries (collectively, the Group), which comprises the consolidated statement of financial position as at 31 December 2021, and the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of DGL Group Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated financial position of the Group as at 31 December 2021, and of its consolidated financial performance for the half-year ended on that date; and
(b) complying with the Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . In accordance with the Corporations Act 2001 , we have given the directors’ of the Group a written Auditor’s Independence Declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors’ of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Regulations 2001 and for such internal control as the directors determine is necessary to enable the preparation of the halfyear financial report that is free from material misstatement, whether due to fraud or error.

PKF Melbourne Audit & Assurance Pty Ltd ABN 75 600 749 184 Level 12, 440 Collins Street, Melbourne, Victoria 3000

T: +61 3 9679 2222 F: +61 3 9679 2288 www.pkf.com.au Liability limited by a scheme approved under Professional Standards Legislation PKF Melbourne Audit & Assurance Pty Ltd is a member firm of the PKF International Limited family of separately owned firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

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Auditor’s Responsibility for the Review of the Half-Year Financial Report

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2021 and its performance for the half year ended on that date, and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of DGL Group Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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PKF Melbourne, 24 February 2022

==> picture [122 x 56] intentionally omitted <==

Kenneth Weldin Partner

PKF Melbourne Audit & Assurance Pty Ltd ABN 75 600 749 184 Level 12, 440 Collins Street, Melbourne, Victoria 3000 T: +61 3 9679 2222 F: +61 3 9679 2288 www.pkf.com.au Liability limited by a scheme approved under Professional Standards Legislation PKF Melbourne Audit & Assurance Pty Ltd is a member firm of the PKF International Limited family of separately owned firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.

AI assistant

DGL GROUP LIMITED — Interim / Quarterly Report 2022

64770_rns_2022-02-24_372c6c2d-0369-4656-bd57-73891f42c682.pdf

ASX RELEASE

DGL reports strong first half FY22 result and highlights growth

Group Revenue and EBITDA

Manufacturing

Warehousing and Distribution

Environmental

Balance Sheet and Cash

Trading Outlook

Live Webcast

Approved for release by the Board of DGL.

CONTACT

MEDIA ENQUIRIES

ABOUT DGL GROUP LIMITED

6. Audit qualification or review

DGL GROUP LIMITED AND CONTROLLED ENTITIES

DGL GROUP LIMITED AND CONTROLLED ENTITIES

ABN: 71 002 802 646

Financial Report For The Half-Year Ended 31 December 2021

DGL GROUP LIMITED AND CONTROLLED ENTITIES DIRECTORS' REPORT

Directors

Principal Activities and Significant Changes in Nature of Activities

(a) Manufacturing of specialised chemicals in Australia and New Zealand

(b) Logistics and storage of dangerous goods and specialised chemicals

Dividends Paid or Declared

DGL GROUP LIMITED AND CONTROLLED ENTITIES DIRECTORS' REPORT

Review of Operations

Matters Subsequent to the End of the Half-Year

Likely Developments and Expected Results of Operations

Auditor's Independence Declaration

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF DGL GROUP LIMITED

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021

DGL GROUP LIMITED AND CONTROLLED ENTITIES ABN: 71 002 802 646 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

DGL GROUP AND CONTROLLED ENTITIES ABN: 71 002 802 646 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

Basis of Preparation

Amendments to Accounting Standards and new Interpretations that are mandatory, effective from the current reporting period

New Accounting Standards and Interpretations published but not yet adopted

Critical Accounting Estimates and Judgements

Key Estimates and Judgements

Performance obligations under AASB 15

Lease term and option to extend under AASB 16

Impairment

Useful lives of depreciable assets

Long service leave

Note 1: Summary of Significant Accounting Policies (continued)

Income tax

Recovery of deferred tax assets

Note 2

Revenue and Other Income

Note 3 Dividends

Note 4 Earnings per Share

Note 6 Interests in Subsidiaries

(a) Information about Principal Subsidiaries

(b) Significant Restrictions

Note 7 Property, Plant and Equipment

Note 7: Property, Plant and Equipment (continued)

(a) Movements in Carrying Amounts

Note 8 Intangible Assets

Goodwill impairment testing

Note 9 Right-of-use Assets and Lease Liabilities

Options to extend or terminate

(i) AASB 16 related amounts recognised in the balance sheet

Note 10 Trade and Other Payables

(b) Collateral provided of the Group

Note 12 Issued Capital

Note 13 Operating Segments

General Information

Identification of reportable segments

Types of products and services by segment

Basis of accounting for purposes of reporting by operating segments

(a) Accounting policies adopted

(b) Intersegment transactions

Note 13: Operating Segments (continued)

(c) Segment assets

(d) Segment liabilities

(e) Segment information

DGL GROUP LIMITED Interim / Quarterly Report 2022