DKLS slapped with RM5m extra tax liabilities; warns of impact on FY17 earnings

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KUALA LUMPUR (Feb 9): The Inland Revenue Board of Malaysia (IRB) has imposed additional tax liabilities, inclusive penalties, amounting to RM5.04 million on management services provider DKLS Industries Bhd and three of its subsidiaries, after 'technical adjustments'.

The additional tax and penalties are for the years of assessment 2010 to 2016, and are expected to eat into the group's earnings and net assets for the financial year ended Dec 31, 2017 (FY17), DKLS said in a Bursa Malaysia filing today.

"The additional tax liabilities and penalties totalling RM5.04 million have been accounted for in the accounts and will be reflected in the financial statements of the Company and of the group for the financial year ended Dec 31, 2017," the filing said. 

The involved three subsidiaries are DKLS Construction Sdn Bhd, DKLS Development Sdn Bhd and DKLS Homebuilders Sdn Bhd. The three owe RM5 million in additional tax liabilities and penalties.

DKLS’ filing showed the three subsidiaries will pay a quarter of the tax payable to IRB before the end of March this year, with the remaining to be paid in six monthly instalments from April 30, 2018 onwards.

The tax liabilities and penalties DKLS itself have been slapped with amounted to RM41,300, which it will settle before Feb 9.

In the cumulative first nine months of FY17 (9MFY17), DKLS' net profit came to RM6.84 million, down 53% from RM14.47 million a year ago, as revenue fell 13% to RM157.51 million, from RM181.64 million in 9MFY16.

Through its subsidiaries, DKLS manufactures pre-cast concrete piles; provides building and general construction services, as well as quarrying; sells building materials and also develops property.

DKLS’ share price slipped one sen or 0.58% to close at RM1.71 today, giving it a market capitalisation of RM158.52 million.