1.1
Definition of "core business"
Pursuant to paragraph 1.01 of the Main LR, "core business" means the business which provides the principal source of operating revenue or after-tax profit to a corporation and which comprises the principal activities of the corporation and its subsidiary companies.
The principal activities of ABC Bhd are manufacturing and property development.
(i)
Scenario 1
Both principal activities of ABC Bhd generate the following operating revenue and after-tax profit for ABC Bhd:
Pursuant to the definition of "core business" in paragraph 1.01 of the Main LR, what is the core business of ABC Bhd?
As the operating revenue and after-tax profit of its property development business provide the higher quantitative contribution compared to the operating revenue and after-tax profit of its manufacturing business, the core business of ABC Bhd is property development.
How does ABC Bhd determine its core business if both its principal activities generate the following operating revenue and after-tax profit?
If the figures in relation to the quantitative aspect of the core business definition do not clearly show the core business of ABC Bhd (i.e where the operating revenue of its property development business is higher than that for its manufacturing business but its after-tax profit of its manufacturing business is higher than that for its property development business), ABC Bhd may take into account other relevant factors such as its corporate objectives and plans when determining its core business.