Risk Mitigation
The Mega Group is aware of the risks associated with operating in the gold industry and has developed the necessary risk mitigation strategies to ensure long-term business sustainability.
The gold price fluctuates depending on investor sentiment. As the Mega Group’s core business revolves around buying, processing, and selling gold, we are exposed to volatility in global gold prices.
Our gold jewellery is mostly sold at a premium valuation due to its superior craftmanship, minimising the impact of fluctuating prices. In any event, sudden rises in the price of gold are passed on to the customer at the point of purchase, shielding the Mega Group from signifificant financial losses.
Most transactions involving gold and other precious metals are conducted in US dollars. If the US dollar appreciates against the Malaysian ringgit, the Malaysia based Mega Group must pay more for the purchase of raw materials.
We make full use of existing fifinancial instruments to reduce the effect flfluctuating exchange rates have on costs.
The Mega Group’s reputation may be adversely affected by events such as data leaks, faulty products, or malicious rumours spread by ill intentioned individuals.
We have invested heavily in quality control and digital security, as well as engaging public relations professionals to polish our image and respond appropriately to contingencies.
Poor cash flflow due to insuffificient inflflows or excessive outflflows may be detrimental to business sustainability.
We maintain healthy cash flflows by minimising the risk of customer defaults. This is accomplished by assigning each customer a ‘credit score’ similar to that used by banks. If a customer’s ‘credit score’ is too low, they must pay upfront in cash / provide additional payment guarantees to buy on credit.
The sudden loss of key personnel due to resignation or death may jeopardise the Mega Group’s ability to continue operating.
Mr. Leong Chee Mun, the leader of the Mega Group, has been training the Group General Manager to eventually take over his role for the last few years. Core staff must also sign an employment contract stipulating a minimum term of service.
The Mega Group will experience heavy fifinancial losses if any of our valuable inventory (gold and gold jewellery) or machinery is lost, stolen, or damaged.
We have purchased high-risk commercial insurance to limit our fifinancial losses in the event assets are lost, stolen, or damaged. To safeguard our assets against criminals, we have invested in advanced security and surveillance equipment, in addition to maintaining a good relationship with local police who will not hesitate to dispatch help upon request.
The Mega Group may face legal action and even criminal prosecution in any of the jurisdictions we operate in if we fail to adapt our business practices to comply with new regulations / amendments to existing regulations.
It is compulsory for new employees to attend regulatory compliance workshops to understand which business practices are permitted and which are forbidden. We have also set up a compliance unit that is responsible for monitoring regulatory changes and adapting business practices in response.
Don’t be fearful of risks.
Understand them, and manage
and minimize them to an
acceptable level. “