Place a medium saucepan on the stove over medium heat to warm up.
Add the rinsed rice along with coconut milk, water, salt, and sugar into the pan and stir everything together gently.
Increase the heat until the mixture comes to a gentle boil.
Once boiling, reduce the heat to the lowest setting and cover the pan with a tight-fitting lid.
Let it simmer gently for 15 to 18 minutes or until all the liquid has been absorbed and the rice is fully cooked.
Turn off the heat and keep the pan covered, allowing the rice to rest for 10 minutes.
Fluff the rice with a fork and sprinkle toasted coconut flakes on top if desired before serving warm.