Please only refer english worded sentence.

note: MFRS 9 = IFRS 9

Coco Lux Bhd, a company based in Shah Alam, Selangor, manufactures a specialized home security product. The majority of sales (by value) are to customers in Singapore (priced in Singapore Dollars) and there are also export sales to customers in Indonesia (priced in Rupiah) and Thailand (priced in Thailand Bhat). All costs are in Ringgit Malaysia (RM). The functional currency of Coco Lux Bhd is also in Ringgit Malaysia (RM). At present, Coco Lux Bhd does not have any formal hedging policy. Given a high volume of transactions in foreign currency, the management has discussed to carry out a hedging for foreign exchange risk. However, one of the directors is of the opinion that shareholders should have been aware of the foreign currency profile of the company when they invested in it and would expect to benefit from favourable exchange rate movements. Therefore the company should not carry out any foreign exchange hedging so that it can still benefit from favourable rate movements. Advise the management of Coco Lux Bhd on hedge accounting and its accounting requirements as prescribed under MFRS 9-Financial Instruments. (10 markah/marks)