Heat the coconut in a dry wok, stirring continuously until golden brown. Set aside to cool.
Using a blender or a food processor, blend the shallots, garlic, chilies, ginger, and lemon grass to a thick paste.
Grind the coriander, fennel, cumin and nutmeg.
Using the wok, fry the shallot paste in a little oil for a few minutes. Add the ground coriander, fennel, cumin and nutmeg; cook for 3 to 4 minutes, stirring continuously. Add beef; cook over a medium heat for a further 3 to 4 minutes, or until meat is browned.
Stir in sugar, coconut, cloves, cinnamon stick, coconut milk , and water. Bring to a boil, lower heat, and simmer until most of the liquid has gone and the meat is tender (about 1 hour). Season with salt to taste.
