Heat a pan and add coconut and fry them to golden brown and keep it aside. In the same pan heat little oil now add rest of the ingredients under the section "-- Roast and to grind to thick paste---" and sauté (roast them). Cool this to room temperature and grind to thick fine paste by adding little water as possible.
In a pan heat little oil. Now add all the ingredients under section "-- Sautéed and grind to paste --" and sauté them. Now cool this down to room temperature and grind to a thick fine paste.
In a pan heat oil. add 1/2 teaspoon (tsp.) cumin seed and let it splatter. Now add the chopped 1 onion and sauté until they become translucent (golden brown). Now add tomato and sauté until they become mushy.
Now add the ground masala (coconut, shallot), salt.
Now add chopped mushroom, 1/2 cup of water. Cook this until the oil starts to separate.