Preheat oven to 180 degree C. Grease and flour two 8 inch round cake pan with butter and flour. Set aside.
Take butter in a bowl, add sugar, vanilla and mix till creamy.
Add eggs and mix till creamy.
Add in flour, baking powder, baking soda, salt and fold lightly.
Add coconut milk and fold gently.
Add in ¾ cup of coconut and fold gently.
Spoon it into the cake pans and bake it in a preheated oven for 40 to 45 mins.
Remove it and cool completely.
Make a batch of cream cheese frosting. Add some coconut extract to the frosting.
Now slice the cooled cakes in half middle.
Arrange it in a plate and frost with the frosting on each layer. Now cover the entire cake in frosting and press with coconut all over.
Chill the cake for few hours before slicing.