How does a coral reef environment follow the law of conservation of mass and the law of conservation of energy? it is said that only about 10% of stored energy is transferred between trophic levels of the ecosystem.

The law of conservation of mass and the law of conservation of energy dictates that the total mass and energy in a given system remain constant. If we consider a coral reef to be the system, we see that all of the nutrients that the coral absorb for growth and maintenance are used within the coral's body, and are never actually "lost". 
Moreover, the energy that is absorbed by the coral is passed to the next trophic level of organisms when they eat the coral, and the amount is 10%, as stated. However, this is not the only direction the energy travels. The energy also is used in growth and other processes within the coral's body, and is therefore conserved.

Very hard to understand