A Beechcraft 200C Super King Air, VH-AMR, impacted the sea or a reef about 6 km north-east of Coffs Harbour Airport, NSW (CFS). The impact occurred immediately after the pilot initiated a go-around during an instrument approach to runway 21 in Instrument Meteorological Conditions (IMC) that included heavy rain and restricted visibility. Although the aircraft sustained structural damage and the left main gear detached, the aircraft remained airborne. During the initial go-around climb, the aircraft narrowly missed a breakwater and adjacent restaurant at the Coffs Harbour boat harbour. Shortly after, the pilot noticed that the primary attitude indicator had failed, requiring him to refer to the standby instrument to recover from an inadvertent turn. The pilot positioned the aircraft over the sea and held for about 30 minutes before returning to Coffs Harbour and landing the damaged aircraft on runway 21. This occurrence is a CFIT accident resulting from inadvertent descent below the MDA on the final segment of a non-precision approach, fortunately without the catastrophic consequences normally associated with such events. The investigation was unable to conclusively determine why the aircraft descended below the MDA while in IMC, or why the descent continued until CFIT could no longer be avoided.