Under pressure from NZX regulation Apple Fields Ltd released a late interim report today that raised doubt about its future.
Directors said they were of the opinion that the company was solvent but the accounts were not been prepared on a "going concern" basis.
Accounts are generally prepared on the assumption that a company is expected to continue in business. This is known as a going concern assumption.
Apple Fields boldly promoted the benefits of competition in the apple growing industry under chief executive Tom Kain but later focused on property development in the Canterbury region.
In the accounts released today the company has had to write down the value of sections at its Kingfisher Point, Takamatua development near Akaroa because of a dispute with funder St Laurence, which is also marketing the sections.
St Laurence made a demand on Apple Fields under its guarantee of debt to subsidiary Takamatua West Ltd and Apple Fields has made an application to set the demand aside.
Directors said today the sections would over time net a figure in excess of the written down value if marketed correctly.
The company's Noble development on the outskirts of Christchurch was also written down because of uncertainty about Apple Fields' position.
Since balance date Christchurch City Council had approved a plan to subdivide the Noble Gardens residential land into 254 sections. The plan envisages medium to high density housing in an affordable price band.
Earlier today NZX regulation said that if Apple Fields did not issue a report for the six months to March 31 by June 10 its shares will be suspended on June 11.
Late today Apple Fields reported a loss of $300,000 in the six months to March 31, compared to a profit of $636,000 last year. The company said it had repaid $2 million of debt and had positive cashflow of $777,000 in the period.
In the 2008 annual report the company was paying a default interest rate of 23 percent on a loan from St Laurence for its Takamatua development and a working capital loan from Southpac Property Holdings was extended until the end of 2009.
In the annual report the company was considered to be a going concern and it was stated that the directors had no intention of winding the group up.
