KPMG, the independent auditors of Lottvision, says the estimates of future cash flows generated from the company’s new web-TV business are “inherently uncertain” in an emphasis of matter report.

In the financial report for the year ended March 31, 2010, the group says it has goodwill and an exclusive technical support agreement with carrying amounts of HK$31,890,000 ($5.6 million) and HK$38,402,000 respectively at 31 March 2010 in respect of the web-TV business.

Following the spin-off of the identification of reading and writing device, mobile lottery and internet management businesses, web-TV business now forms the major operation of the Lottvision.

KPMG says the management has prepared cash flow projections and financial budgets in support of the carrying amounts of the goodwill and exclusive technical support agreement using assumptions based on their expectation of market development of this web-TV business.

“We note that estimates of future cash flows generated from such new business are inherently uncertain,” says KPMG.