TeleNav 2011 Annual Report Download - page 70

Table of Contents
rates. However, most of our contracts with our wireless carrier customers outside of the United States are denominated in currencies other than
the U.S. dollar and therefore expose us to foreign currency risk. Should the revenue generated outside of the United States grow in absolute
amounts and as a percentage of our revenue, we will increasingly be exposed to foreign currency exchange risks. In addition, a substantial
portion of our operating expenses are incurred outside the United States, are denominated in foreign currencies and are subject to changes in
foreign currency exchange rates, particularly the Chinese RMB. Additionally, changes in foreign currency exchange rates may cause us to
recognize transaction gains and losses in our statement of operations. An immediate 10% adverse change in exchange rates on foreign
denominated receivables as of June 30, 2010 and June 30, 2011 would not have resulted in a material loss.
To date, we have not used any foreign exchange forward contracts or similar instruments to attempt to mitigate our exposure to changes in
foreign currency rates.
The response to this item is submitted as a separate section of this Form 10-K. See Part IV, Item 15.
None
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our
disclosure controls and procedures as of June 30, 2011. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15
(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be
disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate
to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating
the cost-
benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30,
2011, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were
effective at the reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
The SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules requiring every company that files reports with the SEC to
include a management report on such company’s internal control over financial reporting in its annual report. In addition, our independent
registered public accounting firm must attest to the effectiveness of our internal control over financial reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable
assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS AND PROCEDURES