1. JUNE1 HBJ CAPITAL VENTURES 2 LLP Annual Newsletter: HBJ Capital Ventures LLP To The Partners & Co-founders, HBJ Capital Ventures LLP, #912, 1F Main, Girinagar, BSK 3rd Stage, Bangalore 85, Karnataka, India Dear Partners, Markets has gained over 8% in June with most of the returns in the second half of the month. There has been a Global Risk rally on the back of Greece Election Results and the recent ECB easing on Bank Funding. This upside has been led by the Large Cap stocks as in most of the initial stage Market Rallies. But the sentiment overall has still not improved and the deep undervaluation of stocks can be seen from such rallies on even mildly positive news flow like Hope for Reforms under the new Finance Minister. There is no doubt in my mind that the Cynics, Fault-Finders and Pessimists are ruling the roost in the Markets. Sentiments are very bad and there are hardly any long-term Investors in the Market. How else would you justify the number of Government Bashers and Bears who come on TV Studios regularly? The only research analysts who are popular nowadays are from companies like Espirito Santo and Veritas who come out with highly negative stock reports. Leave aside reports on R-Com and DLF; they are even questioning the accounting practices of Blue-chips like Infosys, HDFC and Biocon. Only God knows where these people were during the boom period where most of the companies had stodgy Corporate Governance issues and almost all the analysts were giving BUY calls on these companies. So, is the situation that bad from Markets Perspective ? It's said that Human Thinking's are inter-connected much more than we think. Behavior Psychologists have argued that Herd Mentality takes over rational decision making even with the most Intelligent People. We feel negativity has taken such Herd Mentality and People have become blind towards the positive developments which are taking place.#912, 1F Main, Girinagar 2nd Phase, BSK 3rd Stage, BLR - 85Page 1

2. HBJ CAPITAL VENTURES LLPJUNE1 2There are very few moments in a life of an Investor, when you would get such attractive opportunities to make Money. Earnings Yields are currently greater than the Bond Yields which happens very rarely. When everyone is trying to paint a very bleak picture, I am a contrarian and let me help. Investors visualize the positives which are happening in the Market. Investors should not be bogged down by the overall sentiment and try to dissect through data rationally. Let's look into how soon the, sentiments can reverse leading to huge rally in the stock market.#912, 1F Main, Girinagar 2nd Phase, BSK 3rd Stage, BLR - 85Page 2 3. HBJ CAPITAL VENTURES LLPJUNE1 2As George Soros's theory of reflexivity explains, the interlinking between various parameters is not just in one direction. Hence, just a small change in one variable can cause a virtuous response and we have just taken the recent fall in Crude to be the variable. There can be other positives as well, like Better Political Situation and abating Global crisis etc. It's always the "Darkest before Dawn" and Good Investors can make money, only if they are able to oversee the negatives. Remember, only investors who have a strong conviction to stand against the crowd will be able to make money in the stock market. That is the reason why there are very few Warren Buffet's, Peter Lynch's and Rakesh Jhunjhunwala's in this world. All these Investors have been astute Stock Pickers and that is what Good Investors should be doing. If you are waiting for Markets to show signs before entering, then you would never make money in stock markets. They just don't work that way.#912, 1F Main, Girinagar 2nd Phase, BSK 3rd Stage, BLR - 85Page 3 4. JUNE1 HBJ CAPITAL VENTURES 2 We strongly feel that the present Dull and frustrating period will end soon. LLP Whether that eventually leads to a Strong Bull Market depends on the emergence of some catalysts. But just as, High Equity Issuances are symptoms of Markets peaking out - Equity Contraction through (low equity issuances, buy-back and delisting) is a very strong signal for the markets to bottom out. Being Invested is very important to benefit from the rallies. Great Money is always made in the transition from a Bear Market to Bull Market. Our Portfolio with good set of Stocks is well positioned for the Rally. Our Equity Exposure as being communicated regularly, is being deployed in Good Potential Multi-bagger stocks. We now have over 74% Equity exposure and we would be increasing it to 80% over the next month. With the next few quarters of Earnings, we expect many of our Portfolio companies to perform well on both Business and Share returns perspective, which will help our Fund post good returns and extend the Outperformance over the broader Markets (SENSEX). Regards,[Principal Fund Manager, HBJ Capital Venture LLP] Date: June 30th 2012, Place: Bangalore, India#912, 1F Main, Girinagar 2nd Phase, BSK 3rd Stage, BLR - 85Page 4