Sahara R.e.a.l Fund

3

INDEXSAHARA R.E.A.L FUND

1. Report of the Trustees. .................................................................................................... 4

2. AuditorsCertificateontheReportonVotingDecisionsInTheInvesteeCompanies ..... 8

3. auditors report to the Trustees of Sahara Mutual Fund. ................................................. 9

4. AbridgedBalanceSheetasat31stMarch,2016 ............................................................ 11

5. AbridgedRevenueAccountfortheyearended31stMarch,2016 ................................. 12

6. NotestoAccounts ............................................................................................................ 13

7. KeyStatisticsfortheyearended31stMarch2016 ........................................................ 16

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REPORT OF THE TRUSTEESWearepleasedtopresentbeforeyoutheANNUALREPORTofSAHARAMUTUALFUNDfortheyearendedMarch31,2016.Overview of Debt Markets in 2015-162015-16 was not an encouraging year for the Indian debt market, with the INR depreciating and the 10 Year G-sec YieldsremainingFlat(April2015:7.22%--March2016:7.46%).FIIflowshavebeenmuted.Asignificantchangeininflationmanagementregimewasagreedin2015betweentheRBIandthegovernment.Underthisnewmonetarypolicyframework,therewillnowbeaformalinflationtargetfortheRBIwhichhasbeenfixedat4%withinatolerancebandof+/-2%.TheRBIisaimingtohitthistargetrangefrom2017onwards.Thecontinuedsuccesson the inflation frontcombinedwithgrowthdisappointmentsallowed theRBI tocutpolicy ratesby125bpsovertheyear.However,10yeargovernmentsecuritiesdeclinedbyjust10basispoint.EnsuringthebulkofthereturninthefixedincomefundcamefromcouponincomeratherthancapitalappreciationaswasexpectedOverview of Equity Markets in 2015-16Indian equities performed in linewith emerging-market equities in 2015 following big outperformance in 2014.Expectations ofrelativeoutperformance from Indianequities in2015werehigh.Riding the ‘anticipated–reform -agenda’wave,equitymarketsopened2015onanoptimisticnote.However,as theyearprogressed,disappointmentsoncorporateearnings, lackof credibledevelopment on significant reforms (such as GST and Land Acquisition Bill) and aggravated concerns on slowing globalgrowth, led by theChinese slowdown, began toweigh on local equities. China’s slowdown has hurt EmergingMarket growthandcommoditypricesthisyear,draggingnotablyBrazilandRussiaintorecessions.TheFedraisedratesforthefirsttimesince2006.However,Fedpolicymakershavereiteratedagradualpathofraterisesinthefuture.Fortheyear2015-16,theS&PBSESensexended-10.32%lowerat25341.86levels,whiletheNifty50closed-9.87%lowerat7,738.4compared to their respectiveclosingfiguresasonMarch31,2016.Thesilver lininghowever,was thecontinuedflowsreceived by domestic institutions, particularlymutual funds, from retail participantswho sawgreat opportunity in exploiting thevaluationarbitragecreatedfromtheearlierrun-upinthebenchmarkindicesandlargecapstocks.TheReserveBankof Indiaaidedbygovernmentpoliciesand lowercommodityprices,hasmanaged tohelpcurtail inflation in2015.Thisprovided theRBIwithheadroom tocut keybenchmark ratesbyasmuchas125bps thiscalendaryear tosupportgrowth. The underlying stance from the Indian central bank continues to be ‘accommodative’ despite its caution on risinginflationarypressures.TheRBIexpectsinflationtobebroadlycurtailedheadinginto2016Furthermore,theModi-ledNDAgovernmentfailedtomakeprogress in implementingkeyreformsincluding landacquisitionandGoodsandServicesTax(GST)with themonsoonsessionof theParliamentbeinga completewashoutand thewinter sessionendingonamutenote.The rupee fell for the fifth straight year amid global turmoil and strengthening of the US dollar. However, it emerged as oneof the top performing emergingmarkets’ currency, bucking the trend inAsia on the back of slipping oil prices and intermittentinterventionbytheRBI

1. Scheme Performance, Future Outlook and Operations of Sahara R.E.A.L FundReturns:

Performance as of March 31, 2016 1 year Since inception Inception DateSaharaR.E.A.LFund(%) 1.7215 4.7996

April1,1997Nifty50Index(%) (8.8635) 3.7342

“Thepriceandredemptionvalueof theunits,andincomefromthem,cangoupaswellasdownwiththefluctuations inthemarketvalueofitsunderlyinginvestments;”.AsonMarch31,2016,theschemehadinvested94%of itsnetassets investedinequitiesandthebalance6%incashandcashreceivables.

DEBT MARKETSIndiahas to repay$36bnFCNR(B)Deposit,at itsmaturity inSeptember2016.Whilewehaveadequate reserves,suchlargeoutflowswillhaveadverseimpactonrupee.AsharperdepreciationofrupeecouldhaveadverseshorttermimpactonIndianinterestrates.Going forward, theReserveBankhasmaintained itsaccommodativestanceandhaskept thedoorsopen for ratecutsasandwhenroomisavailable,whichislikelytokeepthebondmarketsentimentspositive.However,thepaceofUSFedratehike anddevelopment inChinaare likely to keep themarkets volatile andon fence.The key indirect tax reform theGST(GoodsandServicesTax)whichwaspromisedtobeimplementedinApril2016isyettobepassedintheparliament.On the balance 2016-17 is going to be better year as Investor expectations have moderated and economic recovery isvisible.This belief is also supported by expectations that Indianmacroeconomic situation is expected to be strongdue tolowercommoditypricesandlowerfiscaldeficitinthenextfinancialyear.The rupee, too, is expected to remain stable against major currencies as, comfortable forex reserves and balance ofpaymentsshouldsoftenanycurrencyimpactduetolumpyoutflows.ThisshouldkeepFIIdebtinflowsstrong,

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It is also interesting to note that the spreadbetween theUSand Indian10 year yields remains close to its highover thelastdecadewhichprovidesadegreeofcomfortforlongbondyieldsThe rupee, too, is expected to remain stable against major currencies as, comfortable forex reserves and balance ofpaymentsshouldsoftenanycurrencyimpactduetolumpyoutflows.ThisshouldkeepFIIdebtinflowsstrong,It is also interesting to note that the spreadbetween theUSand Indian10 year yields remains close to its highover thelastdecadewhichprovidesadegreeofcomfortforlongbondyields.EQUITY MARKETSThis year,we feelmore optimistic! Investor expectations havemoderated, economic recovery is visible and the elusivecorporate-earnings growth story should finally begin to play out. Several structural reforms are underway, domesticinvestors continue to show faith, and the corporate profitability cycle is at an all-time low.Average valuations on cycle-lowearningsappearattractive.Indiastandsoutasthefastest-growingemergingmarket.Comfortable forex reserves and balance of payments should soften any currency impact. High-frequency economicindicators imply that the economy bottomed out in 1HCY15 and growth is now visible. The bottoming of the propertymarket thisyearwilldriveabroadereconomic recovery.Theoutlook forboth inflationandgrowth remains ratherbenignforFY17withentrenchedglobalslowdownbackdrop.Thefiscalstancehasalsobeenrathercomforting.Thegovernmentdecided to adhere to the fiscal goalposts and staggered the seventh pay commission allowances. It alsomoved furtheronsupplyenhancementinruralsegment,roadsandrailways.Importantly, the new MCLR regime (Marginal Cost of Funds Based Lending Rate) has kicked in from April 1, 2016wherein Banks shift to use their incremental cost of funds, rather than average cost of deposits to arrive at newbenchmark rate for lending. However, there remains one large ‘known unknown’ from RBI’s perspective – the fateof monsoons. While global agencies are hinting at weakening of El Nino effect from May onwards, rains can still getdelayeddespitebeing‘normal’givenuncertainmeteorologicalfactorsandtimelagsinvolved.FateofthebankingresultsandincrementalRBIstanceonAQRandstressrecognitionalongwithpaceofFedtighteningandchinaslowdown(alongwithitsimpactoncommodities)willbepivotaltothemarketperformance.2. Brief Background of Sponsor, Trust, and AMC Company(a) Sahara Mutual FundSaharaMutualFund(SMF)hasbeenestablishedasaTrustbytheTrustDeed(amendedfromtimetotime)dated18thJuly,1996inaccordancewiththeIndianTrustsAct,1882,anddulyregisteredundertheIndianRegistrationAct,1908,sponsoredbySaharaIndiaFinancialCorporationLimited(“SIFCL”).TheTrustees have appointed SaharaAssetManagement Company Private Limited as the InvestmentManager to SaharaMutualFund to functionas the InvestmentManager forall theSchemesofSaharaMutualFund.SaharaMutualFundwasregisteredwithSEBIon1stOctober,1996.“SEBIvide itsOrderno:WTM/PS/26/IMD/DOF-III/July/2015dated28thJuly,2015haddirectedcancellationof“CertificateofRegistration”ofSaharaMutualFundwhichwas tobeeffectiveonexpiryofsixmonths from thedateof theOrder.Further,SEBIalsodirectedby thesaidOrder that theMutualFundshall not takeanynewsubscription from investors.Accordingly,theMutual Fund has not taken any new subscription from the investors (including existing investors) in line with the saidSEBIorder.SaharaAssetManagementCompanyPvt.Ltd(SAMCPL)filedanappealbeforetheSecuritiesAppellateTribunal(SAT),MumbaitosetasidethesaidSEBIorder.SATvide itsorderdated9thDecember,2015grantedan interimstay inthematter.Theappealispendingfordecision/disposalwiththeSecuritiesAppellateTribunal(SAT).””(b) Board of TrusteesTheBoardofTrusteesasondatecomprisesMr.S.RHegde, IndependentTrustee,Dr.P.PShastri, IndependentTrusteeandMrSPSrivastavaAssociateTrustee.The Board of Trustees is the exclusive owner of the Trust Fund and holds the same in trust for the benefit of the unitholders. The Board of Trustees has been discharging its duties and carrying out the responsibilities as provided in theRegulationsandtheTrustDeed.TheBoardofTrusteesseekstoensurethattheFundandtheSchemesfloatedthereunderaremanagedbytheAMCinaccordancewiththeTrustDeed,theRegulations,directionsandguidelinesissuedbytheSEBI,theStockExchanges,theAssociationofMutualFundsinIndiaandotherregulatoryagencies.3. Investment Objective of the Scheme.The investment objective would be to provide long term capital gains by investing predominantly in equity / equity relatedinstrumentofcompaniesintheRetailing,Entertainment&Media,Auto&autoancillariesandLogisticssector.4. SignificantAccountingPoliciesTheBalanceSheet and theRevenueAccount togetherwith thenotes thereonhavebeenprepared in accordancewith theaccounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (MutualFunds)Regulations,1996andamendmentsthereto,asapplicable.5. Unclaimed Dividends and Redemptions

Scheme Name No of Investors Unclaimed Dividend (`) No of Investors Unclaimed Redemption (`)

Sahara R.e.a.l Fund – – 47 694,576.69

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6. Disclosure of investor complaints for the year 2015-16TotalNumberofFoliosunderallschemes:21000

ComplaintCode

TypeofComplaint#

Actionon(a)and(b)(a)No.ofComplaintspendingat the

beginningoftheyear

(b)Noofcomplaintsreceivedduringthe

year

Resolved*NonActio-nable

Pending

Within 30Days

30-60Days

60-180Days

Beyond180days

0-3mths

3-6mths

6-9mths

9-12mths

IANonreceiptofDividendonUnits

0 1 1 0 0 0 0 0 0 0 0

IB

InterestondelayedpaymentofDividend

0 0 0 0 0 0 0 0 0 0 0

ICNonreceiptofRedemptionProceeds

0 1 1 0 0 0 0 0 0 0 0

ID

InterestondelayedPaymentofRedemption

0 0 0 0 0 0 0 0 0 0 0

IIA

NonreceiptofStatementofAccount/UnitCertificate

0 1 1 0 0 0 0 0 0 0 0

IIBDiscrepancyinStatementofAccount

0 0 0 0 0 0 0 0 0 0 0

IIC

DatacorrectionsinInvestordetails

0 0 0 0 0 0 0 0 0 0 0

IID

Nonreceiptofannual Report /AbridgedSummary

0 0 0 0 0 0 0 0 0 0 0

IIIAWrongswitchbetweenSchemes

0 0 0 0 0 0 0 0 0 0 0

IIIB

UnauthorizedswitchbetweenSchemes

0 0 0 0 0 0 0 0 0 0 0

IIICDeviationfromSchemeattributes

0 0 0 0 0 0 0 0 0 0 0

IIIDWrongorExcesscharges/load

0 0 0 0 0 0 0 0 0 0 0

IIIE

Nonupdationofchangesviz.address,PAN,bankdetails,nomination,etc

0 1 1 0 0 0 0 0 0 0 0

IV Others** 0 5 5 0 0 0 4 0 0 0 0

#includingagainstitsauthorizedpersons/distributors/employeesetc*Nonactionablemeansthecomplaintthatareincomplete/outsidethescopeofthemutualfundOthers**-1.NotpertainingtoSMF;2.FakeInvestormeetings;3.UnabletoRedeem;4.Nonreceiptofinterest;5.Seniorexecutivesofbigcorporatehouses

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7. Role of Mutual Funds in Corporate Governance of Public Listed CompaniesPolicy for voting at AGM/EOGM/through E-voting/through Postal Ballot on resolutions recommended by investee companiesIntroductionSaharaAssetManagementCompanyPrivateLimitedactsasanInvestmentManager(“TheAMC”)totheschemesofSaharaMutual Fund (“Fund”).The general voting policy and procedures being followed by theAMC in exercising the voting rights(“VotingPolicy”)isgivenhereunder.Philosophy and Guidelines of Voting Policy:TheAMChasadualresponsibilityofaprudentFundManager investing investors’moneyaswellasofanentityperformingthe responsibility of protecting the investors’ interest. As part of the management of funds, irrespective of the scheme,theAMC ensures that investments are made in companies that meet investment norms. It is expected that the investeecompanyadherestopropercorporategovernancestandards.ThevotingpolicyfortheinvesteecompaniesbytheAMCisasunder:TheAMChasadualresponsibilityofaprudentFundManager investing investors’moneyaswellasofanentityperformingthe responsibility of protecting the investors’ interest. As part of the management of funds, irrespective of the scheme,theAMC ensures that investments are made in companies that meet investment norms. It is expected that the investeecompanyadherestopropercorporategovernancestandards.ThevotingpolicyfortheinvesteecompaniesbytheAMCisasunder:TheAMC shall deal with voting on case to case basis. For this purpose, theAMC shall review various notices ofAGM/EOGM/Postal Ballot received from the investee companies from time to time and take appropriate voting decision (for,against, abstain) with respect to the each resolution recommended by the management/ shareholders of the companies.The AMC would generally agree with the management of the Investee Company on routine matters, but may object byvotingagainstorabstain, if itbelieves that ithas insufficient informationor there isconflictof interestsor the interestof theshareholdersand/ortheunitholders’interestsareprejudicedinanymanner.As regards non-routine items, the Fund Manager (Equity) with assistance of the Equity Research Department and inconsultationwith theChief InvestmentOfficer shall review each of such cases andmake specific recommendations to theChief Executive Officer. In case theAMC is against any non routine item, it may decide to attend the meeting and voteagainst that item. In some other such cases, itmay decide to abstain based on one ormore of the factors like our smallholding in the company, location of the venueofmeeting, time/cost involved etc. For these instances, the reasons for nonattendancewillberecorded.As per the decision taken by the AMC, it may depute an authorized person to attend and vote at AGM/EOGM/throughE-Voting/ throughPostalBallot appropriately keeping inmind the interest of unit holders.AMCwouldmaintain a record ontheAGM/EOGMvotingrelatedmatters.Disclosure of Voting policy and Maintenance of Records:ThisPolicyon votingatAGM/EOGM/ throughe-voting/ throughpostal ballot and suitabledisclosure thereof is availableonthewebsite(www.saharamutual.com)oftheMutualFund.Note:FordetailsofvotingintheAGMsoftheinvesteecompaniesforthefinancialyear2015-16,unitholderscanlogontothewebsite(www.saharamutual.com)oftheFund.FurtherthesaiddetailsarealsoavailableintheAnnualReportofSaharaMutualFundfortheperiod2015-16.Thedetailsofvotingshallbeemailed/sentasandwhenrequestedbytheunitholdersfreeofcost.8. Statutory Information.a. TheSponsor isnotresponsibleor liableforany lossresultingfromtheoperationof theSchemesof theFundbeyondtheirinitialcontributionofRs.1lakhforsettinguptheFund.b. Thepriceandredemptionvalueoftheunits,andincomefromthem,cangoupaswellasdownwithfluctuationsinthemarketvalueofitsunderlyinginvestments.c. FullAnnual Report is disclosed on thewebsite (www.saharamutual.com) and shall be available for inspection at theHead Office of the Mutual Fund. Present and prospective unit holders can obtain copy of the trust deed, the full AnnualReportoftheFund/AMCfreeofcost.AcknowledgementsThe Trustees would like to thank all the investors for reposing their faith and trust in Sahara Mutual Fund. The Trusteesthank theSecuritiesandExchangeBoardof India, theReserveBankof India, theSponsor, theBoardof theSaharaAssetManagementCompanyPrivateLimitedfortheirsupport,co-operationandguidanceduringtheperiod.We are also thankful to theAuditors, Registrar andTransferAgents, Custodian, Banks, Depositories,AMFI/NISMCertifiedDistributors, KYC Registration Agencies and other service providers for their continuous support. The Trustees alsoappreciate theeffortsmadeby theemployeesofSaharaAssetManagementCompanyPrivateLimitedandplaceon recordtheircontributioningoodperformanceoftheschemes.We look forward for your continued support and assure you of our commitment at all times in managing the schemes ofSahara Mutual Fund.

For and on behalf of Sahara Mutual Fund

Sd/-Place:Mumbai S R HegdeDate :27thJune,2016 Trustee

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INDEPENDENT AUDITORS’ CERTIFICATE ON QUARTERLY DISCLOSURE OF VOTES CASTWe,Chaturvedi&Co,CharteredAccountants,Mumbai,theStatutoryAuditorsofSaharaMutualFund,haveforthepurposeofissuingthiscertificate,examinedthequarterlydisclosurestatementsofvotescastduringeachofthequartersofFY2015-16.

The Sahara Asset Management Company private Limited (the “AMC”) is responsible for preparation and maintenance ofrecordsofvoting reports inaccordancewith theprovisionsofSBEIcircularsasamended from time to timeand forensuringcompliancewithSEBIRegulationsandrelevantguidelines’issuedtotheAssetManagementCompanies.

Our responsibility for the purpose of the certificate is limited to certifying the particulars of the disclosures in the quarterlyvoting reports by examining relevant records and documents maintained by the AMC and produced before us andexplanationsandrepresentationsgiventous.

Onthebasisofourverificationoftherecordsandinformationproducedbeforeus,wecertifytothebestofourknowledgeandinformation provided to us that the detailsmentioned in the quarterly reports of the disclosure statement on the votes cast,are in agreementwith the record s/documentsmaintained by theAMC and the quarterly Voting reports are in linewith therequirementsoftheSEBIcirculars.

This certificate is being issued at the request of the management of theAMC for submission to the Board of Trustees ofSaharaMutualFundintermsofSEBIcirculardateMarch24,2014

For Chaturvedi & CoCharteredAccountants

(FirmRegistrationNo.302137E)

Sd/-

(D S R Murthy)Place:Mumbai PartnerDate :25thMay2016 M.No018295

9

INDEPENDENT AUDITOR’S REPORT

To the Trustees of Sahara Mutual Fund

Report on the Financial Statements

WehaveauditedtheaccompanyingfinancialstatementsofSahara Mutual Fund – Sahara R.E.A.L. Fund (“the Scheme”), which comprise the Balance Sheet as at March 31, 2016, and the Revenue Account for the year then ended, and asummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

Management’s Responsibility for the Financial StatementsThe Trustees of SaharaMutual Fund and the Board of Directors of SaharaAsset Management Company Private Limited(the“Directors”)areresponsibleforthepreparationofthesefinancialstatementsthatgiveatrueandfairviewofthefinancialposition and financial performance of the Scheme in accordance with the accounting policies and standards specified inthe Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (the “Regulations”)and amendments thereto, as applicable. This responsibility also includes maintenance of adequate accounting recordsfor safeguarding the assets of the Scheme and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; anddesign, implementationandmaintenanceofadequate internal financial controls, thatwereoperatingeffectively forensuringthe accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit.We have taken into accountthe Regulations, the applicable accounting standards and the Standards onAuditing issued by the Institute of CharteredAccountantsof India.ThoseStandards require thatwecomplywithethical requirementsandplanandperform theaudit toobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internalfinancialcontrolsrelevant totheScheme’spreparationof thefinancialstatementsthatgiveatrueandfairviewinorder todesignauditproceduresthatareappropriate inthecircumstances,butnot for thepurposeofexpressinganopiniononwhether theSchemehas inplaceanadequate internalfinancialcontrolssystemoverfinancial reportingand theoperating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies usedandthereasonablenessoftheaccountingestimatesmadebytheDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthefinancialstatements.

OpinionInouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thefinancialstatementsgivethe informationrequiredbytheSecuritiesandExchangeBoardof India(MutualFunds)Regulations,1996andamendmentsthereto, asapplicable, in themanner so requiredandgivea trueand fair view in conformitywith theaccountingprinciplesgenerallyacceptedinIndia:(a) inthecaseoftheBalanceSheet,ofthestateofaffairsoftheSchemeasatMarch31,2016;(b) inthecaseoftheRevenueAccount,ofthesurplusfortheyearendedonthatdate.

Emphasis of MatterWedrawattentiontothefollowingmatterintheNotestothefinancialstatements:a) Note no. 8.18 states that during the financial year, SEBI had directed cancellation of “Certificate of Registration” of

SaharaMutualFundwhichwastobeeffectiveonexpiryofsixmonths fromthedateof theOrder.Further,SEBIalsodirected in the said Order that the Mutual Fund shall not take any new subscription from investors. Sahara AssetManagementCompanyPvt.Ltd.(SAMC)hadfiledanappealbeforetheSecuritiesAppellateTribunal(SAT)forastayagainst the SEBI Order. Subsequently an interim stay was granted and the matter is pending for decision with theSAT.ThisindicatestheexistenceofamaterialuncertaintythatmaycastsignificantdoubtaboutSaharaMutualFund’s

10

ability to continue as a going concern. However, the financial statements of the Scheme have been prepared on agoingconcernbasis,pendingthedecisionfromSAT.

Ouropinionisnotmodifiedinrespectoftheabovematter.

Report on Other Legal and Regulatory RequirementsAsrequiredby theSecuritiesandExchangeBoardof India (MutualFunds)Regulations,1996andamendments thereto,asapplicable,wereportthat:a) Wehaveobtainedall theinformationandexplanations,whichtothebestofourknowledgeandbeliefwerenecessary

for the purpose of our audit. b) TheBalanceSheetandRevenueAccountdealtwithbythisReportareinagreementwiththebooksofaccountofthe

Scheme.c) The statement of account has been prepared in accordancewith the accounting policies and standards specified in

theNinthScheduleoftheSecuritiesandExchangeBoardofIndia(MutualFunds)Regulations,1996andamendmentsthereto,asapplicable.

d) Wehave reviewed theValuationPolicybeing followed for theschemesofSaharaMutualFund.TheValuationPolicyimplementedfortheschemeisinlinewiththeSEBIguidelinesissuedinthisregard.

For Chaturvedi & Co. CharteredAccountants (Firm’sRegistrationNo.302137E)

(D S R Murthy) (Partner) Mem.No.018295

Place:MumbaiDate :27thJune,2016

“Specific point of NoteNo.8.18made in the IndependentAuditorsReport bears reference to theNotes toAccounts of theFullAnnualAccounts of the respective schemes of Sahara Mutual Fund”. The said point is covered at point no. 7 in theNotestoAccountsofthisAAR.

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ABRIDGED BALANCE SHEET AS AT 31ST MARCH, 2016(`inlakhs)

Sahara R.E.A.L Fund As at ended 31/03/2016

as at ended31/03/2015

LIABILITIES1 Unit Capital 247.05 302.332 Reserves & Surplus2.1 UnitPremiumReserve (46.88) (41.08)2.2 UnrealisedAppreciationReserve 66.41 125.97 2.3 OtherReserves 99.00 52.47 3 Loans & Borrowings – –4 Current Liabilities & Provisions4.1 ProvisionfordoubtfulIncome/Deposits – –4.2 OtherCurrentLiabilities&Provisions 7.30 10.67 TOTAL 372.88 450.36 ASSETS1 Investments1.1. Listed Securities:1.1.1 EquityShares 342.64 422.21 1.1.2 PreferenceShares – –1.1.3 EquityLinkedDebentures – –1.1.4 OtherDebentures&Bonds – –1.1.5 SecuritisedDebtsecurities – –1.2 Securities Awaited Listing:1.2.1 EquityShares – –1.2.2 PreferenceShares – –1.2.3 EquityLinkedDebentures – –1.2.4 OtherDebentures&Bonds – –1.2.5 SecuritisedDebtsecurities – –1.3 Unlisted Securities1.3.1 EquityShares – –1.3.2 PreferenceShares – –1.3.3 EquityLinkedDebentures – –1.3.4 OtherDebentures&Bonds – –1.3.5 SecuritisedDebtsecurities – –1.4 GovernmentSecurities – –1.5 TreasuryBills – –1.6 CommercialPaper – –1.7 CertificateofDeposits – –1.8 BillRediscounting – –1.9 UnitsofDomesticMutualFund – –1.10 ForeignSecurities – – Total Investments 342.64 422.21 2 Deposits3 Other Current Assets3.1 Cash&BankBalance 24.00 8.633.2 ReverseRepoLending – –3.3 CollateralizedBorrowingandLendingObligation(CBLO) – 12.98 3.4 Others 6.24 6.544 Deferred Revenue Expenditure

(totheextentnotwrittenoff)– –

TOTAL 372.88 450.36 NotestoAccounts-AnnexureI

12

ABRIDGED REVENUE ACCOUNT FOR THE YEAR / PERIOD ENDED 31ST MARCH, 2016(`inlakhs)

Sahara R.E.A L FundCurrent

Year / Period ended 31/03/2016

PreviousYear/Period

ended31/03/2015

1 INCOME1.1 Dividend 3.50 3.64

1.2 Interest 0.22 0.98

1.3 RealisedGain/(Loss)onForeignExchangeTransactions – –

1.4 RealisedGains/(Losses)onInterschemesaleofinvestments – –

1.5 RealisedGains/(Losses)onExternalsale/redemptionofinvestments

59.47 173.86

1.6 RealisedGains/(Losses)onDerivativeTransactions – –

1.7 OtherIncome – –

( A ) 63.19 178.48 2 EXPENSES 2.1 Managementfees 9.67 5.542.2 ServicetaxonManagementfees 1.34 0.682.3 InvestorEducation&AwarenessFees 0.08 0.092.4 Transferagentsfeesandexpenses 0.66 2.062.5 Custodian fees – 1.142.6 Trusteeshipfeesandexpenses – 0.592.7 CommissiontoAgents – 0.032.8 Marketing&Distributionexpenses – 0.452.9 audit fees – 1.362.10 DeferredRevenueExpenditure – –2.11 Otheroperatingexpenses 0.13 0.68

(B ) 11.88 12.623 NET REALISED GAINS / (LOSSES) FOR THE YEAR / PERIOD

(A -B = C)51.31 165.86

4 ChangeinUnrealisedDepreciationinvalueofinvestments (D) (15.26) 22.905 NET GAINS / (LOSSES) FOR THE YEAR / PERIOD (E=(C-D)) 66.57 142.96 6 Changeinunrealisedappreciationinthevalueofinvestments (F) 125.97 71.827 NET SURPLUS / (DEFICIT) FOR THE YEAR / PERIOD

(E + F = G)192.54 214.78

7.1 Add:BalancetransferfromUnrealisedAppreciationReserve (59.56) 54.15 7.2 Less:BalancetransfertoUnrealisedAppreciationReserve 66.41 125.977.3 Add:IncomeEqualisationReserve (20.04) (3.08)8 Total 46.53 139.889 Dividend appropriation –9.1 IncomeDistributedduringtheyear/period – –9.2 Taxonincomedistributedduringtheyear/period – –10 RetainedSurplus/(Deficit)carriedforwardtoBalancesheet 46.53 139.88

Otheroperatingexpensestransactioncosts.NotestoAccounts–Annexure1

13

NOTES TO ACCOUNTS – ANNEXURE 1 TO THE ABRIDGED BALANCE SHEET AND REVENUE ACCOUNT FOR THE YEAR / PERIOD ENDED 31ST MARCH, 2016

1. Investments :-1.1 Certain investmentsareregisteredinthenameoftheFundwithoutspecificreferencetotheScheme.AsatMarch31,2016

the aggregatemarket value of securities under SaharaR.E.A.L. Fund but held in the name of SaharaMutual Fund beinginvestedinCBLOis` Nil(P.Y.` 12,98,248.73).

1.2 During the year ended31.03.2016 theRegistrar andTransferAgents chargesamounting to` 65,935.09 (P.Y.` 206288.00)constitutes5.55%(P.Y.16.34%)ofthetotalschemesexpenses.

1.3 OpenPositionofderivatives(outstandingmarketvalue&%toNetAssetsasoftheYearend).Nil1.4 Investments inAssociates andGroupCompanies: Provide details of issuer, nature of instruments, amount, and aggregate

investmentsbyallschemes.Nil1.5 OpenpositionofSecuritiesBorrowedand/orLendingbythescheme.Nil1.6 DetailsofNPA:Aggregatemarketvalueandprovisionthereof.Nil1.7 AggregateUnrealisedGain/LossasattheendoftheFinancialYear/Periodandpercentagetonetassets.

Asset Class

31-Mar-16 31-Mar-15Appreciation

(` in lakhs)

% to Net

Assets

Depreciation (` in lakhs)

% to Net

Assets

Appreciation(` inlakhs)

%toNet

assets

Depreciation(` inlakhs)

%toNet

assetsEquityShares 66.41 18.17 12.23 3.34 125.97 28.65 27.49 6.25

1.8 AggregateValueofPurchaseandSalewithPercentagetoaverageassets.

Purchases

Year Amount in ` % of Daily Average2015-16 38,397,206 97.332014-15 64,777,561 146.29

Sales

Year Amount in ` % of Daily Average2015-16 47,871,408 121.342014-15 78,724,629 177.78

1.9 Non-Traded securities in the portfolio: Provide Aggregate Value of Equity, Debt & Money Market Instruments andpercentagetonetassets.

Scheme Name Category31-Mar-16 31-Mar-15

Market value (` in lakhs)

% to Net Assets

Marketvalue(` inlakhs)

%toNetassets

Sahara R.e.a.l Fund

Money Market Instruments(CBLO) 0.00 0.00 12.98 2.95

2. Details of Transaction withAssociates under regulation 25(8) Brokerage to SIFCLA/c CMSD (Associate) has beenmadeforsaleofunitsoftheMFason31stMarch2016

Commission to SIFCL A/c CMSD (Associate) made for sale of units of the MF for the current year ended 31st March 2016.

(` in lakhs)

Tax Gain Fund Growth Fund Liquid Fund Mid cap

FundWealth Plus

FundShort Term

Bond Fund**Infrastructure

Fund

0.20 0.02 0.00 0.06 0.00 NotApplicable 0.02

14

(` in lakhs)Star Value

FundSuper 20

FundPower and Natural Resources Fund

Banking & Financial Services Fund Income Fund**

0.00 0.00 0.00 0.09 NotApplicable **Theschemewaswoundupon14thDecember,2015. Commission to SIFCL A/c CMSD (Associate) made for sale of units of the MF for the previous year ended 31st March 2015.

(` in lakhs)Tax Gain

Fund Growth Fund Liquid Fund Mid cap Fund

Wealth Plus Fund

Short Term Bond

Infrastructure Fund

0.33 0.06 0.02 0.10 0.01 0.00 0.06

(` in lakhs)Star Value

FundSuper 20

FundPower and Natural Resources Fund

Banking & Financial Services Fund Income Fund

0.01 0.01 0.00 0.33 0.01

Commission paid to associates / related parties /group companies of Sponsor/AMC

Name of associate / related parties /

group companies of Sponsor / AMC

Nature of association /

nature of relationPeriod Covered

Business given (` cr and % of total

business received by the fund)

Commission paid (` & % of total

commission paid by the fund

(1) (2) (3) (4) (5)

SIFCL A/c CMSD Sponsor / Mutual Fund Distributor April 15-March 16 (` 0.04 & 0.39%) (` 39963.98;

11.49%)

SIFCLA/cCMSD Sponsor / Mutual FundDistributor April14-March15 (` 0.29&0.36%) (` 93537.78;

8.80%)

IncolumnNo4,thetotalbusinessreceivedbythefundincludesbusinessthroughARNs&alsodirectbusiness. IncolumnNo5,theamountincludestheupfrontandthetrail.

Brokerage paid to associates / related parties / group companies of Sponsor/AMC

Name of associate / related parties /

group companies of Sponsor / AMC

Nature of association /

nature of relation

Period Covered

Value of Transaction (in `, Cr & of Total value of Transaction of the Fund)

Brokerage (` Cr & % of total

brokerage paid by the Fund)

– – – – –

Therearenoassociatebrokers,hencenotapplicablefortheperiodApril–Mar2016&April–Mar2015.

3. Large Holdings in the Scheme (i.e. in excess of 25% of the net assets): Nil4. Unit Capital movement during the year ended / period ended March 31, 2016 (Face Value of Units: ` 10/- per unit)

Growth Option

Number of Units Amount (`) NumberofUnits Amount(`)As on

31-Mar-16As on

31-Mar-16as on

31-Mar-15as on

31-Mar-15InitialCapital 10898668.702 108986687.02 10898668.702 108986687.02OpeningBalance 2428620.260 24286202.60 3168164.373 31681643.73UnitsSoldduringtheyear 69.995 699.95 13841.069 138410.69UnitsRepurchasedduringtheyear (445758.386) (4457583.86) (753385.182) (7533851.82)

ClosingBalance 1982931.869 19829318.69 2428620.260 24286202.60

15

Growth Option (Direct)

Number of Units Amount (`) NumberofUnits Amount(`)As on

31-Mar-16As on

31-Mar-16as on

31-Mar-15as on

31-Mar-15InitialCapital 0.00 0.00 0.00 0.00OpeningBalance 43658.864 436588.64 1641.205 16412.05UnitsSoldduringtheyear 34780.989 347809.89 100834.358 1008343.58UnitsRepurchasedduringtheyear (42162.669) (421626.69) (58816.699) (588166.99)

ClosingBalance 36277.184 362771.84 43658.864 436588.64

Dividend Option

Number of Units Amount (`) NumberofUnits Amount(`)As on

31-Mar-16As on

31-Mar-16as on

31-Mar-15as on

31-Mar-15InitialCapital 3653051.558 36530515.58 3653051.558 36530515.58OpeningBalance 544576.362 5445763.62 875828.505 8758285.05UnitsSoldduringtheyear 0.000 0.00 12870.733 128707.33

UnitsRepurchasedduringtheyear (93965.120) (939651.20) (344122.876) (3441228.76)

ClosingBalance 450611.242 4506112.42 544576.362 5445763.62

Dividend Option(Direct)

Number of Units Amount (`) NumberofUnits Amount(`)As on

31-Mar-16As on

31-Mar-16as on

31-Mar-15as on

31-Mar-15InitialCapital 0.000 0.00 0.000 0.00OpeningBalance 6410.131 64101.31 4747.697 47476.97UnitsSoldduringtheyear 274.956 2749.56 2307.621 23076.21

UnitsRepurchasedduringtheyear (5964.752) (59647.52) (645.187) (6451.87)

ClosingBalance 720.335 7203.35 6410.131 64101.31

5. Expensesotherthanmanagementfeeisinclusiveofservicetaxwhereapplicable.6. Previous year figures have been reclassified/regrouped, wherever necessary, to conform to the current year’s

classification. The bifurcation of expenses of the schemes has been revised for the current year.As a result of thisrevision, theexpensescharged to theRevenueAccountof theschemesunderdifferentheadsofexpenditure for theyear would not be comparable with the previous year. However, the total expenses are within the limit prescribedunderRegulation52(6)&(6A)oftheSEBI(MutualFund)Regulations,1996asamendedfromtimetotime.

7. SEBI vide its Order no: WTM/PS/26/IMD/DOF-III/July/2015 dated 28th July, 2015 had directed cancellation of“Certificate of Registration” of SaharaMutual Fundwhichwas to be effective on expiry of sixmonths from the dateof theOrder.Further,SEBIalsodirectedby thesaidOrder that theMutualFundshallnot takeanynewsubscriptionfrominvestors.Accordingly, theMutualFundhasnottakenanynewsubscriptionfromtheinvestors(includingexistinginvestors)inlinewiththesaidSEBIorder.

SaharaAssetManagementCompanyPvt.Ltdfiledanappealbefore theSecuritiesAppellateTribunal (SAT),Mumbaito set aside the saidSEBIorder.SATvide its order dated9thDecember, 2015grantedan interimstay in thematter.Theappealispendingfordecision/disposalwiththeSAT.

8. ContingentLiability:Nil

Mutual Fund investments are subject to market risks read all scheme related documents carefully.

16

KEY STATISTICS FOR THE YEAR / PERIOD ENDED 31ST MARCH, 2016

SAHARA R. E. A. L FUND Current Year / Period ended 31/03/2016

PreviousYear/Periodended31/03/2015

1. NAVperunit(`): Open DividendPlan 14.5394 9.1355 GrowthPlan 14.5394 9.1355 DirectDividendPlan 14.6385 9.1704 DirectGrowthPlan 14.8144 9.1715Repurchase Price during the year** (i) Highest DividendPlan 15.0953 15.4712 GrowthPlan 15.0954 15.4713 DirectDividendPlan 15.2001 15.5692 DirectGrowthPlan 15.3826 15.7561(ii) Lowest DividendPlan 13.8070 9.0707 GrowthPlan 13.8071 9.0707 DirectDividendPlan 13.9042 9.1054 DirectGrowthPlan 14.0722 9.1066Resale Price during the year** (i) Highest DividendPlan 15.2478 15.6275 GrowthPlan 15.2479 15.6276 DirectDividendPlan 15.3536 15.7265 DirectGrowthPlan 15.5380 15.9153(ii) Lowest DividendPlan 13.9465 9.1623 GrowthPlan 13.9466 9.1623 DirectDividendPlan 14.0446 9.1974 DirectGrowthPlan 14.2143 9.1986 End DividendPlan 14.7919 14.5394 GrowthPlan 14.7897 14.5394 DirectDividendPlan 14.9357 14.6385 DirectGrowthPlan 15.2931 14.81442. ClosingAssetsUnderManagement(` inLakhs) end 365.58 439.69 Average(AAuM)4 394.51 442.823. Grossincomeas%ofAAuM1 16.02% 40.31%4. ExpenseRatio: a. TotalExpenseas%ofAAuM 3.01 2.85 b. ManagementFeeas%ofAAuM 2.79 1.40

17

SAHARA R. E. A. L FUND Current Year / Period ended 31/03/2016

PreviousYear/Periodended31/03/2015

5. NetIncomeasapercentageofAAuM2 13.01% 37.46%6. Portfolioturnoverratio3 0.97 1.467. TotalDividendperunitdistributedduringtheyear/period NIL NIL8. Returns(%): a. Last One Year SaharaR.E.A.LFund–GrowthOption 1.7215 59.1528 Nifty50Index -8.8635 26.6520 b. Since Inception SaharaR.E.A.LFund–GrowthOption 4.7996 5.2276 Nifty50Index 3.7342 5.5804

** basedonthemaximumloadduringtheyear1. Grossincome=amountagainst(A)intheRevenueaccounti.e.Income.2. Netincome=amountagainst(C)intheRevenueaccounti.e.NetRealisedGains/(Losses)fortheYear/Period3. PortfolioTurnover=LowerofsalesorpurchasedividedbytheAverageAuMfortheyear/period.4. AAuM=AverageAssetsunderManagement.

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SchemeCode:RF