Sahara Power and Natural Resources Fund

3

INDEXSAHARA POWER AND NATURAL

RESOURCES FUND1. 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 intermittentinterventionbytheRBI1. Scheme Performance, Future Outlook and Operations of Sahara Power and Natural Resources FundReturns:

Performance as of March 31, 2016 1 year Since inception Inception DateSaharaPowerandNaturalResourcesFund(%) (4.6928) 4.4935

17thJune,2008Nifty50Index(%) (8.8635) 6.7463

“Thepriceandredemptionvalueof theunits,andincomefromthem,cangoupaswellasdownwiththefluctuations inthemarketvalueofitsunderlyinginvestments;”.As on March 31, 2016, the scheme had invested 99 % of its net assets in equities and the balance in cash and cashreceivables.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,It is also interesting to note that the spreadbetween theUSand Indian10 year yields remains close to its high over thelastdecadewhichprovidesadegreeofcomfortforlongbondyields

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The 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 is to generate long term capital appreciation through investment in equities and equity relatedsecurities of companies engaged in the business of generation, transmission, distribution of Power or in those companiesthat are engaged directly or indirectly in any activity associated in the power sector or principally engaged in discovery,development,production,processingordistributionofnaturalresources.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 Power and Natural Resources Fund 3 4,450.52 17 209,957.76

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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*Non Actio-nable

Pending

Within 30Days

30-60Days

60-180Days

Beyond180days

0-3mths

3-6mths

6-9mths

9-12mths

IANon receipt of DividendonUnits

0 1 1 0 0 0 0 0 0 0 0

IB

InterestondelayedpaymentofDividend

0 0 0 0 0 0 0 0 0 0 0

ICNon receipt of RedemptionProceeds

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

Non receipt of StatementofAccount/UnitCertificate

0 1 1 0 0 0 0 0 0 0 0

IIBDiscrepancyinStatementof Account

0 0 0 0 0 0 0 0 0 0 0

IIC

Datacorrections inInvestordetails

0 0 0 0 0 0 0 0 0 0 0

IID

Non receipt of Annual Report /AbridgedSummary

0 0 0 0 0 0 0 0 0 0 0

IIIAWrongswitchbetween Schemes

0 0 0 0 0 0 0 0 0 0 0

IIIB

Unauthorizedswitch between Schemes

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

Non updation ofchangesviz.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.Seniorexecutivesofbigcorporate houses

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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 nonattendance will be recorded. 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 AnnualReport of the Fund / AMC free of cost.

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 & CoChartered Accountants

(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

Wehaveaudited theaccompanyingfinancialstatementsofSaharaMutualFund– Sahara Power and Natural Resources Fund (“the Scheme”),whichcomprisetheBalanceSheetasatMarch31,2016,andtheRevenueAccountfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

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

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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. Chartered Accountants (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 theNotes to Accounts of this AAR.

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

Sahara Power & Natural Resources Fund As at ended 31/03/2016

As at ended31/03/2015

LIABILITIES1 Unit Capital 152.96 177.38 2 Reserves & Surplus2.1 UnitPremiumReserve (13.09) (11.41)2.2 UnrealisedAppreciationReserve 23.88 34.92 2.3 OtherReserves 44.23 51.25 3 Loans & Borrowings – –4 Current Liabilities & Provisions4.1 ProvisionfordoubtfulIncome/Deposits – –4.2 OtherCurrentLiabilities&Provisions 2.40 9.56 TOTAL 210.38 261.70 ASSETS1 Investments1.1. Listed Securities:1.1.1 EquityShares 201.14 233.641.1.2 Preference Shares – –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 Preference Shares – –1.2.3 EquityLinkedDebentures – –1.2.4 OtherDebentures&Bonds – –1.2.5 SecuritisedDebtsecurities – –1.3 Unlisted Securities1.3.1 EquityShares – –1.3.2 Preference Shares – –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 201.14 233.64 2 Deposits3 Other Current Assets3.1 Cash&BankBalance 7.26 22.58 3.2 ReverseRepoLending – –3.3 CollateralizedBorrowingandLendingObligation(CBLO) – 2.99 3.4 Others 1.98 2.49 4 Deferred Revenue Expenditure

(totheextentnotwrittenoff)– –

TOTAL 210.38 261.70 NotestoAccounts–AnnexureI

12

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

Sahara Power & Natural Resources FundCurrent

Year / Period ended 31/03/2016

PreviousYear/Period

ended31/03/2015

1 INCOME1.1 Dividend 4.33 3.84

1.2 Interest 0.16 0.68

1.3 RealisedGain/(Loss)onForeignExchangeTransactions – –

1.4 RealisedGains/(Losses)onInterschemesaleofinvestments – –

1.5 RealisedGains/(Losses)onExternalsale/redemptionofinvestments

7.64 43.26

1.6 RealisedGains/(Losses)onDerivativeTransactions – –

1.7 OtherIncome – –

( A ) 12.13 47.78 2 EXPENSES 2.1 Managementfees 5.51 3.432.2 ServicetaxonManagementfees 0.76 0.422.3 InvestorEducation&AwarenessFees 0.05 0.052.4 Transferagentsfeesandexpenses 0.37 1.262.5 Custodian fees – 0.702.6 Trusteeshipfeesandexpenses – 0.312.7 CommissiontoAgents – 0.432.8 Marketing&Distributionexpenses – 0.002.9 Audit fees – 0.832.10 DeferredRevenueExpenditure – 0.002.11 Otheroperatingexpenses 0.09 0.34

(B ) 6.78 7.783 NET REALISED GAINS / (LOSSES) FOR THE YEAR / PERIOD

(A -B = C)5.35 40.00

4 ChangeinUnrealisedDepreciationinvalueofinvestments (D) 4.89 3.655 NET GAINS / (LOSSES) FOR THE YEAR / PERIOD (E=(C-D)) 0.46 36.35 6 Changeinunrealisedappreciationinthevalueofinvestments (F) 34.92 32.457 NET SURPLUS / (DEFICIT) FOR THE YEAR / PERIOD

(E + F = G)35.38 68.80

7.1 Add:BalancetransferfromUnrealisedAppreciationReserve (11.04) 2.47 7.2 Less:BalancetransfertoUnrealisedAppreciationReserve 23.88 34.927.3 Add:IncomeEqualisationReserve (7.48) (0.79)8 Total (7.02) 35.56 9 Dividend appropriation9.1 IncomeDistributedduringtheyear/period – –9.2 Taxonincomedistributedduringtheyear/period – –10 RetainedSurplus/(Deficit)carriedforwardtoBalancesheet (7.02) 35.56

Otheroperatingexpensesincludetransactioncosts.NotestoAccounts–Annexure1

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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

theaggregatemarketvalueofsecuritiesunderSaharaPowerandNaturalResourcesFundbutheld in thenameofSaharaMutualFundbeinginvestedinCBLOisNil(PY:2,99,595.86).

1.2 Duringtheyearended31.03.2016theRegistrarandTransferAgentschargesamountingto` 36,988.72(PY:` 1,26,391.00)constitutes5.46%(PY:16.26%)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 23.88 11.48 10.48 5.04 34.92 13.85 5.59 2.22

1.8 AggregateValueofPurchaseandSalewithPercentagetoaverageassets.

Purchases

Year Amount in ` % of Daily Average2015-16 9,703,672 42.662014-15 36,104,212 131.47

Sales

Year Amount in ` % of Daily Average2015-16 12,124,760 53.302014-15 38,434,829 139.96

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 Power and Natural

Resources Fund

Money Market Instruments(CBLO) 0.00 0.00 3.00 1.19

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**Infrastructure

Fund

0.20 0.02 0.00 0.06 0.00 Not Applicable 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 Not Applicable **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 4493635.091 44936350.91 4493635.091 44936350.91OpeningBalance 1109763.983 11097639.83 1167392.125 11673921.25UnitsSoldduringtheyear 2013.590 20135.90 263725.901 2637259.01UnitsRepurchasedduringtheyear (167550.526) (1675505.26) (321354.043) (3213540.43)

ClosingBalance 944227.047 9442270.47 1109763.983 11097639.83

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 0.000 0.00 0.000 0.00OpeningBalance 197928.911 1979289.11 6702.824 67028.24UnitsSoldduringtheyear 18012.357 180123.57 258783.226 2587832.26UnitsRepurchasedduringtheyear (4113.359) (41133.59) (67557.139) (675571.39)

ClosingBalance 211827.909 2118279.09 197928.911 1979289.11

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 2094688.331 20946883.31 2094688.331 20946883.31OpeningBalance 460805.370 4608053.70 700752.283 7007522.83UnitsSoldduringtheyear 315.089 3150.89 14905.816 149058.16

UnitsRepurchasedduringtheyear (89236.197) (892361.97) (254852.729) (2548527.29)

ClosingBalance 371884.262 3718842.62 460805.370 4608053.70

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 5281.777 52817.77 6182.966 61829.66UnitsSoldduringtheyear 312.941 3129.41 3797.748 37977.48

UnitsRepurchasedduringtheyear (3955.973) (39559.73) (4698.937) (46989.37)

ClosingBalance 1638.745 16387.45 5281.777 52817.775. 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 POWER & NATURAL RESOURCES FUND Current Year / Period ended 31/03/2016

PreviousYear/Periodended31/03/2015

1. NAVperunit(`): Open DividendPlan 12.6045 10.4951 GrowthPlan 14.7779 12.3029 DirectDividendPlan 12.6859 10.5362 DirectGrowthPlan 14.8477 12.3326Repurchase Price during the year** (i) Highest DividendPlan 13.1147 14.2458 GrowthPlan 15.3762 16.6993 DirectDividendPlan 13.2009 14.3083 DirectGrowthPlan 15.4503 16.7476(ii) Lowest DividendPlan 12.1621 10.3604 GrowthPlan 14.2592 12.1449 DirectDividendPlan 12.2432 10.4014 DirectGrowthPlan 14.3298 12.1748Resale Price during the year** (i) Highest DividendPlan 13.5453 14.7135 GrowthPlan 15.8810 17.2475 DirectDividendPlan 13.3342 14.4528 DirectGrowthPlan 15.6064 16.9168(ii) Lowest DividendPlan 12.5613 10.7005 GrowthPlan 14.7273 12.5436 DirectDividendPlan 12.3669 10.5065 DirectGrowthPlan 14.4745 12.2978 End DividendPlan 12.0129 12.6045 GrowthPlan 14.0844 14.7779 DirectDividendPlan 12.1263 12.6859 DirectGrowthPlan 14.2180 14.84772. ClosingAssetsUnderManagement(` inLakhs) End 207.98 252.14 Average(AAuM)4 227.47 274.623. Grossincomeas%ofAAuM1 5.33% 17.40%4. ExpenseRatio: a. TotalExpenseas%ofAAuM 2.97 2.83 b. ManagementFeeas%ofAAuM 2.76 1.40

17

SAHARA POWER & NATURAL RESOURCES FUND Current Year / Period ended 31/03/2016

PreviousYear/Periodended31/03/2015

5. NetIncomeasapercentageofAAuM2 2.35% 14.57%6. Portfolioturnoverratio3 0.43 1.317. TotalDividendperunitdistributedduringtheyear/period NIL NIL8. Returns(%): a. Last One Year SaharaPower&NRFund–GrowthOption -4.6928 20.1172 Nifty50Index -8.8635 26.6520 b. Since Inception SaharaPower&NRFund–GrowthOption 4.4935 5.9213 Nifty50Index 6.7463 9.2641

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

18

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SchemeCode:PN