Annual report of an Indian mutual fund scheme

The annual report of a mutual fund scheme is the audited yearly financial statement and trustee report that every SEBI-registered mutual fund in India must prepare for each scheme under Regulation 68 and the Ninth Schedule of the SEBI (Mutual Funds) Regulations 2026 , and send to unitholders within four months of the 31 March year end, that is by 31 July.

The obligation is three provisions read together. Regulation 68 requires the report “as specified in the Ninth Schedule”. Regulation 69 requires the scheme’s auditor to report on the accounts to the trustees . Regulation 70(1) requires the asset management company to send a digital copy of the full report or an abridged summary to every unitholder, to host it on its website, and to give a free printed abridged copy on request. The operating detail sits in Paras 6.4, 6.11, 6.14 and 6.16 and Format No. 4B of the SEBI Master Circular for Mutual Funds dated 20 March 2026.

The 2026 Regulations replaced the SEBI (Mutual Funds) Regulations 1996 from 1 April 2026, so the provision numbers changed. Under the 1996 text the annual report was Regulation 54 and the Eleventh Schedule, the auditor’s report Regulation 55, delivery to unitholders Regulation 56 and the filing with SEBI Regulation 57.

For an investor the annual report is the one document that combines audited accounts, a statement by the trustees on performance “with full justification”, the year’s investor complaint count, the fund’s votes at investee company meetings, and the money still unclaimed by investors. HSBC Mutual Fund’s scheme-wise reports for FY2025-26 run to 725 pages across 45 schemes, which is why Regulation 70(1)(a) allows an abridged summary to be sent in its place.

Legal basis under the 2026 Regulations

Regulation 68 of the SEBI (Mutual Funds) Regulations 2026, in Chapter XII titled “Annual report of mutual fund schemes”, states: “Every mutual fund or the asset management company shall prepare in respect of each financial year, an annual report of the schemes as specified in the Ninth Schedule and such other requirements as specified by the Board from time to time.” The last clause is what gives the master circular’s additional disclosures legal force.

Source: SEBI (Mutual Funds) Regulations 2026, consolidated text amended to 10 October 2026; SEBI (Mutual Funds) Regulations 1996, consolidated text amended to 1 November 2025. Mapping compiled by webnotes.in.

The schedule numbers moved as well as the regulation numbers. The 1996 Ninth Schedule was the accounting policies; the 2026 Ninth Schedule is the annual report. A citation to “the Ninth Schedule” therefore means different things depending on which set of regulations the writer had open, and any page that pairs “Ninth Schedule” with annual report contents before 1 April 2026 has the numbering wrong.

The 1996 Regulation 57 required the annual report to be forwarded to SEBI within four months. The consolidated 2026 text contains no equivalent filing requirement, and none is stated in Para 6.4 of the master circular; this page states no current SEBI filing deadline for that reason. The two amendments made to the 2026 Regulations so far, SEBI/LAD-NRO/GN/2026/307 of 7 July 2026 and GN/2026/324 of 10 October 2026, do not touch Regulations 68 to 70 or the Ninth Schedule.

Deadline and delivery to unitholders

The scheme annual report must reach unitholders within four months of the 31 March year end, by 31 July. Regulation 70(1)(a) of the 2026 Regulations reads: “The asset management company shall send the digital copy of the scheme-wise Annual Report of a mutual fund or an abridged summary thereof to all unitholders within four months from the date of closure of the relevant financial year, in the manner specified by the Board from time to time.” The Investor Charter for Mutual Funds, reproduced in the 20 March 2026 master circular, lists the same item as “Every year before July 31”.

Source: SEBI (Mutual Funds) Regulations 2026, Regulation 70(1); SEBI Master Circular for Mutual Funds, HO/24/13/11(1)2026-IMD-POD-1/I/7602/2026 dated 20 March 2026, Para 6.4.

Two changes separate the 2026 wording from the 1996 Regulation 56: “send the digital copy” replaced “shall be provided”, and “functional link” replaced “link”. The SEBI board paper on the review of the 1996 Regulations, considered in January 2026, recorded that the regulation was revised “to enable AMCs to send both Annual Report and the abridged summary thereof, to investors in digital format”; the consultation paper of 28 October 2025 had proposed the change.

The four-month window has stood since 29 September 2008, when the SEBI (Mutual Funds) (Third Amendment) Regulations 2008 replaced six months with four. The duty to publish the report through a newspaper advertisement went earlier, omitted from 20 February 2002. Para 6.4.4 traces the e-mail requirement to circular SEBI/HO/IMD-II DOF3/P/CIR/2021/621 of 31 August 2021, and Para 6.4 as a whole consolidates circulars IMD/CIR No.8/132968/2008 of 24 July 2008, Cir/IMD/DF/16/2011 of 8 September 2011 and SEBI/HO/IMD/DF2/CIR/P/2018/92 of 5 June 2018.

No regulation or master circular paragraph sets a number of days within which a requested physical copy must be supplied, so none is stated here. The overall four-month limit is the only dated obligation.

Contents prescribed by the Ninth Schedule

The Ninth Schedule to the SEBI (Mutual Funds) Regulations 2026 has six paragraphs, and its Para 1 lists six items every scheme annual report must carry.

Source: SEBI (Mutual Funds) Regulations 2026, Ninth Schedule, Para 1.

Trustees’ report

The trustees’ report is the narrative half of the annual report. Item (iv)(e) of Para 1 requires “Comments of the trustees on the performance of the scheme, with full justification”, and item (iv)(d) requires the fixed sentence: “The price and redemption value of the units, and income from them, can go up as well as down with the fluctuations in the market value of its underlying investments in securities.”

The Ninth Schedule does not require a separate fund manager commentary for ordinary schemes. The performance commentary is the trustees’ obligation. A “Fund Manager Commentary” is mandatory only for ESG schemes, under Para 4.6.3(d) of the master circular, which also requires engagement case studies and an independent reasonable assurance on the portfolio in the ESG scheme ’s annual report.

Balance sheet and notes

Para 3 of the Ninth Schedule requires a scheme-wise balance sheet in the format SEBI specifies, with investments at market value by type, below-investment-grade and defaulted securities shown separately, the year-end net asset value per unit, and the previous year’s figures alongside. Provisions are deducted from the asset concerned rather than shown as liabilities, and contingent liabilities are disclosed.

The notes under Para 3(vi) carry most of what an analyst looks for:

• investments grouped by major classification, with every industry group forming 5% or more of a classification shown;
• the basis and computation of the management fee;
• brokerage, distribution commission, custodial or other fees paid to any entity in which the AMC or its major shareholders hold “not less than 10% of the equity capital”;
• purchases and sales during the year as a percentage of average net assets;
• non-traded, non-debt securities valued in good faith above 5% of net assets, and debt valued at a price other than the one supplied by the independent valuation agencies;
• unit capital movement by plan and option;
• investments in each group company of the sponsor, scheme by scheme and in aggregate;
• a statement that total income includes unrealised appreciation or depreciation;
• a statement that the full investment list is open for inspection at the AMC.

Revenue account

Para 4 requires a scheme-wise revenue account showing income and expenditure, with profit on inter-scheme transfers shown separately and custodian and registrar fees as their own lines. Total income and total expenditure must also be stated as a percentage of average net assets “calculated on a daily basis”, the audited counterpart of the total expense ratio reported monthly during the year.

Auditor’s report

Para 5 of the Ninth Schedule states that the auditor reports to the trustee company “and not to the unit holders”, and that the report forms part of the annual report. The auditor states that all information and explanations needed were obtained, that the balance sheet and revenue account agree with the books, and whether they give a true and fair view. Regulation 69(1) bars the scheme auditor from being associated with the auditor of the AMC. The audit itself is covered on the mutual fund auditor page.

Per-unit statistics over three years

Para 6 requires per-unit figures for each of the past three years: NAV, gross income by component, expenses, net income, unrealised appreciation, traded high and low prices, the expense and income ratios, the highest and lowest NAV, face value, unit capital, average net assets, the number of days in the period, and the weighted average price-to-earnings ratio of the equity holdings. The table is the quickest way to see a three-year expense ratio trend from audited numbers rather than from factsheets.

Accounting basis: Ind AS and the Eighth Schedule

Scheme accounts are prepared under Indian Accounting Standards. Regulation 72(3) of the SEBI (Mutual Funds) Regulations 2026 applies the Companies (Indian Accounting Standards) Rules 2015, and Regulation 72(4) gives the Regulations precedence where the two conflict. Ind AS first applied to scheme accounts under the 1996 Regulations from 1 April 2023, through the inserted Regulation 50(1A).

The Eighth Schedule supplies the fund-specific policies under Regulations 72(6) and 69(3)(c): mark-to-market valuation, recognition of dividends on the ex-dividend date, daily accrual of interest, weighted-average cost for computing gains, trade-date accounting, treatment of bonus and rights entitlements, provisioning for income, reserves, equalisation, transaction costs and the valuation of non-traded securities. These are the same rules that drive the daily NAV computation , so the audited year-end NAV and the published 31 March NAV are computed on one basis.

Disclosures added by the master circular

Regulation 68’s reference to “such other requirements as specified by the Board” brings in a list of disclosures from the 20 March 2026 master circular. Some belong in the annual report itself; others SEBI placed on the website instead.

Source: SEBI Master Circular for Mutual Funds dated 20 March 2026; SEBI (Mutual Funds) Regulations 2026. Table compiled by webnotes.in.

The split between report and website matters for anyone looking for a figure. The riskometer history, the potential risk class cell, swing pricing and any segregated portfolio are in the report. Commission paid to large distributors, covered on the distributor remuneration disclosure page, is not, and neither is executive pay. Passive schemes are exempt from some half-yearly financial disclosures, but Para 20.5.4(c) states that “the Annual Reports of such schemes shall continue to provide such details”.

The voting disclosures trace to circular SEBI/IMD/CIR No 18/198647/2010 of 15 March 2010 and the scrutiniser requirement to SEBI/HO/IMD/DF2/CIR/P/2016/68 of 10 August 2016; the scrutiniser certifies under Rule 20(3)(ix) of the Companies (Management and Administration) Rules 2014. The complaint requirement traces to circular Cir/IMD/DF/2/2010 of 13 May 2010. The proxy voting by mutual funds page covers the quarterly vote file itself.

Abridged annual report

The abridged annual report is the shorter summary an AMC may send in place of the full report under Regulation 70(1)(a), in the format SEBI prescribes under Regulation 70(1)(c). That format is Format No. 4B, “Abridged Scheme-wise Annual Report Format”, in the 20 March 2026 master circular, which originated in circular IMD/CIR No.8/132968/2008 of 24 July 2008 and now states that the accounts are drawn up in conformity with the 2026 Regulations.

Format 4B has the auditor’s report appended and a trustee report with six numbered items:

1. a brief commentary on the scheme’s one-year and since-inception performance against its benchmark, and the future outlook of the fund and operations of the schemes;
2. the background of the sponsor, the trust, the trustee company and the AMC;
3. the investment objectives;
4. a note that the accounting policies follow the Regulations, with any deviation reported;
5. unclaimed dividends and redemptions, scheme-wise, with the number of investors;
6. statutory information: the sponsor’s liability is limited to its initial contribution, prices can go up as well as down, the full annual report is on the website and open for inspection at the head office, and the trust deed and full report are available at a price.

After the trustee report come an abridged balance sheet and an abridged revenue account in Rs lakh, notes to accounts and a key statistics table. The notes cover investments held in the trustees’ name, open derivative positions, investments in associates and group companies, securities borrowed or lent, below-investment-grade and defaulted securities, aggregate unrealised gain or loss, purchases and sales as a percentage of average assets, non-traded securities, transactions with associates under Regulation 22(5)(b), holdings above 25% of net assets, unit capital movement, prior-year reclassification and contingent liabilities. The key statistics table gives the opening, highest, lowest and closing NAV for the current and previous year.

The SEBI board paper on the 2026 Regulations recorded that the schedule-level requirement for an abridged balance sheet and revenue account “has been deleted”, because the auditor’s report already contains those statements. Format 4B, issued on 20 March 2026, still prescribes them, so the requirement now rests on the master circular format rather than on the schedule.

The AMC’s own annual report

The AMC’s company accounts are a separate document from the scheme annual report. Para 6.11.1 of the 20 March 2026 master circular requires “The annual report containing accounts of the AMC” to be displayed in machine-readable format on the mutual fund’s website “immediately after approval in Annual General Meeting but not later than four months from the date of closure of the financial year”. The scheme annual report must state that unitholders may request the AMC’s annual report.

The requirement traces to circular MFD/CIR/9/120/2000 of 24 November 2000 and circular SEBI/HO/IMD/DF2/CIR/P/2021/024 of 4 March 2021, which one footnote of the master circular prints with the department code DF4. PPFAS Mutual Fund , for example, hosts the FY2025-26 annual reports of its AMC and of its trustee company on its financials page, separately from its scheme reports. The AMC’s report shows the fund manager’s own revenue, profit and balance sheet; the scheme report shows the investors’ money. Readers comparing an AMC’s profitability with the expenses charged to a scheme need both.

Worked example: HSBC Mutual Fund, FY2025-26

HSBC Mutual Fund’s “Schemewise Annual Reports 2025-2026”, hosted on the HSBC Mutual Fund website, is a single PDF of 725 pages covering 45 schemes as at 31 March 2026. The trustees’ report calls it the twenty-fourth annual report and is signed by Nani Javeri, Director, at Mumbai on 17 July 2026. The independent auditor’s report, by Price Waterhouse Chartered Accountants LLP, is dated the same day, 14 days inside the 31 July limit.

Source: HSBC Mutual Fund, Schemewise Annual Reports 2025-2026, trustees’ report and auditor’s report dated 17 July 2026.

The report’s layout follows the rules above. Each group of schemes (equity, fund of funds, debt) carries an auditor’s report, balance sheet, revenue account, cash flow statement, statement of changes in net assets, notes, portfolio holdings and historical per-unit statistics. Then come the potential risk class matrix, related-party transactions in Annexure I, the investments of Annexure II, derivatives in Annexure III, a 233-page proxy voting report and the scrutiniser’s certificate from KPMG Assurance and Consulting Services LLP dated 23 June 2026. The trustees’ report has separate sections on unclaimed amounts, investor grievances, proxy voting, risk-o-meter changes, stewardship and swing pricing, each citing its master circular paragraph.

HSBC’s auditor reports under “Section 55(4) of the Regulations and Clause 5(ii) of the Eleventh Schedule”, the 1996 numbering, for a year that closed on 31 March 2026, the day before the 2026 Regulations took effect. The report itself reached unitholders in July 2026, when Regulation 70(1) was already in force. The FY2026-27 accounts, due to unitholders by 31 July 2027, are expected to be the first audited under the Regulation 69 and Ninth Schedule numbering.

Annual report compared with other scheme disclosures

The annual report is the only audited scheme disclosure. Everything else a mutual fund publishes during the year is unaudited and narrower in scope.

Source: SEBI (Mutual Funds) Regulations 2026, Regulation 70; SEBI Master Circular for Mutual Funds dated 20 March 2026, Paras 6.1, 6.3, 6.11 and 6.14.

The 1996 Regulation 59A required a separate half-yearly portfolio statement within ten days. The 2026 Regulations have no counterpart; the monthly and fortnightly statements under Para 6.1.1 are the security-level disclosure. The 1996 Regulation 59(2) newspaper advertisement for half-yearly results has also given way to an e-mail or SMS notice under Regulation 70(2). The year-end portfolio in the annual report should match the March monthly portfolio published within ten days of 31 March, and a mismatch is something to raise with the AMC. Investor-level holdings, as opposed to scheme-level accounts, are in the consolidated account statement .

Reading an annual report as an investor

A scheme annual report answers questions that no other disclosure answers with audited figures. Six places in the document carry figures found nowhere else:

1. The trustees’ comments on performance. Item (iv)(e) of the Ninth Schedule requires “full justification”, so a one-line comment on a scheme that trailed its benchmark is a governance signal in itself.
2. Fees paid to associates. The Para 3(vi)(e) note and Format 7B show brokerage and commission paid to entities in which the AMC or its major shareholders hold 10% or more, the clearest view of sponsor-group business.
3. Sponsor group investments. The note required by Para 3(vi)(i) lists investments in each sponsor group company, by scheme.
4. Expense ratio from audited figures. The Para 4 percentages and the Para 6 statistics give expenses as a share of average daily net assets for three years.
5. Unclaimed money. The scheme-wise unclaimed dividend and redemption amounts, with the process for claiming them .
6. Voting record. Votes for, against and abstaining, and the fund’s stated voting policy, which stewardship reviews rely on.

The full report for a large fund house runs to several hundred pages because it repeats the accounts for every scheme. A reader interested in one scheme can go straight to that scheme’s balance sheet, revenue account and per-unit statistics, then to the fund-wide trustees’ report and annexures, which cover all schemes at once.

Non-receipt and grievance route

A unitholder who has not received the annual report can download it from the AMC’s website or from AMFI, since both must host it under Para 6.4.1 of the 20 March 2026 master circular. Non-receipt is also a recognised complaint: the Format 7D complaint table in HSBC Mutual Fund’s FY2025-26 report carries a category for “Non receipt of Annual Report/Abridged Summary”.

The complaint goes first to the AMC, which must redress it within 21 calendar days of receipt under Regulation 71(1) of the 2026 Regulations. An unresolved complaint can be escalated through SEBI SCORES , and the timelines that apply are set out in the Investor Charter for Mutual Funds . A request for a free printed abridged copy under Regulation 70(1)(c) is a request, not a complaint, and can be made by SMS, telephone, e-mail or letter, the modes Para 6.4.4 requires the annual report communication to list.

Corrections to earlier versions of this page

Before this revision, this page stated six claims that the primary documents do not support.

• “Regulations 56 and 57” as the source of the obligation. Under the 1996 Regulations those two provisions covered only delivery to unitholders and forwarding to SEBI; the duty to prepare the report was Regulation 54 with the Eleventh Schedule. Since 1 April 2026 the provisions are Regulations 68 to 70 and the Ninth Schedule of the 2026 Regulations.
• Master circular “SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/137 of May 2024”. No SEBI master circular for mutual funds carries that number. The operative document is HO/24/13/11(1)2026-IMD-POD-1/I/7602/2026 dated 20 March 2026.
• Circular “SEBI/IMD/CIR No.16/193388/2010” for annual report content. The master circular does not cite it for the annual report; the abridged format comes from IMD/CIR No.8/132968/2008 of 24 July 2008.
• “Seven principal sections”. The Ninth Schedule lists six items in Para 1.
• A mandatory fund manager commentary for every scheme. The Ninth Schedule puts the performance commentary on the trustees; a fund manager commentary is mandatory only for ESG schemes.
• “Over 90 per cent of unit-holders receive annual reports via email link”. No SEBI or AMFI publication states that figure, so no proportion is given here.

Other webnotes.in pages that repeated the Regulation 56 attribution for half-yearly results or the auditor’s filing have been corrected in the same revision.

Limitations of the annual report

The annual report is backward-looking and late by design. A report due by 31 July describes a portfolio already four months old when it arrives, and up to 16 months old just before the next one is due. For current holdings the monthly portfolio disclosure is the better source.

The Ninth Schedule prescribes what must be disclosed, not how well. A trustees’ comment can satisfy “full justification” in a paragraph or in a page, and the regulations set no minimum length or structure for it. The full report is long: HSBC Mutual Fund’s FY2025-26 edition runs to 725 pages for 45 schemes, which is the reading burden the abridged Format 4B summary exists to reduce.

The FY2025-26 reports were sent while Regulation 70(1) was in force, but their accounts were audited against the 1996 numbering, as HSBC’s auditor’s report shows. The first accounts expected to be audited under Regulation 69 and the Ninth Schedule are for FY2026-27, so how AMCs apply the deletion of the schedule-level abridged accounts will be visible from the reports due by 31 July 2027.

See also

• Mutual fund
• Mutual funds in India
• SEBI (Mutual Funds) Regulations 2026
• SEBI (Mutual Funds) Regulations 1996
• SEBI Master Circular for Mutual Funds 2026
• Securities and Exchange Board of India
• SEBI Investment Management Department
• Association of Mutual Funds in India
• Asset management company
• Mutual fund trustee
• Mutual fund trust structure
• Mutual fund auditor
• SEBI mutual fund compliance audit
• Mutual fund fund accountant
• Mutual fund custodian
• Mutual fund registrar and transfer agent
• Half-yearly unaudited results of mutual funds
• SEBI half-yearly trustee report
• Monthly portfolio disclosure
• AMFI scheme factsheet
• Scheme Information Document
• Statement of Additional Information
• Key Information Memorandum
• Consolidated account statement
• Net asset value
• NAV computation
• Total expense ratio
• Mutual fund riskometer
• Potential risk class matrix
• Swing pricing in mutual funds
• Side-pocketing in debt mutual funds
• Proxy voting by mutual funds
• Distributor remuneration disclosure
• Unclaimed redemption and dividend amounts
• ESG mutual funds in India
• Index funds in India
• Investor Charter for Mutual Funds
• SEBI SCORES
• Mutual fund unit holder rights
• HSBC Mutual Fund
• PPFAS Mutual Fund

External references

• SEBI (Mutual Funds) Regulations 2026, consolidated text
• SEBI Master Circular for Mutual Funds, 20 March 2026
• SEBI (Mutual Funds) Regulations 1996, consolidated text
• SEBI consultation paper on the review of the Mutual Funds Regulations, 28 October 2025
• HSBC Mutual Fund, Schemewise Annual Reports 2025-2026
• AMFI
• SEBI SCORES

References

1. SEBI (Mutual Funds) Regulations 2026, F. No. SEBI/LAD-NRO/GN/2026/294 dated 14 January 2026, consolidated text last amended on 10 October 2026, Regulations 22, 68, 69, 70, 71, 72 and 73, and the Eighth and Ninth Schedules.
2. SEBI (Mutual Funds) Regulations 1996, consolidated text last amended on 1 November 2025, Regulations 50, 51, 54, 55, 56, 57, 59, 59A and 60A, and the Eleventh Schedule.
3. SEBI, Master Circular for Mutual Funds, HO/24/13/11(1)2026-IMD-POD-1/I/7602/2026 dated 20 March 2026, Paras 4.6.3, 5.5.6, 5.8.6, 6.1, 6.3, 6.4, 6.5, 6.7, 6.11, 6.13, 6.14, 6.15, 6.16, 6.18.19, 7.26, 13.11.8, 15.5.8 and 20.5.4, and Formats 4A, 4B, 4C, 7B, 7C and 7D.
4. SEBI circular IMD/CIR No.8/132968/2008 dated 24 July 2008 (abridged scheme-wise annual report format), as consolidated in the 20 March 2026 master circular.
5. SEBI circular SEBI/HO/IMD/DF2/CIR/P/2018/92 dated 5 June 2018, and SEBI (Mutual Funds) (Second Amendment) Regulations 2018, as consolidated in the 20 March 2026 master circular.
6. SEBI circular SEBI/HO/IMD-II DOF3/P/CIR/2021/621 dated 31 August 2021 (e-mail of annual reports), as consolidated in the 20 March 2026 master circular.
7. SEBI circular Cir/IMD/DF/2/2010 dated 13 May 2010 (investor complaint disclosure) and SEBI/HO/IMD/DF2/CIR/P/2016/68 dated 10 August 2016 (scrutiniser certification of voting reports).
8. SEBI, Consultation paper on comprehensive review of the SEBI (Mutual Funds) Regulations 1996, 28 October 2025, and the SEBI board agenda paper on the same review, January 2026.
9. HSBC Mutual Fund, Schemewise Annual Reports 2025-2026, trustees’ report and independent auditor’s report dated 17 July 2026.