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IL&FS Mutual Revises Dividend Frequency.

IL&FS Mutual Fund has revised the dividend frequency in its Liquid Account (Daily Dividend Option and Monthly Dividend Option) and Short-Term Plan under IL&FS Bond Fund, effective June 1, 2002. Now, dividends will be declared on the quarterly basis in all the above schemes. The Record Date for all the foregoing Plans / Options shall be 15th of each quarter (i.e. quarter ending September, December, March and June).

In view of this change in the IL&FS Liquid Account, the Monthly Dividend (Reinvestment) plan shall be merged with Daily Dividend Plan. The merged Plan shall be called as "Dividend Plan". This merged Dividend Plan shall offer Reinvestment and Payout Options. Accordingly, IL&FS Liquid Account, as a whole, shall offer two Plans - Growth and Dividend Plan. The minimum subscription amounts and account balances under Dividend Plan shall be similar to Growth Plan i.e. Rs. 10,000 and in multiples of Re. 1/- and account balance of Rs. 5,000. The above revision is effective from June 1, 2002.

This is in response to the changed tax structure proposed in the Budget. Now, dividends from Mutual Fund are subject to be taxed in the hands of the unit holder. Further, under the Finance Act, 2002, it is mandatory for the Mutual Fund to deduct income tax at source on such income. Thus by reducing dividend frequency, the fund has tried to reduce the complications attached with the dividend distribution to the investor.