AUG. 10.]

(2) For such purpose the local authority shall permanently appropriate a sum which
bears the same proportion to the annual contribution payable, before the date of
conversion, to the existing sinking fund of such loan as the aggregate amount of
principal secured by such unconverted securities bears to the aggregate amount of
principal secured by all the existing securities in respect of which such existing sinking
fund is held, and shall pay such sum to the Commissioners yearly and every year until
the maturity date of such unconverted securities, or until the Commissioners are satisfied
that the accumulations of sinking fund will suffice to redeem such securities at maturity.

(3) The first of such yearly payments shall be made not later than one year after
the date on which the last annual contribution payable before the date of conversion
to the existing sinking fund of such loan was payable.

(4) Subject to the provisions of this Order, the provisions of sections forty to
forty-four of the Local Bodies’ Loans Act, 1926, shall, so far as applicable and with
all necessary modifications, apply with respect to such sinking fund:

Provided that nothing in the said sections or in this Order shall authorize the
removal or suspension of the Public Trustee as Commissioner of any sinking fund.

APPLICATION OF EXISTING SINKING FUND.

23. For the purposes of the next two succeeding clauses the sinking fund of every
    loan in the First Schedule hereto some only of the existing securities issued in respect
    whereof are held by the Public Trustee shall be divided into two parts the first of which
    shall bear to the second the same proportion which the amount of the existing securities
    so held by the Public Trustee bears to the amount of the existing securities held by
    persons other than the Public Trustee. The said parts shall be applied as follows :—

(a) The first part of such sinking fund shall be applied by the Commissioner thereof
in accordance with the provisions of clause twenty-four hereof as if the
existing securities issued in respect of the loan and held by the Public Trustee
were a separate loan held by the Public Trustee and such first part of the
sinking fund were the sinking fund of such separate loan.

(b) The second part of such sinking fund shall be applied by the Commissioner
thereof in accordance with the provisions of clause twenty-five hereof as if
the existing securities issued in respect of the loan and held by persons other
than the Public Trustee were a separate loan within the meaning of that
clause and such second part of the sinking fund were the sinking fund of
such separate loan.

24. (1) Subject to the provisions of clause twenty-three hereof, the existing sinking
    fund of every loan in the First Schedule hereto the securities issued in respect of which
    are held by the Public Trustee, shall be applied by the Commissioner thereof in or
    towards making the following payments, in the following order of priority, namely :—

(a) First, in transferring to the Commissioner of the sinking fund hereinbefore
required to be created for the unconverted securities issued in respect of
such loan a sum which bears the same proportion to the amount of such
existing sinking fund at the date of conversion as the aggregate amount of
principal secured by such unconverted securities bears to the aggregate
amount of principal secured by all the existing securities in respect of which
such sinking fund is held;

(b) Secondly, as far as it will extend to the nearest multiple of five pounds in repayment
as at the date of conversion of the principal secured by the existing
securities issued in respect of such loan and held by the Public Trustee; and

(c) Thirdly, in transferring the balance to the Commissioner of the consolidated
sinking fund hereinbefore required to be created for the new securities, to
be held as part of that sinking fund.

(2) Interest up to the date of conversion on any existing securities so repaid in
accordance with paragraph (b) of the last preceding subclause shall be paid by the local
authority out of the local fund.

25. Subject to the provisions of clause twenty-three hereof, the existing sinking fund
    of every loan referred to in the First Schedule hereto (other than the loans referred to
    in the last preceding clause) shall be applied by the Commissioners thereof, as far as
    it will extend, in or towards making the following payments, in the following order of
    priority, namely :—

(a) First, in transferring to the Commissioners of the sinking fund hereinbefore
required to be created for the unconverted securities issued in respect of
such loan a sum which bears the same proportion to the amount of such
existing sinking fund at the date of conversion as the aggregate amount of
principal secured by such unconverted securities bears to the aggregate
amount of principal secured by all the existing securities in respect of which
such sinking fund is held;

(b) Secondly, in payment, in accordance with the directions of the local authority,
of any cash payments required by this Order to be made in respect of
premiums to which any holder is entitled on the conversion of any existing
securities to which this Order applies (whether issued in respect of such
loan or of any other loan referred to in the First Schedule hereto); and

(c) Thirdly, in transferring the balance to the Commissioner of the consolidated
sinking fund hereinbefore required to be created for the new securities, to
be held as part of that sinking fund.

CONSOLIDATED SPECIAL RATE.

26. (1) As a security for the new securities and the unconverted securities the
    local authority shall forthwith, by resolution gazetted (in the form numbered (4) in the
    Second Schedule hereto), make and levy a special rate over the whole of the district
    of the local authority to provide for the payment of interest, sinking fund, and other
    charges in respect of such securities.