Section 12

Commencing not later than two years after the date on which interest on stock issued under this Act shall commence to run, the Minister shall in each half-year ending on the day on which interest on such stock falls due in addition to the sum appropriated in accordance with subsection 10(2), appropriate out of the Consolidated

Fund for the formation of a sinking fund a sum equal to one half of the annual contributions specified in the prospectus relating to the issue of such stock.

If at any time the Minister is satisfied that the value of the sinking fund will be sufficient with further accumulations of interest but without further payment of such contribution to enable the loan to be redeemed out of the proceeds of the sinking fund when the same falls due to be redeemed, the Minister may suspend further payments of such contribution to the sinking fund:

Provided that the Minister may at any time recommence payment of such contribution if he considers this to be necessary.

The Minister may, at any time, apply all or any part of the moneys in the sinking fund created under this section to the purchase of trustee stock or local stock forming part of a loan which matures not later than the loan raised under this Act.

The Accountant General shall in each year pay into the sinking fund created under this section a sum equivalent to the annual interest which would have been payable on any local stock purchased under subsection (3) if such stock had not been purchased as aforesaid.

Application of sinking fund 13.

The sinking fund created under section 12 shall be applied in the first place in payment of all expenses of, or incidental to, the management of the sinking fund and the redemption of the stock issued under this Act, and then in repayment of principal moneys represented by the stock.

9

Loan (Local)

Procedure if sinking fund insufficient 14.

In case the sinking fund created under section 12 is insufficient for the repayment of all principal moneys represented by stock issued under this Act at the time when the same becomes due, the

Minister shall make good the deficiency out of the Consolidated

Fund.

Delivery up of stock on repayment 15.

Before the repayment of the principal moneys represented by any stock issued under this Act, such stock shall be delivered up to the Treasury for cancellation.