(1) The Board shall every year provide out of its revenues, depreciation in respect of each depreciable asset
12. Section 14 with marginal heading substituted by Act No.4 of 1997.
Subventions and loans to the Board.
Powers of Board to borrow.
Depreciation Reserve.
Guarantee of Loans.
12 [Act No. 15 of 1989] specified in column (1) of the First Schedule, so that the depreciation provided in respect of such asset over the period specified in column (2) accumulates to ninety percent of the original cost of acquisition of the asset, either,-
(a) in equal annual instalments in respect of each such asset; or
(b) at a fixed annual percentage of the original cost of acquisition during the year of acquisition and of the depreciated value of the asset as at the end of the previous financial years during each subsequent year.
(2) If any asset is sold, discarded, demolished or destroyed during the year,-
(a) the excess, if any, of the written down value of such asset over its sale proceeds or as the case may be its scrap value shall be written off;
(b) the excess, if any, of the lower of the sale proceeds and the cost of acquisition over the written down value of the asset shall be accounted for as income during such financial year; and
(c) the excess, if any, of the sale proceeds over the cost of acquistion of the asset shall be credited to the capital reserve of the Board;
in the financial year in which the asset is sold, discarded, demolished or destroyed.]
15. The Board shall create a reserve for improvement works and shall, at the end of every year, credit to such reserve from its revenues, such percentage of the balance remaining after meeting its operating, maintenance and Improvements Reserve.
[Act No. 15 of 1989] 13 management expenses and after adequate provision is made for depreciation, taxes, interest and amortization payments on loans and other borrowings as the Board may determine taking into consideration the improvement works which the Board will have to execute in order to provide adequate water supply and sewage treatment works in the Hyderabad Metropolitan area.