INDUSTRIAL PROFILE

The oil and gas industry has been in an economic slump since the mid 1980. there have not been significant domestic explorations that have been successful. In 1992, manufacturer of equipment related to drilling of oil and gas wells said it was closing its doors because the life of its product was 20 years and a new order had not been received domestically for 10 years. Also, there have been newspaper articles in the past 3 years expressing concerns from companies based in Oklahoma over the drop in the prince of natural gas. However, this concern has been alleviated somewhat as the price of natural gas has steadily increased since then, to a new 5-years high in march 1993. in march 1994, an article in the Dalls morning news provided some statistics that depicted an industry in distress. Oil and gas industry employment in the united states slipped to 1.43 million last, the lowest oil production fell to 6.8 million barrels per day in 1993, the lowest since 1958. US oil imports continue to rise reaching 6.7 million barrels per day last year. The service expanded extensive time and resources auditing the oil and gas industry and related businesses in the 1970s and early 1980s. with the passage of the crude oil windfall profit Tax Act of 1980, the service expanded its resource to include the examination of this excise tax in conjunction with the income tax consideration of the oil and gas industry. Since the mid-1970s, there have been regulations, legislation, and judicial decisions that have narrowed the gap with regard to differences of opinions in the interpretations of various sections of the law. The various interpretations related to Congress intents to how this particular area of law is to be applied. What does the future hold for oil and gas? It appears that the basic oils and gas issue exist. There is no new wrinkle in the industry interpretation such as we saw in tax shelters involving computers, real estates, etc. however, there does not appear to be an area that has good potential for auditing. Due to the declining oil gas prices, there has been increased activity by natural resource companies in the finical markets, trading on the exchange and off exchange. Examiners should be cognizant of financial product transactions when examining oil and gas companies.

General description of the industry Mineral interests: To determine the proper tax treatment of oil and gas transactions, one needs to have basic understanding of the various mineral interests. An operator may acquire the mineral rights in two ways. The first, and most common, method is to acquire the right top the minerals through a mineral lease. The other way is to acquire the mineral interest in fee.

ACQUISITION THROUGH MINERAL LEASE:

The interest begins with the landowner owns the land in fee, including the minerals on and above the surface, does not possess the financial resources or technology required to drill a well. A qualified independent producer will be denied a percentage depletion deduction on production volumes which exceed the average daily production of 1,000 barrels of crude oil. An integrated oil company is a producer which is also either a retailer, which sells more than $5 million of oil or gas in a year, or a refiner, which refines.

ABOUT BRAND IMAGE:

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COMPANY PROFILE
S.V.S is one of the leading largest producers of vegetable oil in Tamil Nadu. S.V.Sivalingam Nadu has established his reputed company in the year 1987 at villupuram. Through the modest and sincere efforts of employees it is quite possible for the company to encounter vast demands successfully. Its main objective is to satisfy the customers S.V.Sivalingam Nadar, is shortly called as S.V.S worked at Madras Vanaspathi Limited. Chennai from 1967 to 1989. In the mean while he has started a cotton industry in Chennai. His hard work and efficient management improved the cotton industry, expanded his business by offering him the required courage to establish a new oil company entitled his name in Villupuram. Initially, the company has produced only refined groundnut oil. 10 years of studies and stupendous work enabled him to introduce SVSRefinary oil containing 1/2, 1, 5, 15liters pack. He had lightened the life of more than 100 works by giving them employment. This company land extends up to 5 acres.

OBJECTIVES OF THE COMPANY: Aim to expand the business by introducing new machines and equipments. The company is about to introduce Gingerly oil and Vanaspathi. In additions to these, the company plan to enter in to a new product line, in the manufacturing of detergents. It intends to develop its market by setting its branches through India.

ORGANISATION CHART
CHAIRMAN

MANAGING DIRECTOR

EXECUTIVE DIRECTOR

ACCOUNTS MANAGER

WORKERS MANAGER

PERSONNAL MANAGER

CASHIER

ACCOUNTANT

DEPUTY MANAGER

CHEMIST

PLANT OPERATOR PLANT MAINTENANCE ENGINEER SUPERVISOR WORKERS

PRODUCT PROFILE:
Sunflower oil Ground net oil Palm oil Product Distributions to Following Area: 1. 2. 3. 4. 5. 6. 7. 8. Villupuram Tirukkoyilur Thindivanam Panruti Kumbakona, Mayiladuthurai Ulundurpet Puducherry