The Directors have pleasure in presenting their 11th Annual Report on
 the affairs of the company together with Audited Accounts for the
 financial year ended 31st March, 2011.
 
 FINANCIAL RESULTS : 
 
                                                           (Rs.in Lacs)
  
                                 Current Year             Previous Year
                                  (2010-11)                 (2009-10)
 
 Operating Income
 
 Gross Sales                         158327.91                 94221.62
 
 Net Sales                           158321.55                 94221.62
 
 Other Income                          2454.39                  3949.79
 
                                     160775.94                 98171.41
 
 Less :
 
 Expenditure             140276.90                  85789.39
 
 Provision for             5574.88   145851.78       3143.13   88932.52
 Depreciation
 
 Profit before taxation               14924.16                  9238.89
 
 Less :
 
 Taxes :Current Tax        2979.00                   1600.00
 
 Deferred Tax              2899.86                    987.58
 
 Fringe Benefit Tax              -                         -
 
 MAT Credit Entit.        (996.09)                   (39.46)
 
 Wealth Tax                   2.25     4885.02          2.25    2550.37
 
 Profit after Tax                     10039.14                  6688.52
 
 Balance brought forward              23285.76                 19595.85
 
                                      33324.90                 26284.37
 
 Add: Previous year Tax Adjustments      78.62                 (498.61)
 
 Less: Transferred to General Reserve  2500.00                  2500.00
 
 Balance Carried over to Balance Sheet 30903.52                23285.76
 
 
 
 BUSINESS
 
 The Company is vertically integrated multi-product textile company,
 manufacturing and exporting various kinds of Knitted Garments, Terry
 Towels, Knitted & Processed Fabric and various kinds of Yarn with
 production facilities located at Ludhiana and Nawansheher in Punjab and
 Baddi in Himachal Pradesh and upcoming unit in the state of Madhya
 Pradesh.
 
 Our Business Strategy
 
 Our principal operating strategies are to:
 
 - Foray into value added yarns like slub fancy yarn, Dyed
 yarns, Bamboo cotton, Organic cotton, Millanges etc
 
 - Expand our garment capacity to cater to more diverse export markets.
 
 - To become an integrated player in the textile market
 catering in all segments from carded and combed yarn, knitting fabrics,
 knitted garments and terry towels.
 
 - Reduction of operational costs.
 
 - Invest in design and product development for setting new
 trends and lifestyles.
 
 - Develop and maintain strong relationship with our clients.
 
 We are expanding our existing capacities in yarn manufacturing and
 terry towels. Further, we have also set up captive Power Plant with a
 capacity of 22MW. The terry towel manufacturing capacities are proposed
 to be increased upto 25200 TPA post expansion.
 
 The implementation work of the new Spinning Project in the state of
 Madhya Pradesh is on full swing which consists of the capacity of
 3,26,400 spindles. Further Vertex Spinning facility with capacity of
 2400 spindles and Open end Spinning with capacity of 2040 Rotors is
 also proposed to be set up. Further expansion of open end Spinning
 consisting of 4800 rotors is also proposed which would take the total
 open end spinning capacity (post expansion) to 9240 rotors.
 
 OPERATIONS
 
 During the year under review, your company has achieved Gross Sales to
 the tune of Rs. 158327.91 lacs as compared to Rs. 94221.62 lacs in the
 previous year. The profit before tax stood at Rs. 14924.16 lacs as
 compared to Rs. 9238.89 lacs during the previous year. After providing
 for taxes and other adjustments, the Profit after tax stood at Rs.
 10039.14 lacs as compared to Rs. 6688.52 lacs during the previous year.
 
 SUBSIDIARY FIRM(S)
 
 The company has one Subsidiary Company namely SEL Textiles Ltd. and two
 subsidiary firm(s) namely M/s SE Exports and M/s Kudu Industries. The
 Company has its branch office at Dubai, United Arab Emirates.
 
 The annual accounts of the subsidiary companies/firms and the related
 detailed information shall be made available to shareholders of the
 holding and subsidiary companies seeking such information at any point
 of time.
 
 Further the annual accounts of the subsidiary companies are kept for
 inspection by any shareholders in the head office i.e.  the Registered
 Office of the holding company and of the subsidiary companies
 concerned.
 
 Your company continue to hold 99% stake each in the partnership firm(s)
 namely M/s SE Exports and M/s Kudu Industries. M/s SE Exports, the firm
 is engaged in the business of manufacture of value added knitted
 garments having production facilities located in the tax free zone in
 Baddi in Himachal Pradesh and M/s Kudu Industries is located at
 Ludhiana.
 
 The Company holds 99.75% stake in SEL Textiles Limited. SEL Textiles
 Ltd. is engaged in the business of textiles and the Company has two
 spinning unit(s) one at Neemrana (Rajasthan) and one at Hansi, Hissar
 (Haryana).
 
 Further the capacities of both of the aforesaid units is being expanded
 as under:
 
 - Addition of 34560 Spindles at the Unit located at Neemrana
 (Rajasthan). It is also proposed to add open end spinning capacity of
 1440 rotors there.
 
 - Addition of 26400 spindles at the Unit located at Hansi (Haryana)
 
 Further a new Spinning unit is being installed under the subsidiary
 i.e. SEL Textiles Ltd. In the State of Punjab with the capacity of
 about 1,88,000 Spindles.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Consolidated Financial Statements of the Company and its
 subsidiaries, prepared and presented in accordance with Accounting
 Standard (AS) 21, are attached to and form part of the Annual Report.
 
 CORPORATE GOVERNANCE
 
 Your Company is committed to adhere to the best Practices of
 governance. In your Company, prime importance is given to reliable
 financial information, integrity, transparency, fairness, empowerment &
 compliances. A separate section on Corporate Governance and a
 Certificate regarding compliance of conditions of Corporate Governance,
 forms part of the Annual Report
 
 DIVIDEND
 
 In order to conserve resources for future growth and the expansion
 projects of the company the directors have not recommended any dividend
 for the Financial year 2010-11.
 
 PREFERENTIAL ISSUE OF WARRANTS
 
 Out of total 66,00,000 equity warrants allotted on 18th September, 2009
 on preferential basis, 57,00,000 warrants were converted in the
 previous financial year and the balance 9,00,000 warrants were
 converted into Equity shares by the holders thereof during the year.
 
 Further during the year the Company had allotted 30,90,000 equity
 warrants on preferential basis, carrying an option to the holder of
 such warrants to subscribe to one equity share of Rs. 10/- each at a
 premium of Rs. 64/- per share for every warrant held, within 18 months
 from the date of allotment (i.e.  from 27.08.2010), in terms of SEBI
 (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure
 Requirements) Regulation, 2009. All of the aforesaid warrants were
 converted into Shares during the year itself.
 
 FURTHER ISSUE OF SECURITIES
 
 During the year 2010-11, the Company has issued two series of GDRs
 (Global Depository Receipts). The first series being of 30,00,000
 Global Depositary Receipts (GDRs) issued on 04.05.2010 representing
 3,00,00,000 Equity Shares of the Company at the rate of USD 15.50 per
 GDR. The second series being of 35,00,000 Global Depositary Receipts
 (GDRs) issued on 09.09.2010 representing 3,50,00,000 Equity Shares of
 the Company at the rate of USD 10.00 per GDR. These GDRs were listed on
 the Luxembourg Stock Exchange. The said GDRs were cancelled/converted
 and there was no share outstanding in lieu of the said GDRs as on
 31.03.2011.
 
 FURTHER ISSUE OF SECURITES TO RAISE FUNDS
 
 To augment long term resources of the Company and also for meeting the
 fund requirements of the existing business, current and future
 expansions etc., the Company proposes to pass requisite resolution in
 this regard to raise funds for the Company, subject to necessary
 approvals and applicable laws & regulations, by way of issue of equity
 shares/securities, in the course of domestic and/or international
 offering(s), in one or more foreign markets, at such time or times in
 one or more tranche or tranches, such Securities include Global
 Depositary Receipts (GDRs) and/or American Depositary Receipts (ADRs)
 convertible into equity shares, Foreign Currency Convertible Bonds
 (FCCBs) or any instrument or securities representing convertible
 securities such as convertible debentures, bonds or warrants etc.
 convertible into equity shares, whether optionally or otherwise or any
 combination thereof (hereinafter referred to as `Securities).
 
 The Company also intends to issue convertible warrants on Preferential
 basis to raise funds for the Company.
 
 The desired resolution(s) for the aforesaid purpose(s) are included in
 the Agenda for the ensuing Annual General Meeting for the consideration
 and approval of the members of the Company.
 
 FIXED DEPOSITS
 
 During the year, your Company has not accepted any fixed deposits
 within the meaning of Section 58-A of the Companies Act, 1956 and the
 Rules made there under.
 
 DIRECTORS
 
 Mr. Dhiraj Saluja, Mr. Sanjiv Garg and Mr. Ranjan Madaan, Directors of
 the Company retire by rotation at this Annual General Meeting and being
 eligible offer themselves for reappointment.
 
 Mr. Navneet Gupta is to be confirmed to be re-appointed as Executive
 Director of the Company for a further period of three years. Further
 the designation of Mr. Dhiraj Saluja is to be confirmed to be as Joint
 Managing Director of the Company.  The required resolution(s) in this
 regard are included in the Agenda for the ensuing Annual General
 Meeting for the consideration and approval of the members of the
 Company.
 
 LISTING WITH EXCHANGES AND LISTING FEES
 
 The Equity Shares of the Company are presently listed with Bombay Stock
 Exchange Limited (BSE) and The National Stock Exchange of India Ltd.
 (NSE). Further the Company has paid listing fees to both the exchanges
 (i.e. BSE and NSE) upto financial year 2011-12.
 
 AUDITORS
 
 M/s Dass Khanna & Co., Chartered Accountants, Ludhiana, the Statutory
 Auditors of the Company retire at the ensuing Annual General Meeting
 and are eligible for reappointment.
 
 AUDITORS REPORT
 
 With reference to the Auditors remarks regarding Non- confirmation of
 debit/credit balances, the same were not confirmed by the respective
 parties despite the letters in this regard been sent to them.
 
 Further pursuant to auditors remarks in their Report on consolidated
 Accounts regarding non-compliance with AS-15 regarding non-provision of
 gratuity by its subsidiary firms the Board has to say that since the
 employee strength of the subsidiary partnership firm(s) is small, the
 gratuity is provided on cash basis. Regarding Non elimination of loss
 on transfer (sale) of fixed assets among Inter group companies while
 preparing the consolidated financial statements, the said amount was
 very small and notional loss only which did not had any material effect
 on the consolidated financial statements of the Company. Further
 regarding Non-confirmation of debit/credit balances, the same were not
 confirmed by the respective parties despite the letters in this regard
 been sent to them.
 
 Further the report of Auditors and notes on accounts are self
 explanatory and do not call for any further comments as there are no
 other adverse remarks by the Auditors.
 
 AUDIT COMMITTEE
 
 The Board has constituted its Audit Committee pursuant to the
 provisions of Section 292A of the Companies Act, 1956 and provisions of
 the Listing Agreement(s) of the Stock Exchange(s).
 
 The Audit Committee of the Company presently comprises of the following
 members namely Mr. Ashwani Kumar, Mr. Amar Narang, Mr. Sanjiv Garg and
 Mr. Navneet Gupta. Sh. Ashwani Kumar is the chairman of the said
 committee.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Information as per section 217(1)(e) read with Companies (Disclosure of
 particulars in the Report of Board of Directors) Rules, 1988 are given
 in Annexure-I forming part of this report.
 
 PARTICULARS OF EMPLOYEES
 
 Details of remuneration paid to employees, as required by Section
 217(2A) of the Companies Act, 1956 read with the Companies (Particulars
 of employees) Rules, 1975 are set out in a separate statement attached
 hereto and marked as Annexure-II and forms part of this report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 The Directors would like to assure the Members that the financial
 statements for the year under review conform in their entirety to the
 requirements of the Companies Act, 1956.
 
 The Directors confirm that:
 
 - In the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 - Appropriate accounting policies have been selected and applied
 consistently and have made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at 31st March, 2011 and of the profit of the Company
 for the year ended on 31st March, 2011;
 
 - Proper and sufficient care has been taken for maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 - The annual accounts have been prepared on a going concern basis.
 
 ACKNOWLEDGEMENT
 
 Your Directors express their gratitude to the Companys vendors,
 customers, Banks, Financial Institutions, Shareholders & society at
 large for their understanding and support. Finally, your Directors
 acknowledge the dedicated services rendered by all employees of the
 company.
 
 
                                      For and on behalf of the Board 
 
                                  For SEL Manufacturing Company Ltd.
 
 
                                                     (NEERAJ SALUJA) 
                                                   Managing Director
 
 
                                                     (NAVNEET GUPTA) 
                                                  Executive Director
 
 
 PLACE : Ludhiana 
 DATE  : 19.05.2011