GMM Pfaudler - Update on formation of a Wholly Owned Subsidiary

With reference to the earlier announcement dated December 07, 2007 the Board of Directors’ decision to acquire 100% shareholding of Mavag AG, Switzerland, GMM Pfaudler Ltd has informed that GMM Mavag AG (WOS) has entered into a Share Purchase Agreement with the shareholders of Mavag AG to acquire 100% equity stake in Mavag AG.

This acquisition is proposed to be funded through the Company's own cash resources and /
or borrowings with the power of the Board of Directors, as may be required.

Mavag AG is a leading supplier of highly engineered, critical equipment and systems for the chemical, Pharmaceutical and Biotech Industries. The acquisition of Mavag AG will enable the Company to get an immediate and significant business presence in Europe and access to the latest technology for the Indian market.