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Darby’s Second Asia Mezzanine Fund makes Investment in Escorts Construction Equipment Ltd.

Infusion of Rs.750 million to meet Escorts' ambitious growth plans in its construction equipment business

New Delhi, March 26, 2007: Darby Overseas Investments, Ltd. ("Darby"), the private equity arm of Franklin Templeton Investments and a leading provider of private equity and mezzanine capital in emerging markets has committed an investment of Rs 750 million through an affiliate of its Darby Asia Mezzanine Fund II ("DAMF II") in Escorts Construction Equipment Ltd. ("ECEL"), the wholly owned subsidiary of Escorts and a leading manufacturer of construction and material handling equipment.

This investment by Darby provides ECEL with a strong capital base to fund its ambitious expansion plans and to meet the fast widening supply-demand gap. Ramping up operations, ECEL is setting up a state-of-the-art manufacturing facility spread over 15 acres land at Ballabhgarh in Haryana. The new facility, the land for which has already been acquired, shall be used for enlarging its product range in existing and newer domains.

Mr. Rajan Nanda, Chairman of Escorts, said of the investment: "Mezzanine finance is an attractive source of long-term capital for us as we pursue our plans for growth and an increased share of the overall market. We are very pleased to take advantage of Darby's broad experience in mezzanine financing for companies such as ours. With an established range of equipment to cater to the demand consequent to the spectacular boom in the construction and real estate industry and with a new range of products in the pipeline, we are today aptly poised at a very significant growth opportunity of the decade."

Richard H. Frank, Darby's Chief Executive Officer, commented: "We were attracted to ECEL because of its pole position within India's rapidly expanding construction equipment sector. In addition, ECEL fits well into our investment strategy of supplying risk capital to medium-sized companies with high quality management and good growth prospects."

About ECEL: The company was incorporated in 1995 following a spin-off from its parent,

Escorts Limited, where ECEL operated as a division manufacturing cranes. The pioneers and the largest manufacturers of the Pick-n-Carry Cranes worldwide and with over three decades of presence, ECEL is a dominant player in the Material Handling, Construction Equipment and Road Construction Equipment sectors. It manufactures a wide range of Pick-n-Carry Cranes, Slew Cranes, Loaders, Vibratory Soil Compactors and Tandem Vibratory Rollers. ECEL also markets & distributes world renowned brands in the product categories of Fork Lift Trucks, Articulated Boom Cranes, Tower and Crawler Cranes.

About Darby Overseas Investments: Darby Overseas Investments was founded in 1994 by The Honorable Nicholas F. Brady, who served as U.S. Secretary of the Treasury between 1988 and 1993. In 2003 Darby became a fully owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, and Darby investment teams. The San Mateo, California-based company has 60 years of investment experience and approximately US$564 billion in assets under management as of February 28, 2007. Darby's first Asia mezzanine fund was launched in 1998 and became fully invested in 2004 after investing US$275 million. The firm has played a pioneering role in bringing mezzanine – a hybrid of both debt and equity – to emerging market regions, initially in Latin America and Asia, and more recently in Central and Eastern Europe.

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