Causes of change in profit

February 16, 1998 Subject : Causes of change in profit To : Manager and Director The Stock Exchange of Thailand Please be advised of the causes of change in 1997 profit in comparison with 1996. 1.) As a result of the negative effects from economic downturn and the intense competition, last quater sales decreased 11% from the same period a year before. The lower consumers spending especially in non-food area together with rapid expansion from both existing and new players in the retail sector effecting substantial reduction in sales and profit. 2.) In the last quater of 1997 the Company has set up one time provisions for doubtful debts on loan and other charges to its affiliated company and other receivables, the write-off of fixed assets, stock shrinkage and obsolescence. Yours faithfully, Siam Makro Public Company Limited