Clarification of the effect of change in accounting policy

Translation 14 May 2007 Subject : Clarification of the effect of change in accounting policy To : Director and Manager Stock Exchange of Thailand According to the Company has changed its accounting policy for investment in subsidiaries in the company financial statements from the equity method to the cost method in compliance with the Federation of Accounting Professions' announcement which has been reported to SET as per our letter of submission of financial statement for the quarter 1/2007 on 11 May 2007. In addition, the Company would like to clarify the effect of change in accounting policy as follows: Since 1 January 2007, the Company has changed its accounting policy for investment in subsidiaries in the company financial statements from the equity method to the cost method in compliance with the Federation of Accounting Professions' announcement. The Company applies retrospective adjustments. As a result, the company balance sheet as at 31 December 2006 and the company statement of income for the three-month period ended 31 March 2006 presented for comparative purposes have been restated. The change in such accounting policy has an impact to the company financial statement only and does not have an impact to the consolidated financial statements. The effect of applying new accounting policy to the company balance sheet as at 31 December 2006 and the company statement of income for the three-month period ended 31 March 2006 are as follows: Balance sheets as at 31 December 2006 Decrease in investments in subsidiaries (Baht'000) 1,805,927 Decrease in retained earnings (Baht'000) 1,805,927 The cumulative effect of the accounting policy has been presented under the subject of "Cumulative effect of the change in accounting policy for investments in subsidiaries" in the company financial statements in the Statements of Changes in Shareholders' Equity. Statement of income for the three-month period ended 31 March 2006 Decrease in share of the net profits from investments - equity method (Baht'000) 63,978 Decrease in net profit (Baht'000) 63,978 Decrease in basic earnings per share (Baht) 0.27 However, the change of accounting policy affected only the company financial statement. It did not have any effect on the consolidated financial statements or business fundamentals. Please be informed accordingly. Yours faithfully, Siam Makro Public Company Limited Signature (Mr Charoen Assawajarukasem) SET Coordinator Manager