Additional Information for Q1 2006

1.   The Company has not published any forecasts of financial results.

2. According to the information available to the Company, as at the date of release of this quarterly report, that is May 15th 2006, the following shareholders submitted information on holding directly or indirectly (through subsidiaries) 5% or more of the total vote at the General Shareholders Meeting of AmRest Holdings N.V.

Shareholder	Number of shares	% of share capital held	Number of votes at GM	% share of the total vote at GM	
IRI LLC * 	5,338,000	39.54%	5,338,000	39.54%	
ING Nationale – Nederlanden Polska OFE	838,046	6.21%	838,046	6.21%	
BZ WBK AIB AM S.A.	724,911	5.37%	724,911	5.37%	
ING TFI S.A.	706,227	5.23%	706,227	5.23%	
AIG OFE	698,535	5.17%	698,535	5.17%	
Other shareholders	5,194,281	38.48%	5,194,281	38.48%	Total	13,500,000	100.00%	13,500,000	100.00%	
*IRI LLC is wholly-owned by ARC.

Since the date of release of the most recent periodic report (annual report published on March 31st 2006), the Company has become aware of the following changes in the structure of significant shareholdings in AmRest Holdings N.V:

Following a share purchase transaction which was settled on April 4th 2006, AIG OFE (an open-end pension fund) became the holder of 698,535 AmRest Holdings N.V. shares, representing 5.17% of the Company’s share capital and conferring the right to 698,535 votes, i.e. 5.17% of the total vote, at the Company’s General Shareholders Meeting. Before acquisition, AIG OFE had held 625,397 AmRest Holdings N.V. shares, representing 4.63% of the Company’s share capital and conferring the right to 625,397 votes, i.e. 4.63% of the total vote, at the Company’s General Shareholders Meeting. 

American Life Insurance and Reinsurance Company previously reported that as a result of entries made in securities accounts on April 26th 2005, American Life Insurance and Reinsurance Company held 767,202 AmRest Holdings N.V. shares, representing 5.68% of the Company’s share capital and conferring the right to 767,202 votes at the General Shareholders Meeting, i.e. 5.68% of the total vote. The shares were an indirect holding resulting from an investment made by AIG OFE (managed by AIG PTE S.A.) and AIG Asset Management Polska S.A. as part of discretionary management of securities portfolios.

As at April 5th 2006, PZU Asset Management S.A. reduced its share in the Company’s share capital below the threshold of 5% following sale of 6,333 Company shares from the portfolios of its customers. As a result, the share of PZU AM S.A. in the total vote at the Company’s General Shareholders Meeting fell below 5%. Before the change, the securities portfolios managed by PZU AM S.A. had comprised a total of 676,618 Company shares, representing 5.01% of the share capital and conferring the right to 676,618 votes, i.e. 5.01% of the total vote, at the General Shareholders Meeting.

PZU Życie S.A. previously reported that as June 7th 2005 it held 694,986 AmRest Holdings N.V. shares, representing 5.15% of the Company’s share capital and conferring the right to 694,986 votes, i.e. 5.15% of the total vote, at the General Shareholders Meeting. As at April 27th 2005, PZU S.A. held 158,638 AmRest Holdings N.V. shares, representing 1.18% of the Company’s share capital and conferring the right to 158,638 votes, i.e. 1.18% of the total vote, at the General Shareholders Meeting.

3. According to the information available to the Company, since the date of release of the recent periodic report (annual report published on March 31st 2006), there have been no changes in the numbers of shares or options (rights to shares) held by the management and supervisory staff of AmRest Holdings N.V. 

4. As at the date of release of this quarterly report, no court, arbitration or administrative proceedings whose single or aggregate value exceeds 10% of the Company’s equity were pending against the Company.

5. Important transactions or agreements resulting in related party transactions:

On April 19th 2006 AmRest Holdings N.V. and Talus Limited concluded a Partnership Agreement whereby the parties agreed to establish a company whose business objective would be to open and operate restaurants in Ukraine. Talus Limited is a subsidiary of Kazyrna Karta (“Royal Card”), the largest restaurant company in Ukraine, which has operated since 1988 and currently manages over 70 restaurants countrywide. AmRest Holdings N.V. will acquire 51% of the shares and 51% of the total vote in the newly establish company, with Talus Limited holding the remaining 49%. They agreed to contribute to the company, in appropriate proportions, an initial share capital of USD 2m. The Partnership Agreement will become effective upon fulfilment of certain conditions, the most important of which are obtaining an authorisation from the Supervisory Board by AmRest Holdings N.V. and an approval from YUM Restaurants International LLC, the franchisor of Pizza Hut and KFC brands, by Talus Limited. By concluding the Partnership Agreement, AmRest Holdings N.V. continues its investment plans in Ukraine and expects to increase the scale of its activities in this country.

6. During the period covered by this quarterly report, AmRest Holdings N.V. did not issue sureties in respect of any loans or guarantees, whose value would represent 10% or more of the Company’s equity.

7. Other information important for the assessment of the Company’s personnel, economic and financial position as well as its financial result.

a) Important personnel changes

On May 2nd 2006, Mr Paweł Miłoszewski joined AmRest to take up the position of Human Resources Director. Mr Miłoszewski previously worked for Avon Operations Polska Sp. z o. o. as HR Director Global Supply Chain, and for Procter & Gamble.

b) Company’s Performance

In the first quarter of 2006, AmRest Holdings N.V. posted sales of PLN 133,167 thousand, up by 25.1% compared with the corresponding period of 2005. The increase in sales was due to the opening of new restaurants and a consistent growth of sales at the existing locations. 

In the first quarter of 2006, the gross margin decreased from 11.8% to 10.8%. The main contributing factor was the growth of marketing costs relative to the previous year (up by almost PLN 3m) and accelerated depreciation of some restaurants assets due to future renovations. The growth of marketing costs was however temporary and was connected with the concentration of expenses planned in the marketing calendar. On an annual basis the planned marketing costs (in relation to sales) should stay unchanged compared with the previous year. 

In the first quarter of 2006, AmRest continued to improve its operating profitability and net profit. Compared with the previous year, EBIT increased to PLN 6,554 thousand, up by 71%, EBITDA for the first quarter of 2006 amounted to PLN 16,458 thousand and was higher by 47% compared with the corresponding period of the previous year. The net profit grew to PLN 5,321 thousand and was 222% higher relative to the first quarter of 2005. It should be noted that the results for the first quarter of 2005 included one-off IPO costs of PLN 1,255 thousand.

The net profit was affected by a change in the deferred tax asset – in the first quarter of 2006 its net value (i.e. its value less the deferred tax liability) fell by PLN 377 thousand. The decrease was due mainly to the utilisation of unrealised retained deficit and an increase in timing differences. In 2006, the Company’s tax payments amounted of PLN 557 thousand. 

The Company’s total liabilities fell by 10.5% (from PLN 162,569 thousand to PLN 145,420 thousand) compared with the first quarter of 2005. The drop was attributable mainly to a reduction of long-term debt from PLN 80,440 thousand to PLN 59,981 thousand.

c) Other information

AmRest Holdings N.V. launched the first restaurants representing two new dining concepts. 

The first Freshpoint restaurant was opened in mid March 2006 in Warsaw. Freshpoint will be a chain of small restaurants operating in locations with high pedestrian traffic, serving sandwiches to eat in or take out. In 2006 AmRest plans to open several such restaurants.

The first Rodeo Drive restaurant (American Bar & Grill) was opened in April 2006 in Wrocław. Rodeo Drive is a casual dining restaurant serving meals based mostly on grilled meat and a wide range of drinks. The restaurants will operate in attractive locations and will be able to serve 150–250 customers. In 2006 AmRest plans to open a few other Rodeo Drive restaurants. 

Both new concepts were developed by AmRest, therefore no franchise fees will be charged on the sales generated by those restaurants. 

8. The Company expects that its performance in the following quarters may be influenced by a number of factors, the most significant of which include:

a) growth of sales spurred by new openings as well as potential further investments;

b) launch of investments by AmRest Holdings N.V. in Ukraine, which may result in expenditure and expenses incurred by the Company to be recouped in later years; 

c) introduction of new dining concepts – Rodeo Drive and Freshpoint;

d) continued streamlining of the Group’s structure in 2006, whereby smaller companies will be incorporated into American Restaurants Sp. z o.o. or American Restaurants s.r.o., the largest of the Group’s undertakings; the restructuring is aimed at lowering the general and administrative expenses; 

e) seasonality of sales. The lowest sales are recorded in the first quarter, which is attributable primarily to fewer operating days (February) and fewer people dining out. The next quarter in terms of sales is the second quarter, in which the restaurants achieve better results thanks to improving weather and a positive effect of the beginning of the holiday season in June. The highest sales are achieved at the end of the third and at the beginning of the fourth quarter. Very good performance in the third quarter is attributable to the increased tourist traffic. Autumn is traditionally a season when people tend to dine out more frequently, which translates into higher sales. An important time in the last three months of the year is the pre-Christmas period, when particularly high sales are reported by the restaurants situated in shopping centres;

f) changes in consumer preferences resulting from health concerns about the consumption of chicken, the key ingredient in KFC menu items, due to negative publicity concerning consumption of poultry and diseases carried by poultry. In the event of such changes, there is a limited risk that demand for products offered by AmRest restaurants, as well as their competitors, may decrease. The Company mitigates this risk by using at the AmRest restaurants ingredients of the highest quality, sourced from proven and reputed suppliers, by complying with strict quality control and hygiene standards, and by applying the most advanced equipment and processes ensuring absolute safety of the meals.

g) In the first quarter of 2006, the Company recorded a reduction of its tax assets related to deferred tax and timing differences. As at March 31st 2006, the deferred tax asset amounted to PLN 11,027 thousand. AmRest expects that a significant portion of the deferred tax asset will be used in 2006 and that the use of the asset may materially affect the financial result for the year and the subsequent years. The expected charge will not influence cash flows.