Additional Information for Q2 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 August 16th 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. (“AmRest”)

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**	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%	
BZ WBK AIB TFI	688,231	5.10%	688,231	5.10%	
*IRI LLC is wholly-owned by ARC.
**BZ WBK AIB AM manages assets which include the funds of BZ WBK AIB TFI.

After the date of release of the previous quarterly report (published on May 15th 2006), the Company became aware of the following significant changes in the structure of large shareholdings in AmRest Holdings N.V:

Following a share purchase transaction which was settled on July 12th 2006, the funds managed by BZ WBK AIB TFI S.A. (“TFI”) became the holders of 688,231 AmRest Holdings N.V. shares, representing 5.10% of the Company’s share capital and conferring the right to 688,231 votes (5.10% of the total vote) at the Company’s General Shareholders Meeting. 

Before the acquisition, the funds managed by TFI had held 635,537 AmRest shares, representing 4.71% of the Company’s share capital and conferring the right to 635,537 votes, i.e. 4.71% of the total vote, at the Company’s General Shareholders Meeting. 

Under Art. 46.1.1 of the Act on Investment Funds dated May 27th 2004, TFI commissioned BZ WBK AIB Asset Management S.A. (AM) to manage the investment portfolios of the investment funds controlled by TFI. Consequently, AM’s notification on having exceeded 5% of the total vote at AmRest by AM customers, as reported by AmRest in Current Report No. 7/2006, also concerned AmRest shares held by the funds controlled by TFI. 

3. The table below sets forth changes in AmRest stock options held by managing or supervising persons which occurred after the publication of the previous quarterly report (i.e. May 15th 2006), in accordance with the information held by the Company:

	Position*	Number of stock options 
as at 
Dec 31 2005	Increase	Decrease	Number of stock options 
as at 
Jun 30 2006	
Henry McGovern	M	100,000	10,000	-	110,000	
Wojciech Mroczyński	M	7,000	-	-	7,000	
* (M) managing person, (S) supervising person

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:

April 1st 2006 was the effective date of release from debt under signed loan waiver agreements, received on August 4th 2006 from the shareholder International Restaurants Investments, LLC (“IRI”). The agreements cover loans advanced in previous years in total amounts of USD 818 thousand and EUR 38 thousand as well as all accrued interest. These amounts also include long-term loans granted by Yum!. As of April 1st 2006, Yum! transferred its receivables under these loans onto IRI.

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 June 15th 2006, Mr Jacek Trybuchowski rejoined the Company, taking the position of New Markets Director and Member of the Management Board of American Restaurants Sp. z o.o. During the ten years of his previous employment with AmRest, Mr Trybuchowski occupied various positions, including the post of Brand President for Pizza Hut Polska. During the last two and a half years, he worked for Yum!, focusing his efforts on various European markets. In addition, Mr Trybuchowski spent eight months in Moscow, where he worked on the merger of Rostik and KFC brands on the Russian market and on the markets of former Soviet Republics.

b) Company’s Performance

In the second quarter of 2006, AmRest Holdings N.V. reported sales of PLN 146,842 thousand, up by 20.9% compared with the corresponding period of 2005. 

The increase in sales was due to such factors as the opening of new restaurants and a consistent growth in same-store-sales. 

The gross profit on sales rose by 19.7% relative to the second quarter of 2005 and reached PLN 19,841 thousand. 
In the second quarter of 2006, the increase in restaurant costs was relatively higher than growth in sales, therefore the gross margin on sales amounted to 13.5% (compared to 13.7% in the second quarter of 2005).
Higher costs of food relative to sales were the result of slight change in sales mix. 
The direct marketing expenses were decreased (13.4% drop compared to the second quarter of 2005). However, in the whole first half of 2006 these expenditures were higher and amounted to PLN 14,157 thousand (which was 5.1% of sales).
The increase in depreciation charge of PLN 1,770 thousand, compared to the second quarter of 2005, is mainly related to the higher number of operating restaurants. The accelerated depreciation of several restaurants that will be renovated has also contributed to the increase in depreciation charge of the period.  
The increase in cost of labour relative to the sales value is connected with general trends observed on the labour markets in Poland and the Czech Republic.
  
In the second quarter of 2006, general and administrative expenses fell by 12.5% relative to the corresponding period of 2005. The results for the second quarter of 2005 were affected by one-off costs of the IPO (PLN 682 thousand).
Moreover, in the second quarter of 2006 the Company disclosed a significant gain on disposal of non-financial non-current assets, related to sale of real property.

As a result of the above factors, in the second quarter of 2006 AmRest doubled its operating profitability. The operating profit rose to PLN 11,684 thousand (increase by 145.7% on the corresponding period of 2005), and EBITDA for the second quarter of 2006 amounted to PLN 22,636 thousand (increase by 72.7% on the Q2 2005 figure).
	
The net profit stood at PLN 13,630 thousand and was up by 116.2% on the previous year’s figure for the second quarter.
A factor with a major positive effect on the net profit recorded by the Company was the loan waiver described in Section 5, which increased the financial income by PLN 3,396 thousand. Another factor which boosted the Company’s result on financing activities were translation differences in respect of loans granted by AmRest Holdings N.V. to its subsidiary American Restaurants s.r.o. The amount of these positive translation differences recognised in profit and loss account for the first half of 2006 amounted to PLN 2,027 thousand.

The balance-sheet total as at the end of the second quarter of 2006 amounted to PLN 300,672 thousand and rose by 4.1% on the end of 2005. The increase was related primarily to the acquisition of Kentucky System Kft., as described below. Relative to the end of 2005, the Company’s total liabilities fell by 2.8% and amounted to PLN 161,199 thousand.

c) Other information

The Annual General Shareholders Meeting of AmRest Holdings N.V. was held on May 22nd 2006. The only shareholder holding at least 5% of the total vote at the general meeting was International Restaurant Investments LLC, with 5,338,000 votes, which at that meeting represented 100.00% of votes, and represent 39.54% of the total vote. 
The Annual General Shareholders Meeting considered all items included in the agenda and adopted resolutions concerning inter alia: approval of the financial statements for 2005, allocation of the 2005 profit to cover retained deficit, and approval of performance of duties by Members of the Supervisory Board and the Management Board of AmRest. Moreover, the Annual General Shareholders Meeting approved the employee stock option plan and authorised the Management Board to increase AmRest’s share capital. The text of all the resolutions adopted at the Meeting is presented in an Appendix to Current Report No. 19/2006 of May 22nd 2006.

On June 30th 2006, American Restaurants Sp. z o.o. (the buyer), wholly-owned subsidiary of AmRest, and Central European Franchise Group, Ltd (the seller) concluded an agreement whereby American Restaurants acquired 100% of shares in Kentucky System Kft. of Budapest. The selling price was USD 6.5m. Following the purchase of all shares in Kentucky System, AmRest came to own 13 Pizza Hut restaurants and four KFC restaurants in Hungary. The execution of the agreement represents an important step towards the implementation of the AmRest Group’s strategy aimed at strengthening its market position in Central and Eastern Europe. The acquisition of restaurants in Hungary provides an opportunity for further expansion through the development of existing and new restaurant chains on the Hungarian market.

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 related to new openings as well as potential further investments;

b) launch of AmRest’s investments in the Ukraine may result in the situation where pay-back on expendituresincurred will occur in later years; 

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

d) seasonality of sales – the lowest sales are recorded in the first quarter of the year, which is attributable primarily to fewer operating days in 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 malls;

e) a factor with a potentially adverse effect on sales is changes in consumer preferences resulting from health concerns about the consumption of chicken, the key product on the KFC menu. This might be due to negative publicity concerning consumption of poultry and diseases carried by poultry. 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.

f) In the second quarter of 2006, the Company recorded a reduction of its deferred tax asset. As at June 30th 2006, the deferred tax asset amounted to PLN 10,511 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 affect the financial result for the year. The expected charge will not influence cash flows.