Merger with Granada - Part 3

Compass Group PLC
17 May 2000

Part Three

                                 APPENDIX 1

Pre-condition and conditions to the Schemes and to the Merger

1.   Pre-condition

The  posting of the Merger documents will take place once the following  pre-
condition is satisfied or waived:

Granada  and  Compass  Group  being  satisfied,  for  the  purposes  of   the
requirements  of  the  UK  Listing Authority, that  the  necessary  financing
facilities  will be available following completion of the Merger  to  provide
for the working capital requirements of the Merged Group.

2.   The Granada Scheme

2.1  The Granada Scheme will become binding and effective if:
  
(a)  the  Granada Scheme is approved by a majority in number representing not
     less  than  three-fourths in value of the holders of the Granada  shares
     present  and  voting  either  in person  or  by  proxy  at  the  Granada
     shareholders' Court Meeting;

(b)  the  Granada Scheme is approved by a majority in number representing not
     less  than  three  fourths  in  value of  the  holders  of  the  Granada
     preference shares present and voting either in person or by proxy at the
     Granada preference shareholders' Court Meeting;

(c)  any  resolution required to approve and implement (i) the Granada Scheme
     (ii)  the  Demerger  and (iii) the constitution of the  Granada  Compass
     board is passed at the Granada extraordinary general meeting;

(d)  the  Granada Scheme is sanctioned (with or without modification) and any
     reduction of capital involved therein is confirmed by the Court  and  an
     office  copy of the Order of the Court is delivered for registration  to
     the  Registrar of Companies in England and Wales and registered  by  him
     not  later than 15 September 2000 or such later date as Granada Compass,
     Granada and the Court may agree;

(e)  the  Compass  Scheme  becomes binding and  effective  save  as  for  the
     satisfaction of the condition set out in paragraph 3.1(d) below;

(f)  permission  for the admission of Granada Compass shares to the  Official
     List (subject to allotment) has been granted by the UK Listing Authority
     and has not been withdrawn.

2.2  Granada  and  Compass  Group have agreed that a final  Order  under  the
     Granada Scheme will only be sought by Granada from the Court if:
     
(a)  so  far  as  may be necessary in order to enable the implementation  and
     carrying  into effect of the Merger and for Granada Compass to  exercise
     effectively the ownership rights over Granada shares, the ITC indicating
     in terms and in a manner satisfactory to Granada and Compass Group that,
     as a result of the Merger, the ITC will not:
     
     (i)  regard  the  Merger as giving rise to a relevant change of  control
          under  the  Broadcasting Acts 1990 and/or 1996  (the  'Broadcasting
          Acts'); or
     (ii) vary  the  terms of any licence issued by it under the Broadcasting
          Acts  currently  held by any member of the Granada  Group  (each  a
          'Licence'); or
     (iii)     suspend or revoke, or take any other action in connection with
          any Licence; or
     (iv) require  the  holder  of any Licence to take any  other  action  in
          connection therewith;

(b)  Granada has received, in terms reasonably satisfactory to it:
     (i)  confirmation, either by decision of the Commission of the  European
          Communities  (the  'Commission') under Article 6(1)(b)  of  Council
          Regulation (EEC) No 4064/89 as amended (the 'Regulation') or, where
          no  decision has been taken under Article 6(1), pursuant to Article
          10(6)  of  the Regulation, that the Merger and any matters  arising
          therefrom  are,  or are deemed to be, compatible  with  the  common
          market; or
     (ii) in  the  event  that  part of the Merger  is  referred  to  the  UK
          competition authorities pursuant to Article 9(3) of the Regulation:
          (A)  in   respect   of  that  part  of  the  Merger  so   referred,
               confirmation from the Office of Fair Trading that  it  is  not
               the  intention of the Secretary of State (whether as a  result
               of  the acceptance of an undertaking(s) in lieu of a reference
               pursuant to section 75G of the Fair Trading Act, or otherwise)
               to  make a reference pursuant to sections 64 or 75 of the Fair
               Trading Act 1973, and
          (B)  confirmation,  either  by  decision of  the  Commission  under
               Article  6(1)(b) of the Regulation or, where no  decision  has
               been  taken under Article 6(1), pursuant to Article  10(6)  of
               the Regulation, that those parts of the Merger not so referred
               are, or are deemed to be, compatible with the common market;
(c)  in  so  far as is required, all filings having been made and all or  any
     applicable waiting periods (including any extensions thereof) under  the
     HSR  Act  and the regulations thereunder having expired, lapsed or  been
     terminated as appropriate in each case in respect of the proposed Merger
     or any matter arising from the proposed Merger;
(d)  Granada has:
     (i)  received in terms reasonably satisfactory to it (A) clearance under
          section  138 TCGA 1992 for the Schemes of Arrangement;  and  (B)  a
          written  opinion  of  leading Counsel (or a note  settled  by  such
          Counsel)  that the Merger will be a scheme for the amalgamation  of
          Compass  Group and Granada and that the Demerger will be  a  scheme
          for the reconstruction of Granada Compass; and
     (ii) either (A) received clearances in terms reasonably satisfactory  to
          it  under sections 138 and 139(5) TCGA 1992 for the Demerger or (B)
          not  received an indication from the Inland Revenue that they  will
          not or are unlikely to give such clearance;
(e)  all  Authorisations necessary or reasonably considered by Granada to  be
     appropriate  for  or in respect of the Merger and the implementation  of
     the  Granada Scheme have been obtained in terms and in a form reasonably
     satisfactory to Granada from all Authorities and, where the  absence  of
     any  such  Authorisations would, in the reasonable opinion  of  Granada,
     have  a  material  adverse  effect on the Merged  Group,  all  of  these
     Authorisations  remain in full force and effect and there  has  been  no
     intimation of any intention to revoke or not renew any of them  and  all
     necessary  waiting periods (including any extensions thereof) under  any
     applicable legislation or regulation of any jurisdiction have expired or
     been  terminated  (as  appropriate)  and  all  necessary  statutory  and
     regulatory   obligations  in  connection  with  the   Merger   and   the
     implementation  of  the  Granada Scheme in any  jurisdiction  have  been
     complied with;
(f)  save as disclosed in writing by Compass Group to Granada on or prior  to
     16 May 2000 there is no provision of any arrangement, agreement, licence
     or other instrument to which Compass Group or any of its subsidiaries or
     companies  in  which any member of its group has a substantial  interest
     ('associates') is a party or by or to which Compass Group or any of  its
     subsidiaries  or associates may be bound or be subject  which  could  or
     might  result,  to  an extent which is material in the  context  of  the
     Compass Group, in (a) any monies borrowed by Compass Group or any of its
     subsidiaries or associates being repayable or capable of being  declared
     repayable  prior  to  their stated maturity (b)  any  such  arrangement,
     agreement,  licence or instrument being terminated or modified,  or  any
     action  or adverse effect being taken or arising thereunder or  (c)  the
     interests  of Compass Group or any of its subsidiaries or associates  in
     the  business  of  Compass  Group  or of  any  of  its  subsidiaries  or
     associates  with  any person being terminated modified or  affected,  in
     each case in consequence of the Merger or the Schemes.
(g)  no  Authority  has  taken,  instituted, implemented  or  threatened  any
     action,  proceeding, suit, investigation or inquiry or enacted, made  or
     proposed  any statute, regulation or order or taken any other step  that
     would  or  might in any respect be material to the Merged Group  (a)  to
     require  the  divestiture  by any member of the  Compass  Group  or  the
     Granada  Group  or  any of their respective associates  of  all  or  any
     portion of their business assets or properties or (b) require any member
     of  the  Compass  Group or the Granada Group or any of their  respective
     associates to make an offer to acquire any shares or other securities in
     any  member  of the Granada Group or the Compass Group or any  of  their
     respective  associates  owned  by any third  party  or  (c)  impose  any
     limitation  on  the ability of any member of the Granada  Group  or  the
     Compass  Group  or any of their respective associates to  conduct  their
     businesses  or to own their assets or properties or (d) make the  Merger
     or the Schemes or their implementation illegal, void or unenforceable in
     or under the laws of any jurisdiction;
(h)  Granada has not discovered regarding Compass Group that:
     (i)  any  financial,  business  or  other  information  in  relation  to
          circumstances  existing on or prior to 16 May  2000  and  which  is
          material  in  the  context  of the Merger  has  not  been  publicly
          disclosed by any member of the Compass Group or otherwise disclosed
          by Compass Group to Granada in writing on or prior to 16 May 2000;
     (ii) any  financial, business or other information disclosed at any time
          (publicly    or   otherwise)   is   misleading   or   contains    a
          misrepresentation  of fact or omits to state a  fact  necessary  to
          make  any  information contained in it not misleading in  any  case
          which  has not been corrected by any subsequent public announcement
          on  or  before 16 May 2000 and which is material in the context  of
          the Compass Group taken as a whole;
     (iii)      any  member of the Compass Group is subject to any liability,
          contingent  or  otherwise,  which is  not  disclosed  in  the  last
          published audited consolidated accounts of the Compass Group or  in
          the  interim  statement for the six months ended 31 March  2000  or
          otherwise  publicly disclosed on or before 16  May  2000  which  is
          material in the context of the Compass Group taken as a whole;
(i)  since  30  September  1999, being the date to which the  latest  audited
     report  and  accounts of Compass Group were made up and  otherwise  than
     publicly announced by Compass Group on or prior to 16 May 2000:
     (i)  no  litigation, arbitration proceedings, prosecution or other legal
          proceedings  to which any member of the Compass Group  is  a  party
          (whether a plaintiff or defendant or otherwise) in each case  which
          is  material and adverse in the context of the Compass Group  taken
          as a whole, have been instituted threatened or remain outstanding;
     (ii) there  has  been  no  material  adverse  change  in  the  business,
          financial  or  trading position of the Compass  Group  taken  as  a
          whole;
(j)  save  as publicly announced by Compass Group on or prior to 16 May  2000
     no member of the Compass Group having since 30 September 1999, being the
     date  which  the last audited report and accounts of Compass Group  were
     made up:
     (i)  issued,  authorised or proposed the issue of additional  shares  of
          any  class  or securities convertible into, or rights, warrants  or
          options  to subscribe for or acquire any such shares or convertible
          securities  save  as  between Compass Group and  its  wholly  owned
          subsidiaries or for options granted and any shares in Compass Group
          issued upon exercise of options granted on or prior to 16 May  2000
          under  or pursuant to the Compass share option schemes or as agreed
          between  Granada and Compass Group from time to time  or  redeemed,
          purchased or reduced any of its shares or other securities;
     (ii) authorised  or proposed or announced its intention to  propose  any
          merger  or any other change in its share or loan capital or  (other
          than  in  the  ordinary course of the business) any acquisition  or
          disposal  of assets or shares which is material in the  context  of
          the Compass Group taken as a whole;
     (iii)      entered into any contract, transaction or commitment (whether
          in  respect of capital expenditure or otherwise) which is of a long
          term  or  unusual  or  onerous nature or which  involves  or  could
          involve  any obligation of a nature or magnitude which is  material
          in the context of the Compass Group taken as a whole;
     (iv) issued  or  proposed the issue of any debentures or,  save  in  the
          ordinary course of business, incurred or increased any indebtedness
          or   contingent  liability  of  an  aggregate  amount  which  might
          materially or adversely affect the Compass Group taken as a  whole;
          or
     (v)  declared paid or made or proposed the declaration paying or  making
          of  any dividend bonus or other distribution (excluding the interim
          dividend announced on 17 May 2000) other than between wholly  owned
          members of the Compass Group.
(k)  there has been no material breach by Compass of any material term of the
     Merger Agreement.
     
Granada reserves the right to waive all or any of conditions 2.2(a) and (d) -
(k) in whole or in part for the purpose of the Granada Scheme.

  
3.   The Compass Group Scheme
     
3.1  The Compass Group Scheme will become binding and effective if:
     
(a)  the   Compass  Group  Scheme  is  approved  by  a  majority  in   number
     representing not less than three-fourths in value of the holders of  the
     Compass Group shares present and voting either in person or by proxy  at
     the Compass Group Court Meeting;
(b)  any  resolution required to approve and implement (a) the Compass  Group
     Scheme  (b) the Demerger and (c) the constitution of the Granada Compass
     board is passed at the Compass Group extraordinary general meeting;
(c)  the  Compass  Group Scheme is sanctioned (with or without  modification)
     and  any reduction of capital involved therein is confirmed by the Court
     and  an  office  copy  of  the  Order of  the  Court  is  delivered  for
     registration  to  the Registrar of Companies in England  and  Wales  and
     registered by him not later than 15 September 2000 or such later date as
     Granada Compass, Compass Group and the Court may agree;
(d)  the  Granada  Scheme  becomes binding and  effective  save  as  for  the
     satisfaction of the condition set out in paragraph 2.1(e) above;
(e)  permission  for the admission of Granada Compass Shares to the  Official
     List (subject to allotment) has been granted by the UK Listing Authority
     and has not been withdrawn.

3.2  Compass  Group  and  Granada have agreed that a final  Order  under  the
     Compass Group Scheme will only be sought by Compass Group from the Court
     if:
(a)  so  far  as  may be necessary in order to enable the implementation  and
     carrying  into effect of the Merger and for Granada Compass to  exercise
     effectively the ownership rights over Granada shares, the ITC indicating
     in terms and in a manner satisfactory to Granada and Compass that, as  a
     result of the Merger, the ITC will not:
     (i)  regard  the  Merger as giving rise to a relevant change of  control
          under  the  Broadcasting Acts 1990 and/or 1996  (the  'Broadcasting
          Acts'); or
     (ii) vary  the  terms of any licence issued by it under the Broadcasting
          Acts  currently  held by any member of the Granada  Group  (each  a
          'Licence'); or
     (iii)     suspend or revoke, or take any other action in connection with
          any Licence; or
     (iv) require  the  holder  of any Licence to take any  other  action  in
          connection therewith;
(b)  Compass has received, in terms reasonably satisfactory to it:
     (i)  confirmation, either by decision of the Commission of the  European
          Communities  (the  'Commission') under Article 6(1)(b)  of  Council
          Regulation (EEC) No 4064/89 as amended (the 'Regulation') or, where
          no  decision has been taken under Article 6(1), pursuant to Article
          10(6)  of  the Regulation, that the Merger and any matters  arising
          therefrom  are,  or are deemed to be, compatible  with  the  common
          market, or
     (ii) in  the  event  that  part of the Merger  is  referred  to  the  UK
          competition authorities pursuant to Article 9(3) of the Regulation:
          (A)  in   respect   of  that  part  of  the  Merger  so   referred,
               confirmation from the Office of Fair Trading that  it  is  not
               the  intention of the Secretary of State (whether as a  result
               of  the acceptance of an undertaking(s) in lieu of a reference
               pursuant to section 75G of the Fair Trading Act, or otherwise)
               to  make a reference pursuant to sections 64 or 75 of the Fair
               Trading Act 1973, and
          (B)  confirmation,  either  by  decision of  the  Commission  under
               Article  6(1)(b) of the Regulation or, where no  decision  has
               been  taken under Article 6(1), pursuant to Article  10(6)  of
               the Regulation, that those parts of the Merger not so referred
               are, or are deemed to be, compatible with the common market;
(c)  in  so  far as is required, all filings having been made and all or  any
     applicable waiting periods (including any extensions thereof) under  the
     HSR  Act  and the regulations thereunder having expired, lapsed or  been
     terminated as appropriate in each case in respect of the proposed Merger
     or any matter arising from the proposed Merger;
(d)  Compass Group has:
     (i)  received in terms reasonably satisfactory to it (A) clearance under
          section 138 TCGA 1992 for the Schemes; and (B) a written opinion of
          leading Counsel (or a note settled by such Counsel) that the Merger
          will  be a scheme for the amalgamation of Granada and Compass Group
          and  that  the Demerger will be a scheme for the reconstruction  of
          Granada Compass; and
     (ii) either (A) received clearances in terms reasonably satisfactory  to
          it  under sections 138 and 139(5) TCGA 1992 for the Demerger or (B)
          not  received an indication from the Inland Revenue that they  will
          not or are unlikely to give such clearance;
(e)  all  Authorisations necessary or reasonably considered by Compass  Group
     to be appropriate for or in respect of the Merger and the implementation
     of  the  Compass Group Scheme have been obtained in terms and in a  form
     reasonably satisfactory to Compass Group from all Authorities and, where
     the  absence of any such Authorisations would, in the reasonable opinion
     of  Compass  Group, have a material adverse effect on the Merged  Group,
     all  of  these Authorisations remain in full force and effect and  there
     has  been no intimation of any intention to revoke or not renew  any  of
     them  and  all  necessary  waiting  periods  (including  any  extensions
     thereof)  under  any  applicable  legislation  or  regulation   of   any
     jurisdiction  have expired or been terminated (as appropriate)  and  all
     necessary  statutory and regulatory obligations in connection  with  the
     Merger  and  the  implementation of the  Compass  Group  Scheme  in  any
     jurisdiction have been complied with;
(f)  save as disclosed in writing by Granada to Compass Group on or prior  to
     16 May 2000 there is no provision of any arrangement, agreement, licence
     or  other  instrument  to which Granada or any of  its  subsidiaries  or
     companies  in  which any member of its group has a substantial  interest
     ('associates')  is  a  party or by or to which Granada  or  any  of  its
     subsidiaries  or associates may be bound or be subject  which  could  or
     might  result,  to  an extent which is material in the  context  of  the
     Granada  Group,  in (i) any monies borrowed by Granada  or  any  of  its
     subsidiaries or associates being repayable or capable of being  declared
     repayable  prior  to  their stated maturity (ii) any  such  arrangement,
     agreement,  licence or instrument being terminated or modified,  or  any
     action or adverse effect being taken or arising thereunder or (iii)  the
     interests  of  Granada or any of its subsidiaries or associates  in  the
     business of Granada or of any of its subsidiaries or associates with any
     person   being  terminated  modified  or  affected,  in  each  case   in
     consequence of the Merger or the Schemes.
(g)  no  Authority  has  taken,  instituted, implemented  or  threatened  any
     action,  proceeding, suit, investigation or inquiry or enacted, made  or
     proposed  any statute, regulation or order or taken any other step  that
     would  or  might in any respect be material to the Merged Group  (i)  to
     require  the  divestiture  by any member of the  Granada  Group  or  the
     Compass  Group  or  any of their respective associates  of  all  or  any
     portion  of  their  business assets or properties or  (ii)  require  any
     member  of  the  Granada  Group or the Compass Group  or  any  of  their
     respective  associates to make an offer to acquire any shares  or  other
     securities  in any member of the Compass Group or the Granada  Group  or
     any  of  their respective associates owned by any third party  or  (iii)
     impose any limitation on the ability of any member of the Compass  Group
     or  the  Granada Group or any of their respective associates to  conduct
     their  businesses or to own their assets or properties or (iv) make  the
     Merger  or  the  Schemes  or  their  implementation  illegal,  void   or
     unenforceable in or under the laws of any jurisdiction;
(h)  Compass Group has not discovered regarding Granada that:
     (i)  any  financial,  business  or  other  information  in  relation  to
          circumstances  existing on or prior to 16 May  2000  and  which  is
          material  in  the  context  of the Merger  has  not  been  publicly
          disclosed by any member of the Granada Group or otherwise disclosed
          by Granada Group to Compass in writing on or prior to 16 May 2000;
     (ii) any  financial, business or other information disclosed at any time
          (publicly    or   otherwise)   is   misleading   or   contains    a
          misrepresentation  of fact or omits to state a  fact  necessary  to
          make  any  information contained in it not misleading in  any  case
          which  has not been corrected by any subsequent public announcement
          before  16 May 2000 and which is material in the context of Granada
          Group taken as a whole;
     (iii)      any  member of the Granada Group is subject to any liability,
          contingent  or  otherwise,  which is  not  disclosed  in  the  last
          published audited consolidated accounts of the Granada Group or  in
          the  interim  statement for the 26 weeks ended  25  March  2000  or
          otherwise  publicly disclosed on or before 16  May  2000  which  is
          material in the context of the Granada Group taken as a whole;
(i)  since  26  September  1999, being the date to which the  latest  audited
     report  and accounts of Granada were made up and otherwise than publicly
     announced by Granada on or prior to 16 May 2000:
     (i) no  litigation, arbitration proceedings, prosecution or other  legal
         proceedings  to  which any member of the Granada Group  is  a  party
         (whether  a plaintiff or defendant or otherwise) in each case  which
         is material and adverse in the context of the Granada Group taken as
         a whole, have been instituted threatened or remain outstanding;
     (ii)there has been no material adverse change in the business, financial
         or trading position of the Granada Group taken as a whole;
(j)  save  as  publicly announced by Granada on or prior to 16  May  2000  no
     member  of  the Granada Group having since 25 September 1999, being  the
     date which the last audited report and accounts of Granada were made up:
     (i)  issued,  authorised or proposed the issue of additional  shares  of
          any  class  or securities convertible into, or rights  warrants  or
          options  to subscribe for or acquire any such shares or convertible
          securities   save   as  between  Granada  and  its   wholly   owned
          subsidiaries  or  for  options granted and any  shares  in  Granada
          issued upon exercise of options granted on or prior to 16 May  2000
          under  or pursuant to the Granada Share Option Schemes or as agreed
          between  Compass  and  Granada  from  time  to  time  or  redeemed,
          purchased or reduced any of its shares or other securities;
     (ii) authorised  or proposed or announced its intention to  propose  any
          merger  or any other change in its share or loan capital or  (other
          than  in  the  ordinary course of the business) any acquisition  or
          disposal  of assets or shares which is material in the  context  of
          the Granada Group taken as a whole;
     (iii)      entered into any contract, transaction or commitment (whether
          in  respect of capital expenditure or otherwise) which is of a long
          term  or  unusual  or  onerous nature or which  involves  or  could
          involve  any obligation of a nature or magnitude which is  material
          in the context of the Granada Group taken as a whole;
     (iv) issued  or  proposed the issue of any debentures or,  save  in  the
          ordinary course of business, incurred or increased any indebtedness
          or   contingent  liability  of  an  aggregate  amount  which  might
          materially or adversely affect the Granada Group taken as a  whole;
          or
     (v)  declared paid or made or proposed the declaration, paying or making
          of any dividend, bonus or other distribution (excluding the interim
          dividend announced on 17 May 2000) other than between wholly  owned
          members of the Granada Group.
(k)  there has been no material breach by Granada of any material term of the
     Merger Agreement.

Compass reserves the right to waive all or any of conditions 3.2(a) and  (d)-
(k) in whole or in part for the purpose of the Compass Scheme.
  
4.   For the purposes of these conditions:
(a)  'Authority' means any government, government department or governmental,
     quasi-governmental, state or local government, supranational, statutory,
     regulatory,  administrative or investigative body, authority  (including
     any  national  anti-trust or merger control authorities),  court,  trade
     agency,  association, institution or professional or environmental  body
     or any other person or body in any jurisdiction;
(b)  an  Authority shall be regarded as having 'intervened' if it has decided
     to take, institute, implement or threaten any action, proceedings, suit,
     investigation,  inquiry or reference or made, proposed  or  enacted  any
     statute,  regulation, decision or order or taken any measures  or  other
     steps  or  required any action to be taken or information to be provided
     or  otherwise  having done anything and 'intervene' is to  be  construed
     accordingly;
(c)  'Authorisations'  means  authorisations, orders,  grants,  recognitions,
     determinations,   certificates,   confirmations,   consents,   licences,
     clearances, permissions, exemptions and approvals; and
(d)  'Instrument'  means any arrangement, agreement, lease, licence,  permit,
     franchise or other instrument.


                                 Appendix 2

Definitions

The  following definitions apply throughout the document, unless the  context
otherwise requires:


Act means the Companies Act 1985;


Carlton Communications means Carlton Communications Plc;


Compass Group means Compass Group PLC;


Compass  Group  Bondholders' Scheme means the proposed scheme of  arrangement
relating to Compass Group and the Compass Group Convertible Bondholders under
section 425 of the Act;


Compass  Group  Convertible Bonds means the 5.75 per cent. convertible  bonds
issued by Compass Group pursuant to a trust deed dated 29 July 1997;


Compass Group Convertible Bondholders means the holders of the Compass  Group
Convertible Bonds;


Compass Group Court Meeting means the meeting of the holders of Compass Group
shares convened by order of the Court under section 425 of the Act;


Compass  Group  Scheme means the proposed scheme of arrangement  relating  to
Compass Group under section 425 of the Act;


Compass   Group   securities  means  Compass  Group  shares,  Compass   Group
Convertible  Bonds  (on the basis that the Compass Group Bondholders'  Scheme
has  become  effective), and Compass Group shares arising on the exercise  of
options under the Compass Group share option schemes;


Compass  Group  shares means the ordinary shares of 2.5  pence  each  in  the
capital of Compass Group;


Compass Hospitality means the hospitality business of Granada Compass  to  be
demerged pursuant to the Demerger;


Court means the High Court of Justice in England and Wales;


CREST means the relevant system (as defined in the Regulations) in respect of
which CRESTCo Limited is the operator (as defined in the Regulations);


Demerger means the demerging of the hospitality business of Granada Compass;


Granada means Granada Group PLC;


Granada Compass means Granada Compass plc;


Granada  Compass  shares  means ordinary shares in  the  capital  of  Granada
Compass;


Granada  Media  means  the  holding  company  of  Granada's  media  interests
including the Granada technology business;


Granada preference shares means the convertible preference shares of 10 pence
each in the capital of Granada;


Granada  preference  shareholders Court Meeting  means  the  meeting  of  the
holders  of  Granada preference shares convened by order of the  Court  under
section 425 of the Act;


Granada  Scheme means the proposed scheme of arrangement relating to  Granada
under section 425 of the Act;


Granada  securities  means Granada shares and Granada preference  shares  and
Granada  shares  arising on the exercise of options under the  Granada  share
option schemes;


Granada shares means the ordinary shares of 12.5 pence each in the capital of
Granada;


Granada  shareholders'  Court Meeting means the meeting  of  the  holders  of
Granada shares convened by order of the Court under section 425 of the Act;


Group  means, in relation to Granada Compass, Granada or Compass Group,  that
company and its subsidiary and associated undertakings;


HSR  Act means the United States Hart-Scott-Rodino Antitrust Improvements Act
of 1976 (as amended);


Independent  Board  of Compass Group means the directors  of  Compass  Group,
excluding  John Du Monceau, who by virtue of his membership of the management
board  of  Accor SA is precluded from expressing an opinion on, or  giving  a
recommendation of, the proposed merger;


IPO  means the initial public offering of a minority holding in Granada Media
PLC;


ITC  mean the Independent Television Commission;


Lazard means Lazard Brothers & Co., Limited;


Merger  means the merger of Granada and Compass Group to be effected  by  the
Schemes;


Merged Group means the combination of the Granada Group and the Compass Group
after the Merger;


Official List means the Official List of the UK Listing Authority;


Panel means the Panel on Takeovers and Mergers;


Proposals means the Merger and the Demerger;


Regulations  means  the Uncertificated Securities Regulations  1995  (SI  No.
95/3272);


Schemes means the Granada Scheme and the Compass Group Scheme;


Schroder Salomon Smith Barney means Salomon Brothers International Limited;


UK Listing Authority means the Financial Services Authority;


United News & Media means United News & Media plc;


United  States  means  the  United States of  America,  its  territories  and
possessions,  any state of the United States of America and the  district  of
Columbia; and


US Securities Act means the US Securities Act of 1933 (as amended).