John Fairfax Holdings Limited

ABN 15 008 663 161

PRESSES
Preferred Reset Securities Exchangeable for Shares

PROSPECTUS FOR A PUBLIC OFFER OF PRESSES TO RAISE A MINIMUM OF $200 MILLION LEAD MANAGER AND UNDERWRITER UBS WARBURG AUSTRALIA LIMITED

CONTENTS
Chairmans letter 1. Presses summary, how to invest and answers to key questions 2. Details of the Offer 3. Fairfax and its operations 4. Effect of the Presses issue on Fairfax 5. Risk factors 6. Taxation letter to Fairfax 7. Additional information Appendix A Terms of Presses Glossary Corporate directory 1 2 7 8 9 12 14 19 25 34 Inside Back Cover

SUMMARY OF KEY DATES

Eligible Employee Entitlement Date Fairfax Annual General Meeting Shareholder Entitlement Date Offer opens Offer closes (1) Allotment Presses commence trading on the ASX on a deferred settlement basis Despatch of holding statements (1) Presses trade on the ASX on a normal settlement basis (1) First Dividend Payment First Reset Date
Note:
(1) These dates are indicative only and are subject to change. Fairfax may, with the consent of the Underwriter, close

(1)

31 October 7 November 12 November 14 November 6 December 12 December 13 December 17 December 18 December 12 June 12 December

2001 2001 2001 2001 2001 2001 2001 2001 2001 2002 2006

the Offer early or extend the Closing Date of the Offer without notice. If the Closing Date of the Offer is varied, the subsequent dates may also vary. Investors are encouraged to submit their original Application Forms as soon as possible after the Offer opens.

Important Information
This Prospectus was lodged with ASIC on and is dated 1 November 2001. ASIC and the ASX take no responsibility for the contents of this Prospectus. Fairfax will apply within 7 days after the date of this Prospectus for the grant by the ASX of official quotation of the Presses. No securities will be allotted or issued on the basis of this Prospectus later than thirteen months after the date of this Prospectus. This Prospectus will be made generally available during the exposure period by being posted on the Fairfax web site at www.fxj.com.au. Printed copies of this Prospectus are available from the date the Offer opens and during the Offer period by calling the Fairfax Presses information line on 1800 301 050. Applications under this Prospectus will not be accepted by Fairfax prior to the opening of the Offer, and in any case, until after expiry of the exposure period and the passing of a special resolution at the Fairfax Annual General Meeting to be held on 7 November 2001 to adopt a new constitution. The exposure period is generally 7 days from the date of lodgement of the Prospectus with ASIC which may be extended by ASIC to a period of 14 days. No preference will be conferred on persons who lodge applications before the expiry of the exposure period. Applicants should read this Prospectus in its entirety before deciding to participate in the Offer. If after reading this Prospectus, you have any questions about the Offer, you should contact your stockbroker, accountant, financial or other professional adviser. Applications for Presses can only be submitted on original Application Forms attached to and forming part of, or accompanying, this Prospectus. Application forms are only available with a Prospectus, and may be obtained electronically from the Fairfax website during the Offer period. Please refer to Section 1.1. Some words used in this Prospectus have defined meanings (see the Glossary at the end of this Prospectus). Disclaimer No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus which is not contained in this Prospectus. Any information or representation not so contained may not be relied upon as having been authorised by Fairfax in connection with the Offer. Except as required by law and only to the extent so required, neither the Company nor any other person warrants the future performance of the Company or any return on any investment made pursuant to this Prospectus. Offers outside Australia This Prospectus does not constitute an offer of, or an invitation to subscribe for, any of the Presses in any place in which, or to any person to whom, it would be unlawful to make such an offer or invitation. No action has been taken to register or qualify the Presses or to otherwise permit a public offering of the Presses outside Australia. The Presses may be offered in a jurisdiction outside Australia where such an offer is made in accordance with the laws of that jurisdiction. Due to regulatory requirements, the invitation to apply for Presses is not extended to Shareholders resident in the United States. Shareholders resident in the United States should also refer to Section 7.

FairfaxPRESSES

John Fairfax Holdings Limited

ABN 15 008 663 161

1 November 2001 Dear Investor, On behalf of the Board of John Fairfax Holdings Limited (Fairfax), I am pleased to offer you this opportunity to invest in Fairfax, one of Australias leading publishing groups, through an issue of Preferred Reset Securities Exchangeable for Shares (Presses). The purpose of the issue of Presses is to strengthen Fairfaxs balance sheet by reducing debt, diversifying its equity base and increasing funding flexibility. This will ensure Fairfax is well placed to take advantage of growth opportunities. Key features of Presses include: Preferred dividend Fully franked dividend for the first five years of at least 6% p.a. on an Issue Price of $100; Exchange for Ordinary Shares Flexibility to Exchange for Ordinary Shares in five years; and Participation in growth Opportunity to participate in any increase in the Fairfax Ordinary Share price above $6.15. Fairfax may reset the Dividend Rate and other terms on certain dates, the first of which is 12 December 2006. Before those new terms take effect, holders of Presses may elect to Exchange their Presses for Ordinary Shares. Fairfax proposes to issue a minimum of 2 million Presses (with a right to accept over-subscriptions of up to 0.5 million Presses) at an issue price of $100 each to raise a minimum of $200 million and up to $250 million. Some priority will be given to Fairfax Shareholders and Eligible Employees over other applicants who do not receive an allocation either directly or indirectly from the Underwriter prior to the date of the opening of the Offer. The minimum investment for applicants is $2,000. The Offer is underwritten by UBS Warburg to the amount of $200 million. Fairfax will have the discretion to accept Applications for up to a further $50 million of Presses. This Prospectus contains details of the Offer, the terms of the Presses, the terms of the underwriting and a description of some of the risks associated with an investment in Presses. Please read it carefully before deciding whether to invest. If there is any matter on which you require further information or if you are uncertain as to whether Presses are a suitable investment for your purposes, you should consult your stockbroker, accountant, financial or other professional adviser. On behalf of the Board of Fairfax, I am pleased to offer this investment opportunity to you. Yours faithfully

Brian M Powers Chairman

FairfaxPRESSES

1. PRESSES SUMMARY
Fairfax proposes to raise a minimum of $200 million through the issue of Presses with the right to accept up to a further $50 million in over-subscriptions. Set out below is a summary of the key terms and conditions of the Presses. This information is a summary only, and should be read carefully in conjunction with the other information contained in this Prospectus, including the full terms of issue set out in Appendix A. If you are uncertain if Fairfax Presses are a suitable investment for you, you should consult a stockbroker, accountant, financial or other professional adviser. Issuer Security Issue size Issue price Dividend Rate John Fairfax Holdings Limited. Non-redeemable reset Exchangeable preference shares. An underwritten issue of 2 million Presses with the right to accept subscriptions for up to a further 0.5 million. $100. The dividend rate is the greater of 6% and the Swap Rate (on the allotment of the Presses) plus 1% p.a. It is a preferential non-cumulative dividend fixed until the first Reset Date payable semi-annually in arrears generally in June and December each year. The first dividend will be paid in June 2002. The Dividend Rate will be increased if the Credit Rating of the Presses falls below BBB. The dividend may be increased or decreased on Reset Dates. The first Reset Date is 12 December 2006. Payment of dividends is at the discretion of Directors and is subject to the Directors declaring or otherwise resolving to pay a dividend and there being no impediment under the Corporations Act to the payment. The Dividend Rate assumes full franking up to the corporate tax rate. If a dividend is unfranked or partially franked, the dividend will be increased to compensate for the unfranked amount. On Reset Dates some or all of the outstanding Presses may be Exchanged for Ordinary Shares at the option of holders of Presses or Fairfax. In certain circumstances, Exchange may occur other than on Reset Dates. Each of the Presses will Exchange for a number of Ordinary Shares calculated generally by applying the Exchange Discount to the volume weighted average sale price of Ordinary Shares traded on ASX during the 20 Business Days immediately preceding the date of Exchange. The number of Ordinary Shares issued on Exchange of each of the Presses will be subject to a minimum of 16.6771 and a maximum of 1,000, subject to certain adjustments. Exchange Discount Credit Rating Reset Dates 2.5%. The Presses have a Credit Rating of BBB (as at the date of this Prospectus). Certain terms including the Dividend Rate, Exchange terms, and Exchange Discount may be reset on each Reset Date. The first Reset Date will be 12 December 2006 and thereafter as determined by Fairfax. Dividends on the Presses will be paid in priority to any dividends declared on Ordinary Shares. In a winding up, the Presses will rank for repayment of capital behind all creditors of Fairfax but ahead of Ordinary Shares. Participation Prior to Exchange, holders of Presses do not have a right to participate in issues of new securities to, or capital reconstructions affecting, holders of Ordinary Shares. However, the minimum and maximum number of Ordinary Shares to be issued on Exchange may be adjusted for rights issues, bonus issues, capital reconstructions, capital distributions and off-market buybacks, where appropriate. No right to vote at general meetings except in limited circumstances. In these circumstances the Presses carry one vote each. Application will be made to have the Presses granted official quotation on the ASX.

Franking Exchange

Exchange Ratio

Ranking

Voting Rights Listing

FairfaxPRESSES

PRESSES

A new opportunity to invest in Fairfax Fully franked dividend for first five years of the greater of 6% and the Swap Rate (on the allotment of the Presses) plus 1% p.a. Flexibility to Exchange for Ordinary Shares worth at least $102.56 in 5 years(1). Opportunity to participate in any increase in Ordinary Share price above $6.15.

Preferred dividend Exchange for Ordinary Shares Participation in growth

FAIRFAX

One of Australias leading publishing groups Revenue

Fairfax is one of Australias leading publishing groups with revenue for the 2001 financial year of over $1.3 billion. Fairfax recently announced a full year net profit after tax for the 2001 financial year of approximately $128 million.

Fairfax ordinary shares are listed on ASX. Based on the closing ordinary share price on 30 October 2001 of $3.46, Fairfax had a market capitalisation of approximately $2.54 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA)

Fairfaxs franchises, in print and online, are among the companys greatest strengths. The portfolio of mastheads and brands includes The Sydney Morning Herald, The Australian Financial Review, The Age, The Sun Herald, The Good Weekend, BRW, Shares and Personal Investor. The f2 interactive network has a number of Australias leading online news sites.

Fairfax has a track record of consistently paying dividends since its listing in 1992. Dividend Full year

Fairfax has a strong financial profile, with an investment grade credit rating and retained earnings as at 30 June 2001 in excess of $500 million.

There are particular risks associated with investing in Presses, as well as general risks associated with investing in Fairfax. These risks are set out in Section 5. Financial Strength

Note: (1) Based on the volume weighted average Ordinary Shares price over the 20 Business Days generally immediately prior to Exchange, and generally provided that the volume weighted average sale price of Ordinary Shares in the 20 Business Days prior to Exchange is greater than $0.10.

FairfaxPRESSES

Presses summary (continued)

1.1 How to invest

When to apply The Offer will open at 9.00 am (Sydney time) on 14 November 2001 (subject to Fairfax Shareholders approving a new constitution for the company at the Annual General Meeting to be held on 7 November 2001), and is expected to close at 5.00 pm (Sydney time) on 6 December 2001. Applications must be received at Computershare Investor Services Pty Limited by no later than 5.00 pm (Sydney time) on 6 December 2001. Fairfax may close the Offer early or extend the Closing Date without notice. Investors are encouraged to submit their Application Forms as soon as possible after the Offer opens. If the Closing Date is varied, subsequent dates may also be varied accordingly. How to apply To apply for Presses, you must complete the Application Form attached to or accompanying this Prospectus in accordance with the instructions set out below and on the Application Form. Your completed Application Form and payment should be returned in accordance with the instructions set out below. Fairfax Shareholders If you were registered as a Fairfax Shareholder at 7.00 pm Sydney time on 12 November 2001, you should receive a blue personalised Application Form with your copy of this Prospectus. You must use the blue personalised Application Form, to ensure that you receive your Shareholder priority. If you own shares under the Fairfax Employee Exempt or Deferred Share Schemes at 7.00 pm Sydney time on 31 October 2001, you will be deemed to be a Shareholder for the purpose of receiving priority and should use the blue personalised Application Form. If you are a Shareholder and did not receive your blue Application Form, please call 1800 301 050. Fairfax Eligible Employees If you qualified as an Eligible Employee at 7.00 pm Sydney time on 31 October 2001, and requested a Prospectus, you should have received a yellow personalised Application Form with your copy of this Prospectus.

You must use the yellow personalised Application Form, to ensure that you receive your Eligible Employee priority. Eligible Employees who are also Shareholders (or deemed to be Shareholders) will be entitled to the Shareholder priority only and will not receive an additional Eligible Employee priority. Other applicants If you were not a Fairfax Shareholder at 7.00 pm Sydney time on 12 November 2001 and are not an Eligible Employee, you should use the brown Application Form attached to or accompanying this Prospectus. Where to send your completed Application Form Completed Application Forms, including Application Forms obtained from the Fairfax website (www.fxj.com.au) (but excluding applications for institutional investors and broker firm allocations), and accompanying cheques must be mailed or delivered to: Computershare Investor Services Pty Limited Level 2 60 Carrington Street Sydney NSW 2000 or Computershare Investor Services Pty Limited GPO Box 7115 Sydney NSW 2001 Application Forms and accompanying cheques will not be accepted at Fairfaxs registered office. Payment Application Forms, duly completed, must be accompanied by a cheque or money order in Australian dollars drawn on an Australian branch of a financial institution. Cheques should be crossed not negotiable and made payable to Fairfax Presses Offer Account. Broker firm and institutional applications If you have received a firm allocation of Presses from a Broker to the Offer, your application and payment procedures will differ in two important respects from that described above: Your broker will be acting as your agent in applying for Presses and your application cheque must be made payable to the broker, not to Fairfax Presses Offer Account.

Your completed Application Form and application cheque must be delivered to the Broker directly (not to Computershare Investor Services Pty Limited). Your broker will then deliver these to Fairfax on your behalf.

These differences, and any other requirements, will be explained to you by your broker. If you have a firm allocation of Presses and are in any doubt about what action you should take, you should immediately contact the broker who has made you an offer of a firm allocation. If you are an institutional investor, application payment procedures will be notified to you by the Lead Manager. Minimum application The price for each of the Presses is $100. Applications must be for a minimum of 20 Presses ($2,000). Brokerage and stamp duty No brokerage or stamp duty on the allocation of Presses is payable. Refunds If you are allocated fewer than the number of Presses you applied for, you will receive a refund cheque as soon as practicable after the conclusion of the Offer. No interest will be payable on application monies. Who may apply? Only Australian residents or persons situated in jurisdictions outside Australia to whom an offer may be made in accordance with the laws of that jurisdiction may apply for Presses under this Prospectus. These restrictions also apply to Fairfax Shareholders and Eligible Employees. Enquiries If you require assistance to complete the Application Form, or require additional copies of this Prospectus, you should contact the Fairfax Presses information line on 1800 301 050. If you are unclear in relation to any matter or are uncertain if Presses are a suitable investment for your purposes, you should contact your stockbroker, accountant, financial or other professional adviser. By returning an Application Form, you acknowledge that you have received and read this Prospectus.

FairfaxPRESSES

1.2 Answers to key questions

The purpose of this Section is to answer some of the questions which you may have about Presses. These answers are intended as a guide only. Further details are provided elsewhere in this Prospectus, which you should read. The terms of issue of the Presses are set out in full in Appendix A. What are Presses? Presses are a class of Fairfax share, which entitle holders to a fully franked dividend in preference to any dividends paid on Ordinary Shares. Presses rank in priority to Ordinary Shares for payment of dividends and for a return of capital on a winding-up. Fairfax may not issue shares ranking in priority to Presses without the prior approval of holders of Presses. When will dividends be paid? Subject to the conditions described below, dividends will be payable semi-annually generally in June and December each year with the first dividend being payable in June 2002. How will dividends be determined? During the first five years of issue, holders will be entitled to a noncumulative fully franked preference dividend of the greater of 6% and the Swap Rate (on the allotment of the Presses) plus 1% p.a. This dividend entitlement is subject to the Directors declaring or otherwise resolving to pay a dividend and there being no impediment under the Corporations Act to the payment. If the Credit Rating of the Presses drops below BBB for any period before the first Reset Date, the amount of the dividend will be increased by 0.75% p.a. (in accordance with the terms of issue of Presses) for each day the Credit Rating remains below BBB. The Dividend Rate may be reset by Fairfax on 12 December 2006 and, following this, on later specified Reset Dates. This rate may be above or below the initial or subsequent Dividend Rate.

On Reset Dates, holders may Exchange the Presses for Ordinary Shares in accordance with the Exchange formula set out in the terms of issue. If a dividend is unfranked or partially franked, it will be increased to compensate for the unfranked portion in accordance with the formula set out in the terms of issue. Will dividends always be paid? Presses are not debt instruments, and dividends are not the same as interest payments. Payment of dividends on Presses is subject to the Directors declaring or otherwise resolving to pay a dividend, and there being no impediment under the Corporations Act to the payment. Generally speaking, dividends may be paid only out of current years profits or retained earnings. Accordingly, if there are insufficient profits or retained earnings in any period, a dividend cannot be paid. As at 30 June 2001, Fairfax had retained earnings in excess of $500 million. Dividends on Presses will be paid in priority to any dividends paid on Ordinary Shares and no dividend may be paid on Ordinary Shares if either of the two immediately preceding Presses dividends has not been paid in full. Dividends are non-cumulative, and therefore if a dividend is not paid in respect of any one period, Fairfax is not obliged, but may elect, to make it up in any subsequent period. What happens on Reset Dates? On Reset Dates, specified terms of the Presses may be changed, including the Dividend Rate, Exchange terms and Exchange Discount. The first Reset Date is 12 December 2006. On receiving notice that terms are to be changed, holders of Presses may elect to Exchange their Presses into Ordinary Shares in accordance with the Exchange formula set out in the terms of the Presses prior to the change, or to retain their Presses on the new terms. When will Exchange occur? Either Fairfax or the holders of Presses may Exchange all or a portion of the

Presses for Ordinary Shares on a Reset Date. The first Reset Date will be 12 December 2006. In certain circumstances, all, or a portion of, the Presses may be Exchanged early by either Fairfax or holders of Presses. What happens on Exchange? On Exchange, each of the Presses will Exchange for Ordinary Shares that will rank equally in all respects with Ordinary Shares from the Exchange date. Each of the Presses will generally Exchange for Ordinary Shares at a 2.5% discount to the weighted average sale price of Ordinary Shares traded on the ASX during the 20 Business Days immediately preceding the date of Exchange. Accordingly, the number of Ordinary Shares issued on Exchange will vary depending on the Ordinary Share price prior to Exchange. This means that, if the Ordinary Share price is above $0.10, holders of Presses will receive Ordinary Shares with a value (based on the previous 20 Business Days) of at least $102.56. However, the number of Ordinary Shares to be issued on Exchange of each Presses will be subject to a minimum of 16.6771 and a maximum of 1,000. Holders of Presses will also generally participate in any increase in the average sale price of Ordinary Shares over the 20 Business Days prior to the Exchange Date above $6.15, as holders of Presses will receive the minimum number of Ordinary Shares regardless of the average sale price of the Ordinary Shares during that period. If the average sale price of Ordinary Shares over that period is below $0.10, holders of Presses are exposed to decreases in the average sale price of Ordinary Shares and may receive Ordinary Shares with a value less than $102.56. The value of Ordinary Shares that holders of Presses receive on Exchange is not guaranteed to be above the Issue Price. The following table shows the number and value of Ordinary Shares received on Exchange at various share prices.

FairfaxPRESSES

Presses summary (continued)

Number and value of Ordinary Shares received on Exchange

Average Ordinary Share price during VWAP period Exchange discount Number of Ordinary Shares (1) issued on Exchange (for each Presses) Value of Ordinary Shares issued on Exchange

$0.05 $0.10 $0.20 $3.00 $5.00 $6.00 $7.00 $8.00

(1)

2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%

1000.0000 1000.0000 512.8205 34.1880 20.5128 17.0940 16.6771 16.6771

$50.00 $100.00 $102.56 $102.56 $102.56 $102.56 $116.74 $133.42

Note: Where the total number of additional Ordinary Shares to be allotted on Exchange to a Presses holder includes a fraction, that number will be rounded down to the next whole number. Can Presses be purchased or sold on the ASX? Fairfax will apply for Presses to be quoted on the ASX. Once quoted, Presses can be purchased or sold through any stockbroker. What are the taxation and entitlement implications of holding or selling Presses? The taxation implications of investing in Presses will depend on investors individual circumstances. A general outline of the taxation consequences of holding or selling Presses appears in the letter from Greenwoods & Freehills Pty Limited to Fairfax set out in Section 6. However, this is not a substitute for professional advice and it is therefore important that you consult your taxation adviser if you are in any doubt as to the suitability of the Presses as an investment in your circumstances. If relevant, you should also seek advice on the treatment of holding Presses under the terms of pension or other Government benefits to which you may be entitled. Do Presses have voting rights? Presses do not have voting rights, except in the limited circumstances specified in the terms of the Presses set out in Appendix A, when each of the Presses will carry one vote. Is brokerage or stamp duty payable? No brokerage or stamp duty on the allotment of Presses is payable by investors. However, brokerage may be payable on any subsequent transfer of Presses. What are the risks of investing in Presses? An investment in Fairfax, through the Presses, will involve some risks. You should refer to Section 5 for further information. You should read the whole of this Prospectus carefully. If you are unclear in relation to any matter or uncertain if Presses are a suitable investment for you, you should consult your stockbroker, accountant, financial or other professional adviser.

Can Fairfax redeem the Presses? Presses cannot be redeemed by Fairfax. Will I be able to request repayment of my investment? Investors will have no right to require Fairfax to repay the money originally paid for Presses except in a winding up of the Company. On Reset Dates, and in certain circumstances prior to Reset Dates, investors may elect to Exchange their Presses for Ordinary Shares. In a winding up, what will holders of Presses receive? In the event of a winding up of Fairfax, investors will be entitled to a return of capital of up to the face value of the Presses and any accrued dividend entitlement after all creditors and other liabilities of the Company have been paid. Holders of Presses will rank ahead of holders of Ordinary Shares in a winding up to the extent of the face value of the Presses and any accrued dividend entitlement. In the event of a shortfall of funds on a winding up, holders of Presses will not receive a full return of capital or accrued dividend entitlement on the Presses.

FairfaxPRESSES

2. DETAILS OF THE OFFER

2.1 Structure of the offer
Allotment and allocation policy Fairfax intends to allot the Presses on 12 December 2001. The Acceptance of Applications for Presses pursuant to this Prospectus is conditional upon the passing of a special resolution to adopt a new constitution by shareholders at the Fairfax Annual General Meeting to be held on 7 November 2001. The Underwriter has the right, in consultation with Fairfax, to nominate the persons to whom the Presses will be allocated, including firm allocations to institutional investors, Brokers and Brokers for their private clients. The distribution by a Broker to its clients will be at the discretion of that Broker. If there is excess demand for Presses, Fairfax has the right, following consultation with the Underwriter, to accept subscriptions of up to a total amount of 2.5 million Presses, or to scale back applications (by issuing fewer Presses to applicants than the number applied for), or a combination of both. Fairfax and the Underwriter reserve the right to reject any Applications, or to allocate any applicant a lesser number of Presses than those applied for, including less than the minimum application of 20 Presses. If an Application is not accepted, or is accepted in part only, the relevant part of the application monies will be refunded to the applicant as soon as practicable after the Offer closes. Priority for Fairfax Shareholders and Eligible Employees If there is excess demand, applicants who are Shareholders registered at 7.00 pm on 12 November 2001 or Eligible Employees who submit a blue or yellow Application Form respectively will receive some priority over other applicants who do not receive an allocation either directly or indirectly from the Underwriter prior to the date of the opening of the Offer. The priority does not mean that Shareholders or Eligible Employees will necessarily receive all the Presses for which they applied. The holders of options over Ordinary Shares will not receive priority. Eligible Employees who are also Shareholders (or deemed to be Shareholders) will be entitled to the Shareholder priority only and will not receive an additional Eligible Employee priority. ASX listing Application will be made to the ASX for official quotation of the Presses within seven days after the date of this Prospectus. If quotation is not granted, the Presses will not be issued and application monies will be refunded to applicants. Provision of holding statements Fairfax will apply for Presses to be granted official quotation and participate in CHESS and, if granted by the ASX, no share certificates will be issued. Each holder of Presses will be provided with a statement of holding which sets out the number of Presses held. Statements of holding for the Presses issued pursuant to this Prospectus are expected to be despatched on 17 December 2001. Deferred settlement trading It is expected that the trading of Presses on the ASX will commence on a deferred settlement basis on 13 December 2001, the day following announcement of allocations, and will continue on that basis until 18 December 2001. Deferred settlement trading allows Presses to be bought and sold on the ASX before entries are made in CHESS in respect of holdings of Presses and before holding statements are sent out to successful applicants. On 17 December 2001, Fairfax expects to despatch shareholder statements under CHESS, which will set out the number of Presses issued to each successful applicant. At this time, deferred settlement trading will cease and the Presses will commence trading on the ASX on a normal settlement basis. It is the responsibility of each applicant to confirm their holding before trading in Presses in a deferred settlement market. Applicants who sell Presses before they receive their shareholder statements will do so at their own risk. Fairfax and the Underwriter disclaim all liability, in negligence or otherwise, to any person who trades Presses before receiving their holding statement, whether on the basis of a confirmation of allocation provided by Fairfax or otherwise.

2.2 Other information

Condition precedent to the Offer The Offer is subject to the passing of a special resolution by Shareholders at the Fairfax Annual General Meeting on 7 November 2001 to adopt a new constitution which, among other things, will permit the issue of preference shares having the terms of the Presses. Underwriting The issue of 2 million Presses is underwritten by the Underwriter. A description of the Underwriting Agreement is set out in Section 7. The underwriting is subject to certain termination events, details of which are also set out in Section 7. Subject to certain conditions, if any of those events occurs, the Underwriter may, at its election, terminate its underwriting obligations. Prospectus available online A copy of this Prospectus may be viewed online in read-only format, without any Application Forms, on the Fairfax corporate website at www.fxj.com.au until the date of the opening of the Offer. From the date of the opening of the Offer being 14 November 2001 and during the Offer period, a copy of this Prospectus may be obtained with an accompanying Application Form. The Offer constituted by this Prospectus in electronic form is available only to persons accessing the Prospectus in electronic form within Australia. Persons who receive a copy of this Prospectus in electronic form at www.fxj.com.au may obtain a paper copy of the Prospectus (including any relevant accompanying Application Form) free of charge, during the Offer period by contacting 1800 301 050. Completed Application Forms must be mailed or delivered to Computershare Investor Services Pty Limited in the manner set out in Section 1.1. There is no facility for online applications, however, investors may obtain an Application Form from the Prospectus available on the Fairfax website after 14 November 2001 and submit the completed Application Form to the address set out in Section 1.1. Shareholders and Eligible Employees must use the blue or yellow personalised Application Forms respectively accompanying their Prospectus to ensure they receive the Shareholder or Eligible Employee priority.

FairfaxPRESSES

3. FAIRFAX AND ITS OPERATIONS

3.1 Introduction
Fairfax is one of Australias leading publishing groups. A copy of the Full Financial Report and Concise Annual Report are available from the Companys website at www.fxj.com.au. In the 2001 financial year, the Company reported revenues of over $1.3 billion. Fairfax operates predominantly in Australia in two business segments within the media industry publishing and online media through the f2 interactive network. The publishing business comprises general newspapers and business media with publishing activities and advertising sales in newspaper, magazine and electronic formats. Fairfaxs f2 interactive network comprises two divisions: News and Classifieds, and CitySearch Directories.

3.2 Business profile

Publishing Fairfax produces a number of metropolitan and regional newspapers as well as business and finance dailies and magazines. Fairfax prides itself on the independence and integrity of its publications and strives for excellence in journalism. Fairfax mastheads include The Sydney Morning Herald, The Age, The Australian Financial Review, The Sun-Herald, BRW, Shares and Personal Investor magazines. Inserted magazines, which are incorporated in the Fairfax newspapers, include Good Weekend, AFR Boss and SundayLife! Regional titles include The Newcastle Herald and The Illawarra Mercury. Fairfax also publishes community newspapers throughout New South Wales and Victoria. Publishing operations Fairfax is presently engaged in projects to increase colour and print capacity at its existing Chullora plant in Sydney and to construct and commission a new plant at Tullamarine in Melbourne. Together the projects will cost in the order of $300 million. Both projects are on time and on budget and are expected to be completed during calendar year 2002.

f2 fairfax interactive network f2 is building businesses serving more than 2.5 million unique users monthly in two divisions: News and Classifieds, which includes one of Australias leading family of online news sites (smh.com.au, theage.com.au and afr.com) and leading classified supersites for jobs, cars and homes (mycareer.com.au, domain.com.au, and drive.com.au) and CitySearch Directories (www.citysearch.com.au), which is building an innovative interactive and print directory covering more than 14 major metropolitan and regional markets in Australia.

3.3 Use of funds

The purpose of the issue of Presses is to strengthen Fairfaxs balance sheet by reducing debt, diversifying its equity base and increasing funding flexibility. This will ensure Fairfax is well placed to take advantage of growth opportunities.

FairfaxPRESSES

4. EFFECT OF THE PRESSES ISSUE ON FAIRFAX

4.1 Fairfaxs share capital
A summary of Fairfaxs capital structure as at 30 June 2001 and on a proforma basis (assuming that the issue of the Presses was completed on 30 June 2001) is set out below:
Proforma Number of shares 30 June 2001

30 June 2001

Ordinary Shares fully paid Presses Note: Fairfax reserves the right to issue up to a maximum of 2,500,000 Presses.

734,879,595 2,000,000 (1)

734,879,595

(1)

4.2 Fairfax Ordinary Share price history

The graph set out below shows the closing price of Fairfax Ordinary Shares for the period from 30 September 1996 to 30 October 2001(1).

(1)

Note: Past share price performance is not necessarily indicative of future share prices. Nothing in this section should be taken as a forecast or prediction of the future price of Fairfax Ordinary Shares.

4.3 Financial impact of the issue

The following historical and proforma financial statements are derived from Fairfaxs audited financial statements for the financial years ended 30 June 2000 and 30 June 2001. The proforma Statement of Financial Position shown below has been prepared as if the issue of 2,000,000 Presses had been completed on 30 June 2001 and assumes that the net proceeds of the issue of $194 million (after allowing for transaction costs of $6 million), are applied to reduce current interest bearing liabilities.

10

FairfaxPRESSES

Effect of the Presses issue on Fairfax (continued)

Statement of Financial Position

At 30 June 2001 proforma $000 2001 $000 2000 $000

Current Assets Cash Receivables Inventories Total Current Assets Non-Current Assets Receivables Investments accounted for using the equity method Other financial assets Property, plant and equipment Intangibles Tax assets Total Non-Current Assets Total Assets Current Liabilities Payables Interest bearing liabilities (1) Tax liabilities Provisions Total Current Liabilities Non-Current Liabilities Interest bearing liabilities Tax liabilities Provisions Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed equity Reserves Retained profits Total parent entity interest in equity Total outside equity interest Total Equity

8,542 226,737 24,973 260,252 5,314 4,184 14,491 651,777 1,278,431 57,719 2,011,916 2,272,168 158,657 114,000 5,198 93,544 371,399 466,334 59,142 40,309 565,785 937,184 1,334,984 822,196 4,915 507,873 1,334,984 1,334,984

8,542 226,737 24,973 260,252 5,314 4,184 14,491 651,777 1,278,431 57,719 2,011,916 2,272,168 158,657 308,000 5,198 93,544 565,399 466,334 59,142 40,309 565,785 1,131,184 1,140,984 628,196 4,915 507,873 1,140,984 1,140,984

10,557 208,962 19,291 238,810 13,944 35,349 9,412 519,559 1,276,865 58,804 1,913,933 2,152,743 205,363 5,000 60,169 86,987 357,519 617,507 47,489 41,675 706,671 1,064,190 1,088,553 619,163 5,254 464,136 1,088,553 1,088,553

Note: (1) The 2001 proforma Statement of Financial Position assumes that interest bearing liabilities have been reduced by the proceeds of the issue (net of transaction costs) of $194 million.

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4.4 Ratio analysis

The table below sets out key financial ratios for Fairfax on an historical and proforma basis.
2001 proforma 2001 2000

Basic EPS (cents) 16.83 17.51 Diluted EPS (cents) 17.18 17.43 EBITDA/Net interest 9.04 6.84 Debt/EBITDA 1.94 2.58 Debt/Debt plus Equity 30.30 40.43 Notes: Earnings used for the ratios included in the 2001 proforma assumes that the issue of 2,000,000 Presses was completed on 30 June 2000.

25.49 25.27 8.20 1.59 36.38

The 2001 proforma earnings used in the above ratio analysis, assumes that proceeds (net of transaction costs) of $194 million were used to retire debt that had an interest rate of 5.5% and that the applicable tax rate is 34%. This would have led to a reduction in borrowing costs of $10,670,000 before tax for the year ended 30 June 2001. The 2001 proforma calculation of earnings per share assumes that the dividend on the Presses is at 6%. The definition of EBITDA is Earnings before Interest, Tax, Depreciation and Amortisation.

4.5 Credit rating of PRESSES

Fairfax and the Presses have each been rated by Standard & Poors. As at the date of this Prospectus the ratings are as follows: Presses issue credit rating (issued 1 November 2001) Standard & Poors BBB Fairfax corporate credit rating (affirmed 1 November 2001) Standard & Poors BBB+/Stable/A-2 These ratings may change over time depending on the financial performance of Fairfax. If the Credit Rating falls below BBB or if Standard & Poors ceases to provide a Credit Rating to the Presses, holders of Presses will be entitled to an increased dividend for the period during which the Credit Rating is below BBB or no rating is provided. This dividend will be at a rate which is 0.75% per annum higher than the Dividend Rate on the Presses and calculated in accordance with the formula contained in the terms of issue. For the avoidance of doubt, an announcement of any negative outlook or credit watch is not taken to be a fall below BBB. A credit rating is not a recommendation to buy, sell or hold securities and it may be subject to revision, suspension or withdrawal at any time by Standard & Poors.

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5. RISK FACTORS
Before applying for Presses, you should consider whether the Presses are a suitable investment for you. In particular, you should be aware that there are risks associated with an investment in Presses, many of which are outside the control of Fairfax, including the risk factors set out below and other matters referred to in this Prospectus. Liquidity The market for Presses may be less liquid than the market for Ordinary Shares. Dividends Presses are not debt instruments, and dividends are not the same as interest payments. Payment of dividends on the Presses is subject to the Directors resolving to pay a dividend and there being no impediment under the Corporations Act to the payment. Dividends are noncumulative, and therefore if a dividend is not paid in any period, there is no obligation on Fairfax to make it up in any subsequent periods. However, if a dividend is not paid then Fairfax cannot pay a dividend to the holders of Ordinary Shares or other preference shares (or redeem, cancel or acquire any share in Fairfax or conduct a capital reduction under which any consideration is paid or distributed) until Fairfax pays holders of Presses two consecutive dividends or otherwise makes up the shortfall (as explained in the terms and conditions in Appendix A). Exchange Either Fairfax or the holders of Presses may Exchange all or a portion of the Presses for Ordinary Shares on Reset Dates and earlier in certain circumstances. The Ordinary Shares issued on Exchange will have the same rights as other Ordinary Shares, which are different to the rights attaching to Presses. The number of Ordinary Shares issued on Exchange will generally vary depending on the Ordinary Share price over the 20 Business Days immediately prior to the Exchange Date. The value of the Ordinary Shares issued on the Exchange date may therefore be different from the value calculated through the 20 Business Day pricing period. Further, if the average sale price of Ordinary Shares over the 20 days prior to the Exchange Date, or the price of Ordinary Shares on or after the Exchange Date, is less than $0.10, the value of Ordinary Shares issued on Exchange may be less than $102.56. Fairfax may, subject to the terms, elect to Exchange at a time that does not coincide with the holders individual preference, which may be disadvantageous to them in light of market conditions or individual circumstances. Ranking Presses are not debt instruments. Consequently, upon any winding up of Fairfax, holders of Presses will rank behind creditors of Fairfax and equally with other preference shares, but in priority to Ordinary Shareholders (unless already Exchanged into Ordinary Shares) to the extent of the face value of the Presses and any accrued dividend entitlement. In the event of a shortfall of funds on a winding up, there is a risk that holders of Presses will not receive a full return of capital or accrued dividend entitlement on the Presses. Credit rating As a result of extended poor market conditions for Fairfax, there is a risk that the credit rating of Fairfax and the Presses could be reviewed. These ratings may change over time depending on the financial performance of Fairfax. If the Credit Rating falls below BBB or if Standard and Poors ceases to provide a Credit Rating to the Presses, holders of Presses will be entitled to an increased dividend for the period during which the Credit Rating is below BBB or no rating is provided. This dividend will be at a rate which is 0.75% per annum higher than the Dividend Rate on the Presses and calculated in accordance with the formula contained in the terms of issue. For the avoidance of doubt, an announcement of any negative outlook or credit watch is not taken to be a fall below BBB.

5.1 Risks associated with investing in Presses

Set out below are specific risks associated with an investment in Fairfax Presses. In particular these risks arise from the nature of investment markets generally and as a result of the Presses and their terms of issue. Financial market conditions The market price of Presses will fluctuate due to various factors, including general movements in the Australian and international equity markets, investor perceptions, worldwide economic conditions, interest rates, movements in the market price of Fairfax Ordinary Shares, and factors which may affect Fairfaxs financial position and earnings. The market price of Presses is expected to be more sensitive than Ordinary Shares to changes in interest rates. Generally speaking, in the absence of other considerations, an increase in the level of relevant interest rates, after the allotment date, is more likely to adversely affect the market value of the Presses. The Presses could trade on the ASX at a price below the issue price. Also, significant events, such as the terrorist attacks on the United States on 11 September 2001, and any subsequent military activity in response to those attacks, may have a material impact on such factors. The Ordinary Shares held as a result of any Exchange would, following Exchange, rank equally with Fairfaxs fully paid Ordinary Shares. Accordingly, their value after any Exchange Date will depend upon the market price of Fairfax Ordinary Shares.

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Taxation considerations and early Exchange A general outline of the taxation consequences for investors in Presses are set out in the letter by Greenwoods & Freehills Pty Limited to Fairfax in Section 6. This discussion is in general terms and is not intended to provide specific advice in relation to the circumstances of any particular investor. Accordingly, investors should seek independent advice in relation to their own individual taxation position. The Australian Government is in the process of a major review of the business tax system, including announced intentions to introduce legislation dealing with the proposed consolidation regime and the simplification of the imputation system. Fairfax does not anticipate that these proposed changes will adversely affect the Presses. If a change to the system materially increases the costs to the Company of having the Presses on issue, or adversely affects the ability of the Company to frank any dividends on the Presses, the Company is entitled to Exchange the Presses for Ordinary Shares prior to the Reset Date. Therefore the exact period for which investors are entitled to the special rights attaching to the Presses is unknown. Investors should refer to the terms of issue set out in Appendix A for further information. Swap rate The Dividend Rate to be paid on the Presses will be determined with reference to the Swap Rate on the allotment of the Presses. Swap rates are a commonly used benchmark of the level of interest rates in an economy, and are variable and influenced by economic factors. However, there is a minimum Dividend Rate payable to investors regardless of the actual Swap Rate. This is explained more fully in the terms and conditions in Appendix A. Further issues of securities Fairfax is entitled to issue further Presses or other securities that rank equally with Presses. However, before Fairfax could issue any securities that rank in priority to Presses it must obtain a special resolution of the holders of Presses.

5.2 Risks associated with Fairfax

An investment in Presses also involves the general risks associated with any investment in securities which are listed on a stock exchange. Fairfaxs business is subject to risks which may impact on its future operations and performance. In addition to other information set out in this Prospectus, the following risk factors should be considered carefully in evaluating Fairfax and its business before subscribing for Presses. Dependence on general economic conditions Fairfaxs business may be affected by general economic conditions (including interest rates, inflation, the industrial relations environment, mortgage rates, oil prices, employment rates, GDP, and the Australian dollar exchange rate). Changes in economic conditions in the markets in which Fairfax operates may result in customers changing spending patterns or their level of general consumption, which may have a material adverse effect on the Companys operating and financial performance. Also, the repercussions of the terrorist attacks in the United States on 11 September 2001, including the possibility of an escalation in military activity, may not yet be fully reflected in market conditions. Volatility of advertising revenues Fairfaxs revenues are largely dependent on the demand for display and classifieds advertising. Advertising expenditure is in itself dependent on a number of factors including advertising market conditions, GDP growth, employment levels and the overall growth in the Australian economy.

Newsprint prices Fairfaxs business may be affected by changes in the cost of newsprint. The Company has entered into arrangements for newsprint purchasing which limit the impact of fluctuations in global newsprint prices and foreign exchange rates. New technology Although new technology such as the Internet may have an impact on the revenues of Fairfaxs core publishing business these risks are mitigated by continuing growth prospects in publishing as well as opportunities in f2. Growth of Internet usage and e-commerce The future profits of f2, in part, depend upon the extent to which the Internet is accepted and used as an effective medium of commerce. Rapid growth in the use of and interest in the Internet and commercial online services is a recent development. There can be no assurance that this acceptance and use will continue to develop such that a sufficient broad base of consumers adopt, and continue to use, online services as a medium of commerce. Failure of this growth and acceptance could adversely affect the future performance of f2. Industrial relationsstaff costs The newspaper industry in Australia is labour intensive and the workforce largely unionised. Consequently Fairfax is sensitive to increases in wage levels and experiences occasional industrial action. The above summary is not exhaustive and prospective investors should read this Prospectus in its entirety and consult their stockbroker, accountant, financial or other professional adviser before deciding whether to apply for Presses.

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6. TAXATION LETTER TO FAIRFAX

FairfaxPRESSES

15

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FairfaxPRESSES

FairfaxPRESSES

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FairfaxPRESSES

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7. ADDITIONAL INFORMATION
TERMS OF ISSUE The rights attaching to Presses will be governed by: Fairfaxs constitution; and The terms of issue of the Presses set out in Appendix A. AVAILABILITY OF DOCUMENTS LODGED WITH ASIC The Corporations Act provides for separate content requirements for transaction specific prospectuses in relation to an offer of securities in a class which have been continuously quoted for the 12 months prior to the date of the prospectus. In these circumstances, a listed disclosing entity may issue a short form prospectus under section 713. The ability to issue a short form prospectus exists in respect of an offer of Exchangeable preference shares (which are not continuously quoted securities) under ASIC Class Order 00/195 which provides that a section 713 prospectus can be issued where the ordinary shares underlying the Exchangeable preference shares are continuously quoted securities. Copies of documents lodged in relation to Fairfax may be obtained from, or inspected at, an office of ASIC. OTHER DOCUMENTS Fairfax will provide a copy of any of the following documents free of charge to any person who requests a copy during the application period in relation to this Prospectus: The financial statements of the Group for the year ended 30 June 2001 (being the most recent annual financial reports lodged with ASIC before the issue of this Prospectus), and Any other document or financial statement lodged by Fairfax with ASIC or the ASX under the continuous disclosure reporting requirements in the period after the lodgement of those financial statements and before lodgement of this Prospectus with ASIC. SUMMARY OF RIGHTS ATTACHING TO ORDINARY SHARES The Ordinary Shares issued on Exchange of Presses will rank equally with existing fully paid Ordinary Shares. The rights attaching to Ordinary Shares are: set out in Fairfaxs constitution (those rights will remain substantially the same under the constitution to be considered by Shareholders at the Annual General Meeting on 7 November 2001) (each of these constitutions can be examined from 8.30 am to 5.00 pm at Level 19, 201 Sussex Street, Sydney, New South Wales), and in certain circumstances, regulated by the Corporations Act, the ASX Listing Rules and the general law.

At the Annual General Meeting of Fairfax to be held on 7 November 2001, Shareholders will be asked to adopt a new constitution. FAIRFAX A DISCLOSING ENTITY Fairfax is a disclosing entity under section 111AC(1) of the Corporations Act and is therefore subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules. These obligations require Fairfax to continuously notify the ASX of information about specific events and matters as they arise for the purpose of the ASX making the information available to the stock market conducted by the ASX. In particular, Fairfax has an obligation under the ASX Listing Rules (subject to certain limited exceptions), to notify the ASX immediately of any information concerning Fairfax, of which it becomes aware, which a reasonable person would expect to have a material effect on the price or value of its shares. It is also required to prepare and lodge with ASIC both yearly and half-yearly financial statements accompanied by a Directors statement and report and an audit or review report.

The rights attaching to Ordinary Shares are, in broad terms, summarised as follows. This summary also applies to the rights attaching to Ordinary Shares under the proposed new constitution: Dividends Dividends declared or resolved to be payable by the Directors on Ordinary Shares are payable (except in limited circumstances) in proportion to the amount of capital credited as paid on the Ordinary Shares during the period in respect of which the dividend is paid. Voting At any general meeting of Fairfax, each member has one vote on a show of hands and one vote for each share held on a poll. Winding up Ordinary Shareholders are entitled to share in any surplus assets on a winding up in proportion to the shares held by them, irrespective of the amounts paid or credited as paid on the Ordinary Shares. Ordinary Shares rank after Presses for return of capital on a winding up. Transferability Ordinary Shares are generally freely transferable, however, the Directors may decline to register a transfer in limited circumstances.

SUMMARY OF RIGHTS ATTACHING TO PRESSES The rights attaching to Presses are summarised in Section 1. Full details of the rights attaching to Presses are set out in the terms of issue at Appendix A.

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7. Additional information (continued)

SUMMARY OF UNDERWRITING AGREEMENT Fairfax entered into an Underwriting Agreement (Underwriting Agreement) with UBS Warburg Australia Limited (Underwriter) on 1 November 2001. The main terms of the Underwriting Agreement are summarised below. Agreement to Underwrite and Manage Under the Underwriting Agreement, the Underwriter agrees to underwrite the issue of 2 million Presses at the Issue Price and to manage the Offer. Fairfax must accept all valid applications for the underwritten Presses. The Underwriter, after consultation with Fairfax, has a right to nominate the allottees of all the underwritten Presses in its absolute discretion. Fairfax may, in consultation with the Underwriter, accept oversubscriptions of up to 500,000 Presses which are not underwritten, and nominate the allottees of those Presses. Representations, Warranties and Undertakings The customary and usual warranties are given by both the Underwriter and Fairfax in relation to matters such as their respective status as companies limited by shares, their legal capacity and power to enter into the Underwriting Agreement, and their respective corporate authority. The customary and usual warranties are given by Fairfax as an issuer of shares in relation to matters such as Fairfaxs compliance with all applicable laws and obligations that apply to this Prospectus and material incidental to this Prospectus, its conduct in relation to this Prospectus and the Offer, its financial position, and its due diligence program for the Offer.

Fees and Indemnities Fairfax is required to pay to the Underwriter: a management fee of 0.75%; a sales fee of 1.25%; and an underwriting fee of 0.75%.

Termination The Underwriter may terminate its obligations under the Underwriting Agreement by notice to Fairfax if, between 1 November 2001 and the date on which a valid shortfall notice and accompanying certificate are given to the Underwriter (Shortfall Notice Date) any of the following matters occurs: 1 The All Ordinaries Index of the ASX either: (a) closes on 3 consecutive Business Days at a level that is 10% or more below its closing level on 31 October 2001 (Starting Level); or closes on a day which is less than 3 Business Days before the Shortfall Notice Date at a level which is 10% or more below its Starting Level and closes at that or a lower level on each subsequent Business Day until and including the Shortfall Notice Date; or is at any time at a level which is 15% or more below its Starting Level;

In addition, Fairfax is required to pay various incidental costs and expenses including GST incurred by the Underwriter in connection with the Offer. The Underwriter is entitled to set off any of the above fees, costs and expenses against any payment it is required to make in respect of Presses received by the Underwriter. If the obligations of the Underwriter under the Underwriting Agreement are terminated or the Offer does not proceed or is not completed for any reason, Fairfax must pay to the Underwriter its reasonable costs and expenses. Fairfax gives certain indemnities to the Underwriter and its related parties in relation to losses suffered by, or claims made against, the Underwriter or its related parties in connection with the Underwriters appointment.

(b)

(c)

This Prospectus omits any material required by the Corporations Act or otherwise fails to comply with the Corporations Act; ASIC issues an order under section 739(1) of the Corporations Act or an interim order under section 739(3) of the Corporations Act; Fairfax does not comply with a requirement to serve a certificate on the Underwriter regarding a shortfall, or furnishes a certificate which is untrue or incorrect in a material respect; ASX does not grant approval for official quotation of the Presses before the Shortfall Application Date or such approval is withdrawn on or before the Shortfall Application Date; Fairfax fails to lodge the Prospectus with ASIC on or before 5 November 2001, except where this is the sole fault of the Underwriter;

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Except as disclosed in this Prospectus to the ASX prior to 1 November 2001 in accordance with the Listing Rules or to the due diligence committee, there is a material adverse change in the financial position, results of operations or prospects of Fairfax from that reflected in the financial statements of Fairfax for the period ended 30 June 2001; Any person who has previously consented to the issue of this Prospectus or to being named in this Prospectus (other than the Underwriter) withdraws that consent; Fairfax withdraws this Prospectus;

14 Any of the following events is delayed for more than five Business Days: (a) (b) (c) (d) Lodgement Date; Opening Date; Closing Date; Shortfall Date (the last date on which a Shortfall Notice may be given); Shortfall Application Date (the latest date on which applications in respect of a Shortfall may be lodged); Allotment Date; Holding Statement Despatch Date (the last date for holding statements to be despatched);

19 Hostilities not presently existing commence or a major escalation in existing hostilities occurs, whether war has been declared or not, involving any one or more of Australia, New Zealand, the United States of America, any member state of the European Union, Indonesia, Japan, Russia, or the Peoples Republic of China,

(e)

(f) (g)

10 Trading in Ordinary Shares is suspended for more than 3 consecutive Business Days, or Ordinary Shares cease to be quoted on ASX; 11 The credit rating assigned to Fairfax by Standard and Poors (Australia) Pty Ltd as at 1 November 2001 is downgraded or withdrawn or is placed on credit watch negative; 12 Trading in all securities quoted on ASX is suspended or limited in a material respect for all or substantially all of a trading day; or if any of the following matters occurs and the event has, or is reasonably likely to have, a material adverse effect on the success of the Offer or leads or is reasonably likely to lead to a liability for the Underwriter under any applicable legislation: 13 Fairfax (or any of its subsidiaries) alters its share capital or its constitution in a material respect without the prior written consent of the Underwriter (which consent must not be unreasonably withheld) except for the adoption of a new constitution by Fairfax at its Annual General Meeting of 7 November 2001;

15 The Dow Jones Industrial Average Index falls in the same manner and to the same extent in percentage terms described in relation to the All Ordinaries Index of the ASX in paragraph 1 above; 16 Fairfax fails to perform or observe any material obligation under the Underwriting Agreement and that failure is not remedied to the reasonable satisfaction of the Underwriter; 17 Any new Australian law or regulation is introduced into Parliament, made or foreshadowed in an announcement which, if it comes into effect, could reasonably be expected to have a material adverse effect on the success of the Offer; 18 Without the prior written consent of the Underwriter (which shall not be unreasonably withheld), any of the material contracts summarised in this Prospectus is terminated (whether by breach or otherwise), rescinded, altered or amended in a material respect or found to be void or voidable;

or a terrorist act is perpetrated on any of those countries or any diplomatic or political establishment of any of those countries elsewhere in the world, or a national emergency is declared by any of those countries; 20 A representation or warranty given by Fairfax has been, is, or becomes, materially untrue or incorrect and the matters rendering the representation or warranty untrue in such respect are not remedied to the reasonable satisfaction of the Underwriter; 21 Fairfax contravenes in a material respect any provision of its constitution, the Corporations Act or any requirement of ASX or any other applicable law; 22 A director of Fairfax: (a) is charged with an indictable offence relating to any financial or corporate matter or any regulatory body commences any public action against the director in his or her capacity as a director of Fairfax or announces that it intends to take any such action; or is disqualified from managing a corporation under sections 206B, 206C, 206D, 206E, 206F or 206G of the Corporations Act;

(b)

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FairfaxPRESSES

7. Additional information (continued)

23 A supplementary prospectus or a replacement prospectus is, in the reasonable opinion of the Underwriter, required under section 719 of the Corporations Act or a person other than the Underwriter gives a notice to Fairfax under Section 730 of the Corporations Act; 24 Trading in all securities quoted or listed on the New York Stock Exchange is suspended or limited in a material respect for all or substantially all of a trading day; 25 A general moratorium is declared on commercial banking activities in Australia or the United States of America and remains in force for two consecutive Business Days or there is a material disruption in commercial banking or security settlement or clearance services in either of those countries which remains in force for two consecutive Business Days (Banking Moratorium Event); If a Banking Moratorium Event occurs which does not entitle the Underwriter to terminate its obligations under the Underwriting Agreement, but which prevents or delays the performance of certain specified obligations of Fairfax or the Underwriter under the Underwriting Agreement, those obligations will be suspended to the extent to which they are affected, for as long as the Banking Moratorium Event continues. If the Banking Moratorium Event continues for more than 7 days, the Underwriter may terminate the Underwriting Agreement, without cost or liability to the Underwriter, by notice to Fairfax. In the event that the Underwriter validly terminates its obligations, it is relieved of its obligations under the Underwriting Agreement, other than in respect of any obligation which may have already accrued.

RESIDENTS OF THE UNITED STATES The Offer has not been and will not be registered under the United States Securities Act of 1933, as amended, (the Securities Act) and, therefore, subject to certain exceptions, the Presses may not be offered, sold, renounced or delivered, directly or indirectly, within the United States. Accordingly, except as described below, the Offer is not being made in the United States or to holders of Ordinary Shares with registered addresses in the United States and neither the Prospectus nor the Application Form will be sent into the United States or to persons with registered addresses in the United States. Certain exemptions from these limitations may be available in the case of certain defined classes of sophisticated investors. Envelopes containing Application Forms should not be postmarked or otherwise despatched from the United States and all persons subscribing for the Presses must provide addresses within Australia for the return of holding statements for Presses. The Company reserves the right to treat as invalid any Application Form (i) postmarked in or which otherwise appears to have been despatched from the United States, (ii) that provides an address in the United States for delivery of holding statements for Presses or (iii) which, except as otherwise agreed with the Company, does not make the representation and warranty set out in the Application Form that the person acquiring the Presses is not in the United States and is not acting for the account or benefit of a person within the United States, unless the accepting person is so acting as an authorised employee of such other person or with investment discretion with respect to an account of such other person. Any person who is unable to make the representation and warranty set out in the Application Form is not entitled to subscribe for any Presses.

Until 40 days after the commencement of the Offer, an offer, sale or transfer of Presses within the United States by any dealer (whether or not participating in the Offer) may violate the registration requirements of the Securities Act. For the purposes of this Prospectus and the Application Form, United States means the United States of America, its territories and possessions, any State of the United States and the District of Columbia. RESIDENTS OF OTHER JURISDICTIONS The Offer will only be made in jurisdictions outside Australia if the making of the Offer does not contravene any applicable laws in the relevant jurisdiction in relation to the Offer. Residents of those jurisdictions will only be able to apply for Presses if the Offer can be made to them in such a way as to comply with all applicable laws in the relevant jurisdiction in relation to the Offer. CONSENTS None of the parties referred to below has made any statement that is included in this Prospectus or any statement on which a statement made in this Prospectus is based, other than as specified below. Each of these parties, to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements or omissions from this Prospectus, other than the reference to its name and a statement or report included in this Prospectus with the consent of that party as specified below. Computershare Investor Services Pty Limited has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named.

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Freehills has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. Ernst & Young has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. UBS Warburg has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. Greenwoods & Freehills Pty Limited has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to the inclusion in this Prospectus of its Taxation Letter to Fairfax in the form and context in which it is included (and to the references to that report in this Prospectus) and to be named in this Prospectus in the form and context in which it is named. UBS Warburg Private Clients Pty Limited has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. Commonwealth Securities Limited has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. Johnson Taylor Potter Limited has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named. Standard & Poors has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus in the form and context in which it is named.

INTERESTS OF ADVISERS Computershare Investor Services Pty Limited has performed work in its capacity as Fairfaxs share registry in relation to the Offer. Fairfax estimates that it will pay approximately $185,000 to Computershare in respect of this work. Freehills has acted as solicitors to Fairfax and has performed work in relation to preparing the due diligence and verification programme and in relation to the due diligence required on legal matters. In respect of this work, Fairfax estimates that it will pay approximately $250,000 (excluding disbursements and GST) to Freehills. Further amounts may be paid to Freehills for future work in accordance with its normal time based charges. Ernst & Young has performed work in relation to the due diligence enquiries on financial matters and the preparation of the financial information in section 4 of this Prospectus. In respect of this work, Fairfax estimates that it will pay approximately $35,000 (excluding disbursements and GST) to Ernst & Young. Further amounts may be paid to Ernst & Young for future work in accordance with its normal time-based charges. Greenwoods & Freehills Pty Limited has performed work in relation to the due diligence inquiries on tax matters and the preparation of the Taxation Letter in section 6 of this Prospectus. In respect of this work, Fairfax estimates that $25,000 (excluding disbursements and GST) to Greenwoods & Freehills Pty Limited. Further amounts may be paid to Greenwoods & Freehills Pty Limited for future work in accordance with its normal time based charges. UBS Warburg has acted as Lead Manager and Underwriter for the Offer, in respect of which they are entitled to receive fees and commissions under the Underwriting Agreement as described above in the summary of the Underwriting Agreement. Each of UBS Warburg Australia Private Clients Pty Limited, Commonwealth Securities Limited and Johnson Taylor Potter Limited has agreed to act as Broker to the Offer.

In respect of this work, each will be entitled to a fee equal to 1.25% of the gross proceeds from the issue of Presses to their respective clients. This amount will be paid by the Underwriter. Except as set out above, no: person named in the Prospectus as performing a function in professional, advisory or other capacity in connection with the preparation or distribution of this prospectus, or Broker or underwriter to this Offer,

holds at this time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in: the formation or promotion of Fairfax, or any property acquired or proposed to be acquired by Fairfax in connection with its formation or promotion or the Offer, or the Offer,

nor has anyone during that period paid or agreed to pay, or given or agreed to give, any benefit to such persons in connection with the formation or promotion of Fairfax or the Offer.

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7. Additional information (continued)

DIRECTORS INTERESTS No Director or proposed Director holds, at the time of lodgement of this Prospectus with ASIC, or has held in the two years before lodgement of this Prospectus with ASIC, an interest in: the formation or promotion of the Company, or any property acquired or proposed to be acquired by the Company in connection with its formation or promotion of the Offer, or the Offer.

ASX WAIVERS The ASX has granted Fairfax the following waivers: Listing Rule 3.20 has been waived so that Fairfax can use 12 November 2001 as the record date for determining entitlements to Shareholder priority allocations rather than being required to give ASX seven Business Days notice of the record date. Listing Rule 7.1.4 has been waived so that the notional rate of Exchange of the Presses (for the purposes of determining whether the issues of Presses under this Offer will exceed 15% of capital) will be calculated using the market price of Ordinary Shares as at the time the Company announced its intention to issue the Presses. The effect of this waiver is that the issue of Presses will not require shareholder approval under Listing Rule 7.1. Listing Rule 10.11 has been waived so that Directors and related parties (as defined in the Corporations Act) can participate in the issue of Presses without obtaining shareholder approval, provided that each Director and his or her related parties are allotted no more than 500 Presses and that this proviso is announced to the market.

No one has, at the time of lodgement of this Prospectus with ASIC, or in the two years before lodgement of this Prospectus with ASIC, paid or agreed to pay any amount, and no one has given or agreed to give any benefit, to any Director or proposed Director: to induce a person to become, or qualify as, a Director, or for services provided by a Director or proposed Director in connection with the formation or promotion of the Company or the Offer.

Listing Rule 7.40 has been waived with the effect that hard copies of this Prospectus may be despatched to shareholders only 1 day prior to the opening of the Offer, rather than the 10 Business Days prescribed in Appendix 7A of the Listing Rules. This waiver has been granted on the condition that Fairfax gives at least 4 Business Days notice of the record date for shareholder priority participation under the Offer and that this Prospectus is lodged with ASIC and posted on Fairfaxs website at least 6 Business Days before the opening of the Offer. The Company has also asked the ASX to provide deferred settlement trading in relation to the Offer as described in Section 2.1.

ASIC MODIFICATIONS ASIC has granted a modification of subsection 711(3) of the Corporations Act to restrict the disclosures required by that sub-section to the period of two years prior to the time of lodgement of the Prospectus with ASIC.

FairfaxPRESSES

25

APPENDIX A TERMS OF PRESSES

Note: Defined terms used in this Appendix are set out in clause 9 below and in the Glossary to the Prospectus. References to clauses and paragraphs in the text below are clauses and paragraphs of this Appendix. (c) If during any Dividend Period the Credit Rating assigned by Standard & Poors to the Presses is below BBB or the Credit Rating ceases to be assigned by Standard & Poors to the Presses at all, an amount calculated in accordance with the following formula (the Additional Dividend) will be added to the Dividend Entitlement for that Dividend Period and the aggregate amount will be the Dividend Entitlement for that Dividend Period for the purposes of these terms: Additional Dividend = AM x100 x AMN
365

1 Description
These are the terms of issue on which the Company will issue a number of $100 preference shares paying noncumulative dividends with certain terms that periodically reset, as set out in these terms. The issue price and face value of each of the Preferred Reset Securities Exchangeable for Shares (Presses) will be $100 (Face Value).

Where: AM is the Additional Margin applicable at that time; and

2 Dividends
2.1 Dividends (a) Subject to these terms including without limitation paragraph (c), the holder of each Presses is entitled to a Dividend in respect of each Dividend Period (Dividend Entitlement) calculated in accordance with the following formula: Dividend Entitlement = Dividend Rate x $100 x N
365

AMN is the number of days during the Dividend Period on which the Credit Rating was below BBB or on which the Presses were not assigned a Credit Rating by Standard & Poors. For the avoidance of doubt, if the Credit Rating of the Presses is BBB with any negative outlook or credit watch, it will not be taken to be below BBB for the purposes of this clause. 2.2 Payment of Dividend The payment of a Dividend is subject to:

Where: N is the number of days in that Dividend Period; and

(a) Dividend Rate is: (1) for the period to 12 December 2006, the higher of: (A) (B) 6%; and the Swap Rate prevailing on the date the Presses are allotted plus a margin of 1%; and (b)

the Directors, at their discretion, declaring the Dividend to be payable or otherwise resolving to pay the Dividend; and there being no impediment under the Corporations Act to the Company paying the Dividend.

2.3 Non-Cumulative Dividends The entitlement of a holder of a Presses to the payment of a Dividend is non cumulative so that if, because of the provisions of clause 2.2, a Dividend is not paid in respect of a Dividend Period or the Dividend paid in respect of a Dividend Period is less, than the Dividend Entitlement for that Dividend Period, the holder has no claim in respect of that Dividend Entitlement, or the balance of that Dividend Entitlement. 2.4 Calculation of Dividends All calculations of Dividends will be to four decimal places. For the purposes of making any Dividend payment in respect of a holders aggregate Presses, any fraction of a cent will be disregarded. 2.5 Dividend Payments Subject to this clause 2, Dividends in respect of a Dividend Period will be payable on a Presses in arrears on: (a) (b) 12 June 2002 and thereafter on each 12 December and 12 June until the Presses are converted; and The date of conversion determined under clause 3 (other than conversion under clause 3.2(b) where a Dividend will not be payable).

(2)

for the period after 12 December 2006 until and including the next Reset Date, and thereafter from each Reset Date to the next Reset Date, a rate expressed as a percentage per annum as specified in accordance with clause 4.

(b)

If any Dividend is not franked to 100% under Part IIIAA of the Tax Act (or any provisions that revise or replace that Part), the amount of the Dividend will be calculated in accordance with the following formula: D 1 - [Ti x (1- f)] where: D Ti is the Dividend; is the Australian corporate tax rate applicable at that time to the franking account of the Company from which that Dividend will be franked, expressed as a decimal; and is the Franking Rate applicable to that Dividend.

26

FairfaxPRESSES

Appendix A Terms of Presses (continued)

2.6 Withholding Obligations The Company will be entitled to deduct from any Dividend payable to a holder the amount of any withholding or other tax, duty or levy required by law to be deducted from it. Where any such deduction is made: (a) the Company will pay the amount required to be deducted to the relevant revenue or collection authority within the time allowed for such payment; the holder will be paid the balance of the Dividend after allowance for the payment referred to in paragraph (a) above; and upon compliance by the Company with paragraphs (a) and (b) above, the holder will be deemed to have been duly paid the Dividend by the Company.

(b)

at least 30 Business Days (but not more than 12 months) before the Reset Date. In that event: the date of conversion is the last Business Day of the month following the month in which the notice is given; and for the purposes of clause 3.6, the Conversion Ratio will equal the Minimum Conversion Number; or

(b)

(c)

(c)

2.7 Record dates (a) A Dividend is only payable to those persons registered as holders of Presses at the record date for Presses holders in respect of each relevant Dividend, or in the case of a dividend payable under clause 2.5(b), to those holders who have given notice to the Company to convert those Presses. For the avoidance of doubt, a Shortfall Dividend is only payable to those persons registered as holders of Presses at the record date in respect of the Shortfall Dividend.

pursuant to clause 3.4. In that event, the date of conversion will be the last Business Day of the month following the month in which the holders notice is received by the Company, except in the case of a Trigger Event comprising a takeover or scheme of arrangement described in clause 3.4(b)(7) or (8) where the date of conversion will be the last Business Day of the week following the week in which the holders notice is received by the Company.

To be valid, the notice must indicate under which paragraph the holder is giving notice. 3.3 Conversion by the Company (a) The Company may convert all or, subject to subparagraph (b), some of the Presses by giving notice to Presses holders: (i) (ii) at least 30 Business Days (but no more than 6 months) before the Reset Date; if the Directors resolve on reasonable grounds (having obtained an opinion from reputable legal counsel or tax adviser) that a change in any taxation law, interpretation or ruling issued by any relevant governmental body has occurred (or is announced) and that change may have a material adverse effect on the ability of the Company to frank Dividends or may materially increase the payments, costs and expenses (including additional Dividend payments) incurred by the Company in relation to the Presses; or sent not later than 5 Business Days after the Company has published a notice under clause 3.4(c) in relation to a takeover or scheme of arrangement described in clause 3.4(b)(7) or (8).

(b)

3 Conversion
3.1 Meaning of Conversion A Presses confers all of the rights attaching to one fully paid Ordinary Share but these rights do not take effect until 5.00 pm Sydney time on the date of conversion determined below. At that time: (a) all other rights or restrictions conferred on that Presses under the terms of issue will no longer have effect (except for rights relating to a Dividend which is due but has not been paid on or before the date of conversion which will subsist); and that Presses will rank equally with all other fully paid Ordinary Shares then on issue and the Company will issue a statement that the holder of those shares holds a share so ranking.

(iii)

(b)

The date of conversion will be the date specified in the notice, but: (iv) in the case of paragraph (i), or (ii), must be at least 30 Business Days after the date of the conversion notice; and in the case of (iii), must be the last Business Day of the week following the date of the conversion notice.

The taking effect of the rights of a Presses under this clause and the allotment of additional shares under clause 3.6 is, for the purposes of these terms of issue, together termed conversion. Conversion does not constitute cancellation, redemption or termination of a Presses or an issue, allotment or creation of a new share (other than the additional shares allotted under clause 3.6). 3.2 Conversion by the holder Holders of Presses may require the Company to convert all or some of their Presses by giving a notice to the Company: (a) at least 21 Business Days (but no more than 3 months) before the Reset Date. In that event, the date of conversion is the Reset Date immediately following the giving of the notice; (b)

(v)

The Company may not convert only some of the Presses if, as at the date the Company issues the notice under sub-paragraph (a), the conversion which results from the Company issuing that notice together with the conversion of any Presses in respect of which the Company has at that time received valid notices under clause 3.2 or 3.4 would result in there being unconverted Presses with an aggregate Face Value

FairfaxPRESSES

27

of less than $100 million. In any partial conversion, the Company must endeavour to treat holders on an approximately equal basis, but may discriminate to take account of the effect on marketable parcels and other factors. (c) The Company may convert all (but not some) of the Presses by giving notice to Presses holders not more than 30 Business Days after:

(7)

a takeover bid (as defined in the Corporations Act) is made to acquire all or some of the Ordinary Shares and the offer is, or becomes, unconditional; and (A) the bidder has at any time during the offer period, a relevant interest in more than 50% of the Ordinary Shares on issue; or the Directors issue a statement recommending acceptance of the offer;

(B) (i) (ii) a Reset Date; or the expiration of the period of 30 Business Days after publication of a notice under clause 3.4(c), (8)

if the aggregate Face Value of the Presses: (iii) in the case of a notice given under sub-paragraph (i), which remain unconverted at the Reset Date; or in the case of a notice given under sub-paragraph (ii), which would remain unconverted if all the Presses in respect of which valid notice from holders under clause 3.2 or 3.4 have been received by the Company at the time the notice is issued were converted,

(iv)

the Company lodges with ASIC a draft explanatory statement for a scheme of arrangement that the Company proposes to enter into under Part 5.1 of the Corporations Act, which, if approved and implemented, will result in a person having a relevant interest in more than 50% of the Ordinary Shares that will be on issue after the scheme is implemented, and either the Company releases to the market an opinion from an independent expert that the proposed scheme is fair and reasonable or the scheme is approved by the Court; the Ordinary Shares or the Presses are suspended from trading on ASX for more than 20 consecutive Business Days; or the Company announces to ASX an intention to sell all or substantially all of its business undertaking or assets (other than to effect a solvent re-construction or where, after the sale, the Company will retain a beneficial or economic interest in at least 50% of the business undertaking or assets sold).

(9)

is less than $100 million. In that event, the date of conversion will be the date specified in the notice which must be at least 30 Business Days after the date of the notice. 3.4 Trigger Event Conversion (a) If a Trigger Event occurs, a Presses holder may require the Company to convert all (or some only) of its Presses by giving notice to the Company at any time after the Trigger Event occurs but no later than 30 Business Days after the publication of the notice under clause 3.4(c). A Trigger Event means the occurrence of any of the following events: (1) a Dividend Entitlement in respect of a Dividend Period is not paid in full by the Business Day which is 20 Business Days after a Dividend Payment Date including where non-payment is due to an event under clause 2.2; the Company resolves in general meeting to be wound up; a provisional liquidator is appointed to the Company; a Court makes an order to wind up the Company (other than to effect a solvent re-construction); an administrator of the Company is appointed under sections 436A, 436B or 436C of the Corporations Act; the Company executes a deed of company arrangement; (e) (c) (a) (b)

(10)

(c)

(b)

The Company must notify Presses holders of the occurrence of a Trigger Event by publishing a notice in a daily financial newspaper in Australia which specifies the particular Trigger Event as soon as practicable after becoming aware of the applicable event.

3.5 Conversion notices A notice given by the Company or a Presses holder under clause 3.2 to 3.4 is irrevocable. A notice given by a Presses holder under clause 3.2 must be accompanied by evidence of title reasonably acceptable to the Company for the Presses being converted and is not taken to be a valid notice unless and until such evidence is received by the Company. A form of notice which may be used by Presses holders under clause 3.2 must be made available by the Company upon request. Where the Company has received from a holder of a Presses a valid notice under clause 3.2 or 3.4 in respect of all of that holders Presses, any notice of conversion subsequently issued by the Company under clause 3.3 will not apply to that holders Presses. Where the Company has issued to a holder of Presses a valid notice of conversion under clause 3.3 in respect of all of that holders Presses, any notice of conversion given by that holder under clause 3.2 or clause 3.4 which is subsequently received by the Company will not be valid.

(2) (3) (4) (5)

(d)

(6)

28

FairfaxPRESSES

Appendix A Terms of Presses (continued)

(f)

Where the Company has received from a holder a valid notice under clause 3.2 or 3.4 in respect of some only of that holders Presses, any notice of conversion subsequently issued by the Company under clause 3.3 to that holder will apply to those Presses held by that holder which were not the subject of the notice of conversion received by the Company from that holder. Where the Company has issued to a holder of Presses a valid notice under clause 3.3 in respect of some only of that holders Presses, any notice of conversion subsequently received by the Company from that holder under clause 3.2 or 3.4 will apply only to those Presses which were not the subject of the notice of conversion issued by the Company. For the purposes of subparagraph (f) and (g) the Directors may apply such adjustments if any as the Directors reasonably consider necessary to reflect the fact that the relevant notice will apply to a lesser holding of Presses. If the Company receives a notice of conversion from a holder under clause 3.2 or 3.4 at the same time as the Company issues a notice of conversion under clause 3.3, the notice issued by the Company will be treated as having been issued prior to the time the notice of conversion from the holder was received. A notice is taken to be issued by the Company for the purposes of this clause 3.5 when it is mailed in a prepaid envelope to an address, or sent to a fax number or electronic address, permitted by the Companys constitution, irrespective of when it is actually received by the holder. This paragraph (j) does not limit the means by which the Company may serve notices upon the holder.

(c)

The Conversion Ratio shall not be less than the Minimum Conversion Number nor greater than the Maximum Conversion Number, where:

Minimum Conversion Number means: as at the date the Presses are issued, the number 16.6771; and thereafter the number determined in accordance with clauses 3.8 to 3.13 as those clauses apply from time to time, so long as successive applications of these clauses, if any, will be based upon the Minimum Conversion Number applying immediately prior to the application of the relevant clause (referred to in clauses 3.8 to 3.10 as CNo); and

(g)

(h)

Maximum Conversion Number means: as at the date the Presses are issued, the number 1,000; and thereafter the number determined in accordance with 3.8 to 3.13 as those clauses apply from time to time, so long as successive applications of these clauses, if any, will be based upon the Maximum Conversion Number applying immediately prior to the application of the relevant clause (referred to in clauses 3.8 to 3.10 as CNo).

(i)

(j)

(d)

Where the total number of additional Ordinary Shares to be allotted on conversion to a Presses holder includes a fraction, that number will be rounded down to the next whole number.

3.7 Adjustment to VWAP For the purposes of calculating VWAP in the formula in clause 3.6: (a) where, on some or all of the Business Days in the Reference Period, Ordinary Shares have been quoted on ASX as cum dividend or cum any other distribution or entitlement and the Presses will convert into Ordinary Shares after the date those Ordinary Shares no longer carry that entitlement (Ex Date), then the VWAP on the Business Days on which those shares have been quoted cum dividend or cum entitlement shall be reduced by an amount (Cum Value) equal to: (1) (in case of a dividend or other distribution), the amount of that dividend or distribution including, if the dividend is franked the amount that would be included in the assessable income of a recipient of the dividend or distribution who is a natural person under the Tax Act; (in the case of an entitlement which is traded on ASX on any of those Business Days), the volume weighted average price of all such entitlements sold on ASX during the Reference Period on the Business Days on which those entitlements were traded; or (in the case of an entitlement not traded on ASX during the Reference Period), the value of the entitlement as reasonably determined by the Directors; and

3.6 Conversion and additional Ordinary Shares (a) (b) Each Presses will on the relevant date of conversion convert into one Ordinary Share. Upon conversion, each Presses will entitle the holder to be allotted an additional number of Ordinary Shares equal to one less than the conversion ratio, where, subject to clause 3.2(b) and paragraph (c) below, the conversion ratio is an amount calculated in accordance with the following formula (Conversion Ratio): Face Value VWAP-[CD x VWAP] Where: CD means the conversion discount of 2.5% (Conversion Discount);

VWAP means the VWAP during the period (Reference Period) of 20 Business Days immediately preceding, but not including: if the Company receives a notice under clause 3.4(a) following a suspension of trading of the Ordinary Shares described in clause 3.4(b)(9), the first day the Ordinary Shares are suspended; and

(2)

(3) otherwise, the date of conversion.

FairfaxPRESSES

29

(b)

where, on some or all of the Business Days in the Reference Period, Ordinary Shares have been quoted ex dividend, ex distribution or ex entitlement, and the Presses will convert into Ordinary Shares which would be entitled to receive the relevant dividend, distribution or entitlement, the VWAP on the Business Days on which those Ordinary Shares have been quoted ex dividend, ex distribution or ex entitlement shall be increased by the Cum Value.

3.9 Adjustments for Off Market Buy-backs (a) Subject to paragraph (b) below, if the Company undertakes an off market buy-back of Ordinary Shares, the Minimum Conversion Number and Maximum Conversion Number shall be adjusted immediately in accordance with the following formula: CN = CNo x P x Where: (BD - BN) (BD x P) - (BN x A)

3.8 Adjustments for bonus and rights issues (a) Subject to paragraphs (b) and (c) below, if the Company makes a pro rata bonus issue or a rights issue of Ordinary Shares to holders of Ordinary Shares generally, the Minimum Conversion Number and Maximum Conversion Number shall be adjusted immediately in accordance with the following formula: CN = CNo x P x Where: CN means the Minimum Conversion Number and Maximum Conversion Number respectively applying immediately after the application of this formula as provided for in clause 3.6; (RD + RN) (RD x P) + (RN x A)

CN

means the Minimum Conversion Number and Maximum Conversion Number respectively applying immediately after the application of this formula as provided for in clause 3.6;

CNo means the Minimum Conversion Number and Maximum Conversion Number respectively applying immediately prior to the application of this formula as provided for in clause 3.6; P A BN BD (b) means the VWAP during the 20 Business Days prior to the announcement of the buy-back; means the buy-back price per Ordinary Share; means the number of Ordinary Shares bought back; and means the number of Ordinary Shares on issue immediately prior to the buy-back.

CNo means the Minimum Conversion Number and Maximum Conversion Number respectively applying immediately prior to the application of this formula as provided for in clause 3.6; P means the VWAP during the period from the first Business Day after the announcement of the bonus or rights issue to ASX up to and including the last Business Day of trading cum rights or bonus issue; means the subscription or unit price per Ordinary Share for the rights issue and is zero in the case of a bonus issue; means the number of Ordinary Shares issued pursuant to the rights or bonus issue; and means the number of Ordinary Shares on issue immediately prior to the allotment of new Ordinary Shares pursuant to the rights or bonus issue.

No adjustment to the Minimum Conversion Number or Maximum Conversion Number shall occur if P exceeds A.

3.10 Adjustment for return of capital or capital distribution If the Company makes a return of capital or there is a Capital Distribution to holders of Ordinary Shares (other than by way of a share buyback) the Minimum Conversion Number and Maximum Conversion Number shall be adjusted in accordance with the following formula: CN = CNo x Where: CN means the Minimum Conversion Number and Maximum Conversion Number respectively applying immediately after the application of this formula as provided for in clause 3.6; P (P - C)

RN RD

(b) (c)

No adjustment to the Minimum Conversion Number or Maximum Conversion Number shall occur if A exceeds P. Paragraph (a) does not apply to Ordinary Shares issued as part of a bonus share plan, employee or executive share plan, executive option plan, share top up plan or a dividend reinvestment plan.

CNo means the Minimum Conversion Number and Maximum Conversion Number respectively applying immediately prior to the application of this formula as provided for in clause 3.6;

30

FairfaxPRESSES

Appendix A Terms of Presses (continued)

means the VWAP during the period from the first Business Day after the announcement of the return of capital to ASX up to and including the last Business Day of trading cum the return of capital; and (b) means: (a) with respect to a return of capital, the amount of the cash and/or the value (as reasonably determined by the Directors) of any other property distributed to holders of Ordinary Shares per Ordinary Share (or such lesser amount such that the difference between P and C is greater than zero); and with respect to a Capital Distribution, the amount of such Capital Distribution as defined in clause 9.

(2)

in the case of a market bid, the cash price offered under the bid as at the time when the notice of conversion is given; and

the VWAP over the 20 Business Days immediately preceding the announcement of the takeover offer or the scheme of arrangement plus 50% of the amount calculated by subtracting that VWAP from the Offer Price.

3.13 Discretion in adjustment of conversion mechanism Where: (a) any of the adjustment provisions set out in clauses 3.7 to 3.12 or the number of additional Ordinary Shares to be allotted on conversion of the Presses, is not, in the reasonable opinion of the Directors, appropriate in any particular circumstances (including for the reason that more than one adjustment provision applies to a particular occurrence); or the Company makes a distribution other than by way of dividend in the ordinary course of business or makes a pro rata offer to Ordinary Shares holders to subscribe for, or purchase, securities in any company other than the Company in a way which does not, in the reasonable opinion of the Directors, result in an appropriate adjustment to the Minimum Conversion Number or Maximum Conversion Number; or any other event occurs in relation to the Company that may have a diluting or concentrative effect on the value of the Ordinary Shares, and the Directors determine that any such occurrence would, in the reasonable opinion of the Directors, affect the relative values of the Presses and the Ordinary Shares, the Directors may: (d) make such alterations to the Minimum Conversion Number or Maximum Conversion Number or to Conversion Discount (as defined in clause 3.6) as the Directors reasonably considers appropriate or necessary to maintain that relativity; or extend an entitlement to the holders of the Presses to participate in such distribution or pro rata offer based upon the number of Ordinary Shares to which those holders would have been entitled if their Presses had been converted on a date nominated by the Directors and adapting the formula in clause 3.6 as the Directors reasonably considers appropriate to maintain the relativity.

(b)

3.11 Adjustment for capital reconstruction If at any time the Ordinary Shares are reconstructed, consolidated, divided or reclassified (other than by way of a bonus issue, which is dealt with under clause 3.8) into a lesser or greater number of securities, the Presses must, in accordance with the ASX Listing Rules (as they apply to the Company), be reconstructed, consolidated, divided or reclassified by the Directors on the same basis and the Face Value (for the purpose of calculating the Dividends on the Presses and the Conversion Ratio in clause 3.6) shall be adjusted by the Directors as appropriate. 3.12 Adjustment to the Conversion Ratio for a Takeover or scheme of arrangement In the case of conversion under clause 3.3(a) or (c) or under 3.4(a) in relation to a takeover or a scheme of arrangement, the denominator of the formula in clause 3.6 will be the lesser of: (a) 97.5% of the amount calculated as follows (Offer Price): (1) in the case of an off market bid (as defined in the Corporations Act) or a scheme of arrangement under Part 5.1 of the Corporations Act: (A) the cash consideration offered (as at the date when the notice of conversion is given) in respect of each Ordinary Share under the bid or scheme of arrangement; plus (B) if the consideration offered for each Ordinary Share includes any amount which is not cash, the value of the non cash consideration as determined by an independent expert appointed by the directors (who shall act as an expert) proposed at the time of announcement of the scheme of arrangement or, in the case of a bid, at the date of the announcement or, if the non-cash consideration has been increased after announcement, the date of the most recent increase prior to the date when the notice of conversion is given; or (e)

(b)

(c)

FairfaxPRESSES

31

4 Reset of Terms
4.1 Company may change terms If there remains any Presses on issue on a relevant Reset Date, the Company may change: (a) (b) the dividend rate applying from the relevant Reset Date until and including the next Reset Date; the Minimum Conversion Number and Maximum Conversion Number applying from the relevant Reset Date until and including the next Reset Date (subject to the operation of any or all of clauses 3.8 to 3.13); for the purposes of clause 3.6, the calculation of the Conversion Discount until and including the next Reset Date; the next Reset Date; the Additional Margin applicable until and including the next Reset Date; and the definition of Capital Distribution.

(b)

the Face Value,

before any return of capital is made to holders of Ordinary Shares or any other class of shares ranking behind the Presses. Presses do not confer on their holders any right to participate in the profits or property of the Company except as set out in these terms of issue. 5.4 Shortfall on winding up If, upon a return of capital on a winding up, there are insufficient funds to pay in full the amounts referred to in clause 5.3 and the amounts payable in respect of any other shares in the Company ranking as to such distribution equally with the Presses on a winding up, the holders of the Presses and the holders of any such other shares will share in any distribution of assets of the Company in proportion to the amounts to which they respectively are entitled. 5.5 Participation in surplus assets The Presses do not confer on their holders any further right to participate in the surplus assets of the Company on a winding up beyond the rights set out in clauses 5.3 and 5.4 above. 5.6 Restrictions on other issues Until the date on which all Presses have been converted, the Company must not, without approval of a special resolution passed at a separate meeting of holders of the Presses, issue shares ranking in priority to the Presses or permit the conversion of any existing shares to shares ranking equally or in priority to the Presses. The Directors may issue further Presses or other preference shares ranking equally with any existing Presses without the approval of a special resolution of holders of Presses. 5.7 Non-payment of dividends in respect of a Fixed Dividend Period If a Dividend is not declared in respect of a Fixed Dividend Period or the Dividend declared in respect of the Fixed Dividend Period is less than the Dividend Entitlement for that Dividend Period (the amount of the shortfall being the Shortfall) the Company must not, without the approval of a special resolution passed at a meeting of holders of Presses: (a) pay a cash dividend or make any distribution on any share over which the Presses rank in priority for participation in profits; or redeem, cancel or acquire for any consideration (whether cash or other property) any share in the Company or return capital,

(c)

(d) (e) (f)

4.2 Notification To be effective, notice of any change under clause 4.1 must be given to the remaining Presses holders no later than 30 Business Days immediately preceding the relevant Reset Date. If the Company fails to notify the Presses holders of the matters set out in clause 4.1, the Company will be deemed to have served a notice under clause 3.3(a) converting all of the Presses, and the date of conversion will be the Reset Date.

5 Presses general rights

5.1 Presses Rights Ranking Presses rank equally amongst themselves in all respects. 5.2 Preferential Dividend Until conversion, the Presses rank in priority to Ordinary Shares for the payment of dividends. In any Dividend Period, the directors of the Company must not pay a dividend on any other shares of the Company which rank equally with Presses as to dividends, unless dividends are paid in relation to the Presses and paid on those other shares in proportion to the amounts to which the holders of Presses and the other shares respectively are entitled in respect of that Dividend Period. 5.3 Return of Capital on a winding up Until conversion, if there is a return of capital on a winding up of the Company, Presses holders will be entitled to receive out of the assets of the Company available for distribution to holders of shares, in respect of each Presses held, a cash payment equal to the sum of: (a) the amount of any Dividend Entitlement calculated on a daily basis (assuming a 365 day year) throughout the period from and including the preceding Dividend Payment Date to the date of commencement of the winding up; and

(b)

until such time as: (c) a Dividend is paid in respect of two consecutive Fixed Dividend Periods equal to the Dividend Entitlements for those Fixed Dividend Periods; there are no Presses remaining unconverted; or the Shortfall Dividend is paid in accordance with clause 5.8. prior to the next Fixed Dividend Payment Date.

(d) (e)

32

FairfaxPRESSES

Appendix A Terms of Presses (continued)

5.8 Satisfaction of a Shortfall Dividend Without derogating from the fact that the Dividend Entitlement is non-cumulative and that the Directors are under no obligation to declare or resolve to pay a Dividend, if at any time; (a) the Directors declare, and fix a date for payment of, a Dividend other than a Dividend payable in respect of a Dividend Period under clause 2.5; the amount of that Dividend equals the aggregate amount of the Shortfall in respect of the two immediately preceding Fixed Dividend Periods and the date fixed for payment is a date before the next Fixed Payment Date referred to in clause 5.7(e),

6 Voting Rights
A Presses does not entitle its holder to vote at any general meeting of the Company except in the following circumstances: (a) on a proposal: (1) (2) (3) (4) (b) (c) to reduce the share capital of the Company; that affects rights attached to the Presses; to wind up the Company; or for the disposal of the whole of the property, business and undertaking of the Company;

(b)

then once that Dividend (the Shortfall Dividend) is paid it will be treated as having been paid for the purposes of clause 5.7 so that the restrictions on the Company in clause 5.7(a) and (b) shall no longer apply. 5.9 Non-payment of dividend on date of conversion If the Dividend payable on a Presses on the date of conversion is not paid, the Company must not, for the period of one year after the date of conversion: (a) declare or pay a cash dividend or make any distribution on any share over which the Presses rank (or if there are no Presses remaining unconverted, previously ranked) in priority for participation in profits; or redeem, cancel or acquire for any consideration (whether cash or other property) any share in the Company or conduct a capital reduction under which any consideration is paid or distributed.

on a resolution to approve the terms of a buy back agreement; during a period in which a Dividend on the Presses which has been declared as payable on a Fixed Dividend Payment Date has not been paid in full; or during the winding up of the Company.

(d)

If a poll is conducted on a resolution on which a holder of Presses is entitled to vote under this clause 6, the holder has 1 vote for each Presses he or she holds.

7 Listing
The Company must use all reasonable endeavours and furnish all such documents, information and undertakings as may be reasonably necessary in order to procure, at its own expense, listing of the Presses on the ASX and all converted Presses and additional Ordinary Shares issued under clause 3.6 on each of the stock exchanges on which the other Ordinary Shares of the Company are listed on the date of conversion.

(b)

5.10 Takeovers and schemes of arrangement If a takeover bid is made for Ordinary Shares, acceptance of which is recommended by the Directors, or the Directors recommend a members scheme of arrangement, the Company will use reasonable endeavours to procure that equivalent takeover offers are made to Presses holders or that they participate in the scheme of arrangement. 5.11 Participation in New Issues Until the Presses are converted they will confer no rights to subscribe for new securities in the Company or to participate in any bonus issues.

8 Amendments to the terms of issue

Subject to complying with all applicable laws, the Company may without the authority, assent or approval of Presses holders amend or add to these terms of issue if such amendment or addition is, in the opinion of the Company: (a) (b) (c) of a formal, minor or technical nature; made to correct a manifest error; or not likely (taken as a whole and in conjunction with all other modifications, if any, to be made contemporaneously with that modification) to be materially prejudicial to the interests of the holders of the Presses.

FairfaxPRESSES

33

9 Interpretation
(a) Unless the context otherwise requires, if there is any inconsistency between the provisions of these terms of issue and the Companys constitution, then, to the maximum extent permitted by law, the provisions of these terms of issue will prevail. If a calculation is required under these terms of issue, unless the contrary intention is expressed, the calculation will be performed to four decimal places. Definitions and interpretation under the Companys constitution will also apply to these terms of issue. References to clauses are to clauses of these terms of issue. References in these terms to paragraphs are to paragraphs of the clause in which the reference is made. The following expressions shall have the following meanings: Additional Margin is: (a) (b) 0.75% per annum for the period to 12 December 2006; and for the period after 12 December 2006 until and including the next Reset Date and thereafter from each Reset Date to the next Reset Date, a rate expressed as a percentage per annum as specified in accordance with clause 4.

Dividend Period means in respect of a Presses: (a) the period from (and including) the date of allotment of the Presses until but not including the first Dividend Payment Date; thereafter the period from (and including) each Dividend Payment Date until but not including the first to occur of: (i) the next Dividend Payment Date; or (ii) the conversion date of that Presses. Fixed Dividend Payment Dates means the Dividend Payment Dates specified under clause 2.5(a); Fixed Dividend Period means a Dividend Period ending on a Fixed Dividend Payment Date; Franking Rate, in relation to a Dividend, means the franking percentage (within the meaning of Part IIIAA of the Tax Act or any part that replaces or revises that part) of the Dividend, expressed as a decimal; Ordinary Share means an ordinary share in the Company; Reset Date is 12 December 2006 and thereafter the date as specified by the Company in a notice issued under clause 4.2 of these terms; Swap Rate is the rate expressed as a percentage per annum calculated as the average of the mid-point of the quoted average five year swap reference rates at three pre-determined times on Reuters page CMBE (or any page which replaces that page) on the relevant date. Tax Act means:

(b)

(b)

(c) (d

(e)

Capital Distribution is the amount by which the sum of all dividends per Ordinary Share (grossed up to account for franking) paid by the Company in respect of a financial year exceeds the relevant amount shown below for that financial year. In respect of the financial year ending 30 June 2002 30 June 2003 30 June 2004 30 June 2005 30 June 2006 Relevant Amount $0.1971 $0.2365 $0.2838 $0.3406 $0.4087

(a)

the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 as the case may be as amended and a reference to any section of the Income Tax Assessment Act 1936 includes a reference to that section as rewritten in the Income Tax Assessment Act 1997; any other Act setting the rate of income tax payable; and any regulation promulgated thereunder.

(b) (c)

Directors means the directors of the Company from time to time; Dividend means a dividend in respect of the Presses; Dividend Entitlement has the meaning set out in clause 2.1(a) and, if applicable, clause 2.1(c); Dividend Payment Date means each date on which a Dividend is payable in accordance with clause 2.5 whether or not a Dividend is paid on that date;

VWAP for any period is, subject to clause 3.6, the average of the daily volume weighted average sale price of Ordinary Shares sold on ASX during the relevant period or on the relevant days but does not include any transaction defined in the ASX Business Rules as special crossings prior to the , commencement of normal trading, crossings during the after hours adjust phase nor any overseas trades or exchange traded option exercises.

34

FairfaxPRESSES

GLOSSARY
The following is a glossary of the terms used in this Prospectus. Acceptance Allotment Date Application Application Form Application Monies ASIC ASX Board Brokers Business Days CHESS Closing Date Credit Rating Director Dividend Rate Eligible Employee Exchangeable or Exchange the acceptance by Fairfax of an Application. the date on which Presses are allotted to successful applicants. a valid application made on the conditions set out in the Prospectus by using an Application Form to apply for a specified number of Presses. each application form attached to or accompanying the Prospectus upon which an application for Presses must be made. the monies payable on Application, being the amount equal to the number of Presses applied for multiplied by the amount of $100. the Australian Securities & Investments Commission. Australian Stock Exchange Limited (ABN 98 008 624 691). the board of Directors of Fairfax from time to time. UBS Warburg Private Clients Pty Limited (ABN 50 005 311 937), Commonwealth Securities Limited (ABN 60 067 254 399) and Johnson Taylor Potter Limited (ABN 72 069 152 656). has the same meaning as in the ASX Listing Rules. Clearing House Electronic Subregister System. the last day on which Application Forms will be accepted. the credit rating provided by Standard & Poors to the Presses. a director of the Company. has the meaning given to that term in the terms of issue of the Presses set out in Appendix A to this Prospectus. means a person recorded by Fairfax at 7.00 pm Sydney time on 31 October 2001 as a permanent full-time or part-time employee of Fairfax or any of its subsidiaries. is used to describe Conversion as defined in the terms of issue of the Presses set out in Appendix A to this Prospectus, which effects a variation of the status and rights attaching to Presses and the issue of Ordinary Shares. means the Conversion Discount as defined in the terms of issue of the Presses set out in Appendix A to this Prospectus. John Fairfax Holdings Limited (ABN 15 008 663 161).

Exchange Discount Fairfax or the Company Fairfax Shareholder, Shareholder, or Ordinary Shareholder Issue Price Lead Manager Listing Rules Offer Ordinary Shares Presses Prospectus Register

holder of Ordinary Shares. the price payable for each of the Presses under this Offer, being $100. UBS Warburg. the Listing Rules of the ASX. the invitation made by the Company pursuant to the Prospectus for members of the public to apply for Presses. ordinary shares in the capital of Fairfax. Preferred Reset Securities Exchangeable for Shares issued by Fairfax pursuant to the Prospectus. this document setting out, amongst other things, the terms and conditions of the Presses. means the register of Fairfax Presses maintained by the Company and includes any sub-register established or maintained under the Clearing House Electronic Sub-Register System (as defined in the Listing Rules). has the meaning given to that term in the terms of issue of the Presses set out in Appendix A to this Prospectus. Standard & Poors (Australia) Pty Limited. is the rate expressed as a percentage per annum calculated as the average of the mid-point of the quoted average five year swap reference rates at three pre-determined times on Reuters page CMBE (or any page which replaces that page) on the relevant date. UBS Warburg. UBS Warburg Australia Limited (ABN 40 008 582 705).

Reset Date Standard & Poors Swap Rate

Underwriter UBS Warburg

Underwriting Agreement the underwriting agreement dated 1 November 2001 between Fairfax and the Underwriter.

FairfaxPRESSES

35

DIRECTORS AUTHORISATION
The Directors have authorised the issue of this Prospectus on behalf of John Fairfax Holdings Limited. This Prospectus has been signed by a Director for and on behalf of the Directors, in accordance with section 351 of the Corporations Act.

Frederick G Hilmer Director

36

FairfaxPRESSES

This page intentionally left blank

Pin cheque(s) here. Do not staple.

JOHN FAIRFAX HOLDINGS LIMITED

ABN 15 008 663 161

APPLICATION FORM
BEFORE COMPLETING THE APPLICATION FORM THE APPLICANT(S) SHOULD READ THE PROSPECTUS TO WHICH THIS APPLICATION FORM RELATES. YOU MAY ONLY USE THIS APPLICATION FORM IF YOU RECEIVED IT TOGETHER WITH THE PROSPECTUS.

Information Line 1800 301 050

Broker Code
Broker Reference Stamp Only

Adviser Code

Presses applied for:

No. of Presses For each Presses

B
Amount

Offer Closes 6 December 2001 (unless extended)

x
Must be a minimum of 20 Presses.

A$100.00

A$

Write your name below:

Name of Individual Applicant, Company, Trustee, Executor, Partner or Office Bearer

Name of Joint Applicant or <Account Name> of beneficial holder

Name of Joint Applicant or <Account Name> of beneficial holder

Write your postal address below:

Unit Street No. Street Name

City Suburb/Town

State

Postcode

CHESS HIN (if applicable)

Tax File Number or Exemption

TFN of Individual Applicant

X
TFN of Joint Applicant

TFN of Company, Partnership, Trust or Super Fund

Telephone Number

ABN of Company, Partnership, Trust or Super Fund

(
H

Payment Details
Presses applied for:
No. of Presses For each Presses Amount

x
Must be a minimum of 20 Presses.

A$100.00
BSB No.

A$
Account No. Amount A$

Name of drawer of cheque

Cheque No.

Total Amount Enclosed

A$

Guide to Completing the Application Form

A B C Presses Applied for
Enter the number of Presses you wish to apply for. The application must be for a minimum of 20 Presses.

H Payment
Make your cheque or money order payable to Fairfax Presses Offer Account in Australian currency and cross it Not Negotiable Your cheque must be drawn on an . Australian Bank. Complete the Payment details section and cheque details in the boxes provided. The amount must correspond with the amount shown in box B. Sufficient cleared funds should be held in your account as cheques returned unpaid will not be re-presented and will result in your Application being rejected. Pin (do not staple) your cheque(s) to the Application Form where indicated. DISCLAIMER BEFORE COMPLETING THE APPLICATION FORM THE APPLICANT(S) SHOULD READ THE PROSPECTUS TO WHICH THE APPLICATION RELATES. BY LODGING THE APPLICATION FORM, THE APPLICANT(S) AGREES TO TAKE ANY NUMBER OF SECURITIES EQUAL TO OR LESS THAN THE NUMBER OF PRESSES INDICATED IN BOX A THAT MAY BE ALLOTTED TO THE APPLICANT(S) PURSUANT TO THE OFFER AND DECLARES THAT ALL DETAILS AND STATEMENTS MADE ARE COMPLETE AND ACCURATE. IT IS NOT NECESSARY TO SIGN THE APPLICATION FORM. PRESSES HAVE NOT AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933. ACCORDINGLY, PRESSES MAY NOT BE SOLD, RESOLD OR OFFERED IN, OR TO PERSONS IN, THE UNITED STATES. BY COMPLETING THIS APPLICATION FORM THE APPLICANT(S) WARRANTS AND REPRESENTS THAT IT IS NOT, AND IS NOT ACTING FOR THE ACCOUNT OR BENEFIT OF, A PERSON IN THE UNITED STATES. IF YOU RESIDE OUTSIDE AUSTRALIA YOU WARRANT AND REPRESENT THAT IT IS NOT UNLAWFUL FOR THE OFFER TO BE MADE OR ACCEPTED IN THAT JURISDICTION.

Application Monies
Enter the amount of Application Monies. To calculate the amount, multiply the number of Presses by A$100.00.

Registration name(s)
Enter the full name(s) you wish to appear on the statement of security holdings. This must be either your own name or the name of a company, trustee, executor, partner or office bearer. Up to 3 joint applicants may register. You should refer to the table below for the correct forms of registration. Applications using the wrong form of name may be rejected. Clearing House Electronic Sub-register System (CHESS) participants should complete their name and address in the same format as presently registered in the CHESS system.

D E

Postal Address
All communications to you will be mailed to the address as shown. For joint applicants, only 1 address should be entered.

CHESS HIN (if applicable)

John Fairfax Holdings Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, John Fairfax Holdings Limited will operate an electronic CHESS subregister of security holdings and an electronic Issuer sponsored subregister of Securityholdings. Together the two subregisters will make up John Fairfax Holdings Limiteds principal register of Presses. John Fairfax Holdings Limited will not be issuing certificates to applicants in respect of Presses allotted. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold Presses allotted to you under this Application in uncertificated form on the CHESS subregister, enter your CHESS HIN. Otherwise, leave the section blank and on allotment, you will be sponsored by John Fairfax Holdings Limited and a Securityholder Reference Number (SRN) will be allocated to you.

TFN Exemption or ABN

Enter your Tax File Number (TFN) or exemption category or ABN Number. Where applicable, please enter the TFN for one or more Applicants. Collection of TFNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application. However, if no TFN is quoted your dividends may be taxed at the highest marginal tax rate plus Medicare Levy.

Lodgment of applications
Return the Application Form with cheque(s) attached to: Computershare Investor Services Pty Limited GPO Box 7115 SYDNEY NSW 2001 OR Level 2 60 Carrington Street SYDNEY NSW 2000

Telephone Number
Enter your telephone number. This is not required but will assist us if there are any problems with your application.

Application Forms must be received at the Sydney office of Computershare Investor Services Pty Limited no later than 5.00 pm Sydney time on 6 December 2001.

Correct forms of Registration

Note that ONLY legal entities are allowed to hold Presses. Applications must be in the name(s) of natural persons, companies or other legal entities acceptable to John Fairfax Holdings Limited. At least one full given name and the surname is required for each natural person. The name of the beneficial or any other registrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms of registrable names below.

Type of Investor
Individual Use given names, not initials Company Use company title, not abbreviations Trusts Use trustee(s) personal name(s), Do not use the name of the trust Deceased Estates Use executor(s) personal name(s), Do not use the name of the deceased Partnerships Use partners personal names, Do not use the name of the partnership Clubs/Unincorporated Bodies/Business Names Use office bearer(s) personal name(s), Do not use the name of clubs etc. Superannuation Funds Use name of trustee of fund, Do not use the name of the fund

Correct Form
John Alfred Smith ABC Pty Ltd Janet Smith <Janet Smith Family A/C> Michael Smith <Est John Smith A/C> John Smith and Michael Smith <John Smith & Son A/C> Janet Smith <ABC Tennis Association A/C> John Smith Pty Ltd <Super Fund A/C>

Sample of Incorrect Form

J.A Smith ABC P/L ABC Co Janet Smith Family Trust

Estate of Late John Smith

John Smith & Son

ABC Tennis Association

John Smith Pty Ltd Superannuation Fund

Put the name(s) of any joint applicant(s) and/or account description using <> as indicated above in designated space(s) on the Application.

Pin cheque(s) here. Do not staple.

JOHN FAIRFAX HOLDINGS LIMITED

ABN 15 008 663 161

APPLICATION FORM
BEFORE COMPLETING THE APPLICATION FORM THE APPLICANT(S) SHOULD READ THE PROSPECTUS TO WHICH THIS APPLICATION FORM RELATES. YOU MAY ONLY USE THIS APPLICATION FORM IF YOU RECEIVED IT TOGETHER WITH THE PROSPECTUS.

Information Line 1800 301 050

Broker Code
Broker Reference Stamp Only

Adviser Code

Presses applied for:

No. of Presses For each Presses

B
Amount

Offer Closes 6 December 2001 (unless extended)

x
Must be a minimum of 20 Presses.

A$100.00

A$

Write your name below:

Name of Individual Applicant, Company, Trustee, Executor, Partner or Office Bearer

Name of Joint Applicant or <Account Name> of beneficial holder

Name of Joint Applicant or <Account Name> of beneficial holder

Write your postal address below:

Unit Street No. Street Name

City Suburb/Town

State

Postcode

CHESS HIN (if applicable)

Tax File Number or Exemption

TFN of Individual Applicant

X
TFN of Joint Applicant

TFN of Company, Partnership, Trust or Super Fund

Telephone Number

ABN of Company, Partnership, Trust or Super Fund

(
H

Payment Details
Presses applied for:
No. of Presses For each Presses Amount

x
Must be a minimum of 20 Presses.

A$100.00
BSB No.

A$
Account No. Amount A$

Name of drawer of cheque

Cheque No.

Total Amount Enclosed

A$

Guide to Completing the Application Form

A B C Presses Applied for
Enter the number of Presses you wish to apply for. The application must be for a minimum of 20 Presses.

H Payment
Make your cheque or money order payable to Fairfax Presses Offer Account in Australian currency and cross it Not Negotiable Your cheque must be drawn on an . Australian Bank. Complete the Payment details section and cheque details in the boxes provided. The amount must correspond with the amount shown in box B. Sufficient cleared funds should be held in your account as cheques returned unpaid will not be re-presented and will result in your Application being rejected. Pin (do not staple) your cheque(s) to the Application Form where indicated. DISCLAIMER BEFORE COMPLETING THE APPLICATION FORM THE APPLICANT(S) SHOULD READ THE PROSPECTUS TO WHICH THE APPLICATION RELATES. BY LODGING THE APPLICATION FORM, THE APPLICANT(S) AGREES TO TAKE ANY NUMBER OF SECURITIES EQUAL TO OR LESS THAN THE NUMBER OF PRESSES INDICATED IN BOX A THAT MAY BE ALLOTTED TO THE APPLICANT(S) PURSUANT TO THE OFFER AND DECLARES THAT ALL DETAILS AND STATEMENTS MADE ARE COMPLETE AND ACCURATE. IT IS NOT NECESSARY TO SIGN THE APPLICATION FORM. PRESSES HAVE NOT AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933. ACCORDINGLY, PRESSES MAY NOT BE SOLD, RESOLD OR OFFERED IN, OR TO PERSONS IN, THE UNITED STATES. BY COMPLETING THIS APPLICATION FORM THE APPLICANT(S) WARRANTS AND REPRESENTS THAT IT IS NOT, AND IS NOT ACTING FOR THE ACCOUNT OR BENEFIT OF, A PERSON IN THE UNITED STATES. IF YOU RESIDE OUTSIDE AUSTRALIA YOU WARRANT AND REPRESENT THAT IT IS NOT UNLAWFUL FOR THE OFFER TO BE MADE OR ACCEPTED IN THAT JURISDICTION.

Application Monies
Enter the amount of Application Monies. To calculate the amount, multiply the number of Presses by A$100.00.

Registration name(s)
Enter the full name(s) you wish to appear on the statement of security holdings. This must be either your own name or the name of a company, trustee, executor, partner or office bearer. Up to 3 joint applicants may register. You should refer to the table below for the correct forms of registration. Applications using the wrong form of name may be rejected. Clearing House Electronic Sub-register System (CHESS) participants should complete their name and address in the same format as presently registered in the CHESS system.

D E

Postal Address
All communications to you will be mailed to the address as shown. For joint applicants, only 1 address should be entered.

CHESS HIN (if applicable)

John Fairfax Holdings Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement and Transfer Corporation Pty Ltd, a wholly owned subsidiary of Australian Stock Exchange Limited. In CHESS, John Fairfax Holdings Limited will operate an electronic CHESS subregister of security holdings and an electronic Issuer sponsored subregister of Securityholdings. Together the two subregisters will make up John Fairfax Holdings Limiteds principal register of Presses. John Fairfax Holdings Limited will not be issuing certificates to applicants in respect of Presses allotted. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold Presses allotted to you under this Application in uncertificated form on the CHESS subregister, enter your CHESS HIN. Otherwise, leave the section blank and on allotment, you will be sponsored by John Fairfax Holdings Limited and a Securityholder Reference Number (SRN) will be allocated to you.

TFN Exemption or ABN

Enter your Tax File Number (TFN) or exemption category or ABN Number. Where applicable, please enter the TFN for one or more Applicants. Collection of TFNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application. However, if no TFN is quoted your dividends may be taxed at the highest marginal tax rate plus Medicare Levy.

Lodgment of applications
Return the Application Form with cheque(s) attached to: Computershare Investor Services Pty Limited GPO Box 7115 SYDNEY NSW 2001 OR Level 2 60 Carrington Street SYDNEY NSW 2000

Telephone Number
Enter your telephone number. This is not required but will assist us if there are any problems with your application.

Application Forms must be received at the Sydney office of Computershare Investor Services Pty Limited no later than 5.00 pm Sydney time on 6 December 2001.

Correct forms of Registration

Note that ONLY legal entities are allowed to hold Presses. Applications must be in the name(s) of natural persons, companies or other legal entities acceptable to John Fairfax Holdings Limited. At least one full given name and the surname is required for each natural person. The name of the beneficial or any other registrable name may be included by way of an account designation if completed exactly as described in the examples of correct forms of registrable names below.

Type of Investor
Individual Use given names, not initials Company Use company title, not abbreviations Trusts Use trustee(s) personal name(s), Do not use the name of the trust Deceased Estates Use executor(s) personal name(s), Do not use the name of the deceased Partnerships Use partners personal names, Do not use the name of the partnership Clubs/Unincorporated Bodies/Business Names Use office bearer(s) personal name(s), Do not use the name of clubs etc. Superannuation Funds Use name of trustee of fund, Do not use the name of the fund

Correct Form
John Alfred Smith ABC Pty Ltd Janet Smith <Janet Smith Family A/C> Michael Smith <Est John Smith A/C> John Smith and Michael Smith <John Smith & Son A/C> Janet Smith <ABC Tennis Association A/C> John Smith Pty Ltd <Super Fund A/C>

Sample of Incorrect Form

J.A Smith ABC P/L ABC Co Janet Smith Family Trust

Estate of Late John Smith

John Smith & Son

ABC Tennis Association

John Smith Pty Ltd Superannuation Fund

Put the name(s) of any joint applicant(s) and/or account description using <> as indicated above in designated space(s) on the Application.

CORPORATE DIRECTORY
Fairfax Registered and Head Office
Level 19 201 Sussex Street Sydney NSW 2000

Fairfax Presses Information Line

1800 301 050

Underwriter and Lead Manager

UBS Warburg Australia Limited Level 25 Governor Phillip Tower 1 Farrer Place Sydney NSW 2000

Brokers to the Offer

UBS Warburg Private Clients Pty Limited Level 8 530 Collins Street Melbourne Victoria 3000 Commonwealth Securities Limited Level 6 120 Pitt Street Sydney NSW 2000 Johnson Taylor Potter Limited Level 3 7 Macquarie Place Sydney NSW 2000

Auditor to Fairfax
Ernst & Young 321 Kent Street Sydney NSW 2000

Legal Adviser to Fairfax

Freehills Level 32 MLC Centre Sydney NSW 2000

Share Registry
Computershare Investor Services Pty Limited Level 2 60 Carrington Street Sydney NSW 2000

Fairfax is a competitive media company, with a strong performance ethic, serving its communities through high quality, independent journalism and dynamic venues for commerce and information.