e40vf
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 40-F
[Check one]
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Registration statement pursuant to section 12 of the Securities Exchange Act of 1934 |
or
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Annual report pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2007 Commission File Number: 1-31556
FAIRFAX FINANCIAL HOLDINGS LIMITED
(Exact name of Registrant as specified in its charter)
Canada
(Province or other jurisdiction of incorporation or organization)
6331
(Primary Standard Industrial Classification Code Number (if applicable))
95 Wellington Street West
Suite 800
Toronto, Ontario Canada
M5J 2N7
(416) 367-4941
(Address and telephone number of Registrants principal executive offices)
Not Applicable
(I.R.S. Employer Identification Number (if applicable))
CT Corporation System
111 Eighth Avenue,
13th Floor
New York, NY 10011
U.S.A.
(212) 894-8700
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange |
Title of each class |
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on which registered |
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Subordinate Voting Shares
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New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Not Applicable
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Not Applicable
For annual reports, indicate by check mark the information filed with this Form:
þ Annual information form þ Audited annual financial statements
Indicate the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the annual report:
Subordinate Voting Shares 16,918,020
Multiple Voting Shares 1,548,000
Indicate by check mark whether the Registrant by filing the information contained in this Form is
also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934 (the Exchange Act). If Yes is marked, indicate the filing
number assigned to the Registrant in connection with such Rule.
Yes o 82- o No þ
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.
Yes þ No o
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
The Registrant undertakes to make available, in person or by telephone, representatives to respond
to inquiries made by the staff of the Securities and Exchange Commission, and to furnish promptly,
when requested to do so by the Securities and Exchange Commission staff, information relating to
the securities in relation to which the obligation to file an annual report on Form 40-F arises; or
transactions in said securities. The Registrant has previously filed with the Securities and
Exchange Commission a Form F-X in connection with the class of securities in relation to which the
obligation to file this report arises.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Registrants chief executive officer and its chief financial officer, after evaluating the
effectiveness of the Registrants disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) as of the end of the period covered by this annual report on
Form 40-F, have concluded, based upon such evaluation, that the Registrants disclosure controls
and procedures were effective as of the end of such period.
Managements Report on Internal Control over Financial Reporting
Managements Report on Internal Control over Financial Reporting is included in Exhibit 3 hereto
and is incorporated by reference herein.
Attestation Report of the Registered Public Accounting Firm
The
attestation report of PricewaterhouseCoopers LLP on internal control
over financial reporting is included in Exhibit 2 hereto and is incorporated by reference herein.
Changes in Internal Control over Financial Reporting
Other than as described in Exhibit 3, which is incorporated by reference herein, there was no
change in the Registrants internal control over financial reporting that occurred during the
period covered by this report that has materially affected, or is reasonably likely to materially
affect, the Registrants internal control over financial reporting.
The design of any system of controls and procedures is based in part upon certain assumptions about
the likelihood of future events. There can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of how remote.
IDENTIFICATION OF THE AUDIT COMMITTEE
The Registrant has a standing audit committee established in accordance with Section 3(a)(58)(A) of
the Securities Exchange Act of 1934. The members of the Registrants audit committee are Robert J.
Gunn, Anthony F. Griffiths and Paul L. Murray. The disclosure provided under Statement of
Corporate Governance PracticesAudit Committee in the Registrants Management Proxy Circular,
included as Exhibit 5 hereto, is incorporated by reference herein.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrants board of directors determined that it has at least one audit committee financial
expert serving on its audit committee. The Chair of the Registrants audit committee, Mr. Paul L.
Murray, has been determined to be such an audit committee financial expert and is independent, as
that term is defined by the New York Stock Exchanges listing standards applicable to the
Registrant. The U.S. Securities and Exchange Commission has indicated that the designation of Mr.
Murray as an audit committee financial expert does not make Mr. Murray an expert for any purpose,
impose any duties, obligations or liability on Mr. Murray that are greater than those imposed on
members of the audit committee and board of directors who do not carry this designation or affect
the duties, obligations or liability of any other members of the audit committee or board of
directors.
CORPORATE GOVERNANCE GUIDELINES
The disclosure provided under Statement of Corporate Governance Practices in the Registrants
Management Proxy Circular, included as Exhibit 5 hereto, is incorporated by reference herein.
CODE OF ETHICS
The disclosure provided under Statement of Corporate Governance Practices in the Registrants
Management Proxy Circular, included as Exhibit 5 hereto, is incorporated by reference herein.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
For details on the Registrants accountant fees payable to PricewaterhouseCoopers LLP and its
affiliates for the years ended December 31, 2007 and December 31, 2006, as well as a description of
the nature of each category of fees, see the information under Audit Committee in the
Registrants Annual Information Form dated March 7, 2008, included as Exhibit 1 hereto.
Pre-Approval Policies and Procedures
The Registrants Audit Committee has adopted a pre-approval policy with respect to permitted
non-audit services. Non-audit fees are expected to relate primarily to tax advisory services.
Under the policy, estimated non-audit fees payable by the Registrant and its subsidiaries must be
submitted prior to the initiation of non-audit services in advance of each financial quarter for
pre-approval by the Registrants Audit Committee. Requests by the Registrant or its subsidiaries
for pre-approval of non-audit fees (other than tax advisory services discussed below) within any
financial quarter must be submitted to the Registrants chief financial officer and approved by the
Chair of the Audit Committee. During any quarter, the Registrants chief financial officer may
approve requests for tax advisory services of less than CDN $5,000 per item subject to an aggregate
quarterly limit of CDN $25,000 for Canadian and international tax matters and $25,000 for U.S. tax
matters.
For the year ended December 31, 2007, none of the services described above were approved by the
Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant and its subsidiaries have certain security arrangements and commitments that have
financial implications. These arrangements are described in Note 13 to the Registrants
audited consolidated financial statements for the year ended December 31, 2007 included as Exhibit 2 hereto.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
Tabular disclosure of the Registrants present and future obligations as at December 31, 2007 is
provided in Note 18 to the Registrants audited consolidated financial statements for the year
ended December 31, 2007 included as Exhibit 2 hereto.
For further details on the Registrants provision for claim liability, long term debt principal and
interest payments, purchase obligation and other liabilities payments and operating lease payments,
see Notes 5, 8, 9 and 15 of the Registrants audited consolidated financial statements for the year
ended December 31, 2007 included as Exhibit 2 hereto.
FORWARD-LOOKING INFORMATION
Certain statements contained herein may constitute forward-looking statements and are made pursuant
to the safe harbor provisions of the United States Private Securities Litigation Reform Act of
1995. The words believe, anticipate, project, expect, intend, will likely result, will
seek to, or will continue and similar expressions identify forward-looking statements which
relate to, among other things, the Registrants plans and objectives for future operations and
reflect the Registrants current views with respect to future results, performance and
achievements. Such forward-looking statements are subject to known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or achievements of Fairfax to be
materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements.
Such factors include, but are not limited to: a reduction in net income if the reserves of the
Registrants subsidiaries (including reserves for asbestos, environmental and other latent claims)
are insufficient; underwriting losses on the risks these subsidiaries insure that are higher or
lower than expected; the lowering or loss of one of these subsidiaries financial or claims paying
ability ratings; an inability to realize the Registrants investment objectives; exposure to credit
risk in the event the Registrants subsidiaries reinsurers or insureds fail to make payments; a
decrease in the level of demand for these subsidiaries products, or increased competition; an
inability to obtain reinsurance coverage at reasonable prices or on terms that adequately protect
these subsidiaries; an inability to obtain required levels of capital; an inability to access cash
of the Registrants subsidiaries; risks associated with requests for information from the
Securities and Exchange Commission or other regulatory bodies; risks associated with current
government investigations of, and class action litigation related to, insurance industry practice;
the passage of new legislation; and the failure to realize future income tax assets. Additional
risks and uncertainties are described in Exhibit 3 hereto under the heading Issues and Risks and in
Fairfaxs Short Form Base Shelf Prospectus (under Risk Factors) dated April 10, 2007 filed with
the securities regulatory authorities in Canada and the United States, which is available on SEDAR
and EDGAR. Fairfax disclaims any intention or obligation to update or revise any forward-looking
statements, except as otherwise required by law.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant certifies that
it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to
be signed on its behalf by the undersigned, thereunto duly authorized.
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FAIRFAX FINANCIAL HOLDINGS LIMITED
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Date: March 7, 2008 |
By: |
/s/ Bradley P. Martin
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Name: |
Bradley P. Martin |
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Title: |
Vice President, Chief Operating Officer and
Corporate Secretary |
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EXHIBIT INDEX
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1 |
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Annual Information Form dated March 7, 2008 |
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Audited Consolidated Financial Statements of the Registrant as of |
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December 31, 2007 and 2006 and for the three years in the period ended |
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December 31, 2007 and related notes and the auditors report thereon |
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Managements Discussion and Analysis of Financial Condition and
Results of Operations dated March 7, 2008, including Managements
Report on Internal Control over Financial Reporting |
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4 |
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Narrative Description of Business dated March 7, 2008 |
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The information under Statement of Corporate Governance Practices in
the Registrants Management Proxy Circular, dated March 7, 2008 in
connection with the annual meeting of shareholders to be held on April
16, 2008, is incorporated herein by reference to Exhibit 1 to the
Registrants Report on Form 6-K furnished to the Securities and
Exchange Commission on March 7, 2008 |
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[intentionally omitted] |
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7 |
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Consent of PricewaterhouseCoopers LLP regarding its report dated March 7, 2008 |
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Rule 13a-14(a)/15d-14(a) Certifications: |
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Certification of Registrants Chief Executive Officer |
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Certification of Registrants Chief Financial Officer |
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Section 1350 Certifications: |
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Certification of Registrants Chief Executive Officer |
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Certification of Registrants Chief Financial Officer |