content_image/178558.jpg
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using appropriate valuation techniques and making assumptions that are based on market conditions existing at the end of each reporting period. The fair value of forward foreign exchange contracts is calculated as the present value of expected future cash flows relating to the difference between the contract rates and the market forward rates at the end of the reporting period. Interest rate and cross currency swaps are measured at the present value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates. These derivative financial instruments are included in Level 2. 

In the circumstances where a valuation technique for derivative financial instruments is based on significant unobservable inputs, such instruments are included in Level 3. 

The following table provides a reconciliation of fair value movements in Level 3 financial instruments. 

<img src='content_image/178558.jpg'>

The total gains or losses for the year included a loss of $75.9 million relating to electricity derivative contracts held at the end of the reporting period (2011: a loss of $37.8 million). Fair value gains or losses on electricity derivatives are included in the line item ‘cost of sales – (gain)/loss in fair value of electricity derivatives’ in Note 7. 

## Note 54 – Subsequent events 

There has not been any other matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods other than: 

## Repayment of Loy Yang A debt 

On 13 August 2012, AGL repaid $978.1 million of Loy Yang A secured debt assumed at the date of acquisition of Great Energy Alliance Corporation Pty Limited. 

## Final dividend 

On 22 August 2012, the Directors of AGL resolved to pay a fully franked final dividend of 32.0 cents per share, amounting to $174.7 million. The record date for the final dividend is 5 September 2012 with payment to be made on 27 September 2012. Shares will commence trading ex-dividend on 30 August 2012. 

The AGL Dividend Reinvestment Plan (DRP) will be in operation and shares will be allotted at a 1.5% discount to the simple average of the daily weighted average market price at which AGL’s ordinary shares are traded on ASX during each of the 10 trading days commencing on 7 September 2012. 

