20.	FINANCIAL INSTRUMENTS.

20.1 Financial instruments, classified by type and category

The detail of financial assets, classified by type and category, as of December 31, 2017 and 2016, is as follows:

			December 31, 2017
	Financial assets held for trading (*)		Held-to-maturity investments (*)				Loans and receivables			Available-for-sale financial assets			Financial derivatives for hedging
	ThCh$		ThCh$				ThCh$			ThCh$			ThCh$
Derivative instruments		402,716		—		—				—			20,038,433
Other financial assets		—		185,913		478,880,650				—			—
Total Current		402,716		185,913		478,880,650				—			20,038,433

Equity instruments		—		—		—				2,628,501			—
Derivative instruments		—		—		—				—			30,789,703
Other financial assets		—		—		36,182,399				—			—
Total Non-current		—		—		36,182,399				2,628,501			30,789,703

Total		402,716		185,913		515,063,049				2,628,501			50,828,136

			December 31, 2016
	Financial assets held for trading (*)		Held-to-maturity investments (*)		Loans and receivables				Available-for-sale financial assets			Financial derivatives for hedging
	ThCh$		ThCh$		ThCh$				ThCh$			ThCh$
Derivative instruments		—		—		—				—			121,443
Other financial assets		—		462,801		464,235,411				—			—
Total Current		—		462,801		464,235,411				—			121,443

Equity instruments		—		—		—				2,641,620			—
Derivative instruments		—		—		—				—			25,533,189
Other financial assets		—		652,733		33,500,105				—			—
Total Non-current		—		652,733		33,500,105				2,641,620			25,533,189

Total		—		1,115,534				497,735,516			2,641,620			25,654,632

(*) See note 7.

The book value of trade accounts receivable and payable approximates their fair value.

The detail of financial liabilities, classified by type and category, as of December 31, 2017 and 2016, is as follows:

	December 31, 2017
	Financial liabilities held for trading		Loans and payables		Financial derivatives for hedging
	ThCh$		ThCh$		ThCh$
Interest-bearing loans		—		17,255,692		—
Derivative instruments		1,255,478		—		304,278
Other financial liabilities		—		670,642,077		—
Total Current		1,255,478		687,897,769		304,278

Interest-bearing loans		—		760,932,929		—
Derivative instruments		—		—		21,045,216
Other financial liabilities		—		978,342		—
Total Non-current		—		761,911,271		21,045,216

Total		1,255,478		1,449,809,040		21,349,494


	December 31, 2016
	Financial liabilities held for trading		Loans and payables		Financial derivatives for hedging
	ThCh$		ThCh$		ThCh$
Interest-bearing loans		—		18,013,114		—
Derivative instruments		7,369,481		—		313,571
Other financial liabilities		—		617,955,794		—
Total Current		7,369,481		635,968,908		313,571

Interest-bearing loans		—		802,046,968		—
Derivative instruments		2,987,830		—		48,981,953
Other financial liabilities		—		1,734,640		—
Total Non-current		2,987,830		803,781,608		48,981,953

Total		10,357,311		1,439,750,516		49,295,524

20.2 Derivative instruments

The risk management policy of the Group uses primarily interest rate and foreign exchange rate derivatives to hedge its exposure to interest rate and foreign currency risks.

The Group classifies its derivatives as follows:

•

Cash flow hedges: Those that hedge the cash flows of the underlying hedged item.

•

Fair value hedges: Those that hedge the fair value of the underlying hedged item.

•

Non-hedge derivatives: Financial derivatives that do not meet the requirements established by IFRS to be designated as hedge instruments are recorded at fair value with changes in net income (assets held for trading).

Assets and liabilities for hedge derivative instruments

As of December 31, 2017 and 2016, financial derivative transactions qualifying as hedge instruments resulted in recognition of the following assets and liabilities in the consolidated statement of financial position:

	December 31, 2017
	Assets				Liabilities
	Current		Non-current		Current		Non-current
	ThCh$		ThCh$		ThCh$		ThCh$
Exchange rate hedge:		20,038,433		30,789,703		304,278		21,045,216
Cash flow hedge		20,038,433		30,789,703		304,278		21,045,216
Total		20,038,433		30,789,703		304,278		21,045,216

	December 31, 2016
	Assets				Liabilities
	Current		Non-current		Current		Non-current
	ThCh$		ThCh$		ThCh$		ThCh$
Exchange rate hedge:		121,443		25,533,189		313,571		48,981,953
Cash flow hedge		121,443		25,533,189		313,571		48,981,953
Total		121,443		25,533,189		313,571		48,981,953

General information on hedge derivative instruments

Hedge derivative instruments and their corresponding hedged instruments are shown in the following table:

Detail of hedging

Description of hedging instrument

Description of hedged item

Fair value of hedged item

Type of risk hedged

instrument

12-31-2017

12-31-2016

ThCh$

SWAP

Exchange rate

Unsecured obligations (bonds) (*)

7,696,061

(23,640,892

)

Cash Flow

FORWARD

Exchange rate

Revenues

21,782,581

—

Cash Flow

(*) See note 18.2.

For the years ended December 31, 2017, 2016 and 2015, the Group did not recognize gains or losses for ineffective cash flow hedges.

The Group has not entered into any fair value hedges for any of the periods reported.

Financial derivative instrument assets and liabilities at fair value through profit or loss

As of December 31, 2017 and 2016, financial derivative transactions recorded at fair value through profit or loss, resulted in the recognition of the following assets and liabilities in the statement of financial position:

December 31, 2017

December 31, 2016

Current Assets

Current Liabilities (*)

Non-Current Assets

Non-Current Liabilities (*)

Current Assets

Current Liabilities (*)

Non-Current Assets

Non-Current Liabilities (*)

ThCh$

Non-hedging derivative

instrument

402,716

1,255,478

—

7,369,481

—

2,987,830

(*) See note 18.

These derivative instruments correspond to forward contracts entered into by the Group, whose purpose is to hedge the exchange rate risk related to future obligations arising from civil works contracts linked to the construction of the Los Cóndores Plant. Although these hedges have an economic substance, they do not qualify for hedge accounting because they do not strictly comply with the hedge accounting requirements established in IAS 39 Financial Instruments: Recognition and Measurement.

Other information on derivatives:

The following tables present the fair value of hedging and non-hedging derivatives entered into by the Group as well as the remaining contractual maturities as of December 31, 2017 and 2016:

	December 31, 2017
				Notional Amount
	Fair value			Less than 1 year		1-2 years		2-3 years		3-4 years		4-5 years		Total
Financial derivatives	ThCh$			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Interest rate hedge:		—			—		—		—		—		—		—
Cash flow hedge		—			—		—		—		—		—		—
Exchange rate hedge:		29,478,642			306,350,419		525,812,635		—		—		—		832,163,054
Cash flow hedge		29,478,642			306,350,419		525,812,635		—		—		—		832,163,054
Derivatives not designated for hedge accounting		(852,762	)		19,682,638		—		—		—		—		19,682,638
Total		28,625,880			326,033,057		525,812,635		—		—		—		851,845,692

	December 31, 2016
				Notional Amount
	Fair value			Less than 1 year		1-2 years		2-3 years		3-4 years		4-5 years		Total
Financial derivatives	ThCh$			ThCh$		ThCh$		ThCh$		ThCh$		ThCh$		ThCh$
Interest rate hedge:		—			—		—		—		—		—		—
Cash flow hedge		—			—		—		—		—		—		—
Exchange rate hedge:		(23,640,892	)		—		—		523,686,966		—		—		523,686,966
Cash flow hedge		(23,640,892	)		—		—		523,686,966		—		—		523,686,966
Derivatives not designated for hedge accounting		(10,357,311	)		49,738,751		21,434,625		—		—		—		71,173,376
Total		(33,998,203	)		49,738,751		21,434,625		523,686,966		—		—		594,860,342

The hedging and non-hedging derivatives contractual maturities do not represent the Group’s total risk exposure, as the amounts presented in the above tables have been drawn up based on undiscounted contractual cash inflows and outflows for their settlement.

20.3 Fair value hierarchy

Financial instruments recognized at fair value in the consolidated statement of financial position are classified, based on the hierarchy described in Note 3.h.

The following table presents financial assets and liabilities measured at fair value as of December 31, 2017 and 2016:

			Fair Value Measured at End of Reporting Period Using:
	12-31-2017		Level 1		Level 2		Level 3
Financial Instruments Measured at Fair Value	ThCh$		ThCh$		ThCh$		ThCh$
Financial Assets:
Financial derivatives designated as cash flow hedges		50,828,136		—		50,828,136		—
Financial derivatives not designated for hedge accounting		402,716		—		402,716		—
Commodity derivatives not designated as cash flow hedges		9,940,955		—		9,940,955		—
Commodity derivatives designated as cash flow hedges		5,742,633		—		5,742,633
Available-for-sale financial assets, non-current		33,158		33,158		—		—
Total		66,947,598		33,158		66,914,440		—
Financial Liabilities:
Financial derivatives designated as cash flow hedges		21,349,494		—		21,349,494		—
Financial derivatives not designated for hedge accounting		1,255,478		—		1,255,478		—
Commodity derivatives not designated for hedge accounting		—		—		—		—
Commodity derivatives designated as cash flow hedges		889,026		—		889,026		—
Total		23,493,998		—		23,493,998		—
			Fair Value Measured at End of Reporting Period Using:
	12-31-2016		Level 1		Level 2		Level 3
Financial Instruments Measured at Fair Value	ThCh$		ThCh$		ThCh$		ThCh$
Financial Assets:
Financial derivatives designated as cash flow hedges		25,654,632		—		25,654,632		—
Commodity derivatives not designated for hedge accounting		875,841		—		875,841		—
Commodity derivatives designated as cash flow hedges		16,159,565		—		16,159,565		—
Available-for-sale financial assets, non-current		25,381		25,381		—		—
Total		42,715,419		25,381		42,690,038		—
Financial Liabilities:
Financial derivatives designated as cash flow hedges		49,295,524		—		49,295,524		—
Financial derivatives not designated for hedge accounting		10,357,311		—		10,357,311		—
Commodity derivatives not designated for hedge accounting		40,013		—		40,013		—
Commodity derivatives designated as cash flow hedges		1,063,193		—		1,063,193		—
Total		60,756,041		—		60,756,041		—

20.3.1 Financial instruments whose fair value measurement is classified as Level 3.

The Group does not have any financial instruments whose fair value measurement is classified as Level 3.