71 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2021 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2021 (Expressed in Barbados dollars) 44 13. Loans and Advances, continued In October 2015, the subsidiary entered into a Deed of Sale and Administration agreement with the Eastern Caribbean Home Mortgage Bank (ECHMB), wherein the subsidiary sold its rights to 100% of the cash flows arising on a portfolio of loans amounting to $2,424,473. The agreement provides that the subsidiary could repurchase and replace any loan included in the loan portfolio subject to the mutual agreement of the parties. The subsidiary has determined that substantially all the risks and rewards of the said loan portfolio have been retained by the subsidiary and consequently, the loans were not derecognized. The subsidiary accounted for the transaction as collateralized borrowing and recorded the cash received from such agreement as loans payable reported in the consolidated statement of financial position (see Note 18). A portfolio of mortgage loans of a subsidiary has been pledged as security for certain customer deposits totalling $18,850,000 (2020 - $18,850,000). At March 31, 2021 a floating charge of $15,000,000 (2020 - $15,000,000) over these deposits had been formalised. (ii) The movement in the expected credit loss allowance is as follows: 2021 Consumer Business Mortgages Total Balance, beginning of year $ 22,702,460 575,115 4,239,728 27,517,303 Expected credit losses 7,040,257 226,063 2,908,281 10,174,601 Balance, end of year $ 29,742,717 801,178 7,148,009 37,691,904 2020 Consumer Business Mortgages Total Balance, beginning of year $ 21,085,445 883,022 6,185,296 28,153,763 Reclassification of ECL: Undrawn commitments (219,860) - - (219,860) Amounts charged/written off (6,888,101) (218,109) - (7,106,210) Expected credit losses 8,724,976 (89,798) (1,945,568) 6,689,610 Balance, end of year $ 22,702,460 575,115 4,239,728 27,517,303
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