2020 Directors' Report - JOHNSON & JOHNSON FOUNDATION SCOTLAND

 
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2020 Directors' Report - JOHNSON & JOHNSON FOUNDATION SCOTLAND
2020
Directors’ Report
JOHNSON & JOHNSON FOUNDATION SCOTLAND
2020 Directors' Report - JOHNSON & JOHNSON FOUNDATION SCOTLAND
Directors’ Report and
  Financial Statements
  Johnson & Johnson Foundation Scotland
  (Formerly Johnson & Johnson Corporate Citizenship Trust)
  Directors’ Report (including the Directors’ Strategic Report)
  For the year ended 31 December 2020

  2020 List of Directors
                                                                                                                                             Contents
  Directors                                                                                 Company Secretary      Banker
  Alissa Hsu Lynch (resigned 20 March 2020)                                                 Gillespie MacAndrew    Royal Bank of Scotland    5    Objectives and Activities                               9   Structure, Governance and Management
  An Claes (appointed 16 February 2021)                                                     Secretaries Ltd        36 St. Andrews Square          Mission                                                     Governing Document
  Angelika Elser                                                                            5 Atholl Crescent      Edinburgh EH2 27B
                                                                                                                                                  About Us                                                    Relationship to Johnson & Johnson Family of Companies
  Carol Ella Leland (appointed 22 June 2020)                                                Edinburgh EH3 8EJ      United Kingdom
                                                                                                                                                  Strategic Framework                                         Recruitment and Appointment of Directors
  Demet Gurunlu Russ (resigned 16 February 2021)                                            United Kingdom
  Frank Welvaert                                                                                                                                  Alignment with the Johnson & Johnson Global Community       Organization and Decision Making
                                                                                                                   Solicitor
  Frederik Richard Van Batenburg (appointed 23 July 2020)                                                                                         Impact Strategy                                             Program Operations Committee
                                                                                            Registered Office      Gillespie MacAndrew LLP
  Hani Souheill Abouhalka                                                                                                                         Grant Making Policy                                         Finance Advisory Committee
                                                                                            5 Atholl Crescent      5 Atholl Crescent
  Inder Sheel Kumar Khosla (resigned 4 November 2020)                                                                                             Impact Investment Policy
                                                                                            Edinburgh EH3 8EJ      Edinburgh EH3 8EJ                                                                          Impact Advisory Committee
  Jaak Peeters (resigned 20 March 2020)
                                                                                            United Kingdom         United Kingdom                                                                             Risk Management and Assessment
  Jessica Lindsay Moore (appointed 23 November 2020)                                                                                         6    Strategic Report
  Kris Emiel Sterkens (Chair)                                                                                                                     Achievements and Performance                            10 Directors’ Responsibilities
  Luis Diaz-Rubio                                                                           Auditor                Company Number:
                                                                                                                   SC327028                  7    2020 Significant Areas of Activity                      10 Independent Auditor’s Report
  Mireille Maes (appointed 4 January 2021)                                                  Azets Audit Services
  Neil Wood                                                                                 Exchange Place 3                                                                                                 to the Members and Directors
                                                                                                                   Charity Number:           8    Financial Review
  Patrick Smallcombe (resigned 31 December 2020)                                            Semple Street          SC017977                       Results for the Period                                  13 Statement of Financial Activities
  Paula Patino Conde                                                                        Edinburgh EH3 8BL
                                                                                                                                                  Principal Funding Sources
  Wim Bossens (resigned 18 September 2020)                                                  United Kingdom                                                                                                14 Balance Sheet
  Zeger Vercouteren
                                                                                                                                                  Investment Policy
                                                                                                                                                                                                          15 Statement of Cash Flows
                                                                                                                                                  Reserves Policy
  Executive Director*                                                                                                                             Plans for the Future                                    16 Notes to Financial Statements
  Ben Davies

  * Executive Director is a job title and not a director for Companies Act 2006 purposes.                                                    Front Cover Photo credit: UNICEF

2 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                       Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 3
2020 Directors' Report - JOHNSON & JOHNSON FOUNDATION SCOTLAND
We support and champion the
                                                                   people on the front lines who are
                                                                   at the heart of delivering care.

                                                                   Objectives and Activities
                                                                   Mission                                      About Us                                    Strategic Framework
                                                                   The mission of the Johnson & Johnson         The Foundation, formerly known              Our Strategic Framework guides the
                                                                   Foundation Scotland – “The Foundation”–      as Johnson & Johnson Corporate              future direction of the Foundation. It
                                                                   is to make sustainable, long-term            Citizenship Trust, is responsible for       is based on three strategic focus areas
                                                                   differences in human health. It does this    managing Johnson & Johnson’s Global         which are all closely interconnected and
                                                                   by investing in strategic partnerships and   Community Impact programs and               build-on and amplify the impact and
                                                                   innovative solutions that add value to       initiatives across Europe, the Middle       reach generated by each:
                                                                   society and impact people’s lives.           East and Africa (EMEA). The Foundation      1. Partnerships: Empowering
                                                                                                                was founded in 2007 and is a registered        strategic and innovative
                                                                                                                charity and a company limited by               partnerships across EMEA
                                                                                                                guarantee. It is an independent
                                                                                                                                                            2. People: Connecting people
                                                                                                                organization that reflects the Johnson
                                                                                                                                                               and creating networks to share
                                                                                                                & Johnson’s Family of Companies’
                                                                                                                                                               knowledge and skills
                                                                                                                commitment to improve the quality
                                                                                                                of life of the communities that its         3. Impact Investment: Addressing
                                                                                                                employees live and work in.                    social issues in a sustainable way
                                                                                                                The Foundation is funded by the Johnson        through impact investment.
                                                                                                                & Johnson Family of Companies through
                                                                                                                Johnson & Johnson Global Community
                                                                                                                Impact and Johnson & Johnson
                                                                                                                Operating Companies in EMEA and our
                                                                                                                work guided by the Johnson & Johnson
                                                                                                                Centre for Health Worker Innovation.

4 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                  Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 5
2020 Directors' Report - JOHNSON & JOHNSON FOUNDATION SCOTLAND
2020 Significant Areas of Activity
  Alignment with the Johnson                             Impact Investment Policy                        JJIV is building a global portfolio of
                                                                                                         innovative social enterprises and start-   • Aga Khan Development Network                             • UNICEF – The Foundation supported           • Secondment Program – Launched
  & Johnson Global Community                             Our impact investing mission is to
                                                                                                         ups, focusing on addressing the needs of     (AKDN) – The Foundation has a                              efforts to build the capacity of health       in 2014, the Secondment Program
  Impact Strategy                                        demonstrate that health & wellness
                                                                                                                                                      long-term partnership with the                             workers by strengthening primary              provides Johnson & Johnson
                                                                                                         low-income populations.
  The Foundation’s Strategic Framework                   investing in low-resource settings can
                                                                                                         A section of our investments to date         AKDN working together on a                                 care health services to provide               employees with the unique
  is fully aligned with the Johnson &                    generate sustainable social impact with
                                                                                                         include:                                     number of innovative programs                              quality and accessible maternal, new-         opportunity to give back to society
  Johnson Global Community Impact                        financial returns. All impact investments
                                                                                                                                                      and initiatives in Asia and Africa                         born, child and adolescent health             by sharing their business skills
  Strategy “to support and champion                      are aligned with the Johnson & Johnson          • Jacaranda Maternity, a maternity           aimed at supporting frontline health                       and nutrition services for the most           and knowledge with our NGO
  the people on the front lines who are                  Global Community Impact Strategy                  hospital focused on providing              workers and improving access to                            vulnerable communities in Lebanon.            partner organizations in long-term
  at the heart of delivering care.” These                and focus on health and wellness                  affordable, patient-centered care          quality healthcare. This includes                          The Foundation also supported the             assignments (up to six months).
  primarily include nurses, midwives and                 based social enterprises with a broad             to urban mothers in Kenya.                 creating a nursing and midwifery                           procurement of protective equipment
                                                         geographical spread.                                                                                                                                                                                • One Young World (OYW) – Johnson
  community health workers working at                                                                    • Flare, a Kenya-based emergency             platform in Kenya to strengthen                            for healthcare professionals and
                                                         In 2015 an impact investment effort was                                                                                                                                                               & Johnson has partnered with OYW,
  the intersection between community                                                                       response technology platform,              and professionalize these cadres in                        experts in the field within UNICEF’s
                                                         launched to focus on a limited number of                                                                                                                                                              an NGO which connects the world’s
  health and the primary health system                                                                     that connects the largest network          East Africa, COVID-19 response in                          COVID-19 emergency programming
                                                         investment opportunities over a 5-7year                                                                                                                                                               most impactful young leaders to
  in reaching vulnerable populations                                                                       of first responders and has                Pakistan, and psychosocial well-being                      in Croatia and also supported quality
                                                         time horizon, to demonstrate that health &                                                                                                                                                            create a better world, since 2013.
  and contributing to the Sustainable                                                                      reduced emergency response time            and resiliency of frontline health                         and continuity of healthcare services
                                                         wellness investing in low-resource settings                                                                                                                                                           OYW leaders (aged 18-30) from
  development Goal of Health for All                                                                       from an average of 162 minutes to          workers in the context of COVID-19                         for the most effected population by
                                                         could deliver sustainable impact and a                                                                                                                                                                across the globe have participated
  (Universal Health Coverage).                                                                             20 minutes.                                and beyond.                                                COVID-19 pandemic in Serbia.
                                                         financial return.                                                                                                                                                                                     in providing a unique opportunity
  Grant Making Policy                                                                                    • WaterEquity, a fund that invests in      • International Federation of Red Cross                    • World Continuing Education Alliance           to debate and formulate innovative
                                                         In 2019, the initiative formally launched as
                                                                                                           social enterprises and microfinance        and Red Crescent Societies – The                           – The lack of standard COVID-19               solutions to some of the world’s most
  The Board of Directors has developed                   Johnson & Johnson Impact Ventures (JJIV),
                                                                                                           institutions that deliver access           Foundation supported emergency                             procedures and guidelines for nurses          pressing health issues.
  a Grant Making Policy to ensure that                   targeting innovations including digital
                                                                                                           to clean water to homes and                response programs across Europe                            at the community level early in the
  grant making decisions are made                        health platforms and artificial intelligence
                                                                                                           communities across Southeast               and the Middle East, including Italy,                      pandemic led to a project with the
  effectively and transparently. Given the               technologies to support the access and
                                                                                                           Asia and is expected to provide 4.5        Spain, France and the UK, as well as                       World Continuing Education Alliance
  geographical spread of the Foundation,                 delivery of quality and affordable care. JJIV
                                                                                                           million people with water access in        in India, Indonesia, the Philippines,                      which has contributed to the training
  consideration and thought is given to                  has committed $7 million to seven impact
                                                                                                           seven years.                               Brazil, Colombia and other countries.                      of 285,000 nurses to date and the
  the individual needs and challenges                    investments in Kenya, the UK and South
                                                                                                                                                      The response included medical care,                        completion of 2.2 million continued
  of each country. To this end, the                      East Asia that have been 70% executed. $1       • mClinica, the first digital                and a multitude of interventions at the                    education certifications across Sub-
  Foundation supports both cross-border                  million dollars was granted in seed funding       pharmacy platform in Southeast             community level such as communication                      Saharan Africa. The program has
  programs and initiatives and national                  for impact investments.                           Asia, developing a network that            of risks, hygiene promotion, livelihoods                   the potential to reach up to 650,000
  programs and initiatives.                              During the year, the Foundation Board             connects over 180,000 pharmacy             and food security, emergency medical                       nurses and midwives.
  Every approved national and cross-                     of Directors delegated authority to its           professionals                              transportation and care, and creating
  border grant requires approval against                 Investment Committee to make appropriate                                                     isolation spaces for suspected patients
  strategic priorities and health care                   innovative finance and impact investment                                                     among others.
  compliance. Each program supported                     decisions on its behalf following a rigorous
  by the Foundation has a dedicated                      due diligence process. Post investment
  Project Leader, Health Care Business                   we are developing a coherent portfolio
  Integrity Officer and Grant Coordinator,               management strategy to ensure these
  all of whom have a role in the grant                   investments achieve both social impact and
  application process. The Board of                      meet our financial requirements.
  Directors gives final approval.

  Strategic Report
  Achievements and Performance
  Our 2020 grant making activities were guided by the Johnson & Johnson Global Community Impact strategy, which is to support
  and champion people on the front lines of care. As the COVID-19 crisis unfolded, the Foundation remained steadfast in prioritizing
  the needs of frontline health workers and the new realities on the ground facing our partners.
  In 2020, the Foundation engaged with 70 partners in 54 countries delivering over £15.5 million to programs within the EMEA region.1

                                                                                                                                                    1. These numbers include donor advised funding partnerships.

6 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                                   Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 7
Financial Review                                                                                                                                  Structure, Governance and Management
  Results for the Period                                 Restricted Funds                               We do not see any significant impacts       Governing Document                              Upon appointment, new Directors are                its recommendations. The Committee is
                                                         These are restricted funds that are            for the Foundation as it relates to                                                         provided with training and information on          made up of senior finance executives of the
  The Statement of Financial Activities                                                                                                             The Foundation is governed by its
                                                         earmarked by the donors to be used for         our operations in 2021. The donation                                                        their role and responsibilities, the mission of    Johnson & Johnson Family of Companies.
  is reported on page 13 of the accounts.                                                                                                           Memorandum and Articles of Association.
                                                         particular projects. They are accounted        from Johnson & Johnson to fund our                                                          the Foundation, and the Global Community
  The Foundation incurred net income of                                                                                                             The liability of the members of the charity                                                        Impact Advisory Committee
                                                         for as part of the charity’s restricted        budgeted programs for the coming year                                                       Impact Strategy to which the Foundation
  £9.2m (2019: £15.4m, net income) as a                                                                                                             is limited and every member undertakes
                                                         funds. Please refer to page 21 for a list of   is committed and our operating costs,                                                       adheres. They are also invited to meet and         The Impact Advisory Committee was
  result of increased grant awards towards                                                                                                          to contribute such amount as may be
                                                         restricted funds.                              as usual, will be covered by the J&J                                                        discuss their role, responsibilities and areas     created in 2015. The role of the Impact
  the end of the year.                                                                                                                              required (not exceeding £1) in the event of
                                                                                                        Corporate Global Community Impact                                                           of interest with the Executive Director of         Advisory Committee is to provide
  The financial position at 31 December                  Investment Policy                                                                          the charity winding up.
                                                                                                        team. As to be expected, with the                                                           the Foundation.                                    expert counsel on strategic investment
  2020 was £57.5m of net assets (2019:                   The Directors have full power of               restrictions that are in place globally,    Relationship to Johnson &                       Directors who formally and contractually           decisions, assess and select for
  £48.4m) which primarily consisted of                   investment. In 2020, the Investment                                                                                                                                                           recommendation to the Board, build
  cash deposits of £6.4m (2019: £34.5m),
                                                                                                        is likely to have a slowdown effect on      Johnson Family of Companies                     leave the Johnson & Johnson Family of
                                                         Committee established two low risk             a number of our programs but we will                                                        Companies must tender their resignation to         and prioritize the Johnson & Johnson
  money market funds of £48.8m (2019:                                                                                                               The Foundation is funded by the Johnson
                                                         money-market fund accounts following           endeavour to keep moving forward in                                                         the Board.                                         Global Community Impact Strategy,
  £nil) and the impact investments of                                                                                                               & Johnson Family of Companies as part
                                                         the guidance of the established                close partnership with our partners and                                                                                                        and support the Foundation on the
  £3.4m (2019: £3m).                                                                                                                                of its commitment to Johnson & Johnson          The Directors are the decision-making body
                                                         investment policy.                             will remain agile yet focused.                                                                                                                 implementation of its recommendations.
                                                                                                                                                    Global Community Impact in the EMEA             on the Foundation commitments and do
  Principal Funding Sources                                                                             Looking ahead, the Foundation will                                                                                                             The Committee is made up of senior
                                                         Reserves Policy                                                                            region. The Johnson & Johnson Family of         not receive any remuneration for this.
                                                                                                                                                                                                                                                       internal and external experts from the
  The Foundation’s activities are funded                                                                continue to deliver against its strategic   Companies’ commitment to the Foundation
                                                         The Foundation’s reserves policy is set                                                                                                    Organization and Decision                          field of impact investment.
  through donations from the Johnson &                                                                  framework, guided by the Johnson            extends to the provision of office space,
                                                         to a level of spending intended to deliver
  Johnson Family of Companies.                                                                          & Johnson Centre for Health Worker          facilities and the release of its employees     Making                                             Risk Management and
                                                         our charitable mission today and to meet
                                                                                                        Innovation , and closely focused            to sit on local, informal committees that
  Within the portfolio of the Foundation,                our commitments to our partners in the                                                                                                     The Board of Directors meets biannually            Assessment
                                                                                                        on partnerships, people and scaled          provide advice to the Foundation.               and presides over the strategic direction
  various types of funds have been created               future; unrestricted funds are maintained                                                                                                                                                     A risk matrix is reviewed on an annual basis
                                                                                                        investment, aligned with the Johnson                                                        of the charity, having responsibility and
  to effectively manage donations. These                 at the value of approximately four                                                         In 2010, the Foundation signed a trademark                                                         ensuring the Directors have considered the
                                                                                                        & Johnson Global Community Impact                                                           control of its affairs and activities.
  are endowment funds, designated funds                  months of on-going activities.                                                             licensing agreement with the Johnson &                                                             major risks faced by the Foundation and
                                                                                                        Strategy which focuses on supporting
  and restricted funds.                                  Total funds held at 31 December 2020                                                       Johnson Family of Companies for the use of      The day-to-day running of the                      to ensure the necessary steps are taken to
                                                                                                        those on the frontlines of health care,
  Endowment Funds                                        were £57.5m (2019: £48.4m), of which                                                       the Johnson & Johnson name and logo.            Foundation is delegated to the Executive           mitigate against the risks.
                                                                                                        particularly Nurses, Midwives and
  These are restricted investment funds                  £23k (2019: £23k) were restricted                                                          As of the 31st of December 2020, all            Director, an employee of the Johnson &
                                                                                                        Community Health Workers.                                                                                                                      One of the risks which has been identified
  donated to the Foundation with the                     for specific purposes by the donor,                                                        Directors are employees of the Johnson &        Johnson Family of Companies whom is
                                                                                                        Continued efforts will be made to                                                                                                              by the Directors relates to the appropriate
  intention to produce income. While                     £nil (2019: £103k) were endowment                                                          Johnson Family of Companies.                    not remunerated by the Foundation.
                                                                                                        strengthen primary care systems and                                                                                                            use of funds. The Foundation regularly
  withdrawals from the principal amount                  funds, £46.2m (2019: £29.2m) were                                                                                                                                                             reviews its grant making policy and controls
                                                                                                        the health workers operating there with     Recruitment and Appointment                     Program Operations Committee
  may only be used for purposes of the                   designated, and a further £3.4m (2019:                                                                                                                                                        to monitor this risk and to ensure funds are
                                                                                                        a primary focus on; nurses, midwives,       of Directors                                    Whilst overall management of the
  Foundation upon the donors’ decision,                  £3m) were held within programme                                                                                                                                                               spent according to highest standards of
                                                                                                        community health workers and others                                                         Foundation is decided by collective
  any investment income generated from                   related investments. The remaining free                                                    The Foundation is managed by a                                                                     diligence and transparency. An example
                                                                                                        who are at the very foundation of any                                                       decision of the Board, much of the
  the endowment can be spent for the                     reserves at 31 December 2020 were                                                          Foundation Board of Directors consisting                                                           of one of the controls in place is the
                                                                                                        health care system. Investments will be                                                     Foundation’s functioning is undertaken
  Foundation’s ongoing operations or other               £7.9m (2019: £16 m).                                                                       of senior Johnson & Johnson leaders                                                                contractual “right to audit” clause allowing
                                                                                                        made to support formal and informal                                                         by the Program Operations Committee
  specific purposes. As of the close of                                                                                                             across the Pharmaceutical, Consumer,                                                               the Foundation to ensure that funding was
  2020, the Foundation does not have any                 Plans for the Future                           care structures to ensure there is a
                                                                                                                                                    Medical Devices and Global Supply Chain         (Foundation staff). The Committee is made
                                                                                                        workforce ready and able to respond to                                                                                                         used for the intended purposes.
  active endowment funds.                                As the COVID-19 pandemic evolves,                                                          organization in the EMEA region. The            up of employees of the Johnson & Johnson
                                                                                                        the benefit of vulnerable populations                                                       Family of Companies. The activities of the         Another risk identified relates to the
  Designated Funds                                       the management team will continue to                                                       Directors are responsible for managing the
                                                                                                        who do not otherwise have access to                                                         Program Operations Committee during                ability of the Foundation to fulfil its
  These are unrestricted funds that                      explore how the Foundation can help                                                        affairs of the Foundation and ensuring that
                                                                                                        quality basic health services. As we                                                        2020 were aligned to the Foundation                multi-year grant making commitments
  are earmarked by the directors to be                   meet the critical needs of organizations                                                   it delivers on its mandate of public benefit.
                                                                                                        have seen many health systems struggle                                                      strategy and in reflection of the Johnson          without a guaranteed annual corporate
  used for particular purposes in the                    supporting front line healthcare workers                                                   The Foundation has the capacity to
                                                                                                        due to the impact of the Covid-19                                                           & Johnson Global Community Impact                  grant making income. The resources
  future. They are still accounted for                   and communities affected by Covid-19.                                                      appoint 15 Directors to its Board.
                                                                                                        pandemic, we will also conduct an                                                           organisational structure.                          that have come into the Foundation and
  as part of the charity’s unrestricted                  This may result in decisions that could                                                    Nominations for new appointees are
                                                                                                        inquiry with experts to assess how the                                                                                                         the reserves set aside however provide
  funds, as the directors have the power                 divert some of our uncommitted
                                                                                                        Foundation can take on board learnings,     made to and approved by the Board.              Finance Advisory Committee                         a sufficient buffer to meet current
  to re-designate these funds to other                   funds towards further supporting an                                                        The aspiration is to build a balanced and
                                                                                                        assess the impact of its programs and                                                       The Finance Advisory Committee was                 and future intended expenditure. The
  purposes. Please refer to page 21 for a                emergency response as the situation                                                        diverse board. Therefore, the following
                                                                                                        inform its forward looking strategy in                                                      created in January 2014. The role of the           Directors are of the opinion that the
  list of designated funds.                              evolves quickly.                                                                           factors are taken into consideration when
                                                                                                        strengthening health systems.                                                               Finance Advisory Committee is to provide           Foundation can continue to meet its
                                                                                                                                                    recruiting new Board members: an interest       expert counsel to the Board on strategic           obligations as they fall due for the
                                                                                                                                                    in the health and societal challenges of        finance decisions, build and prioritize the        foreseeable future. As a consequence
                                                                                                                                                    the EMEA region, relevant business track        2015 - 2020 Finance Strategy, and support          they have prepared the financial
                                                                                                                                                    record, cultural background and gender.         the Foundation on the implementation of            statements on the going concern basis.

8 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                             Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 9
Directors’ Responsibilities                                                                                                                     In our opinion, the financial statements:
                                                                                                                                                  • give a true and fair view of the state of
                                                                                                                                                                                                    Other information
                                                                                                                                                                                                    The other information comprises the
                                                                                                                                                                                                                                                     We have nothing to report in respect of
                                                                                                                                                                                                                                                     the following matters in relation to which
                                                                                                                                                    the charitable company’s affairs as at 31       information included in the annual report,       the Companies Act 2006 and the Charities
                                                                                                                                                    December 2020 and of its income and             other than the financial statements and          Accounts (Scotland) Regulations 2006 (as
  The directors (who are also the trustees                • State whether applicable UK                Disclosure of information to auditor                                                         our auditor’s report thereon. The directors      amended) require us to report to you if, in
                                                                                                                                                    expenditure for the year then ended;
  of the Foundation for the purpose                         Accounting Standards have been             As far as each of the directors, at the                                                      are responsible for the other information        our opinion:
  of charity law) are responsible for                       followed, subject to any material          time the report is approved, are aware:    • have been properly prepared in
                                                                                                                                                                                                    contained within the annual report. Our          • adequate and proper accounting records
  preparing the Directors’ Report and                       departures disclosed and explained in                                                   accordance with United Kingdom
                                                                                                       • There is no relevant information of                                                        opinion on the financial statements does           have not been kept, or returns adequate
  financial statements in accordance                        the financial statements; and                                                           Generally Accepted Accounting
                                                                                                         which the organisation’s auditor is                                                        not cover the other information and, except        for our audit have not been received
  with applicable law and regulations.                                                                                                              Practice; and
                                                          • Prepare the financial statements on          unaware, and                                                                               to the extent otherwise explicitly stated in       from branches not visited by us; or
  Company law requires the directors                        the going concern basis, unless it is                                                 • have been prepared in accordance                our report, we do not express any form of
                                                                                                       • the directors have taken all steps                                                                                                          • the financial statements are not in
  to prepare financial statements for                       inappropriate to presume that the                                                       with the requirements of the                    assurance conclusion thereon.
                                                                                                         needed to make themselves aware of                                                                                                            agreement with the accounting records
  each financial year. Under this law, the                  company will continue in business.                                                      Companies Act 2006, the Charities
                                                                                                         any relevant audit information, and to                                                     Our responsibility is to read the other            and returns; or
  directors have elected to prepare the                                                                                                             and Trustee Investment (Scotland) Act
                                                          The directors are responsible for keeping      establish that the auditor is aware of                                                     information and, in doing so, consider
  financial statements in accordance with                                                                                                           2005 and regulation 8 of the Charities                                                           • certain disclosures of directors’
                                                          accounting records that are sufficient         that information.                                                                          whether the other information is materially
  United Kingdom Generally Accepted                                                                                                                 Accounts (Scotland) Regulations 2006                                                               remuneration specified by law are not
                                                          to show and explain the Foundation’s         The Directors’ Report and Strategic                                                          inconsistent with the financial statements
  Accounting Practice (United Kingdom                                                                                                               (as amended).                                                                                      made; or
                                                          transactions and disclose, with              Report is approved by the Directors                                                          or our knowledge obtained in the course
  Standards and applicable law). Under                                                                                                                                                                                                               • we have not received all the information
                                                          reasonable accuracy and at any time, the     on 7 June 2021, and signed on their        Basis for opinion                                 of the audit, or otherwise appears to be
  company law the directors must not                                                                                                                                                                                                                   and explanations we require for our audit.
                                                          financial position of the Foundation. The    behalf by:                                 We conducted our audit in accordance              materially misstated. If we identify such
  approve the financial statements unless
                                                          records must also enable the directors                                                  with International Standards on Auditing          material inconsistencies or apparent             Responsibilities of the directors
  they are satisfied that they give a true
                                                          to ensure that the financial statements                                                 (UK) (ISAs (UK)) and applicable law. Our          material misstatements, we are required          As explained more fully in the directors’
  and fair view of the state of affairs of
                                                          comply with the Companies Act 2006,                                                     responsibilities under those standards            to determine whether this gives rise to          responsibilities statement set out on page
  the Foundation and of the income and
                                                          the Charities and Trustee Investment                                                    are further described in the auditor’s            a material misstatement in the financial         15, the directors (who are the directors
  expenditure of the Foundation for the
                                                          (Scotland) Act 2005 and the Charity          ……………………….                                 responsibilities for the audit of the financial   statements themselves. If, based on the          for the purposes of company law and
  period. In preparing these financial
                                                          Accounts (Scotland) Regulations 2006                                                    statements section of our report. We are          work we have performed, we conclude              trustees for the purposes of charity law)
  statements, the directors are required to:                                                           Kris Emiel Sterkens
                                                          (as amended). In addition, the directors                                                independent of the charitable company in          that there is a material misstatement of this    are responsible for the preparation of
  • Select suitable accounting policies                                                                Chair, Johnson & Johnson Foundation
                                                          are responsible for safeguarding the                                                    accordance with the ethical requirements          other information, we are required to report     the financial statements and for being
    and then apply them consistently;                                                                  Scotland
                                                          assets of the Foundation, and hence for                                                 that are relevant to our audit of the financial   that fact.                                       satisfied that they give a true and fair
  • Observe the methods and principles                    taking reasonable steps towards the                                                     statements in the United Kingdom,                 We have nothing to report in this regard.        view, and for such internal control as the
    of the charities SORP;                                prevention and detection of fraud and                                                   including the Financial Reporting Council’s                                                        directors determine is necessary to enable
                                                          other irregularities.                                                                   Ethical Standard, and we have fulfilled           Opinions on other matters prescribed by
  • Make judgments and accounting                                                                                                                                                                                                                    the preparation of financial statements
                                                                                                                                                  our ethical responsibilities in accordance        the Companies Act 2006
    estimates that are reasonable and                                                                                                                                                                                                                that are free from material misstatement,
                                                                                                                                                  with these requirements. We believe that          In our opinion, based on the work
    prudent;                                                                                                                                                                                                                                         whether due to fraud or error. In preparing
                                                                                                                                                  the audit evidence we have obtained is            undertaken in the course of the audit:
                                                                                                                                                                                                                                                     the financial statements, the directors are
                                                                                                                                                  sufficient and appropriate to provide a basis     • the information given in the Directors’        responsible for assessing the charitable
                                                                                                                                                  for our audit opinion.                              incorporating the Strategic Report,            company’s ability to continue as a going
                                                                                                                                                                                                      which includes the Directors’ Report           concern, disclosing, as applicable, matters
                                                                                                                                                  Conclusions relating to going concern
                                                                                                                                                                                                      and the Strategic Report prepared for          related to going concern and using the
                                                                                                                                                  In auditing the financial statements, we
                                                                                                                                                                                                      the purposes of company law, for the           going concern basis of accounting unless
                                                                                                                                                  have concluded that the directors’ use of

  Independent Auditor’s Report
                                                                                                                                                                                                      financial year for which the financial         the directors either intend to liquidate the
                                                                                                                                                  the going concern basis of accounting
                                                                                                                                                                                                      statements are prepared is consistent          charitable company or to cease operations,
                                                                                                                                                  in the preparation of the financial
                                                                                                                                                                                                      with the financial statements; and             or have no realistic alternative but to do so.
                                                                                                                                                  statements is appropriate.

  to the Members and Directors                                                                                                                    Based on the work we have performed,
                                                                                                                                                  we have not identified any material
                                                                                                                                                                                                    • the Strategic Report and the Directors’
                                                                                                                                                                                                      Report included within the Directors’
                                                                                                                                                                                                                                                     Auditor’s responsibilities for the audit of
                                                                                                                                                                                                                                                     the financial statements
                                                                                                                                                                                                      incorporating the Strategic Report have
                                                                                                                                                  uncertainties relating to events or                                                                Our objectives are to obtain reasonable
                                                                                                                                                                                                      been prepared in accordance with
  For the year ended 31 December 2020                                                                                                             conditions that, individually or collectively,
                                                                                                                                                                                                      applicable legal requirements
                                                                                                                                                                                                                                                     assurance about whether the financial
                                                                                                                                                  may cast significant doubt on the charitable                                                       statements as a whole are free from
  Opinion                                                 and Expenditure Account), the Balance        law and United Kingdom Accounting          company’s ability to continue as a going          Matters on which we are required to              material misstatement, whether due to
  We have audited the financial statements                Sheet, the Statement of Cash Flows and       Standards, including FRS 102 The           concern for a period of at least twelve           report by exception                              fraud or error, and to issue an Auditor’s
  of Johnson & Johnson Foundation                         the notes to the financial statements,       Financial Reporting Standard applicable    months from when the financial statements         In the light of the knowledge and                Report that includes our opinion.
  Scotland (the ‘charitable company’) for                 including a summary of significant           in the UK and Republic of Ireland          are authorised for issue.                         understanding of the charitable company          Reasonable assurance is a high level
  the year ended 31 December 2020 which                   accounting policies. The financial           (United Kingdom Generally Accepted         Our responsibilities and the responsibilities     and its environment obtained in the course       of assurance, but is not a guarantee
  comprise the Statement of Financial                     reporting framework that has been            Accounting Practice).                      of the directors with respect to going            of the audit, we have not identified material    that an audit conducted in accordance
  Activities (incorporating the Income                    applied in their preparation is applicable                                              concern are described in the relevant             misstatements in the Directors’ Report           with ISAs (UK) will always detect a
                                                                                                                                                  sections of this report.                          incorporating the Strategic Report.              material misstatement when it exists.

10 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                          Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 11
Misstatements can arise from fraud or error
  and are considered material if, individually
  or in aggregate, they could reasonably
                                                          We assessed the susceptibility of the
                                                          charitable company’s financial statements
                                                          to material misstatement, including
                                                                                                          other management and the inspection of
                                                                                                          regulatory and legal correspondence, if any.      Statement of Financial Activities
                                                                                                          Material misstatements that arise due to
  be expected to influence the economic                   obtaining an understanding of how fraud
                                                                                                          fraud can be harder to detect than those          Statement of Financial Activities (Incorporating the Income and Expenditure Account)
  decisions of users taken on the basis of                might occur, by:
                                                                                                          that arise from error as they may involve
  these financial statements.                             • making enquiries of management as             deliberate concealment or collusion.
                                                                                                                                                            For the year ended 31 December 2020
  Irregularities, including fraud, are instances            to where they considered there was
  of non-compliance with laws and                           susceptibility to fraud, their knowledge      A further description of our responsibilities
  regulations. We design procedures in line                 of actual, suspected and alleged fraud;       for the audit of the financial statements
                                                                                                                                                                                                                       NOTES        ENDOWMENT              RESTRICTED        UNRESTRICTED               TOTAL            TOTAL
  with our responsibilities, outlined above, to             and                                           is located on the Financial Reporting
                                                                                                                                                                                                                                          2020                   2020                2020                2020              2019
  detect material misstatements in respect                                                                Council’s website at: www.frc.org.uk/
                                                          • considering the internal controls in                                                                                                                                             £                      £                   £                   £                 £
  of irregularities, including fraud. The extent                                                          auditorsresponsibilities. This description
                                                            place to mitigate risks of fraud and non-                                                         Income from endowments from:
  to which our procedures are capable of                                                                  forms part of our Auditor’s Report.
                                                            compliance with laws and regulations.                                                             Donations and legacies                                      4                         -            193,483            27,721,177      27,914,660      26,696,849
  detecting irregularities, including fraud is                                                            Use of this report
  detailed below.                                         To address the risk of fraud through                                                                Investments                                                                           -                    -            192,466          192,466          208,057
                                                                                                          This report is made solely to the charitable
                                                          management bias and override of controls,                                                           Other                                                                                 -                    -             21,001            21,001           37,376
  Our approach to identifying and assessing                                                               company’s members, as a body, in
                                                          we:
  the risks of material misstatement in                                                                   accordance with Chapter 3 of Part 16                Total                                                                                 -            193,483          27,934,644        28,128,127      26,942,282
  respect of irregularities, including fraud and          • performed analytical procedures to            of the Companies Act 2006 and to the
  non-compliance with laws and regulations,                 identify any unusual or unexpected            charitable company’s directors as a body,           Expenditure on:
  was as follows:                                           relationships;                                in accordance with regulation 10 of the             Charitable activities                                       5                         -            193,483           18,213,128        18,406,611       10,747,724
  • the engagement partner ensured that                   • tested journal entries to identify unusual    Charities Accounts (Scotland) Regulations
                                                                                                                                                              Exchange losses                                                                       -                    -           555,552           555,552          833,267
    the engagement team collectively                        transactions;                                 2006 (as amended).
                                                                                                                                                              Total                                                                                 -            193,483          18,768,680        18,962,163        11,815,552
    had the appropriate competence,                       • assessed whether judgements and               Our audit work has been undertaken
    capabilities and skills to identify                     assumptions made in determining the           so that we might state to the charitable            Net income                                                                            -                    -         9,165,964         9,165,964        15,361,291
    or recognise non-compliance with                        accounting estimates set out in note 3        company’s members, as a body, and the
                                                            were indicative of potential bias; and                                                            Transfers between funds                                    15                (102,629)                     -           102,629                   -                -
    applicable laws and regulations;                                                                      charitable company’s directors, as a body,
                                                          • investigated the rationale behind             those matters we are required to state              Net movement in funds                                                       (102,629)                      -         9,268,593         9,165,964        15,361,291
  • we identified the laws and regulations
    applicable to the company through                       significant or unusual transactions.          to them in an Auditor’s Report and for
                                                                                                                                                              Reconciliation of funds:
    discussions with directors and                                                                        no other purpose. To the fullest extent
                                                          In response to the risk of irregularities and                                                       Total funds brought forward                                15                 102,629               22,729          48,248,132       48,373,490         33,012,199
    other management, and from                                                                            permitted by law, we do not accept or
                                                          non-compliance with laws and regulations,
    our commercial knowledge and                                                                          assume responsibility to anyone other than          Total funds carried forward                                15                         -             22,729           57,516,725      57,539,454       48,373,490
                                                          we designed procedures which included,
    experience of the charity sector;                                                                     the charitable company, the charitable
                                                          but were not limited to:
  • we focused on specific laws and                                                                       company’s members, as a body, and the
                                                          • agreeing financial statement                  charitable company’s directors as a body,         There are no recognised gains or losses other than those shown in the statement of financial activities above.
    regulations which we considered
                                                            disclosures to underlying supporting          for our audit work, for this report, or for the   All the activities relate to continuing activities.
    may have a direct material effect
                                                            documentation;                                opinions we have formed.                          The notes on pages 16 to 23 form part of these financial statements.
    on the financial statements or the
    operations of the company, including                  • reading the minutes of meetings of those
    the Companies Act 2006, data                            charged with governance;
    protection, anti-bribery, employment,                 • enquiring of management as to actual
    and health and safety legislation;                      and potential litigation and claims; and      ……………………….
  • we assessed the extent of compliance                  • reviewing correspondence with HMRC,           Michael Harkness
    with the laws and regulations                           relevant regulators, and the charitable       Senior Statutory Auditor
    identified above through making                         company’s legal advisors.
                                                                                                          For and on behalf of
    enquiries of management and                           There are inherent limitations in our           Azets Audit Services, Statutory Auditor
    inspecting legal correspondence; and                  audit procedures described above. The           Eligible to act as an auditor in terms of
  • identified laws and regulations were                  more removed that laws and regulations          Section 1212 of the Companies Act 2006
    communicated within the audit team                    are from financial transactions, the less
                                                                                                          Exchange Place 3
    regularly and the team remained                       likely it is that we would become aware
                                                                                                          Semple Street
    alert to instances of non-compliance                  of non-compliance. Auditing standards
                                                                                                          Edinburgh
    throughout the audit.                                 also limit the audit procedures required
                                                                                                          EH3 8BL
                                                          to identify non-compliance with laws and
                                                          regulations to enquiry of the directors and     Date: 7 June 2021

12 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                                                   Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 13
Balance Sheet                                                                                     Statement of Cash Flows
  As at 31 December 2020                                                                            For the year ended 31 December 2020

                                                            NOTES             2020          2019                                                                          NOTES                            2020                                   2019
                                                                                 £             £                                                                                                  £                   £                    £                 £
     Fixed Assets                                                                                     Cash flows from operating activities:
     Investments                                              10         3,361,688     2,954,881      Net cash provided by operating activities                            15                      -         21,158,757                     -      4,183,498

     Current assets                                                                                   Cash flows from investing activities:
     Debtors                                                   11          278,625     11,576,980     Interest Income                                                                        192,466                   -            208,057                  -
     Cash and cash equivalents                                 12       55,268,947    34,473,276      Net cash provided by investing activities                                                    -           192,466                      -        208,057
                                                                        55,547,572    46,050,256      Change in cash and cash equivalents in the year                                              -        21,351,223                      -      4,391,555

     Creditors: amounts falling due within one year            13       (1,369,806)     (631,647)     Cash and cash equivalents at the beginning of the year                                       -        34,473,276                      -     27,013,054
     Net current assets                                                 54,177,766    45,418,609      Change in cash and cash equivalents due to exchange rate                                     -         (555,552)                      -        833,267
                                                                                                      movements
     Net assets                                                         57,539,454    48,373,490      Cash and cash equivalents at the end of the reporting period                                 -       55,268,947                       -     34.473,276

     Funds
     Endowment funds                                           15                 -      102,629                                                                                      2019        CASH FLOWS                  FOREIGN                    2020
     Restricted funds                                          15           22,729        22,729                                                                                                                            EXCHANGE
                                                                                                                                                                                                                           MOVEMENTS
     Unrestricted                                              15        11,297,779   19,033,235
                                                                                                                                                                                        £                       £                     £                      £
     Designated funds                                          15       46,218,946    29,214,897
                                                                                                      Analysis of cash and cash equivalents and reconciliation of net debt
     Total funds                                                        57,539,454    48,373,490      Cash at bank                                                              34,473,276             21,351,223             (555,552)           55,268,947

  The notes on pages 16 to 23 form part of these financial statements
                                                                                                      The charitable company has no debt financing.

                                                                                                    The notes on pages 16 to 23 form part of these financial statements
  Authorised for issue and approved and
  authorised by the Board on 7 June 2021
  and signed on its behalf by:

  ……………………….
  Kris Emiel Sterkens

  Company Registration No: SC327028
  Charity Number: SC017977

14 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 15
Notes to the Financial Statements
                                                                                                                                                              Cash and cash equivalents                    Creditors                                       and assumptions about the carrying amount
                                                                                                                                                              Cash and cash equivalents consist of cash    Grants payable and accruals are                 of assets and liabilities that are not readily
                                                                                                                                                              on hand and balances with banks, including   obligations to pay for commitments made         apparent from other sources. The estimates
                                                                                                                                                              money-market funds, and are measured at      before the year end. They are recognised        and associated assumptions are based on
  For the year ended 31 December 2020                                                                                                                         amortised cost.                              at the undiscounted amount owed to the          historical experience and other factors that
                                                                                                                                                              Debtors                                      grantee or supplier, which is normally the      are considered to be relevant. Actual results
  1. Charity information                                  functional currency is US dollars, being           losses arising are included in the Statement     Accrued donation income includes             amount per the grant agreement or the           may differ from these estimates.
                                                          the currency in which the highest value of         of Financial Activities in full in the year in   donations due in the year but not            invoice price.                                  The directors are satisfied that accounting
  The principal activity of the Johnson and
  Johnson Foundation Scotland is to to                    transactions takes place.                          which they arise.                                received until the next financial year.      Pension costs                                   policies are appropriate and applied
  make sustainable, long-term differences                 Going concern                                      Programme-related investments                    Accrued donations are recognised at the      The Foundation is recharged the costs of        consistently. Key sources of accounting
  in human health. It does this by investing              The directors are of the opinion that the          Concessionary loans are measured at              undiscounted amount of cash receivable,      a defined contribution pension scheme for       estimation have been applied to the
  in strategic partnerships and innovative                Foundation can continue to meet its                the amounts paid less any subsequent             which is normally the amount per the         employees. The cost of providing pensions       valuation of investments, including
  solutions that add value to society and                 obligations as they fall due for the foreseeable   repayments, and adjusted if necessary for        donation letter.                             is charged to expenditure in the period in      concessionary loans. The Foundation
  impact people’s lives.                                  future. The Foundation has sufficient levels       any impairment. As fair values could not be      Taxation                                     which contributions are made.                   assesses impairment at each reporting
                                                          of unrestricted funds to support ongoing           measured reliably, equity investments are        The Foundation is a charity and is                                                           date by evaluating conditions that may
  The Johnson & Johnson Foundation                                                                                                                                                                         3. Critical judgements and
                                                          activities. As a consequence they have             measured at cost and adjusted if necessary       recognised as such for taxation purposes,                                                    lead to an impairment of assets. Where an
  Scotland is a charitable company limited                                                                                                                                                                 estimates
                                                          prepared the financial statements on the           for any impairment.                              therefore no corporation tax is payable.                                                     impairment trigger exists, the recoverable
  by guarantee incorporated in the United                                                                                                                                                                  In the application of the Foundation’s
                                                          going concern basis.                               Fund accounting                                  The Foundation is not registered for                                                         amount of the asset is determined.
  Kingdom and registered in Scotland. It is                                                                                                                                                                accounting policies, the directors are
  recognised as a charity for tax purposes                Recognition and allocation of income               • Unrestricted funds are available for           VAT and therefore all costs are shown
                                                                                                                                                                                                           required to make judgements, estimates
  by HMRC and is registered with the Office                                                                    use at the discretion of the directors in      inclusive of VAT.
                                                          Income is recognised when the Foundation
  of the Scottish Charity Regulator (OSCR)                has legal entitlement to the funds, the              furtherance of the general objectives of
  under charity number SC017977. In the                   receipt is probable and the amount can be            the Foundation.
  event of the winding up of the charitable                                                                                                                   4. Donations and legacies
                                                          measured reliably.                                 • Restricted funds are subjected to
  company a member is liable to contribute                Deferred income                                      restrictions on their expenditure imposed                                                                     2020                2019
  a sum not exceeding £1. Details of the                  Where the charity has received income                by the donor.                                                                                                TOTAL              TOTAL
  registered office and company registration              in the current year that has time related          • Designated funds are earmarked from the                                                                          £                   £
  number can be found on page 2 of these                  restrictions for future years or will not be         unrestricted funds by the directors for a        Donations – Cilag                                         8,201,797         7,392,492
  financial statements.                                   earned until future years, this income is            specific purpose.
                                                                                                                                                                Donations – Janssen EMEA fund                            13,175,231        13,565,453
  The charitable company was known as                     deferred to be released in the year to which       • Endowment funds are restricted
  Johnson & Johnson Corporate Citizenship                 it relates.                                                                                           Donations – Janssen Benelux Fund                           876,562            495,576
                                                                                                               investment funds donated to the
  Trust until 25 July 2019.                               Recognition and allocation of expenditure            Foundation with the intention to produce         Donations – GPH Funding                                  5,010,754          4,659,422
  2. Accounting policies                                  Expenditure is recognised when the                   income. Withdrawals from the principal           Donations – Matched funding                                193,483            219,484
  Basis of preparation                                    Foundation has entered into a legal or               amount may only be used for purposes of          Donations – In-kind income                                 456,833            364,422
  The financial statements have been                      constructive obligation. Expenditure is              the Foundation upon the donors’ decision,
                                                                                                                                                                                                                        27,914,660        26,696,849
  prepared in accordance with the Financial               allocated to the function to which it relates.       any investment income generated from
  Reporting Standard 102, as issued by the                Where costs cannot be directly attributed to         the endowment can be spent for the
  Financial Reporting Council, the Statement              particular headings they have been allocated         Foundation’s ongoing operations or other       5. Charitable activities – grant making
  of Recommended Practice (SORP)                          to activities on a basis consistent with use of      specific purposes. The Foundation does
                                                          the resources.                                       not have any active endowment funds as                                                                        2020                2019
  “Accounting and Reporting by Charities
                                                                                                               of the close of 2020.                                                                                        TOTAL              TOTAL
  preparing their accounts in accordance with             Governance costs are those incurred in
                                                                                                                                                                                                                                £                   £
  the Financial Reporting Standard applicable             connection with setting and monitoring the         Financial assets and financial liabilities
  in the UK and Republic of Ireland (FRS 102)”            strategic direction of the Foundation and          Financial instruments are recognised in            Grants (note 7)                                          16,381,113          8,465,741
  and the Companies Act 2006. They are                    compliance with constitutional and statutory       the statement of financial activities when         Staff costs (note 9)                                       694,234            547,783
  prepared on the historical cost basis.                  requirements.                                      the Foundation becomes a party to the
                                                                                                                                                                Administrative costs                                     1,309,665           1,707,083
  Johnson & Johnson Foundation Scotland                   Grants awarded                                     contractual provisions of the instrument.
                                                                                                             Financial instruments are initially measured       Governance costs (note 6)                                   21,599              27,117
  meets the definition of a public benefit                Grants awarded are recognised in full when
                                                                                                             at transaction price. Subsequent to initial                                                                18,406,611          10,747,724
  entity under FRS102. Assets and liabilities             there is a constructive obligation in the
  are initially recognised at historical cost or          Foundation to make the payment.                    recognition, they are accounted for as set
  transition value unless otherwise stated in                                                                out below.                                       6. Governance costs
                                                          Foreign currency transactions
  the relevant accounting policy.                                                                            Financial instruments are all classified
                                                          Transactions in currencies other than in the                                                                                                                      2020                 2019
  These financial statements are presented in                                                                as ‘basic’ in accordance with Chapter 11
                                                          presentational currency (Sterling - GBP) are                                                                                                                     TOTAL               TOTAL
  pounds sterling (GBP) as the Foundation is                                                                 of FRS102. At the end of each reporting
                                                          recorded at exchange rates ruling at the date                                                                                                                        £                    £
  incorporated in Scotland. The Foundation                                                                   period, basic financial instruments are
                                                          of the transaction. Balances at the year-end
  incurs transactions in sterling (GBP),                                                                     measured at amortised cost using the               Legal & professional fees                                   9,599               15,117
                                                          date are retranslated at the exchange rates
  US dollars and euros. The Foundation’s                                                                     effective rate method.                             Audit fees                                                 12,000              12,000
                                                          ruling at the year-end date. All gains and
                                                                                                                                                                                                                           21,599               27,117

16 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                               Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 17
7. Analysis of grants                                                                                                                                                   BENEFICIARY                                       PROJECT NAMES                                                                                2020              2019

  The Foundation does not make grants to individuals. An analysis has been provided below of each of the main grants paid by beneficiary                                  North Star Alliance
                                                                                                                                                                                                                            North Star Alliance 2018, Mozambique, South Africa, Zimbabwe, Kenya, Tanzania,
                                                                                                                                                                                                                                                                                                                              -        £153,492
                                                                                                                                                                                                                            Uganda (2019 only)
  noting all projects that are included within the payments.
                                                                                                                                                                          The Aurum Institute NPC                           Oto-toxicity research for MDR TB                                                          £226,811          £221,117

     BENEFICIARY                                     PROJECT                                                                                      2020         2019       Global Health Innovation Technology Fund          Global Health Innovation Technology Fund                                                  £199,012         £202,411
     International Federation of Red Cross and Red   COVID-19 Global Emergency Appeal                                                                                     World Health Organization                         WHO, 2019, Geneva --> cross region                                                        £469,557                 -
                                                                                                                                                                    -
     Crescent Societies                              Floods Relie                                                                             £3,917,685
                                                     Middle East Health Leadership Program                                                                                Hi Hopes                                          Hearing Loss and early intervention (2019 only)                                                   -       £124,303
     INSEAD - The Business School for the World      Innovating Health for Tomorrow (2019 only)                                                £234,122    £694,858                                                         Mental Health UK, 2019, United Kingdom
                                                     Middle East Health Leadership Program (2019 only)                                                                    Mental Health UK                                                                                                                            £271,663         £122,414
                                                                                                                                                                                                                            Emergency relief through Covid-19
                                                     Capacity-Building for Senior Caregivers                                                                              EUFAMI                                            Supporting Family Caregivers in Mental Health (Prospect Plus Program)                     £108,059         £115,299
                                                     Nursing and Midwifery Platform
                                                     AKU-SONAM                                                                                                                                                              YouthCan
     Aga Khan Foundation                                                                                                                      £1,523,849   £763,502       SOS Children's Villages Austria                                                                                                             £135,045        £106,688
                                                     Strengthening preparedness, readiness and response action for Covid-19                                                                                                 Child protection and advocacy in Algeria
                                                     Protecting the wellbeing and strengthening the resilience of Frontline Health Workers
                                                                                                                                                                          Attigo                                            Ghanaian Community Project                                                                        -        £64,318
                                                     MECP Transformation (2019 only)

     US Fund for UNICEF                              Maternal Newborn Child Adolescent Health Initiative (Lebanon)                             £699,150             -     Museum Dr Guislain                                Museum Dr. Guislain                                                                        £134,771        £127,834

     Aquity Innovations                              Paediatric drug resistant TB: scaling up care in children                                 £493,990             -     Optidel                                           Drug Resistant TB – Support New molecules introduction in Kenya                            £32,597         £147,245
     Elizabeth Glaser Pediatric AIDS Foundation      New Horizons Advancing Pediatric HIV Care Collaborative                                   £398,071             -     SOS Children Villages CEE                         Grow Happily project CEE                                                                          -         £137,118
     Infectious Diseases Institute Limited           The Ugandan Academy for Health Innovation and Impact (2019 only)                                  -   £1,281,376     Other grants below £100,000 in the current year                                                                                            £1,754,731      £1,169,868
     AO Alliance                                     Fracture solutions Trauma Educational Development for West Africa                         £386,270    £386,569       Total                                                                                                                                     £16,381,113      £8,465,741
     International Union Against Tuberculosis and
                                                     DR - TB Academy                                                                           £342,648             -
     Lung Disease

     CCBRT
                                                     Continued investment in sustainable capacity building of frontline health workers to
                                                     increase access to quality healthcare in Tanzania
                                                                                                                                               £339,974             -   8. Surplus for the year
     The African Academy of Sciences                 J&J-AESA Research & Development (R&D) Fellowship Program                                  £328,467             -                                                                                   2020                        2019
     Friends of UNFPA                                UNFPA South Africa DREAMS Thina Abnatu                                                     £317,410   £372,324                                                                                        £                           £
     Save the children Federation                    Improving Maternal, Newborn & Child Health Outcomes                                       £293,473             -     This is stated after charging:
     BIO Venture                                     African Access Initiative (AAI) / Rwanda EST Program                                      £237,667             -
                                                                                                                                                                          Exchange loss/(gain)                                                      555,552                    833,267
     The Forum for the Future                        System Change Capacity for Health Transformation                                          £226,705             -
                                                                                                                                                                          Auditor’s remuneration in respect of
                                                     Support to mental health capacity strengthening in Ghana
     BasicNeeds-Ghana                                                                                                                          £198,430             -
                                                     Response to the mental health impact of COVID-19 on the populations of Ghana                                         - audit                                                                      12,000                    12,000
                                                     Saving Mothers at Delivery                                                                                           - taxation services                                                             850                      1,550
     Tropical Health and Education Trust             The Tropical Health Education Trust, Sub-Saharan Africa (2019 only)                       £198,306    £378,888
                                                     THET AGP 2017/18 grants funds and THET (2019 only)                                                                   - other non-audit services                                                           -                  3,000
     Italian Red Cross                               A time of kindness                                                                        £189,774             -

     Spanish Foundation of Psychiatry and Mental     Grants for active projects whose aim is to help mitigate the impact of COVID-19 on the
                                                                                                                                               £180,099             -
     Health                                          mental health of health professionals.
                                                                                                                                                                        9. Salaries
     The World Continuing Education Alliance         COVID 19 Emergency Response for Nurses & Midwives                                         £158,705             -

     Helen Keller International                      HKI Bangladesh - Deworming Campaign                                                        £157,911            -                                                                                   2020                        2019
                                                                                                                                                                                                                                                           £                           £
     International Rescue Committee                  COVID-19 Health Response for Vulnerable Populations in Jordan and Syria                   £152,288             -

     Turkish Red Crescent Society                    Providing PPE to Healthcare Providers                                                     £152,288             -
                                                                                                                                                                          Salaries and associated costs                                             580,842                     322,775

     Lebanese Red Cross                              Response to Lebanon Crisis                                                                £149,533             -     Other staff costs                                                           26,808                     68,412

     Kenya Kamili                                    Mental Health Awareness                                                                   £147,004             -     Temporary staff costs                                                       86,584                    156,596

     Grameen Foundation USA                          MOTS Enabled Response to COVID In Rwanda (MERCIR)                                          £121,598            -                                                                               694,234                     547,783
     Foundation for Professional Development (FPD)   COVID-19 Mental Health Resilience e-learning course for Healthcare Professionals           £113,186            -

                                                     Support for COVID-19 response in Nigeria
     Liverpool School of Tropical Medicine                                                                                                      £94,054      £76,746
                                                     Sustaining the impact of mentorship program introduced in Sierra Leone (2019 only)

     Medical and Surgical Skills Institute Ghana     Medical and Surgical Skills Institute program                                             £142,045     £143,844
                                                                                                                                                                        None of the staff carrying out work for the Foundation are employees of Johnson & Johnson Foundation Scotland (2019: none). The
     Amref Health Africa                             Capacity building of Oncology Nurses in Kenya                                              £131,945   £276,883
                                                                                                                                                                        majority of salaries and associated costs relating to Johnson & Johnson Foundation Scotland are recognised as an in-kind donation.
     International Confederation of Midwives         International Confederation of Midwives Young Midwifery Leaders Program (2019 only)               -    £237,718
                                                                                                                                                                        The Directors and Executive Director are deemed to be the only key management personnel. None of the Directors received any
     PINPOINT                                        Infection control in community (2019 only)                                                        -    £176,084
                                                                                                                                                                        remuneration during the current or prior period. No expenses were reimbursed to Directors during the current or prior period. The donation
     Boston Children's Hospital                      Dengue Hotspot detection and monitoring                                                   £283,354     £147,280    in kind for the total employee benefits of Key Management Personnel is estimated to be approximately £110,000 (2019 £101,000).
     Partners in Health                              Community-Based Mental Healthcare: PIH MESH Scale-up                                      £583,968     £577,413

     Stichting zin                                   Care days                                                                                   £19,763    £125,668

     SOS Children Villages Romania                   "Strong & Healthy" Balkans Program                                                         £135,135    £134,481

18 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                                                                 Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 19
10. Investments                                                                                                                                 14. Deferred income
                                                          EQUITY CONCESSIONARY                         2020                                                                                                             2020              2019
                                                     INVESTMENT          LOANS                       TOTAL                                                                                                             TOTAL            TOTAL
                                                               £             £                            £                                                                                                                £                 £
                                                                                                                                                   Balance at 1 January 2020                                       442,460              42,003
     Balance at 1 January 2020 at cost                        564,862             2,390,019        2,954,881
                                                                                                                                                   Donation income received in advance during the year                     -            401,774
     Additions during the year                                 217,791                        -       217,791
                                                                                                                                                   Income recognized on grants paid                               (218,672)                  (1,317)
     Returns during the year                                  124,013                 122,026       246,039
                                                                                                                                                                                                                   223,788             442,460
     Conversion to equity                                      531,191                (531,191)              -

     Adjustments and transfers                                       -                (57,023)       (57,023)
                                                                                                                                                  15. Analysis of reserves
     Balance at 31 December 2020 at cost                  1,437,857               1,923,831        3,361,688
                                                                                                                                                                                                    BALANCE AT                   INCOME           EXPENDITURE             TRANSFER           BALANCE AT
                                                                                                                                                                                                      1 JANUARY                       £                     £                    £          31 DECEMBER
                                                                                                                                                                                                           2020                                                                                     2020
  An investment of £0.6m was paid during 2018 to an unlisted Delaware Limited Partnership registered in Delaware, U.S.A., in the                                                                              £                                                                                        £
  furtherance of the charitable objectives of the Foundation. As a limited partner the Foundation does not have control over the Delaware
                                                                                                                                                   Endowment funds                                          102,629                      -                        -          (102,629)                     -
  Limited Partnership. Under the terms of the limited partnership agreement, the Foundation is committed to a further investment of
  £0.2m, if required by the Delaware Limited Partnership, which was called and paid during 2020.                                                   Restricted funds

  A concessionary loan of £1.5m was made in 2017, in the furtherance of the charitable objectives of the Foundation. The loan falls due for        Matched Partnership Fund                                  22,729               193,483                (193,483)                    -              22,729
  repayment during 2022. Interest accrues at 3% per annum; a total interest income of £45,000 (2019: £45,000) was received. The loan is
                                                                                                                                                   Designated funds
  secured via share warrants issued by the borrower. There was no commitment to provide further loans at 31 December 2020.
                                                                                                                                                   Janssen EMEA Fund                                     20,859,856             13,175,231              (6,866,128)         (1,182,521)         25,986,438
  Three further concessionary loans were made in 2019, in the furtherance of the charitable objectives of the Foundation:
                                                                                                                                                   Janssen Benelux Fund                                            -              876,562                (654,500)           1,182,521            1,404,583
  • £0.4m convertible loan which was converted to equity during the year at a gain. This was transferred from concessionary loans to
    equity investments.                                                                                                                            Designated Corporate Budget                            2,658,062               480,162               (1,921,448)           669,896             1,886,672

  • £0.3m repayable based on certain key performance indicators of the borrower with any remaining balance to be repaid during 2029.               Global Public Health Innovation Fund                   5,696,979             5,010,754               (3,970,017)                   -           6,737,716
    The loan is interest-free until 2026, whereupon interest accrues at 7%. The loan is unsecured.                                                 Impact Investments Fund                                         -               176,414                (59,052)          10,086,175          10,203,537
  • £0.2m repayable based on certain key performance indicators of the borrower with any remaining balance to be repaid during 2031.
    The loan has an effective interest rate of 1% and is unsecured.                                                                                Total designated funds                                29,214,897             19,719,123             (13,471,145)        10,756,071           46,218,946
                                                                                                                                                   Unrestricted funds                                    19,033,235             8,215,521              (5,297,535)       (10,653,442)            11,297,779
                                                                                                                                                   Total                                                 48,373,490             28,128,127             (18,962,163)                   -         57,539,454
  11. Debtors                                                                            12. Cash and cash equivalents
                                                                                                                                                  15. Analysis of reserves (continued) – prior year
                                                     2020                     2019                                        2020          2019
                                                        £                        £                                           £             £
                                                                                                                                                                                                    BALANCE AT                   INCOME           EXPENDITURE             TRANSFER           BALANCE AT
     Accrued donation income                              -              11,304,544         Cash at bank             6,434,434    34,473,276                                                          1 JANUARY                       £                     £                    £          31 DECEMBER
     Other debtors                                 25,252                  212,403          Cash equivalents         48,834,513               -                                                            2020                                                                                     2020
                                                                                                                                                                                                              £                                                                                        £
     Prepayments                                  253,373                   60,023                                  55,268,947    34,473,276
                                                                                                                                                   Endowment funds                                          102,629                      -                        -                   -             102,629
                                                 278,625                 11,576,980
                                                                                                                                                   Restricted funds
                                                                                                                                                   Matched Partnership Fund                                  22,034               219,484                 (218,789)                   -              22,729
  13. Creditors: amounts falling due within one year
                                                                                                                                                   Designated funds
                                                                                 2020                2019                                          Janssen EMEA Fund                                      8,624,366            14,061,029               (1,825,539)                   -         20,859,856
                                                                                TOTAL              TOTAL
                                                                                                                                                   Designated Corporate Budget                            3,445,265               763,698               (1,550,901)                   -          2,658,062
                                                                                    £                   £
                                                                                                                                                   Global Public Health Innovation Fund                   4,084,440             4,659,422              (3,046,883)                    -          5,696,979
     Trade Creditors                                                             31,891             45,739
     Grants payable                                                             977,170             81,084                                         Total designated funds                                 16,154,071           19,484,149              (6,423,323)                    -         29,214,897
     Accruals                                                                  136,957             62,364                                          Unrestricted funds                                    16,733,465             7,238,649              (4,938,879)                    -         19,033,235
     Deferred income (note 14)                                                 223,788            442,460                                          Total                                                 33,012,199            26,942,282              (11,580,991)                   -         48,373,490
                                                                             1,369,806             631,647

20 | Johnson & Johnson Foundation Scotland Directors’ Report 2020                                                                                                                                                                              Johnson & Johnson Foundation Scotland Directors’ Report 2020 | 21
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