3 Subsidiaries Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. The Company recognises non-controlling interests in an acquired entity at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Non-controlling interests within equity and within profit or loss for the year are presented separately. Transactions eliminated on consolidation Intra-Group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions, are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. B. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors. During the reporting period the Group was active in Content, Data&Digital Media and Technology Services. More detailed information is included in Note 6. C. Revenue recognition S4Capital Group produces digital campaigns, films, creative content, platforms and ecommerce for home-grown and international brands and provides data & digital media solutions for future thinking marketers and agencies. During the reporting period S4Capital Group combined with Zemoga, building a third practice area around technology services. S4Capital Group operates in the following operating segments: • The Content practice consists of both short-term, one to six months, projects with fixed pricing and also projects with longer-lasting characteristics with prices that are mostly based on actual time spent. • The Data&Digital Media practice consists of full-service campaign management analytics, creative production and ad serving, platform and systems integration and transition and training and education. Revenue from this segment is generated primarily from marketing platform services, various consulting arrangements and pass-through media. For contracts from customers where the Company is acting as an agent, pass-through expenses are deducted from revenue and cost of sales. • The Technology Services practice consists of digital transformation services in delivering advanced digital product design, engineering services and delivery services. The services consist of breadth of in-demand and specialised capabilities to deliver on customers’ digital product needs with prices that are mostly based on actual time spent. Determining the transaction price Billings comprise all gross amounts billed, or billable to clients and is stated exclusive of VAT and sales taxes. Billings is a non-GAAP measure and is included as it influences the quantum of trade and other receivables due to be recognised at a point in time. The balancing figure between billings and revenue is represented by costs incurred on behalf of clients with whom we operate as an agent. Revenue is stated exclusive of VAT and sales taxes. Net revenue is exclusive of third-party costs recharged to our clients where we are acting as principal. Measurement of revenue S4Capital Group determines all the separate performance obligations within the customers’ contract at contract inception. In general, S4Capital Group satisfies a performance obligation and recognises revenue over time. This is assessed on a contract by contract basis. In many cases, revenue is recognised over time because the customer consumes the service as it is performed or in the case where content is created, the customer takes control of that content throughout as it is produced. In some cases, there is no clear consumption by the customer or limited activities that transfer to the customer. In these cases, revenue is recognised over time if the asset has no alternative use to the Group and the Group is entitled to payment for performance-to-date. The asset for each project is produced to a customer’s specification and the asset can only be used by the customer. Entitlement is in some cases obtained through milestone payments that are paid with adequate frequency to represent performance-to-date. In limited cases, where no such evidence exists to recognise revenue over time, revenue might be recognised at a point in time generally when the services or created content is delivered to the customer. S4Capital Annual Report and Accounts 2021 117