FRONTIER DEVELOPMENTS PLC Annu Al RePoR t And ACCountS 2013
FRONTIER DEVELOPMENTS PLC
Annual report and accounts 2013 FRONTIER PLaNS TO uSE ITS 
PROPRIETaR y SOFTw aRE TEChNOLOgy 
TO LEaD ThE gaMES INDuSTR y IN 
ITS TRaNSITION TO ThE w ORLD’S 
PREMIERE FORM OF ENTERTaINMENT .
FRONTIER DEVELOPMENTS PLC REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
1 Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC
HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
•	 We raised £1 .55 million from a crowd-funding campaign 
for our Elite: Dangerous self-published title.
•	 We increased our capacity by opening our 
first overseas development studio, in Halifax, 
nova Scotia, Canada.
•	 We adapted our Cobra software technology 
to work with new 64-bit Cpu architectures.
•	 We released our first game with a cloud-based 
server backend and successfully supported over 
500,000 concurrent users. 
•	 We started development of an Xbox one launch title 
to accelerate our technology development for the 
new game console generation.
UNDERLYING REVENUE
£12.0m +19%
ADJUSTED EBITDA
£3.6m +12%
LIKE-FOR-LIKE OPERATING PROFIT
£1.8m +27%
REVIEW OF THE YEAR
1 Highlights
2 our business
6 Chairman’s statement
7 Chief executive’s review
9 Financial review
12 principal risks and uncertainties
CORPORATE GOVERNANCE
14 directors’ biographies
15 Corporate directory
16 Report of the directors
20 Corporate governance report
22 Remuneration report
FINANCIAL STATEMENTS
24 Independent auditor’s report
25 Consolidated income statement
25  Consol idated statement 
of comprehensive income
26  Consol idated statement 
of financial position
27  Compan y statement 
of financial position
28  Consol idated statement 
of cashflows
29  Company statement of cashflows
30  Consol idated statement 
of changes in equity
31  Company statement of changes 
in equity
32  notes to the financial statements
55 notice of meeting
56  explanatory notes to the notice 
of Annual General Meeting
IBC Advisors and Company information
ADJUSTED EPS
7.3p +25% REVIEW OF THE YEAR
FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013 2
OUR BUSINESS
About us
Frontier plans to use its proprietary software technology to lead 
the games industry in its transition to the world’s premiere form 
of entertainment.
t he Group has 240 full-time employees and operations in Cambridge, uK and 
Halifax, nova Scotia, Canada. Frontier has a proven track record of software 
technology and video games development and innovation spanning three 
decades of rapid technological change. 
Frontier has exploited its technology to develop innovative video games across 
a wide variety of different game genres and platforms, and has established 
relationships with globally renowned partners.
We are transitioning from being primarily a developer of video games 
for major external publishers into a business which develops and 
licenses technology to support games for major external publishers, 
other developers and our own self-published game titles.
ZOO TYCOON
Frontier’s launch title for the Xbox one 
in november 2013 “ … could convince 
you better than anything else out there 
that you’ve done the right thing in 
investing in the next-generation. ”
Martin Robinson, Eurogamer.com
$78.5bn
value of the global video game 
market in June 2012. Source: Reuters
50bn
downloads from Apple’s App Store, 
as of May 2013. Source: Apple
130m
Xbox 360 and playStation 3 consoles 
have been sold, with next-gen versions 
launching n ovember 2013. Source: Reuters
“THE RISE OF DIGITAL DISTRIBUTION 
VIA ‘ APP STORE’ ECOSYSTEMS 
ON ALL VIDEOGAME PLATFORMS 
PRESENTS INCREDIBLE 
OPPORTUNITIES FOR FRONTIER.”
David Walsh Chief operating officer REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 3
ELITE: DANGEROUS
Frontier’s high-end franchise re-boot 
uses the latest CoBRA technology 
to deliver an innovative multi-player 
experience in galaxy containing 
100 billion star systems, the largest 
game-environment ever created.
FRONTIER'S TECHNOLOGY ORIGINS
david Braben co-authored the seminal ‘Elite’ 
game in 1982 with Ian Bell. Elite was one of the 
first home computer games to use 3d graphics 
and the first to employ an open-world ‘sandbox’ 
game play model. Its revolutionary 3d graphics 
ensured that the game created the modern 
space flight simulation genre and influenced 
gaming as a whole.
Our technology
COBRA has been carefully planned, developed and evolved since 1988. 
We develop our own cutting-edge techniques and tools, and supplement 
this with licensed middleware for ‘commodity’ uses as appropriate. This 
allows COBRA to maximise the performance extracted from hardware 
platforms and fully leverage the efforts and talents of content creators. 
Cobra has allowed Frontier to deliver industry-leading gameplay 
innovations and efficient multi-platform development since 1988.
CoBRA allows game teams to develop and debug their games primarily 
on desktop computers, without the need to concern themselves with the 
technical details of the individual target platforms unless necessary. It also 
makes for clean, structured code, where the game logic only needs one set 
of verification at the beta stage of the project – greatly reducing the amount 
of testing time required for additional platform versions of a game.
CoBRA also has a sophisticated tools framework which enables rapid 
development of powerful tools. t hese tools offer the ability to view, tweak 
and review changes to resources of all types in game on the target platform(s), 
in a live game session that is running on that platform, without the intervention 
of a programmer. our tools philosophy is to design aids to maximise the impact 
of skilled people on games development and remove barriers to getting the 
results of their work in-game and iterated, so that work can be as polished 
as possible.
Most recently, we have added Cloud-based capability to CoBRA, whereby 
Frontier’s code running on commodity servers interacts with games to 
provide data-driven game rules and information gathering. t his facilitates 
full play through tracking, sophisticated A-B tests, player segmentation and 
friends’ lists as well as the usual leader-board and achievement functionality. 4
Our cross-platform approach
Frontier’s COBRA proprietary cross-platform technology allows code 
and resources developed on PC to be compiled and run on different 
platforms such other desktop and laptop computers, tablets, 
videogame consoles and smartphones, whilst offering the ability 
flexibly to take advantage of the different platforms’ capabilities 
(e.g. different artwork resolutions, shaders etc.).
t he current fourth generation of CoBRA provides a common platform-neutral 
core ApI and resource pipeline that isolates both game code and resources 
from the underlying hardware, whilst maximising use of the multi-processor, 
multi-threaded environment.
CoBRA has been successfully used for a wide variety of game genres, and by 
development teams that range in size from a handful to many hundreds of people.
FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013
REVIEW OF THE YEAR
OUR BUSINESS
continued
LOSTWINDS2
Frontier’s LostWinds2 was the Apple 
App Store’s ipad game of the week, 
and featured graphical techniques 
normally available only on dedicated 
videogame consoles.
“COBRA IS A SINGLE, 
POWERFUL TECHNOLOGY 
SOLUTION THAT SUPPORTS 
MANY TARGET HARDW ARE 
PLATFORMS, CAN BE 
SUCCESSFULL Y USED BY 
LARGE DEVELOPMENT TEAMS, 
AND IS FLEXIBLE ENOUGH 
TO CREA TE GAMES IN A WIDE 
V ARIETY OF GENRES.”
David Walsh Chief operating officer
Google Android 
Smartphones 
and tablets
Microsoft Windows 
pCs and 
Windows phone
Apple iOS 
iphone, ipad and 
ipod t ouch
MacOS 
Apple Mac
computers
Sony PlayStation
pS3 and pS4 
consoles
Nintendo Wii 
o riginal Wii and 
Wii u consoles
Microsoft Xbox 
Xbox 360 and 
Xbox o ne consoles REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 5
COASTER CRAZY
Coaster Crazy was Frontier’s first 
release to use CoBRA ’s cloud-based 
server backend. Frontier’s server 
technology successfully supported 
a maximum of over 500,000 
concurrent users.
Key strengths and opportunities
Proven track record
Frontier has a track record of successfully exploiting its software technology 
in games over a period spanning three decades.
Highly experienced and respected management
t he Group’ s management team, led by david Braben, has successfully 
implemented its technology strategy and delivered an industry leading games 
development capability which has led to improved revenue and profitability and 
the current opportunity.
Industry leading multi-platform development technology
proprietary ‘Cobra’ technology powers innovative, efficient, cross-platform 
software development spanning personal computers, tablets, smart 
phone and video game consoles and a wide variety of game genres.
Significant IP portfolio 
t he Group’s Ip catalogue includes potentially valuable properties including 
the rights to the Elite franchise.
Profitable and established business
Adjusted eBItd A growth over the four financial years ended 31 May 2013.
Blue-chip international client base
t he Group has established relationships with key industry players.
Growth opportunities
t he directors believe that the Group has strong growth prospects.
25+
years experience and development 
in the video games industry.
55+
games developed, to date, using 
our proprietary Co BRA technology.
240
staff in two offices: Cambridge, u K 
and Halifax, n ova Scotia. CHAIRMAN’S STATEMENT
t
he year ended 31 May 2013 and the current 
financial year are transitional years for our Company. 
We concluded a very successful crowd-funding 
programme to support the development of Elite: 
Dangerous. Since the year end we have also completed the 
listing of the Company’s shares on AIM by way of an Ipo .
We are making good progress from being primarily a developer 
of video games for major external publishers into a business 
that develops and licenses technology to support games 
for major external publishers, other developers and our 
own self-published game titles.
to fund this transition we raised £9.7 million in three tranches: 
£2.7 million came via a pre-Ipo placing over May and June; 
£4.0 million came from institutions that subscribed to new 
shares in our Ipo; and £3.0 million has been provided by 
our bankers through a revolving credit facility. 
I’d like to take this opportunity to thank all those who have 
supported our vision and plan by subscribing for shares.
l ooking at our financial performance in 2013, we saw an underlying 
increase in revenue (19%) and eBItd A (12%). Headline revenue 
decreased by 15%, and eBItd A showed an 12% reduction. 
like-for-like operating profit and adjusted earnings per share 
also grew. t his is explained simply by the fact that in 2012 
we booked pass-through revenue that did not apply in 2013. 
In the year ended 31 May 2014 we expect to further execute 
our plans to maintain our existing valued relationships, focus 
strongly on the development and launch of Elite: Dangerous, 
and continue to invest significant resources in the development 
of our technology for third party use. We expect revenues from 
our traditional publishing business to reduce whilst we invest 
in building the new elements we need for the transition.
I would like to pay tribute and gratitude to the 35,138 (at the time 
of writing) gaming fans that have invested in our crowd-funding 
campaign for the development of Elite: Dangerous. t heir response 
and enthusiasm has been a key ingredient in helping shape our 
strategy. We know that they are an expert and discerning audience 
and we continue to value their input as we work together through 
the alpha and beta phases towards a full public retail launch 
later in 2014.
Finally, Frontier has earned a deserved reputation for excellence 
and quality from its customers, which is only possible because 
of the dedication, skill and hard work of its people. I would also 
like to take this opportunity to thank them for their sustained 
effort and commitment. 
David Gammon
Non-Executive Chairman
13 november 2013
“WE ARE MAKING GOOD 
PROGRESS IN OUR 
TRANSITION INTO A 
BUSINESS WHICH DEVELOPS 
AND LICENSES TECHNOLOGY 
TO SUPPORT GAMES FOR 
MAJOR EXTERNAL 
PUBLISHERS, OTHER 
DEVELOPERS AND OUR OWN 
SELF-PUBLISHED GAMES.”
David Gammon
Non-Executive Chairman
REVIEW OF THE YEAR
6 FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013 CHIEF EXECUTIVE’S REVIEW
I
n the financial year ended 31 May 2013, Frontier developments 
delivered strong growth in underlying revenue, which 
increased 19% to £12.0 million. Adjusted eBItd A rose 
12% to £3.6 million, like-for-like operating profit was 27% higher 
at £1 .8 million, and adjusted basic earnings per share rose 25% 
to 7 .3 pence (as set out in the Financial Review).
Alongside this strong financial performance, the Group saw 
a number of operational highlights during the financial year: 
Studio in Halifax, Nova Scotia
We opened our first overseas studio, in Halifax, nova Scotia, 
Canada, in August 2012. north America is a strategically important 
region for the games industry. We had been looking at nova Scotia 
for some time due to the attractiveness of the province’s digital 
Media tax Credit programme, its attractive geographic location 
and the new talent pool offered by the existing healthy ICt 
sector and local universities. 
Further Cobra technology developments
We completed the adaption of our Cobra software technology 
to work with 64-bit Cpu architectures, which will allow us 
to continue to extract maximum performance from the new 
generation of Cpus starting to appear in console, smartphone 
and tablet hardware. We now have a proven, mature solution 
for taking full advantage of 64-bit multi-core processor systems 
as used in key new hardware target platforms such as the 
Xbox one, playStation4, iphone 5S and ip ad Air.
Coaster Crazy
We completed development and released a new game Ip , 
Coaster Crazy. t he game was based on our cross-platform Cobra 
technology and incorporated very sophisticated roller coaster 
construction techniques, which are based on our experience 
as a world-leading roller coaster game creator.
Coaster Crazy was our first game with a cloud-based server 
back end. t he game achieved a maximum of over 500,000 
concurrent users with our server technology performing well. 
We released Coaster Crazy on ioS devices and, as with LostWinds 
and LostWinds2 on ioS, the game received significant promotion 
from Apple. In addition we promoted it via in-game cross-selling 
in our own LostWinds ioS games and used third party 
marketing channels.
“ ALONGSIDE STRONG 
FINANCIAL PERFORMANCE, 
THE GROUP SA W A NUMBER 
OF OPERATIONAL 
HIGHLIGHTS DURING 
THE FINANCIAL YEAR 
AND SUBSEQUENTL Y .”
David Braben
Founder and Chief Executive Officer
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 7 REVIEW OF THE YEAR
FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013 8
Strategic overview and outlook 
our investment programme in our platform technology will 
benefit and facilitate better and more cost-effective results 
for our third party publisher games, such as Zoo T ycoon, and 
will also improve our own self-published offering with Elite: 
Dangerous and other games going forward. t he high graphical 
quality and very efficient development we have achieved with 
Zoo T ycoon is a great demonstration of this capability.
Elite: Dangerous will be sold directly to customers through 
our own e-commerce platform and through third parties. 
We are confident that other developers and/or publishers will 
take advantage of our sales portal and cross-platform technology, 
and over time we will cover an increasing number of games, 
platforms, new features and facilities.
Frontier is in transition as our publishing activity with 
Elite: Dangerous and the associated new services ramp up. 
Although the opportunities and scope for Elite: Dangerous 
to grow and develop are very substantial and the potential 
financial rewards significant, particularly given how fast our 
markets grow and change, it is very difficult for the Board 
to know exactly how quickly it will be taken up. For example, 
some pC online games (Elite: Dangerous is a pC online game) 
that have caught the public’s imagination, such as Minecraft 
and World of T anks, have reached estimated revenues of 
over £100 million per annum over a small number of years. 
others have not grown quite so quickly, but on the additional 
platforms the levels of success could be higher still. 
We expect Elite: Dangerous revenues to grow gradually in a similar 
way to other pC online games, but also that it will hit a quality 
resonance at which point revenues would increase significantly, 
as it did for those other titles.
We started the current financial year as we expected and are 
now executing the transition of our business to its next stage. 
o verall, despite the expected reduction in headline revenue 
and eBItd A over the transition, I believe that the continued 
delivery of our plan will result in much greater opportunity 
and returns.
David Braben
Chief Executive Officer
13 november 2013
Crowd-funding for Elite: Dangerous
In november 2012 we started a 60-day crowd-funding campaign 
using both Kickstarter.com and our own website. When the 
Kickstarter campaign closed on 4 January 2013 we had raised 
£1 .55 million, exceeding our ‘ask’ of £1 .25 million. t his was the 
highest crowd-funding target ever successfully achieved on 
Kickstarter. We had 26,834 individuals backing the project, and 
some 8,304 more (at time of writing) have participated through 
our own website since. 
t his clearly demonstrates the viability of the Elite: Dangerous 
project. We had previously been running the project in order 
to develop the key innovative technologies necessary to deliver 
the game’s vision, and this additional funding has allowed us to 
put it into full production. We continue to successfully communicate 
with the large customer/stakeholder community that has provided 
this funding, and this close dialogue and engagement will 
continue to the initial launch of the game and beyond.
Key industry partnerships
We also continued our close working relationship with Microsoft, 
starting development of an Xbox one launch title based on 
Microsoft’s popular Zoo T ycoon franchise, giving us experience 
on the new console hardware early. t his is in addition to working 
with other important partners such as Apple, nintendo, 
Amazon and Atari.
Recent developments
We have continued working with Microsoft on Zoo T ycoon, 
planned for commercial release in november 2013 alongside 
the Xbox one launch, as one of the five full disc-based games 
to be released by Microsoft Studios at the launch of Xbox one.
We announced Coaster Crazy Deluxe for the nintendo Wiiu – 
this game is an extension of our Coaster Crazy title and will use 
more new online functionality. We have taken advantage of 
partnering opportunities with nintendo to promote the game.
We announced a new relationship with Atari, whereby our 
e-commerce strategy is accelerated. We now have non-exclusive 
rights to distribute Atari games, as well as the rights to publish 
our RollerCoaster T ycoon 3 game on new platforms.
We also announced that the Alpha testing phase for 
Elite: Dangerous will begin in december 2013 and 
that we were planning to support the oculus Rift 
virtual reality headset in the game.
CHIEF EXECUTIVE’S REVIEW 
continued REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 9
FINANCIAL REVIEW
£7.2m
cash balance at £7.2m at year end.
+56%
investment of 566 man months in technology 
and self-published titles up 56%.
+58%
self-published revenue 58% higher 
at £0.5m.
t
he Board is pleased to provide a detailed review 
of the financial highlights.
Group trading performance
t he Group’s underlying trading performance was 
improved from the prior year. t he Group is now entering 
an investment phase up to the launch of Elite: Dangerous 
and associated technology development and licensing.
Revenue 
We delivered a 19% growth in underlying revenue after 
excluding subcontract costs recharged to customers at 
nil margin, reconciled as follows:
underlying revenue £’000 2012–13 2011–12 %
Headline revenue 12,072 14,157 (15%)
Subcontract pass-through (26) (4,033) (99%)
underlying revenue 12,046 10,124 19%
t he launch of Coaster Crazy and recognition of Elite: Dangerous 
revenues enabled the Group to show growth in our self-published 
revenues of 58%. Growing our self-published revenue stream 
is one of our strategic aims. We recognised an element of 
revenue for Elite: Dangerous from our crowd-funding raise on 
commencement of delivery of pledges and sold £0.02 million 
of merchandise in the year. our LostWinds ioS titles continued 
to sell at 88% of their prior year level.
publishing revenue was lower, as we did not work on any 
game titles that required significant subcontract pass-through 
revenues. We worked on three projects for our key client, two 
of which are due to be released in the financial year 2013–14. 
Royalty income was impacted by one of our publishing partners, 
Atari Interactive Inc. (Atari), going into Chapter 1 1 . Revenues 
from 1 october 2012 to 20 January 2013 sit within the pre-petition 
creditor balances of Atari and prudently have not been included. 
t hese income streams from Atari originate from our Roller coaster 
T ycoon 3 development and Ip licence agreement. 
Revenue mix £’000 2012–13 2011–12 %
publishing 11,355 13,499 (16%)
Self-published 511 323 58%
Royalties 203 335 (39%)
o ther 3 — —
 12,072 14,157 (15%) REVIEW OF THE YEAR
FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013 10
FINANCIAL REVIEW
continued
Intangible assets and research and development expenditure
Investment in our own Ip capitalised in the year was up 27% 
at £1 .7 million, reflecting Frontier’s commitment to a strategic 
software development programme in respect of our Cobra 
technology and self-published titles.
A good proportion of our investment is in research and 
development, representing £0.76 million (2012: £0.73 million), 
an increase of 4%. Research and development expensed rose 
to £0.60 million from £0.33 million. 
Frontier expensed £0.36 million of costs within software 
development projects.
Gross margin and contribution
t he overall gross margin rose to 30% from 20%. on an 
underlying basis, after stripping out pass-through recharges, 
the improvement was 2%. t his underlying improvement 
stemmed mainly from improved margins in the publication 
business exceeding a lower margin for self-published titles 
which are impacted by a cautious approach on capitalisation 
and amortisation in the relatively new mobile platform segment.
Profitability and adjusted EBITDA
Frontier is in a state of transition, following its listing of the 
Group’s shares on AIM in July 2013. As a consequence the 
Board monitors performance on an adjusted eBItd A basis. 
t he adjusting items were primarily share-based compensation 
and funding costs associated with the Ipo .
operating profit was 24% lower at £1 .05 million and eBItd A 
11% lower at £2.85 million.
Compared to 2011–12 on a like-for-like basis, without the one-off 
funding costs and share-based compensation, operating profit 
rose 27%. Adjusted eBItd A rose 12% to £3.62 million.
t he reconciliation is as follows:
2012–13
£’000
2011–12
£’000 % 
o perating profit 1,052 1,390 (24%)
d epreciation 151 185 
Amortisation 1,650 1,623 
eBItd A 2,853 3,198 (11%)
Share-based compensation 416 — 
Funding costs 308 — 
d ilapidations provision 37 37 
Canada setup fees 10 — 
eBItd A adjusted 3,624 3,235 12%
Finance income
Interest receivable from the Group’s cash resources nearly 
doubled to £19,000 from £10,000 and remains at low levels 
due to the current interest rate environment worldwide.
Income tax
t he charge in the year remained low, mainly comprising a rebate 
on overseas tax of £5,735 and uK tax on finance income of 
£3,716. t he Group recorded a deferred tax liability of £27 ,793 
for overseas tax due to the timing difference over which R&d 
tax relief and a local digital media tax rate operate. t he holding 
company continues to hold unused tax losses of £3.69 million 
to set against future taxable profits generated in the uK.
Corporate structure
on 21 december 2012 the Company changed its status by 
re-registering as a plc. t he share capital was expanded and 
re-denominated into units of 0.5 pence.
Earnings per share
t he basic earnings per share reduced from 5.7 pence per share 
to 4.2 pence based on a weighted average number of shares 
of 25.0 million (2012: 24.7 million).
on a diluted basis the earnings per share dropped from 5.5 pence 
to 4.1 pence based on a weighted average number of shares 
of 25.5 million (2012: 25.5 million).
t he adjusted earnings per share rose to 7 .3 pence from 
5.8 pence per share on an undiluted basis (a 25% increase), 
as a result of the improved adjusted eBItd A figure.
Dividend
t he directors are not recommending the payment of a dividend 
(2012: £nil).
Share issues
employees converted 505,382 (re-denominated) share options 
into ordinary shares in november 2012; the exercise proceeds 
were £166,776. 
t he Group granted 1 .6 million share options in the year, the first 
grant for seven years.
A convertible loan was issued towards the end of the year 
granting shares at a discount of 15% to the Ipo flotation price. 
t he amount received was £1 .13 million.
Subsidiary setup
on 27 July 2012 the Company incorporated Frontier 
developments Inc. in Halifax, nova Scotia, with Cd$100 
of share capital.
Balance sheet
t he Group received Convertible loans to the value of £1 .13 million 
just prior to year end and increased net investment in intangibles 
to £3.5 million.
Non-current assets
Investment in intangibles was focused on developing 
self-published titles, Elite: Dangerous (scheduled for release 
in 2014) and Coaster Crazy on the ioS platform (released 
during the year).
t he Group maintained prudent amortisation rates to reflect 
the dynamic changing nature of the video games sector. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 11
Current assets
trade and other receivables decreased by £0.42 million 
to £2.08 million mainly as a result of receipt of contracted 
income from publication customers.
Current liabilities
trade and other payables increased by £2.19 million to £3.06 million. 
t he main drivers for this increase were convertible loan notes of 
£1 .13 million, deferred income of £0.56 million and funding cost 
accruals of £0.23 million.
deferred income constituted both crowd-funding ‘pledges’ 
expected to be delivered within one year for Elite: Dangerous 
and publication contract revenue.
Non-current liabilities
t he Group fully offset uK deferred tax liabilities with deferred 
tax assets that were available. An overseas deferred tax liability 
of £0.03 million was provided against government assistance 
due. t he holding company added to its dilapidation provision 
ahead of leases expiring in 2015. deferred income of 
£1 .28 million represents crowd-funding ‘pledges’ expected 
to be delivered after one year for Elite: Dangerous.
Cash and cashflow
t he Group’s operating cashflow rose by £4.1 million to 
£6.2 million mainly driven by the working capital changes. 
t hese comprised a £1 .56 million raise from a successful 
Kickstarter campaign for Elite: Dangerous. In addition the 
Group raised £1 .13 million from the issue of convertible 
loan notes.
t he Group invested £2.0 million in non-current assets, 
up by £0.57 million.
non-cash costs included share-based compensation charges 
of £0.42 million (2012: £nil).
Cash balances were also increased by the injection 
of £0.17 million of share capital proceeds.
t he overall impact was an increase of £5.47 million in cash and 
cash equivalents to £7 .16 million, being a positive staging point 
for the Group’s investment and growth plans.
Key performance indicators
In addition to the adjusted revenue and eBItd A measures 
mentioned previously as a key indicator of growth and 
profitability, the Group is looking to invest in its own content 
to produce a balanced spread of income streams:
% of revenue by segment 2013 2012
publishing 94% 95%
Self-published 4% 2%
Royalties and other income 2% 2%
As part of the strategy the Group is investing in its own 
technology and content:
Man months 2013 2012
Self-published 376 202
t echnology 190 161
Risk
t he principal financial risks are those of liquidity and currency.
liquidity risk is considered in respect of projected revenues 
from self-published titles being slower to materialise than 
expected, particularly in respect to Elite: Dangerous. t he 
successful crowd-funding campaign and post-year Ipo raise and 
revolving credit facility have significantly mitigated these risks. 
As the Group expands its revenue sources the amount of 
revenue originating in non-Sterling currencies will increase. 
t he cost base of the Canadian operation is also likely to become 
material. t he company currently holds contracts in uSd which is 
seen as a natural hedge for the Canadian operational costs over 
the next two years. t he currency exposure is monitored closely.
Neil Armstrong
Company Secretary and Chief Finance Officer
13 november 2013 REVIEW OF THE YEAR
FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013 12
PRINCIPAL RISKS AND UNCERTAINTIES
t he Group faces competitive and strategic risks that are inherent in a rapidly growing emerging market. t he Audit Committee 
maintains the Risk Register and escalates the Key risks for further consideration at full Board level on a regular basis. 
Key business risks affecting the Group are set out below:
Business risks
Description Mitigation
Strategic focus
t he Group is intending to diversify its business base to a 
balanced mix of technology, self-published and published 
based revenue streams. Inherently such a strategic shift 
of focus creates execution risk, whilst perhaps reducing 
financial risk based on a small customer base.
t he Group is confident that it can deliver on both the 
technology and the commercial relationships that support 
this strategy.
Financial
t he Group recognises that it is currently dependent 
on a small number of sources of revenue, and this has 
the potential to cause financial stress should these 
relationships break down.
t he Group is confident that if this were to happen 
it could undertake work for other customers whilst 
it builds up a diversified revenue base.
T echnology
t he Group operates in a fast moving industry where 
monetisation strategies for video games and the 
associated technology platforms are evolving rapidly. 
t he ability to both forecast and monetise revenue 
streams is subject to a risk of uncertainty that may 
not cover development costs.
t he Board believes that its design of its own technology 
and self-published games, ability to execute on high end 
technology platforms and the flexibility demonstrated by 
the diverse range of video games we have successfully 
developed in the past mitigates some of this risk.
Growth management
t he Group’s future success will depend on its ability 
to manage anticipated expansion. t his now includes the 
management of an overseas based subsidiary and may 
include acquisitions. Such expansion is expected to place 
demands on management and support functions. If the 
Group is unable to manage its expansion effectively, 
its business and financial results could suffer.
In order to mitigate this risk, the Group is investing in 
suitable training for key staff and key internal systems. 
t he Group continues to seek to strengthen its 
non-executive director base and has appointed key 
advisors with experience in the sector to ensure these 
risks are managed objectively.
Attracting and retaining staff
t he Group acknowledges that it is in a sector where 
world class staff are in high demand.
t he Group is undertaking a three year programme 
of improving incentives and leadership skills which 
is intended to further enhance its attractiveness 
as an employer. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 13
Financial risk management objectives and policies
As part of its listing process the Group took the opportunity to review its financial environment and practises. t his led to improved 
Corporate Governance, financial policies and internal controls to manage financial risk and align financial measures with the 
strategic objectives it is committed to.
Description Mitigation
Currency risk
t he Group’s reporting currency is 
pounds Sterling (GBp). exposure 
to currency exchange rates arises 
where transactions are in a 
currency other than the functional 
currency of the entity, primarily 
Canadian dollars (CAd), uS 
dollars (uSd) and euro (euR).
Currency risk is managed by ensuring, where possible, that financial revenues and 
operating costs are denominated in £ Sterling or where subcontract costs have 
been recharged, they have been recharged in the same currency. t he operating 
costs of the Canadian entity are matched to uSd revenue flows where possible, 
as this exchange rate has been more stable than via the £ Sterling.
t he Group does not enter into forward exchange contracts to mitigate the 
exposure to foreign currency risk as the Group’s currency transactions are not 
considered significant enough to warrant this. However the Group does seek 
to maintain the same level of working capital in both its Canadian Subsidiary 
and in the uK parent, measured in calendar months.
Liquidity risk
liquidity risk is the risk arising from 
the Group not being able to meet 
its obligations as they fall due.
t he Group seeks to manage this risk by ensuring sufficient liquidity is available 
to meet the foreseeable needs and to invest cash assets safely and profitably. 
t he Group’s policy throughout the year has been to place surplus funds 
on short-term treasury deposits based on its detailed cashflow forecasting. 
t he Group prudently manages its liquidity needs by carefully monitoring 
forecast cash inflows and outflows both in the short and medium term.
t he Admission to AIM and pre-Ipo placing has strengthened the balance sheet 
and combined with the £3 million revolving credit facility has enabled the Group 
to resource an accelerated growth plan.
net cash requirements are compared to balances in order to determine 
headroom or any shortfalls. t his analysis shows that available cash is expected 
to be sufficient to continue to operate as it is currently.
Credit risk
Credit risk is the risk that a 
third party might fail to fulfil its 
performance obligations under the 
terms of a financial instrument.
t he Group’ s exposure is limited to the carrying amount of financial assets and cash and 
cash equivalents recognised at the year -end date (as summarised in notes 14 and 15). 
t he Group’s management consider all financial assets, not impaired, for each 
reporting date are of good credit quality, including those past due. In respect 
of trade and other receivables the Group is exposed to significant credit risk 
for a single counterparty.
t he Group considers it has minimal credit risk for liquid funds and other short term 
financial assets as cash is held with reputable uK and Canadian banks.
At the year end none of the Group’s financial assets are secured by collateral 
or other credit enhancements.
Interest rate sensitivity
Interest rate risk is the current 
or prospective risk that earnings 
and/or capital are negatively 
affected by interest rate changes 
in the financial markets.
t he convertible loan notes issued carry a fixed rate of 8% per annum.
t he Group has no other borrowings through which it is subject to interest rate risk.
t he risk associated with interest earned on cash balances is low given low level 
of interest currently being earned worldwide. FRONTIER DEVELOPMENTS PLC Annu Al RepoR t And ACCountS 2013 14
CORPORATE GOVERNANCE
DIRECTORS’ BIOGRAPHIES
DA VID BRABEN
Founder and CEO
Joined david was the founding 
shareholder of Frontier in January 1994.
Experience david is the co-author 
of the seminal Elite title and has over 
30 years’ experience in the gaming 
industry. david is also a founding trustee 
of the Raspberry pi Foundation, a charity 
which aims to inspire a new generation 
of children to get interested in computer 
science through the use of a credit-card 
sized computer that plugs into your tV 
and a keyboard. david was formerly a 
non-executive director of phonetic Arts, 
a Cambridge-based company focused 
on speech synthesis that was acquired 
by Google in december 2010. david 
is a member of the BAFt A games 
committee, a Fellow of the Royal 
Academy of engineering and the 
chairman of Skillset university 
Approvals Board. 
Committees nominations
DA VID GAMMON
Non-Executive Chairman
Joined February 2012
Experience david has over 15 years’ 
experience as an investment banker 
having worked for Baring Securities, 
Salomon Brothers, Robert Fleming & Co 
and Credit l yonnais. Since 2001, david 
has focused on developing, advising and 
investing in uK technology companies. 
In 1988, david founded Rockspring, 
an advisory and investment firm which 
focuses on early stage technology 
companies and where david continues 
as Ceo today. other current positions 
include non-executive directorships 
at l oQ plc and Imaginatik plc. He is 
group strategic advisor to Marshall 
of Cambridge (Holdings) limited, and 
acts as general advisor to deepMind 
technologies limited and Hawkwood 
Capital llp .
Committees Audit, Remuneration, 
nominations
DA VID W ALSH
Chief Operating Officer
Joined September 2001
Experience david has over 25 years’ 
experience of engineering and 
commercial management roles in 
high-growth technology companies. 
In 2001 david joined Frontier from 
ARM, the FtSe/nASd AQ listed 
microprocessor Ip licensing company 
where he served for six years, helping 
to grow the company and as director of 
software systems setting up a division 
of the company to facilitate adoption 
of the architecture in key target market 
segments. In 2012 david established 
and became president of Frontier 
developments Inc., Frontier’s wholly 
owned Canadian subsidiary, and he 
also serves as a board member of the 
entertainment Software Association 
of Canada.
Committees Remuneration
JONATHAN MILNER
Non-Executive Director 
Joined november 2012
Experience Jonathan is an experienced 
entrepreneur and business leader with a 
background in genetic research. In 1998, 
he founded Abcam with david Cleevely 
and professor tony Kouzarides, to supply 
the rapidly growing market for antibodies 
and other life science reagents. As Ceo , 
Jonathan was instrumental in building 
Abcam into an £800+ million company. 
Jonathan is an active supporter of the 
Cambridge, uK business community. 
He is also a non-executive director 
of Horizon discovery, a personalised 
genomics company.
Committees Remuneration
JONNY W ATTS
Chief Creative Officer
Joined november 1998
Experience Jonny has over 26 years’ 
experience in gaming. He joined 
the Company in 1998 from Sensible 
Software, and over the course of his 
career has been involved in all aspects 
of the creation of 23 published games 
such as Sensible Soccer, Cannon Fodder, 
Roller coaster Tycoon 3, Kinectimals, 
LostWinds, Kinect Disneyland Adventures 
and Kinect Star Wars. Jonny’s titles span 
the full range from indie development 
to 400-person projects, encompass a 
diverse range of genres, and together 
have been enjoyed by over 34 million 
people worldwide. Jonny holds zoology 
and computer science degrees and is 
an active member of BAFt A, including 
serving as a judge for five years and on 
the BAFt A Young designer committee.
NEIL ARMSTRONG
Company Secretary and CFO
Joined June 2009
Experience neil is a chartered 
accountant (ACA) with over 24 years’ 
experience. He has previously 
held positions as finance director 
or financial controller with Skillshare 
International, the International Institute 
for environment and development, 
Cowells Arrow Bingo Company, 
Cinram uK limited and dane 
& Company limited. FINANCIAL STATEMENTS
Annu Al RepoR t And ACCountS 2013 FRONTIER DEVELOPMENTS PLC 15
REVIEW OF THE YEAR CORPORATE GOVERNANCE
CORPORATE DIRECTORY
Directors
Mr d R Gammon 
Mr d J Braben 
Mr d J Walsh 
Mr J F Watts 
dr J S Milner (appointed 1 november 2012)
Company Secretary and CFO
Mr n R Armstrong
Registered office
306 Science park 
Milton Road 
Cambridge CB4 0WG
Company number
02892559
david Braben
Jonathan Milner
david Gammon
neil Armstrong
david Walsh
Jonny Watts
For a full list of Advisors and 
Company Information see 
inside back cover. CORPORATE GOVERNANCE
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 16
Going concern
The Group’s forecasts for the intended development activity 
as adjusted for the successful raising of share capital on AIM, 
lead to a reasonable expectation that the Group has adequate 
resources to continue in operational existence for the 
foreseeable future. 
Principal risks and uncertainties
The Group faces competitive and strategic risks that are 
inherent in a rapidly growing emerging market. The Audit 
Committee maintains the Risk Register and escalates 
the key risks for further consideration at full Board level 
on a regular basis. 
Key business risks affecting the Group are set out below:
Strategic focus
The Group is diversifying its business base to a balanced mix 
of technology, self-published and published-based revenue 
streams. Inherently such a strategic shift of focus creates 
execution risk, whilst perhaps reducing financial risk based on 
a small customer base. The Group is confident that it can deliver 
on both the technology and the commercial relationships that 
support this strategy and has taken initial steps to achieve this.
Financial
The Group recognises that it is currently dependent on a small 
number of sources of revenue, and this has the potential to 
cause financial stress should these relationships break down. 
The Group is also confident that if this were to happen it could 
undertake work for other customers whilst it builds up a 
diversified revenue base.
T echnology
The Group operates in a fast moving industry where 
monetisation strategies for video games and the associated 
technology platforms are evolving rapidly. The ability to both 
forecast and monetise revenue streams is subject to a risk 
of uncertainty that may not cover development costs. The 
Board believes that its design of its own technology and 
self-published games, ability to execute on high-end technology 
platforms and the flexibility demonstrated by the diverse range 
of video games we have successfully developed in the past 
mitigates some of this risk. 
Growth management
The Group’s future success will depend on its ability to manage 
anticipated expansion. This now includes the management 
of an overseas-based subsidiary and may include acquisitions. 
Such expansion is expected to place demands on management 
and support functions. If the Group is unable to manage its 
expansion effectively, its business and financial results could 
suffer. In order to mitigate this risk, the Group is investing 
in suitable training for key staff and key internal systems. 
The Group continues to seek to strengthen its Non-Executive 
Director base and has appointed key advisors with experience 
in the sector to ensure these risks are managed objectively. 
REPORT OF THE DIRECTORS
for the year ended 31 May 2013
The Directors present their report on the affairs of the Group 
and Company together with the financial statements for 
the year to 31 May 2013. The financial statements are 
prepared under International Financial Reporting Standards 
(EU-adopted IFRS). 
Principal activities
The principal activity of the Group and Company in the year 
under review was that of design and production of computer 
software, particularly video games within the interactive 
entertainment sector.
Review of business
A more detailed review of the Group’s activities is contained 
within the Chairman’s Statement, the Chief Executive’s Review 
and the Financial Review.
We continued our transition towards a technology company 
within the interactive entertainment sector. 
We continue to develop and invest in novel enabling technology 
and tools for our FGDK multi-threaded game development 
platform (known publicly as COBRA), as well as supporting 
selected third party technology and/or tools that we believe 
provide a cost-effective value-add for our developments. In the 
year we added functionality for the latest versions of iOS and 
Windows 8, as well as preparing for the new generation of 
games consoles.
In order to add resource for this transition we set up our 
subsidiary in Halifax, Nova Scotia, Canada, in July 2012.
As part of our strategy of diversifying revenue streams we 
released our self-published rollercoaster game Coaster Crazy 
on the iOS platform and commenced development for its 
release on WiiU and a deluxe version on iOS.
We continued to work with Microsoft Studios on a number 
of projects, including Zoo T ycoon, scheduled for release 
on the Xbox One.
To fund our plans we were able to raise £1 .13 million in 
convertible loan notes by the year end, subsequently rising 
to £2.71 million and £0.13 million in equity. We took the 
opportunity to float on AIM on 15 July 2013 raising a further 
£4.03 million gross and securing a £3.00 million revolving 
credit facility with Barclays Bank plc.
The Board is grateful for the continuing support from 
its key shareholders.
Key performance indicators
The Directors took the opportunity to refresh the key performance 
measures that underpin the strategy of the Group during the year.
The key performance indicators that relate to the strategy 
both currently and going forward will be those around 
measures of market capitalisation, profitability, investment 
in own IP , quality, efficiency and Frontier becoming 
a ‘destination employer’.  REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 17
Attracting and retaining staff
The Group acknowledges that it is in a sector where world-class 
staff are in high demand. The Group is undertaking a three-year 
programme of improving incentives and leadership skills which 
is intended to further enhance its attractiveness as an employer.
Financial risk management objectives and policies
As part of its listing process the Group took the opportunity 
to review its financial environment and practises. This led to 
improved corporate governance, financial policies and internal 
controls to manage financial risk and align financial measures 
with the strategic objectives it is committed to. 
Currency risk
Currency risk is managed by ensuring, where possible, that 
financial revenues and operating costs are denominated in 
£ Sterling or where sub-contract costs have been recharged, 
they have been recharged in the same currency. The operating 
costs of the Canadian entity are matched to USD revenue flows 
where possible, as this exchange rate has been more stable 
than against £ Sterling. 
Liquidity risk
Liquidity risk is the risk arising from the Group not being able 
to meet its obligations as they fall due. The Group seeks to 
manage this risk by ensuring sufficient liquidity is available to 
meet the foreseeable needs and to invest cash assets safely 
and profitably. 
The Group’s policy throughout the year has been to place 
surplus funds on short-term treasury deposits based on its 
detailed cashflow forecasting. The Group prudently manages 
its liquidity needs by carefully monitoring forecast cash inflows 
and outflows both in the short and medium term.
The Admission to AIM and pre-IPO placing has strengthened 
the balance sheet and, combined with the £3 million revolving 
credit facility, has enabled the Group to resource an 
accelerated growth plan.
Net cash requirements are compared to balances in order 
to determine headroom or any shortfalls. This analysis shows 
that available cash is expected to be sufficient to continue 
to operate through the transition period. 
Share issues
Details of the shares issued during the year are detailed in Note 16 
to the financial statements. The Company has one class of ordinary 
share which carries no right to fixed income. Each share carries 
the right to one vote at general meetings of the Company.
Directors
The Directors who held office at 31 May 2013 and their interest 
in the share capital of the Company, as restated for the 
re-denomination in December 2012 were as follows:
Name 2013 2012
David Gammon 224,720 224,720
David Braben 17,494,380 17,662,920
David Walsh* 1,245,820 1,000,000
Jonathan Watts 32,000 32,000
Jonathan Milner* (appointed  
1 November 2012) 572,104 —
Jonathan Roach (resigned  
3 September 2012) — 648,000
Total 19,569,024 19,680,000
*Including direct family holdings.
Directors’ remuneration and share options 
Details of Directors’ remuneration and share options are 
provided within the Remuneration Report and are in addition 
to the interests in shares shown above.
During the year David Braben sold 168,540 shares and 
David Walsh sold 56,180 shares to Jonathan Milner, realising 
gains of £149,832 and £21,910 before tax respectively. 
David Walsh exercised 302,000 (re-denominated) share options 
granted in November 2002 at a restated exercise price of 33 pence. 
Directors’ responsibilities for the financial statements
The Directors are responsible for preparing the Report of the 
Directors and the financial statements in accordance with 
applicable law and regulations. 
Company law requires the Directors to prepare such financial 
statements for each financial year. Under that law, the Directors 
have elected to prepare the Company financial statements in 
accordance with International Financial Reporting Standards 
(IFRSs) as adopted by the European Union. Under company law 
the Directors must not approve the financial statements unless 
they are satisfied that they give a true and fair view of the state 
of affairs and of the profit or loss of the Company for that year. 
In preparing these financial statements, the Directors are required to:
•	 select suitable accounting policies and then apply 
them consistently;
•	 make judgements and accounting estimates that are 
reasonable and prudent;
•	 state whether the applicable IFRSs have been followed, 
subject to any material departures disclosed and explained 
in the Company’s financial statements; and
•	 prepare the financial statements on a going concern basis 
unless it is inappropriate to presume that the Company 
will continue in business. CORPORATE GOVERNANCE
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 18
The Group’s policies and procedures are created and 
administered in such a way that they do not tolerate 
or foster such discrimination.
The Group has an Employee Consultation group that meets 
regularly with senior management.
The Group encourages employee involvement in the Group’s 
performance by using a contractual bonus scheme for all 
non-Director level staff. In addition it seeks to issue share 
options at relevant times. 
Employment policies
The Group is committed to following UK employment law for 
its Cambridge-based operations and the Canada Labour Code 
for its Halifax, Nova Scotia, operation. Where possible the Group 
strives for similar employment and benefit arrangements 
between territories.
Health and safety and environment
The aim of the Directors is to provide healthy, safe and 
congenial working conditions, equipment and systems 
of work for all employees.
The Directors further intend to provide sufficient information, 
training and supervision to enable employees to do their work 
safely, effectively and without risk to themselves or to others.
We acknowledge that we are responsible for the safety of 
visitors, both professional and social, who enter the premises.
Frontier Developments plc recognises its duty to comply and 
operate within the requirements of statutory environmental 
legislation and is committed to minimising the environmental 
impacts of its business operations. The Directors of the Group 
will support this policy with this commitment in mind. 
Substantial shareholders
At 12 November 2013 the following, other than the Directors 
whose shareholdings are listed on page 17 , had notified the 
Company of disclosable interests in 3% or more of the 
nominal value of Frontier Developments plc of 0.5 pence each:
Name Shareholding %
Chris Sawyer 2,565,726 8.2%
Lansdowne Partners 2,362,204 7.6%
Amati Venture Capital 1,042,150 3.3%
REPORT OF THE DIRECTORS
for the year ended 31 May 2013 continued
Directors’ responsibilities for the financial statements 
continued
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the Company and to enable them to 
ensure that the financial statements comply with the Companies 
Act 2006. They are also responsible for safeguarding the assets 
of the Company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
The Directors confirm that:
•	 so far as each Director is aware, there is no relevant audit 
information of which the Company’s auditor is unaware; and
•	 the Directors have taken all steps that they ought to have 
taken as Directors to make themselves aware of any 
relevant audit information and to establish that the auditor 
is aware of that information.
The Directors are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
Company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions.
Directors’ indemnity arrangements
During the year the Company purchased directors’ and officers’ 
liability insurance in respect of itself and its Directors.
Intellectual property and research and development
The Group actively protects its intellectual property via 
trademark registrations. Whilst the Directors consider 
these to be of significant value, the costs associated 
with registrations are expensed.
The Group invests heavily in research and development 
through the COBRA engine and associated development tools. 
Costs that meet the criteria for capitalisation are included in 
intangible assets (see Note 7 of the financial statements). The 
Group‘s total spend in research and development to support 
its strategy was £1 .36 million in the year (2012: £1 .05 million).
Employee involvement
The Group seeks to encourage and promote an agile, open, fair 
and meritocratic culture of engagement, achievement and fun.
The Group is committed to the principle of equal opportunities 
in employment. Its aim is to ensure that no job applicant 
or employee receives less favourable treatment or is placed 
at a disadvantage by requirements or conditions that cannot 
be shown to be justifiable and thereby promote equality of 
opportunity for employment within the Group on grounds 
such as sex, disability, marital status, religion, colour, race, 
nationality, ethnic or national grounds, age or sexual orientation. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 19
Payment policy and practice
The Group’s policy concerning the payment of suppliers is 
to agree terms of payment at the start of business with each 
supplier. The Group’s normal policy is to pay supplier invoices in 
accordance with those terms and conditions provided there are 
no disputes. At 31 May 2013 the Company had an average of 
42 days’ purchases outstanding (2012: 3 days’). The variation 
in days outstanding is a function of the amount of sub-contract 
work being undertaken for projects and, in 2013, funding fees 
associated with the IPO.
Donations and community support
The Group made charitable donations during the year of £4,560 
(2012: £500) to various educational establishments. There were 
no donations to political parties. Employees of the Company 
participate actively in the community of entrepreneurial 
businesses clustered around Cambridge.
Senior employees of the Company have been involved closely 
with the Raspberry Pi foundation, and the majority of charitable 
donations comprise the provision of Raspberry Pi devices to 
educational establishments.
Post-balance sheet event
On 15 July 2013 the holding company listed on AIM.
Auditor
A resolution to re-appoint Grant Thornton UK LLP as the 
Company’s auditor will be proposed at the forthcoming 
Annual General Meeting. In accordance with normal 
practice, the Directors will be authorised to determine 
the Auditor’s remuneration.
Approved by the Board of Directors and signed on behalf 
of the Board
Neil Armstrong
Company Secretary
13 November 2013 CORPORATE GOVERNANCE
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 20
Board composition
The Board of Frontier Developments plc comprises the 
Non-Executive Chairman, the Chief Executive Officer and 
two other Executive officers, the Company Secretary and one 
further Non-Executive Director. As can be deduced from the 
individual biographies, the Directors have a range of experience 
and provide a balance of skills, experience and knowledge to 
the Board. 
All Directors are subject to election at the first Annual General 
Meeting following their appointment and to re-election 
thereafter at intervals of no more than four years.
Board Committees 
Audit Committee
The Audit Committee determines the terms of engagement of 
the Company’s auditor and, in consultation with the Company’s 
auditor, the scope of the audit. It will receive and review 
reports from management and the Company’s auditor relating 
to the interim and annual accounts and the accounting and 
internal control systems in use by the Company and Group. 
The Audit Committee has unrestricted access to the 
Company’s auditor. The Audit Committee also reviews 
accounting and treasury policies, financial reporting including 
key performance indicators and supporting key areas of 
management judgements, the corporate Risk Register, 
and corporate governance standards. The Audit Committee 
is open to attendance by any Director, and reports its key 
issues at Board meetings.
The Audit Committee comprises David Gammon and 
Neil Armstrong, supported by James Dixon (one of 
the senior operation managers) and Amanda Heslam 
(the Group’s management accountant).
Remuneration Committee
The Remuneration Committee reviews the scale and structure 
of the Executive Directors’ future remuneration and the terms 
of the service agreements with due regard to the interests 
of shareholders. No Director is permitted to participate in 
discussions or decisions concerning their own remuneration. 
The Remuneration Committee also approves annual salary 
review limits, bonus schemes and payment limits, and 
significant employee benefits, such as pension and share 
option schemes. 
The Remuneration Committee comprises David Gammon, 
David Walsh and Jonathan Milner, supported by Neil Armstrong.
CORPORATE GOVERNANCE REPORT
for the year ended 31 May 2013
The Board
The Board of Frontier Developments plc is responsible for 
the long-term financial success of the business. The Directors 
recognise the value and importance of high standards of 
corporate governance and observe the requirements of the 
UK Corporate Governance Code (even though it does not 
apply to AIM listed companies) to the extent they consider 
appropriate in light of the Company’s size, stage of 
development and resources.
The following statements set out the principles and 
methods to which it adheres. The Statement of Directors’ 
Responsibilities is set out on pages 17 and 18.
Board meetings and practices
The Board seeks to meet formally at least eleven times a year 
including two ‘offsite’ strategic review days. All members of 
the Board are invited to attend all meetings.
The Chairman and the Company Secretary plan the agenda 
for each Board meeting in consultation with all other Directors. 
That agenda is issued with supporting papers ahead of the 
Board meetings providing the appropriate information required 
to enable the Board to discharge its duties.
The matters reserved for the attention of the Board include:
•	 overall business strategy of the Group;
•	 review of key operational and commercial matters;
•	 review of key finance matters, including approval of financial 
plans, changes to capital structure, acquisitions and disposals 
of businesses and material capital expenditure, and dividends;
•	 governance: Board membership and powers including 
the appointment and removal of Board members, set up 
and delegation of matters to appropriate Committees, 
and the reviewing of reporting back thereof;
•	 approval of financial statements both interim and year end;
•	 stock exchange related issues including the approval 
of communications to the stock exchange and 
communications with shareholders in conjunction 
with the financial public relations firm (College Hill);
•	 subsidiary Board appointments, as the 100% shareholder, 
and review of key decisions at their Board meetings;
•	 approval of acquisitions, disposals, borrowing facilities, 
premises and matters proposed by the corporate 
lawyer (Bird and Bird) and investment advisor 
(Canaccord Genuity); and 
•	 appointment and performance review of key advisors. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 21
Control environment and internal audit
The Group has established operating procedures appropriate 
to its size and structure for reporting financial and non-financial 
information to the Board.
These include, but are not limited to:
•	 operating guidelines and procedures with approval limits;
•	 accounting policies, controls and procedures; 
•	 performance monitoring systems updated monthly 
for review at Board meetings; and
•	 regulatory and legal changes that may materially impact 
on the business.
Due to the Executive Directors’ close involvement in the 
business activities, the Group does not currently believe that 
an internal audit function would be cost effective. The Audit 
Committee reviews this position on a regular basis.
Investor relations
The Directors, together with the Group’s advisors, are 
preparing to hold meetings and discussions with key institutional 
shareholders, ensuring clarity around the Group’s strategic 
intent. The Group intends to use the Annual General Meeting 
to encourage attendance and participation by shareholders.
Nominations Committee
The Nominations Committee reviews the constituents 
of the Board and its committees to ensure appropriate 
balance representation.
The Nominations Committee comprises David Gammon 
and David Braben, supported by Neil Armstrong. 
Company Secretary
The role of the Company Secretary is to ensure reliable 
and regular information flows to the Board and its committees 
and to ensure applicable rules and regulations are followed. 
The Company Secretary is available to all Directors to provide 
advice and assistance and is responsible for providing 
governance advice to the Board.
Auditor independence
The external audit function provides independent review 
and audit. It is the responsibility of the Audit Committee to 
review and monitor the external auditor’s independence and 
objectivity and the effectiveness of the audit process, taking 
into consideration relevant UK professional and regulatory 
requirements and to develop and implement policy on the 
engagement of the external auditor to supply non-audit 
services, taking into account relevant ethical guidance.
Senior management and Group functions
The Executive Directors are supported by a number of senior 
managers; however the close involvement of the Executive 
Directors in the day-to-day activities of the business at the 
present time negates the need for a formal Executive Team. 
The Group maintains central finance, HR, IT and marketing 
functions to support the Group’s activities, reporting to the 
Executive Team. 
Internal control and assessment of business risk
The Board took the opportunity to fully review the Group’s 
policies and procedures for internal controls to ensure an 
appropriate framework under which the business can operate 
and in line with regulations as part of its Admission to AIM.
The systems for internal control and risk management 
processes are designed to manage rather than eliminate risk 
of the achievement of strategic objectives. Such systems can 
only provide a reasonable but not absolute level of assurance 
against material misstatement or loss.
A risk assessment process is embedded within the project 
and administrative process within the Group. The strategic 
risks are regularly reviewed by the Board, under the guidance 
of the Audit Committee. A Risk Register is maintained to 
review key risks and the related controls and mitigation plans.  CORPORATE GOVERNANCE
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 22
Components of Executive Directors’ remuneration
Overview
The remuneration policy is to maintain an appropriate balance 
between fixed elements of remuneration and performance 
related elements, with an increasing proportion of the latter. 
Directors and staff are all encouraged to acquire shares in the 
Company and to hold these shares for the long term. This 
participatory element is an important aspect of the Group’s 
culture and its focus on long-term performance.
As part of the changes the Remuneration Committee has 
plans to adopt the following:
•	 a move to median level pay over an affordable period 
of time;
•	 the set up of a new Executive share option scheme;
•	 the set up of a ‘stretch goal’ based bonus scheme; and
•	 pension provision in line with the Group’s auto 
enrolment plans.
Components of remuneration package
Service contracts
The service agreements adopted on 1 July 2013 for the 
Executive Directors can be terminated by either party 
provided at least six months’ notice has been given.
Basic pay
Salaries were reviewed on 1 July 2013 upon the take up of 
new service agreements, required prior to Admission on AIM. 
The intention is to subsequently review these annually on 
1 August in line with all staff.
Annual bonus
The bonus payment for the year to May 2013 will be 
discretionary up to 8% of basic pay; from that point a new 
scheme based on stretch goals and limited to 21% of pay 
will be adopted. The bonus scheme is subject to affordability.
Share options
The Enterprise Management Initiative Scheme is being replaced 
by a revised Company Share Option Plan which will be available 
to Executive Directors until such time as a longer-term executive 
arrangement can be put in place.
Pension contributions and life cover
The intention of the Committee is to place the Executive 
Directors under the proposed Group’s scheme for pension 
auto enrolment and life cover arrangements. 
Non-Executive Directors’ remuneration
The remuneration of Non-Executive Directors is determined by 
the Board and reflects their anticipated time commitment to fulfil 
their duties. The Non-Executive Directors’ remuneration is subject 
to the same principles of the remuneration policy for the Group 
and is in a transitional phase of alignment to median market rates. 
The letters of appointment of Non-Executive Directors can 
be terminated with six months’ notice for the Chairman and 
three months’ for all other Non-Executives under notice given 
by either party.
REMUNERATION REPORT
for the year ended 31 May 2013
As Frontier Developments is an AIM-listed company it is not 
required to disclose all the information in the Remuneration 
Report; however, in the interests of transparency the Board 
has chosen to provide the following details as a voluntary 
disclosure. The auditor is not required and has not, except 
where indicated, audited the information included in the 
Remuneration Report.
The Remuneration Committee is responsible to the Board 
for developing remuneration policy. The Report of the 
Remuneration Committee has been approved by the Board 
of Directors for submission for shareholders’ approval at the 
Annual General Meeting.
Remuneration Committee terms of reference
The Remuneration Committee comprises both Non-Executive 
Directors of the Company and the Chief Operations Officer, 
supported by the Company Secretary. The Remuneration 
Committee meets at least twice a year.
The Remuneration Committee is responsible for the 
following functions:
•	 setting of remuneration for Directors and senior managers, 
including pay, bonuses and long-term incentive arrangements;
•	 approval of the overall increase for annual pay and bonus 
levels for all other staff;
•	 approval of share option plans or arrangements;
•	 setting of overall share option issues;
•	 approval of any significant employee benefit 
arrangements; and 
•	 reviewing the Committee’s terms of reference and 
submitting to the Board for subsequent approval.
Remuneration policy
The Remuneration Committee approved the following policy:
“Frontier endeavours to pay salaries and benefits around the 
median level for relevant skills. Where there is a material gap 
in remuneration, it is the policy of the Group to close this over 
time and subject to affordability. ”
As part of the Group’s Admission to AIM the Remuneration 
Committee, along with its legal advisors, implemented new 
service agreements to take effect from 1 July 2013. In doing 
so and in recognition of the higher public profile the Committee 
reviewed the ‘ AIM Directors’ Pay 2013’ report published by 
Growth Company Investor, and identified a significant gap 
between Directors’ actual pay to the policy intent. 
The Remuneration Committee has set out to move to a median 
level of pay over a four to five-year period. In addition the 
Remuneration Committee aims to bring incentives in to place 
that align the Group’s strategic objectives and investor interests 
with a large element of the total remuneration package.  REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 23
Directors’ remuneration (audited)
The remuneration of the Directors is as follows:
Current Directors
Salary/fee
£’000
Bonus
£’000
2013 
Total
£’000
2012 
Total
£’000
Executive
David Braben 93 — 93 80
David Walsh 93 — 93 80
Jonathan Watts 95 4 99 78
Non-Executive
David Gammon 24 — 24 8
Jonathan Milner 14 — 14 —
Total 319 4 323 246
Jonathan Roach received £20,000 salary during the period that he was a Director in 2013 (2012: £81,000).
Share options (re-denominated where appropriate)
Granted Number of options Performance criteria Exercise price Exercise period
David Walsh 30 Jul 2012 20,000 No 89 pence 31 Jul 2013 to 30 Jul 2022
15 May 2013 180,000 No 95 pence 16 May 2014 to 15 May 2023
Jonathan Watts 6 Dec 2005* 60,000 No 67 pence 7 Dec 2006 to 6 Dec 2015
30 Jul 2012 140,000 No 89 pence 31 Jul 2013 to 30 Jul 2022
*Re-denominated in December 2012.
The expense recognised in the Statement of Comprehensive Income for the Directors’ share options was £45,302 (2012: £nil) 
with the amount attributable to the highest paid Director being £34,586 (2012: £nil).
During the year, David Walsh exercised 302,000 share options (re-denominated) at the corresponding restated price of 33 pence each.
A resolution to accept the Report of the Remuneration Committee will be put to shareholders at the Annual General Meeting.
David Gammon
Chairman, Remuneration Committee
13 November 2013 FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 24
INDEPENDENT AUDITOR’S REPORT
to the members of Frontier Developments plc (Registered No: 02892559)
We have audited the consolidated financial statements of Frontier Developments plc for the year ended 31 May 2013 which 
comprise the consolidated income statement, consolidated statement of comprehensive income, consolidated and company 
statement of financial position, consolidated and company statement of cashflows, consolidated and company statement of 
changes in equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable 
law and International Financial Reporting Standards (IFRS’s) as adopted by the European Union. 
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for 
the opinions we have formed.
Respective Responsibilities of Directors and Auditor
As explained more fully in the Directors’ Responsibilities Statement set out on pages 17 and 18, the Directors are responsible for 
the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit 
and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing 
(UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the Audit of the Financial Statements
A description of the scope of an audit of financial statements is provided on the APB’ s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on Financial Statements
In our opinion:
•	 The financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 
31 May 2013 and of the Group’s profit for the year then ended,
•	 The Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union.
•	 The parent company financial statements have been properly prepared in accordance with IFRS as adopted by the European 
Union and as applied in accordance with the provisions of the Companies Act 2006: and
•	 The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on Other Matter Prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the Company financial statements are 
prepared is consistent with the Company financial statements.
Matters on which we are required to Report by Exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, 
in our opinion:
•	 Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been 
received from branched not visited by us; or.
•	 The parent company financial statements are not in agreement with the accounting records and returns; or
•	 Certain disclosures of directors’ remuneration specified by law are not made, or
•	 We have not received all the information and explanations we require for our audit. 
Alison Seekings
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP , Statutory Auditor, Chartered Accountants, Cambridge
13 November 2013 REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 25
CONSOLIDATED INCOME STATEMENT
for the year ended 31 May 2013
Notes
31 May 2013
£’000
31 May 2012
£’000
Revenue 5 12,072 14,157
Cost of sales (8,375) (11,259)
Gross profit 3,697 2,898
Administrative expenses (2,645) (1,508)
Operating profit 1,052 1,390
Finance income 21 19 10
Profit before tax 6 1,071 1,400
Income tax 22 (26) (2)
Profit for the period 1,045 1,398
All the activities of the Group are classified as continuing 
Earnings per share 23
Basic earnings per share 4.2p 5.7p
Diluted earnings per share 4.1p 5.5p 
31 May 2013
£’000
31 May 2012
£’000
Profit for the period 1,045 1,398
Other comprehensive income:
Items that will be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations 3 —
Total comprehensive income for the period attributable to the owners of the Group 1,048 1,398
The accompanying accounting policies and notes form part of this financial information.
CONSOLIDATED STATEMENT  
OF COMPREHENSIVE INCOME
for the year ended 31 May 2013 FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 26
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 May 2013 (Registered No: 02892559)
Notes
31 May 2013
£’000
31 May 2012
£’000
Non‑current assets 
Intangible assets 7 3,450 3,331
Property, plant and equipment 9 299 185
Total non‑current assets 3,749 3,516
Current assets
Inventories 13 — 75
Trade and other receivables 14 2,082 2,505
Total cash and cash equivalents 15 7,155 1,686
Total current assets 9,237 4,266
Total assets 12,986 7,782
Equity and liabilities
Equity
Share capital 16 127 12
Share premium account 1,847 1,794
Option reserve 643 263
Foreign exchange reserve 3 —
Retained earnings 5,775 4,694
Total equity 8,395 6,763
Liabilities
Current
Trade and other payables 19 3,060 867
Current tax liabilities 33 2
Total current liabilities 3,093 869
Non‑current 
Provisions 20 187 150
Deferred income 19 1,283 —
Deferred tax 12 28 —
Total non‑ current liabilities 1,498 150
Total liabilities 4,591 1,019
Total equity and liabilities 12,986 7,782
These financial statements were approved by the Directors on 13 November 2013 and signed on their behalf by:
David Braben
Director
The accompanying accounting policies and notes form part of this financial information. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 27
COMPANY STATEMENT OF FINANCIAL POSITION
for the year ended 31 May 2013 (Registered No: 02892559)
Notes
31 May 2013
£’000
31 May 2012
£’000
Non‑current assets 
Intangible assets 7 3,450 3,331
Investment in subsidiary undertaking 8 — —
Property, plant and equipment 9 227 185
Total non‑current assets 3,677 3,516
Current assets
Inventories 13 — 75
Trade and other receivables 14 2,237 2,505
Total cash and cash equivalents 15 6,819 1,686
Total current assets 9,056 4,266
Total assets 12,733 7,782
Equity and liabilities
Equity
Share capital 16 127 12
Share premium account 1,847 1,794
Option reserve 630 263
Retained earnings 5,648 4,694
Total equity 8,252 6,763
Liabilities
Current
Trade and other payables 19 3,010 867
Current tax liabilities 1 2
Total current liabilities 3,011 869
Non‑current 
Provisions 20 187 150
Deferred income 19 1,283 —
Total non‑ current liabilities 1,470 150
Total liabilities 4,481 1,019
Total equity and liabilities 12,733 7,782
These financial statements were approved by the Directors on 13 November 2013 and signed on their behalf by:
David Braben
Director
The accompanying accounting policies and notes form part of this financial information. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 28
CONSOLIDATED STATEMENT OF CASHFLOWS
for the year ended 31 May 2013
Notes
31 May 2013
£’000
31 May 2012
£’000
Operating activities
Profit after tax 1,045 1,398
Adjustments 24 2,198 1,829
Net changes in working capital 24 2,923 (1,174)
Taxes (paid)/received (5) 12
Cashflow from operating activities 6,161 2,065
Investing activities
Purchase of property, plant and equipment (251) (28)
Expenditure on intangible assets (1,783) (1,433)
Interest received 19 10
Cashflow from investing activities (2,015) (1,451)
Financing activities
Proceeds from convertible loan notes 1,129 —
Proceeds from issue of share capital 168 —
Cashflow from financing activities 1,297 —
Net change in cash and cash equivalents from continuing operations 5,443 614
Cash and cash equivalents at beginning of period 1,686 1,064
Exchange differences on cash and cash equivalents 26 8
Cash and cash equivalents at end of period 7,155 1,686
The accompanying accounting policies and notes form part of this financial information. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 29
COMPANY STATEMENT OF CASHFLOWS
for the year ended 31 May 2013
Notes
31 May 2013
£’000
31 May 2012
£’000
Operating activities
Profit after tax 918 1,398
Adjustments 24 2,124 1,829
Net changes in working capital 24 2,677 (1,174)
Taxes (paid)/received (5) 12
Cashflow from operating activities 5,714 2,065
Investing activities
Purchase of property, plant and equipment (148) (28)
Expenditure on intangible assets (1,783) (1,433)
Interest received 19 10
Cashflow from investing activities (1,912) (1,451)
Financing activities
Proceeds from convertible loan notes 1,129 —
Proceeds from issue of share capital 168 —
Cashflow from financing activities 1,297 —
Net change in cash and cash equivalents from continuing operations 5,099 614
Cash and cash equivalents at beginning of period 1,686 1,064
Exchange differences on cash and cash equivalents 34 8
Cash and cash equivalents at end of period 6,819 1,686
The accompanying accounting policies and notes form part of this financial information. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 May 2013
Share 
capital
£’000
Share 
premium 
account
£’000
Option 
reserve
£’000
Foreign 
exchange
reserve
£’000
Retained 
earnings
£’000
Total 
equity
£’000
At 31 May 2011 12 1,794 364 — 3,195 5,365
Share‑ based payment transfer — — (101) — 101 —
Transactions with owners — — (101) — 101 —
Profit for the year — — — — 1,398 1,398
Total comprehensive income  
for the year — — — — 1,398 1,398
At 31 May 2012 12 1,794 263 — 4,694 6,763
Increase in equity in relation  
to options issued — — 416 — — 416
Share‑ based payment transfer — — (36) — 36 —
Issue of share capital 1 167 — — — 168
Re‑ denomination of share capital 114 (114) — — — —
Transactions with owners 115 53 380 — 36 584
Profit for the year — — — — 1,045 1,045
Other comprehensive income:
Exchange differences on translation  
of foreign operations — — — 3 — 3
Total comprehensive income  
for the year — — — 3 1,045 1,048
At 31 May 2013 127 1,847 643 3 5,775 8,395
The accompanying accounting policies and notes form part of this financial information. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 31
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 May 2013
Share 
capital
£’000
Share 
premium 
account
£’000
Option 
reserve
£’000
Retained 
earnings
£’000
Total 
equity
£’000
At 31 May 2011 12 1,794 364 3,195 5,365
Share‑ based payment transfer — — (101) 101 —
Transactions with owners — — (101) 101 —
Profit for the year — — — 1,398 1,398
Total comprehensive income  
for the year — — — 1,398 1,398
At 31 May 2012 12 1,794 263 4,694 6,763
Increase in equity in relation  
to options issued — — 403 — 403
Share‑ based payment transfer — — (36) 36 —
Issue of share capital 1 167 — — 168
Re‑ denomination of share capital 114 (114) — — —
Transactions with owners 115 53 367 36 571
Profit for the year — — — 918 918
Total comprehensive income  
for the year — — — 918 918
At 31 May 2013 127 1,847 630 5,648 8,252
The accompanying accounting policies and notes form part of this financial information. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 32
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
Frontier Developments plc (“the Group”) develops non‑game applications and video games for the interactive entertainment 
sector. The Company is a public limited company and is incorporated and domiciled in the United Kingdom.
The address of its registered office is 306 Science Park, Milton Road, Cambridge CB4 0WG.
The Group’s operations are based in the UK and a subsidiary, Frontier Developments Inc, based in Canada.
2. Basis of preparation and statement of compliance 
The principal accounting policies applied in the preparation of this financial information are set out below. These policies have 
been consistently applied to all the periods presented, unless otherwise stated.
Basis of preparation
The financial information of Frontier Developments plc has been prepared in accordance with International Financial Reporting 
Standards as adopted by the European Union (IFRSs as adopted by the EU) and the Companies Act 2006 applicable to companies 
reporting under IFRS. 
The financial information has been prepared under the historical cost convention. The financial information is presented in 
Sterling, the presentation currency for the Group, and all values are rounded to the nearest thousand pounds (£’000) except 
when otherwise indicated.
The preparation of this financial information requires the Directors to make critical accounting estimates and judgements 
that affect the amounts reported in the financial statements and accompanying notes. The areas involving a higher degree of 
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed 
in Note 4.
Going concern basis
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, support the 
conclusion that there is a reasonable expectation that the Group has adequate resources to continue in operational existence 
for the foreseeable future, a period of not less than twelve months from the date of this financial information. The Group 
therefore continues to adopt the going concern basis in preparing its financial statements. The Group has acquired the 
resources via its flotation on AIM and revolving credit facility to support an accelerated growth plan for the business. 
3. Principal accounting policies
Basis of consolidation and business combinations
Basis of consolidation
The consolidated financial statements incorporate those of the Group and all entities controlled by it, after eliminating internal 
transactions. Control is achieved where the Group has the power to control the financial and operating policies through its share 
ownership. Subsidiaries are consolidated from the date on which control is obtained by the Group and cease to be consolidated 
from the date on which control is transferred out of the Group. The entities’ results are adjusted, where appropriate, to conform 
to Group accounting policies.
a) Business combinations
Business combinations are accounted for using the acquisition method under the revised IFRS 3 “Business Combinations” (IFRS 3R). 
The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition‑date fair 
value of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any 
asset or liability arising from a contingent consideration agreement. Acquisition costs are expensed as incurred. 
The Group recognises identifiable assets acquired and liabilities assumed, including contingent liabilities, in a business 
combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior 
to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition‑date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum 
of a) fair value of consideration transferred, b) the recognised amount of any non‑controlling interest in the acquiree and 
c) acquisition‑date fair value of any existing equity interest in the acquiree, over the acquisition‑date fair values of identifiable 
net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a 
bargain purchase) is recognised in profit or loss immediately. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 33
3. Principal accounting policies continued
b) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. 
Depreciation is charged to the income statement so as to write off the cost less estimated residual values over their expected 
useful lives on a straight line basis over the following periods:
Fixtures and fittings 5 years 
Computer equipment 2½ years – 5 years
Leasehold improvements Length of the lease
Residual values and useful economic lives are assessed annually. The gain or loss on the disposal or retirement of an asset 
is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in 
administrative expenses.
As a result of the review of useful economic lives an additional amortisation charge of £nil was made in the period to 31 May 2013 
(31 May 2012: £85,720).
c) Intangible assets 
Intangible assets are measured at historic cost and are amortised on a straight line basis over their expected useful economic life. 
They comprise three elements:
•	 development tools;
•	 software (self‑published games); and
•	 software (third party).
An internally generated intangible asset arising from the Group’s development activities is recognised only if all of the following 
conditions are met:
•	 completion of the intangible asset is technically feasible so that it will be available for use in developing games (in respect 
of development tools) or for sale of games (in respect of self‑published software);
•	 the Group intends to complete the intangible asset and has the ability to use or licence it as indicated above, thus generating 
probable future economic benefits;
•	 the expenditure attributable to the intangible asset during its development, mainly salary costs, can be measured reliably; and
•	 the Group has adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
Internally generated intangible assets, consisting of direct labour costs, other specific direct project costs and attributable project 
support costs, are amortised on a straight line basis over their useful economic lives. The estimated useful lives of current 
development projects are between two and five years. Until completion the assets are subject to annual impairment testing. 
Amortisation commences upon completion of the asset and is shown within cost of sales in the income statement. 
Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the 
period in which it is incurred.
d) Research activities
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
e) Impairment of property, plant and equipment and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and individual intangible 
assets for any indication that these assets have suffered an impairment loss. Until the internally generated intangible assets are 
available for use when amortisation can be charged, the assets are subject to an annual impairment test. Intangible assets 
already being amortised are also reviewed for any indication that the asset has suffered an impairment. If any such indication 
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. 
The recoverable amount is the higher of the fair value less costs to sell and value in use. 
Fair value in use is measured for self‑published games by discounting future cashflows. For all other assets a review of 
the expected useful economic life is undertaken and compared to that implied in the amortisation rate. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 34
NOTES TO THE FINANCIAL STATEMENTS
continued
3. Principal accounting policies continued
f) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the total accumulated project cost less the 
amount expensed as cost of sales, being an allocation to match sales revenue, subject to an economic benefit test of milestone 
delivery for long‑term contracts. Economic benefit tests are measured by reference to contractual terms such as acceptance and 
approval of a milestone by the customer. Net realisable value is based on estimated selling value less additional cost to completion 
and distribution. Provisions are made for obsolete or defective elements (which do not meet quality criteria and have to be replaced 
in full) of cost where appropriate and are recognised as an expense in the period in which the write down or loss occurs.
g) Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. 
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its financial 
liabilities. Equity instruments do not include a contractual obligation to deliver cash or other financial assets to another entity. Any 
instrument that does have the obligation to deliver cash or another financial asset to another entity is classified as a financial liability. 
Financial liabilities are presented under liabilities on the statement of financial position.
Financial assets
Financial assets comprise assets trade receivables, other receivables and cash and cash equivalents.
Trade and other receivables are recognised initially at fair value and measured subsequent to initial recognition at amortised cost 
using the effective interest method, less provision for impairment. Any change in their value through impairment or reversal of 
impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect all 
amounts due to it in accordance with the original terms of those receivables. The amount of the write down is determined 
as the difference between the assets carrying amount and the present value of estimated future cashflows discounted at 
the original effective interest rate.
Financial liabilities
The Group’s financial liabilities include trade and other payables and convertible loan notes.
Financial liabilities are initially measured at fair value and are subsequently measured at amortised cost, using the effective 
interest rate method, except for financial liabilities designated at fair value through profit and loss (FVTPL). All derivative financial 
instruments that are not designated and effective as hedging instruments are accounted for at FVTPL.
The convertible loan notes issued in the year are recognised as financial liabilities rather than equity as their characteristics are 
more akin to debt rather than equity. 
Share capital and reserves
Share capital represents the nominal value of the shares that have been issued.
Share premium – Share premium represents the excess over nominal value of the fair value of consideration received for equity 
shares, net of expenses of the share issue.
Option reserve – This reserve represents equity‑settled share‑based employee remuneration until such share options are exercised.
Foreign exchange reserve – This represents the exchange difference on consolidation of overseas subsidiaries.
Retained earnings – Retained earnings include all current and prior period retained earnings.
h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank deposits available on demand.
i) Income taxes
Income tax expense comprises the current and deferred tax. 
Current income tax liabilities comprise those obligations to fiscal authorities relating to the current or prior reporting period that are unpaid 
at the statement of financial position date. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to 
which they relate, based on the taxable profit for the year. All changes to current tax assets or liabilities are recognised as a component of 
tax expense in the income statement, except where it relates to items outside profit or loss. T ax relating to items in other comprehensive 
income is recognised in other comprehensive income and tax relating to items directly in equity is recognised directly in equity. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 35
3. Principal accounting policies continued
i) Income taxes continued
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the 
carrying amounts of assets and liabilities in the financial statements with their respective tax bases. In addition, tax losses 
available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax 
assets. However, deferred tax is not provided on the initial recognition of an asset or liability, unless the related transaction 
is a business combination or affects tax or accounting profit. 
Deferred tax liabilities are always provided in full. Deferred tax assets are recognised to the extent that it is probable that the 
underlying deductible temporary differences will be able to be offset against future taxable income. Deferred tax assets and 
liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, 
provided they are enacted or substantively enacted at the reporting date.
Deferred tax is recognised as a component of tax expense in the income statement. Deferred tax relating to items directly in 
equity is recognised directly in equity and deferred tax relating to items recognised in other comprehensive income is recognised 
in other comprehensive income.
j) Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are 
charged to the income statement net of any incentives received from the lessor on a straight line basis over the period of the lease. 
k) Revenue recognition
Revenue represents amounts derived from the design, production and sale of computer games software and related technology 
which fall within the Group’s ordinary activities, exclusive of value added tax and other similar sales taxes. Revenue is measured 
by reference to the fair value of consideration received or receivable.
Revenue includes income from the design and production of computer software contracted for customers, royalties from 
published games, income from the release of self‑published games, and crowd‑sourced funding pledges.
Revenues on project contracts are mapped against the expected profile of costs. In most circumstances these are closely correlated.
Where there is close correlation between the revenue and cost profile, the milestones within the project contracts are considered 
to approximate the stage of completion of the obligations under the contract and therefore recognition of revenue based on these 
milestones provides a sufficiently accurate approximation of recognition of revenue on a stage of completion basis, except for 
where there are significant acceptance requirements. Under such arrangements, revenue is recognised when the Group has 
substantially met all its performance obligations and the customer has approved the relevant milestone.
Where there is less correlation between the revenue and cost profile, revenue from customer specific contracts are recognised 
on the stage of completion of each assignment (milestone) at the period end date compared to the total estimated service based 
on the estimate of labour and other costs to be provided over the entire contract where the outcome can be estimated reliably. 
If a contract outcome cannot be estimated reliably, revenues are recognised equal to costs incurred, to the extent that costs are 
expected to be recovered. An expected loss on a contract is recognised immediately in the income statement.
Additionally project contracts may contain provision for the pass‑through of subcontract costs, these are recharged on a matching 
basis in the same period as the underlying cost.
Revenue earned from royalties under distribution agreements are recognised in the period that the sales to the end customer 
are made, estimated on an accruals basis as royalty reports are generally per calendar quarter. 
Revenue from released self‑published titles is recognised on download of the game or part thereof (micro transaction) from the 
sales channel and/or distribution platform.
Revenue from crowd‑funding for self‑published titles is normally recognised when the Group meets its performance obligations. 
Where there is no clear performance obligation, for example, membership of a development forum, this is taken as revenue over 
the expected development period of the game on a straight line basis.
l) Employee benefits
All accumulating employee compensated absences that are unused at the balance sheet date are recognised as a liability. 
The Group does not generally operate any pension scheme for its employees, beyond providing access to an ‘employee 
contribution only’ stakeholder scheme. There was, however, a small defined contribution pension contribution for an employee, 
which finished in the period to 31 May 2012. Payments to defined contribution retirement benefit schemes are charged as an 
expense in the period to which they relate.  FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 36
NOTES TO THE FINANCIAL STATEMENTS
continued
3. Principal accounting policies continued
m) Share‑based payment transactions
Share options are periodically granted to staff. Share options are measured at fair value at the date of issue and recognised over 
the vesting period of the option. Fair value is measured using the Black‑Scholes option pricing model. The expected life used in the 
model is the expiry date of the options prior to any public listing. The share‑based payment is recognised as an expense in profit or 
loss, together with a corresponding credit to a share‑based payment reserve in equity. This expense is recognised on a straight line 
basis based on the Group’s estimate of the number of shares that will vest. Estimates are subsequently revised if there is any 
indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior 
to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options 
ultimately exercised are different to that estimated on vesting. Upon exercise of share options, the proceeds received up to the 
nominal value of the shares issued are allocated to share capital with any excess being recorded as share premium.
n) Foreign currencies
Transactions denominated in a foreign currency are translated at the rate of exchange ruling at a month end rate in order to 
approximate to actual rate for the relevant transaction date. Monetary assets and liabilities denominated in foreign currencies 
are translated at the rate of exchange ruling at the statement of financial position date.
Foreign exchange differences are charged to the income statement in the period in which they arise.
The assets and liabilities in the financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the 
statement of financial position date. Income and expenses are translated at the actual exchange rate. The exchange differences 
arising from the re‑translation of the opening net investment in subsidiaries are recognised in other comprehensive income 
and are accumulated in the foreign currency reserve in equity. On disposal of a foreign operation, the cumulative translation 
differences are transferred to the profit and loss as a reclassification adjustment as part of the gain or loss on disposal.
o) Segment reporting
The Group identifies only one operating segment as the business is managed as a whole. For management purposes the 
chief operating decision maker reviews the financial information which is consistent with that reported in its financial statements, 
with financial performance measured on the basis of earnings before interest, tax, depreciation and amortisation. Assets are not 
directly attributable to any separable activity. 
p) Provisions
Provisions for dilapidations are recognised when the Group has a present legal or constructive obligation as a result of a past 
event, it is probable that an outflow of economic resources will be required from the Group and amounts can be estimated 
reliably. Timing or amount of the outflow may be uncertain.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable 
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation.
q) Standards and interpretations not yet applied
The following new standards, which are yet to become mandatory, have not been applied in the financial statements.
•	 IFRS 9 “Financial Instruments” (effective 1 January 2015)
•	 IFRS 10 “Consolidated Financial Statements” (effective 1 January 2014)
•	 IFRS 11 “Joint Arrangements” (effective 1 January 2014)
•	 IFRS 12 “Disclosure of Interests in Other Entities” (effective 1 January 2014)
•	 IFRS 13 “Fair Value Measurement” (effective 1 January 2013)
•	 IAS 27 (Revised) “Separate Financial Statements” (effective 1 January 2014)
•	 IAS 28 (Revised) “Investments in Associates and Joint Ventures” (effective 1 January 2014)
Based on the Group’s current business model and accounting policies, management does not expect material impacts on the 
financial information when the standards become effective. The Group does not intend to apply these pronouncements early. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 37
4. Significant accounting estimates and key judgements
The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing 
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
a) Intangible assets
The Group invests heavily in research and development. The identification of development costs that meet the criteria for capitalisation is 
dependent on management’ s judgement and knowledge of the work done. Development costs of software tools within a project that can 
be utilised generically are separately identified. Judgements are based on the information available at each period end. Economic success 
of any development is assessed on a reasonable basis but remains uncertain at the time of recognition as it may be subject to future 
technical problems and therefore a review for indicators of impairment is completed by product at each period end date. The net book 
values of the Group and Company intangible assets at 31 May 2013 are £3,449,515 (2012: £3,331,253).
Intangible assets are subject to amortisation and reviewed for impairment whenever events or changes in circumstances indicate 
that the carrying amount may not be recoverable, for example, a decision to suspend a self‑published title under development. 
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The 
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing 
impairment, assets are reviewed by project for which there are separately identifiable cashflows. 
Games developed to be self‑published are reviewed for impairment based on the status at the end of each financial year and 
at the half year against a prudent level of the projected net earnings. 
b) T rade receivables and recovery of work in progress
Trade receivables are stated net of any impairment for bad and doubtful debts, based on the Group’s best estimate of the 
likelihood of recovery on a specific basis. Recovery of work in progress is dependent on the successful completion of projects. 
Judgement is therefore needed to be applied for projects which are in progress regarding the ability of the Group to complete 
and deliver the project in accordance with contractual terms.
c) Deferred tax
A deferred tax asset is recognised where the Group considers it probable that future tax profits will be available against which 
the tax credit will be utilised in the future. This specifically applies to tax losses and to outstanding vested share options at the 
statement of financial position date. In estimating the amount of the deferred tax asset that should be recognised, the Directors 
make judgements based on current forecasts about the amount of future taxable profits and the timings of when these will be 
realised. A deferred tax asset is currently not being recognised in full due to the unpredictability of future taxable trading profits.
d) Revenue recognition
Significant management judgement is applied in determining the allocation and timing of the recognition of revenue on contracts. 
In this process management takes into account milestones, actual work performed and further obligations and costs expected to 
complete the work. Management monitors the progress and has regular dialogue with customers to confirm the project status.
5. Segment information
The Group identifies operating segments based on internal management reporting that is regularly reviewed by the chief 
operating decision maker and reported to the Board. The chief operating decision maker is the Chief Executive Officer.
Management information is reported as a single operating segment being the design and production of computer software 
irrespective of platform or route to market. Resources are managed on the basis of the Group as a whole. 
The Group’s revenues from external customers are divided into the following geographical areas:
31 May 2013
£’000
31 May 2012
£’000
United Kingdom (country of domicile) 113 29
United States of America 11,684 13,905
Rest of the world 275 223
12,072 14,157
At 31 May 2013 £72,574 of non‑current assets are based in Canada, with the remainder in the UK. Up until August 2012 all 
non‑current assets were based in the UK.
In 2013 and 2012 periods there was one customer whose revenue accounted for more than 10% of the Group and Company’s 
total revenue. The customer is based in the United States of America and totals 94% (2012: 95%) of the annual revenue.
All material revenue is categorised as either ‘self‑published’, ‘publishing’ or royalties. The majority of the revenue is services 
provided; however, a small proportion of the 2012/13 revenue was for goods provided. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 38
NOTES TO THE FINANCIAL STATEMENTS
continued
5. Segment Information continued
31 May 2013
£’000
31 May 2012
£’000
Publishing 11,355 13,499
Self‑published 511 323
Royalties 203 335
Other 3 —
12,072 14,157
EBITDA before material exceptional items is a key performance indicator for the Group and is also used by the Chief Executive 
Officer and is calculated as follows:
31 May 2013
£’000
31 May 2012
£’000
Operating profit 1,052 1,390
Depreciation 151 185
Amortisation 1,650 1,623
EBITDA 2,853 3,198
Share‑based compensation 416 —
Funding costs 308 —
Dilapidation provision 37 37
Canada set up fees 10 —
EBITDA adjusted 3,624 3,235
6. Profit before tax
31 May 2013
£’000
31 May 2012
£’000
This is stated after charging/(crediting):
Amortisation and impairment on intangibles 1,650 1,623
Depreciation of owned property, plant and equipment: 151 185
Loss on disposal of fixed assets — 1
Research and development costs expensed 603 333
Auditor remuneration:
Audit services         – statutory audit 37 11
Non‑audit services – tax services 4 3
– other services 133 10
Operating leases    – land and buildings 495 415
Foreign exchange gain (26) (8) REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 39
7 . Intangible assets
Group and Company 
The Group and Company intangible assets comprise capitalised development tools and self‑published software from internal 
development activities and acquired software licences. The carrying amounts for the reporting periods under review can be 
analysed as follows:
Development 
tools and licences
£’000
Self‑published 
software
£’000
Third party 
software
£’000
Total
£’000
Cost 
At 31 May 2011 5,181 85 647 5,913
Additions 574 769 90 1,433
Disposals (732) — — (732)
At 31 May 2012 5,023 854 737 6,614
Additions 695 1,013 75 1,783
Disposals (768) — — (768)
Transfer to tangibles — — (17) (17)
Transfer from tangibles — — 14 14
Adjustment — (78) — (78)
At 31 May 2013 4,950 1,789 809 7,548
Amortisation and impairment
At 31 May 2011 1,979 5 408 2,392
Charge for the period 1,207 287 129 1,623
Disposals (732) — — (732)
At 31 May 2012 2,454 292 537 3,283
Charge for the period 1,093 446 111 1,650
Disposals (768) — — (768)
Transfer to tangibles — — (1) (1)
Transfer from tangibles — — 12 12
Adjustment — (78) — (78)
At 31 May 2013 2,779 660 659 4,098
Net book value at 31 May 2013 2,171 1,129 150 3,450
Net book value at 31 May 2012 2,569 562 200 3,331
All amortisation charges, impairments (or reversals if any) are included within cost of sales.
8. Investment in subsidiary undertaking
During 2013 the Company set up a £66 investment in Frontier Developments Inc, a company registered in Canada. 
This represents 100% of the ordinary share capital of the company which is engaged in non‑game applications and 
video games for the interactive entertainment sector. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 40
NOTES TO THE FINANCIAL STATEMENTS
continued
9. Property, plant and equipment
Group 
Fixtures 
and fittings
£’000
Computer 
equipment
£’000
Leasehold 
improvements
£’000
Total
£’000
Cost 
At 31 May 2011 258 1,035 4 1,297
Additions — 28 — 28
Disposals (1) (108) — (109)
Reversals (36) — — (36)
At 31 May 2012 221 955 4 1,180
Additions 19 226 6 251
Disposals — (5) — (5)
Transfer from intangibles — 17 — 17
Transfer to intangibles — (14) — (14)
At 31 May 2013 240 1,179 10 1,429
Depreciation
At 31 May 2011 113 801 4 918
Charge for the period 54 144 — 198
Disposals (1) (107) — (108)
Reversals (13) — — (13)
At 31 May 2012 153 838 4 995
Charge for the period 33 117 1 151
Disposals — (5) — (5)
Transfer from intangibles — 1 — 1
Transfer to intangibles — (12) — (12)
At 31 May 2013 186 939 5 1,130
Net book value at 31 May 2013 54 240 5 299
Net book value at 31 May 2012 68 117 — 185 REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 41
9. Property, plant and equipment continued
Company 
Fixtures 
and fittings
£’000
Computer 
equipment
£’000
Leasehold 
improvements
£’000
Total
£’000
Cost 
At 31 May 2011 258 1,035 4 1,297
Additions — 28 — 28
Disposals (1) (108) — (109)
Reversals (36) — — (36)
At 31 May 2012 221 955 4 1,180
Additions 11 137 — 148
Disposals — (5) — (5)
Transfer from intangibles — 17 — 17
Transfer to intangibles — (14) — (14)
At 31 May 2013 232 1,090 4 1,326
Depreciation
At 31 May 2011 113 801 4 918
Charge for the period 54 144 — 198
Disposals (1) (107) — (108)
Reversals (13) — — (13)
At 31 May 2012 153 838 4 995
Charge for the period 31 89 — 120
Disposals — (5) — (5)
Transfer from intangibles — 1 — 1
Transfer to intangibles — (12) — (12)
At 31 May 2013 184 911 4 1,099
Net book value at 31 May 2013 48 179 — 227
Net book value at 31 May 2012 68 117 — 185 FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 42
NOTES TO THE FINANCIAL STATEMENTS
continued
9. Property, plant and equipment continued
Depreciation charges (or reversals, if any) are apportioned to the income statement as follows:
Consolidated year ended Company year ended
31 May 2013 31 May 2012 31 May 2013 31 May 2012
£’000 £’000 £’000 £’000
Charge 
Cost of sales (including reversals) 89 144 88 144 
Administration expenses 62 41 32 41
Total 151 185 120 185
The reversal in 2012 arises from the non‑payment for an asset previously capitalised in 2010 but where performance was short 
of specification. 
10. Operating leases as lessee
At each period end the future minimum operating lease payments were as follows:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Minimum lease payments due within one year 535 469 415 469
Minimum lease payments due within one to five years 801 947 400 947
Total 1,336 1,416 815 1,416
Group lease payments recognised as an expense during the year ended 31 May 2013: £495,269 (2012: £414,983).
The lease payments relate to the rental contracts for the office buildings, which expire April 2015 and August 2015. The lease 
signed in October 2012 for the Canadian subsidiary expires September 2017 .
Company lease payments recognised as an expense during the year ended 31 May 2013: £415,983 (2012: £414,983).
The lease payments relate to the rental contracts for the office buildings, which expire April 2015, August 2015 and September 2017 .
The Group’s and Company’s operating lease agreements do not contain any contingent rent clauses. None of the operating lease 
agreements contain renewal or purchase options or escalation clauses or any restrictions regarding dividends, further leasing or 
additional debt.
11. Financial assets and liabilities
The carrying amounts presented in the Statement of Financial Position relate to the following categories of financial assets and liabilities:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Financial assets
Loans and receivables
Trade and other receivables 1,808 2,362 2,046 2,362
Cash and cash equivalents 7,155 1,686 6,819 1,686
Total 8,963 4,048 8,865 4,048 REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 43
11. Financial assets and liabilities continued
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Financial liabilities
Financial liabilities measured at amortised cost
Current
Trade and other payables 1,122 585 1,050 585
Designated at fair value through profit and loss:
Convertible loan notes 1,129 — 1,129 —
Total 2,251 585 2,179 585
The financial liability associated with the convertible loan notes comprised interest cashflows payable at 8% and an embedded 
derivative liability to convert to a variable number of shares. Given that the loan note was issued near the period, the liability 
is based on the net proceeds received. The loan notes converted to equity on the admission to AIM.
12. Deferred tax assets and liabilities
Deferred taxes arising from temporary differences can be summarised as follows:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Accelerated capital allowances 520 533 522 533
Short‑term temporary differences (39) (36) (69) (36)
Tax losses (restricted) (453) (497) (453) (497)
Total liability 28 — — —
Balance brought forward — — — —
Effect of tax rate change on opening balance — — — —
Movement in year 28 — — —
Balance carried forward liability 28 — — —
No deferred tax asset at 31 May 2013 has been recognised in the Statement of Financial Position for the Group. The deferred tax 
liability at 31 May 2013 is £27 ,793 (2012: £nil), being wholly attributable to the Canadian entity.
The table below summarises the deferred tax assets for the Group and Company which have not been recognised in the financial 
statements as only a proportion of the tax losses are anticipated to crystallise or be able to be used in the foreseeable future. 
Total UK tax losses available at 31 May 2013 amount to £3,694,177 (2012: £3,729,030).
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Deferred tax asset not provided
Losses (397) (398) (397) (398)
13. Inventories
Inventories recognised in the Statement of Financial Position can be analysed as follows:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Work in progress — 75 — 75
There is no material difference between the replacement cost of inventory and the amounts stated above.
For the year ended 31 May 2013 a total of £94,366 (2012: £183,687) was included in profit and loss as an expense to cost of sales.  FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 44
NOTES TO THE FINANCIAL STATEMENTS
continued
14. T rade and other receivables
Trade and other receivables recognised in the Statement of Financial Position can be analysed as follows: 
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Trade receivables, gross 1,580 2,153 1,580 2,153
Intercompany receivable — — 325 —
Allowances for credit losses — — — —
Trade receivables, net 1,580 2,153 1,905 2,153
Other receivables 228 209 141 209
Financial assets 1,808 2,362 2,046 2,362
Prepayments 230 88 191 88
VAT and taxation 44 55 — 55
Non‑financial assets 274 143 191 143
Trade and other receivables 2,082 2,505 2,237 2,505
All amounts are short term. The net carrying value of trade receivables is considered a reasonable approximation of fair value. 
Group
Total
£’000
Neither past due
nor impaired
£’000
Past due but not impaired
0–90 days
£’000
>90 days
£’000
May 2013 1,580 1,580 — —
May 2012 2,153 2,153 — —
No other receivables are past their due date.
Company
Total
£’000
Neither past due
nor impaired
£’000
Past due but not impaired
0–90 days
£’000
>90 days
£’000
May 2013 1,905 1,905 — —
May 2012 2,153 2,153 — —
No other receivables are past their due date. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 45
14. T rade and other receivables continued
A reconciliation of the allowances for credit losses provision for trade receivable is provided below:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Brought forward provision — 2,169 — 2,169
Debts written off in period — (2,169) — (2,169)
Carried forward provision — — — —
15. Cash and cash equivalents
Cash and cash equivalents include the following components:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Cash at bank and in hand
GBP 5,411 1,671 5,411 1,671
USD 1,218 5 1,217 5
EUR 22 10 22 10
CAD 504 — 169 —
Financial assets 7,155 1,686 6,819 1,686
Cash at bank earns interest at a floating rate based on the length of deposit at standard commercial terms. The net carrying value 
of cash and cash equivalents equates to fair value.
16. Equity
Share capital
Group and Company movements in share capital
Movements in ordinary shares are as follows:
Number
‘000
Value
£‘000
At 1 June 2011 and 31 May 2012 
Ordinary shares of 0.1 pence 12,364 12
Shares issued on option exercises 253 1
Shares re‑denominated to 0.5 pence 12,617 114
At 31 May 2013 25,234 127
During the period to 30 November 2012 252,691 ordinary shares of 0.1 pence were allotted as fully paid at a premium 
of 65.9 pence per share.
On 21 December 2012 the Company re‑organised into a plc and bonus shares were issued on a 9 to 1 basis out of share 
premium, on the same day the ordinary shares were re‑denominated to 0.5 pence per share. The combined effect of these 
changes resulted in the addition of 12,617 ,023 shares and a transfer from share premium of £113,553.  FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 46
NOTES TO THE FINANCIAL STATEMENTS
continued
17 . Employee remuneration
Expenses recognised for employee benefits (including Directors) are analysed below.
Staff costs for all employees, including Directors, consist of:
31 May 2013
£’000
31 May 2012
£’000
Wages and salaries 7,517 7,248
Social security costs 774 764
Pension costs — 3
Share‑based compensation 416 —
8,707 8,015
Included in the above payroll costs for the year ended 31 May 2013 is £1,621,571 (2012: £1,251,545) capitalised within intangible 
fixed assets (Note 7). Pension costs relate to contributions to one employee’s private pension plan.
The average number of employees, including Directors, during the period were:
31 May 2013
£’000
31 May 2012
£’000
Research and development 212 209
General and administrative 14 6
226 215
Remuneration of Directors
31 May 2013
£’000
31 May 2012
£’000
Directors’ emoluments 318 273
Non‑Executive fees 25 8
Emoluments of highest paid Director
31 May 2013
£’000
31 May 2012
£’000
Emoluments 99 81
Remuneration of key management personnel
31 May 2013
£’000
31 May 2012
£’000
Short‑term employee benefits
Salaries including bonuses 755 573
Social security 101 72
Total short‑term employee benefits 856 645
Non‑ Executive fees 25 8
Share‑based compensation charge 183 —
Key management of the Group are the Board and senior management (functional heads).
Number of key management personnel, including directors at the statement of financial 
position date 11 8
A total of 648,000 share options were issued in the year to key management including Directors. The number of options exercised 
for ordinary shares from the December 2002 EMI grant was 449,060 (restated after re‑denomination).  REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 47
18. Share options
The Group has an employee share option scheme (EMI scheme), under which options may be granted to employees (including 
Directors) to subscribe for ordinary shares in the Group. The scheme was approved by shareholders in a general meeting. The 
2012 number and option price have been restated in the respect to the re‑denomination of share capital*.
Date of grant Scheme type
Period when 
exercisable Price in pence*
2013 
Number
2012 
Number
(restated)*
12 November 2002 2002 EMI Scheme 2003–2012 33 — 926,000
6 December 2005 2002 EMI Scheme 2006–2015 67 843,800 943,800
30 July 2012 2012 EMI Scheme 2013–2011 89 1,214,000 —
30 January 2013 Unapproved 2014–2023 89 100,000 —
15 May 2013 2012 EMI Scheme 2014–2023 95 240,000 —
15 May 2013 Unapproved 2014–2023 95 20,000 —
2,417,800 1,869,800
Movements in the number of share options outstanding and their related weighted average exercise price, as restated for the 
Share re‑denomination in December 2012 are as follows:
Group and Company year ended
May 2013 May 2012 (restated)*
Number
Average exercise 
price in pence Number
Average exercise 
price in pence
Opening balance 1,869,800 50.2 2,303,800 52.2p
Granted 1,626,000 90.0 — —
Exercised (505,382) 33.0 — —
Forfeited (572,618) 44.0 (434,000) 61.2p
Closing balance 2,417,800 82.0 1,869,800 50.2p
Exercisable at the year end 843,800 67.0 1,869,800 50.2p
There was no weighted average share price at the date of exercise of the share options, as the Company was not quoted.
 The share options at the end of May 2013 have a weighted average contractual life as follows:
Group and Company year ended
May 2013 May 2012 (restated)*
Expiry date
Exercise price 
per share
Pence
Options
Number
Weighted 
average remaining
 contractual life
Months
Options
Number
Weighted 
average remaining
 contractual life
Months
November 2012 33 — — 926,000 6
December 2015 67 843,800 31 943,800 43
July 2022 89 1,214,000 108 — —
January 2023 89 100,000 116 — —
May 2023 95 260,000 120 — —
Total 2,417,800 83 1,869,800 25 FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 48
NOTES TO THE FINANCIAL STATEMENTS
continued
18. Share options continued
Under the rules of the share option schemes, options are not normally exercisable until one year from the date of the grant. 
Options are valued at date of grant using the Black‑Scholes option pricing model. 
There are no performance conditions attaching to the options. 
The significant inputs into the model were calculated share price at the grant date, exercise price volatility of 20% and expected 
option life of ten years and, given that the company was not listed at date of grants, an annual risk free interest rate of 3.87%–4.15%. 
The volatility used is based on similar companies. The only vesting condition is continued service in the Company.
19. T rade and other payables
Trade and other payables recognised in the statement of financial position can be analysed as follows:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Trade payables 183 40 153 40
Intercompany payable — — 30 —
Other taxation and social security 284 188 285 188
Accruals and deferred income 1,464 639 1,413 639
Convertible loan note 1,129 — 1,129 —
Total trade and other payables 3,060 867 3,010 867
Trade and other payables are due within one year and with the exception of the convertible loan note are non‑interest bearing. The 
convertible loan note carries an interest rate of 8% per annum. The loan notes are convertible into ordinary shares on an AIM IPO 
at a discount rate of 15% of the listing price. The carrying values of trade and other payables are considered to be a reasonable 
approximation of fair value.
Payable over more than one year
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Deferred income 1,283 — 1,283 —
Deferred income payable over one year represent crowd sourced income recognised where the expected pledge level to which 
it relates is not expected to be delivered until after one year.
20. Provisions for dilapidations
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Opening balance 150 113 150 113
Provided for in period 37 37 37 37
At period end 187 150 187 150
The dilapidation provision relates to the rental contracts for two office buildings (included within Note 10). These leases expire 
April 2015 and August 2015. This is when the majority of this expenditure is expected to be incurred. The provision is based on the 
estimated costs of work to be performed to bring the buildings back to a state of repair and condition, similar to the start of the 
lease. The lease of the premises in Canada has no repair conditions. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 49
21. Finance income 
Finance income may be analysed as follows for the reporting periods presented:
31 May 2013
£’000
31 May 2012
£’000
Interest income from cash and cash equivalents 19 10
22. T axation on ordinary activities
(a) Analysis of the charge in the period
31 May 2013
£’000
31 May 2012
£’000
UK corporation tax based on the results for the year 4 2
Overseas tax on the results for the period (6) —
Deferred tax 28 —
Tax on profit on ordinary activities 26 2
(b) Factors affecting tax expenses
The tax assessed on the profit on ordinary activities for the year differs from the effective tax rate of corporation tax 24.1% (2012: 24.0%) 
as follows:
31 May 2013
£’000
31 May 2012
£’000
Profit on ordinary activities before taxation 1,071 1,400
Tax on profit on ordinary activities at standard rate 258 336
Factors affecting tax expense for the year:
Adjustment on transition to IFRS — (124)
Expenses not deductible for tax purposes 215 —
Adjustments for opening deferred tax average rate 16 —
Deferred tax not provided (1) 13
Research and development tax credits (397) (223)
Exercise of share options (65) —
Total amount of tax 26 2
Factors that may affect future tax charges 
The Group takes advantage of the enhanced tax deductions for research and development expenditure in the UK and expects to 
continue to be able to do so. From 1 April 2013 the Video Games Tax Relief becomes available and the Group expects that some 
of its work will qualify for this relief.
23. Earnings per share
The calculation of the basic earnings per share is based on the profits attributable to the shareholders of Frontier Developments plc 
divided by the weighted average number of shares in issue during the year. Separate calculations have been performed to a profit 
taking out the adjusted items in Note 5.
31 May 2013 31 May 2012
Profit attributable to shareholders (£’000) 1,045 1,398
Weighted average number of shares 25,014,043 24,728,664
Basic earnings per share (pence) 4.2 5.7
The calculation of the diluted earnings per share is based on the profits attributable to the shareholders of Frontier Developments plc 
divided by the weighted average number of shares in issue during the year as adjusted for diluted share options. FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 50
NOTES TO THE FINANCIAL STATEMENTS
continued
23. Earnings per share continued
31 May 2013 31 May 2012
Profit attributable to shareholders (£’000) 1,045 1,398
Weighted average number of shares 25,495,040 25,572,937
Adjusted basic earnings per share (pence) 4.1 5.5
The reconciliation of average number of ordinary shares used for basic and diluted earnings per share is as follows:
Weighted average number of ordinary shares 31 May 2013 31 May 2012
Ordinary shares 25,014,043 24,728,664
Under option 480,997 844,273
Diluted average number of shares 25,495,040 25,572,937
The calculation of the adjusted earnings per share, as calculated by external analysts, is based on the profit after tax, adjusted for 
acquired intangible assets. Separate calculations have been performed to a profit taking out the adjusted items:
31 May 2013 31 May 2012
Adjusted profit attributable to shareholders (£’000) 1,816 1,435
Weighted average number of shares 25,014,043 24,728,664
Adjusted basic earnings per share (pence) 7.3 5.8
Weighted average number of shares (diluted) 25,495,040 25,572,937
Adjusted diluted earnings per share (pence) 7.1 5.6
Adjusted profit 
31 May 2013
£’000
31 May 2012
£’000
Profit attributable to shareholders 1,045 1,398
Share‑based compensation 416 —
Funding costs 308 —
Dilapidations provision 37 37
Set up of Canadian subsidiary 10 —
Adjusted profit 1,816 1,435 REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 51
24. Cashflow adjustments and changes in working capital
The following non‑cashflow adjustments and adjustments for changes in working capital have been made to profit before tax 
to arrive at operating cashflow:
Group adjustments and changes
Adjustments
31 May 2013
£’000
31 May 2012
£’000
Depreciation, amortisation and impairment 1,801 1,808
Adjustment of cost of property, plant and equipment (see Note 8) — 36
Finance income (19) (10)
Loss on disposal of fixed assets and available for sale assets — 1
Share‑based payment expenses 416 —
Taxation 26 2
Foreign exchange (26) (8)
Total adjustments 2,198 1,829
Net changes in working capital:
Change in inventories 75 184
Change in trade and other receivables 464 (373)
Change in trade and other payables 1,064 (1,022)
Change in non‑ current liabilities 1,320 37
Total changes in working capital 2,923 (1,174)
Company adjustments and changes
Adjustments
31 May 2013
£’000
31 May 2012
£’000
Depreciation, amortisation and impairment 1,770 1,808
Adjustment of cost of property, plant and equipment (see Note 8) — 36
Finance income (19) (10)
Loss on disposal of fixed assets and available for sale assets — 1
Share‑based payment expenses 403 —
Taxation 4 2
Foreign exchange (34) (8)
Total adjustments 2,124 1,829
Net changes in working capital:
Change in inventories 75 184
Change in trade and other receivables 268 (373)
Change in trade and other payables 1,014 (1,022)
Change in non‑ current liabilities 1,320 37
Total changes in working capital 2,677 (1,174) FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 52
NOTES TO THE FINANCIAL STATEMENTS
continued
25. Related party transactions
Two shareholders receive ongoing royalties or commission as a percentage of royalty sales for some of the Group’s video games 
launched in prior periods.
Consolidated year ended Company year ended
Connected party
Expense paid
May 2013
£’000
Creditor 
balance 
May 2013
£’000
Expense paid
May 2012
£’000
Creditor 
balance 
May 2012
£’000
Expense paid
May 2013
£’000
Creditor 
balance 
May 2013
£’000
Expense paid
May 2012
£’000
Creditor 
balance 
May 2012
£’000
Chris Sawyer – Royalties 53 6 76 18 53 6 76 18
Marjacq Micro Limited – 
Sales Commission 27 — 29 6 27 — 29 6
One Director was granted an interest‑free qualifying loan for the purchase of shares under the Group’s Share Option Plan in April 2010. 
The loan value was £8,000 at 31 May 2013. The loan with repaid to the Company in June 2013.
David Braben has assigned his rights to the Elite franchise to the Company pursuant to an assignment agreement dated 1 June 2008. 
The Company has agreed to pay a royalty of 10% of the profits in respect of Elite sequels, including Elite: Dangerous. There is no 
royalty currently due payable under this agreement (2012: £nil).
26. Financial instrument risks
Risk management objectives and policies
The Group is exposed to various risks in relation to financial assets and liabilities. Financial assets and liabilities by category are 
summarised in Note 11 . The main types of risks are credit risk, currency risk and liquidity risk. 
The Group’s risk management is coordinated in close cooperation with the Board of Directors and focuses on actively securing 
the Group’s short to medium‑term cashflows.
The Group does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks 
to which the Group is exposed are described below.
26.1 Credit risk
The Group’s exposure is limited to the carrying amount of financial assets and cash and cash equivalents recognised at the year 
end date (as summarised in Note 11). 
The Group’s management consider all financial assets, not impaired, for each reporting date are of good credit quality, including 
those past due. In respect of trade and other receivables the Group is exposed to significant credit risk for a single counterparty.
The Group considers it has minimal credit risk for liquid funds and other short‑term financial assets as cash is held with reputable 
UK and Canadian banks.
At the year end none of the Group’s financial assets are secured by collateral or other credit enhancements.
26.2 Foreign currency risk
The Group’s reporting currency is pounds Sterling (GBP). Exposure to currency exchange rates arises where transactions are 
in a currency other than the functional currency of the entity, primarily Canadian Dollars (CAD), US Dollars (USD) and Euro (EUR).
The Group does not enter into forward exchange contracts to mitigate the exposure to foreign currency risk as the Group’s 
currency transactions are not considered significant enough to warrant this. However the Group does seek to maintain the 
same level of working capital in both its Canadian subsidiary and in the UK parent, measured in calendar months.  REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 53
26. Financial instrument risks continued
26.2 Foreign currency risk continued
The carrying amounts of the Group’s Canadian Dollar, US Dollar and Euro denominated monetary assets outside the functional 
currency of the entity at the reporting date are as follows: 
Consolidated year ended Company year ended
31 May 2013 31 May 2012 31 May 2013 31 May 2012
CAD
£’000
USD
£’000
Euro
£’000
USD
£’000
Euro
£’000
CAD
£’000
USD
£’000
Euro
£’000
USD
£’000
Euro
£’000
Assets 169 2,758 25 8 12 501 2,756 25 8 12
In addition some of the Group’s revenue and overhead transactions are completed in a foreign currency. Transaction exposure 
is hedged through the use of currency bank accounts.
Foreign currency sensitivity analysis
The following table details the Group’s sensitivity to a 5% increase or decrease in the Sterling exchange rate against all relevant 
currencies, albeit the main exposures are USD and CAD. An increase in Sterling would lead to a decrease in income and a 
decrease in equity. 
Consolidated year ended Company year ended
May 
2013
£’000
May 
2012
£’000
May 
2013
£’000
May 
2012
£’000
Effect of a 5% change in relevant exchange rate on:
Income statement 100 32 100 32
Equity 105 32 123 32
26.3 Liquidity risk analysis
Liquidity risk is the risk arising from the Group not being able to meet its obligations as they fall due. The Group manages its 
liquidity needs by carefully monitoring forecast cash inflows and outflows due in day‑to‑day business. Net cash requirements 
determine headroom or any shortfalls over the medium term. This analysis shows if there is a need to seek external funding 
or the need for securing finance from its shareholder base.
The Group’s financial liabilities have contractual maturities as summarised below:
Current Non‑ current
Within 6 months
£’000
Between 
6 and 12 months
£’000
Between 
1 and 5 years
£’000
Later than 5 years
£’000
As at 31 May 2013
Trade and other payables 564 479 79 —
As at 31 May 2012
Trade and other payables 164 282 139 —
The Company’s financial liabilities have contractual maturities as summarised below:
Current Non‑ current
Within 6 months
£’000
Between
6 and 12 months
£’000
Between 
1 and 5 years
£’000
Later than 5 years
£’000
As at 31 May 2013
Trade and other payables 492 479 79 —
As at 31 May 2012
Trade and other payables 164 282 139 — FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 54
NOTES TO THE FINANCIAL STATEMENTS
continued
26. Financial instrument risks continued
26.3 Liquidity risk analysis continued
The convertible loan notes have no contractual redemption rights.
Financial assets used for managing liquidity risk
Cashflows from trade and other receivables are contractually due within six months.
Cash is generally held in accounts with immediate notice. Where surplus cash deposits are identified these are placed 
in accounts with access terms of no more than one year.
26.4 Interest rate sensitivity
The convertible loan carries a fixed rate of 8% per annum. The Group has no other borrowings through which it is subject 
to interest rate risk.
The risk associated with interest earned on cash balances is low given low level of interest currently being earned worldwide.
27 . Capital management policies and procedures
The Group’s capital management objective is to ensure the Group’s ability to continue as a going concern by securing sufficient 
funding through equity or debt.
The Group sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Group 
manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the strategic plans 
of the business over a rolling three‑year forecast. In order to maintain or adjust the capital structure and provide funds to support 
the planned growth, the Group may issue new shares or raise other funds through debt. The Group undertook a public listing on 
AIM in July 2013 to meet this objective.
At each balance sheet date the Group had no borrowings except for the convertible loan note. The Group is not subject 
to externally imposed capital requirements.
Capital for the reporting period under review is summarised as follows:
Consolidated year ended Company year ended
31 May 2013
£’000
31 May 2012
£’000
31 May 2013
£’000
31 May 2012
£’000
Total equity 8,395 6,763 8,252 6,763
Convertible loan 1,129 — 1,129 —
Less cash and cash equivalent (7,155) (1,686) (6,819) (1,686)
2,369 5,077 2,562 5,077
28. Ultimate control
The Directors consider that David Braben has ultimate control of the Group by reference to his shareholding interest. REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT AND ACCOUNTS 2013 FRONTIER DEVELOPMENTS PLC 55
NOTICE OF MEETING
FRONTIER DEVELOPMENTS PLC
(Incorporated and registered in England and Wales with no. 02892559)
(THE “COMPANY”)
Notice is hereby given that the Annual General Meeting of the Company will be held at the offices of Frontier Developments plc 
at 306 Science Park, Milton Road, Cambridge CB4 0WG on Monday 23 December 2013 at 10 a.m. (London time) for the 
following purposes:
ORDINARY BUSINESS
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:
Resolution 1. To receive and adopt the financial statements for the year ended 31 May 2013 together with the Reports 
of the Directors and Auditors thereon.
Resolution 2. To re‑ appoint David John Braben as a Director, who has retired by rotation in accordance with Article 70 
of the Company’s Articles of Association (the “Articles”) and is therefore required to stand for re‑ election 
pursuant to Article 70 of the Articles. 
Resolution 3. To re‑ appoint David Gammon as a Director, who has retired by rotation in accordance with Article 70 of the 
Company’s Articles of Association (the “Articles”) and is therefore required to stand for re‑ election pursuant 
to Article 70 of the Articles.
Resolution 4. To re‑ appoint Grant Thornton UK LLP as the Company’s auditor until the conclusion of the next Annual General 
Meeting and to authorise the Directors to determine the auditor’s remuneration for the ensuing year.
OTHER BUSINESS
To consider and, if thought fit, pass the following resolution as an ordinary resolution:
Resolution 5. THAT in substitution for all authorities in existence immediately prior to this resolution being passed, the 
directors of the Company (the “Directors”) be and are hereby generally and unconditionally authorised to 
exercise all powers of the Company, pursuant to Section 551 of the Companies Act 2006 (the “Act”), to allot 
equity securities (within the meaning of Section 560 of the Act) up to an aggregate nominal amount of 
£51,892.54, which represents one‑third of the nominal value of the Company’s issued share capital at the 
date of this notice provided that this authority shall expire at the conclusion of the next Annual General 
Meeting of the Company save that the Company may before such expiry make an offer or agreement which 
would or might require equity securities to be allotted after such expiry and the Directors may allot equity 
securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. 
To consider and, if thought fit, pass the following resolution as a special resolution:
Resolution 6. THAT, subject to the passing of resolution 5 above, the Directors be empowered in accordance with Section 570 and 
Section 571 of the Act to allot equity securities (within the meaning of Section 560 of the Act) for cash pursuant to 
the authority conferred on them pursuant to resolution 5 above as if Section 561(1) of the Act did not apply to any 
such allotment provided that this power shall be limited to:
(a)  the allotment of equity securities in connection with an open offer or otherwise in favour of ordinary 
shareholders in proportion (as nearly as possible) to the respective number of shares held, or deemed 
to be held, by them subject only to such exclusions or other arrangements as the Directors may consider 
appropriate to deal with fractional entitlements or problems arising in any territory or with the requirements 
of any recognised regulatory body or stock exchange in any territory; and
(b)  the allotment of equity securities (otherwise than pursuant to sub‑ paragraph (a) above) up to an aggregate 
nominal amount of £15,567.76 which represents one‑tenth of the nominal value of the Company’s issued 
share capital as at the date of this notice,
provided that this power shall expire at the conclusion of the next Annual General Meeting of the Company 
save that the Company may before such expiry make an offer or agreement which would or might require 
equity securities to be allotted after such expiry and the Board may allot equity securities in pursuance of 
such an offer or agreement as if the authority conferred hereby had not expired.
By order of the Board
David Gammon
Chairman
13 November 2013 
Frontier Developments plc FINANCIAL STATEMENTS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2013 56
EXPLANATORY NOTES
to the Notice of Annual General Meeting
Notes
1 .  A member entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend, speak and vote 
instead of him. A member may appoint more than one proxy in relation to the meeting, provided that each proxy is appointed 
to exercise the rights attached to a different share or shares held by that member. The proxy need not be a member of the 
Company. Please refer to the notes to the Form of Proxy for further information on appointing a proxy, including how to appoint 
multiple proxies (as the case may be).
2.  If you wish your proxy to speak on your behalf at the meeting, you will need to appoint your own choice of proxy (not the 
Chairman) and give your instructions directly to them. If you wish to appoint a proxy other than the Chairman, write the full 
name of your proxy in the box provided in the Form of Proxy.
3.  In the absence of instructions, the person appointed proxy may vote or abstain from voting as he/she thinks fit on the specified 
resolutions and, unless otherwise instructed, may also vote or abstain from voting on any other matter (including amendments 
to resolutions) which may properly come before the meeting. 
4.  In the case of joint holders, the signature of any one of them will suffice but the names of all joint holders should be stated. 
The vote of the senior who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the votes of the 
other holders. For this purpose, seniority is determined by the order in which the names stand in the register of members in 
respect of the joint holding.
5.  To be effective, the enclosed Form of Proxy must be duly completed and deposited together with any power of attorney or 
other authority (if any) under which it is executed (or a duly certified copy of such power or authority) and lodged at the offices 
of the Company no later than 11 a.m. on Saturday 21 December 2013 (being not more than 48 hours prior to the time fixed 
for the meeting).
6.  Whether or not you propose to attend the Annual General Meeting, please complete and submit a Form of Proxy in accordance 
with the instructions printed on the enclosed form. Completion and return of the Form of Proxy will not preclude a shareholder 
from attending and voting in person at the meeting. 
7 .  The Company, pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those members 
entered on the register of members of the Company at 11 a.m. UK time on Saturday 21 December 2013 (being not more 
than 48 hours prior to the time fixed for the meeting) shall be entitled to attend and vote at the meeting or, if the meeting 
is adjourned, 11 a.m. UK time on such date being not more than two working days prior to the date fixed for the adjourned 
meeting. Changes to entries on the register of members after such time shall be disregarded in determining the right of 
any person to attend or vote at the meeting.
8.  The following documents will be available for inspection from the date of this notice until the meeting at the Company’s 
registered office and at the meeting convened by this notice:
 (a) Register of Directors’ share interests; and
 (b) Directors’ service contracts. aDVISORS aND COMP aNy INFORMa TION
Company Secretary and CFO
Mr n R Armstrong
Registered and Head Office
306 Science Park
Milton Road
Cambridge CB4 0WG
Website
www.frontier.co.uk
Broker and Nominated Advisor
Canaccord Genuity Limited
88 Wood Street
l ondon eC2V 7QR
Auditor
Grant Thornton UK LLP
101 Cambridge Science Park
Milton Road
Cambridge CB4 0FY
Legal advisors to the Company
Bird & Bird LLP
15 Fetter lane
l ondon eC4A 1JP
Registrars
Capita Registrars
Ibex House
42–47 Minories
l ondon eC3n 1dX
Registered Number
02892559
(Incorporated and registered in england and Wales) FRONTIER DEVELOPMENTS PLC
306 Science Park 
Milton Road 
Cambridge CB4 0WG FRONTIER DEVELOPMENTS PLC Annu Al RePoR t And ACCountS 2013