FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2016
POISED TO SUCCESSFULL Y 
COMPLETE OUR BUSINESS 
TRANSITION
FRONTIER DEVELOPMENTS PLC 
ANNUAL REPORT AND ACCOUNTS 2016 04
06
10
BUILDING WORLD-CLASS 
FRANCHISES
The games industry is transitioning into the world’s 
premier form of entertainment. Frontier has a proven 
track record of progressive development in video 
games spanning several decades of rapid technological 
change. The Group’s projects cross a wide variety of 
genres and platforms and are linked by an underlying 
drive for innovation, timely delivery and, above all, 
quality, enabled by its COBRA technology.
CHAIRMAN’S STATEMENT
Building the right management teams, 
organisation and infrastructure to further  
the success of our franchises and grow  
their number .
CHIEF EXECUTIVE’S STATEMENT
The expected full release of Planet Coaster  
will mark the successful completion of our 
transition, with all development staff working  
on revenue-generating franchises under our 
new self-published business model.
OUR STRATEGIC PRIORITIES AND  
KEY PERFORMANCE INDICATORS
Continued investment in the Group’s transition 
with Elite Dangerous revenues used to fund 
development of both Planet Coaster and further 
Elite Dangerous franchise development. i
CONTENTS
STRATEGIC REPORT
Highlights  02
Chairman’s statement 04
Chief Executive’s statement 06
Our strategic priorities and key performance indicators 10
Principal risks and uncertainties 20
Financial review 22
CORPORATE GOVERNANCE
Directors’ biographies 26
Report of the Directors 28
Corporate governance report 30
Remuneration report 34
FINANCIAL STATEMENTS
Independent Auditor’s report 36
Consolidated statement of cashflows 37
Company statement of cashflows  38
Consolidated income statement  39
Consolidated statement of comprehensive income  39
Consolidated statement of financial position   40
Company statement of financial position  41
Consolidated statement of changes in equity  42
Company statement of changes in equity  43
Notes to the financial statements  44
ADDITIONAL INFORMATION
Notice of Annual General Meeting  65
Advisors and Company information  68
For more information visit:  
AR2016.frontier.co.uk or www.frontier.co.uk
01 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 8.4
1 0.5
8.6
NET CASH BALANCE (£m)
-18%
£8.6m
2014 2015 2016
0.3
6. 1
4. 9
EBITDA (£m)
-20%
£4.9m
2014 2015 2016
(1 .7)
1 .6
1.2
OPERATING PROFIT (£m)
-21%
£1.2m
2014 2015 2016
(3.5)
2.5
(2.7)
ADJUSTED OPERATING 
RESULT* (£m)
-209%
£(2.7)m
2014 2015 2016
9 .5
22.8
21 .4
REVENUE (£m)
-6%
£21.4m
2014 2015 2016
2.5
0.7
2.2
DEFERRED INCOME (£m)
+68%
£2.2m
2014 2015 2016
(5.8)
4.9
4.2
EPS (p)
-14%
4.2p
2014 2015 2016
( 1 1 .4)
7.4
(8.0)
ADJUSTED LPS / (EPS)* (p)
-208%
(8.0)p
2014 2015 2016
HIGHLIGHTS
SUBSTANTIALL Y , ALL GROUP REVENUES IN THE  
PERIOD WERE DERIVED FROM SELF-PUBLISHING.
CONTINUED INVESTMENT IN THE GROUP’S TRANSITION.
EXPANDED THE ELITE DANGEROUS AUDIENCE.
PLANET COASTER ON A POSITIVE TRAJECTORY  
FOR NOVEMBER 2016 LAUNCH. 
FINANCIAL
*  See page 24 for the reconciliation to the operating profit. 
02 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 3
4
2
OPERATIONAL HIGHLIGHTS
1 Poised to complete business transition
• Substantially, all Group revenues in the period were derived from 
self-publishing activities, which was up 13% at £21.0 million 
(FY15: £18.6 million). In addition the deferred income balance 
rose by £1.5 million to £2.2 million.
• Good progress was made during the period towards the strategic 
objective of self-publishing multiple revenue generating franchises. 
There was continued investment in the Group’s transition with 
Elite Dangerous revenues used to fund development of both 
Planet Coaster and further Elite Dangerous franchise development.
3 Elite Dangerous audience expanded
• The Group expanded the audience for Elite Dangerous by releasing 
on Microsoft’s Xbox One, and supporting the consumer launch of 
the two major PC Virtual Reality systems.
• New Elite Dangerous products were introduced to cover  
all main price points: Elite Dangerous: Horizons is a paid-for  
seasons pass of expansions to extend the Elite Dangerous game, 
and Elite Dangerous: Arena is a low-priced entry point offering 
instant action player-vs-player combat.
4  Frontier’s player numbers grow
• The total Elite Dangerous franchise unit sales increased by over 
one million during the year, and are currently around 1.8 million.
• Planet Coaster exceeded the Board’s expectations, with around 
25,000 unit sales during the period and 50,000 to date.
2  Second franchise on track 
• Alpha builds of the Group’s second franchise, Planet Coaster, 
were released to early adopter customers and the game 
remains on track for launch on 17 November 2016.
03 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT  “THE FINANCIAL YEAR TO  
31 MA Y 2016 (FY16) REPRESENTS  
A YEAR OF CONTINUED GOOD 
PROGRESS IN OUR TRANSITION  
TO A MUL TI-FRANCHISE,  
SELF-PUBLISHING COMPANY .”
DAVID GAMMON
Non-Executive Chairman
CHAIRMAN’S STATEMENT
For the first time substantially all our 
revenue has come from self-published 
titles: Elite Dangerous and Planet Coaster  
(in Alpha). We have transformed a 
business-to-business enterprise into  
a business-to-consumer organisation  
in the space of two years.
In FY17 , we will launch our second franchise, 
Planet Coaster , and as a result will complete 
our strategic transition to self-publishing 
multiple revenue generating franchises.
As part of this transition and to continue the 
preparation of the business for long-term 
success, we will continue to develop, evolve 
and invest in our organisational structure 
and facilities. This will provide the right 
platform as we endeavour to further the 
success of our franchises and continue to 
grow their number.
We believe we are building the right 
management teams, organisation and 
infrastructure to be able to effectively 
create, develop, market and sell even  
more distinct franchises aimed at  
different audience segments. 
Number of Planet Coaster 
pre-orders at end  
August 2016: 
50,000
04 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 On behalf of all shareholders, I take  
this opportunity to thank our employees 
and advisors for their amazing skill, 
professionalism and dedication.
I would also like to pay tribute to the 
support and experience Jonathan Milner 
brought to our Board during his period as 
an NED. Jonathan joined the Board pre-IPO 
in order to lend his weight and experience 
to the transfer from a private company to 
an AIM quoted company. That work has 
now been completed and I am delighted to 
welcome Charles Cotton as our new NED 
and Jonathan’s replacement. Charles has  
a successful worldwide track record in 
high-growth technology companies and  
his experience will be invaluable as we 
continue to build the organisation.
During FY16 we further developed  
both Elite Dangerous and Planet Coaster 
franchises and recruited new people into 
the organisation. In FY17 we expect to  
start seeing the results of these efforts.
DAVID GAMMON
Non-Executive Chairman
6 September 2016
Elite Dangerous  
franchise units:
1,800,000
10
Read more on page:
05 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT CHIEF EXECUTIVE’S STATEMENT
 “WE HAVE DELIVERED ANOTHER 
GREA T YEAR OF PROGRESS 
TOWARDS OUR GOAL OF EARNING 
REVENUE FROM MUL TIPLE  
SELF-PUBLISHED FRANCHISES.”
DAVID BRABEN OBE
Founder and CEO
OVERVIEW
We have had our first full year with  
Elite Dangerous, selling over one million 
franchise units in the period. At the same 
time we have made great progress with 
our second franchise Planet Coaster, 
releasing its first and second ‘alpha test’ 
versions to the public towards the end of 
the financial year, with the third ‘alpha test’ 
version released since the close of the 
financial year. The expected full release  
of Planet Coaster has just been announced 
for 17 November 2016 at the time of going 
to press, and will mark the successful 
completion of our transition, with all 
development staff working on revenue-
generating franchises under our new 
self-published business model. We can 
then start on a third franchise as planned.
This year we earned substantially all our 
revenue from self-published products  
for the first time, with self-published 
revenue increasing by 13% and revenue 
from work-for-hire contracts falling to zero  
in the year as planned, other than trailing 
royalties. Headline revenue was £21 .4 million 
with deferred income of £2.2 million.  
The Group remains in a strong financial 
position with a net cash balance of £8.6 
million. As we continued our planned 
transition, we generated a pre-tax profit  
of £1.3 million and EBITDA of £4.9 million. 
We are pleased with the strong financial 
position of the business, having invested  
£8.9 million in our two major self-published 
franchises during the financial year (2015: 
£4.3 million), with an increased proportion 
of development relating to titles yet to be 
released to 51% (2015: 30%).
06 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 1
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3
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MARKET
The video games sector continues to  
grow significantly. In calendar year 2016, 
analysts predict that the global video  
game market will hit around $100 billion.
PC is the largest digital sales revenue 
generator by platform, with over 50% 
market share, followed by mobile, then 
console. The shift to digital distribution is 
already largely complete in the PC and 
mobile segments. Consoles are the only 
segment in which physical retail remains 
significant; this is also the segment where 
digital sales are growing at their fastest rate.
STRATEGY
Our transition to publishing our own 
franchises is the best way to maximise the 
benefit of our core skills, assets and our 
technological platform, COBRA, which 
enables both Elite Dangerous and Planet 
Coaster and future franchises to have a 
significant technological advantage. The 
Company’s focus is on developing top 
quality self-published PC and console titles 
for digital distribution, as together these 
segments represent the majority of the 
available market by revenue, and generally 
the audiences on these platforms value 
high quality games, and quality is one of 
Frontier’s key development strengths.  
We will also continue to create further 
franchises and games that benefit from 
work on existing franchises that would 
make use of our established expertise  
and / or IP in order to further build our 
revenue pipeline over the long term.
Our belief is that having all our people in  
our Cambridge HQ working together in a 
single building will maximise our operational 
efficiency. We will work toward this objective 
in the coming months and years. 
Going forward we will continue to grow the 
capacity and capability of our organisation 
in both commercial and development areas 
in order to further the successful evolution 
of our franchises. As part of this process, 
we will explore potential partnerships  
and licensing opportunities. We will also 
continue to review potential acquisition 
targets that could augment our capacity or 
add new capabilities and / or IP that may 
help us achieve our goals. We will endeavour 
to enhance and expand our franchises and 
grow their audiences using appropriate 
additional products, platforms, media, 
distribution channels, and charging models 
through investing in the necessary people, 
organisation, resources and infrastructure.
We believe that using our COBRA 
development tools and technology to 
facilitate the creation of innovative, strongly 
differentiated features for the PC and 
console audiences currently provides the 
best return on our investment. Whilst a 
publisher partner has in FY17 taken up  
two options under previous work-for-hire 
contracts to license COBRA to facilitate 
ports of existing games to new platforms, 
licensing our COBRA technology to new 
customers is not a current focus and 
remains a future strategic opportunity  
that we will continue to evaluate.
OPERATING IN LINE WITH 
OUR STRATEGIC PRIORITIES
T ransition to 
self-publishing
Repeatable model  
over multiple franchises
Elite Dangerous  
franchise
Planet Coaster  
franchise
10
Read more on page:
07 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT CHIEF EXECUTIVE’S STATEMENT CONTINUED
PLANET COASTER
Development of Planet Coaster remains  
on track for launch in calendar Q4 2016. 
Planet Coaster draws on our extensive  
past experience in the ‘Tycoon’ genre,  
and in coaster park games, including  
the massive hit RollerCoaster Tycoon 3.  
We have now released three Alpha builds 
of Planet Coaster (the first two within the 
financial year). These have been very well 
received, and early indications are positive,  
with social media ‘footprint’ tracking 
significantly higher than Elite Dangerous  
at the equivalent time in the development 
cycle. Planet Coaster moves the ‘Tycoon’ 
genre forwards significantly, adding 
detailed creative building and a community 
hub to enrich simulation gameplay, and 
has captured the imagination of players 
already with a number of ‘Youtubers’ showing 
their experiences of building truly amazing 
structures within the game.
SUMMARY
We have delivered another great year  
of progress towards our goal of earning 
revenue from multiple self-published 
franchises. I would like to add my thanks  
to all at Frontier for their hard work,  
our investors for their continued support, 
and to our many fans around the world  
that continue to make it all possible. 
DAVID BRABEN OBE
Founder and CEO
6 September 2016
ELITE DANGEROUS
We have continued to support Elite Dangerous 
with regular significant expansions,  
and released Elite Dangerous: Horizons,  
a paid-for seasons pass of expansions,  
and Elite Dangerous: Arena, an immediate-
action player-vs-player component as a 
stand-alone entry-level game. These allow 
us to cover all main price points. We have 
also participated in price promotions on 
each of the distribution platforms we are 
using, making the game available to a 
wider audience than we would otherwise 
reach. We have continued to reach new 
audiences for the game by supporting new 
distribution channels and platforms such 
as Xbox One and Amazon as well as the 
first consumer Virtual Reality (VR) 
headsets, the HTC Vive and the Oculus  
Rift. Our investment in our own COBRA 
technology allowed us to benefit from e 
arly adoption of this new technology –  
for example, Elite Dangerous has been a 
leading title on Oculus Rift for both sales 
and play-time each and every month since 
its launch. All of this continues to build  
the franchise.
Elite Dangerous is now in its second  
year of release. The attach rate of  
Elite Dangerous: Horizons to the base  
game was initially lower than expected,  
but unit sales of the base game were 
higher at the same time. Horizons and  
the base Elite Dangerous game continue  
to sell steadily, helped by the regular 
updates. These updates add to the quality 
of the game, renew the interest of existing 
players, and also generate additional 
coverage resulting in new sales. 
The opportunity to become a breakout  
hit franchise remains, as the game 
continues to sell and we continue to focus 
on enhancements to further improve 
perceived quality and sentiment. We expect 
to continue to expand the player base over 
the next financial year, adding new content 
and increasing the audience.
08 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 OUTLOOK AND CURRENT TRADING UPDATE
Trading since the year end, in what is a 
seasonally quiet quarter for the Group, 
has exceeded the Board’s expectations. 
Up to 31 August 2016 the Group had  
sold approximately 1.8 million franchise 
units of Elite Dangerous. The third  
Planet Coaster Alpha build was released  
in August, and up to 31 August 2016 the 
Group had sold approximately 50,000 
pre-order units of Planet Coaster.  
Net cash balance at 31 August 2016  
was approximately £8.4 million.
Since the year end the Group has also 
received £0.2 million of UK video game 
tax relief relating to its work for Amazon 
Game Studios. Frontier has submitted a 
further £0.7 million of claims related to 
Elite Dangerous which were not recognised 
in FY16, and will continue to submit claims 
for eligible projects at the appropriate 
time. See note 25 in the financial statements 
for an explanation of how this is treated.
Frontier remains at an early stage of the 
multi-franchise self-published model and 
therefore, although the Board believes 
Frontier’s strategy will deliver successfully, 
it is difficult to predict future outcomes 
with a degree of certainty and the Board 
expects Frontier’s results to continue to 
exhibit stepped characteristics driven by 
the timing of major franchise releases. 
In FY1 7 , following the successful completion 
of Frontier’s transition to generating 
self-publishing revenue from multiple 
franchises with the release of Planet 
Coaster , the Board expects the Group to 
be well placed – using the self-published 
business model maximises the return  
on Frontier’s core skills and assets,  
and two strong revenue-generating 
franchises will provide a good foundation 
from which to take further advantage  
of the significant opportunities available 
in the fastest growing segment of the 
entertainment industry. 
We plan to continue to increase the 
audience for Elite Dangerous via new 
distribution channels and platforms,  
and to further enrich the Elite Dangerous 
experience with new activities and new 
ways to play. The Board expects sales  
of Elite Dangerous to continue to build  
over the rest of the financial year as new 
players are recruited and adoption of  
Elite Dangerous: Horizons continues.
The results for the year will primarily  
be driven by the successful launch of 
Planet Coaster in November and trading 
over the holiday period. The encouraging 
performance of Planet Coaster pre-orders 
and the positive reception of the Alpha 
build give the Board confidence of a 
successful launch. We will support  
Planet Coaster post launch in order to 
grow the community of players over time.
Overall, the Board is confident and 
excited about the opportunities ahead  
in the coming years.
Note regarding the effects of the UK’s 
referendum vote to leave the EU:
The Board does not consider the UK 
referendum result to present any 
significant concerns for the business. 
Frontier has significant revenues from 
non-GBP sources, and exchange rate 
shifts therefore influence the Company’s 
finances. T o date the impact of the currency 
movements since the referendum has 
been positive, notwithstanding the 
Group’s policy of hedging half its forecast 
exposure in its most significant foreign 
currencies. The Company is expecting 
that all existing non-UK EU nationals 
currently employed in the UK by Frontier 
will be able to remain working for the 
Company, although at the time of writing 
there are no specific details available  
as to the impact of the vote. The Board 
expects that even in the case where a  
visa may be required, as Frontier is a  
Tier 2 visa sponsor the Company should 
be able to retain the services of its 
current non-UK EU nationals. Frontier’s 
approach to exchange rate volatility,  
staff availability and staff retention risks  
is set out in the Principal Risks and 
Uncertainties section on pages 20 to 21.
09 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT 1
2
OUR STRATEGIC PRIORITIES AND  
KEY PERFORMANCE INDICATORS 
TRANSITION TO  
SELF-PUBLISHING
REPEATABLE MODEL OVER 
MULTIPLE FRANCHISES
Frontier has been shifting to a  
self-publishing business model using 
digital distribution channels, and has 
grown end-customer facing facets of 
the organisation such as marketing, 
community and customer support as 
well as re-focusing its development 
staff to self published projects.
Frontier invests its development resources 
in games with strong franchise potential. 
In order to maximise the return on its core 
skills and assets Frontier has targeted game 
genres in which the company has established 
expertise and intellectual property.
Read more on page:
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12
14
FRONTIER’S STRATEGY IS TO BUILD MUL TIPLE 
FRANCHISES OVER TIME IN THE PC AND CONSOLE 
SPACE, USING ITS COBRA TECHNOLOGY TO 
DELIVER QUALITY AND DIFFERENTIATION.
10 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 3
4
RELEVANT KEY PERFORMANCE INDICATORS
INVESTMENT IN SELF-PUBLISHING  
AND TECHNOLOGY
This was the Group’s first year of investing in two 
self-published franchises.
Adjusted operating profit as per note 5  
to the financial statements.
Self-published revenue grew to be substantially all 
the Group’s total revenue. It grew in absolute terms to 
£21.0 million, an increase of 13% on the previous year.
1 ,864
1 ,243
2,608
2014 2015 2016
MEASURE OF 
PROFITABILITY (£)
2.5
(3.5) (2.7)
2014 2015 2016
TRANSITION OF REVENUE MIX  
& MEASURE OF GROWTH 
19.4
0
21.0
2014 2015 2016
22.8
9.5
21.4
2014 2015 2016
19.4
0
21.0
2014 2015 2016
22.8
9.5
21.4
2014 2015 2016
21.0m
self-published 
21.4m
total revenue 
PLANET COASTER FRANCHISE
ELITE DANGEROUS  
FRANCHISE
Planet Coaster draws on our extensive past 
experience in the ‘Tycoon’ genre, and in 
coaster park games. Feedback from the Alpha 
builds of Planet Coaster is very positive, with 
social media ‘footprint’ tracking significantly 
higher than Elite Dangerous at the equivalent 
time in the development cycle.
Elite Dangerous is now in its second 
year of release, and made its debut 
on Xbox One. Horizons and the base 
Elite Dangerous game continue to sell 
steadily, with regular updates adding 
to the quality of the game, renewing 
the interest of existing players, and 
driving new sales.
Read more on page:
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16
£(2.7)m 2,608
man months 
11 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT 1
Frontier has been shifting to a  
self-publishing business model using 
digital distribution channels, and has 
grown end-customer facing facets  
of the organisation such as marketing, 
community and customer support as  
well as re-focusing its development  
staff to self-published projects.
The most significant sales drivers in the 
games market are perceived quality and 
creating a unique experience. Frontier’s 
development process uses its proprietary 
COBRA development tools and technology 
to facilitate innovative features and the 
creation of top quality self-published 
games with strong differentiation.
Frontier’s control of its own COBRA 
games development technology also 
de-risks its developments in terms of 
risks related to ongoing access to  
third party technology, risks relating to 
ability to fix uncovered problems in that 
technology and lack of control over the 
delivery dates and feature roadmap of 
such solutions. It also facilitates rapid 
response to market opportunities like 
support for VR and Augmented Reality.
A previous publishing partner has in  
FY17 exercised its option under two 
previous work-for-hire contracts to 
license COBRA for their ports of existing 
games to new platforms. The Board  
is not expecting further such options  
to be exercised, and licensing Frontier’s 
COBRA technology to new customers 
remains a potential future strategic 
opportunity that the Board will continue 
to evaluate rather than a current focus.
T ransition to 
self-publishing
12 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 STRATEGIC REPORT
13 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 2
Repeatable 
model over 
multiple 
franchises
Frontier invests its development resources 
in games with strong franchise potential.
Its focus is on PC and console titles, as 
together these segments represent the 
majority of the available market by revenue 
and generally the audiences on these 
platforms have valued games that exhibit 
Frontier’s key development strengths.
In order to maximise the return on its  
core skills and assets Frontier has 
targeted game genres in which the 
Company has established expertise  
and intellectual property.
Frontier sustained similar levels of 
revenue with one franchise in the  
market whilst continuing to develop  
two franchises.
Major new releases will be key drivers  
of revenue. Because of the small number 
of franchises and relatively infrequent 
major releases Frontier is able to make, 
the revenue growth profile over financial 
years will be sensitive to the specific 
release schedule of such releases and 
may therefore exhibit ‘stepped’ behaviour.
2016 was a year of substantial investment 
for Frontier as we invested in Planet 
Coaster ahead of its release, which will 
complete our transition to earning 
self-published revenue from all our 
development effort.
Frontier uses online channels to create 
and engage with a fan-base or community 
during its self-published developments, 
which provides a valuable source of 
feedback and an enthusiastic community 
for each franchise before first release.
FRONTIER DEVELOPMENTS PLC 
ANNUAL REPORT AND ACCOUNTS 2016
14 STRATEGIC REPORT
FRONTIER DEVELOPMENTS PLC 
ANNUAL REPORT AND ACCOUNTS 2015
15 3
Further updates to Elite Dangerous
During the financial year Frontier continued 
to release updates to Elite Dangerous in order 
to drive awareness and interest in the game.
1.3 Powerplay (June 2015) added the 
ability for players to influence the 
behaviour of the main story characters.
1.4 Close Quarter Combat (CQC) (October 
2015) added an instant action ‘CQC’ arena 
mode to the game for players to take part 
in combat as a sport.
1.5 (December 2015) added more playable 
ships into the game.
1.6 (May 2016) added a new mission 
system, including the first images of 
human characters in the game.
Elite Dangerous on Xbox One
In June 2015 Elite Dangerous became  
the first game to be offered as part of 
Microsoft’s Game Preview Program (GPP) 
for its Xbox One games console, opening 
up a further audience for the game.
The GPP was the first time a paid beta / 
early access has been offered for a 
console, and Frontier’s experience with 
this method of development on the PC 
platform was a large factor in Microsoft’s 
decision to select Elite Dangerous as a 
lead title for the GPP .
Elite Dangerous was launched on Xbox  
One in October 2015, including the first  
four expansions.
Elite Dangerous for Xbox One was updated 
in May 2016 to allow Xbox players to make 
additional purchases of in-game items 
such as paint jobs for their ships, giving 
parity between the Xbox One and PC 
versions of the game. Future expansions 
are planned for simultaneous release on 
all platforms.
Elite Dangerous: Horizons
In August 2015 Frontier announced  
Elite Dangerous: Horizons, a second, paid-for, 
season of new expansions for Elite Dangerous 
dedicated to expanding gameplay, community 
and narrative. Frontier was able to engineer 
the underlying technology such that Horizons 
was fully backwards compatible, offering  
the key benefit that all players retain their 
progress and remain playing together in the 
same galaxy.
The first expansion in the Horizons season, 
Planetary Landings, was released on PC  
in December 2015, and the second, The 
Engineers, in May 2016. The Engineers was 
released six weeks later than originally 
planned, in order to give additional 
development time to focus on the quality  
of the release.
Elite Dangerous: Horizons initially offered an 
unclear value proposition to a proportion of 
players, and its positioning was subsequently 
altered early in 2016.
The number of Elite Dangerous players 
upgrading to Horizons built throughout the 
second half of the financial year , and Frontier 
expects this to continue as further Horizons 
expansions are released which further 
enhance the perceived quality and sentiment.
In June 2016, just after the end of the 
financial year, Elite Dangerous: Horizons 
was launched for Xbox One customers. 
Future expansions in the season will be 
released simultaneously on all platforms.
Elite Dangerous: Arena
Frontier launched Elite Dangerous: Arena  
on PC in February 2016 and in April 2016  
for Xbox One. Elite Dangerous: Arena offers  
Elite Dangerous ‘CQC’ player-vs-player 
game as a standalone release at a low 
price point, with an easy upgrade path to 
the main game.
Virtual Reality
Using its COBRA technology Frontier was 
able to design Elite Dangerous from the 
ground up to support VR display systems.
As a result Elite Dangerous was the only 
‘AAA’ game fully available in VR at the 
commercial launch of such systems.
After supporting early developer versions 
of the Oculus Rift, Frontier announced 
support for HTC’s Vive VR headset (and 
other Steam VR compatible headsets)  
in September 2015, and in March 2016 
Elite Dangerous was a launch title for 
Facebook’s Oculus Rift consumer 
headset and available for purchase 
through the Oculus Home store on day 
one of its operation – Elite Dangerous  
has been a leading title on Oculus Rift  
for both sales and play-time each and 
every month since Home’s launch.
Elite Dangerous 
franchise
16 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 STRATEGIC REPORT
17 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 4
Planet Coaster 
franchise
Early in 2015 Frontier completed its 
outstanding contractual obligations to its 
publisher partners and started to invest 
in its second self-published franchise, 
Planet Coaster , a coaster park simulation 
game. Frontier has a very successful track 
record in developing games in this genre, 
for example RollerCoaster Tycoon 3 and 
Zoo T ycoon for PC and Xbox One respectively.
A trailer video for Planet Coaster 
premiered at the PC Gaming Show held 
during the E3 tradeshow in Los Angeles 
in June 2015, with pre-orders being made 
available for purchase at that time.
Planet Coaster Alpha builds
Planet Coaster is being developed using  
a similar philosophy of phased public  
pre-release builds to the game’s 
community of followers that Frontier 
used successfully with Elite Dangerous.
This serves both to test increasing  
levels of game functionality with large 
numbers of people and stimulate 
awareness of the game.
Alpha One was released in March 2016 
offering the first creation tools such  
as modular scenery construction  
and pathing, plus an early version  
of rollercoaster construction.
Alpha Two was released in May 2016 
including terrain modification tools,  
a further iteration of rollercoaster 
construction, refinements to pathing  
and other improvements.
Building the Planet Coaster community
Frontier started a programme to engage  
the Planet Coaster community including  
a ‘development diary’ video series, 
livestreams and internet forum ‘Q&A 
sessions’ designed to show the team’s 
design philosophy, progress and plans.
The Board is encouraged by the  
feedback from the Planet Coaster 
community so far.
18 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 STRATEGIC REPORT
FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
19 PRINCIPAL RISKS AND UNCERTAINTIES
DESCRIPTION MITIGATION
RELATIVE CHANGE  
OVER PERIOD
STAFF AVAILABILITY 
If the Group does not have the correct 
numbers of people with the correct skills 
available, the execution of its business  
plan will be compromised.
The Group continues to prioritise direct recruitment and 
outreach. We have visibility of our future needs via a regularly 
reviewed plan of record, and undertake analysis of potential 
bottlenecks. We seek to minimise days lost to sickness via 
healthcare benefits and general morale and wellbeing initiatives. 
The Group is a Tier 2 visa sponsor, to facilitate its objective to 
employ the best possible people from the worldwide talent pool.
STAFF RETENTION 
Staff departures could create staff  
and key skill / experience shortages  
and compromise the execution of the 
Group’s business plan.
Whilst there will unavoidably be some level of staff turnover, 
the Group believes that its attractive project portfolio, talented 
staff and good quality leadership make Frontier a place where 
talented people want to build their careers. We use our 
business success to deliver benefits to our people, and the 
Group is undertaking a programme of improving incentives  
and leadership skills which is intended to further enhance its 
attractiveness as an employer.
CYBERSECURITY
A breach of security could take many forms, 
and could significantly impact the business 
and impair our self-publishing plans. 
Exposure includes that of failure of security 
at our partners including Amazon, Valve  
and Microsoft.
We review our security provisions regularly and believe them  
to be in accordance with industry best practices.
STRATEGIC FOCUS
The Group is in the process of transitioning 
from entirely work-for-hire revenue from  
a small number of publisher customers  
to generating its revenue entirely from 
consumers via a number of self-published 
franchises based on its own IP . Inherently 
such a strategic shift of focus creates 
execution risks, whilst perhaps reducing 
financial risk based on a small customer base.
The first step in the Group’s transition to fully self-publishing 
its output has been successful with materially all of its revenue 
coming from self-published sales in the financial year, mainly 
from ongoing sales of Elite Dangerous. The Group remains 
confident that it can use its experience and expertise to 
continue to deliver on the product, technology, commercial  
and operational aspects that support its strategy.
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 US Dollars 
(USD) and Euros (EUR).
As the Group has expanded its revenue sources and there  
has been a subsequent increase in revenue from non-GBP 
currencies, the Group has entered into forward exchange 
contracts to mitigate the exposure to foreign currency risk. 
The intention is to retain an approximate 50% hedge against 
expected receipts over a rolling 12-month period. The currency 
exposure is monitored daily.
The Group faces competitive, strategic and financial risks that  
are inherent in a rapidly growing emerging market. The executive 
team maintains the risk register and escalates the key risks for 
further consideration at full Board level on a regular basis.
The key business and financial risks for the Group are set out below: 
20 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 Increase
DESCRIPTION MITIGATION
RELATIVE CHANGE  
OVER PERIOD
GROWTH MANAGEMENT
The Group’s future success will depend on 
its ability to manage and fund its anticipated 
expansion. This includes the management  
of overseas-based subsidiaries and may 
include acquisitions. Such expansion and 
investment is expected to place demands  
on management, support functions and 
working capital. If the Group is unable to 
manage and fund its expansion effectively, 
its business and financial results  
could suffer.
In order to mitigate the risk, the Group is investing in suitable 
training for key staff and key internal systems. The Group has 
appointed experienced key Non-Executive advisors to ensure 
risks are managed objectively, and will continue to review  
its requirements for strategic advice. The Group prudently 
manages its liquidity by monitoring forecast cash inflows  
and outflows both in the short and medium terms, as well  
as its long-term investment needs and opportunities.
MARKET DISRUPTION
The Group operates in a fast moving 
industry where competitive products,  
larger and better capitalised competitors, 
new market trends or disruptive technology 
may emerge which reduce its ability to 
compete and execute its business plan.
Investing in its own COBRA technology and self-published 
games allows the Group to continue to innovate, and we seek 
to make our processes and business decisions agile and well 
informed so we can anticipate and exploit such changes. We 
believe this risk is mitigated by our track record of execution 
on new platforms and the flexibility demonstrated by the 
diverse range of video games we have successfully developed 
in the past.
CREDIT
A third party might fail to fulfil its 
performance obligations under the terms  
of a financial instrument. This includes 
balances within trade and other receivables 
from distributors which can be up to two 
months of sales from the relevant platform.
The Group’s exposure is limited to the carrying value  
of financial assets recognised at the year end date  
(as summarised in notes 11 and 28). 
The Group’s management considers 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 risk  
from two counterparties who distribute product on the Group’s 
behalf; however, given the identity of each and their financial 
performance, we believe the likelihood of the risk of those 
companies defaulting to be low.
Decrease
No change
21 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT FINANCIAL REVIEW
TRADING RESULTS
During this transition year direct work- 
for-hire revenue fell to zero for the first 
time as planned (2015: £3.4 million),  
and self-published revenue grew to be 
substantially all the Group’s total revenue. 
For the first time, all the Group’s developers 
worked on our own self-published games 
and associated technology throughout the 
whole year.
The continued support and growth of  
Elite Dangerous including the addition  
of the Xbox One platform, the release of 
Elite Dangerous: Horizons, the release of  
the Alpha version of Planet Coaster and  
the launch of RollerCoaster Tycoon 3 on  
the iOS platform all contributed to another 
profitable year whilst the business remains 
in transition. Development of Planet Coaster 
continued towards its intended launch of  
17 November 2016, including the release  
of the first Alpha build in March 2016.
The Group continues to show cashflow as 
the primary financial statement as the Board 
believes it represents a clearer picture of the 
Group’s performance during transition.
The Group’s operating cashflow was  
£7.3 million (2015: £7.3 million) and its 
investment in non-current assets was  
£9 .2 million (2015: £4.7 million), consequently 
net cash balance reduced in this investment 
phase to £8.6 million from £10.5 million.
Total revenue was 6% lower year-on-year 
at £21.4 million (2015: £22.8 million), 
although self-published revenue grew 
from £16.8 million to £21.0 million and 
EBITDA was £4.9 million (2015: £6. 1 million).
The Group delivered an operating profit of 
£1.2 million (2015: £1.6 million).
Self-published revenue
£21.0m
Investment in  
non-current assets
£9.2m
EBITDA
£4.9m
DAVID WALSH
Chief Operations Officer
 
NEIL ARMSTRONG
Company Secretary and  
Chief Finance Officer
 “IN THE FINANCIAL YEAR ENDED  
31 MA Y 201 6, THE GROUP CONTINUED 
WITH ITS PLANNED INVESTMENT IN 
THE TRANSITION OF ITS BUSINESS 
TO EARNING ITS REVENUE FROM 
MUL TIPLE SELF-PUBLISHED 
FRANCHISES. THE TRANSITION 
WILL BE COMPLETE WITH THE 
LAUNCH OF PLANET COASTER.”
22 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 An adjusted operating result is used as  
the Board’s measure of profitability in 
order to provide an improved insight into 
performance by reflecting the underlying 
cash use of the business whilst in transition. 
The adjusted operating result is stated 
after adding back material non-cash 
overheads and expensing capitalised 
development costs. 
The adjusted operating result for the year 
was a loss of £2.7 million (2015: profit  
£2.5 million), reflecting the Group’s 
planned increased investment in its 
self-published franchises in the year.
Basic earnings per share were 4.2 pence 
per share compared to 4.9 pence per share 
in the prior year, and on an adjusted basis 
(this measure, set out in note 5, excludes 
amortisation, depreciation and R&D 
capitalised) the basic adjusted loss per 
share was 8.0 pence (2015: positive  
7.4 pence per share).
Following a full year of Planet Coaster 
development, the increased amount of 
development effort related to future 
self-published releases resulted in 51% of 
all development man months contributing 
to releases outside the period (2015: 30%).
Both Frontier Developments Inc. (USA  
& Canada) continued to provide publisher 
support services for the Group.
At 31 May 2016 the Group’s Employee Benefit 
Trust had an interest in 230,400 Ordinary 
Shares (2015: 24,455 Ordinary Shares).
The expenses stated in the income 
statement have been reclassified to allow 
comparability with other companies in the 
sector. Cost of sales is now represented  
by sales commission, royalties payable, 
online payment charges and physical 
merchandise costs. Operating costs have 
been analysed into selling and distribution, 
research and development, administration, 
and other expenses.
Accounting policies and significant accounting 
estimates have been moved to the appropriate 
notes in the financial statements.
CASH AND CASHFLOW
The Group’s cash balance at the end  
of the financial year was £8.6 million  
(2015: £10.5 million) with movements 
summarised as follows:
Summarised cashflow  
statement
2016
£m
2015
£m
Cash at start of period 10.5 8.6
Operating cashflow 7.3 7.3 
Investing activities (9.7) (5.1)
Financing activities 0.3 –
Exchange differences 0.2 (0.3)
Movement in net cash balance 
inc. borrowings (1.9) 1.9 
Cash at end of period 8.6 10.5
The Group’s operating cashflow was 
£7.3 million, supported by continued sales 
of Elite Dangerous franchise products,  
and pre-orders for Planet Coaster.
The Group invested £9.2 million in non-
current assets, including development 
costs for the Elite Dangerous and Planet 
Coaster franchises plus the continued 
investment in our underlying COBRA 
technology. The loan to the Employee 
Benefit Trust increased by £0.6 million  
to meet the exercise of options related to 
the expiry options, mainly issued in 2005.
A working capital improvement of £2 million 
was mainly supported by an increase in 
deferred income of £1.5 million, shown  
in note 22. Funding and other sources 
comprised share issues and tax credits 
received. Financing from share issues, 
warrants and options exercised amounted 
to £0.3 million. 
The overall result was a decrease of  
£1.9 million in net cash and cash equivalents 
to £8.6 million, as a result of the Group’s 
continued investment and growth plan.
Frontier’s simplified cash movements can 
be represented as follows:
Movement in cash balances 
2016
£m
2015
£m
Customer receipts 19.4 21.1
Funding and other sources 0.7 0.3
Incoming funds 20.1 21.4
Salaries 11.9 11.3
Overhead, other expenses,  
tax and currency differences 10.1 8.2
Outgoing flows 22.0 19. 5
Movement in net cash balance 
inc. borrowings (1.9) 1.9
REVENUE AND REVENUE MIX
Group revenue is now generated from  
our self-publishing activities plus 
associated merchandise and some trailing 
royalties from previous successful titles. 
Self-published revenue grew to be 
substantially all the Group’s total revenue.
The prior year included £3.4 million from 
external publisher work, for which as planned 
we have not sought replacement contracts.
Total revenue was 6% lower at £21.4 million 
(2015: £22.8 million).
Revenue
2016
£’000
2015
£’000
%
change
2014
£’000
Revenue 21,363 22,763 (6%) 9,541
Revenue mix
2016
£’000
2015
£’000
% 
change
2014
£’000
Self-published 20,958 18,558 13% 424
External 
publishers – 3,429 (100%) 7,707
Royalties 241 322 (25%) 1,366
Merchandise  
and other 164 454 (64%) 44
T otal revenue 21,363 22,763 (6%) 9,541
Merchandise and other income in FY15 
included recognition of revenue from the 
Elite Dangerous Kickstarter crowd-funding 
campaign in conjunction with the public 
release of the game.
Self-published revenue
Self-published revenue was substantially 
derived from product sales within the  
Elite Dangerous franchise and related 
digital in-game purchases, with the Alpha 
proportion of pre-orders for Planet Coaster 
and RollerCoaster Tycoon 3 sales on the iOS 
platform also contributing.
Deferred income of £0.2 million from prior  
Elite Dangerous lifetime pass sales was 
released to the income statement in the 
year from the brought forward balance  
of £0.7 million. During the financial year 
£1.7 million of deferred income was carried 
forward into future years, arising from a 
proportion of Elite Dangerous: Horizons and 
Elite Dangerous lifetime pass sales, and 
pre-orders of the release version of Planet 
Coaster . Deferred revenue for the year was 
therefore £2.2 million (2015: £0.7 million).
Royalty income continued to accrue from 
sales under prior work-for-hire agreements 
on the RollerCoaster Tycoon 3 and Kinect 
Disneyland Adventures titles, published by 
Atari and Microsoft respectively. The Group 
receives royalty reports from Atari for 
RollerCoaster Tycoon 3 on a quarterly  
basis and Microsoft for Kinect Disneyland 
Adventures on a monthly basis. Revenue is 
accrued upon receipt of royalty reports. 
Royalty revenues were £0.2 million (2015: 
£0.3 million).
23 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT FINANCIAL REVIEW CONTINUED
GROSS MARGIN BY REVENUE STREAM
The digital distribution of products is 
undertaken from Frontier’s own online 
store and third party stores (Steam,  
Xbox, iOS, Amazon, Oculus). Commission 
payments for such third party distribution 
platforms are typically around 30% of  
net revenue.
Distribution to USA and Russian customers 
of the Frontier store is undertaken by  
the wholly-owned subsidiary Frontier 
Developments Inc. (USA).
Gross  
margin 
2016
£’000
2015
£’000
%
change
Self-published 16,061 17,078 (6%)
External 
publishers – 3,429 (100%)
Royalties, 
merchandise  
& other 204 137 49%
Gross margin 16,265 20,644 (21%) 
Overall gross margin was 76% (2015: 91%), 
reflecting a shift to third party platform 
distribution which represented 75% of the 
value of self-published orders (2015: 28%)  
as the Group expanded the audience for  
Elite Dangerous via such third party channels.
Gross margin is stated after deduction  
of third party commissions / royalties, 
payment charges and merchandise 
product costs.
Gross margin reported in last year’s 
Annual Report has been reclassified  
in order to align with common industry 
gross margin reporting practice and as  
a result there are no costs attributed to 
external publisher work in the comparative  
period shown above. Costs of £2.5 million 
disclosed in cost of sales in the prior year 
associated with publisher revenues have 
been moved to development costs within 
the reclassified comparative shown in the 
income statement.
PROFITABILITY
Operating profit was £1.2 million compared with £1.6 million in the prior period.  
EBITDA was £4.9 million compared with £6.1 million in the prior year.
The Board monitors performance on an adjusted operating profit basis in order to focus 
on the cash value drivers of the business whilst in transition. For adjusted operating profit 
the adjusting items were depreciation and amortisation, fair value on forward exchange 
contracts, R&D capitalised, share-based compensation, and tax credits due, offset 
against administration costs.
The measures of EBITDA and adjusted EBITDA are shown below as sub totals for 
comparative purposes.
The reconciliation is as follows:
2016
£’000
2015
£’000 %
2014
£’000
Operating result 1,238 1,566 (21%) (1,705)
Depreciation 262 271 225
Amortisation and impairment 3,376 4,246 1,802
EBITDA 4,876 6,083 (20%) 322
Share-based compensation 738 767 286
Fair value adjustments 551 72 32
Gain on sale of investment – 1 (21)
Funding costs / listing expenses – – 217
Dilapidations provision 13 37 36
Subsidiary set-up fees – 7 –
EBITDA adjusted 6,178 6,967 (11%) 872
R&D capitalised (8,857) (4,338) 4,035
Tax credits deducted from 
administration expenses (13) (163) (307)
Adjusted operating (loss) / profit (2,692) 2,466 (209%) (3,470)
Amortisation has reduced as in the period up to the release of Elite Dangerous, in December 
2014 it was charged at a higher rate to reflect the development costs funded by the 
Kickstarter campaign of 2012.
The adjusted operating result is stated after adding back material non-cash overheads 
and expensing capitalised development costs. The adjusted operating result was a  
loss of £2.7 million compared to a profit of £2.5 million in the prior year (and 2016 
consensus figure of £6.9 million loss) reflecting the investment in the period where 51%  
of development activity was for product not yet fully released (2015: 30%). The Group was 
able to recognise income related to the delivery of a content update for Elite Dangerous: 
Horizons prior to the financial year end.
The Group’s policy is to hedge 50% of estimated net income in foreign currencies  
(mainly US$ and €) on a rolling 12 month basis in order to manage the risk of currency 
fluctuations. Although the recognised forward sterling contracts increased cost in  
the year, the Group expects to benefit from a falling £ on the unhedged proportion.
The increase in R&D capitalised reflects the change to all development being for  
self-published projects.
24 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 FINANCE INCOME
Interest receivable from the Group’s  
cash resources was £0.04 million (2015: 
£0.05 million), reflecting both lower cash 
balances in the business and a lower 
interest rate environment worldwide.
INCOME TAX
Frontier is able to take advantage of 
cash-based tax credits in the UK for the 
creative service industry (Video Games  
Tax Relief) available from April 2014. With 
Video Games Tax Relief, eligible claims 
based on cultural tests administered by  
the British Film Institute (BFI) are made 
after the completion of a project and are 
based on relevant development expenses 
over the project life (up to two years). 
Frontier intends to recognise claims once 
they have been submitted to HMRC along 
with the certification from the BFI. In the 
first year since this is a new tax relief, 
acknowledgement by HMRC is also sought 
before recognition. Frontier has currently 
made Video Games Tax Relief claims 
totalling £0.9 million, £0.2 million of  
which have been received post year end 
and thus recognised in full. The remaining 
£0.7 million has not been recognised as  
we await acknowledgement from HMRC. 
The Group had a tax credit of £0.16 million 
for current taxes within which is a liability 
of £0.05 million relating to overseas tax  
and tax credits of £0.21 million recognised 
in the UK. In the prior year the Canadian 
operation incurred a £0.01 million charge.
There is no deferred tax liability in the 
Group for the financial year ended May 
2016 (prior year £0.04 million in Canada).
The parent company continues to hold 
unused tax losses of £5.6 million to set 
against future taxable profits generated  
in the UK (2015: £5.9 million).
EARNINGS PER SHARE
The basic earnings per share for 2016 was 
4.2 pence per share (2015: 4.9 pence) based 
on a weighted average number of shares of 
33.8 million (2015: 33.5 million).
On a diluted basis earnings per share  
was 4.1 pence (2015: 4.7 pence) based on  
a weighted average number of shares of  
35.3 million (2015: 35.3 million).
The adjusted basic earnings per share is 
based on the adjusted operating result with 
all development spend expenses shown on 
page 24. The adjusted loss per share was  
8.0 pence compared to the prior period of  
7 .4 pence of earnings per share. On a diluted 
basis the adjusted loss per share is 8.0 pence 
(2015: earnings 7 .0 pence).
NON-CURRENT ASSETS AND RESEARCH 
AND DEVELOPMENT EXPENDITURE
Investment in the Group’s own IP capitalised 
in the year rose to £8.9 million in line with 
our transition plans, reflecting Frontier’s 
commitment to a strategic software 
development programme in respect of  
Elite Dangerous, Planet Coaster and COBRA 
technology. Including the acquired rights, 
£11.5 million of self-published net book 
value is represented by the Elite Dangerous 
franchise, and £3.7 million for Planet Coaster , 
(scheduled for Q4 2016).
Research and development expensed was 
£0.6 million (2015: £0.8 million).
Additions for tangible assets mainly 
comprised computer equipment.
SHARE ISSUES
Employees converted 0.5 million share 
options into Ordinary Shares up to the end 
of May 2016; exercise proceeds were £0.4 
million, and of these conversions 0.3 million 
of Ordinary Shares were transferred under 
arrangements with the Employee Benefit 
Trust, representing exercise proceeds of 
£0.2 million. The Group granted 0.2 million 
share options in the year (2015: 1.5 million) 
under CSOP and unapproved plans.
288,000 share options vested in the year.
The Employee Benefit Trust operates by 
way of a loan under a drawdown facility of 
up to £10.0 million dated 9 December 2014. 
At 31 May 2016 the loan balance drawn 
down was £1.4 million, and the trust owned 
230,400 Ordinary Shares.
CURRENT ASSETS
T rade and other receivables were £0.6 million 
lower at £2.4 million, caused by a reduction 
in local digital media tax credits due in 
Canada being reported before tax. Other 
short-term assets are represented by 
current tax assets in both the UK and 
Canada, which are reported via the tax line. 
For cash and cash equivalents see note 16.
CURRENT AND NON-CURRENT 
LIABILITIES
Trade and other current liabilities were 
£3.1 million (2015: £3.1 million). Current  
tax liabilities increased in Canada, whilst  
a reduction in trade payables was offset by 
a fair value provision for forward exchange  
rate contracts.
Deferred income was £2.2 million (2015: 
0.7 million) with £1.1 million (2015: £0.6 
million) being reported in non-current 
liabilities, being revenue from the sale of 
lifetime passes which are being recognised 
annually over the expected length of  
the franchise. 
The Group did not recognise any deferred 
tax liabilities in the year. 
The Group fully utilised deferred tax assets 
(losses and provisions) to offset UK deferred 
tax liabilities (timing differences on fixed 
asset) resulting in a nil balance. Overseas 
deferred tax of £0.04 million crystallised  
in the year, all based in Canada.
Dilapidation provisions are ongoing 
following the renewal of the leases in  
2015 with termination dates of 2020.
This Strategic Report was approved by the Board and signed on its behalf by:
DAVID WALSH
Chief Operations Officer
6 September 2016
NEIL ARMSTRONG
Company Secretary and Chief Finance Officer
6 September 2016
25 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
STRATEGIC REPORT 2 1
3
5
4
6
DIRECTORS’ BIOGRAPHIES
1. DAVID GAMMON 
Non-Executive Chairman  
Joined: February 2012 
David has widespread experience in 
developing and building technology based 
businesses. Since 2001, David has focused  
on finding, advising and investing in UK 
technology companies. David founded 
Rockspring, an advisory and investment firm, 
which focuses on early stage technology 
companies and where he continues as  
CEO today. Other current positions include 
Non-Executive Directorships at Accesso 
Technologies plc, Funderbeam Limited  
and Raspberry Pi Trading Limited, and  
he is Group Strategy Advisor at Marshall  
of Cambridge (Holdings) Limited. 
Previous experience includes Non-
Executive Director (NED) and advisor at 
artificial general intelligence company 
DeepMind Technologies Limited, advisor to 
Hawkwood Capital LLP , NED at real-time 
location technology specialist Ubisense 
Trading Limited, NED at internet TV 
specialist Amino Technologies plc, NED  
at smart metering and software company 
BGlobal plc and acting CFO at internet 
specialist Envisional Solutions Limited. 
Earlier in his career David worked as an 
investment banker for over 15 years.
Committees 
Audit, Remuneration, Nominations
4. JONNY WATTS 
Chief Creative Officer 
Joined: November 1998 
Jonny has over 30 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 25 published 
games such as Sensible Soccer and Cannon 
Fodder , along with Frontier’s suite of games, 
including Rollercoaster Tycoon 3, Elite 
Dangerous and the forthcoming Planet 
Coaster . Jonny’s titles span the full range 
from independent development to 400-person 
projects, encompass a diverse range of 
genres, and together have been enjoyed  
by over 35 million people worldwide.  
Jonny holds zoology and computer science 
degrees, is an active member of BAFTA, 
including serving as a judge for seven 
years, and an advocate of supporting young 
game developers. Jonny joined the Board 
in February 2012. 
Committees 
n/a
26 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 2. DAVID BRABEN OBE 
Founder and CEO  
Founding shareholder January 1994 
David is the co-author of the seminal  
Elite title and has over 34 years’ experience 
in the gaming industry. David is also one of 
the six founding trustees 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 low cost 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 Fellow of  
the Royal Academy of Engineering, was 
honoured with a Fellowship of BAFTA  
in 2015, the recipient of three honorary 
doctorates (from Abertay University,  
The Open University and York University), 
and was honoured with an OBE in the  
2014 Birthday Honours for services to the 
UK computer and video games industry. 
Committees 
Nominations 
CORPORATE DIRECTORY 
3. DAVID WALSH 
Chief Operations Officer 
Joined: September 2001 
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 / 
NASDAQ 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. David  
is President of Frontier Developments  
Inc., Frontier’s wholly owned Canadian 
subsidiary, and Frontier Developments Inc. 
(USA), Frontier’s wholly owned US subsidiary.
Committees 
Remuneration 
DIRECTORS 
Mr D R Gammon 
Dr. D J Braben 
Mr D J Walsh 
Mr J F Watts  
Mr C W A Cotton 
COMPANY SECRETARY AND CFO 
Mr N R Armstrong 
REGISTERED OFFICE 
306 Science Park 
Milton Road 
Cambridge  
CB4 0WG 
REGISTERED COMPANY NUMBER 
02892559 
(Incorporated and registered  
in England and Wales)
5. CHARLES COTTON 
Non-Executive Director
Joined: July 2016 
Charles has a successful worldwide  
track record in high-growth technology 
companies. He was a Supervisory Board 
member of Euronext Amsterdam listed 
Tele Atlas which was sold to TomTom for 
€2.8 billion in 2008; Executive Chairman  
of NASDAQ listed GlobespanVirata Inc.; 
and CEO of Virata Corp. which he took 
public on NASDAQ in 1999 and achieved  
a market capitalisation of $5 billion in 2000.
Charles is an active member of the 
Cambridge technology community, holding 
a range of technical and financial roles.  
He also founded and is currently Chairman 
of Cambridge Phenomenon International 
Ltd and has co-authored two books;  
The Cambridge Phenomenon 50 Years  
of Innovation and Enterprise and The 
Cambridge Phenomenon: Global Impact.
Committees 
Remuneration
6. NEIL ARMSTRONG 
Company Secretary and CFO 
Joined: June 2010 
Neil qualified with Ernst & Whinney (now 
Ernst & Young) as a chartered accountant 
in 1989. He has previously held various 
senior finance positions in the SME space 
with experience of media, manufacturing 
and international charities. In 2014 Neil 
was appointed as Treasurer to Frontier 
Developments Inc. (USA), Frontier’s wholly 
owned US subsidiary.
Committees 
Audit, Remuneration, Nominations 
27 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE GOVERNANCE REPORT OF THE DIRECTORS
The Directors present their report for  
the Group and Company together with  
the financial statements for the year to  
31 May 2016. The financial statements are 
prepared under International Financial 
Reporting Standards as adopted by the EU.
BUSINESS REVIEW
A review of the Group’s development 
performance and future development  
is provided in the Strategic Report (see 
page 9 to 19). Information on the financial 
risk management strategy is given within 
that report and in note 28 to the financial 
statements.
GOING CONCERN
The Group’s forecasts lead to a reasonable 
expectation that the Group has adequate 
resources to continue business for the 
foreseeable future. Further to a review  
of required cash resources the Group  
did not renew the revolving credit facility 
with Barclays Bank plc of £1 million,  
which expired on 8 May 2016.
SHARE ISSUES
Details of shares issued during the year 
are given in note 17 to the financial 
statements. The Company has one class  
of Ordinary Shares which carries no right 
to fixed income. Each share carries the 
right to one vote at general meetings of  
the Company, with the exception of shares 
held by the Employee Benefit Trust that are 
not eligible to vote under the Trust deed.
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 below.
During the year
David Gammon purchased 20,000 Ordinary 
Shares of 0.5 pence each in the Company 
at 240 pence per share.
David Braben sold 750,000 Ordinary 
Shares at 240 pence per share.
Jonathan Watts exercised share options  
in respect of 30,000 Ordinary Shares at  
an exercise price of 67 pence per Ordinary 
Share. On the same day as the exercise  
of these options, Mr Watts sold 19,370 
Ordinary Shares at a price of 230 pence  
per Ordinary Share to meet the exercise 
costs and associated tax liabilities.
DIRECTORS
The Directors who held office at 31 May 2016 and their interest in the share capital of the 
Company were as follows:
Name
2016
Number
2016
%
2015
Number
2015
%
David Gammon* 311,720 0.9 291,720 0.9
David Braben 17,160,953 50.3 17,910,953 53.3
David Walsh* 1,245,820 3.7 1,245,820 3.7
Jonathan Watts 55,390 0.2 44,760 0.1
Jonathan Milner* 662,104 1.9 662,104 2.0
Total 19,435,987 57.0 20,155,357 60.0
* Including direct family holdings.
DIRECTORS’ RESPONSIBILITIES FOR  
THE FINANCIAL STATEMENTS
The Directors are responsible for preparing 
the Strategic Report, 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 and Group  
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.
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.
FOR THE YEAR ENDED 31 MAY 2016
28 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 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, including items expensed,  
in research and development to support  
its strategy was £9.5 million in the year 
(2015: £5.1 million).
DIVIDEND
The Directors are not recommending  
the payment of a dividend at this time 
(2015: £nil).
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.
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, the Canada Labour Code  
for its Halifax, Nova Scotia operations  
and applicable labor codes for its US 
operations based in Nevada and Kansas.
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 1 September 2016 the following, other 
than the Directors whose shareholdings 
are listed on page 28, 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 %
Lansdowne Partners 3,263,089 9.6
Chris Sawyer 1,283,726 3.8
Amati Venture Capital 1,073,230 3.1
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
6 September 2016
29 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT
The Board of Frontier Developments plc established Corporate Governance 
arrangements through consideration of best practice guidelines and aspects 
of the UK Corporate Governance Code relevant to the Company. Progress is 
reviewed against the 12 principles of Corporate Governance issued by the 
Quoted Companies Alliance issued in the 2013 Corporate Governance Code 
for Small and Mid-sized Quoted Companies. Being an AIM-listed company 
Frontier is not required to comply with the UK Corporate Governance Code.
THE BOARD
The Board is responsible for the long-term 
growth and profitability of Frontier 
Developments plc. Among its responsibilities 
it works with management to set corporate 
values and to develop strategy, including 
deciding its risk management policy and 
financial objectives.
A schedule of matters reserved for the 
Board’s resolution details key aspects  
of the Company’s affairs that are not 
delegated beyond the Board (including, 
among other things, approval of business 
plans and budgets, material expenditure 
and alterations to share capital). 
Approximately half of the time at Board 
meetings is set aside for Core Strategic 
issues. At least two meetings a year have 
extended time allowed where the focus is 
predominantly on Core Strategic issues.
The following statements set out the 
principles and methods to which it adheres. 
BOARD MEETINGS AND PRACTICES
The Board seeks to meet formally at least 
nine times a year including two extended 
strategic review days. The entire Board  
is invited to attend all meetings. In the 
financial year to 31 May 2016 the Board  
met on nine occasions.
The Chairman and the Company Secretary 
plan the agenda for each Board meeting in 
consultation with all other Directors. The 
agenda is issued with supporting papers 
ahead of the Board meetings, along with 
appropriate information required to enable 
the Board to discharge its duties.
The matters reserved for the attention of 
the Board include:
• overall business strategy; 
• 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, 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 
any financial public relations firm;
• 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 nominated 
advisor and broker, Numis Securities 
Limited;
• appointment and performance review  
of key advisors; and
• approval of letters of recommendation 
for the Employee Benefit Trust in  
the respect of the operation of share 
option schemes.
BOARD COMPOSITION
The Board of Frontier Developments plc is 
comprised of the Non-Executive Chairman, 
the Chief Executive Officer and two other 
Executive officers, one further Non-Executive 
Director and the Company Secretary. As 
per 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.
The composition of the Board of Directors 
is illustrated on pages 26 and 27. There 
were no changes in membership during 
the financial year 2015/16, however, on  
1 July 2016, Jonathan Milner stepped down 
as Non-Executive Director and Charles 
Cotton was appointed in his place as NED.
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. 
FOR THE YEAR ENDED 31 MAY 2016
30 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 BOARD COMMITTEES 
The committees report regularly to the 
Board on the performance of the activities 
they have been assigned.
Audit Committee
The Audit Committee comprises only 
independent Non-Executive Directors;  
its members are: David Gammon and  
Neil Armstrong, supported by Amanda 
Alsop (Group Accountant).
The Audit Committee determines the 
terms of engagement of the Company’s 
Auditor and, in consultation with the 
Auditor, the scope of the audit. It will 
receive and review reports from 
management and the Auditor relating to 
the interim and annual accounts as well  
as 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, and corporate governance 
standards. The Audit Committee is open  
to attendance by any Director and reports 
its key issues at Board meetings.
In the financial year to 31 May 2016 the 
Audit Committee met on four occasions, 
including three meetings with the  
Auditor present. 
Key areas of activity
• Financial reporting
• Internal control and risk management 
reviews
• External audit
• Significant audit issues – revenue 
recognition
• Treasury policy and foreign exchange 
risk review
ATTENDANCE AT MEETINGS 
Board
Remuneration 
Committee
Nominations 
Committee
Audit  
Committee
Number of meetings 9 5 2 4
David Gammon 9 5 2 4
David Braben 9 – 2 –
David Walsh 9 5 – –
Jonathan Watts 9 – – –
Jonathan Milner 9 4 – –
Neil Armstrong 9 5 2 4
Remuneration Committee
During the financial year the Remuneration 
Committee comprised David Gammon, 
David Walsh, Jonathan Milner, Neil 
Armstrong and, as required, Yvonne 
Dawes (HR Manager). Charles Cotton 
replaced Jonathan Milner on 1 July 2016.
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, in 
addition to significant employee benefits, 
such as pensions, medical insurance and 
share option schemes. 
In the financial year to 31 May 2016 the 
Remuneration Committee met on five 
occasions.
Key areas of activity
• Review of staff benefits through 
employee surveys and benchmarking
• Introducing performance related pay for 
Executives
Nominations Committee
The Nominations Committee comprises 
David Gammon, David Braben and  
Neil Armstrong.
The Nominations Committee reviews  
the constituents of the Board and its 
committees to ensure appropriate 
balanced representation. 
In the financial year to 31 May 2016  
the Nominations Committee met on  
two occasions. 
Key areas of activity
• Assessing the need for further  
Non-Executives
• Review of senior positions required  
to strengthen the organisation
31 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE GOVERNANCE CORPORATE GOVERNANCE REPORT CONTINUED
AUDITOR INDEPENDENCE
Frontier Developments’ external Auditor is 
Grant Thornton UK LLP , who has served 
the Company since 2012. 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, objectivity 
and the effectiveness of the audit process, 
taking into consideration relevant UK 
professional and regulatory requirements 
as well as developing and implementing 
policy on the engagement of the external 
Auditor to supply non-audit services.
The Audit Committee monitors procedures 
to ensure the rotation of external audit 
partners every five years and audit managers 
every seven years.
SENIOR MANAGEMENT AND  
GROUP FUNCTIONS
Frontier’s Senior Management are involved 
in multiple functions within the Company. 
They are responsible for reviewing the 
overall organisational structure of the 
Company, as well as refining and 
implementing the recruitment and 
retention programme in order to identify 
and hire the right candidates as required in 
addition to retaining existing staff members. 
INTERNAL CONTROL AND ASSESSMENT 
OF BUSINESS RISK
The systems for internal control and risk 
management processes are designed to 
manage and mitigate risks that may impact 
achievement of the Company’s strategic 
objectives. Such systems can only provide 
a reasonable but not absolute level of 
assurance against material misstatement 
or loss.
The strategic risks are regularly reviewed 
by the Board and a Corporate Risk Register 
(CRR) is maintained. 
The risk assessment process is facilitated 
by the COO who holds and appraises the 
Risk Register at least once a year.
A further review is then undertaken with 
Senior Management and the Register  
itself is updated for the Executive Team  
to consider.
Once the review has concluded the revised 
CRR is forwarded to the Audit Committee 
which assesses the updated register and 
confirms the key risks. A proposal for updating 
the risks reported in the Annual Report is 
then drawn up; the Audit Committee will then 
take its recommendations to the Board on 
key risks and the reporting thereof.
CONTROL ENVIRONMENT AND 
INTERNAL AUDIT
The Group has established operating 
procedures appropriate to its size and 
structure for reporting both 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 business activities, the 
Group does not currently believe that  
an internal audit function would be cost 
effective. The Audit Committee considers 
the need annually and will advise the  
Board as and when it feels this position  
is required.
INVESTOR RELATIONS
The Company places considerable 
importance on communication with 
Shareholders and maintains regular 
contact with its larger institutional 
Shareholders through its investor  
relations team, meetings with the 
Executive Directors and the Chairman  
and through investor events. 
The Directors, together with the Group’s 
advisors, held a number of meetings  
and discussions with key institutional 
Shareholders, ensuring clarity around  
the Group’s strategic intent. The Executive 
Directors and officers also took the 
opportunity during the year to hold external 
(London based) and on-site meetings to 
demonstrate Elite Dangerous: Horizons  
and Planet Coaster to both investors and 
potential investors. 
The Group uses the Annual General 
Meeting to encourage attendance and 
participation by Shareholders. In order  
to support internal capacity building  
for investor relations the Group has 
continued to be a member of the Quoted 
Companies Alliance and the IR Society.
The latest results presentation is  
available through the Company’s  
investor relations website.
FOR THE YEAR ENDED 31 MAY 2016
32 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 ANNUAL GENERAL MEETING
The AGM will be held at:
306 Cambridge Science Park 
Milton Road 
Cambridge 
CB4 0WG 
UK
On:
18 October 2016
At:
9.15am 
The Company’s Annual General Meeting 
(“AGM”) affords shareholders the 
opportunity to question the Chairman 
and the Board. The Chairmen of the 
Audit, Nominations and Remuneration 
Committees are also available to 
answer questions. 
All voting at the meeting will be 
conducted on a poll where every 
shareholder present in person or via 
proxy will have one vote per share held. 
The Group will convey the results of the 
poll via RNS following the AGM. 
Shareholders are invited to submit 
written questions in advance of the 
meeting. Questions should be sent  
to the Company Secretary, Neil 
Armstrong, Frontier Developments plc 
306 Cambridge Science Park, Milton 
Road, Cambridge CB4 0WG, UK or via 
email to IR@frontier.co.uk
Details of resolutions to be proposed at 
the meeting are set out in the Notice of 
General Meeting on pages 65 to 66.
Notice of the AGM, the Form of Proxy 
and the Annual Report are sent to 
shareholders at least 20 working days 
before the AGM via post and online at 
AR2016.frontier.co.uk
33 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE GOVERNANCE REMUNERATION REPORT
FOR THE YEAR ENDED 31 MAY 2016
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, the Chief Operations Officer and the  
Company Secretary. The Remuneration Committee meets at least twice a year. After the financial year end Charles Cotton replaced 
Jonathan Milner and was appointed as chairman of the committee.
The Remuneration Committee is responsible for the following functions:
• setting of remuneration for Directors and officers, including pay, annual cash 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.”
The Remuneration Committee commissioned a report from KPMG LLP on Executive Incentives, bonus schemes and Long Term 
Incentive plans in order to bring incentives in line with the Group’s strategic objectives and investor interests by way of linking the 
majority of remuneration with market based performance criteria and structure commonly operated by AIM and FTSE 350 companies.
Having reviewed the report the Remuneration Committee has decided to revise the annual bonus scheme to operate from 1 June 2016 
based on EPS performance against market consensus. Arrangements for a Long Term Incentive Plan based on share price 
performance remain under consideration.
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.
The Remuneration Committee is pleased to report on progress against the policy objectives as follows:
• the move to median level pay as benchmarked by KPMG LLP’s survey of Executive remuneration in AIM companies (March 2016);
• from 1 June 2016 the introduction of an annual cash bonus scheme based on market consensus EPS; and 
• plans to set up a new Executive share option scheme based on share price performance.
34 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 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 last reviewed to take effect from 1 June 2014. Having considered the results of KPMG’s survey of Executive remuneration 
in AIM companies, an update of base pay will be implemented to take effect from 1 June 2016.
Annual bonus
A bonus payment totalling £0.07 million was made for the year to May 2015, paid in December 2015 representing 3.5% of the 5% eligible  
pool. The interim scheme adopted for the year to 31 May 2015 is based on a 5% pool of profit before tax and bonus allocated between 
Executive Directors and officer. The scheme operates in the same way as the staff contractual scheme whereby an element is paid pro 
rata and the remainder discretionary. 
Share options
No further share option grants were made to Executive Directors and the Non-Executive Directors in the year to 31 May 2016.
Pension contributions, medical insurance and life cover
The Executive Directors joined the Group’s scheme for pension auto enrolment and life cover arrangements. A basic life cover sum of 
£25,000 per person was adopted from 1 October 2013. Pension auto enrolment of a 1% employer contribution was commenced from 
1 July 2014. These benefits are the same as adopted for all UK-based staff. From August 2014, medical insurance including family cover 
was offered to all employees including Executive Directors. All Executive Directors elected to take up these 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 the 
same transitional phase of alignment to median market rates was undertaken. 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.
Share warrants were issued to the Non-Executive Directors in connection with the IPO (see note 19 to the accounts).
DIRECTORS’ REMUNERATION (AUDITED)
The remuneration of the Directors is as follows:
Current Directors
Salary / fee
£’000
Bonus
£’000
Pension  
contribution
£’000
Taxable  
benefits
£’000
2016
Total
£’000
2015
Total
£’000
Executive
David Braben 180 20 2 1 203 183
David Walsh 180 20 2 1 203 183
Jonathan Watts 180 29 2 1 212 183
Non-Executive
David Gammon 50 – – – 50 50
Jonathan Milner 30 – – – 30 30
Total 620 69 6 3 698 629
The expense recognised in the statement of comprehensive income for the Directors’ share options including Non-Executive Directors’ 
was £207,765 (2015: £375,525) with the amount attributable to the highest paid Director being £46,149 (2015: £34,612).
The gain attributable to Directors on share options in the year at the date of exercise was £31,573 (2015: £1,246).
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
6 September 2016
35 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE GOVERNANCE INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF FRONTIER DEVELOPMENTS PLC 
(REGISTERED NO: 02892559)
We have audited the financial statements of Frontier Developments plc for the year ended 31 May 2016 which comprise the  
consolidated statement of cashflows, the Company statement of cashflows, the consolidated income statement, the consolidated 
statement of comprehensive income, the consolidated statement of financial position, the Company statement of financial position,  
the consolidated statement of changes in equity, the 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 
(IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with  
the provisions of the Companies Act 2006.
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 as set out on page 28, 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 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 Financial Reporting Council’s website at  
www.frc.org.uk/auditscopeukprivate
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 2016  
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with IFRSs 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 Strategic Report and Directors’ Report for the financial year for which the financial statements 
are prepared is consistent with the 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 branches 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
12 September 2016
36 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 MAY 2016
31 May 2016
£’000
31 May 2015
£’000
Operating activities
Cash generated from operations (see below) 7,475 7,334
Finance income (37) (53)
Taxes (paid) / received (121) 23
Cashflow from operating activities 7,317 7,304
Investing activities
Purchase of property, plant and equipment (233) (289)
Expenditure on intangible assets (8,965) (4,385)
Proceeds from disposal of non-derivative financial assets – 36
Employee Benefit Trust investment (563) (551)
Interest received 37 53
Cashflow from investing activities (9,724) (5,136)
Financing activities
Repayment of interest-free loan – (158)
Proceeds from issue of share capital 276 159
Cashflow from financing activities 276 1
Net change in cash and cash equivalents from continuing operations (2,131) 2,169
Cash and cash equivalents at beginning of period 10,478 8,612
Exchange differences on cash and cash equivalents 263 (303)
Cash and cash equivalents at end of period 8,610 10,478
The accompanying accounting policies and notes form part of this financial information.
The following non-cashflow adjustments and adjustments for changes in working capital have been made to profit before tax to arrive at 
operating cashflow:
CASH GENERATED FROM OPERATIONS
31 May 2016
£’000
31 May 2015
£’000
Profit after tax 1,432 1,647
Depreciation and amortisation 3,638 4,517
Fair value adjustments 551 31
Profit on disposal of fixed assets and available for sale assets – 1
Proceeds from the sale of non-current assets – 16
Share-based payment expenses 738 767
Taxation (162) (190)
Foreign exchange (267) 242
Operating cashflow before changes in working capital 5,930 7,031
Net changes in working capital:
Change in inventories 4 2
Change in trade and other receivables 603 74
Change in trade and other payables 925 190
Change in provisions 13 37
Cash generated from operations 7,475 7,334
37 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS COMPANY STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 MAY 2016
31 May 2016
£’000
31 May 2015
£’000
Operating activities
Cash generated from operations (see below) 6,572 7,468
Finance income (35) (50)
Taxes (paid) / received (148) –
Cashflow from operating activities 6,389 7,418
Investing activities
Purchase of property, plant and equipment (233) (287)
Expenditure on intangible assets (8,965) (4,385)
Proceeds from disposal of non-derivative financial assets – 36
Employee Benefit Trust investment (563) (551)
Interest received 35 50
Cashflow from investing activities (9,726) (5,137)
Financing activities
Proceeds from issue of share capital 276 159
Cashflow from financing activities 276 159
Net change in cash and cash equivalents from continuing operations (3,061) 2,440
Cash and cash equivalents at beginning of period 10,203 7,997
Exchange differences on cash and cash equivalents 389 (234)
Cash and cash equivalents at end of period 7,531 10,203
The accompanying accounting policies and notes form part of this financial information.
The following non-cashflow adjustments and adjustments for changes in working capital have been made to profit before tax to arrive at 
operating cashflow:
CASH GENERATED FROM OPERATIONS
31 May 2016
£’000
31 May 2015
£’000
Profit after tax 1,531 1,584
Depreciation and amortisation 3,638 4,485
Fair value adjustments 551 –
Loss on disposal of fixed assets and available for sale assets – 3
Share-based payment expenses 745 761
Taxation (217) (7)
Foreign exchange (389) 233
Operating cashflow before changes in working capital 5,859 7,059
Net changes in working capital:
Change in inventories 4 2
Change in trade and other receivables 185 676
Change in trade and other payables 511 (306)
Change in provisions 13 37
Cash generated from operations 6,572 7,468
38 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT  
OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2016
FOR THE YEAR ENDED 31 MAY 2016 FOR THE YEAR ENDED 31 MAY 2016
31 May 2016
£’000
31 May 2015
£’000
Profit for the period 1,434 1,647
Other comprehensive income:
Items that will be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations (4) (27)
Total comprehensive income for the period attributable to the equity holders of the parent 1,428 1,620
The accompanying accounting policies and notes form part of this financial information.
Notes
31 May 2016
£’000
31 May 2015
£’000
Revenue 5 21,363 22,763
Cost of sales (5,098) (2,119)
Gross profit 16,265 20,644
Other income 3 3
Selling and distribution expenses (3,887) (2,749)
Administrative expenses (4,154) (4,561)
Research and development expenses (6,989) (11,771)
Operating profit 1,238 1,566
Finance income 24 37 53
Profit before tax 6 1,275 1,619
Income tax 25 157 28
Profit for the period attributable to the equity holders of the parent 1,432 1,647
All the activities of the Group are classified as continuing.
Notes
31 May 2016
p
31 May 2015
p
Earnings per share 26
Basic earnings per share 4.2 4.9
Diluted earnings per share 4.1 4.7
39 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2016 (REGISTERED COMPANY NO: 02892559)
Notes
31 May 2016
£’000
31 May 2015
£’000
Non-current assets
Intangible assets 7 16,690 11,101
Property, plant and equipment 9 304 333
Total non-current assets 16,994 11,434
Current assets
Inventories 13 9 13
Trade and other receivables 14 2,443 3,046
Other short-term assets 15 376 50
Cash and cash equivalents 16 8,610 10,478
Total current assets 11,438 13,587
Total assets 28,432 25,021
Equity and liabilities
Equity
Share capital 17 170 168
Share premium account 14,476 13,963
Equity reserve 579 633
Foreign exchange reserve (61) (57)
Retained earnings 7,600 6,180
Total equity 22,764 20,887
Liabilities
Current
Trade and other payables 20 3,073 3,107
Deferred income 22 1,085 96
Current tax liabilities 21 89 –
Total current liabilities 4,247 3,203
Non-current
Provisions 23 273 260
Deferred income 22 1,148 627
Deferred tax 12 – 44
Total non-current liabilities 1,421 931
Total liabilities 5,668 4,134
Total equity and liabilities 28,432 25,021
These financial statements were approved by the Directors on 6 September 2016 and signed on their behalf by:
DAVID BRABEN OBE
Director
The accompanying accounting policies and notes form part of this financial information.
40 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2016 (REGISTERED COMPANY NO: 02892559)
Notes
31 May 2016
£’000
31 May 2015
£’000
Non-current assets
Intangible assets 7 16,690 11,101
Property, plant and equipment 9 304 333
Total non-current assets 16,994 11,434
Current assets
Inventories 13 9 13
Trade and other receivables 14 2,586 2,771
Other short-term assets 15 376 13
Cash and cash equivalents 16 7,531 10,203
Total current assets 10,502 13,000
Total assets 27,496 24,434
Equity and liabilities
Equity
Share capital 17 170 168
Share premium account 14,476 13,963
Equity reserve 579 633
Retained earnings 7,133 5,607
Total equity 22,358 20,371
Liabilities
Current
Trade and other payables 20 3,103 3,080
Deferred income 22 822 96
Total current liabilities 3,925 3,176
Non-current
Provisions 23 273 260
Deferred income 22 940 627
Total non-current liabilities 1,213 887
Total liabilities 5,138 4,063
Total equity and liabilities 27,496 24,434
These financial statements were approved by the Directors on 6 September 2016 and signed on their behalf by:
DAVID BRABEN OBE
Director
The accompanying accounting policies and notes form part of this financial information.
41 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2016
Share capital 
£’000
Share 
premium 
account 
£’000
Equity  
reserve 
£’000
Foreign 
exchange 
reserve 
£’000
Retained 
earnings 
£’000
Total 
equity
£’000
At 31 May 2014 167 13,805 790 (30) 4,160 18,892
Increase in equity in relation to options issued – – 767 – – 767
Net loss on EBT shares – – (495) – – (495)
Own shares held by the EBT – – (56) – – (56)
Share-based payment transfer – – (373) – 373 –
Issue of share capital less expenses 1 158 – – – 159
Transactions with owners 1 158 (157) – 373 375
Profit for the year – – – – 1,647 1,647
Other comprehensive income:
Exchange differences on translation of foreign operations – – – (27) – (27)
Total comprehensive income for the year – – – (27) 1,647 1,620
At 31 May 2015 168 13,963 633 (57) 6,180 20,887
Increase in equity in relation to options issued – – 738 – – 738
Net loss on EBT shares – – (412) – – (412)
Own shares held by the EBT – – (392) – – (392)
Share-based payment transfer – – 12 – (12) –
Issue of share capital less expenses 2 513 – – – 515
Transactions with owners 2 513 (54) – (12) 449
Profit for the year – – – – 1,432 1,432
Other comprehensive income:
Exchange differences on translation of foreign operations – – – (4) – (4)
Total comprehensive income for the year – – – (4) 1,432 1,428
At 31 May 2016 170 14,476 579 (61) 7,600 22,764
The accompanying accounting policies and notes form part of this financial information.
42 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2016
Share capital 
£’000
Share 
premium 
account 
£’000
Equity 
reserve 
£’000
Retained 
earnings 
£’000
Total 
equity 
£’000
At 31 May 2014 167 13,805 777 3,668 18,417
Increase in equity in relation to options issued – – 762 – 762
Net loss on EBT shares – – (495) – (495)
Own shares held by the EBT – – (56) – (56)
Share-based payment transfer – – (355) 355 –
Issue of share capital less expenses 1 158 – – 159
Transactions with owners 1 158 (144) 355 370
Profit for the year – – – 1,584 1,584
Total comprehensive income for the year – – – 1,584 1,584
At 31 May 2015 168 13,963 633 5,607 20,371
Increase in equity in relation to options issued – – 745 – 745
Net loss on EBT shares – – (412) – (412)
Own shares held by the EBT – – (392) – (392)
Share-based payment transfer – – 5 (5) –
Issue of share capital less expenses 2 513 – – 515
Transactions with owners 2 513 (54) (5) 456
Profit for the year – – – 1,531 1,531
Total comprehensive income for the year – – – 1,531 1,531
At 31 May 2016 170 14,476 579 7,133 22,358
The accompanying accounting policies and notes form part of this financial information.
43 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2016
1. CORPORATE INFORMATION
Frontier Developments plc (“the Group”) develops 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 its North American subsidiaries, Frontier Developments Inc., are based in Canada and 
in the US.
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, except for financial instruments held at fair value.  
The financial information is presented in Sterling, the presentation and functional currency for the Group and Company. All values  
are rounded to the nearest thousand pounds (£’000) except when otherwise indicated.
The expenses stated in the income statement have been reclassified to allow comparability with other companies in the sector.  
Cost of sales is now represented by sales commission, royalties payable, online payment charges and physical merchandise costs. 
Operating costs have been analysed into selling and distribution, research and development and administration expenses.
Going concern basis
The Group’s forecasts and projections, taking account of current cash resources and 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 12 months from the date of approval of these financial 
statements. The Group therefore continues to adopt the going concern basis in preparing its financial statements.
3. PRINCIPAL ACCOUNTING POLICIES
The majority of the principal accounting policies have been repositioned to the relevant notes to the financial statements.
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 is exposed or has rights to variable returns from its involvement with the investee  
and has the ability to affect those returns through its power over the investee. 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.
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.
44 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 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 (IASB effective date 1 January 2018)*
• IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018)*
• IFRS 16 Leases (effective 1 January 2019)*
• Clarification of Acceptable Methods of Depreciation and Amortisation – Amendments to IAS 16 and IAS 38 (IASB effective date 
1 January 2016) (Endorsed)
• Annual Improvements to IFRSs 2010–2012 Cycle (IASB effective date generally 1 July 2014) (EU mandatory effective date  
is financial years starting on or after 1 February 2015) (Endorsed)
• Annual Improvements to IFRSs 2012–2014 Cycle (effective 1 January 2016) (Endorsed)
• Amendments to IAS 27 Equity Method in Separate Financial Statements (effective 1 January 2016) (Endorsed)
• Disclosure Initiative: Amendments to IAS 1 Presentation of Financial Statements (effective 1 January 2016) (Endorsed)
• Disclosure Initiative: Amendments to IAS 7 Statement of Cash Flows (effective 1 January 2017)
• Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses (effective 1 January 2017)*
* Not yet EU endorsed.
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 except for IFRS 16. The Group is considering early implementation in line with the 
timing of its strategic intent to relocate into one building.
The Group does not expect IFRS 15 to have a material impact on the business as the key principles have already been adhered to within 
the current revenue recognition policy.
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 have been moved to notes 5, 7 and  
12 of the financial statements.
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 one operating segment, being self-published work, and royalties plus merchandise (in the prior 
financial year the Group recognised external publisher work as a separate segment, but has transitioned the business away from that 
type of work). 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 2016
£’000
31 May 2015
£’000
United Kingdom 3,271 5,795
United States of America 8,787 7,687
Rest of the world 9,305 9,281
21,363 22,763
The Group’s gross profit by each revenue stream is as follows:
31 May 2016
£’000
31 May 2015
£’000
Self-published 16,061 17,078
External publishers – 3,429
Royalties, merchandise and other income 204 137
16,265 20,644
45 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
5. SEGMENT INFORMATION CONTINUED
For further analysis of gross margin per revenue stream see Financial review page 24.
All of the Group’s non-current assets are held within the UK. 
In both 2015 and 2016 there were no customers whose revenue accounted for more than 10% of the Group and Company’s total revenue, 
although the Group bears the credit risk associated with sales made through distribution platforms.
All material revenue is categorised as either ‘self-published’, ‘external publishers’ or royalties, or merchandise and other.
31 May 2016
£’000
31 May 2015
£’000
External publishers – 3,429
Self-published 20,958 18,558
Royalties 241 322
Other 164 454
21,363 22,763
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 release of full games and early access versions of self-published games royalties from published 
games, and associated merchandise.
Revenue from released self-published titles is recognised on download of the game or upon purchase of in-game digital items. 
Revenue from pre-orders of games and crowd-funding for self-published titles is normally deferred, then 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. 
Revenue earned from royalties under distribution agreements is recognised in the period that the sales to the end customer are made, 
estimated on an accruals basis as royalty reports are received on a monthly or calendar quarter basis.
Adjusted operating profit / (loss) costs are adjusted for non cash expenses and funding items as a key performance indicator for the 
Group and are also used by the Chief Executive Officer. Adjusted EBITDA was monitored in prior years and has been included as sub 
totals which are calculated as follows:
31 May 2016
£’000
31 May 2015
£’000
Operating profit 1,238 1,566
Depreciation 262 271
Amortisation and impairment 3,376 4,246
EBITDA 4,876 6,083
Share-based compensation 738 767
Dilapidation provision 13 37
Fair value adjustments 551 72
Gain on investment – 1
US set-up fees – 7
Adjusted EBITDA 6,178 6,967
R&D capitalised (8,857) (4,338)
Tax credits deducted from administration expenses (13) (163)
Adjusted Operating (loss) / profit (2,692) 2,466
Accounting policies
Segment reporting
The Group identifies one operating segment as the business is managed as a whole reflecting the transition of the Group from an 
external publisher to self-publishing. 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 contribution 
before central costs. Assets are not fully directly attributable to any separable activity, other than to self-published software intangibles.
46 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 Significant accounting estimates
Revenue recognition
Where self-published titles have pre-orders, recognition is made by reference to delivery of performance obligations. Revenue stemming 
from the sale of ‘early versions’ of a game are recognised from the date of release of the ‘early access versions’. Where pre-orders 
include delivery of the final version of the game, an estimate is made of this final element, which is based on man months to complete 
and is moved to deferred income until the final version is released to the public. 
Where the Group has made a self-published title containing a season of content (a number of periodic releases) recognition is made by 
reference to delivery of performance obligations which use a measure of development man months incurred per periodic release as an 
estimate of delivery of these performance obligations.
6. PROFIT BEFORE TAX
31 May 2016
£’000
31 May 2015
£’000
This is stated after charging / (crediting):
Amortisation and impairment on intangibles 3,376 4,246
Depreciation of owned property, plant and equipment 262 271
Research and development costs expensed 609 287
Auditor remuneration:
Audit of the parent and Group 40 39
Audit related assurance services 10 8
Operating leases – land and buildings 655 526 
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.
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 2014 4,527 9,466 956 14,949
Additions – arising from internal development 663 3,675 47 4,385
Disposals (848) – (9) (857)
At 31 May 2015 4,342 13,141 994 18,477
Additions – arising from internal development 398 8,459 108 8,965
Disposals (774) – – (774)
At 31 May 2016 3,966 21,600 1,102 26,668
Amortisation and impairment
At 31 May 2014 2,025 1,166 796 3,987
Charge for the period 1,075 2,680 116 3,871
Charge for the period for acquired rights – 375 – 375
Disposals (848) – (9) (857)
At 31 May 2015 2,252 4,221 903 7,376
Charge for the period 1,127 1,509 96 2,732
Charge for the period for acquired rights – 644 – 644
Disposals (774) – – (774)
At 31 May 2016 2,605 6,374 999 9,978
Net book value at 31 May 2016 1,361 15,226 103 16,690
Net book value at 31 May 2015 2,090 8,920 91 11,101
47 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
7. INTANGIBLE ASSETS CONTINUED
Excluding an immaterial amount of third party software amortisation that is included in administrative expenses, all amortisation 
charges, impairments or reversals (if any) are included within research and development expenses.
The Elite rights acquired from Professional Practice Automation LLP in 2014 are included within self-published software. The net book 
value of the acquired rights at 31 May 2016 was £4.1 million (2015: £4.8 million).
Accounting policies
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 categories:
• development tools;
• software (self-published games) and royalty rights acquired in connection with jointly held IP; 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 license 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 three and five years. When a self-published game is intended for release on multiple platforms without material 
content change, amortisation is based on the length of time in which that game is expected to be supported in an unchanged format with 
a limit of up to six years. Acquired rights are assessed for the useful ‘franchise life’. For Elite Dangerous this is prudently estimated at 
eight years; within the sector successful franchises normally have useful lives of over ten years. Until completion the assets are subject 
to annual impairment testing. In most circumstances amortisation commences upon completion of the asset and is shown within 
research and development expenses 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.
Research activities
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Impairment of intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its individual intangible assets for any indication that these assets 
have suffered an impairment loss. 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 or value in use.
Fair value is measured for self-published games by discounting future cashflows. 
Significant accounting estimates
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 including rights acquired at 31 May 2016 are £16,689,747 (2015: £11,100,568).
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.
48 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 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.
In respect to amortisation, normally self-published titles are amortised on completion of the game, however an exception to this  
occurs when project funding is obtained via innovative crowd-funded platforms, such as Kickstarter. Such funding is generally seen  
as ‘contributing to make the game happen’ and requires the Company to set up a number of pledge levels which include a donation 
element. When ‘donation and intangible’ elements of pledge levels are recognised as revenue, an equivalent amount of amortisation 
charged reflects this ‘contribution element’. The pledge levels also include delivery of a number of ‘early versions’ of the game and an 
estimated and prudent cost is applied as amortisation. In the case of Elite Dangerous 60% was used and upon release of the game, 
amortisation reverted to an estimated useful life of six years. In the financial year to May 2016 £1,509,238 of amortisation was recognised 
for these elements of Elite Dangerous (2015: £1,220,085).
8. INVESTMENT IN SUBSIDIARY UNDERTAKINGS
The Company holds a £66 investment in Frontier Developments Inc., a company registered in Canada and a £6 investment in Frontier 
Developments Inc., a company registered in the US. These represent 100% of the Ordinary Share capital of the companies, which are 
engaged in publisher support services for the Group.
Accounting policy
Employee Benefit Trust
As the Company is deemed to have control of its Employee Benefit Trust (EBT), it is treated as a subsidiary and consolidated for  
the purposes of the consolidated financial statements. The EBT’s assets (other than investments in the Company’s shares), liabilities, 
income and expenses are included on a line-by-line basis in the consolidated financial statements. The EBT’s investment in the Company’s 
shares is deducted from equity in the consolidated statement of financial position as if they were treasury shares. The gain or loss on 
transfer of the shares from the EBT to employees is recognised within equity.
9. PROPERTY, PLANT AND EQUIPMENT 
Group
Fixtures and 
fittings
£’000
Computer 
equipment
£’000
Leasehold 
improvements
£’000
Total
£’000
Cost
At 31 May 2014 273 1,399 10 1,682
Additions 76 213 – 289
Disposals (116) (267) (6) (389)
At 31 May 2015 233 1,345 4 1,582
Additions 2 231 – 233
Disposals – – – –
At 31 May 2016 235 1,576 4 1,815
Depreciation
At 31 May 2014 230 1,118 6 1,354
Charge for the period 52 216 3 271
Disposals (110) (261) (5) (376)
At 31 May 2015 172 1,073 4 1,249
Charge for the period 41 221 – 262
Disposals – – – –
At 31 May 2016 213 1,294 4 1,511
Net book value at 31 May 2016 22 282 – 304
Net book value at 31 May 2015 61 272 – 333
49 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
9. PROPERTY, PLANT AND EQUIPMENT CONTINUED
Company
Fixtures and 
fittings
£’000
Computer 
equipment
£’000
Leasehold 
improvements
£’000
Total
£’000
Cost
At 31 May 2014 258 1,299 4 1,561
Additions 75 212 – 287
Disposals (100) (166) – (266)
At 31 May 2015 233 1,345 4 1,582
Additions 2 231 – 233
Disposals – – – –
At 31 May 2016 235 1,576 4 1,815
Depreciation
At 31 May 2014 223 1,050 4 1,277
Charge for the period 49 189 – 238
Disposals (100) (166) – (266)
At 31 May 2015 172 1,073 4 1,249
Charge for the period 41 221 – 262
Disposals – – – –
At 31 May 2016 213 1,294 4 1,511
Net book value at 31 May 2016 22 282 – 304
Net book value at 31 May 2015 61 272 – 333
Depreciation charges are apportioned to the income statement as follows:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Charge
Research and development expenses 253 241 253 213
Administration expenses 9 30 9 25
Total 262 271 262 238
Accounting policies
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.
Impairment of property, plant and equipment 
At each balance sheet date, the Group reviews the carrying amounts of its individual property, plant and equipment for any indication 
that these assets have suffered an impairment loss. 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 or 
value in use.
Fair value is measured by a review of the expected useful economic life compared to that implied in the amortisation rate.
50 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 10. OPERATING LEASES AS LESSEE
At each period end the future operating lease payments were as follows:
Group and Company year ended
31 May 2016
£’000
31 May 2015
£’000
Minimum lease payments due within one year 692 670
Minimum lease payments due within one to five years 2,037 2,669
Minimum lease payments due in greater than five years – 43
Total 2,729 3,382
Group lease payments recognised as an expense during the year ended 31 May 2016: £651,695 (2015: £522,587).
The lease payments relate to the rental contracts for the office buildings, which expire April 2020 and August 2020, a lease agreement 
for office equipment that will expire in January 2019 and a lease agreement for a commercial vehicle which expires in October 2018.  
A new lease agreement was entered into for Unit 321-3 Cambridge Science Park and is due to expire in August 2020. Both building 
leases have flexible break clauses that can be exercised if required by the Group.
During the year the Group entered into two new lease agreements, one for office equipment and another for a commercial vehicle.
Company property lease payments recognised as an expense during the year ended 31 May 2016: £651,695 (2015: £431,227), for the 
office equipment: 31 May 2016: £3,455 (2015: £nil) and for the commercial vehicle: 31 May 2016: £1,049 (2015: £nil).
The lease payments relate to the rental contracts for the office buildings, which expire April 2020 and August 2020. 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.
Accounting policy
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.
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 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Loans and receivables
Trade and other receivables 1,598 1,592 1,781 1,656
Cash and cash equivalents 8,610 10,478 7,531 10,203
Total 10,208 12,070 9,312 11,859
Derivative financial instruments
The Group’s financial instruments measured at fair value are summarised below:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Derivative financial (liabilities) / assets
Total – Forward exchange contracts – held for trading (388) 163 (388) 163
The Group used forward foreign exchange contracts to mitigate exchange rate exposure arising from forecast sales in US Dollars.  
The forward contracts are considered by management to be part of economic hedge arrangements but have not been formally designated.
All forward contracts are held at fair value through the profit and loss by reference to the exchange rate at the balance sheet date as 
supplied by the Group’s main banking partner.
51 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
11. FINANCIAL ASSETS AND LIABILITIES CONTINUED
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Financial liabilities
Financial liabilities measured at amortised cost:
Trade and other payables 2,337 2,806 2,367 2,779
Total 2,337 2,806 2,367 2,779
Accounting policies
Foreign currencies
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 average exchange rate. The exchange differences arising from the 
retranslation 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.
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
Loans and receivables comprise trade receivables, other receivables and cash and cash equivalents.
Financial assets classified as loans and 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 asset’s carrying amount and the present value of estimated future cashflows discounted at the financial asset’s original effective 
interest rate.
Financial assets and liabilities at FVTPL
Derivative financial instruments are financial assets and liabilities measured at fair value through the profit and loss (FVTPL) and are 
financial instruments that are either classified as held for trading or that meet certain conditions and are designated at FVTPL upon 
initial recognition. All derivative instruments fall into this category.
Financial instruments in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of 
financial assets and liabilities in this category are determined by reference to active market transactions or using a valuation technique 
where no active market exists.
Financial liabilities
The Group’s other financial liabilities include trade and other payables.
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). 
Fair value measurements recognised in the balance sheet
Financial instruments that are measured subsequent to initial recognition at fair value have been classified using a fair value hierarchy 
that reflects the significance of the inputs used in measuring the fair value of those instruments. The fair value hierarchy has the 
following levels:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable 
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not 
based on observable market data (unobservable market inputs).
52 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 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 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Accelerated capital allowances 1,885 1,493 1,885 1,493
Short-term temporary differences (restricted) (267) (483) (267) (483)
Tax losses (restricted) (1,618) (966) (1,618) (1,010)
Total liability – 44 – –
Balance brought forward 44 74 – –
Effect of tax rate change on opening balance – – – –
Effect of exchange rate change on opening balance – (2) – –
Movement in year (44) (28) – –
Balance carried forward liability – 44 – –
No deferred tax asset at 31 May 2016 has been recognised in the statement of financial position for the Group. The deferred tax liability  
at 31 May 2016 is £nil (2015: £43,689), with the 2015 liability 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 2016 amount to £5.6 million (2015: £5.9 million). 
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Deferred tax asset not provided
Losses and Video Games Tax Relief (893) (1,122) (893) (1,122)
Total (893) (1,122) (893) (1,122)
Significant accounting estimate
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.
13. INVENTORIES
Inventories recognised in the statement of financial position can be analysed as follows:
Group and Company year ended
31 May 2016
£’000
31 May 2015
£’000
Merchandise 9 13
Total inventory 9 13
There is no material difference between the replacement cost of inventory and the amounts stated above. For the year ended 31 May 2016 
a total of £144,872 was expensed for merchandise (2015: £453,784).
Accounting policy
Inventories
Inventories are stated at the lower of cost and net realisable value. Inventory comprises stock of merchandise items held at a third party 
distribution location; these are reviewed at the balance sheet date for an indication of slow moving and defective items. Where such an 
indication exists, a suitable provision is made.
53 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
14. TRADE 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 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Trade receivables, gross 106 134 75 127
Intercompany receivable – – 213 72
Trade receivables, net 106 134 288 199
Derivative financial instruments – 163 – 163
Other receivables 1,492 1,458 1,493 1,457
Financial assets 1,598 1,755 1,781 1,819
Prepayments 779 770 779 752
VAT and other taxes 66 521 26 200
Non-financial assets 845 1,291 805 952
Trade and other receivables 2,443 3,046 2,586 2,771
All amounts are short term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.
No receivables are past their due date and the balances comprise receivables from highly credit rated customers.
15. OTHER SHORT-TERM ASSETS
Other short-term assets comprise:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Other short-term assets – current tax assets 376 50 376 13
16. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include the following components:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Cash at bank and in hand
GBP 6,352 7,944 6,352 7,944
USD 1,404 2,229 877 2,195
EUR 301 55 301 55
CAD 553 250 1 9
Financial assets 8,610 10,478 7,531 10,203
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.
Accounting policy
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank deposits available on demand.
54 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 17. EQUITY 
Share Capital 
Group and Company movements in share capital
Movements in Ordinary Shares are as follows:
 
2016 2015
Number
’000
Value
£’000
Number
’000
Value
£’000
At 1 June 2014 and 31 May 2015
Ordinary Shares of 0.5 pence 33,580 168 33,384 167
Shares issued on option exercises 217 1 196 1
Shares issued to Employee Benefit Trust 300 1 – –
At 31 May 2016 34,097 170 33,580 168
During the year to 31 May 2016 the following share issues were made:
From 1 June 2015 to 31 May 2016 517,084 Ordinary Shares of 0.5 pence were allotted as fully paid at an average premium of 99 pence 
being the exercise of share warrants by a third party (granted at IPO) and to the Employee Benefit Trust in order to meet employee 
exercise of share options. The average market value was 223.3 pence on the days of allotment.
Accounting policy
Share capital and reserves
Share capital represents the nominal value of the shares that have been issued.
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.
Equity reserve represents the value of the Employee Benefit Trust (EBT) that gets offset against distributable reserves and equity-settled 
share-based employee remuneration until such share options are exercised.
Foreign exchange reserve represents the exchange difference on consolidation of overseas subsidiaries. 
Retained earnings include all current and prior period retained earnings.
18. EMPLOYEE REMUNERATION
Remuneration recognised for employee benefits (including Directors) are analysed below.
Staff costs for all employees, including Directors, consist of:
31 May 2016
£’000
31 May 2015
£’000
Wages and salaries 10,603 10,933
Social security costs 1,084 1,048
Pension costs 92 84
Share-based compensation 738 767
12,517 12,832
Included in the above payroll costs for the year ended 31 May 2016 is £7,954,705 (2015: £4,021,039) capitalised within intangible fixed 
assets (see note 7). Pension costs relate to contributions to the parent company’s defined contribution scheme for auto enrolment.
The average number of employees, including Directors, during the period was:
31 May 2016
£’000
31 May 2015
£’000
Research and development 267 258
General and administrative 14 15
281 273
55 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
18. EMPLOYEE REMUNERATION CONTINUED
Remuneration of Directors
31 May 2016
£’000
31 May 2015
£’000
Directors’ emoluments 609 540
Non-Executive fees 20 20
Non-Executive consultancy fees 60 60
Emoluments of highest paid Director
31 May 2016
£’000
31 May 2015
£’000
Emoluments 209 180
Remuneration of key management personnel
31 May 2016
£’000
31 May 2015
£’000
Short-term employee benefits
Salaries including bonuses 1,401 1,321
Social security 178 168
Pension contributions 13 12
Benefits in kind 8 7
Total short-term employee benefits 1,600 1,508
Non-Executive fees 60 50
Share-based compensation charge 351 488
Total 2,011 2,046
Number of key management personnel, including Directors, at the statement of financial position date* 13 14
* Key management of the Group are the Board and senior management (functional heads).
A total of 8,000 share options were issued in the year to key management under the Company Share Option Plan. The number of options 
exercised for Ordinary Shares in the year ended 31 May 2016 was 223,600 from previous EMI grants.
Accounting policy
Employee benefits
All accumulating employee compensated absences that are unused at the balance sheet date are recognised as a liability.
The parent company operates a defined contribution retirement benefit scheme which was commenced on 1 January 2014 ahead of the 
Company’s expected auto enrolment date. Payments to defined contribution retirement benefit schemes are charged as an expense in 
the period to which they relate.
56 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 19. SHARE OPTIONS
The Group has a Company Share Option plan for employees, under which options may be granted to employees (including Directors)  
to subscribe for Ordinary Shares in the Group. The scheme was approved in January 2014.
The Group operates two EMI schemes (Pre July 2013), a Company Share Option Plan (from January 2014), and an Unapproved scheme 
(Pre July 2013) and plan (from January 2014). The share option grants for employees vest between one and three years with a contractual 
term of ten years. The option holder must be employed by the Group at the time of exercise. The unapproved options carry similar 
conditions as the main Company Share Option Plan, except for one tranche issued on 15 September 2014 that had a shorter vesting 
period of one year.
Date of grant Scheme type
Period when 
exercisable
Price 
in pence
2016
Number
2015
Number
6 December 2005 2002 EMI scheme 2006–2015 67 – 443,400
30 July 2012 2013 EMI scheme 2012–2022 89 722,523 789,223
15 May 2013 2013 EMI scheme 2014–2023 95 224,000 228,000
21 March 2014 Company Share Option Plan 2017–2024 224.5 206,000 228,000
15 September 2014 Company Share Option Plan 2017–2024 257.5 283,950 291,950
15 September 2014 Unapproved 2017–2024 257.5 626,850 649,850
15 September 2014 Unapproved 2015–2024 257.5 288,350 288,350
10 March 2015 Company Share Option Plan 2018–2025 230 175,600 232,100
10 March 2015 Unapproved 2018–2025 230 8,200 8,200
21 September 2015 Company Share Option Plan 2018–2025 193.5 144,800 –
21 September 2015 Unapproved 2018–2025 193.5 47,400 –
2,727,673 3,159,073
A number of share warrants around the IPO and subsequent share options for Non-Executive Directors are as follows:
Date of grant Warrant type
Period when 
exercisable
Price 
in pence
2016 
Number
2015 
Number
8 July 2013 Unapproved pre–IPO warrants* 2013–2023 95 65,790 65,790
15 July 2013 Unapproved IPO warrants** 2013–2015 127 15,748 232,832
15 July 2013 Unapproved IPO warrants* 2013–2023 127 147,638 147,638
10 March 2015 Unapproved Options 2018–2025 193.5 25,000 –
254,176 446,260
*  These share options were issued to the Non-Executive Directors (including Rockspring, which is a company controlled by David Gammon) at the prevailing market price.
**  Of these share options 217,084 were issued to Canaccord Genuity Limited for services rendered as part of the IPO process, which were exercised in July 2015, and 15,748 
to Adam Glinsman for services rendered as part of the IPO process, a pre-IPO investor upon listing at the flotation price.
57 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
19. SHARE OPTIONS CONTINUED
Movements in the number of employee and Non-Executive share options outstanding and their related weighted average exercise price 
are as follows:
Group and Company year ended
31 May 2016 31 May 2015
Number
Weighted 
average 
exercise price  
in pence Number
Weighted 
average 
exercise price  
in pence
Opening balance 3,372,501 181.9 2,440,426 100.0
Granted 193,200 193.5 1,512,450 216.6
Exercised (508,100) 70.9 (496,375) 78.7
Forfeited (91,500) 226.3 (84,000) 210.4
Closing balance 2,966,101 157.0 3,372,501 181.9
Exercisable at the year end 1,159,951 95.3 1,674,051 87.6
The weighted average share price at the date of exercise of the share options was 217.3 pence. The share based compensation charge in 
the profit and loss was £738,020 of which £10,287 was in respect of warrants.
The share options at the end of May 2016 including those for Non-Executive Directors but excluding those of third parties have a weighted 
average contractual life as follows:
Group and Company year ended
31 May 2016 31 May 2015
Expiry date
Exercise 
price per share 
Pence
Options 
Number
Weighted 
average 
remaining 
contractual life 
Months
Options 
Number
Weighted 
average 
remaining 
contractual life 
Months
December 2015 67 – – 443,400 7
July 2022 89 722,523 72 789,223 84
May 2023 95 224,000 84 228,000 96
July 2023 95 65,790 86 65,790 98
July 2023 127 147,638 86 147,638 98
March 2024 224.5 206,000 94 228,000 106
September 2024 257.5 1,199,150 100 1,230,150 112
March 2025 230.0 208,800 106 240,300 118
September 2025 193.5 192,200 111 – –
Total 2,966,101 91 3,372,501 90
Under the rules of the new Company Share Option Plan, options are not exercisable until three years from the date of the grant.  
There are no performance conditions attaching to the options. The only vesting condition is continued service in the Company.
Fair value assumptions of share-based payments
The fair value of services received in return for share options is measured by reference to the fair value of share options granted.  
The estimate of fair value is measured using the Black-Scholes model. Details of the fair value granted in the period, together with  
the assumptions used in determining the fair value, are summarised below:
September 2015 March 2015
Share price at date of grant (pence) 193.5 230
Exercise price 193.5 230
Expected time to expiry (years) 8.25 8.47
Risk-free interest rate (%) 2.9 4.3
Expected dividend yield on shares (%) 0 0
Expected volatility of share price (%) 34 38
Fair value of options granted (pence) 86.8 123.4
The assumptions of volatility for the September 2015 round are based on statistical analysis of share price data from the listing on AIM.
58 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 Employee Benefit Trust (EBT)
On 5 December 2014 the Company set up an Employee Benefit Trust for the purposes of allowing employees to exercise their  
share options, including the choice of being able to do this on a cashless exercise basis. The exercise of options are approved by the 
Board at each Board meeting, outside of share dealing closed periods, under a letter of recommendation to the Trustees of the EBT.  
The fulfilment of the share option conversions, whether by issue of shares to the EBT or market purchases, is also made at the same 
time. The EBT is limited under ABI guidelines to holding not more than 10% of the Ordinary Share capital of the Group. The Trustees  
are appointed by Estera Trust (Jersey Limited) (formerly Appleby Trust (Jersey) Limited), who administer the trust. The number of  
share options exercised by employees in the year and fulfilled as part of these arrangements was 508,100 Ordinary Shares. The EBT 
purchased 195,899 Ordinary Shares from the market and 218,146 Ordinary Shares from employees exercising under the cashless 
options. The EBT had no other assets or liabilities at 31 May 2016 outside of its interest in 230,400 Ordinary Shares, and £1,353,770  
(2015: £550,766) was the drawndown balance from the £10 million facility provided by the Company.
Accounting policy
Share-based payment transactions
Share options are periodically granted to staff. Share options are measured at fair value at the date of grant 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 an estimate of the likely average expiry date of the options by reference to the current rate of exercise by employees. The share-based 
payment is recognised as an expense in profit or loss, together with a corresponding credit to an equity reserve. 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 those 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. Upon the 
exercise or lapsing of the grant a transfer of the cumulative value of the grant is made from the equity reserve to the profit and loss reserve.
20. TRADE 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 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Trade payables 702 1,014 701 974
Intercompany payable – – 39 26
Accruals 1,635 1,792 1,627 1,779
Financial liabilities 2,337 2,806 2,367 2,779
Derivative financial instruments 388 – 388 –
Other taxation and social security 348 301 348 301
Total trade and other payables 3,073 3,107 3,103 3,080
Trade and other payables are due within one year. The carrying values of trade and other payables are considered to be a reasonable 
approximation of fair value.
21. CURRENT TAX LIABILITIES
Current tax liabilities in the statement of financial position can be analysed as follows:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Current tax liabilities 89 – – –
The Group current tax liability is £89,136. This is represented by a UK tax liability of £nil and the remainder attributed to Canada. 
59 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
22. DEFERRED INCOME
Deferred income in the statement of financial position can be analysed as follows:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Deferred income – Self-published activities 2,233 723 1,762 723
£1,085,612 of deferred income is to be recognised within one year with the remaining £1,147,767 due within the next five and a half years 
(expected remaining life of the franchise period).
The deferred revenue is in respect of Elite Dangerous lifetime expansion passes purchased during the financial year , Elite Dangerous: Horizons 
revenue in respect of future promised content and Planet Coaster pre-orders. 
The deferred lifetime expansion passes revenue will be released over the remaining franchise period after the first paid-for update has 
been released. Elite Dangerous: Horizons and Planet Coaster pre-orders revenue will be released when the product has been delivered to 
the customer. The carrying values of deferred income are considered to be a reasonable approximation of fair value.
23. PROVISIONS
Provisions for dilapidations
Group and Company year ended
31 May 2016
£’000
31 May 2015
£’000
Opening balance 260 223
Provided for in period 13 37
At period end 273 260
The dilapidation provision relates to the rental contracts for two office buildings (included within note 10). These leases expire in April 
2020 and August 2020. 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.
Accounting policy
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.
24. FINANCE INCOME
Finance income may be analysed as follows for the reporting periods presented:
31 May 2016
£’000
31 May 2015
£’000
Interest income from cash and cash equivalents 37 53
25. TAXATION ON ORDINARY ACTIVITIES
(a) Analysis of the charge in the period
31 May 2016
£’000
31 May 2015
£’000
UK corporation tax based on the results for the year
Overseas tax on the results for the period 94 –
Video Games Tax Relief credits (UK) (207) –
Deferred tax (44) (28)
Tax on profit on ordinary activities (157) (28)
60 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 (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 19.6% (2015: 21.5%) 
as follows:
31 May 2016
£’000
31 May 2015
£’000
Profit on ordinary activities before taxation 1,275 1,619
Tax on profit on ordinary activities at standard rate 250 347
Factors affecting tax expense for the year:
Expenses not deductible for tax purposes 297 236
Adjustments for opening deferred tax average rate – (2)
Research and development tax credits (410) (282)
Deferred tax 44 –
Exercise of share options (159) (163)
Losses to carry forward (179) (164)
Total amount of tax (157) (28)
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 2014 the Video Games Tax Relief became available and the Group expects that some of its projects will 
qualify for this relief. Claims of £207,087 were received post period and recognised; a further claim of £664,761 has been made, but not 
yet received nor recognised.
Accounting policy
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. Tax 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.
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.
Tax credits
The UK and Canada offer tax credits which are reported ‘above the line’, meaning that they are reported within the operating result.  
The Group recognises these on the likelihood of their receipt, taking into account any uncertainty in the claims, including uncertainty  
that arises in the first year of any claim for a new credit.
61 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
26. 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 adjusted 
operating profit as shown for adjusted items in note 5.
31 May 2016 31 May 2015
Profit attributable to Shareholders (£’000) 1,432 1,647
Weighted average number of shares 33,812,840 33,513,575
Basic earnings per share (pence) 4.2 4.9
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 dilutive share options.
31 May 2016 31 May 2015
Profit attributable to Shareholders (£’000) 1,432 1,647
Diluted weighted average number of shares 35,302,973 35,346,221
Diluted earnings per share (pence) 4.1 4.7
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 2016 31 May 2015
Ordinary Shares 33,812,840 33,513,575
Under option 1,490,133 1,832,647
Diluted average number of shares 35,302,973 35,346,221
The calculation of the adjusted earnings per share, based on the adjusted operating profit / (loss) as shown in detail in note 5, is as follows:
31 May 2016 31 May 2015
Adjusted Operating (loss) / profit attributable to shareholders (£’000) (2,691) 2,466
Weighted average number of shares 33,812,840 33,513,575
Adjusted basic (loss) / earnings per share (pence) (8.0) 7.4
Weighted average number of shares (diluted) 35,302,973 35,346,222
Adjusted diluted earnings per share (pence) (8.0) 7.0
27. 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.
Group and Company year ended
31 May 2016 
£’000
31 May 2016 
£’000
31 May 2015
£’000
31 May 2015
£’000
Connected party
Expense  
paid 
Creditor 
balance 
Expense  
paid 
Creditor 
balance 
Chris Sawyer – royalties 84 – 58 –
Marjacq Micro Limited – sales commission 19 – 33 –
Group and Company year ended
31 May 2016 
£’000
31 May 2015 
£’000
Connected party
Change in 
value of loan 
expense paid 
Change in 
value of loan 
Employee Benefit Trust 129 (63)
– Share options exercised by employees
Employee Benefit Trust 675 614
– Shares issued and market purchases
Movement in year 804 551
Opening loan balance 550 –
Closing loan balance 1,354 551
62 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 28. 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 co-ordinated in close co-operation 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.
28.1 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 Board 
monitors the credit risk by reference to the date of receipt compared to the contractual terms.
The Group considers it has minimal credit risk for liquid funds and other short-term financial assets as cash is held with reputable UK,  
US and Canadian banks.
At the year end the Group’s financial assets are secured by a debenture issued in favour of Barclays Bank plc.
28.2 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 has entered into several forward contracts during the financial year in order to mitigate the risk of US currency movements. 
The closing value of the contracts has been disclosed within financial assets, and accounted for at fair value through the profit and loss.
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 Consolidated year ended Company year ended
31 May 2016 31 May 2016 31 May 2015 31 May 2015
CAD
£’000
USD
£’000
Euro
£’000
CAD
£’000
USD
£’000
Euro
£’000
CAD
£’000
USD
£’000
Euro
£’000
CAD
£’000
USD
£’000
Euro
£’000
Assets 553 1,404 301 728 878 301 9 2,229 55 9 2,195 55
In addition, some of the Group’s revenue and overhead transactions are completed in a foreign currency. Transaction exposure is reduced 
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 EUR. An increase in Sterling would lead to a decrease in income and a decrease in equity.
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Effect of a 5% change in relevant exchange rate on:
Income statement 298 202 661 330
Equity 188 192 118 182
 
63 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 MAY 2016
28. FINANCIAL INSTRUMENT RISKS CONTINUED
28.3 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 use the revolving credit facility, 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 2016
Trade and other payables 2,281 56 – –
As at 31 May 2015
Trade and other payables 2,748 58 – –
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 2016
Trade and other payables 2,311 56 – –
As at 31 May 2015
Trade and other payables 2,721 58 – –
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 three months.
29. 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.
Capital for the reporting period under review is summarised as follows:
Consolidated year ended Company year ended
31 May 2016
£’000
31 May 2015
£’000
31 May 2016
£’000
31 May 2015
£’000
Total equity 22,764 20,887 22,358 20,371
Borrowings (includes current element) – – – –
Less cash and cash equivalent (8,610) (10,478) (7,531) (10,203)
Total capital 14,154 10,409 14,827 10,168
30. ULTIMATE CONTROL
The Directors consider that David Braben has a majority control of the Group by reference to his shareholding interest.
64 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 NOTICE OF ANNUAL GENERAL 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 registered offices of Frontier Developments plc 
at 306 Science Park, Milton Road, Cambridge CB4 0WG on 18 October 2016 at 9: 15am (London time) for the following purposes:
ORDINARY RESOLUTIONS
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 2016 together with the Reports of the 
Directors and Auditor thereon.
Resolution 2.  To appoint Mr Charles Cotton as a Non-Executive Director in accordance with Article 67 of the Company’s Articles  
of Association (the ‘Articles’).
Resolution 3.  To re-appoint Dr. David Braben as a Director, who has retired by rotation in accordance with Article 70 of the Articles 
and is therefore required to stand for re-election pursuant to Article 70 of the Articles.
Resolution 4.   To re-appoint Mr David Gammon as a Non-Executive Director, who has retired by rotation in accordance with Article 
70 of the Articles and is therefore required to stand for re-election pursuant to Article 70 of the Articles.
Resolution 5.  To re-appoint Grant Thornton UK LLP as the Company’s Auditor in accordance with Section 489 of the Companies Act 
2006 (the ‘Act’) until the conclusion of the next Annual General Meeting.
Resolution 6.  To authorise the directors of the Company (the ‘Directors’) to determine the Auditor’s remuneration for the ensuing year.
Resolution 7.  That in substitution for all authorities in existence immediately prior to this resolution being passed, the Directors be 
and are hereby generally and unconditionally authorised to exercise all powers of the Company, pursuant to Section 
551 of the Act, to allot equity securities (within the meaning of Section 560 of the Act) up to an aggregate nominal 
amount of £56,854.22, 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, unless renewed, varied or revoked by the Company in a general 
meeting, shall expire on the earlier of 15 months after the passing of this resolution or the conclusion of the Annual 
General Meeting of the Company to be held in 2017 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.
65 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
ADDITIONAL INFORMATION NOTICE OF ANNUAL GENERAL MEETING CONTINUED
SPECIAL RESOLUTION
To consider and, if thought fit, pass the following resolution as a special resolution:
Resolution 8.  THAT subject to the passing of resolution 7 above, the Directors be empowered in accordance with Section 570 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 7 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 £17,056.26 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 on the earlier of 15 months after the passing of this resolution or the conclusion of the Annual 
General Meeting of the Company to be held in 2017 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
8 September 2016
Frontier Developments plc 
306 Science Park 
Milton Road 
Cambridge CB4 0WG
66 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 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 but must 
attend the meeting to represent you.
2.  You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, you will  
need to complete a separate Form of Proxy in relation to each appointment. To request additional Forms of Proxy, please contact  
the Company Secretary on 01223 394300 or at Frontier Developments plc, 306 Science Park, Milton Road, Cambridge, CB4 0WG.  
You will need to state clearly on each Form of Proxy the number of shares in relation to which the proxy is appointed. A failure to 
specify the number of shares a proxy appointment relates to or specifying a number of shares in excess of those held by the member 
will result in the proxy appointment being invalid.
3.  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.
4.  A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. 
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.
5.  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.
6.  To be effective, the 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 PXS, Capita Asset Services,  
34 Beckenham Road, Beckenham, Kent, BR3 4TU no later than 9.15am on 14 October 2016 (being not more than 48 hours (excluding 
non-working days) prior to the time fixed for the meeting).
7.  Whether or not you propose to attend the Annual General Meeting, please complete, sign and submit a Form of Proxy to our registrars 
Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by no later than the time and date specified above.
8. Completion and return of the Form of Proxy will not preclude a shareholder from attending and voting in person at the meeting.
9.  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 by close of business UK time on 14 October 2016 (being not more than 48 hours (excluding 
non-working days) prior to the time fixed for the meeting) shall be entitled to attend and vote at the meeting or, if the meeting is 
adjourned, by close of business UK time on such date being not more than 48 hours (excluding non-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.
10.  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 and letters of appointment (as applicable).
11.  A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as 
a member.
67 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016
ADDITIONAL INFORMATION ADVISORS AND COMPANY INFORMATION
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
REGISTERED NUMBER
02892559
(Incorporated and registered in England and Wales)
BROKER AND NOMINATED ADVISOR
Numis Securities Limited
The London Stock Exchange Building 
10 Paternoster Square 
London EC4M 7LT
JOINT BROKER 
FinnCap Limited
60 New Broad Street 
London EC2M 1JJ
AUDITOR
Grant Thornton UK LLP
101 Cambridge Science Park 
Milton Road 
Cambridge CB4 0FY
LEGAL ADVISORS TO THE COMPANY
Bird & Bird LLP
12 New Fetter Lane 
London EC4A 1JP
REGISTRARS
Capita Asset Services
The Registry 
34 Beckenham Road 
Beckenham  
Kent BR3 4TU 
United Kingdom
68 FRONTIER DEVELOPMENTS PLC
ANNUAL REPORT AND ACCOUNTS 2016 This report is printed on Condat Silk paper. Manufactured at a mill that 
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Telephone: 020 7403 4099 www.sampsonmay.com FRONTIER DEVELOPMENTS PLC
306 Science Park 
Milton Road 
Cambridge CB4 0WG