FRONTIER DEVELOPMENTS PLC 
ANNUAL REPORT AND ACCOUNTS 2015
RECORD REVENUE 
AND PROFIT WHILE 
IN TRANSITION CONTENTS
FRONTIER IS FOCUSED ON  
BUILDING WORLD-CLASS 
FRANCHISES AS THE GAMES 
INDUSTRY TRANSITIONS  
TO THE WORLD’S PREMIERE  
FORM OF ENTERTAINMENT.
Frontier has a proven track record of progressive development  
in video games spanning several decades of rapid technological 
change. Its 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.
STRATEGIC REPORT
Highlights 01
Chairman’s statement 02
Market overview 04
Chief Executive’s statement 08
Strategic priorities and key performance indicators 10
Principal risks and uncertainties 12
Financial review 14
CORPORATE GOVERNANCE
Directors’ biographies 20
Report of the Directors 22
Corporate governance report 24
Remuneration report 26
FINANCIAL STATEMENTS
Independent Auditor’s report 28
Consolidated statement of cashflows 29
Company statement of cashflows 30
Consolidated income statement 31
Consolidated statement of comprehensive income 31
Consolidated statement of financial position 32
Company statement of financial position 33
Consolidated statement of changes in equity 34
Company statement of changes in equity 35
Notes to the financial statements 36
ADDITIONAL INFORMATION
Notice of Annual General Meeting 59
Advisors and Company information 62 £10.5M
+24%
7.2
8.4
10.5
2013 2014 2015
NET CASH BALANCE (£M) OPERATING RESULT (£M)
£1.6M
+192%
1.1
(1.7)
1.6
2013 2014 2015
REVENUE (£M)
£22.8M
+139%
12.1
9.5
22.8
2013 2014 2015
EBITDA (£M)
£6.1M
+1,790%
2.9
0.3
6.1
2013 2014 2015
ADJUSTED OPERATING PROFIT* (£M)
£2.5M
+171%
1.8
(3.5)
2.5
2013 2014 2015
EPS / (LPS) (P)
4.9P
+185%
4.2
(5.8)
4.9
2013 2014 2015
ADJUSTED EPS / (LPS)** (P)
7.4P
+165%
7.3
(11.4)
7.4
2013 2014 2015
DEFERRED INCOME (£M)
£0.7M
-70%
1.3
2.5
0.7
2013 2014 2015
HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
•  Strategic step: The first stage of 
transition was successfully completed 
as Elite Dangerous launched. At  
the end of August 2015 it had sold 
approximately 825,000 paid units 
(excluding free ‘demo’ units) and 
generated 84% of Group revenues  
via a self-publishing business model 
including associated merchandise.
•  S e l f - pu bl i s h i ng c o n t r i bu t e d 
significantly to record revenues,  
up 139% to £22.8 million, a cash 
increase of £2.1 million to £10.5 
million, EBITDA up 1,790% to £6.1 
million and an adjusted operating 
profit up 171% to £2.5 million  
whilst still in transition.
•  The Group expanded the reach of  
Elite Dangerous through subsequent 
releases on Mac and Xbox One 
platforms in addition to PC, and via 
the Steam and Xbox Live distribution 
channels in addition to the Group’s  
own online store. The Group’s  
COBRA technology facilitated the 
significant technological and logistical 
achievement of simultaneous 
multi-platform and multi-channel 
releases whilst players all share  
the same server environment. 
•  All remaining work-for-hire projects 
were completed, as Tales from Deep 
Space with Amazon and Screamride 
with Microsoft were released.
•  The organisation was restructured  
for fully self-published operations  
by centralising development in the 
Group’s Cambridge headquarters  
and changing the staffing mix via 
targeted recruitment and redundancy  
at a cost of £0.3 million.
•  The Group started the development  
of its second self-published franchise, 
Planet Coaster, which was also  
publicly announced.
FINANCIAL HIGHLIGHTS
FIND OUT MORE ONLINE
at www.frontier.co.uk
* See page 18 for reconciliation to reported revenue and operating result on income statement. 
** See note 26.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  01 “ THIS HAS BEEN A LANDMARK 
YEAR FOR OUR COMPANY .  
TWO YEARS AGO WE 
EMBARKED ON A TRANSITION 
PLAN. I AM VERY PLEASED  
TO REPORT THA T THE FIRST 
ST AGE OF THA T TRANSITION  
IS NOW COMPLETE.”
This has been a landmark year for our 
Company. Two years ago we embarked  
on a transition plan. I am very pleased  
to report that the first stage of that 
transition is now complete. Last year  
81% of our revenue was derived from  
two clients on whose behalf we developed 
games. This financial year 84% of our 
sales (including associated merchandise) 
have come from the consumers who 
bought our self-published game Elite 
Dangerous. In 2016 we expect 100%  
of our revenue to be booked from 
consumers buying our self-published 
games. This transition has involved 
significant internal re-organisation  
as well as adapting from a B2B to B2C 
model. I take this opportunity to thank  
all our employees for their dedication, 
long hours and hard work. In 2015 we 
also released the last of our games 
developed for third parties: Tales from 
Deep Space on behalf of Amazon and 
Screamride for Microsoft. We thank these 
customers and continue to maintain  
a close relationship with them as they 
play key parts in the distribution of our 
self-published games.
READ MORE ABOUT OUR BUSINESS:
P08
PERCENTAGE OF OUR TOTAL REVENUE 
DERIVED FROM SELF-PUBLISHED GAMES:
84%
CUSTOMERS WHO HAVE BOUGHT  
ELITE DANGEROUS:
825,000+
EXPECTED TOTAL REVENUE WE 
EXPECT FROM CUSTOMERS BUYING 
OUR SELF-PUBLISHED GAMES IN 2016:
100%
CHAIRMAN’S STATEMENT
2015 above all else has been the year of 
Elite Dangerous. We have built a virtual 
galaxy with 400 billion star systems in 
which players can engage with each other 
in combat, explore the stars and their 
planets, mine resources and trade them. 
The second step in our transition is  
to take the success of Elite Dangerous  
to become a multi-franchise game 
publisher. We recently announced that 
our second franchise, Planet Coaster,  
is being built on our knowledge and  
long experience of roller coaster games.  
We expect to reveal details of a third 
franchise once Planet Coaster is released. 
This will keep our creative teams busy  
for many years ahead.
02  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
STRATEGIC REPORT
02  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015 The Group successfully completed  
its outstanding work-for-hire 
commitments during the year, 
developing Screamride on Xbox  
One for Microsoft Game Studios  
and Tales from Deep Space on  
behalf of Amazon.
WORK-FOR-HIRE BUSINESS 
SUCCESSFULLY COMPLETED
As well as developing franchises, the  
core of our capability must focus on 
remaining at the forefront of game 
development technology. Our COBRA 
engine, which enables us to release 
games on many platforms, remains  
an important effort. Elite Dangerous  
was one of the first games to showcase  
the possibilities of Virtual Reality (VR)  
and we intend to stay in touch with 
hardware manufacturers of VR systems 
such as Facebook’s Oculus Rift, Valve  
and HTC’s Vive, Microsoft’s HoloLens  
and Sony’s Morpheus as 3D virtual  
reality becomes more commonplace. 
Elite Dangerous has now been released  
on PC, Mac and Xbox One, and we will 
continue to invest in releases to achieve 
the maximum customer reach. 
In last year’s statement I said that  
“In future years, starting with 2015, we  
will see the harvest of the seeds we have 
sown.” We have delivered a transformation 
in our business model, achieved a record  
level of revenue, sold our first developed 
game to 825,000 consumers (the majority 
through our own web store), re-engineered 
our development capability (from third 
party published to self-published) and 
announced a net profit in the financial  
year. Looking ahead I see a multi-franchise 
game developer / publisher with its games 
being distributed on the most modern  
and best hardware platforms, achieving 
sustainable returns for our shareholders. 
Activision Blizzard Inc. and Electronic  
Arts Inc. are good exemplars as to where  
we are heading.
Our Company could not achieve its 
success without the hard work, creative 
talent, dedication and perspiration from 
our exceptional employees. I take this 
opportunity to thank them on behalf of  
all shareholders. Equally, our transition 
would not have been possible without the 
financial support of our shareholders and 
backers. I take this opportunity to thank 
them on behalf of all employees.
DAVID GAMMON
Chairman 
8 September 2015
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  03 THE VIDEO GAMES SECTOR HAS CONTINUED TO GROW SIGNIFICANTLY OVER THE 
LAST DECADE. THE TARGET AUDIENCE WITHIN THE VIDEO GAMES SECTOR HAS 
EXTENDED FROM THE TRADITIONAL YOUNG MALE FOCUS TO A MORE BROAD ONE, 
WITH FEMALE PLAYERS OUTNUMBERING MEN IN SOME AGE RANGES. PLATFORMS 
ARE BROADLY SEGMENTED INTO I) PC, II) CONSOLE AND III) SMARTPHONE / TABLET.
In 2004, the games industry as a whole generated revenue of 
US$25 billion. An average of available estimates for 2015 values  
the market at US$82 billion revenue and estimates for 2017  
range as high as US$103 billion.
1,2,3
 Spending in each of the  
three platform segments is approximately equal,
1,2,3
 each  
segment having a one-third share of the total, or approximately 
US$28 billion each, annually.
The video games industry is made up of 
developers, publishers, platform holders 
(such as Sony, Microsoft, Nintendo and 
Apple), distributors, retailers and secondary 
service providers.
The distinction between developers and 
publishers has become blurred, as the 
route to market is now open to developers 
such as Frontier directly self-publishing 
in the digital space.
MARKET OVERVIEW
STRATEGIC REPORT
04  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015 This industry move towards digital 
distribution has removed significant 
barriers to entry for developers like 
Frontier to access the market directly  
on a similar footing to traditional  
game publishers, something that  
was not feasible during the physical 
distribution era.
PC SEGMENT
PC performance continues to improve 
incrementally and PC as a gaming 
platform has had a resurgence. PCs offer 
an open platform and lead the market on 
processing performance. The low barriers 
to entry and performance on offer to 
developers act to stimulate a wide variety 
of gaming experiences and the highest 
potential visual quality, as Frontier’s 
support for 4K and higher resolutions  
in Elite Dangerous illustrates. 
The open nature of the PC platform also 
makes it amenable to using a variety of 
sophisticated third party peripherals to 
enhance the gameplay experience, such 
as Elite Dangerous’ support for joystick 
controllers. For this reason also we are 
seeing the re-birth of Virtual Reality (VR) /  
Head Mounted Displays, leading on the PC 
platform via Oculus Rift and the HTC Vive.
The PC segment has a high concentration 
of the core gaming audience at whom 
Frontier’s current franchises are targeted. 
Valuable franchises continue to be 
created in the PC segment. In September 
2014 Microsoft announced the acquisition 
of Mojang, the Swedish creators of 
Minecraft for US$2.5 billion.
4
 Oculus,  
the crowd funded pioneer of modern VR, 
was bought by Facebook in a US$2 billion 
deal
9
 in July 2014.
CONSOLE SEGMENT
The key players in the console world  
have shipped their respective new 
generation of consoles, generally 
providing a multimedia centre with  
Cloud and streaming technologies,  
and typically offering a more holistic 
entertainment experience than their 
previous incarnations. The market  
for the new console generation is now 
starting to mature as we approach  
the second anniversary of their launch. 
This new console generation is also 
designed to be suited to digital distribution 
of content, unlike the previous generation 
– many instances of which were not  
fitted with enough local storage. The  
new generation facilitates wide digital 
distribution as the new generation  
takes the place of the old one.
Access to the console market is gated  
by the owners of the different platforms, 
and together they have an established 
audience that contains the second 
significant concentration of the core 
gaming audience at whom Frontier’s 
current franchises are targeted.
Some major video game franchise 
console releases have eclipsed major 
movie openings in revenue terms. 
Activision’s Call of Duty: Black Ops II 
reached US$1 billion in 15 days – faster 
than the top-selling movie “Avatar”
5
 –  
and grossed over US$500 million within 
24 hours of going on sale,
6
 beating the 
previous record (also held by a game). 
This performance would have positioned 
it at the top of the list for the highest-ever 
opening weekend if it were a movie.
7
DIGITAL DISTRIBUTION
In video games and other industries 
like film, music and TV, direct digital 
distribution of products to customers  
is rapidly becoming ubiquitous as  
physical retail channels recede. 
Major platform holders are still key  
as they control access to their platform 
audiences. Devices now have their own 
associated App Store ecosystems which 
allow discovery of content, direct digital 
download to the device and integrated 
billing mechanisms; for example Apple’s 
App Store, Microsoft’s Xbox Live and 
Windows Store, Google Play, Amazon 
Appstore, Nintendo’s eShop and Sony’s 
Playstation Network.
Digital distribution share vs. physical for 
the major platform segments in 2015 is 
estimated as:
1,2,3,12
SMARTPHONE AND TABLET:
 100%
PC:
86%
CONSOLE: 
50%
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  05 FRONTIER’S FOCUS
Frontier’s decisions to invest in Elite 
Dangerous and Planet Coaster are the 
result of the current focus on leveraging 
its proven strengths to build strong game 
franchises. Frontier’s online store and 
COBRA exploitation are considered to  
be long-term growth opportunities.
Frontier’s current key differentiators  
are its franchise IP (such as Elite) and 
unique expertise in certain genres of 
game (such as ‘Tycoon’ games), its 
COBRA game development technology 
that facilitates unique core gaming 
experiences across multiple platforms, 
and its ability to deliver quality games  
for specific target audiences on both  
the PC and console platforms.
It is therefore well placed to digitally 
self-publish unique games in their  
genre, using its IP , expertise and COBRA 
technology to target the core gamer 
audience in both the PC and console 
market segments. Together these two 
segments have a combined estimated 
revenue value of $56 billion in 2015.
1,2,3
The smartphone and tablet segment  
will be considered for companion apps  
in its franchises that are likely to have 
increasing functionality over time, as 
Frontier determines there is both the 
device performance and market potential 
to allow it to leverage its differentiators  
in that segment.
SMARTPHONE AND TABLET SEGMENT
Smartphones and tablets are catching  
up in performance terms with video  
game consoles,
8
 helped by their annual 
product life cycles compared to the 
typical six-year life cycle of a dedicated 
games console. The smartphone and 
tablet games market is composed of 
hundreds of millions of mainly casual 
players, in contrast to the concentrations 
of core gamers on the other platforms.  
The smartphone and tablet audience 
therefore generally places a correspondingly 
lower value on games, predominantly 
choosing to play relatively low priced or 
free-to-play games.
Viral appeal therefore plays a much larger 
part in a game’s success than on PC or 
console, but the sector has also seen 
significant investment for those who 
managed to win through against the vast 
numbers of games on offer. In October 
2013, Supercell, creator of Clash of Clans, 
sold 51% of itself to Japan’s SoftBank and 
GungHo in a deal valuing the company at 
US$3 billion.
10
 The maker of Candy Crush 
Saga, King, undertook an Initial Public 
Offering on the New York Stock Exchange 
in March 2014 valuing the company at 
US$7 billion.
11
Although not key to the strategic 
transition, Frontier retains a presence  
in the market with games such as 
LostWinds and Coaster Crazy. In August 
2015 Frontier published RollerCoaster 
Tycoon 3 on Apple’s platform.
MARKET OVERVIEW CONTINUED
SUCCESSFUL GAME FRANCHISES
In each of the three main gaming  
market segments there is evidence  
of multi-billion dollar values being  
placed on successful franchises.
Despite the ongoing changes in distribution 
model in the industry, there is enough 
publicly available data for PC and console 
to analyse top video game franchises.
A selection of five successful, well-managed 
PC and console franchises are plotted on 
the page opposite. Ignoring the occasional 
upturn or downturn in individual franchises, 
they exhibit similar annual revenue profiles 
over their lifecycles, irrespective of the 
subject matter or revenue model for the 
franchise. The average curve (black line)  
is straightforward to model.
Microsoft paid US$2.5 billion for the 
Minecraft franchise. By plotting historical 
public information and projecting future 
revenues using the model ‘franchise 
lifecycle curve’, we can use a standard 
discounted cashflow valuation (with a  
9% discount). This results in a franchise 
value at January 2015 of approximately 
US$2.7 billion, supporting Microsoft’s 
purchase price.
A portfolio of three or more successful 
franchises supports very significant 
market capitalisations of publicly traded 
publishers such as Electronic Arts 
(US$19.8 billion
*
) and Activision Blizzard 
(US$20.4 billion
*
) in the USA.
 *  Market Capitalisation values as at 31 August 2015.
STRATEGIC REPORT
06 FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015 FIVE SUCCESSFUL, WELL-MANAGED PC AND CONSOLE FRANCHISE EXAMPLES
Franchise year
Annual revenue (£M)
1
1,200
1,000
800
600
400
200
0
2 3 4 5 6 7 8 9 10 11 12 13 14 15
Average
LONG-TERM TRENDS
The long-term trends (5–10 years  
or more from now) suggest the overall 
entertainment industry converging as 
lines between the media become ever 
more blurred and current early-stage 
video-game sub-segments such  
as eSports and Virtual Reality
1
  
grow substantially.
Elite Dangerous has already established 
Frontier as a leader in Virtual Reality,  
and the new Close Quarter Combat 
Championship feature for Elite Dangerous 
on PC, Mac and Xbox One provides a good 
environment for eSports enthusiasts 
within the franchise.
AMOUNT PAID BY MICROSOFT FOR  
THE MINECRAFT FRANCHISE
US$2.5B
APPROXIMATE RESULTING  
FRANCHISE VALUE
US$2.7B
ELECTRONIC ARTS  
MARKET CAPITALISATION
US$19.8B
ACTIVISION BLIZZARD  
MARKET CAPITALISATION
US$20.4B
We already see the beginnings of 
interactive TV (more than just ‘pressing 
the red button’), such as Microsoft’s ‘1 vs 
100’ in the USA and the social aspects  
of the Microsoft and ESPN collaborations 
via Xbox Live, allowing the group watching 
of sport even when the group is widely 
distributed. In parallel, the digital 
distribution of non-interactive content  
by Netflix, Microsoft, Amazon, Apple, the 
BBC and others is already widespread.
The expertise in interactivity lies largely 
within what is currently the games 
industry, so organisations with such 
expertise will be well placed for 
significant value in this interactive, 
converged future.
1.  Global Games Market Report 2015,  
SuperData Research
2.  N e w z o o http://www.newzoo.com/insights/
global-games-market-will-reach-102-9-
billion-2017-2/
3.  Global entertainment and media outlook  
2015–2019, PwC
4.  E n ga d ge t http://www.engadget.com/2014/09/19/
microsoft-buying-minecraft-explanation/
5.  Bl o o m b er g http://www.bloomberg.com/
6.  v g 2 47 http://www.vg247.com/
7.  B oxof fi c e m o j o http://www.boxofficemojo.com/
8. Tomshardware http://www.tomshardware.com/
9.  th e gu ar d i an http://www.theguardian.com/
technology/2014/jul/22/facebook-oculus-rift-
acquisition-virtual-reality
10.  P a n d o http://pando.com/2013/10/15/ 
what-supercells-1-5b-deal-means-for- 
mobile-global-gaming-and-finland/
11.  F o r b e s http://www.forbes.com/sites/
maggiemcgrath/2014/03/25/candy-crush-
maker-prices-ipo-at-22-50-per-share/
12.  C N B C http://www.cnbc.com/2014/06/07/ 
new-consoles-dont-spark-retail-run- 
on-game-sales.html
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  07 800
700
600
500
400
300
200
100
0
Nov ‘13
Jan ‘14
Dec ‘13
Dec ‘14
Mar ‘14
Feb ‘14
May ‘14
Apr ‘14
Jul ‘14
Jun ‘14
Sep ‘14
Oct ‘14
Aug ‘14
May ‘15
Apr ‘15
Jul ‘15
Jun ‘15
Aug ‘15
Nov ‘14
Mar ‘15
Jan ‘15
Feb ‘15
(’000)
35
30
25
20
15
10
5
0
Nov ‘13
Jan ‘14
Dec ‘13
Dec ‘14
Mar ‘14
Feb ‘14
May ‘14
Apr ‘14
Jul ‘14
Jun ‘14
Sep ‘14
Oct ‘14
Aug ‘14
May ‘15
Apr ‘15
Jul ‘15
Jun ‘15
Aug ‘15
Nov ‘14
Mar ‘15
Jan ‘15
Feb ‘15
“ WITH OUR FIRST FRANCHISE 
ABOUT TO ENTER ITS  
SECOND SEASON, AND THE 
ANNOUNCEMENT OF OUR 
SECOND, PLANET COASTER, 
FRONTIER IS IN A VERY 
STRONG POSITION, AND  
VERY WELL PLACED FOR  
AN EXCITING FUTURE AND 
FURTHER REVENUE GROWTH.”
Just over half of our developers are 
working on Elite Dangerous, and the  
rest are now working on Planet Coaster. 
The second stage of our transition will  
be complete in late 2016 when Planet 
Coaster is planned to ship.
Sales of our first major franchise,  
Elite Dangerous, are tracking well. Sales 
figures of Elite Dangerous have already 
been made public over the year, and  
as of the end of August 2015 stood at 
approximately 825,000 unit sales. A 
summary of the cumulative paid-for units 
and the gross revenue each month up to 
the end of August 2015 are plotted below.
We are delighted to have returned to  
profit this early in our transition. We 
raised funds during the Kickstarter 
crowd-funding at pre-IPO and IPO in 
order to fund the transition but, with 
hindsight, the process has been more 
successful and more cash generative 
than anticipated.
We successfully launched Elite Dangerous 
via our own web-based store and have 
continued to support it with regular 
significant expansions. We reached new 
audiences for the game by supporting new 
distribution channels and platforms with 
Steam, Mac and Xbox One.
As we completed our obligations to third 
party publishers, the success of Elite 
Dangerous allowed us to start investing  
in a second self-published franchise in 
anticipation of higher future returns. 
Planet Coaster is a game in the ‘Tycoon’ 
genre; a teaser trailer was launched 
during the E3 trade show in June.  
Planet Coaster will launch in 2016 and  
will allow the Group to make use of its 
proven expertise in the ‘Tycoon’ genre,  
as Elite Dangerous has in its genre. 
The significantly higher net receipts from 
self-publishing Elite Dangerous compared 
to our previous work-for-hire business 
model enabled Frontier to more than 
double headline revenue for the year to 
£22.8 million, and the net cash balance 
increased by £2.1 million to £10.5 million 
at 31 May 2015. This allowed us to 
generate a pre tax profit of £1.6 million 
(EBITDA of £6.1 million) whilst still in  
a planned transition.
CHIEF EXECUTIVE’S STATEMENT
STRATEGIC REPORT
08  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015 Following the successful completion of the first stage of our transition the Board 
expects the Group to be well placed as it develops its IP into world class franchises. 
Frontier is on course to launch the Xbox One version of Elite Dangerous in September 
2015 and the follow up season of expansions, Elite Dangerous: Horizons, in the 
calendar Q4 of 2015. Elite Dangerous: Horizons is a season of major gameplay 
expansions for Elite Dangerous, beginning with Planetary Landings on 1:1 scale 
worlds across the Elite Dangerous galaxy. Elite Dangerous: Horizons will continue  
to introduce major new features and gameplay as the season continues into 2016, 
enriching the Elite Dangerous experience with new activities and new ways to play.
The Board expects further strong revenue growth in the current financial year.  
The timing of the release of Elite Dangerous: Horizons, expected to be around our 
half year end, will likely have a significant impact on the half-on-half phasing of  
the current year’s revenues. 
As planned, Frontier has started development on Planet Coaster, set for release  
in the calendar Q4 of 2016 as a second franchise.
The launch of Planet Coaster will represent the end of the next stage of our transition, 
delivering a fully self-published revenue pipeline that maximises returns from the 
use of our established expertise and pool of IP.
We will also continue to identify further franchises that would make full use of our 
established expertise and IP in order to further build our revenue pipeline for the 
longer term.
Up to 31 August 2015 the Group had sold approximately 825,000 units of Elite 
Dangerous. At the Gamescom show we announced Elite Dangerous: Horizons,  
a new paid-for season of expansions for the game, to a positive critical reception. 
Net cash balance at 31 August was approximately £10.7 million. An early video  
of Frontier’s second franchise Planet Coaster was shown for the first time at E3’s 
inaugural PC Gaming Show. The game is set to be publicly released in Q4 of 2016 
and is available now on a pre-order basis.
In addition to our major self-published 
franchises, we released a port of our 
classic PC game RollerCoaster Tycoon 3  
for iOS (Apple) devices on 13 August 2015.
Our work for external publishing partners 
in the financial year included Amazon 
Game Studios’ release of Tales from  
Deep Space for Kindle Fire devices, and 
subsequently on iOS. We also worked  
for Microsoft Game Studios on the 
release of Screamride for Xbox One, 
digitally available via Xbox Live in March.
Overall we have had a great year. This  
is down to the hard work of our staff,  
and the great support from our many  
fans around the world.
DAVID BRABEN OBE
Founder and CEO
8 September 2015
REVENUE
£22.8M 
NET CASH BALANCE
£10.5M
ADJUSTED OPERATING PROFIT
£2.5M
OPERATING IN LINE WITH 
OUR FIVE STRATEGIC PILLARS
 Transition to self-publishing
  Repeatable model over  
multiple franchises
 Elite Dangerous
 Planet Coaster
 COBRA
OUTLOOK AND CURRENT TRADING UPDATE
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  09 2013 2014 2015
82%
15%
3%
TRANSITION OF REVENUE MIX:
% of revenue by operating segment
Self-published
External published
Royalties, merchandise and other income
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
STAFF SPLIT ON DEVELOPMENT TEAMS: 
for external published and self-published work
Development external published
Development self-published
Feb ‘13
Aug ‘13
Oct ‘13
Dec ‘13
Jun ‘13
Apr ‘13
Feb ‘14
Aug ‘14
Oct ‘14
Dec ‘14
Jun ‘14
Apr ‘14
Feb ‘15
Aug ‘15
Jun ‘15
Apr ‘15
70
60
50
40
30
20
10
0
Feb ‘13
Aug ‘13
Oct ‘13
Dec ‘13
Jun ‘13
Apr ‘13
Feb ‘14
Aug ‘14
Oct ‘14
Dec ‘14
Jun ‘14
Apr ‘14
Feb ‘15
Aug ‘15
Jun ‘15
Apr ‘15
GROWTH OF STAFF:
focusing on traditional publishing tasks
Publishing support staff
FRONTIER’S STRATEGY IS TO BUILD UP KEY FRANCHISES OVER TIME.
 Transition to self-publishing
STRATEGIC PRIORITIES AND  
KEY PERFORMANCE INDICATORS
The first stage of Frontier’s transition  
to self-publishing is complete. Elite 
Dangerous, Frontier’s first major franchise,  
is in the market. It is earning significantly 
more revenue with higher margins  
from unit sales than by working for third 
party publishing partners, despite the 
development process being the same.
Having successfully completed its obligations 
to third party publishers during the financial 
year, Frontier used the staff who had been 
allocated to work-for-hire contracts to start 
investment in the creation of a second major 
self-published franchise in anticipation of 
higher returns in the longer term. The game  
is a strategy / simulation genre, rollercoaster-
based title – Planet Coaster – due for release  
in Q4 2016.
Since completion of external publisher 
contract work with Amazon Game Studios, 
just over half of Frontier’s developers have 
been working on Elite Dangerous, with the rest 
working on Planet Coaster . The second stage 
of Frontier’s transition will be complete in late 
2016 when Planet Coaster is planned to ship.
10  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
STRATEGIC REPORT 333
190
301
333
2013 2014 2015
INVESTMENT IN TECHNOLOGY:
Man months
£22.8M
12.1
9.5
22.8
2013 2014 2015
MEASURE OF GROWTH: 
Revenue
£2.5M
1.8
(3.5)
2.5
2013 2014 2015
MEASURE OF PROFITABILITY:
Adjusted Operating Profit* 
1 ,531
376
933
1,531
2013 2014 2015
INVESTMENT IN SELF-PUBLISHING: 
Man months
 Elite Dangerous
 Planet Coaster
 COBRA
 Repeatable model over multiple franchises
RELEVANT KPIS
*  See page 18 for reconciliation to income statement.
Frontier’s strategy is to build up key 
franchises over time. Frontier is following 
the pattern of successful franchises in the 
games industry by planning for their growth 
over many years, releasing new content  
on new platforms to extend addressable 
markets, while working to build a supportive 
fan base.
In addition to the launch of Elite Dangerous 
itself, Frontier has released three ‘expansions’ 
for Elite Dangerous, called ‘Community Goals’, 
‘Wings’ and ‘Powerplay’, with two further 
expansions to come in calendar year 2015.  
This represents a ‘season’ of content, with each 
expansion creating new interest in the game.
Frontier has also reached new audiences 
through the Valve’s Steam distribution 
channel, and online market place, a 
community of 25 million gamers and  
added support for new platforms with  
Apple Mac and Microsoft Xbox One.
Subsequent to the end of the financial year, 
Frontier announced Elite Dangerous: Horizons. 
This is a second ‘season’ of major gameplay 
expansions for Elite Dangerous on PC, 
announced during the Gamescom games 
show in Cologne, Germany.
This announcement made clear Frontier’s plans 
for continued monetisation of the Elite Dangerous 
franchise. Additional expansions to the game 
will continue to be released in paid seasons  
– all players will fly together in the same galaxy 
but access different features depending on 
which season they have purchased.
The Group has a very successful track 
record in developing games of the strategy / 
simulation genre, for example RollerCoaster 
Tycoon 3 and Zoo Tycoon for PC and Xbox  
One respectively.
Originally titled ‘Coaster Park Tycoon’, Planet 
Coaster was renamed to help communicate 
the fresh approach the game will bring  
to the strategy / simulation genre and 
differentiate it from a plethora of games  
in the genre with the word ‘Tycoon’ in their 
title, using the sub-title ‘Simulation Evolved’. 
‘Tycoon’ has latterly become synonymous 
with a perception of low-quality in the minds 
of today’s consumers.
A trailer video for Planet Coaster premiered 
at the PC Gaming Show held during the E3 
tradeshow in Los Angeles in June 2015. This 
was well received and Frontier believes it 
was successful in both raising awareness of 
the new game and establishing its position in 
the market as a modern-day continuation of 
the Group’s previous work on high-quality 
strategy / simulation titles.
Elite Dangerous was created using the  
latest evolution of the Group’s COBRA 
technology and tools. It included several 
ground-breaking features such as a  
novel hybrid server architecture, which 
offers significant cost advantages over 
other approaches and an ongoing  
player-driven story.
Additionally, the Group has used the 
cross-platform nature of COBRA to  
release Elite Dangerous on new platforms 
such as Apple’s OS X operating system for 
Macintosh computers (the first time this 
platform has been supported by COBRA)  
and Microsoft Xbox One. 
The Group’s support of additional distribution 
channels for Elite Dangerous from Valve and 
Microsoft was facilitated by linking its own 
online store with Steam and Xbox Live, two  
of the leading gaming digital eco-systems.
COBRA technology facilitated the significant 
technological and logistical achievement  
of simultaneous multi-platform and 
multi-channel releases whilst players  
all share the same server environment. 
Frontier has used this model for Elite 
Dangerous and is now repeating this for  
Planet Coaster, which Frontier expects  
to follow a similar profile over time.
The Company plans to begin a third franchise 
around the time of Planet Coaster’s launch,  
using the same philosophy.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  11 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:
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, general morale and wellbeing initiatives.
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 in the middle of a three-year 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 small 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 Group has seen a significant shift in revenue mix towards self-published 
sales in the financial year. This was driven by the successful launch of  
Elite Dangerous, which is the first important and successful step in the 
Group’s transition to fully self- publishing its output. 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).
Currency risk is managed by ensuring, where possible, that financial 
revenues and operating costs are denominated in GBP. However, as 
anticipated, 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 as the Group’s currency transactions  
are now considered to be significant enough to warrant this. The intention  
is to retain more than a 50% hedge against expected receipts over a  
rolling 12 month period. The currency exposure is monitored daily.
PRINCIPAL RISKS AND UNCERTAINTIES
12  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
STRATEGIC REPORT 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 now 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 ceased development in its 
Halifax, Nova Scotia office during the financial year, deciding to focus 
development through its Cambridge-based teams that contain significant 
project-specific expertise relevant to the Group’s current developments.  
The Group continues to seek to strengthen its Non-Executive Director base 
and has appointed key advisors with experience in the sector to ensure these 
risks are managed objectively. 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. 
The Group has access to its £1 million revolving credit facility.
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
Credit risk is the risk that 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 and 
cash and cash equivalents recognised at the year end date (as summarised 
in notes 16 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 for 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 such risk to be low.
 Increase
 Decrease
 No change
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  13 TRADING RESULTS
In the financial year ended 31 May 2015, Frontier Developments 
delivered the first key milestone within a planned transitional 
period as it self-published its first major title, Elite Dangerous, 
on PC and Mac platforms. 
The Group’s operating cashflow was £7.3 million (2014:  
£0.3 million) and its investment in non-current assets was  
£4.6 million (2014: £4.4 million), consequently net cash balance  
rose to £10.5 million from £8.4 million, and the Group was  
able to pay back early the interest free loan from the Atlantic 
Canada Opportunities Agency. The Group is once again  
debt free. Revenue more than doubled to £22.8 million from  
£9.5 million, and EBITDA rose to £6.1 million from £0.3 million.  
The Group delivered an operating profit of £1.6 million 
compared with an operating loss of £1.7 million in the prior  
year. Adjusted operating profit (being revenue less non-cash 
expenses) was £2.5 million (2014: loss £3.5 million).
Basic earnings per share were 4.9 versus 5.8 pence loss 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 within the measure) the basic earnings per share 
was 7.4 pence, compared to a loss per share of 11.4 pence.
The Group has made cashflow the primary financial statement 
as the Board believes it represents a clearer picture of the 
Group’s performance. Frontier has also fine-tuned its key 
financial measures in conjunction with the business model 
transition: measuring revenue on an unadjusted basis as the 
differences to underlying revenue have become less material.
The Group has presented adjusted operating profit as its 
preferred measure of profitability to provide an improved  
insight into performance over the transition period; adjusted 
operating profit seeks to add back funding related and all non 
cash overheads so as to measure the surplus resources available 
after re-investment in development costs of its self-publishing 
and tools and technology work.
DAVID WALSH
Chief Operations Officer
NEIL ARMSTRONG
Company Secretary and  
Chief Finance Officer
“ IN THE FINANCIAL YEAR ENDED  
31 MA Y 201 5, FRONTIER DEVELOPMENTS 
DELIVERED THE FIRST KEY MILESTONE 
WITHIN A PLANNED TRANSITIONAL 
PERIOD AS IT SELF-PUBLISHED ITS  
FIRST MAJOR TITLE, ELITE DANGEROUS, 
ON PC AND MAC PLA TFORMS.”
FINANCIAL REVIEW
14  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
STRATEGIC REPORT GROUP TRADING PERFORMANCE IN TRANSITION
The Group continued the planned transitional investment phase  
to develop and launch Elite Dangerous in the year on both PC  
and Mac platforms, this being its first major large budget self-
published title, together with associated technology development.
The Group is in transition from being a developer of video games 
and related software technology, to becoming an independent 
publisher of its own video game franchises, while continuing  
to develop its own software in-house. By the end of the financial 
year the first franchise team, working on Elite Dangerous, 
represented approximately half of the development effort of  
the Company. Following the successful completion of work  
for external publishers, including Screamride for Microsoft and 
Tales from Deep Space for Amazon, the transition of the other 
half of the development effort began, developing second franchise 
“Planet Coaster” – this was announced at the E3 trade show 
shortly after the end of the financial year, receiving a very positive 
response from the public and press. The transitional phase is 
expected to complete in 2016 with the launch of Planet Coaster.
In January 2015 the Group consolidated its development activity 
in Cambridge and took the opportunity to align the mix of skills 
in the business. The office in Canada was closed, leaving the 
subsidiary operating as a home based project support function. 
The cost of the re-organisation was £0.3 million. In August 2014 
Frontier Developments Inc., a US subsidiary incorporated in 
Delaware, was set up and began trading in May 2015 to distribute 
Frontier’s video games into the US market. The Group also set 
up an Employee Benefit Trust in December 2014, at 31 May 2015 
the Trust had an interest in 24,455 Ordinary Shares.
CASH AND CASHFLOW
The Group’s operating cashflow was £7.3 million, supported  
by the public release of Elite Dangerous. The Group invested  
£4.4 million in non-current assets, being development costs  
for the franchises of Elite and Planet Coaster plus the continued 
investment in our underlying COBRA technology. Working 
capital was relatively static as the Group switched revenue 
streams, and debt repayment of £0.2 million was made to repay 
the Group’s (Canadian subsidiary) interest-free loan from the 
federal-backed Atlantic Canada Opportunities Agency, thus 
bringing the Group back to a debt free position. The overall 
impact was an increase of £2.1 million in net cash and cash 
equivalents to £10.5 million, continuing to support the Group’s 
investment and growth plan. Frontier’s simplified cash 
movements can be represented as follows: 
Movement in cash balances
2015 
£m 
2014 
£m 
Sources of cash
Customer receipts 21.1 9.5
Funding and other sources 0.3 5.9
Incoming funds 21.4 15.4
Use of cash
Salaries 11.3 9.6
Overhead, Other expenses, Tax and currency 
differences 8.0 4.6
Outgoing flows 19.3 14.2
Movement in net cash balance inc. borrowings 2.1 1.2
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  15 REVENUE 
The public release of Elite Dangerous prompted a significant 
change in the Group’s revenue composition and value.  
Group revenue more than doubled to £22.8 million, and  
Elite Dangerous represented 84% of total revenue including 
associated merchandise. 
Revenue
2015 
£’000 
2014
£’000 % 
2013
£’000
Revenue 22,766 9,541 139 12,072
Self-published revenues consisted of sales of the game  
and digital in-game purchases. An element of revenue from  
the sale of ‘lifetime expansion passes’ remains as deferred 
income and is expected to be released over the useful  
economic life of the franchise.
External publisher revenue was lower as planned with the 
Group switching focus to self-publishing projects. Frontier 
worked on three projects of varying sizes for two key clients, 
and two of these games were released in the financial year 
2014–15. The other project was cancelled at the client’s request.  
At the financial year end we had no further contracted work.
FINANCIAL REVIEW CONTINUED
GROSS MARGIN AND SEGMENTAL CONTRIBUTION
Overall gross margin improved to 27% from 17%. Gross margin is stated after amortisation and expensed research and 
development costs. The Group has a number of revenue and cost streams where it is able to identify contribution towards  
gross profit:
2015 2014
Contribution for the year ending May
Revenue
£’000
Cost
£’000
Contribution
£’000
Revenue
£’000
Cost
£’000
Contribution
£’000
Self-published 18,558 (9,218) 9,340 428 (1,026) (598)
External publishers 3,429 (2,452) 977 7,707 (4,591) 3,116
Other income and unallocated costs 779 (4,969) (4,190) 1,406 (2,297) (891)
Total 22,766 (16,639) 6,127 9,541 (7,914) 1,627
Royalty income continued to accrue from our agreements on 
RollerCoaster Tycoon 3 and Kinect Disneyland Adventures. Within 
the prior year revenue included ‘one off’ releases from Atari 
Interactive Inc. stemming from its re-organisation and a catch 
up royalty on Kinect Disneyland Adventures.
Revenue mix
2015 
£’000 
2014
£’000
%
change 
2013
£’000
Self-published 18,558 424 4,276 511
External publishers 3,429 7,707 (56) 11,355
Royalties 322 1,366 (76) 203
Merchandise  
and Other 457 44 939 3
Total Revenue 22,766 9,541 139 12,072
16  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
STRATEGIC REPORT Self-Published 
Revenue: The video game Elite Dangerous represents 98%  
of self-published revenue recognised in the year (2014: 77%). 
Revenue recognised included a release of £1.5 million of 
deferred revenue from the balance at the beginning of the year. 
Deferred revenue of £0.7 million (2014: £2.2 million) was carried 
forward, which is expected to be released over the estimated 
useful economic life of the franchise, estimated at eight years.
Costs: Staff costs incurred were £5.2 million (2014: £2.7 million), 
overheads incurred including sub contract and server costs  
were £2.1 million (2014: £0.1 million), and external marketing 
costs were £2.5 million (2014: £0.2 million). Costs capitalised 
into intangible assets were £3.7 million (2014: £2.8 million) and 
amortisation charged was £3.1 million (2014: £0.3 million for  
pre-release amortisation and £0.5 million of amortisation and 
impairment of the Coaster Crazy game). Internal development 
costs of £5.8 million are to be amortised over a period up to  
six years on a straight line basis, as adjusted for assessments  
of useful economic life. Incremental development costs for 
releases on additional platforms will be amortised over their 
useful economic life upon release. Amortisation for the 
acquired royalty streams of £5.1 million commenced on  
a straight line basis from December 2014 over the expected 
useful life of the franchise, estimated at eight years.  
Self-published work represented 45% of our man month 
development work in the year.
External Publishers
Publisher revenues were mainly derived from completion  
of milestones on Screamride with Microsoft Game Studios  
and Tales from Deep Space with Amazon Game Studios,  
being £3.3 million (2014: £7.4 million) recognised in the year.  
The remaining revenue stems from sub contract recharges 
(which are passed on at nil margin) of £0.1 million (2014:  
£0.3 million). There were no work in progress balances at  
year end as contracts had been completed (2014: £0.3 million  
of deferred income).
External publisher cost of sales includes staff costs of £2.4 
million (2014: £4.4 million) and sub contract costs of £0.1 million 
(2014: £0.3 million). External publisher work represented 45%  
of our development work as measured in man months in the 
financial year.
Other income and unallocated costs  
– Royalties, Technology & Project support
The Group receives royalties 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. Merchandise revenues of  
£0.5 million (2014: £0.04 million) were recorded and those  
for royalties of £0.3 million (2014: £1.3 million). Royalty income 
in 2014 was supported by a one off promotional campaign for 
Kinect Disneyland Adventures and some catch up royalties  
from Atari as they emerged from Chapter 11 administration.
Technology costs are represented by the continued development 
costs of our COBRA technology. Project support includes the 
functions of senior management (including Executive Directors), 
marketing and customer support. The Group invested in this 
area during the year to support the self-publishing plans.
In the full year to 31 May 2015 the costs were staff costs of  
£3.0 million (2014: £2.0 million) and overhead of £1.2 million 
(2014: £0.4 million). Overhead includes third party commissions, 
merchandise costs and software subscription costs. Depreciation 
was £0.2 million (2014: £0.2 million), costs of £0.7 million  
(2014: £1.2 million) were capitalised, and amortisation charged 
represented £1.2 million (2014: £0.9 million). Of the development 
resource available to Frontier 10% of man months were used  
in the COBRA’s Tools and Technology.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  17 PROFITABILITY
Frontier is currently delivering a planned transition to become  
a sustainable self-publishing business. The Board monitors 
performance on an adjusted operating profit basis (replacing 
adjusted EBITDA) in order to focus on the cash value drivers 
of the business. For adjusted operating profit the adjusting 
items were depreciation and amortisation, R&D capitalised, 
share-based compensation,and tax credits due, offset against 
administration costs and (in the prior year) funding costs 
associated with the IPO. It has also been decided to include  
fair value adjustments on currency forward contracts and 
financial assets as an adjusting item. The measures of  
EBITDA and adjusted EBITDA have been shown as sub totals  
for comparative purposes.
As expected, Frontier has incurred additional costs and lower 
revenue because of the transition, but despite this, the Group 
has already become a profitable operation. Operating profit  
was £1.6 million compared with a loss in the prior period  
of £1.7 million. EBITDA was £6.1 million compared with  
£0.3 million in the prior year. Adjusted operating profit increased 
to £2.5 million from a loss in the prior year of £1.3 million.
The public release of Elite Dangerous led to a significant  
increase in amortisation. An increase in share-based 
compensation was principally due to a one off share  
option grant to Directors and senior employees issued in 
September 2014 and vesting between one and three years.
The reconciliation is as follows:
2015 
£’000 
2014
£’000 %
2013
£’000
Operating result 1,566 (1,705) 192 1,052
Depreciation 271 225 151
Amortisation and 
impairment 4,246 1,802 1,650
EBITDA 6,083 322 1,790 2,853
Share-based 
compensation 767 286 416
Fair value adjustments 72 32 –
(Loss) / gain on sale of 
investment 1 (21) –
Funding costs / listing 
expenses – 217 308
Dilapidations provision 37 36 37
Subsidiary set-up fees 7 – 10
EBITDA adjusted 6,967 872 699 3,624
R&D capitalised (4,338) 4,035 (1,708)
Tax credits deducted from 
Administration costs (163) (307) (86)
Adjusted Operating  
Profit / (loss) 2,466 (3,470) 171 1,830
FINANCIAL REVIEW CONTINUED
FINANCE INCOME
Interest receivable from the Group’s cash resources was 
relatively flat at £0.1 million, and continues to be at low levels 
due to the current interest rate environment worldwide.
INCOME TAX
The Group had no current tax liability and in the prior year  
the Canadian operation incurred a £0.04 million charge.  
There was a release of £0.03 million in the deferred tax  
credit (2014: charge £0.07 million) for tax, due to the temporary 
difference over R&D tax relief and a local digital media tax.  
The parent company continues to hold unused tax losses of  
£5.9 million to set against future taxable profits generated in  
the UK (2014: £6.7 million). Frontier are able to take advantage  
of cash based tax credits in both the UK and Canada; in the  
year we accounted for £0.2 million (absorbed as a reduction  
in administrative costs) (2014: £0.3 million).
EARNINGS PER SHARE
The basic earnings per share for 2015 was 4.9 pence per  
share compared to loss per share of (5.8) pence for 2014  
based on a weighted average number of shares of 33.5 million 
(2014: 33.3 million).
On a diluted basis, earnings per share was 4.7 pence compared 
to diluted loss per share in the prior year of (5.8) pence based  
on a weighted average number of shares of 35.3 million (2014: 
33.3 million).
The adjusted basic earnings per share is based on the adjusted 
operating profit shown on this page. The adjusted basic earnings 
per share was 7.4 pence compared to the prior period’s adjusted 
loss per share of (11.4) pence. On a diluted basis the adjusted 
earnings per share is 7.0 pence (2014: loss (11.4 pence)). 
18  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
STRATEGIC REPORT NON-CURRENT ASSETS AND RESEARCH  
AND DEVELOPMENT EXPENDITURE
Investment in the Group’s own IP capitalised in the year  
was up 8% in line with our transition plans at £1.3 million, 
reflecting Frontier’s commitment to a strategic software 
development programme in respect of Elite Dangerous  
and COBRA technology. Including the acquired rights,  
£8.2 million of self-published net book value is represented  
by the Elite Dangerous franchise. 
Investment in intangibles was focused on developing  
self-published titles (Elite Dangerous, with the first public 
release in December 2014), continuing expansion of platform 
versions (Mac and Xbox One) and Planet Coaster, (scheduled  
for Q4 2016) and further multi-platform work on COBRA.
Research and development expensed was higher at £0.8 million, 
up from £0.4 million. 
Additions for tangible assets mainly comprised computer 
equipment for staff and durable marketing materials, for 
example, a model of the Cobra space ship.
SHARE ISSUES
Employees remain confident in the Company and converted  
0.5 million share options into Ordinary Shares up to the end  
of May 2015; exercise proceeds were £0.4 million, and of these 
conversions 0.3 million of Ordinary Shares were transferred 
under arrangements with the newly formed Employee Benefit 
Trust, representing exercise proceeds of £0.2 million. The Group 
granted 1.5 million share options in the year (2014: 0.4 million) 
under CSOP and unapproved plans. This included one off grants 
to Directors of 0.5 million shares (2014: nil).
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 the loan balance drawn down was £0.6 million, and  
the trust owned 24,255 Ordinary Shares.
This Strategic Report was approved by the Board and signed on its behalf by:
DAVID WALSH   NEIL ARMSTRONG
Chief Operations Officer  Company Secretary and Chief Finance Officer
8 September 2015
CURRENT ASSETS
Trade and other receivables were unchanged at £3.1 million, as  
a reduction in publisher amounts owed was offset by amounts 
owed from sales made via the PC distribution platform ‘Steam’. 
Investments held for sale include shares in Atari SA provided  
as part of the Chapter 11 creditor agreement for pre-petition 
balances; these were sold in the year at a small loss.
For cash and cash equivalents see note 16.
CURRENT LIABILITIES
Trade and other current liabilities decreased by £0.5 million  
to £3.2 million, mainly as a result of deferred income release. 
The Group’s Canadian subsidiary repaid an interest-free loan 
from the federal-backed Atlantic Canada Opportunities Agency 
of £0.2 million. 
Deferred income was £0.7 million (2014: £2.5 million). Deferred 
income not released at the launch of Elite Dangerous comprised 
income for lifetime expansion passes, which is expected to  
be released over the expected useful economic life of the Elite 
franchise. In the prior year £0.3 million of deferred income  
was for external publisher work. 
NON-CURRENT LIABILITIES
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. An 
overseas deferred tax liability of £0.1 million is provided  
against federal investment tax credits due. Deferred income  
is represented by amounts expected to be recognised on 
lifetime expansion passes during the franchise period and  
more than one year. Dilapidation provisions are ongoing 
following the renewal of the leases in 2015 with a  
termination date of 2020.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  19 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 
David continues as CEO today. Other 
current positions include Non-Executive 
Directorship at Accesso Technologies  
plc, and he is Group Strategic Advisor to 
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
DAVID BRABEN OBE
Founder and CEO
Joined 
Founding shareholder, January 1994
David is the co-author of the seminal  
Elite title and has over 32 years’ 
experience in the gaming industry.  
David is also a founding trustee of the 
Raspberry Pi Foundation, a charity  
which aims to inspire a new generation  
of children to get interested in computer 
science through the use of a credit-card 
sized computer that plugs into your TV 
and a keyboard. 
David was formerly a Non-Executive 
Director of Phonetic Arts, a Cambridge-
based company focused on speech 
synthesis that was acquired by Google  
in December 2010. David is a 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
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., Frontier’s wholly 
owned US subsidiary.
Committees 
Remuneration
DIRECTORS’ BIOGRAPHIES
20  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE JONNY WATTS
Chief Creative Officer
Joined 
November 1998
Jonny has over 28 years’ experience in 
gaming. He joined the Company in 1998 
from Sensible Software, and over the 
course of his career has been involved in  
all aspects of the creation of 23 published 
games such as Sensible Soccer and Cannon 
Fodder, along with Frontier’s suite of games. 
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 34 million people worldwide. Jonny 
holds zoology and computer science 
degrees, is an active member of BAFTA, 
including serving as a judge for five years, 
and an advocate of supporting young game 
developers. Jonathan joined the Board in 
February 2012. 
Committees 
n/a
JONATHAN MILNER
Non-Executive Director 
Joined 
November 2012
Jonathan is an experienced entrepreneur 
and business leader with a background  
in genetic research. In 1998, he founded 
Abcam with David Cleevely and Professor 
Tony Kouzarides, to supply the rapidly 
growing market for antibodies and other 
life science reagents. As CEO, Jonathan 
was instrumental in building Abcam, 
which now has a market capitalisation  
of c.£1.2 billion. Jonathan is an active 
supporter of the Cambridge, UK, 
business community. He is Deputy 
Chairman of Abcam plc and Chairman of 
Axol Bioscience Limited and PhoreMost 
Limited. He is also a Non-Executive 
Director of Horizon Discovery Group and 
GeoSpock Limited.
Committees 
Remuneration
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., Frontier’s wholly 
owned US subsidiary. In the financial year 
Neil was also appointed as a Director of 
Frontier Developments Inc., Frontier’s 
wholly owned Canada subsidiary, in order 
to assist with a business re-organisation.
Committees 
Audit, Nominations, Remuneration
CORPORATE DIRECTORY
DIRECTORS
Mr D R Gammon 
Dr. D J Braben 
Mr D J Walsh 
Mr J F Watts 
Dr. J S Milner 
COMPANY SECRETARY AND CFO
Mr N R Armstrong
REGISTERED OFFICE
306 Science Park 
Milton Road 
Cambridge  
CB4 0WG 
REGISTERED COMPANY NUMBER
02892559
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  21 The Directors present their report for  
the Group and Company together with  
the financial statements for the year to  
31 May 2015. 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 8). 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 reduced its 
revolving credit facility with Barclays 
Bank plc in May 2015 from £3 million to  
£1 million. The facility expires 8 May 2016. 
SHARE ISSUES
Details of shares issued during the year 
are detailed in note 17 to the financial 
statements. The Company has one class 
of Ordinary Share which carries no right 
to fixed income. Each share carries the 
right to one vote at general meetings of 
the Company, 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 230 pence per share.
David Braben purchased 15,000 Ordinary 
Shares at 230 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 8,740 
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 2015 and their interest in the share capital of 
the Company were as follows:
The Directors are responsible for keeping 
adequate accounting records that are 
sufficient to show and explain the 
Company’s transactions and disclose 
with reasonable accuracy at any time the 
financial position of the Company and to 
enable them to ensure that the financial 
statements comply with the Companies 
Act 2006. They are also responsible for 
safeguarding the assets of the Company 
and hence for taking reasonable steps  
for the prevention and detection of fraud 
and other irregularities.
The Directors confirm that:
• so far as each Director is aware, 
there is no relevant audit information 
of which the Company’s Auditor is 
unaware; and
• the Directors have taken all steps that 
they ought to have taken as Directors to 
make themselves aware of any relevant 
audit information and to establish that 
the Auditor is aware of that information.
The Directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
Company’s website. Legislation in the United 
Kingdom governing the preparation and 
dissemination of financial statements may 
differ from legislation in other jurisdictions.
DIRECTORS’ INDEMNITY 
ARRANGEMENTS
During the year the Company purchased 
directors’ and officers’ liability insurance 
in respect of itself and its Directors.
Name
2015 
Number
2015
%
2014 
Number
2014
%
David Gammon* 291,720 0.9 271,720 0.9
David Braben 17,910,953 53.3 17,895,953 53.6
David Walsh* 1,245,820 3.7 1,245,820 3.7
Jonathan Watts 44,760 0.1 23,500 0.0
Jonathan Milner* 662,104 2.0 662,104 2.0
Total 20,155,357 60.0 20,099,097 60.2
* 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.
FOR THE YEAR ENDED 31 MAY 2015
REPORT OF THE DIRECTORS
22  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE 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 £1.0 million in the year 
(2014: £1.2 million).
DIVIDEND
The Directors are not recommending the 
payment of a dividend at this time (2014: £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. During the year the Group added  
medical insurance as a benefit and 
implemented pension auto enrolment.
EMPLOYMENT POLICIES
The Group is committed to following UK 
employment law for its Cambridge-based 
operations and the Canada Labour Code  
for its Halifax, Nova Scotia, operation. 
Where possible the Group strives for 
similar employment and benefit 
arrangements between territories.
HEALTH AND SAFETY AND 
ENVIRONMENT
The aim of the Directors is to provide 
healthy, safe and congenial working 
conditions, equipment and systems  
of work for all employees.
The Directors further intend to provide 
sufficient information, training and 
supervision to enable employees to  
do their work safely, effectively and 
without risk to themselves or to others.
We acknowledge that we are responsible 
for the safety of visitors, both professional 
and social, who enter the premises.
Frontier Developments plc recognises  
its duty to comply and operate within the 
requirements of statutory environmental 
legislation and is committed to minimising 
the environmental impacts of its business 
operations. The Directors of the Group will 
support this policy with this commitment 
in mind. 
SUBSTANTIAL SHAREHOLDERS
At 1 September 2015 the following,  
other than the Directors whose 
shareholdings are listed on page 22,  
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 9.7
Chris Sawyer 2,341,226 6.9
Amati Venture Capital 1,072,730 3.2
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
8 September 2015
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  23 FOR THE YEAR ENDED 31 MAY 2015
THE BOARD
The Board of Frontier Developments plc  
is responsible for the long-term financial 
success of the business. We do not 
comply with the UK Corporate 
Governance Code. However, we have 
established our Corporate Governance 
arrangements by drawing upon best 
practice available, including those aspects 
of the UK Corporate Governance Code  
we consider to be relevant to the company 
and best practice.
The following statements set out the 
principles and methods to which it 
adheres. The Statement of Directors’ 
Responsibilities is set out on page 22.
BOARD MEETINGS AND PRACTICES
The Board seeks to meet formally at least 
nine times a year including two ‘off-site’ 
strategic review days. All members of the 
Board are invited to attend all meetings. 
In the financial year to 31 May 2015 the 
Board met on 11 occasions.
The Chairman and the Company 
Secretary plan the agenda for each Board 
meeting in consultation with all other 
Directors. That agenda is issued with 
supporting papers ahead of the Board 
meetings, providing the appropriate 
information required to enable the Board  
to discharge its duties.
The matters reserved for the attention 
of the Board include:
• overall business strategy of the Group;
• review of key operational and 
commercial matters;
• review of key finance matters, including 
approval of financial plans, changes  
to capital structure, acquisitions and 
disposals of businesses and material 
capital expenditure, and dividends;
• governance: Board membership and 
powers including the appointment and 
removal of Board members, set up  
and delegation of matters to 
appropriate committees, and the 
reviewing of reporting back thereof;
• approval of financial statements both 
interim and year end;
• stock exchange related issues including 
the approval of communications to the 
stock exchange and communications 
with Shareholders in conjunction with 
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; and
• appointment and performance review 
of key advisors.
BOARD COMPOSITION
The Board of Frontier Developments plc 
comprises the Non-Executive Chairman, 
the Chief Executive Officer and two  
other Executive officers, the Company 
Secretary and one further Non-Executive 
Director. As can be deduced from the 
individual biographies, the Directors  
have a range of experience and provide  
a balance of skills, experience and 
knowledge to the Board.
All Directors are subject to election  
at the first Annual General Meeting 
following their appointment and to 
re-election thereafter at intervals of  
no more than four years.
BOARD COMMITTEES 
Audit Committee
The Audit Committee determines the 
terms of engagement of the Company’s 
Auditor and, in consultation with the 
Company’s Auditor, the scope of the audit. 
It will receive and review reports from 
management and the Company’s Auditor 
relating to the interim and annual 
accounts and the accounting and internal 
control systems in use by the Company 
and Group. The Audit Committee has 
unrestricted access to the Company’s 
Auditor. The Audit Committee also 
reviews accounting and treasury  
policies, financial reporting including key 
performance indicators and supporting 
key areas of management judgements, 
and corporate governance standards. 
The Audit Committee is open to 
attendance by any Director and reports  
its key issues at Board meetings.
The Audit Committee comprises  
David Gammon and Neil Armstrong,  
and is supported by Amanda Heslam  
(the Group Accountant).
In the financial year to 31 May 2015 the 
Audit Committee met on four occasions, 
including three meetings with the 
Auditor present.
Remuneration Committee
The Remuneration Committee reviews 
the scale and structure of the Executive 
Directors’ future remuneration and the 
terms of the service agreements with due 
regard to the interests of shareholders. 
No Director is permitted to participate in 
discussions or decisions concerning their 
own remuneration. The Remuneration 
Committee also approves annual salary 
review limits, bonus schemes and 
payment limits, and significant employee 
benefits, such as pensions, medical 
insurance and share option schemes. 
The Remuneration Committee 
comprises David Gammon, David Walsh, 
Jonathan Milner, Neil Armstrong and, as 
required, Yvonne Dawes (HR manager).
In the financial year to 31 May 2015  
the Remuneration Committee met on 
three occasions.
Nominations Committee
The Nominations Committee reviews 
the constituents of the Board and its 
committees to ensure appropriate 
balance representation. 
The Nominations Committee comprises 
David Gammon, David Braben and  
Neil Armstrong.
In the financial year to 31 May 2015  
the Nominations Committee met on  
one occasion. 
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. The Company 
Secretary holds regular telephone  
calls with the Chairman.
CORPORATE GOVERNANCE REPORT
24  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE ATTENDANCE AT MEETINGS
The number of meetings held and attendance by each Director and officer during the 
financial year to 31 May 2015 was as follows:
Board
Remuneration 
Committee
Nominations 
Committee
Audit 
Committee
Number of meetings 11 3 1 3
David Gammon 11 3 1 3
David Braben 11 – 1 –
David Walsh 11 3 – –
Jonathan Watts 11 – – –
Jonathan Milner 7 3 – –
Neil Armstrong 11 3 1 3
Project support is provided by the  
IT, customer support and marketing 
(including e-commerce) functions. 
Administration support is provided  
by a central finance, investor relations,  
HR, purchasing and site functions.  
All functions report to the Executive 
Directors or Company Secretary. 
INTERNAL CONTROL AND  
ASSESSMENT OF BUSINESS RISK
The Board took the opportunity to  
fully review the Group’s policies and 
procedures for internal controls to 
ensure an appropriate framework  
under which the business can operate 
and in line with regulations as part of  
its Admission to AIM.
The systems for internal control and risk 
management processes are designed to 
manage rather than eliminate risk of the 
achievement of strategic objectives. Such 
systems can only provide a reasonable 
but not absolute level of assurance 
against material misstatement or loss.
A risk assessment process is embedded 
within the project and administrative 
process within the Group. The strategic 
risks are regularly reviewed by the  
Board and a Corporate Risk Register is 
maintained by the Executive Directors to 
review key risks and the related controls 
and mitigation plans. 
CONTROL ENVIRONMENT AND 
INTERNAL AUDIT
The Group has established operating 
procedures appropriate to its size and 
structure for reporting financial and 
non-financial information to the Board.
These include, but are not limited to:
• operating guidelines and procedures 
with approval limits;
• accounting policies, controls and 
procedures; 
• performance monitoring systems 
updated monthly for review at Board 
meetings; and
• regulatory and legal changes that may 
materially impact on the business.
Due to the Executive Directors’ close 
involvement in the business activities,  
the Group does not currently believe that 
an internal audit function would be cost 
effective. The Audit Committee reviews 
this position annually.
INVESTOR RELATIONS
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 both  
‘tour with’ and hold ‘on-site’ meetings  
to demonstrate Elite Dangerous to  
both investors and potential investors. 
The Group intends to use the Annual 
General Meeting to encourage attendance 
and participation by Shareholders.  
In order to support internal capacity 
building for investor relations the Group 
has become a member of the Quoted 
Company Alliance and the IR Society.
AUDITOR INDEPENDENCE
The external audit function provides 
independent review and audit. It is the 
responsibility of the Audit Committee to 
review and monitor the external Auditor’s 
independence and objectivity and the 
effectiveness of the audit process,  
taking into consideration relevant UK 
professional and regulatory requirements 
and to develop and implement policy on 
the engagement of the external Auditor 
to supply non-audit services, taking into 
account relevant ethical guidance.
SENIOR MANAGEMENT AND 
GROUP FUNCTIONS
The Executive Directors are supported by 
a number of senior managers; however 
the close involvement of the Executive 
Directors in the day-to-day activities of 
the business at the present time negates 
the need for a formal Executive Team. 
The Executive Directors and Company 
Secretary seek to meet on a weekly basis, 
joined by the Group Accountant and Head 
of Marketing. Project meetings covering 
all projects individually, technology, 
finance, marketing, customer support, 
quality assurance, investor relations 
support services and HR seek to meet  
on a weekly basis.
A new leadership group including all 
senior managers seeks to meet at least 
once a month.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  25 FOR THE YEAR ENDED 31 MAY 2015
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.
The Remuneration Committee is responsible for the following functions:
• setting of remuneration for Directors and senior managers, including pay, bonuses and long-term incentive arrangements;
• approval of the overall increase for annual pay and bonus levels for all other staff;
• approval of share option plans or arrangements;
• setting of overall share option issues;
• approval of any significant employee benefit arrangements; and 
• reviewing the Committee’s terms of reference and submitting to the Board for subsequent approval.
Remuneration policy
The Remuneration Committee approved the following policy:
“Frontier endeavours to pay salaries and benefits around the median level for relevant skills. Where there is a material gap in 
remuneration, it is the policy of the Group to close this over time and subject to affordability.”
As part of the Group’s Admission to AIM the Remuneration Committee, along with its legal advisors, implemented new service 
agreements to take effect from 1 July 2013. In doing so and in recognition of the higher public profile, the Committee reviewed the 
‘AIM Directors’ Pay 2013’ report published by Growth Company Investor, and identified a significant gap between Directors’ actual 
pay to the policy intent. 
Having commissioned a report from Deloitte on both Executive and Non-Executive remuneration, the Remuneration Committee 
has set out to accelerate the move to a median level of pay as soon as practical. In addition, the Remuneration Committee aims  
to bring incentives in to place that align the Group’s strategic objectives and investor interests with a large element of the total 
remuneration package. As a consequence, salaries were reviewed and amended at 1 June 2014. 
COMPONENTS OF EXECUTIVE DIRECTORS’ REMUNERATION
Overview
The remuneration policy is to maintain an appropriate balance between fixed elements of remuneration and performance 
related elements, with an increasing proportion of the latter. 
Directors and staff are all encouraged to acquire shares in the Company and to hold these shares for the long term. 
This participatory element is an important aspect of the Group’s culture and its focus on long-term performance.
As part of the changes, the Remuneration Committee has plans to adopt the following:
• a move to median level pay as soon as practical;
• the set up of a new Executive share option scheme; and
• the set up of a ‘stretch goal’ based bonus scheme. 
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.
REMUNERATION REPORT
26  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE Basic pay
Salaries were reviewed on 1 July 2013 upon the take up of new service agreements, required prior to Admission on AIM. A further 
interim review was undertaken in January 2014. Having considered the remuneration report from Deloitte, a further review was 
taken to take effect from 1 June 2014.
Annual bonus
There was no bonus payment for the year to May 2014, which would have been made in December 2014. An interim scheme has 
been adopted for the year to 31 May 2015 whereby a 5% pool of profit before tax and bonus will be allocated between Executive 
Directors, officers and senior management. The scheme is intended to operate in the same way as the staff contractual scheme 
whereby an element is paid pro rata and the remainder discretionary.
Share options
A ‘one off’ share option grant was made to Executive Directors in September 2014 using the Group’s Company Share Option 
Plans, being approved and unapproved. The Share option grant sought to bring Executive Directors’ total options to 300,000 each. 
The Non-Executive Directors were issued with a small grant of 12,500 Share options each at a price of £2.30 in March 2015 in 
recognition of their contribution. 
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 
Contributions
£’000
Taxable 
Benefits
£’000
2015
Total
£’000
2014
Total
£’000
Executive
David Braben 180 – 2 1 183 128
David Walsh 180 – 2 1 183 128
Jonathan Watts 180 – 2 1 183 128
Non-Executive
David Gammon 50 – – – 50 37
Jonathan Milner 30 – – – 30 28
Total 620 – 6 3 629 449
The expense recognised in the statement of comprehensive income for the Directors’ share options including Non-Executive 
Directors’ was £434,032 (2014: £186,055) with the amount attributable to the highest paid Director being £351,967 (2014: £64,099).
The gain attributable to Directors on share options in the year at the date of exercise was £48,900.
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
8 September 2015
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  27 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 2015 which comprise the 
consolidated and company statement of cashflows, the consolidated income statement, consolidated statement of comprehensive 
income, consolidated and company statement of financial position, consolidated and company statement of changes in equity and 
the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International 
Financial Reporting Standards (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 22, the Directors are responsible for the 
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit  
and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing  
(UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
A description of the scope of an audit of financial statements is provided on the 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 2015 
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
8 September 2015
INDEPENDENT AUDITOR’S REPORT
28  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
28  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2015
31 May 2015
£’000
31 May 2014 
£’000 
Operating activities
Cash generated from operations (see below) 7,334 342
Finance income (53) (63)
Taxes received / (paid) 23 (1)
Cashflow from operating activities 7,304 278
Investing activities
Purchase of property, plant and equipment (289) (254)
Expenditure on intangible assets (4,385) (4,182)
Proceeds from disposal of non-derivative financial assets 36 21
Employee benefit trust investment (551) –
Interest received 53 63
Cashflow from investing activities (5,136) (4,352)
Financing activities
Proceeds from convertible loan notes – 1,580
(Repayment) / Proceeds from interest-free loan (158) 175
Proceeds from issue of share capital 159 4,145
Cashflow from financing activities 1 5,900
Net change in cash and cash equivalents from continuing operations 2,169 1,826
Cash and cash equivalents at beginning of period 8,612 7,155
Exchange differences on cash and cash equivalents (303) (369)
Cash and cash equivalents at end of period 10,478 8,612
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 2015
£’000
31 May 2014 
£’000 
Profit / (loss) after tax 1,647 (1,754)
Depreciation, amortisation and impairment 4,517 2,027
Atari shares – (33)
Fair value adjustments 31 (32)
Profit on disposal of fixed assets and available for sale assets 1 (5)
Proceeds from the sale of non-current assets 16 –
Share-based payment expenses 767 286
Taxation (190) (70)
Foreign exchange 242 336
Operating cashflow before changes in working capital 7,031 755
Net changes in working capital:
Change in inventories 2 (15)
Change in trade and other receivables 74 (882)
Change in trade and other payables 190 447
Change in provisions 37 37
Cash generated from operations 7,334 342
CONSOLIDATED STATEMENT OF CASHFLOWS
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  29 FOR THE YEAR ENDED 31 MAY 2015
31 May 2015
£’000
31 May 2014 
£’000 
Operating activities
Cash generated from operations (see below) 7,468 184
Finance income (50) (57)
Cashflow from operating activities 7,418 127
Investing activities
Purchase of property, plant and equipment (287) (246)
Expenditure on intangible assets (4,385) (4,182)
Proceeds from disposal of non-derivative financial assets 36 21
Employee benefit trust investment (551) –
Interest received 50 57
Cashflow from investing activities (5,137) (4,350)
Financing activities
Proceeds from convertible loan notes – 1,580
Proceeds from issue of share capital 159 4,145
Cashflow from financing activities 159 5,725
Net change in cash and cash equivalents from continuing operations 2,440 1,502
Cash and cash equivalents at beginning of period 7,997 6,819
Exchange differences on cash and cash equivalents (234) (324)
Cash and cash equivalents at end of period 10,203 7,997
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 2015
£’000
31 May 2014 
£’000 
Operating profit 1,584 (2,094)
Depreciation, amortisation and impairment 4,485 1,981
Atari shares – (33)
(Profit) / loss on disposal of fixed assets and available for sale assets 3 (5)
Share-based payment expenses 761 262
Taxation (7) (10)
Foreign exchange 233 326
Operating cashflow before changes in working capital 7,059 427
Net changes in working capital:
Change in inventories 2 (15)
Change in trade and other receivables 676 (1,210)
Change in trade and other payables (306) 945
Change in provisions 37 37
Cash generated from operations 7,468 184
COMPANY STATEMENT OF CASHFLOWS
30  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
30  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2015
FOR THE YEAR ENDED 31 MAY 2015
Notes
31 May 2015
£’000
31 May 2014
£’000
Revenue 5 22,766 9,541
Cost of sales (16,639) (7,914)
Gross profit 6,127 1,627
Administrative expenses (4,561) (3,332)
Operating profit / (loss) 1,566 (1,705)
Finance income 24 53 63
Profit / (loss) before tax 6 1,619 (1,642)
Income tax 25 28 (112)
Profit / (loss) for the period attributable to the equity holders of the parent 1,647 (1,754)
All the activities of the Group are classified as continuing.
Notes
31 May 2015
p
31 May 2014
p
Earnings per share 26
Basic earnings / (loss) per share 4.9 (5.8)
Diluted earnings / (loss) per share 4.7 (5.8)
31 May 2015
£’000
31 May 2014
£’000
Profit / (loss) for the period 1,647 (1,754)
Other comprehensive income:
Items that will be reclassified subsequently to profit and loss
Exchange differences on translation of foreign operations (57) (30)
Total comprehensive income for the period attributable to the equity holders of the parent 1,590 (1,784)
The accompanying accounting policies and notes form part of this financial information. 
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED STATEMENT  
OF COMPREHENSIVE INCOME
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  31 AS AT 31 MAY 2015 (REGISTERED COMPANY NO: 02892559)
Notes
31 May 2015
£’000
31 May 2014
£’000
Non-current assets 
Intangible assets 7 11,101 10,962
Property, plant and equipment 9 333 328
Total non-current assets 11,434 11,290
Current assets
Inventories 13 13 15
Trade and other receivables 14 3,046 2,964
Other short-term assets 15 50 106
Cash and cash equivalents 16 10,478 8,612
Total current assets 13,587 11,697
Total assets 25,021 22,987
Equity and liabilities
Equity
Share capital 17 168 167
Share premium account 13,963 13,805
Equity reserve 633 790
Foreign exchange reserve (57) (30)
Retained earnings 6,180 4,160
Total equity 20,887 18,892
Liabilities
Current
Trade and other payables 20 3,107 1,207
Deferred income 21 96 2,456
Borrowings 22 – 14
Total current liabilities 3,203 3,677
Non-current 
Provisions 23 260 223
Borrowings 22 – 121
Deferred income 21 627 –
Deferred tax 12 44 74
Total non-current liabilities 931 418
Total liabilities 4,134 4,095
Total equity and liabilities 25,021 22,987
These financial statements were approved by the Directors on 8 September 2015 and signed on their behalf by:
DAVID BRABEN OBE
Director
The accompanying accounting policies and notes form part of this financial information. 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
32  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
32  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS AS AT 31 MAY 2015 (REGISTERED COMPANY NO: 02892559)
Notes
31 May 2015
£’000
31 May 2014
£’000
Non-current assets 
Intangible assets 7 11,101 10,962
Property, plant and equipment 9 333 284
Total non-current assets 11,434 11,246
Current assets
Inventories 13 13 15
Trade and other receivables 14 2,771 3,447
Other short-term assets 15 13 45
Cash and cash equivalents 16 10,203 7,997
Total current assets 13,000 11,504
Total assets 24,434 22,750
Equity and liabilities
Equity
Share capital 17 168 167
Share premium account 13,963 13,805
Equity reserve 633 777
Retained earnings 5,607 3,668
Total equity 20,371 18,417
Liabilities
Current
Trade and other payables 20 3,080 1,654
Deferred income 21 96 2,456
Total current liabilities 3,176 4,110
Non-current 
Provisions 23 260 223
Deferred income 21 627 –
Total non-current liabilities 887 223
Total liabilities 4,063 4,333
Total equity and liabilities 24,434 22,750
These financial statements were approved by the Directors on 8 September 2015 and signed on their behalf by:
DAVID BRABEN OBE
Director
The accompanying accounting policies and notes form part of this financial information. 
COMPANY STATEMENT OF FINANCIAL POSITION
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  33 FOR THE YEAR ENDED 31 MAY 2015
Share 
capital 
£’000
Share 
premium 
account
£’000
Equity 
reserve
£’000
Foreign 
exchange
reserve
£’000
Retained 
earnings
£’000
Total 
equity
£’000
At 31 May 2013 127 1,847 643 3 5,775 8,395
Increase in equity in relation to options issued – – 286 – – 286
Share-based payment transfer – – (139) – 139 –
Issue of share capital less expenses 40 11,958 – – – 11,998
Transactions with owners 40 11,958 147 — 139 12,284
Loss for the year – – – – (1,754) (1,754)
Other comprehensive income:
Exchange differences on translation of foreign operations – – – (33) – (33)
Total comprehensive income for the year – – – (33) (1,754) (1,787)
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
The accompanying accounting policies and notes form part of this financial information.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
34  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
34  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2015
Share 
capital
£’000
Share 
premium 
account 
£’000
Equity 
reserve 
£’000
Retained 
earnings 
£’000
Total 
equity 
£’000
At 31 May 2013 127 1,847 630 5,648 8,252
Increase in equity in relation to options issued – – 260 – 260
Share-based payment transfer – – (113) 113 –
Issue of share capital less expenses 40 11,958 – – 11,998
Transactions with owners 40 11,958 147 113 12,258
Loss for the year – – – (2,093) (2,093)
Total comprehensive income for the year – – – (2,093) (2,093)
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
The accompanying accounting policies and notes form part of this financial information. 
COMPANY STATEMENT OF CHANGES IN EQUITY
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  35 1. CORPORATE INFORMATION
Frontier Developments plc (“the Group”) develops non-game applications and video games for the interactive entertainment sector. 
The Company is a public limited company and is incorporated and domiciled in the United Kingdom.
The address of its registered office is 306 Science Park, Milton Road, Cambridge CB4 0WG.
The Group’s operations are based in the UK and its North American subsidiaries, Frontier Developments Inc., based in Canada and 
Frontier Developments Inc. 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.
Change in accounting policies
The Group adopted IFRS 10, ‘Consolidated financial statements’, IFRS 12, ‘Disclosure of interests in other entities’ and IAS 27, 
‘Separate financial statements’ on 1 June 2014. This resulted in the Group changing its accounting policy for the basis of 
consolidation and definition of control but has had no further impact on the 2015 financial statements.
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 preparation of this financial information requires the Directors to make critical accounting estimates and judgements that 
affect the amounts reported in the financial statements and accompanying notes. The areas involving a higher degree of judgement 
or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.
Going concern basis
The Group’s forecasts and projections, taking account of 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.  
The Group maintains a revolving credit facility to support its plans, and remains cash positive.
3. PRINCIPAL ACCOUNTING POLICIES
Basis of consolidation and business combinations
Basis of consolidation
The consolidated financial statements incorporate those of the Group and all entities controlled by it, after eliminating internal 
transactions. Control is achieved where the Group 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.
a) Business combinations
Business combinations are accounted for using the acquisition method under the revised IFRS 3 “Business Combinations” (IFRS 3R). 
The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair 
value of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any 
asset or liability arising from a contingent consideration agreement. Acquisition costs are expensed as incurred. 
The Group recognises identifiable assets acquired and liabilities assumed, including contingent liabilities, in a business 
combination regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the 
acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair value 
of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair 
value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values  
of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in 
profit or loss immediately. 
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS
36  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
36  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS b) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation 
is charged to the income statement so as to write off the cost less estimated residual values over their expected useful lives on a 
straight line basis over the following periods:
Fixtures and fittings 5 years
Computer equipment 2½ years – 5 years
Leasehold improvements Length of the lease
Residual values and useful economic lives are assessed annually. The gain or loss on the disposal or retirement of an asset  
is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in 
administrative expenses.
c) Intangible assets 
Intangible assets are measured at historic cost and are amortised on a straight line basis over their expected useful economic life. 
They comprise three 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 cost of sales in the income statement. 
Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the 
period in which it is incurred.
d) Research activities
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
e) Impairment of property, plant and equipment and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and individual intangible 
assets for any indication that these assets have suffered an impairment loss. 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. For all other assets a review of the expected 
useful economic life is undertaken and compared to that implied in the amortisation rate.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  37 3. PRINCIPAL ACCOUNTING POLICIES CONTINUED
Basis of consolidation and business combinations continued
f) 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.
For external publisher work, cost is based on the total accumulated project cost less the amount expensed as cost of sales, being  
an allocation to match sales revenue, subject to an economic benefit test of milestone delivery for long-term contracts. Economic 
benefit tests are measured by reference to contractual terms such as acceptance and approval of a milestone by the customer.  
Net realisable value is based on estimated selling value less additional cost to completion and distribution. Provisions are made  
for obsolete or defective elements (which do not meet quality criteria and have to be replaced in full) of cost where appropriate and 
are recognised as an expense in the period in which the write down or loss occurs.
g) Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. 
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its financial 
liabilities. Equity instruments do not include a contractual obligation to deliver cash or other financial assets to another entity. Any 
instrument that does have the obligation to deliver cash or another financial asset to another entity is classified as a financial liability. 
Financial liabilities are presented under liabilities on the statement of financial position.
Financial assets
Loans and receivables comprise trade receivables, other receivables, derivative financial instruments and cash and cash equivalents.
Financial assets 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 at FVTPL
Derivative financial instruments are financial assets measured at fair value through the profit and loss (FVTPL) and are financial 
assets 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.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets 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 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). All derivative financial 
instruments that are not designated and effective as hedging instruments are accounted for at 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). 
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
38  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
38  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS Share capital and reserves
Share capital represents the nominal value of the shares that have been issued.
Share premium – Share premium represents the excess over nominal value of the fair value of consideration received for equity 
shares, net of expenses of the share issue.
Equity reserve – This 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 – This represents the exchange difference on consolidation of overseas subsidiaries.
Retained earnings – Retained earnings include all current and prior period retained earnings.
h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank deposits available on demand.
i) Income taxes
Income tax expense comprises the current and deferred tax. 
Current income tax liabilities comprise those obligations to fiscal authorities relating to the current or prior reporting period that 
are unpaid at the statement of financial position date. They are calculated according to the tax rates and tax laws applicable to the 
fiscal periods to which they relate, based on the taxable profit for the year. All changes to current tax assets or liabilities are 
recognised as a component of tax expense in the income statement, except where it relates to items outside profit or loss. 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.
j) Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are 
charged to the income statement net of any incentives received from the lessor on a straight line basis over the period of the lease. 
k) Revenue recognition
Revenue represents amounts derived from the design, production and sale of computer games software and related technology 
which fall within the Group’s ordinary activities, exclusive of value added tax and other similar sales taxes. Revenue is measured by 
reference to the fair value of consideration received or receivable.
Revenue includes income from the design and production of computer software contracted for customers, royalties from published 
games, income from the release of self-published games, and crowd-sourced funding pledges to support the development of 
self-published games.
Revenues on project contracts are mapped against the expected profile of costs. In most circumstances these are closely correlated.
Where there is close correlation between the revenue and cost profile, the milestones within the project contracts are considered 
to approximate the stage of completion of the obligations under the contract and therefore recognition of revenue based on these 
milestones provides a sufficiently accurate approximation of recognition of revenue on a stage of completion basis, except for where 
there are significant acceptance requirements. Under such arrangements, revenue is recognised when the Group has substantially 
met all its performance obligations and the customer has approved the relevant milestone.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  39 3. PRINCIPAL ACCOUNTING POLICIES CONTINUED
Basis of consolidation and business combinations continued
Where there is less correlation between the revenue and cost profile, revenue from customer specific contracts is recognised on 
the stage of completion of each assignment (milestone) at the period end date compared to the total estimated service based on the 
estimate of labour and other costs to be provided over the entire contract where the outcome can be estimated reliably. If a contract 
outcome cannot be estimated reliably, revenue is recognised equal to costs incurred, to the extent that costs are expected to be 
recovered. An expected loss on a contract is recognised immediately in the income statement.
Additionally, project contracts may contain provision for the pass through of subcontract costs; these are recharged on a matching 
basis in the same period as the underlying cost.
Revenue earned from royalties under distribution agreements are recognised in the period that the sales to the end customer are 
made, estimated on an accruals basis as royalty reports are received on a monthly or calendar quarter basis. 
Revenue from released self-published titles is recognised on download of the game or upon purchase of in-game digital items. 
Revenue from 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.
l) 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. 
m) 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 that estimated on vesting. Upon exercise of share options, the proceeds received up to the 
nominal value of the shares issued are allocated to share capital with any excess being recorded as share premium. 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.
n) 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.
o) Foreign currencies
Transactions denominated in a foreign currency are translated at the rate of exchange ruling at a month-end rate in order to 
approximate to actual rate for the relevant transaction date. Monetary assets and liabilities denominated in foreign currencies are 
translated at the rate of exchange ruling at the statement of financial position date.
Foreign exchange differences are charged to the income statement in the period in which they arise.
The assets and liabilities in the financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the 
statement of financial position date. Income and expenses are translated at the actual exchange rate. The exchange differences 
arising from the 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.
p) Segment reporting
The Group identifies two operating segments even though 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.
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
40  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
40  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS q) Provisions
Provisions for dilapidations are recognised when the Group has a present legal or constructive obligation as a result of a past 
event, it is probable that an outflow of economic resources will be required from the Group and amounts can be estimated reliably. 
Timing or amount of the outflow may be uncertain.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable 
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation.
r) 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 as equity.
s) 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 2017)*
• Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations (IASB effective date 1 January 2016)*
• Clarification of Acceptable Methods of Depreciation and Amortisation – Amendments to IAS 16 and IAS 38 (IASB effective date  
1 January 2016)*
• Annual Improvements to IFRSs 2010-2012 Cycle (EU effective date 1 February 2015)
• Annual Improvements to IFRSs 2011-2013 Cycle (EU effective date 1 January 2015)
• Annual Improvements to IFRSs 2012-2014 Cycle (effective 1 January 2016)*
• Amendments to IAS 27: Equity Method in Separate Financial Statements (effective 1 January 2016)*
• Disclosure Initiative: Amendments to IAS 1 Presentation of Financial Statements (effective 1 January 2016)*
* Not adopted by the EU (as at 8 September 2015).
Based on the Group’s current business model and accounting policies, management does not expect material impacts on the 
financial information when the standards become effective. The Group does not intend to apply these pronouncements early.
4. SIGNIFICANT ACCOUNTING ESTIMATES AND KEY JUDGEMENTS
The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing  
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
a) Intangible assets
The Group invests heavily in research and development. The identification of development costs that meet the criteria for 
capitalisation is dependent on management’s judgement and knowledge of the work done. Development costs of software tools 
within a project that can be utilised generically are separately identified. Judgements are based on the information available at  
each period end. Economic success of any development is assessed on a reasonable basis but remains uncertain at the time of 
recognition as it may be subject to future technical problems and therefore a review for indicators of impairment is completed  
by product at each period end date. The net book values of the Group and Company intangible assets including rights acquired  
at 31 May 2015 are £11,100,568 (2014: £10,961,795).
Intangible assets are subject to amortisation and reviewed for impairment whenever events or changes in circumstances indicate 
that the carrying amount may not be recoverable, for example, a decision to suspend a self-published title under development. 
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.  
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing 
impairment, assets are reviewed by project for which there are separately identifiable cashflows.
Games developed to be self-published are reviewed for impairment based on the status at the end of each financial year and at  
the half year against a prudent level of the projected net earnings. 
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  41 4. SIGNIFICANT ACCOUNTING ESTIMATES AND KEY JUDGEMENTS CONTINUED
a) Intangible assets continued
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 of sale is applied as amortisation. In the case of Elite Dangerous 60% was used.  
In the financial year to May 2015 £1,220,085 of amortisation was recognised for these elements of Elite Dangerous (May 2014: 
£271,143).
b) 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.
c) 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 moved to deferred income until the final version is released to the public.
For external publishing work significant management judgement is applied in determining the allocation and timing of the 
recognition of revenue on contracts. In this process management takes into account milestones, actual work performed and 
further obligations and costs expected to complete the work. Management monitors the progress and has regular dialogue  
with customers to confirm the project status.
5. SEGMENT INFORMATION
The Group identifies operating segments based on internal management reporting that is regularly reviewed by the chief operating 
decision maker and reported to the Board. The chief operating decision maker is the Chief Executive Officer.
Management information is reported as two operating segments, being self-published work, and projects for external publishers 
and royalties plus merchandise. 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 2015
£’000
31 May 2014
£’000
United Kingdom 5,798 1,807
United States of America 7,687 7,470
Rest of the world 9,281 264
22,766 9,541
The Group’s contribution (revenue less directly attributable costs) by each segment is as follows:
31 May 2015
£’000
31 May 2014
£’000
Self-published 9,340 (598)
External publishers 977 3,116
Other income and unallocated costs (4,190) (891)
6,127 1,627
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
42  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
42  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS For further analysis of contribution per operating segment see Finance review page 16.
At 31 May 2015 £nil of non-current assets were based in Canada (2014: £43,342), with the remainder in the UK. 
In 2015 there were no customers whose revenue accounted for more than 10% of the Group and Company’s total revenue  
(2014: there were two main customers that accounted for 63% and 18% of revenue). 
All material revenue is categorised as either ‘self-published’, ‘external publishers’ or royalties.
31 May 2015
£’000
31 May 2014
£’000
External publishers 3,429 7,707
Self-published 19,012 469
Royalties 322 1,362
Other 3 3
22,766 9,541
Adjusted operating profit / (loss) costs are adjusted for non cash expenses an funding items as a key performance indicator for the 
Group and are also used by the Chief Executive Officer. In the prior year Adjusted EBITDA was monitored and has been included as 
sub totals which are calculated as follows:
31 May 2015
£’000
31 May 2014
£’000
Operating profit / (loss) 1,566 (1,705)
Depreciation 271 225
Amortisation and impairment 4,246 1,802
EBITDA 6,083 322
Share-based compensation 767 286
Funding costs / listing expenses – 217
Dilapidation provision 37 36
Fair value adjustments 72 32
Gain on investment 1 (21)
US set-up fees 7 –
Adjusted EBITDA 6,967 872
R&D capitalised (4,338) (4,035)
Tax credits deducted from Administration costs (163) (307)
Adjusted Operating Profit / (loss) 2,466 (3,470)
6. PROFIT / (LOSS) BEFORE TAX
31 May 2015
£’000
31 May 2014
£’000
This is stated after charging / (crediting):
Amortisation and impairment on intangibles 4,246 1,802
Depreciation of owned property, plant and equipment: 271 225
Research and development costs expensed 287 371
Auditor remuneration:
Audit services  – statutory audit 39 30
Non-audit services – tax services – 5
   – corporate finance services – 61
   – other services 8 7
Operating leases  – land and buildings 526 527
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  43 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 2013 4,950 1,789 809 7,548
Additions – arising from internal development 1,214 2,821 147 4,182
Additions – acquired separately – 5,148 – 5,148
Disposals (1,637) – – (1,637)
Adjustment – (16) – (16)
Impairment – (276) – (276)
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
Amortisation and impairment
At 31 May 2013 2,779 660 659 4,098
Charge for the period 883 506 137 1,526
Disposals (1,637) – – (1,637)
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
Net book value at 31 May 2015 2,090 8,920 91 11,101
Net book value at 31 May 2014 2,502 8,300 160 10,962
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 cost of sales.
The impairment in 2014 arose from a review of the monetisation profile of Coaster Crazy.
In 2014 the additions acquired separately were the Elite rights acquired from Professional Practice Automation LLP.
The net book value of the acquired rights at 31 May 2015 was £4.8 million (2014: £5.1 million).
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 non-game applications and video games for the interactive entertainment sector.
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
44  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
44  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS 9. PROPERTY, PLANT AND EQUIPMENT
Group 
Fixtures 
and fittings
£’000
Computer 
equipment
£’000
Leasehold 
improvements
£’000
Total
£’000
Cost 
At 31 May 2013 240 1,179 10 1,429
Additions 34 220 – 254
Disposals (1) – – (1)
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
Depreciation
At 31 May 2013 186 939 5 1,130
Charge for the period 45 179 1 225
Disposals (1) – – (1)
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
Net book value at 31 May 2015 61 272 – 333
Net book value at 31 May 2014 43 281 4 328
Company
Fixtures 
and fittings
£’000
Computer 
equipment
£’000
Leasehold 
improvements
£’000
Total
£’000
Cost 
At 31 May 2013 232 1,090 4 1,326
Additions 27 209 – 236
Disposals (1) – – (1)
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
Depreciation
At 31 May 2013 184 911 4 1,099
Charge for the period 40 139 – 179
Disposals (1) – – (1)
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
Net book value at 31 May 2015 61 272 – 333
Net book value at 31 May 2014 35 249 – 284
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  45 9. PROPERTY, PLANT AND EQUIPMENT CONTINUED
Depreciation charges are apportioned to the income statement as follows:
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Charge 
Cost of sales 241 196 213 150
Administration expenses 30 29 25 29
Total 271 225 238 179
10. OPERATING LEASES AS LESSEE
At each period end the future operating lease payments were as follows:
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Minimum lease payments due within one year 670 487 670 372
Minimum lease payments due within one to five years 2,669 271 2,669 28
Minimum lease payments due in greater than five years 43 – 43 –
Total 3,382 758 3,382 400
Group lease payments recognised as an expense during the year ended 31 May 2015: £522,587 (2014: £526,599).
The lease payments relate to the rental contracts for the office buildings, which expire April 2015 and August 2015. New lease 
agreements have now been entered into for both buildings on the Science Park and they are due to expire in April 2020 and August 
2020. Both leases have flexible break clauses that can be exercised if required by the Group.
The Group decided to exercise the right to the lease break clause in the Halifax office on 31 March 2015. This was carried out as 
part of the office closure.
Company lease payments recognised as an expense during the year ended 31 May 2015: £431,227 (2014: £415,983).
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.
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Loans and Receivables
Trade and other receivables 1,592 2,259 1,656 2,904
Cash and cash equivalents 10,478 8,612 10,203 7,997
Total 11,070 10,871 11,859 10,901
Derivative financial instruments
The Group’s financial instruments are measured at fair value and are summarised below:
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Derivative financial assets
Forward exchange contracts – held for trading 163 – 163 –
Total 163 – 163 –
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
46  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
46  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS During the financial year the Group started using 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 our main banking partner.
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Financial liabilities
Financial liabilities measured at amortised cost:
Trade and other payables 2,806 937 2,779 1,400
Designated at fair value through profit and loss:
Interest-free loan – 135 – –
Total 2,806 1,086 2,779 1,400
The interest free loan that was due to the Atlantic Canada Opportunities Agency was repaid in full during the financial year.  
This was due to the closure of the Halifax office.
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Accelerated capital allowances 1,493 503 1,493 505
Short-term temporary differences (restricted) (483) (429) (483) (505)
Tax losses (restricted) (966) – (1,010) –
Total liability 44 74 – –
Balance brought forward 74 28 – –
Effect of tax rate change on opening balance – – – –
Effect of exchange rate change on opening balance (2) 1 – –
Movement in year (28) 45 – –
Balance carried forward liability 44 74 – –
No deferred tax asset at 31 May 2015 has been recognised in the statement of financial position for the Group. The deferred tax 
liability at 31 May 2015 is £43,689 (2014: £73,781), 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 2015 amount to £5.9 million (2014: £6.7 million). Total UK based short-term temporary differences 
available at 31 May 2015 amount to £2.0 million (2014: £0.6 million).
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Deferred tax asset not provided
Short-term temporary differences – (125) – (127)
Losses (1,122) (996) (1,122) (996)
Total (1,122) (1,121) (1,122) (1,123)
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  47 13. INVENTORIES
Inventories recognised in the statement of financial position can be analysed as follows:
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Work in progress – 3 – 3
Merchandise 13 12 13 12
Total inventory 13 15 13 15
There is no material difference between the replacement cost of inventory and the amounts stated above.
For the year ended 31 May 2015 a total of £453,784 was expensed for merchandise (2014: £16,061).
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Trade receivables, gross 134 953 127 953
Intercompany receivable – – 72 706
Trade receivables, net 134 953 199 1,659
Derivative financial instruments 163 – 163 –
Other receivables 1,458 1,306 1,457 1,245
Financial assets 1,755 2,259 1,819 2,904
Prepayments 770 532 752 515
VAT and other taxes 521 173 200 28
Non-financial assets 1,291 705 952 543
Trade and other receivables 3,046 2,964 2,771 3,447
All amounts are short term. The net carrying value of trade receivables is considered a reasonable approximation of fair value. 
Within other receivables is an amount due from Atari S.A. for royalties arising from a distribution agreement. The terms of this 
agreement allow recoup as a commission from the Group distributing the product on its own e-commerce site or via non-PC 
platforms. This receivable has been determined by reference to Fair value measurement recognised in the balance sheet.  
The Group has applied the methodology in Level 3 of the hierarchy with reference to discounted cashflow of expected incomes, 
taking into account any costs to completion. 
Group
Neither past due nor impaired Past due but not impaired
Total
£’000 £’000
0–90 days
£’000
›90 days
£’000
May 2015 134 134 – –
May 2014 953 953 – –
No receivables are past their due date and the balances comprise receivables from highly credit rated customers.
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
48  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
48  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS Company
Neither past due nor impaired Past due but not impaired
Total
£’000 £’000
0–90 days
£’000
›90 days
£’000
May 2015 199 199 – –
May 2014 1,659 1,659 – –
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Investment in shares – 33 – 33
Software applications – 6 – 6
Current tax assets 50 67 13 6
Other short-term assets 50 106 13 45
The investment in shares was acquired via an agreement with Atari S.A. (quoted on the Paris Stock Exchange) in respect to 
balances owing under their Chapter 11 administration process. These shares were sold during the financial year at a profit to  
the Group of £6,796.
During 2014 software applications were acquired under the asset acquisition from Professional Practice Automation LLP;  
the Group disposed of this asset during the year for no proceeds.
16. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include the following components:
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Cash at bank and in hand
GBP 7,944 5,410 7,944 5,411
USD 2,229 1,170 2,195 1,169
EUR 55 38 55 38
CAD 250 1,994 9 1,379
Financial assets 10,478 8,612 10,203 7,997
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.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  49 17. EQUITY
Share capital
Group and Company movements in share capital
Movements in Ordinary Shares are as follows:
2015 2014
Number
’000
Value
’000
Number
’000
Value
’000
At 1 June 2013 and 31 May 2014
Ordinary Shares of 0.5 pence (0.1 pence) 33,384 167 25,234 127
Shares issued on option exercises 196 1 338 1
Shares issued pre-IPO – – 132 1
Shares issued upon listing on AIM – – 5,678 28
Shares issued as non-cash consideration – – 2,002 10
At 31 May 2015 33,580 168 33,384 167
During the year to 31 May 2015 the following share issues were made:
From 1 June 2014 to 31 May 2015 195,900 Ordinary Shares of 0.5 pence were allotted as fully paid at an average premium of  
80.7 pence being the exercise of share options by employees. The average market value was 244.1 pence on the days of exercise.
18. EMPLOYEE REMUNERATION
Remuneration recognised for employee benefits (including Directors) are analysed below.
Staff costs for all employees, including Directors, consist of:
31 May 2015
£’000
31 May 2014
£’000
Wages and salaries 10,933 8,577
Social security costs 1,048 876
Pension costs 84 18
Share-based compensation 767 180
12,832 9,651
Included in the above payroll costs for the year ended 31 May 2015 is £4,021,039 (2014: £4,027,605) capitalised within intangible  
fixed assets (see note 7). Pension costs relate to contributions to the parent company’s new defined contribution scheme set up 
ahead of auto enrolment.
The average number of employees, including Directors, during the period was:
31 May 2015
£’000
31 May 2014
£’000
Research and development 258 233
General and administrative 15 12
273 245
Remuneration of Directors
31 May 2015
£’000
31 May 2014
£’000
Directors’ emoluments 540 384
Non-Executive fees 20 20
Non-Executive consultancy fees 60 42
Emoluments of highest paid Director
31 May 2015
£’000
31 May 2014
£’000
Emoluments 180 128
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
50  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
50  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS Remuneration of key management personnel
31 May 2015
£’000
31 May 2014
£’000
Short-term employee benefits
Salaries including bonuses 1,321 1,012
Social security 168 128
Pension contributions 12 2
Benefits in kind 7 –
Total short-term employee benefits 1,508 1,142
Non-Executive fees 50 65
Share-based compensation charge 488 212
Total 2,046 1,419
Key management of the Group are the Board and senior management (functional heads).
Number of key management personnel, including Directors, at the statement of financial position date
14 14
A total of 801,000 share options were issued in the year to key management under the Company’s new Company Share Option Plan. 
The number of options exercised for Ordinary Shares in the year ended 31 May 2015 was 70,000 from previous EMI grants.
19. SHARE OPTIONS
The Group has a new 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 the similar conditions as the main Company Share option plan, except for one tranche issued on 15 September 2014 
that has a shorter vesting period of one year.
Date of grant
Scheme  
type
Period when 
exercisable
Price  
in pence
2015  
Number
2014  
Number
6 December 2005 2002 EMI scheme 2006–2015 67 443,400 675,475
30 July 2013 2013 EMI scheme 2013–2011 89 789,223 1,036,523
30 January 2013 Unapproved 2014–2023 89 – 34,000
15 May 2013 2013 EMI scheme 2014–2023 95 228,000 230,000
21 March 2014 Company Share Option Plan 2017–2024 224.5 228,000 251,000
15 September 2014 Company Share Option Plan 2017–2024 257.5 291,950 –
15 September 2014 Unapproved 2017–2024 257.5 649,850 –
15 September 2014 Company Share Option Plan 2015–2024 257.5 288,350 –
10 March 2015 Company Share Option Plan 2018–2025 230 232,100 –
10 March 2015 Unapproved 2018–2025 230 8,200 –
3,159,073 2,226,998
A number of share warrants that vested immediately were issued as part of the pre-IPO and IPO process as follows:
Date of grant
Warrant 
type
Period when 
exercisable
Price  
in pence
2015  
Number
2014  
Number
8 July 2013 Unapproved pre-IPO warrants* 2013–2023 95 65,790 65,790
15 July 2013 Unapproved IPO warrants** 2013–2015 127 232,832 232,832
15 July 2013 Unapproved IPO warrants* 2013–2023 127 147,638 147,638
446,260 446,260
*  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.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  51 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 2015 31 May 2014
Number
Weighted 
average 
exercise 
price in pence Number
Weighted 
average 
exercise 
price in pence
Opening balance 2,440,426 100.0 2,417,800 82.0
Adjustment – – 30,000 82.0
Granted 1,512,450 216.6 464,428 175.2
Exercised (496,375) 78.7 (337,802) 76.8
Forfeited (84,000) 210.4 (134,000) 90.0
Closing balance 3,372,501 181.9 2,440,426 100.0
Exercisable at the year end 1,674,051 87.6 2,189,426 85.6
The weighted average share price at the date of exercise of the share options was 242.1 pence. The share based compensation 
charge in the profit and loss was £767,000 of which £9,000 was in respect of warrants.
The share options at the end of May 2015 including those for Non-Executive Directors have a weighted average contractual  
life as follows:
Group and Company year ended
31 May 2015 31 May 2014
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 7 675,475 19
July 2022 89 789,223 84 1,036,523 96
January 2023 89 – 92 34,000 104
May 2023 95 228,000 96 230,000 108
July 2023 95 65,790 98 65,790 110
July 2023 127 147,638 98 147,638 110
March 2024 224.5 228,000 106 251,000 118
September 2024 257.5 1,230,150 112 – –
March 2025 230.0 240,300 118 – –
Total 3,372,501 90 2,440,426 79
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
52  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
52  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS 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:
March
2015
September 
2014
Share price at date of grant (pence) 230 258
Exercise price 230 258
Expected time to expiry (years) 8.47 8.64
Risk-free interest rate (%) 4.3 3.7
Expected dividend yield on shares (%) 0 0
Expected volatility of share price (%) 38 41
Fair value of options granted (pence) 123.4 138.4
The assumptions for the September 2014 and March 2015 rounds are based on statistical analysis of share price data from the 
listing on AIM.
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 
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 300,475 Ordinary Shares. The EBT purchased 251,733 Ordinary Shares from the market and 73,197 
Ordinary Shares from employees exercising under the cashless options. The EBT had no other assets or liabilities at 31 May 2015  
outside of its interest in 24,455 Ordinary Shares, and £550,766 was drawndown from the £10 million facility provided by the Company. 
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Trade payables 1,014 463 974 463
Intercompany payable – – 26 500
Accruals 1,792 474 1,779 437
Financial liabilities 2,806 937 2,779 1,400
Other taxation and social security 301 270 301 254
Total trade and other payables 3,107 1,207 3,080 1,654
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.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  53 21. DEFERRED INCOME
Deferred income in the statement of financial position can be analysed as follows:
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Contractual – 268 – 268
Self-published 723 2,188 723 2,188
Deferred income 723 2,456 723 2,456
£96,467 of deferred income is to be recognised within one year with the remaining £627,034 due within the next 6.5 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. The deferred revenue will be released over the remaining franchise period after the first paid-for update 
has been released. The carrying values of deferred income are considered to be a reasonable approximation of fair value.
22. BORROWINGS
The Company has a £1 million revolving credit facility with Barclays Bank plc; this has not been drawn upon in the financial year.  
In the prior year the revolving credit facility was £3 million and the Group had an interest free loan from the Atlantic Canada 
Opportunities Agency (see note 11).
23. PROVISIONS FOR DILAPIDATIONS
Consolidated year ended Company year ended
31 May 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Opening balance 223 187 223 187
Provided for in period 37 36 37 36
At period end 260 223 260 223
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. 
24. FINANCE INCOME 
Finance income may be analysed as follows for the reporting periods presented:
31 May 2015
£’000
31 May 2014
£’000
Interest income from cash and cash equivalents 53 63
25. TAXATION ON ORDINARY ACTIVITIES
(a) Analysis of the charge in the period
31 May 2015
£’000
31 May 2014
£’000
UK corporation tax based on the results for the year – (8)
Overseas tax on the results for the period – 75
Deferred tax (28) 45
Tax on profit / (loss) on ordinary activities (28) 112
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
54  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
54  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS (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 21.5% (2014: 20.3%) 
as follows:
31 May 2015
£’000
31 May 2014
£’000
Profit / (loss) on ordinary activities before taxation 1,619 (1,642)
Tax on profit / (loss) on ordinary activities at standard rate 347 (334)
Factors affecting tax expense for the year:
Overprovision in prior period – (8)
Expenses not deductible for tax purposes 236 116
Adjustments for opening deferred tax average rate (2) (1)
Research and development tax credits (282) (452)
Exercise of share options (163) (88)
Losses to carry forward (164) 879
Total amount of tax (28) 112
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.
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 2015 31 May 2014
Profit / (loss) attributable to Shareholders (£’000) 1,647 (1,754)
Weighted average number of shares 33,513,575 30,479,942
Basic earnings / (loss) per share (pence) 4.9 (5.8)
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. For May 2014, 
as the effect of options and convertible loan notes would reduce the loss per share the diluted loss per share is the same as the 
basic loss per share.
31 May 2015 31 May 2014
Profit / (loss) attributable to Shareholders (£’000) 1,647 (1,754)
Diluted weighted average number of shares 35,346,221 30,479,942
Diluted earnings / (loss) per share (pence) 4.7 (5.8)
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 2015 31 May 2014
Ordinary Shares 33,513,575 30,479,942
Under option 1,832,647 –
Diluted average number of shares 35,346,221 30,479,942
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  55 26. EARNINGS PER SHARE CONTINUED
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 2015 31 May 2014
Adjusted Operating profit / (loss) attributable to shareholders (£’000) 2,466 (3,470)
Weighted average number of shares 33,513,575 30,479,942
Adjusted basic earnings / (loss) per share (pence) 7.4 (11.4)
Weighted average number of shares (diluted) 35,346,221 30,479,942
Adjusted diluted earnings per share (pence) 7.0 (11.4)
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.
Consolidated year ended Company year ended
Connected party
Expense 
paid
31 May 2015
£’000
Creditor 
balance 
31 May 2015
£’000
Expense 
paid
31 May 2014
£’000
Creditor 
balance 
31 May 2014
£’000
Expense 
paid
31 May 2015
£’000
Creditor 
balance 
31 May 2015
£’000
Expense 
paid
31 May 2014
£’000
Creditor 
balance 
31 May 2014
£’000
Chris Sawyer  
– royalties 
58 – 40 53 58 – 40 53
Marjacq Micro Limited  
– sales commission
33 – 20 27 33 – 27 27
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 and Canadian banks.
At the year end the Group’s financial assets are secured by a debenture issued in favour of Barclays Bank plc as part of its 
agreement to provide a revolving credit facility.
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
56  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
56  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS 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
31 May 2015 31 May 2014 31 May 2015 31 May 2014
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 9 2,229 55 1,379 1,170 38 9 2,195 55 1,379 1,169 38
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Effect of a 5% change in relevant exchange rate on:
Income statement 202 189 330 189
Equity 192 180 182 164
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 2015
Trade and other payables 2,748 58 – –
As at 31 May 2014
Trade and other payables 834 131 102 19
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  57 28. FINANCIAL INSTRUMENT RISKS CONTINUED
Risk management objectives and policies continued
28.3 Liquidity risk analysis continued
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 2015
Trade and other payables 2,721 58 – –
As at 31 May 2014
Trade and other payables 1,258 124 (8) –
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 2015
£’000
31 May 2014
£’000
31 May 2015
£’000
31 May 2014
£’000
Total equity 20,927 18,892 20,371 18,417
Borrowings (includes current element) – 135 – –
Less cash and cash equivalent (10,478) (8,612) (10,203) (7,997)
Total Capital 10,449 10,415 10,168 10,420
30. ULTIMATE CONTROL
The Directors consider that David Braben has a majority control of the Group by reference to his shareholding interest.
FOR THE YEAR ENDED 31 MAY 2015
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
58  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
CORPORATE GOVERNANCE
58  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
FINANCIAL STATEMENTS FRONTIER DEVELOPMENTS PLC
(Incorporated and registered in England and Wales with no. 02892559)
(THE ‘COMPANY’)
Notice is hereby given that the Annual General Meeting of the Company will be held at the offices of Frontier Developments plc 
at 306 Science Park, Milton Road, Cambridge CB4 0WG on Tuesday 20 October 2015 at 09:15 a.m. (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 2015 together with the Reports of the 
Directors and Auditor thereon.
Resolution 2.  To re-appoint Mr Jonathan Francis Watts as a Director, who has retired by rotation in accordance with Article 70 
of the Company’s Articles of Association (the ‘Articles’) and is therefore required to stand for re-election 
pursuant to Article 70 of the Articles.
Resolution 3.  That, for the purposes of section 423 of the Companies Act 2006, the annual reports for the Company be 
distributed to the Shareholders by electronic means from the year end 31 May 2016 onwards, unless any 
shareholder opts in to receive a paper version.
Resolution 4.  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 5.  To authorise the Directors to determine the Auditor’s remuneration for the ensuing year.
Resolution 6.   That in substitution for all authorities in existence immediately prior to this resolution being passed, the Directors 
of the Company (the ‘Directors’) be and are hereby generally and unconditionally authorised to exercise all 
powers of the Company, pursuant to Section 551 of the Companies Act 2006 (the ‘Act’), to allot equity securities 
(within the meaning of Section 560 of the Act) up to an aggregate nominal amount of £56,327.97, 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 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 2016 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.
NOTICE OF ANNUAL GENERAL MEETING
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  59 SPECIAL RESOLUTION
To consider and, if thought fit, pass the following resolution as a special resolution:
Resolution 7.   That subject to the passing of resolution 6 above, the Directors be empowered in accordance with Section 
570 and Section 571 of the Act to allot equity securities (within the meaning of Section 560 of the Act) for cash 
pursuant to the authority conferred on them pursuant to resolution 6 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 £16,898.39 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 2016 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 2015
Frontier Developments plc 
306 Science Park 
Milton Road 
Cambridge CB4 0WG
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
60  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
ADDITIONAL INFORMATION EXPLANATORY 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.  If you wish your proxy to speak on your behalf at the meeting, you will need to appoint your own choice of proxy (not the Chairman) 
and give your instructions directly to them. If you wish to appoint a proxy other than the Chairman, write the full name of your 
proxy in the box provided in the Form of Proxy.
3.  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.
4.  In the case of joint holders, the signature of any one of them will suffice but the names of all joint holders should be stated.  
The vote of the senior who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the votes of the  
other holders. For this purpose, seniority is determined by the order in which the names stand in the register of members in 
respect of the joint holding.
5.  To be effective, the enclosed Form of Proxy must be duly completed and deposited together with any power of attorney or other 
authority (if any) under which it is executed (or a duly certified copy of such power or authority) and lodged at PXS, Capita Asset 
Services, 34 Beckenham Road, Beckenham, Kent, BR3 4TU no later than 9:15 a.m on Friday 16 October 2015 (being not more than 
48 hours (excluding non-working days) prior to the time fixed for the meeting).
6.  Whether or not you propose to attend the Annual General Meeting, please complete, sign and submit a Form of Proxy to Capita 
Asset Services (address above) by no later than the time and date specified above.
7.  Completion and return of the Form of Proxy will not preclude a shareholder from attending and voting in person at the meeting.
8.  The Company, pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those members 
entered on the register of members of the Company at 6:00 p.m UK time on Friday 16 October 2015 shall be entitled to attend  
and vote at the meeting or, if the meeting is adjourned, 6:00 p.m 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.
9.  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).
10.  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.
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  61 COMPANY SECRETARY AND CFO
Mr N R Armstrong
REGISTERED AND HEAD OFFICE
306 Science Park
Milton Road
Cambridge CB4 0WG
Website
www.frontier.co.uk
BROKER AND NOMINATED ADVISOR
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
15 Fetter Lane
London EC4A 1JP
REGISTRARS
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham 
Kent BR3 4TU
United Kingdom
REGISTERED NUMBER
02892559
(Incorporated and registered in England and Wales)
ADVISORS AND COMPANY INFORMATION 
62  FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015
ADDITIONAL INFORMATION NOTES
FRONTIER DEVELOPMENTS PLC ANNUAL REPORT AND ACCOUNTS 2015  63 NOTES
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306 Science Park 
Milton Road 
Cambridge CB4 0WG