Explanatory note

This Order extends the operations of the Defence Research Agency Trading Fund. That fund was established under the Government Trading Funds Act 1973 to finance those operations of the Ministry of Defence known as the Defence Research Agency and which were described in Schedule 1 to the Defence Research Agency Trading Fund Order 1993.

The Order adds to those operations further operations of the Ministry of Defence which have not hitherto been financed by means of a trading fund. The Defence Research Agency and the additional operations are renamed the Defence Evaluation and Research Agency. The Defence Research Agency Trading Fund is renamed the Defence Evaluation and Research Agency Trading Fund.

The Order provides for the additional assets (estimated at£243 million) and liabilities (estimated at £46 million) set out in the Schedule to be appropriated to the fund, and for 68% of the difference in value between the additional assets and additional liabilities to be treated as public dividend capital of the fund. Working capital of £72 million will be issued to the fund in respect of the extended operations and will be financed by debt; the debt/public dividend capital ratio of the additional capital employed in the fund will accordingly be approximately 50:50.