Note 30 - Changes in equity, share premium and reserves

2007 Financial statements

Note 30 - Changes in equity, share premium and reserves

	Year ended 31 December 2007			Year ended 31 December 2006
Summary statement of changes in equity	Attributable to shareholders of Rio Tinto US$m	Outside interests US$m	Total US$m	Attributable to shareholders of Rio Tinto US$m	Outside interests US$m	Total US$m
Opening balance	18,232	1,153	19,385	14,948	791	15,739
Total recognised income for the year	9,407	470	9,877	8,514	468	8,982
Dividends (note 10)	(1,507)	(164)	(1,671)	(2,573)	(193)	(2,766)
Own shares purchased from Rio Tinto shareholders:
- Under capital management programme (a)	(1,348)	-	(1,348)	(2,658)	-	(2,658)
- To satisfy share options	(64)	-	(64)	(49)	-	(49)
Ordinary shares issued	13	-	13	31	-	31
Outside interests in acquired companies	-	55	55	-	-	-
Shares issued to outside interests	-	38	38	-	69	69
Employee share options charged to income statement	39	-	39	23	-	23
Other movements	-	-	-	(4)	18	14
Closing balance	24,772	1,552	26,324	18,232	1,153	19,385

Notes	Expand
The charge to equity for shares bought back in 2006 included US$288 million in respect of a commitment entered into before the financial year end to purchase, from a bank, Rio Tinto plc shares that the bank could buy in the market during the period up to the preliminary announcement of the Group's results. The commitment was settled during 2007.

	2007 Total US$m	2006 Total US$m
Share premium account
At 1 January	1,919	1,888
Premium on issues of ordinary shares	13	31
At 31 December	1,932	1,919

Retained earnings
At 1 January	14,401	11,893
Parent and subsidiaries' profit for the year	7,058	7,440
Equity accounted units' retained profit for the year	254	(2)
Actuarial gains	135	338
Dividends	(1,507)	(2,573)
Own shares purchased from Rio Tinto shareholders under capital management programme	(1,348)	(2,658)
Employee share options charged to income statement	19	12
Tax recognised directly in statement of recognised income and expense	21	(45)
Other movements	-	(4)
At 31 December	19,033	14,401

Hedging reserves (b)
At 1 January	(133)	(77)
Parent and subsidiaries' net cash flow hedge fair value losses	(197)	(178)
Equity accounted units' cash flow hedge fair value losses	(4)	-
Parent and subsidiaries' net cash flow hedge losses transferred to the income statement	89	63
Tax on the above	71	59
At 31 December	(174)	(133)

Available for sale revaluation reserves (c)
At 1 January	31	20
Gains on available for sale securities	49	14
Gains on available for sale securities transferred to the income statement	(16)	(4)
Tax on the above	(7)	1
At 31 December	57	31

Other reserves (d)
At 1 January	8	42
Own shares purchased from Rio Tinto shareholders to satisfy share options	(64)	(49)
Employee share options: value of services	20	11
Deferred tax on share options	55	4
At 31 December	19	8

Foreign currency translation reserve (e)
At 1 January	735	(9)
Currency translation adjustments	1,796	748
Exchange losses	(30)	(8)
Currency translation reclassified on disposal	-	4
Tax on exchange adjustments	13	-
At 31 December	2,514	735
Total other reserves per balance sheet	2,416	641

Notes

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Retained profit and movements in reserves of subsidiaries include those arising from the Group's share of proportionally consolidated units.
The hedging reserve records gains or losses on cash flow hedges that are recognised initially in equity, as described in note 1(p).
The available for sale revaluation reserves record fair value gains or losses relating to available for sale securities, as described in note 1(p).
Other reserves record the cumulative amount recognised in respect of options granted but not exercised to acquire shares in Rio Tinto Limited less, where applicable, the cost of shares purchased to satisfy share options exercised. The estimated effect of unexercised options to acquire shares in Rio Tinto plc is recorded in retained earnings.
Exchange differences arising on the translation of the Group's net investment in foreign controlled companies are taken to the foreign currency translation reserve, as described in note 1(d), (net of translation adjustments relating to Rio Tinto Limited share capital). The cumulative differences relating to an investment would be transferred to the income statement if the investment were disposed of.