Annual report & accounts

Thursday, 05. April 2007 16:12




information 3
Report of the supervisory board 5
Report of the management board 6
statements 12
Profit and loss account
summary 13
Other data
Spread of net assets
List of
Purchases and
sales 31

(investment company with a variable capital, having its registered
office in Rotterdam, the Netherlands)
Coolsingel 120
Postbus 973
NL-3000 AZ Rotterdam
Tel. +31- 10 - 224 12 24
Fax +31 - 10 - 411 52 88

Supervisory Board
Paulus C. van den Hoek, chairman
Gilles Izeboud
Philip Lambert
Dirk P.M. Verbeek

Management Board
Robeco Fund Management B.V. (as of 27 April 2006)
Arnout van Rijn (until 27 April 2006)
Volker Wytzes (until 27 April 2006)

Robeco Fund Management B.V.
(as of 1 January 2006)
Management board:
Mark F. van der Kroft
Edith J. Siermann
Edwin de Weerd (as of 12 January 2006)
Eduard B. van Wijk (as of 1 November 2006)

Fund Manager
Arnout van Rijn

Secretary of the Company
David H. Cross
Management Board of Robeco Groep N.V.
(the holding company of the Robeco Group)
George A. Möller, chairman
Leni M.T. Boeren
Sander van Eijkern
Constant Th.L. Korthout
Frank L. Kusse 2
Niek F. Molenaar

The General Meeting of Shareholders will be held on 26 April 2007 at
11:30 hours at the Hilton Rotterdam, Weena 10, Rotterdam, the
Netherlands. Holders of share certificates to bearer wishing to
attend and vote at the meeting should apply for a written statement
from the Euroclear Netherlands-affiliated institution where their
shares are held, which will give admission to the meeting. The
institutions affiliated with Euroclear Netherlands should submit a
copy of this statement to ABN AMRO Bank N.V. stating the number of
shares held for the shareholder concerned prior to the meeting, and
which will be frozen until after the meeting. This statement should
be submitted not later than 19 April 2007.
Holders of K shares should lodge their share certificates not later
than 19 April 2007 with one of the banks mentioned in the convening
notice of 5 April 2007.
Holders of an account with Robeco Direct N.V. in Rotterdam, Banque
Robeco S.A. in Paris or Robeco Bank Belgium in Brussels wishing to
attend the meeting should inform the management board in writing not
later than 19 April 2007.
This report is also published in Dutch, French and German. Only the
original Dutch edition is binding and will be submitted to the
General Meeting of Shareholders.

A simplified prospectus with information on Rolinco N.V. and its
associated costs and risks is available. This simplified prospectus
and the full prospectus are available at the company's office and via

2As of 2 February 2007.

We herewith present the Rolinco N.V. accounts for the financial year
2006 together with the report of the management board.
The way in which the supervisory board carries out its supervisory
duties is significantly determined by the structure of the Robeco
Group. Discussion of the management of Rolinco N.V. can take place in
the supervisory board of either the company or that of Robeco Groep
N.V. As a result of the personal links between members of the two
boards, in practice this presents no difficulties. Rolinco N.V. is
managed by Robeco Fund Management B.V., a wholly owned (indirect)
subsidiary of Robeco Groep N.V. The management board of Robeco Fund
Management B.V. consists of Edith Sierman (Chief Investment Officer
Fixed Income), Mark van der Kroft (Chief Investment Officer
Equities), Edwin de Weerd (Manager of Robeco Fund Services Center)
and Ed van Wijk (Executive Vice President at Robeco Alternative
Investments). Arnout van Rijn is the fund manager of Rolinco N.V.
The purpose of an investment institution such as Rolinco N.V., as
laid down in its Articles of Association, is limited to the investing
of its assets in securities in such a way that risks are diversified
with the object of allowing its shareholders to participate in the
profits. At its meetings the supervisory board therefore primarily
devotes its attention to the investment policy, the realized results
and the development of the assets invested, on the basis of frequent
and detailed reports. Attention is also paid to matters relating to
risk management, such as operational and market risks, and
compliance, such as investment restrictions and compliance with
requirements of the regulator. In connection with what has already
been mentioned regarding the structure of the Robeco Group, matters,
such as the risks associated with the investment policy, the
application of instruments to manage these risks and compliance
issues, may also be discussed at the meetings of the supervisory
board of Robeco Groep N.V.
The general policy of the Robeco Group is determined by the
Management Board of Robeco Groep N.V. in consultation with its
supervisory board. This means that matters such as product
development, acquisitions and risk management and compliance are
discussed at the meetings of the supervisory board of Robeco Groep
N.V. An audit and compliance committee and a nomination, remuneration
and corporate-governance committee have been appointed by this board.
Two members of each of these committees are also supervisory
directors of Rolinco N.V. Within these committees extensive
discussions are held about internal audit, risk-management and
compliance issues and the functioning of and remuneration structure
for the Robeco Groep N.V. Management Board and other human-resource
issues. Besides the subjects mentioned, no special issues were
discussed at the meetings of the supervisory board during the
reporting year.
We have taken note of the contents of the auditor's report presented
by Ernst & Young Accountants and recommend approval of the annual
financial statements. We concur with management's proposal to
distribute a dividend of EUR 0.40 per share in cash.
At the General Meeting of Shareholders on 27 April 2006, Dirk Verbeek
was reappointed as a supervisory director of the company with
immediate effect.
According to schedule, Gilles Izeboud will resign at the General
Meeting of Shareholders to be held on 26 April 2007. Mr. Izeboud is
available for reelection. It is proposed that he be reappointed as a
supervisory director of the company with immediate effect.

Rotterdam, 22 March 2007

The supervisory board

Paulus C. van den Hoek, chairman (68)
Dutch nationality. Appointed in 1990 and last reappointed in 2005.
Lawyer and partner at Stibbe, lawyers and notaries, in Amsterdam, the
Netherlands, since 1965. Former Dean of the Dutch National Bar
(1981/84). Supervisory director of ASM International, Bührmann,
Wavin, Robeco Groep , Robeco and Rorento.

Gilles Izeboud (64)
Dutch nationality. Appointed in 2004.
Former partner and director at PricewaterhouseCoopers. Deputy justice
of the Enterprise Section of the Amsterdam Court of Appeal.
Supervisory director of Buhrmann, Robeco Groep, Robeco and Rorento.

Philip Lambert (60)
Dutch nationality. Appointed in 2005.
Former head of Corporate Pensions of Unilever N.V. and PLC in
London. Supervisory director of Robeco Groep , Robeco and Rorento.

Dirk P.M. Verbeek (56)
Dutch nationality. Appointed in 2001 and last reappointed in 2006.
Member of the executive board of Aon Group in Chicago, USA, and
chairman/CEO of the executive board of Aon Holdings in Rotterdam, the
Netherlands. Supervisory director of Robeco Groep , Robeco and

N.B. Only supervisory directorships at listed companies and the
Robeco Group are mentioned.


An excellent year for the world economy
The past year has been an excellent one for the world economy, with
growth recorded at around 5%. However, the composition of growth was
somewhat different from past years. Growth in the United States
slowed down in the course of the year, while Japan and the euro area
recorded higher growth rates. The emerging economies continued their
process of catching up with the developed economies.
Inflationary pressures increased worldwide after oil prices rose to
well above USD 70 per barrel early in the year. Actual inflation
remained contained under the influence of tighter monetary polices in
many countries. The fact that oil prices moved back to levels around
USD 60 per barrel later in the year contributed to a more benign
development of inflation, in combination with restrained wage
increases in many countries.

A very favorable year for equity markets
The combination of high economic growth and modest inflation was a
splendid one for equity markets. Generally corporate earnings
continued strongly, while price/earnings ratios were reasonable at
the beginning of the year. Many central banks around the world hiked
interest rates in the course of the year. On balance, long-term
government yields also increased, although less so than the
short-term interest rates. However, bond yields remained low from a
historical perspective, as a result of which yield developments were
no threat for equity markets.
The second quarter saw a correction, which was more than reversed in
the remainder of the year. In the end most equity markets have
recorded double-digit increases in their indices. After the strong
increase in 2005 the Japanese stock market index recorded a
relatively small increase in 2006. Although the US stock markets had
a favorable year, the outcome for investors with euro-denominated
investments was not that good, because the dollar depreciated by more
than 10% against the euro. The stock markets in the euro area had a
better than average performance.

The US economy
In the course of the year, the US economy slowed down. The
interest-rate hikes by the US central bank (the Fed) since mid 2004
started to take their toll. The Fed funds rate ended the year 2006 at
5.25%. On balance, long-term interest rates increased to around 4.7%
by the end of the year.
The housing market in particular was responsible for the slowdown in
US growth. The marked increase of prices and volumes in the housing
market came to an end in the past year. For the time being the US
consumer appeared to be unaffected by the developments in the housing
market. Consumption continued to grow at a healthy pace, further
facilitated by strong conditions in the labor market.
Initially, core inflation went up, but fell to just above 2% in the
final months of the year.

Last year, the Japanese economy continued its recovery. This led the
Bank of Japan to abandon its zero interest-rate policy. The policy
rate was increased once by 25 basis points. The recovery was not
convincing in all respects. The Japanese consumer remains hesitant to
spend. Inflation is still very low. Under these circumstances, the
long-term interest rates fluctuated mainly within a bandwidth of 1.5%
and 1.75%.

The euro area
Last year, economic performance in the euro area was strong. Economic
growth amounted to more than 2.5%. Initially inflation increased on
the back of higher oil prices, but ended the year at a level just
below 2%. Strong economic growth, a substantial increase in money
supply and credit growth, and just over 2% projected inflation over
the medium term prompted the European Central Bank (ECB) to increase
interest rates from 2.25% to 3.5%. Long-term rates increased by no
more than 60 basis points.

The world economy is continuing to grow rapidly, albeit at a slower
pace than last year. The emerging economies are maintaining their
catching-up course, and Japan and the euro area will record growth
rates of some 2%. For the US economy, a slowdown of growth to around
2% is being penciled in. The ECB and Bank of Japan have not yet
finished their hiking cycle and this is also true for a number of
other central banks. The Fed will probably start to ease its monetary
policy as inflation gets under control. The development of long-term
rates will remain moderate.
All in all this year more or less average returns of around 8% are to
be expected.

Investment result

Overview 2002-2006
(in %) Average
over last
2006 2005 2004 2003 2002 5 years

Based on:
- market price 6.9 33.8 2.6 7.7 -32.9 1.2
- net asset value 6.2 33.6 3.8 7.2 -32.3 1.4
Benchmark1) 4.8 25.4 3.3 8.6 -32.2 -0.1
Dividend in euros2) 0.40 0.36 0.28 0.28 0.28 0.32
Total net assets3) 1.6 1.6 1.3 1.4 1.3

1) S&P/Citigroup World Growth Primary Market Index (Total Return).
MSCI World Index until 1 November 2002. Currencies have been
converted at rates supplied by World Market Reuters.
2) Proposed for 2006.
3) EUR x billion.

During 2006, the share price of Rolinco rose from EUR 23.73 to EUR
25.01. Assuming reinvestment of the dividend of EUR 0.36 per share
distributed in May 2006, this was an investment result of 6.9%. Based
on net asset value, which rose from EUR 23.84 to EUR 24.96, the
investment result was 6.2%. The fund's benchmark, the S&P/Citigroup
World Growth Primary Market Index (Total Return), rose 4.5% over the
same period.
2006 was once again a good year for equity investors. The major stock
markets all booked gains over the year in local currency terms,
ranging from 5% in Japan, 11% in the United States and the United
Kingdom to 19% in the Netherlands and as much as 33% in Spain.
Rolinco's absolute return came under pressure as a result of the
strength of the euro. This was the only reason that the fund did not
achieve double-digit returns in 2006. Nevertheless an investment in
Rolinco was still a good choice as returns were once again
considerably higher than those achieved on a savings account.
Although stock markets have risen significantly over the last few
years, sentiment now is totally different to how it was in the rising
markets at the end of the nineties. Then people paid high prices for
the long-term future profitability of technology companies, whereas
now investors can only drum up enthusiasm for companies which are
offering high dividends right now. To summarize a Rabobank
advertisement: People now would rather have a 'bird in the hand'
whereas then they preferred to have 'two birds in the bush'.
Currently there is only slight interest for the companies with
attractive growth profiles that growth fund Rolinco likes to buy.
This made 2006 a slightly disappointing year for investors in growth
stocks as these stocks once again underperformed the broader market
completing a biblical seven years of famine.
Rolinco achieved a sound relative performance. After a fantastic year
in 2005 the fund again substantially outperformed the benchmark in
2006. Stock selection was the most important factor behind this and,
especially in the technology sector, Rolinco's stock picks showed an
above-average performance. Another driving force behind the strong
performance was the position in emerging markets, where most stock
markets continued to perform well. On the other hand the large
position in Japan only performed moderately. We expected domestic
investors there to push the market higher as the low interest rates
offered few attractive alternatives. A scandal involving one of
Japan's most well-known entrepreneurs was, however, enough to make
Japanese investors shy away. Sector allocation made a negative
contribution to the result. As a growth fund Rolinco was
overrepresented in the health-care sector where there are still many
new developments, but underrepresented in stable but slow-growing
utilities and cyclical materials. In 2006 utilities,
telecommunications and materials were the best-performing sectors,
primarily because of the considerable merger and acquisition

Many investors are too hasty in their actions and have too short an
investment horizon. Rolinco moves nice and slowly and has an
investment horizon of 3 to 5 years. The fund's policy in 2006 can be
summed up by the motto: Be skeptical, do little, have patience.
During the year any changes that were made were well thought out and
limited in size. Turnover in the portfolio, without taking into
account the sale and purchase of the fund's own shares, amounted to
about 50%.
The general strategy was to slowly reduce the risks in the portfolio.
Many stocks that had performed very well in 2005, had little further
upside potential. So in the first few months of the year we reduced
the position in energy. Oil will remain scarce, but the exaggerated
stories that were circulating at the time (USD 100 per barrel) seemed
overoptimistic. Moreover, many speculators had plunged into oil,
which made the market vulnerable. Our sector weight was gradually
reduced by more than 2%.
We used the correction in the Japanese market to buy our first
Japanese bank for the portfolio. Resona (formally Daiwa bank) was the
lucky candidate. This bank should be in an ideal position to benefit
from the gradually rising deposit rates in Japan. The return on this
investment is still in negative territory because the process of
increasing interest rates in Japan has been disappointingly slow.
Throughout the year the position in financial conglomerate Citigroup
was markedly increased. The bank had been penalized for investing
heavily in its future growth. Many investors searched for more
attractive growth stories but had to pay considerably more for them
- we did not! Citigroup moved into our top ten.
Following extensive research, in the spring we bought a position in
the trendy shoe manufacturer Crocs. Investors thought that growth in
the US had peaked and built up a large short position in the stock.
We, however, believed in the underestimated demand from Europe and
Asia which did come through, quickly pushing up the stock by 50%. It
transpired that high-growth companies can also disappoint when the US
senate unexpectedly made gambling online impossible. The English
companies Partygaming and generated a large proportion of
their turnover from poker with Americans and their stock prices
collapsed like a house of cards as a result of this news. We do
believe that the European market still does offer sufficient growth
prospects to keep holding the stocks at these low levels. Another
disappointment was Neurocrine Biosciences. Contrary to our
expectations its insomnia drug Indiplon failed to be passed by the
approvals committee and the stock price fell by more than 80%,
In the Dutch part of the portfolio publisher VNU was sold when it's
private equity buyers came forward with a higher bid. The fund also
took a position in Philips. Many still see the company as a shapeless
conglomerate, but under the leadership of Kleisterlee it has been
considerably restructured. Following the sale of the semiconductor
division, the emphasis has been shifted further on to the future
growth in the medical and lighting divisions. We also bought Dupont
because the company has geared its portfolio far more towards
structural growth, without the market taking this into account in
terms of the stock's valuation. We at Rolinco like to take advantage
of prejudices and misconceptions.
In the information-technology sector the sector weight was reduced
towards the end of the year by selling positions in Nokia, Toshiba,
SAP and Qualcomm. The rationale behind this was a combination of
unrealistic expectations and quantitative factors. In 2006 Cisco
systems was the best performer in the top ten by a considerable
margin. Having initially been too optimistic the market then became
too apprehensive about this stock. When growth picked up again the
stock regained the spotlight.
In the second half of the year the weight of the US was increased by
about 4% at the expense of Europe. The differences in valuation
between the two regions became much smaller as a result of better
performance by the European stock markets. The fund's weight in Japan
and emerging markets remained stable throughout the year.
In the spring the position in the US dollar was reduced in two steps,
from 53% to 44%. Our models lost their confidence in the dollar which
had been so surprisingly strong in 2005. In 2006 the euro became the
strongest currency again. In May a position was taken in Robeco
Global Telecom Opportunities, a hedge fund that focuses solely on
stocks in the telecom sector and is therefore ideally positioned to
find good investment opportunities.
Rolinco makes use of financial instruments, the associated risks of
which are specified in the financial statements. The fund uses
liquidity limits based on market capitalization and tradability for
the stocks in which it invests. The fund invests in 85 names
diversified over 17 countries and 10 sectors resulting in wide
diversification and limited price risk. Investments are made within
the limits stated in the prospectus. On the basis of reports the
management board has discussed risk-management and compliance issues,
subjects which were also covered in meetings with the supervisory

Top 10 stocks
Country Interest in Performance in %
% 01/01-31/12/2006
In euros In local

1. Total France 3,1 7,8% 7,8%
2. Cisco Systems United States 2.4 42.8% 59.6%
3. Citigroup United States 2.1 6.9% 19.6%
4. Microsoft United States 1.9 3.6% 15.8%
5. Nestlé Switzerland 1.8 8.9% 12.8%
6. Astellas
Pharma Japan 1.8 6.1% 19.7%
7. Roche Holding Switzerland 1.7 8.3% 12.2%
8. Wyeth United States 1.7 1.0% 12.9%
9. Fannie Mae United States 1.6 11.2% 24.3%
Novartis Switzerland 1.6 -0.1% 3.4%

Notes to the top 10 stocks
Total is a French integrated oil company with the best prospects for
production growth. Cisco Systems is global market leader in the field
of computer-network technology. Citigroup is one of the world's
largest financial conglomerates. Microsoft is the world's largest
software supplier. Nestlé produces and sells food products all over
the world. Astellas Pharma is a Japanese drug manufacturer. Roche
Holding develops and produces drugs and is the market leader in
diagnostics. Wyeth is an American pharmaceutical company. Fannie Mae
collects and packages mortgages in the US. Novartis is a Swiss
pharmaceutical company.

The growth stocks in which Rolinco invests will come into their own
as soon as the economy begins to experience difficulties and interest
rates start to rise. The Rolinco portfolio has been carefully
constructed to include a high proportion of companies that are
relatively insensitive to the economic cycle.
As long as interest rates remain low investors will continue to favor
stocks. For 2007 we do not, for the time being, envisage any major
obstacles. It is important to keep a close eye on wage inflation
because this can be the driving force behind structurally higher
interest rates. However in the coming reporting period, from a
demographic perspective, there will probably be little evidence of
this. Earnings disappointments are another possible stumbling block.
However as long as globalization continues, companies will still be
able to further reduce their cost base and benefit from the
advantages of computerization. For these reasons we believe that 2007
looks like another good year for growth stocks.

Since the beginning of 2005, the Rolinco team has been made up of
three people: Arnout van Rijn, Maarten de Kok and Michiel van Voorst.
We are convinced that we can operate decisively, creatively and
contrarily with a small team, and in doing so beat the market.
The greatest risk for growth investors is that they pay too much for
growth. We therefore use detailed valuation models before we buy a
stock. In addition, we are highly aware of what the market is
thinking. It is possible for less popular stocks to realize the
highest returns if growth turns out better than expected. Finally, we
think that by investing in a limited number of companies and by
implementing relatively few changes, we can pay sufficient attention
to each of our investments and guarantee the fund's long-term

The fund Rolinco
Rolinco, established in 1965, is a global equity fund aimed at
generating capital growth for its shareholders. The fund invests in
growth stocks which are expected to show above-average or
accelerating earnings growth in the coming years. This growth can be
realized either by high turnover growth or by rapid margin growth and
is only dependent on the macroeconomic climate to a limited degree.
Rolinco's portfolio contains a relatively small number of interests
and as such has a high risk profile.

Dutch Financial Supervision Act
The Dutch Financial Supervision Act [Wet op het financieel toezicht,
or 'Wft'] became effective on 1 January 2007. This act regulates
supervision of the Dutch financials sector. The Wft has replaced
existing supervision legislation (including the Dutch Investment
Institutions Supervision Act [Wet toezicht beleggingsinstellingen]).

Declaration regarding administrative organization and internal

The administrative organization and internal control of the
Management Company Robeco Fund Management BV are discussed below
insofar as these target the activities of the investment institution.
Administrative organization and internal control are both geared to
the size of the organization and meet the requirements of article 8
of the 2005 Dutch Investment Institutions Supervision Decree [Besluit
toezicht beleggingsinstellingen 2005, or 'Btb']. Administrative
organization and internal control can never offer absolute
guarantees, rather they are designed to provide reasonable assurance
of the effectiveness of internal-control measures in relation to the
risks of the activities of the investment institution.
The assessment of the effectiveness and good functioning of
administrative organization and internal control is the
responsibility of the Management Company.

Within the scope of the application for a license under the 2005
Dutch Investment Institutions Supervision Act [Wet toezicht
beleggingsinstellingen 2005, or 'Wtb'], the structural aspects of the
administrative organization and internal control applied were
assessed and adjusted to the Wtb. The relevant risks were identified
and corresponding internal-control measures formulated.
The effectiveness and good functioning of administrative organization
and internal control are assessed in various ways. The management
board is informed periodically by means of control reports which are
based on the process descriptions and the internal-control measures
included therein. Furthermore, there are incident and complaints
In 2006, the effective functioning of the internal-control measures
was tested by means of partial tests to verify their design,
existence and effectiveness. This involved generic test activities
that were carried out in a process-oriented way for the various
investment institutions for which Robeco Fund Management B.V. acts as
management company. The test activities may therefore differ for the
individual investment institutions. The tests were executed by
various departments at group and business-unit level, in consultation
with internal and external auditors.
The tests did not lead to relevant findings for this annual report.

Report on administrative organization and internal control
In 2006, we assessed the various aspects of administrative
organization and internal control. In our assessment we noted nothing
that would lead us to conclude that the description of the structural
aspects of administrative organization and internal control within
the meaning of article 8 of the 2005 Dutch Investment Institutions
Supervision Decree failed to meet the requirements as specified in
said decree and related regulations. Neither did we conclude that the
internal-control measures were ineffective or failed to function
according to the description provided.

Rotterdam, 22 March 2007

The management board
Robeco Fund Management B.V.

Financial statements

Balance sheet
before profit appropriation, EUR x
31/12/2006 31/12/2005
Financial investments
Stocks 1 1,536,917 1,512,999
Investments in Robeco Group mutual 2 125,233 97,449
Derivatives 3, 13 7,977 911

Total investments 1,670,127 1,611,359

Accounts receivable
Dividends and interest receivable 4 391 445
Receivable on securities transactions 10,128 -
Receivables on affiliated companies 5 954 440
Sundry debtors 6 6,759 4,848

18,232 5,733
Other assets
Cash 7 80 206

Accounts payable
Obligations arising from derivative 3, 13 352 1,001
Payable on securities transactions - 2
Payable to credit institutions 25,722 4,836
Payable to affiliated companies 8 2,835 1,438
Sundry creditors 9 2,621 913
6¿% convertible bond loan 10 9,051 9,525

40,581 17,715

Accounts receivable and other assets -22,269 -11,776
less accounts payable

Shareholders' equity 11 1,647,858 1,599,583

Composition of shareholders' equity
Issued capital 12 65,863 66,949
Other reserves 11 1,471,879 1,116,055
Net result 11 106,157 413,094

Assets attributable to holders of ordinary 1,643,899 1,596,098

6 ¿% cumulative preference shares 3,959 3,485

1,647,858 1,599,583

Profit and loss account
EUR x thousand
2006 2005

Investment income 26,617 20,362
Changes in value 1,2,3 99,415 409,510

126,032 429,872
Management costs 16 16,951 14,171
Service fee 16 1,898 1,617
Other costs 17 424 370
Interest costs 10 602 620

19,875 16,778

Net result 106,157 413,094

The numbers of the items in the financial statements refer to the
numbers in the Notes.

Cash-flow summary
indirect method, EUR x thousand
2006 2005
Cash flow from investment activities
Net result 106,157 413,094
Realized and unrealized results -99,415 -409,510
Purchase of investments -417,831 -393,271
Sale of investments 454,903 522,592
Increase(-)/decrease(+) accounts receivable -12,526 -2,930
Increase(+)/decrease(-) accounts payable 1,644 -55

32,932 129,920

Cash flow from financing activities
Received for shares subscribed 394,668 121,659
Paid for repurchase of own shares -427,475 -233,824
Profit distribution -25,549 -19,982
Increase(-)/decrease(+) accounts receivable 27 -27
Increase(+)/decrease(-) accounts payable 1,459 -602

-56,870 -132,776

Net cash flow -23,938 -2,856
Currency and cash revaluation 2,926 -2,696

Increase(+)/decrease(-) cash -21,012 -5,552

Cash at opening date 206 1,823
Accounts payable to credit institutions at -4,836 -901
opening date

Total cash at opening date -4,630 922

Cash at closing date 80 206
Accounts payable to credit institutions at -25,722 -4,836
closing date

Total cash at closing date -25,642 -4,630


Rolinco N.V. (hereafter also referred to as 'the fund') is a Dutch
investment company with a variable capital within the meaning of
article 28 of the 1969 Dutch Corporate Income Tax Act [Wet op de
Vennootschapsbelasting 1969]. This means that no corporate-income tax
is due, providing that the fund makes its profit available for
distribution to shareholders in the form of dividend within eight
months of the close of the financial year and satisfies any other
relevant regulations. As a result of the appointment as Manager of
Robeco Fund Management B.V., which holds a license from the AFM [the
Netherlands Authority for the Financial Markets] under the Dutch
Investment Institutions Supervision Act [Wet toezicht
beleggingsinstellingen, or 'wtb'], the license in accordance with
article 5 of the 1990 Dutch Investment Institutions Supervision Act
has been legally cancelled.

The fund appointed Robeco Fund Management B.V. as Manager of the fund
as of 1 March 2006. The tasks for which the Manager will be
responsible include the execution of the investment policy,
management of the fund assets as well as handling the fund's
financial administration, marketing and distribution. Robeco Fund
Management B.V. is part of the Robeco Group and was granted a license
by the Netherlands Authority for the Financial Markets to act as
manager on 29 December 2005. The agreement between the fund's
management board and the Manager includes the stipulation that the
Manager will comply with the provisions of the prospectus, the
Articles of Association and the directives of the fund's management
board, insofar as these are in line with the shareholders' interests,
and that the Manager will observe the applicable legislation and
regulations. The Manager will also regularly report to the management
board on its duties. At the General Meeting of Shareholders held on
27 April 2006 Robeco Fund Management B.V. was appointed as director
of the company.

The annual financial statements have been drawn up in conformity with
the models provided by Dutch legislature. In certain areas,
descriptions have been used which better express the nature of the
items and relate better to the characteristics of an investment

Open-end fund
Rolinco N.V. is an open-end investment company, meaning that, barring
exceptional circumstances, Rolinco N.V. issues and repurchases its
shares on a daily basis at prices approximating net asset value. A
fixed spread between the bid and offer price applies to cover costs
related to issuance and repurchase of own shares. The issue price
will not be more than 0.5% higher than the net asset value and the
repurchase price will not be more than 0.5% lower than the net asset
value. The abovementioned margin between the net asset value and the
issue and repurchase prices, and the associated costs, are for the
account and risk of Robeco Investment Consulting B.V., as a result of
which Rolinco N.V. issues and repurchases its shares at net asset
value. Robeco Investment Consulting B.V. will distribute any positive
spread results to the funds, in proportion to each fund's positive
contribution to the spread result. A buffer is maintained to cover
any future losses. As of 26 February 2007, the new trading system for
open-end investment institutions on Euronext Amsterdam will be
implemented. For the company this means that the bid and offer system
described above will no longer be valid. According to the Euronext
guidelines, orders can be placed until 16:00 hours (cut-off time).
Orders that are placed via Euronext Amsterdam will be processed once
a day only and will be executed on the next stock-exchange day at the
net asset value, augmented or reduced by a limited surcharge or
discount. The only purpose of this surcharge or discount is to cover
the costs made by the company related to the entry and exit of

Non-certificated participation in the Netherlands
Shares may be held in non-certificated form in Robeco Direct N.V.
accounts or via the affiliated branches of Rabobank in the Rabo
Securities Account. Participants pay costs on the sum deposited for
each purchase, and in the event of a sale a percentage of the sum
withdrawn. These participation costs are currently a maximum of 0.4%
via Robeco Direct and a maximum of 0.5% via Rabobank, depending on
the channel selected. These sums will accrue to Robeco Direct and
Rabobank respectively.

Outsourcing core tasks
Until 1 March 2006, the administration was outsourced to Robeco
Nederland B.V., a 100% subsidiary of Robeco Groep N.V. These costs
were covered by the service fee. Agreements have been made with the
aforementioned party relating to the provision of information and
performance standards. As a result of the appointment of the Manager,
outsourcing of the administration has been terminated as of 1 March

Accounting principles

Unless stated otherwise, items shown in the annual financial
statements are included at nominal value and expressed in thousands
of euros.

Financial investments
Unless stated otherwise, financial investments are included at fair
value. The fair value of stocks is determined on the basis of market
prices or other market quotations at closing date. For derivatives
such as forward exchange transactions, this value is based on
currency rates and reference interest rates at closing date.
Transaction costs incurred in the purchase and sale of investments
are included in the purchase or sale price as appropriate.
Securities lending
Investments for which the legal ownership has been transferred by the
fund for a given period of time as a result of securities-lending
transactions, will continue to be included in the fund's balance
sheet during this period, since their economic advantages and
disadvantages, in the form of investment income and changes in value,
will be added to or deducted from the fund's result. The way in which
collateral ensuing from securities-lending transactions is reported
depends on the nature of this collateral. If the collateral is
received in the form of investments these will not be included in the
Balance sheet as the economic advantages and disadvantages relating
to the collateral will be for the account and risk of the
counterparty. If the collateral is received in cash it will be
included in the Balance sheet as, in this case, the economic
advantages and disadvantages will be for the account and risk of the

Affiliated parties
Both the fund and its Manager are affiliated to entities belonging
to Robeco Groep N.V. The affiliation with Robeco Groep N.V. is the
result of the possibility of having decisive control or a substantial
influence on the business policy of the fund and the Manager
respectively. Robeco Groep N.V. belongs to the Rabobank Group. The
management structure of Robeco Groep N.V., in which significant
authority is allocated to its independent supervisory board, is such
that Rabobank does not have meaningful say in or influence on the
fund's business policy. Robeco Groep N.V. pursues an independent
investment policy on behalf of its affiliated investment companies,
taking into account the interests of the investors involved. Besides
services of other market parties, Rolinco N.V. also uses the services
of one or more of these affiliated entities including transactions
relating to securities, treasury, derivatives, custody, securities
lending sale and purchase of its own shares, fund-administration
services, as well as management activities. Transactions are executed
at market rates.

Structure of the Robeco Group
The schematic diagram below shows the position of the entities
referred to in the annual report and their mutual relationship within
the Robeco Group. Only the relationships that are relevant to the
investment institution have been included in the flow chart.

Determination of the result

Investment results are determined by investment income, rises or
declines in stock prices, rises or declines in foreign exchange rates
and results of transactions in currencies, including forward
transactions, and derivative instruments. The results are accounted
for in the Profit and loss account.

Investment income
Net cash dividends declared during the year under review, the nominal
value of stock dividends declared, interest received and proceeds
from loan transactions. Accrued interest at balance-sheet date is
taken into account.

Movements in value
Realized and unrealized capital gains and losses on securities and

Foreign currencies
Transactions in currencies other than the euro are converted into
euros at the exchange rates valid at the time. Assets and liabilities
expressed in other currencies are converted into euros at the
exchange rate prevailing at balance-sheet date. Any exchange
differences arising are accounted for in the Profit and loss account.

Transactions in financial instruments may lead to the fund being
subject to the risks described below or to the fund transferring
these risks to another party.
Price risk
Currency risk is the risk that the value of a financial instrument
will fluctuate as a result of changes in exchange rates.
Interest-rate risk is the risk that the value of a financial
instrument will fluctuate as a result of changes in market rates.
Market risk is the risk that the value of a financial instrument will
fluctuate as a result of changes in market prices, caused by factors
that exclusively apply to the individual instrument or its issuer or
caused by factors that affect all instruments traded in the market.
The fund minimizes the risks by investing mainly in large and
well-known companies and by making a balanced selection with regard
to distribution across regions, sectors, individual stocks and
Credit risk
Credit risk is the risk that the counterparty of a financial
instrument will no longer meet its obligations, as a result of which
the fund will suffer a financial loss. The fund minimizes this risk
by trading exclusively with reputable counterparties. Wherever it is
customary in the market, the fund will demand and obtain collateral.
As of balance-sheet date collateral ensuing from securities-lending
transactions was received. More information can be found in the Notes
to the balance sheet.
Liquidity risk
Liquidity risk is the risk that the fund is not able to obtain the
financial means required to meet the obligations arising from
financial instruments. The fund minimizes this risk by mainly
investing in financial instruments that are tradable on a daily

Insight into actual risks
The Report of the management board, the Balance sheet, the Notes to
the balance sheet and the Spread of net assets, which includes the
geographic distribution of the investments, the net currency position
and distribution over sectors, give an insight into the actual risks
at balance-sheet date.

Risk management
Managing risk is a part of the investment process as a whole and with
the help of advanced systems, the risks outlined above are limited,
measured and monitored on the basis of fixed risk measures.

Policy regarding the use of derivative instruments
Investing implies that positions are taken. As it is possible to use
various instruments, including derivative instruments, to construct
an identical position, the selection of derivatives is subordinate to
the positioning of a portfolio. In our published information,
attention is given primarily to the overall position, and secondarily
to the nature and volume of the financial instruments employed.

The market value of derivatives is reported in the Balance sheet. The
presentation of the market value is based on the liabilities and
receivables per counterparty. The receivables are reported under
Financial investments and the liabilities are reported under Accounts
payable. The value of the derivatives' underlying instruments is not
included in the Balance sheet. If applicable, they are explained
under the heading Commitments not shown in the balance sheet.

Notes to the balance sheet

1 Stocks

Movements in the stock portfolio
EUR x thousand
2006 2005

Book value (market value) at opening date 1,512,999 1,211,971
Purchases 378,954 365,293
Sales -434,833 -407,477
Realized and unrealized results:
stocks 174,328 265,272
currencies -94,531 77,940

Book value (market value) at closing date 1,536,917 1,512,999

A breakdown of the portfolio and overviews of purchases and sales
exceeding an amount of EUR 4.5 million and the spread of net assets
can be found at the end of this report. Shares in an amount of
EUR 107.5 million (EUR 233.6 million at the end of last year) were
lent at balance-sheet date. To cover the risk of non-restitution,
adequate collateral with a value of EUR 131.9 million (EUR 254.6
million at the end of last year) was demanded and obtained EUR 1.9
million of this amount concerns cash collateral. This amount is
reported and explained under cash. Other collateral is not included
in the Balance sheet.

Share swaps
Synthetic share swaps are customized products that offer investors
the opportunity to obtain the economic return of equity investments
without actually investing in the underlying value. There are various
ways to offer over-the-counter (OTC) exposure to equities, for
instance in the form of warrants, notes, option combinations and
share swaps. A share swap is a customized contract concluded between
the investor and the swap seller, which gives economic exposure to an
underlying share, a related security, basket of stocks or index. In a
swap contract two parties agree to swap the capital gains of, or the
total return on, one certain share. In a typical long-side swap
transaction, for instance, the investor receives all the positive
performance of the reference share and pays all the negative
performance plus interest based on LIBOR. At balance-sheet date,
Rolinco held a share swap ensuing from a securities-lending
transaction, with a market value of EUR 1.9 million. This position is
marked in the List of securities with an asterisk.

2 Investments in Robeco Group mutual funds
Part of the portfolio is invested in funds offered by the Robeco

Movements in investments in Robeco Group mutual funds
EUR x thousand
2006 2005

Book value (market value) at opening date 97,449 116,343
Purchases 32,611 27,978
Sales -20,070 -84,934
Realized and unrealized results:
stocks 16,826 38,034
currencies -1,583 28

Book value (market value) at closing date 125,233 97,449

A list of these investments is given below. Rolinco N.V. can enter
and exit daily at net asset value in the abovementioned Robeco Group
mutual funds Robeco Institutioneel Emerging Markets Fonds and Robeco
Institutioneel European Opportunities Fund. These funds do not have
an entry charge and have an exit charge of 0.50%, as included in the
Terms and Conditions of Management and Custody of the said funds. For
Robeco Global Long Short Quant Fund and Robeco Global Telecom
Opportunities 1 limited class (EUR), entry and exit is possible once
a month at net asset value; for Robeco Capital Growth Funds - Robeco
European Opportunities I EUR entry and exit is possible daily. These
funds do not charge any costs.

|Investments in Robeco Group mutual funds |
| | Market value| | Interest in| | Net asset value| | Return| | Total expense|
| | | | fund| | 1)| | | | ratio 2|
| | EUR x thousand| | In %| | EUR x 1| | In %| | |
| | 31/12| 31/12| | 31/12| 31/12| | 31/12| 31/12| | | | | | |
| | 2006| 2005| | 2006| 2005| | 2006| 2005| | 2006| 2005| | 2006| 2005|
| | | | | | | | | | | | | | | |
|Robeco | | | | | | | | | | | | | | |
|Institutioneel | | | | | | | | | | | | | | |
|Emerging Markets | | | | | | | | | | | | | | |
|Fonds 3 | 78,504| 69,071| | 3.5| 3.3| | 88.18| 76.57| | 17.4| 62.4| | 0.87| 0.86|
|Robeco Captial | | | | | | | | | | | | | | |
|Growth Funds - | | | | | | | | | | | | | | |
|Robeco European | | | | | | | | | | | | | | |
|Opportunities I EUR | | | | | | | | | | | | | | |
|4, 6 | 17,001| -| | 72.2| -| | 103.31| -| | 3.3| -| | 0.34| -|
|Robeco Global | | | | | | | | | | | | | | |
|Telecom | | | | | | | | | | | | | | |
|Opportunities 1 | | | | | | | | | | | | | | |
|limited Class (EUR) | | | | | | | | | | | | | | |
|5, 7 | 15,339| -| | 85.7| -| | 102.26| -| | 2.3| -| | 0.07| -|
|Robeco Global Long | | | | | | | | | | | | | | |
|Short Quant Fund 5, | | | | | | | 107.| | | | | | | |
|8 | 14,389| 14,967| | 75.0| 75.0| | 2010| 99.7410| | 7.510| -0.310| | 0.03| 0.00|
|Robeco | | | | | | | | | | | | | | |
|Institutioneel | | | | | | | | | | | | | | |
|European | | | | | | | | | | | | | | |
|Opportunities Fund | | | | | | | | | | | | | | |
|3, 9 | -| 13,411| | -| 72.2| | -| 103.40| | 27.4| 3.4| | 1.67| 0.14|
| | | | | | | | | | | | | | | |
| | 125,233| 97,449| | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|1 Per share/participating unit. |
|2 The management fee, the service fee and the performance fee will be restituted to Rolinco N.V. by the manager of|
|the funds mentioned. |
|3 This fund is managed by Robeco Institutional Asset Management B.V. and is not regulated. The annual report for the |
|period ending on 31 December 2006 will be available at the offices of Rolinco N.V. after publication. |
|4 This fund has a UCITS III status and is regulated by the Luxembourg authorities. The annual report of the fund for|
|the period ending on 30 June 2006 and the semiannual report for the period ending on 31 December 2006 will be|
|available at the offices of Rolinco N.V. after publication. |
|5 This fund is not regulated. The annual report of the fund for the period ending on 31 December 2006 will be|
|available at the offices of Rolinco N.V. after publication. |
|6 Relates to the period 20 November 2006 through 31 December 2006. |
|7 Relates to the period 27 April 2006 through 31 December 2006. |
|8 Relates to the period 29 November 2005 through 31 December 2005. |
|9 Relates to the period 1 December 2005 through 24 November 2006. The fund was terminated on 24 November 2006. |
|10 In USD. |
| |

3 Derivatives

Movements in derivatives
EUR x thousand Forward exchange transactions
2006 2005

Book value (market value) at opening -841
date -90
Expirations 6,266 -30,181
Realized and unrealized results 1,449 30,932

Book value (market value) at closing
date 7,625 -90

The presentation of derivatives in the Balance sheet is based on the
liabilities and receivables per counterparty.

Presentation of derivatives in the Balance sheet

EUR x thousand Under financial Under accounts
investments payable
2006 2005 2006 2005
Type of derivative
Forward exchange 7,977 911 352 1,001

4 Interest and dividends receivable
Concerns dividends declared but not yet received.

5 Receivables on affiliated companies
These are borrowing fees and receivable restitution of management,
service and performance fees.

6 Sundry debtors
This includes recoverable dividend tax, tax withheld at source
outside the Netherlands on behalf of the Dutch Tax Office, in
accordance with article 6 of the Dutch Investment Institutions Decree
[Besluit toezicht beleggingsinstellingen, or 'Btb'] and suspense

7 Cash
Includes balances in current accounts at banks and call money. This
item also includes the cash collateral received (EUR 1.9 million)
from securities-lending transactions.

8 Payable to affiliated companies
These are debts arising from issuance and repurchase of own shares
and management and service fees to be paid.

9 Sundry creditors
Includes unpaid expenses.

10 6¿ % convertible bond loan
Since bonds which have not been converted on 1 July 2007 will be
redeemed on that same date, the loan is included under Accounts
payable. Previously it was included under Long-term debt. The
comparative figures have been adjusted accordingly.
The bonds may be converted into 6¿% cumulative preference shares at a
ratio of 1:1 at any time. During the 2006 financial year NLG
1,044,000 were converted (previous year NLG 57.700). The loan is
valued at nominal value.

11 Shareholders' equity

Composition of and movements in shareholders' equity
EUR x thousand 2006 2005

Issued capital
Situation at opening date 66,949 72,590
Received on shares issued 16,610 5,927
Paid for shares repurchased -17,696 -11,568

Situation at closing date 65,863 66,949

6¿% cumulative preference shares 3,959 3,485

Other reserves
Situation at opening date 1,116,055 1,188,195
Received on shares issued 378,058 115,732
Paid for shares repurchased -409,779 -222,256
Net result from previous financial year 413,094 54,366
Profit distribution -25,549 -19,982

Situation at closing date 1,471,879 1,116,055

Net result 106,157 413,094

Shareholders' equity 1,647,858 1,599,583

The company's authorized share capital amounts to EUR 400 million,
divided into 380,000,000 ordinary shares with a nominal value of EUR
1 each and 500,000 cumulative preference shares with a nominal value
of EUR 40 each. EUR 4 million of the cumulative preference shares has
been placed.

12 Assets, shares outstanding and net asset value per share

Assets, shares outstanding and net asset value per share
31/12/2006 31/12/2005 31/12/2004

Assets EUR x thousand 1,647,858 1,599,583 1,318,610

Shares issued in financial 16,610,485 5,926,741 7,291,123
Shares repurchased in -17,696,102 -11,568,345 -12,446,962
financial year
Number of shares outstanding 65,862,564 66,948,181 72,589,785

Net asset value per share in 24.96 23.84 18.12

13 Commitments not shown in the balance sheet
The forward exchange transactions current at closing date represent
purchases of AUD 36 million, CAD 32 million, EUR 76 million, GBP 25
million and USD 12 million, against sales of CHF 120 million and JPY
12,884 million. Futures contracts have been included in the Spread of
net assets at the end of this report. Unrealized results of these
transactions at closing date are included in the Profit and loss

Notes to the profit and loss account

14 Performance

|Performance | | | | | | | | | | |
|per share* | | | | | | | | | | |
|EUR x 1 | 2006| | 2005| | 2004| | 2003| | 2002| |
| | | | | | | | | | | |
|Investment | 0.38| | 0.30| | 0.29| | 0.26| | 0.27| |
|income | | | | | | | | | | |
|Change in | 1.41| | 5.95| | 0.60| | 1.08| | -8.00| |
|value | | | | | | | | | | |
|Management | | | -0.23| | -0.17| | -0.15| | -0.17| |
|costs, | | | | | | | | | | |
|service fee | -0.27| | | | | | | | | |
|and other | | | | | | | | | | |
|costs | | | | | | | | | | |
|Interest | | | -0.01| | -0.01| | -0.01| | -0.01| |
|payable | -0.01| | | | | | | | | |
| | | | | | | | | | | |
|Net result | 1.51| | 6.01| | 0.71| | 1.18| | -7.91| |
|*) Based on the average number of shares outstanding during the reporting|
|year. The average number of shares outstanding is calculated on a daily |
|basis for the years 2006, 2005 and 2004, and on a monthly basis for the |
|preceding years. |


15 Total expense ratio

Total expense ratio
2006 Maximum 2005
In % prospectus

Cost item
Management costs 1.00 1.00 1.00
Service fee 0.11 0.12 0.1 1
Other costs 0.02 0.02 0.03
Costs relating to investments in Robeco - 0.02
Group mutual funds

Total 1.13 1.14 1.16

The total expense ratio expresses the costs charged to the fund
during the reporting period as a percentage of the average assets
entrusted during the reporting period. In addition to the costs
charged directly to the fund assets, the total expense ratio includes
the costs indirectly charged to the fund assets via the underlying
funds. The total expense ratio as shown does not include transaction
costs. The total expense ratio was 1.13% during the reporting period.
The management costs relate to all of the fund's current costs, which
include the fees paid for registering shareholders and all costs
resulting from the management of the fund, with the exception of
costs relating to investments and taxes. The service fee covers the
administration, the costs of the external auditor, other external
advisers, regulators, costs relating to reports required by law, such
as the annual and semiannual reports, and the costs relating to the
meetings of shareholders. Other costs relate to bank charges and the
custody fee charged by third parties for the custody of the fund's
securities portfolio. The custody fee is EUR 197 thousand (previous
year EUR 196 thousand). The total expense ratio takes into account
the costs of intra-group investments, as presented in the etable on
page 17. As the management fee and the service and performance fees
are restituted to Rolinco, only the other costs of intra-group
investments are included in the total expense ratio. These costs are
less than 0.01%, which is why they are not presented in the table.
The interest on the convertible bond loan is no longer reported
because of a change in regulations which means that interest on
bonds no longer has to be included in the total expense ratio. The
comparative figures have been adjusted accordingly.

16 Management costs and service fee
Management costs relate exclusively to the management fee of 1.00%
per year. The service fee amounts to 0.12% per year. Formal and
operational expenses are paid from the service fee. These are
explained in the Notes to the total expense ratio. For assets
exceeding EUR 1 billion the service fee is 0.10% per year; for assets
exceeding EUR 5 billion the service fee is 0.08% per year. Up to 1
March 2006 the management fee and service fee were charged by Robeco
Nederland B.V., from this date onwards these fees have been charged
by Robeco Fund Management B.V. The fees are calculated on a daily
basis, based on the average assets entrusted. Wherever in this report
mention is made of the average assets entrusted this is also
calculated on a daily basis, unless stated otherwise.

17 Other costs
This includes bank charges and custody costs.

18 Performance fee
Rolinco N.V. is not subject to a performance fee.

19 Transaction costs
Brokerage costs and exchange fees relating to investment transactions
are discounted in the cost price or the sales value of the investment
transactions. These costs and fees are charged to the result ensuing
from changes in value. The quantifiable transaction costs are shown
below. The transaction volume of the quantifiable transaction costs
is 88.5% (previous year 96.6%) of the total transaction volume.

Transaction costs
EUR x thousand
2006 2005

Transaction type
Stocks 991 1,762

20 Commission-sharing arrangements, soft-dollar arrangements and
hard commissions
Various independent research institutions/third parties provide
services to the company to support its decision-making process. Part
of the commission paid to brokers is used to pay for these services
through commission-sharing arrangements and in such cases the
commission is exclusively for research services. In 2006
commission-sharing arrangements represented an amount of EUR 270
thousand (last year EUR 72 thousand).
Furthermore, there are so-called soft-dollar arrangements to pay for
financial-service companies' services and products. These services
and products are covered by part of the commissions paid to brokers
in connection with the execution of securities transactions. Only the
aforementioned commission-sharing arrangements were used during the
reporting year. There were no soft-dollar arrangements (previous year
EUR 64 million) or hard commissions during the reporting year.

21 Turnover ratio
This shows the turnover of the investments against the average assets
entrusted and is a measure of the incurred transaction costs
resulting from the portfolio policy pursued and the ensuing
investment transactions. In the calculation method used, the amount
of the turnover is determined by the sum of the purchases and sales
of investments less the sum of issuance and repurchase of own shares.
If the outcome is negative, the turnover ratio is 0. The turnover
ratio is determined by expressing the amount of turnover as a
percentage of the average assets entrusted. The turnover ratio over
2006 is 3% against 40% in the previous year.

22 Transactions with affiliated parties
Part of the transaction volume over the reporting period relates to
transactions with affiliated parties. The table below shows the
various types of transactions where this was the case.

Transactions with affiliated parties
Part of the total volume in %
2006 2005

Transaction type
Robeco Group mutual funds 100.0 100.0
Stocks 4.1 11.0
Forward exchange transactions 2.6 5.1
Deposits - 100.0

23 Securities lending
Robeco Securities Lending B.V. is the intermediary for all Rolinco
N.V.'s securities-lending transactions. As compensation for its
services Robeco Securities Lending B.V. receives a fee of 40% of the
gross income resulting from these securities-lending transactions. An
external agency periodically assesses whether the agreements between
the fund and Robeco Securities Lending B.V. are still in line with
the market. In 2006 the proceeds for the fund amounted to EUR 507
thousand (last year EUR 341 thousand). For Robeco Securities Lending
B.V. this was EUR 352 thousand (last year EUR 227 thousand).

24 Voting policy for stocks in the investment portfolio
In 2006 Rolinco N.V. voted at the majority of the general meetings of
shareholders of the companies in which it invests. If the shares of
an investment position have been lent out, the voting rights attached
to those shares may not be exercised during general meetings of
shareholders. If an important event were to occur, the shares that
have been lent out may be recalled in order for the voting rights
attached to these shares to be able to be exercised. The voting
policy and more information about votes cast can be found on Robeco
Group's Internet site,

25 Personnel costs
Rolinco N.V. does not employ personnel. Robeco Nederland B.V. is the
employer of Rolinco N.V.'s management board and personnel in the
Netherlands. Their remuneration is paid out of the management fees
Robeco Nederland B.V.'s remuneration policy for fund managers
consists of both fixed and variable income. The secondary conditions
of employment are in line with what is common practice in the
financial-services industry.
The fixed income offers a good and competitive remuneration basis
within the Dutch asset-management market. A fund manager is assigned
to a salary scale with a minimum and maximum income based on the
level of responsibility of his function (Hay method for function
valuation). Growth within this scale is linked to results, including
performance results, and competencies.
The variable income offers the fund manager remuneration for his
individual, long-term outperformance. Payment is related to the
outperformance relative to a preset target. The track record over
both a 1-year and 3-year period is taken into account when
determining the variable remuneration. The variable remuneration to
which the fund manager is entitled for any single year, is paid out
over a three-year period (60% in the first year, 30% in the second
and 10% in the third year).
Fund managers, are given the opportunity to participate directly in
Robeco's future through virtual shares (E-notes). The individual
allocation of E-notes is linked to individual performance and the
contribution to the realization of the strategic targets of Robeco
as a whole and the individual's own business unit. The E notes
represent a value which is directly linked to Robeco Groep N.V.'s

Rotterdam, 22 March 2007

Supervisory board
P.C. van den Hoek, chairman
G. Izeboud
Ph. Lambert
D.P.M. Verbeek

Management board
Robeco Fund Management B.V.

Other data
Stock-exchange listings
The ordinary shares of Rolinco N.V. are listed on Eurolist by
Euronext Amsterdam N.V. in Amsterdam, the Netherlands. In addition,
Rolinco N.V. has a stock-exchange quotation for its ordinary shares
in Paris, Brussels, London, Luxembourg, Berlin, Dusseldorf,
Frankfurt, Hamburg, Munich, Vienna and Zurich. The cumulative
preference shares are listed on the exchanges of Amsterdam and

Articles of Association rules regarding profit appropriation
According to sections 39 and 40 of the Articles of Association, a
distribution from the profit to the cumulative preferred shareholders
will be effected first. Thereafter, the profit less allocations to
the reserves deemed desirable by the management board in agreement
with the supervisory board will be at the disposal of the General
Meeting of Shareholders.

Proposed profit appropriation
We propose to declare a dividend of EUR 0.40 per share for the 2006
financial year (previous year EUR 0.36). If this proposal is
accepted, the dividend will be payable on Friday 11 May 2007. With
effect from Monday 30 April 2007, Rolinco shares will be listed
ex-dividend coupon no. 47 on the stock exchange.
Shareholders will be offered the opportunity to reinvest the dividend
(less dividend tax) in Rolinco shares at the expense of the company.
The price used to calculate this is the opening price of the shares
on the stock market of Euronext Amsterdam N.V. on Friday 11 May 2007.
Any collection commissions charged by banks in line with the relevant
regulations in their respective countries will be borne by the
shareholder. In some countries, reinvestment will not be possible for
technical reasons.

Supervisory directors' fee
An amount of EUR 18.378 (previous year EUR 18.378) has been allocated
from the profit appropriation for this purpose. The chairman of the
supervisory board receives a remuneration of EUR 6,126 and an
ordinary member of the supervisory board receives a remuneration of
EUR 4,084.

Directors' interests
Statement pursuant to article 45, paragraph 3, of the 2005 Dutch
Investment Institutions Supervision Decree [Besluit toezicht
beleggingsinstellingen, or ' Btb'].

Interests in investments of Rolinco N.V.
Description Supervisory Managing Total
directors directors Quantity
Quantity Quantity
At 1 January 2006
ING Groep stocks 20,294 - 20,294
Intel stocks 5,000 - 5,000
Nestlé stocks 315 - 315
Pfizer stocks 1,000 - 1,000
Novartis stocks 1,962 - 1,962
Royal Dutch Shell stocks 14,785 400 15.185
Telenor stocks 15,000 - 15,00
Total stocks 610 - 610
VNU stocks 6,294 - 6,294

At 31 December
ING Groep stocks 13,200 - 13,200
Intel stocks 5,000 - 5,000
Nestlé stocks 315 - 315
Novartis stocks 3,062 - 3,062
Philips stocks
Electronics 11,385 - 11,385
Royal Dutch Shell stocks
A 18,692 400 19,092
Telenor stocks 15,000 - 15,000
Total stocks 3,700 - 3700

The table below shows the personal interests in the investments of
the investment institution held by the directors of the investment
institution and/or the management company on 1 January 2006 and 31
December 2006.
Supervisory directors held a joint interest of 5,645 and 5,708
Rolinco N.V. shares on 1 January 2006 and 31 December 2006,
respectively. The managing directors of the management company held a
joint interest of 2,992 and 4,041 Rolinco N.V. shares on 1 January
2006 and 31 December 2006, respectively. On 1 January 2006 and 31
December 2006, no options had been granted to supervisory directors;
managing directors of the management company held options to acquire
21,858 and 17,845 Rolinco N.V. shares on the respective dates.
Under the option scheme, Robeco Groep N.V. grants the right at its
own expense to purchase Rolinco N.V. shares for five years, the value
of the shares being at least the opening price on the first trading
day following the day the options are granted.
Aon Risk Services International, of which Dirk P.M. Verbeek is a
director, acted as an intermediary of various insurance policies
concluded at Rabobank Group level, including a Bankers, General
Liability and D&O liability policy. Furthermore Aon Risk Services
International insures several of Robeco's art objects. Apart from the
above, there were no business relations between supervisory
directors and the company other than that of their membership of the
supervisory board during the period under review.

Interests of the fund manager
The fund manager should act in accordance with Dutch legislation and,
insofar as is relevant, legislation in other countries. As an
employee of Robeco Nederland B.V. he is bound by Robeco's internal
regulations and procedures, including the Rules and regulations
regarding private investment transactions, which are based on the
Dutch Securities Transactions Supervision Act. These Rules should
guarantee that insider trading and mixing of business and private
interests, or semblance thereof, are avoided at all times.
On 1 January 2006 and 31 December 2006 the fund manager held an
interest of 3,076 and 3,947 Rolinco N.V. shares respectively.
Futhermore, at these same dates he had the following interests in
Rolinco N.V. investments: 500 shares of Royal Dutch Shell A.
Statement for the London Stock Exchange
The members of the supervisory board and the management board of
Rolinco N.V. hereby declare that their beneficial interests and those
of their children below the age of 18 years do not in the aggregate
exceed 5% of the company, in respect of either share capital or
voting control.

Rotterdam, 22 March 2007

Statement concerning the 6¿% bond loan originally amounting to NLG
22,670,000 issued by Rolinco N.V., convertible into 6¿% cumulative
preference shares
In pursuance of article 17 of the trust executed before H. Lambert,
civil-law notary in Rotterdam, on 6 June 1967, we declare: that from
the date of the original contract for the bond loan up to 31 December
2006, 5 bonds of NLG 50,000 nominal value, 2,184 bonds of NLG 1,000
nominal value and 2,907 bonds of NLG 100 nominal value were
converted; that all these bonds were cancelled by us; that at 31
December 2006, the total bonds outstanding amounted to NLG
19,945,300; that we have found no circumstances requiring comments or

Amsterdam, 12 January 2007
B.V. Algemeen Administratie- en Trustkantoor

To the General Meeting of Shareholders and members of the supervisory

Auditor's report

Report on the financial statements
We have audited the financial statements 2006 of Rolinco N.V.,
Rotterdam, which comprise the balance sheet as at 31 December 2006,
the profit and loss account for the year then ended and the notes.
Management's responsibility
The company's management is responsible for the preparation and fair
presentation of the financial statements and for the preparation of
the report of the management board, both in accordance with Part 9 of
Book 2 of the Netherlands Civil Code and the Investment Institutions
Supervision Act. This responsibility includes: designing,
implementing and maintaining internal control relevant to the
preparation and fair presentation of the financial statements that
are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditor's responsibility
Our responsibility is to express an opinion on the financial
statements based on our audit. We conducted our audit in accordance
with Dutch law. This law requires that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material

An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control. An
audit also includes an evaluation of how appropriate the accounting
policies and how reasonable the management's accounting estimates
are, as well as an evaluation of the overall presentation of the
financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of
the financial position of Rolinco N.V. as at 31 December, 2006, and
of its result for the year then ended in accordance with Part 9 of
Book 2 of the Netherlands Civil Code and the Investment Institutions
Supervision Act.
Report on other legal and regulatory requirements
Pursuant to the legal requirement under 2:393 sub 5 part e of the
Netherlands Civil Code, we report, to the extent of our competence,
that the report of the management board is consistent with the
financial statements as required by 2:391 sub 4 of the Netherlands
Civil Code.

The Hague, 22 March 2007

for Ernst & Young Accountants
signed by Joost Hendriks
Spread of net assets

Across countries and currencies
Across countries Across currencies
31/12/2006 31/12/2006 31/12/2005 31/12/2006 31/12/2005
EUR x thousand In % In % In % In %

North America
United States 673,858 40.89 37.23 43.18 52.97
Canada 43,164 2.62 3.77 3.90 5.24

Switzerland 110,821 6.73 7.43 2.39 2.65
United Kingdom 110,427 6.70 6.84 8.96 9.10
France 95,905 5.82 5.44 - -
Netherlands 58,282 3.54 3.33 - -
Germany 24,577 1.49 3.30 - -
Norway 20,707 1.26 1.04 1.26 1.04
Belgium 19,440 1.18 0.73 - -
Spain 17,938 1.09 0.87 - -
Robeco Capital 17,001 1.03 0.84 - -
Growth Funds -
Greece 7,680 0.47 0.35 - -
Austria - - 1.11 - -
Finland - - 0.53 - -
Europe - - - 22.74 22.74

Robeco 78,504 4.76 4.32 - -
Markets Fonds

Asia (21.50%)
Japan 294,773 17.89 18.38 13.36 11.50
Singapore 23,539 1.43 1.19 1.43 1.19
Hong Kong 17,435 1.06 0.98 1.48 1.78
South Korea 11,477 0.70 1.27 - -
China 6,894 0.42 0.79 - -

Australia - - - 1.30 1.37

Others (1.80%)
Robeco Global 15,339 0.93 - - -
1 limited
class (EUR)
Robeco Global 14,389 0.87 0.94 - -
Long Short
Quant Fund2)

Other assets -14,292 -0.88 -0.68 - -

___________ ___________ ___________ ___________ ___________
Total 1,647,858 100.00 100.00 100.00 100.00
1) In addition to investments in equities, the portfolio may include
positions in derivatives. The sum of equities and derivatives reflects the
true volume of the investments by country and in total. As was the case at
31 December 2005 the portfolio only contained forward exchange
transactions at 31 December 2006. These forward exchange transactions have
been included in the currency position.

By sector
In % 31/12/2006 31/12/2005

Financials 19.9 17.6
Health care 15.1 16.5
Information technology 13.8 16.3
Consumer discretionary 12.9 12.6
Energy 12.1 13.9
Industrials 9.4 8.0
Consumer staples 8.7 8.7
Materials 4.7 3.1
Telecommunication services 3.7 3.5
Utilities 0.6 0.5
Other assets and liabilities -0.9 -0.7

Total 100.0 100.0
2) In terms of currencies, the investments have been included under
the item euro.

Exchange rates
31/12/2006 31/12/2005 31/12/2006 31/12/2005

AUD 1.6731 1.6080 AUD 1 0.5977 0.6219
CAD 1.5344 1.3779 CAD 1 0.6517 0.7257
CHF 1.6095 1.5546 CHF 1 0.6213 0.6433
CNY 10.2881 9.5192 CNY 1 0.0972 0.1051
GBP 0.6738 0.6871 GBP 1 1.4842 1.4554
HKD 10.2564 9.1457 HKD 1 0.0975 0.1093
JPY 157.1339 139.2223 JPY 100 0.6364 0.7183
KRW 1,226.9939 1,192.3482 KRW 100 0.0815 0.0838
NOK 8.2102 7.9870 NOK 1 0.1218 0.1252
SGD 2.0231 1.9614 SGD 1 0.4943 0.5098
USD 1.3186 1.1796 USD 1 0.7584 0.8478

at 31 December

Market value Market value

AMERICA (43.51%)

EUR USD United States (40.89%)
19,570,534 25,806,684 Accenture CL/A
23,387,555 30,840,000 Adobe Systems
17,631,669 23,250,000 Amdocs
22,166,495 29,229,849 Amgen
22,550,336 29,736,000 Avon Products
16,933,986 22,330,000 Brunswick
39,378,910 51,927,000 Cisco Systems
34,636,939 45,674,000 Citigroup
26,190,422 34,536,000 ConocoPhillips
14,295,833 18,851,200 Covance
7,371,175 9,720,000 Crocs
15,236,416 20,091,500 CVS
16,992,075 22,406,600 Du Pont de Nemours
26,725,838 35,242,026 Fannie Mae
13,053,123 17,212,500 Intel
22,169,643 29,234,000 Ishares Nasdaq Biotechnology Index
10,497,478 13,842,500 Kinetic Concepts
24,961,724 32,915,778 Metlife
31,638,715 41,720,392 Microsoft
11,970,576 15,785,000 Mirant
16,332,840 21,537,300 Monsanto
25,244,442 33,288,584 Morgan Stanley
2,370,606 3,126,000 Neurocrine Biosciences
12,660,676 16,695,000 News Corp-Class B
20,262,390 26,719,000 Office Depot
19,497,213 25,710,000 Oracle System
16,695,105 22,015,000 Pfizer
5,899,973 7,780,000 Plug Power
16,493,232 21,748,800 Schering-Plough
19,158,988 25,264,000 Schlumberger
24,775,338 32,670,000 Time Warner
8,299,397 10,944,000 Tyco International
23,231,942 30,634,800 United Technologies
0 0 Venture Associates
18,499,147 24,393,900 Wellpoint
27,077,014 35,705,104 Wyeth

EUR CAD Canada (2,62%)
22,004,624 33,766,095 Canadian Natural Resources
21,159,987 32,470,000 Petro-Canada/Variable Vtg. Shares

EUR EUR Others (1.80%)
Robeco Global Telecom Opportunities 1
15,338,925 15,338,925 Limited Class (EUR)

14,388,899 18,973,922 Robeco Global Long Short Quant fund

EUROPE (29.31%)

EUR CHF Switzerland (6.73%)
15,515,795 24,975,000 Adecco Cheserex
30,262,790 48,712,500 Nestle
26,185,817 42,150,000 Novartis
28,506,197 45,885,000 Roche
10,350,853 16,661,250 UBS

EUR GBP United Kingdom (6.70%)
6,883,117 4,637,500 888 Holdings
12,218,182 8,232,000 AstraZeneca (GBP)
24,551,020 16,541,250 Diageo
11,083,544 7,467,538 Kingfisher
2,445,751 1,647,825 Partygaming
17,933,210 12,082,500 Petrofac
21,192,547 14,278,478 Reckitt Benckiser
14,119,481 9,513,000 Rio Tinto

EUR EUR France (5.82%)
3,538,813 3,538,813 Air Liquide
Air Liquide - Act. Nom. Pime de fidelite
10,883,590 10,883,590 2007
2,248,750 2,248,750 Air Liquide
19,731,500 19,731,500 Saint-Gobain
50,619,125 50,619,125 Total
8,883,000 8,883,000 Vivendi

EUR EUR Netherlands (3.54%)
21,497,600 21,497,600 ING Groep
17,999,100 17,999,100 Philips Electronics
18,785,496 18,785,496 Royal Dutch Shell A

EUR EUR Germany (1.49%)
24,576,900 24,576,900 Metro

EUR NOK Norway (1.26%)
20,706,969 170,012,500 Telenor

EUR EUR Belgium (1.18%)
19,440,000 19,440,000 RHJ International

EUR EUR Spain (1.09%)
12,726,000 12,726,000 Banco Santander Central Hispano
5,212,500 5,212,500 Gamesa Corporacion Tecnologica

EUR EUR Luxembourg (1.03%)
Robeco Capital Growth Funds - Robeco
17,001,089 17,001,089 Europe Opportunities I EUR

EUR EUR Greece (0.47%)
7,680,000 7,680,000 Public Power

Asia (21.50%)

EUR JPY Japan (17.89%)
6,718,524 1,055,640,000 Aozora Bank
29,611,046 4,652,600,000 Astellas Pharma
18,335,860 2,881,000,000 Canon
21,605,893 3,394,800,000 Daikin Industries
22,377,259 3,516,000,000 Fanuc
19,742,394 3,102,000,000 Honda Motor
16,949,055 2,663,100,000 KDDI
14,033,520 2,205,000,000 Millea
17,820,343 2,800,000,000 Mitsubishi
16,269,973 2,556,400,000 Mitsui Fudosan
14,288,096 2,245,000,000 Nomura
14,739,969 2,316,000,000 Obayashi
18,615,894 2,925,000,000 Resona Bank
14,558,966 2,287,560,000 Sekisui House
10,596,740 1,665,000,000 Seven & I Holdings
19,475,673 3,060,091,800 Sony
19,033,399 2,990,600,000 T&D

EUR SGD Singapore (1.43%)
14,197,608 28,724,600 DBS
9,341,637 18,900,000 Venture

EUR HKD Hong Kong (1.06%)
17,434,632 178,800,000 Sun Hung Kai Properties

EUR USD South Korea (070%)
11,476,889 15,134,000 Samsung Electronics/GDR 1/2 vgt.s -144A-

EUR HKD China (0.42%)
6,893,895 70,700,000 Semiconductor Manufacturing


EUR EUR Emerging markets (4.76%)
Robeco Institutioneel Emerging Markets
78,503,744 78,503,744 Fonds

* Concerns share swap of EUR 1,876,090

of more than EUR 4.5 million during the financial year

Shares Amount PURCHASES

EUR United States
230,000 5,449,567 Adobe Systems
150,000 4,622,515 Brunswick
420,000 16,457,476 Citigroup
200,000 10,278,093 ConocoPhillips
460,000 14,817,142 Du Pont de Nemours
250,000 4,620,082 Intel
90,000 5,399,529 Ishares Nasdaq Biotechnology Index
350,000 11,173,187 Kinetic Concepts
500,000 10,326,947 Mirant
750,000 11,964,247 News Corp-Class B
400,000 8,186,245 Pfizer
920,000 14,856,978 Schering-Plough
360,000 8,345,969 Tyco International

Robeco Global Telecom Opportunities 1 Limited
150,000 15,000,000 Class (EUR)

180,000 8,283,232 Adecco Cheserex
150,000 6,618,335 Novartis

630,000 16,861,133 Philips Electronics

26,242 4,509,953 Total

600,000 11,440,628 RHJ International

250,000 4,502,063 Gamesa Corporacion Tecnologica

Robeco Capital Growth Funds - European
165,075 16,471,181 Opportunities I EUR

2,280,000 8,643,831 Aozora Bank
211,000 5,174,284 Daikin Industries
9,000 25,230,709 Resona Bank
140,100 4,778,219 Sony

Quantity Shares SALES

EUR United States
280,000 5,981,293 Constellation Brands
340,000 22,064,078 Guidant
302,800 7,021,250 Microsoft
360,000 9,954,149 Qualcomm
400,000 18,435,513 Valero Energy
1,000,000 22,168,777 Warner Music
120,000 6,321,920 Wellpoint

356,700 15,722,002 Canadian Natural Resources

67,000 13,267,005 Nobel Biocare
40,000 5,589,256 Roche
295,000 14,391,066 UBS

Robeco Institutional European Opportunities
129,353 16,448,699 Fund
221,889 5,925,340 Royal Dutch Shell A

United Kingdom
150,000 6,563,119 AstraZeneca (GBP)

123,686 9,648,609 LVMH Moet Hennessy Louis Vuitton

1,050,000 14,852,822 Deutsche Telekom
110,000 17,476,879 Sapag

550,000 7,010,951 Telenor

350,000 5,063,658 Banco Santander Central Hispano

550,000 8,548,408 Nokia/A

360,000 18,828,224 OMV

400,000 4,816,266 Dai Nippon Printing
370,000 6,736,294 Mitsui Fudosan
1,800,000 9,632,861 Shinsei Bank
3,200,000 16,129,876 Toshiba

South Korea
26,874 6,864,975 Samsung Electronics/GDR 1/2 vgt.s -144A-

40,000,000 4,944,439 Semiconductor Manufacturing

1) Robeco (Schweiz) AG, Uraniastrasse 12, CH-8001 Zurich, is the
fund's appointed representative in Switzerland. Copies of the
prospectus, Articles of Association, annual and semiannual reports
and a list of all purchases and sales in the fund's securities
portfolio during the reporting period are available from the above
address free of charge. UBS AG, Bahnhofstrasse 45, CH-8098 Zurich, is
the fund's paying agent in Switzerland.

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