ING (L) PATRIMONIAL. Société d'investissement à Capital Variable. Annual report and audited financial statements. R.C.S. Luxembourg N B

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1 ING (L) PATRIMONIAL Société d'investissement à Capital Variable R.C.S. Luxembourg N B LUXEMBOURG

2 For additional information please contact: ING Investment Management P.O. Box LL The Hague The Netherlands Tel or ING INVESTMENT MANAGEMENT

3 Warning No subscription can be received on the basis of the financial statements alone. Subscriptions are only valid if made on the basis of the current prospectus, accompanied by the latest annual report and the most recent semiannual report, if published thereafter. The prospectus, the statutes, the annual and semiannual reports are made available to the shareholders at the custodian bank and at the Company's registered office as well as at the financial servicing institutions identified in this report. They will also be sent free of charge to anyone who so requests. The information given in this report is for reference purposes only. It is not a guide to future results. ING INVESTMENT MANAGEMENT

4 Table of contents Page Organisation 3 Management's report 7 Independent auditor's report 12 Combined statements Combined statement of net assets as at 30/09/ Combined statement of operations and changes in net assets for the year ended 30/09/ ING (L) Patrimonial Aggressive Statistics 15 Financial statements 16 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial Balanced Statistics 18 Financial statements 19 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial Defensive Statistics 21 Financial statements 22 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial EMD Opportunities Statistics 24 Financial statements 25 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial Euro Statistics 33 ING INVESTMENT MANAGEMENT 1

5 Table of contents Page Financial statements 34 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial First Class Multi Asset Statistics 36 Financial statements 37 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial Global Equity Allocation Statistics 41 Financial statements 42 Statement of operations and changes in net assets for the period from 01/10/2012 to 19/04/ ING (L) Patrimonial Multi Asset 5 Statistics 43 Financial statements 44 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ ING (L) Patrimonial Target Return Bond Statistics 46 Financial statements 47 Statement of net assets as at 30/09/ Statement of operations and changes in net assets for the year ended 30/09/ Securities portfolio as at 30/09/ Financial derivative instruments as at 30/09/ Notes to the financial statements 51 Other information to shareholders 57 2 ING INVESTMENT MANAGEMENT

6 Organisation Registered Office Board of Directors 3, rue Jean Piret, L2350 Luxembourg Chairman André van den Heuvel, Chief Marketing and Sales Officer, ING Investment Management (Europe) B.V. Directors Dirk Buggenhout, Chief Operating Officer, ING Investment Management (Europe) B.V. Mark den Hollander (until 31/08/2013), Chief Risk Officer, ING Investment Management (Europe) B.V. Jelle van der Giessen (from 24/01/2013 to 05/03/2013), Chief Investment Officer Insurance, ING Investment Management (Europe) B.V. Maaike van Meer (until 03/12/2012), Head of Legal & Compliance, ING Investment Management (Europe) B.V. Hans Stoter (since 01/06/2013), Chief Investment Officer, ING Investment Management (Europe) B.V. Benoît de Belder (since 01/09/2013), Head of Fund and Risk Engineering, ING Investment Management (Europe) B.V. Management Company ING Investment Management Luxembourg S.A., 3, rue Jean Piret, Luxembourg Investment Manager ING Investment Management Luxembourg S.A., 3, rue Jean Piret, Luxembourg delegated to ING Asset Management B.V., 65, Schenkkade, The Hague ING INVESTMENT MANAGEMENT 3

7 Organisation Administrative, Registrar and Transfer Agent ING Investment Management Luxembourg S.A., 3, rue Jean Piret, Luxembourg delegated to Brown Brothers Harriman (Luxembourg) S.C.A., 28, avenue Charles de Gaulle, Luxembourg Custodian Brown Brothers Harriman (Luxembourg) S.C.A., 28, avenue Charles de Gaulle, Luxembourg Independent Auditor Ernst & Young S.A., 7, rue Gabriel Lippmann, Parc d'activité Syrdall 2, Munsbach Financial Servicing Institutions Austria ING Bank N.V.Vienna branch (*), Ungargasse 6466/305, Wien Belgium Czech Republic Finland France Greece Italy Luxembourg Slovakia ING Belgium S.A., 24, avenue Marnix/Marnixlaan, Brussels ING Bank N.V., Organizačni složka, Nádražni 344/25, Praha Danske Capital Finland Oy, Aleksanterinkatu 44, 7 krs, Helsinki CACEIS Bank, 1/3, Place Valhubert, Paris ING Piræus Asset Management M.F.M.C., 3, Korai Street, Athens ING Investment Management Italy Sim, Via Paleocapa 5, Milano ING Luxembourg S.A., 52, route d'esch, Luxembourg ING Bank N.V., Pobočka zahraničnej banky, Jesenského 4/C, Bratislava (*) Only the subfund ING (L) Patrimonial Target Return Bond is registered in Austria. 4 ING INVESTMENT MANAGEMENT

8 Organisation Spain ING Investment Management Spain, Génova 27 3a Planta, Madrid The Netherlands ING Bank N.V., Amstelveenseweg 500, Amsterdam Counterparties to overthecounter financial derivative instruments Forward foreign exchange contracts counterparties Barclays Bank PLC, 1 Churchill Place, Canary Wharf, London E14 5HP BNP Paribas, 787 Seventh Avenue, New York, NY Citibank N.A., Citigroup Centre, 25 Canada Square, Canary Wharf, London E14 5LB Deutsche Bank AG London, Winchester House, 1 Great Winchester Street, London EC2N 2DB Goldman Sachs International, Peterborough Court, 133 Fleet Street, London EC4A 2BB HSBC Bank plc, 8 Canada Square, London E14 5HQ JPMorgan Chase Bank N.A., 25 Bank Street, Canary Wharf, London E14 5JP Morgan Stanley, 25 Cabot Square, Canary Wharf, London E14 4QA The Royal Bank of Scotland plc, 36 St Andrew Square, Edinburgh EH2 2YB UBS AG London Branch, 1 Finsbury Avenue, London, EC2M 2PP, United Kingdom ING INVESTMENT MANAGEMENT 5

9 Organisation Swap counterparties Barclays Bank PLC, 1 Churchill Place, Canary Wharf, London E14 5HP Citibank N.A., Citigroup Centre, 25 Canada Square, Canary Wharf, London E14 5LB Crédit Suisse, 1 Cabot Square, Canary Wharf, London E14 4QJ 6 ING INVESTMENT MANAGEMENT

10 Management's report Economic context During the fourth quarter of 2012, we saw a global upturn in retail sales and capital investment. The signs of recovery were the strongest in the US and China. The Purchasing Managers Index ("PMI"), which measures global activity in industry and the services sector, rose by 2.7 points to 53.7 points in November, its highest level since March. In the US several indicators confirm the recovery in global industrial production. For example, the figures for durable goods orders have been revised upwards. And the number of new jobs increased by 146,000 in November. The improvement in employment was thus equal to the average for the past three months. Hurricane Sandy seems to have had little impact on the economy. Given the good news about durable goods orders, it seems the uncertainties surrounding the fiscal cliff have had little influence on the "hard" data. Some figures do indicate that consumer confidence is under pressure, however. In particular, expectations of government policy, unemployment and wage growth (Michigan Consumer Sentiment) have declined. This could well be related to the uncertainties surrounding the fiscal cliff. In the Eurozone, we saw signs of stabilisation but the region remains in recession. The IFO Index climbed to points in December, its highest level since July. This second rise in a row demonstrates the buoyancy of the German economy. This buoyancy is based partly on Germany s strong position in emerging markets. Whereas 45% of German exports in 2008 went to the Eurozone countries, now it is 35%. We also see improvements in countries like Spain and Italy. Under the influence of policy measures and cost cuts, these countries have managed to show robust export growth. The Japanese economy has fallen back into recession as it suffered from a still weak global demand and from the conflict with China. The global economy is recovering during the first quarter of The economic recovery is more obvious in the US, Germany and Japan. The February global PMI is consistent with the "consolidationinthefaceofcontinuedcorporateexpansion" story. The output index (53.0) is now 0.7% below the December peak, but the details (new orders, employment) continue to be quite upbeat. We see some signs of recovery in the Eurozone as a whole, but also disappointing PMI indicators for March and a decline in the economic sentiment indicator of the European Commission. These declining indicators may have something to do with the bad weather and with "Cyprus". Signals that China intends to give priority to reducing the imbalances in the economy and the financial sector (rather than maximising growth) made investors cautious. The US economy is performing much better than expected. We estimated growth of approximately 3% in the first quarter, driven partly by betterthanexpected consumer spending, stock building in industry and a recovering housing market. The upward trend in the labour market (approximately 190,000 new jobs have been created each month for the past three months) is underpinning the economy. Germany is towing the Eurozone along. The ZEW index, which measures investor confidence, climbed to 48.5 points in March, its highest level since April The improved financial conditions (somewhat lower euro, rise in share prices) are beginning to have a knockon effect on Germany s real economy. In Japan, consumer and business confidence has risen sharply thanks to the new measures of the Abe government, which took office in December In emerging economies, economic growth remains fairly high due particularly to the growth in real estate investment. Because credit growth is increasingly due to trust loans by nonregulated financial institutions, the Chinese government has announced that it intends to bring the shadow banks under tighter control. The surge in house prices is another thorn in the government s side. The way in which the government is operating at the moment indicates that they are primarily concerned with reducing the imbalances in the economy and tackling the weak spots in the financial system. Maximising economic growth no longer takes priority. The exports of emerging markets to China remain buoyant. But growth in the emerging world is feeling the negative impact of the weak European economy and smaller capital flows. The declining capital flows hinge partly on lower Chinese growth forecasts. Moreover, some emerging markets have been hit by one of the consequences of Japanese policy the depreciation of the yen. This is particularly hurting exportoriented countries in Asia, such as South Korea and Taiwan. We also see the increased uncertainty about the Chinese economy reflected in the commodity markets (which lag the financial markets) and the slowing economic growth in the commodityproducing countries. In the second quarter of 2013, growth in the US and Japan surprised on the upside. However, growth in the emerging world was disappointing. The global index that measures activity in the manufacturing and services sectors fell to 51.9 points in April. This did not prove to be a trend as the indicator recovered to around 53 points in May. In the United States, consumer spending was the main engine of the US economy, supported by the improving housing and equity markets. Falling inflation expectations also boosted consumer confidence. Businesses also became more confident. In short, the private sector successfully managed to absorb the cutbacks of the federal government. In Japan, the revolutionary turnaround in economic policy began to pay off. The economy advanced above its longterm average. Consumption, in particular, picked up sharply. Exports also supported growth. Economic activity in the euro region was weak, but there were signs of a very gradual improvement in growth momentum. Recent indicators did show an improvement in sentiment in the peripheral Eurozone countries. While Germany is still the best performer, the differences between the core countries and the peripheral countries have narrowed somewhat. Growth slowed in a growing number of emerging markets, including in large countries like China and Brazil. Growth in corporate earnings and business investment in the region are weak. Businesses are suffering due to declining competitiveness and are finding it difficult to raise their prices. ING INVESTMENT MANAGEMENT 7

11 Management's report In the third quarter of 2013, the pace of growth in the global economy accelerated, driven by the United States, Japan, Germany and the United Kingdom. The global index that measures activity in the manufacturing and services sectors climbed further to 55.2 points in August, driven by a surge in new orders, which indicates a faster acceleration in final demand. In the United States, the economic indicators consistently pointed to a sustainable recovery. However, recent figures, e.g. for job growth and the housing market, showed a less uniform picture than the figures at the start of the summer did. That is one of the reasons why the Federal Reserve ("Fed") decided in September to delay scaling back its bondbuying programme. Japan s economy advanced by 3% annualized in the first half of the year. The pace of growth eased slightly in the third quarter but was still well above the longterm growth rate of less than 1%. The euro area climbed out of recession in the second quarter of 2013 and it looks like the recovery was sustained in the third quarter. The differences between the core countries and the peripheral countries narrowed. While Germany continues to perform robustly, other core countries (France and the Benelux region) are participating to a lesser extent in the recovery. At the same time, countries like Spain and Italy are showing a distinct improvement. In the emerging world, the Chinese economy recovered in the summer partly as a result of the acceleration in demand in the mature economies. The main impetus, however, came from investment in the infrastructure and restocking. Stock replenishment has however only a temporary effect. The recovery in the property market is also vulnerable owing to overcapacity. The imbalances elsewhere in the emerging world continue to increase. Examples are the growing current account deficits in India, Turkey and South Africa and rising inflation. The fundamental weaknesses in many emerging countries remain considerable. Monetary policy In the course of the fourth quarter of 2012, the Fed continued to pursue an innovative policy aimed at lifting the negative expectations of consumers, businesses and investors. The Fed also announced that the Fed funds rate will remain at its present low level for as long as unemployment is above 6.5%, the Fed s own inflation forecast is below 2.5% and longerterm inflation expectations remain within a limited range. Fed President Ben Bernanke has stated that these conditions must be met before the Central Bank will hike interest rates. He stresses, however, that these conditions alone are not enough to justify a hike. The Fed will in fact always look at other factors (e.g. market developments, other indicators that give an impression of overcapacity in the economy) before coming to any decision on an interest rate hike. The European Central Bank ("ECB") remained on hold, probably in order to put some pressure on the decision making of the government leaders. Government leaders decided in December to initiate banking union. In principle, the ECB will be the regulator for all the Eurozone s banks (and all banks in any noneurozone countries that decide to join the union). A crucial point is what banking union will mean to the direct recapitalisation of weak banks through the rescue fund. Comments by the German Minister of Finance (Schäuble) suggest that the rescue fund can act already in 2013, subject to certain conditions (e.g. approval by the Bundestag), as the lender of last resort for banks that get into difficulties. The Bank of Japan ("BoJ") has eased its monetary policy further. Under the new Abe government, further easing (moving towards the policy of the US Federal Reserve) may be expected. The appointment of three new board members of the BoJ by the new government in March and April should facilitate this policy change. During the first quarter of 2013, the Fed didn t change its extremely easy monetary policy and continued to buy Treasury bonds and mortgagerelated bonds. This policy has lifted the pessimism that previously prevailed among business and consumers. In the Eurozone, we note here that particularly small and mediumsized enterprises in countries like Italy and Spain are continuing to have difficulty raising credit, while inflation is on a downward trend. We expect that the ECB will publish new measures to restore the financial transmission mechanism. The ECB s hesitation to date in cutting the interest rate is a clear indication that the ECB is pursuing a patently less aggressive policy than the Fed, the Bank of England and the BoJ. The BoJ has a new governor, Haruhiko Kuroda. It appears from his comments that the Central Bank is going to pursue a very easy monetary policy. This will probably include a massive buy programme of longterm government debt. The markets have anticipated such an extremely easy monetary policy. They are looking forward with interest to the meeting (early April) of the BoJ s policymaking committee, which will be the first time it convenes in its new formation. In China, the priority of the authorities has so far been to maximise economic growth, but now the prime focus of their policy is on reducing the imbalances in the economy and the financial system. A factor here is that the present robust credit growth originates with an informal part of the financial sector. The government intends to impose stricter controls on these shadow banks. The very easy policy of the Central Banks of the mature economies is contributing to a growing inflation risk in the emerging markets. The sharp fall of the yen has also hit exportoriented countries like South Korea, Taiwan and China. The emerging economies want to remain as competitive as possible. One way to achieve this is likewise to pursue an easy monetary policy and thus weaken their own currencies. The developments in the quarter are an illustration of this. During the second quarter of 2013, the most notable change in monetary policy occurred in the Eurozone as the ECB cut its main refinancing rate from 0.75% to 0.5% and the marginal lending rate the rate at which banks can borrow overnight from 1.5% to 1%. At the same time, the ECB left the deposit rate unchanged at 0%. In the US and Japan, the Fed and the BoJ maintained their conventional and unconventional monetary policy unchanged. However, a reduction in the pace of Fed s asset purchases is more and more priced in by the markets even though the macroeconomic targets set by the Fed haven t been met yet. 8 ING INVESTMENT MANAGEMENT

12 Management's report In the third quarter of 2013, expectations grew that the US Federal Reserve would start reducing (tapering) its bond purchases in September. This contributed to higher bond yields, particularly in the US. Against all expectations, the Fed decided to not go through with its plan to reduce its purchases of government bonds in September. For the Fed, too many risks were still weighing on the economy. Among these were increases in bond yields since June, the slower rate of job creation and the prospect of a new confrontation on the budget and the national debt in Congress between Republicans and Democrats. Tapering has, of course, not been abandoned, but its start has now been delayed until the Fed meets in October or December. In the euro area, the President of the ECB stated that he remains very cautious regarding the current economic upturn. He reaffirmed his intention to keep rates low for an extended period and did not rule out granting further longterm credits to banks in the zone in order to offset the negative impact of increased bond yields. In Japan, given the current improvement in the economic outlook, the BoJ has kept its monetary policy unchanged during the summer. As such it is maintaining its interest rate at close to 0% as well as a plan to expand the monetary base by 6070 trillion yen per year. Central banks in the emerging world have only limited ways to react to the outflow of capital from the region. This applies particularly to countries that rely on foreign capital to finance the deficits on their balance of payments current accounts. We have in mind: Brazil, Indonesia, Turkey, South Africa and India. The central banks of India and Indonesia have hiked interest rates to support their sharply depreciated currency. Fixed Income Markets During the fourth quarter of 2012, yields on German and US tenyear government bonds continued to move at very low level and within a narrow band. The government bond markets of the peripheral countries profited from bullish sentiment for most of the quarter. Thanks to the Outright Monetary Transactions ("OMT") mechanism that the ECB introduced in September, the unrest precipitated by political developments in Italy led to only a minimal rise in risk premiums on Italian government bonds. This unrest also had only a limited knockon effect on the Spanish government bond market and the government bond markets of the other peripheral countries. The downgrading of France (from AAA to AA+) did not have an appreciable impact on the French government bond market. All spread products (Investment Grade Credit, High Yield & Emerging Market Debt) benefited from the bullish sentiment in financial markets worldwide and saw their spread narrow further. During the first quarter of 2013, the yield on tenyear German government bonds fluctuated between 1.3% and 1.7%. It peaked at the end of January (1.71%) due to the good news about the progress of the global economic recovery. The increase in political uncertainties (Italy, Cyprus) heightened interest in government bonds that are considered safe. This depressed the yield in the second half of the quarter. At the end of March, the tenyear yield stood at 1.3%. It had thus returned to the level of the end of December. In the US, Government bonds continued to move within a narrow band. The economic recovery, which exceeded expectations, raised the tenyear yield from 1.8% at the beginning of the year to 2.1%. Some uncertainty about the continuance of the Fed s policy and the drawnout negotiations between Democrats and Republicans depressed yields. At the end of March the longterm yield on US government bonds amounted to 1.9%. In Japan, interest rates fell sharply driven by the country s current economic policy. Within the credit space, the investment grade credit spread in the Eurozone rose slightly in the first quarter from 151 basis points to 156 basis points. High yield credits performed well globally in the first quarter. The yield on global high yield credits went from around 5.90% at the end of December to 5.50% at the end of March. EMD encountered a headwind in the first quarter. During the second quarter of 2013, long term Bund and Treasury yields rose. The rise in yields in Germany and the US coincided with some better macroeconomic data. An ECB rate cut (May 2, 2013) followed by better German data (factory orders, IFO, ) produced a (mild) upward trend in Bund yields while for the US better than expected payrolls data marked the turning point. Probably the most striking event has been the sharp reversal in long term Japanese government bond ("JGB") yields. Markets have taken the view that the monetary pulses (combined with Abe s fiscal injections) are credible and long term rates have been rising to levels slightly above the ones at the start of the year. Another explanatory factor has been the steady improvement in macroeconomic data in Japan, positively surprising market expectations (Gross Domestic Product in the first quarter, unemployment, ). From the major regions economic surprises in Japan have shown the sharpest improvement. Although peripheral bond yields have slightly risen due to the increase in bund yields, they have dropped to levels we last saw at the end of New bond issues were popular: Spain yielded EUR 5 billion on a 10year bond issue, while Italy fetched EUR 7 billion with new 30year government bonds. The Italian issue was particularly remarkable. At the height of the euro crisis, Southern Eurozone countries had no choice but to issue shortterm bonds, as investors shunned their long dated issuance. That trend has now apparently been reversed. The recent rise in bond yields has pressured Credits from a total return perspective. High Yield spreads tightened somewhat since May, followed to a lesser extent by Emerging Markets Debt Hard Currency spreads and EUR Investment Grade. The extent of spread tightening however failed to compensate for the rise in government bond yields leading to negative total returns. ING INVESTMENT MANAGEMENT 9

13 Management's report During the third quarter of 2013, yields on the safest Treasuries rose further. Initially, government bond yields rose to 3% (US) and 2% (Germany). After 5 September yields declined to 2.6% (US) and 1.8% (Germany) on 30/9, due to a mixed news flow in the US and the Fed s decision not to taper yet. The higher yields at the long end had a slight knockon effect on shortterm yields. The yield curve (210 years) in the US and Germany consequently steepened. Yields on tenyear US government bonds rose on the back of better economic figures and uncertainty in the markets about the Fed s future policy. Delay of tapering on 18 September, somewhat less favourable economic macro data and political uncertainties (debt ceiling) led to lower yields (30 September: 2.6%). The rising yield on tenyear German government bonds should be seen as a result of the better indicators in the mature economies (Germany), upward pressure on US yields and the first signs of recovery in the Eurozone. We saw increasing demand for the government bonds of countries like Spain, Italy, Portugal and Ireland. The signs of recovery in the peripheral countries have naturally added support. The Japanese government bond market was the only one among the mature economies where yield movements remained relatively stable over the summer (between 0.7% and 0.9%). This market is relatively independent of outside influences, as it is dominated by domestic investors and by the considerable purchases of bonds by the central bank (quantitative easing). The corporate bond market staged a recovery in the summer from the setback it experienced in June. The recovery strengthened when the Federal Reserve decided on 18 September to delay tapering its bond buying programme. All in all, investors are again paying more attention to good corporate fundamentals. The spread of investment grade credits in the Eurozone narrowed from 147 basis points to 134 basis points in the third quarter. High yield credits were the best performers in the high risk categories while Emerging Market Debt in local currencies suffered the most. Equity markets Based on the relatively attractive valuation and the reduced systemic risks, equities in the Eurozone performed the best (+7.1% / full year 2012: +20.6%) during the fourth quarter of Wall Street was hit in the fourth quarter by the uncertainty surrounding the socalled fiscal cliff (2.6% in euros / year 2012: +14.4%). Japan went to the polls on December 16, During the electoral battle and after the Liberal Democratic Party ("LDP") landslide Japanese equities rallied, gaining more than 17% in local currency during the quarter. However, the yen fell substantially against the euro. Thus, Eurozone investors won only somewhat more than 3% on their Japanese equity portfolios. Japanese equities gained 6.7% in full year 2012 (in euros). Better economic figures in China had a positive impact on emerging market equities in the fourth quarter (+3.1% in euros / full year 2012: +16.8%). The improvement in economic data and the diminished systemic risks had a favourable effect on cyclical sectors and financials. The financial sector performed the best (+5.8%). Cyclicals beat defensive sectors. Cyclical consumer goods (+3.9%) continued to advance (full year 2012: +23%). Capital goods also posted an aboveaverage performance (+3.6%). Defensive sectors like telecommunication services (7%) and utilities (3%) clearly lagged. That also applied to other defensive sectors like health care (1.6%) and noncyclical consumer goods (1.8%). However, with rises of respectively 16.5% and 12.4% in full year 2012, the latter two sectors did considerably better than the former two. Telecommunication services gained 5.9% in 2012 and utilities a mere 1.3%. Global equities had a strong first quarter of Lifted by the burgeoning recovery in the global economy and an increase in investor risk appetite, equities gained 10.6% worldwide. In regional terms, Japanese equities were the main winner. New Prime Minister Abe has announced a clearly stimulating policy, which has had an impact on investor sentiment. The Japanese stock market rose by as much as 21.5% measured in Japanese yen. However, because of the yen s sharp fall against the euro, the rise in euro terms amounted to nearly 15%. US equities followed with a gain of 12.6% in euros. The US economy is showing a strong recovery, with major support from the steady pickup in the labour market and the recovery in the housing market. That Democrats and Republicans still have very different ideas on the budget policy to be pursued proved of little interest to investors. European equities (+5.5%) lagged the global average. Although economic figures recovered slightly (from very low levels), they were still not convincing. Moreover, uncertainty in the Eurozone increased again after the deadlocked general election in Italy and unrest concerning a bailout for Cyprus. By far the weakest performance was by emerging markets (+1.0%). The economic figures for many emerging markets lagged the more robustly recovering economies such as the US, Germany and Japan. Besides this, the depreciation of the yen put other Asian exporters under pressure. This has given rise to the expectation that Asian currencies are more likely to depreciate than appreciate. Consequently, a major reason for investors to invest in the region has disappeared, which has resulted in an outflow from emerging equity markets. Cyclical equities did not perform appreciably better than defensive equities. The two best performing sectors were actually defensive ones, i.e. healthcare (+17.2%) and consumer staples (+15.7%). The cyclical sectors consumer discretionary (+12.7%) and industrials (+11.3%) followed close behind. The materials sector clearly scored below average (0.8%). The sector was depressed by the weak commodity market. The announcement of new measures by China to combat overheating in the housing market was partly to blame for this. 10 ING INVESTMENT MANAGEMENT

14 Management's report During the second quarter of 2013, the positive trend in the equity market continued. However in May, contrary to the first four months of the year, cyclical sectors largely outperformed defensive sectors. Likewise, Japan which was the star performer since the beginning of the year underperformed massively in the second half of May. Global equities had a strong third quarter with a gain of 3.9% with for a euro based investor. Equities were supported by the numerous signals of economic upturn in developed economies and China as well as by the pledge from central bankers in both the US and Europe that interest rates would remain low for a long time. The bright outlook for equity markets was reflected in the capital flows from investors. For the first time since 2007, the flows to equities have exceeded the flows to bond funds; a trend that has strengthened since the summer. European equities were the main winner in the third quarter with a gain of 9.1% in euros. The Eurozone came out of recession in the second quarter and various figures indicated that the recovery continued in the third quarter. The other regions, too, showed a sharp rise, but since the euro gained 3.8% in value, returns measured in euros turned out lower. The mature markets of Asia excluding Japan (+6.0%) and emerging markets (+1.7%) rebounded from a weak first half of the year. One of the main reasons for this was the improvement in Chinese economic figures as from August. Japan (+2.5%) and the US (+1.5%) posted modest gains measured in euros. Logically enough, the biggest rises were posted by cyclical sectors, which benefited the most from the economic recovery. Outlook Our main assumption is that the global economic consolidation phase seen in the first half of 2013 will be followed by a gradual acceleration. Household real disposable income growth currently enjoys the triple benefit of falling inflation, easier financial conditions induced by monetary policy and a fading drag from fiscal policy. Our base case states that key interest rates in developed economies will be kept at current record low levels at least until mid2015. As a result, we anticipate that yields on the safest Treasuries will only modestly edge up in the next 6 to 12 months. In addition to this, employment growth in many regions has held up reasonably well in the face of twoyears of subpar global growth. The flipside of this is that corporate margins in many regions have suffered. This margin squeeze is obviously the main source of downside risk to the outlook. It has already been responsible for a softening of capex growth in some parts and may give rise to a softening of labour demand. Yet, we remain confident that this will not occur in developed economies space. The United States, the United Kingdom, Japan and Germany are all expected to grow above their long term average in coming quarters. In the emerging economies however, the corporate margin squeeze has been the result of real wage gains that have outstripped productivity performance. There is thus a risk of a negative feedback loop between falling emerging domestic demand and cautious emerging corporates. We expect this to be a drag on global growth but not a show stopper. To some extent emerging growth will be cushioned by the acceleration in developed economies, all the more so since many emerging currencies have depreciated. Also, central banks in developed economies will limit further steep rises in their real yields which may have a soothing effect on emerging capital inflows and global risk appetite. Finally, in some parts of the emerging market space (e.g. China), there is still room for policy to cushion a growth slowdown. As a result, we anticipate the world economy to grow by 3.4% in This would be a pickup from the 2.6% growth rate expected in Besides a structural lower growth rate in emerging economies, other potential headwinds for the global growth outlook include the recent US government partial shutdown, stress in the euro zone and geopolitical tensions in the Middle East. For financial markets, these headwinds create uncertainty. There are indeed always reasons to worry and this is actually an indispensable driver of the creation of investment opportunities. It seems however fair to say that interesting investment opportunities are in place as rising evidence of a cyclical rebound in the global economy is seen. Also, investor behaviour has started to become less riskaverse as fears for renewed systemic shocks have come down and investor flows have started to be redirected from defensive and low "yielding" assets (like fixed income) towards more return oriented assets with have more leverage on "growth" (like equities). It seems therefore that equities are relatively attractive compared with bonds at the moment. Our main inclination at this stage is to stay the (riskon) course, but also not to be hesitant to modify our allocation stance if political tension builds further from here. Luxembourg, December 13, 2013 ING INVESTMENT MANAGEMENT 11

15 Independent auditor's report To the Shareholders of, 3, rue Jean Piret, L2350 Luxembourg Following our appointment by the Annual General Meeting of the Shareholders of the SICAV of January 24, 2013, we have audited the accompanying financial statements of and of each of its subfunds, which comprise the statement of net assets, the securities porfolio and the financial derivative instruments as at September 30, 2013 and the statement of operations and changes in net assets for the year then ended, and a summary of significant accounting policies and other explanatory notes to the financial statements. Responsibility of the Board of Directors of the SICAV for the financial statements The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements and for such internal control as the Board of Directors of the SICAV determines is necessary to enable the preparation and presentation of financial statements that are free from material misstatement, whether due to fraud or error. Responsibility of the "réviseur d'entreprises agréé" Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier". Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgement of the "réviseur d'entreprises agréé", 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 "réviseur d'entreprises agréé" 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 evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as evaluating 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. Opinion In our opinion, the financial statements give a true and fair view of the financial position of and of each of its subfunds as of September 30, 2013 and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements. 12 ING INVESTMENT MANAGEMENT

16 Independent auditor's report Other matter Supplementary information included in the annual report has been reviewed in the context of our mandate but has not been subject to specific audit procedures carried out in accordance with the standards described above. Consequently, we express no opinion on such information. However, we have no observation to make concerning such information in the context of the financial statements taken as a whole. Ernst & Young Société Anonyme Cabinet de révision agréé JeanMarc Cremer Luxembourg, January 8, 2014 ING INVESTMENT MANAGEMENT 13

17 Combined statements (Denominated in EUR) Combined statement of net assets as at 30/09/2013 Notes Total securities portfolio 1,242,476, Shares 99,202, Undertakings for collective investment 682,498, Bonds and other debt instruments 460,774, Total financial derivative instruments 7,205, Forward foreign exchange contracts 7,083, Futures 122, Cash at bank 61,351, Margin deposits 18,404, Other assets 4 10,672, Total assets 1,340,110, Bank overdrafts (1,269,645.32) Current liabilities 4 (7,184,774.08) Total financial derivative instruments (1,317,164.56) Credit default swaps (374,918.86) Futures (942,245.70) Total liabilities (9,771,583.96) Net assets at the end of the year 1,330,339, Combined statement of operations and changes in net assets for the year ended 30/09/2013 Notes Total income 19,924, Dividends 10,846, Interest on bonds and other debt instruments 7,958, Bank interest 30, Interest on swaps 126, Other income , Total expenses (7,190,632.93) Management fees 5 (5,034,511.75) Performance fees 11 (63.92) Fixed service fees 6 (1,701,275.22) Subscription tax 8 (168,604.76) Bank interest (14,846.70) Interest on swaps (271,330.58) Net investment income 12,734, Net realised gains or (losses) on securities portfolio 39,090, Net realised gains or (losses) on financial derivative 8,385, instruments Net realised gains or (losses) on currency 28, Changes in net unrealised gains or (losses) on securities (2,009,116.36) portfolio Changes in net unrealised gains or (losses) on financial 5,663, derivative instruments Result of operations 63,892, Subscriptions 298,567, Redemptions (434,753,170.97) Distribution (14,440,622.31) Net assets at the beginning of the year 1,432,389, Conversion difference (15,316,985.70) Net assets at the end of the year 1,330,339, The accompanying notes form an integral part of these financial statements. 14 ING INVESTMENT MANAGEMENT

18 ING (L) Patrimonial Aggressive (Denominated in EUR) Statistics Net assets 30/09/2013 EUR 64,868, EUR 59,143, EUR 51,730, Net asset value per share** Capitalisation P (EUR) 30/09/2013 EUR EUR EUR Capitalisation X (EUR) 30/09/2013 EUR EUR EUR Ongoing charges in %* Capitalisation P (EUR) 30/09/ % Capitalisation X (EUR) 30/09/ % Capitalisation X Hedged (CZK) 30/09/ % Distribution P (EUR) 30/09/ % Portfolio turnover in %* 30/09/2013 (11.32%) Capitalisation X Hedged (CZK) 30/09/2013 CZK 9, CZK 8, CZK 7, Distribution P (EUR) 30/09/2013 EUR 1, EUR 1, EUR 1, Number of shares Capitalisation P (EUR) 30/09/ ,323 99, ,582 Capitalisation X (EUR) 30/09/2013 3,101 2,418 2,126 Capitalisation X Hedged (CZK) 30/09/ ,162 5,313 4,588 Distribution P (EUR) 30/09/2013 1,891 2,007 2,260 Dividend Distribution P (EUR) 14/12/2012 EUR Distribution P (EUR) 14/12/2011 EUR Distribution P (EUR) 21/12/2010 EUR * The portfolio turnover rate is calculated in accordance with the CSSF Circular 2003/122 issued on December 19, The ongoing charges figure corresponds to the ongoing charges figure as mentioned in the latest available Key Investor Information Document ("KIID") as at the date of this report. Transaction costs are included in the purchase/sale price of the securities. These costs, which are not treated as operating expenses, are not included in the calculation of the ongoing charges. The ongoing charges and the portfolio turnover rate are calculated for the last twelve months. The ongoing charges are annualised for periods less than one year. The portfolio turnover rate is not annualised for periods less than one year. ** Official net asset value per share including a swing pricing adjustment, if any. ING INVESTMENT MANAGEMENT 15

19 ING (L) Patrimonial Aggressive (Denominated in EUR) Financial statements Statement of net assets as at 30/09/2013 Notes Total securities portfolio 62,862, Undertakings for collective investment 62,862, Total financial derivative instruments 130, Forward foreign exchange contracts 8, Futures 122, Cash at bank 1,142, Margin deposits 792, Other assets 4 71, Total assets 64,998, Current liabilities 4 (129,391.17) Total liabilities (129,391.17) Net assets at the end of the year 64,868, Statement of operations and changes in net assets for the year ended 30/09/2013 Notes Total income 13, Dividends 10, Other income 12 3, Total expenses (516,604.49) Management fees 5 (421,942.81) Fixed service fees 6 (93,594.83) Subscription tax 8 (888.31) Bank interest (178.54) Net investment loss (503,261.96) Net realised gains or (losses) on securities portfolio 1,366, Net realised gains or (losses) on financial derivative (460,807.33) instruments Net realised gains or (losses) on currency (22,834.42) Changes in net unrealised gains or (losses) on securities 6,073, portfolio Changes in net unrealised gains or (losses) on financial 142, derivative instruments Result of operations 6,596, Subscriptions 12,999, Redemptions (13,805,621.57) Distribution (64,550.30) Net assets at the beginning of the year 59,143, Net assets at the end of the year 64,868, The accompanying notes form an integral part of these financial statements. 16 ING INVESTMENT MANAGEMENT

20 ING (L) Patrimonial Aggressive (Denominated in EUR) Securities portfolio as at 30/09/2013 Quantity/ Nominal Currency Market value % in EUR NAV Quantity Currency Commitment in EUR Unrealised profit or (loss) in EUR Transferable securities and money market instruments admitted to an official stock exchange listing and/or dealt in on another regulated market Undertakings for collective investment Luxembourg 24,225 ING (L) INVEST BANKING & INSURANCE I CAP USD 11,119, ,071 ING (L) INVEST CONSUMER GOODS I CAP USD 5,804, ,258 ING (L) INVEST ENERGY I CAP USD 3,546, ,799 ING (L) INVEST FOOD & BEVERAGES I CAP USD 3,680, ,593 ING (L) INVEST GLOBAL HIGH DIVIDEND I EUR 2,221, CAP 755 ING (L) INVEST GLOBAL OPPORTUNITIES I EUR 4,910, CAP 6,668 ING (L) INVEST HEALTH CARE I CAP USD 6,555, ,142 ING (L) INVEST INDUSTRIALS I CAP EUR 5,544, ,408 ING (L) INVEST INFORMATION TECHNOLOGY USD 5,973, I CAP 4,551 ING (L) INVEST MATERIALS I CAP USD 3,472, ,149 ING (L) INVEST TELECOM I CAP USD 3,004, ,790 ING (L) INVEST UTILITIES I CAP USD 923, ,650 ING (L) RENTA FUND EURO I CAP EUR 4,801, ,023 ING (L) RENTA FUND EURO LONG DURATION EUR 667, P CAP 1,326 ING (L) RENTA FUND GLOBAL HIGH YIELD I EUR 636, CAP HEDGED 62,862, Future on interest rates 30 EUROBUND FUTURE 06/12/2013 EUR 4,215, , ,215, , Total financial derivative instruments 130, Summary of net assets as at 30/09/2013 % NAV Total securities portfolio 62,862, Total financial derivative instruments 130, Cash at bank 1,142, Other assets and liabilities 734, Total net assets 64,868, ,862, Total securities portfolio 62,862, Financial derivative instruments as at 30/09/2013 To receive To pay Maturity date Commitment in EUR Unrealised profit or (loss) in EUR Forward foreign exchange contracts 103,015, CZK 3,994, EUR 15/10/2013 3,994, , , EUR 26, CZK 15/10/2013 1, ,995, , Quantity Currency Commitment in EUR Unrealised profit or (loss) in EUR Futures on stock indices 23 EURO STOXX 50 20/12/2013 EUR 662, , FTSE 100 INDEX FUTURE 20/12/2013 GBP 307, (6,198.77) (95) S&P 500 EMINI FUTURE 20/12/2013 USD 5,875, , TOPIX INDEX FUTURE 12/12/2013 JPY 360, , ,205, , The accompanying notes form an integral part of these financial statements. ING INVESTMENT MANAGEMENT 17

21 ING (L) Patrimonial Balanced (Denominated in EUR) Statistics Net assets 30/09/2013 EUR 215,523, EUR 241,513, EUR 254,337, Net asset value per share** Capitalisation P (EUR) 30/09/2013 EUR 1, EUR 1, EUR Capitalisation X (EUR) 30/09/2013 EUR 1, EUR EUR Distribution P (EUR) 30/09/2013 EUR EUR EUR Number of shares Capitalisation P (EUR) 30/09/ , , ,206 Capitalisation X (EUR) 30/09/2013 6,192 4,943 4,841 Distribution P (EUR) 30/09/ ,659 27,203 35,259 Dividend Distribution P (EUR) 14/12/2012 EUR Distribution P (EUR) 14/12/2011 EUR Distribution P (EUR) 21/12/2010 EUR 7.15 Ongoing charges in %* Capitalisation P (EUR) 30/09/ % Capitalisation X (EUR) 30/09/ % Distribution P (EUR) 30/09/ % Portfolio turnover in %* 30/09/ % * The portfolio turnover rate is calculated in accordance with the CSSF Circular 2003/122 issued on December 19, The ongoing charges figure corresponds to the ongoing charges figure as mentioned in the latest available Key Investor Information Document ("KIID") as at the date of this report. Transaction costs are included in the purchase/sale price of the securities. These costs, which are not treated as operating expenses, are not included in the calculation of the ongoing charges. The ongoing charges and the portfolio turnover rate are calculated for the last twelve months. The ongoing charges are annualised for periods less than one year. The portfolio turnover rate is not annualised for periods less than one year. ** Official net asset value per share including a swing pricing adjustment, if any. 18 ING INVESTMENT MANAGEMENT