N-CSR 1 e-9624.txt N-CSR OF ING VP NATURAL RESOURCES TRUST OMB APPROVAL OMB Number: 3235-0570 Expires: Nov. 30, 2005 Estimated average burden hours per response: 5.0 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-5710 ING VP Natural Resources Trust (Exact name of registrant as specified in charter) 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258 (Address of principal executive offices) (Zip code) C T Corporation System, 101 Federal Street, Boston, MA 02110 (Name and address of agent for service) Registrant's telephone number, including area code: 1-800-992-0180 Date of fiscal year end: December 31 Date of reporting period: December 31, 2002 ITEM 1. REPORTS TO STOCKHOLDERS. The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1): Annual Report December 31, 2002 ING VP Natural Resources Trust [PHOTO] [LION LOGO] ING FUNDS TABLE OF CONTENTS -------------------------------------------------------------------------------- President's Letter ................................... 1 Portfolio Manager's Report ........................... 2 Independent Auditors' Report ......................... 4 Statement of Assets and Liabilities .................. 5 Statement of Operations .............................. 6 Statements of Changes in Net Assets .................. 7 Financial Highlights ................................. 8 Notes to Financial Statements ........................ 9 Portfolio of Investments ............................. 12 Tax Information ...................................... 13 Trustee and Officer Information ...................... 14 PRESIDENT'S LETTER -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to present the December 31, 2002 Annual Report for the ING VP Natural Resources Trust. The year ended December 31, 2002 proved to be a difficult year as a weak economy and continued accounting scandals in the corporate sector took their toll on the U.S. equity markets. Amid the difficulties of the past year, we were successful in integrating the operations of various mutual fund groups that have been acquired by ING Groep N.V. over the past two years. The ING Funds family now offers more than 100 open- and closed-end funds and variable products with a wide range of investment objectives and styles. At ING Funds, we are dedicated to providing core investments for serious investors. Our goal is to understand and anticipate your needs and objectives, and manage our products accordingly. We greatly appreciate your continued investment in the ING Funds. Sincerely, /s/ James M. Hennessy James M. Hennessy President ING Funds Services, LLC January 15, 2003 1 ING VP NATURAL RESOURCES TRUST Portfolio Manager's Report -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT: James A. Vail, Senior Vice President and Portfolio Manager, ING Investments, LLC. GOAL: The ING VP Natural Resources Trust (the "Trust") seeks long-term growth of capital through investment primarily in common stocks of companies that own or develop natural resources and other basic commodities, or supply goods and services to such companies. MARKET OVERVIEW: Natural resources generally trended higher in the fourth quarter of 2002. The prices of non-energy resources strengthened modestly as economic activity stabilized. This was apparent in aluminum, copper and forest products. Gold finished the period $24 higher than it began, but experienced wide price swings. Crude oil and natural gas performed well in the quarter as supply fears in both categories supported prices. In natural gas, supply continues to fall as companies have cut back drilling for additional production and we believe prices may rise over the course of this winter as increased demand reduces available storage. The world economy appears to be recovering and with it we expect to see increasing demand for natural resources and intermediate materials. With limited supply additions on the near term horizon the outlook for higher commodity prices is good. Moreover, since non-energy resource prices remain at depressed levels, increases may be absorbed without sparking a new round of inflation. PERFORMANCE: For the year ended December 31, 2002, the Trust, excluding any charges, provided a total return of -2.10% compared to the S&P 500 Index which returned -22.10% PORTFOLIO SPECIFICS: The Trust maintains broad exposure to natural resources with 30% in intermediates such as metals, paper and forest products; 52% in energy related names and 3% in industrials with a close correlation to the farm sector. In addition, 15% of the Trust's assets are invested in precious metal shares. MARKET OUTLOOK: Over the last 10 years, we have experienced under investment in the natural resources and materials sectors. As the global economies recover and such regions as India and China emerge as consumers, the demand for these resources should rise dramatically. This sets the stage for higher commodity prices and eventually higher equity prices. 2 Portfolio Manager's Report ING VP NATURAL RESOURCES TRUST --------------------------------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 -------- -------- -------- -------- -------- -------- ING VP Natural Resources Trust $ 10,000 $ 11,090 $ 10,494 $ 12,264 $ 15,562 $ 16,674 S&P 500 Index $ 10,000 $ 11,008 $ 11,153 $ 15,345 $ 18,868 $ 25,163 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 -------- -------- -------- -------- -------- ING VP Natural Resources Trust $ 13,403 $ 15,292 $ 18,100 $ 15,217 $ 14,897 S&P 500 Index $ 32,353 $ 39,159 $ 35,594 $ 31,364 $ 24,431
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 2002 ------------------------------- 1 YEAR 5 YEAR 10 YEAR ------- ------- ------- ING VP Natural Resources Trust -2.10% -2.23% 4.07% S&P 500 Index(1) -22.10% -0.59% 9.34% Based on a $10,000 initial investment, the table and graph above illustrate the total return of ING VP Natural Resources Trust against the S&P 500 Index. The Index has an inherent performance advantage over the Trust since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Trust's performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your annuity contract or life insurance policy. Total returns would have been lower if such expenses or charges were included. Performance table and graph do not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE TRUST WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. PORTFOLIO HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) The S&P 500 INDEX is a widely recognized unmanaged index of 500 common stocks. PRINCIPAL RISK FACTOR(S): Price volatility due to non-diversification and concentration in stocks in the natural resources industry. There are certain risks involved in investing in foreign securities or concentrating in specific industries such as natural resources. These risks include those resulting from future adverse political and economic developments, as well as imposition of foreign exchange or other foreign governmental restrictions or laws. 3 INDEPENDENT AUDITORS' REPORT -------------------------------------------------------------------------------- The Shareholders and Board of Trustees ING VP Natural Resources Trust: We have audited the accompanying statements of assets and liabilities, including the portfolio of investments, of the ING VP Natural Resources Trust (formerly, Pilgrim Natural Resources Trust) (the "Trust") as of December 31, 2002, and the related statements of operations for the year then ended, statements of changes in net assets for each of the years in the two-year period then ended and financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2002 by correspondence with the custodian and broker, and other appropriate audit procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects the financial position of the ING VP Natural Resources Trust as of December 31, 2002, the results of its operations for the year then ended, changes in net assets for each of the years in the two-year period then ended, and financial highlights for each of the years or periods in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP Boston, Massachusetts February 7, 2003 4 STATEMENT OF ASSETS AND LIABILITIES as of December 31, 2002 -------------------------------------------------------------------------------- ASSETS: Investments in securities at value* $ 19,805,667 Short-term investments at amortized cost 1,537,000 Cash 88 Foreign currency at value** 45,393 Receivables: Dividends and interest 9,577 Prepaid expenses 511 ------------ Total assets 21,398,236 ------------ LIABILITIES: Payable for fund shares redeemed 46,071 Payable to affiliates (Note 4) 20,035 Other accrued expenses and liabilities 95,581 ------------ Total liabilities 161,687 ------------ NET ASSETS (EQUIVALENT TO $12.12 PER SHARE ON 1,751,592 SHARES OUTSTANDING) $ 21,236,549 ============ NET ASSETS WERE COMPRISED OF: Paid-in capital-shares of beneficial interest at no par value (unlimited shares authorized) $ 22,159,520 Accumulated net realized loss on investments and foreign currencies (1,080,453) Net unrealized appreciation of investments and foreign currencies 157,482 ------------ NET ASSETS $ 21,236,549 ============ * Cost of securities $ 19,656,430 ** Cost of foreign currencies $ 37,148 See Accompanying Notes to Financial Statements 5 STATEMENT OF OPERATIONS -------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 2002 ----------------- INVESTMENT INCOME: Dividends (net of foreign withholding taxes of $6,780) $ 259,296 Interest 25,785 ---------- Total Investment Income 285,081 ---------- EXPENSES: Investment management fees 231,067 Administrative and service fees 23,107 Printing and postage expenses 19,967 Custodian and accounting expenses 10,064 Transfer agent fees 31,675 Professional fees 54,206 Miscellaneous expenses 3,133 Trustees' fees 6,722 Registration fees 101 ---------- Total expenses 380,042 ---------- Net investment loss (94,961) ---------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized loss on investments (276,527) Net realized loss on foreign currencies (2,201) Net change in unrealized depreciation of investments and foreign currencies (362,262) ---------- Net realized and unrealized loss on investments and foreign currencies (640,990) ---------- DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (735,951) ========== See Accompanying Notes to Financial Statements 6 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
YEAR YEAR ENDED ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 ----------------- ----------------- FROM OPERATIONS: Net investment income (loss) $ (94,961) $ 48,298 Net realized gain (loss) on investments and foreign currencies (278,728) 253,243 Net change in unrealized depreciation of investments and foreign currencies (362,262) (5,825,037) ------------ ------------ Net decrease in net assets resulting from operations (735,951) (5,523,496) ------------ ------------ FROM DIVIDENDS TO SHAREHOLDERS: Net investment income (41,560) -- ------------ ------------ Total distributions (41,560) -- ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 6,211,430 11,669,299 Shares resulting from dividend reinvestments 41,560 -- Cost of shares redeemed (7,979,545) (14,696,546) ------------ ------------ Net decrease in net assets resulting from capital share transactions (1,726,555) (3,027,247) ------------ ------------ Net decrease in net assets (2,504,066) (8,550,743) NET ASSETS: Beginning of year 23,740,615 32,291,358 ------------ ------------ End of year $ 21,236,549 $ 23,740,615 ============ ============ Undistributed net investment income at end of year $ -- $ 39,132 ============ ============
See Accompanying Notes to Financial Statements 7 ING VP NATURAL RESOURCES TRUST FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
YEAR ENDED DECEMBER 31, ---------------------------------------------- 2002 2001 2000(2) 1999 1998 ------ ------ ------ ------ ------ PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of year $ 12.40 14.75 12.51 11.03 14.91 Income (loss) from investment operations: Net investment income (loss) $ (0.05) 0.03 (0.07) 0.06 0.08 Net realized and unrealized gain (loss) on investments $ (0.21) (2.38) 2.36 1.50 (2.98) Total income (loss) from investment operations $ (0.26) (2.35) 2.29 1.56 (2.90) Less distributions from: Net investment income $ 0.02 -- 0.05 0.08 0.08 Net realized gain on investments $ -- -- -- -- 0.90 Total distributions $ 0.02 -- 0.05 0.08 0.98 Net asset value, end of year $ 12.12 12.40 14.75 12.51 11.03 TOTAL RETURN(1) % (2.10) (15.93) 18.37 14.09 (19.62) RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000's) $ 21,237 23,741 32,291 31,737 35,418 Ratios to average net assets: Expenses % 1.64 1.35 1.66 1.33 1.29 Net investment income (loss) % (0.41) 0.17 (0.53) 0.34 0.42 Portfolio turnover rate % 80 85 72 42 74
---------- (1) Total return is calculated assuming reinvestment of all dividend and capital gain distributions at net asset value. (2) Effective July 26, 2000, ING Investments, LLC, became the Investment Manager of the Trust. See Accompanying Notes to Financial Statements 8 NOTES TO FINANCIAL STATEMENTS as of December 31, 2002 -------------------------------------------------------------------------------- NOTE 1 -- ORGANIZATION ORGANIZATION. ING VP Natural Resources Trust (the "Trust") is an open-end, non-diversified management investment company registered under the Investment Company Act of 1940, as amended. The Trust commenced operation in 1991. The Trust's Investment objective is to seek long-term growth of capital through investment primarily in common stock of companies, which own, or develop natural resources and other basic commodities, or supply goods and services to such companies. With the exception of shares held in connection with initial capital of the Trust, shares of the Trust are currently being offered only to participating insurance companies for allocation to certain of their separate accounts established for the purpose of funding variable annuity contracts and variable life insurance policies issued by the participating insurance companies. NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements: A. INVESTMENTS. Securities transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are reported on the identified cost basis. Securities traded on a recognized stock exchange are valued at the last sales price reported by the exchange on which the securities are traded. If no sales price is recorded, the mean between the last bid and asked prices is used. Securities traded on the over-the-counter market are valued at the mean between the last current bid and asked prices. Short-term securities having a maturity of 60 days or less at the date of acquisition are stated at amortized cost, which approximates market value. Securities for which market quotations are not readily available and other assets are valued by management in good faith under the direction of the Trust's Board of Trustees. Dividend income is recorded on the ex-dividend date. Interest income is accrued as earned. Premium amortization and discount accretion are determined using the effective yield method. B. FEDERAL INCOME TAXES. It is the Trust's policy to comply with the requirements of the Internal Revenue Code applicable to "regulated investment companies" and to distribute all of its taxable income to its shareholders. Therefore, no provision for Federal income taxes is required. In addition, by distributing during each calendar year substantially all of its net investment income and net realized capital gains, the Trust intends not to be subject to any federal excise tax. C. DISTRIBUTIONS. Dividends from net investment income and net realized capital gains, if any, are normally declared and paid annually, but the Trust may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. Distributions are recorded on the ex-dividend date. The character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. D. USE OF ESTIMATES. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reported period. Actual results could differ from those estimates. E. FOREIGN CURRENCY TRANSACTIONS. Assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at current exchange rates. Purchases and sales of investments, as well as income and expense items denominated in a foreign currency, are translated at the rates of exchange prevailing on the respective dates of such transactions. The Trust does not isolate that portion of the results of operations resulting from translation gains or losses due to changes in exchange rates and realized gains and losses on the settlement of foreign currency denominated receivables and payables. Realized gains and losses from the sale of foreign currencies as well as the settlement of forward foreign exchange contracts are separately disclosed in the statement of 9 NOTES TO FINANCIAL STATEMENTS as of December 31, 2002 (Continued) -------------------------------------------------------------------------------- operations. The Trust may enter into forward foreign exchange contracts in order to hedge against foreign currency risk in the purchase or sale of securities denominated in foreign currency. The Trust may also enter into such contracts to hedge against changes in foreign currency exchange rates on portfolio positions. These contracts are marked to market daily, by recognizing the difference between the contract exchange rate and the current market rate as unrealized gains or losses. The Trust authorizes its custodian to place and maintain equity securities in a segregated account of the Trust having a value equal to the aggregate amount of the Trust's commitments under forward foreign currency contracts entered into with respect to position hedges. The Trust did not have any open forward foreign currency contracts outstanding at December 31,2002. NOTE 3 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES The Trust pays an investment advisory fee to ING Investments, LLC ("Investment Advisor", formerly ING Pilgrim Investments, LLC) at an annual rate of 1.00% of the Trust's average daily net assets. The Investment Advisor voluntarily agreed to reimburse the Trust if total annual expenses (including management fees, but excluding interest, taxes, brokerage commission and extraordinary expenses) exceed 2.50% of the Trust's average net assets. No reimbursement was required for the year ended December 31, 2002. Effective July 26, 2000, ING Funds Services, LLC (the "Administrator", formerly ING Pilgrim Group, LLC) began serving as Administrator to the Trust. The Trust pays the Administrator a fee calculated at an annual rate of 0.10% of the Trust's average daily net assets. NOTE 4 -- OTHER TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES At December 31, 2002, the Trust had the following amounts recorded in payable to affiliates on the accompanying Statements of Assets and Liabilities: ACCRUED ACCRUED ADVISORY ADMINISTRATIVE FEE FEE TOTAL --- --- ----- $18,214 $1,821 $20,035 The Trust has adopted a Retirement Policy covering all independent trustees of the Trust who will have served as an independent trustee for at least five years at the time of retirement. Benefits under this plan are based on an annual rate as defined in the plan agreement, as amended May 24, 2002. NOTE 5 -- INVESTMENT TRANSACTIONS The cost of purchases and proceeds from sales of investments for the year ended December 31, 2002, excluding short-term securities, were $17,384,498 and $20,272,042, respectively. NOTE 6 -- INVESTMENT AND CONCENTRATION RISKS The Trust makes significant investments in foreign securities and has a policy of investing in the securities of companies that own or develop natural resources and other basic commodities, or supply goods and services to such companies. There are certain risks involved in investing in foreign securities or concentrating in specific industries such as natural resources that are in addition to the usual risks inherent in domestic investments. These risks include those resulting from future adverse political and economic developments, as well as the possible imposition of foreign exchange or other foreign governmental restrictions or laws, all of which could affect the market and/or credit risk of the investments. 10 NOTES TO FINANCIAL STATEMENTS as of December 31, 2002 (Continued) -------------------------------------------------------------------------------- NOTE 7 -- CAPITAL SHARE TRANSACTIONS Transactions in capital shares and dollars were as follows:
YEAR YEAR ENDED ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 ---------------------------- ---------------------------- SHARES DOLLARS SHARES DOLLARS ------------ ------------ ------------ ------------ Shares sold 503,557 $ 6,211,430 850,954 $ 11,669,299 Shares issued as reinvestment of dividends 3,247 41,560 -- -- Shares redeemed (670,496) (7,979,545) (1,125,489) (14,696,546) ------------ ------------ ------------ ------------ Net decrease (163,692) $ (1,726,555) (274,535) $ (3,027,247) ============ ============ ============ ============
NOTE 8 -- FEDERAL INCOME TAXES During the year ended December 31, 2002, the foreign taxes paid or withheld were $6,780. Foreign taxes paid or withheld should be included in taxable income with an offsetting deduction from gross income or as a credit for taxes paid to foreign governments. You should consult your tax advisor regarding the appropriate treatment of foreign taxes paid. Dividends paid by the Trust from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders. The tax composition of dividends and distributions to shareholders for year ended December 31, 2002 were as follow: ORDINARY LONG-TERM TAX RETURN INCOME CAPITAL GAINS OF CAPITAL ------ ------------- ---------- $ 41,560 $ -- $ -- The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. Key differences are the treatment of short-term capital gains, foreign currency transactions, organization costs and other temporary differences. To the extend that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassifications. To the extent distributions exceed net investment income and/or net realized capital gains for tax purposes, they are reported as distributions of paid-in capital. Accordingly, the following amounts represent current year permanent tax differences that have been reclassified as of December 31, 2002: ACCUMULATED NET PAID-IN UNDISTRIBUTED NET REALIZED GAINS CAPITAL INVESTMENT INCOME ON INVESTMENTS ------- ----------------- -------------- $(99,590) $ 97,389 $ 2,201 Capital loss carryforwards, which may be used to offset future realized capital gains for federal income tax purposes were as follows at December 31, 2002: AMOUNT EXPIRATION DATES ------ ---------------- $1,079,917 2006-2010 The following represents the tax-basis components of distributable earnings as of December 31, 2002: UNDISTRIBUTED CAPITAL UNDISTRIBUTED LONG-TERM UNREALIZED LOSS ORDINARY INCOME CAPITAL GAINS APPRECIATION CARRYFORWARDS --------------- ------------- ------------ ------------- $ -- $ -- $ 156,945 $(1,079,917) 11 ING VP Natural Resources Trust PORTFOLIO OF INVESTMENTS as of December 31, 2002 -------------------------------------------------------------------------------- Shares Value -------------------------------------------------------------------------------- COMMON STOCK: 93.26% CHEMICALS: 2.99% 10,000 @@ Potash Corp. of Saskatchewan $ 635,900 ----------- 635,900 ----------- FOREST PRODUCTS & PAPER: 10.49% 79,000 @@ Abitibi-Consolidated, Inc. 606,615 60,000 @@ Domtar, Inc. 603,600 15,000 International Paper Co. 524,550 10,000 Weyerhaeuser Co. 492,100 ----------- 2,226,865 ----------- IRON/STEEL: 1.85% 30,000 United States Steel Corp. 393,600 ----------- 393,600 ----------- MACHINERY-DIVERSIFIED: 2.60% 25,000 AGCO Corp. 552,500 ----------- 552,500 ----------- MINING: 18.98% 60,000 @,@@ African Rainbow Minerals Gold Ltd. 552,958 100,000 @,@@ AUR Resources, Inc. 234,855 60,000 @@ Harmony Gold Mining Co. Ltd. ADR 1,008,600 15,000 @,@@ Impala Platinum Holdings Ltd. ADR 953,075 20,000 @,@@ Inco Ltd. 424,400 12,500 @ Phelps Dodge Corp. 395,625 40,000 @@ Placer Dome, Inc. 460,000 ----------- 4,029,513 ----------- OIL & GAS: 39.18% 10,000 Anadarko Petroleum Corp. 479,000 9,570 Apache Corp. 545,394 50,000 Chesapeake Energy Corp. 387,000 6,200 Devon Energy Corp. 284,580 15,000 @@ EnCana Corp. 466,500 20,000 ENSCO Intl., Inc. 589,000 14,000 EOG Resources, Inc. 558,880 30,000 GlobalSantaFe Corp. 729,600 8,000 Murphy Oil Corp. 342,800 10,400 @,@@ Nabors Industries Ltd. 366,808 16,500 Noble Energy, Inc. 619,575 21,000 Ocean Energy, Inc. 419,370 17,000 @ Pioneer Natural Resources Co. 429,250 26,200 @ Pride Intl., Inc. 390,380 8,000 @@ Royal Dutch Petroleum Co. ADR 352,160 18,000 @ Spinnaker Exploration Co. 396,900 20,000 Transocean, Inc. 464,000 13,500 Valero Energy Corp. 498,690 ----------- 8,319,887 ----------- OIL & GAS SERVICES: 13.55% 15,000 Baker Hughes, Inc. 482,850 20,000 @ BJ Services Co. 646,200 8,600 Schlumberger Ltd. 361,974 16,400 @ Smith Intl., Inc. 534,968 10,700 Tidewater, Inc. 332,770 13,000 @,@@ Weatherford Intl. Ltd. 519,090 ----------- 2,877,852 ----------- PACKAGING & CONTAINERS: 3.62% 50,000 @ Smurfit-Stone Container Corp. 769,550 ----------- 769,550 ----------- Total Common Stock (Cost $19,656,430) 19,805,667 ----------- Principal Amount Value -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 7.24% REPURCHASE AGREEMENT: 7.24% $1,537,000 State Street Repurchase Agreement dated 12/31/02, 0.800% due 01/02/03, $1,537,068 to be received upon repurchase (Collateralized by $1,420,000 U.S. Treasury Notes, 4.875% Market Value $1,570,875 due 02/15/12) $ 1,537,000 ----------- Total Short-Term Investments (Cost $1,537,000) 1,537,000 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $21,193,430)* 100.50% $21,342,667 OTHER ASSETS AND LIABILITIES-NET -0.50% (106,118) ------ ----------- NET ASSETS 100.00% $21,236,549 ====== =========== @ Non-income producing security @@ Foreign Issuer ADR American Depository Receipt * Cost for federal income tax purposes is $21,193,967. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 2,136,625 Gross Unrealized Depreciation (1,987,925) ------------ Net Unrealized Appreciation $ 148,700 ============ See Accompanying Notes to Financial Statements 12 TAX INFORMATION (Unaudited) -------------------------------------------------------------------------------- Dividends paid during the year ended December 31, 2002 were as follows: PER SHARE TYPE AMOUNT ---- ------ NII $0.0211 ---------- NII -- Net investment income The above figure may differ from that cited elsewhere in this report due to differences in the calculation of income and gains for Securities and Exchange Commission (book) purposes and Internal Revenue Service (tax) purposes. Shareholder are strongly advised to consult their own tax advisers with respect to the tax consequences of their Investments in the Trust. In January 2003, shareholders, excluding corporate shareholders, received an IRS 1099-DIV regarding the federal tax status of the dividends and distributions received by them in calendar 2002. 13 TRUSTEE AND OFFICER INFORMATION (Unaudited) -------------------------------------------------------------------------------- The business and affairs of the Trust are managed under the direction of the Trust's Board of Directors/Trustees. Information pertaining to the Trustees and Officers of the Trust is set forth below:
TERM OF NUMBER OF OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY AND AGE FUND SERVED PAST FIVE YEARS BY TRUSTEE TRUSTEE ------- ---- ------ --------------- ---------- ------- Independent Trustees: Paul S. Doherty Trustee October Mr. Doherty is President 104 Mr. Doherty is a Trustee of 7337 E. Doubletree Ranch Rd. 1999 to and Partner, Doherty, the GCG Trust (February Scottsdale, AZ 85258 Present Wallace, Pillsbury and 2002 to present). Born: 1934 Murphy, P.C., Attorneys (1996 to present); a Director of Tambrands, Inc. (1993 to 1998); and a Trustee of each of the funds managed by Northstar Investment Management Corporation (1993 to 1999). J. Michael Earley Trustee February President and Chief 104 Mr. Earley is a Trustee of the 7337 E. Doubletree Ranch Rd. 2002 to Executive Officer of GCG Trust (1997 to present). Scottsdale, AZ 85258 Present Bankers Trust Company, Born: 1945 N.A. (1992 to present). R. Barbara Gitenstein Trustee February President of the College 104 Dr. Gitenstein is a Trustee of 7337 E. Doubletree Ranch Rd. 2002 to of New Jersey (1999 to the GCG Trust (1997 to Scottsdale, AZ 85258 Present present); Executive Vice present). Born: 1948 President and Provost at Drake University (1992 to 1998). Walter H. May Trustee October Retired. Mr. May was 104 Mr. May is a Trustee for the 7337 E. Doubletree Ranch Rd. 1999 to formerly Managing Best Prep Charity (1991 to Scottsdale, AZ 85258 Present Director and Director of present) and the GCG Trust Born: 1936 Marketing for Piper (February 2002 to present). Jaffray, Inc. (an investment banking/underwriting firm). Mr. May was formerly a Trustee of each of the funds managed by Northstar Investment Management Corporation (1996 to 1999). Jock Patton Trustee August Private Investor. Mr. 104 Mr. Patton is a Trustee of 7337 E. Doubletree Ranch Rd. 1995 to Patton was formerly the GCG Trust (February Scottsdale, AZ 85258 Present Director and Chief 2002 to present); He is also Born: 1945 Executive Officer of Director of Hypercom, Inc. Rainbow Multimedia and JDA Software Group, Group, Inc. (January 1999 Inc. (January 1999 to to December 2001); present); National Airlines Director of Stuart Inc.; and BG Associates, In Entertainment, Inc.; Directory of Artisoft, Inc. (1994 to 1998); President and co-owner of StockVal, Inc. (November 1992 to June 1997) and a Partner and Director of the law firm of Streich Lang, P.A. (1972 to 1993).
14 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
TERM OF NUMBER OF OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY AND AGE FUND SERVED PAST FIVE YEARS BY TRUSTEE TRUSTEE ------- ---- ------ --------------- ---------- ------- David W.C. Putnam Trustee October President and Director of 104 Mr. Putnam is a Trustee of 7337 E. Doubletree Ranch Rd. 1999 to F.L. Putnam Securities GCG Trust (February 2002 to Scottsdale, AZ 85258 Present Company, Inc. and its present); Director of F.L. Born: 1939 affiliates. Mr. Putnam is Putnam Securities Company, also President, Secretary Inc. (June 1978 to present); and Trustee of The F.L. Putnam Investment Principled Equity Market Management Company Fund. Mr. Putnam was (December 2001 to present); formerly a Asian American Bank and Director/Trustee of Trust Trust Company (June 1992 Realty Corp., Anchor to present); and Notre Investment Trust, Bow Dame Health Care Center Ridge Mining Co., and (1991 to present). He is also each of the funds a Trustee of The Principled managed by Northstar Equity Market Fund Investment Management (November 1996 to present); Corporation (1994 to Progressive Capital 1999). Accumulation Trust (August 1998 to present); Anchor International Bond Trust (December 2000 to present); F.L. Putnam Foundation (December 2000 to present); Mercy Endowment Foundation (1995 to present); and an Honorary Trustee of Mercy Hospital (1973 to present). Blaine E. Rieke Trustee February General Partner of 104 Mr. Rieke is a 7337 E. Doubletree Ranch Rd. 2001 to Huntington Partners, an Director/Trustee of the Scottsdale, AZ 85258 Present investment partnership Morgan Chase Trust Co. Born: 1933 (1997 to present). Mr. (January 1998 to present) Rieke was formerly and the GCG Trust (February Chairman and Chief 2002 to present). Executive Officer of Firstar Trust Company (1973 to 1996). Mr. Rieke was formerly the Chairman of the Board and a Trustee of each of the funds managed by ING Investment Management Co. LLC. (1998 to 2001). Roger B. Vincent Trustee February President of Springwell 104 Mr. Vincent is a Trustee of 7337 E. Doubletree Ranch Rd. 2002 to Corporation, a corporate the GCG Trust (1994 to Scottsdale, AZ 85258 Present advisory firm (1989 to present) and a Director of Born: 1945 present). Mr. Vincent was AmeriGas Propane, Inc. formerly a Director of (1998 to present). Tatham Offshore, Inc. (1996 to 2000) and Petrolane, Inc. (1993 to 1995).
15 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
TERM OF NUMBER OF OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY AND AGE FUND SERVED PAST FIVE YEARS BY TRUSTEE TRUSTEE ------- ---- ------ --------------- ---------- ------- Richard A. Wedemeyer Trustee February Vice President -- Finance 104 Mr. Wedemeyer is a Trustee 7337 E. Doubletree Ranch Rd. 2001 to and Administration -- of of Touchstone Consulting Scottsdale, AZ 85258 Present the Channel Corporation, Group (1997 to present) and Born: 1936 an importer of specialty the GCG Trust (February alloy aluminum products 2002 to present). (1996 to present). Mr. Wedemeyer was formerly Vice President -- Finance and Administration -- of Performance Advantage, Inc., a provider of training and consultation services (1992 to 1996), and Vice President -- Operations and Administration of Jim Henson Productions (1979 to 1997). Mr. Wedemeyer was a Trustee of each of the funds managed by ING Investment Management Co. LLC. (1998 to 2001). Interested Directors: R. Glenn Hilliard(1) Trustee February Chairman and CEO of 104 Mr. Hilliard is a Trustee of ING Americas 2002 to ING Americas and a the GCC Trust (February 5780 Powers Ferry Road, NW Present member of its Americas 2002 to present). Mr. Atlanta, GA 30327 Executive Committee Hilliard also serves as a Born: 1943 (1999 to present). Mr. member of the Board of Hilliard was formerly Directors of the Clemson Chairman and CEO of University Foundation, the ING North America, Board of Councilors for the encompassing the U.S., Carter Center, a Trustee of Mexico and Canada the Woodruff Arts Center regions (1994 to 1999). and also on the Board of Directors for the High Museum of Art.
16 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
TERM OF NUMBER OF OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY AND AGE FUND SERVED PAST FIVE YEARS BY TRUSTEE TRUSTEE ------- ---- ------ --------------- ---------- ------- Thomas J. McInerney(2) Trustee February Chief Executive Officer, 158 Mr. McInerney serves as a 7337 E. Doubletree Ranch Rd. 2001 to ING U.S. Financial Director/Trustee of Aeltus Scottsdale, AZ 85258 Present Services (October 2001 to Investment Management, Born: 1956 present); President, Chief Inc. (1997 to present); each Executive Officer, and of the Aetna Funds (April Director of Northern Life 2002 to present); Ameribest Insurance Company Life Insurance Co. (2001 to (2001 to present); and present); Equitable Life President and Director of Insurance Co. (2001 to Aetna Life Insurance and present); First Columbine Annuity Company (1997 Life Insurance Co. (2001 to to present), Aetna present); Golden American Retirement Holdings, Inc. Life Insurance Co. (2001 to (1997 to present), Aetna present); Life Insurance Investment Adviser Company of Georgia (2001 Holding Co. (2000 to to present); Midwestern present), and Aetna United Life Insurance Co. Retail Holding Company (2001 to present); ReliaStar (2000 to present). Mr. Life Insurance Co. (2001 to McInerney was formerly present); Security Life of General Manager and Denver (2001 to present); Chief Executive Officer Security Connecticut Life of ING Worksite Division Insurance Co. (2001 to (since December 2000 to present); Southland Life October 2001); President Insurance Co. (2001 to of Aetna Financial present); USG Annuity and Services (August 1997 to Life Company (2001 to December 2000); Head of present); United Life and National Accounts and Annuity Insurance Co. Inc Core Sales and (2001 to present); and the Marketing for Aetna U.S. GCG Trust (February 2002 to Healthcare (April 1996 to present). Mr. McInerney is a March 1997). member of the Board of the National Commission on Retirement Policy, the Governor's Council on Economic Competitiveness and Technology of Connecticut, the Board of Directors of the Connecticut Business and Industry Association, the Board of Trustees of the Bushnell, the Board for the Connecticut Forum, and the Board of the Metro Hartford Chamber of Commerce, and is Chairman of Concerned Citizens for Effective Government.
17 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
TERM OF NUMBER OF OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY AND AGE FUND SERVED PAST FIVE YEARS BY TRUSTEE TRUSTEE ------- ---- ------ --------------- ---------- ------- John G. Turner(3) Chairman and October President, Turner 104 Mr. Turner serves as a 7337 E. Doubletree Ranch Rd. Director/ 1999 to Investment Company member of the Board of the Scottsdale, AZ 85258 Trustee Present (since January 2002). Mr. GCG Trust. Mr. Turner also Born: 1939 Turner was formerly Vice serves as a Director of the Chairman of ING Hormel Foods Corporation Americas (2000 to 2001); (May 2000 to present), Chairman and Chief Shopko Stores, Inc. (August Executive Officer of 1999 to present), and M.A. ReliaStar Financial Corp. Mortenson Co. (March 2002 and ReliaStar Life to present). Insurance Company (1993 to 2000); Chairman of ReliaStar United Services Life Insurance Company (1995 to 1998); Chairman of ReliaStar Life Insurance Company of New York (1995 to 2001); Chairman of Northern Life Insurance Company (1992 to 2000); Chairman and Director/Trustee of the Northstar affiliated investment companies (1993 to 2001) and Director, Northstar Investment Management Corporation and its affiliates (1993 to 1999).
(1) Mr. Hilliard is an "interested person", as defined by the Investment Company Act of 1940, as amended (the "1940 Act"), because of his relationship with ING Americas, an affiliate of ING Investments, LLC. (2) Mr. McInerney is an "interested person", as defined by the 1940 Act, because of his affiliation with ING U.S. Worksite Financial Services, an affiliate of ING Investments, LLC. (3) Mr. Turner is an "interested person", as defined by the 1940 Act, because of his former affiliation with ING Americas, an affiliate of ING Investments, LLC. 18 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
PRINCIPAL TERM OF OFFICE OCCUPATION(S) NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS ------- -------------- ----------- --------------- Officers: James M. Hennessy President, Chief March 2002 to President and Chief Executive Officer of 7337 E. Doubletree Ranch Rd. Executive Officer, Present (for the ING Capital Corporation, LLC, ING Funds Scottsdale, AZ 85258 and Chief ING Funds) Services, LLC, ING Advisors, Inc., ING Born: 1949 Operating Officer Investments, LLC, Lexington Funds Distributor, Inc., Express America T.C. Inc. President, Chief February 2001 to and EAMC Liquidation Corp. (since Executive Officer, March 2002 (for December 2001); Executive Vice and Chief the Pilgrim Funds) President and Chief Operating Officer of Operating Officer ING Funds Distributor, LLC (since June 2000). Formerly, Executive Vice President Chief Operating June 2000 to and Chief Operating Officer of ING Officer February 2001 (for Quantitative Management, Inc. (October the Pilgrim Funds) 2001 to September 2002); Senior Executive Vice President (June 2000 to December 2000) and Secretary (April 1995 to December 2000) of ING Capital Corporation, LLC, ING Funds Services, LLC, ING Investments, LLC, ING Advisors, Inc., Express America T.C. Inc., and EAMC Liquidation Corp.; and Executive Vice President, ING Capital Corporation, LLC and its affiliates (May 1998 to June 2000) and Senior Vice President, ING Capital Corporation, LLC and its affiliates (April 1995 to April 1998). Mary Lisanti Executive Vice March 2002 to Executive Vice President of ING 7337 E. Doubletree Ranch Rd. President Present (for the Investments, LLC and ING Advisors, Inc. Scottsdale, AZ 85258 ING Funds) (since November 1999); Chief Investment Born: 1956 Officer of the Domestic Equity Portfolios, Executive Vice May 1998 to ING Investments, LLC (since 1999). President March 2002 (for Formerly, Executive Vice President of ING the domestic Quantitative Management, Inc. (July equity portfolios 2000 to September 2002); Executive Vice of the Pilgrim President and Chief Investment Officer Funds) for the Domestic Equity Portfolios of Northstar Investment Management Corporation, whose name changed to Pilgrim Advisors, Inc. and subsequently became part of ING Investments, LLC (May 1998 to October 1999); Portfolio Manager with Strong Capital Management (May 1996 to 1998); a Managing Director and Head of Small- and Mid-Capitalization Equity Strategies at Bankers Trust Corp. (1993 to 1996).
19 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
PRINCIPAL TERM OF OFFICE OCCUPATION(S) NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS ------- -------------- ----------- --------------- Michael J. Roland Executive Vice March 2002 to Executive Vice President, Chief Financial 7337 E. Doubletree Ranch Rd. President, Present (for the Officer and Treasurer of ING Funds Scottsdale, AZ 85258 Assistant Secretary ING Funds) Services, LLC, ING Funds Distributor, LLC, Born: 1958 and Principal ING Advisors, Inc., ING Investments, LLC Financial Officer (December 2001 to present), Lexington Funds Distributor, Inc., Express America Chief Financial December 2002 T.C. Inc. and EAMC Liquidation Corp. Officer to Present (for (since December 2001). Formerly, the IPI Funds) Executive Vice President, Chief Financial Officer and Treasurer of ING Senior Vice June 1998 to Quantitative Management, Inc. President and March 2002 (for (December 2001 to October 2002); Senior Principal Financial the Pilgrim Funds) Vice President, ING Funds Services, LLC, Officer ING Investments, LLC, and ING Funds Distributor, LLC (June 1998 to December 2001) and Chief Financial Officer of Endeavor Group (April 1997 to June 1998). Robert S. Naka Senior Vice March 2002 to Senior Vice President and Assistant 7337 E. Doubletree Ranch Rd. President and Present (for the Secretary of ING Funds Services, LLC, ING Scottsdale, AZ 85258 Assistant Secretary ING Funds) Funds Distributor, LLC, ING Advisors, Inc., Born: 1963 ING Investments, LLC (October 2001 to Senior Vice November 1999 to present) and Lexington Funds President and March 2002 (for Distributor, Inc. (since December 2001). Assistant Secretary the Pilgrim Funds) Formerly, Senior Vice President and Assistant Secretary for ING Quantitative Assistant Secretary July 1996 to Management, Inc. (October 2001 to November 1999 October 2002); Vice President, ING (for the Pilgrim Investments, LLC (April 1997 to October Funds) 1999), ING Funds Services, LLC (February 1997 to August 1999) and Assistant Vice President, ING Funds Services, LLC (August 1995 to February 1997). Robyn L. Ichilov Vice President and March 2002 to Vice President of ING Funds Services, LLC 7337 E. Doubletree Ranch Rd. Treasurer Present (for the (since October 2001) and ING Scottsdale, AZ 85258 ING Funds) Investments, LLC (since August 1997); Born: 1967 Accounting Manager, ING Investments, Vice President and May 1998 to LLC (since November 1995). Treasurer March 2002 (for the Pilgrim Funds) Vice President November 1997 to May 1998 (for the Pilgrim Funds) Kimberly A. Anderson Vice President and March 2002 to Vice President and Assistant Secretary of 7337 E. Doubletree Ranch Rd. Secretary Present (for the ING Funds Services, LLC, ING Funds Scottsdale, AZ 85258 ING Funds) Distributor, LLC, ING Advisors, Inc., ING Born: 1964 Investments, LLC (since October 2001) February 2001 to and Lexington Funds Distributor, Inc. March 2002 (for (since December 2001). Formerly, Vice the Pilgrim Funds) President for ING Quantitative Management, Inc. (October 2001 to October 2002); Assistant Vice President of ING Funds Services, LLC (November 1999 to January 2001) and has held various other positions with ING Funds Services, LLC for more than the last five years. Todd Modic Assistant Vice April 2002 to Director of Financial Reporting of ING 7337 E. Doubletree Ranch Rd. President Present (for Investments, LLC (since March 2001). Scottsdale, AZ 85258 the ING Funds) Formerly, Director of Financial Reporting, Born: 1967 Axient Communications, Inc. (May 2000 March 2002 to to January 2001) and Director of Present (for Finance, Rural/Metro Corporation (March certain ING Funds) 1995 to May 2000). August 2001 to March 2002 (for the Pilgrim Funds)
20 TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) --------------------------------------------------------------------------------
PRINCIPAL TERM OF OFFICE OCCUPATION(S) NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS ------- -------------- ----------- --------------- Maria M. Anderson Assistant Vice April 2002 to Assistant Vice President of ING Funds 7337 E. Doubletree Ranch Rd. President Present (for Services, LLC (since October 2001). Scottsdale, AZ 85258 the ING Funds) Formerly, Manager of Fund Accounting Born: 1958 and Fund Compliance, ING Investments, March 2002 to LLC (September 1999 to November Present (for 2001); Section Manager of Fund certain ING Funds) Accounting, Stein Roe Mutual Funds (July 1998 to August 1999); and Financial August 2001 to Reporting Analyst, Stein Roe Mutual March 2002 (for Funds (August 1997 to July 1998). the Pilgrim Funds) James Vail Senior Vice March 2002 to Senior Vice President for ING 7337 E. Doubletree Ranch Rd. President and Present (for Investments, LLC (since June 2001) and Scottsdale, AZ 85258 Portfolio Manager certain ING Funds) Portfolio Manager of ING Investments, Born: 1944 LLC and ING Advisors, Inc. (since October June 2001 to 2001). Formerly, Vice President, March 2002 (for Lexington Management Corporation certain Pilgrim (which was acquired by ING Investments, Funds) LLC's parent company in July 2000) (1991 to 2000); and has held investment research positions with Chemical Bank, Oppenheimer & Co., Robert Fleming, Inc. and Beacon Trust Company, where he was a Senior.
21 Investment Manager ING Investments, LLC 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 Administrator ING Funds Services, LLC 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 Transfer Agent DST Systems, Inc. P.O. Box 219368 Kansas City, Missouri 64141-6368 Custodian State Street Bank & Trust 801 Pennsylvania Avenue Kansas City, Missouri 64105 Legal Counsel Dechert 1775 Eye Street, N.W. Washington, D.C. 20006 Independent Auditors KPMG LLP 99 High Street Boston, MA 02110-2371 Prospectus containing more complete information regarding the Fund, including charges and expenses, may be obtained by calling ING Funds Services, LLC at 1-800-992-0180. Please read the prospectus carefully before you invest or send money. [LION LOGO] ING FUNDS VPNRTAR 1202-021803 ITEM 2. CODE OF ETHICS. Not applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable. ITEMS 4-8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) Not applicable. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. (a) The officer certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as EX-99.CERT. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as a part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ING VP Natural Resources Trust By /s/ James M. Hennessy ------------------------------------- James M. Hennessy President and Chief Executive Officer Date March 3, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ James M. Hennessy ------------------------------------- James M. Hennessy President and Chief Executive Officer Date March 3, 2003 By /s/ Michael J. Roland ------------------------------------- Michael J. Roland Executive Vice President and Chief Financial Officer Date March 3, 2003