SURAMERICANA DE INVERSIONES S.A. SURAMERICANA. Principal Members

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2 BOARD OF DIRECTORS Principal Members José Alberto Vélez Cadavid Luis Fernando Vergara Munárriz Carlos Enrique Piedrahíta Arocha Darío Múnera Arango Alberto Espinosa López Antonio De Roux Rengifo Alternate Members Jorge Ignacio Acevedo Zuluaga Jorge Mario Velásquez Jaramillo Jorge Eusebio Arango López Ricardo Toro Ludeke Juan Guillermo Londoño Posada Lucía Margarita González González 1 COMPANY MANAGEMENT David Bojanini García President Andrés Bernal Correa Vice-president for Investment Rodrigo Ferreira Camacho Vice-president for Auditing Fernando Ojalvo Prieto Vice-president for Administration

3 CORPORATIVE INFORMATION Mission Suramericana de Inversiones is a corporation dedicated to making and managing investments in strategic sectors of both the Colombian and Latin American economies, with the firm commitment of providing value to its shareholders and thereby contributing to Colombia s social and economic progress. 3 Vision To create greater value trough an efficient and transparent management of our investment portfolio and establish closer relationship with our investors. Values Absolute transparency in all our activities and undertakings with shareholders, customers, and suppliers trough a comprehensive policy of Good Corporate Governance. Knowledge of the business environment to maintain ongoing competitiveness. Orthodox business practices. Firm commitment to social and community concerns. Integral development of all those associated with us.

4 HIGHLIGHTS Operating Income (MM COP$) 1,015,005 Shareholders Equity (MM COP$) 10,086,418 8,571,239 99, , , , ,849 3,399,710 1,841,787 1,131, , Net Profits (MM COP$) 949,629 Book Value (COP$) 22,052 18,739 32, , , , ,520 2,639 3,251 5,050 9, Earning per Share (COP$) Annual Dividends (COP$) 2, To be Approved

5 Shareholders SURAMERICANA Inversiones Argos and subsidiaries 10.76% GNCH and subsidiaries 11.40% 36.26% Colinversiones and subsidiaries Institutional Investors 15.12% International Funds 1.93% 9.95% 1.96% 12.62% Pension Funds Local Funds Individual Investors Number of Shareholders 16, ,576 2,617 2,662 3,006 4, Suramericana s stock Suramericana s IGBC s Index Suramericana s price US$ D-2005 M-2006 J-2006 S-2006 D-2006

6 MAIN INVESTMENTS Book value vs. Inflation (100 Basis in 2001) For the past five years the Shareholders Equity had an appraisal over its book value of 8.6 times (856%), therefore the correspondent inflation has been of 31.68%. In the last year the appraisal was 17.7% and for the last two years it was 136.6%. Book value Inflation 1, Book Value COP$ 1, , , , , , Annual Appraisal Book Value 32.77% 26.16% 55.33% 84.59% % 17.68% Book Value 100 Basis Inflation 100 Basis Annual Inflation 7.65% 6.99% 6.49% 5.50% 4.85% 4.48% Dividend yield vs. Inflation (100 Basis in 2001) The annual dividend that the shareholders have received during the past five years has had an appraisal of 77%, which in real terms is equal to 34.2% Dividend 200 Inflation Annual Dividend COP$ Dividend Annual Appraisal 0.00% 16.67% 14.29% 10.00% 11.36% 8.16% Dividend 100 Basis Inflation 100 Basis Annual Inflation 7.65% 6.99% 6.49% 5.50% 4.85% 4.48%

7 Compound yield vs. Inflation (100 Basis in 2001) The yield that would have received a shareholder that had invested in Suramericana s shares in the last five-year period would have been of %, % superior to the one that would have received in a fix investment with a yield equal to the inflation, which for the same period was 31.68%. Compound yield Inflation Compound yield 46.05% 33.83% 61.11% 88.65% % 18.90% Compound yield 100 Basis Inflation 100 Basis Annual Inflation 7.65% 6.99% 6.49% 5.50% 4.85% 4.48% 7 Shareholders Equity Increase For the past five years the Shareholders Equity has had an annual average appraisal of 49.9%. In the last year the appraisal was 17.68%. Annual appraaisal of Book value Average increase 120% 90% 60% 30% 49.9% 0% Book Value COP$ 1, , , , , , Annual appraisal of Book Value 32.77% 26.16% 55.33% 84.59% % 17.68%

8 SHAREHOLDERS REPORT Dear Shareholders, Pursuant to current legislation and the Company's by-laws, we hereby present you with a report on the activities carried out and the results obtained by Suramericana de Inversiones S.A. during ECONOMIC ENVIRONMENT 2006 was one of the best years for the Colombian economy, driven by the dynamics of different sectors, the most salient being the growth of the construction industry and rising household consumption, all of which contributed to a year-end economic growth of 6.8%. Latin America and the world-wide economy also performed well, and this is expected to continue into The inflation rate also contributed positively to the Colombian economy finishing the year at 4.48%, just under the 4.5% target set by Central Bank. The Producer Price Index registered a 5.5% increase for the year. The falling dollar rate in 2006 forced Central Bank to intervene on the foreign exchange market on various occasions. The market exchange rate began the year at $2, per dollar and closed at $2,238.79, showing a decline of $45.43 over the 12-month period, this entailing an appreciation of the Colombian peso of 1.99%. The exchange rate has now reached the same level as in April STOCK EXCHANGE PERFORMANCE After a fall in share prices half way through the year, demand started to recover during the third quarter, due to factors such as enhanced economic conditions on a global scale, the sound foundations of the local economy and to the good operating results secured by Colombian companies. 1 The Colombian Stock Exchange Index registered a year-on-year increase of 17.3%. The total volume of shares transacted on the Colombian Stock Exchange came to $33.7 billion versus the $16.6 billion recorded the previous year. Suramericana de Inversiones share price closed the year at $20,480, showing a year-on-year increase of 4.2% versus the $19,660 recorded at the end of During the year, $6.26 billion worth of Suramericana de Inversiones shares were transacted, showing a year-on-year increase of 259%, for a total daily trading average in shares of $25,964 million. This has translated in Suramericana de Inversiones share attaining the highest liquidity index on the Colombian Stock Exchange. RESULTS OBTAINED BY SURAMERICANA DE INVERSIONES Net profits at the end of 2006 came to $333,520 million, which was a very positive result considering that our listed investments provided a lower rate of return that than recorded in 2005, which was doubtlessly an exceptional year. Furthermore, an important package of shares that were previously registered as negotiable instruments were classified as permanent investments so as to reduce the amount of volatility on Suramericana s Income Statement. The Company s Operating Income in 2006 came to $359,849 million, of which $248,089 million came from Inversura, Suramericana de Construcciones and Portafolio de Inversiones Suramericana, via the Equity Method.

9 SHAREHOLDERS REPORT Total dividends paid to the Company totaled $81,194 million, showing an increase of 15% compared to the dividends posted on the Income Statement in 2005, deducting from this account the income corresponding to the to the winding-up of Inversiones Reacol. Profits from the sale of investments came to $8,986 million, given the divestiture of certain companies that no longer had any strategic importance for Suramericana, including Meriléctrica and Promotora de Hoteles Medellin. To conclude, the Mark-to-Market Account came to $18,826 million, corresponding to the increase in value of all those assets classified as negotiable belonging to Bancolombia, Colinversiones, Inversiones Argos and Cementos Argos. Out of the $13,423 million posted in Operating Expense, $6,335 million corresponded to Provisions and Adjustments relating to Exchange Differences On Investments and $7,088 corresponded to Miscellaneous Administrative Expense and Taxes. This account registered a 3% increase with respect to last year. Interest and Financial Expense dropped by 78% from $29,798 million in 2005 to $6,633 million in 2006, given a decrease in the Company s financial liabilities and hence interest. Total Assets closed at $10.2 billion, of which Negotiable Equity Investments came to $274,353 million, Controlling and Permanent Investments $7.4 billion and Permanent Investment Valuations came to $2.5 billion; the two latter accounts posting an increase of $1.67 billion for the year. Total Liabilities closed at $123,163 million, having paid off Commercial Paper borrowings totaling $150,000 million. Shareholders Equity ended the year at $10.1 billion, showing a year-on-year increase of 17.7%. 2 NEW COMPANIES ENLACE OPERATIVO S.A. On August 1st 2006, Suramericana de Inversiones, Protección and Inversura set up a new company under the name of Enlace Operativo S.A with Suramericana de Inversiones holding a 55% stake, and Inversura and Protección each with a 22.5% stake. From the beginning Enlace Operativo has acted as an Information Operator, providing information processing services with respect to the social security system, through software called SuAporte. Later on, the Company shall provide payroll and operating process services on an outsourcing basis. At December , the Company had processed social security contributions from 462,558 employees belonging to 1,781 affiliated entities, thereby obtaining a 15.7% stake of the domestic market in terms of active members. SOCIEDAD INVERSIONISTA ANONIMA S.A. This Company was set up on December 20th, 2006 as a result of dividing up the portfolios of Suramericana de Seguros, Suramericana de Seguros de Vida and Suramericana de Capitalización. Shareholders Equity at December 31st, 2006 came to $1.56 billion and consisted of shares held mainly in Inversiones Argos, Grupo Nacional de Chocolates, Bancolombia, Exito, Inversiones La Merced, Enka, Protección among other companies. In the short term, Suramericana de Inversiones shall work towards reacquiring IFC and MunichRe stakes in the Company, with a view to a possible merger at a later date.

10 SHAREHOLDERS REPORT PORTAFOLIO DE INVERSIONES SURAMERICANA S.A. MERGES WITH INVERSIONES SPC S.A. At Extraordinary Meetings held August 24th, the Shareholders of Portafolio de Inversiones Suramericana S.A. and Inversiones SPC S.A., together with the Portafolio Bondholders at a General Meeting held October 12th, 2006, gave their approval to a merger between Portafolio de Inversiones Suramericana and Inversiones SPC, with Portafolio de Inversiones Suramericana as the Surviving Company. Both companies, subsidiaries of Suramericana de Inversiones, handle important investment portfolios of a similar nature. With this merger, a much better organization was obtained within the Group, in addition to providing much more clarity to our current and potential shareholders and maximizing efficiency in handling the investments common to both companies. At December 31, 2006 Shareholders Equity for Portafolio de Inversiones Suramericana came to $4.6 billion. Currently on the market are its Portfolio Bonds that were given a Triple "A"rating by BRC Investor Services (a rating which was updated September 15th, 2006, given the projected merger). The current balance of the bonds outstanding, which correspond to the C10 series maturing in August 2009, comes to $43,489 million. MAIN INVESTMENTS In keeping with Suramericana de Inversiones strategic focus, 17.9% of the total value of its portfolio at the end of 2006 corresponded to investments in insurance and social security and a further 37.2% corresponded to financial services, which together account for 55% of the total. Individually, Inversura s subsidiaries accounted for 17.3% of the total, Bancolombia 36.0% and Protección 0.8%. Also, Inversiones Argos and Grupo Nacional de Chocolates accounted for 20.6% and 22.4%, respectively. In addition to the above, the Company and its subsidiaries hold an ample portfolio of investments in other sectors such as services, (Enlace Operativo, Sodexho Colombia and Sodexho Pass), wholesale (Makro) and retail (Éxito), textiles (Fabricato Tejicóndor, Enka) and apparel (Confecciones Colombia - Everfit). 3 INVERSURA AND SUBSIDIARIES Inversura is a subsidiary of Suramericana de Inversiones that handles investments in the insurance and social security sectors. Inversura offers life insurance and general insurance through Suramericana de Seguros S.A. and Suramericana de Seguros de Vida S.A.; it also offers its clients savings facilities through Administradora de Fondos de Inversión Suramericana S.A.. With regard to social security, clients obtain occupational risk coverage through Suratep S.A. and healthcare through Susalud S.A. Healthcare services are also provided through other Group facilities such as I.P.S. Dinámica S.A, Punto de Salud S.A. and Centro para los Trabajadores S.A., as well as other recently inaugurated SaludSURA healthcare centers in Medellín and Barranquilla. Inversura also offers insurance in Panama through its subsidiary Interoceánica S.A.. In August, Inversura placed at the disposal of the local community its first healthcare center SaludSURA in Medellin, with an area of 12,800 m 2 at a total cost of $22 thousand million, Later in December, it inaugurated another SaludSURA healthcare center in Barranquilla, with an area of 2,142 m 2 and for a total investment of $865 million. More SaludSURA healthcare facilities are being built in Bogota and Cali. New projects include a chain of AutoSURA service centers that are also being built in these same cities. The Inversura Holding Company obtained $155,029 million in Net Profits for Revenues totaled $161,983 million of which Revenues from the Equity Method came to $158,128 million Total Assets rose

11 SHAREHOLDERS REPORT by 30.0%, from $1.87 billion in 2005 to $2.44 billion in Shareholders Equity increased by 29.9% to $2.43 billion. At the end of 2006, Inversura spun off part of the portfolios belonging to its insurance and capitalization companies, creating a new company called Sociedad Inversionista Anónima S.A.. For this reason, Shareholders Equity corresponding to both Suramericana de Seguros S.A., Suramericana de Seguros de Vida S.A. and Suramericana de Capitalización S.A. registered an important drop at the end of the year, which did not have any fundamental effect on Inversura. Also in 2006, the purchase of the assets, liabilities and contracts belonging to the Compañía Agrícola de Seguros S.A. was duly negotiated. Given the complementary nature of both Companies, Inversura now enjoys No. 1 position on the Colombian general insurance market and shall be consolidating its leading position on the life and occupational risk insurance markets. The total value of this operation came to $301,815 million Colombian pesos in the case of Compañía Agrícola de Seguros and $66,252 million in the case of Compañía Agrícola de Seguros de Vida S.A. This acquisition is subject to prior authorization being given by the Colombian Superintendency of Finance for it to be subsequently made official. It is important to point out the structural changes that Inversura implemented in 2006 by setting up shared service units for all its Insurance, Social Security and Investment companies in the areas of administration, finance, control and risk management. With this, Inversura seeks to enhance its overall efficiency, taking full advantage of the synergies existing between its various companies. 4 SURAMERICANA DE SEGUROS S.A. Total Premiums rose by 9.6%, from $379,059 million in 2005 to $415,462 million in 2006, providing a Technical Result of $65,048 million. Claims Ratio fell by 4.7% from 46.2% in 2005 to 41.5% in Return on Company Investments came to $85,635 million in 2006, ending the year with Net Profits of $32,165 million and an Expense Ratio of 27.5%. As a result of the dividing up the Company, both Assets and Shareholders Equity registered a drop at the end of the year, posting $744,255 million and $247,832 million respectively. With regard to Liabilities, the most salient item was Technical Insurance Reserves totaling $354,650 million. Suramericana de Seguros ended the year with a Solvency Margin of $49,458 million and Technical Equity of $139,467 million. At December 2006, the Company s client base included companies and private individuals, representing a market share in terms of written premiums of 10.2%, which in 2007 shall be extended with Agricola de Seguros share of the market, placing Suramericana in leading position on the general insurance market with a total combined share of 19.5%. SURAMERICANA DE SEGUROS DE VIDA S.A. With 1,409,555 clients and a year-on-year growth of 18.4%, the Company maintained its lead on the life insurance and annuities markets with a 23.9% share of the market. This shall be extended with the premiums of Seguros Agricola, which at December 2006 held a 3.5% share of the market. This volume of policy-holders provided the Company in 2006 with Revenues from Written Premiums totalizing $816,201 million, registering a year-on-year growth of 43.81% and a Claims Ratio of 42.3% compared with 51.3% in 2005.

12 SHAREHOLDERS REPORT With an Expense Factor of 8.3%, the Company s Technical Result came to $71,011 million. Return on Investment came to $99,040 million, showing a drop of 64.96%, bringing Net Profits to $102,184 million for As in the case of Suramericana de Seguros, this Company spun off part of its portfolio which, was taken up by Sociedad Inversionista Anónima S.A., ending the year with $1.65 billion in Assets and $416,645 million in Shareholders Equity. Technical Insurance Reserves, which is its single most important liability, closed the year at $1.14 billion. The Company s Solvency Margin came to $114,867 million and Technical Equity $203,601 million. ADMINISTRADORA DE FONDOS DE INVERSIÓN SURAMERICANA S.A. In 2006, this Company continued working on positioning its funds and increasing the net value of its managed volume, securing the budgeted targets in both cases. Administradora de Fondos de Inversión Suramericana S.A. continued enjoying the same AA+ (Double A Plus) rating granted by Duff and Phelps de Colombia for its Strength in Managing Portfolios. The Suramericana Fixed Income and Growth Fund was also given the same AA+ (Double A Plus) credit risk rating. Operating Income dropped by 23.6%, from $3,468 million pesos in 2005 to $2,648 million pesos in This was primarily due to the drop in fund management commissions, brought on by the crisis that affected the different markets between May and July of At the end of the year, the Company posted $1,809 million in Net Profits, showing a decline of 74.4% with regard to the previous year. It should be pointed out that the Company s Income Statement in 2005 included Extraordinary Income obtained from the winding up of Inversiones Reacol, reflecting also a rise in stock prices for that year. 5 Managed funds, belonging to an investor base of 25,412, totaled $162,081 million, showing a year-onyear increase of 20.7%. SURAMERICANA DE CAPITALIZACIÓN S.A. As expected given the decision not to sell any more products, capitalization quotas collected showed a decrease of 77% with regard to the $6,749 million obtained in Return on its investments allowed the Company to post $737 million in Net Profits. On the other hand, Assets dropped by 72%, that is to say, from $257,794 million in 2005 to $71,413 million in This was mainly due to the changes made to its investments, $209,000 million of which migrated with the dividing up the companies. However the investments that remain in the hands of the Company still cover its Technical Capitalization Reserve by 3.7 times. The aforementioned split decreased the Company s Shareholders Equity by 79%, going from $230,053 million in 2005 to $49,358 million in Financial results continue to clearly show the effect of having suspended the sale of capitalization securities. However clients and brokers alike continue to invest in other savings options that Inversura offers through its Fund Management firm, Administradora de Fondos de Inversión Suramericana S.A. as well as financial products pertaining to its personal insurance business. Suramericana s capitalization business shall continue gradually winding down, with the substitute products fully satisfying client needs.

13 SHAREHOLDERS REPORT SURATEP S.A. At the end of 2006, this Occupational Risk Management Company obtained $193,682 million in Revenues, posting a year-on-year growth of 22.3%. Profits came to $13,924 million showing a 13.3% increase vs. previous year. Assets came to $339,523 million and Liabilities $290,058 million. Thanks to a sales drive in 2006 together with new companies being set up in Colombia, SURATEP affiliated 2,705 new companies and 98,278 workers and employees, all of which accounted for $9,620 million in additional revenue. At the end of the year, the Company s affiliate base included 1,078,917 workers and employees and 17,163 companies. Suratep maintained its lead on the private market with a share of 30.7% in premiums. Now that Agricola has been acquired together with its occupational risk business, this share shall be now extended by 4.4%. As part of the "We Make Your Welfare Our Business" campaign implemented in conjunction with Susalud, an ample range of comprehensive products and services were offered to almost eight thousand companies throughout the country, representing more than one million workers and/or employees. Thanks to all of these strategies, an excellent Technical Result was obtained, along with substantial satisfaction levels with all of our affiliates. In 2006, Suratep obtained recertification for the NTC-ISO 9001 Standard version 2000 awarded by ICONTEC (The Colombian Standards Bureau). 6 SUSALUD S.A. With a total of 1,052,115 affiliates enrolled in the Mandatory Healthcare Plan, Susalud secured a growth of 10.3% and a share of 6.1% of the market corresponding to Health Service Provider Entities. The number of affiliates enrolled in Complementary Plans came to 13,978 at the end of the year, posting a growth of 12.5% with a further 36,343 affiliates in Prepaid Medical Plans. Company Revenues came to $487,248 million at the end of 2006 and Net Profits $7,774 million, of which $6,228 million were obtained from Mandatory Healthcare Plans and $1,548 million from Pre-Paid Healthcare Plans. Assets increased by 1.2%, from $110,520 million in 2005 to $111,667 million in 2006 and Shareholders Equity closed at $32,604 million vs. $32,439 million posted in Its subsidiary Punto de Salud IPS (Healthcare Provider Institute) ended the year with a total of 410,664 affiliated users. Operating Income came to $74,607 million posting an increase of 21.7%. In 2006, the Company posted an Operating Loss of $3,184 million and a Net Loss of $2,146 million given the fact that Income for the year increased at a lower rate than did Indirect General Costs and Expense. The subsidiary I.P.S. Dinámica (another Healthcare Provider Institute) obtained $29,146 million in Net Income, showing a growth of 15.65%. Net Profits for this Healthcare Provider Institute came to $438 million in 2006, with Third Party sales totaling $11,633 million, representing an increase of 15%, and a 37.7 % share of the Company s Total Revenue. INTEROCEÁNICA Interoceánica de Seguros is an insurance company with more than 28 years of experience on the Panamanian market. It offers practically all lines of insurance (except health insurance) with particular emphasis on Automobile, Individual Life and Residential Fire insurance, which it distributes either directly or through its traditional channel of insurance brokers.

14 SHAREHOLDERS REPORT In 1998, Suramericana de Inversiones obtained a controlling stake in this Company through one of its subsidiaries, and began capitalizing the business and driving sales of its Individual Life Insurance products. In 2006, a technological integration process was deployed and synergies with Suramericana were fully taken advantage of, from both the administrative standpoint as well as the insurance business, thereby preparing Interoceánica for greater growth and development in the future. The Company has obtained a 155% increase in premiums since 1998, which is far superior to the 48.6% market average. At the end of 2006, out of the entire 17 insurance companies that are active on the Panamanian market, Interoceanica holds third place with a 3.7% share of the market. This year written premiums totaled US$18.2 million, showing a 22.7% increase, which is far superior to the 15.4% market average. The Company s claims rate came to 32.7%, which is much lower than the 39.6% market average. Net Profits for the year came to US$420,119, which is 33.4% below that obtained in 2005, this due to heavy investments in projects ensuring the Company s ongoing growth and development. Shareholders Equity came to US$ 7.4 million, showing a growth of 5.7% and Assets US$19.0 million registering an increase of 13.6%. BANCOLOMBIA S.A. In 2006 Bancolombia maintained its long-standing position as No. 1 bank in Colombia, growing and consolidating its business at the same time. In November 2006 it unified its technological platform and launched a new image for the Bancolombia Group, product of the merger between Bancolombia, Conavi and Corfinsura. The Group s main challenge is to continue to develop as a player on the international finance market, embracing change and innovation, gaining greater experience, becoming more specialized and improving service so as to be able to grow together with its clients, employees and shareholders. 7 One of the goals for 2007 is to secure a greater pace of growth on both the local and international finance markets. This is amply reflected in: Recent negotiations to acquire Banagrícola S.A, a leading financial institution in El Salvador deal that is expected to be official during the first half of 2007 thereby representing a transcendental strategic decision that paves the way towards gaining greater international scale. Extending banking services to a greater percentage of the population, through new service initiatives and financial brokerage arrangements including Non-Banking Correspondents, Mobile Points of Service, Mini Points of Service, Mobile Bank Branches, and products such as microcredit and family remittances which are providing the Bank with access to new segments of the population. The Bancolombia Group posted $749,529 million in Consolidated Net Earnings. The merger with Bancolombia, Conavi and Corfinsura brought about a more favorable restructuring of its balance sheet. Its Loan and Net Leasing Portfolios grew by 32.9%. Portfolio investments decreased by 32.9% and, as a result, its Loan Portfolio now accounts for 69% of Total Asset figure for 2006 vs. the 58.2% recorded in On the other hand, investments dropped from 27.5% of Total Assets in 2005 to 16.5% en Total Assets increased by 12%. Similarly the merger also had a favorable affect on Liabilities. Non-interest bearing liabilities grew by 29.8%, mainly with a 30.0%, increase in non-remunerated Checking Accounts, whereas interest-bearing liabilities registered a 25.5% increase, thanks to the dynamics shown by Savings Accounts which posted a year-on-year growth of 33.0%. The Cost of Loanable Funds remained at 4.5% during 2005 and 2006.

15 SHAREHOLDERS REPORT The Group s Shareholders Equity increased by 8.0% for the year thanks to the results obtained, maintaining an adequate solvency ratio that exceeded the minimum requirement by 206 basis points. Revenues for 2006 were affected by a drop of 13.8% in Net Interest, given the performance of its Investment Portfolio. Interest on both its Loan and Leasing Portfolios increased by 15.2% and Net Commissions by 12.9%, with Operating Income dropping by 4.3%. Likewise, Operating Expense grew by 14.1%. Its Net Interest Margin dropped from 7.2% in 2005 to 5.9% in The increase in Operating Expense on account of the abovementioned reduction in Operating Income resulted in an Efficiency Ratio of 65.6%. The Group s consolidated average ROE came to 22.1% and its average ROA 2.3%. PROTECCION S.A. The total value of funds managed by Protección during 2006 came to $13.35 billion, with which it maintained its position as the second most important Pension and Severance Fund Management Firm with a total market share of 25.1%. At the close of 2006, its Mandatory Pension Fund totaled $10.78 billion, showing a growth of 19.5% with regard to last year and with an affiliate base of 1,521,626. Its Severance Fund totaled $856,313 million, showing a total variance of 0.8%, ending the year with 724,775 affiliates. Its Voluntary Pension Fund ended the year at $1.71 billion, showing a year-on-year increase of 16.8%, an affiliate base of 89,880 and a total market share of 27.8%. 8 In 2006, the Company obtained $234,537 million in Operating Income, registering a 6.9% increase with regard to Net Profits closed at $48,331 million, showing an 11.8% drop due to a declining rate of return compared to the prior year. Total Assets ended the year at $221,754 million and Shareholders Equity at $183,663 million, showing year-on-year growths of 8.2% and 11.2% respectively. INVERSIONES ARGOS S.A. Inversiones Argos S.A. s main asset is its subsidiary Cementos Argos S.A., which continued with its international expansion initiative first begun in In 2006, it acquired the Ready Mixed Concrete Company for a total value of US $435 million. This was the third in a series of acquisitions, beginning with Southern Star and Concrete Express in Thus, the Company ceased to be a mere exporter of cement to become the sixth most important player in the concrete industry in the world s No. 1 economy. The Colombian market showed a slight recovery in the price of cement, after the considerable drop in 2005 as a result of heavy competition. It should be pointed out that in spite of this increase in prices, the market continues with the same drive prevalent since 2002 and the Company was able to maintain its leadership position with almost a 51% share of the market. So as to consolidate the Company as a world-class player in the cement industry, various projects are underway. Special mention must be made of the plan to expand its Cartagena plant, that shall extend capacity by a further 1.8 million tons of cement per year at a cost of more than US $300 dollars. With this, the Company shall be in a condition to satisfy the rising demand abroad by the year Inversiones Argos obtained Consolidated Operating Income of $3.5 billion, doubling those of last year. EBITDA went above $638,000 million showing more than a 200% increase with regard to Net Profits came to more than $152,000 million.

16 SHAREHOLDERS REPORT On an individual basis, Inversiones Argos posted $143,102 million in Operating Income and more than $116,879 million in EBITDA. This represents more than a 20% increase with regard to Assets increased by 4%, ending the year at $6.32 billion, with Shareholders Equity increasing at the same rate to more than $6.29 billion. GRUPO NACIONAL DE CHOCOLATES S.A was a year of considerable progress for the Grupo Nacional de Chocolates S.A. and its subsidiaries. On a consolidated basis, practically all the goals contained in its strategic plan were achieved by an ample margin. Consolidated Income came to $2.9 billion, posting a growth of 25%. Net Profits increased by 24.4%. The processed food basket increased by 8.0%, however the Group s overall growth came to 11.9%. Thanks to this, the Group s market share in its respective categories went from 48.7% in 2005 to 50.0% in The Group made important progress in 2006 with regard to acquiring new businesses and reorganizing its internal structure. In March 2006, it acquired Meals de Colombia S.A. a leading ice cream firm. This was an important strategic move for the Group affording entry into a highly dynamic category that is the perfect complement to the Group s chocolate and biscuit business. The results obtained by Meals this year were excellent and far superior to the estimated figures contained in the business plan that served as a basis for assessing this business prior to its acquisition. In May 2006, the purchase of Blue Ribbon, a leading processed meat company in Panama was duly made official. Sales for this Company reached almost US$13 million. With this acquisition the Company has become an important regional player in the processed meat business, occupying the No. 1 position on both the Colombian and Panamanian markets and coming in second place on the Venezuelan market with the Hermo brand. 9 In August, 2006, the Group purchased Galletas Pozuelo, a leading biscuit firm in Central America, with sales exceeding US$60 million and a 31% share of the regional market. This Company was acquired from the multinational company Ebro Puleva for US$116 million. Thanks to this acquisition, the biscuit business of the Grupo Nacional de Chocolates is now consolidating its regional leadership from Colombia to Central America with its umbrella brands Noel and Pozuelo. As a new investment for its meat business, an agreement has been arrived at to purchase Mil Delicias S.A., a company specialized in producing and selling ready-made frozen meals, under its principal brand, Crujientes. Sales for this Company total $5,000 million per year. This level of sales shall complement those of Zenu s Sofia Express brand, in this same segment, which goes with modern tendencies towards greater convenience in food preparation. At the end of the year, an agreement was arrived at to acquire, for an approximate amount of US$36 million, all those assets and brands belonging to Good Foods, a company with an important share of the chocolate market in Peru, via its Winters brand, in addition to additional shares held in the biscuit and confectionary markets. Annual sales come to almost US$40 million per year. A new company, Compañía Nacional de Chocolates de Peru S.A., was set up for the purpose of continuing to run this business.

17 SHAREHOLDERS REPORT These two latter acquisitions began to be consolidated within the Group as of Sales from all acquisitions carried out in 2006 came to $266,730 million. On the other hand it is important to mention that a new service company, Servicios Nacional de Chocolates S.A., has been set up to provide a shared array of services to the other Group s companies, with regard to accounting, treasury management, financial planning, taxes, auditing, insurance, human resources, purchases, general and IT services. Grupo Nacional de Chocolates S.A. now consists of 40 different food companies located in 12 countries, employing more than people, of whom work outside Colombia. Consolidated sales came to US$ 1,217 million, 22% (US$265 million) of which corresponded to sales abroad. OTHER INVESTMENTS SODEXHO COLOMBIA S.A. This Company provides its clients with comprehensive Facilities Management services, on an outsourcing basis. With 7,455 employees, 185 service agreements, a presence spanning 4 regions and 130 cities in Colombia, and a diverse range of services offered, this Company billed a total of $167,229 million in 2006, posting a year-on-year growth of 24.9% 10 Net Profits came to $3,263 million. Company Assets came to $45,302 million, showing a growth of 62.4% and Shareholders Equity increased by 11.7% for a total of $6,259 million SODEXHO PASS DE COLOMBIA S.A. Sodexho Pass de Colombia, through the service check facilities it provides, allows employees from different companies to enjoy their employment benefits. Leading the Colombian market with an 80% share, it issued $322 thousand million in checks in Operating Income increased by 16.8% to $11,768 million with Net Profits increasing by 28.5% for a total of $1,796 million. Total Assets increased by 30.5% for a total of $75,649 million, and Shareholder Equity ended the year at $4,308 million, posting a 14.7% year-on-year growth. FABRICATO - TEJICONDOR S.A. The Board of Directors of Fabricato-Tejicondor S.A. at a meeting held July 19th, 2006 gave its approval for expanding its indigo plant for a total cost of US$32 million. With this, plant capacity shall be extended by another meters per month This project is to be carried out on the Company s premises in Bello, taking full advantage of important synergies with the existing infrastructure. This is to be financed mainly with funds from the sale of shares in Comercia as well as with ongoing operating income. This shall represent an increase in annual sales of almost $90,000 million. This project is expected to be up and running by the end of 2007.

18 SHAREHOLDERS REPORT The three wool companies INDULANA - FABRISEDAS OMNES are to be grouped together under one single business unit within Fabricato Tejicóndor. The Company arrived at an agreement to purchase Indulana belonging to the apparel company, Confecciones Colombia, for $15,000 million. This amount was paid with an issue of shares in Textiles Fabricato Tejicóndor. Approval has already been obtained from the Colombian Superintendency of Finance to merge Indulana with Fabricato Tejicóndor. Also, a stake in Fabrisedas S.A. is to be purchased from Suramericana de Seguros, Confecciones Colombia and the former owners of Textiles Omnes. This transaction shall be officially concluded in March, CONFECCIONES COLOMBIA S.A. - EVERFIT The year 2006 was indeed a milestone in the history of Confecciones Colombia, given the events and decisions that helped to enhance its overall performance and financial results. A new competitive strategy was put into effect at the end of 2005, by means of which new value proposals were put forward for each of its strategic business units, whereby value-added, welldifferentiated products are to be offered in the three market niches where the Company holds a competitive advantage. After an exhaustive analysis of the situation, the Company decided to sell its strategic textile unit, Indulana, to Fabricato Tejicondor. This decision obeyed a new strategic approach to guarantee more focus and a greater degree of specialization within the different businesses, and the acquiring company represented an opportunity to take advantage of the synergies offered in the textile business and for the Company it represented the possibility of focusing on its apparel business in a much more efficient fashion. The uncertainty surrounding the postponement of the APTDEA benefits before the Free Trade Pact comes into effect, plus the appreciation of the Colombian peso during the year, negatively impacted the Company s performance, especially its export business. Generally speaking, Colombian textile and apparel exports to the US, its main export market, declined by 24% and 13% respectively. 11 Bearing in mind that Indulana was under the control of Confecciones Colombia S.A. for 11 months of the year, the Company obtained $95,415 million in income, showing an increase of 1.2%. which produced $3,057 million in operating earnings, that is to say $5,050 million higher than the figure posted for the previous year. EBITDA came to $9,261 million compared to the $1,608 million posted in Unfortunately this level of EBITDA, for the merged business, was insufficient to cover its financial and pension burdens. Without taking into account the impact of the sale of Indulana, operating losses came to $ 6,324 million. Considering the mentioned effect in books of divesting the textile unit together with other provisions, losses for the year came to $18,089 million. ALMACENES EXITO S.A. In 2006, the Company s Net Profits came to $123,176 million, posting an increase of 81.5%. Operating Earnings closed at $168,431 million, registering a year-on-year increase of 4.5%. As during recent years, the Company continued to show the highest level of Operating Income within the real sector with $4.26 billion representing a year-on-year increase of 20.7%. EBITDA came to $345,860 million, that is to say 8.1% of sales, and a year-on-year increase of 20.1%.

19 SHAREHOLDERS REPORT Total Assets came to $3.60 billion, showing an increase of 18.4%, this reflecting the Company s expansion and modernization plan. Shareholders Equity came to $2.22 billion, showing an increase of 10.9% with regard to the previous year. The credit rating firm, Duff & Phelps gave Almacenes Éxito S.A, a AAA rating for its issue of bonds totaling $200 thousand million. On August 19th, 2006, it was publicly announced that Almacenes Éxito had decided to purchase the Carulla Vivero Organization and on December 19th, the Colombian Superintendency of Industry and Commerce announced that it had no objection to said acquisition but nevertheless stipulated certain conditions to be fulfilled. In 2006, Almacenes Éxito inaugurated a series of new stores, further defined its different brands and introduced new shopping formats (Éxito Convenience and Éxito Supermarket). Almacenes Exito provides 16,330 direct and 28,633 indirect jobs. CORPORATE GOVERNANCE The Code of Good Governance, pursuant to both the law and the Company's by-laws, sets out fundamental provisions for managing and running Suramericana de Inversiones. It contains standards that are recognized on a national and international level for an optimum and responsible corporate management, so that the Company maintains a transparent and an understandable governance system 12 The Code also contains a specific focus on the rights of minority shareholders, guaranteeing their investments in the Company, since one of its fundamental principles is to protect investor rights. In 2006, the Company took part in seminars, courses and congresses in conjunction with different market players. These activities included organizing the Corporate Governance and Sarbanes Oxley Act Seminar in Medellin; attending the Corporate Governance Development and Outlook organized by the Chamber of Commerce in Bogotá; attending the II International Congress on Corporate Governance held in Cartagena; taking part in the Country Code Project sponsored by ANDI (Colombian Association of Industrialists), for the purpose of creating a Code of Best Corporate Practices for Colombia and taking part also in the Project for Creating a Code of Good Corporate Governance for the insurance sector, lead by Fasecolda (Colombian Insurance Federation). The Board of Directors wish it to be known that in 2006 no conflict of interest regarding transactions or matters that could affect the Company were brought to their attention. SOCIAL RESPONSABILITY The purpose of the Suramericana Foundation, established in 1971, is to improve social, educational, civic and cultural conditions and, generally speaking, improve the wellbeing of the community, either by means of its own initiatives or in conjunction with other entities. During 2006, the Foundation took part in cultural and educational projects as well as other social welfare initiatives with contributions that amounted to $1,516 million. In 2006, donations worth $235 million were made through the "Dividend for Colombia" Foundation corresponding to contributions from both the Company and 698 employees and consultants working for both Suramericana and its subsidiaries.

20 SHAREHOLDERS REPORT According to a study carried out by the Great Place to Work Organization, a worldwide authority in evaluating working environments, some of the companies belonging to the Suramericana portfolio were rated as being the best companies to work for in Colombia. These include Almacenes Exito that ranked in third place, Protección in fifth place, Suramericana de Seguros in sixth, Suratep in seventh, Bancolombia twelfth, Leasing Colombia in position No.21st and Susalud No. 23rd. OPERATIONS WITH COMPANY MANAGEMENT AND SHAREHOLDERS Transactions with Shareholders and Company Management have fully complied with all applicable legislation and were given the same treatment as any other third party would receive. IMPORTANT EVENTS TAKING PLACE SUBSEQUENT TO THE ANNUAL CLOSING OF 2006 SETTING UP INVERSIONES OTRABANDA S.A. On January 9th, 2007, Suramericana de Inversiones S.A. Suramericana, in conjunction with Sociedad Inversionista Anónima S.A., Compañía Suramericana de Construcciones S.A. and Suratep S.A., set up a new company called Sociedad Inversiones Otrabanda S.A This Company received in the form of contributions in kind, the shares that the Company s shareholders held in Almacenes Exito S.A., which represented 8.3% of the total amount of its subscribed shares, this in order to obtain a greater degree of efficiency in handling this investment, bearing in mind that this is the most significant investment that has been made in the retail sector. Suramericana de Inversiones shall continue to be the real beneficiary of these shares. The shares thus contributed each represented a value of $15,920 per share, the same price registered for Almacenes Exito s shares at December 28th, 2006, the last business day of the year on which said shares were traded on the Colombian Stock Exchange in FINANCIAL INFORMATION CONTROL AND DISCLOSURE SYSTEMS The Company has designed adequate disclosure and control procedures in order to adequately obtain financial information and disclose this to shareholders, investors and the stock market. INTELLECTUAL PROPERTY AND COPYRIGHT The Company is in full compliance with all intellectual property and copyright legislation, and all purchases in this regard have been made through authorized suppliers of good legal standing. The Company only usufructs intellectual property that has been acquired through the proper channels and therefore recognizes the authors rights to said property and protects the owners rights to all commercial property. We dedicate our very best efforts to ensure that said principles are complied with on an internal level, this being a fundamental factor encouraging creativity, avoiding plagiarism, and boosting the development of the economy based on knowledge. SPECIAL MENTION Each of the Company s accomplishments included in this report is undoubtedly the result of the leadership, professionalism and outstanding vision of Mr. Juan Camilo Ochoa Restrepo who until September 2006 and for the space of two and a half years, was the CEO of Suramericana de Inversiones S.A..

21 SHAREHOLDERS REPORT We would like to express our deepest gratitude to Mr. Juan Camilo Ochoa Restrepo for his brilliant work in leading the Company, wishing also to reassure him that we shall continue working with the same degree of responsibility and tenacity as he taught us with his example. ACKNOWLEDGEMENTS Without the commitment, dedication and hard work of many people, the Company would not have secured such a good level of results in We therefore extend our deepest gratitude to our employees, shareholders, clients, government and regulatory authorities as well as to all those others who in one form or another contributed to the growth of our Company and subsidiaries. José Alberto Vélez Cadavid, Chairman of the Board of Directors Luis Fernando Vergara Munárriz Carlos Enrique Piedrahita Arocha Darío Múnera Arango Alberto Espinosa López Antonio de Roux Rengifo Members of the Board of Directors 14 David Bojanini García CEO

22 MAIN INVESTMENTS COMMERCIAL VALUE OF THE PORTFOLIO Others 2.7% GNCH 22.4% Bancolombia 36.0% Inversura 17.3% Protección 0.8% 1 Inversiones Argos 20.8% Includes the commercial value of these investments at stock prices or its book value according to the accounting rules applied by the following investment companies: Suramericana de Inversiones S.A., Suramericana; Portafolio de Inversiones Suramericana S.A. and Compañía Suramericana de Construcciones S.A.; excluding the commercial value of these same (Due to December 31, 2006 the commercial value of the portfolio came up to $10.1 billon)

23 MAIN INVESTMENTS MAIN INVESTMENTS Outstanding Shares Shares of Suramericana and Subsidiaries Stake of Suramericana and Subsidiaries CONTROLLING COMPANIES Financial Administradora de Fondos de Inversión Suramericana 350, , % Investment Portafolio de Inversiones Suramericana 1,418,341 1,418, % Compañía Suramericana de Construcciones 3,703,887 3,703, % Sociedad Inversionista Anónima 150,622, ,617, % Inversiones GVCS 27,991 27, % Inversura BVI 10,627,120 10,627, % Suramericana BVI 71,390,231 71,390, % Inversura 121,885 86, % 2 Social Security Susalud - EPS 10,000,000 10,000, % Dinámica - I.P.S. 1,519,992 1,519, % Centro para los Trabajadores - I.P.S. 912, , % I.P.S. Punto de Salud 168, , % Suratep - ARP 880, , % Insurance Suramericana de Seguros 1,836,895,142 1,836,895, % Suramericana de Seguros de Vida 202, , % Suramericana de Capitalización 151, , % Interoceánica - Panamá 460, , % Services Seriauto 355, , % Enlace Operativo 10,000 7, % MAIN INVESTMENTS Finance Bancolombia 727,827, ,074, % Protección 17,280,030 7,601, % Investments Grupo Nacional de Chocolates 435,123, ,358, % Compañía de Inversiones La Merced 79,680 27, % Inversiones Argos 645,400, ,801, % Compañía Colombiana de Inversiones - Colinversiones 83,374,747 2,595, %