Chairman Letter

2009, like its predecessor, was a year of tremendous complexity and increasing difficulty, in excess of what might have been expected when the year began. Nevertheless, we managed to record very significant growth and profitability rates, which have kept us even more clearly at the forefront of our industry than in previous years.

Against such a difficult backdrop, the fact that we have managed to meet each and every one of our demanding objectives underpins the conviction in our capacity to continue generating value for our customers and shareholders, while also offering our employees an appealing future in terms of professional development and career prospects.

In the last ten years we have had to tackle highly complex and difficult challenges, although this was certainly the toughest and most global and will likely last the longest; and we have learned that our wisest decision and best strategy has been, and will continue to be, to pursue the values that define us. This will enable us to continue to build a company that is strongly sustainable in the very long term and based on an unflinching commitment to innovation in all our fields of activity, not only internally but also in respect of our stakeholders, and in particular our customers, to whom we want to convey and extend this conviction and this commitment.

“Yes to innovation” is the message we want to share and galvanise wherever we operate. In 2009, we increased our investment in R&D&i significantly, to 7% of revenue. This has contributed to our sustained and sustainable growth during this difficult period and will continue to do so. We are the leading European company in terms of R&D investment in our industry and we rank second among all Spanish companies.

We think this firm commitment to innovation is the way for companies to achieve economic sustainability, and it must be combined with social and environmental sustainability to comprise a three-pillared approach throughout any organisation. The same applies to regions and countries, in a context where the main and most significant challenges are already global in scale.

This Annual Report summarises our activity and our commitment as a company and in particular it highlights the sustainable value of our solutions and services, which enables us to use our own activity as a springboard from which to help and encourage other public and private, regional and global organisations, to be innovators.

This innovation encompasses and extends to all spheres, including energy efficiency systems, emissions measurement, control and management, and remote control of the environmental aspect of sustainability; citizens’ services and participation, electronic administration, the scorecard system, localisation and monitoring, smart grids and knowledge portals emphasising economic sustainability that secures the future of organisations and companies; and solutions and services to facilitate remote healthcare, employee mobility, accessibility, supplier chain responsibility and equality policies, all within the sphere of social commitment, which is the third pillar of sustainability.

This commitment to innovation prioritises substantial investment in talented professionals, in supporting their development and in retaining them at Indra. Consequently, this year we have grown in talent an increasingly international talent that we are managing through a new model based on both diversity and values, on the ethical outlook linked to sustainability.

This year we approved the revised version of our Code of Ethics and Professional Conduct, which not only sets out the internal control systems and other procedures to prevent, identify and correct any deficiencies or weaknesses in the company’s compliance and control systems. Above all, this Code unites all of us working at Indra in a commitment to the strong values (ambition, determination, rigour, sensitivity and originality) which must define and distinguish us.

Our future hinges on our ability to continue persevering and progressing in developing our highly technology-oriented solutions and services; on recruiting and retaining the most talented professionals; on maintaining and strengthening the position of an increasing number of our leading customers with large-scale business projects and on boosting our global development and presence.

The following report has been prepared in accordance with the Global Reporting Initiative’s G3 Guidelines, to application level A+, as well as the AA1000 APS (2008) Accountability standard, including our conduct in respect of the principles of the Global Compact, to which we are wholeheartedly committed. The result is a balanced and fair presentation of our economic, environmental and social performance, which has been externally verified.

Javier Monzón
Chairman