DRAFT [For approval of stockholders at the next meeting] MINUTES OF THE ANNUAL MEETING OF THE SHAREHOLDERS OF IONICS, INC. Held on 30 May 2017 At the Sta. Elena Golf & Country Club, Light Industry and Science Park I, Cabuyao, Laguna STOCKHOLDERS PRESENT/REPRESENTED Please refer to Annex A 1. CALL TO ORDER The Chairman and President, Mr. Lawrence C. Qua, called the meeting to order and presided over the same. The Corporate Secretary, Atty. Manuel R. Roxas, recorded the minutes of the proceedings. 2. PROOF OF NOTICE OF MEETING The Secretary certified that in accordance with Rule 20 of the Securities Regulation Code, notices for the stockholders meeting were sent to all stockholders of record at least fifteen (15) days prior to the meeting. 3. CERTIFICATION OF QUORUM Atty. Roxas stated that based on the attendance record and the proxies and powers of attorney in his possession, as well as the certification of the Corporation s transfer agent, the total number of stockholders present in person or by proxy represented more than Sixty Seven Percent (67%) of the total number of outstanding shares of the Corporation. He then certified as to the existence of a quorum for the valid transaction of business.
Page 2 of 5 A copy of the Certification issued by the Corporation s transfer agent attesting to the foregoing is attached hereto as Annex B. 4. READING AND APPROVAL OF THE MINUTES OF THE PREVIOUS MEETING OF THE STOCKHOLDERS HELD ON 20 MAY 2016. Mr. Lawrence C. Qua then proceeded to the next item in the Agenda, the reading and approval of the minutes of the previous meeting of the stockholders. Upon motion duly made and seconded, the reading of the minutes of the last annual stockholders meeting was dispensed with and the minutes covering the same as appearing in the Corporation s minutes book were duly approved. 5. REPORT OF MANAGEMENT FOR THE FISCAL YEAR 2016 / APPROVAL OF THE FINANCIAL STATEMENTS Mr. Lawrence C. Qua then presented the Management Report for the fiscal year 2016 and reported that the Ionics Group of companies ( the Group) continued the profitable track it has shown for several years. Ionics Properties, Inc. increased its net income to US$1.944M in 2016 from US$1.870M in 2015. Ionics EMS, Inc. increased its gross profit from US$4.388M in 2016 from US$4.340 million in 2015. Its net income, however, slightly decreased from US$1.650M in 2015 to US$1.446M. Iomni Precision, Inc. posted a decrease in sales from US$2.964M in 2015 to US$2.657M in 2016 resulting in an increase in its loss from US$0.149M in 2015 to US$0.357M in 2016. Ionics Circuits Limited, Inc., the offshore investment subsidiary of the Corporation, reversed its losses of the previous year of US$0.152M and posted a net income of US$0.162M. The consolidated sales of the Group slid by 24% from US$63.746M in 2015 to US$48.356M in 2016. Mr. Qua pointed out that had it not been for the
Page 3 of 5 impairment provision in the amount of US$0.16M on its receivables, the Group could have exceeded the earnings of 2015. The Net Income of the Group attributable to the equity holders of the Ionics, Inc. in 2016 was US$2.802M, compared to the US$2.925M in 2015. As of 31 December 2016, the consolidated assets of the Group decreased from US$59.419M in 2015 to US$58.383M in 2016. While the return on equity decreased from 7.46% in 2015 to 6.69% in 2016, the debt to equity ratio improved from 37% in 2015 to 49% in 2016. Moving forward, Mr. Qua stated that he foresees that growth and expansion will continue. Mr. Qua then expressed his appreciation to the stockholders and pledged the Group s unrelenting efforts to enhance shareholder value. With the foregoing report and upon motion duly made and seconded, the following resolution was approved: RESOLVED, That the Audited Financial Statements of the Corporation for the period ending 31 December 2016 as prepared by SGV & Co., the external auditors of the Corporation, and as contained in the Annual Report, be, as it is hereby, approved. 6. RATIFICATION OF ACTS, PROCEEDINGS AND RESOLUTIONS OF THE BOARD OF DIRECTORS AND MANAGEMENT.. The meeting then proceeded to consider the next item in the Agenda, the ratification of all the acts, resolutions and investments of the Board of Directors and the Officers of the Corporation from the date of the last stockholders meeting held on 20 May 2016 up to 30 May 2017 as reflected in the minutes book. An enumeration of the significant acts, resolutions and investments sought to be approved was provided in the Information Statement circulated to the stockholders. Upon motion duly made and seconded, the following resolution was approved: RESOLVED, That all acts, resolutions and investments of the Board of Directors and Management
Page 4 of 5 of the Corporation from the date of the last stockholders meeting held on 20 May 2016 up to 30 May 2017 as reflected in the minutes book of the Corporate Secretary be, as they are hereby, approved, confirmed and ratified. 7. ELECTION OF DIRECTORS The Chairman of the Nomination Committee, Mr. Alfredo de Borja, reported on the nominees approved by the Nomination Committee for directorship for the year 2017-2018. Upon motion duly made and seconded, the following were elected directors of the Corporation: Lawrence C. Qua Alfredo R. de Borja Cecilia Q. Chua Virginia Judy Q. Dy Guillermo D. Luchangco Meliton C. Qua Raymond C. Qua Monica Siguion Reyna Villonco Amelia B. Cabal Diana P. Aguilar Anna Melissa R. Lichaytoo Mr. Alfredo R. de Borja and Ms. Amelia B. Cabal were nominated as independent directors. It was announced that the Company is in the process of identifying one or more suitable nominees for the position of independent directors by the end of the year in order to comply with SEC Memorandum Circular No. 19, Series of 2016. There being no other nominees, upon motion duly made and seconded, the nominations were closed. Since there were only eleven nominees, upon motion duly made and seconded, the Corporate Secretary was instructed to cast all votes equally among the nominees and the nominees were considered elected as directors of the Corporation to serve as such for the ensuing year until the election and qualification of their successors.
Page 5 of 5 9. APPOINTMENT OF EXTERNAL AUDITOR The accounting firm of SGV & Co. was nominated and appointed as external auditor of the Corporation. 10. ADJOURNMENT There being no further business to transact, and upon motion duly made and seconded, the annual stockholders meeting was adjourned. ATTEST: MANUEL R. ROXAS Corporate Secretary LAWRENCE C. QUA Chairman of the Annual Stockholders Meeting