Feature story ■ Work on social issues

Our efforts to improve product quality
INOAC GROUP has introduced a comprehensive management system based on ISO 9001 and is working with the product quality assurance system in cooperation with ourcustomers to assure product safety while also supplying excellent products and services to satisfy our customers.
Safety in our products is the beginning of everything. We secure safety in our products in the compliance Code of Conduct and arrange our system in order to implement theCode. We are also working to ensure the design process includes essential safety design.

Basic policy

Critical defects: 0①No critical quality problem②Strict quality review & to strengthen inspection function③To enhance examination of new products

Quality assurance
1. Implement quality audits to monitor quality assurance activities

3. Implement audits to secure quality in production

INOAC GROUP continues to improve process conformity and effectiveness by implementing thePDCA* cycle of the quality management system, and implements integrated quality audits forbetter quality assurance.

INOAC GROUP implements audits for quality assurance to see whether (1) the quality for receiving
materials and purchases is secured in product manufacturing and (2) products satisfy theperformance and characteristics with respect to the design quality in accordance with ourimportant quality commodity audit at 34 domestic bases and 8 overseas bases.

*PDCA: Plan, Do, Check, and Action

2. Implement product examinations to secure stable quality
INOAC GROUP objectively evaluates if the content and level of the measures to prevent risks
related to products are necessary and sufficient during new product development byimplementing design verification, design review and validation to secure product safety.

4. Implement managing chemicals to secure environmental safety
We quickly respond to customer inquiries through our chemical substance management system
regarding substances that may influence our environment.
The chemicals in purchased materials and parts (domestic and overseas products) are thoroughlymanaged in accordance with our Green Procurement Management Provisions.

Feature story ■ Work on social issues

5. Ongoing quality education to secure quality improvement
We provide ongoing quality education to all our employees from new employees to employees incharge of key positions because the quality of each employee's work is the base for INOAC todetermine product and service quality.
(Key positions are administrative positions including managers and higher positions.)
New employee induction course: Study of basic knowledge about quality, cause investigation, etc.
Quality control education: Introduction to quality control, statistical quality control technique,study of quality engineering, etc.
● Other quality-related training: Training of knowledge about products, compliance education,
chemical management education, etc.
●●Risk management for quality
1. Response system for early detection and prevention of critical complaints
We are working hard on early detection and prevention of critical quality problems.
We attach great importance to rapid and appropriate response, and have "Quality dial 110
provisions" to prevent critical quality problems from expanding damages.
We center on the functional quality division of our headquarters, cooperating with the functional
quality division of each department, to rapidly respond, detect issues as soon as possible andprevent complaints.

■ Quality risk management flow chart

Within 24 hours

Customers

Contact Division forcustomersQuality assurance activity

Division
Domestic groupcompanies

Since our company’s basic management policies include developing production bases for local
production and local consumption combined with promoting management localization, theemployment, education and promotion of candidates for executive positions at overseas bases isurgent.
INOAC GROUP has implemented education such as trainer training and teaching quality control
techniques since 2013 in China where many of our overseas bases are located. Last year we
focused on 201 front field managers and candidates, implementing on-site training to improve theirfield capability, implement appropriate process
management and strengthen the capability ofmaintaining processes in a stable manner at 19
bases in total.
We will expand our education overseas inThailand, Indonesia, Vietnam and other countries
by regarding the education in China as a modelfor the future.

Global Quality Assurance
Headquarters

6. Develop global human resources to improve overseas field capability

President (Director)

Countermeasure meeting

Feature story ■ Work on social issues

Welfare and Nursing care business
The rate of the elderly to the total population has accelerated sharply since Japan becamean aging society in 1970; now the rate of the population over 65 years old to the total population exceeds 21 percent, which is a super aging society. The rate of the elderly is expected
to increase in the future; the rate will be approximately 30 percent in 2025 and 40 percent in
2060. Social problems are generated such as an insufficient labor population, medical care,
pensions and nursing care. INOAC is working on such social issues through our business.
Home for the elderly with an attachedclinic in Nagoya

Converting our real estate into nursing care facilities
Insufficient facilities for the elderly who need nursing care have become more and more serious
year after year. INOAC is converting our real estate into facilities for the elderly to respond tosuch social requirements. We started with a home nursing care support center built in Nagoya
City, Aichi Prefecture in 2000, built a home for the elderly with a clinic attached to it in Nagoya
City in 2016, and have built six facilities for the elderly so far. When creating the facilities, weused Thermax, which is INOAC's high-functioning heat-insulating board with excellent heatinsulation and thermal barriers that is moisture-proof, and FoamLight, which is on-site foam
heat insulation with excellent heat insulation, which wraps a building with air foam, in thefoundations, walls and ceilings. We promote energy saving and expand our know-how as aspecialist in air conditioning, hot-water supply and heat insulation. The facilities use our original
nursing care brand, Smile, and Smile products and furniture.

An example of a room

FoamLightⓇFuwamo

Thermax

Feature story ■ Work oan social issues

Smile, the brand of INOAC nursing care goods, to cuddle the heart among smiling faces
We have pursued the gentleness of the parts contacting human body since 1997, and accordingly
started the development of welfare/nursing care goods with especially good quality. We put theReversible PRO Mattress on the market in 2002, which was developed in cooperation with theJapanese Society of Pressure Ulcers. With thinking that originated from our desire to deliver oursmile to the people for whom care is provided and to the people who provide care, we established
Smile, our care product brand, in 2014. "Smile" was named after reading of Roman letters of"smile". We are working to cuddle hearts among smiling faces by manufacturing products on thebasis of softness.

Exhibited at International Home Care andRehabilitation Exhibition

Smile series playing a key role at nursing care fieldsⓇReversible PROMattress

Locomo MatINOAC LIVING displayed products at theinternational care apparatus exhibition, H.C.R
2017, held at Tokyo Big Sight in September
2017. The centerpiece in this exhibition wasSwimo, the wheelchair cushion that enables
smoothly standing up. In our exhibition booth,
we held a product introduction seminarconducted by a doctor working for Amakusa
Hospital, who is also an associate developer
and many people came. Swimo utilizing
INOAC's urethane mold technique has realized
an unprecedentedly high-quality cushion, which
has generated much positive feedback.

Posture change
super breathable thirty pad

Message from INOAC LIVING
Toward an aging society accelerating in the future
INOAC LIVING develops extremely useful and required products from the perspective of manufacturers of rubber, urethane and resin materials as well as staff using such products and the elderly forwhom such products are used.
Our soft material group supports the muscles of the elderly to reduce the burdens on their bodies. For
example, Swimo, a wheelchair cushion using automobile seat technology, which has achieved bodypressure dispersion and high durability, stabilizes sitting and supports standing up. This product isutilized in the Soft Wall Cushion to protect only the necessary parts from impact by combining thesuction effect of PureCell and PE foam. We are working to contribute to our aging society through ourproducts with safety and comfort as the key.
We also promote cooperation with and contribution to local society by presenting our products
including medical and nursing care mats to neighboring hospitals and facilities. This is mainly
conducted by our factories and business offices because we regard medical and nursing care ascommunity-based businesses.

Takashi Ishii, President