Good corporate governance is the intrinsic motivation for enterprises to achieve sustainable progress. Since the establishment of the company in 2011, the company has organically combined corporate governance with production and operation. Strictly in accordance with the Company Law and the relevant national laws, regulations and rules, the establishment of modern enterprise system, improve the corporate governance structure, standard company operation. The company has established a systematic and scientific regulatory system based on the articles of association and the rules of procedure for the general meeting of shareholders, the rules of procedure for the board of directors, the rules of procedure for the board of supervisors and the working rules for the general leader. It has formed a power balance mechanism of decision-making, execution, operation governance and effective supervision with shareholders' general meeting, board of directors, board of supervisors and management as the main structure, ensuring the healthy operation of the company's business activities such as production and operation and realizing the sustainable and healthy progress of the company.

In 2021, centering on the theme of reform and innovation, the company will deeply implement the concept of scientific progress, innovate marketing strategies, actively cope with market changes, carry out independent innovation, pay attention to financial budget and cost assessment, strengthen the company's ability to defend and manipulate risks, and improve the company's business performance to maintain a sustained and rapid increase. In 2021, the company will achieve operating revenue of 120 million yuan and total profit of 33.89 million yuan

The company has always been adhering to the quality of "quality to ensure survival, quality to build brand, quality to seek efficiency, quality to increase progress" quality policy. Regard product quality as enterprise life, strictly control product quality, establish long-term mechanism of product quality control and comprehensive quality control system, strengthen quality control and guarantee from raw material control, technical support, production process control, sales link control and other links, provide customers with reassuring products. The company has been rated as a hundred enterprises, key enterprises, AAA credit enterprises.

The company has developed a series of preferential policies, the implementation of the recruitment, the introduction of talent method, the introduction of talent for their spouses to solve the job, housing, so that they feel our work is sincere, to the happiness, dry favorite. Through this method, in recent years we have introduced from all over the country a number of college degree or above, senior technical title of engineering and technical personnel, for the enterprise's scientific and technological innovation and progress to provide a talent guarantee.

The company organizes and implements all kinds of on-job training for more than 400 people. Encourage a worker to walk the road that teaches oneself to become a talent, already had many workers to obtain certificate of graduation of big, technical secondary school at present, and bold use talent. The development of these works has added vitality to the progress of the company.

The employee is the biggest fortune of the enterprise, the employee lives very hard below current social condition, the company starts from concern and love the employee's total interest from strict management, at the same time in the daily work and the super takes seriously concern employee life and thought. In order to solve the accommodation problem of employees and create a warm home for employees, the company rents 2 sets of dormitories near the company and renovates the existing facilities which are insufficient to provide comfortable accommodation for employees. Every Spring Festival, the leadership of the company will pay condolences to all employees.

The company regards environmental conservation as an important part of its sustainable development strategy, pays attention to fulfilling its responsibility of environmental conservation, and actively practices environment-friendly and resource-conserving progress.

(1) environmental protection management into the enterprise governance system, deep product production in each link. The company in each department to enhance publicity, improve the environmental awareness of all employees. The environmental governance indicators will be implemented in every link of the product production process, the establishment of the target responsibility system from the enterprise high-level, middle to the grass-roots team, the formation of a governance network, timely notification of the production and pollution situation of various departments, to achieve the responsibility in place, clear rewards and punishments, truly the environmental care and environmental concept deeply to every employee.

(2) Use modern information technology to implement paperless office and promote the construction of energy-saving society. The company actively introduces financial computerization, ERP management, Intranet and other modern information technology to constantly improve OA office system and realize paperless office, which not only saves paper costs, communication costs and mailing costs. Moreover, it also reduces the occupation of social communication lines and postal resources by means of and mail contact, and actively promotes the construction of a conservation-oriented society.

(3) Encourage technical innovation of employees, eliminate outdated production techniques, and build environment-friendly enterprises. House Xiao injection production system around the "energy saving authors, increase efficiency" theme collect rationalization proposal, fully improve the comprehensive utilization of the energy and materials, including equipment, pipe lines, waste equipment and facilities, machine material qualitative, waste energy innovation improved rationalization proposal was proposed to reduce gas consumption of energy and resource recycling, Optimize and improve the existing production process to achieve energy conservation, emission reduction, increase production and efficiency.

(4) Establishing an emergency management system. In order to better adapt to the requirements of legal and economic activities, the company provides a better and safer environment for the work of employees and residents around the construction site, ensures that all kinds of emergency response resources are in a good state of readiness, and guides emergency response actions to be carried out in an orderly manner as planned. Avoid the delay of emergency rescue due to the poor organization of emergency response action or the disorder and confusion of on-site rescue work, effectively avoid or reduce injuries and property losses, help to realize the rapid, orderly and efficient emergency response action, and fully show the "emergency spirit" of emergency rescue. Company contingency plans to start fire accidents involving the content for the area, falls and get an electric shock, scaffolding collapse, radioactive isotope source or radioactive isotope device lost, two or more persons by the poisonous and harmful chemical poisoning and other major producing safe accident, unpredictable sudden events and emergency command thought must start the emergency plan, etc.

(V) Release the safety operation results of regular inspection of employees. Company has always attached importance to safe work, because many don't help assimilation engineering technology advantage not only body now "a man without I have, people have me fine" technical strength, and more service object at the moment of "high, difficult, special and big, fine", and is very dangerous, such as machining, large-sized pressure vessels, crane, explosion-proof dustproof technology service, Taking unimaginable technical risks. Therefore, in the face of safe working conditions, the company stressed that further enhance peace governance responsibilities, employee check safe operation on schedule, do work peace wake-up call, first, to further clear job responsibilities, job responsibilities, requires every employee to do their own things, do the prevention method, peace "strict", to "love life" as; The 2nd, an annulus quality manages functional branch to assist each production branch further, perfect the special safe technology plan in construction technology plan, the requirement on the content of safe, environmental protection achieves appropriate, conformity, pertinence, management personnel is deep important construction process, key node, easy to produce the management of dangerous working procedure, Operation branch is safe, environmental protection member or management personnel should undertake stand by type whole course to supervise; Third, the departments to seriously dangerous to predict and control counter work, starting from the hazards and environmental factors identification, set up the parameter, timely organize employee method.considering hazards, new projects, new area construction must have hazards analysis evaluation work, functional departments to assist the production department organization analysis to judge major hazards and the important environmental factors, Familiar with the owners of the breach of the scoring management method, to avoid hidden dangers, do "safety first, violation is zero", and release the safety inspection results on schedule.

(6) The safety prevention measures stipulated by law shall be implemented for the production, storage, transportation, sale and utilization of dangerous goods. The company strictly implements the regulation on the management of dangerous chemicals Warehouse (QG/GCJS WZ 52-XX/A).

(7) Release of safety accidents of a larger magnitude or above, major equipment accidents and similar equipment accidents. Up to now, the company has not had large safety accidents, major equipment accidents and similar equipment accidents.

(1) Procurement liability system and policy

The purchasing person is responsible for the quality of the supplier and the purchased products, timely put forward the purchase plan according to the production needs, sign the purchase contract upon the company's approval, and arrange the on-site inspection of the products according to the purchase contract. Only those who pass the inspection can promise to enter the factory, and insist on returning or changing the products for the unqualified materials.

(2) Protect the legitimate rights and interests of suppliers, subcontractors and customers and distributors. The company shall pay the supplier strictly in accordance with the purchase contract to protect the rights and interests of the supplier legally. Cooperate with supplier happily, obtain supplier's trust.

(3) Promulgate policies and promises to suppliers and distributors. The company improves the customer service system, following the idea of early planning, process of boutique, after sale, service extension, to achieve customer satisfaction. Respect the cooperation team and qualified sub-suppliers related to the company's business, each other strictly in accordance with the contract, with integrity to seek progress, win-win cooperation.

Shanghai Xiaopuwu Display Equipment Co., Ltd

Social Responsibility Policy Guidelines

Our company and all management recognize that complying with international labor standards and safeguarding labor rights are fundamental requirements for a responsible company, as well as the expectations of stakeholders such as consumers, customers, the public, and the government.

Our company promises to comply with national labor laws and regulations, internationally recognized labor standards, as well as other applicable industry standards and international conventions, and continuously improve working conditions and employee benefits.

Like quality management, social responsibility management is also an integral part of our company's daily operations. Fulfilling social responsibility is a necessary condition for the company to provide good products to meet customer needs. The company appoints senior managers to be responsible for social responsibility management, establishing, implementing, and maintaining a sound social responsibility management system, and extending this requirement to suppliers and subcontractors.

The company declares and promises:

*Prohibit the use of child labor and forced labor, and do not accept any suppliers or subcontractors who use child labor or forced labor.

*Respect workers' freedom and prohibit any form of forced labor.

*Provide safe and hygienic working and living conditions to ensure the safety and health of employees.

*Promote labor management cooperation, respect employees' freedom of association and collective bargaining rights.

*Provide an equal and fair working environment, and prohibit any form of discriminatory behavior.

*Respect the basic human rights of employees and prohibit any form of insulting behavior.

*Reasonably arrange production plans, schedule workers' working hours and rest and vacation time.

*Provide reasonable wages and benefits that meet at least the basic needs of workers.

Chairman: Wang Feng

2025 ESG Sustainability Report

Shanghai Shopworks Fixture & Display Co., Ltd.

About This Report

This is the third Environmental, Social and Governance (ESG) report officially released by Shanghai Shopworks Fixture & Display Co., Ltd. (hereinafter referred to as "the Company"). Targeted at all stakeholders including shareholders, employees, customers, suppliers, regulatory authorities and local communities, this report comprehensively and objectively discloses the Company’s management philosophies, practical initiatives and performance achievements in environmental protection, social responsibility and corporate governance.

Compiled in accordance with the Core Option of GRI Standards 2021 issued by the Global Reporting Initiative (GRI), this report also aligns relevant issues with the United Nations Sustainable Development Goals (SDGs). In 2025, in accordance with international ESG assessment methodologies and evaluation criteria, the Company systematically sorted out the maturity level of four core sectors including environmental management, labor and human rights, business ethics and sustainable procurement from three dimensions: Policy, Action and Performance. Multiple improvement areas were identified and key optimization measures were fully implemented, all of which are fully disclosed in this report. Reviewed and confirmed by the Company’s management team, all information contained herein is true, accurate and complete.

Report Scope & Boundary

The report covers all operational entities of the Company located in Sanzao Industrial Park, Pudong New Area, Shanghai, including three production workshops (woodworking workshop, metal processing workshop, painting & assembly workshop) and all functional departments.Report Period: January 1, 2025 – December 31, 2025Unless otherwise specified, all financial data are denominated in Chinese Yuan (CNY). Environmental data are calculated and statistically compiled in compliance with relevant regulations issued by the Ministry of Ecology and Environment of the People’s Republic of China and Shanghai municipal authorities. Partial historical data are adopted for trend comparative analysis.

Contact Information

For inquiries and suggestions, please feel free to contact us via:Email: info@shopwork.com.cnTel: (0086-21) 20786832Address: Sanzao Industrial Park, Pudong New Area, Shanghai, China

Chairman’s Statement

Dear All Stakeholders,

The year 2025 marks another pivotal year for Shanghai Shopworks Fixture & Display Co., Ltd. as we further deepen our presence in the customized commercial display fixture industry. As a private enterprise specializing in the R&D and manufacturing of mid-to-high-end brand display fixtures, hotel furniture and office furniture, we have always embedded sustainable development concepts into corporate strategies and daily operations.

Against the backdrop of a volatile market landscape and rising customer expectations over the past year, the Company adhered to customer-oriented principles, prioritized product quality, and pursued green low-carbon development. We continuously optimized production processes, improved energy efficiency and safeguarded employee well-being. We firmly believe that long-term corporate development cannot be achieved without respect for nature, care for employees and commitment to social responsibilities. This annual report serves not only as a full review of our ESG practices, but also as a sincere response to all stakeholders.

In terms of environmental performance, the Company steadily increased investment in environmental protection, reaching RMB 100,000 in 2025 to ensure all pollutant emissions meet national standards. We carried out a series of in-plant energy-saving renovations, including thermal insulation coating for drying cylinders, replacement of LED lighting fixtures, air compressor leakage repair and refined water consumption management, so as to cut down energy and resource consumption step by step. We completed the first pilot carbon footprint calculation for representative products, confirming purchased electricity and raw materials as two core emission reduction priorities. The proportion of water-based paint usage rose from 40% at the beginning of the year to 65%, bringing us closer to the full replacement target scheduled for 2027.

In social aspects, we attach great importance to employee growth and career development, achieving a 100% training coverage rate with an average of 40 training hours per employee. A multi-channel formal employee appeal mechanism and an independent external reporting hotline were established to optimize internal communication channels. Zero work-related injuries were recorded throughout the year, which we regard as our most fundamental and valuable achievement. We updated the Supplier Code of Conduct and required all core suppliers to sign social responsibility commitments for the first time, promoting joint progress across the industrial chain.

In corporate governance, we kept improving the internal control system and upheld strict business ethics. In accordance with the Conflict of Interest Management Regulations, we strengthened integrity supervision for key positions. No corruption, bribery or major violations of laws and regulations occurred during the year. The regular ESG working group integrated sustainable development indicators into quarterly business reviews.

In addition, we re-examined and corrected greenhouse gas emission data this year. Frankly speaking, we still lack sufficient experience in relevant statistical work and made mistakes previously. Nevertheless, we chose to face problems squarely, make timely corrections and formulate stricter review procedures, which embodies our consistent business philosophy: integrity, transparency and accountability.

Meanwhile, we benchmarked ourselves against international ESG assessment systems and launched a batch of improvement measures covering full-process chemical management, employee appeal guarantee, whistleblower protection and supplier social responsibility audit, driving refined internal management with higher standards. We are convinced that these efforts will not only elevate the overall sustainable development capacity of the Company, but also better satisfy customers’ demands for sound supply chain ESG performance.

Looking ahead, Shanghai Shopworks will continue to uphold the business philosophy of Exquisite Craftsmanship & Green Intelligent Manufacturing, drive development through innovation and lead industrial progress with social responsibilities. We will actively respond to China’s dual-carbon strategic goals and further improve the ESG management system. Within the next two years, we plan to realize full replacement of solvent-based paint with water-based paint, launch the first series of low-carbon concept display fixtures, and officially participate in international ESG evaluations. We are ready to join hands with all stakeholders to forge a prosperous and sustainable future.

Wang FengChairman of the BoardApril 2026

Chapter 1 Company Profile

1.1 Company Introduction

Shanghai Shopworks Fixture & Display Co., Ltd. is a professional private enterprise engaged in customized mid-to-high-end brand display fixtures, hotel furniture and office furniture manufacturing. Founded in 2012, the Company is registered in Sanzao Industrial Park, Pudong New Area, Shanghai, enjoying superior geographical location with only 15-minute drive away from Pudong International Airport and easy access to Shanghai Ring Expressway and Hulu Expressway, enabling efficient logistics and rapid response to domestic and overseas customer demands.

The Company owns three professional production workshops namely woodworking workshop, metal processing workshop and painting & assembly workshop, covering a total land area of approximately 8,000 square meters and a construction area of 6,500 square meters. Our main products include wood-metal combined commercial equipment, display fixtures and high-end customized furniture, adopting diversified materials such as natural wood veneer, solid wood, fireproof board, melamine board, blister board, mirror stainless steel, brushed stainless steel, titanium-plated stainless steel, antique metal, chrome-plated and nickel-plated metal as well as powder-sprayed metal products. By combining different materials and production technologies, we are capable of meeting diversified demands of brand customers in terms of quality, style, function and budget.

Sticking to the core philosophy of Exquisite Craftsmanship & Green Intelligent Manufacturing, we devote ourselves to providing one-stop display and exhibition solutions for world-renowned brands. Our products are widely applied in retail terminals including brand stores and shopping mall counters, hotel spaces such as lobbies, guest rooms and banquet halls, as well as office environments including reception areas and meeting rooms. Our client groups cover internationally renowned retail brands, high-end hotel groups and professional commercial space design institutions, with products exported to Europe, America, Southeast Asia and other regions. Centering on customized services, superior quality and timely delivery as core competitive strengths, we have built a solid reputation in segmented industries.

1.2 Development History & Milestones

Since its establishment in 2012, Shopworks has grown steadily from a small-scale processing factory into a well-established professional display fixture manufacturer driven by quality and innovation.

• 2012: Officially founded and settled in Sanzao Industrial Park, Pudong; initial staff: 12 employees with 1,200 ㎡ leased workshop, mainly engaged in simple wooden fixture processing.

• 2013: Purchased the first CNC engraving machine to greatly improve product precision and production efficiency; annual sales volume exceeded RMB 2 million.

• 2015: Passed ISO 9001 Quality Management System Certification and established standardized production and quality control systems; annual operating income exceeded RMB 8 million with staff size expanded to 30.

• 2016: Received the first overseas brand orders and exported products to Southeast Asia, marking our formal entry into the global market.

• 2017: Completed the first workshop expansion and set up an independent metal processing workshop, introducing laser cutting machines and CNC bending machines; product lines expanded from single wooden fixtures to integrated wood-metal products.

• 2018: Annual operating income hit RMB 15 million with 50 on-the-job employees; systematically launched work safety management system construction.

• 2019: Obtained FSC Forest Certification, becoming an early adopter of sustainable timber materials in the industry; environmental protection investment was officially included in annual budget with an expenditure of RMB 30,000.

• 2020: Stabilized employee team and customer resources amid the pandemic; carried out comprehensive workshop sorting and equipment maintenance during off-peak production periods.

• 2021: Annual operating income broke RMB 30 million and staff number reached 80; business footprint covered numerous well-known domestic and overseas brands with steadily rising market share in East China.

• 2022: Launched lean production projects and implemented 5S on-site management, boosting production efficiency by 15% and reducing semi-finished product inventory by 20%.

• 2023: Released the first sustainable development report and fully initiated ESG system construction; established three-level work safety management network; annual environmental protection investment rose to RMB 80,000.

• 2024: Annual operating income reached RMB 32 million; obtained pollutant discharge permit; started greenhouse gas emission accounting (previous statistical errors have been corrected in this report).

• 2025: Annual operating income exceeded RMB 50 million with a year-on-year growth rate of 56.3%; completed self-assessment against international ESG evaluation standards and achieved systematic progress in chemical management, employee appeal mechanism, whistleblower protection and supplier code of conduct; formally set up the ESG working group and issued the second sustainable development report.

1.3 Industrial Value Chain

Instead of operating independently, the Company is deeply embedded in a complete industrial value chain. Managing ESG impacts across all links of the value chain constitutes a core part of our sustainable development strategy.

1.3.1 Upstream Supply Chain

Our upstream suppliers mainly provide raw and auxiliary materials including solid wood & wood veneer, stainless steel plates & profiles, eco-friendly paint, adhesives, hardware accessories and packaging materials. In 2025, we maintained cooperation with 5 core suppliers covering timber, metal materials, coatings and hardware accessories, plus multiple non-core suppliers of standard parts. The average cooperation duration with core suppliers exceeds 6 years with solid mutual trust established.

In ESG management, we mainly focus on the legality and sustainability of timber sources (FSC certification compliance), energy consumption and pollutant discharge in metal smelting and surface treatment, hazardous substance content in coatings and adhesives, as well as labor rights protection of suppliers. In 2025, we required core suppliers to complete ESG self-evaluation in reference to international standards, laying a foundation for subsequent risk identification and coordinated improvement.

1.3.2 Midstream Manufacturing

Our in-house manufacturing procedures are divided among three workshops: the woodworking workshop undertakes timber cutting, engraving, polishing and assembly; the metal processing workshop is responsible for metal cutting, welding, polishing and partial outsourced surface treatment; the painting & assembly workshop finishes spraying, assembling, quality inspection and packaging. Internal material transfer systems ensure smooth logistics connection between workshops.

Key ESG impacts in self-operation include waste gas emission generated during painting and polishing processes, solid waste produced in wood and metal processing, power consumption of production equipment and lighting facilities, safe storage and usage of chemical products as well as occupational health and safety protection for employees. We are gradually establishing refined environmental data statistics and safety management mechanisms.

1.3.3 Downstream Clients & End-use Markets

Finished products are delivered to designated stores, warehouses and project sites via third-party logistics providers. Our main clients include international retail brands, high-end hotel groups and commercial space design companies. After years of service life, products will eventually be dismantled and disposed of.

Major downstream ESG issues cover carbon emissions generated during product transportation, service life and maintainability of finished products, recyclability and disassembly performance after scrapping, as well as clients’ demands for environmental information such as material composition and carbon footprint. Such downstream requirements in turn drive our continuous optimization in product design, material selection and information disclosure.

We extend the exquisite craftsmanship concept from manufacturing links to every node of the value chain, promoting full-chain sustainable development via responsible upstream procurement, clean midstream production and green downstream product design.

1.4 Organizational Structure & Corporate Governance

1.4.1 Corporate Governance Structure

A well-defined hierarchical organizational structure has been established. The General Manager acts as the top management leader, in charge of Production Department, Technology & R&D Department, Procurement Department, Sales Department, Finance Department and Admin & Safety Office (including human resources management). All department supervisors report directly to the General Manager, and major business decisions are finalized through collective discussions among the management team.

1.4.2 Work Safety Management

A standardized three-level work safety management network has been formed: the Admin & Safety Office takes charge of overall planning at company level; workshop directors and department supervisors implement daily management at department level; team leaders conduct on-site supervision at team level. A work safety and fire prevention leading group is set up with the General Manager as group leader and all department heads as members. Quarterly work safety meetings are held to review safety performance, rectify hidden dangers and confirm key work priorities.

1.4.3 ESG Governance

The formal establishment of the ESG working group in 2025 marked the transformation of ESG management from scattered departmental tasks to systematic cross-departmental collaboration. Led by the General Manager, the working group consists of directors from Admin & Safety Office, Production Department, Procurement Department and Finance Department, holding regular quarterly meetings to fulfill core responsibilities as follows:

• Formulate and revise annual ESG work plans and objectives

• Coordinate and supervise the implementation of ESG-related initiatives across departments

• Collect and verify ESG performance data submitted by various departments

• Organize risk assessment and countermeasure formulation for major ESG issues

• Compile annual sustainable development reports

• Conduct ESG-related communication with external stakeholders

Workshop directors serve as primary persons in charge of regional environmental and safety management to ensure effective implementation at the execution level. We plan to further optimize the ESG governance framework and gradually incorporate ESG indicators into annual performance appraisal of management staff to strengthen responsibility implementation.

1.5 Key Financial & Operational Data (2025)

The Company achieved steady business growth in 2025 with year-on-year revenue growth of 56.3% and a net profit margin of approximately 15%. The asset-liability ratio stood at around 45%, reflecting sound financial conditions.

表格

Note: The decrease in total employees is mainly attributed to personnel structure optimization in 2025. Through technological upgrading and efficiency improvement, we realized substantial revenue growth while reducing labor demand.

1.6 Corporate Management System Certifications

By the end of 2025, the Company has obtained four third-party management system certifications:

1. ISO 14001:2015 Environmental Management System (Certificate No.: 17425E20165R0M, valid until March 4, 2028)

2. ISO 45001:2018 Occupational Health and Safety Management System (Certificate No.: 17425S20151R0M, valid until March 4, 2028)

3. SA8000:2014 Social Accountability Management System (Certificate No.: CN044375 Rev.1, certified by Bureau Veritas)

4. FSC Chain of Custody Certification (Certificate No.: BV-COC-179753, valid until August 7, 2027), covering the production and sales of FSC 100% and FSC Mix products.

All above certifications cover all display fixture manufacturing operations in Pudong New Area, Shanghai.