The supervisory committee of Chongqing Machinery & Electric Co., Ltd. received a resignation letter from Mr. Xiang Hu on 5 July 2018, a supervisor and the chairman of the supervisory committee. Due to personal reasons, Mr. Xiang Hu has applied to resign from the positions as a supervisor and the chairman of the fourth supervisory committee of the company. As the resignation of Mr. Xiang Hu has not led to the number of members of the fourth supervisory committee of the Company falling below the requirement of the statutory minimum number of members, and his resignation would not affect the normal operation of the supervisory committee of the company, the resignation of Mr. Xiang Hu was immediately effective upon the delivery of his resignation letter to the supervisory committee. Mr. Xiang Hu has confirmed that there is no disagreement between him and the board of directors and the supervisory committee of the company, and there is no other matter relating to his resignation that has to be brought to the attention of the shareholders and the creditors of the company.