China Shenhua Energy : Rules of Procedures of the Remuneration Committee of the Board of Directors of China Shenhua Energy Company Limited

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 01088)

Rules of Procedures of the Remuneration Committee of

the Board of Directors of China Shenhua Energy Company Limited

These rules were passed on 26 August 2005 at the 5th meeting of the first session of the board of directors, were revised on 17 August 2007 at the 16th meeting of the first session of the board of directors, and were revised on 28 August 2020 at the 3rd meeting of the fifth session of the board of directors of the Company.

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Article 1 Objectives

1. These rules are formulated in accordance with relevant laws, regulations, rules and regulatory documents and the Articles of Association (the "Articles of Association") of China Shenhua Energy Company Limited (the "Company") with reference to the Company's actual situation in order to ensure rational operations, establish effective monitoring and incentive mechanisms and improve corporate governance structure of the Company.
2. The Remuneration Committee is a special committee of the board of directors of the Company (the "Board") and shall report to the Board.
3. The Remuneration Committee is responsible for studying and reviewing the remuneration policies and packages for directors, supervisors, chief executive officer and other senior officers.

Article 2 Members of the Remuneration Committee

1. The Remuneration Committee shall consist of no less than three directors of the Company, at least two-thirds of whom shall be independent directors.
2. Members of the Remuneration Committee are appointed and dismissed by the Board.
3. The term of office of members of the Remuneration Committee shall be the same as that of directors, renewable upon re-election at its expiry. If during the term, a member of the Remuneration Committee no longer serves as a director or independent director of the Company, the Board shall fill the vacancy in time in accordance with these rules in order to meet the requirements herein on the composition of the Remuneration Committee. The member shall exercise relevant functions and powers hereunder until the vacancy is filled by the Board under these rules.
4. The Remuneration Committee shall have one chairman who shall be an independent director. The chairman shall be nominated by the Chairman of the Board and considered and approved by the Board.

Article 3 Operations of the Remuneration Committee

1. The meetings of the Remuneration Committee shall be convened at least twice a year. When proposed by one half or more of its members or by the chairman of the Remuneration Committee, an extraordinary meeting may be convened.
2. The meetings of the Remuneration Committee shall be chaired by the chairman who, if unable to attend the meeting, may appoint another member (being independent director) to chair the meeting.

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1. The quorum of the meetings of the Remuneration Committee shall be two-thirds or more of all its members, each having one vote. Resolutions of the meetings shall be passed by a majority of all members. Where a member fails to be present, he/she may appoint in writing another member to attend the meeting on his/her behalf.
2. The directors, supervisors, chief executive officer and other senior officers of the Company may be invited by the Remuneration Committee to attend its meeting as non-voting participants when necessary.
3. Records shall be produced for meetings of the Remuneration Committee, with minutes and resolutions to be submitted to the Board after the meetings. All members present at the meetings shall sign on the minutes and resolutions. Any objection to the resolutions by a member present at the meetings shall be recorded in the meeting records or minutes.
4. A meeting of the Remuneration Committee may be held on site or by way of telecommunications including telephone conference, video conference and written proposal meeting, etc.
5. Where a meeting of the Remuneration Committee is held by way of telephone or video conference, it shall be ensured that the participating members can hear each other clearly and communicate with each other. Meetings convened in such ways shall be taped. Where the participating members are not able to sign the resolutions of the meetings immediately at such meetings, oral voting shall be adopted, the results of which shall be valid with the resolutions and minutes of the meeting signed after the meeting as soon as practicable. The oral voting of the members has the same effect as written signatures. However, the resolutions and minutes of the meetings signed afterwards shall be consistent with the oral voting.
6. Where a meeting of the Remuneration Committee is held by way of written proposal, the written proposal shall be despatched by facsimile, e-mail courier or by hand or otherwise to all members, and shall be returned in original copies to the Company for filing after voting by the members. A proposal signed by consenting members satisfying the threshold hereunder shall become a resolution of the committee.
7. The Remuneration Committee shall consult with the Chairman and/or the chief executive officer of the Company in respect of the proposed remunerations for other executive directors . The Remuneration Committee may seek recommendations from experts, if necessary. Resolutions passed by and voting results of the meetings of the Remuneration Committee shall be submitted to the Board in writing (unless prohibited by the laws or regulatory requirements).
8. The Remuneration Committee shall be provided with sufficient resources to exercise its functions and powers.

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1. The Remuneration Committee shall make available its terms of reference, explaining its role and powers authorised by the Board.
2. Human Resources, Legal and other departments of the Company are the supporting departments of the Remuneration Committee. The person in charge of the support department may attend the meeting of the Remuneration Committee and report on the relevant resolutions.

Article 4 Duties of the Remuneration Committee

1. To make recommendations to the Board on the remuneration plans and packages for directors, supervisors, chief executive officer and other senior officers, including but not limited to standards and procedures of performance assessment and key assessment system as well as major scheme and system of incentive and punishment;
2. to study the standards of assessment on directors, supervisors, chief executive officer and other senior officers, review their performance of duties and conduct annual performance assessment on them;
3. to monitor the implementation of the Company's remuneration polices, and review and approve the performance-based remuneration by reference to corporate goals resolved by the Board from time to time;
4. to determine, as authorised by the Board, the remuneration packages of all executive directors, supervisors, chief executive officer and other senior officers, including benefits in kind, pension rights and compensation payments, including compensation payable for loss or termination of their office or appointment;
5. to review and approve the compensation payable to executive directors, supervisors, chief executive officer and other senior officers in connection with any loss or termination of their office or appointment to ensure that such compensation is determined in accordance with relevant contractual terms and that such compensation is otherwise fair and not excessive to the Company;
6. to review and approve compensation arrangements relating to dismissal or removal of directors for misconduct to ensure that such arrangements are determined in accordance with relevant contractual terms and that any compensation payment is otherwise reasonable and appropriate;

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1. to make recommendations to the Board on the remuneration of non-executive directors (considering factors such as remuneration paid by comparable companies, time commitment and duties of the directors, employment conditions elsewhere in the group and desirability of performance-based remuneration);
2. to ensure that no director or any of his/her associates is involved in deciding his/ her own remuneration; and
3. other matters authorised by the Board.

Article 5 Duties and Powers of the Chairman of the Remuneration Committee

1. To convene and chair the meetings of the Remuneration Committee;
2. to supervise and inspect the implementation of resolutions of meetings of the Remuneration Committee;
3. to sign on important documents of the Remuneration Committee;
4. to report to the Board on a regular basis or in line with the arrangements of the Board;
5. other duties and powers authorised by the Board.

Article 6 Miscellaneous

1. Unless otherwise specified, the term "above" herein shall include the underlying number.
2. Unless otherwise specified, terms used herein shall have the same meanings ascribed thereto under the Articles of Association.
3. These rules shall come into effect from the date of approval by the Board.
4. These rules shall be interpreted by the Board.

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