EXHIBIT
        11.1
 
 **HIGHWAY
        HOLDINGS LIMITED**
 **CODE
        OF BUSINESS CONDUCT AND ETHICS**
 
 **Introduction** **.**
  Highway
        Holdings Limited (the “ Company ”)
        will
        conduct its business honestly and ethically wherever we operate. We will
        constantly attempt to improve the quality of our services, products and
        operations and will maintain a reputation for honesty, fairness, respect,
        responsibility, integrity, trust and sound business judgment. No illegal
        or
        unethical conduct on the part of our directors, officers or employees or
        their
        affiliates is in the Company’s best interest. The Company will not compromise
        its principles for short-term advantage. The honest and ethical performance
        of
        the Company is reflected by the ethics of the men and women who work here.
        Therefore, we are all expected to adhere to high standards of personal
        integrity.
  This
        Code
        of Business Conduct and Ethics (this “ Code ”)
        covers
        a wide range of business practices and procedures. It does not cover every
        issue
        that may arise, but it sets out basic principles to guide all directors,
        officers and employees of the Company. All of our directors, officers and
        employees must conduct themselves accordingly and seek to avoid even the
        appearance of improper behavior. This Code should also be provided to and
        followed by the Company’s other agents and representatives, including
        consultants.
  In
        accordance with applicable law and regulations, this Code will be filed with
        the
        Securities and Exchange Commission (the “ SEC ”),
        posted on the Company’s website and/or otherwise made available for examination
        by our stockholders.
  **1.** **Compliance
        with Applicable Laws, Rules and Regulations** **.**
  All
        directors, officers and employees must respect the customs and normal business
        procedures and applicable laws of the cities, states and countries in which
        we
        operate. In addition, as a company whose stock is publicly traded in the
        United
        States on the Nasdaq Stock Market, we also must respect and obey the rules
        of
        the SEC and of the Nasdaq Stock Market. In particular, all directors, officers
        and employees must comply with United States federal securities laws, rules
        and
        regulations that govern the Company.
  **2.** **Avoidance
        of Conflicts of Interest** **.**
  The
        Company’s directors, officers and employees must never permit their personal
        interests to conflict, or even appear to conflict, with the interests of
        the
        Company. A “conflict of interest” exists when a person’s private interests
        interfere in any way, or even appear to interfere, with the Company’s interests.
        A conflict situation can arise when a director, officer or employee takes
        actions, or has interests, that may make it difficult to perform his or her
        Company work objectively and effectively. Conflicts of interest may also
        arise
        when a director, officer or employee, or a member of his or her family, receives
        improper personal benefits as a result of his or her position with the Company.
        Loans to, or guarantees of the obligations of, directors, officers and employees
        and their family members may create conflicts of interest.
  
 For
        example, it is a conflict of interest for a director, officer or employee
        to
        work simultaneously for a competitor or customer, even as a consultant or
        board
        member. Each director, officer and employee must be particularly careful
        to
        avoid representing the Company in any transaction with a third party with
        whom
        the director, officer or employee has any outside business affiliation or
        relationship. The best policy is to avoid any direct or indirect business
        connection with our customers and competitors, except on our
        behalf.
  Conflicts
        of interest (including both actual and apparent conflicts of interest) are
        prohibited under this Code except in limited cases under guidelines or
        exceptions specifically approved in advance by the Board of Directors.
  Conflicts
        of interest may not always be clear-cut, so if you have a question, you should
        consult with Po Fong, our Chief Financial Officer, or with Roland Kohl, our
        Chief Executive Officer. Any director, officer or employee who becomes aware
        of
        any transaction or relationship that is a conflict of interest or a potential
        conflict of interest should bring it to the attention of Mr. Kohl, the Chairman
        of the Board.
  **3.** **Bribes,
        Kickbacks and Gifts** **.**
  No
        bribes, kickbacks or other similar remuneration or consideration may be given
        to
        any person or organization in order to attract or influence business activity.
        The United States Foreign Corrupt Practices Act prohibits giving anything
        of
        value, directly or indirectly, to officials of foreign governments or foreign
        political candidates in order to obtain or retain business. Therefore, this
        Code
        strictly prohibits making illegal payments to government officials of any
        country.
  The
        Company’s directors, officers and employees are also prohibited from receiving
        or providing gifts, gratuities, fees or bonuses as an inducement to attract
        or
        influence business activity. No entertainment should ever be offered, given
        or
        accepted by any director, officer or employee (or any family member of any
        such
        person) in connection with our business activities unless it: (a) is
        consistent with customary business practices; (b) is not excessive
        in
        value; (c) cannot be construed as a bribe or payoff; and (d) does
        not
        violate any laws or regulations.
  **4.** **Confidential
        Information** **.**
  Our
        directors, officers and employees will often come into contact with, or have
        possession of, confidential information about the Company or our suppliers,
        customers or affiliates, and they must take all appropriate steps to assure
        that
        the confidentiality of such information is maintained. Confidential information
        includes all nonpublic information and may include, among other things,
        strategic business plans, actual operating results, projections of future
        operating results, marketing strategies, customer lists, personnel records,
        proposed acquisitions and divestitures, new investments, changes in dividend
        policies, the proposed issuance of additional securities, management changes
        or
        manufacturing costs, processes and methods. Confidential information about
        our
        Company and other companies, individuals and entities must be treated with
        sensitivity and discretion and only be disclosed to persons within the Company
        whose positions require use of that information or if disclosure is required
        by
        applicable laws, rules and regulations.
  2
 **5.** **Insider
        Trading** **.**
  Trading
        in the Company’s securities is covered by the Company’s Insider Trading Policy
        previously distributed to all employees, which Policy is hereby incorporated
        in
        its entirety in this Code.
  **6.** **Public
        Disclosure of Information Required by the Securities
        Laws** **.**
  The
        Company is a public company that is required to file various reports and
        other
        documents with the SEC. An objective of this Code is to ensure full, fair,
        accurate, timely and understandable disclosure in the reports and other
        documents that we file with, or otherwise submit to, the SEC and in the press
        releases and other public communications that we distribute.
  The
        federal securities laws, rules and regulations require the Company to maintain
        “disclosure controls and procedures,” which are controls and other procedures
        that are designed to ensure that financial information and non-financial
        information that is required to be disclosed by us in the reports that we
        file
        with or otherwise submit to the SEC (i) is recorded, processed, summarized
        and
        reported within the time periods required by applicable federal securities
        laws,
        rules and regulations and (ii) is accumulated and communicated to our
        management, including our Chief Executive Officer and Chief Financial Officer,
        in a manner allowing timely decisions by them regarding required disclosure
        in
        the reports.
  Some
        of
        our directors, officers and employees will be asked to assist management
        in the
        preparation and review of the reports that we file with the SEC, including
        recording, processing, summarizing and reporting to management information
        for
        inclusion in these reports. If you are asked to assist in this process, you
        must
        comply with all disclosure controls and procedures that are communicated
        to you
        by management regarding the preparation of these reports. You must also perform
        with diligence any responsibilities that are assigned to you by management
        in
        connection with the preparation and review of these reports, and you may
        be
        asked to sign a certification to the effect that you have performed your
        assigned responsibilities.
  SEC
        regulations impose upon our Chief Executive Officer and Chief Financial Officer
        various obligations in connection with the reports that we file with the
        SEC,
        including responsibility for:
  ·
            Establishing
                and maintaining disclosure controls and procedures and internal control
                over financial reporting that, among other things, ensure that material
                information relating to the Company is made known to them on a timely
                basis;  ·
            Designing
                the Company’s internal control over financial reporting to provide
                reasonable assurances that the Company’s financial statements are fairly
                presented in conformity with generally accepted accounting principles;  ·
            Evaluating
                the effectiveness of the Company’s disclosure controls and procedures and
                internal control over financial
                reporting;  3
  ·
            Disclosing
                (i) specified deficiencies and weaknesses in the design or operation
                of
                the Company’s internal control over financial reporting, (ii) fraud that
                involves management or other employees who have a significant role
                in the
                Company’s internal control over financial reporting, and (iii) specified
                changes relating to the Company’s internal control over financial
                reporting; and  ·
            Providing
                certifications regarding the above items and other specified matters.  This
        Code
        requires our Chief Executive Officer and Chief Financial Officer to carry
        out
        their designated responsibilities in connection with our annual and quarterly
        reports, and this Code requires you, if asked, to assist our executive officers
        in performing their responsibilities under these SEC regulations.
  **7.** **Record-Keeping** **.**
  The
        Company requires honest and accurate recording and reporting of information
        in
        order to make responsible business decisions. All of the Company’s books,
        records, accounts and financial statements must be maintained in reasonable
        detail, must accurately and appropriately reflect the Company’s transactions and
        must conform both to applicable legal requirements and to the Company’s internal
        control over financial reporting and disclosure controls and procedures.
        All
        transactions must be recorded in a manner that will present accurately and
        fairly our financial condition, results of operations and cash flows and
        that
        will permit us to prepare financial statements that are accurate, complete
        and
        in full compliance with applicable laws, rules and regulations. Unrecorded
        or
“off the books” funds or assets should not be maintained unless expressly
        permitted by applicable laws, rules and regulations.
  Business
        records and communications often become public, and we should avoid
        exaggeration, derogatory remarks, guesswork or inappropriate characterizations
        of people and companies that can be misunderstood. This applies equally to
        e-mail, internal memoranda and formal reports.
  Records
        should be retained in accordance with the Company’s record retention policies,
        and records should be destroyed only if expressly permitted by our record
        retention policies and applicable laws, rules and regulations. If you become
        the
        subject of a subpoena, lawsuit or governmental investigation relating to
        your
        work at the Company, please contact our Chief Financial Officer
        immediately.
  **8.** **Competition
        and Fair Dealing** **.**
  We
        seek
        to outperform our competition fairly and honestly. We seek competitive
        advantages through superior performance, never through unethical or illegal
        business practices. Stealing proprietary information, possessing trade secret
        information that was obtained without the owner’s consent, or inducing such
        disclosures by past or present employees of other companies is prohibited.
        Each
        director, officer and employee should endeavor to respect the rights of and
        deal
        fairly with the Company’s customers, suppliers, competitors and affiliates. No
        director, officer or employee should take unfair advantage of anyone through
        manipulation, concealment, abuse of privileged information, misrepresentation
        of
        material facts or any other intentional unfair-dealing practice.
  4
 **9.** **Waivers
        and Amendments of the Code of Business Conduct and
        Ethics** **.**
  A
        waiver
        of any provision of this Code may be granted to any director, officer or
        employee only by the Company’s Board of Directors, and any such waiver promptly
        will be publicly disclosed to the extent required by law or the regulations
        of
        the SEC or the Nasdaq Stock Market.
  This
        Code
        can be amended only by the Board of Directors, and any such amendment promptly
        will be publicly disclosed as required by law or the regulations of the SEC
        or
        the Nasdaq Stock Market.
  **10.** **Enforcement
        of the Code of Business Conduct and Ethics** **.**
  A
        violation of this Code by any director, officer or employee will be subject
        to
        disciplinary action, including possible termination of employment. The degree
        of
        discipline imposed by the Company may be influenced by whether the person
        who
        violated this Code voluntarily disclosed the violation to the Company and
        cooperated with the Company in any subsequent investigation. In some cases,
        a
        violation of this Code may constitute a criminal offense that is subject
        to
        prosecution by authorities.
  **11.** **Compliance
        Procedures; Reporting Misconduct or Other Ethical
        Violations** **.**
  Directors,
        officers and employees should promptly report any unethical, dishonest or
        illegal behavior, or any other violation of this Code or of other Company
        policies and procedures, to Ms. Fong, our Chief Financial Officer or to Mr.
        Kohl, our Chief Executive Officer and the Chairman of the Board. If you ever
        have any doubt about whether your conduct or that of another person violates
        this Code or compromises the Company’s reputation, please discuss the issue with
        your supervisor or with Ms. Fong or Mr. Kohl.
  The
        Company’s policy is not to allow retaliation for a report of unethical,
        dishonest or illegal behavior, or of any other violation of this Code or
        of
        other Company policies and procedures, if the report about another person’s
        conduct is made in good faith by a director, officer or employee. Directors,
        officers and employees are expected to cooperate in internal investigations
        regarding possible unethical, dishonest or illegal behavior or any other
        possible violation of this Code or of other Company policies and
        procedures.
  5
 **ACKNOWLEDGMENT
          AND CERTIFICATION**
   The
        undersigned hereby acknowledges and certifies that the undersigned:
  (a)
            has
                read and understands the Highway Holdings Limited Code of Business
                Conduct
                and Ethics (the “Code of Ethics”); and  (b)
            will
                continue to comply with the Code of Ethics for as long as the undersigned
                is subject thereto.   
 Signature:_______________________________
                Date:___________________________________
                Print
                  Name:______________________________
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