Ethics | Euro Shipping AB

CODE OF ETHICS

OVERVIEW

This Code of Ethics sets forth the guiding principles by which we intend to operate our company and conduct our daily business with our shareholders, customers, vendors and with each other. These principles apply to all of the directors, officers and employees of Euro Shipping AB and all of its subsidiaries (“ESSI”).

PRINCIPLES

Complying with Laws, Regulations, Policies and Procedures, All directors, officers and employees of ESSI are expected to understand, respect and

comply with the laws, regulations, policies and procedures that apply to them in their position with ESSI. Employees are responsible for talking to their managers or compliance officer to determine which laws, regulations and ESSI policies apply to their position and what training is necessary to understand and comply with them.

Insider Trading

No director, officer or employee may purchase or sell any ESSI securities while in possession of material non-public information regarding ESSI, nor may any director, officer or employee purchase or sell another company’s securities while in possession of material non-public information regarding that company. Directors, officers and employees are prohibited from using material non-public information to (a) obtain a profit for themselves;

and (b) directly or indirectly “tip” others who might base an investment decision on such information. Any questions as to whether information is material or has been adequately disclosed should be directed to the office of the Chief Financial Officer. ESSI has an insider trading policy that applies to all directors and certain officers and employees who possess material nonpublic information about ESSI. A copy of this policy may be obtained from the Chief Financial Officer.

Conflicts of Interest

All directors, officers and employees of ESSI should avoid any action or interest that conflicts or gives the appearance of a conflict with ESSI’s interests. A “conflict of interest” exists whenever an individual’s private interests interfere or conflict (or appear to interfere or conflict) with the interests of ESSI. A conflict situation can arise when an employee, officer

or director takes action or has interests that may make it difficult to perform his or her work for ESSI 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 ESSI, whether from a third party or from ESSI.

Loans by ESSI to employees or their family members are of special concern and could constitute improper personal benefits, depending on the facts and circumstances. Loans by ESSI to any director or executive officer or their family members are expressly prohibited.

Conflicts of interest may not always be clear-cut, so if a question arises, an officer or employee should consult with their supervisor or manager. Any employee, officer or director who becomes aware of a conflict of interest or potential conflict of interest should bring it to the attention of a supervisor, manager or other appropriate personnel, and take reasonable steps to handle the conflict of interest in an ethical manner that avoids the conflict from having an adverse affect on ESSI. Conflicts of interest or potential conflicts of interest involving a director or executive officer should be brought to the attention of the Audit Committee of the Board of Directors.

Corporate Opportunity

Directors, officers and employees are prohibited from

(a) taking for themselves personally opportunities that properly belong to ESSI or are discovered through the use of corporate property, information, or position;

(b) using corporate property, information or position for personal gain; and (c) competing with ESSI. Directors, officers and employees owe a duty

to ESSI to advance its legitimate interests when the opportunity to do so arises.

Confidentiality

Directors, officers and employees must maintain the confidentiality of confidential information entrusted to them by ESSI, except when disclosure is specifically required by laws, regulations, or legal proceedings or is permitted by law solely for the purpose of reporting or participating in an investigation of a suspected violation of law, or when such disclosure is specifically authorized by the Company’s Chief Financial Officer.

Confidential information includes all non-public information that might be of use to competitors of ESSI or its customers, or their employees if disclosed. Directors, officers and employees, in the course of their work for ESSI, may also receive confidential information from ESSI's customers or suppliers. This information should also be treated as confidential information, and not disclosed outside of ESSI. This obligation to protect confidential information does not end when an employee, officer or director leaves ESSI. Any questions about whether information is confidential should be directed to your supervisor or an officer of ESSI.

Fair Dealing

We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior and diligent performance, never through unethical or illegal business practices. Stealing proprietary information, possessing or utilizing 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 is expected to deal fairly with ESSI’s customers,

suppliers, competitors, officers and employees. No director, officer and employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice.

Protection and Proper Use of Assets

All ESSI assets should be used for legitimate business purposes. Directors, officers and employees who use ESSI's assets are expected to use them in a reasonable manner, and to avoid wasting ESSI's assets.

Public Company Reporting

As a public company, it is important that ESSI’s filings with the Securities and Exchange Commission (“SEC”) and other public communications be accurate and timely. In that regard, ESSI’s management must take reasonably appropriate actions to:

establish and maintain effective disclosure controls and procedures and internal control over financial reporting;
ensure that ESSI’s periodic reports and other documents filed with the SEC are timely filed and comply with the requirements of the federal securities laws and the rules of the SEC; and
ensure that information contained in ESSI’s periodic reports and financial statements fairly presents in all material respects the financial condition and results of operations of ESSI.

Depending on his or her position with ESSI, an employee, officer or director may be called upon to provide necessary information to assist ESSI in making its public reports and other public communications complete, fair and understandable. ESSI expects employees, officers and directors to take this responsibility seriously and to provide prompt, accurate answers to ESSI inquiries related to its public disclosure requirements.

Each director, officer and employee who is involved in ESSI’s disclosure process must:

be familiar with and comply with ESSI’s disclosure controls and procedures and its internal control over financial reporting; and
take the necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of the Company provide full, fair, accurate and timely disclosure.

Financial Statements and Other Records

ESSI's books, records, accounts and financial statements should be maintained in reasonable detail, appropriately reflect ESSI's transactions and conform to applicable legal requirements. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation. Records should be retained or destroyed according to ESSI's record retention policies.

III. REPORTING ILLEGAL OR UNETHICAL BEHAVIOR & ACCOUNTING COMPLAINTS

Reporting

Employees, officers and directors who suspect or know of violations of this Code or illegal or unethical business or workplace conduct by employees, officers or directors have an obligation to promptly contact either their supervisor or superiors or ESSI’s Internal Audit Department. If the individuals to whom such information is conveyed are not responsive, or

if there is a reason to believe that reporting to such individuals is inappropriate in particular cases, then the employee, officer or director should report the information to an officer of ESSI. If the employee, officer or director is still not satisfied with the response, he or she should contact the Audit Committee of the Board of Directors. If concerns or complaints

relate to conduct involving a director or executive officer, they should be reported to the Audit Committee. If concerns or complaints relate to accounting, internal accounting controls or auditing matters, they may be reported on a confidential and anonymous basis using the procedures established by the Audit Committee for that purpose.

Non-Retaliation

ESSI prohibits retaliation of any kind against individuals who have made good faith reports or complaints of violation of this Code or other known or suspected illegal or unethical conduct.

Accountability

The principles and responsibilities set forth in the Code are important to ESSI and must be taken seriously. Each employee, officer or director has a duty to ensure that his or her actions adhere to the requirements of the Code. Any reported allegation of wrongdoing under this Code must be promptly investigated. Any violation of the Code may result in disciplinary action, including termination of employment with ESSI, and, if warranted, legal proceedings against the violating party.

AMENDMENT, MODIFICATION AND WAIVER

This Code may be amended or modified by the Board of Directors of ESSI. Waivers of the Code for directors or executive officers may only be granted by the Board of Directors. Waivers of this Code that relate to ESSI's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, or to directors or other executive officers, of the Company will be publicly disclosed, with the reasons for the waiver, to the extent required by the Securities Exchange Act of 1934 and the rules under that Act and the applicable rules of The Nasdaq Stock Market.

CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF EURO SHIPPING AB

Purpose

The Audit Committee is established by the Board of Directors (the “Board”) for the primary purpose of assisting the Board in overseeing the accounting and financial reporting process of Euro Shipping AB (the “Company”), the audits of the Company's financial statements, and internal control and audit functions.

The Audit Committee serves a board-level oversight role where it oversees the relationship with the independent auditor, as set forth in this Charter.

The Audit Committee should provide an open avenue of communication among the independent auditor, financial and senior management, the internal auditing function, and the Board.

The Audit Committee has the authority to obtain advice and assistance from outside legal, accounting, or other advisers as it deems appropriate to perform its duties and responsibilities.

The Company shall provide appropriate funding, as determined by the Audit Committee, for compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company and to any advisers that the Audit Committee chooses to engage as well as for payment of ordinary expenses the Audit Committee determines are necessary or appropriate in carrying out its duties and compensation.

The Audit Committee will primarily fulfil its responsibilities by carrying out the activities listed in Section III of this Charter. The Audit Committee will report to the Board periodically regarding the performance of its duties.

Composition and Meetings

The Audit Committee shall be comprised of three or more directors as determined by the Board, each of whom shall be an "independent director" for purposes of Audit Committee membership in accordance with the rules of The Nasdaq Stock Market (“Nasdaq”), Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other applicable legal or regulatory requirements. Each member of the Audit Committee shall be free from any relationship (including disallowed compensatory arrangements) that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Audit Committee. Each member of the

Audit Committee shall be able to read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement, and have a working familiarity with basic finance and accounting practices. No member of the Audit Committee shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years. Notwithstanding the foregoing, the Company may appoint one director who does not meet the Nasdaq independence requirements to the Audit Committee if the Board, under exceptional and limited circumstances, determines that membership on the Audit Committee by such director is required by the best interests of the Company and its shareholders, provided such director (a) meets the criteria for independence under Section 10A(m)(3) of the Exchange Act and (b) is not a current officer or employee or a family member (as defined in the rules of Nasdaq) of a current officer or employee.

Following any determination by the Company that a director shall be appointed to the Audit Committee under the exception set forth above, the Company must disclose in its next proxy statement (or, if the Company does not file a proxy, in its Form 10-K), the reasons for such determination and the nature of the relationship that caused such director not to be “independent” for Nasdaq purposes. Any member appointed under such exception may not serve on the Audit Committee longer than two years and may not serve as chairperson of the Audit Committee. No member of the Audit Committee may receive any consulting, advisory or other compensatory fee from the Company or any subsidiary of the Company other than (a) fees for service as a director of the Company, including reasonable compensation for serving on the Audit Committee, another committee of the Board and regular benefits that other directors receive, (b) fees for service as chairman of the Board, the Audit Committee, or another committee of the Board and (c) fixed amounts of compensation under a retirement plan (including deferred compensation), provided that such compensation is not conditioned on continued or future service to the Company.

The Audit Committee shall have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting or any other comparable experience or background which results in the individual’s financial sophistication and at least one member who qualifies as an “audit committee financial expert” in compliance with the criteria established by the rules of the Securities and Exchange Commission ("SEC") and Nasdaq and any other applicable regulatory requirement. The existence of such member, including his or her name and whether or not he or she is independent, shall be disclosed in the Company’s annual proxy statement or other periodic filings as required by the SEC. A member who satisfies the criteria of an audit committee financial expert will also be presumed to have financial sophistication for purposes of this paragraph.

The members of the Audit Committee shall be designated by the Board of Directors annually and shall serve until such member's successor is duly designated or until such member's earlier resignation or removal. Any member of the Audit Committee may be removed, with or without cause, by a majority vote of the Board. Unless a chairperson is elected by the full Board, the members of the Audit Committee may designate a chairperson by majority vote of the full Audit Committee membership. The chairperson shall chair the meetings of the Audit Committee that he or she attends and may set the agenda for the meetings of the Audit Committee.

The Audit Committee shall ordinarily meet at least four times annually, or more frequently as circumstances dictate. Any member of the Audit Committee may call a meeting of the Audit Committee.

The Audit Committee shall meet in executive session, absent members of management, at least twice a year, and on such terms and conditions as the Audit Committee may elect. Such executive sessions may be held in conjunction with regular meetings of the Audit Committee.

The Audit Committee should meet periodically with management, the director of the internal auditing function and the independent auditor in separate executive sessions to discuss any matters that the Audit Committee or each of these groups believes should be discussed privately.

III. Responsibilities And Duties

To fulfil its responsibilities and duties the Audit Committee shall documents, reports, and accounting information review:

Review this Charter at least annually and recommend to the Board any changes to this Charter that the Audit Committee considers necessary or appropriate.
Review and discuss with management the Company’s annual financial statements, quarterly financial statements, and internal controls reports (or summaries of the reports). Review and discuss with the independent auditor the form of audit opinion and other relevant reports rendered by the independent auditor (or summaries of the reports).
Recommend to the Board whether the financial statements should be included in the Annual Report on Form 10-K. Review with financial management and the independent auditor each Quarterly Report on Form 10-Q prior to its filing.
Review, or have a member of the Audit Committee review, earnings press releases with management, including review of “pro-forma” or “adjusted” non- GAAP information.
Have the authority and direct responsibility to select, retain, evaluate, determine compensation of, and, where appropriate, replace the independent auditor. The independent auditor shall report directly to the Audit Committee. The Audit Committee shall review the performance of the independent auditor at least annually and make determinations regarding the appointment or termination of the independent auditor. The Audit Committee shall oversee the resolution of disagreements between management and the independent auditor in the event that they arise.
Have the authority and direct responsibility to select, retain, evaluate, determine compensation of, and, where appropriate, replace any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company.
Review and preapprove both audit and nonaudit services to be provided by the independent auditor or other registered public accounting firms (other than with respect to de minimis exceptions permitted by the Sarbanes-Oxley Act of 2002). This duty may be delegated to one or more designated members of the Audit Committee with any such preapproval reported to the Audit Committee at its next regularly scheduled meeting. To the extent required by the rules of Nasdaq or any other applicable legal or regulatory requirements, the Committee’s preapproval policy and the approval of nonaudit services shall be disclosed to investors in the Company’s annual proxy statement or other periodic filings as required by the SEC. The Audit Committee shall consider whether the auditor’s performance of permissible non audit services is compatible with the auditor’s independence.
At least annually, obtain, review, and, if necessary, discuss with the independent auditor a report by the independent auditor describing:
1. the firm’s internal quality control procedures;
2. any material issues raised by the most recent internal quality-control review, peer review, Public Company Accounting Oversight Board (“PCAOB”) review or inspection of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm and any steps taken to deal with any such issues; and
3. all relationships between the independent auditor and the Company to assess the auditor’s independence, including any information required to be disclosed to audit committees in accordance with PCAOB Rule 3526 (or any successor to such rule).
On an annual basis, review and discuss with the independent auditor any disclosed relationships or services that may impact the objectivity and independence of the independent auditor and take, or recommend that the full Board take, appropriate action to oversee the independence of the independent auditor.
Review and discuss with the independent auditor:
1. the auditor’s responsibilities under generally accepted auditing standards and the responsibilities of management in the audit process;
2. the overall audit strategy;
3. the scope and timing of the annual audit;
4. any significant risks identified during the auditor’s risk assessment procedures; and
5. when completed, the results, including significant findings, of the annual audit.
At least annually, hold discussions, outside the presence of management if appropriate, at which the independent auditor may discuss with the Audit Committee the following:
1. all critical accounting policies, practices and estimates to be used in the audit;
2. all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor;
3. other material written communications between the independent auditor and management including, but not limited to, the management letter and schedule of unadjusted differences;
4. an analysis of the auditor’s judgment as to the quality of the Company’s accounting principles, setting forth significant reporting issues and judgments made in connection with the preparation of the financial statements; and
5. any other information required to be communicated to audit committees in accordance with the auditing standards of the PCAOB, as they may be modified or supplemented, relating to the conduct of the audit, including under Auditing Standard 1301 (or any successor to such standard).
Review with management and the independent auditor: any major issues regarding accounting principles and financial statement presentation, including any significant changes in the Company’s selection or application of accounting principles; any significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including the effects of alternative GAAP methods; and the effect of regulatory and accounting initiatives and off-balance sheet structures on the Company’s financial statements.
Review with the independent auditor any problems or difficulties that the independent auditor brings to the attention of the Audit Committee and management’s response.
Review and advise on the selection and removal of the internal controls auditor.
Review activities and qualifications of the internal audit function, including the scope and performance of the internal audit plan, the results of any internal audits, any reports to management, and management’s response to those reports.
Review management’s assessment of the effectiveness of internal control over financial reporting as of the end of the most recent fiscal year and the independent auditor’s attestation and report on management’s assessment.
Discuss with management, the internal controls auditor, and the independent auditor the adequacy and effectiveness of internal control over financial reporting, including any significant deficiencies or material weaknesses identified by management of the Company in connection with its required quarterly certifications under Section 302 of the Sarbanes-Oxley Act, and any fraud involving management or other employees with a significant role in such internal controls .
Discuss with management, the internal controls auditor, and the independent auditor any significant changes in internal control over financial reporting that are disclosed, or considered for disclosure, in the Company’s periodic filings with the SEC.
Discuss the Company’s policies with respect to risk assessment and risk management, including the risk of fraud, and discuss the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.
Establish, review and update as the Audit Committee deems necessary or appropriate a code of ethics for the principal executive officer and senior financial personnel of the Company in accordance with applicable law, rules and regulations.
Obtain periodic updates from management regarding legal and regulatory compliance.
Review legal and regulatory matters, including legal cases against or regulatory investigations of the Company and its subsidiaries, that could have a significant impact on the Company's financial statements.
Review and approve related party transactions to the extent required by applicable Nasdaq rules.
Keep the independent auditor informed of the Audit Committee’s understanding of the Company’s relationships and transactions with related parties that are significant to the Company; and review and discuss with the independent auditor the auditor’s evaluation of the Company’s identification of, accounting for, and disclosure of its relationships and transactions with related parties, including any significant matters arising from the audit regarding the Company’s relationships and transactions with related parties.
Establish and maintain procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting, or auditing matters.
Establish and maintain procedures for the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.
Prepare the report of the Audit Committee that the SEC requires be included in the Company’s annual proxy statement.
Annually, perform a self-assessment relative to the Audit Committee’s purpose, duties and responsibilities under this Charter.

Extent of Duties

The primary role of the Audit Committee is to oversee the financial reporting and disclosure process, and the committee members’ basic responsibility is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its stockholders. To fulfil this obligation, the Audit Committee relies on: management for the preparation and accuracy of the Company's financial statements; both management and the internal controls auditor for establishing effective internal controls and procedures to ensure the Company’s compliance with accounting standards, financial reporting procedures and applicable laws and regulations; and the independent auditor for an unbiased, diligent audit or review, as applicable, of the Company’s financial statements and the effectiveness of the Company’s internal controls. The members of the Audit Committee are not employees of the Company and are not responsible for conducting the audit or performing other accounting procedures. While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in ac cordance with generally accepted accounting principles. These are the responsibilities of management and the independent auditors. It is also not the duty of the Audit Committee to conduct investigations or to assure compliance with laws, regulations, or the Company’s internal policies, procedures or controls. Nothing in this Charter shall be deemed to decrease or modify in any manner adverse to any member of the Audit Committee such member’s right to rely on statements and certifications made by the Company’s officers, employees, agents, counsel, experts and auditors. Nothing in this Charter shall be deemed to adversely affect in any manner the rights of members of the Audit Committee to indemnification and/or advancement of expenses under the Certificate of Incorporation or By -Laws of the Company or under any contract, agreement, arrangement or understanding benefitting such member.