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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarter ended DECEMBER 31, 2002



Commission file number 1-9875



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LOGO



STANDARD
COMMERCIAL CORPORATION



|Incorporated under the laws of North Carolina |  | I.R.S. Employer Identification No. 13-1337610
|--------------------------------------------- |  | ---------------------------------------------



2201
Miller Road, Wilson, North Carolina 27893



Telephone Number 252-291-5507



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On February 4, 2003 the registrant had outstanding 13,492,769 shares of Common Stock ($0.20 par value).



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.  YES  x  NO ̈



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PART I FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

STANDARD COMMERCIAL CORPORATION

CONSOLIDATED BALANCE SHEET

(In thousands, except share data)



|                                                                                                                       |  | December 31 |         |   | March 31 |  
|---------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------- | - | -------- | -
|                                                                                                                       |  | 2002        |         |   | 2001     |  
|                                                                                                                       |  | (unaudited) |         |   |          |  
|ASSETS                                                                                                                 |  |             |         |   |          |  
|Cash                                                                                                                   |  | $           | 38,063  |   |          | $
|Receivables                                                                                                            |  |             | 210,031 |   |          |  
|Inventories                                                                                                            |  |             | 310,569 |   |          |  
|Assets of discontinued operations                                                                                      |  |             | 7,217   |   |          |  
|Prepaid expenses                                                                                                       |  |             | 6,110   |   |          |  
|Marketable securities                                                                                                  |  |             | 1,191   |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|Current assets                                                                                                         |  |             | 573,181 |   |          |  
|Property, plant and equipment                                                                                          |  |             | 157,650 |   |          |  
|Investment in affiliates                                                                                               |  |             | 9,564   |   |          |  
|Other assets                                                                                                           |  |             | 38,232  |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|Total assets                                                                                                           |  | $           | 778,627 |   |          | $
|                                                                                                                       |  |             |         |   |          |  
|LIABILITIES                                                                                                            |  |             |         |   |          |  
|Short-term borrowings                                                                                                  |  | $           | 256,206 |   |          | $
|Current portion of long-term debt                                                                                      |  |             | 5,679   |   |          |  
|Accounts payable                                                                                                       |  |             | 113,892 |   |          |  
|Liabilities of discontinued operations                                                                                 |  |             | 2,472   |   |          |  
|Taxes accrued                                                                                                          |  |             | 14,724  |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|Current liabilities                                                                                                    |  |             | 392,973 |   |          |  
|Long-term debt                                                                                                         |  |             | 78,914  |   |          |  
|Convertible subordinated debentures                                                                                    |  |             | 45,051  |   |          |  
|Retirement and other benefits                                                                                          |  |             | 21,026  |   |          |  
|Deferred taxes                                                                                                         |  |             | 5,178   |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|Total liabilities                                                                                                      |  |             | 543,142 |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|MINORITY INTERESTS                                                                                                     |  |             | 1,921   |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|SHAREHOLDERS EQUITY                                                                                                   |  |             |         |   |          |  
|Preferred stock, $1.65 par value; authorized shares 1,000,000 Issued none                                              |  |             |         |   |          |  
|Common stock, $0.20 par value; authorized shares 100,000,000 Issued 16,109,404
(Dec.0115,981,719; Mar. 0215,985,848) |  |             | 3,222   |   |          |  
|Additional paid-in capital                                                                                             |  |             | 108,391 |   |          |  
|Unearned restricted stock plan compensation                                                                            |  |             | (3,313  | ) |          |  
|Treasury shares, 2,617,707 (Dec. 012,617,707; Mar.
022,617,707)                                                      |  |             | (4,250  | ) |          |  
|Retained earnings                                                                                                      |  |             | 160,961 |   |          |  
|Accumulated other comprehensive income                                                                                 |  |             | (31,447 | ) |          |  
|                                                                                                                       |  |             |         |   |          |  
|Total shareholders equity                                                                                             |  |             | 233,564 |   |          |  
|                                                                                                                       |  |             |         |   |          |  
|Total liabilities and equity                                                                                           |  | $           | 778,627 |   |          | $
|                                                                                                                       |  |             |         |   |          |  



The
accompanying notes are an integral part of these consolidated financial statements.



2



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STANDARD COMMERCIAL
CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

(In thousands, except per share information; unaudited)



|                                                             |  | Third quarter ended December 31 |         |   | Nine months ended December 31 |  
|------------------------------------------------------------ |  | ------------------------------- | ------- | - | ----------------------------- | -
|                                                             |  | 2002                            |         |   | 2001                          |  
|Salestobacco                                                |  | $                               | 211,455 |   |                               | $
|nontobacco                                                  |  |                                 | 51,535  |   |                               |  
|                                                             |  |                                 |         |   |                               |  
|Total sales                                                  |  |                                 | 262,990 |   |                               |  
|Cost of salesmaterials, services and supplies               |  |                                 | 219,984 |   |                               |  
|interest                                                    |  |                                 | 4,225   |   |                               |  
|                                                             |  |                                 |         |   |                               |  
|Gross profit                                                 |  |                                 | 38,781  |   |                               |  
|Selling, general and administrative expenses                 |  |                                 | 20,306  |   |                               |  
|Other interest expense                                       |  |                                 | 1,183   |   |                               |  
|Other income (expense)net                                   |  |                                 | 1,408   |   |                               |  
|                                                             |  |                                 |         |   |                               |  
|Income before taxes                                          |  |                                 | 18,700  |   |                               |  
|Income taxes                                                 |  |                                 | (6,581  | ) |                               |  
|                                                             |  |                                 |         |   |                               |  
|Income after taxes                                           |  |                                 | 12,119  |   |                               |  
|Equity in earnings of affiliates                             |  |                                 | (65     | ) |                               |  
|                                                             |  |                                 |         |   |                               |  
|Income from continuing operations                            |  |                                 | 12,054  |   |                               |  
|Loss from discontinued operations, net of tax                |  |                                 | (1,287  | ) |                               |  
|Extraordinary gain (loss) due to buyback of debt, net of tax |  |                                 | (130    | ) |                               |  
|                                                             |  |                                 |         |   |                               |  
|Net income                                                   |  |                                 | 10,637  |   |                               |  
|Retained earnings at beginning of period                     |  |                                 | 151,167 |   |                               |  
|Common stock dividends                                       |  |                                 | (843    | ) |                               |  
|                                                             |  |                                 |         |   |                               |  
|Retained earnings at end of period                           |  | $                               | 160,961 |   |                               | $
|                                                             |  |                                 |         |   |                               |  
|Earnings per common share                                    |  |                                 |         |   |                               |  
|Basic:                                                       |  |                                 |         |   |                               |  
|From continuing operations                                   |  | $                               | 0.89    |   |                               | $
|From discontinued operations                                 |  |                                 | (0.10   | ) |                               |  
|Extraordinary item                                           |  |                                 | 0.00    |   |                               |  
|                                                             |  |                                 |         |   |                               |  
|Net                                                          |  | $                               | 0.79    |   |                               | $
|                                                             |  |                                 |         |   |                               |  
|Average shares outstanding                                   |  |                                 | 13,489  |   |                               |  
|Diluted:                                                     |  |                                 |         |   |                               |  
|From continuing operations                                   |  | $                               | 0.83    |   |                               | $
|From discontinued operations                                 |  |                                 | (0.09   | ) |                               |  
|Extraordinary item                                           |  |                                 | 0.00    |   |                               |  
|                                                             |  |                                 |         |   |                               |  
|Net                                                          |  | $                               | 0.74    |   |                               | $
|                                                             |  |                                 |         |   |                               |  
|Average shares outstanding                                   |  |                                 | 15,088  |   |                               |  
|Dividend declared per common share                           |  | $                               | 0.0625  |   |                               | $



The
accompanying notes are an integral part of these consolidated financial statements.



3



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STANDARD COMMERCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands; unaudited)



|                                                                        |  | Nine months ended December 31 |        
|----------------------------------------------------------------------- |  | ----------------------------- | -------
|                                                                        |  | 2002                          |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                    |  |                               |        
|Net income                                                              |  | $                             | 30,503 
|Depreciation and amortization                                           |  |                               | 14,582 
|Deferred income taxes                                                   |  |                               | 178    
|Undistributed (earnings) losses of affiliates net of dividends received |  |                               | 174    
|Loss (gain) on buyback of debts                                         |  |                               | (17    
|Gain on disposition of property, plant and equipment                    |  |                               | (134   
|Other                                                                   |  |                               | 808    
|                                                                        |  |                               |        
|                                                                        |  |                               | 46,094 
|Net changes in working capital other than cash                          |  |                               |        
|Receivables                                                             |  |                               | (29,647
|Inventories                                                             |  |                               | (57,949
|Current payables                                                        |  |                               | (18,932
|Discontinued operations                                                 |  |                               | 7,563  
|                                                                        |  |                               |        
|CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES                        |  |                               | (52,871
|                                                                        |  |                               |        
|CASH FLOWS FROM INVESTING ACTIVITIES                                    |  |                               |        
|Property, plant and equipmentadditions                                 |  |                               | (29,121
|dispositions                                                           |  |                               | 356    
|Business (acquisitions) dispositions                                    |  |                               | 600    
|                                                                        |  |                               |        
|CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES                        |  |                               | (28,165
|                                                                        |  |                               |        
|CASH FLOWS FROM FINANCING ACTIVITIES                                    |  |                               |        
|Net change in short-term borrowings                                     |  |                               | 123,826
|Proceeds from long-term borrowings                                      |  |                               | 7,645  
|Repayment of long-term borrowings                                       |  |                               | (15,307
|Buyback of senior notes/convertible subordinated debentures             |  |                               | (23,743
|Dividends paid                                                          |  |                               | (2,354 
|Other                                                                   |  |                               | 32     
|                                                                        |  |                               |        
|CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES                        |  |                               | 90,099 
|                                                                        |  |                               |        
|Increase in cash for period                                             |  |                               | 9,063  
|Cash at beginning of period                                             |  |                               | 29,000 
|                                                                        |  |                               |        
|CASH AT END OF PERIOD                                                   |  | $                             | 38,063 
|                                                                        |  |                               |        
|Cash payments forinterest                                              |  | $                             | 18,944 
|income taxes                                                           |  | $                             | 17,004 



The
accompanying notes are an integral part of these consolidated financial statements.



4



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STANDARD COMMERCIAL
CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|1. |  | BASIS OF PRESENTATION
|-- |  | ---------------------



The interim statements presented herein should be read in conjunction with the audited financial statements and notes thereto included in
the Companys latest Annual Report on Form 10-K. The interim period financial statements have been prepared by the Company without audit and contain all of the adjustments which are, in the opinion of management, necessary for a fair statement
of the results of operations. All such adjustments are of normal, recurring nature and there were no material changes in accounting policies during the period ended December 31, 2002. Because of the nature of the Companys businesses,
fluctuations in results for interim periods are not necessarily indicative of business trends or results to be expected for other interim periods or a full year.



|2. |  | INVENTORIES
|-- |  | -----------



|               |  | December 31 |         | March 31
|-------------- |  | ----------- | ------- | --------
|               |  | 2002        |         | 2001    
|(In thousands) |  |             |         |         
|Tobacco        |  | $           | 247,701 |         
|Nontobacco     |  |             | 62,868  |         
|               |  |             |         |         
|Total          |  | $           | 310,569 |         
|               |  |             |         |         



|3. |  | COMPREHENSIVE INCOME
|-- |  | --------------------



The components of comprehensive income (loss) were as follows:



|                                                                               |  | Quarter ended |        |      | Nine months ended |       
|------------------------------------------------------------------------------ |  | ------------- | ------ | ---- | ----------------- | ------
|                                                                               |  | December 31   |        |      | December 31       |       
|(In thousands)                                                                 |  | 2002          |        | 2001 |                   |       
|Net income                                                                     |  | $             | 10,637 |      | $                 | 5,653 
|Other comprehensive income:                                                    |  |               |        |      |                   |       
|Translation adjustment                                                         |  |               | 5,110  |      |                   | (1,661
|Cumulative effect of change in accounting for derivative financial
instruments |  |               |       |      |                   |      
|Derivative financial instruments                                               |  |               | 784    |      |                   | (90   
|                                                                               |  |               |        |      |                   |       
|Total comprehensive income                                                     |  | $             | 16,531 |      | $                 | 3,902 
|                                                                               |  |               |        |      |                   |       



|4. |  | SEGMENT INFORMATION
|-- |  | -------------------



The Company is engaged in purchasing, processing and selling leaf tobacco and wool. Its activities other than these are minimal. Segment
revenue and net income (loss) were as follows:



|                  |  | Quarter ended |         |   | Nine months ended |  
|----------------- |  | ------------- | ------- | - | ----------------- | -
|                  |  | December 31   |         |   | December 31       |  
|                  |  | 2002          |         |   | 2001              |  
|                  |  |               |         |   |                   |  
|(In thousands)    |  |               |         |   |                   |  
|Sales             |  |               |         |   |                   |  
|Tobacco           |  | $             | 211,455 |   |                   | $
|Nontobacco        |  |               | 51,535  |   |                   |  
|                  |  |               |         |   |                   |  
|                  |  | $             | 262,990 |   |                   | $
|                  |  |               |         |   |                   |  
|Net income (loss) |  |               |         |   |                   |  
|Tobacco           |  | $             | 11,974  |   |                   | $
|Nontobacco        |  |               | (1,337  | ) |                   |  
|                  |  |               |         |   |                   |  
|                  |  | $             | 10,637  |   |                   | $
|                  |  |               |         |   |                   |  



5



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STANDARD COMMERCIAL
CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|5. |  | EARNINGS PER SHARE
|-- |  | ------------------



Earnings per share has been presented in conformity with Statement of Financial Accounting Standards (SFAS) 128. The diluted earnings per
share include the effect of the convertible subordinated debentures which if converted would have increased the weighted average number of shares and net income applicable to common stock. The weighted numbers of shares were further increased by
employee stock options. Employee stock options with exercise prices greater than the average market price of common shares were not included in the computation of diluted earnings per share.



|6. |  | DERIVATIVE FINANCIAL INSTRUMENTS
|-- |  | --------------------------------



On April 1, 2001 the Company adopted SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended by
SFAS 137 and SFAS 138. SFAS 133 establishes new accounting and disclosure requirements for most derivative instruments and hedge transactions involving derivatives. SFAS 133 also requires formal documentation procedures for hedging relationships and
effectiveness testing when hedge accounting is to be applied.



In accordance with the transition provisions of SFAS 133, in the nine months ended December 31, 2001 the Company recorded a cumulative effect loss adjustment of $2.1 million, net of applicable taxes, in other comprehensive income to
recognize the fair value of all derivatives designated as cash flow hedging instruments.



The Companys derivative usage is principally foreign currency forwards. These contracts typically have maturities of less than one year. As a matter of policy, the Company does not use derivative
instruments unless there is an underlying exposure. The Companys foreign currency forwards have been designated and qualify as cash flow hedges under the criteria of SFAS 133. SFAS 133 requires that changes in fair values of derivatives that
qualify as cash flow hedges be recognized in other comprehensive income, while the ineffective portion of change in fair value of derivatives be recognized immediately in earnings. The fair value of the Companys foreign currency forward
contracts at December 31, 2002 was $30.7 million with a notional value of $31.7 million.



|7. |  | GOODWILL AND OTHER INTANGIBLE ASSETS
|-- |  | ------------------------------------



In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS 141, Business Combinations, and SFAS 142
Goodwill and Other Intangible Assets. SFAS 141 requires the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 142 requires that upon adoption, amortization of goodwill cease and
instead, the carrying value of goodwill be evaluated for impairment on an annual basis. Identifiable intangible assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS 121, Accounting
for Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed Of. SFAS 142 is effective for fiscal years beginning after December 15, 2001. The Company adopted SFAS 142 on April 1, 2002.



In accordance with SFAS 142, the Company discontinued the
amortization of goodwill effective April 1, 2002. A reconciliation of previously reported net income and earnings per share to the amounts adjusted for the exclusion of goodwill amortization follows:



6



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STANDARD COMMERCIAL
CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued



|                                    |  | Quarter ended December 31 |        | Nine months ended December 31
|----------------------------------- |  | ------------------------- | ------ | -----------------------------
|                                    |  | 2002                      |        | 2001                         
|(In thousands)                      |  |                           |        |                              
|Reported net income                 |  | $                         | 10,637 |                              
|Add: Goodwill amortization          |  |                           |       |                              
|                                    |  |                           |        |                              
|Adjusted net income                 |  | $                         | 10,637 |                              
|                                    |  |                           |        |                              
|Reported basic earnings per share   |  | $                         | 0.79   |                              
|Add: Goodwill amortization          |  |                           |       |                              
|                                    |  |                           |        |                              
|Adjusted basic earnings per share   |  | $                         | 0.79   |                              
|                                    |  |                           |        |                              
|                                   
|                                    |  | Quarter ended December 31 |        | Nine months ended December 31
|                                    |  | 2002                      |        | 2001                         
|Reported diluted earnings per share |  | $                         | 0.74   |                              
|Add: Goodwill amortization          |  |                           |       |                              
|                                    |  |                           |        |                              
|Adjusted diluted earnings per share |  | $                         | 0.74   |                              
|                                    |  |                           |        |                              



The carrying amount of
goodwill and other intangible assets for the quarter ended December 31, 2002, by operating segments, were as follows:



GOODWILL



|                                       |  | Tobacco |       | Wool |   | Total
|-------------------------------------- |  | ------- | ----- | ---- | - | -----
|(In thousands)                         |  |         |       |      |   |      
|At April 1, 2002 and December 31, 2002 |  | $       | 9,003 |      | $ | 2,286
|                                       |  |         |       |      |   |      
|                                      
|INTANGIBLES                            |  |         |       |      |   |      
|                                       |  | Tobacco |       | Wool |   | Total
|(In thousands)                         |  |         |       |      |   |      
|At April 1, 2002                       |  | $       | 2,614 |      |   |     
|Additions                              |  |         | 1,547 |      |   |     
|Less amortization                      |  |         | 1,567 |      |   |     
|                                       |  |         |       |      |   |      
|Balance as of December 31, 2002        |  | $       | 2,594 |      |   |     
|                                       |  |         |       |      |   |      



Estimated amortization
expenses for the next five fiscal years is as follows:

2003 (three months)-$234; 2004-$936; 2005-$936; 2006-$383 and 2007-$106.



|8. |  | DISCONTINUED OPERATIONS
|-- |  | -----------------------



In August 2001, the FASB issued SFAS 144, Accounting for Impairment or Disposal of Long-Lived Assets. Under SFAS 144 a
component of business that is held for sale is reported in discontinued operations if the operations and cash flows will be, or have been eliminated from the on-going operations of the Company and the Company will not have any significant continuing
involvement in such operations. The Company adopted the provisions of SFAS 144 in the quarter ended March 31, 2002. During the same period the Company decided to close and dispose of wool units in South Africa, New Zealand and Argentina, and its
specialty fibers business in Holland. During the quarter ended December 31, 2002, the Company sold its New Zealand operations. The Argentinean and specialty fibers business have been substantially liquidated and the South African operation is being
wound down.



7



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STANDARD COMMERCIAL
CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued



Revenues and the assets and liabilities for these units, other than debt guaranteed by the Company, were as follows:



|                                                                         |  | Quarter ended December 31 |       | Nine months ended December 31
|------------------------------------------------------------------------ |  | ------------------------- | ----- | -----------------------------
|                                                                         |  | 2002                      |       | 2001                         
|(In thousands)                                                           |  |                           |       |                              
|Revenues                                                                 |  | $                         | 9,337 |                              
|                                                                         |  |                           |       |                              
|                                                                         |  | December
31               |       |                              
|                                                                         |  | 2002                      |       | 2001                         
|(In thousands)                                                           |  |                           |       |                              
|Inventory                                                                |  | $                         | 2,833 |                              
|Receivables                                                              |  |                           | 2,799 |                              
|Other assets                                                             |  |                           | 1,585 |                              
|                                                                         |  |                           |       |                              
|Assets                                                                   |  |                           | 7,217 |                              
|Accounts payables and other liabilities                                  |  |                           | 2,472 |                              
|                                                                         |  |                           |       |                              
|Net assets available for sale                                            |  | $                         | 4,745 |                              
|                                                                         |  |                           |       |                              
|Debt guaranteed by the Company (not included in discontinued
operations) |  | $                         | 8,982 |                              
|                                                                         |  |                           |       |                              



|9. |  | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|-- |  | -----------------------------------------



In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements 4, 44 and 64, Amendment to FASB Statement 13, and Technical
Corrections. One of the major changes made by this Statement is to change the accounting for the classification of gains and losses from the extinguishment of debt as previously required under SFAS 4. Upon adoption, the Company will follow APB
30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, in determining whether any extinguishment of debt may be
classified as extraordinary. The provision of this statement related to the rescission of FASB Statement 4 shall be applied in fiscal years beginning after May 15, 2002 with early application encouraged. The Company is currently evaluating the
impact of this Statement.



In June 2002, the FASB
issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS 146 addresses significant issues regarding the recognition, measurement and reporting of costs associated with exit and disposal activities,
including restructuring activities. SFAS 146 also addresses recognition of certain costs related to terminating a contract that is not a capital lease, costs to consolidate facilities, relocate employees and provide benefits to employees who are
involuntarily terminated under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS 146 is effective for exit or disposal activities initiated after December 31,
2002. The impact on the Companys financial position and results of operations from adopting SFAS 146 has not been determined.



In November 2002, the FASB issued Financial Accounting Standards Board Interpretation (FIN) 45, Guarantors Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB Statements 5, 57, and 107 and Rescission of FASB Interpretation 34. FIN 45 clarifies the requirements of FASB Statement
5, Accounting for Contingencies, relating to the guarantors accounting for, and disclosure of, the issuance of certain types guarantees. FIN 45 requires that upon issuance of a guarantee, the entity (i.e., the guarantor) must
recognize a liability for the fair value of the obligation it assumes under the guarantee. The disclosure provisions of FIN 45 are effective for



8



---



STANDARD COMMERCIAL
CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued



financial statements of interim or annual periods that end after December 15, 2002. FIN 45s provisions
for initial recognition and measurement should be applied on a prospective basis to guarantees issued or modified after December 15, 2002, irrespective of the guarantors fiscal year-end. The guarantors previous accounting for guarantees
that were issued before the date of FIN 45s initial application may not be revised or restated to reflect the effect of the recognition and measurement provisions of FIN 45. The Company will evaluate at quarterly intervals issuance of
guarantees and recognize a liability for the fair value of the obligation it assumes under the guarantee on its financial statements.



In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation  Transition and Disclosure  an
Amendment of FASB Statement 123. This Statement amends SFAS 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. This statement requires that companies having a year-end after December 15, 2002 follow the prescribed format and provide the additional disclosures in their annual reports.



|10. |  | SENIOR NOTES
|--- |  | ------------



The 87/8% Senior Notes due 2005 were issued by Standard Commercial Tobacco Co., Inc. (the Issuer), a wholly owned subsidiary of the Company. The Company and Standard Wool, Inc., a wholly owned subsidiary of the Company (the
Guarantors), jointly and severally, guarantee, on a senior basis, the full and prompt performance of the Issuers obligations under the terms of the indenture. Management has determined that full financial statements of the
Guarantors would not be material to investors and such financial statements are not provided. The following supplemental combining financial statements present information regarding the Issuer and the Guarantors.



9



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING BALANCE SHEET

December 31, 2002

(In thousands; unaudited)



|                                            |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -
|Assets                                      |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Cash                                        |  | $                                             | 598     |   |                                             | $ | 137     |                                |  | $ |                                     |   |  | $            | 37,328  |   |       | $
|Receivables                                 |  |                                               | 16,770  |   |                                             |   | 3       |                                |  |   |                                     |   |  |              | 193,258 |   |       |  
|Intercompany receivables                    |  |                                               | 124,197 |   |                                             |   | 35,199  |                                |  |   |                                     |   |  |              | 11,497  |   |       |  
|Inventories                                 |  |                                               | 83,603  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 226,966 |   |       |  
|Assets of discontinued operations           |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 7,217   |   |       |  
|Prepaid expenses                            |  |                                               | 2,578   |   |                                             |   | 382     |                                |  |   |                                     |   |  |              | 3,150   |   |       |  
|Marketable securities                       |  |                                               |        |   |                                             |   | 1       |                                |  |   |                                     |   |  |              | 1,190   |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Current assets                              |  |                                               | 227,746 |   |                                             |   | 35,722  |                                |  |   |                                     |   |  |              | 480,606 |   |       |  
|Property, plant and equipment               |  |                                               | 34,890  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 122,760 |   |       |  
|Investment in subsidiaries                  |  |                                               | 152,869 |   |                                             |   | 244,040 |                                |  |   | 15,132                               |   |  |              | 156,064 |   |       |  
|Investment in affiliates                    |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 9,564   |   |       |  
|Other noncurrent assets                     |  |                                               | 1,238   |   |                                             |   | 14,015  |                                |  |   |                                     |   |  |              | 22,979  |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total assets                                |  | $                                             | 416,743 |   |                                             | $ | 293,777 |                                |  | $ | 15,132                               |   |  | $            | 791,973 |   |       | $
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Liabilities                                 |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Short-term borrowings                       |  | $                                             | 54,968  |   |                                             | $ |        |                                |  | $ |                                     |   |  | $            | 201,238 |   |       | $
|Current portion of long-term debt           |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 5,679   |   |       |  
|Accounts payable                            |  |                                               | 13,395  |   |                                             |   | 1,925   |                                |  |   |                                     |   |  |              | 98,572  |   |       |  
|Liabilities of discontinued operations      |  |                                               |        |   |                                             |   |        |                                |  |   |                                      |   |  |              | 2,472   |   |       |  
|Intercompany accounts payable               |  |                                               | 40,898  |   |                                             |   | 14,276  |                                |  |   | 906                                  |   |  |              | 114,813 |   |       |  
|Taxes accrued                               |  |                                               | 7,096   |   |                                             |   | (4,410  | )                              |  |   |                                     |   |  |              | 12,038  |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Current liabilities                         |  |                                               | 116,357 |   |                                             |   | 11,791  |                                |  |   | 906                                  |   |  |              | 434,812 |   |       |  
|Long-term debt                              |  |                                               | 65,177  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 13,737  |   |       |  
|Convertible subordinated debentures         |  |                                               |        |   |                                             |   | 45,051  |                                |  |   |                                     |   |  |              |        |   |       |  
|Retirement and other benefits               |  |                                               | 9,570   |   |                                             |   | 990     |                                |  |   |                                     |   |  |              | 10,466  |   |       |  
|Deferred taxes                              |  |                                               | (1,710  | ) |                                             |   | (376    | )                              |  |   |                                     |   |  |              | 7,264   |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total liabilities                           |  |                                               | 189,394 |   |                                             |   | 57,456  |                                |  |   | 906                                  |   |  |              | 466,279 |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Minority interests                          |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 1,921   |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Shareholders' equity                        |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Common stock                                |  |                                               | 993     |   |                                             |   | 3,222   |                                |  |   | 32,404                               |   |  |              | 166,365 |   |       |  
|Additional paid-in capital                  |  |                                               | 130,860 |   |                                             |   | 108,391 |                                |  |   |                                     |   |  |              | 60,564  |   |       |  
|Unearned restricted stock plan compensation |  |                                               | (779    | ) |                                             |   | (556    | )                              |  |   |                                     |   |  |              | (1,978  | ) |       |  
|Treasury stock at cost                      |  |                                               |        |   |                                             |   | (4,250  | )                              |  |   |                                     |   |  |              |        |   |       |  
|Retained earnings                           |  |                                               | 110,959 |   |                                             |   | 160,961 |                                |  |   | (15,102                              | ) |  |              | 129,982 |   |       |  
|Accumulated other comprehensive income      |  |                                               | (14,684 | ) |                                             |   | (31,447 | )                              |  |   | (3,076                               | ) |  |              | (31,160 | ) |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total shareholders' equity                  |  |                                               | 227,349 |   |                                             |   | 236,321 |                                |  |   | 14,226                               |   |  |              | 323,773 |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total liabilities and equity                |  | $                                             | 416,743 |   |                                             | $ | 293,777 |                                |  | $ | 15,132                               |   |  | $            | 791,973 |   |       | $
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  





10



---



SUPPLEMENTAL COMBINING
STATEMENT OF INCOME AND RETAINED EARNINGS

Third Quarter ended December 31, 2002

(In thousands; unaudited)



|                                                           |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|---------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -
|Sales                                                      |  | $                                             | 58,612  |   |                                             | $ |        |                                |  | $ |                                     |   |  | $            | 275,394 |   |       | $
|Cost of sales:                                             |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Materials services and supplies                            |  |                                               | 47,881  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 243,119 |   |       |  
|Interest                                                   |  |                                               | 232     |   |                                             |   |        |                                |  |   |                                     |   |  |              | 3,993   |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Gross profit                                               |  |                                               | 10,499  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 28,282  |   |       |  
|Selling, general & administrative expenses                 |  |                                               | 4,214   |   |                                             |   | 1,253   |                                |  |   |                                     |   |  |              | 14,839  |   |       |  
|Other interest expense                                     |  |                                               | 1,963   |   |                                             |   | 826     |                                |  |   |                                     |   |  |              | (1,606  | ) |       |  
|Other income (expense) net                                 |  |                                               | 227     |   |                                             |   | 2,699   |                                |  |   |                                     |   |  |              | (1,518  | ) |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income (loss) before taxes                                 |  |                                               | 4,549   |   |                                             |   | 620     |                                |  |   |                                     |   |  |              | 13,531  |   |       |  
|Income taxes                                               |  |                                               | 1,729   |   |                                             |   | 236     |                                |  |   |                                     |   |  |              | 4,616   |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income (loss) after taxes                                  |  |                                               | 2,820   |   |                                             |   | 384     |                                |  |   |                                     |   |  |              | 8,915   |   |       |  
|Equity in earnings of affiliates                           |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | (65     | ) |       |  
|Equity in earnings of subsidiaries                         |  |                                               | 8,900   |   |                                             |   | 11,540  |                                |  |   | (50                                  | ) |  |              |        |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income from continuing operations                          |  |                                               | 11,720  |   |                                             |   | 11,924  |                                |  |   | (50                                  | ) |  |              | 8,850   |   |       |  
|Discontinued operations                                    |  |                                               |        |   |                                             |   | (1,287  | )                              |  |   | (1,287                               | ) |  |              | 8       |   |       |  
|Extraordinary gain (loss) due to buyback of long-term debt |  |                                               | (130    | ) |                                             |   |        |                                |  |   |                                     |   |  |              |        |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Net income                                                 |  |                                               | 11,590  |   |                                             |   | 10,637  |                                |  |   | (1,337                               | ) |  |              | 8,858   |   |       |  
|Retained earnings at beginning of period                   |  |                                               | 99,369  |   |                                             |   | 151,167 |                                |  |   | (13,765                              | ) |  |              | 121,124 |   |       |  
|Common stock dividends                                     |  |                                               |        |   |                                             |   | (843    | )                              |  |   |                                     |   |  |              |        |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Retained earnings at end of period                         |  | $                                             | 110,959 |   |                                             | $ | 160,961 |                                |  | $ | (15,102                              | ) |  | $            | 129,982 |   |       | $
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  



11



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Nine months ended December 31, 2002

(In thousands; unaudited)



|                                                                       |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|---------------------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -
|                                                                      
|Sales                                                                  |  | $                                             | 156,127 |   |                                             | $ |        |                                |  | $ |                                     |   |  | $            | 770,676 |   |       | $
|Cost of sales:                                                         |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Materials services and supplies                                        |  |                                               | 126,387 |   |                                             |   |        |                                |  |   |                                     |   |  |              | 674,174 |   |       |  
|Interest                                                               |  |                                               | 582     |   |                                             |   |        |                                |  |   |                                     |   |  |              | 11,489  |   |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                                                      
|Gross profit                                                           |  |                                               | 29,158  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 85,013  |   |       |  
|Selling, general & administrative expenses                             |  |                                               | 11,121  |   |                                             |   | 4,490   |                                |  |   | 1                                    |   |  |              | 45,348  |   |       |  
|Other interest expense                                                 |  |                                               | 5,691   |   |                                             |   | 2,518   |                                |  |   |                                     |   |  |              | (4,930  | ) |       |  
|Other income (expense) net                                             |  |                                               | 306     |   |                                             |   | 6,892   |                                |  |   |                                     |   |  |              | (3,716  | ) |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                                                      
|Income (loss) before taxes                                             |  |                                               | 12,652  |   |                                             |   | (116    | )                              |  |   | (1                                   | ) |  |              | 40,879  |   |       |  
|Income taxes                                                           |  |                                               | 4,808   |   |                                             |   | (44     | )                              |  |   |                                     |   |  |              | 15,651  |   |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                                                      
|Income (loss) after taxes                                              |  |                                               | 7,844   |   |                                             |   | (72     | )                              |  |   | (1                                   | ) |  |              | 25,228  |   |       |  
|Equity in earnings of affiliates                                       |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | (91     | ) |       |  
|Equity in earnings of subsidiaries                                     |  |                                               | 27,350  |   |                                             |   | 32,850  |                                |  |   | (2,213                               | ) |  |              |        |   |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                                                      
|Income from continuing operations                                      |  |                                               | 35,194  |   |                                             |   | 32,778  |                                |  |   | (2,214                               | ) |  |              | 25,137  |   |       |  
|Discontinued operations                                                |  |                                               |        |   |                                             |   | (2,422  | )                              |  |   | (2,422                               | ) |  |              | (1,127  | ) |       |  
|Extraordinary gain (loss) due to buyback of long-term debt, net of tax |  |                                               | (130    | ) |                                             |   | 147     |                                |  |   |                                     |   |  |              |        |   |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                                                      
|Net income                                                             |  |                                               | 35,064  |   |                                             |   | 30,503  |                                |  |   | (4,636                               | ) |  |              | 24,010  |   |       |  
|Retained earnings at beginning of period                               |  |                                               | 75,895  |   |                                             |   | 132,812 |                                |  |   | (10,466                              | ) |  |              | 106,426 |   |       |  
|Common stock dividends                                                 |  |                                               |        |   |                                             |   | (2,354  | )                              |  |   |                                     |   |  |              | (454    | ) |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                                                      
|Retained earnings at end of period                                     |  | $                                             | 110,959 |   |                                             | $ | 160,961 |                                |  | $ | (15,102                              | ) |  | $            | 129,982 |   |       |  
|                                                                       |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  



12



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS

Nine months ended December 31, 2002

(In thousands; unaudited)



|                                                                   |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |        | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         | Total | 
|------------------------------------------------------------------ |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------ | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | ----- | 
|Cash provided by (used in) operating activities                    |  | $                                             | (7,830  | ) |                                             | $ | 8,548  |                                |  | $ | (123                                 | ) |  |              | (53,466 | )     | 
|Cash flows from investing activities Property, plant and equipment |  |                                               |         |   |                                             |   |        |                                |  |   |                                      |   |  |              |         |       | 
|additions                                                         |  |                                               | (18,207 | ) |                                             |   |       |                                |  |   |                                     |   |  |              | (10,914 | )     | 
|disposals                                                         |  |                                               | 3       |   |                                             |   |       |                                |  |   |                                     |   |  |              | 353     |       | 
|Business (acquisitions) dispositions                               |  |                                               |        |   |                                             |   |       |                                |  |   | 600                                  |   |  |              |        |       | 
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |   |                                      |   |  |              |         |       | 
|Cash provided by (used in) investing activities                    |  |                                               | (18,204 | ) |                                             |   |       |                                |  |   | 600                                  |   |  |              | (10,561 | )     | 
|Cash flows from financing activities:                              |  |                                               |         |   |                                             |   |        |                                |  |   |                                      |   |  |              |         |       | 
|Proceeds from long-term borrowings                                 |  |                                               |        |   |                                             |   |       |                                |  |   |                                     |   |  |              | 7,645   |       | 
|Repayment of long-term borrowings                                  |  |                                               |        |   |                                             |   |       |                                |  |   |                                     |   |  |              | (15,307 | )     | 
|Net change in short-term borrowings                                |  |                                               | 43,049  |   |                                             |   |       |                                |  |   |                                     |   |  |              | 80,777  |       | 
|Buyback of long-term debt                                          |  |                                               | (18,952 | ) |                                             |   | (4,791 | )                              |  |   |                                     |   |  |              |        |       | 
|Dividends received /( paid)                                        |  |                                               |        |   |                                             |   | (2,354 | )                              |  |   |                                     |   |  |              |        |       | 
|Other                                                              |  |                                               |        |   |                                             |   | (1,345 | )                              |  |   | (600                                 | ) |  |              | 1,977   |       | 
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |   |                                      |   |  |              |         |       | 
|Cash provided by (used in) financing activities                    |  |                                               | 24,097  |   |                                             |   | (8,490 | )                              |  |   | (600                                 | ) |  |              | 75,092  |       | 
|Increase (decrease) in cash for year                               |  |                                               | (1,937  | ) |                                             |   | 58     |                                |  |   | (123                                 | ) |  |              | 11,065  |       | 
|Cash at beginning of year                                          |  |                                               | 2,535   |   |                                             |   | 79     |                                |  |   | 123                                  |   |  |              | 26,263  |       | 
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |   |                                      |   |  |              |         |       | 
|Cash at end of period                                              |  | $                                             | 598     |   |                                             | $ | 137    |                                |  | $ |                                     |   |  | $            | 37,328  |       | 
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |   |                                      |   |  |              |         |       | 
|Interest                                                           |  | $                                             | 9,509   |   |                                             | $ | 1,633  |                                |  | $ |                                     |   |  | $            | 7,802   |       | 
|Income taxes                                                       |  |                                               | 1,281   |   |                                             |   | 7,760  |                                |  |   |                                     |   |  |              | 7,963   |       | 





13



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING BALANCE SHEET

December 31, 2001

(In thousands; unaudited)

|                                            |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -
|Assets                                      |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Cash                                        |  | $                                             | 28,204  |   |                                             | $ | 7       |                                |  | $ | 123                                  |   |  | $            | 30,527  |   |       | $
|Receivables                                 |  |                                               | 11,521  |   |                                             |   | 14      |                                |  |   |                                     |   |  |              | 193,273 |   |       |  
|Intercompany receivables                    |  |                                               | 144,404 |   |                                             |   | 3,494   |                                |  |   | 35                                   |   |  |              | 21,557  |   |       |  
|Inventories                                 |  |                                               | 62,326  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 148,932 |   |       |  
|Assets of discontinued operations           |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 21,086  |   |       |  
|Prepaid expenses                            |  |                                               |        |   |                                             |   |        |                                |  |   | 1                                    |   |  |              | 5,440   |   |       |  
|Marketable securities                       |  |                                               |        |   |                                             |   | 1       |                                |  |   |                                     |   |  |              | 536     |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                           
|Current assets                              |  |                                               | 246,455 |   |                                             |   | 3,516   |                                |  |   | 159                                  |   |  |              | 421,351 |   |       |  
|                                           
|Property, plant and equipment               |  |                                               | 20,360  |   |                                             |   |        |                                |  |   | 11                                   |   |  |              | 115,499 |   |       |  
|Investment in subsidiaries                  |  |                                               | 118,352 |   |                                             |   | 223,581 |                                |  |   | 22,694                               |   |  |              | 149,347 |   |       |  
|Investment in affiliates                    |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 9,981   |   |       |  
|Other noncurrent assets                     |  |                                               | 2,444   |   |                                             |   | 13,680  |                                |  |   |                                     |   |  |              | 23,582  |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                           
|Total assets                                |  | $                                             | 387,611 |   |                                             | $ | 240,777 |                                |  | $ | 22,864                               |   |  | $            | 719,760 |   |       | $
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                           
|Liabilities                                 |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Short-term borrowings                       |  | $                                             | 362     |   |                                             | $ |        |                                |  | $ |                                     |   |  | $            | 136,657 |   |       | $
|Current portion of long-term debt           |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 11,278  |   |       |  
|Accounts payable                            |  |                                               | 19,425  |   |                                             |   | 1,916   |                                |  |   | 7                                    |   |  |              | 109,982 |   |       |  
|Liabilities of discontinued operations      |  |                                               |        |   |                                             |   |        |                                |  |   |                                      |   |  |              | 2,590   |   |       |  
|Intercompany accounts payable               |  |                                               | 37,777  |   |                                             |   | 1,136   |                                |  |   | 1,590                                |   |  |              | 128,987 |   |       |  
|Taxes accrued                               |  |                                               | 8,979   |   |                                             |   | (3,226  | )                              |  |   |                                     |   |  |              | 3,113   |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                           
|Current liabilities                         |  |                                               | 66,543  |   |                                             |   | (174    | )                              |  |   | 1,597                                |   |  |              | 392,607 |   |       |  
|                                           
|Long-term debt                              |  |                                               | 113,000 |   |                                             |   |        |                                |  |   |                                     |   |  |              | 17,451  |   |       |  
|Convertible subordinated debentures         |  |                                               |        |   |                                             |   | 51,316  |                                |  |   |                                     |   |  |              |        |   |       |  
|Retirement and other benefits               |  |                                               | 9,711   |   |                                             |   | 900     |                                |  |   |                                     |   |  |              | 9,562   |   |       |  
|Deferred taxes                              |  |                                               | (1,302  | ) |                                             |   | (1,619  | )                              |  |   |                                     |   |  |              | 8,849   |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total liabilities                           |  |                                               | 187,952 |   |                                             |   | 50,423  |                                |  |   | 1,597                                |   |  |              | 428,469 |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Minority interests                          |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 55      |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|                                           
|Shareholders' equity                        |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Common stock                                |  |                                               | 993     |   |                                             |   | 3,196   |                                |  |   | 32,404                               |   |  |              | 166,211 |   |       |  
|Additional paid-in capital                  |  |                                               | 130,860 |   |                                             |   | 106,003 |                                |  |   |                                     |   |  |              | 58,106  |   |       |  
|Unearned restricted stock plan compensation |  |                                               | (618    | ) |                                             |   | (432    | )                              |  |   | (13                                  | ) |  |              | (1,181  | ) |       |  
|Treasury stock at cost                      |  |                                               |        |   |                                             |   | (4,250  | )                              |  |   |                                     |   |  |              |        |   |       |  
|Retained earnings                           |  |                                               | 90,293  |   |                                             |   | 134,786 |                                |  |   | 2,608                                |   |  |              | 117,049 |   |       |  
|Accumulated other comprehensive income      |  |                                               | (21,869 | ) |                                             |   | (48,949 | )                              |  |   | (13,732                              | ) |  |              | (48,949 | ) |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total shareholders' equity                  |  |                                               | 199,659 |   |                                             |   | 190,354 |                                |  |   | 21,267                               |   |  |              | 291,236 |   |       |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Total liabilities and equity                |  | $                                             | 387,611 |   |                                             | $ | 240,777 |                                |  | $ | 22,864                               |   |  | $            | 719,760 |   |       | $
|                                            |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  



14



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Third Quarter ended December 31, 2001

(In thousands; unaudited)



|                                                           |  | Standard Commercial Tobacco Co. Inc. (Issuer) |        | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|---------------------------------------------------------- |  | --------------------------------------------- | ------ | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -
|Sales                                                      |  | $                                             | 66,555 |                                             | $ |        |                                |  | $ |                                     |   |  | $            | 233,411 |   |       | $
|Cost of sales:                                             |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Materials services and supplies                            |  |                                               | 53,672 |                                             |   |        |                                |  |   |                                     |   |  |              | 210,060 |   |       |  
|Interest                                                   |  |                                               | 985    |                                             |   |        |                                |  |   |                                     |   |  |              | 3,471   |   |       |  
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Gross profit                                               |  |                                               | 11,898 |                                             |   |        |                                |  |   |                                     |   |  |              | 19,880  |   |       |  
|Selling, general & administrative expenses                 |  |                                               | 3,624  |                                             |   | 1,288   |                                |  |   | 47                                   |   |  |              | 16,388  |   |       |  
|Other interest expense                                     |  |                                               | 2,324  |                                             |   | 1,027   |                                |  |   |                                     |   |  |              | (1,478  | ) |       |  
|Other income (expense) net                                 |  |                                               | 830    |                                             |   | 2,163   |                                |  |   | (1                                   | ) |  |              | (2,856  | ) |       |  
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income (loss) before taxes                                 |  |                                               | 6,780  |                                             |   | (152    | )                              |  |   | (48                                  | ) |  |              | 2,114   |   |       |  
|Income taxes                                               |  |                                               | 2,307  |                                             |   | (52     | )                              |  |   |                                     |   |  |              | 248     |   |       |  
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income (loss) after taxes                                  |  |                                               | 4,473  |                                             |   | (100    | )                              |  |   | (48                                  | ) |  |              | 1,866   |   |       |  
|Equity in earnings of affiliates                           |  |                                               |       |                                             |   |        |                                |  |   |                                     |   |  |              | (20     | ) |       |  
|Equity in earnings of subsidiaries                         |  |                                               | 3,390  |                                             |   | 6,271   |                                |  |   | (1,544                               | ) |  |              |        |   |       |  
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income from continuing operations                          |  |                                               | 7,863  |                                             |   | 6,171   |                                |  |   | (1,592                               | ) |  |              | 1,846   |   |       |  
|Discontinued operations                                    |  |                                               |       |                                             |   | (529    | )                              |  |   | (529                                 | ) |  |              | (529    | ) |       |  
|Extraordinary gain (loss) due to buyback of long-term debt |  |                                               |       |                                             |   | 11      |                                |  |   |                                     |   |  |              |        |   |       |  
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Net income                                                 |  |                                               | 7,863  |                                             |   | 5,653   |                                |  |   | (2,121                               | ) |  |              | 1,317   |   |       |  
|Retained earnings at beginning of period                   |  |                                               | 82,430 |                                             |   | 129,801 |                                |  |   | 4,729                                |   |  |              | 115,732 |   |       |  
|Common stock dividends                                     |  |                                               |       |                                             |   | (668    | )                              |  |   |                                     |   |  |              |        |   |       |  
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Retained earnings at end of period                         |  | $                                             | 90,293 |                                             | $ | 134,786 |                                |  | $ | 2,608                                |   |  | $            | 117,049 |   |       | $
|                                                           |  |                                               |        |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  



15



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Nine months ended December 31, 2001

(In thousands; unaudited)



|                                                           |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|---------------------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -
|Sales                                                      |  | $                                             | 176,271 |   |                                             | $ |        |                                |  | $ | 82                                   |   |  | $            | 728,555 |   |       | $
|Cost of sales:                                             |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Materials services and supplies                            |  |                                               | 145,499 |   |                                             |   |        |                                |  |   |                                     |   |  |              | 644,910 |   |       |  
|Interest                                                   |  |                                               | 3,386   |   |                                             |   |        |                                |  |   |                                     |   |  |              | 11,275  |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Gross profit                                               |  |                                               | 27,386  |   |                                             |   |        |                                |  |   | 82                                   |   |  |              | 72,370  |   |       |  
|Selling, general & administrative expenses                 |  |                                               | 9,926   |   |                                             |   | 4,402   |                                |  |   | 147                                  |   |  |              | 41,272  |   |       |  
|Other interest expense                                     |  |                                               | 7,035   |   |                                             |   | 3,010   |                                |  |   |                                     |   |  |              | (3,561  | ) |       |  
|Other income (expense) net                                 |  |                                               | (2,153  | ) |                                             |   | 6,553   |                                |  |   | (1                                   | ) |  |              | (2,209  | ) |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income (loss) before taxes                                 |  |                                               | 8,272   |   |                                             |   | (859    | )                              |  |   | (66                                  | ) |  |              | 32,450  |   |       |  
|Income taxes                                               |  |                                               | (648    | ) |                                             |   | (292    | )                              |  |   |                                     |   |  |              | 17,568  |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income (loss) after taxes                                  |  |                                               | 8,920   |   |                                             |   | (567    | )                              |  |   | (66                                  | ) |  |              | 14,882  |   |       |  
|Equity in earnings of affiliates                           |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 100     |   |       |  
|Equity in earnings of subsidiaries                         |  |                                               | 16,902  |   |                                             |   | 23,819  |                                |  |   | (1,920                               | ) |  |              |        |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Income from continuing operations                          |  |                                               | 25,822  |   |                                             |   | 23,252  |                                |  |   | (1,986                               | ) |  |              | 14,982  |   |       |  
|Discontinued operations                                    |  |                                               |        |   |                                             |   | (2,159  | )                              |  |   | (2,159                               | ) |  |              | (2,159  | ) |       |  
|Extraordinary gain (loss) due to buyback of long-term debt |  |                                               | (17     | ) |                                             |   | 11      |                                |  |   |                                     |   |  |              |        |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Net income                                                 |  |                                               | 25,805  |   |                                             |   | 21,104  |                                |  |   | (4,145                               | ) |  |              | 12,823  |   |       |  
|Retained earnings at beginning of period                   |  |                                               | 64,488  |   |                                             |   | 115,680 |                                |  |   | 6,753                                |   |  |              | 104,226 |   |       |  
|Common stock dividends                                     |  |                                               |        |   |                                             |   | (1,998  | )                              |  |   |                                     |   |  |              |        |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  
|Retained earnings at end of period                         |  | $                                             | 90,293  |   |                                             | $ | 134,786 |                                |  | $ | 2,608                                |   |  | $            | 117,049 |   |       |  
|                                                           |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |  



16



---



STANDARD COMMERCIAL
CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS

Nine months ended December 31, 2001

(In thousands; unaudited)



|                                                |  | Standard Commercial Tobacco Co. Inc. (Issuer) |        |   | Standard Commercial Corporation (Guarantor) |   |        | Standard Wool Inc. (Guarantor) |  | Other Subsidiaries (Non-Guarantors) |     |  | Eliminations |         | Total | 
|----------------------------------------------- |  | --------------------------------------------- | ------ | - | ------------------------------------------- | - | ------ | ------------------------------ |  | ----------------------------------- | --- |  | ------------ | ------- | ----- | 
|Cash provided by (used in) operating activities |  | $                                             | 32,525 |   |                                             | $ | 5,956  |                                |  | $                                   | 79  |  |              | 18,374  |       | 
|Cash flows from investing activities            |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|Property, plant and equipment                   |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|additions                                      |  |                                               | (2,976 | ) |                                             |   |       |                                |  |                                     |    |  |              | (7,806  | )     | 
|disposals                                      |  |                                               | 12     |   |                                             |   |       |                                |  |                                     |    |  |              | 446     |       | 
|Business (acquisitions) dispositions            |  |                                               |       |   |                                             |   |       |                                |  |                                     |    |  |              | 164     |       | 
|                                                |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|Cash provided by (used in) investing activities |  |                                               | (2,964 | ) |                                             |   |       |                                |  |                                     |    |  |              | (7,196  | )     | 
|Cash flows from financing activities:           |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|Proceeds from long-term borrowings              |  |                                               |       |   |                                             |   |       |                                |  |                                     |    |  |              | 7,432   |       | 
|Repayment of long-term borrowings               |  |                                               |       |   |                                             |   | (3,594 | )                              |  |                                     |    |  |              | (11,508 | )     | 
|Net change in short-term borrowings             |  |                                               | (294   | ) |                                             |   | (33    | )                              |  |                                     |    |  |              | (14,256 | )     | 
|Buyback of long-term debt                       |  |                                               | (2,017 | ) |                                             |   | (324   | )                              |  |                                     |    |  |              |        |       | 
|Dividends received /( paid)                     |  |                                               |       |   |                                             |   | (1,998 | )                              |  |                                     |    |  |              |        |       | 
|Other                                           |  |                                               | 406    |   |                                             |   |       |                                |  |                                     |    |  |              |        |       | 
|                                                |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|Cash provided by (used in)                      |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|financing activities                            |  |                                               | (1,905 | ) |                                             |   | (5,949 | )                              |  |                                     |    |  |              | (18,332 | )     | 
|Increase (decrease) in cash for year            |  |                                               | 27,656 |   |                                             |   | 7      |                                |  |                                     | 79  |  |              | (7,154  | )     | 
|Cash at beginning of year                       |  |                                               | 548    |   |                                             |   |       |                                |  |                                     | 44  |  |              | 37,681  |       | 
|                                                |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|Cash at end of period                           |  | $                                             | 28,204 |   |                                             | $ | 7      |                                |  | $                                   | 123 |  | $            | 30,527  |       | 
|                                                |  |                                               |        |   |                                             |   |        |                                |  |                                     |     |  |              |         |       | 
|Interest                                        |  | $                                             | 5,152  |   |                                             | $ | 2,152  |                                |  | $                                   |    |  | $            | 9,100   |       | 
|Income taxes                                    |  |                                               | 5,389  |   |                                             |   | 4,650  |                                |  |                                     |    |  |              | 10,258  |       | 





17



---



ITEM 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION



Results of Operations



Sales for the quarter ended December 31, 2002 were $263.0 million, an increase of 11.9% from a year earlier. Sales for the nine-month period were $700.6 million, up 2.6% from same period a year earlier. Tobacco division sales for the
quarter were $211.5 million versus $196.0 million in the corresponding period in fiscal 2002, an increase of 7.9%. Volume and revenue increases were achieved in Asia and South America. The Asian increases were from China, India and Indonesia and the
South American increases were from Argentina and Brazil. Sales for the nine months were approximately level because the prior year included more shipments of higher priced U.S. tobacco, offsetting the current year volume and revenue increases from
Asia and South America. Processing revenue for the current quarter and nine months increased by 67.5% and 81.2%, respectively, from the same prior year periods primarily due to the contributions from the recently acquired processing facility in the
United States. The volume of tobacco sold during the current quarter and nine months increased 10.5% and 1.5% respectively, over the same prior year periods. The average selling price of tobacco during the quarter and nine months was 5.5% and 7.1%
lower than the corresponding periods in fiscal 2002. Nontobacco sales of $51.5 million and $132.3 million for the current quarter and nine months, respectively, were up 32.2% and 16.5% respectively, from the same periods a year earlier primarily due
to higher wool prices. However stable conditions are yet to return to the wool markets where the demand and prices have been erratic due to uncertain consumer demand for textile goods and spinners efforts to adjust their blends in reaction to
relatively high prices.



Gross profit for the
quarter and nine months of $38.8 million and $114.2 million increased 22.0% and 14.4%, respectively over the corresponding periods in fiscal 2002, due primarily to increased processing revenues from the recently acquired tobacco leaf processing
facility in the United States, contributions from the new processing facility in Argentina and sales mix. The gross profit from nontobacco more than doubled in the current quarter against the corresponding prior year quarter due primarily to
improved margins and increased sales and was level for the nine months. Total interest expense was $0.9 million and $5.8 million lower than the corresponding quarter and nine months periods in fiscal 2002 due to the Companys debt repurchase
program and lower rates on short-term borrowings. Selling, general and administrative expenses for the current nine months increased due primarily to the recently acquired tobacco leaf processing facilities in the United States and Argentina, higher
insurance, legal and professional fees and normal inflationary increases. Other income for the current quarter was $1.4 million versus $0.1 million during the same prior year period. The increase was mainly due to the recovery of a $0.9 million
receivable which was written off in the past.



The effective tax rate for the quarter and nine months was 35.2% and 38.2%, respectively, versus 28.8% and 41.8% for the corresponding prior year periods. This was due to differences in tax rates and relief available in some areas
where profits are earned and losses are incurred.



Income from continuing operations for the quarter and nine months was $12.1 million and $32.9 million, respectively, versus $6.2 million and $23.2 million in the prior year periods. Net income for the quarter was $10.6 million, or
$0.79 and $0.74 per share on a basic and diluted basis, respectively, versus $5.7 million, or $0.42 and $0.41 per share on a basic and diluted basis for the corresponding prior year period. For the nine-month period, net income was $30.5 million, or
$2.27 and $2.13 per share on a basic and diluted basis, respectively, versus $21.1 million, or $1.59 and $1.52 per share on a basic and diluted basis in the prior year period.



Liquidity and Capital Resources



Working capital at December 31, 2002 was $180.2 million, compared to $210.9 million a year earlier. Most of
the decrease was due to the buy-back of $54.1 million of publicly traded debt and a net reduction of $3.7 million long-term borrowings. Capital expenditures of $29.1 million during the ninemonth period consisted



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STANDARD COMMERCIAL CORPORATION

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued)



of $28.4 million in the tobacco division and $0.7 million in the wool division. The tobacco division
expenditures included the purchase of the leaf processing assets of Export Leaf Tobacco in the United States, construction of a new processing facility in Indonesia and routine expenditures. Cash used in the operating activities during the nine
months totaled $52.9 million mainly due to increase in inventories, increased receivables due to the timing and mix of customer sales and a decrease in payables versus prior years due to prefinancing activities of certain customers in that period.
The increase in inventories are due to shipment delays relating to a shortage of shipping containers in Africa, seasonal increases and increases resulting from direct contracting in the United States. The Company continues to closely monitor its
inventory levels, which fluctuate, depending on the timing of customer intake of inventories and seasonal factors.



On August 26, 2002 the Companys major tobacco subsidiaries amended their global revolving bank credit facility. The facility was
decreased from $230.0 million to $210.0 million. The maturity date has been extended from July 31, 2003 to July 31, 2005. Financial covenants and other terms and conditions are essentially unchanged. Borrowings under the facility continue to be
guaranteed by the Company and are secured by substantially all of the assets of the borrowers. Certain debt agreements to which the Company and its subsidiaries are parties contain financial covenants that could restrict the payment of cash
dividends. Under its most restrictive covenant, the Company had approximately $28.7 million of retained earnings available for distribution as dividends at December 31, 2002.



Based on the outlook for the business for the next twelve months, management anticipates that it will be able
to service the interest and principal on its indebtedness, maintain adequate working capital and provide for capital expenditures out of operating cash flow and available borrowings under its credit facilities.



Forward-Looking Statements



Statements in this report that are not purely statements of
historical fact may be deemed to be forward-looking. Readers are cautioned that any such forward-looking statements are based upon managements current knowledge and assumptions, and actual results could be affected in a material way by many
factors, including ones over which the Company has little or no control, e.g. trading conditions; unforeseen changes in shipping schedules; the balance between supply and demand; and market, economic, political and weather conditions. More
information regarding certain of these factors is contained in the Companys other SEC filings, copies of which are available upon request from the Company. The Company assumes no obligation to update any of these forward-looking statements.



Item 4. Controls and Procedures



(a) Within 90 days prior to the filing date of this report,
the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and
operation of the Companys disclosure controls and procedures as defined in to Exchange Act Rule 13a-14. Based upon that evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that the Companys
disclosure controls and procedures are effective.



(b) There have been no significant changes in the Companys internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation described above.



19



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PART
IIOTHER INFORMATION



Item 1. Legal Proceedings



On February 26, 2001, the Company was
served with a Third Amended Complaint, naming the Company and other leaf merchants as defendants in Deloach, et al. V. Philip Morris Inc., et al., a suit originally filed against U.S. cigarette manufacturers in the United States District Court for
the District of Columbia and now pending in the United States District Court for the Middle District of North Carolina, Greensboro Division (Case No. 00-CV-1235) (Deloach Suit). The Deloach suit is a class action claim brought on behalf
of U.S. tobacco growers and quota holders alleging that defendants violated antitrust laws by bid-rigging at tobacco auctions and by conspiring to undermine the tobacco quota and price support program administered by the federal government.
Plaintiffs seek injunctive relief, trebled damages in an unspecified amount, pre-and post-judgement interest, attorneys fees and costs of litigation. On April 3, 2002 the Court granted the plaintiffs motion for class action
certification. The Company intends to vigorously defend the Deloach suit, because the suit is still in its initial stages, the Company cannot estimate the amount or range of loss that could result from an unfavorable outcome.



In October 2001, the Director General-Competition of the
European Commission (the DG Comp.), began conducting an administrative investigation of certain selling and buying practices alleged to have occurred within the leaf tobacco industry in some countries within the European Union, including Spain,
Italy and Greece. The Company, through its local subsidiaries, is cooperating fully with the investigation and has discovered and voluntarily disclosed information which tends to establish that a number of leaf dealers, including the Companys
subsidiaries, have jointly agreed with respect to green tobacco prices and purchase quantities. The Company believes, however, that there are significant mitigating circumstances relating to structure of these markets, their historical conduct and
the prominence of sellers cooperatives. The investigation is in its very early stages and although the fines, if any that the DG Comp may assess on the Companys subsidiaries could be material, the Company is not able to make an accurate
assessment of the amount of any such fines at this time.



Except for the above, neither the Company nor any of its subsidiaries are currently involved in any litigation that it believes would, individually or in the aggregate, have a material adverse effect on its consolidated position,
consolidated results of operation or liquidity nor, to its knowledge, is any such litigation currently threatened against it or its subsidiaries.



Item 6. EXHIBITS AND REPORTS ON FORM 8-K



|  
|--
|11
|  
|99



20



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SIGNATURES



Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: February 4, 2003.



STANDARD COMMERCIAL CORPORATION(Registrant)By

/s/    Robert E
HarrisonRobert E Harrison President, Chief Executive OfficerBy

/s/    Robert A
SheetsRobert A Sheets Vice President and Chief Financial Officer




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CERTIFICATION



I, Robert E. Harrison, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of Standard Commercial Corporation;
| | -- |  | --------------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly
report (the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Date: February 4, 2003.



By

/s/    Robert E. HarrisonRobert E. Harrison President and Chief Executive Officer




22



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CERTIFICATION



I, Robert A. Sheets, certify that:



| | 1. |  | I have reviewed this quarterlyreport on Form 10-Q of Standard Commercial Corporation;
| | -- |  | -------------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly
report (the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent functions):
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. |  | The registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Date: February 4, 2003.



By

/s/    Robert A. SheetsRobert A. Sheets Vice President and Chief Financial Officer




23