---



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934



FOR THE QUARTER ENDED DECEMBER 31, 2003



COMMISSION FILE NUMBER 1-9875



LOGO



STANDARD COMMERCIAL CORPORATION



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



2201
MILLER ROAD, WILSON, NORTH CAROLINA 27893



Telephone Number 252-291-5507



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) had been subject to such filing requirements for the past 90 days.



YES x NO ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).



YES x NO ̈



On February 2, 2004, the registrant had outstanding 13,642,063 shares of common stock ($0.20 par value per share).



---



---

PART I FINANCIAL INFORMATION

|ITEM 1 | FINANCIAL STATEMENTS
|------ | --------------------

STANDARD COMMERCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)



|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|---------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------- | - | -------------- | - | ------- | - |  | - | ------- | -
|                                                                                                                             |  | December 31 |         |   | March 31 2003* |  
|                                                                                                                             |  | 2003        |         |   | 2002*          |   |        
|                                                                                                                             |  | (unaudited) |         |   |                |  
|ASSETS                                                                                                                       |  |             |         |   |                |   |         |   |  |   |         |  
|Cash                                                                                                                         |  | $           | 22,031  |   |                | $ | 31,918  |   |  | $ | 26,570  |  
|Receivables                                                                                                                  |  |             | 194,369 |   |                |   | 168,753 |   |  |   | 169,550 |  
|Inventories                                                                                                                  |  |             | 280,154 |   |                |   | 247,701 |   |  |   | 216,272 |  
|Assets of discontinued operations                                                                                            |  |             | 104,629 |   |                |   | 137,937 |   |  |   | 142,981 |  
|Prepaid expenses                                                                                                             |  |             | 6,634   |   |                |   | 5,242   |   |  |   | 2,300   |  
|Marketable securities                                                                                                        |  |             | 1,179   |   |                |   | 1,191   |   |  |   | 1,234   |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|Current assets                                                                                                               |  |             | 608,996 |   |                |   | 592,742 |   |  |   | 558,907 |  
|Property, plant and equipment                                                                                                |  |             | 166,085 |   |                |   | 143,502 |   |  |   | 146,861 |  
|Investment in affiliates                                                                                                     |  |             | 8,094   |   |                |   | 6,641   |   |  |   | 7,421   |  
|Goodwill                                                                                                                     |  |             | 9,003   |   |                |   | 9,003   |   |  |   | 9,003   |  
|Other assets                                                                                                                 |  |             | 36,167  |   |                |   | 26,739  |   |  |   | 26,108  |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|Total assets                                                                                                                 |  | $           | 828,345 |   |                | $ | 778,627 |   |  | $ | 748,300 |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|LIABILITIES                                                                                                                  |  |             |         |   |                |   |         |   |  |   |         |  
|Short-term borrowings                                                                                                        |  | $           | 271,575 |   |                | $ | 256,206 |   |  | $ | 182,103 |  
|Current portion of long-term debt                                                                                            |  |             | 8,508   |   |                |   | 5,679   |   |  |   | 5,107   |  
|Accounts payable and accrued liabilities                                                                                     |  |             | 114,587 |   |                |   | 95,465  |   |  |   | 135,444 |  
|Liabilities of discontinued operations                                                                                       |  |             | 22,416  |   |                |   | 26,436  |   |  |   | 29,164  |  
|Taxes accrued                                                                                                                |  |             | 15,190  |   |                |   | 14,888  |   |  |   | 10,170  |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|Current liabilities                                                                                                          |  |             | 432,276 |   |                |   | 398,674 |   |  |   | 361,988 |  
|Long-term debt                                                                                                               |  |             | 83,154  |   |                |   | 78,914  |   |  |   | 78,672  |  
|Convertible subordinated debentures                                                                                          |  |             | 45,051  |   |                |   | 45,051  |   |  |   | 45,051  |  
|Retirement and other benefits                                                                                                |  |             | 15,536  |   |                |   | 16,640  |   |  |   | 13,871  |  
|Deferred income taxes                                                                                                        |  |             | 4,316   |   |                |   | 3,894   |   |  |   | 4,753   |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|Total liabilities                                                                                                            |  |             | 580,333 |   |                |   | 543,173 |   |  |   | 504,335 |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|MINORITY INTERESTS                                                                                                           |  |             | 2,008   |   |                |   | 1,890   |   |  |   | 1,840   |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|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 16,256,022 (Dec. 02  16,109,404; Mar. 03 
16,110,750) |  |             | 3,251   |   |                |   | 3,222   |   |  |   | 3,222   |  
|Additional paid-in capital                                                                                                   |  |             | 111,001 |   |                |   | 108,391 |   |  |   | 108,453 |  
|Unearned restricted stock plan compensation                                                                                  |  |             | (3,628  | ) |                |   | (3,313  | ) |  |   | (2,991  | )
|Treasury shares, 2,617,707                                                                                                   |  |             | (4,250  | ) |                |   | (4,250  | ) |  |   | (4,250  | )
|Retained earnings                                                                                                            |  |             | 160,194 |   |                |   | 160,961 |   |  |   | 167,495 |  
|Accumulated other comprehensive loss                                                                                         |  |             | (20,564 | ) |                |   | (31,447 | ) |  |   | (29,804 | )
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|Total shareholders equity                                                                                                   |  |             | 246,004 |   |                |   | 233,564 |   |  |   | 242,125 |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  
|Total liabilities and shareholders equity                                                                                   |  | $           | 828,345 |   |                | $ | 778,627 |   |  | $ | 748,300 |  
|                                                                                                                             |  |             |         |   |                |   |         |   |  |   |         |  



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



|* | Certain amounts reclassified to comply with the current period presentation as a result of discontinuing the wool operations.
|- | -----------------------------------------------------------------------------------------------------------------------------



-2-



---

STANDARD COMMERCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS

(In thousands, except per
share data; unaudited)



|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------ |  | ------------------------------- | ------- | - | ----------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                 |  | Third quarter ended December 31 |         |   | Nine months ended December 31 |  
|                                                 |  | 2003                            |         |   | 2002*                         |   |         | 2003 |  |   | 2002*   |  
|Sales - tobacco                                  |  | $                               | 191,016 |   |                               | $ | 211,455 |      |  | $ | 575,185 |   |  | $ | 568,359 |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Cost of sales - materials, services and supplies |  |                                 | 159,274 |   |                               |   | 172,920 |      |  |   | 467,522 |   |  |   | 452,239 |  
|- interest                                       |  |                                 | 3,343   |   |                               |   | 3,372   |      |  |   | 8,586   |   |  |   | 9,564   |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Gross profit                                     |  |                                 | 28,399  |   |                               |   | 35,163  |      |  |   | 99,077  |   |  |   | 106,556 |  
|Selling, general and administrative expenses     |  |                                 | 19,610  |   |                               |   | 16,588  |      |  |   | 56,918  |   |  |   | 50,697  |  
|Other interest expense                           |  |                                 | 615     |   |                               |   | 1,182   |      |  |   | 3,037   |   |  |   | 3,276   |  
|Other income (expense)  net                     |  |                                 | 1,177   |   |                               |   | 1,089   |      |  |   | 2,176   |   |  |   | 3,073   |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Income before taxes                              |  |                                 | 9,351   |   |                               |   | 18,482  |      |  |   | 41,298  |   |  |   | 55,656  |  
|Income taxes                                     |  |                                 | (2,818  | ) |                               |   | (6,508  | )    |  |   | (12,320 | ) |  |   | (20,617 | )
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Income after taxes                               |  |                                 | 6,533   |   |                               |   | 11,974  |      |  |   | 28,978  |   |  |   | 35,039  |  
|Minority interests                               |  |                                 | (192    | ) |                               |   |        |      |  |   | (53     | ) |  |   |        |  
|Equity in earnings of affiliates                 |  |                                 | 105     |   |                               |   |        |      |  |   | 672     |   |  |   | 100     |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Income from continuing operations                |  |                                 | 6,446   |   |                               |   | 11,974  |      |  |   | 29,597  |   |  |   | 35,139  |  
|Loss from discontinued operations, net of tax    |  |                                 | (2,815  | ) |                               |   | (1,337  | )    |  |   | (33,663 | ) |  |   | (4,636  | )
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss)                                |  |                                 | 3,631   |   |                               |   | 10,637  |      |  |   | (4,066  | ) |  |   | 30,503  |  
|Retained earnings at beginning of period         |  |                                 | 157,755 |   |                               |   | 151,167 |      |  |   | 167,495 |   |  |   | 132,812 |  
|Common stock dividends                           |  |                                 | (1,192  | ) |                               |   | (843    | )    |  |   | (3,235  | ) |  |   | (2,354  | )
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Retained earnings at end of period               |  | $                               | 160,194 |   |                               | $ | 160,961 |      |  | $ | 160,194 |   |  | $ | 160,961 |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Earnings (loss) per common share                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Basic:                                           |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|From continuing operations                       |  | $                               | 0.47    |   |                               | $ | 0.89    |      |  | $ | 2.18    |   |  | $ | 2.61    |  
|From discontinued operations                     |  |                                 | (0.20   | ) |                               |   | (0.10   | )    |  |   | (2.47   | ) |  |   | (0.34   | )
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Net                                              |  | $                               | 0.27    |   |                               | $ | 0.79    |      |  | $ | (0.29   | ) |  | $ | 2.27    |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Average shares outstanding                       |  |                                 | 13,631  |   |                               |   | 13,489  |      |  |   | 13,595  |   |  |   | 13,447  |  
|Diluted:                                         |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|From continuing operations                       |  | $                               | 0.46    |   |                               | $ | 0.83    |      |  | $ | 2.05    |   |  | $ | 2.44    |  
|From discontinued operations                     |  |                                 | (0.19   | ) |                               |   | (0.09   | )    |  |   | (2.21   | ) |  |   | (0.31   | )
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Net                                              |  | $                               | 0.27    |   |                               | $ | 0.74    |      |  | $ | (0.16   | ) |  | $ | 2.13    |  
|                                                 |  |                                 |         |   |                               |   |         |      |  |   |         |   |  |   |         |  
|Average shares outstanding                       |  |                                 | 15,246  |   |                               |   | 15,088  |      |  |   | 15,188  |   |  |   | 15,079  |  
|Dividend declared per common share               |  | $                               | 0.0875  |   |                               | $ | 0.0625  |      |  | $ | 0.2375  |   |  | $ | 0.175   |  



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



|* | Certain amounts reclassified to comply with the current period presentation as a result of discontinuing the wool operations.
|- | -----------------------------------------------------------------------------------------------------------------------------



-3-



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STANDARD COMMERCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands; unaudited)



|                                                               |  |                               |         |   |       |   |         |  
|-------------------------------------------------------------- |  | ----------------------------- | ------- | - | ----- | - | ------- | -
|                                                               |  | Nine months ended December 31 |        
|                                                               |  | 2003                          |         |   | 2002* |  
|CASH FLOWS FROM OPERATING ACTIVITIES                           |  |                               |         |   |       |   |         |  
|Net income (loss)                                              |  | $                             | (4,066  | ) |       | $ | 30,503  |  
|Loss from discontinued operations                              |  |                               | 33,663  |   |       |   | 4,636   |  
|Depreciation and amortization                                  |  |                               | 13,109  |   |       |   | 12,757  |  
|Minority interest                                              |  |                               | 53      |   |       |   |        |  
|Deferred income taxes                                          |  |                               | (436    | ) |       |   | (24     | )
|Undistributed earnings of affiliates net of dividends received |  |                               | (672    | ) |       |   | (100    | )
|(Gain) loss on buyback of debt                                 |  |                               |        |   |       |   | (17     | )
|(Gain) loss on disposition of fixed assets                     |  |                               | 99      |   |       |   | (117    | )
|Other                                                          |  |                               | 3,474   |   |       |   | 37      |  
|                                                               |  |                               |         |   |       |   |         |  
|                                                               |  |                               | 45,224  |   |       |   | 47,675  |  
|Net changes in working capital other than cash                 |  |                               |         |   |       |   |         |  
|Receivables                                                    |  |                               | (35,719 | ) |       |   | (32,906 | )
|Inventories                                                    |  |                               | (55,507 | ) |       |   | (57,667 | )
|Current payables                                               |  |                               | (39,107 | ) |       |   | (9,426  | )
|                                                               |  |                               |         |   |       |   |         |  
|Cash used for continuing operations                            |  |                               | (85,109 | ) |       |   | (52,324 | )
|Cash from (used for) discontinued operations                   |  |                               | 12,894  |   |       |   | (3,277  | )
|                                                               |  |                               |         |   |       |   |         |  
|CASH USED FOR OPERATING ACTIVITIES                             |  |                               | (72,215 | ) |       |   | (55,601 | )
|                                                               |  |                               |         |   |       |   |         |  
|CASH FLOW FROM INVESTING ACTIVITIES                            |  |                               |         |   |       |   |         |  
|Property, plant and equipment - additions                      |  |                               | (27,310 | ) |       |   | (28,455 | )
|- dispositions                                                 |  |                               | 283     |   |       |   | 296     |  
|                                                               |  |                               |         |   |       |   |         |  
|Cash used for continuing operations                            |  |                               | (27,027 | ) |       |   | (28,159 | )
|Cash from (used for) discontinued operations                   |  |                               | 1,034   |   |       |   | (22     | )
|                                                               |  |                               |         |   |       |   |         |  
|CASH USED FOR INVESTING ACTIVITIES                             |  |                               | (25,993 | ) |       |   | (28,181 | )
|                                                               |  |                               |         |   |       |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                           |  |                               |         |   |       |   |         |  
|Net change in short-term borrowings                            |  |                               | 89,472  |   |       |   | 123,826 |  
|Proceeds from long-term borrowings                             |  |                               | 13,596  |   |       |   | 7,645   |  
|Repayment of long-term borrowings                              |  |                               | (6,961  | ) |       |   | (15,307 | )
|Buyback of debt                                                |  |                               |        |   |       |   | (23,743 | )
|Dividends paid                                                 |  |                               | (3,235  | ) |       |   | (2,354  | )
|Other                                                          |  |                               | 147     |   |       |   | 32      |  
|                                                               |  |                               |         |   |       |   |         |  
|CASH PROVIDED BY FINANCING ACTIVITIES                          |  |                               | 93,019  |   |       |   | 90,099  |  
|                                                               |  |                               |         |   |       |   |         |  
|Effect of exchange rate changes on cash                        |  |                               | 650     |   |       |   | 917     |  
|                                                               |  |                               |         |   |       |   |         |  
|Increase (decrease) in cash for period                         |  |                               | (4,539  | ) |       |   | 7,234   |  
|Cash at beginning of period                                    |  |                               | 26,570  |   |       |   | 24,684  |  
|                                                               |  |                               |         |   |       |   |         |  
|CASH AT END OF PERIOD                                          |  | $                             | 22,031  |   |       | $ | 31,918  |  
|                                                               |  |                               |         |   |       |   |         |  
|Cash payments for - interest                                   |  | $                             | 11,114  |   |       | $ | 10,486  |  
|- income taxes                                                 |  | $                             | 8,460   |   |       | $ | 16,731  |  



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



|* | Certain amounts reclassified to comply with the current period presentation as a result of discontinuing the wool operations.
|- | -----------------------------------------------------------------------------------------------------------------------------



-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 consolidated financial statements and notes thereto included in the
Companys latest Annual Report on Form 10-K. The interim period consolidated financial statements have been prepared by the Company without audit and contain all of the adjustments which are, in the opinion of the management, necessary for a
fair statement of the financial condition and 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, 2003. Because of the nature of
the Companys business, 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. | DISCONTINUED OPERATIONS
|-- | -----------------------



During the last quarter of fiscal 2002, the Company decided to close and dispose of wool units in South Africa, New Zealand, Argentina and the specialty
fibers business in Holland. By December 31, 2003, the sales of the companies in South Africa and New Zealand, the trade assets of Argentina and the specialty fibers business in Holland had been completed.



Despite the decision in fiscal 2002 to shrink our wool division and focus on
its core markets while also reducing divisional overheads, trading conditions remained difficult, resulting in continual losses. This is particularly true in the initial processing stages for the apparel industry. Given the continuing uncertainty of
an adequate turnaround leading to acceptable returns for our shareholders, during the second quarter of the current fiscal we made the strategic decision to focus on our core tobacco operations. Accordingly, we decided to exit all of our remaining
wool operations. These operations are in Australia, UK, Chile, France and Germany. We are currently in discussions with various prospective purchasers for these operations and have identified these assets as held for sale. The wool operating units
are available for immediate sale and the expectation is that the exit plan will be completed without significant changes. We expect to complete the process of selling/liquidating these units by September 30, 2004.



These wool units are expected to incur additional operating losses until
final disposition. Once disposed, we will not retain a financial interest and we have not identified any significant contingent liabilities that would delay or significantly alter the plan of disposition. The Company will continue to guarantee the
debt of the wool units until disposition, at which time we do not expect to provide any guarantees for the obligations or commitments of the wool units.



We have accounted for the sale of the wool units as discontinued operations, in accordance with the provisions of Statement of Financial Accounting
Standards (SFAS) No 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The results for all periods presented are included in the consolidated financial statements as discontinued operations. As noted above, since
the existing debt of the wool units is guaranteed by the Company, we have not included any such debt in liabilities of discontinued operations.



The wool trading loss for the quarter and nine months, excluding the loss to discontinue the operations, was $2.8 and $7.0 million, respectively, versus
$1.3 and $4.6 million in the prior year periods. The estimated loss on disposition recorded in the nine months to discontinue the wool operation was $26.6 million. The basic loss per share for the discontinued operations for the quarter and nine
months was $0.20 and $2.47, respectively, versus a loss of $0.10 and $0.34 in the prior year periods.



The estimated loss to discontinue the wool operations of $26.6 million has been recorded in the nine months ended December 31, 2003, as the carrying
amount of the net assets of the wool units exceeded the fair value less estimated disposal costs. The fair value was determined based on current negotiations with prospective purchasers and comparisons with other industry transactions.



-5-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Revenues and the assets and liabilities for these units were as follows:



|               |  |                           |        |                              |   |        |  |      |         |  |   |        
|-------------- |  | ------------------------- | ------ | ---------------------------- | - | ------ |  | ---- | ------- |  | - | -------
|               |  | Quarter ended December 31 |        | Nine months endedDecember 31
|(In thousands) |  | 2003                      |        | 2002                         |   | 2003   |  | 2002
|Revenues       |  | $                         | 55,196 |                              | $ | 57,046 |  | $    | 136,497 |  | $ | 153,437
|               |  |                           |        |                              |   |        |  |      |         |  |   |        



|                                       |  |             |         |              |   |         |  |   |        
|-------------------------------------- |  | ----------- | ------- | ------------ | - | ------- |  | - | -------
|                                       |  |            
|                                       |  | December 31 |         | March 312003
|(In thousands)                         |  | 2003        |         | 2002         |  
|Receivables                            |  | $           | 38,605  |              | $ | 44,077  |  | $ | 44,493 
|Inventory                              |  |             | 65,190  |              |   | 65,701  |  |   | 68,883 
|Other assets                           |  |             | 834     |              |   | 28,159  |  |   | 29,605 
|                                       |  |             |         |              |   |         |  |   |        
|Assets                                 |  | $           | 104,629 |              | $ | 137,937 |  | $ | 142,981
|Accounts payable and other liabilities |  |             | 22,416  |              |   | 26,436  |  |   | 29,164 
|                                       |  |             |         |              |   |         |  |   |        
|Net assets available for sale          |  | $           | 82,213  |              | $ | 111,501 |  | $ | 113,817
|                                       |  |             |         |              |   |         |  |   |        



Wool debt guaranteed
by the Company not included in discontinued operations was as follows:



|                                     |  |             |        |              |   |        |  |   |       
|------------------------------------ |  | ----------- | ------ | ------------ | - | ------ |  | - | ------
|                                     |  | December 31 |        | March 312003
|(In thousands)                       |  | 2003        |        | 2002         |  
|Bank borrowings                      |  | $           | 57,718 |              | $ | 66,219 |  | $ | 74,894
|Current portion of long-term debt    |  |             | 313    |              |   | 845    |  |   | 698   
|                                     |  |             |        |              |   |        |  |   |       
|Total current                        |  |             | 58,031 |              |   | 67,064 |  |   | 75,592
|Long-term portion of long-term debt. |  |             | 195    |              |   | 1,049  |  |   | 248   
|                                     |  |             |        |              |   |        |  |   |       
|Total debt guaranteed                |  | $           | 58,226 |              | $ | 68,113 |  | $ | 75,840
|                                     |  |             |        |              |   |        |  |   |       



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



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



|                                                                            |  |                           |       |                               |   |        |  |   |        |   |  |   |       
|--------------------------------------------------------------------------- |  | ------------------------- | ----- | ----------------------------- | - | ------ |  | - | ------ | - |  | - | ------
|                                                                            |  | Quarter ended December 31 |       | Nine months ended December 31
|(In thousands)                                                              |  | 2003                      |       | 2002                          |   | 2003   |  |   | 2002  
|Net income (loss)                                                           |  | $                         | 3,631 |                               | $ | 10,637 |  | $ | (4,066 | ) |  | $ | 30,503
|Other comprehensive income (loss):                                          |  |                           |       |                               |   |        |  |   |        |   |  |   |       
|Reclassification for translation adjustment recognized in net income (loss) |  |                           |      |                               |   |       |  |   | 2,772  |   |  |   |      
|Translation adjustment                                                      |  |                           | 4,543 |                               |   | 5,110  |  |   | 7,014  |   |  |   | 12,854
|Derivative financial instruments                                            |  |                           | 110   |                               |   | 784    |  |   | (546   | ) |  |   | 882   
|                                                                            |  |                           |       |                               |   |        |  |   |        |   |  |   |       
|Total comprehensive income                                                  |  | $                         | 8,284 |                               | $ | 16,531 |  | $ | 5,174  |   |  | $ | 44,239
|                                                                            |  |                           |       |                               |   |        |  |   |        |   |  |   |       



|4. | EARNINGS PER SHARE
|-- | ------------------



Earnings per share has been presented in conformity with SFAS No. 128. The diluted earnings per share for the quarter ended December 31, 2002 and for the
nine months ended December 31, 2003 and 2002 include the effect of the convertible subordinated debentures, which if converted would have increased the weighted number of shares and net income applicable to common stock. For the quarter ended
December 31, 2003, the incremental shares from assumed conversion of convertible subordinated debentures are not included in computing the diluted per share amount because the calculation includes adjustments which are antidilutive. The weighted
number of shares were further



-6-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



increased by shares subject to employee stock options. Employee stock options with exercise prices greater than the average market price of common shares
were not included in computation of diluted earnings per share.



|5. | DERIVATIVE FINANCIAL 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 No. 133. SFAS No. 133
requires that the effective portion of the changes in fair value of derivatives that qualify as cash flow hedges be recognized in other comprehensive income, while the ineffective portion be recognized immediately in earnings. The fair value of the
Companys foreign currency forward contracts at December 31, 2003 was $3.1 million with a notional value of $3.2 million.



|6. | STOCK-BASED COMPENSATION
|-- | ------------------------



The Company has adopted SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure  an amendment of FASB Statement
No. 123. As permitted under SFAS No. 123, Accounting for Stock-Based Compensation, the Company accounts for stock options under the intrinsic value method of recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees. No stock-based employee compensation cost is reflected in net income (loss) because all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of
grant. As required by SFAS No. 148, the following table illustrates the effect on net income (loss) and earnings (loss) per share if the Company had applied the fair value recognition provisions of SFAS No. 123, as amended by SFAS No. 148, to
stock-based employee compensation:



|                                                                                                            |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----- | - | ----------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                            |  | Quarter ended December 31 |       |   | Nine months ended December 31 |  
|                                                                                                            |  | 2003                      |       |   | 2002                          |   |        | 2003 |  |   | 2002   |  
|Net income (loss) (in thousands):                                                                           |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|As reported                                                                                                 |  | $                         | 3,631 |   |                               | $ | 10,637 |      |  | $ | (4,066 | ) |  | $ | 30,503 |  
|Deduct Total stock-based compensation expense determined under fair value method of all awards, net of tax |  |                           | (69   | ) |                               |   | (43    | )    |  |   | (195   | ) |  |   | (120   | )
|                                                                                                            |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Pro forma                                                                                                   |  | $                         | 3,562 |   |                               | $ | 10,594 |      |  | $ | (4,261 | ) |  | $ | 30,383 |  
|                                                                                                            |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Diluted                                                                                                     |  | $                         | 4,170 |   |                               | $ | 11,176 |      |  | $ | (2,449 | ) |  | $ | 32,145 |  
|Deduct Total stock-based compensation expense determined under fair value method of all awards, net of tax |  |                           | (69   | ) |                               |   | (43    | )    |  |   | (195   | ) |  |   | (120   | )
|                                                                                                            |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Pro forma                                                                                                   |  | $                         | 4,101 |   |                               | $ | 11,133 |      |  | $ | (2,644 | ) |  | $ | 32,025 |  
|                                                                                                            |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|Basic earnings (loss) per share:                                                                            |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|As reported                                                                                                 |  | $                         | 0.27  |   |                               | $ | 0.79   |      |  | $ | (0.29  | ) |  | $ | 2.27   |  
|Pro forma                                                                                                   |  | $                         | 0.26  |   |                               | $ | 0.79   |      |  | $ | (0.31  | ) |  | $ | 2.26   |  
|Diluted earnings (loss) per share:                                                                          |  |                           |       |   |                               |   |        |      |  |   |        |   |  |   |        |  
|As reported                                                                                                 |  | $                         | 0.27  |   |                               | $ | 0.74   |      |  | $ | (0.16  | ) |  | $ | 2.13   |  
|Pro forma                                                                                                   |  | $                         | 0.26  |   |                               | $ | 0.74   |      |  | $ | (0.17  | ) |  | $ | 2.12   |  



-7-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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



In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill
and Other Intangible Assets. SFAS No. 141 requires the use of the purchase method of accounting for business combinations initiated after June 30, 2001 and broadens the criteria for recording intangible assets separate from goodwill. SFAS No.
142 uses a non-amortization approach to account for purchased goodwill and certain intangible assets with indefinite useful lives and also requires at least an annual assessment for impairment by applying a fair-value-based test. Intangible assets
with finite useful lives will continue to be amortized over their useful lives.



In accordance with SFAS No. 142, goodwill was tested for impairment as of the beginning of the year in which the statement was adopted in its entirety. SFAS No. 142 allowed six months from the date the statement was
initially applied to complete the first step of the transitional goodwill impairment test. During the second quarter of fiscal 2003, the Company completed the process of performing the first step of the transitional goodwill impairment test as of
April 1, 2002, and as a result of the test performed, management believes that goodwill was not impaired as of April 1, 2002. SFAS No. 142 also requires that goodwill be tested for impairment annually at the same time each year and on an interim
basis when events or circumstances change. The Company elected to perform its annual goodwill impairment test as of September 30, and any subsequent impairment losses, if any, will be reflected in operating income in the statements of income. The
Company completed its impairment test and there was no impairment identified at September 30, 2003 nor any events or changes in circumstances which would indicate an impairment as of December 31, 2003.



|                                |  |       |        |  
|------------------------------- |  | ----- | ------ | -
|INTANGIBLES (In thousands)      |  | Total |       
|At April 1, 2003                |  | $     | 2,330  |  
|Additions                       |  |       | 396    |  
|Less amortized                  |  |       | (1,164 | )
|                                |  |       |        |  
|Balance as of December 31, 2003 |  | $     | 1,562  |  
|                                |  |       |        |  



|8. | RECENT ACCOUNTING PRONOUNCEMENTS
|-- | --------------------------------



In January 2003, the FASB issued FASB Interpretation (FIN) 46, Consolidation of Variable Interest Entitiesan Interpretation of ARB
No. 51. This interpretation provides guidance related to identifying variable interest entities (previously known as special purpose entities or SPEs) and determining whether such entities should be consolidated. Certain disclosures are required
if it is reasonably possible that a company will consolidate or disclose information about a variable interest entity when it initially applies FIN 46. This interpretation will be effective for the Companys quarter ending March 31, 2004. The
Company currently has no investment in or contractual relationship or other business relationship with a variable interest entity and therefore the adoption of FIN 46 is not expected to have any impact on the Companys consolidated financial
position or results of operations. However, if the Company enters into any such arrangement with a variable interest entity in the future (or an entity with which we currently have a relationship is reconsidered based on guidance in FIN 46 to be a
variable interest entity), the Companys consolidated financial position or results of operations will be impacted.



In December 2003, the FASB issued a revision of FIN 46 (FIN 46R) to clarify certain provisions of the standard. FIN 46R requires that FIN 46
be applied to those entities that are considered to be special-purpose entities, no later than the end of the first interim or annual period ending after December 15, 2003. The application of FIN 46 to special-purpose entities as of December 31,
2003 had no impact on the Companys consolidated financial position or results of operations. FIN 46R is effective for all variable-interest entities no later than the end of the first interim or annual period ending after March 15, 2004. The
Company is currently evaluating the impact of adopting FIN 46R on its consolidated financial position and results of operations.



-8-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|8. | RECENT ACCOUNTING PRONOUNCEMENTSContinued
|-- | -----------------------------------------





In April 2003, the FASB
issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, to provide clarification on the meaning of an underlying, the characteristics of a derivative that contains financing components and the meaning
of an initial investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors. This statement is effective for contracts entered into or modified after
June 30, 2003, except as stated below and for hedging relationships designated after June 30, 2003. In addition, except as stated below, all provisions of this statement should be applied prospectively. The provisions of this statement that relate
to Statement 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. The adoption of this statement did not have a
material impact on the Companys financial condition or results of operations.



In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those
instruments were previously classified as equity. Some of the provisions of this Statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, Elements of Financial Statements. This statement is
effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Accordingly the Company adopted the provisions of SFAS No. 150 on
July 1, 2003. The adoption of this statement did not have a material impact on the Companys financial position or results of operations.



|9. | LEGAL PROCEEDINGS
|-- | -----------------



On February 26, 2001, we were served with a Third Amended Complaint, naming us 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). 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. In May 2003, we along with several other domestic cigarette manufacturers and tobacco-leaf dealers, entered into a settlement agreement with the plaintiffs. Under
the agreement, we agreed to pay $7 million for distribution of the class. The total amount paid by all the settling defendants, to the class is approximately $212.0 million, plus commitments by the three settling cigarette manufacturers (1) to
purchase certain volumes of domestic flue-cured and burley tobacco for at least 10 years and (2) to pay the fees of plaintiffs counsel. The court approved the settlement agreement in October 2003, and we made our agreed payment on October 16,
2003.



In October 2001, the Director General - Competition of
the European Commission, or 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. We, through our local subsidiaries, are cooperating fully with the investigation and have discovered and voluntarily disclosed information which tends to establish that a number of leaf dealers, including our subsidiaries, have
jointly agreed with respect to green tobacco prices and purchase quantities. In respect of the Spanish investigation, on December 15, 2003, the DG Comp served on twenty entities within the Spanish leaf tobacco industry, including Standard



-9-



---

STANDARD COMMERCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|9. | LEGAL PROCEEDINGS Continued
|-- | ---------------------------



Commercial Corporation (the Company) and three of its subsidiaries, a Statement of Objections (the Statement) alleging certain
infringements of the antitrust laws of the European Union. We are in the process of responding to the Statement and will continue to cooperate in the investigation. Through the Statement, DG Comp intends to impose, where appropriate and probably
late in 2004, administrative penalties on the entities it determines have infringed the EC anticompetition laws. The Company expects that those penalties could be material to the Companys earnings. DG Comp has, however, indicated that there
may be mitigating circumstances resulting from the regulation of the Spanish tobacco market. The Company is currently unable to assess the amount of such penalties, but expects that the mitigating factors in the market, along with its
cooperation with the DG Comp, could result in a reduction in any penalties imposed.



Except for the above, neither we nor any of our subsidiaries are currently involved in any litigation that we believe would, individually or in the aggregate, have a material adverse effect on our consolidated
financial position, consolidated results of operations, or liquidity nor, to our knowledge, is any such litigation currently threatened against us or our subsidiaries.



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



The 8 7/8 % 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.



-10-



---

STANDARD COMMERCIAL CORPORATION

SUPPLEMENTAL COMBINING BALANCE SHEET

December 31, 2003

(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                                        |  | $                                             | 883     |   |                                             | $ | 255     |                                |  | $                                    |  |  | $            | 20,893  |   |       | $ |          |   |  |   | 22,031  |  
|Receivables                                 |  |                                               | 26,505  |   |                                             |   | 18      |                                |  |                                      |  |  |              | 167,846 |   |       |   |          |   |  |   | 194,369 |  
|Intercompany receivables                    |  |                                               | 106,325 |   |                                             |   | 21,414  |                                |  |                                      |  |  |              | 59,651  |   |       |   | (187,390  | ) |  |   |        |  
|Inventories                                 |  |                                               | 69,265  |   |                                             |   |        |                                |  |                                      |  |  |              | 210,889 |   |       |   |          |   |  |   | 280,154 |  
|Assets of discontinued operations           |  |                                               |        |   |                                             |   |        |                                |  |                                      |  |  |              | 104,629 |   |       |   |          |   |  |   | 104,629 |  
|Prepaid expenses                            |  |                                               | 3,883   |   |                                             |   | (456    | )                              |  |                                      |  |  |              | 3,207   |   |       |   |          |   |  |   | 6,634   |  
|Marketable securities                       |  |                                               |        |   |                                             |   | 1       |                                |  |                                      |  |  |              | 1,178   |   |       |   |          |   |  |   | 1,179   |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Current assets                              |  |                                               | 206,861 |   |                                             |   | 21,232  |                                |  |                                      |  |  |              | 568,293 |   |       |   | (187,390  | ) |  |   | 608,996 |  
|Property, plant and equipment               |  |                                               | 39,996  |   |                                             |   |        |                                |  |                                      |  |  |              | 126,089 |   |       |   |          |   |  |   | 166,085 |  
|Investment in subsidiaries                  |  |                                               | 189,577 |   |                                             |   | 254,458 |                                |  |                                      |  |  |              | 160,660 |   |       |   | (604,695  | ) |  |   |        |  
|Investment in affiliates                    |  |                                               |        |   |                                             |   |        |                                |  |                                      |  |  |              | 8,094   |   |       |   |          |   |  |   | 8,094   |  
|Other noncurrent assets                     |  |                                               | (1,157  | ) |                                             |   | 13,590  |                                |  |                                      |  |  |              | 32,737  |   |       |   |          |   |  |   | 45,170  |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total assets                                |  | $                                             | 435,277 |   |                                             | $ | 289,280 |                                |  | $                                    |  |  | $            | 895,873 |   |       |   | ($792,085 | ) |  | $ | 828,345 |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Liabilities                                 |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Short-term borrowings                       |  | $                                             | 39,798  |   |                                             | $ |        |                                |  | $                                    |  |  | $            | 231,777 |   |       | $ |          |   |  | $ | 271,575 |  
|Current portion of long-term debt           |  |                                               |        |   |                                             |   |        |                                |  |                                      |  |  |              | 8,508   |   |       |   |          |   |  |   | 8,508   |  
|Accounts payable and accrued liabilities    |  |                                               | 17,752  |   |                                             |   | 1,540   |                                |  |                                      |  |  |              | 95,295  |   |       |   |          |   |  |   | 114,587 |  
|Liabilities of discontinued operations      |  |                                               |        |   |                                             |   |        |                                |  |                                      |   |  |              | 22,416  |   |       |   |          |   |  |   | 22,416  |  
|Intercompany accounts payable               |  |                                               | 31,609  |   |                                             |   | 3,436   |                                |  |                                      |  |  |              | 152,345 |   |       |   | (187,390  | ) |  |   |        |  
|Taxes accrued                               |  |                                               | 10,349  |   |                                             |   | (10,343 | )                              |  |                                      |  |  |              | 15,184  |   |       |   |          |   |  |   | 15,190  |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Current liabilities                         |  |                                               | 99,508  |   |                                             |   | (5,367  | )                              |  |                                      |  |  |              | 525,525 |   |       |   | (187,390  | ) |  |   | 432,276 |  
|Long-term debt                              |  |                                               | 65,177  |   |                                             |   |        |                                |  |                                      |  |  |              | 17,977  |   |       |   |          |   |  |   | 83,154  |  
|Convertible subordinated debentures         |  |                                               |        |   |                                             |   | 45,051  |                                |  |                                      |  |  |              |        |   |       |   |          |   |  |   | 45,051  |  
|Retirement and other benefits               |  |                                               | 9,612   |   |                                             |   | 1,047   |                                |  |                                      |  |  |              | 4,877   |   |       |   |          |   |  |   | 15,536  |  
|Deferred income taxes                       |  |                                               | (1,480  | ) |                                             |   | (428    | )                              |  |                                      |  |  |              | 6,224   |   |       |   |          |   |  |   | 4,316   |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total liabilities                           |  |                                               | 172,817 |   |                                             |   | 40,303  |                                |  |                                      |  |  |              | 554,603 |   |       |   | (187,390  | ) |  |   | 580,333 |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Minority interests                          |  |                                               |        |   |                                             |   |        |                                |  |                                      |  |  |              | 2,008   |   |       |   |          |   |  |   | 2,008   |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Shareholders equity                        |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Common stock                                |  |                                               | 993     |   |                                             |   | 3,251   |                                |  |                                      |  |  |              | 148,765 |   |       |   | (149,758  | ) |  |   | 3,251   |  
|Additional paid-in capital                  |  |                                               | 130,860 |   |                                             |   | 111,001 |                                |  |                                      |  |  |              | 60,564  |   |       |   | (191,424  | ) |  |   | 111,001 |  
|Unearned restricted stock plan compensation |  |                                               | (882    | ) |                                             |   | (655    | )                              |  |                                      |  |  |              | (2,091  | ) |       |   |          |   |  |   | (3,628  | )
|Treasury stock at cost                      |  |                                               |        |   |                                             |   | (4,250  | )                              |  |                                      |  |  |              |        |   |       |   |          |   |  |   | (4,250  | )
|Retained earnings                           |  |                                               | 135,577 |   |                                             |   | 160,194 |                                |  |                                      |  |  |              | 152,342 |   |       |   | (287,919  | ) |  |   | 160,194 |  
|Accumulated other comprehensive loss        |  |                                               | (4,088  | ) |                                             |   | (20,564 | )                              |  |                                      |  |  |              | (20,318 | ) |       |   | 24,406    |   |  |   | (20,564 | )
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total shareholders equity                  |  |                                               | 262,460 |   |                                             |   | 248,977 |                                |  |                                      |  |  |              | 339,262 |   |       |   | (604,695  | ) |  |   | 246,004 |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total liabilities and shareholders equity  |  | $                                             | 435,277 |   |                                             | $ | 289,280 |                                |  | $                                    |  |  | $            | 895,873 |   |       |   | ($792,085 | ) |  | $ | 828,345 |  
|                                            |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |   |           |   |  |   |         |  



-11-



---

STANDARD COMMERCIAL CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Third Quarter
ended December 31, 2003

(In thousands; unaudited)



|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|-------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | ------------------------------------ | - |  | ------------ | ------- | - | ----- | -------- | - |  | - | ------- | -
|                                             |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |         
|Sales                                        |  | $                                             | 69,510  |   |                                             | $ |        |                                |  | $                                    |  |  | $            | 165,066 |   |       | ($43,560 | ) |  | $ | 191,016 |  
|Cost of sales:                               |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Materials services and supplies              |  |                                               | 57,974  |   |                                             |   |        |                                |  |                                      |  |  |              | 144,860 |   |       | (43,560  | ) |  |   | 159,274 |  
|Interest                                     |  |                                               | 583     |   |                                             |   |        |                                |  |                                      |  |  |              | 2,760   |   |       |         |   |  |   | 3,343   |  
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Gross profit                                 |  |                                               | 10,953  |   |                                             |   |        |                                |  |                                      |  |  |              | 17,446  |   |       |         |   |  |   | 28,399  |  
|Selling, general and administrative expenses |  |                                               | 11,632  |   |                                             |   | (5,732  | )                              |  |                                      |  |  |              | 13,710  |   |       |         |   |  |   | 19,610  |  
|Other interest expense                       |  |                                               | 1,110   |   |                                             |   | 544     |                                |  |                                      |  |  |              | (1,039  | ) |       |         |   |  |   | 615     |  
|Other income (expense) net                   |  |                                               | 1,083   |   |                                             |   | (169    | )                              |  |                                      |  |  |              | 263     |   |       |         |   |  |   | 1,177   |  
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Income (loss) before taxes                   |  |                                               | (706    | ) |                                             |   | 5,019   |                                |  |                                      |  |  |              | 5,038   |   |       |         |   |  |   | 9,351   |  
|Income taxes                                 |  |                                               | 307     |   |                                             |   | (1,907  | )                              |  |                                      |  |  |              | (1,218  | ) |       |         |   |  |   | (2,818  | )
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Income (loss) after taxes                    |  |                                               | (399    | ) |                                             |   | 3,112   |                                |  |                                      |  |  |              | 3,820   |   |       |         |   |  |   | 6,533   |  
|Minority interests                           |  |                                               |        |   |                                             |   |        |                                |  |                                      |  |  |              | (192    | ) |       |         |   |  |   | (192    | )
|Equity in earnings of affiliates             |  |                                               |        |   |                                             |   |        |                                |  |                                      |  |  |              | 105     |   |       |         |   |  |   | 105     |  
|Equity in earnings of subsidiaries           |  |                                               | 3,733   |   |                                             |   | 3,334   |                                |  |                                      |  |  |              |        |   |       | (7,067   | ) |  |   |        |  
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Income from continuing operations            |  |                                               | 3,334   |   |                                             |   | 6,446   |                                |  |                                      |  |  |              | 3,733   |   |       | (7,067   | ) |  |   | 6,446   |  
|Discontinued operations                      |  |                                               | 3,365   |   |                                             |   | (2,815  | )                              |  |                                      |  |  |              | 3,365   |   |       | (6,730   | ) |  |   | (2,815  | )
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Net income                                   |  |                                               | 6,699   |   |                                             |   | 3,631   |                                |  |                                      |  |  |              | 7,098   |   |       | (13,797  | ) |  |   | 3,631   |  
|Retained earnings at beginning of period     |  |                                               | 128,878 |   |                                             |   | 157,755 |                                |  |                                      |  |  |              | 145,244 |   |       | (274,122 | ) |  |   | 157,755 |  
|Common stock dividends                       |  |                                               |        |   |                                             |   | (1,192  | )                              |  |                                      |  |  |              |        |   |       | 0        |   |  |   | (1,192  | )
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  
|Retained earnings at end of period           |  |                                               | 135,577 |   |                                             |   | 160,194 |                                |  |                                      |  |  |              | 152,342 |   |       | (287,919 | ) |  |   | 160,194 |  
|                                             |  |                                               |         |   |                                             |   |         |                                |  |                                      |   |  |              |         |   |       |          |   |  |   |         |  



-12-



---

STANDARD COMMERCIAL CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Nine months ended
December 31, 2003

(In thousands; unaudited)



|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|-------------------------------------------------- |  | --------------------------------------------- | ------- | - | ------------------------------------------- | - | ------- | ------------------------------ |  | - | ------------------------------------ | - |  | ------------ | ------- | - | ----- | - | -------- | - |  | - | ------- | -
|                                                   |  | Standard Commercial Tobacco Co. Inc. (Issuer) |         |   | Standard Commercial Corporation (Guarantor) |   |         | Standard Wool Inc. (Guarantor) |  |   | Other Subsidiaries (Non- Guarantors) |   |  | Eliminations |         |   | Total |  
|Sales                                              |  | $                                             | 153,454 |   |                                             | $ |        |                                |  | $ |                                     |   |  | $            | 598,659 |   |       | $ | (176,928 | ) |  | $ | 575,185 |  
|Cost of sales:                                     |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Materials services and supplies                    |  |                                               | 127,300 |   |                                             |   |        |                                |  |   |                                     |   |  |              | 517,150 |   |       |   | (176,928 | ) |  |   | 467,522 |  
|Interest                                           |  |                                               | 969     |   |                                             |   |        |                                |  |   |                                     |   |  |              | 7,617   |   |       |   |         |   |  |   | 8,586   |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Gross profit                                       |  |                                               | 25,185  |   |                                             |   |        |                                |  |   |                                     |   |  |              | 73,892  |   |       |   |         |   |  |   | 99,077  |  
|Selling, general and administrative expenses       |  |                                               | 18,350  |   |                                             |   | (2,757  | )                              |  |   |                                     |   |  |              | 41,325  |   |       |   |         |   |  |   | 56,918  |  
|Other interest expense                             |  |                                               | 3,708   |   |                                             |   | 2,431   |                                |  |   |                                     |   |  |              | (3,102  | ) |       |   |         |   |  |   | 3,037   |  
|Other income (expense), net                        |  |                                               | 3,544   |   |                                             |   | (350    | )                              |  |   |                                     |   |  |              | (1,018  | ) |       |   |         |   |  |   | 2,176   |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) before taxes                         |  |                                               | 6,671   |   |                                             |   | (24     | )                              |  |   |                                     |   |  |              | 34,651  |   |       |   |         |   |  |   | 41,298  |  
|Income taxes                                       |  |                                               | (2,496  | ) |                                             |   | 9       |                                |  |   |                                     |   |  |              | (9,833  | ) |       |   |         |   |  |   | (12,320 | )
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income (loss) after taxes                          |  |                                               | 4,175   |   |                                             |   | (15     | )                              |  |   |                                     |   |  |              | 24,818  |   |       |   |         |   |  |   | 28,978  |  
|Minority interests                                 |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | (53     | ) |       |   |         |   |  |   | (53     | )
|Equity in earnings of affiliates                   |  |                                               |        |   |                                             |   |        |                                |  |   |                                     |   |  |              | 672     |   |       |   |         |   |  |   | 672     |  
|Equity in earnings of subsidiaries                 |  |                                               | 25,437  |   |                                             |   | 29,612  |                                |  |   |                                     |   |  |              |        |   |       |   | (55,049  | ) |  |   |        |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income from continuing operations                  |  |                                               | 29,612  |   |                                             |   | 29,597  |                                |  |   |                                     |   |  |              | 25,437  |   |       |   | (55,049  | ) |  |   | 29,597  |  
|Discontinued operations                            |  |                                               | (10,030 | ) |                                             |   | (33,663 | )                              |  |   | 16,551                               |   |  |              | (10,030 | ) |       |   | 3,509    |   |  |   | (33,663 | )
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Net income (loss)                                  |  |                                               | 19,582  |   |                                             |   | (4,066  | )                              |  |   | 16,551                               |   |  |              | 15,407  |   |       |   | (51,540  | ) |  |   | (4,066  | )
|Retained earnings (deficit) at beginning of period |  |                                               | 123,495 |   |                                             |   | 167,495 |                                |  |   | (16,551                              | ) |  |              | 136,935 |   |       |   | (243,879 | ) |  |   | 167,495 |  
|Common stock dividends                             |  |                                               | (7,500  | ) |                                             |   | (3,235  | )                              |  |   |                                     |   |  |              |        |   |       |   | 7,500    |   |  |   | (3,235  | )
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  
|Retained earnings at end of period                 |  | $                                             | 135,577 |   |                                             | $ | 160,194 |                                |  | $ |                                     |   |  | $            | 152,342 |   |       |   | (287,919 | ) |  | $ | 160,194 |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                      |   |  |              |         |   |       |   |          |   |  |   |         |  



-13-



---

STANDARD COMMERCIAL CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS

Nine months ended December 31, 2003

(In thousands; unaudited)



|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|--------------------------------------- |  | ----------------------------------------- | ------ | - | ---------------------------------------- | - | ------ | ---------------------------- |  | --------------------------------- | - |  | ------------ | ------- | ----- |  | - | - |  | - | ------- | -
|                                        |  | StandardCommercialTobaccoCo. Inc.(Issuer) |        |   | StandardCommercialCorporation(Guarantor) |   |        | StandardWool Inc.(Guarantor) |  | OtherSubsidiaries(Non-Guarantors) |   |  | Eliminations |         | Total | 
|Cash used for operating activities      |  | $                                         | (2,597 | ) |                                          | $ | (4,211 | )                            |  | $                                 |  |  |              | (65,407 | )     |  | $ |  |  | $ | (72,215 | )
|Cash flows from investing activities    |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Property, plant and equipment           |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|- additions                             |  |                                           | (7,504 | ) |                                          |   |       |                              |  |                                   |  |  |              | (19,806 | )     |  |   |  |  |   | (27,310 | )
|- disposals                             |  |                                           |       |   |                                          |   |       |                              |  |                                   |  |  |              | 283     |       |  |   |  |  |   | 283     |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Net cash used for continuing operations |  |                                           | (7,504 | ) |                                          |   |       |                              |  |                                   |  |  |              | (19,523 | )     |  |   |  |  |   | (27,027 | )
|Net cash from discontinued operations   |  |                                           |       |   |                                          |   |       |                              |  |                                   |  |  |              | 1,034   |       |  |   |  |  |   | 1,034   |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Cash used for investing activities      |  |                                           | (7,504 | ) |                                          |   |       |                              |  |                                   |  |  |              | (18,489 | )     |  |   |   |  |   | (25,993 | )
|Cash flows from financing activities:   |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Proceeds from long-term borrowings      |  |                                           |       |   |                                          |   |       |                              |  |                                   |  |  |              | 13,596  |       |  |   |  |  |   | 13,596  |  
|Repayment of long-term borrowings       |  |                                           |       |   |                                          |   |       |                              |  |                                   |  |  |              | (6,961  | )     |  |   |  |  |   | (6,961  | )
|Net change in short-term borrowings     |  |                                           | 18,021 |   |                                          |   |       |                              |  |                                   |  |  |              | 71,451  |       |  |   |  |  |   | 89,472  |  
|Dividends received /( paid)             |  |                                           | (7,500 | ) |                                          |   | 4,265  |                              |  |                                   |  |  |              |        |       |  |   |  |  |   | (3,235  | )
|Other                                   |  |                                           |       |   |                                          |   | 147    |                              |  |                                   |  |  |              |        |       |  |   |  |  |   | 147     |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Cash provided by financing activities   |  |                                           | 10,521 |   |                                          |   | 4,412  |                              |  |                                   |  |  |              | 78,086  |       |  |   |  |  |   | 93,019  |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Effect of exchange rate changes on cash |  |                                           |       |   |                                          |   |       |                              |  |                                   |  |  |              | 650     |       |  |   |  |  |   | 650     |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Increase (decrease) in cash for year    |  |                                           | 420    |   |                                          |   | 201    |                              |  |                                   |  |  |              | (5,160  | )     |  |   |  |  |   | (4,539  | )
|Cash at beginning of year               |  |                                           | 463    |   |                                          |   | 54     |                              |  |                                   |  |  |              | 26,053  |       |  |   |  |  |   | 26,570  |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Cash at end of period                   |  | $                                         | 883    |   |                                          | $ | 255    |                              |  | $                                 |  |  | $            | 20,893  |       |  |   |  |  | $ | 22,031  |  
|                                        |  |                                           |        |   |                                          |   |        |                              |  |                                   |   |  |              |         |       |  |   |   |  |   |         |  
|Interest                                |  | $                                         | 3,318  |   |                                          | $ | 1,615  |                              |  | $                                 |  |  | $            | 6,181   |       |  |   |   |  | $ | 11,114  |  
|Income taxes                            |  |                                           |       |   |                                          |   | 1,180  |                              |  |                                   |  |  |              | 7,280   |       |  |   |   |  |   | 8,460   |  



-14-



---

STANDARD COMMERCIAL CORPORATION

SUPPLEMENTAL COMBINING BALANCE SHEET

December 31, 2002

(In thousands; unaudited)



|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|------------------------------------------- |  | ------------------------------------------- | ------- | - | ---------------------------------------- | - | ------- | ---------------------------- |  | - | --------------------------------- | - |  | ------------ | ------- | - | ----- | - | --------- | - |  | - | ------- | -
|                                            |  | StandardCommercialTobacco Co. Inc. (Issuer) |         |   | StandardCommercialCorporation(Guarantor) |   |         | StandardWool Inc.(Guarantor) |  |   | OtherSubsidiaries(Non-Guarantors) |   |  | Eliminations |         |   | Total |  
|Assets                                      |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Cash                                        |  | $                                           | 598     |   |                                          | $ | 137     |                              |  | $ |                                  |   |  | $            | 31,183  |   |       | $ |          |   |  |   | 31,918  |  
|Receivables                                 |  |                                             | 16,770  |   |                                          |   | 3       |                              |  |   |                                  |   |  |              | 151,980 |   |       |   |          |   |  |   | 168,753 |  
|Intercompany receivables                    |  |                                             | 124,197 |   |                                          |   | 35,199  |                              |  |   |                                  |   |  |              | 11,497  |   |       |   | (170,893  | ) |  |   |        |  
|Inventories                                 |  |                                             | 83,603  |   |                                          |   |        |                              |  |   |                                  |   |  |              | 164,098 |   |       |   |          |   |  |   | 247,701 |  
|Assets of discontinued operations           |  |                                             |        |   |                                          |   |        |                              |  |   |                                  |   |  |              | 137,937 |   |       |   |          |   |  |   | 137,937 |  
|Prepaid expenses                            |  |                                             | 2,578   |   |                                          |   | 382     |                              |  |   |                                  |   |  |              | 2,282   |   |       |   |          |   |  |   | 5,242   |  
|Marketable securities                       |  |                                             |        |   |                                          |   | 1       |                              |  |   |                                  |   |  |              | 1,190   |   |       |   |          |   |  |   | 1,191   |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Current assets                              |  |                                             | 227,746 |   |                                          |   | 35,722  |                              |  |   |                                  |   |  |              | 500,167 |   |       |   | (170,893  | ) |  |   | 592,742 |  
|Property, plant and equipment               |  |                                             | 34,890  |   |                                          |   |        |                              |  |   |                                  |   |  |              | 108,612 |   |       |   |          |   |  |   | 143,502 |  
|Investment in subsidiaries                  |  |                                             | 152,869 |   |                                          |   | 244,040 |                              |  |   | 15,132                            |   |  |              | 156,064 |   |       |   | (568,105  | ) |  |   |        |  
|Investment in affiliates                    |  |                                             |        |   |                                          |   |        |                              |  |   |                                  |   |  |              | 6,641   |   |       |   |          |   |  |   | 6,641   |  
|Other noncurrent assets                     |  |                                             | 1,238   |   |                                          |   | 14,015  |                              |  |   |                                  |   |  |              | 20,489  |   |       |   |          |   |  |   | 35,742  |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total assets                                |  | $                                           | 416,743 |   |                                          | $ | 293,777 |                              |  | $ | 15,132                            |   |  | $            | 791,973 |   |       |   | ($738,998 | ) |  | $ | 778,627 |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Liabilities                                 |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Short-term borrowings                       |  | $                                           | 54,968  |   |                                          | $ |        |                              |  | $ |                                  |   |  | $            | 201,238 |   |       | $ |          |   |  | $ | 256,206 |  
|Current portion of long-term debt           |  |                                             |        |   |                                          |   |        |                              |  |   |                                  |   |  |              | 5,679   |   |       |   |          |   |  |   | 5,679   |  
|Accounts payable and accrued liabilities    |  |                                             | 13,395  |   |                                          |   | 1,925   |                              |  |   |                                  |   |  |              | 80,145  |   |       |   |          |   |  |   | 95,465  |  
|Liabilities of discontinued operations      |  |                                             |        |   |                                          |   |        |                              |  |   |                                   |   |  |              | 26,436  |   |       |   |          |   |  |   | 26,436  |  
|Intercompany accounts payable               |  |                                             | 40,898  |   |                                          |   | 14,276  |                              |  |   | 906                               |   |  |              | 114,813 |   |       |   | (170,893  | ) |  |   |        |  
|Taxes accrued                               |  |                                             | 7,096   |   |                                          |   | (4,410  | )                            |  |   |                                  |   |  |              | 12,202  |   |       |   |          |   |  |   | 14,888  |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Current liabilities                         |  |                                             | 116,357 |   |                                          |   | 11,791  |                              |  |   | 906                               |   |  |              | 440,513 |   |       |   | (170,893  | ) |  |   | 398,674 |  
|Long-term debt                              |  |                                             | 65,177  |   |                                          |   |        |                              |  |   |                                  |   |  |              | 13,737  |   |       |   |          |   |  |   | 78,914  |  
|Convertible subordinated debentures         |  |                                             |        |   |                                          |   | 45,051  |                              |  |   |                                  |   |  |              |        |   |       |   |          |   |  |   | 45,051  |  
|Retirement and other benefits               |  |                                             | 9,570   |   |                                          |   | 990     |                              |  |   |                                  |   |  |              | 6,080   |   |       |   |          |   |  |   | 16,640  |  
|Deferred income taxes                       |  |                                             | (1,710  | ) |                                          |   | (376    | )                            |  |   |                                  |   |  |              | 5,980   |   |       |   |          |   |  |   | 3,894   |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total liabilities                           |  |                                             | 189,394 |   |                                          |   | 57,456  |                              |  |   | 906                               |   |  |              | 466,310 |   |       |   | (170,893  | ) |  |   | 543,173 |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Minority interests                          |  |                                             |        |   |                                          |   |        |                              |  |   |                                  |   |  |              | 1,890   |   |       |   |          |   |  |   | 1,890   |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Shareholders equity                        |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Common stock                                |  |                                             | 993     |   |                                          |   | 3,222   |                              |  |   | 32,404                            |   |  |              | 166,365 |   |       |   | (199,762  | ) |  |   | 3,222   |  
|Additional paid-in capital                  |  |                                             | 130,860 |   |                                          |   | 108,391 |                              |  |   |                                  |   |  |              | 60,564  |   |       |   | (191,424  | ) |  |   | 108,391 |  
|Unearned restricted stock plan compensation |  |                                             | (779    | ) |                                          |   | (556    | )                            |  |   |                                  |   |  |              | (1,978  | ) |       |   |          |   |  |   | (3,313  | )
|Treasury stock at cost                      |  |                                             |        |   |                                          |   | (4,250  | )                            |  |   |                                  |   |  |              |        |   |       |   |          |   |  |   | (4,250  | )
|Retained earnings                           |  |                                             | 110,959 |   |                                          |   | 160,961 |                              |  |   | (15,102                           | ) |  |              | 129,982 |   |       |   | (225,839  | ) |  |   | 160,961 |  
|Accumulated other comprehensive loss        |  |                                             | (14,684 | ) |                                          |   | (31,447 | )                            |  |   | (3,076                            | ) |  |              | (31,160 | ) |       |   | 48,920    |   |  |   | (31,447 | )
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total shareholders equity                  |  |                                             | 227,349 |   |                                          |   | 236,321 |                              |  |   | 14,226                            |   |  |              | 323,773 |   |       |   | (568,105  | ) |  |   | 233,564 |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  
|Total liabilities and equity                |  | $                                           | 416,743 |   |                                          | $ | 293,777 |                              |  | $ | 15,132                            |   |  | $            | 791,973 |   |       |   | ($738,998 | ) |  | $ | 778,627 |  
|                                            |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |           |   |  |   |         |  



-15-



---

STANDARD COMMERCIAL CORPORATION

SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGS

Third quarter
ended December 31, 2002

(In thousands; unaudited)



|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|-------------------------------------------------- |  | ------------------------------------------- | ------- | - | ---------------------------------------- | - | ------- | ---------------------------- |  | - | --------------------------------- | - |  | ------------ | ------- | - | ----- | - | -------- | - |  | - | ------- | -
|                                                   |  | StandardCommercialTobacco Co. Inc. (Issuer) |         |   | StandardCommercialCorporation(Guarantor) |   |         | StandardWool Inc.(Guarantor) |  |   | OtherSubsidiaries(Non-Guarantors) |   |  | Eliminations |         |   | Total |  
|Sales                                              |  | $                                           | 58,612  |   |                                          | $ |        |                              |  | $ |                                  |   |  | $            | 210,785 |   |       | $ | (57,942  | ) |  | $ | 211,455 |  
|Cost of sales:                                     |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Materials services and supplies                    |  |                                             | 47,881  |   |                                          |   |        |                              |  |   |                                  |   |  |              | 182,981 |   |       |   | (57,942  | ) |  |   | 172,920 |  
|Interest                                           |  |                                             | 232     |   |                                          |   |        |                              |  |   |                                  |   |  |              | 3,140   |   |       |   |         |   |  |   | 3,372   |  
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Gross profit                                       |  |                                             | 10,499  |   |                                          |   |        |                              |  |   |                                  |   |  |              | 24,664  |   |       |   |         |   |  |   | 35,163  |  
|Selling, general and administrative expenses       |  |                                             | 4,214   |   |                                          |   | 1,253   |                              |  |   |                                  |   |  |              | 11,121  |   |       |   |         |   |  |   | 16,588  |  
|Other interest expense                             |  |                                             | 1,963   |   |                                          |   | 826     |                              |  |   |                                  |   |  |              | (1,607  | ) |       |   |         |   |  |   | 1,182   |  
|Other income (expense), net                        |  |                                             | 30      |   |                                          |   | 2,699   |                              |  |   |                                  |   |  |              | (1,640  | ) |       |   |         |   |  |   | 1,089   |  
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income before taxes                                |  |                                             | 4,352   |   |                                          |   | 620     |                              |  |   |                                  |   |  |              | 13,510  |   |       |   |         |   |  |   | 18,482  |  
|Income taxes                                       |  |                                             | (1,662  | ) |                                          |   | (236    | )                            |  |   |                                  |   |  |              | (4,610  | ) |       |   |         |   |  |   | (6,508  | )
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income after taxes                                 |  |                                             | 2,690   |   |                                          |   | 384     |                              |  |   |                                  |   |  |              | 8,900   |   |       |   |         |   |  |   | 11,974  |  
|Equity in earnings of affiliates                   |  |                                             |        |   |                                          |   |        |                              |  |   |                                  |   |  |              |        |   |       |   |         |   |  |   |        |  
|Equity in earnings of subsidiaries                 |  |                                             | 8,900   |   |                                          |   | 11,590  |                              |  |   |                                  |   |  |              |        |   |       |   | (20,490  | ) |  |   |        |  
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income from continuing operations                  |  |                                             | 11,590  |   |                                          |   | 11,974  |                              |  |   |                                  |   |  |              | 8,900   |   |       |   | (20,490  | ) |  |   | 11,974  |  
|Discontinued operations                            |  |                                             |        |   |                                          |   | (1,337  | )                            |  |   | (1,337                            | ) |  |              | (42     | ) |       |   | 1,379    |   |  |   | (1,337  | )
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Net income (loss)                                  |  |                                             | 11,590  |   |                                          |   | 10,637  |                              |  |   | (1,337                            | ) |  |              | 8,858   |   |       |   | (19,111  | ) |  |   | 10,637  |  
|Retained earnings (deficit) at beginning of period |  |                                             | 99,369  |   |                                          |   | 151,167 |                              |  |   | (13,765                           | ) |  |              | 121,124 |   |       |   | (206,728 | ) |  |   | 151,167 |  
|Common stock dividends                             |  |                                             |        |   |                                          |   | (843    | )                            |  |   |                                  |   |  |              |        |   |       |   |         |   |  |   | (843    | )
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  
|Retained earnings (deficit) at end of period       |  | $                                           | 110,959 |   |                                          | $ | 160,961 |                              |  | $ | (15,102                           | ) |  | $            | 129,982 |   |       | $ | (225,839 | ) |  | $ | 160,961 |  
|                                                   |  |                                             |         |   |                                          |   |         |                              |  |   |                                   |   |  |              |         |   |       |   |          |   |  |   |         |  



-16-



---

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 |   |                                             | $ |        |                                |  | $ |                                    |   |  | $            | 603,779 |   |       | $ | (191,547 | ) |  | $ | 568,359 |  
|Cost of sales:                                     |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Materials services and supplies                    |  |                                               | 126,387 |   |                                             |   |        |                                |  |   |                                    |   |  |              | 517,399 |   |       |   | (191,547 | ) |  |   | 452,239 |  
|Interest                                           |  |                                               | 582     |   |                                             |   |        |                                |  |   |                                    |   |  |              | 8,982   |   |       |   |         |   |  |   | 9,564   |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Gross profit                                       |  |                                               | 29,158  |   |                                             |   |        |                                |  |   |                                    |   |  |              | 77,398  |   |       |   |         |   |  |   | 106,556 |  
|Selling, general and administrative expenses       |  |                                               | 11,121  |   |                                             |   | 4,490   |                                |  |   |                                    |   |  |              | 35,086  |   |       |   |         |   |  |   | 50,697  |  
|Other interest expense                             |  |                                               | 5,691   |   |                                             |   | 2,518   |                                |  |   |                                    |   |  |              | (4,933  | ) |       |   |         |   |  |   | 3,276   |  
|Other income (expense), net                        |  |                                               | 109     |   |                                             |   | 7,115   |                                |  |   |                                    |   |  |              | (4,151  | ) |       |   |         |   |  |   | 3,073   |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income before taxes                                |  |                                               | 12,455  |   |                                             |   | 107     |                                |  |   |                                    |   |  |              | 43,094  |   |       |   |         |   |  |   | 55,656  |  
|Income taxes                                       |  |                                               | (4,741  | ) |                                             |   | (32     | )                              |  |   |                                    |   |  |              | (15,844 | ) |       |   |         |   |  |   | (20,617 | )
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income after taxes                                 |  |                                               | 7,714   |   |                                             |   | 75      |                                |  |   |                                    |   |  |              | 27,250  |   |       |   |         |   |  |   | 35,039  |  
|Equity in earnings of affiliates                   |  |                                               |        |   |                                             |   |        |                                |  |   |                                    |   |  |              | 100     |   |       |   |         |   |  |   | 100     |  
|Equity in earnings of subsidiaries                 |  |                                               | 27,350  |   |                                             |   | 35,064  |                                |  |   |                                    |   |  |              |        |   |       |   | (62,414  | ) |  |   |        |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Income from continuing operations                  |  |                                               | 35,064  |   |                                             |   | 35,139  |                                |  |   |                                    |   |  |              | 27,350  |   |       |   | (62,414  | ) |  |   | 35,139  |  
|Discontinued operations                            |  |                                               |        |   |                                             |   | (4,636  | )                              |  |   | (4,636                              | ) |  |              | (3,340  | ) |       |   | 7,976    |   |  |   | (4,636  | )
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Net income (loss)                                  |  |                                               | 35,064  |   |                                             |   | 30,503  |                                |  |   | (4,636                              | ) |  |              | 24,010  |   |       |   | (54,438  | ) |  |   | 30,503  |  
|Retained earnings (deficit) at beginning of period |  |                                               | 75,895  |   |                                             |   | 132,812 |                                |  |   | (10,466                             | ) |  |              | 106,426 |   |       |   | (171,855 | ) |  |   | 132,812 |  
|Common stock dividends                             |  |                                               |        |   |                                             |   | (2,354  | )                              |  |   |                                    |   |  |              | (454    | ) |       |   | 454      |   |  |   | (2,354  | )
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  
|Retained earnings (deficit) at end of period       |  | $                                             | 110,959 |   |                                             | $ | 160,961 |                                |  | $ | (15,102                             | ) |  | $            | 129,982 |   |       |   | (225,839 | ) |  | $ | 160,961 |  
|                                                   |  |                                               |         |   |                                             |   |         |                                |  |   |                                     |   |  |              |         |   |       |   |          |   |  |   |         |  



-17-



---

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 for) operating activities                   |  | $                                             | (7,830  | ) |                                             | $ | 8,548  |                                |  | $                                   |  |  |              | (56,319 | )     |  | $ |  |  | $ | (55,601 | )
|Cash flows from investing activities Property, plant and equipment |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|- additions                                                        |  |                                               | (18,207 | ) |                                             |   |       |                                |  |                                     |  |  |              | (10,248 | )     |  |   |  |  |   | (28,455 | )
|- disposals                                                        |  |                                               | 3       |   |                                             |   |       |                                |  |                                     |  |  |              | 293     |       |  |   |  |  |   | 296     |  
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Cash used for continuing operations                                |  |                                               | (18,204 | ) |                                             |   |       |                                |  |                                     |  |  |              | (9,955  | )     |  |   |  |  |   | (28,159 | )
|Cash used for discontinued operations                              |  |                                               |        |   |                                             |   |       |                                |  |                                     |  |  |              | (22     | )     |  |   |   |  |   | (22     | )
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Cash used for investing activities                                 |  |                                               | (18,204 | ) |                                             |   |       |                                |  |                                     |  |  |              | (9,977  | )     |  |   |   |  |   | (28,181 | )
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Cash flows from financing activities:                              |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Proceeds from long-term borrowings                                 |  |                                               |        |   |                                             |   |       |                                |  |                                     |  |  |              | 7,645   |       |  |   |  |  |   | 7,645   |  
|Repayment of long-term borrowings                                  |  |                                               |        |   |                                             |   |       |                                |  |                                     |  |  |              | (15,307 | )     |  |   |  |  |   | (15,307 | )
|Net change in short-term borrowings                                |  |                                               | 43,049  |   |                                             |   |       |                                |  |                                     |  |  |              | 80,777  |       |  |   |  |  |   | 123,826 |  
|Buyback of long-term debt                                          |  |                                               | (18,952 | ) |                                             |   | (4,791 | )                              |  |                                     |  |  |              |        |       |  |   |  |  |   | (23,743 | )
|Dividends paid                                                     |  |                                               |        |   |                                             |   | (2,354 | )                              |  |                                     |  |  |              |        |       |  |   |  |  |   | (2,354  | )
|Other                                                              |  |                                               |        |   |                                             |   | (1,345 | )                              |  |                                     |  |  |              | 1,377   |       |  |   |  |  |   | 32      |  
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Cash provided by (used for) financing activities                   |  |                                               | 24,097  |   |                                             |   | (8,490 | )                              |  |                                     |  |  |              | 74,492  |       |  |   |  |  |   | 90,099  |  
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Effect of exchange rate changes on cash                            |  |                                               |        |   |                                             |   |       |                                |  |                                     |  |  |              | 917     |       |  |   |  |  |   | 917     |  
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Increase (decrease) in cash for year                               |  |                                               | (1,937  | ) |                                             |   | 58     |                                |  |                                     |  |  |              | 9,113   |       |  |   |  |  |   | 7,234   |  
|Cash at beginning of year                                          |  |                                               | 2,535   |   |                                             |   | 79     |                                |  |                                     |  |  |              | 22,070  |       |  |   |  |  |   | 24,684  |  
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Cash at end of period                                              |  | $                                             | 598     |   |                                             | $ | 137    |                                |  | $                                   |  |  | $            | 31,183  |       |  |   |  |  | $ | 31,918  |  
|                                                                   |  |                                               |         |   |                                             |   |        |                                |  |                                     |   |  |              |         |       |  |   |   |  |   |         |  
|Interest                                                           |  | $                                             | 4,560   |   |                                             | $ | 1,633  |                                |  | $                                   |  |  | $            | 4,293   |       |  |   |   |  | $ | 10,486  |  
|Income taxes                                                       |  |                                               | 1,281   |   |                                             |   | 7,760  |                                |  |                                     |  |  |              | 7,330   |       |  |   |   |  |   | 16,371  |  



-18-



---

Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION



Consolidated Results of Operations (in thousands)



|                                            |  |                                 |         |   |                               |   |         |                       |  |   |         |   |  |      |         |   |                       |   |         |   |  |   |         |  
|------------------------------------------- |  | ------------------------------- | ------- | - | ----------------------------- | - | ------- | --------------------- |  | - | ------- | - |  | ---- | ------- | - | --------------------- | - | ------- | - |  | - | ------- | -
|                                            |  | Third Quarter Ended December 31 |         |   | Nine Months Ended December 31 |  
|                                            |  | 2003                            |         |   | 2002                          |   |         | Increase / (Decrease) |  |   | 2003    |   |  | 2002 |         |   | Increase / (Decrease) |  
|Sales                                       |  | $                               | 191,016 |   |                               | $ | 211,455 |                       |  | $ | (20,439 | ) |  | $    | 575,185 |   |                       | $ | 568,359 |   |  | $ | 6,826   |  
|Gross profit                                |  |                                 | 28,399  |   |                               |   | 35,163  |                       |  |   | (6,764  | ) |  |      | 99,077  |   |                       |   | 106,556 |   |  |   | (7,479  | )
|Selling general and administrative expenses |  |                                 | 19,610  |   |                               |   | 16,588  |                       |  |   | 3,022   |   |  |      | 56,918  |   |                       |   | 50,697  |   |  |   | 6,221   |  
|Income taxes                                |  |                                 | 2,818   |   |                               |   | 6,508   |                       |  |   | (3,690  | ) |  |      | 12,320  |   |                       |   | 20,617  |   |  |   | (8,297  | )
|Income from continuing operations           |  |                                 | 6,446   |   |                               |   | 11,974  |                       |  |   | (5,528  | ) |  |      | 29,597  |   |                       |   | 35,139  |   |  |   | (5,542  | )
|Loss from discontinued operations           |  |                                 | (2,815  | ) |                               |   | (1,337  | )                     |  |   | 1,478   |   |  |      | (33,663 | ) |                       |   | (4,636  | ) |  |   | 29,027  |  
|Net income (loss)                           |  |                                 | 3,631   |   |                               |   | 10,637  |                       |  |   | (7,006  | ) |  |      | (4,066  | ) |                       |   | 30,503  |   |  |   | (34,569 | )



Executive Summary



In general, the supply/demand models for flue-cured and burley styles of tobacco indicate
a relatively balanced position globally. There is still an oversupply condition for the oriental styles. Most of the oriental oversupply is held by the Turkish monopoly.



The Euro has continued to strengthen against the dollar during the course of this fiscal year. While most tobacco sales are denominated in
dollars, local country operating costs, including the purchasing and processing costs for tobaccos, may be incurred in local currency.



The company has completed the construction and start-up of a new joint-venture processing facility in Indonesia in the quarter ended December 31, 2003.



Discontinued operations



During the last quarter of fiscal 2002, the Company decided to close and dispose of wool units in South Africa, New Zealand, Argentina and
the specialty fibers business in Holland. By September 30, 2003, the sales of the Companies in South Africa and New Zealand, the trade assets of Argentina and the specialty fibers business in Holland had been substantially completed.



Despite the decision in fiscal 2002 to shrink our wool division and focus on its core markets
while also reducing divisional overheads, trading conditions remained difficult, resulting in continual losses. This is particularly true in the initial processing stages for the apparel industry. Given the continuing uncertainty of an adequate
turnaround leading to acceptable returns for our shareholders, we have made the strategic decision to focus on our core tobacco operations. Accordingly, during the second quarter of the current fiscal year we decided to exit all of our remaining
wool operations. These operations are in Australia, UK, Chile, France and Germany. We are currently in discussions with various prospective purchasers for these operations and have identified these assets as held for sale. The wool operating units
are available for immediate sale and the expectation is that the exit plan will be completed without significant changes. We expect to complete the process of selling/liquidating these units by September 30, 2004.



These wool units are expected to incur additional operating losses until final disposition.
Once disposed, we will not retain a financial interest and we have not identified any significant contingent liabilities that would delay or significantly alter the plan of disposition. The Company will continue to guarantee the debt of the wool
units until disposition, at which time we do not expect to provide any guarantees for the obligations or commitments of the wool units.



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Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION(Continued)



We have accounted for the sale of the wool units as discontinued operations, in accordance with the provisions of
SFAS No 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The results for all periods presented are included in the consolidated financial statements as discontinued operations. As noted above, since the existing debt of
the wool units is guaranteed by the Company, we have not included any such debt in liabilities of discontinued operations.



The wool trading loss for the quarter and nine months, excluding the loss to discontinue the operations, was $2.8 and $7.0, million respectively, versus $1.3 and $4.6
million in the prior year periods. The estimated loss of disposition recorded for the nine months to discontinue the wool operation was $26.6 million. The basic loss per share for the discontinued operations for the quarter and nine months was $0.20
and $2.47, respectively, versus a loss of $0.10 and $0.34 in the prior year periods.



The estimated loss to discontinue the wool operations of $26.6 million has been recorded in the nine months ended December 31, 2003, as the carrying amount of the net assets of the wool units exceeded the fair value less estimated disposal
costs. The fair value was determined based on current negotiations with prospective purchasers and comparisons with other industry transactions.



Continuing operations



Sales for the quarter ended December 31, 2003 were $191.0 million, a decrease of 9.7% from $211.5 million a year earlier. For the nine months sales were up 1.2% from $568.4 million to $575.2 million. Volume for the
current quarter was down 8.3% and was level for the nine months when comparing with the prior year periods. The average sales value per kilo for the current quarter was down 3.6% and for the nine months was up 1.2% over the prior year periods.
Shipments for the quarter from Brazil, China, Italy, Kenya and Zimbabwe were lower than prior year period due to increased shipments in earlier quarters and reduced quantities available from Brazil and Zimbabwe due to lower crops. For the nine
months lower shipments from Greece, Spain, the US and Zimbabwe were offset by increased shipments from Argentina, Italy, Thailand and Turkey.



Gross profit for the quarter and nine months was $28.4 million and $99.1 million versus $35.2 million and $106.6 million, respectively, in the prior year periods. The
variances were mainly due to sales mix and reduced margins in European tobaccos due to approximately 21% appreciation of Euro against the US Dollar. Selling, general and administrative expenses for the quarter and nine months were higher than
the prior year periods. For the quarter these were mainly due to inflationary increases of $0.8 million, the effect of the weak dollar against other currencies in which certain expenses were incurred of $0.7 million, legal and professional fees of
$0.6 million, pension and medical expenses of $0.4 million and $0.5 million relating to new operations in Indonesia and Malawi. For the nine months, these were mainly due to inflationary increases of $2.5 million, the effect of the weak dollar
against other currencies in which certain expenses were incurred of $2.0 million, legal and professional fees and expenses relating to new operations of $1.3 million and pension and medical expenses of $0.8 million. The reduction in other income
(expense)net was mainly due to reduced interest income during the current nine months and to the fact that the prior period nine months included insurance recoveries.



The effective tax rate decreased to 30.1% and 29.8% for the current quarter and nine months from 35.2% and 37.0% respectively, in the
corresponding periods a year earlier. This was due to the payment of withholding taxes on dividends from subsidiary companies in the prior year periods and variances in tax rates in areas where profits were earned or losses were incurred.



Income from continuing operations for the quarter and nine months was $6.4
million and $29.6 million, respectively, versus $12.0 million and $35.1 million in the prior year periods. The basic earnings per share from continuing operations for the quarter was $0.47 versus $0.89 in the prior year period. Basic earnings per
share from continuing operations for the nine months was $2.18 versus $2.61 in the prior years period.



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Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION(Continued)



The net income for the quarter was $3.6 million and the net loss for the nine months was $4.1 million or $0.27 and
$(0.29) per share basic versus net income for the quarter and nine months after the discontinued operations in the prior year periods of $10.6 million and $30.5 million or basic earnings per share of $0.79 and $2.27 respectively.



Liquidity and Capital Resources



The following table is a summary of items from the Consolidated Balance Sheet and the
Statement of Consolidated Cash Flows



|                                        |  |                              |          |                          |   |          |  |   |         
|--------------------------------------- |  | ---------------------------- | -------- | ------------------------ | - | -------- |  | - | --------
|(in millions, except for current ratio) |  | Nine months endedDecember 31 |          | Year ended March 31 2003
|                                        |  | 2003                         |          | 2002                     |  
|Cash                                    |  | $                            | 22,031   |                          | $ | 31,918   |  | $ | 26,570  
|Short-term borrowings                   |  |                              | 271,575  |                          |   | 256,206  |  |   | 182,103 
|Working capital                         |  |                              | 176,720  |                          |   | 194,068  |  |   | 196,919 
|Current ratio                           |  |                              | 1.41 : 1 |                          |   | 1.49 : 1 |  |   | 1.54 : 1
|Long-term debt                          |  |                              | 128,205  |                          |   | 123,965  |  |   | 123,723 
|Capital expenditures                    |  |                              | 27,310   |                          |   | 28,455   |  |   | 36,223  
|Depreciation and amortization expense   |  |                              | 13,109   |                          |   | 12,757   |  |   | 16,886  



Working capital at December 31, 2003
was $176.7 million, a decrease of $17.4 million compared to $194.1 million a year earlier. Capital expenditures during the 2003 nine months of $27.3 million consisted of routine capital expenditures mainly in the U.S., Indonesia, Italy, Malawi,
Brazil and Turkey. Cash used for operating activities during the period totaled $72.2 million mainly due to seasonal increases in inventories of $55.5 million, receivables of $35.7 million and reduction in payables of $39.1 million and partly offset
by net cash flows from discontinued operations. We continue to closely monitor our inventory levels, which fluctuate, depending on seasonal factors and the timing of deliveries to customers.



On August 26, 2002, our 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 was extended from July 31, 2003 to July 31, 2005. Financial covenants and other terms and conditions were essentially unchanged. Borrowings under the
facility continue to be guaranteed by us and are secured by substantially all of the assets of the borrowers. Certain debt agreements to which we and our subsidiaries are parties contain financial covenants that could restrict the payment of cash
dividends. Under the most restrictive covenant, we had approximately $44.8 million of retained earnings available for distribution as dividends at December 31, 2003.



We continue to guarantee the debt of the wool units up to their actual disposition and accordingly have not included the wool debt in the
liabilities of discontinued operations. At December 31, 2003, this amounted to $58.2 million. We believe that the disposition of the wool operations will not have a material impact on our overall liquidity needs. Based on the outlook for the
business for the next twelve months, we anticipate that we will be able to service the interest and principal on our indebtedness, maintain adequate working capital and provide for capital expenditures out of operating cash flow and available
borrowings under our credit facilities.



Contractual Obligations



We have tobacco purchase obligations that result from contracts with
growers to buy either specified quantities of tobacco or the growers total tobacco production. This is a normal and routine practice in our industry in some areas, notably South America. At December 31, 2003 we had contractual obligations with
tobacco growers in Brazil to purchase tobacco for approximately $88.0 million.



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Item 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF

RESULTS OF OPERATIONS AND FINANCIAL CONDITION(Continued)



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 we have little or no control. These include
changes in timing of shipments, weather, demand for and supply of leaf tobacco and wool, tobacco litigation or legislation, customer consolidations, changes in general economic conditions, political risks and changes in government regulations.
Additional information regarding these factors is contained in our other Securities and Exchange Commission filings, copies of which are available upon request from us. We assume no obligation to update any of these forward-looking statements.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------



As disclosed in our Annual Report on Form 10-K for the year ended March 31, 2003, we are exposed to market risk primarily related to foreign exchange and interest rates.
These exposures are actively monitored by management. To manage the volatility relating to these exposures, we enter into derivative financial instruments. The objective is to reduce, where we deem appropriate, fluctuations in earnings and cash
flows associated with changes in interest rates and foreign currency rates. It is our policy and practice to use derivative financial instruments only to the extent necessary to manage exposures. Our market risk has not changed substantially since
March 31, 2003.



|Item 4. | Controls and Procedures
|------- | -----------------------



| | (a) | As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that our disclosure controls and procedures are effective.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | No change in our internal control over financial reporting occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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PART II - OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------



On February 26, 2001, we were served with a Third Amended Complaint, naming us 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). 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. In May 2003, we along with several other domestic cigarette manufacturers and tobacco-leaf dealers, entered into a settlement agreement with the plaintiffs. Under the agreement, we agreed to pay $7 million for distribution of
the class. The total amount paid by all the settling defendants, to the class is approximately $212.0 million, plus commitments by the three settling cigarette manufacturers (1) to purchase certain volumes of domestic flue-cured and burley tobacco
for at least 10 years and (2) to pay the fees of plaintiffs counsel. The court approved the settlement agreement in October 2003, and we made our agreed payment on October 16, 2003.



In October 2001, the Director General  Competition of the European Commission, or 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. We, through our local subsidiaries, are cooperating fully
with the investigation and have discovered and voluntarily disclosed information which tends to establish that a number of leaf dealers, including our subsidiaries, have jointly agreed with respect to green tobacco prices and purchase quantities. In
respect of the Spanish investigation, on December 15, 2003, the DG Comp served on twenty entities within the Spanish leaf tobacco industry, including Standard Commercial Corporation (the Company) and three of its subsidiaries, a
Statement of Objections (the Statement) alleging certain infringements of the antitrust laws of the European Union. We are in the process of responding to the Statement and will continue to cooperate in the investigation. Through the
Statement, DG Comp intends to impose, where appropriate and probably late in 2004, administrative penalties on the entities it determines have infringed the EC anticompetition laws. The Company expects that those penalties could be material to the
Companys earnings. DG Comp has, however, indicated that there may be mitigating circumstances resulting from the regulation of the Spanish tobacco market. The Company is currently unable to assess the amount of such penalties, but expects that
the mitigating factors in the market, along with its cooperation with the DG Comp, could result in a reduction in any penalties imposed.



Except for the above, neither we nor any of our subsidiaries are currently involved in any litigation that we believe would, individually or in the aggregate, have a
material adverse effect on our consolidated financial position, consolidated results of operations, or liquidity nor, to our knowledge, is any such litigation currently threatened against us or our subsidiaries.



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PART II  OTHER INFORMATION Continued.



|Item 6. | Exhibits and Reports on Form 8-K
|------- | --------------------------------



|(a) | Exhibits:
|--- | ---------



|          |  |                                                                                                                                                                             
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit # |  | Description                                                                                                                                                                 
|          | 
|11        |  | Computation of earnings per common share                                                                                                                                    
|          | 
|31.1      |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)                                                                                                     
|          | 
|31.2      |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)                                                                                                     
|          | 
|32        |  | Certification by the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



|(b) | Reports on Form 8-K:
|--- | --------------------



| |  | November 6, 2003 under Item 12 to report the September 30, 2003 fiscal quarter operating and financial results.
| | - | ---------------------------------------------------------------------------------------------------------------



| |  | November 13, 2003 under Item 5 to report that the Board of Directors had approved a quarterly cash dividend of $0.0875 per share on our common shares and the appointment of H. Carl
McCall to our Board of Directors.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | December 19, 2003 under Item 5 to report that in respect of the Spanish investigation, on December 15, 2003, the Director General  Competition of the European Commission
served on twenty entities within the Spanish leaf tobacco industry, including us and three of our subsidiaries, a Statement of Objections (the Statement) alleging certain infringements of the antitrust laws of the European Union and we
are in the process of responding to the Statement and will continue to cooperate in the investigation.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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.



|                       |  |  |  |                                               |  |                           |  |                                           
|---------------------- |  |  |  | --------------------------------------------- |  | ------------------------- |  | ------------------------------------------
|                       |  |  |  | STANDARD COMMERCIAL CORPORTATION (Registrant)
|                       |  |  | 
|Date: February 9, 2004 |  |  |  | By:                                           |  | /s/    Robert E. Harrison
|                       |  |  |  |                                               |  |                           | 
|                       |  |  |  |                                               |  |                           |  | Robert E. Harrison Chief Executive Officer
|                       |  |  |  |                                              
|                       |  |  |  |                                               |  | By:                       |  | /s/    Robert A. Sheets                   
|                       |  |  |  |                                               |  |                           |  |                                           
|                       |  |  |  |                                               |  |                           |  | Robert A. Sheets Chief Financial Officer  



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