SECURITIES AND EXCHANGE COMMISSIONWashington, 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 SEPTEMBER 30, 2002

Commission file number 1-9875

|STANDARD COMMERCIAL CORPORATION                
|-----------------------------------------------
|                                               
|Incorporated under the laws of North Carolina  
|                                               
|2201 Miller Road, Wilson, North Carolina  27893
|                                               
|Telephone Number 252-291-5507                  

On November 1, 2002 the registrant had outstanding
13,486,630 shares of Common Stock ($0.20 par value).

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) had been subject to such filing requirements for the past 90 days.

|YES | x | NO | o
|--- | - | -- | -





---

PART I FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTSSTANDARD COMMERCIAL CORPORATION CONSOLIDATED BALANCE
SHEET(In thousands, except share data)

|                                                                                                                            |                              | September  30 |         | March  31 |  
|--------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ------------- | ------- | --------- | -
|                                                                                                                            |                              |               |         |           |  
|                                                                                                                            |                              | 2002          |         | 2001      |  
|                                                                                                                            |                              |               |         |           |  
|                                                                                                                            |                              | (unaudited)   |         |           |  
|ASSETS                                                                                                                      |                              |               |         |           |  
|Cash                                                                                                                        |                              | $             | 15,297  |           | $
|Receivables                                                                                                                 |                              |               | 193,044 |           |  
|Inventories                                                                                                                 |                              |               | 311,899 |           |  
|Assets of discontinued operations                                                                                           |                              |               | 11,919  |           |  
|Prepaid expenses                                                                                                            |                              |               | 6,917   |           |  
|Marketable securities                                                                                                       |                              |               | 1,019   |           |  
|                                                                                                                            |                              |               |         |           |  
|Current assets                                                                                                              |                              |               | 540,095 |           |  
|Property, plant and equipment                                                                                               |                              |               | 149,725 |           |  
|Investment in affiliates                                                                                                    |                              |               | 9,560   |           |  
|Other assets                                                                                                                |                              |               | 36,804  |           |  
|                                                                                                                            |                              |               |         |           |  
|                                                                                                                            | Total assets                 |               | $       | 736,184   |  
|                                                                                                                            |                              |               |         |           |  
|LIABILITIES                                                                                                                 |                              |               |         |           |  
|Short-term borrowings                                                                                                       |                              | $             | 226,228 |           | $
|Current portion of long-term debt                                                                                           |                              |               | 4,953   |           |  
|Accounts payable                                                                                                            |                              |               | 102,628 |           |  
|Liabilities of discontinued operations                                                                                      |                              |               | 4,082   |           |  
|Taxes accrued                                                                                                               |                              |               | 14,145  |           |  
|                                                                                                                            |                              |               |         |           |  
|Current liabilities                                                                                                         |                              |               | 352,036 |           |  
|Long-term debt                                                                                                              |                              |               | 95,977  |           |  
|Convertible subordinated debentures                                                                                         |                              |               | 45,051  |           |  
|Retirement and other benefits                                                                                               |                              |               | 20,655  |           |  
|Deferred taxes                                                                                                              |                              |               | 5,036   |           |  
|                                                                                                                            |                              |               |         |           |  
|                                                                                                                            | Total liabilities            |               |         | 518,755   |  
|                                                                                                                            |                              |               |         |           |  
|MINORITY INTERESTS                                                                                                          |                              |               | 30      |           |  
|                                                                                                                            |                              |               |         |           |  
|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 16,101,397 (Sept. 01  15,956,745; Mar 02  15,985,848) |                              |               | 3,220   |           |  
|Additional paid-in capital                                                                                                  |                              |               | 108,260 |           |  
|Unearned restricted stock plan compensation                                                                                 |                              |               | (3,657  | )         |  
|Treasury shares, 2,617,707 (Sept. 01 - 2,617,707; Mar 02 - 2,617,707)                                                       |                              |               | (4,250  | )         |  
|Retained earnings                                                                                                           |                              |               | 151,167 |           |  
|Accumulated other comprehensive income                                                                                      |                              |               | (37,341 | )         |  
|                                                                                                                            |                              |               |         |           |  
|                                                                                                                            | Total shareholders equity   |               |         | 217,399   |  
|                                                                                                                            |                              |               |         |           |  
|                                                                                                                            | Total liabilities and equity |               | $       | 736,184   |  
|                                                                                                                            |                              |               |         |           |  

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

2





---

STANDARD COMMERCIAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS(In thousands, except per share information; unaudited)

|                                                             |                                    | Second quarter ended September 30 |         | Six months ended September 30 |  
|------------------------------------------------------------ | ---------------------------------- | --------------------------------- | ------- | ----------------------------- | -
|                                                             |                                    |                                   |         |                               |  
|                                                             |                                    | 2002                              |         | 2001                          |  
|                                                             |                                    |                                   |         |                               |  
|Sales     - tobacco                                          |                                    | $                                 | 203,715 |                               | $
|                                                             | - nontobacco                       |                                   |         | 35,729                        |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Total sales                        |                                   |         | 239,444                       |  
|Cost of sales    - materials, services and supplies          |                                    |                                   | 191,041 |                               |  
|                                                             | - interest                         |                                   |         | 4,493                         |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Gross profit                       |                                   |         | 43,910                        |  
|Selling, general and administrative expenses                 |                                    |                                   | 21,258  |                               |  
|Other interest expense                                       |                                    |                                   | 824     |                               |  
|Other income (expense)  net                                 |                                    |                                   | 1,209   |                               |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Income before taxes                |                                   |         | 23,037                        |  
|Income taxes                                                 |                                    |                                   | (7,792  | )                             |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Income after taxes                 |                                   |         | 15,245                        |  
|Equity in earnings of affiliates                             |                                    |                                   | 47      |                               |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Income from continuing operations  |                                   |         | 15,292                        |  
|Loss from discontinued operations, net of tax                |                                    |                                   | (212    | )                             |  
|Extraordinary gain (loss) due to buyback of debt, net of tax |                                    |                                   | 42      |                               |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Net income                         |                                   |         | 15,122                        |  
|Retained earnings at beginning of period                     |                                    |                                   | 136,888 |                               |  
|Common stock dividends                                       |                                    |                                   | (843    | )                             |  
|                                                             |                                    |                                   |         |                               |  
|Retained earnings at end of period                           |                                    | $                                 | 151,167 |                               | $
|                                                             |                                    |                                   |         |                               |  
|Earnings per common share                                    |                                    |                                   |         |                               |  
|Basic:                                                       |                                    |                                   |         |                               |  
|                                                             | From continuing operations         |                                   | $       | 1.13                          |  
|                                                             | From discontinued operations       |                                   |         | (0.01                         | )
|                                                             | Extraordinary item                 |                                   |         | 0.00                          |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Net                                |                                   | $       | 1.12                          |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Average shares outstanding         |                                   |         | 13,483                        |  
|Diluted:                                                     |                                    |                                   |         |                               |  
|                                                             | From continuing operations         |                                   | $       | 1.05                          |  
|                                                             | From discontinued operations       |                                   |         | (0.01                         | )
|                                                             | Extraordinary item                 |                                   |         | 0.00                          |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Net                                |                                   | $       | 1.04                          |  
|                                                             |                                    |                                   |         |                               |  
|                                                             | Average shares outstanding         |                                   |         | 15,100                        |  
|                                                             | Dividend declared per common share |                                   | $       | 0.0625                        |  
|                                                             |                                    |                                   |         |                               |  

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

3





---

STANDARD COMMERCIAL CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands; unaudited)

|                                                            |                                                                         | Six months ended September 30 |        
|----------------------------------------------------------- | ----------------------------------------------------------------------- | ----------------------------- | -------
|                                                            |                                                                         |                               |        
|                                                            |                                                                         | 2002                          |        
|                                                            |                                                                         |                               |        
|CASH FLOWS FROM OPERATING ACTIVITIES                        |                                                                         |                               |        
|Net income                                                  |                                                                         | $                             | 19,866 
|                                                            | Depreciation and amortization                                           |                               |        
|                                                            | Deferred income taxes                                                   |                               |        
|                                                            | Undistributed earnings (losses) of affiliates net of dividends received |                               |        
|                                                            | Loss (gain) on buyback of debts                                         |                               |        
|                                                            | Gain on disposition of property, plant and equipment                    |                               |        
|                                                            | Other                                                                   |                               |        
|                                                            |                                                                         |                               |        
|                                                            |                                                                         |                               | 28,972 
|Net changes in working capital other than cash              |                                                                         |                               |        
|                                                            | Receivables                                                             |                               |        
|                                                            | Inventories                                                             |                               |        
|                                                            | Current payables                                                        |                               |        
|                                                            | Discontinued operations                                                 |                               |        
|                                                            |                                                                         |                               |        
|CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES            |                                                                         |                               | (73,411
|                                                            |                                                                         |                               |        
|CASH FLOWS FROM INVESTING ACTIVITIES                        |                                                                         |                               |        
|Property, plant and equipment - additions                   |                                                                         |                               | (21,196
|                                                            | - dispositions                                                          |                               |        
|Business (acquisitions) dispositions                        |                                                                         |                               |       
|                                                            |                                                                         |                               |        
|CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES            |                                                                         |                               | (21,005
|                                                            |                                                                         |                               |        
|CASH FLOWS FROM FINANCING ACTIVITIES                        |                                                                         |                               |        
|Net change in short-term borrowings                         |                                                                         |                               | 93,848 
|Proceeds from long-term borrowings                          |                                                                         |                               | 6,641  
|Repayment of long-term borrowings                           |                                                                         |                               | (13,329
|Buyback of senior notes/convertible subordinated debentures |                                                                         |                               | (4,791 
|Dividends paid                                              |                                                                         |                               | (1,511 
|Other                                                       |                                                                         |                               | (145   
|                                                            |                                                                         |                               |        
|CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES            |                                                                         |                               | 80,713 
|                                                            |                                                                         |                               |        
|Decrease in cash for period                                 |                                                                         |                               | (13,703
|Cash at beginning of period                                 |                                                                         |                               | 29,000 
|                                                            |                                                                         |                               |        
|CASH AT END OF PERIOD                                       |                                                                         | $                             | 15,297 
|                                                            |                                                                         |                               |        
|Cash payments for - interest                                |                                                                         | $                             | 12,048 
|                                                            | - income taxes                                                          |                               | $      
|                                                            |                                                                         |                               |        

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

4





---

STANDARD COMMERCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The interim statements presented herein should be read in conjunction with the audited financial statements and notes thereto included in the Companys latest Annual Report on
Form 10-K. The interim period financial statements have been prepared by the Company without audit and contain all of the adjustments which are, in the opinion of the management, necessary for a fair statement of the results of operations. All such
adjustments are of normal, recurring nature and there were no material changes in accounting policies during the period ended September 30, 2002. Because of the nature of the Companys businesses, fluctuations in results for interim periods are
not necessarily indicative of business trends or results to be expected for other interim periods or a full year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | INVENTORIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|               |  | September 30 |         | March 31 |  
|-------------- |  | ------------ | ------- | -------- | -
|               |  |              |         |          |  
|(In thousands) |  |              | 2002    |          |  
|               |  |              |         |          |  
|Tobacco        |  | $            | 256,291 |          | $
|Nontobacco     |  |              | 55,608  |          |  
|               |  |              |         |          |  
|Total          |  | $            | 311,899 |          | $
|               |  |              |         |          |  

|3. | COMPREHENSIVE INCOME                                          
|-- | --------------------------------------------------------------
|   | The components of comprehensive income (loss) were as follows:

|                                                                               |  | Quarter ended September 30 |        | Six months ended September 30 |  
|------------------------------------------------------------------------------ |  | -------------------------- | ------ | ----------------------------- | -
|                                                                               |  |                            |        |                               |  
|(In thousands)                                                                 |  |                            | 2002   |                               |  
|                                                                               |  |                            |        |                               |  
|Net income                                                                     |  | $                          | 15,122 |                               | $
|Other comprehensive income:                                                    |  |                            |        |                               |  
|Translation adjustment                                                         |  |                            | (1,081 | )                             |  
|Cumulative effect of change in accounting for derivative financial instruments |  |                            |       |                               |  
|Derivative financial instruments                                               |  |                            | (119   | )                             |  
|                                                                               |  |                            |        |                               |  
|Total comprehensive income (loss)                                              |  | $                          | 13,922 |                               | $
|                                                                               |  |                            |        |                               |  

|4. | SEGMENT INFORMATION                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The Company is engaged in purchasing, processing and selling leaf tobacco and wool. Its activities other than these are minimal. Segment revenue and net income (loss) were as
follows:

|                  |            | Quarter ended September 30 |         | Six months ended September 30 |  
|----------------- | ---------- | -------------------------- | ------- | ----------------------------- | -
|                  |            |                            |         |                               |  
|(In thousands)    |            | 2002                       |         | 2001                          |  
|                  |            |                            |         |                               |  
|Sales             |            |                            |         |                               |  
|                  | Tobacco    |                            | $       | 203,715                       |  
|                  | Nontobacco |                            |         | 35,729                        |  
|                  |            |                            |         |                               |  
|                  |            | $                          | 239,444 |                               | $
|                  |            |                            |         |                               |  
|Net income (loss) |            |                            |         |                               |  
|                  | Tobacco    |                            | $       | 16,647                        |  
|                  | Nontobacco |                            |         | (1,525                        | )
|                  |            |                            |         |                               |  
|                  |            | $                          | 15,122  |                               | $
|                  |            |                            |         |                               |  

5





---

STANDARD COMMERCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|5. | EARNINGS PER SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Earnings per share has been presented in conformity with Statement of Financial Accounting Standards (SFAS) 128. The diluted earnings per share include the effect of the convertible
subordinated debentures which if converted would have increased the weighted average number of shares and net income applicable to common stock. The weighted number of shares were further increased by employee stock options.                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6. | DERIVATIVE FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On April 1, 2001 the Company adopted SFAS 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS 137 and SFAS 138. SFAS 133 establishes new
accounting and disclosure requirements for most derivative instruments and hedge transactions involving derivatives. SFAS 133 also requires formal documentation procedures for hedging relationships and effectiveness testing when hedge accounting is
to be applied.                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In accordance with the transition provisions of SFAS 133, in the six months ended September 30, 2001 the Company recorded a cumulative effect loss adjustment of $2.1 million, net of
applicable taxes, in other comprehensive income to recognize the fair value of all derivatives designated as cash flow hedging instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Companys derivative usage is principally foreign currency forwards. These contracts typically have maturities of less than one year. As a matter of policy, the Company does
not use derivative instruments unless there is an underlying exposure. The Companys foreign currency forwards have been designated and qualify as cash flow hedges under the criteria of SFAS 133.SFAS 133 requires that changes in fair values of
derivatives that qualify as cash flow hedges be recognized in other comprehensive income, while the ineffective portion of change in fair value of derivatives be recognized immediately in earnings. The fair value of the Companys foreign
currency forward contracts at September 30, 2002 was not material.                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | GOODWILL AND OTHER INTANGIBLE ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Financial Accounting Standards Board (FASB) issued SFAS 141, Business Combinations and 142 Goodwill and Other Intangible Assets. SFAS 141 requires the
purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 142 requires that upon adoption, amortization of goodwill cease and instead, the carrying value of goodwill be evaluated for impairment on an
annual basis. Identifiable intangible assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS 121 Accounting for Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed
Of. SFAS 142 is effective for fiscal years beginning after December 15, 2001. The Company adopted SFAS 142 on April 1, 2002.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In accordance with SFAS 142 the Company discontinued the amortization of goodwill effective April 1, 2002. A reconciliation of previously reported net income and earnings per share
to the amounts adjusted for the exclusion of goodwill amortization follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

6





---

STANDARD COMMERCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued

|                                  |  | Quarter ended September 30 |                            | Six months ended September 30 |  
|--------------------------------- |  | -------------------------- | -------------------------- | ----------------------------- | -
|                                  |  |                            |                            |                               |  
|(In thousands)                    |  | 2002                       |                            | 2001                          |  
|                                  |  |                            |                            |                               |  
|Reported net income               |  | $                          | 15,122                     |                               | $
|Add:  Goodwill amortization       |  |                            |                           |                               |  
|                                  |  |                            |                            |                               |  
|Adjusted net income               |  | $                          | 15,122                     |                               | $
|                                  |  |                            |                            |                               |  
|Reported basic income per share   |  | $                          | 1.12                       |                               | $
|Add:  Goodwill amortization       |  |                            |                           |                               |  
|                                  |  |                            |                            |                               |  
|Adjusted basic income per share   |  | $                          | 1.12                       |                               | $
|                                  |  |                            |                            |                               |  
|                                  |  |                            |                            |                               |  
|                                  |  |                            | Quarter ended September 30 |                               |  
|                                  |  |                            |                            |                               |  
|                                  |  |                            | 2002                       | 2001                          |  
|                                  |  |                            |                            |                               |  
|Reported diluted income per share |  | $                          | 1.04                       |                               | $
|Add:  Goodwill amortization       |  |                            |                           |                               |  
|                                  |  |                            |                            |                               |  
|Adjusted diluted income per share |  | $                          | 1.04                       |                               | $
|                                  |  |                            |                            |                               |  

The carrying amount of goodwill and other intangible assets for the quarter ended September 30, 2002 by operating segments, were as follows:

GOODWILL

|(In thousands)                          |  | Tobacco |       | Wool |   | Total | 
|--------------------------------------- |  | ------- | ----- | ---- | - | ----- | 
|                                        |  |         |       |      |   |       | 
|At April 1, 2002 and September 30, 2002 |  | $       | 9,003 |      | $ | 2,286 | 
|                                        |  |         |       |      |   |       | 

INTANGIBLES

|(In thousands)                   |  | Tobacco |       | Wool |  | Total | 
|-------------------------------- |  | ------- | ----- | ---- |  | ----- | 
|                                 |  |         |       |      |  |       | 
|At April 1, 2002                 |  | $       | 2,614 |      |  |      | 
|Additions                        |  |         | 1,298 |      |  |      | 
|Less amortization                |  |         | 677   |      |  |      | 
|                                 |  |         |       |      |  |       | 
|Balance as of September 30, 2002 |  | $       | 3,235 |      |  |      | 
|                                 |  |         |       |      |  |       | 

|8. | DISCONTINUED OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In August 2001, the FASB issued SFAS 144, Accounting for Impairment or Disposal of Long-Lived Assets. Under SFAS 144 a component of business that is held for sale is
reported in discontinued operations if the operations and cash flows will be, or have been eliminated from the on-going operations of the Company and the Company will not have any significant continuing involvement in such operations. The Company
adopted the provisions of SFAS 144 in the quarter ended March 31, 2002. During the same period the Company decided to close and dispose of wool units in South Africa, New Zealand and Argentina, and its specialty fibers business in Holland. Efforts
to sell the operations in South Africa and New Zealand and the trade assets of Argentina and specialty fibers units are progressing. The Company currently believes these transactions will be completed by March 31, 2003.

7





---

STANDARD COMMERCIAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Continued

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

|                                                                         |  | Quarter ended September 30 |        | Six months ended September 30 |  
|------------------------------------------------------------------------ |  | -------------------------- | ------ | ----------------------------- | -
|                                                                         |  |                            |        |                               |  
|(In thousands)                                                           |  | 2002                       |        | 2001                          |  
|                                                                         |  |                            |        |                               |  
|Revenues                                                                 |  | $                          | 14,754 |                               | $
|                                                                         |  |                            |        |                               |  
|                                                                         |  | September 30               |        |                               |  
|                                                                         |  |                            |        |                               |  
|(In thousands)                                                           |  |                            | 2002   |                               |  
|                                                                         |  |                            |        |                               |  
|Inventory                                                                |  | $                          | 4,619  |                               | $
|Receivables                                                              |  |                            | 4,936  |                               |  
|Other assets                                                             |  |                            | 2,364  |                               |  
|                                                                         |  |                            |        |                               |  
|Assets                                                                   |  |                            | 11,919 |                               |  
|Accounts payables and other liabilities                                  |  |                            | 4,082  |                               |  
|                                                                         |  |                            |        |                               |  
|Net assets available for sale                                            |  | $                          | 7,837  |                               | $
|                                                                         |  |                            |        |                               |  
|Debt guaranteed by the Company (not included in discontinued operations) |  | $                          | 9,450  |                               | $
|                                                                         |  |                            |        |                               |  
|                                                                         |  |                            |        |                               |  

|9.  | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements 4, 44 and 64, Amendment to FASB Statement 13, and Technical Corrections. One of the major changes
made by this Statement is to change the accounting for the classification of gains and losses from the extinguishment of debt. Upon adoption, the Company will follow APB 30, Reporting the Results of Operations-Reporting the Effects of Disposal
of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, in determining whether any extinguishment of debt may be classified as extraordinary. The provision of this statement related to the
rescission of FASB Statement 4 shall be applied in fiscal years beginning after May 15, 2002 with early application encouraged. The Company is currently evaluating the impact of this Statement.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS 146 addresses significant issues regarding the recognition,
measurement and reporting of costs associated with exit and disposal activities, including restructuring activities. SFAS 146 also addresses recognition of certain costs related to terminating a contract that is not a capital lease, costs to
consolidate facilities, relocate employees and provide benefits to employees who are involuntarily terminated under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation
contract. SFAS 146 was issued in June 2002 and is not yet effective. The impact on the Companys financial position and results of operations from adopting SFAS 146 has not been determined.    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|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.                                                                                                                                                                                         

8





---

STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING BALANCE SHEETSeptember 30, 2002 (In thousands; unaudited)

|                                            |                              | Standard Commercial Tobacco Co. Inc. (Issuer) |         | Standard Commercial Corporation (Guarantor) |   | Standard Wool Inc. (Guarantor) |         | Other Subsidiaries (Non- Guarantors) |         | Eliminations |   | Total   |        
|------------------------------------------- | ---------------------------- | --------------------------------------------- | ------- | ------------------------------------------- | - | ------------------------------ | ------- | ------------------------------------ | ------- | ------------ | - | ------- | -------
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Assets                                      |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Cash                                        |                              | $                                             |        |                                             | $ | 58                             |         | $                                    |        |              | $ | 15,239  |        
|Receivables                                 |                              |                                               | 24,408  |                                             |   | 14                             |         |                                      |        |              |   | 168,622 |        
|Intercompany receivables                    |                              |                                               | 132,248 |                                             |   | 33,667                         |         |                                      |        |              |   | 13,124  |        
|Inventories                                 |                              |                                               | 64,477  |                                             |   |                               |         |                                      |        |              |   | 247,422 |        
|Assets of discontinued operations           |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 11,919  |        
|Prepaids expenses                           |                              |                                               | 1,916   |                                             |   |                               |         |                                      |        |              |   | 5,001   |        
|Marketable securities                       |                              |                                               |        |                                             |   | 1                              |         |                                      |        |              |   | 1,018   |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Current assets               |                                               |         | 223,049                                     |   |                                | 33,740  |                                      |         |             |   |         | 462,345
|Property, plant and equipment               |                              |                                               | 34,120  |                                             |   |                               |         |                                      |        |              |   | 115,605 |        
|Investment in subsidiaries                  |                              |                                               | 141,498 |                                             |   | 227,893                        |         |                                      | 14,540  |              |   | 153,214 |        
|Investment in affiliates                    |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 9,560   |        
|Other noncurrent assets                     |                              |                                               | (68     | )                                           |   | 14,391                         |         |                                      |        |              |   | 22,481  |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total assets                 |                                               | $       | 398,599                                     |   | $                              | 276,024 |                                      | $       | 14,540       |   | $       | 763,205
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Liabilities                                 |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Short-term borrowings                       |                              | $                                             | 18,662  |                                             | $ |                               |         | $                                    |        |              | $ | 207,566 |        
|Current portion of long-term debt           |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 4,953   |        
|Accounts payable                            |                              |                                               | 13,903  |                                             |   | 1,009                          |         |                                      |        |              |   | 87,716  |        
|Liabilities of discontinued operations      |                              |                                               |        |                                             |   |                               |         |                                      |         |              |   | 4,082   |        
|Intercompany accounts payable               |                              |                                               | 45,505  |                                             |   | 20,827                         |         |                                      | 1,505   |              |   | 111,202 |        
|Taxes accrued                               |                              |                                               | 16,240  |                                             |   | (11,894                        | )       |                                      |        |              |   | 9,799   |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Current liabilities          |                                               |         | 94,310                                      |   |                                | 9,942   |                                      |         | 1,505        |   |         | 425,318
|Long-term debt                              |                              |                                               | 84,000  |                                             |   |                               |         |                                      |        |              |   | 11,977  |        
|Convertible subordinated debentures         |                              |                                               |        |                                             |   | 45,051                         |         |                                      |        |              |   |        |        
|Retirement and other benefits               |                              |                                               | 9,624   |                                             |   | 964                            |         |                                      |        |              |   | 10,067  |        
|Deferred taxes                              |                              |                                               | (1,710  | )                                           |   | (376                           | )       |                                      |        |              |   | 7,122   |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total liabilities            |                                               |         | 186,224                                     |   |                                | 55,581  |                                      |         | 1,505        |   |         | 454,484
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Minority interests                          |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 30      |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Shareholders equity                        |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Common stock                                |                              |                                               | 993     |                                             |   | 3,220                          |         |                                      | 32,404  |              |   | 166,240 |        
|Additional paid-in capital                  |                              |                                               | 130,860 |                                             |   | 108,260                        |         |                                      |        |              |   | 60,564  |        
|Unearned restricted stock plan compensation |                              |                                               | (861    | )                                           |   | (613                           | )       |                                      |        |              |   | (2,183  | )      
|Treasury stock at cost                      |                              |                                               |        |                                             |   | (4,250                         | )       |                                      |        |              |   |        |        
|Retained earnings                           |                              |                                               | 99,369  |                                             |   | 151,167                        |         |                                      | (13,765 | )            |   | 121,124 |        
|Accumulated other comprehensive income      |                              |                                               | (17,986 | )                                           |   | (37,341                        | )       |                                      | (5,604  | )            |   | (37,054 | )      
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total shareholders equity   |                                               |         | 212,375                                     |   |                                | 220,443 |                                      |         | 13,035       |   |         | 308,691
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total liabilities and equity |                                               | $       | 398,599                                     |   | $                              | 276,024 |                                      | $       | 14,540       |   | $       | 763,205
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        

9





---

STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGSSecond quarter ended September 30, 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                                                      |                                    | $                                             | 63,365 |                                             | $ |                               |         | $                                    |        |              | $ | 258,375 |        
|Cost of sales:                                             |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|Materials services and supplies                            |                                    |                                               | 51,752 |                                             |   |                               |         |                                      |        |              |   | 221,585 |        
|Interest                                                   |                                    |                                               | 302    |                                             |   |                               |         |                                      |        |              |   | 4,191   |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Gross profit                       |                                               |        | 11,311                                      |   |                                |        |                                      |         |             |   |         | 32,599 
|Selling, general & administrative expenses                 |                                    |                                               | 4,553  |                                             |   | 1,897                          |         |                                      |        |              |   | 14,808  |        
|Other interest expense                                     |                                    |                                               | 1,864  |                                             |   | 815                            |         |                                      |        |              |   | (1,855  | )      
|Other income (expense) net                                 |                                    |                                               | (1,876 | )                                           |   | 4,233                          |         |                                      |        |              |   | (1,148  | )      
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Income (loss) before taxes         |                                               |        | 3,018                                       |   |                                | 1,521   |                                      |         |             |   |         | 18,498 
|Income taxes                                               |                                    |                                               | 1,350  |                                             |   | 487                            |         |                                      |        |              |   | 5,955   |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Income (loss) after taxes          |                                               |        | 1,668                                       |   |                                | 1,034   |                                      |         |             |   |         | 12,543 
|Equity in earnings of affiliates                           |                                    |                                               |       |                                             |   |                               |         |                                      |        |              |   | 47      |        
|Equity in earnings of subsidiaries                         |                                    |                                               | 13,902 |                                             |   | 14,258                         |         |                                      | (1,312  | )            |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Income from continuing operations  |                                               |        | 15,570                                      |   |                                | 15,292  |                                      |         | (1,312       | ) |         | 12,590 
|Discontinued operations                                    |                                    |                                               |       |                                             |   | (212                           | )       |                                      | (212    | )            |   | (212    | )      
|Extraordinary gain (loss) due to buyback of long-term debt |                                    |                                               |       |                                             |   | 42                             |         |                                      |        |              |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|Net income                                                 |                                    |                                               | 15,570 |                                             |   | 15,122                         |         |                                      | (1,524  | )            |   | 12,378  |        
|Retained earnings at beginning of period                   |                                    |                                               | 83,799 |                                             |   | 136,888                        |         |                                      | (12,241 | )            |   | 108,746 |        
|Common stock dividends                                     |                                    |                                               |       |                                             |   | (843                           | )       |                                      |        |              |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Retained earnings at end of period |                                               | $      | 99,369                                      |   | $                              | 151,167 |                                      | $       | (13,765      | ) | $       | 121,124
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        

10





---

STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGSSix months ended September 30, 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                                                      |                                    | $                                             | 97,515 |                                             | $ |                               |         | $                                    |        |              | $ | 495,282 |        
|Cost of sales:                                             |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|Materials services and supplies                            |                                    |                                               | 78,506 |                                             |   |                               |         |                                      |        |              |   | 431,055 |        
|Interest                                                   |                                    |                                               | 350    |                                             |   |                               |         |                                      |        |              |   | 7,496   |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Gross profit                       |                                               |        | 18,659                                      |   |                                |        |                                      |         |             |   |         | 56,731 
|Selling, general & administrative expenses                 |                                    |                                               | 6,907  |                                             |   | 3,237                          |         |                                      | 1       |              |   | 30,509  |        
|Other interest expense                                     |                                    |                                               | 3,728  |                                             |   | 1,692                          |         |                                      |        |              |   | (3,324  | )      
|Other income (expense) net                                 |                                    |                                               | 79     |                                             |   | 4,193                          |         |                                      |        |              |   | (2,198  | )      
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Income (loss) before taxes         |                                               |        | 8,103                                       |   |                                | (736    | )                                    |         | (1           | ) |         | 27,348 
|Income taxes                                               |                                    |                                               | 3,079  |                                             |   | (280                           | )       |                                      |        |              |   | 11,035  |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Income (loss) after taxes          |                                               |        | 5,024                                       |   |                                | (456    | )                                    |         | (1           | ) |         | 16,313 
|Equity in earnings of affiliates                           |                                    |                                               |       |                                             |   |                               |         |                                      |        |              |   | (26     | )      
|Equity in earnings of subsidiaries                         |                                    |                                               | 18,450 |                                             |   | 21,310                         |         |                                      | (2,163  | )            |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Income from continuing operations  |                                               |        | 23,474                                      |   |                                | 20,854  |                                      |         | (2,164       | ) |         | 16,287 
|Discontinued operations                                    |                                    |                                               |       |                                             |   | (1,135                         | )       |                                      | (1,135  | )            |   | (1,135  | )      
|Extraordinary gain (loss) due to buyback of long-term debt |                                    |                                               |       |                                             |   | 147                            |         |                                      |        |              |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Net income                         |                                               |        | 23,474                                      |   |                                | 19,866  |                                      |         | (3,299       | ) |         | 15,152 
|Retained earnings at beginning of period                   |                                    |                                               | 75,895 |                                             |   | 132,812                        |         |                                      | (10,466 | )            |   | 106,426 |        
|Common stock dividends                                     |                                    |                                               |       |                                             |   | (1,511                         | )       |                                      |        |              |   | (454    | )      
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        
|                                                           | Retained earnings at end of period |                                               | $      | 99,369                                      |   | $                              | 151,167 |                                      | $       | (13,765      | ) | $       | 121,124
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |         |              |   |         |        

11





---

STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWSSix months ended September 30, 2002 (In thousands; unaudited)

|                                                |             | Standard Commercial Tobacco Co. Inc. (Issuer) |         | Standard Commercial Corporation (Guarantor) |   | Standard Wool Inc. (Guarantor) |   | Other Subsidiaries (Non- Guarantors) |      | Eliminations |   | Total   |       
|----------------------------------------------- | ----------- | --------------------------------------------- | ------- | ------------------------------------------- | - | ------------------------------ | - | ------------------------------------ | ---- | ------------ | - | ------- | ------
|                                                |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Cash provided by (used in) operating activities |             | $                                             | 7,086   |                                             | $ | 6,426                          |   | $                                    | (123 | )            |   | (86,800 | )     
|Cash flows from investing activities            |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Property, plant and equipment                   |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|                                                | - additions |                                               |         | (16,368                                     | ) |                                |  |                                      |      |             |   |         | (4,828
|                                                | - disposals |                                               |         | 3                                           |   |                                |  |                                      |      |             |   |         | 188   
|Business (acquisitions) dispositions            |             |                                               |        |                                             |   |                               |   |                                      |     |              |   |        |       
|                                                |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Cash provided by (used in) investing activities |             |                                               | (16,365 | )                                           |   |                               |   |                                      |     |              |   | (4,640  | )     
|Cash flows from financing activities:           |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Proceeds from long-term borrowings              |             |                                               |        |                                             |   |                               |   |                                      |     |              |   | 6,641   |       
|Repayment of long-term borrowings               |             |                                               |        |                                             |   |                               |   |                                      |     |              |   | (13,329 | )     
|Net change in short-term borrowings             |             |                                               | 6,744   |                                             |   |                               |   |                                      |     |              |   | 87,104  |       
|Buyback of long-term debt                       |             |                                               |        |                                             |   | (4,791                         | ) |                                      |     |              |   |        |       
|Dividends received /(paid)                      |             |                                               |        |                                             |   | (1,511                         | ) |                                      |     |              |   |        |       
|Other                                           |             |                                               |        |                                             |   | (145                           | ) |                                      |     |              |   |        |       
|                                                |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Cash provided by (used in) financing activities |             |                                               | 6,744   |                                             |   | (6,447                         | ) |                                      |     |              |   | 80,416  |       
|Increase (decrease) in cash for year            |             |                                               | (2,535  | )                                           |   | (21                            | ) |                                      | (123 | )            |   | (11,024 | )     
|Cash at beginning of year                       |             |                                               | 2,535   |                                             |   | 79                             |   |                                      | 123  |              |   | 26,263  |       
|                                                |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Cash at end of period                           |             | $                                             |        |                                             | $ | 58                             |   | $                                    |     |              | $ | 15,239  |       
|                                                |             |                                               |         |                                             |   |                                |   |                                      |      |              |   |         |       
|Interest                                        |             | $                                             | 5,092   |                                             | $ | 1,692                          |   | $                                    |     |              | $ | 5,264   |       
|Income taxes                                    |             |                                               | 916     |                                             |   | 2,936                          |   |                                      |     |              |   | 5,860   |       

12





---

STANDARD COMMERCIAL CORPORATIONSUPPLEMENTAL COMBINING BALANCE SHEETSeptember 30, 2001 (In thousands; unaudited)

|                                            |                              | Standard Commercial Tobacco Co. Inc. (Issuer) |         | Standard Commercial Corporation (Guarantor) |   | Standard Wool Inc. (Guarantor) |         | Other Subsidiaries (Non- Guarantors) |         | Eliminations |   | Total   |        
|------------------------------------------- | ---------------------------- | --------------------------------------------- | ------- | ------------------------------------------- | - | ------------------------------ | ------- | ------------------------------------ | ------- | ------------ | - | ------- | -------
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Assets                                      |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Cash                                        |                              | $                                             | 7,010   |                                             | $ |                               |         | $                                    | 78      |              | $ | 15,467  |        
|Receivables                                 |                              |                                               | 11,657  |                                             |   | 14                             |         |                                      | 7       |              |   | 185,102 |        
|Intercompany receivables                    |                              |                                               | 146,183 |                                             |   | 2,077                          |         |                                      | 35      |              |   | 30,744  |        
|Inventories                                 |                              |                                               | 83,125  |                                             |   |                               |         |                                      |        |              |   | 198,442 |        
|Assets of discontinued operations           |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 23,929  |        
|Prepaids expenses                           |                              |                                               | 109     |                                             |   |                               |         |                                      | 1       |              |   | 4,109   |        
|Marketable securities                       |                              |                                               |        |                                             |   | 1                              |         |                                      |        |              |   | 553     |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Current assets               |                                               |         | 248,084                                     |   |                                | 2,092   |                                      |         | 121          |   |         | 458,346
|Property, plant and equipment               |                              |                                               | 20,956  |                                             |   |                               |         |                                      | 11      |              |   | 112,210 |        
|Investment in subsidiaries                  |                              |                                               | 116,520 |                                             |   | 219,498                        |         |                                      | 25,742  |              |   | 149,262 |        
|Investment in affiliates                    |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 9,911   |        
|Other noncurrent assets                     |                              |                                               | 32      |                                             |   | 9,829                          |         |                                      |        |              |   | 26,174  |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total assets                 |                                               | $       | 385,592                                     |   | $                              | 231,419 |                                      | $       | 25,874       |   | $       | 755,903
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Liabilities                                 |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Short-term borrowings                       |                              | $                                             |        |                                             | $ | 99                             |         | $                                    |        |              | $ | 149,535 |        
|Current portion of long-term debt           |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 10,269  |        
|Accounts payable                            |                              |                                               | 22,547  |                                             |   | 800                            |         |                                      | 7       |              |   | 120,782 |        
|Liabilities of discontinued operations      |                              |                                               |        |                                             |   |                               |         |                                      |         |              |   | 3,070   |        
|Intercompany accounts payable               |                              |                                               | 36,440  |                                             |   | 1,548                          |         |                                      | 1,590   |              |   | 139,461 |        
|Taxes accrued                               |                              |                                               | 12,850  |                                             |   | (8,432                         | )       |                                      |        |              |   | 6,812   |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Current liabilities          |                                               |         | 71,837                                      |   |                                | (5,985  | )                                    |         | 1,597        |   |         | 429,929
|Long-term debt                              |                              |                                               | 113,000 |                                             |   |                               |         |                                      |        |              |   | 15,144  |        
|Convertible subordinated debentures         |                              |                                               |        |                                             |   | 51,652                         |         |                                      |        |              |   |        |        
|Retirement and other benefits               |                              |                                               | 9,599   |                                             |   | 873                            |         |                                      |        |              |   | 9,464   |        
|Deferred taxes                              |                              |                                               | (1,302  | )                                           |   | (1,619                         | )       |                                      |        |              |   | 9,080   |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total liabilities            |                                               |         | 193,134                                     |   |                                | 44,921  |                                      |         | 1,597        |   |         | 463,617
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Minority interests                          |                              |                                               |        |                                             |   |                               |         |                                      |        |              |   | 50      |        
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Shareholders equity                        |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|Common stock                                |                              |                                               | 993     |                                             |   | 3,191                          |         |                                      | 32,404  |              |   | 167,040 |        
|Additional paid-in capital                  |                              |                                               | 130,860 |                                             |   | 105,444                        |         |                                      |        |              |   | 58,106  |        
|Unearned restricted stock plan compensation |                              |                                               | (684    | )                                           |   | (400                           | )       |                                      | (13     | )            |   | (1,354  | )      
|Treasury stock at cost                      |                              |                                               |        |                                             |   | (4,250                         | )       |                                      |        |              |   |        |        
|Retained earnings                           |                              |                                               | 82,430  |                                             |   | 129,801                        |         |                                      | 4,729   |              |   | 115,732 |        
|Accumulated other comprehensive income      |                              |                                               | (21,141 | )                                           |   | (47,288                        | )       |                                      | (12,843 | )            |   | (47,288 | )      
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total shareholders equity   |                                               |         | 192,458                                     |   |                                | 186,498 |                                      |         | 24,277       |   |         | 292,236
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        
|                                            | Total liabilities and equity |                                               | $       | 385,592                                     |   | $                              | 231,419 |                                      | $       | 25,874       |   | $       | 755,903
|                                            |                              |                                               |         |                                             |   |                                |         |                                      |         |              |   |         |        

13





---

STANDARD COMMERCIAL CORPORATIONSUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGSSecond Quarter ended September 30, 2001 (In thousands;
unaudited)

|                                                           |                                    | Standard Commercial Tobacco Co. Inc. (Issuer) |        | Standard Commercial Corporation (Guarantor) |   | Standard Wool Inc. (Guarantor) |         | Other Subsidiaries (Non- Guarantors) |       | Eliminations |   | Total   |        
|---------------------------------------------------------- | ---------------------------------- | --------------------------------------------- | ------ | ------------------------------------------- | - | ------------------------------ | ------- | ------------------------------------ | ----- | ------------ | - | ------- | -------
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|Sales                                                      |                                    | $                                             | 62,065 |                                             | $ |                               |         | $                                    | 37    |              | $ | 266,567 |        
|Cost of sales:                                             |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|Materials services and supplies                            |                                    |                                               | 52,381 |                                             |   |                               |         |                                      |      |              |   | 229,203 |        
|Interest                                                   |                                    |                                               | 837    |                                             |   |                               |         |                                      |      |              |   | 4,142   |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           | Gross profit                       |                                               |        | 8,847                                       |   |                                |        |                                      |       | 37           |   |         | 33,222 
|Selling, general & administrative expenses                 |                                    |                                               | 3,644  |                                             |   | 1,683                          |         |                                      | 49    |              |   | 11,053  |        
|Other interest expense                                     |                                    |                                               | 2,825  |                                             |   | 978                            |         |                                      |      |              |   | (1,095  | )      
|Other income (expense) net                                 |                                    |                                               | (5,264 | )                                           |   | 4,001                          |         |                                      |      |              |   | 2,143   |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           | Income (loss) before taxes         |                                               |        | (2,886                                      | ) |                                | 1,340   |                                      |       | (12          | ) |         | 25,407 
|Income taxes                                               |                                    |                                               | (4,444 | )                                           |   | 460                            |         |                                      |      |              |   | 14,592  |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           | Income (loss) after taxes          |                                               |        | 1,558                                       |   |                                | 880     |                                      |       | (12          | ) |         | 10,815 
|Equity in earnings of affiliates                           |                                    |                                               |       |                                             |   |                               |         |                                      |      |              |   | 106     |        
|Equity in earnings of subsidiaries                         |                                    |                                               | 11,455 |                                             |   | 12,450                         |         |                                      | (534  | )            |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           | Income from continuing operations  |                                               |        | 13,013                                      |   |                                | 13,330  |                                      |       | (546         | ) |         | 10,921 
|Discontinued operations                                    |                                    |                                               |       |                                             |   | (969                           | )       |                                      | (969  | )            |   | (969    | )      
|Extraordinary gain (loss) due to buyback of long-term debt |                                    |                                               | (17    | )                                           |   |                               |         |                                      |      |              |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           | Net income                         |                                               |        | 12,996                                      |   |                                | 12,361  |                                      |       | (1,515       | ) |         | 9,952  
|Retained earnings at beginning  of period                  |                                    |                                               | 69,434 |                                             |   | 118,107                        |         |                                      | 6,244 |              |   | 105,780 |        
|Common stock dividends                                     |                                    |                                               |       |                                             |   | (667                           | )       |                                      |      |              |   |        |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           | Retained earnings at end of period |                                               | $      | 82,430                                      |   | $                              | 129,801 |                                      | $     | 4,729        |   | $       | 115,732
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        
|                                                           |                                    |                                               |        |                                             |   |                                |         |                                      |       |              |   |         |        

14





---

STANDARD COMMERCIAL CORPORATIONSUPPLEMENTAL COMBINING STATEMENT OF INCOME AND RETAINED EARNINGSSix months ended September 30, 2001 (In thousands;
unaudited)

|                                                           |                                    | Standard Commercial Tobacco Co. Inc. (Issuer) |         | Standard Commercial Corporation (Guarantor) |   | Standard Wool Inc. (Guarantor) |         | Other Subsidiaries (Non- Guarantors) |        | Eliminations |   | Total   |        
|---------------------------------------------------------- | ---------------------------------- | --------------------------------------------- | ------- | ------------------------------------------- | - | ------------------------------ | ------- | ------------------------------------ | ------ | ------------ | - | ------- | -------
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|Sales                                                      |                                    | $                                             | 109,716 |                                             | $ |                               |         | $                                    | 82     |              |   | 495,144 |        
|Cost of sales:                                             |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|Materials services and supplies                            |                                    |                                               | 91,827  |                                             |   |                               |         |                                      |       |              |   | 434,850 |        
|Interest                                                   |                                    |                                               | 2,401   |                                             |   |                               |         |                                      |       |              |   | 7,804   |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|                                                           | Gross profit                       |                                               |         | 15,488                                      |   |                                |        |                                      |        | 82           |   |         | 52,490 
|Selling, general & administrative expenses                 |                                    |                                               | 6,302   |                                             |   | 3,114                          |         |                                      | 100    |              |   | 24,884  |        
|Other interest expense                                     |                                    |                                               | 4,711   |                                             |   | 1,983                          |         |                                      |       |              |   | (2,083  | )      
|Other income (expense) net                                 |                                    |                                               | (2,983  | )                                           |   | 4,390                          |         |                                      |       |              |   | 647     |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|                                                           | Income (loss) before taxes         |                                               |         | 1,492                                       |   |                                | (707    | )                                    |        | (18          | ) |         | 30,336 
|Income taxes                                               |                                    |                                               | (2,955  | )                                           |   | (240                           | )       |                                      |       |              |   | 17,320  |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|Income (loss) after taxes                                  |                                    |                                               | 4,447   |                                             |   | (467                           | )       |                                      | (18    | )            |   | 13,016  |        
|Equity in earnings of affiliates                           |                                    |                                               |        |                                             |   |                               |         |                                      |       |              |   | 120     |        
|Equity in earnings of subsidiaries                         |                                    |                                               | 13,512  |                                             |   | 17,548                         |         |                                      | (376   | )            |   |        |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|                                                           | Income from continuing operations  |                                               |         | 17,959                                      |   |                                | 17,081  |                                      |        | (394         | ) |         | 13,136 
|Discontinued operations                                    |                                    |                                               |        |                                             |   | (1,630                         | )       |                                      | (1,630 | )            |   | (1,630  | )      
|Extraordinary gain (loss) due to buyback of long-term debt |                                    |                                               | (17     | )                                           |   |                               |         |                                      |       |              |   |        |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|                                                           | Net income                         |                                               |         | 17,942                                      |   |                                | 15,451  |                                      |        | (2,024       | ) |         | 11,506 
|Retained earnings at beginning of period                   |                                    |                                               | 64,488  |                                             |   | 115,680                        |         |                                      | 6,753  |              |   | 104,226 |        
|Common stock dividends                                     |                                    |                                               |        |                                             |   | (1,330                         | )       |                                      |       |              |   |        |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|                                                           | Retained earnings at end of period |                                               | $       | 82,430                                      |   | $                              | 129,801 |                                      | $      | 4,729        |   | $       | 115,732
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        
|                                                           |                                    |                                               |         |                                             |   |                                |         |                                      |        |              |   |         |        

15





---

STANDARD COMMERCIAL CORPORATION SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWSSix months ended September 30, 2001 (In thousands; unaudited)

|                                                |             | Standard Commercial Tobacco Co. Inc. (Issuer) |        | Standard Commercial Corporation (Guarantor) |   | Standard Wool Inc. (Guarantor) |   | Other Subsidiaries (Non- Guarantors) |    | Eliminations |   | Total   |       
|----------------------------------------------- | ----------- | --------------------------------------------- | ------ | ------------------------------------------- | - | ------------------------------ | - | ------------------------------------ | -- | ------------ | - | ------- | ------
|                                                |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Cash provided by (used in) operating activities |             | $                                             | 11,906 |                                             | $ |                               |   | $                                    | 34 |              |   | (12,901 | )     
|Cash flows from investing activities            |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Property, plant and equipment                   |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|                                                | - additions |                                               |        | (2,778                                      | ) |                                |  |                                      |    |             |   |         | (4,377
|                                                | - disposals |                                               |        | 7                                           |   |                                |  |                                      |    |             |   |         | 361   
|Business (acquisitions) dispositions            |             |                                               |       |                                             |   |                               |   |                                      |   |              |   | 44      |       
|                                                |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Cash provided by (used in) investing activities |             |                                               | (2,771 | )                                           |   |                               |   |                                      |   |              |   | (3,972  | )     
|Cash flows from financing activities:           |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Proceeds from long-term borrowings              |             |                                               |       |                                             |   |                               |   |                                      |   |              |   | 4,850   |       
|Repayment of long-term borrowings               |             |                                               |       |                                             |   |                               |   |                                      |   |              |   | (8,810  | )     
|Net change in short-term borrowings             |             |                                               | (656   | )                                           |   | 66                             |   |                                      |   |              |   | (1,378  | )     
|Buyback of long-term debt                       |             |                                               | (2,017 | )                                           |   |                               |   |                                      |   |              |   |        |       
|Dividends received /(paid)                      |             |                                               |       |                                             |   | (1,330                         | ) |                                      |   |              |   |        |       
|Other                                           |             |                                               |       |                                             |   | 1,264                          |   |                                      |   |              |   | (3      | )     
|                                                |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Cash provided by (used in) financing activities |             |                                               | (2,673 | )                                           |   |                               |   |                                      |   |              |   | (5,341  | )     
|Increase (decrease) in cash for year            |             |                                               | 6,462  |                                             |   |                               |   |                                      | 34 |              |   | (22,214 | )     
|Cash at beginning of year                       |             |                                               | 548    |                                             |   |                               |   |                                      | 44 |              |   | 37,681  |       
|                                                |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Cash at end of period                           |             | $                                             | 7,010  |                                             | $ |                               |   | $                                    | 78 |              | $ | 15,467  |       
|                                                |             |                                               |        |                                             |   |                                |   |                                      |    |              |   |         |       
|Interest                                        |             | $                                             | 5,139  |                                             | $ | 1,872                          |   | $                                    |   |              | $ | 6,730   |       
|Income taxes                                    |             |                                               | 650    |                                             |   | 3,650                          |   |                                      |   |              |   | 6,248   |       

16





---

ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

| | Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sales for the quarter ended September 30, 2002 were $239.4 million, an increase of 1.2% from a year earlier.  Sales for the six-month period were $437.6 million, a decrease of
2.3% from same period in the prior year. Tobacco division sales for the quarter of $203.7 million were essentially level with the corresponding period in 2001. Sales for the six months were down 4.4% from $373.3 million to $356.9 million because the
prior year included more shipments of higher priced U.S. tobacco.  Processing revenue for the current quarter and six months increased over 50% from the same prior year periods mainly due to the contributions from the recently acquired
processing facility in the United States.  The volume of tobacco sold during the current quarter was slightly higher than the same prior year quarter. The volume sold for the six months was 2.6% lower than the same prior year period mainly due
to lower shipments from North America, CIS and Europe. To certain extent the decrease in volume was offset by increased shipments from the Far East, South America and Africa. The average tobacco selling price during the quarter and six months was
lower than the corresponding periods in fiscal 2001. Nontobacco sales of $35.7 million and $80.7 million for the current quarter and six months, respectively, were up 6.0% and 8.3% from the same periods a year earlier primarily due to higher wool
prices. Wool demand and prices have been erratic in recent months due to uncertain consumer demand for textile goods and spinners efforts to adjust their wool/synthetic blends in reaction to relatively high wool prices.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Gross profit for the quarter and six months of $43.9 million and $75.4 million improved 4.3% and 10.8% from the corresponding periods in fiscal 2001, due primarily to increased
processing revenues, contribution from the new processing facility in Argentina and sales mix. The gross profit from nontobacco was 53% and 33% lower than prior year periods due primarily to difficult trading conditions in Europe. Total interest
expense was $2.4 million and $4.9 million lower than the corresponding quarter and six months periods in fiscal 2001 due to the Companys debt repurchase program and lower rates on short-term borrowings. Selling, general and administrative
expenses increased due primarily to the first time inclusion of the recently acquired tobacco leaf processing facilities in the United States and Argentina, higher insurance, legal and professional fees and normal inflationary increases. Other
income for the current quarter was $1.2 million versus $0.9 million during the same prior year period. The increase was mainly due to increase in interest income and insurance recoveries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The effective tax rate decreased to 33.8% and 39.9% in the current second quarter and six months from 44.5% and 45.4% in the corresponding periods a year earlier. This was due to
differences in tax rates and relief available in some areas where profits are earned and losses are incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Income from continuing operations for the quarter and six months were $15.3 million and $20.9 million, respectively, versus $13.3 million and $17.1 million in the prior year periods.
Net income for the quarter was $15.1 million, or $1.12 and $1.04 per share on a basic and diluted basis, respectively, versus $12.4 million, or $0.93 and $0.86 share on  basic and diluted basis for the corresponding prior year period. For the
six-month period, net income was $19.9 million, or $1.48 and $1.39 per share on a basic and diluted basis, respectively, versus $15.5 million, or $1.16 and $1.10 per share on a basic and diluted basis in the prior year period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Working capital at September 30, 2002 was $188.1 million, compared to $211.3 million a year earlier. Most of the decrease was due to the buy-back of $36.6 million of publicly traded
debt and a net reduction of $2.2 million long- term borrowings. Capital expenditures of $21.2 million during the current six months consisted of $20.9 million in the tobacco division and $0.3 million in the wool division. The tobacco division
expenditures included the purchase of the leaf processing assets of Export Leaf Tobacco in the United States and routine expenditures. Cash used in the operating activities during the six months totaled $73.4 million mainly due to the seasonal
increase in inventories, receivables and decrease in payables. The Company continues to closely monitor its inventory levels, which fluctuate, depending on seasonal factors and timing of customer intake of inventories. Since September 30, 2002 the
Company completed its current $20 million open market debt buyback program announced in August of this year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

17





---

STANDARD COMMERCIAL CORPORATIONMANAGEMENTS DISCUSSION AND ANALYSIS OF    RESULTS OF OPERATIONS AND FINANCIAL CONDITION(continued)

|                                 | On August 26, 2002 the Companys major tobacco subsidiaries amended their global revolving bank credit facility. The facility was decreased from $230.0 million to $210.0
million. The maturity date has been extended from July 31, 2003 to July 31, 2005. Financial covenants and other terms and conditions are essentially unchanged. Borrowings under the facility continue to be guaranteed by the Company and are secured by
substantially all of the assets of the borrowers. Certain debt agreements to which the Company and its subsidiaries are parties contain financial covenants that could restrict the payment of cash dividends.  Under its most restrictive covenant,
the Company had approximately $24.3 million of retained earnings available for distribution as dividends at September 30, 2002.
|-------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                 | Based on the outlook for the business for the next twelve months, management anticipates that it will be able to service the interest and principal on its indebtedness, maintain
adequate working capital and provide for capital expenditures out of operating cash flow and available borrowings under its credit facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                 | Forward-Looking Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                 | Statements in this report that are not purely statements of historical fact may be deemed to be forward-looking.  Readers are cautioned that any such forward-looking statements
are based upon managements current knowledge and assumptions, and actual results could be affected in a material way by many factors, including ones over which the Company has little or no control, e.g. trading conditions; unforeseen changes
in shipping schedules; the balance between supply and demand; and market, economic, political and weather conditions.  More information regarding certain of these factors is contained in the Companys other SEC filings, copies of which are
available upon request from the Company.  The Company assumes no obligation to update any of these forward-looking statements.      
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Item 4.  Controls and Procedures
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                 | (a)  Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon that
evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures are effective.                                                                                                                                                                                                                                   
|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                 | (b)  There have been no significant changes in the Companys internal controls or in other factors that could significantly affect these controls subsequent to the date of
the evaluation described above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

18





---

PART II - OTHER INFORMATION

|Item 3.  Legal Proceedings
|--------------------------
|                          
|                          
|                          
|                          
|                          
|                          
|                          
|Item 4.                   
|                          
|                          
|                          
|                          

|Nominee            |  |  | Votes For  |  |  | Votes Withheld | 
|------------------ |  |  | ---------- |  |  | -------------- | 
|                   |  |  |            |  |  |                | 
|Robert E. Harrison |  |  | 10,990,976 |  |  | 1,672,174      | 
|William A. Ziegler |  |  | 12,569,384 |  |  | 93,766         | 

19





---

PART II - OTHER INFORMATION (continued)

| |  | c. | One person nominated by management was elected as director for term expiring in 2004, as follows:
| |  | -- | -------------------------------------------------------------------------------------------------

|Nominee          |  |  | Votes For  |  |  | Votes Withheld | 
|---------------- |  |  | ---------- |  |  | -------------- | 
|                 |  |  |            |  |  |                | 
|Robert A. Sheets |  |  | 12,605,048 |  |  | 58,102         | 

|        |                                  |                                                                                                                                                                                                  | In addition the following directors remained in office after the meeting:  J.Alec G. Murray; Daniel M. Sullivan; B. Clyde Preslar; Mark W. Kehaya; William S. Barrack, Jr.; and
William S. Sheridan.     
|------- | -------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  | d.                                                                                                                                                                                               | The appointment of Deloitte & Touche LLP as the Companys independent auditors for fiscal 2003 was approved by a vote of 12,466,304 shares in favor, 84,290 shares against
and 112,556 shares abstaining.
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|Item 5  | OTHER INFORMATION               
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  | The Companys Audit Committee has approved for Deloitte & Touche, LLP, the independent auditors of the Company, to provide normal tax return review services for
the Company during fiscal 2003.
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|Item 6. | EXHIBITS AND REPORTS ON FORM 8-K
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  | a.                                                                                                                                                                                               | The following exhibit is filed as a part of this report:                                                                                                                                                 
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  |                                                                                                                                                                                                  | 4 (i) Seventh Supplemental Agreement dated  August 26, 2002 between the Company and certain subsidiaries and Deutsche Bank A.G. et al.                                                                   
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  |                                                                                                                                                                                                  | 11 Computation of Earnings per Common Share.                                                                                                                                                             
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  |                                                                                                                                                                                                  | 99 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                             
|        |                                  |                                                                                                                                                                                                  |                                                                                                                                                                                                          
|        |                                  | b.                                                                                                                                                                                               | The Company filed a Current Report on Form 8-K on August 14, 2002 announcing an increase in its cash dividend and a debt buy-back program..                                                              

20





---

SIGNATURES

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

|Date: November 8, 2002. |    |                                                           
|----------------------- | -- | ----------------------------------------------------------
|                        |    | STANDARD COMMERCIAL CORPORATION                           
|                        |    | (Registrant)                                              
|                        |    |                                                           
|                        |    |                                                           
|                        | By | /s/ ROBERT E HARRISON                                     
|                        |    |                                                           
|                        |    | Robert E Harrison President, Chief Executive Officer      
|                        |    |                                                           
|                        |    |                                                           
|                        | By | /s/ ROBERT A SHEETS                                       
|                        |    |                                                           
|                        |    | Robert A Sheets Vice President and Chief Financial Officer

21





---

CERTIFICATION

Securities Exchange Act
Rule 13a-14 adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002:

I, Robert E. Harrison, certify that:

|                        | 1. | I have reviewed this quarterlyreport on Form10-Q of Standard Commercial Corporation;                                                                                                                                                                                                                                                                                                     
|----------------------- | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        | 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;                                                  
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        | 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations of the issuer as of, and for, the periods presented in this quarterly report;                                                                                                 
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        | 4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                                                                                   
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        | 5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent functions):                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        | 6. | The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|Date:  November 8, 2002 |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        | By | /s/ ROBERT E HARRISON                                                                                                                                                                                                                                                                                                                                                                    
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          
|                        |    | Robert E Harrison President, Chief Executive Officer                                                                                                                                                                                                                                                                                                                                     
|                        |    |                                                                                                                                                                                                                                                                                                                                                                                          

22





---

CERTIFICATION

Securities
Exchange Act Rule 13a-14 adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002:

I, Robert A. Sheets, certify that:

|                       | 1.  | I have reviewed this QuarterlyReport on Form10-Q of Standard Commercial Corporation;                                                                                                                                                                                                                                                                                              
|---------------------- | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       | 2.  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;                                                    
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       | 3.  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;                                                                       
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       | 4.  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                                                                            
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       | 5.  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent functions):                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       | 6.  | The registrants other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|Date: November 8, 2002 | By: | /s/ ROBERT A SHEETS                                                                                                                                                                                                                                                                                                                                                               
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   
|                       |     | Robert A Sheets Vice President and Chief Financial Officer                                                                                                                                                                                                                                                                                                                        
|                       |     |                                                                                                                                                                                                                                                                                                                                                                                   

23