DIMON INC, 10-K405/A, 1996-05-08

DIMON INC
10-K405/A, 1996-05-08
FARM PRODUCT RAW MATERIALS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A1

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended June 30, 1995

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from to .

Commission File Number 0-25734; 1-13684

DIMON Incorporated
(Exact name of registrant as specified in its charter)

VIRGINIA 54-1746567
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)

512 Bridge Street, Danville, Virginia 24541
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (804) 792-7511

Securities registered pursuant to Section 12(b) of the Act:

Common Stock (no par value)

Common Stock Purchase Rights

Securities registered pursuant to Section 12(g) of the Act:

7 3/4 percent Convertible Subordinated Debentures due September 30, 2006

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

Yes.....X...... No...........

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of Common Stock held by non-affiliates of the
registrant (based upon the closing sale price quoted by The New York Stock
Exchange) on May 1, 1996, was approximately $600 million. In determining this
figure, the registrant has assumed that all of its directors and officers, and
all persons known to it to beneficially own ten percent or more of its Common
Stock, are affiliates. This assumption shall not be deemed conclusive for any
other purpose.

As of April 30, 1996, there were 42,348,609 shares of Common Stock
outstanding.

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Explanatory Note

This Form 10K/A1 amends Items 1, 2, 5, 7, 8 and 14 of the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1995. The remaining Items
have not been amended and have not been restated in this Form 10-K/A1. Certain
information contained in Items 1 and 5 is presented as of the date of this
filing.

PART I

ITEM 1. BUSINESS

As used in the following description, unless the context otherwise requires, the
term "Company" refers to DIMON Incorporated and its subsidiaries and affiliates.
Unless otherwise indicated, references to years refer to the Company's fiscal
year ended June 30, 1995.

The Company is engaged in two international businesses -- the purchasing,
processing and selling of leaf tobacco, primarily flue-cured, burley and
oriental tobaccos, which are the primary components of American blend
cigarettes, and the purchasing, transporting and selling of fresh-cut flowers to
wholesalers and retailers. The Company believes it is the world's second largest
independent leaf tobacco merchant with an estimated 30% share of the established
worldwide leaf tobacco market. The Company is the successor to Dibrell Brothers,
Incorporated ("Dibrell") and Monk-Austin, Inc. ("Monk-Austin") which merged in
April 1995 ("the "Merger"). The Company was incorporated in 1995 under the laws
of the Commonwealth of Virginia. See Note G to the Company's Consolidated
Financial Statements for the year ended June 30, 1995, included herein as part
of Item 8, for detailed financial information regarding each of the Company's
business segments.

Tobacco

The Leaf Tobacco Industry

The world's large multinational cigarette manufacturers, with one exception,
rely on independent leaf tobacco merchants such as the Company to supply the
majority of their leaf tobacco needs. Leaf tobacco merchants select, purchase,
process, store, pack, ship and, in certain developing markets, provide agronomy
expertise and financing for growing leaf tobacco. At the present time, there are
four major global leaf tobacco merchants including the Company. These four
merchants source, process and ship leaf tobacco around the world, for delivery
to manufacturers of cigarettes and other tobacco products. The Company believes
that the leaf tobacco industry is characterized by the following trends:

Growth of American Blend Cigarettes. As a result of increased demand and strong
brand growth, production of branded American blend cigarettes has increased in
recent years. In addition, worldwide consumption of American blend cigarettes
continues to increase even in some countries where total cigarette consumption
is flat or declining. American blend cigarettes contain less tar and nicotine
and taste milder than cigarettes historically consumed outside of the U.S.
Cigarette production in the U.S. reached record levels in 1995, totaling 741.84
billion units, an increase of 4.1% over 1994, according to the U.S. Department
of Agriculture. Exports of domestically produced cigarettes in 1995 totaled
35.1% of cigarette production in the U.S., up from 31.8% in 1994 and 30.9% in
1993. As American blend cigarettes have continued to gain market share, the
demand for export quality flue-cured, burley and oriental tobaccos sourced and
processed by leaf tobacco merchants has grown accordingly. Although the
consumption of cigarettes increased by 1% in the U.S. in 1995, the consumption
of cigarettes generally has decreased in the U.S. and in some other countries in
recent years, and may continue to decrease in the future. The Company believes
that cigarette consumption in certain other countries, however, including those
in Central and Eastern Europe and the former Soviet Union, has increased.

Growth in Foreign Operations of Large Cigarette Manufacturers. Several of the
large multinational cigarette manufacturers have expanded their operations
throughout the world, particularly in Central and Eastern Europe and the former
Soviet Union, in order to increase their access to and penetration of these
markets. As cigarette manufacturers expand their global operations, the Company
believes there will be increased demand for local sources of leaf tobacco and
local tobacco processing and distribution, primarily due to the semi-perishable

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nature of unprocessed leaf tobacco and the existence of domestic content laws in
certain countries. The Company believes that the international expansion of the
large multinational cigarette manufacturers will cause these manufacturers to
place greater reliance on the services of financially strong leaf tobacco
merchants with the ability to source and process tobacco on a global basis and
to help develop higher quality local sources of tobacco.

Growth in Foreign Sourced Tobacco. In an effort to respond to cigarette
manufacturers' increasing demand for lower cost American blend cigarette
ingredients, the major leaf tobacco merchants have made significant investments
in South America, Africa and Asia, the principal sources of flue-cured and
burley tobaccos outside the U.S. This trend is expected to continue in the
foreseeable future as the quality of foreign grown tobacco continues to improve.

Improved Market Conditions. The global leaf tobacco industry is currently
recovering after experiencing a disruption in demand and reduction in pricing
during 1993 and 1994. The disruption of the industry in the U.S. during these
years occurred primarily because of (i) the enactment of legislation requiring
that cigarettes manufactured in the U.S. for domestic consumption and export
contain at least 75% domestically grown tobacco (the "75/25 Rule"), (ii) a poor
quality 1993 flue-cured tobacco crop in the U.S. and (iii) the introduction of
legislation in the summer of 1993 to increase significantly the federal excise
tax on cigarettes that resulted in manufacturers' reluctance to build
inventories. Concurrent with the reduction in demand for international tobaccos
related to the 75/25 Rule and lower than expected initial demand for imported
tobacco products in Central and Eastern Europe and the former Soviet Union, the
worldwide price of tobacco declined due to oversupply attributable to record
foreign tobacco crops. This combination of reduced demand and lower prices had a
negative impact on the financial performance of the leaf tobacco merchants and
resulted in significant increases in uncommitted tobacco inventories among the
merchants.

In 1994 and 1995, the demand and supply imbalance in the worldwide tobacco
market began to improve. Leaf tobacco production outside the U.S. was curtailed
in response to the high levels of uncommitted tobacco inventories. The 75/25
Rule was repealed due to its violation of GATT and was replaced by a series of
less stringent import quotas. This resulted in cigarette manufacturers in the
U.S. resuming their purchases of tobacco grown outside the U.S. The combination
of lower levels of tobacco production and increased demand had a positive impact
on worldwide tobacco prices, a corresponding positive impact on the
profitability of the industry, and resulted in significant reductions in
uncommitted tobacco inventories.

Business Strategy

The Company's primary business objective is to capitalize on growth in worldwide
consumption of American blend cigarettes by becoming the low-cost preferred
supplier of leaf tobacco to the large multinational manufacturers of American
blend cigarettes. To achieve this objective, the Company has designed a strategy
to position itself to meet the needs of its cigarette manufacturing customers
throughout the world by expanding its global operations directly in the major
tobacco exporting countries and by forming strategic partnerships with its major
customers in countries with emerging tobacco production in which such customers
have specific needs. The Company's ability to respond to the global expansion
and changing needs of the large multinational cigarette manufacturers is a
critical factor in developing and expanding customer relationships.

The principal components of the Company's business strategy are as follows:

(bullet) Increase the Company's operations in low-cost tobacco growing
regions. To ensure breadth and depth of supply of tobacco,
particularly the tobaccos used in American blend cigarettes, the
Company has expanded and plans to continue to expand its operations
in South America, Africa and China, the largest production areas of
flue-cured and burley tobaccos outside of the U.S. In 1995, the
Company signed an agreement with the China National Tobacco
Corporation to provide additional access to a state-of-the art
processing facility and tobacco sources in the province of Yunnan.
The Company also made acquisitions in 1995 in Bulgaria, Greece and
Turkey, all of which are key producers of oriental tobacco. The
Company intends to utilize its agronomy expertise in helping to
develop low-cost sources of American blend quality tobaccos and its
existing relationships with the major multinational cigarette
manufacturers to gain market share in these growth regions.

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(bullet) Capitalize on outsourcing trends. The Company anticipates further
outsourcing of leaf tobacco purchasing and processing by cigarette
manufacturers. This outsourcing trend is driven by (i) higher
margins in cigarette production, (ii) the increasing sophistication
required in sourcing leaf tobacco on a global basis, (iii) and
continued privatization of tobacco and cigarette production
operations in certain countries. In 1994, the Company began
providing all leaf tobacco auction buying in the U.S. for RJR Tobacco
Company, Inc. ("RJR"), the second largest cigarette producer in the
U.S. More recently, the Company began to purchase and process all of
Lorillard Tobacco Company's ("Lorillard") auction market tobacco
requirements in the U.S.

(bullet) Improve efficiency and reduce operating costs. In connection with the
Merger, the Company initiated a restructuring plan for its
operations. The plan was designed to eliminate unprofitable
locations, consolidate duplicative processing facilities, reduce the
salaried workforce, improve operating efficiencies and increase
regional unit accountability. This initiative resulted in the
recognition of various charges in fiscal 1995, aggregating $17.8
million, and in the first nine months of fiscal 1996, aggregating
$5.6 million. These charges, together with additional anticipated
charges of $6 million to $9 million in the fourth quarter of fiscal
1996 are expected to reduce the Company's annual operating costs and
expenses by approximately $25 million in fiscal 1997 when the
benefits are expected to be fully realized. Since the Merger, the
Company has completed the following in connection with its
restructuring plan:

Consolidated the former Dibrell and Monk-Austin operations in Brazil
to operate as DIMON do Brazil and sold its 50% interest in a
Brazilian tobacco processing joint venture in November, 1995,
recognizing a $3.7 million pre-tax gain;

Combined the former Dibrell and Monk-Austin operations in Malawi at
Centraleaf to operate as DIMON Malawi and dissolved a former Dibrell
joint venture in Malawi;

Combined the former Dibrell and Monk-Austin operations in Zimbabwe to
operate as DIMON Zimbabwe;

Revised plans for two factories in China's Yunnan Province to call
for a single plant in the city of Kunming; and

Closed Monk-Austin's Lake City, South Carolina plant.

(bullet) Expand operations in new markets. During the last decade, several of
the large multinational cigarette manufacturers have expanded their
global operations, particularly into Central and Eastern Europe and
the former Soviet Union, in order to increase their access to and
penetration of new markets. The Company believes this will increase
demand for local sources of leaf tobacco and local tobacco processing
due to the semi-perishable nature of unprocessed tobacco and the
existence of domestic content laws in certain foreign countries. The
Company believes those factors will cause manufacturers to place
greater reliance on the services of financially strong leaf tobacco
merchants with the ability to source and process tobacco on a global
basis and to help develop higher quality local sources of leaf
tobacco.

Operations

The Company has developed an extensive international network through which it
purchases, processes and sells tobacco. In addition to its processing facilities
in Virginia and North Carolina, the Company owns or has an interest in,
processing facilities in Brazil and Zimbabwe, the two most significant non-U.S.
exporters of flue-cured tobacco, Malawi and Mexico, two of the leading non-U.S.
exporters of burley tobacco, and Greece and Turkey, the leading exporters of
oriental tobacco. The Company also has processing facilities in Italy and
Germany. In addition, the Company has entered into contracts, joint ventures and
other arrangements for the purchase of tobacco grown in substantially all
countries that produce export-quality, flue-cured and burley tobaccos, including
Argentina, Canada, China, India and Tanzania.

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Purchasing. The Company purchases tobacco in approximately 26 countries.
Although the majority of the dollar value of tobacco sold by the Company is
produced domestically, the relative importance of tobacco grown overseas to the
Company's profitability has increased steadily. During 1995, approximately 60%
of the dollar value of tobacco purchased by the Company was purchased in the
U.S. Approximately 18%, 10% and 4% of the dollar value of tobacco purchased by
the Company during 1995 was purchased in Brazil, Zimbabwe and Malawi,
respectively. The balance of the Company's tobacco purchases during 1995 were
made in other tobacco growing countries, including Argentina, Bulgaria, Canada,
China, Germany, France, Greece, India, Italy, Mexico, Poland, the former Soviet
Union, Tanzania and Turkey. The Company believes it has access to a diverse
supply of tobacco grown in a number of regions throughout the world and can
respond quickly to factors that may cause fluctuations in the quality, yield or
price of tobacco crops grown in any one region.

Tobacco generally is purchased at auction or directly from growers. Tobacco
grown in the U.S., Canada, Malawi and Zimbabwe is purchased by the Company
principally on auction markets. The Company purchases domestic tobacco on the
flue-cured, burley and air-cured auction markets in Florida, Georgia, Kentucky,
Maryland, North Carolina, South Carolina, Tennessee and Virginia for shipment to
the Company's facilities in North Carolina and Virginia for processing to
customer specification. The Company usually purchases tobacco at the auction
markets after receiving specific customer orders or indications of customers'
upcoming needs. The Company's network of more than 100 tobacco buyers allows the
Company to cover the major auctions of flue-cured and burley tobaccos throughout
the world. These buyers are experts in differentiating hundreds of grades of
tobacco based on customer specifications and preferences that take into account,
among other factors, the texture, visual appearance and aroma of the tobacco.

In non-auction markets such as Argentina, Brazil, Greece and Turkey, the Company
purchases tobacco directly from farmers or from local entities that have
arranged for purchase from farmers. These direct purchases are often made by the
Company based upon its projection of the needs of its long-standing customers
rather than against specific purchase orders. The Company's arrangements with
farmers vary from locale to locale depending on the Company's predictions of
future supply and demand, local historical practice and availability of capital.
For example, in Brazil, the Company generally contracts to purchase a farmer's
entire tobacco crop at the market price at the time of harvest based on the
quality of the tobacco delivered. Pursuant to these purchase contracts, the
Company provides farmers with fertilizer and other materials necessary to grow
tobacco and may extend loans to farmers to finance the crop. Under longer-term
arrangements with farmers, the Company may also finance farmers' construction of
curing barns. In addition, the Company's agronomists maintain frequent contact
with farmers prior to and during the growing and curing seasons to provide
technical assistance to improve the quality and yield of the crop. In other
non-auction markets, such as Argentina and India, the Company buys tobacco from
local entities that have purchased tobacco from farmers and supervises the
processing of that tobacco by those local entities. The Company believes that
its long-standing relationships with its customers are vital to its operations
outside of the auction markets.

Processing. The Company processes tobacco to meet each customer's specifications
as to quality, yield, chemistry, particle size, moisture content and other
characteristics. The Company processes purchased tobacco in its 17 tobacco
facilities located throughout the world. Unprocessed tobacco is a
semi-perishable commodity that generally must be processed within a relatively
short period of time to prevent fermentation or deterioration in quality.
Accordingly, the Company has located its processing facilities in proximity to
its principal sources of tobacco.

Upon arrival at the Company's processing plants, flue-cured and burley tobacco
is first reclassified according to grade. Most of that tobacco is then blended
to meet customer specifications regarding color, body and chemistry, threshed to
remove the stem from the leaf and further processed to produce strips of tobacco
and sieve out small scrap. The Company also sells a small amount of processed
but unthreshed flue-cured and burley tobacco in loose-leaf and bundle form to
certain of its customers.

Processed flue-cured and burley tobacco is redried to remove excess moisture so
that it can be held in storage by customers or the Company for long periods of
time. After redrying, whole leaves, bundles, strips or stems are separately
packed in cases, bales, cartons or hogsheads for storage and shipment. Packed
flue-cured and burley tobacco generally is transported in the country of origin
by truck or rail, and exports are moved by ship.

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Prior to and during processing, steps are taken to ensure consistent quality of
the tobacco, including the regrading and removal of undesirable leaves, dirt and
other foreign matter. Customer representatives are frequently present at the
Company's facilities to monitor the processing of their particular orders.
Increased consumption of discount and value-priced cigarettes and competition
among leaf merchants have led to improvements in processing designed to minimize
waste and thereby increase yield. Throughout the processing, Company technicians
use laboratory test equipment for quality control to ensure that the product
meets all customer specifications.

From time to time, the Company processes and stores tobacco acquired by various
stabilization cooperatives under the U.S.'s price support program. The Company
can derive significant revenues from the fees charged for such services,
particularly in years when a substantial portion of the domestic tobacco crop is
acquired by such cooperatives under the program. While these revenues are not
material to the Company's net sales, they result in additional recovery of fixed
cost which may be significant to gross profit.

Selling. The Company sells its tobacco to manufacturers of cigarettes and other
consumer tobacco products located in about 60 countries around the world. The
Company ships tobacco to international locations designated by these
manufacturers. A majority of the shipments of tobacco are to factories of these
manufacturers that are located outside the U.S. In certain countries, the
Company also uses sales agents to supplement its selling efforts. Several of
these customers individually account for a significant portion of the Company
sales in a normal year. The loss of any one or more of such customers could have
a materially adverse effect on the tobacco business of the Company.

The consumer tobacco business in most markets is dominated by a relatively small
number of large multinational cigarette manufacturers and by government
controlled entities. Approximately 46% and 53% of the Company's consolidated
tobacco sales for the nine months ended March 31, 1996, and fiscal year 1995,
respectively, were contracted to be delivered to 33 customers which the Company
believes are owned by or under common control of Japan Tobacco, Philip Morris or
RJR, each of which contributed in excess of 10% of total tobacco sales, with RJR
and Philip Morris accounting for significantly more sales than Japan Tobacco. No
other customer accounts for more than 10% of the Company's sales. See " --
Global Operations -- United States" and Note G to the Company's Consolidated
Financial Statements for the year ended June 30, 1995, included herein as part
of Item 8. The Company generally has maintained relationships with its customers
for over forty years. In fiscal 1995, the Company delivered approximately 37% of
its tobacco sales to customers in the U.S., approximately 27% to customers in
Europe and the remainder to customers located in Asia, South America and
elsewhere.

As of March 31, 1996, the Company's consolidated entities had tobacco
inventories of approximately $343 million and approximately $278 million in
commitments or indications from customers for purchases of tobacco. At March 31,
1995, those entities had tobacco inventories of approximately $296 million and
approximately $209 million in commitments or indications from customers for
purchases of tobacco. Substantially all of the March 31, 1996, orders are
expected to be delivered in fiscal 1996. The level of purchase commitments for
tobacco fluctuates from period to period and is significant only to the extent
it reflects short-term changes in demand for leaf tobacco. The Company makes
85-95% of its leaf tobacco purchases pursuant to customer orders or supply
contracts or customer indications of anticipated need, with most purchases made
based on indications. Customers are legally bound to purchase tobacco purchased
by the Company pursuant to orders, but no contractual obligation exists with
respect to tobacco purchased in response to indications. However, the Company
has done business with most of its customers for many years and has never
experienced a significant failure of customers to purchase tobacco for which
they have given indications. Other than the contracts with RJR and Lorillard
described below under "--Global Operations -- United States," the Company has no
significant supply agreements with its customers.

The Company typically makes sales based on a customer's letter of credit, by
cash against documents or by payment against invoice. Virtually all of the
Company's sales throughout the world are denominated in U.S. dollars. While
payment for tobacco sold by the Company is usually received after the tobacco
has been processed and shipped, some customers make advances to the Company
periodically throughout the buying season as tobacco is purchased by the Company
for their accounts. Distribution of processed tobacco is made

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by delivery from the Company's storage facilities directly to customers, by
truck or rail to customers' storage or manufacturing facilities or to port for
shipping.

Global Operations

United States. The Company owns and operates four processing facilities in North
Carolina and Virginia. The price of tobacco grown in the U.S. is supported under
a government price support program which also establishes quotas for production.
Consequently, U.S.-grown tobacco is typically more expensive than tobacco grown
elsewhere. Although domestic tobacco historically has accounted for the majority
of the Company's sales, the Company expects that, because of this price
differential and its generally increasing business outside of the U.S., sales of
flue-cured and burley tobacco grown in the U.S. and related services will be
less significant than in the past. The Company believes that any short-term
decline in its domestic business should be offset in the short-term by increased
foreign operations.

In late fiscal 1994, Monk-Austin entered into an agreement with RJR to purchase
all of RJR's U.S. auction market tobacco requirements. In late fiscal 1995,
Dibrell entered into an agreement with Lorillard pursuant to which the Company
will purchase and process all of Lorillard's domestic auction market tobacco
requirements. Generally, the contracts establish a framework for pricing the
Company's services (which generally is negotiated with respect to crop year,
grade of tobacco leaf or type of service provided based on market prices), do
not provide for minimum purchases and are terminable upon reasonable notice. The
Company expects that purchases under these agreements will account for a
substantial portion of its tobacco purchases in the U.S. in the future.

Brazil. The Company believes it is one of the two largest independent leaf
tobacco merchants in Brazil. The Company exports the majority of the tobacco
that it processes in Brazil to its customers around the world. In fiscal 1995,
the Company derived approximately 24% of its revenue from its Brazilian
operations.

In fiscal 1996, the Company merged its two wholly owned subsidiaries, Tabra and
Dibrell do Brazil to form DIMON do Brazil. DIMON do Brazil has three modern
tobacco processing facilities located in the center of Brazil's tobacco
production area. Brazil represents the Company's most significant foreign
operation in virtually all respects, including purchasing volume, processing and
storage capacities and operating income potential. Through the merger and
resulting reduction in duplicative functions and facilities the Company believes
that it will realize certain economies of scale. The Company believes that these
economies of scale and savings will be partially achieved in fiscal 1996
operating results and fully reflected in fiscal 1997 operating results.

Zimbabwe and Malawi. The Company exports the majority of the tobacco it
processes in Zimbabwe and Malawi to its customers around the world. In fiscal
1995, the Company derived approximately 10% of its revenue from its Zimbabwean
and Malawian operations.

In fiscal 1995, the Company combined the former Dibrell and Monk-Austin
operations in Zimbabwe and Malawi to form two wholly-owned subsidiaries, DIMON
Zimbabwe and DIMON Malawi. Through DIMON Zimbabwe the Company purchases,
processes in two facilities and exports flue-cured and burley tobacco grown in
Zimbabwe. Through DIMON Malawi the Company purchases, processes in one facility
and exports flue-cured and burley tobacco grown in Malawi.

Greece and Turkey. The Company believes it is the largest exporter of processed
oriental tobacco in the world as a result of the acquisition of additional
oriental tobacco processing facilities in Greece and Turkey. Greece and Turkey
are the most important producers of oriental tobaccos. Through its wholly-owned
subsidiaries, DIMON Hellas Tobacco SA and DIMON Turk Tutun AS, the Company buys,
exports and processes, in two facilities in each country, oriental tobacco grown
in each country.

Other Foreign Operations. The Company also has foreign subsidiaries, joint
ventures and affiliates that purchase and sell tobacco grown in other countries
throughout the world. In addition, the Company owns and operates processing
facilities in Italy and Germany.

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In certain countries, such as China and India, the Company has processing
agreements with other processors to use their facilities under the supervision
of the Company's employees. In several South American countries where the
Company operates, tobacco is bought from the farmers by the processors at
negotiated prices, and it is necessary to prefinance the crop by making advances
of cash or materials to the farmers prior to and during the growing season.

Competition

The leaf tobacco industry is highly competitive. Competition among dealers in
leaf tobacco is based on the price charged for products and services as well as
the dealers' ability to meet customer specifications in the buying, processing
and financing of tobacco. The Company believes that it is well positioned to
meet this competition, particularly in view of its important processing
facilities in the U.S., Brazil and other major tobacco growing countries. Among
independent tobacco leaf merchants, the principal competitors are Universal
Corporation ("Universal"), Standard Commercial Corporation and Intabex Holding
Worldwide S.A. Of the independent leaf tobacco merchants, the Company believes
that, based on revenues, it ranks second in established worldwide market share.
The Company further believes that among independent tobacco leaf merchants, it
has the largest or second largest market share in Brazil, Greece, Turkey, the
U.S. and Zimbabwe. Universal's market share in the U.S. is considerably greater
than that of the Company.

Seasonality

The purchasing and processing activities of the Company's tobacco business are
seasonal. Flue-cured tobacco grown in the U.S. generally is purchased during the
five-month period beginning in July and ending in November. U.S.-grown burley
tobacco is usually purchased from late November through January or February.
Tobacco grown in Brazil usually is purchased from January through June and
delivered from May to September. Other markets around the world last for similar
periods, although at different times of the year, and as the importance of these
markets has grown the seasonality in the Company's business has decreased.

Mature tobacco, prior to being processed and packed, is a semi-perishable
commodity. The production cycle for redrying and packing is relatively short.
For example, flue-cured tobacco in the U.S. is processed, packed and invoiced
within the same five-month period (July through November) that it is purchased.
During this period inventories of unprocessed tobacco, inventories of redried
tobacco and trade accounts receivable normally reach peak levels in succession.
Current liabilities, particularly advances from customers and short-term notes
payable to banks, normally reach their peak in this period as a means of
financing the seasonal expansion of current assets. Increasing amounts of
U.S.-grown burley and foreign tobacco are now being processed in periods other
than July through November, reducing the seasonal fluctuations in working
capital. At June 30, the end of the Company's fiscal year, the seasonal
components of the Company's working capital reflect primarily the operations
related to foreign grown tobacco.

Flowers

Operations

The Company's fresh-cut flower operations consist of buying flowers from sources
throughout the world and transporting them, normally by air, to operating units
for resale to wholesalers and retailers through its wholly-owned flowers
subsidiary, Florimex Worldwide, Inc. ("Florimex"). For the year ended June 30,
1995, the Company's flower operations produced approximately 20% of the
Company's revenues and represented approximately 10% of the Company's
consolidated assets at year end.

Florimex operates through 51 offices in 18 countries, including Austria, Canada,
Colombia, the Czech Republic, Ecuador, France, Germany, Hungary, Italy, Japan,
Poland, The Netherlands, Spain, Switzerland, the United Kingdom and the U.S. The
activities of certain of these offices are limited to acquiring flowers in the
country of origin, but most are engaged in importation and distribution.
Florimex is also engaged in additional value-added services through the design
and assembly of floral bouquets for sale to supermarket retailers. Virtually all
offices are operated as corporate profit centers with the general manager
receiving a bonus related

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to the financial performance of the operation. In a limited number of cases, the
local general manager owns a minority share of the unit's equity and
participates in dividend distributions.

Florimex's Dutch exporting operations, Baardse, are headquartered in Aalsmeer,
The Netherlands, inside the premises of the world's largest flower auction
facilities. In addition to the Aalsmeer auction, Florimex routinely acquires
flowers from all principal Dutch flower auctions. Florimex's Dutch exporting
operations sell and ship product directly to Florimex's fresh-cut flower
operations and its competitors.

Business Strategy

The Company's business strategy for Florimex is to increase profitability by
increasing sales volume within its established distribution system,
rationalizing its cost structure and reducing credit losses. The Company
believes that its extensive global network, with buying capacity in all major
flower production markets and broad based distribution arrangements in the
world's primary wholesale and retail flower markets, gives it substantial
competitive advantages.

The principal components of Florimex's business strategy are as follows:

(bullet) Expansion of Sales; New Distribution Channels. Florimex expects to
increase its sales by focusing on areas of growing per capita
consumption of flowers, particularly in non-traditional flower
consumption markets in Europe and North America. To accomplish this
objective, Florimex has recently (i) restructured its operations in
North America to concentrate on (a) the growing channels of
supermarkets and mass merchant retailers and (b) bouquet sales in the
U.S. and (ii) concentrated on sales in Europe, particularly eastern
Germany and the Czech Republic.

(bullet) Rationalize operations. Florimex has realized substantial cost
savings by reducing personnel, streamlining administrative functions
globally and by eliminating its unprofitable wholesale operations in
New York, Chicago and Los Angeles.

(bullet) Reduce credit losses. As the timely collection of trade accounts
receivable has traditionally represented a considerable business risk
to Florimex's flower operations, trade accounts receivable reporting
and credit authorization procedures have been entirely revised.
These revisions include (i) the implementation of centralized credit
reporting procedures, (ii) an overall reassessment of customer
credits, (iii) the culling of customer listings for the various
Florimex companies in order to concentrate on higher margin accounts,
(iv) requiring bi-monthly updates to the head office on outstanding
balances, and, (v) the creation of a prompt response program for
customers who begin to evidence slow payer characteristics.

Sources of Supply

Florimex acquires its fresh-cut flowers from more than 300 suppliers located in
more than 50 countries on five continents. Its primary sources of supply include
The Netherlands (via the Dutch auction system), Kenya (via a renewable exclusive
supplier contract effective since 1976), and Columbia, Ecuador and Thailand.
Florimex purchased $33.7 million, or 11.5%, of its total purchases in 1995
($27.3 million, or 11.9% in 1994) from its Dutch exporting operations on terms
similar to those offered to independent parties. Florimex annually buys
approximately 30% of the flower crop grown on independent supplier farms in
Kenya. Florimex believes that its existing sources of supply are adequate at
current sales levels. Florimex also believes that its close relationships with
commercial and cargo airlines give it a competitive advantage by permitting it
to transport its products around the world expeditiously and cost effectively.

- 9 -

<PAGE>

Customers and Market Potential

Florimex sells to thousands of wholesalers and retailers throughout Europe,
North America and Asia. No customer accounts for a significant portion of
Florimex's sales in a normal year, and the loss of any one customer or a group
of related customers should not have a material adverse effect on Florimex's
business.

Industry statistics indicate that the annual retail sales of fresh-cut flowers
in the U.S., the largest single flower market in the world, exceed $6.5 billion.
While the routine purchase of flowers is a tradition in the mature European
market, the U.S. market is growing and offers an opportunity for significant
penetration. The primary market growth in the U.S. is occurring among
supermarkets. During 1995, the Company substantially redirected its U.S. flower
resources to serve this important group of customers.

Competition

Competition within the fresh-cut flower distribution industry is based on
adequate and reliable supplies of competitively priced, fresh, good quality
flowers. Prices quoted to wholesalers are volatile and often change several
times a day. Credit terms are also important. Major competitors are numerous and
vary according to market. However, no cut-flower operation, including Florimex,
has more than a small share of the worldwide market. Competition is therefore
intense. Based on its long-standing sources of supply and well-developed
purchasing and distribution facilities, Florimex believes that it competes
effectively.

Seasonality

Sales of fresh-cut flowers are seasonal and are significantly affected by peak
holiday demand. Generally the June through August months have low sales levels,
with sales increasing through the fall and Christmas season. Special days, such
as Valentine's Day and Mother's Day, generally result in material sales
increases in February through May.

Employees

The Company's consolidated entities employ about 3,800 persons, excluding
seasonal employees, in its worldwide tobacco operations. In the U.S. tobacco
operations the Company's consolidated entities employ about 1,100 persons,
excluding 1,300 seasonal employees. Most seasonal employees are covered by
collective bargaining agreements with several U.S. labor unions. In the non-U.S.
tobacco operations the Company's consolidated entities employ about 2,700
persons, excluding 5,100 seasonal employees. The Company's worldwide
consolidated cut flower operation entities employ about 1,250 persons, excluding
seasonal employees. The Company considers its employee relations to be
satisfactory.

Government Regulation and Environmental Compliance

In recent years, governmental entities in the U.S. at all levels have taken or
have proposed actions that may have the effect of reducing consumption of
cigarettes. These activities have included: (i) the U.S. Environmental
Protection Agency's decision to classify tobacco environmental smoke as a Group
"A" (known human) carcinogen; (ii) restrictions on the use of tobacco products
in public places and places of employment including a proposal by the U.S.
Occupational Safety and Health Administration to ban smoking in the work place;
(iii) proposals by the U.S. Food and Drug Administration to sharply restrict
cigarette advertising and promotion and to regulate nicotine as a drug; (iv)
increases in tariffs on imported tobacco; (v) proposals to increase the U.S.
excise tax on cigarettes; (vi) the recently announced policy of the U.S.
government to link certain federal grants to the enforcement of state laws
banning the sale of tobacco products to minors and (vii) recent filings of
lawsuits against cigarette manufacturers by several states seeking reimbursement
of Medicaid and other expenditures by such states claimed to have been made to
treat diseases allegedly caused by cigarette smoking. It is not possible to
predict the extent to which governmental activities might affect the Company's
business.

- 10 -

<PAGE>

In 1993, Congress enacted a law requiring that all domestically manufactured
cigarettes contain at least 75% domestically grown tobacco. Although that law
was repealed in 1995 and was replaced with import quotas designed to assist
domestic tobacco growers, the law had the effect of drastically disrupted demand
for foreign tobacco in the domestic production of cigarettes. It is not possible
to predict the extent to which future governmental activities might affect the
Company's business.

A number of foreign countries have also taken steps to restrict or prohibit
cigarette advertising and promotion, to increase taxes on cigarettes and to
discourage cigarette smoking. In some cases, such restrictions are more onerous
than those in the U.S. For example, advertising and promotion of cigarettes has
been banned or severely restricted for a number of years in Australia, Canada,
Finland, France, Italy, Singapore and a number of other countries. It is
impossible to predict the extent to which restrictions on advertising might
affect the Company's business.

Compliance with federal, state and local provisions which have been enacted or
adopted regulating the discharge of materials into the environment or otherwise
relating to the protection of the environment have not had, and are not
anticipated to have, any material effect upon the competitive position of the
Company.

- 11 -

<PAGE>

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS, FOREIGN AND
DOMESTIC OPERATIONS AND EXPORT SALES

As discussed in Item 1, the Company operates in two business segments:
the purchasing, processing and selling of leaf tobacco and the purchasing and
selling of cut flowers. Financial information concerning segments and
geographical operations is included in Note G to the Notes to Consolidated
Financial Statements. Information with respect to the Company's working capital
appears in "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources," included herein as
Item 7.

ITEM 2. PROPERTIES

Following is a description of the material properties of the Company:

Corporate

The Company's corporate headquarters are located in Danville, Virginia.
The tobacco operations are headquartered in Farmville, North Carolina and
headquarters for flowers operations are in Nuremberg, Germany.

Tobacco Facilities

The Company operates each of its tobacco processing plants for seven to
nine months during the year to correspond with the applicable growing season.
While the Company believes its processing facilities are being efficiently
utilized, the Company also believes its domestic processing facilities and
certain foreign processing facilities have the capacity to process additional
volumes of tobacco if required by customer demand.

The following is a listing of the various properties used in the
tobacco operations:

AREA IN
LOCATION USE SQUARE FEET

UNITED STATES
DANVILLE, VA STORAGE 250,000
DANVILLE, VA FACTORY 494,000
KENBRIDGE, VA STORAGE 1,469,000
GREENVILLE, N.C. FACTORY/STORAGE 809,000
FARMVILLE, N.C. FACTORY/STORAGE 1,136,000
KINSTON, N.C. FACTORY/STORAGE 1,069,000
SANFORD, N.C. STORAGE 121,000
GREENVILLE, TN STORAGE 70,000
MULLINS, S.C STORAGE 104,000
LAKE CITY, S.C. STORAGE 252,000

SOUTH AMERICA
VERA CRUZ, BRAZIL FACTORY/STORAGE 1,833,000
SANTA CRUZ, BRAZIL FACTORY/STORAGE 1,201,000
MEXICO CITY, MEXICO FACTORY 5,000
VENANCIO AIRES, BRAZIL FACTORY/STORAGE 593,000
ZACAPA, GUATEMALA FACTORY 15,000

- 12 -

<PAGE>

AFRICA
LILONGWE, MALAWI FACTORY 247,000
HARARE, ZIMBABWE FACTORY/STORAGE 1,426,000

EUROPE
KARLSRUHE, GERMANY FACTORY/STORAGE 320,000
IZMIR, TURKEY FACTORY/STORAGE 290,000
SPARANISE, ITALY FACTORY/STORAGE 742,000
THESSALONIKI, GREECE FACTORY/STORAGE 790,000

Flower Facilities

Florimex has 51 different operating facilities throughout the world.
The owned properties include an international distribution warehouse in
Kelsterbach, Germany (near Frankfurt Airport), with offices and storages of
about 60,000 square feet. In Nuremberg, the headquarters of Florimex, owned
properties include office and storages of about 300,000 square feet. At all
Florimex locations there are various properties, generally located near
airports, consisting of owned or leased offices and storages. The storages at
each location include cooler storages of various sizes to accommodate the needs
of individual locations. The Company's management believes its flower operation
facilities, including office, distribution and warehouse facilities, are
efficiently utilized and are adequate for current and projected sales levels for
the foreseeable future.

With the acquisition of the shares of Baardse, the Company acquired
various assets related to and leased from the auctions from which it buys the
flowers. Baardse has about 110,000 square feet of office and storage associated
with the Aalsmeer auction operation. Aalsmeer has the largest auction facility
in The Netherlands. A major addition to the lease was completed in 1989. Baardse
also owns glasshouses in Aalsmeer with 125,000 square feet.

All of the above property is owned, except as otherwise indicated, by
the Company, its subsidiaries or investee companies. The Company believes that
the facilities are generally well maintained and in good operating condition and
are suitable and adequate for its purposes at current and reasonably anticipated
future sales levels.

- 13 -

<PAGE>

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

DIMON Incorporated's common stock is traded on the New York Stock
Exchange, under the ticker symbol "DMN". The Common Stock began trading on the
NYSE on April 3, 1995.

The following table sets forth for the periods indicated the high and
low reported sales prices of the Common Stock as reported by the NYSE and the
amount of dividends declared per share for the periods indicated.

DIMON
Common Stock
Dividends
High Low Declared (1)
Fiscal Year 1996
Fourth Quarter (through May 1).... 17 1/4 17 1/4 --
Third Quarter..................... 20 7/8 16 .135
Second Quarter.................... 18 3/4 13 3/4 .135
First Quarter..................... 17 5/8 14 5/8 .135

Fiscal Year 1995 (1)
Fourth Quarter.................... 18 5/8 14 .135

Dibrell Monk-Austin
Common Stock (2) Common Stock (4)
High-Low (3) High-Low

Third Quarter........... $14 2/3 - 10 2/3 $13 1/4 - 11 5/8 .090
Second Quarter.......... 14 5/6 - 13 15 - 12 7/8 .090
First Quarter........... 13 1/2 - 9 1/4 15 - 12 1/4 .090

Fiscal Year 1994
Fourth Quarter.......... 12 5/6 - 8 5/6 16 5/8 - 12 .085
Third Quarter........... 18 - 12 1/3 19 1/8 - 15 3/8 .085
Second Quarter.......... 21 1/2 - 16 3/16 17 - 13 1/2 .085
First Quarter........... 20 1/2 - 15 1/3 16 - 13 .085

- ------------------------
(1) Dividends declared through the third quarter of 1995 represent
dividends of Dibrell. Monk-Austin paid no dividends.

(2) Prior to April 1, 1995, Dibrell common stock was traded on The Nasdaq
National Market.

(3) Adjusted to reflect the issuance of 1.5 shares of DIMON Common Stock
for each share of Dibrell common stock in the Merger.

(4) Prior to April 1, 1995, Monk-Austin common stock was traded on the
NYSE.

The last sale price of Common Stock as reported on the NYSE on May 1,
1996, was $17.25. As of June 30, 1995, there were approximately 4,244 holders of
record of the Common Stock. Management of the Company believes that there are in
excess of 3,600 beneficial holders of its Common Stock. The Company pays
dividends quarterly.

- 14 -

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion relates to the Company's Consolidated Financial
Statements for the year ended June 30, 1995, except as indicated.

General

The Company is engaged in two business segments: the purchasing, processing and
selling of leaf tobacco and the purchasing and selling of fresh-cut flowers.

The Company believes that it is the world's second largest independent purchaser
and processor of leaf tobacco. Approximately 80% and 75% of the Company's
revenues in fiscal 1995 and fiscal 1994, respectively, were derived from its
tobacco operations. The Company's tobacco operating profits fluctuate from year
to year, primarily due to changes in worldwide supply and demand and government
regulations.

The Company's tobacco business is generally conducted in U.S. dollars, as is the
business of the industry as a whole. Accordingly, there is minimal currency risk
related to the sale of tobaccos. However, local country operating costs,
including the purchasing and processing costs for tobaccos, are subject to the
effects of exchange fluctuations of the local currency against the U.S. dollar.
The Company attempts to minimize such currency risks by matching the timing of
its working capital borrowing needs against the tobacco purchasing and
processing funds requirements in the individual countries of tobacco origin.
Fluctuations in the value of foreign currencies can significantly affect the
Company's operating results. In particular, the Company has a significant
concentration of its purchasing, processing and exporting operations in southern
Brazil. In recent years, Brazil's economic problems have received wide
publicity, and that country has taken and is expected to continue to take
various actions relating to foreign currency exchange controls and adjustments
for devaluation of the currency and inflation. While such controls generally
influence the amount of cash dividends remitted from Brazil and such adjustments
can adversely affect the Company's processing costs, they have not and are not
expected to adversely affect the Company's ability to export tobacco from
Brazil. See Note J to the Company's Consolidated Financial Statements for the
year ended June 30, 1995, included herein.

On April 1, 1995, Dibrell and Monk-Austin merged into DIMON. The Merger has been
accounted for as a pooling of interests and all consolidated financial
statements have been restated to include the historical results of operations of
both Dibrell and Monk-Austin including the effects of conforming the accounting
policies of the two former entities. Recorded assets and liabilities have been
carried forward at their historical book values.

In connection with the Merger, the Company initiated a restructuring plan
including both the tobacco and flower businesses. The plan is designed to
eliminate unprofitable locations, consolidate duplicative processing facilities,
reduce the salaried workforce, improve operating efficiencies and increase
regional unit accountability. This initiative resulted in the recognition of
various charges in fiscal 1995, aggregating $17.8 million, and the first nine
months of fiscal 1996, aggregating $5.6 million. These charges, together with
additional anticipated charges of $6 million to $9 million in the fourth quarter
of fiscal 1996 are expected to reduce the Company's annual operating costs and
expenses by approximately $25 million in fiscal 1997 when the benefits are
expected to be fully realized.

The remainder of the Company's revenues are derived from purchasing and selling
fresh-cut flowers. Florimex has two principal operations, importing, exporting
and wholesaling fresh-cut flowers, and exporting fresh-cut flowers purchased
primarily from the major flower auctions in The Netherlands. Approximately 20%
of the Company's 1995 revenues were derived from its flower operations.

Results of Operations

The following table expresses items in the Statement of Consolidated Income as a
percentage of sales for each of the three most recent fiscal years. Any
reference in the table and the following discussion to any given year is a
reference to the Company's fiscal year ended June 30.

- 15 -

<PAGE>

Year Ended June 30,
1995 1994 1993
---- ---- ----
Net sales of goods and services 100.0% 100.0% 100.0%
Cost of goods and services sold 91.2 90.9 86.7
Gross Margin 8.8 9.1 13.3
Selling, general and administrative expenses 6.9 8.1 6.7
Restructuring and merger related costs 1.3 -- --
------- ------- -------
Operating income .06 1.0 6.6
Other income (expense)-- net(1) (1.8) (1.4) (0.9)
------- ------- -------
Income (loss) before income taxes, minority
interest, equity in net income of investee
companies and cumulative effect of
accounting changes (1.2) (0.4) 5.7
Income taxes 0.3 0.2 1.9
Equity in net income of investee companies (0.1) -- 0.1
Extraordinary items -- -- --
------- ------- -------
Cumulative effect of accounting changes -- -- (0.1)
------- ------- -------
Net income (loss) (1.6)% (0.6)% 3.8%
======== ======== =======

(1) Includes other income, interest and sundry and other deductions, interest
and sundry.

Comparison of the Year Ended June 30, 1995 to the Year Ended June 30, 1994

The Company's net sales of goods and services in 1995 were $1.928 billion, an
increase of 33.0% from $1.449 billion in 1994. Net sales from tobacco operations
increased 42.8%, from $1.082 billion in 1994 to $1.544 billion in 1995,
primarily due to higher prices and increased production quantities primarily
from the U.S. and Brazil. The higher tobacco prices and increased production
quantities from the U.S. accounted for $88.1 million and $248.5 million,
respectively, while the increased production quantities from Brazil accounted
for substantially all of the increase from Brazil. The Company's increase in net
sales of U.S. tobacco was primarily attributable to the Company's 1994 agreement
to purchase the U.S. tobacco needs for RJR. The increased sales of tobacco from
Brazil resulted from the sales of uncommitted stocks from prior year crops.

Net sales of flowers increased 4.4%, from $367.5 million in 1994 to $383.6
million in 1995. The increase in the Company's sales of flowers was primarily
due to the favorable effect of applying U.S. dollar exchange rates to European
operations, but these favorable effects were partially offset by decreased sales
of certain North American operations that were closed during the year. The
application of exchange rates increased sales by $35.5 million and the closing
of operations decreased sales by $15.7 million.

Cost of sales and expenses of the Company's tobacco operations increased 42.9%
in 1995 from 1994 due primarily to the 42.8% increase in net sales. The world
oversupply of tobacco, which began in fiscal 1993, started to improve in fiscal
1995 as indicated by the improvement in the tobacco operating margin (operating
income), before restructuring and merger related costs. As a percent of net
sales, operating margins increased to 3.2% in 1995 compared to 1.8% in 1994. See
Item 1, "Business -- Tobacco -- The Tobacco Leaf Industry -- Recent Market
Conditions." However, sales prices continued to be negatively affected by the
oversupply, causing the Company to reduce the carrying amount of its tobacco
inventory at year end by $9.2 million, reflecting the revaluation of that
inventory at the lower of its cost or market value.

Cost of sales and expenses of the flower operations increased by 6.0% in 1995
from 1994 primarily due to the sales increase of 4.4% and increased bad debts
associated with flower operations now closed and other costs, inclusive of
restructuring costs. The flower operating income decreased from 0.3% of net
sales in 1994 to (1.2)% of net sales in 1995, primarily due to decreased gross
margins of both the U.S. operations that were closed and the Baardse operations
and by increased costs mentioned above.

- 16 -

<PAGE>

Corporate expenses increased $3.7 million, or 64.9%, to $9.4 million in 1995
from $5.7 million in 1994, due primarily to increased personnel costs and legal
and professional expenses in 1995 and reversals of prior accruals in 1994 for
stock appreciation rights and certain stock options.

Restructuring charges for the tobacco and flower operations amounted to $15.2
million and $2.6 million, respectively. The charges are comprised of $12.6
million for employee separations, $2.8 million for facility closures, $2.4
million for asset writedowns and other items. In addition the Company incurred
$8.1 million for merger related charges for legal, accounting and financial
advisors.

Other income, interest and sundry, decreased $2.3 million in 1995. The decrease
relates to the Company's tobacco operations, resulting from the gain on the sale
of substantially all of the operating assets of Korean American Tobacco Company
in 1994 and decreased rental income.

Other deductions, primarily interest expense, increased $11.5 million in 1995,
primarily due to higher borrowings because of increased average inventories and,
to a lesser extent, higher average interest rates.

The Company had tax expense in spite of the overall pre-tax loss in 1995 due to
the effects of foreign tax rates, the mix of income and losses of subsidiaries,
the currency effect in Brazil and non-deductible merger expenses.

The $1.9 million decrease in equity in net income of investee companies in 1995
was due primarily to the devaluations of the local currency for the Company's
investee with operations in Zimbabwe and decreased earnings for the operations
in Malawi and Brazil.

Comparison of the Year Ended June 30, 1994 to the Year Ended June 30, 1993

The Company's net sales of goods and services in 1994 were $1.449 billion, a
decrease of 13.8% from $1.681 billion in 1993. Net sales from tobacco operations
decreased 17.0%, from $1.303 billion in 1993 to $1.082 billion in 1994,
primarily due to lower prices and decreased quantities primarily from Brazil,
the U.S. and Argentina. The lower prices and decreased quantities of tobacco
were due to the worldwide surplus and uncertainties in the U.S. relating to the
domestic content law and the proposed increased excise taxes on cigarettes.

The Company's net sales of flowers decreased 2.6%, from $377.4 million in 1993
to $367.5 million in 1994, primarily as an effect of applying U.S. dollar
exchange rates to the European operations.

Cost of sales and expenses of the Company's tobacco operations decreased 10.7%
in 1994 from 1993 due primarily to the 17.0% decrease in sales, which was offset
partially by other increased costs due to $40.9 million in charges related to
the revaluation at the lower of cost or market of certain tobacco inventories
and advances, primarily in South America. The tobacco operating margin
(operating income) as a percent of net sales was 1.8% in 1994 compared to 8.7%
in 1993. The decrease in operating margins and operating profit resulted from
decreased margins on tobacco of practically all origins due to the worldwide
surplus, uncertainties in the U.S. and the $40.9 million valuation charges
mentioned above, all of which were partially offset by increased gross margins
on tobacco from Zimbabwe.

Cost of sales and expenses of the Company's flower operations decreased by 2.0%
in 1994 from 1993 primarily due to the sales decrease of 2.6% and the inclusion,
in 1993 results, of operational studies and bad debts at Baardse, all of which
were partially offset in 1994 by increased bad debts and other costs in the U.S.
operations. The cost in 1993 of operational studies and bad debts at Baardse of
$3.3 million were offset partially by increased 1994 bad debts and other costs
in the U.S. operations of $2.2 million with the decrease in sales accounting for
the balance of the decrease. The flower operating income decreased from 1.0% of
net sales in 1993 to 0.3% of net sales in 1994, primarily due to decreased gross
margins, offset by decreased costs mentioned above.

Corporate expenses decreased $0.9 million, or 13.6%, in 1994 from $6.6 million
in 1993, due primarily to reduced accruals for bonuses and reversals of prior
accruals for stock appreciation rights and certain stock options.

- 17 -

<PAGE>

Other income, interest and sundry, decreased $10.0 million in 1994. The decrease
relates to the Company's tobacco operations, primarily due to items in 1993 not
repeated in 1994, including currency exchange gains in Brazil and the United
Kingdom not related to operations, settlements of insurance proceeds resulting
from the Mexican flood loss and gains on sale of property and equipment.

Other deductions, sundry, decreased $2.3 million in 1994, primarily due to the
tobacco operations and $1.4 million of charges incurred in 1993 on the
uncompleted merger with Standard Commercial Corporation.

Interest expense decreased $3.0 million in 1994, or 7.9%, from $38.1 million in
1993, primarily due to the financing of foreign tobaccos through U.S. bank lines
at rates lower than the rates available through foreign bank lines.

Due to the mix of income and losses among its subsidiaries, the Company had tax
expense in spite of the overall pre-tax loss in 1994. The Company's effective
income tax rate was 32.6% in 1993. The increase in the tax rate, due to the
August 1993 change in U.S. tax laws, had no material effect on the Company.

The decrease in equity in net income of investee companies in 1994 was due
primarily to the loss from operations of the investee located in Brazil,
partially offset by devaluations of the local currency for the Company's
investee with operations in Zimbabwe.

Liquidity and Capital Resources

The following table summarizes items from the Company's Consolidated Balance
Sheet and the Statement of Consolidated Cash Flows.
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------
1995 1994 1993
---- ---- ----
(in thousands, except for current ratio)
<S> <C> <C> <C>
Cash and cash equivalents $ 42,326 $ 12,471 $ 16,399
Net trade receivables 182,750 164,314 217,098
Inventories and advances on purchases
of tobacco 468,989 469,015 424,015
Total current assets 731,119 685,443 666,454
Notes payable to banks 233,736 255,607 244,051
Accounts payable 90,446 112,310 124,103
Total current liabilities 453,522 467,776 423,854
Current ratio 1.6 to 1 1.5 to 1 1.6 to 1
Revolving credit notes and other long-term debt 292,528 188,825 180,270
Convertible subordinated debentures 56,370 56,475 56,475
Stockholders' equity 238,806 288,314 308,149
Purchase of property and equipment 35,892 32,382 42,232
Proceeds from sale of property and equipment 4,877 5,991 5,220
Depreciation and amortization 31,852 28,862 24,559
</TABLE>

The purchasing and processing activities of the Company's tobacco business are
seasonal. The Company's need for capital fluctuates accordingly and, at any of
several seasonal peaks, the Company's outstanding indebtedness may be
significantly greater or lesser than at year end. The Company historically has
needed capital in excess of cash flow from operations to finance inventory and
accounts receivable and, more recently, to finance acquisitions of foreign
tobacco operations and flower operations. The Company also prefinances tobacco
crops in certain foreign countries by making cash advances to farmers prior to
and during the growing season.

The Company's working capital increased from $217.7 million at June 30, 1994 to
$277.6 million at June 30, 1995. The Company's current ratio was 1.6 to 1 and
1.5 to 1 at June 30, 1995, and June 30, 1994, respectively. At June 30, 1995,
current assets had increased $45.7 million, or $6.7%, and current liabilities
had increased $14.3 million, or 3.0%, from June 30, 1994. The $45.7 million
increase in current assets is

- 18 -

<PAGE>

primarily due to the $29.9 million increase in cash and cash equivalents and
$18.4 million increase in trade receivables. The $14.3 million decrease in
current liabilities is primarily due to the decreases in accounts payable and
notes payable to banks, offset partially by an increase in accrued expenses. The
increase in cash and cash equivalents is primarily related to the financing
activities and the proceeds from long-term debt. The increase in receivables
reflects the increase in sales during the fourth quarter by the tobacco
division. The decrease in accounts payable is due primarily to timing of
inventory purchases, and the decrease in notes payable is due to increased
long-term debt. The increase in accrued expense is due to increased crop costs
accrued in Brazil.

Cash flows from operating activities decreased 81.7% to $6.8 million in 1995 as
compared to 1994 and 20.6% to $37.1 million in 1994 as compared to 1993, which
was consistent with the net losses incurred in those periods. Cash flows used by
investing activities decreased $39.6 million, or 73.2%, to $14.5 million in 1995
as compared to 1994, primarily due to the increase in payments on notes
receivable and amounts due from investees for the same period and the reduction
in issuance of notes receivable. The 1995 purchase of subsidiaries was offset
with the Company's 1994 investment in another company. Cash used by investing
activities decreased $3.2 million in 1994 primarily due to this investment,
offset primarily by the reduction in purchase of property and equipment during
the year. Cash provided by financing activities increased $21 million, or 143%,
and $9.1 million, or 167%, in 1995 as compared to 1994 and 1994 as compared to
1993, respectively, as a result of increased proceeds from debt issuance, which
was offset partially by increased cash dividends paid to shareholders.

At June 30, 1995, the Company had seasonally adjusted lines of credit of $1.126
billion, including $876 million uncommitted, unsecured working capital lines
with several banks. At June 30, 1995, the Company had borrowed $234 million
under its $876 million lines of credit with interest rates ranging from 4.3% to
9.8%. At June 30, 1995, the unused short-term lines of credit amounted to $509
million, net of $133 million of letters of credit and guarantees that reduce
lines of credit.

The Company has historically financed its operations through a combination of
short-term lines of credit, customer advances, cash from operations and equity
and equity-linked securities. At June 30, 1995, the Company had no material
capital expenditure commitments.

The Company's off balance sheet financing is not material. Certain operating
leases were acquired with the acquisition of, or have been added by, several
foreign tobacco processing facilities and the flower subsidiaries. However, most
operating assets are of long-term and continuing benefit and the Company has
generally purchased these assets.

Tax and Repatriation Matters

The Company and its subsidiaries are subject to income tax laws in each of the
countries in which it does business through wholly-owned subsidiaries and
through affiliates. The Company makes a comprehensive review of the income tax
requirements of each of its operations, files appropriate returns and makes
appropriate income tax planning analyses directed toward the minimization of its
income tax obligations in these countries. Appropriate income tax provisions are
determined on an individual subsidiary level and at the corporate level on both
an interim and annual basis. These processes are followed using an appropriate
combination of internal staff at both the subsidiary and corporate levels as
well as independent outside advisors in review of the various tax laws and in
compliance reporting for the various operations.

Dividend distributions are regularly made from certain subsidiaries while the
undistributed earnings of certain foreign subsidiaries are not subject to
additional foreign income taxes nor considered to be subject to U.S. income
taxes unless remitted as dividends. The Company intends to reinvest such
undistributed earnings indefinitely; accordingly, no provision has been made for
U.S. taxes on those earnings. The Company regularly reviews the status of the
accumulated earnings of each of its U.S. and foreign subsidiaries and
reevaluates the aforementioned dividend policy as part of its overall financing
plans.

- 19 -

<PAGE>

Accounting Matters

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," which will be effective for the Company's fiscal year 1997
statements. SFAS No. 123 defines a fair value based method of accounting for
stock-based compensation and requires certain disclosures to be made by entities
electing not to adopt this method. The Company has not yet determined the impact
of adoption of SFAS No. 123.

- 20 -

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<PAGE>

DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Income

(in thousands, except per share amounts)

<TABLE>
<CAPTION>
Years Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Net sales of goods and services..................................................... $1,927,749 $1,449,078 $1,680,616
Cost of goods and services sold..................................................... 1,757,516 1,317,286 1,457,828
170,233 131,792 222,788
Selling, administrative and general expenses........................................ 132,802 117,311 111,957
Restructuring and merger related costs.............................................. 25,955 -- --
Operating Income............................................................... 11,476 14,481 110,831
Other income:
Interest.......................................................................... 7,512 7,025 5,716
Sundry............................................................................ 5,927 8,675 19,962
13,439 15,700 25,678
Other deductions:
Interest.......................................................................... 45,231 35,117 38,128
Sundry............................................................................ 1,848 419 2,694
47,079 35,536 40,822
Income (loss) before income taxes, minority interest,
equity in net income of investee companies and
cumulative effect of accounting changes........................................ (22,164) (5,355) 95,687
Income taxes........................................................................ 5,980 2,767 31,173
Income (loss) before minority interest, equity in net
income of investee companies and cumulative effect
of accounting changes.......................................................... (28,144) (8,122) 64,514
Income applicable to minority interest.............................................. 216 466 486
Income (loss) before equity in net income of investee
companies and cumulative effect of accounting changes.......................... (28,360) (8,588) 64,028
Equity in net income (loss) of investee companies (net of
U.S. tax expense of $370, 1995; $589, 1994;
$145, 1993).................................................................... (1,805) 98 1,259
Income (loss) before cumulative effect of accounting
changes........................................................................... (30,165) (8,490) 65,287
Cumulative effect of accounting changes:
Postretirement benefit plans (net of applicable
income tax benefit of $5,965).................................................. -- -- (9,746)
Income taxes........................................................................ -- -- 8,963
Net Income (Loss).............................................................. $ (30,165) $ (8,490) $ 64,504
EARNINGS PER SHARE, PRIMARY
Income (loss) before cumulative effect of accounting
changes:.......................................................................... $ (.79) $ (.22) $ 1.76
Cumulative effect of accounting changes:
Postretirement benefit plans, net of tax.......................................... -- -- (.26)
Income taxes...................................................................... -- -- .24
Net Income (Loss).............................................................. $ (.79) $ (.22) $ 1.74
EARNINGS PER SHARE, ASSUMING FULL DILUTION
Income before cumulative effect of accounting changes:.............................. $ * $ * $ 1.65
Cumulative effect of accounting changes:
Postretirement benefit plans, net of tax.......................................... * * (.24)
Income taxes...................................................................... * * .22
Net Income..................................................................... $ * $ * $ 1.63
Weighted average number of common shares
Primary........................................................................... 38,100 38,091 37,072
Assuming full dilution............................................................ 42,355 42,297 41,310
</TABLE>

See notes to consolidated financial statements

* Computation of loss per share is anti-dilutive for the fiscal years 1994 and
1995.

-21-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet

(in thousands)

<TABLE>
<CAPTION>
June 30
1995 1994
<S> <C> <C>
ASSETS

Current assets
Cash and cash equivalents.................................................................... $ 42,326 $ 12,471
Notes receivable............................................................................. 2,002 16,531
Trade receivables, net of allowances
(1995 - $8,823, 1994 - $9,972)............................................................ 182,750 164,314
Inventories:
Tobacco................................................................................... 410,431 403,211
Other..................................................................................... 14,179 5,675
Advances on purchases of tobacco............................................................. 44,379 60,129
Recoverable income taxes..................................................................... 2,007 6,151
Prepaid expenses and other assets............................................................ 33,045 16,961
Total current assets.................................................................... 731,119 685,443
Investments and other assets
Equity in net assets of investee companies................................................... 22,622 34,407
Other investments............................................................................ 1,749 14,336
Notes receivable............................................................................. 6,107 12,616
Other........................................................................................ 28,147 16,040
58,625 77,399
Intangible assets
Excess of cost over related net assets
of businesses acquired.................................................................... 26,167 12,694
Production and supply contracts.............................................................. 36,340 42,340
Pension asset................................................................................ 4,219 2,458
66,726 57,492
Property, plant and equipment
Land......................................................................................... 19,432 17,632
Buildings.................................................................................... 135,808 117,783
Machinery and equipment...................................................................... 169,181 160,909
Allowances for depreciation.................................................................. (101,372) (86,585)
223,049 209,739
Deferred taxes and other deferred charges...................................................... 14,089 13,743
$ 1,093,608 $ 1,043,816
</TABLE>

-22-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet -- Continued

(in thousands)

<TABLE>
<CAPTION>
June 30
1995 1994
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Notes payable to banks.......................................................................... $ 233,736 $ 255,607
Accounts payable:
Trade........................................................................................ 56,559 84,645
Officers and employees....................................................................... 20,714 18,073
Other........................................................................................ 13,173 9,592
Advances from customers......................................................................... 49,224 48,929
Accrued expenses................................................................................ 57,359 31,858
Income taxes.................................................................................... 11,199 4,846
Long-term debt current.......................................................................... 11,558 14,226
Total current liabilities.................................................................. 453,522 467,776
Long-term debt
Revolving Credit Notes and Other................................................................ 292,528 188,825
Convertible Subordinated Debentures............................................................. 56,370 56,475
348,898 245,300
Deferred credits
Income taxes.................................................................................... 10,731 11,227
Compensation and other benefits................................................................. 40,715 29,972
51,446 41,199
Minority interest in subsidiaries................................................................. 936 1,227
Commitments and contingencies..................................................................... -- --
Stockholders' equity
Preferred Stock -- no par value:
1995
Authorized shares.......................... 10,000
Issued shares.............................. --
Common Stock -- no par value:
1995
Authorized shares.......................... 125,000
Issued shares.............................. 38,092........................................ 80,030 79,861
Retained earnings............................................................................... 157,880 203,615
Equity -- currency conversions.................................................................. 1,565 6,471
Additional minimum pension liability............................................................ (1,286) (1,374)
Unrealized gain (loss) on investments........................................................... 617 (259)
238,806 288,314
$1,093,608 $1,043,816
</TABLE>

See notes to consolidated financial statements

-23-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Stockholders' Equity

(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Additional
Equity Minimum Unrealized
Common Preferred Retained Currency Pension Gain (Loss) On
Stock Stock Earnings Conversions Liability Investments
<S> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1992.................. $37,505 $ 13,368 $170,434 $ 2,075 $ (420) $ --
Net income for the year................. 64,504
Cash dividends -- $0.26 per share....... (9,819 )
Recapitalization of preferred stock..... 13,368 (13,368 )
Issuance of common stock in connection
with public offering.................. 27,765
Conversion of foreign currency financial
statements............................ 1,402
Reduction in minimum pension
liability............................. 140
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 410
Stock options exercised................. 785
Balance, June 30, 1993.................. $79,833 $ -- $225,119 $ 3,477 $ (280) $ --
Net loss for the year................... (8,490 )
Cash dividends -- $0.34 per share....... (13,014 )
Conversion of foreign currency financial
statements............................ 2,994
Additional minimum pension liability.... (1,094)
Stock options exercised................. 28
Unrealized loss on investments.......... (259)
Balance, June 30, 1994.................. $79,861 $ -- $203,615 $ 6,471 $ (1,374) $ (259)
Net loss for the year................... (30,165 )
Cash dividends -- $0.41 per share....... (15,570 )
Conversion of foreign currency financial
statements............................ (4,906)
Reduction in minimum pension
liability............................. 88
Stock options exercised................. 67
Unrealized gain on investments.......... 876
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 102
Balance, June 30, 1995.................. $80,030 $ -- $157,880 $ 1,565 $ (1,286) $ 617

<CAPTION>
Total
Stockholders'
Equity
<S> <C>
Balance, June 30, 1992.................. $222,962
Net income for the year................. 64,504
Cash dividends -- $0.26 per share....... (9,819)
Recapitalization of preferred stock..... --
Issuance of common stock in connection
with public offering.................. 27,765
Conversion of foreign currency financial
statements............................ 1,402
Reduction in minimum pension
liability............................. 140
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 410
Stock options exercised................. 785
Balance, June 30, 1993.................. $308,149
Net loss for the year................... (8,490)
Cash dividends -- $0.34 per share....... (13,014)
Conversion of foreign currency financial
statements............................ 2,994
Additional minimum pension liability.... (1,094)
Stock options exercised................. 28
Unrealized loss on investments.......... (259)
Balance, June 30, 1994.................. $288,314
Net loss for the year................... (30,165)
Cash dividends -- $0.41 per share....... (15,570)
Conversion of foreign currency financial
statements............................ (4,906)
Reduction in minimum pension
liability............................. 88
Stock options exercised................. 67
Unrealized gain on investments.......... 876
Conversion of 7 3/4% Convertible
Debentures to Common Stock............ 102
Balance, June 30, 1995.................. $238,806
</TABLE>

See notes to consolidated financial statements

-24-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Cash Flows

(in thousands)

<TABLE>
<CAPTION>
Years Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Operating activities
Net Income (Loss)....................................................................... $ (30,165) $ (8,490) $ 64,504
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization......................................................... 31,852 28,862 24,559
Deferred items........................................................................ (620) 565 1,341
Loss (gain) on foreign currency transactions.......................................... 570 (1,179) (9,339)
Gain on disposition of fixed assets................................................... (1,819) (1,624) (3,234)
Undistributed (earnings) loss of investees............................................ 1,805 (99) (1,259)
Dividends received from investees..................................................... 478 577 3,756
Income applicable to minority interest................................................ 216 466 486
Bad debt expense...................................................................... 3,820 4,681 4,258
Gain on disposal of operations........................................................ -- (1,792) --
Cumulative effect of accounting changes............................................... -- -- 783
Decrease (increase) in accounts receivable............................................ 52,520 31,454 (26,476)
Decrease (increase) in inventories and advances on purchases of tobacco............... 2,156 (16,512) (51,911)
Decrease in recoverable taxes......................................................... 4,293 1,351 1,167
Decrease (increase) in prepaid expenses............................................... (3,581) (2,056) 4,085
Increase (decrease) in accounts payable and accrued expenses.......................... (58,163) 9,730 12,938
Increase (decrease) in advances from customers........................................ (3,028) 4,951 10,719
Increase (decrease) in income taxes................................................... 6,075 (8,744) 3,095
Other................................................................................. 404 (4,983) 7,309
Net cash provided by operating activities........................................... 6,813 37,158 46,781
Investing activities
Purchase of property and equipment...................................................... (27,036) (32,382) (42,232)
Proceeds from sale of property and equipment............................................ 4,877 5,991 5,220
Payments on notes receivable and receivables from investees............................. 27,541 4,477 5,408
Issuance of notes receivable............................................................ (6,329) (18,385) (17,302)
Proceeds from or (advances) for other investments and other assets...................... 4,067 (194) (7,897)
Purchase of minority interest in subsidiaries........................................... (507) -- --
Purchase of subsidiaries, $8,856 for property and equipment............................. (17,123) -- --
Purchase of shares of Standard Commercial Corporation................................... -- (13,408) (386)
Other................................................................................... -- (194) (130)
Net cash used by investing activities............................................... (14,510) (54,095) (57,319)
Financing activities
Repayment of debt....................................................................... (927,022) (279,304) (358,818)
Proceeds from debt...................................................................... 978,366 307,246 346,189
Cash dividends paid to DIMON Incorporated stockholders.................................. (15,570) (13,014) (9,818)
Cash dividends paid to minority stockholders............................................ (237) (285) (351)
Proceeds from sale of common stock...................................................... 169 28 28,298
Net cash provided by financing activities........................................... 35,706 14,671 5,500
Effect of exchange rate changes on cash................................................... (1,584) (1,662) 779
Increase (decrease) in cash and cash equivalents.......................................... 26,425 (3,928) (4,259)
Increase in cash from purchased subsidiaries.............................................. 3,430 -- --
Cash and cash equivalents at beginning of year............................................ 12,471 16,399 20,658
Cash and cash equivalents at end of year............................................ $ 42,326 $ 12,471 $ 16,399
Other information:
Cash paid during the year:
Interest.............................................................................. $ 46,768 $ 34,965 $ 34,627
Income taxes.......................................................................... 18,917 12,627 27,204
Non-cash investing and financing activities:
Capitalized leases.................................................................... -- -- 180
Conversion of debt to equity.......................................................... 102 -- 420
Exercise of stock options............................................................. -- -- 232
</TABLE>

See notes to consolidated financial statements

-25-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(in thousands)

NOTE A -- MERGER AND SIGNIFICANT ACCOUNTING POLICIES

Merger

On October 23, 1994, Dibrell and Monk-Austin announced execution of a
definitive Agreement and Plan of Reorganization pursuant to which the businesses
of Dibrell and Monk-Austin would be combined. At special meetings on March 31,
1995, the shareholders of both Dibrell and Monk-Austin approved the Agreement
and related combination. As a result, Dibrell and Monk-Austin were merged into
DIMON Incorporated ("DIMON") and each share of Dibrell Common Stock outstanding
at the merger date was converted to 1.5 shares, and each share of Monk-Austin
Common Stock outstanding at the merger date was converted into 1.0 share of
DIMON Common Stock, resulting in 38.069 million total outstanding shares at
April 1, 1995, the effective date of the merger.

The merger qualifies as a tax free reorganization and was accounted for as a
pooling of interests. Accordingly, the Company's financial statements have been
restated to include the results of both Dibrell and Monk-Austin for all periods
presented. Recorded assets and liabilities have been carried forward to the
combined company at their historical book values.

Combined and separate results of Dibrell and Monk-Austin during the periods
preceding the merger were as follows:

<TABLE>
<CAPTION>
Dibrell Monk-Austin Adjustment Combined
<S> <C> <C> <C> <C>
Nine months ended March 31, 1995 (unaudited)
Net revenues.............................................................. $ 812,021 $ 735,653 $ (140) $1,547,534
Net income (loss)......................................................... 6,090 (6,152) 9,829 9,767
Fiscal year ended June 30, 1994
Net revenues.............................................................. $ 919,114 $ 528,256 $ 1,708 $1,449,078
Net income (loss)......................................................... (9,144) 930 (276) (8,490)
Fiscal year ended June 30, 1993
Net revenues.............................................................. $1,065,439 $ 611,433 $ 3,744 $1,680,616
Net income (loss)......................................................... 39,348 28,692 (3,536) 64,504
</TABLE>

The combined financial results presented above include adjustments made to
conform accounting policies of the two companies. The significant adjustments
impacting net income for conformity relate to the accounting for income taxes,
the treatment of grower advances in Brazil, foreign currency transaction gains
and losses and certain other inventory costing policies. All other adjustments
are reclassifications to conform financial statement presentation. Intercompany
transactions between the two companies for the periods presented were not
material.

Significant Accounting Policies

The accounts of the Company and its consolidated subsidiaries are included
in the consolidated financial statements after elimination of significant
intercompany accounts and transactions. Certain foreign consolidated
subsidiaries of the Company have fiscal year ends of March 31 and May 31 to
facilitate reporting of consolidated accounts. The Company accounts for its
investments in certain investee companies (ownership 20% - 50%) under the equity
method of accounting. Investments in certain other foreign investees and
subsidiaries which are combined with other investments are stated at cost or
less than cost since the Company does not exercise significant influence over
financial or operating policies and because of restrictions imposed on the
transfer of earnings and other economic uncertainties.

Sales and revenue recognition is based on the passage of ownership, usually
with shipment of product.

Cash equivalents are defined as temporary investments of cash with
maturities of less than 90 days.

Inventories are valued at the lower of cost or market. Inventory valuation
provisions included in cost of goods and services sold totaled approximately
$9.2 million and $40.9 million for 1995 and 1994, respectively. Costs of tobacco
inventories are generally determined by the average cost method while costs of
other inventories are generally determined by the first-in, first-out method.
Substantially all of the tobacco inventory represents finished goods. Interest
and other carrying charges on the inventories are expensed in the period in
which they are incurred.

-26-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE A -- MERGER AND SIGNIFICANT ACCOUNTING POLICIES -- Continued
Equity in net assets of investee companies includes excess of equity over
cost in the amount of $2,244 ($2,066 in 1994) and is being amortized on a
straight-line basis over ten years.

Excess of cost over related net assets of businesses acquired is being
amortized on a straight-line basis over periods ranging from 10 to 40 years. The
accumulated amortization at June 30, 1995, is $4,283 ($2,912 at June 30, 1994).

Supply contracts include the cost allocated to two ten-year tobacco supply
agreements with R. J. Reynolds Tobacco Company (Reynolds) pursuant to which the
Company will supply Reynolds and its affiliates with specified quantities of its
required tobaccos. Each contract is being amortized over the quantities shipped
or the contract period, whichever is sooner. The accumulated amortization at
June 30, 1995, is $15,129 ($11,311 at June 30, 1994).

Production contracts include the cost allocated to contracts associated with
farmers for the future supply of their annual tobacco production. The production
contracts are being amortized primarily on a straight-line basis over ten years.
The accumulated amortization at June 30, 1995, is $9,931 ($7,360 at June 30,
1994).

Property, plant and equipment is accounted for on the basis of cost.
Provisions for depreciation are computed on a straight-line basis at annual
rates calculated to amortize the cost of depreciable properties over their
estimated useful lives. Buildings and machinery and equipment are depreciated
over ranges of 20 to 40 years and over five to ten years, respectively. The
consolidated financial statements do not include fully depreciated assets.

The Company provides deferred income taxes on temporary differences arising
from tax loss carryforwards, employee benefit accruals, depreciation, deferred
compensation and undistributed earnings of consolidated subsidiaries and
unconsolidated affiliates not permanently reinvested.

Primary earnings per share are computed by dividing earnings by the weighted
average number of shares outstanding plus any common stock equivalents during
each period. The fully diluted earnings per share calculation assumes that all
of the Convertible Subordinated Debentures were converted into Common Stock at
the beginning of the reporting period thereby increasing the weighted average
number of shares considered outstanding during each period and reducing the
after-tax interest expense. The weighted average number of shares outstanding
are further increased by common stock equivalents on employee stock options.

The Company carries its equity security investments at fair value as prepaid
expenses and other assets with any change from the average cost basis being
reflected in stockholders' equity net of the tax benefit.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets To Be Disposed Of." The Company is
required to adopt the new method of accounting for long-lived assets no later
than the first quarter of fiscal year 1997. The Company believes that its
adoption of SFAS No. 121 will not have a material impact on its financial
position.

In October, 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123 "Accounting for Stock-Based
Compensation," which will be effective for the Company's fiscal year 1997
statements. SFAS No. 123 defines a fair value based method of accounting for
stock-based compensation and requires certain disclosures to be made by entities
electing not to adopt this method. The Company has not yet determined the impact
of adoption of SFAS No. 123.

-27-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE B -- INVESTEE COMPANIES, RELATED PARTIES AND ACQUISITIONS

The combined summarized information for investee companies is approximately
as follows:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current assets.................................................................. $ 84,635 $110,531 $144,235
Non-current assets.............................................................. 57,344 67,066 70,044
Current liabilities............................................................. 84,244 99,649 129,506
Non-current liabilities......................................................... 3,130 6,275 8,942
Interest of other shareholders.................................................. 31,982 37,953 39,382
Net sales....................................................................... 120,183 146,731 210,575
Gross profit.................................................................... 9,953 22,506 25,772
Net income (loss)............................................................... (1,395) 2,609 3,933
</TABLE>

Balances with related parties, primarily unconsolidated, affiliated
companies, are as follows:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Trade receivables............................................................... $ 21,258 $ 10,968 $ 8,884
Advances on purchases of tobacco................................................ 9,716 38,557 75,809
Notes receivable................................................................ 4,169 10,425 3,496
Trade payables.................................................................. 1,556 7,555 4,428
Other income: Interest.......................................................... 1,376 1,299 497
Net sales....................................................................... 12,907 16,257 13,217
Purchases of tobacco............................................................ 73,474 76,321 108,690
</TABLE>

On April 1, 1995 the Company acquired the businesses of Austro-Hellenique De
Tabac S.A. (Hellas) and Austro-Turk Tutun A.S. (Austro-Turk) for cash of $13,372
and assumption of liabilities of $3,821. Hellas and Austro-Turk have tobacco
buying, processing and selling operations in Greece and Turkey, respectively.
This acquisition has been accounted for as a purchase. The excess of cost over
businesses acquired of $17,193 will be amortized over a ten year period.

The following pro forma information has been prepared assuming that this
acquisition had taken place at the beginning of the period. The pro forma
information includes adjustments to give effect to amortization of goodwill and
interest expense on acquisition debt, together with related income tax effects.

<TABLE>
<CAPTION>
Year ended June 30, 1995
(unaudited)
<S> <C>
Net sales of goods and services...................................................................... $1,965,437
Net loss............................................................................................. 36,577
Loss per share, primary.............................................................................. .96
</TABLE>

NOTE C -- LONG-TERM DEBT

Such debt is comprised of:

<TABLE>
<CAPTION>
1995 1994
Maturing Maturing Maturing Maturing
within after within after
One Year One Year One Year One Year
<S> <C> <C> <C> <C>
Convertible Subordinated Debentures.................... $ -- $ 56,370 $ -- $ 56,475
Revolving Credit Notes................................. -- 250,000 -- 140,000
Other Long-Term Debt................................... 9,679 40,772 12,372 47,191
$ 9,679 $347,142 $12,372 $ 243,666
Capitalized Lease Obligations.......................... 1,879 1,756 1,854 1,634
$11,558 $348,898 $14,226 $ 245,300
</TABLE>

-28-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE C -- LONG-TERM DEBT -- Continued
Payments of the debt are scheduled as follows:

<TABLE>
<CAPTION>
Convertible Revolving Other
Subordinated Credit Long-Term
Debentures Notes Debt Total
<S> <C> <C> <C> <C>
1997.............................................. $ -- $ 250,000 $12,084 $262,084
1998.............................................. -- -- 8,037 8,037
1999.............................................. -- -- 7,988 7,988
2000.............................................. -- -- 4,679 4,679
2001.............................................. -- -- 1,864 1,864
2002.............................................. -- -- 1,714 1,714
Later years....................................... 56,370 -- 4,406 60,776
$ 56,370 $ 250,000 $40,772 $347,142
</TABLE>

Other long-term debt consists of obligations of DIMON Incorporated,
Florimex, Baardse and the tobacco operations in Brazil, and is principally
payable in foreign currencies at interest rates varying from 6.35% to 14.4%.

The capitalized lease obligations are payable through fiscal 1999. Interest
rates are imputed at 7.0% to 10.7%.

To ensure long-term liquidity, DIMON has entered into a $250 million Credit
Agreement with 13 banks (the Revolver). This Revolver replaces Dibrell's
Revolving Credit Notes of $130 million and Monk-Austin's Credit Agreement of
$125 million. The Company had no borrowings under the agreement at either June
30, 1995 or 1994. However, the Company has used these facilities to classify
$250,000 ($130,000 at June 30, 1994) of working capital loans to Revolving
Credit Notes. It is the Company's intent to finance at least $250,000 on a
long-term basis. The interest rates available under the Revolver depend on the
type of advance selected. The primary advance rate is the agent bank's base
lending rate (9% at June 30, 1995). The Revolver is subject to certain
commitment fees and covenants that among other things require DIMON to maintain
minimum working capital and tangible net worth amounts, require specific
liquidity and long-term solvency ratios and restrict acquisitions and, under
certain circumstances, payment of dividends by the Company. The Revolver's
initial term is to March 31, 1997, and, pending approval by the lenders, may be
extended for up to three additional years.

The rates of interest are based upon the type of loan requested by the
Company. During the life of the agreement the interest rate could be the prime
rate or the LIBOR rate adjusted. The Company pays a commitment fee of 1/4% per
annum on any unused portion of the facility. Decisions relative to repayments
and reborrowings are made based on circumstances then existing, including
management's judgment as to the most effective utilization of funds.

On June 3, 1991, Dibrell issued $57.5 million of 7 3/4% Convertible
Subordinated Debentures due on September 30, 2006. The bonds are convertible
into shares of the Company's Common Stock at a conversion price of approximately
$13.44 at any time prior to maturity. The Debentures are subordinated in right
of payment to all existing and future senior indebtedness, as defined, of the
Company. The Debentures are redeemable at the option of the Company under
certain circumstances on or after September 30, 1994. Beginning September 30,
2002, and ending September 30, 2005, the Company is required to make payments
each year to a sinking fund in an amount sufficient to redeem 5% of the
aggregate principal amount of the securities. At June 30, 1995, principal
amounts of $1,130 have been converted into 84.1 thousand shares of the Company's
Common Stock.

NOTE D -- RETAINED EARNINGS

Consolidated retained earnings included $4,860 at June 30, 1995, for the
Company's share of undistributed net income of investee companies accounted for
on the equity method.

-29-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE E -- INCOME TAXES

Consolidated retained earnings at June 30, 1995 and 1994 include
undistributed earnings of $101,102 and $118,247 respectively, of certain foreign
consolidated and unconsolidated subsidiaries which are not subject to additional
foreign income taxes nor considered to be subject to United States income taxes
unless remitted as dividends. The Company intends to reinvest these
undistributed earnings indefinitely; accordingly, no provision has been made for
United States taxes on such earnings.

At June 30, 1995, the Company has net operating tax loss carryforwards of
approximately $45,730 for income tax purposes that expire in 1996 and
thereafter. Those carryforwards relate primarily to the operations of Dibrell
Brothers International S.A., a 100% owned Swiss sales subsidiary of the tobacco
division, Florimex and Baardse. For tax return purposes, the Company has
available tax credit carryforwards of approximately $2,000 which will expire in
1999.

The components of income (loss) before income taxes, minority interest,
equity in net income of investee companies and cumulative effect of accounting
changes, consisted of the following:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
U.S................................................................................. $(28,293) $(1,837) $51,564
Foreign............................................................................. 6,129 (3,518) 44,123
$(22,164) $(5,355) $95,687
</TABLE>

The details of the amount shown for income taxes in the Statement of
Consolidated Income follow:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current
Federal........................................................................... $ 4,967 $ 2,721 $17,515
State............................................................................. 73 469 1,904
Foreign........................................................................... 9,719 109 8,533
$ 14,759 $ 3,299 $27,952
Deferred
Federal........................................................................... $ (6,622) $(2,417) $ (392)
State............................................................................. (810) (546) 3
Foreign........................................................................... (1,347) 2,431 3,610
$ (8,779) $ (532) $ 3,221
Total............................................................................... $ 5,980 $ 2,767 $31,173
</TABLE>

-30-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE E -- INCOME TAXES -- Continued
The reasons for the difference between income tax expense based on income or
(loss) before income taxes, minority interest, equity in net income of investee
companies, and cumulative effect of accounting changes, and the amount computed
by applying the statutory Federal income tax rate to such income, are as
follows:

<TABLE>
<CAPTION>
Pre-tax Income
1995 1994 1993
<S> <C> <C> <C>
Computed "expected" tax expense (benefit)............................................ $(7,757) $(1,784) $32,975
State income taxes, net of Federal income tax benefit................................ (530) (77) 1,213
Effect of foreign income taxes....................................................... 6,962 2,324 (2,365)
Brazilian tax benefit for preacquisition indexing.................................... -- -- (3,033)
U.S. taxes on foreign income, net of tax credits..................................... 1,440 524 1,042
Net operating losses without benefit................................................. 2,748 2,658 1,932
Net operating loss benefits.......................................................... (806) (762) (281)
Tax benefits derived from Foreign Sales Corporations................................. (887) (1,169) (1,309)
Excess tax basis depreciation........................................................ -- -- (327)
Meals and entertainment.............................................................. 316 200 --
Non-deductible merger expenses....................................................... 1,583 -- --
Amortization of goodwill............................................................. 1,787 799 621
Other, net........................................................................... 1,124 54 705
Actual tax expense................................................................... $ 5,980 $ 2,767 $31,173
</TABLE>

The long-term deferred tax liabilities (assets) are comprised of the
following:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax liabilities:
Fixed assets......................................................................................... $ 13,825 $ 13,073
Foreign earnings and investments..................................................................... 1,637 592
Other................................................................................................ -- 969
Gross deferred tax liabilities......................................................................... 15,462 14,634
Deferred tax assets:
Tax loss carryforwards............................................................................... (12,618) (8,219)
Postretirement and other benefits.................................................................... (9,041) (7,070)
Depreciation......................................................................................... -- (2,320)
Inventory reserves................................................................................... -- (1,767)
Reserve for bad debts................................................................................ -- (747)
Contingent liability................................................................................. (2,594) (2,594)
Foreign tax credit................................................................................... (2,000) (2,000)
Other................................................................................................ (1,333) (1,178)
Gross deferred tax assets.............................................................................. (27,586) (25,895)
Valuation allowance.................................................................................... 12,414 8,996
Net deferred tax assets................................................................................ (15,172) (16,899)
Net deferred tax liability (asset)..................................................................... $ 290 $ (2,265)
</TABLE>

The net change in the valuation allowance for deferred tax assets was an
increase of $3,418 and relates primarily to the increase in tax loss
carryforwards for which no benefit can be currently recognized.

-31-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE F -- EMPLOYEE BENEFITS

Retirement Benefits

The Company assumed the defined Benefit Pension Plan (the Retirement Plan)
and an Excess Benefit Plan of the former Dibrell. The Retirement Plan provides
retirement benefits for substantially all of Dibrell's U.S. salaried personnel
based on years of service rendered and compensation during the last five years
of employment. The Company maintains an Excess Benefit Plan that provides
individuals who participate in the Retirement Plan the difference between the
benefits they could potentially accrue under the Retirement Plan and the
benefits actually paid as limited by regulations imposed by the Internal Revenue
Code. The Company funds these plans in amounts consistent with the funding
requirements of Federal Law and Regulations.

Certain non-U.S. plans are sponsored by certain Florimex subsidiaries
located in Italy, Austria and Germany. These plans cover substantially all of
their full-time employees. Additional non-U.S. plans sponsored by certain
tobacco subsidiaries cover substantially all of their full-time employees
located in The Netherlands, Turkey and Zimbabwe.

The following tables include both U.S. and non-U.S. plans.

Net pension cost included the following components:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost -- benefits earned during the year...................................... $ 1,528 $ 1,270 $ 1,309
Interest cost on projected benefit obligation........................................ 4,040 3,612 3,402
Return on assets -- actual........................................................... (4,596) (357) (2,741)
Amortization of transition asset at July, 1986....................................... (268) (273) (269)
Amortization of prior service costs.................................................. 704 488 481
Amortization of unrecognized loss(gain).............................................. 1,778 (2,537) (90)
Net Pension Cost................................................................... $ 3,186 $ 2,203 $ 2,092
</TABLE>

The funded status of the plans at June 30 was as follows:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Actuarial present value of accumulated benefit obligation
Vested.................................................................................... $41,935 $34,970
Nonvested................................................................................. 576 579
42,511 35,549
Benefits attributable to projected salary increases......................................... 12,077 9,800
54,588 45,349
Plan assets at fair value................................................................... 37,141 31,556
Projected benefit obligation in excess of plan assets....................................... 17,447 13,793
Unamortized transition asset (obligation)................................................... (425) 2,359
Unrecognized prior service costs............................................................ (5,283) (5,290)
Unrecognized net loss....................................................................... (1,797) (3,113)
Adjustment required to recognize minimum liability.......................................... 5,505 3,871
Net pension liability..................................................................... $15,447 $11,620
</TABLE>

For the U.S. plans, projected benefit obligations were determined using
assumed discount rates of 8% for the Retirement Plan for all three years and 8%
for the Excess Benefit Plan for 1995 and 1994 and 10% for 1993. Assumed
compensation increases were 6.5% for all three years for the Retirement Plan and
5% for 1995 and 4% for 1994 and 1993 for the Excess Benefit Plan. The assumed
long-term rate of return on plan assets for all three years was 9% for the
Retirement Plan and 8% for 1995 and 10% for 1994 and 1993 for the Excess Benefit
Plan. Plan assets consist principally of common stock and fixed income
securities. For non-U.S. plans, discount rates and assumed compensation
increases are in accordance with locally

-32-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE F -- EMPLOYEE BENEFITS -- Continued
accepted practice. No assumed long-term rate of return is made for non-U.S. plan
assets as these plans are generally not funded.

The Company also sponsors a 401-K savings plan for most of its salaried
employees located in the United States. The Company's contributions to the plan
were $652 in 1995, $648 in 1994 and $452 in 1993.

The Company has a Profit-Sharing Plan for substantially all of the salaried
employees meeting certain eligibility requirements who were employed by
Monk-Austin. This Profit Sharing Plan is in lieu of a defined benefit pension
plan. Profit-Sharing Plan contributions are discretionary and totaled $1,043 in
1995, $1,416 in 1994 and $1,569 in 1993.

The Company is in the process of standardizing employee benefits and expects
this process to be completed in fiscal year 1996. The Company has not yet
determined its future plans for the separate benefit plans for former employees
of Dibrell and Monk-Austin. No material financial statement impact is
anticipated from this standardization.

Postretirement Health and Life Insurance Benefits

The Company provides certain health and life insurance benefits to retired
employees (and their eligible dependents) who meet specified age and service
requirements. Plan assets consist of paid up life insurance policies on certain
current retirees. The Company retains the right, subject to existing agreements,
to modify or eliminate the medical benefits.

Effective July 1, 1992 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 106, "Employer's Accounting for Postretirement Benefits
Other Than Pensions." This statement requires the accrual of the cost of
providing postretirement benefits, including medical and life insurance
coverage, during the active service period of the employee. In adopting SFAS
106, the Company elected to immediately recognize the accumulated liability,
measured at the adoption date. This accumulated liability at adoption was
$15,711 ($9,746 net of tax).

The benefit obligation was determined using an assumed discount rate of 8.0%
for 1995 and 1994 and 8.5% for 1993 and an assumed rate of increase in health
care costs, also known as the health care cost trend rate, of 13.0% for 1995 and
1994 and 15.5% for 1993. This trend rate is assumed to decrease gradually to 6%
by fiscal 2007. The assumed long-term rate of return on plan assets was 5.4% for
1995 and 1994 and 7.6% for 1993. Based on current estimates, increasing the
health care cost trend rate by one percentage point would increase the benefit
obligation by approximately $1.4 million.

The following table presents the plan's funded status at June 30 reconciled
with amounts recognized in the Company's balance sheet:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................................................. $11,104 $10,343
Fully eligible active plan participants................................................... 2,937 2,872
Other active plan participants............................................................ 4,118 3,874
Plan assets at fair value................................................................... (159) (305)
Accumulated postretirement benefit obligation in excess of plan assets...................... 18,000 16,784
Unrecognized prior service cost............................................................. (191) --
Unrecognized net gain....................................................................... 1,237 1,189
Accrued postretirement benefit cost......................................................... $19,046 $17,973
</TABLE>

-33-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE F -- EMPLOYEE BENEFITS -- Continued
Net periodic postretirement benefit cost included the following components:

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Service cost................................................................................... $ 395 $ 361
Interest cost.................................................................................. 1,348 1,338
Actual return on plan assets................................................................... 7 (17)
Net periodic postretirement benefit cost....................................................... $1,750 $1,682
</TABLE>

The Company continues to evaluate ways in which it can better manage these
benefits and control the costs. Any changes in the plan or revisions to
assumptions that affect the amount of expected future benefits may have a
significant effect on the amount of the reported obligation and annual expense.

Employees in operations located in certain foreign countries are covered by
various foreign postretirement life insurance benefit arrangements. For these
foreign plans, neither the cash-basis cost of benefits charged to income, nor
the accrual-basis cost of benefits was material in 1995, 1994 and 1993.

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION

The following description and tables present the Company's tobacco and
flower operations in different geographic areas in conformity with the Statement
of Financial Accounting Standards No. 14, "Financial Reporting for Segments of a
Business Enterprise" (SFAS 14). Geographic area information for tobacco
operations as to net sales and operating profit is based on the origin of the
product sold, and identifiable assets are classified based on the origination of
the product. Turkish tobacco is included in other origin. Geographic area
information for flower operations as to net sales and operating profit is based
on the point of sale, and identifiable assets are classified based on the point
of sale. Corporate assets consist primarily of those related to cost
investments. Export sales are defined as foreign sales of United States origin.

Tobacco

DIMON Incorporated is principally engaged in the tobacco business. The
Company and its U.S. tobacco subsidiaries buy leaf tobacco on the auction
markets in Florida, Georgia, South Carolina, North Carolina, Virginia, Kentucky,
Tennessee and Maryland for its customers. This tobacco is shipped to plants
located in Virginia and North Carolina where it is processed, packed in
hogsheads or cases and then stored until ordered shipped by the Company's
customers. The Company and its tobacco subsidiaries also are engaged in buying,
processing and exporting tobacco grown in Argentina, Brazil, China, Greece,
Guatemala, India, Italy, Malawi, Mexico, Turkey, Zimbabwe and other areas which
is sold on the world markets. The Company's investee companies are located in
Brazil, Greece, Zimbabwe and the United States. The disaggregation of entities
necessary for geographic area data requires the use of estimation techniques for
operating profit. The identifiable assets presentation does not take into
account the seasonal aspects of the tobacco business, particularly the seasonal
peak in South America.

Flowers

The Company imports, exports and distributes cut flowers through the
Florimex group, which operates through 52 offices on five continents, and
through Baardse, which is located in The Netherlands.

-34-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued

<TABLE>
<CAPTION>
Operating
Profit (Loss)
As Defined By Identifiable
Net Sales SFAS 14 Assets
<S> <C> <C> <C>
1995
Tobacco
United States................................................................... $ 876,982 $ 17,737 $ 119,889
South America................................................................... 442,891 15,986 455,526
Asia............................................................................ 27,890 (2,975) 40,850
Africa.......................................................................... 161,455 2,706 150,736
Other........................................................................... 34,965 1,265 74,180
Worldwide supply contract....................................................... -- -- 10,770
$1,544,183 $ 34,719 $ 851,951
Flowers
Europe.......................................................................... $ 324,338 $ 2,421 $ 98,835
United States................................................................... 24,439 (6,259) 6,722
Other........................................................................... 34,789 712 4,976
$ 383,566 $ (3,126) $ 110,533
$1,927,749 $ 31,593 $ 962,484
Corporate......................................................................... (8,807) 108,502
Equity in net assets of
investee companies and
related advances: Tobacco....................................................... -- 22,622
$ 1,093,608
Operating profit
before interest expense......................................................... $ 22,786
Interest expense.................................................................. (45,231)
Dividend income................................................................... 281
Income (loss) before income taxes, minority
interest, and equity in net assets of
investee companies........................................................... $ (22,164)
</TABLE>

<TABLE>
<CAPTION>
Europe Far East Other Total

<S> <C> <C> <C> <C>
Export sales of U.S. origin................................................... $174,649 $260,310 $23,891 $458,850
</TABLE>

<TABLE>
<CAPTION>
Tobacco Flowers Total
<S> <C> <C> <C>
Depreciation and amortization................................................................. $24,034 $ 7,818 $31,852
Capital expenditures.......................................................................... $29,033 $ 6,859 $35,892
Equity in net income of investee companies.................................................... $ 1,805 $ -- $ 1,805
</TABLE>

-35-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued

<TABLE>
<CAPTION>
Operating
Profit (Loss)
As Defined By Identifiable
Net Sales SFAS 14 Assets
<S> <C> <C> <C>
1994
Tobacco
United States................................................................... $ 541,646 $ 19,110 $ 268,910
South America................................................................... 281,472 1,905 448,428
Asia............................................................................ 34,048 (1,010) 13,177
Africa.......................................................................... 159,211 15,831 105,611
Other........................................................................... 65,166 2,576 40,993
Worldwide supply contract....................................................... -- -- 12,000
$1,081,543 $ 38,412 $ 889,119
Flowers
Europe.......................................................................... $ 294,094 $ 3,989 $ 89,241
United States................................................................... 42,304 (2,109) 10,290
Other........................................................................... 31,137 681 3,409
$ 367,535 $ 2,561 $ 102,940
$1,449,078 $ 40,973 $ 992,059
Corporate......................................................................... (11,832) 17,350
Equity in net assets of
investee companies and
related advances: Tobacco.................................................... 34,407
$ 1,043,816
Operating profit
before interest expense......................................................... $ 29,141
Interest expense.................................................................. (35,117)
Dividend income................................................................... 621
Income (loss) before income taxes, minority interest, and equity in net assets
of investee companies........................................................ $ (5,355)
</TABLE>

<TABLE>
<CAPTION>
Europe Far East Other Total
<S> <C> <C> <C> <C>
Export sales of U.S. origin................................................... $119,650 $239,881 $ 9,511 $369,042
</TABLE>

<TABLE>
<CAPTION>
Tobacco Flowers Total
<S> <C> <C> <C>
Depreciation and amortization................................................................ $21,871 $ 6,991 $28,862
Capital expenditures......................................................................... $22,354 $10,028 $32,382
Equity in net income of investee companies................................................... $ 98 $ -- $ 98
</TABLE>

-36-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued

<TABLE>
<CAPTION>
Operating
Profit (Loss)
As Defined By Identifiable
Net Sales SFAS 14 Assets
<S> <C> <C> <C>
1993
Tobacco
United States..................................................................... $ 631,205 $ 31,737 $203,220
South America..................................................................... 433,222 87,104 490,146
Asia.............................................................................. 55,113 5,114 19,888
Africa............................................................................ 113,646 10,063 92,392
Other............................................................................. 70,027 5,030 35,260
Worldwide supply contract......................................................... -- -- 14,660
$1,303,213 $ 139,048 $855,566
Flowers
Europe............................................................................ $ 312,888 $ 5,471 $ 83,273
United States..................................................................... 39,612 476 8,765
Other............................................................................. 24,903 534 3,324
$ 377,403 $ 6,481 $ 95,362
$1,680,616 $ 145,529 $950,928
Corporate........................................................................... (12,236) 5,501
Equity in net assets of
investee companies and
related advances: Tobacco...................................................... 42,091
$998,520
Operating profit
before interest expense........................................................... $ 133,293
Interest expense.................................................................... (38,128)
Dividend income..................................................................... 522
Income (loss) before income taxes,
minority interest, and equity in net
assets of investee companies................................................... $ 95,687
</TABLE>

<TABLE>
<CAPTION>
Europe Far East Other Total
<S> <C> <C> <C> <C>
Export sales of U.S. origin................................................... $154,101 $239,244 $30,874 $424,219
</TABLE>

<TABLE>
<CAPTION>
Tobacco Flowers Total
<S> <C> <C> <C>
Depreciation and amortization................................................................. $18,563 $ 5,996 $24,559
Capital expenditures.......................................................................... $33,215 $ 9,017 $42,232
Equity in net income of investee companies.................................................... $ 1,259 $ -- $ 1,259
</TABLE>

Of the 1995, 1994 and 1993 tobacco sales, approximately 53%, 43% and 37%,
respectively, were to various tobacco customers which management has reason to
believe are now owned by or under the common control of three companies (two
companies in 1994 and 1993), each of which accounted for more than 10% of net
sales. At June 30, 1995, there was approximately $22.6 million due from the
three major tobacco customers and included in Trade receivables.

-37-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE G -- GEOGRAPHIC AREA DATA, EXPORT SALES AND OTHER INFORMATION -- Continued
The following table summarizes the net sales made to each customer for the
periods indicated:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Customer A...................................................................... $317,110 $238,370 $271,688
Customer B...................................................................... 214,622 231,852 212,595
Customer C...................................................................... 279,257 -- --
Total.................................................................... $810,989 $470,222 $404,283
</TABLE>

No customers in the flower operation accounted for more than 10% of flower
sales.

NOTE H -- SHORT-TERM BORROWING ARRANGEMENTS

The Company has lines of credit arrangements with several banks under which
the Company may borrow up to a total of $876,181 ($1,032,331 at June 30, 1994),
excluding all long-term credit agreements. These lines bear interest at rates
ranging from 4.3% to 9.8% at June 30, 1995. Unused lines of credit at June 30,
1995, amounted to $508,947 ($619,761 at June 30, 1994), net of $133,498 of
available letters of credit and guarantees that reduce lines of credit. There
were no compensating balance agreements at June 30, 1995, or 1994.

NOTE I -- CONTINGENCIES AND OTHER INFORMATION

In 1993, the Company received notices from Brazilian tax authorities of
proposed adjustments to the income tax returns of the Company's entities located
in Brazil for the calendar years ending 1988 through 1992. The approximate
proposed adjustments claim additional tax, including penalties and interest, of
$36,942, before related tax benefits for all assessed interest. The Company
believes that it has properly reported its income and paid its taxes in Brazil
in accordance with applicable laws and intends to contest the proposed
adjustments vigorously. The Company expects that the ultimate resolution of this
matter will not have a material adverse effect on the Company's consolidated
balance sheet or results of operations.

Consistent with the fiscal 1994 plan to liquidate Korean American Tobacco, a
49% owned affiliate, the Company is involved in legal negotiations related to
the final settlement and liquidating dividend. While the ultimate results of
these negotiations cannot be determined, management does not expect that the
outcome will have a material adverse effect on the Company's consolidated
balance sheet or results of operations.

The Company and certain subsidiaries have available letters of credit of
$153,380 at June 30, 1995, of which $113,181 was outstanding. These letters of
credit represent, generally, performance guarantees issued in connection with
purchases and sales of domestic and foreign tobacco.

The Company is guarantor as to certain lines and letters of credit of
affiliated companies in an amount not to exceed approximately $14,080. There was
approximately $7,388 outstanding under these guarantees at June 30, 1995.

The Company's subsidiaries have guaranteed certain loans made by Brazilian
banks to local farmers. There was approximately $20,563 outstanding under these
guarantees at June 30, 1995.

The Company enters into forward exchange contracts to hedge certain foreign
currency transactions for periods consistent with the terms of the underlying
transactions. While the forward contracts affect the Company's results of
operations, they do so only in connection with the underlying transactions. As a
result, they do not subject the Company to risk from exchange rate movements,
because gains and losses on these contracts offset losses and gains on the
transactions being hedged. At June 30, 1995, the Company had $1 million ($7
million in 1994) of U.S. dollar/Deutschmark exchange contracts outstanding, all
of which were in Deutschmarks. The forward exchange contracts generally have
maturities that do not exceed 275 days.

The Company's other off balance sheet risks are not material.

-38-

DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE J -- FOREIGN CURRENCY TRANSLATION

The financial statements of foreign entities included in the consolidated
financial statements have been translated to U.S. dollars in accordance with
FASB Statement No. 52, "Foreign Currency Translation." Under that Statement, all
asset and liability accounts are translated at the current exchange rate, and
income statement items are translated at the average exchange rate for each
quarter; resulting translation adjustments, net of deferred taxes, are made
directly to a separate component of stockholders' equity. Transaction
adjustments, however, are made in the Statement of Consolidated Income. These
include realized exchange adjustments relating to assets and liabilities
denominated in foreign currencies. Financial statements of entities located in
highly inflationary economies are remeasured in U.S. dollars. The remeasurement
of and subsequent transaction adjustments are also made in the Statement of
Consolidated Income.

For 1995, the transaction adjustments netted to a loss of $570. The
transaction adjustments were gains of $1,179 and gains of $9,339 for 1994 and
1993, respectively, and were primarily related to the Company's Brazilian
operations.

NOTE K -- PREFERRED STOCK

The Board of Directors is authorized to issue shares of Preferred Stock in
series with variations as to the number of shares in any series. The Board of
Directors also is authorized to establish the rights and privileges of such
shares issued including dividend and voting rights. At June 30, 1995, no shares
had been issued.

NOTE L -- LONG-TERM LEASES

The Company, primarily through Florimex, has both capital and operating
leases. The capital leases are for land, buildings, automobiles and trucks; the
operating leases are for office equipment. Amortization is included in
depreciation expense. Minimum future obligations and capitalized amounts are as
follows:

<TABLE>
<CAPTION>
Capital Operating
Leases Leases
<S> <C> <C>
1996.................................................................................................... $ 2,059 $ 3,204
1997.................................................................................................... 1,237 2,459
1998.................................................................................................... 594 1,668
1999.................................................................................................... 69 890
2000.................................................................................................... -- 459
Later years............................................................................................. -- --
$ 3,959 $ 8,680
Less amount representing interest and deposits.......................................................... 325
Present value of net minimum lease payments............................................................. $ 3,634
Less current portion of obligations under capital leases................................................ 1,878
Long-term obligations under capital leases.............................................................. $ 1,756
Capitalized amounts
Land.................................................................................................. $ 2,871
Building.............................................................................................. 5,476
Machinery and equipment, primarily vehicles........................................................... 5,344
Accumulated amortization................................................................................ (3,548)
$10,143
</TABLE>

-39-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE M -- STOCK INCENTIVE PLAN

At the 1995 Special Meeting of Stockholders the DIMON Incorporated Omnibus
Stock Incentive Plan (the Incentive Plan) and the DIMON Incorporated
Non-Employee Directors' Stock Option Plan (the Directors' Plan) were approved.
Also, as a result of the merger, options granted under previous plans were
assumed by DIMON.

The Incentive Plan authorizes the issuance of up to 2 million shares of
common stock (subject to increase annually by 3% of the number of shares of
common stock issued during such year, other than pursuant to the Incentive
Plan). The Incentive Plan authorizes the issuance of various stock incentives to
key employees of the Company or any subsidiary, including nonqualified or
incentive stock options, stock appreciation rights and shares of restricted
stock.

Stock options granted under the Incentive Plan allow for the purchase of
common stock at prices determined at the time the option is granted by a
committee composed of independent directors. Stock appreciation rights (SARs)
may be granted under the Incentive Plan in relation to option grants or
independently of option grants. SARs generally entitle the participant to
receive in cash the excess of the fair market value of a share of common stock
on the date of exercise over the value of the SAR at the date of grant.
Restricted stock is common stock that is both nontransferable and forfeitable
unless and until certain conditions are satisfied. No options or SARs may be
granted and no restricted stock may be awarded under the Incentive Plan after
February 8, 2005.

The options and SARs become exercisable on various dates as originally
determined for the grants assumed by DIMON. Under the Incentive Plan, the
committee will determine the dates that the options and SARs become exercisable.

A separate Directors' Plan authorizes automatic annual grants to purchase
1,000 shares to non-employee directors. Any 1995 grants will be awarded at the
meeting of the DIMON Board following the 1995 annual meeting of the shareholders
of DIMON. The option price will be equal to the fair market value of DIMON
Common Stock on the date of grant. The maximum number of shares to be issued
under the Directors' Stock Plan is 50 thousand shares. Options granted under the
Directors' Stock Plan are immediately exercisable. No grants had been made under
the Directors' Stock Plan as of June 30, 1995.

The Company has elected to treat the costs of SARs as compensation charges
to the income statement with quarterly adjustments for market price
fluctuations. All other options are treated as equivalent shares outstanding.
There was a $680 charge to income in 1995, a $974 credit to income in 1994, and
an $836 charge to income in 1993 arising from adjustments in fair market values
of the SARs.

-40-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE M -- STOCK INCENTIVE PLAN -- Continued

Information with respect to options and SARs follows:

<TABLE>
<CAPTION>
Year Ended June 30
1995 1994 1993
<S> <C> <C> <C>
Options outstanding at beginning of year.................... 1,354 1,074 455
Options and SARs granted.................................... 231 299 708
Options exercised........................................... (5) (12) (64)
Options cancelled........................................... (40) (7) (25)
Options outstanding at end of year.......................... 1,540 1,354 1,074
SARs included as outstanding at end of year................. 498 415 329
Options available for future grants at end of year.......... 500 1,665 914
Options and SARs exercisable at end of year................. 926 392 119
Option and SAR market prices per share:
Date of grant............................................. $ 11.50 $ 16.67 $ 16.50-
22.00
Exercised (at lowest and highest market prices)........... 14.42- 18.23- 21.50-
18.25 20.67 29.00
Cancelled (at lowest and highest market prices)........... 11.50-
13.87 10.00 N/A

</TABLE>

NOTE N -- RESTRUCTURING AND MERGER RELATED COSTS

As a result of the April, 1995, merger of Dibrell and Monk-Austin,
accounted for as a pooling of interests, the Company has initiated various
activities to restructure its worldwide operations. Merger related costs
incurred and paid for legal, accounting and financial consultants were $8.1
million.

The following tables set forth the Company's restructuring provisions
provided and changes in the related reserves for fiscal 1995. The reserve
balances are included in accrued expenses and deferred compensation and other
benefits.

<TABLE>
<CAPTION>
Facilities
Employee Closure
Separations Costs Other Total
<S> <C> <C> <C> <C>
Provision for restructuring........................................... $ 12,593 $ 2,848 $2,416 $17,857
Reduced for:
Cash payments....................................................... 76 223 205 504
Asset writedowns.................................................... -- 1,493 2,211 3,704
Reserve balances at June 30, 1995..................................... $ 12,517 $ 1,132 $ -- $13,649

</TABLE>

The restructuring charges provided include approximately $2.6 million for
the closing of certain unprofitable flower facilities and related severance
costs. Those flower operations which were closed are not expected to have a
material impact on the Company's consolidated results of operations. The
remaining restructuring provision of $15.2 million addresses rationalization of
the tobacco operations through elimination of duplicative facilities and
reduction of personnel. During the quarter ended June 30, 1995, the Company
severed a total of 104 employees of which 33 were involuntarily separated. The
severed employees were primarily in the tobacco division and worked in various
departments throughout the Company. Substantially all of the restructuring
reserves will result in future cash expenditures. Additional restructuring
charges of $5 million to $10 million are anticipated during fiscal 1996, as the
Company further rationalizes its combined operations to achieve desired
efficiencies and synergies.

-41-

<PAGE>

DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE O -- CAPITAL STOCK AND RECAPITALIZATION

On November 13, 1992 and in connection with the Monk-Austin initial public
offering, Monk-Austin effected a plan of recapitalization and amended and
restated its articles of incorporation. Among other things, the amended and
restated articles of incorporation and the related articles of restatement (i)
created a new class of common stock, par value $.01 per share (Common Stock),
with one vote per share, (ii) converted all outstanding shares of the Company's
Class A and Class B common stock into an aggregate of 15,422 shares of the newly
created Common Stock, reflecting a 128 for 1 conversion ratio, and (iii)
converted all outstanding shares of Monk-Austin's 10% preferred stock into 810
shares of Common Stock. The accompanying financial statements reflect the
conversion of the Class A and Class B common stock for all periods presented and
the pooling of interests that occurred in fiscal 1995.

On November 20, 1992, Monk-Austin completed an initial public offering in
which it issued 1,881 shares of Common Stock at $16.50 per share. The Company's
gross proceeds and share of total issuance costs were $31,041 and $3,276,
respectively. Issuance costs are included as a reduction of additional paid-in
capital.

NOTE P -- FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments at June 30,
1995 is provided in the following table:

<TABLE>
<CAPTION>
Carrying Fair
Amount Value
<S> <C> <C>
Convertible Subordinated Debentures......................................................... $ 56,370 $70,462
Other Long-Term Debt........................................................................ 50,451 38,769
</TABLE>

Interest rate swap agreements with an aggregate material principal balance
of $31,285 and expiring December 31, 1996 had a negative value of $600 at June
30, 1995.

In the normal course of business, the Company is a party to financial
instruments with off balance sheet risk such as letters of credit and
guarantees. Management does not expect any material losses to result from these
instruments.

The fair value estimates presented herein are based on information
available to management at June 30, 1995, and were determined using market
information and other commonly accepted valuation methodologies.

-42-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements -- Continued

(in thousands)

NOTE Q -- SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial information is as follows:

<TABLE>
<CAPTION>
Net
Income
(Loss)(3)
Gross Net per Share of
Net Profit Income Common
Sales (Loss)(1) (Loss) Stock
<S> <C> <C> <C> <C>
1995 Fiscal Year.................................. $1,927,749 $170,233 $(30,165) $(0.79)
Fourth Quarter.............................. 380,215 27,243 (39,928)(1) (1.05)(1)
Third Quarter............................... 644,079 58,320 7,576 0.20
Second Quarter.............................. 631,503 52,627 3,709 0.10
First Quarter............................... 271,952 32,043 (1,522) (0.04)

1994 Fiscal Year.................................. $1,449,078 $131,792 $ (8,490) $(0.22)
Fourth Quarter.............................. 322,147 (2,805) (32,080)(2) (0.84)(2)
Third Quarter............................... 404,751 42,112 3,627 0.10
Second Quarter.............................. 391,199 43,932 9,199 0.24
First Quarter............................... 330,981 48,553 10,764 0.28
</TABLE>

(1) In the fourth quarter of 1995 the Company recorded charges of $9.2 million
and $26.0 million related to the valuation of certain inventories and
restructuring and merger related costs, respectively.

(2) The Company recorded a charge of $36.9 million in the fourth quarter of 1994
related to the valuation of certain tobacco inventories and advances on
purchases of tobacco.

(3) Fully diluted amounts are anti-dilutive.

NOTE R -- SUPPLEMENTAL GUARANTOR INFORMATION

DIMON International, Inc. and Florimex Worldwide, Inc. (collectively, the
"Guarantors"), wholly owned subsidiaries of DIMON Incorporated, have fully and
unconditionally guaranteed on a joint and several basis DIMON Incorporated's
obligations to pay principal, premium and interest relative to the $125,000,000
% Senior Notes due 2006. Management has determined that separate, full financial
statements of the Guarantors would not be material to investors and such
financial statements are not provided. Supplemental combining financial
information of the Guarantors is presented below:

-43-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Year Ended June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services................. $ 44 $1,244,301 $825,175 $ (141,771) a $1,927,749
Cost of goods and services sold................. 3,314b 1,159,466 731,863 (137,127) a 1,757,516
(3,270) 84,835 93,312 (4,644) 170,233
Selling, administrative and general............. 13,936 51,073 80,692 (12,899) a,c 132,802
Restructuring and merger related costs........ 16,891 9,487 (423) 0 25,955
(34,097) 24,275 13,043 8,255 11,476
Other income:
Interest...................................... 10,346 12,550 12,791 (28,175) a 7,512
Sundry........................................ 151 2,274 11,757 (8,255) a,c 5,927
10,497 14,824 24,548 (36,430) 13,439
Other deductions:
Interest...................................... 11,882 33,824 27,700 (28,175) a 45,231
Sundry........................................ 26 147 1,675 0 1,848
11,908 33,971 29,375 (28,175) 47,079
Income (loss) before income taxes, minority
interest and equity in net income of investee
companies..................................... (35,508) 5,128 8,216 0 (22,164)
Income taxes (benefits)......................... (8,567) 3,767 10,780 0 5,980
Income (loss) before minority interest, equity
in net income of investee companies........... (26,941) 1,361 (2,564) 0 (28,144)
Income applicable to minority interest.......... 0 0 216 0 216
Equity in net income (loss) of investee
companies, net of income taxes................ 0 348 (2,153) 0 (1,805)
Equity in net income of subsidiaries............ (3,224) (4,933) 0 8,157 0
NET LOSS........................................ $(30,165) $ (3,224) $ (4,933) $ 8,157 $ (30,165)
</TABLE>

a. Inter-company eliminations, including profit in inventory

b. Reserve for inter-company profit in ending inventories

c. Royalty expense in SG&A and Royalty income in Other Income for Consolidated
Entities.

-44-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................... $ 1,328 $ 1,879 $ 12,254 $ 26,865d $ 42,326
Notes receivable.............................. 30,015 851 1,136 (30,000) a 2,002
Trade receivables, net of allowances.......... 150,127 164,866 124,048 (256,291) a 182,750
Inventories:
Tobacco.................................... (5,116) b 103,294 312,253 0 410,431
Other...................................... 25 2,240 11,914 0 14,179

Advances on purchases of tobacco.............. 183,504 70,009 25,448 (234,582) a 44,379
Recoverable income taxes...................... 0 0 2,007 0 2,007
Prepaid expenses.............................. 12,499 667 19,879 0 33,045
Total current assets..................... 372,382 343,806 508,939 (494,008) 731,119
Investments and other assets
Equity in net assets of investee
companies.................................. 0 2,555 20,067 0 22,622
Consolidated subsidiaries..................... 266,381 243,970 5,007 (515,358) d 0
Other investments............................. 965 366 418 0 1,749
Notes receivable.............................. 45 1,016 5,046 0 6,107
Other......................................... 292 13,410 14,445 0 28,147
267,683 261,317 44,983 (515,358) a 58,625
Intangible assets
Excess of cost over related net assets of
business acquired.......................... 388 15,209 10,570 0 26,167
Production and supply contracts............... 0 28,340 8,000 0 36,340
Pension asset................................. 3,131 1,088 0 0 4,219
3,519 44,637 18,570 0 66,726
Property, plant and equipment
Land.......................................... 1,770 1,573 16,089 0 19,432
Buildings..................................... 4,998 21,127 109,683 0 135,808
Machinery and equipment....................... 5,187 44,335 119,659 0 169,181
Allowances for depreciation................... (4,167) (25,293) (71,912) 0 (101,372)
7,788 41,742 173,519 0 223,049
Deferred taxes and other deferred charges....... 10,076 4,557 (544) 0 14,089
$661,448 $696,059 $745,467 $ (1,009,366) $1,093,608
</TABLE>

a. Inter-company eliminations, including profit in inventory

b. Reserve for inter-company profit in ending inventories.

d. To adjust for cash transfers made by DIMON Incorporated to an entity which
reports on an earlier period.

-45-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

Notes payable................................. $ 54,400 $ 30,000 $179,336 $ (30,000) a $ 233,736
Accounts payable:
Trade...................................... 4,367 149,566 111,036 (208,410) a 56,559
Officers and employees..................... 14,643 27 6,044 0 20,714
Other...................................... 144 426 12,603 0 13,173
Advances from customers....................... 3,880 228,057 75,748 (258,461) a 49,224
Accrued expenses.............................. 4,509 13,815 42,158 (3,123) a 57,359
Income taxes.................................. (10,744) e 3,672 18,271 0 11,199
Long-term debt current........................ 4,714 628 6,216 0 11,558
Total current liabilities................ 75,913 426,191 451,412 (499,994) 453,522

Long-term debt
Revolving Credit Notes and Other.............. 264,143 2,559 25,826 0 292,528
Convertible Subordinated Debentures........... 56,370 0 0 0 56,370
320,513 2,559 25,826 0 348,898
Deferred Credits
Income taxes.................................. 70 19 10,642 0 10,731
Compensation and other benefits............... 26,146 7,642 6,927 0 40,715
26,216 7,661 17,569 0 51,446
Minority interest in subsidiaries............... 0 0 936 0 936

Stockholders' equity
Common stock.................................. 80,030 108,780 152,609 (261,389) a 80,030
Retained earnings............................. 157,880 148,455 94,791 (243,246) a 157,880
Equity-currency conversions................... 1,565 1,796 1,707 (3,503) a 1,565
Unrealized gain on investments................ 617 617 617 (1,234) a 617
Additional minimum pension liability.......... (1,286) 0 0 0 (1,286)
238,806 259,648 249,724 (509,372) a 238,806
$661,448 $696,059 $745,467 $ (1,009,366) $1,093,608
</TABLE>

a. Inter-company eliminations, including profit in inventory

e. Current deferred tax on reserves and unallocated, estimated tax payments.

-46-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Year Ended June 30, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)...................................... $ (30,165) $ (3,224) $ (4,933) $ 8,157a $(30,165)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization........................ 607 10,372 20,873 0 31,852
Deferred items....................................... 3,922 (3,130) (1,412) 0 (620)
Loss (gain) on foreign currency transactions......... (55) 81 544 0 570
Gain on disposition of fixed assets.................. 0 (280) (1,539) 0 (1,819)
Undistributed (earnings) loss of
investees/subsidiaries............................. 3,224 4,585 2,153 (8,157)a 1,805
Dividends received from investees.................... 0 400 78 0 478
Income applicable to minority interest............... 0 0 216 0 216
Bad debt expense..................................... 0 (30) 3,850 0 3,820
Decrease (increase) in accounts receivable........... (102,713) (33,329) 97,941 90,621a 52,520
Decrease (increase) in inventories and advances on
purchases of tobacco............................... 97,253 823 (261,577) 165,657a 2,156
Decrease in recoverable taxes........................ 1,666 0 2,627 0 4,293
Decrease (increase) in prepaid expenses.............. (8,718) 1,420 3,717 0 (3,581)
Increase (decrease) in accounts payable and accrued
expenses........................................... 5,224 7,736 (25,238) (45,885)a (58,163)
Increase (decrease) in advances from customers....... (918) (15,652) 201,799 (188,257)a (3,028)
Increase (decrease) in income taxes.................. (2,817) 7,135 1,757 0 6,075
Other................................................ 269 0 135 0 404
Net cash provided (used) by operating activities... (33,221) (23,093) 40,991 22,136 6,813
Investing Activities
Purchase of property and equipment..................... (117) (10,966) (15,953) 0 (27,036)
Proceeds from sale of property and equipment........... 0 838 4,039 0 4,877
Payments on notes receivable and receivable from
investees............................................ 15 3,516 24,010 0 27,541
Issuance of notes receivable........................... (30,000) (2,829) (3,500) 30,000a (6,329)
Proceeds from or (advances) for other investments and
other assets......................................... 5,865 (9,075) 2,601 4,676a 4,067
Purchase of minority interest in subsidiaries.......... 0 0 (507) 0 (507)
Purchase of subsidiary, $8,856 for property and
equipment............................................ 0 (17,123) 0 0 (17,123)
Net cash provided (used) by investing activities... (24,237) (35,639) 10,690 34,676 (14,510)
Financing Activities
Repayment of debt...................................... (641,100) (4,699) (281,223) 0 (927,022)
Proceeds from debt..................................... 708,995 60,000 239,371 (30,000)a 978,366
Cash dividends paid to DIMON Incorporated
stockholders......................................... (15,568) 0 (2) 0 (15,570)
Cash dividends paid to minority stockholders........... 0 0 (237) 0 (237)
Proceeds from sale of common stock..................... 169 0 0 0 169
Net cash provided (used) by financing activities... 52,496 55,301 (42,091) (30,000) 35,706
Effect of exchange rate changes on cash.................. 0 0 (1,584) 0 (1,584)
Increase (decrease) in cash and cash equivalents......... (4,962) (3,431) 8,006 26,812 26,425
Increase in cash from purchased subsidiaries............. 0 3,430 0 0 3,430
Cash and cash equivalents at beginning
of year................................................ 6,290 1,880 4,248 53 12,471
Cash and cash equivalents at end of year........... $ 1,328 $ 1,879 $ 12,254 $ 26,865 $ 42,326
</TABLE>

a. Inter-company eliminations, including profit in inventory

-47-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Year Ended June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services.................. $ 42 $892,729 $708,508 $ (152,201) a $1,449,078
Cost of goods and services sold.................. 984b 832,225 634,485 (150,408) a 1,317,286
(942) 60,504 74,023 (1,793) 131,792
Selling, administrative and general.............. 6,148 51,368 69,051 (9,256) a 117,311
(7,090) 9,136 4,972 7,463 14,481
Other income:
Interest....................................... 8,046 5,953 9,502 (16,476) a 7,025
Sundry......................................... 491 3,020 5,164 0 8,675
8,537 8,973 14,666 (16,476) 15,700
Other deductions:
Interest....................................... 4,568 13,879 25,683 (9,013) a 35,117
Sundry......................................... 4,533 1,542 (5,656) 0 419
9,101 15,421 20,027 (9,013) 35,536

Income (loss) before income taxes, minority
interest, and equity in net income of investee
companies...................................... (7,654) 2,688 (389) 0 (5,355)
Income taxes (benefits).......................... (1,999) 3,067 1,699 0 2,767

Income (loss) before minority interest,
and equity in net income of
investee companies............................. (5,655) (379) (2,088) 0 (8,122)
Income applicable to minority interest........... 0 0 466 0 466
Equity in net income (loss) of investee
companies, net of income taxes................. (265) (109) 472 0 98
Equity in net income of subsidiaries............. (2,570) (2,082) 0 4,652 0

NET LOSS......................................... $ (8,490) $ (2,570) $ (2,082) $ 4,652 $ (8,490)
</TABLE>

a. Inter-company eliminations, including profit in inventory

b. Reserve for inter-company profit in ending inventories

-48-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents...................... $ 6,290 $ 1,880 $ 4,248 $ 53a $ 12,471
Notes receivable............................... 15 1,561 14,955 0 16,531
Trade receivables, net of allowances........... 116,086 145,363 68,535 (165,670) a 164,314
Inventories:
Tobacco..................................... (1,803) b 150,875 254,139 0 403,211
Other....................................... 0 564 5,111 0 5,675

Advances on purchases of tobacco............... 47,382 45,787 35,885 (68,925) a 60,129
Recoverable income taxes....................... 1,666 0 4,485 0 6,151
Prepaid expenses............................... 887 4,357 11,717 0 16,961
Total current assets...................... 170,523 350,387 399,075 (234,542) 685,443
Investments and other assets
Equity in net assets of investee companies..... 0 3,801 30,606 0 34,407
Consolidated subsidiaries...................... 276,731 229,756 5,007 (511,494) a 0
Other investments.............................. 14,259 43 34 0 14,336
Notes receivable............................... 60 530 12,026 0 12,616
Other.......................................... 810 11,461 3,769 0 16,040
291,860 245,591 51,442 (511,494) 77,399
Intangible assets
Excess of cost over related net assets of
business acquired........................... 399 1,886 10,409 0 12,694
Production and supply contracts................ 0 32,740 9,600 0 42,340
Pension asset.................................. 2,458 0 0 0 2,458
2,857 34,626 20,009 0 57,492
Property, plant and equipment
Land........................................... 68 3,336 14,228 0 17,632
Buildings...................................... 1,269 26,943 89,571 0 117,783
Machinery and equipment........................ 639 55,187 105,083 0 160,909
Allowances for depreciation.................... (590) (41,374) (44,621) 0 (86,585)
1,386 44,092 164,261 0 209,739

Deferred taxes and other deferred charges...... 11,246 4,608 (2,111) 0 13,743

$477,872 $679,304 $632,676 $ (746,036) $1,043,816
</TABLE>

a. Inter-company eliminations, including profit in inventory

b. Reserve for inter-company profit in ending inventories.

-49-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks........................... $ 68,500 $ 14,600 $172,507 $ 0 $ 255,607
Accounts payable:
Trade....................................... 7,229 148,216 94,626 (165,426) a 84,645
Officers and employees...................... 1,372 13,397 3,304 0 18,073
Other....................................... 200 445 8,947 0 9,592
Advances from customers........................ 937 90,865 27,331 (70,204) a 48,929
Accrued expenses............................... 2,614 6,629 22,837 (222) a 31,858
Income taxes................................... (4,910) e 2,174 7,582 0 4,846
Long-term debt current......................... 5,161 0 9,065 0 14,226
Total current liabilities................. 81,103 276,326 346,199 (235,852) 467,776
Long-term debt
Revolving Credit Notes and Other............... 27,982 133,885 26,958 0 188,825
Convertible Subordinated Debentures............ 56,475 0 0 0 56,475
84,457 133,885 26,958 0 245,300
Deferred Credits
Income taxes................................... 4,894 (2,969) 9,302 0 11,227
Compensation and other benefits................ 19,104 6,803 4,065 0 29,972
23,998 3,834 13,367 0 41,199
Minority interest in subsidiaries................ 0 0 1,227 0 1,227
Stockholders' equity
Common stock................................... 79,861 105,662 139,457 (245,119) a 79,861
Retained earnings.............................. 203,615 151,679 99,725 (251,404) a 203,615
Equity-currency conversions.................... 6,471 7,918 5,743 (13,661) a 6,471
Unrealized loss on investments................. (259) 0 0 0 (259)
Additional minimum pension liability........... (1,374) 0 0 0 (1,374)

288,314 265,259 244,925 (510,184) 288,314
$477,872 $679,304 $632,676 $ (746,036) $1,043,816
</TABLE>

a. Inter-company eliminations, including profit in inventory

e. Current deferred tax on reserves and unallocated, estimated tax payments.

-50-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Year Ended June 30, 1994

(in thousands)
<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations
<S> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)....................................... $ (8,490) $ (2,570 ) $ (2,082) $ 4,652a
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization......................... (416) 10,508 18,770 0
Deferred items........................................ 672 (4,461 ) 4,354 0
Loss (gain) on foreign currency transactions.......... 80 120 (1,379) 0
Gain on disposition of fixed assets................... 0 (447 ) (1,177) 0
Gain on disposal of operations........................ 0 (1,792 ) 0 0
Undistributed earnings of investees/subsidiaries...... 2,835 2,190 (472) (4,652)a
Dividends received from investees..................... 0 0 577 0
Income applicable to minority interest................ 0 0 466 0
Bad debt expense...................................... (3) 0 4,684 0
Decrease (increase) in accounts receivable............ (5,838) 6,356 123,701 (92,765)a
Decrease (increase) in inventories and advances on
purchases of tobacco................................ 60,215 4,301 (149,953) 68,925a
Decrease (increase) in recoverable taxes.............. (1,472) 0 2,823 0
Decrease (increase) in prepaid expenses............... (273) (217 ) (1,566) 0
Increase (decrease) in accounts payable and accrued
expenses............................................ 5,280 22,090 (8,738) (8,902)a
Increase (decrease) in advances from customers........ 937 (101,502 ) 65,659 39,857a
Increase (decrease) in income taxes................... (8,373) 4,154 (4,525) 0
Other................................................. (281) 0 (4,702) 0
Net cash provided (used) by operating activities.... 44,873 (61,270 ) 46,440 7,115
Investing Activities
Purchase of property and equipment...................... (234) (9,897 ) (22,251) 0
Proceeds from sale of property
and equipment......................................... 0 2,023 3,968 0
Payments received on notes receivable and
receivable from investees............................. 0 7,162 6,092 (8,777)a
Advances for notes receivable........................... (75) 0 (18,310) 0
Proceeds from or advances for investees,
other investments and other assets.................... (11,082) (5,389 ) 13,677 2,600a
Purchase of shares of Standard Commercial Corporation... (13,408) 0 0 0
Other................................................... 69 0 (263) 0

Net cash provided (used) by investing activities...... (24,730) (6,101 ) (17,087) (6,177)
Financing Activities
Repayment of debt....................................... (35,016) (17,770 ) (226,518) 0
Proceeds from debt...................................... 16,605 85,403 205,238 0
Cash dividends paid to DIMON Incorporated
stockholders.......................................... (13,014) 0 0 0
Cash dividends paid to minority stockholders............ 0 0 (285) 0
Proceeds from sale of common stock...................... 28 0 0 0
Net cash provided (used) by financing activities...... (31,397) 67,633 (21,565) 0
Effect of exchange rate changes on cash................... 0 0 (1,662) 0
Increase (decrease) in cash and cash equivalents.......... (11,254) 262 6,126 938
Cash and cash equivalents at beginning of year............ 17,544 1,618 (1,878) (885)a
Cash and cash equivalents at end of year............ $ 6,290 $ 1,880 $ 4,248 $ 53

<CAPTION>
Total
<S> <C>
Operating Activities
Net Income (Loss)....................................... $ (8,490)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization......................... 28,862
Deferred items........................................ 565
Loss (gain) on foreign currency transactions.......... (1,179)
Gain on disposition of fixed assets................... (1,624)
Gain on disposal of operations........................ (1,792)
Undistributed earnings of investees/subsidiaries...... (99)
Dividends received from investees..................... 577
Income applicable to minority interest................ 466
Bad debt expense...................................... 4,681
Decrease (increase) in accounts receivable............ 31,454
Decrease (increase) in inventories and advances on
purchases of tobacco................................ (16,512)
Decrease (increase) in recoverable taxes.............. 1,351
Decrease (increase) in prepaid expenses............... (2,056)
Increase (decrease) in accounts payable and accrued
expenses............................................ 9,730
Increase (decrease) in advances from customers........ 4,951
Increase (decrease) in income taxes................... (8,744)
Other................................................. (4,983)
Net cash provided (used) by operating activities.... 37,158
Investing Activities
Purchase of property and equipment...................... (32,382)
Proceeds from sale of property
and equipment......................................... 5,991
Payments received on notes receivable and
receivable from investees............................. 4,477
Advances for notes receivable........................... (18,385)
Proceeds from or advances for investees,
other investments and other assets.................... (194)
Purchase of shares of Standard Commercial Corporation... (13,408)
Other................................................... (194)
Net cash provided (used) by investing activities...... (54,095)
Financing Activities
Repayment of debt....................................... (279,304)
Proceeds from debt...................................... 307,246
Cash dividends paid to DIMON Incorporated
stockholders.......................................... (13,014)
Cash dividends paid to minority stockholders............ (285)
Proceeds from sale of common stock...................... 28
Net cash provided (used) by financing activities...... 14,671
Effect of exchange rate changes on cash................... (1,662)
Increase (decrease) in cash and cash equivalents.......... (3,928)
Cash and cash equivalents at beginning of year............ 16,399
Cash and cash equivalents at end of year............ $ 12,471
</TABLE>

a. Inter-company eliminations, including profit in inventory

-51-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Year Ended June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total

<S> <C> <C> <C> <C> <C>
Net sales of goods and services................. $ 1,860 $1,074,417 $820,240 $ (215,901) a,f $1,680,616
Cost of goods and services sold................. 602b 971,284 690,115 (204,173) a 1,457,828
1,258 103,133 130,125 (11,728) 222,788
Selling, administrative and general............. 9,962 46,009 67,714 (11,728) a,f 111,957
(8,704) 57,124 62,411 0 110,831
Other income:
Interest...................................... 2,195 11,396 1,616 (9,491) a 5,716
Sundry........................................ 3,689 (2,077) 18,350 0 19,962
5,884 9,319 19,966 (9,491) 25,678
Other deductions:
Interest...................................... 7,562 15,320 24,737 (9,491) a 38,128
Sundry........................................ 1,449 35 1,210 0 2,694
9,011 15,355 25,947 (9,491) 40,822
Income (loss) before income taxes, minority
interest, equity in net income of investee
companies, subsidiary companies and cumulative
effect of accounting changes.................. (11,831) 51,088 56,430 0 95,687
Income taxes (benefits)......................... (3,535) 13,870 20,838 0 31,173

Income (loss) before minority interest, equity
in net income of investee companies and
cumulative effect of accounting changes....... (8,296) 37,218 35,592 0 64,514
Income (loss) applicable to minority interest... 0 0 486 0 486
Equity in net income (loss) of investee
companies, net of income taxes............. (146) (113) 1,518 0 1,259
Equity in net income of subsidiary companies.... 73,729 36,624 0 (110,353) a 0

Income before cumulative effect of accounting
changes....................................... 65,287 73,729 36,624 (110,353) 65,287
Post retirement benefit plans (net of tax)...... (9,746) 0 0 0 (9,746)
Income taxes.................................... 8,963 0 0 0 8,963
NET INCOME...................................... $ 64,504 $ 73,729 $ 36,624 $ (110,353) $ 64,504
</TABLE>

a. Inter-company eliminations, including profit in inventory

b. Reserve for inter-company profit in ending inventories

f. Commission expense in SG&A and Commission income in Sales.

-52-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents........................ $ 17,544 $ 1,618 $ (1,878) $ (885) a $ 16,399
Notes receivable................................. 0 8,619 3,077 (8,411) a 3,285
Trade receivables, net of allowances............. 112,162 154,610 208,762 (258,437) a 217,097
Inventories:
Tobacco....................................... (2,602) b 168,843 158,527 0 324,768
Other......................................... 0 525 16,962 0 17,487

Advances on purchases of tobacco................. 105,055 31,778 32,177 (96,054) a 72,956
Recoverable income taxes......................... 194 0 4,573 0 4,767
Prepaid expenses................................. 614 4,139 4,942 0 9,695
Total current assets........................ 232,967 370,132 427,142 (363,787) 666,454
Investments and other assets
Equity in net assets of investee companies....... 0 (3,106) 39,450 0 36,344
Consolidated subsidiaries........................ 266,495 188,378 5,007 (459,880) a 0
Other investments................................ 2,264 41 51 0 2,356
Notes receivable................................. 0 635 10,455 (366) a 10,724
Other............................................ 782 5,372 16,940 0 23,094
269,541 191,320 71,903 (460,246) 72,518
Intangible assets
Excess of cost over related net assets of
business acquired............................. 405 7,984 5,663 0 14,052
Production and supply
contracts..................................... 0 37,442 6,087 0 43,529
Pension asset.................................... 2,527 0 0 0 2,527
2,932 45,426 11,750 0 60,108
Property, plant and equipment
Land............................................. 68 4,235 14,076 0 18,379
Buildings........................................ (653) 33,752 75,809 0 108,908
Machinery and equipment.......................... 682 54,285 91,979 0 146,946
Allowances for depreciation...................... (272) (41,574) (42,838) 0 (84,684)
(175) 50,698 139,026 0 189,549

Deferred taxes and other deferred charges.......... 6,706 1,112 2,073 0 9,891

$511,971 $658,688 $651,894 $ (824,033) $998,520
</TABLE>

a. Inter-company eliminations, including profit in inventory

b. Reserve for inter-company profit in ending inventories.

-53-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

Notes payable to banks........................... $ 75,895 $(31,903) $193,625 $ 0 $237,617
Accounts payable:
Trade....................................... 114 124,783 99,192 (156,747) a 67,342
Officers and employees...................... 2,954 14,423 10,268 0 27,645
Other....................................... 0 256 1,345 0 1,601
Advances from customers.......................... 0 192,367 39,963 (206,116) a 26,214
Accrued expenses................................. 3,068 7,135 27,304 0 37,507
Income taxes..................................... 3,463e (1,980) 11,973 0 13,456
Long-term debt current........................... 5,392 0 7,081 0 12,473

Total current liabilities................... 90,886 305,081 390,751 (362,863) 423,855
Long-term debt
Revolving Credit Notes and Other................. 38,767 108,755 32,749 0 180,271
Convertible Subordinated Debentures.............. 56,475 0 0 0 56,475
95,242 108,755 32,749 0 236,746
Deferred Credits
Income taxes..................................... (760) 588 2,807 0 2,635
Compensation and other benefits.................. 18,454 4,145 3,393 0 25,992
17,694 4,733 6,200 0 28,627

Minority interest in subsidiaries.................. 0 0 1,143 0 1,143
Stockholders' equity
Common stock..................................... 79,833 80,757 115,659 (196,416) a 79,833
Retained earnings................................ 225,119 154,250 101,806 (256,056) a 225,119
Equity-currency conversions...................... 3,477 5,112 3,586 (8,698) a 3,477
Additional minimum pension liability............. (280) 0 0 0 (280)
308,149 240,119 221,051 (461,170) 308,149
$ 511,971 $658,688 $651,894 $ (824,033) $998,520
</TABLE>

a. Inter-company eliminations, including profit in inventory

e. Current deferred tax on reserves and unallocated, estimated tax payments.

-54-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Year Ended June 30, 1993

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss).................................... $ 64,504 $ 73,729 $ 36,624 $ (110,353) a $ 64,504
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization...................... (386) 10,099 14,846 0 24,559
Deferred items..................................... 8,306 1,855 (8,820) 0 1,341
Loss (gain) on foreign currency transactions....... (439) (99) (8,801) 0 (9,339)
Gain on disposition of fixed assets................ (10) (1,584) (1,640) 0 (3,234)
Undistributed earnings of investees/subsidiaries... (73,584) (36,512) (1,518) 110,355a (1,259)
Dividends received from investees.................. 0 0 3,756 0 3,756
Income applicable to minority interest............. 0 0 486 0 486
Bad debt expense................................... 0 (8) 4,266 0 4,258
Cumulative effect of accounting changes............ 0 0 783 0 783
Decrease (increase) in accounts receivable......... (63,263) 30,695 (108,781) 114,873a (26,476)
Decrease (increase) in inventories and advances on
purchases of tobacco............................. (61,282) 246,762 (194,221) (43,170) a (51,911)
Decrease (increase) in recoverable taxes........... 1,991 0 (824) 0 1,167
Decrease (increase) in prepaid expenses............ (379) 65 4,399 0 4,085
Increase (decrease) in accounts payable and accrued
expenses......................................... (400) 55,333 23,300 (65,295) a 12,938
Increase (decrease) in advances from customers..... 0 (160,445) 183,967 (12,803) a 10,719
Increase (decrease) in income taxes................ 5,938 (3,760) 917 0 3,095
Other.............................................. 0 0 7,309 0 7,309
Net cash provided (used) by operating
activities.................................... (119,004) 216,130 (43,952) (6,393) 46,781
Investing Activities
Purchase of property and equipment................... (166) (14,295) (27,771) 0 (42,232)
Proceeds from sale of property and equipment......... 54 2,100 3,066 0 5,220
Payments received on notes receivable and receivable
from investees..................................... 0 2,405 4,909 (1,906) a 5,408
Advances for notes receivable........................ 0 (1,180) (16,122) 0 (17,302)
Proceeds from or advances for investees, other
investments and other assets....................... 53,701 (50,033) (10,275) (1,290) a (7,897)
Purchase of shares of Standard Commercial
Corporation........................................ (386) 0 0 0 (386)
Other................................................ 0 0 (130) 0 (130)
Net cash provided (used) by investing activities... 53,203 (61,003) (46,323) (3,196) $ (57,319)
Financing Activities
Repayment of debt.................................... 0 (203,217) (155,601) 0 $ (358,818)
Proceeds from debt................................... 64,641 48,282 233,266 0 346,189
Cash dividends paid to DIMON Incorporated
stockholders....................................... (9,818) 0 0 0 (9,818)
Cash dividends paid to minority stockholders......... 0 0 (351) 0 (351)
Proceeds from sale of common stock................... 28,298 0 0 0 28,298
Net cash provided (used) by financing activities... 83,121 (154,935) 77,314 0 5,500
Effect of exchange rate changes on cash................ 0 0 779 0 779
Increase (decrease) in cash and cash equivalents....... 17,320 192 (12,182) (9,589) (4,259)
Cash and cash equivalents at beginning
of year.............................................. 224 1,426 10,304 8,704a 20,658
Cash and cash equivalents at end of year......... $ 17,544 $ 1,618 $ (1,878) $ (885) $ 16,399
</TABLE>

a. Inter-company eliminations, including profit in inventory

-55-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

(a) Each of the Guarantors, the Company's wholly-owned subsidiaries, DIMON
International, Inc. and Florimex Worldwide Inc., will fully and unconditionally
guarantee on a joint and several basis the performance and punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all of the
Company's obligations under the Notes and the related indenture, including its
obligations to pay principal, premium, if any, and interest with respect to the
Notes. The obligations of each Guarantor will be limited to the maximum amount
which, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
the Indenture, can be guaranteed by the relevant Guarantor without resulting in
the obligations of such Guarantor under its Guarantee constituting a fraudulent
conveyance or fraudulent transfer under applicable federal or state law. Each of
the Guarantees will be a guarantee of payment and not collection. Each Guarantor
that makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in an amount pro rata, based on the
assets less liabilities of each Guarantor determined in accordance with
generally accepted accounting principles (GAAP). The Company will not be
restricted from selling or otherwise disposing of any of the Guarantors other
than DIMON International, Inc. provided that the proceeds of any such sale are
applied as required by the Indenture.

Florimex Worldwide, Inc. is the primary holding and operating company in
the U.S. and represents the lead company for the flowers segment. The cut
flowers operations consist of buying flowers from sources throughout the world
and transporting them, normally by air, to operating units for resale to
wholesalers and retailers.

DIMON International, Inc. is the primary holding and operating company in
the U.S. and represents the lead company in the Tobacco division whose
operations consist primarily of selecting, buying, processing, packing,
shipping, storage and financing tobacco.

Management has determined that separate,full financial statements of the
Guarantors would not be material to investors and such financial statements are
not provided.

(b) DIMON Incorporated and each of the Guarantors has accounted for their
respective subsidiaries on the equity basis.

(c) Certain reclassifications were made to conform all of the financial
information to the financial presentation on a consolidated basis. The principal
eliminating entries eliminate investments in subsidiaries and intercompany
balances.

(d) Included in the above balance sheets are certain related party balances
among borrower, the guarantors and non-guarantors. Due to the Company's
world-wide operations, related party activity is included in most balance sheet
accounts. The tables below set forth the significant intercompany balances for
each of the periods presented.

-56-

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

<TABLE>
<CAPTION>
June 30, 1995
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 150,153 $ 104,676 $ 20,284
Advances on Purchases............................................................ 183,503 64,284 (3,108)

Accounts Payable................................................................. (780) (138,137) (69,487)
Advances from Customers.......................................................... (3,879) (201,229) (57,605)
</TABLE>

<TABLE>
<CAPTION>
June 30, 1994
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 116,001 $ 81,726 $ (7,027)
Advances on Purchases............................................................ 47,382 25,505 21,277

Accounts Payable................................................................. (28) (132,840) (41,110)
Advances from Customers.......................................................... -- (64,028) (6,197)
</TABLE>

<TABLE>
<CAPTION>
June 30, 1993
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 110,279 $ 61,413 $ 105,370
Advances on Purchases............................................................ 105,055 25,695 31,937

Accounts Payable................................................................. (111) (116,044) (45,019)
Advances from Customers.......................................................... -- (175,755) (30,583)
</TABLE>

-57-

<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1) and (2)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

Consolidated Balance Sheet--June 30, 1995 and 1994
Statement of Consolidated Income--Years ended June 30, 1995, 1994 and 1993
Statement of Consolidated Cash Flows--Years ended June 30, 1995, 1994 and 1993
Statement of Stockholders' Equity--Years ended June 30, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Financial Statement Schedules:
Schedule II Valuation and Qualifying Accounts
Report of Price Waterhouse LLP
Report of Ernst & Young LLP

(b) Current Reports on Form 8-K

Form 8-K, filed April 1, 1995, regarding mergers of Dibrell Brothers,
Incorporated and Monk-Austin, Inc. with and into registrant.

Form 8-K, filed April 20, 1995, regarding designation of Price Waterhouse
LLP as independent accountant for registrant.

Form 8-K, filed May 5, 1995, regarding disposition of Africa
Holding S.A. and Africa Overseas Limited.

Form 8-K, filed June 22, 1995, regarding acquisition of leaf tobacco
processing business formerly conducted by Austro-Hellenique S.A. De Tabac
Et De Batiment and Austro Turk Tutun A.S.

Form 8-K/A, filed August 21, 1995, amending Current Report on form 8-K,
filed June 22, 1995.

(3) Exhibits

The following documents are filed as exhibits to this Form 10-K
pursuant to Item 601 of Regulation S-K:

3.01 Amended and Restated Articles of Incorporation of DIMON
Incorporated (incorporated by reference to Appendix VII to
DIMON Incorporated's Joint Proxy Statement filed pursuant to
Rule 424(b) in connection with DIMON Incorporated's
Registration Statement on Form S-4 (form 33-89780))

3.02 Amended and Restated By-Laws as amended of DIMON Incorporated
(incorporated by reference to Exhibit 3.2 to DIMON
Incorporated's Registration Statement on Form S-4 (file
33-89780))

4.01 Specimen of Common Stock Certificate (incorporated herein by
reference to Exhibit 4.1 to DIMON Incorporated's Registration
Statement on Form S-4 (file 33-89780))

-58-

<PAGE>

4.02 Article III of the Amended and Restated Articles of
Incorporation of DIMON Incorporated (filed as
Exhibit 3.01)

4.03 Article III of the Amended and Restated By-Laws of DIMON
Incorporated (filed as Exhibit 3.02)

4.04 Indenture, dated May 15, 1991, between Dibrell Brothers,
Incorporated and Crestar Bank, as Trustee (incorporated
herein by reference to Exhibit 4.02 of Dibrell Brothers,
Incorporated's Registration Statement on Form S-1 (file
No. 33-39531))

4.05 Form of Supplemental Indenture by and among the registrant,
Dibrell Brothers, Incorporated and Crestar Bank, as Trustee
(incorporated herein by reference to Exhibit 4.5 to DIMON
Incorporated's Registration Statement on Form S-4 (file No.
33-89780))

4.06 Rights Agreement, dated as of March 31, 1995, between DIMON
Incorporated and First Union National Bank of North Carolina,
as Rights Agent (incorporated by reference to Exhibit 4 to
DIMON Incorporated Current Report on Form 8-K, dated April 1,
1995)

10.01 DIMON Incorporated Omnibus Stock Incentive Plan (incorporated
herein by reference to Exhibit 10.1 to DIMON Incorporated's
Registration Statement on Form S-4 (file No. 33-89780))

10.02 DIMON Incorporated Non-Employee Directors' Stock Option Plan
(incorporated herein by reference to Exhibit 10.2 to DIMON
Incorporated's Registration Statement on Form S-4 (file No.
33-89780))

10.03 Dibrell Brothers, Incorporated 1994 Omnibus Stock Incentive
Plan (incorporated by reference to Exhibit 10.6 to Dibrell
Brothers, Incorporated's Annual Report on Form 10-K for the
fiscal year ended June 30, 1994)

10.04 Form of Interpretive Letter, dated January 11, 1995, under
the Dibrell Brothers, Incorporated 1994 Omnibus Stock
Incentive Plan delivered by Dibrell Brothers, Incorporated to
Claude B. Owen, Jr., T. H. Faucett, T. W. Oakes, L. N.
Dibrell, III and H. P. Green (incorporated by reference to
Exhibit 10.6 to Dibrell Brothers, Incorporated's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1994)

10.05 Dibrell Brothers, Incorporated Retirement Plan (Excess
Benefit Plan) (incorporated herein by reference to Exhibit
10.4 to Dibrell Brothers, Incorporated's Annual Report on
Form 10-K for the year ended June 30, 1987)

10.06 Dibrell Brothers, Incorporated Pension Equalization Plan
(Benefit Assurance Plan) (incorporated herein by reference to
Exhibit 10.13 to Dibrell Brothers, Incorporated's

-59-

<PAGE>

Annual Report on Form 10-K for the year ended June 30,
1991)

10.07 Long-Term Stock Investment Plan for Key Employees of
Monk-Austin, Inc. (incorporated by reference to Exhibit 10.5
of Monk-Austin, Inc.'s Registration Statement on S-1 (File
No. 33-51842))

10.08 Form of 1995 Declaration of Amendment to Long-Term Stock
Investment Plan for Key Employees of Monk-Austin, Inc.
(incorporated herein by reference to Exhibit 10.8 to DIMON
Incorporated's Registration Statement on Form S-4 (File No.
33-89780))

10.09 Agreement for Supplemental Retirement Benefits, dated August
7, 1986, between A.C. Monk and Company, Inc. and W. C. Monk
(incorporated by reference to Exhibit 10.3 to Monk-Austin,
Inc.'s Registration Statement on Form S-1 (File No.
33-51842))

10.10 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and Albert C. Monk, III
(incorporated by reference to Exhibit 10.1 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.11 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and John M. Hines
(incorporated by reference to Exhibit 10.2 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.12 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and Robert T. Monk, Jr.
(incorporated by reference to Exhibit 10.3 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.13 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and Brian J. Harker
(incorporated by reference to Exhibit 10.4 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.14 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and James H. Felts
(incorporated by reference to Exhibit 10.5 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.15 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and E. Shelton Griffin
(incorporated by reference to Exhibit 10.6 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.16 Employment Agreement, dated October 18, 1994, between

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<PAGE>

Monk-Austin International, Inc. and Larry R. Corbett
(incorporated by reference to Exhibit 10.7 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.17 Employment Agreement, dated October 18, 1994, between
Monk-Austin International, Inc. and Thomas A. Lewis
(incorporated by reference to Exhibit 10.8 to Monk-Austin,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994)

10.18 Employment Agreement, dated as of December 21, 1994,
effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and Claude B. Owen, Jr. (incorporated
by reference to Exhibit 10.1 to Dibrell Brothers,
Incorporated's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1994)

10.19 Employment Agreement, dated as of December 21, 1994,
effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and T. H. Faucett (incorporated by
reference to Exhibit 10.2 to Dibrell Brothers, Incorporated's
Quarterly Report on Form 10-Q for the quarter ended December
31, 1994)

10.20 Employment Agreement, dated as of December 21, 1994,
effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and T. W. Oakes (incorporated by
reference to Exhibit 10.3 to Dibrell Brothers, Incorporated's
Quarterly Report on Form 10-Q for the quarter ended December
31, 1994)

10.21 Employment Agreement, dated as of December 21, 1994,
effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and L. N. Dibrell (incorporated by
reference to Exhibit 10.4 to Dibrell Brothers, Incorporated's
Quarterly Report on Form 10-Q for the quarter ended December
31, 1994)

10.22 Employment Agreement, dated as of December 21, 1994,
effective as of November 1, 1994, by and between Dibrell
Brothers, Incorporated and H. P. Green, III (incorporated by
reference to Exhibit 10.5 to Dibrell Brothers, Incorporated's
Quarterly Report on Form 10-Q for the quarter ended December
31, 1994)

10.23 Agreement with W. G. Barker, Jr. dated June 2, 1993
(incorporated by reference to Exhibit 10.12 to Dibrell
Brothers, Incorporated's Annual Report on Form 10-K for the
year ended June 30, 1993), as amended by letter, dated
December 20, 1995

10.24 Credit Agreement dated as of March 31, 1995 (incorporated by
reference to Exhibit 10.1 to DIMON Incorporated's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1995)

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<PAGE>

10.25 Guarantee Agreement, dated as of March 31, 1995 (incorporated
by reference to Exhibit 10.2 to DIMON Incorporated's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1995)

10.26 Form of Note in connection with Credit Agreement
(incorporated by reference to Exhibit 10.3 to DIMON
Incorporated's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995)

10.27 Amendment No. 1, dated September 15, 1995, to the Credit
Agreement dated March 31, 1995*

10.28 Amendment No. 2, dated October 3, 1995, to the Credit
Agreement dated March 31, 1995*

10.29 Plan of Disposal (incorporated by reference to Exhibit 10.1
to DIMON Incorporated's Current Report on Form 8-K, dated May
5, 1995)

10.30 Purchase Agreement by and among DIMON Incorporated, Austria
Tabakwerke AG, Austria Tabak Einkaufs-Und Handelsorganisation
GesmbH and Austro-Hellenique S.A. De Tabac Et De Batiment,
dated April 13, 1995 (incorporated by reference to Exhibit
10.1 to DIMON Incorporated's Current Report on Form 8-K,
dated June 7, 1995)

11 Computation of Earnings per Common Share*

21 List of Subsidiaries*

23.1 Consent of Price Waterhouse LLP

23.2 Consent of Ernst & Young LLP

27 Financial Data Schedule

* Previously filed

(d) Financial Statement Schedules:

Schedule II, Valuation and Qualifying Accounts, appears on the following
pages. All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are not applicable and,
therefore, have been omitted.

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<PAGE>

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

DIMON INCORPORATED AND SUBSIDIARIES

PERIODS ENDED JUNE 30
- ------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------
DESCRIPTION BALANCE AT ADDITIONS
BEGINNING (1) (2) BALANCE AT
OF PERIOD CHARGED TO CHARGED TO DEDUCTIONS END OF
COSTS AND OTHER ACCOUNTS - DESCRIBE PERIOD
EXPENSES -DESCRIBE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1995:
Deducted from asset accounts:
Allowance for doubtful accounts $ 9,972,568 $3,820,054 $ 0 $4,969,283 (A) $8,823,339
Other Investments 417,958 0 (1,034,819) 0 (616,861) (B)
---------- ---------- ------------ ---------- -----------
$10,390,526 $3,820,054 $(1,034,819) $4,969,283 $8,206,478
=========== ========== ============ ========== ===========

Year ended June 30, 1994:
Deducted from asset accounts:
Allowance for doubtful accounts $10,211,471 $3,633,649 $ 0 $3,872,552 (A) $ 9,972,568
Other Investments 0 0 417,958 0 417,958 (B)
---------- ---------- ------------ ---------- -----------
$10,211,471 $3,633,649 $ 417,958 $3,872,552 $10,390,526
=========== ========== ============ ========== ===========

Year ended June 30, 1993:
Deducted from asset accounts:
Allowance for doubtful accounts $ 8,252,682 $4,268,738 $ 0 $2,309,949 (A) $10,211,471
=========== ========== ============ ========== ===========

</TABLE>

(a) Currency translation and direct write-off.
(b) Net realized (gain) loss before tax on long-term marketable equity
securities recorded in stockholders' equity.

REPORT OF INDEPENDENT ACCOUNTANTS

To Board of Directors and Shareholders of DIMON Incorporated

In our opinion, based upon our audits and the report of other auditors, the
accompanying consolidated balance sheets and the related consolidated statements
of income, of cash flows and of changes in stockholders' equity present fairly,
in all material respects, the financial position of DIMON Incorporated and its
subsidiaries at June 30, 1995 and 1994, and the results of their operations and
their cash flows for each of the three years in the period ended June 30, 1995,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Dibrell Brothers,
Incorporated, which statements reflect total assets of $651,457,020 at June 30,
1994 and total revenues of $919,114,139 and $1,065,438,864 for the years ended
June 30, 1994 and 1993, respectively. Those statements were audited by other
auditors whose report thereon has been furnished to us, and our opinion
expressed herein, insofar as it relates to the amounts included for Dibrell
Brothers, Incorporated is based solely on the report of the other auditors. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the report of the other auditors provide a reasonable basis for the
opinion expressed above.

Our audits of the consolidated financial statements also included an audit of
the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our
opinion, this Financial Statement Schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.

/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Raleigh, North Carolina
October 3, 1995, except as to Note R,
which is of March 11, 1996

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<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES

To the Board of Directors of DIMON Incorporated

Our audits of the consolidated financial statements referred to in our report
dated October 3, 1995, except as to Note R, which is as of March 11, 1996,
appearing in the 1995 Annual Report to Shareholders of DIMON Incorporated (which
report and consolidated financial statements are incorporated by reference in
this Annual Report on Form 10-K/A) also included an audit of the Financial
Statement Schedule listed in Item 14(a) of this Form 10-K/A. In our opinion,
this Financial Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.

/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Raleigh, North Carolina
October 3, 1995, except as to Note R,
which is as of March 11, 1996

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<PAGE>

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
Dibrell Brothers, Incorporated

We have audited the consolidated balance sheet of Dibrell Brothers, Incorporated
and subsidiaries as of June 30, 1994, and the related consolidated statements of
income, stockholders' equity, and cash flows for each of the two years in the
period ended June 30, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Dibrell Brothers,
Incorporated and subsidiaries at June 30, 1994, and the consolidated results of
their operations and their cash flows for each of the two years in the period
ended June 30, 1994, in conformity with generally accepted accounting
principles.

As discussed in Note E and Note F to the financial statements, effective July 1,
1992, the Company changed its methods of accounting for income taxes and
postretirement benefits other than pensions.

/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Winston-Salem, North Carolina
August 26, 1994

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<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized on May 8, 1996

DIMON INCORPORATED (Registrant)

By: /s/ JAMES A. COOLEY
James A. Cooley
Vice President and Treasurer

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<PAGE>

EXHIBIT INDEX

Exhibit

Page No.

3.01 Amended and Restated Articles of
Incorporation of DIMON
Incorporated (incorporated by reference to
Appendix VII to DIMON Incorporated's
Joint Proxy Statement filed pursuant to
Rule 424(b) in connection with DIMON
Incorporated Registration Statement on
Form S-4 (No. 33-89780).

3.02 Amended and Restated By-Laws as
amended of DIMON Incorporated
(incorporated by reference to Appendix
VII to DIMON Incorporated's Joint Proxy
Statement filed pursuant to Rule 424(b) in
connection with DIMON Incorporated
Registration Statement on Form S-4 (No.
33-89780).

4.01 Specimen of Common Stock Certificate
incorporated by reference to Exhibit 4.1 to
DIMON Incorporated Registration
Statement and Form S-4 (No. 33-89780).

4.02 Articles of Incorporation of DIMON
Incorporated (filed as Exhibit 3.01)

4.03 Article III of the Amended and Restated
By-Laws of DIMON Incorporated
(filed as Exhibit 3.02)

4.04 Indenture, dated May 15, 1991, between
Dibrell Brothers, Incorporated and Crestar
Bank, as Trustee (incorporated herein by
reference to Exhibit 4.02 of Dibrell
Brothers, Incorporated's Registration
Statement on Form S-1 (file No. 33-
39531))

4.05 Form of Supplemental Indenture by and
among the registrant, Dibrell Brothers,
Incorporated and Crestar Bank, as Trustee
(incorporated herein by reference to
Exhibit 4.5 to DIMON Incorporated's
Registration Statement on Form S-4 (file
No. 33-89780))

4.06 Rights Agreement, dated as of March 31,
1995, between DIMON Incorporated and
First Union National Bank of North
Carolina, as Rights Agent (incorporated by
reference to Exhibit 4 to DIMON
Incorporated Current Report on Form 8-K,
dated April 1, 1995)

10.01 DIMON Incorporated Omnibus Stock
Incentive Plan (incorporated herein by
reference to Exhibit 10.1 to DIMON
Incorporated's Registration Statement on
Form S-4 (file No. 33-89780))

10.02 DIMON Incorporated Non-Employee
Directors' Stock Option Plan (incorporated
herein by reference to Exhibit 10.2 to
DIMON Incorporated's Registration
Statement on Form S-4 (file No. 33-
89780))

10.03 Dibrell Brothers, Incorporated 1994 Omnibus
Stock Incentive Plan (incorporated by
reference to Exhibit 10.6 to Dibrell
Brothers, Incorporated's Annual Report on
Form 10-K for the fiscal year ended June
30, 1994)

10.04 Form on Interpretive Letter, dated January
11, 1995, under the Dibrell Brothers,
Incorporated 1994 Omnibus Stock
Incentive Plan delivered by Dibrell
Brothers, Incorporated to Claude B.
Owen, Jr., T. H. Faucett, T. W. Oakes,
L. N. Dibrell, III and H. P. Green
(incorporated by reference to Exhibit 10.6
to Dibrell Brothers, Incorporated's
Quarterly Report on Form 10-Q for the
quarter ended December 31, 1994)

10.05 Dibrell Brothers, Incorporated Retirement
Plan (Excess Benefit Plan) (incorporated
herein by reference to Exhibit 10.4 to
Dibrell Brothers, Incorporated's Annual
Report on Form 10-K for the year ended June
30, 1987)

10.06 Dibrell Brothers, Incorporated Pension
Equalization Plan (Benefit Assurance Plan)
(incorporated herein by reference to
Exhibit 10.13 to Dibrell Brothers,
Incorporated's Annual Report on Form 10- K
for the year ended June 30, 1991)

10.07 Long-Term Stock Investment Plan for Key
Employees of Monk-Austin, Inc.
(incorporated by reference to Exhibit 10.5
of Monk-Austin, Inc.'s Registration
Statement on S-1 (File No. 33-51842))

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<PAGE>

10.08 Form of 1995 Declaration of Amendment
to Long-Term Stock Investment Plan for
Key Employees of Monk-Austin, Inc.
(incorporated herein by reference to
Exhibit 10.8 to DIMON Incorporated's
Registration Statement on Form S-4 (File
No. 33-89780))

10.09 Agreement for Supplemental Retirement
Benefits, dated August 7, 1986, between
A.C. Monk and Company, Inc. and W. C.
Monk ((incorporated by reference to
Exhibit 10.3 to Monk-Austin, Inc.'s
Registration Statement on Form S-1 (File
No. 33-51842))

10.10 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and Albert C. Monk, III
(incorporated by reference to Exhibit 10.1
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

10.11 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and John M. Hines
((incorporated by reference to Exhibit 10.2
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

10.12 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and Robert T. Monk,
Jr. (incorporated by reference to Exhibit
10.3 to Monk-Austin, Inc.'s Quarterly
Report on Form 10-Q for the quarter
ended December 31, 1994)

10.13 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and Brian J. Harker
(incorporated by reference to Exhibit 10.4
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

10.14 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and James H. Felts
(incorporated by reference to Exhibit 10.5
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

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<PAGE>

10.15 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and E. Shelton Griffin
(incorporated by reference to Exhibit 10.6
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

10.16 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and Larry R. Corbett
(incorporated by reference to Exhibit 10.7
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

10.17 Employment Agreement, dated October
18, 1994, between Monk-Austin
International, Inc. and Thomas A. Lewis
(incorporated by reference to Exhibit 10.8
to Monk-Austin, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended
December 31, 1994)

10.18 Employment Agreement, dated as of
December 21, 1994, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and Claude
B. Owen, Jr. (incorporated by reference to
Exhibit 10.1 to Dibrell Brothers,
Incorporated's Quarterly Report on Form
10-Q for the quarter ended December 31,
1994)

10.19 Employment Agreement, dated as of
December 21, 1994, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and T. H.
Faucett (incorporated by reference to
Exhibit 10.2 to Dibrell Brothers,
Incorporated's Quarterly Report on Form
10-Q for the quarter ended December 31,
1994)

10.20 Employment Agreement, dated as of
December 21, 1994, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and T. W.
Oakes (incorporated by reference to
Exhibit 10.3 to Dibrell Brothers,
Incorporated's Quarterly Report on Form
10-Q for the quarter ended December 31,
1994)

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<PAGE>

10.21 Employment Agreement, dated as of
December 21, 1994, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and L. N.
Dibrell (incorporated by reference to
Exhibit 10.4 to Dibrell Brothers,
Incorporated's Quarterly Report on Form
10-Q for the quarter ended December 31,
1994)

10.22 Employment Agreement, dated as of
December 21, 1994, effective as of
November 1, 1994, by and between
Dibrell Brothers, Incorporated and H. P.
Green, III (incorporated by reference to
Exhibit 10.5 to Dibrell Brothers,
Incorporated's Quarterly Report on Form
10-Q for the quarter ended December 31,
1994

10.23 Agreement with W. G. Barker, Jr. dated
June 2, 1993 (incorporated by reference to
Exhibit 10.12 to Dibrell Brothers,
Incorporated's Annual Report on Form 10-
K for the year ended June 30, 1993), as
amended by letter, dated December 20,
1995

10.24 Credit Agreement dated as of March 31, 1995
(incorporated by reference to Exhibit 10.1
to DIMON Incorporated's Quarterly Report on
Form 10-Q for the quarter ended March 31,
1995)

10.25 Guarantee Agreement, dated as of March 31,
1995 (incorporated by reference to Exhibit
10.2 to DIMON Incorporated's Quarterly
Report on Form 10-Q for the quarter ended
March 31, 1995)

10.26 Form of Note in connections with Credit
Agreement (incorporated by reference to
Exhibit 10.3 to DIMON Incorporated's
Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995)

10.27 Plan of Disposal (incorporated by reference
to Exhibit 10.1 to DIMON Incorporated's
Current Report on Form 8- K, dated May 5,
1995)

10.28 Purchase Agreement by and among
DIMON Incorporated, Austria Tabakwerke
AG, Austria Tabak Einkaufs-Und
Handelsorganisation GesmbH and Austro-
Hellenique S.A. De Tabac Et De
Batiment, dated April 13, 1995
(incorporated by reference to Exhibit 10.1
to DIMON Incorporated's Current Report
on Form 8-K, dated June 7, 1995)

*11 Computation of Earnings per Common Share

*21 List of Subsidiaries

23.1 Consent of Price Waterhouse LLP

23.2 Consent of Ernst & Young LLP

27 Financial Data Schedule

*previously filed

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Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 33-93172, 33-91364, 33-93162, 33-93174, 33-93170 and
33-93168) of DIMON Incorporated of our report dated October 3, 1995, except as
to Note R, which is as of March 11, 1996, appearing in the 1995 Annual Report on
Form 10-K/A. We also consent to the incorporation by reference of our report on
the Financial Statement Schedule, which appears in the 1995 Annual Report on
Form 10-K/A.

/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Raleigh, North Carolina
May 8, 1996

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Exhibit 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements
Form S-8 (Nos. 33-93172, 33-91364, 33-93162,33-93174,33-93170 and 33-93168)
of DIMON Incorporated of our report dated August 26, 1994, included in
the Annual Report (Form 10-K) of DIMON Incorporated for the year ended
June 30, 1995, with respect to the consolidated financial statements
of Dibrell Brothers, Incorporated for the year ended June 30, 1994.

/s/ ERNST & YOUNG LLP
Ernst & Young LLP
Winston-Salem, North Carolina
May 7, 1996

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<ARTICLE> 5
<MULTIPLIER> 1,000

<FN>
<F1> Computation of loss per share is anti-dilutive for fiscal year 1995.
</FN>

</TABLE>