DIMON INC, 424B4, 1996-05-23

DIMON INC
424B4, 1996-05-23
FARM PRODUCT RAW MATERIALS

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PROSPECTUS

$125,000,000

[DIMON Logo]

DIMON Incorporated

8 7/8% Senior Notes due 2006

The 8 7/8% Senior Notes due 2006 (the "Notes") are being offered by DIMON
Incorporated, a Virginia corporation ("DIMON" or the "Company"). The net
proceeds from this offering (the "Offering") will be used by the Company to
repay certain existing short-term indebtedness.

The Notes mature on June 1, 2006, unless previously redeemed. Interest on
the Notes is payable semi-annually on June 1 and December 1 of each year,
commencing December 1, 1996. The Notes will be redeemable at the option of the
Company, in whole or in part, on or after June 1, 2001, at the redemption prices
set forth herein, plus accrued and unpaid interest to the redemption date. Upon
a Change of Control (as defined herein), the holders of the Notes (the
"Holders") will have the right to require the Company to repurchase all or any
part (equal to $1,000 or integral multiple thereof) of the Notes at a price
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest to the date of purchase. See "Description of Notes -- Repurchase at the
Option of Holders."

The Notes will be general unsecured senior obligations of the Company and
will rank equally in right of payment with all other unsecured, unsubordinated
indebtedness of the Company. The Notes will also be fully and unconditionally
guaranteed on a joint and several basis (the "Guarantees") by the Company's two
principal direct subsidiaries, DIMON International, Inc. ("DIMON International")
and Florimex Worldwide, Inc. ("Florimex" and, together with DIMON International,
the "Guarantors"). The Guarantees will be general unsecured obligations of the
Guarantors and will rank equally in right of payment with all other unsecured,
unsubordinated indebtedness of the Guarantors. As of March 31, 1996, on a pro
forma basis after giving effect to the Refinancing Plan (as defined herein), the
Company and the Guarantors would have had approximately $171 million of
outstanding unsubordinated indebtedness, of which approximately $1 million would
have been secured. As a result of the Company's holding company structure, the
creditors of the Company (including the Holders) will effectively rank junior to
all creditors (including unsecured creditors) of the Company's subsidiaries
other than the Guarantors with respect to the assets of such subsidiaries,
notwithstanding that the Notes will be senior obligations of the Company. As of
March 31, 1996, on a pro forma basis after giving effect to the Offering, the
aggregate amount of indebtedness of the Company's subsidiaries other than the
Guarantors to which the Holders would be structurally subordinated would have
been approximately $221 million, of which approximately $27 million would have
been secured. Approximately 43% of the Company's revenues for the year ended
June 30, 1995 were attributable to the Company's subsidiaries other than the
Guarantors. See "Description of Notes -- The Guarantees" and " -- Ranking."

The Notes will initially be issued in the form of one Global Note (the
"Global Note") which will be deposited on the date of the closing of the sale of
the Notes with the Trustee as custodian for The Depository Trust Company ("DTC")
and registered in the name of Cede & Co., as nominee of DTC (the "Global Note
Holder"). So long as the Global Note Holder is the registered owner of any of
the Notes, interests in such Notes will be shown on, and transfers thereof will
be effected only through records maintained by DTC and its participants.
Beneficial owners of the Notes will not have the right to receive physical
certificates evidencing their ownership except under the limited circumstances
described herein. Settlement for the Notes will be made in immediately available
funds. The Notes will trade in DTC's Same-Day Funds Settlement System and
secondary market trading activity for the Notes will, therefore, settle in
immediately available funds. All payments of principal and interest on the Notes
will be made by the Company in immediately available funds so long as the Notes
are maintained in book-entry form. Beneficial interests in the Notes may be
acquired, or subsequently transferred, only in denominations of $1,000 and
integral multiples thereof. See "Description of Notes -- Book-Entry, Delivery
and Form" and " -- Same-Day Settlement and Payment."

See "Risk Factors" beginning on page 10 for a discussion of certain factors
that should be considered in evaluating an investment in the Notes.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Price to Discounts and Proceeds to
Public(1) Commissions(2) Company(3)
<S> <C> <C> <C>
Per Note............................................ 100% 2% 98%
Total............................................... $125,000,000 $2,500,000 $122,500,000
</TABLE>

(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company and the Guarantors have agreed to indemnify the Underwriters (as
defined herein) against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses payable by the Company, estimated at $600,000.

The Notes are being offered, subject to prior sale, by the Underwriters
when, as and if delivered to and accepted by the Underwriters, and subject to
various prior conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the Notes will be made on or about May 29, 1996, in book-entry
form through the facilities of DTC, against payment therefor.

NationsBanc Capital Markets, Inc.

BA Securities, Inc.

First Union Capital Markets Corp.

The date of this Prospectus is May 23, 1996

<PAGE>

[photo] [photo]

caption: Agronomist works with local caption: Buyers purchase flue-cured
growers in South America. tobacco at auction.

[DIMON LOGO]

[photo] [photo]

caption: Tobacco is monitored during caption: Customer samples are
threshing process. inspected for quality and consistency.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

<PAGE>

DIMON'S GLOBAL TOBACCO OPERATIONS

[MAP]

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context requires otherwise, "DIMON" or the "Company" refers to DIMON
Incorporated and its consolidated subsidiaries. Capitalized terms used in this
summary under the caption "The Offering" and not otherwise defined are defined
below under the caption "Description of Notes -- Certain Definitions."

The Company

DIMON 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"). See "Business."

The Company has developed an extensive international network through which
it purchases and sells tobacco grown globally. The Company purchases tobacco in
approximately 26 countries, generally at auction or directly from growers. 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 grown in any one
region.

The tobacco purchased by the Company is processed at 17 facilities around
the world. In addition to 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 other countries that produce export-quality
flue-cured and burley tobaccos, including Argentina, Canada, China, India and
Tanzania. Flue-cured and burley tobaccos are processed through a complex
mechanized threshing and separating operation. Thereafter, flue-cured and burley
tobaccos are "redried" by regulating the proper amount of moisture in accordance
with customers' specifications. Oriental tobacco is sorted, baled and allowed to
ferment.

The Company sells its tobacco predominantly to the large multinational
cigarette manufacturers including Philip Morris Companies, Inc., Japan Tobacco,
Inc., RJR Tobacco Company, Inc., Lorillard Tobacco Company, Reemstma
Cigarettenfabriken GmbH and Rothmans International PLC. The Company, through its
predecessors, 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.

The global leaf tobacco industry is currently recovering after experiencing
a disruption in demand and reduction in pricing during 1993 and 1994 which was
primarily the result of legislation (the "75/25 Rule") requiring that cigarettes
manufactured in the U.S. for domestic consumption and export contain at least
75% domestically grown tobacco. This combination of reduced demand and lower
prices had a negative impact on the financial performance of 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 because of the repeal
of the 75/25 Rule due to its violation of GATT and with leaf tobacco production
outside the U.S. being curtailed in response to the high levels of uncommitted
tobacco inventories. As a result of the strong worldwide demand for tobacco
products and tightening of worldwide tobacco inventories, the leaf tobacco
industry has experienced substantial improvement in profitability in the nine
months ended March 31, 1996. See "Business -- Tobacco -- The Leaf Tobacco
Industry -- Improved Market Conditions." These factors, together with the
increasing demand for American blend cigarettes and improved efficiency
resulting from the Merger, have contributed to substantial improvement in the
Company's net revenue, operating margins and net income. For the nine months
ending March 31, 1996, compared to the same period in 1995, the Company's net
revenue increased 7.5% to $1.7 billion from $1.5 billion, EBITDA increased 54%
to $113.3 million from $73.7 million and net income increased 229% to $32.1
million from $9.8 million. For the fiscal year ended June 30, 1995, the Company
had net revenue, EBITDA and a net loss of $1.9 billion, $73.4 million and
$(30.2) million, respectively. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<PAGE>
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. 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, which the Company believes positions DIMON
as the largest worldwide merchant 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.

(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, and (iii) 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. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." 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 operations with those of Monk-Austin 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 these 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.

<PAGE>
Refinancing Plan

Concurrent with the execution of its business strategy, the Company is
implementing a refinancing plan (the "Refinancing Plan") that is designed to
reduce its financial leverage, decrease its reliance on short-term uncommitted
lines of credit and diversify its sources of debt financing. The Refinancing
Plan consists of the following three components:

(Bullet) A reduction in outstanding debt achieved through the call for
redemption in March 1996 of the Company's approximately $54.3 million
principal balance of 7 3/4% Convertible Subordinated Debentures due
2006 (the "Debentures"), 99.85% of which were converted by holders of
the Debentures into the Company's common stock, no par value ("Common
Stock"). The conversion reduced debt and increased shareholders' equity
by $54.2 million;

(Bullet) The offering of the Notes; and

(Bullet) The execution of a $240 million Credit Agreement, dated as of March 15,
1996, among the Company, as borrower, NationsBank, N.A. as
administrative agent, Bank of America NT&SA, First Union National Bank
of Virginia and Crestar Bank as co-agents, and several other lenders
(the "New Credit Facility"), replacing the Company's $250 million
credit facility (the "Former Credit Facility").

The Company will use the net proceeds from the offering of the Notes to
reduce the level of borrowings under the Company's uncommitted unsecured
short-term 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. As the Company has
increased in size and scope, it has become increasingly dependent on uncommitted
short-term lines of credit. The Company believes that it is prudent to finance a
larger percentage of its working capital with longer term, more permanent
capital. The Company believes that the longer maturity of the Notes, combined
with the reduced financial leverage resulting from the conversion of the
Debentures and the less restrictive terms of the New Credit Facility, will give
the Company increased financial flexibility.

Risk Factors

For a discussion of certain matters that should be considered by
prospective investors in connection with the Offering, see "Risk Factors."

<PAGE>
The Offering

<TABLE>
<S> <C>
Securities Offered.................................... $125 million aggregate principal amount of 8 7/8% Senior Notes of the
Company due 2006.

Issuer................................................ DIMON Incorporated.

Guarantors............................................ DIMON International, Inc. and Florimex Worldwide, Inc.

Maturity Date......................................... June 1, 2006.

Interest Payment Dates................................ June 1 and December 1, commencing December 1, 1996.

Optional Redemption................................... On or after June 1, 2001, the Company may redeem the Notes, in whole
or in part, at the redemption prices set forth herein, plus accrued
and unpaid interest, if any, to the date of redemption.

Mandatory Redemption.................................. None, except at maturity on June 1, 2006.

Ranking............................................... The Notes will be general unsecured senior obligations of the Company
and will rank equally in right of payment with all other unsecured,
unsubordinated indebtedness (including the New Credit Facility) of
the Company. As of March 31, 1996, on a pro forma basis after giving
effect to the Offering, the Company and the Guarantors would have had
approximately $171 million of outstanding unsubordinated
indebtedness, of which approximately $1 million would have been
secured. As a result of the Company's holding company structure, the
creditors of DIMON (including the holders of the Notes), will
effectively rank junior to all creditors (including unsecured
creditors) of the Company's subsidiaries other than the Guarantors
with respect to the assets of such subsidiaries, notwithstanding that
the Notes will be senior obligations of DIMON. As of March 31, 1996,
on a pro forma basis after giving effect to the Offering, the
aggregate amount of indebtedness of the Company's subsidiaries other
than the Guarantors to which the holders of the Notes would be
structurally subordinated would have been approximately $221 million,
of which approximately $27 million would have been secured.
Approximately 43% of the Company's revenues for the year ended June
30, 1995, were attributable to the Company's subsidiaries other than
the Guarantors. See "Description of Notes -- The Guarantees" and
" -- Ranking."

Guarantees............................................ The Notes will be fully and unconditionally guaranteed on a joint and
several basis by each of the Guarantors. The Guarantees will be
general unsecured obligations of the Guarantors and will rank equally
in right of payment with all other unsecured, unsubordinated
indebtedness of the Guarantors. The liability of Florimex under its
Guarantee will be released in connection with certain sales or
dispositions of its capital stock or assets. See "Description of
Notes -- The Guarantees."

Change of Control..................................... Upon a change in control, defined as the acquisition by any persons,
other than certain members of the Monk family, of beneficial
ownership of 30% or more of the outstanding shares of the Company's
Common Stock, transfers of substantially all of the Company's assets,
certain substantial changes in the Company's Board of Directors and
certain consolidations or mergers of the Company involving a
significant change in shareholdings, the Company will be required to
make an offer to repurchase all
</TABLE>

<PAGE>

<TABLE>
<S> <C>
outstanding Notes at 101% of the aggregate principal amount thereof
plus accrued and unpaid interest to the date of purchase.
Acquisitions of Common Stock by members of the Monk Family will not
require the Company to make such an offer. As of April 30, 1996,
members of the Monk family owned approximately 31% of the outstanding
Common Stock. See "Description of Notes -- Repurchase at the Option
of Holders -- Change of Control."

Certain Covenants..................................... The Indenture (as defined herein) will contain certain covenants
that, among other things, limit the ability of the Company and its
Subsidiaries to (i) transfer or issue shares of capital stock of
subsidiaries to third parties, (ii) pay dividends or make certain
other payments, (iii) incur additional indebtedness, (iv) issue
preferred stock, (v) incur liens to secure indebtedness of the
Company and the Guarantors, (vi) apply net proceeds from certain
asset sales, (vii) enter into certain transactions with affiliates,
(viii) merge with or into any other person or (ix) enter into certain
sale and leaseback transactions. See "Description of
Notes -- Repurchase at the Option of Holders" and " -- Certain
Covenants."

Use of Proceeds....................................... The Company intends to use the net proceeds from the Offering to
repay certain existing short-term indebtedness.
</TABLE>

<PAGE>
Summary Historical Financial Information

The following table presents summary selected historical consolidated
financial information of the Company, as of the dates and for the periods
indicated. The historical financial data for the year ended June 30, 1995, have
been derived from the Company's financial statements which, except as they
relate to the former Dibrell's financial statements as of June 30, 1994, and for
each of the two years in the period ended June 30, 1994, have been audited by
Price Waterhouse LLP, independent accountants, and by Ernst & Young LLP,
independent accountants, insofar as they relate to the former Dibrell's
financial statements referred to above. The summary financial information should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Company's financial statements and
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
Nine Months
Ended March 31 Year Ended June 30
1996 1995 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
(in thousands) (unaudited)
Income Statement Data:
Net sales of goods and
services....................... $1,663,661 $1,547,534 $1,927,749 $1,449,078 $1,680,616 $1,698,314 $1,633,019
Cost of goods and services
sold........................... 1,481,128 1,404,544 1,757,516 1,317,286 1,457,828 1,481,482 1,439,897
Gross profit..................... 182,533 142,990 170,233 131,792 222,788 216,832 193,122
Selling, general and adminis-
trative expenses............... 102,736 94,883 132,802 117,311 111,957 110,738 104,261
Restructuring and merger-related
costs.......................... 5,568 -- 25,955 -- -- -- --
Operating income................. 74,229 48,107 11,476 14,481 110,831 106,094 88,861
Interest income.................. 6,687 6,631 7,512 7,025 5,716 4,931 9,531
Interest expense................. 38,036 34,139 45,231 35,117 38,128 42,837 40,306
Other income (expense), net...... 9,239 3,714 4,079 8,256 17,268 6,111 (1,130)
Income (loss) from continuing
operations before income taxes,
minority interest, equity in
net income of investee
companies, extraordinary items
and cumulative effect of
accounting changes............. 52,119 24,313 (22,164) (5,355) 95,687 74,299 56,956
Income taxes..................... 20,847 13,157 5,980 2,767 31,173 23,590 24,587
Income (loss) applicable to
minority interest.............. 242 272 216 466 486 214 541
Equity in net income of investee
companies (net of taxes)....... (290) (1,121) (1,805) 98 1,259 5,112 2,278
Income (loss) from continuing
operations before extraordinary
items and cumulative effect of
accounting changes............. 30,740 9,763 (30,165) (8,490) 65,287 55,607 34,106
Extraordinary items(1)........... 1,400 -- -- -- -- 2,573 (5,202)
Cumulative effect of accounting
changes(2)..................... -- -- -- -- (783) -- --
Net income (loss)................ $ 32,140 $ 9,763 $ (30,165) $ (8,490) $ 64,504 $ 58,180 $ 28,904
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Nine Months
Ended March 31 Year Ended June 30
1996 1995 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
(in thousands, except
percentages and ratios) (unaudited)

Balance Sheet Data:
Working capital.............................. $ 298,762 $ 203,177 $ 277,597 $ 217,667 $ 242,600 $ 218,405
Total assets................................. 1,011,291 987,456 1,093,608 1,043,816 998,520 940,266
Total debt................................... 388,710 474,582 594,192 515,133 482,838 542,006
Total liabilities............................ 699,515 703,213 853,866 754,275 689,227 716,263
Minority interest............................ 544 1,014 936 1,227 1,143 1,041
Stockholders' equity......................... 311,232 283,229 238,806 288,314 308,149 222,962

Other Financial Data:
EBITDA(3).................................... $ 113,270 $ 73,712 $ 73,362 $ 51,599 $ 152,658 $ 136,292
Depreciation and amortization................ 24,234 21,891 31,852 28,862 24,559 24,087
Capital expenditures......................... 20,609 18,845 35,892 32,382 42,232 34,818
EBITDA as a % of net sales(3)................ 6.8% 4.8% 3.8% 3.6% 9.1% 8.0%
Ratio of earnings to fixed charges(4)(5)..... 2.26x 1.65x -- -- 3.26x 2.53x
Ratio of total debt to EBITDA(3)............. -- -- 8.10x 9.98x 3.16x 3.98x
Ratio of EBITDA to
net interest expense(3).................... 3.61x 2.68x 1.94x 1.84x 4.71x 3.60x

1991
<S> <C>
(in thousands, except
percentages and ratios)
Balance Sheet Data:
Working capital.............................. $ 177,355
Total assets................................. 798,450
Total debt................................... 454,099
Total liabilities............................ 625,324
Minority interest............................ 872
Stockholders' equity......................... 172,254
Other Financial Data:
EBITDA(3).................................... $ 102,544
Depreciation and amortization................ 14,813
Capital expenditures......................... 24,334
EBITDA as a % of net sales(3)................ 6.3%
Ratio of earnings to fixed charges(4)(5)..... 2.25x
Ratio of total debt to EBITDA(3)............. 4.43x
Ratio of EBITDA to
net interest expense(3).................... 3.33x
</TABLE>

(1) Extraordinary items include a reserve on Iraqi receivables of ($5.2) million
and ($3.6) million, net of tax, in 1991 and 1992, respectively, a reduction
of foreign income tax arising from utilization of prior years' operating
losses of $6.2 million in 1992 and a partial recovery against the 1992 Iraqi
extraordinary trade receivable reserve of $1.4 million, net of tax, in the
nine months ended March 31, 1996.

(2) Cumulative effect of accounting changes includes postretirement benefit
plans of ($9.7) million, net of tax, and income taxes of $9.0 million in
1993.

(3) EBITDA, as defined in "Description of Notes", represents earnings before
deduction of interest expense, income taxes, depreciation and amortization
and restructuring and merger costs. EBITDA is included herein to provide
additional information about the Company's ability to service debt. EBITDA
should not be considered as an alternative measure of the Company's net
income, operating income, cash flows from operating activities or liquidity
prepared in accordance with generally accepted accounting principles.

(4) For purposes of computing this ratio, earnings consist of earnings before
interest, amortized debt costs, the portion of rents considered
representative of the interest factor (one-third) and preferred dividends.
Fixed charges consist of interest, amortization of debt costs, the portion
of rents considered representative of the interest factor and preferred
dividends.

(5) As a result of the losses incurred in the periods ended June 30, 1994, and
June 30, 1995, earnings did not cover fixed charges by $5,355 and $22,164
respectively.

<PAGE>
RISK FACTORS

In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following factors in
evaluating an investment in the Notes offered hereby. This Prospectus contains
certain forward-looking statements. The Company wishes to caution readers that
the following important factors, among others, in some cases have affected, and
in the future could affect, the Company's actual results and could cause the
Company's actual results for 1996 and beyond, to differ materially from those
expressed in any foward-looking statements made by, or on behalf of, the
Company.

Governmental Intervention

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 claimed to have been made by such states 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.

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 decreasing 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.

Smoking and Health Issues

Reports and speculation with respect to the alleged harmful physical
effects of cigarette smoking have been publicized for many years and, together
with restrictions on cigarette advertisements, requirements that warning
statements be placed on cigarette packaging and in advertising, increased taxes
on tobacco products and controls in certain foreign countries on production and
prices, decreased social acceptance of smoking and increased pressure from
anti-smoking groups have had an ongoing adverse effect on sales of tobacco
products. In addition, litigation is pending against the leading U.S.
manufacturers of consumer tobacco products seeking damages for health problems
alleged to have resulted from the use of tobacco in various forms. It is not
possible to predict the outcome of such litigation or what effect adverse
developments in pending or future litigation against manufacturers might have on
the business of the Company.

Significant Leverage and Debt Service

Upon consummation of the offering of the Notes, the Company will continue
to have significant indebtedness. As of March 31, 1996, after giving effect to
the issuance of the Notes, the Company's total indebtedness would have been
approximately $392 million, of which $171 million was indebtedness of the
Company and the Guarantors, as compared to stockholders' equity of approximately
$311 million. In addition, at such date, approximately $613 million of
additional borrowing capacity would have been available under the New Credit
Facility and the other credit facilities of the Company and its subsidiaries
that the Company uses to finance tobacco advances, inventories and receivables
on a seasonal basis. The Indenture will permit the Company and its subsidiaries
to incur certain additional specified indebtedness. See "Description of
Notes -- Certain Covenants."

<PAGE>
The purchasing and processing activities, and related borrowing needs, of
the Company are seasonal. The Company has historically required capital in
excess of operating cash flow to finance inventories and accounts receivable
and, more recently, flower operations. Peak borrowings generally occur in
November and December of each year, coinciding with the peak of the U.S.
flue-cured tobacco purchasing and processing season and the opening of the U.S.
burley tobacco season. Maximum borrowings at any month-end during the nine
months ended March 31, 1996, were $745 million at December 31, 1995. See
" -- Variability of Annual and Quarterly Financial Results."

The level of the Company's indebtedness could have important consequences
to Holders including: (i) a substantial portion of the Company's cash flows must
be dedicated to debt service and, therefore, will not be available for other
purposes; (ii) the Company's ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions, debt service
requirements, general corporate purposes or other purposes may be restricted;
(iii) the borrowings of the Company and its subsidiaries under the New Credit
Facility and other credit facilities accrue interest at variable rates, which
could result in increased interest expense in the event of higher interest
rates; and (iv) the Company's level of indebtedness could limit its flexibility
in reacting to changes in its industry and economic conditions generally.

The Company's ability to pay interest on the Notes will be dependent on the
Company's future operating performance, which itself is dependent on a number of
factors, many of which are beyond the Company's control. As a result of losses
incurred in the periods ended June 30, 1994, and June 30, 1995, earnings were
inadequate to cover fixed charges by $5.4 million and $22.2 million,
respectively. The Company's ability to repay the Notes at maturity or to
purchase the Notes upon a Change in Control (as defined herein) will depend upon
these same factors and the ability of the Company to raise additional funds.
There can be no assurances that the Company will be able to raise additional
funds. See "Management's Discussion of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

Restrictions Imposed by Terms of Indebtedness

The Indenture and terms of the New Credit Facility will restrict, among
other things, the Company's and its subsidiaries' ability to (i) transfer or
issue shares of capital stock of subsidiaries to third parties, (ii) pay
dividends or make certain other payments, (iii) incur additional indebtedness,
(iv) issue preferred stock, (v) incur liens to secure indebtedness of the
Company and the Guarantors, (vi) apply net proceeds from certain asset sales,
(vii) enter into certain transactions with affiliates, (viii) merge with or into
any other person or (ix) enter into certain sale and lease back transactions. A
breach of one or more covenants could result in the acceleration of the
Company's obligations thereunder. See "Description of Notes -- Certain
Covenants."

Reliance on Significant Customers

The Company's customers are manufacturers of cigarette and tobacco products
located in approximately 60 countries around the world. Several of these
customers individually account for a significant portion of the Company's sales
in a normal year, and the loss of any one or more of such customers could have a
material adverse effect on the Company's results of operations. Approximately
46% and 53% of the Company's consolidated tobacco sales for the nine months
ended March 31, 1996, and fiscal 1995, respectively, were made to 33 customers
that the Company believes are owned or under common control of Japan Tobacco,
Inc. ("Japan Tobacco"), Philip Morris Companies, Inc. ("Philip Morris") or RJR
Tobacco Company, Inc. ("RJR"), each of which contributed in excess of 10% of
consolidated tobacco sales, with Philip Morris and RJR accounting for
significantly larger portions of the Company's sales than Japan Tobacco. See
"Business -- Tobacco -- Operations -- Selling."

International Business Risks

The Company's international operations are subject to international
business risks, including unsettled political conditions, expropriation, import
and export restrictions, exchange controls, inflationary economies and currency
risks and risks related to the restrictions of repatriation of earnings or
proceeds from liquidated assets of foreign subsidiaries. In certain countries,
the Company has advanced substantial sums or guaranteed local loans or lines of
credit in substantial amounts for the purchase of tobacco from growers. Risk of
repayment is normally limited to the tobacco season, and the maximum exposure
occurs within a shorter period.

<PAGE>
borrowing needs against the tobacco purchasing and processing funds requirements
in the currency of the country of tobacco origin. Fluctuations in the value of
foreign currencies can significantly affect the Company's operating results. See
Note J to the Company's Consolidated Financial Statements for the year ended
June 30, 1995, included herein.

The Company has expanded its international operations in areas where the
export of tobacco has increased due to increased demand for lower-priced
tobacco. 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. However, the
Company's sales and operating profits from South America decreased significantly
in fiscal 1994. While sales recovered in fiscal 1995, operating profits did not
recover to the same extent, primarily due to Brazil's monetary policy adopted in
July 1994. This policy, along with the weakened U.S. dollar, caused the dollar
cost of the 1995 Brazilian crop to increase by 40% over the cost of the 1994
crop. As a result, even though the worldwide oversupply of tobacco has been
reduced and uncertainties in the U.S. import market related to government
regulation have eased, operating profits from the Company's South American sales
have not rebounded to the levels they reached in 1993. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Variability of Annual and Quarterly Financial Results

The comparability of the Company's financial results, particularly the
quarterly financial results, may be significantly affected by fluctuations in
tobacco growing seasons and customer instructions with regard to the shipment of
processed tobacco. The cultivation period for tobacco is dependent upon a number
of factors, including the weather and other natural events, and the Company's
processing schedule can be significantly altered by variations in harvesting
periods.

Further, it is not possible to predict with precision the timing of orders
or shipments, and the Company may from time to time in the ordinary course of
business keep a significant amount of processed tobacco in inventory for its
customers to accommodate their inventory management and other needs. Sales and
revenue recognition by the Company and its subsidiaries is based on the passage
of ownership, usually with shipment of product. Since individual shipments may
represent significant amounts of revenue, the Company's quarterly and annual
financial results may vary significantly depending on its customers' needs and
shipping instructions. In particular, because deliveries of Brazilian tobacco
are made at the end of the fourth fiscal quarter of each year or the beginning
of the first quarter of the following year, significant amounts of revenue and
operating profits may shift from fiscal year to fiscal year. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business -- Tobacco -- Seasonality" and "Business -- Flowers -- Seasonality."

Fraudulent Conveyance Considerations

Each Guarantor's Guarantee of the obligations of the Company under the
Notes may be subject to review under relevant federal and state fraudulent
conveyance statutes in a bankruptcy or reorganization case or similar proceeding
or a lawsuit by or on behalf of unpaid creditors of such Guarantor. If a court
were to find under relevant fraudulent conveyance statutes that, at the time the
Notes were issued, (a) a Guarantor guaranteed the Notes with the intent of
hindering, delaying or defrauding current or future creditors or (b) (i) a
Guarantor received less than reasonably equivalent value or fair consideration
for guaranteeing the Notes and (ii)(A) was insolvent or was rendered insolvent
by reason of such Guarantee, (B) was engaged, or about to engage, in a business
or transaction for which its assets constituted unreasonably small capital or
(C) intended to incur, or believed that it would incur, obligations beyond its
ability to pay as such obligations matured (as all of the foregoing terms are
defined in or interpreted under such fraudulent conveyance statutes), such court
could avoid or subordinate such Guarantee to presently existing and future
indebtedness of such Guarantor and take other action detrimental to the holders
of the Notes, including, under such circumstances, invalidating such Guarantee.
See "Description of Notes -- The Guarantees."

Each Guarantor believes that, after taking into account the issuance of the
Guarantees, it will not be insolvent, will not have unreasonably small capital
for the businesses in which it is engaged and will not incur debts beyond its
ability to pay such debts as they mature. There can be no assurance, however, as
to what standard a court would apply in making such determinations.

<PAGE>
No Market for Notes

The Notes are new securities for which there is no trading market. The
Company does not intend to list the Notes on any securities exchange. The
Company has been advised by the Underwriters that the Underwriters currently
intend to make a market in the Notes; however, the Underwriters are not
obligated to do so and may discontinue any such market making activities at any
time without notice. No assurance can be given as to the development or
liquidity of any trading market for the Notes. See "Underwriting."

Holding Company Structure

The Company is a holding company whose material assets consist primarily of
the capital stock of the Guarantors. Consequently, DIMON is dependent upon
dividends paid by the Guarantors to pay its operating expenses, service its debt
obligations, including the Notes, and to satisfy any mandatory repurchase
obligations relating to the Notes as a result of a Change of Control or a sale
or other disposition of certain assets. See "Description of Notes." A
substantial portion of the material assets of DIMON International and all of the
material assets of Florimex consist of the capital stock of the Company's
indirect subsidiaries. Consequently, the ability of the Company to meet its debt
service and principal repayment obligations will depend upon the continued
dividend stream from the Guarantors to the Company and the ability of the
Guarantors to satisfy their respective obligations under the Guarantees will
depend, in part, upon the continued dividend stream from the Company's indirect
subsidiaries to the Guarantors. Approximately 43% of the Company's revenues for
the year ended June 30, 1995, were attributable to the Company's subsidiaries
other than the Guarantors. See "Description of Notes -- Effect of Corporate
Structure."

Effective Subordination to Creditors of the Company's Non-Guarantor Subsidiaries

As a result of the Company's holding company structure, the creditors of
DIMON (including the holders of the Notes), will effectively rank junior to all
creditors (including unsecured creditors) of the Company's subsidiaries other
than the Guarantors with respect to the assets of such subsidiaries
notwithstanding that the Senior Notes will be senior obligations of DIMON.
Accordingly, any right of the Company or a Guarantor to receive the assets of
any of its respective subsidiaries which are not Guarantors upon liquidation or
reorganization of such subsidiary (and the consequent right of the holders of
the Notes to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except to
the extent that the Company or such Guarantor is itself recognized as a creditor
of such subsidiary, in which case the claims of the Company or such Guarantor
would still be subordinated to any security interests in the assets of such
subsidiary in favor of another creditor and subordinated to any indebtedness of
such subsidiary senior to that held by the Company or such Guarantor. As of
March 31, 1996, on a pro forma basis after giving effect to the Offering, the
aggregate amount of indebtedness of the Company to which the holders of the
Notes would be structurally subordinated would have been approximately $221
million, of which approximately $27 million would have been secured. See
"Description of Notes -- Effect of Corporate Structure."

<PAGE>
ISSUER AND GUARANTORS

Issuer

Guarantors

The Guarantors of the Notes are the Company's two major direct
subsidiaries, DIMON International and Florimex. DIMON International is a North
Carolina corporation which was formed in 1920. DIMON International directly
conducts all of the Company's tobacco operations in the U.S., and direct and
indirect subsidiaries of DIMON International conduct all tobacco operations
elsewhere. Florimex is the Company's flower operations subsidiary which, through
its subsidiaries, conducts all of the Company's flower operations. Florimex is a
holding company and has no assets other than the capital stock of its
subsidiaries. Florimex was incorporated in Virginia in 1996 to consolidate the
operations of the Company's flower business, which previously had been conducted
by several subsidiaries of the Company.

The charts below show the net sales of goods and services, net income
(loss), total assets, total debt and total stockholders' equity of the Issuer
and each Guarantor in millions of dollars and as a percentage of the total net
sales of goods and services, net income (loss), total assets, total debt and
total stockholders' equity for the year ended June 30, 1995, and the nine months
ended March 31, 1996.

<TABLE>
<CAPTION>
Nine Months Ended March 31, 1996
The Company Non-
Guarantors Guarantors Eliminations Total
$ % $ % $ % $ % $ %
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
(in millions, except percentages)
Net sales of goods and services........ -- -- 1,195 72 777 47 (309) (19) 1,664 100
Net income (loss)...................... 37 116 39 121 38 118 (82) (255) 32 100
Total assets........................... 513 51 696 69 509 50 (706) (70) 1,011 100
Total debt............................. 167 43 1 -- 223 57 (2) -- 389 100
Total stockholders' equity............. 311 100 302 97 42 13 (344) (110) 311 100
</TABLE>

<TABLE>
<CAPTION>
Year Ended June 30, 1995
The Company Non-
Guarantors Guarantors Eliminations Total
$ % $ % $ % $ % $ %
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(in millions, except percentages)
Net sales of goods and services........ -- -- 1,244 65 825 43 (141) (7) 1,928 100
Net income (loss)...................... (30) 100 (3) 10 (5) 17 8 (27) (30) 100
Total assets........................... 661 60 696 64 745 68 (1,009) (92) 1,093 100
Total debt............................. 380 64 33 5 211 36 (30) (5) 594 100
Total stockholders' equity............. 239 100 260 109 250 104 (510) (213) 239 100
</TABLE>

Although the Guarantor financial information presented above includes the
results of DIMON International and Florimex, Florimex conducts all operations
through subsidiaries. Therefore all net sales, income, and total debt of the
Guarantors pertain to the U.S. tobacco operations conducted at DIMON
International. The sole financial information reported on the Florimex financial
statements represents Florimex's ownership of the common stock in subsidiaries
and equity interest in subsidiaries. See Note R to the Company's Consolidated
Financial Statements for the year ended June 30, 1995, included herein.

<PAGE>
USE OF PROCEEDS

The net proceeds from the sale of the Notes will be approximately $121.9
million, after deducting underwriting discounts and offering expenses of
approximately $3.1 million. The Company intends to use the net proceeds to repay
short-term lines of credit with several banks, including affiliates of the
Underwriters. See "Underwriting." At May 6, 1996, these lines of credit had a
weighted average interest rate of 6.62% and a weighted average maturity of eight
days. The Company uses these lines of credit to finance its seasonal working
capital needs. See "Capitalization."

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1996, as adjusted to reflect on a pro forma basis the application of
the net proceeds from the sale of the Notes:

<TABLE>
<CAPTION>
March 31, 1996
Pro Forma
Actual As Adjusted
<S> <C> <C>
(in thousands) (unaudited)
Short-term debt:
Notes payable to banks............................................................................ $101,288 --
Current portion of long-term debt................................................................. 8,982 $ 8,982

Long-term debt:
New Credit Facility(1)............................................................................ 240,000 219,388
8 7/8% Senior Notes due 2006...................................................................... -- 125,000
Other long-term borrowings........................................................................ 38,440 38,440
Total indebtedness........................................................................... 388,710 391,810
Shareholders' equity:
Preferred stock, no par value; authorized 10,000 shares; none issued.............................. -- --
Common stock, no par value; authorized 125,000 shares; issued 42,349.............................. 136,693 136,693
Retained earnings................................................................................. 174,050 174,050
Equity-currency conversion........................................................................ 1,774 1,774
Additional minimum pension liability.............................................................. (1,285) (1,285)
Total shareholders' equity................................................................... 311,232 311,232
Total capitalization................................................................................ $699,942 $ 703,042
</TABLE>

(1) As of March 31, 1996, the Company had no borrowings under the New Credit
Facility, and has historically used this type of credit facility to
reclassify notes payable to banks to long-term debt.

<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents summary selected historical consolidated
financial information of the Company, as of the dates and for the periods
indicated. The historical financial data for the year ended June 30, 1995 have
been derived from the Company's financial statements which, except as they
relate to the former Dibrell's financial statements as of June 30, 1994, and for
each of the two years in the period ended June 30, 1994, have been audited by
Price Waterhouse LLP, independent accountants, and by Ernst & Young LLP,
independent accountants, insofar as they relate to the former Dibrell financial
statements referred to above. The summary financial information should be read
in conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Company's financial statements and notes
thereto included elsewhere in this Prospectus.

<PAGE>
<TABLE>
<CAPTION>
Nine Months
Ended March 31 Year Ended June 30
1996 1995 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
(in thousands, except
percentages and ratios) (unaudited)

(2) Cumulative effect of accounting changes includes postretirement benefit
plans of ($9.7) million, net of tax, and income taxes of $9.0 million in
1993.

(3) EBITDA, as defined in "Description of Notes," represents earnings before
deduction of interest expense, income taxes, depreciation and amortization
and restructuring and merger costs. EBITDA is included herein to provide
additional information about the Company's ability to service debt. EBITDA
should not be considered as an alternative measure of the Company's net
income, operating income, cash flows from operating activities or liquidity
prepared in accordance with generally accepted accounting principles.

(5) As a result of the losses incurred in the periods ended June 30, 1994, and
June 30, 1995, earnings did not cover fixed charges by $5,355 and $22,164
respectively.

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

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. See "Risk Factors -- Variability of Annual and Quarterly
Financial Results."

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. See "Risk Factors -- International Business Risks"
and 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.

<PAGE>
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 and for
the nine month periods ended March 31, 1996 and 1995. 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.

<TABLE>
<CAPTION>
Nine Months
Ended
March 31 Year Ended June 30
1996 1995 1995 1994 1993
<S> <C> <C> <C> <C> <C>
(unaudited)
Net sales of goods and services............................................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods and services sold............................................. 89.0 90.8 91.2 90.9 86.7
Gross margin................................................................ 11.0 9.2 8.8 9.1 13.3
Selling, general and administrative expenses................................ 6.2 6.1 6.9 8.1 6.7
Restructuring and merger related costs...................................... 0.3 -- 1.3 -- --
Operating income............................................................ 4.5 3.1 0.6 1.0 6.6
Other income (expense), net(1).............................................. (1.3) (1.5) (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................................................................... 3.1 1.6 (1.2) (0.4) 5.7
Income taxes................................................................ 1.3 0.9 0.3 0.2 1.9
Equity in net income of investee companies.................................. -- (0.1) (0.1) -- 0.1
Extraordinary items......................................................... 0.1 -- -- -- --
Cumulative effect of accounting changes..................................... -- -- -- -- (0.1)
Net income (loss)........................................................... 1.9 0.6 (1.6) (0.6) 3.8
</TABLE>

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

Comparison of Nine Months Ended March 31, 1996 to Nine Months Ended March 31,
1995

Net sales of goods and services for the nine month period ended March 31,
1996 were $1.664 billion, an increase of 7.5% from $1.548 billion for the nine
month period ended March 31, 1995. Net sales from tobacco operations increased
8.3%, to $1.367 billion in the nine month period ended March 31, 1996 from
$1.261 billion in the corresponding period in 1995. The increase in tobacco
sales was due to higher average prices and increased quantities of foreign grown
tobacco and increased service revenues from U.S. tobacco, partially offset by
lower average prices for U.S. grown tobacco. The increase in average prices for
foreign grown tobacco, increased quantities of foreign grown tobacco, and
increased service revenues accounted for $78.2 million, $47.1 million, and $42.7
million of the increase in tobacco revenues, respectively, offset by a $67.6
million decrease due to lower average prices for U.S. grown tobacco. The
increased foreign tobacco sales were primarily the result of higher tobacco
sales in Africa and Europe.

Net sales from flower operations increased 3.8%, from $286.1 million in the
nine month period ended March 31, 1995 to $296.9 million for the nine month
period ended March 31, 1996. This increase in flower sales was primarily due to
the effects of applying U.S. dollar exchange rates to the European flower
operations.

Cost of sales and expenses, including selling, general and administrative
expenses and restructuring and merger related costs for the nine month period
ended March 31, 1996 were $1.589 billion, an increase of 6.0% from $1.499
billion for the nine month period ended March 31, 1995. This increase included
$5.6 million in restructuring charges in the nine month period ended March 31,
1996. Cost of sales and expenses for the tobacco operations increased 6.6% in
the nine month period ended March 31, 1996 over the corresponding period in
1995, primarily due to the higher net sales in the period of tobacco grown in
Africa and Europe. The gross profit for the tobacco operations increased 31.2%
for the nine month period ended March 31, 1996 over the corresponding period in
1995, primarily due to increased sales and gross margins on the operations in
Europe and increased gross margins for the operations in South America and
Africa. The Company's gross margin for tobacco operations improved to 11.1% for
the nine month period ended March 31, 1996 from 9.2% for the corresponding
period in 1995, due to higher gross margins in the U.S. and Brazilian tobacco
operations.

<PAGE>
Cost of sales and expenses for the flower operations increased 1.9% in the
nine month period ended March 31, 1996 over the corresponding period in 1995,
primarily due to increased sales. The Company's gross margin for flower
operations improved to 10.3% for the nine month period ended March 31, 1996 from
9.5% for the corresponding period in 1995, due to lower costs in the European
flower operations.

Corporate expenses increased $5.4 million, or 68.0%, for the nine month
period ended March 31, 1996 from the corresponding period in 1995, primarily due
to increased bonuses accrued, professional expenses, and costs related to
revolving credit facilities and restructuring costs related to severance which
will reduce the number of employees on the corporate staff.

Other income, interest and sundry, increased $5.3 million, or 47.7%, for
the nine month period ended March 31, 1996 from the corresponding period in
1995, primarily due to the increase in sundry income. The increase in sundry
income is primarily due to the tobacco operations and the $3.7 million gain on
the sale of its 50% interest in an unconsolidated Brazilian affiliate.

Other deductions, primarily interest expense, increased $3.7 million, or
10.5%, for the nine month period ended March 31, 1996 from the corresponding
period in 1995. Interest expense increased $3.9 million, primarily due to
increased average short-term borrowings.

The effective tax rate decreased to 40.0% for the nine month period ended
March 31, 1996 from 54.1% for the corresponding period in 1995, based on
estimates of taxable income projected for each year. The higher effective tax
rate in 1995 was due to tax and monetary regulations in Brazil.

Equity in net loss of the tobacco investee companies decreased $0.8
million, or 74.1%, for the nine month period ended March 31, 1996 from the
corresponding period in 1995. The decrease is primarily due to the Company's
investee in Brazil which was sold during fiscal 1996.

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 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 "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.

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.

<PAGE>
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.

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.

<PAGE>
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>
Nine Months Ended
March 31 Year Ended June 30
1996 1995 1995 1994 1993
<S> <C> <C> <C> <C> <C>
(in thousands, except for current ratio) (unaudited)
Cash and cash equivalents........................................ $ 12,148 $ 56,225 $ 42,326 $ 12,471 $ 16,399
Net trade receivables............................................ 195,999 175,621 182,750 164,314 217,098
Inventories and advances on purchases
of tobacco..................................................... 438,383 364,417 468,989 469,015 424,015
Total current assets............................................. 662,756 624,735 731,119 685,443 666,454
Notes payable to banks........................................... 101,288 216,431 233,736 255,607 244,051
Accounts payable................................................. 126,514 106,141 90,446 112,310 124,103
Total current liabilities........................................ 363,994 421,558 453,522 467,776 423,854
Current ratio.................................................... 1.8 to 1 1.5 to 1 1.6 to 1 1.5 to 1 1.6 to 1
Revolving credit notes and other long-term debt.................. 278,440 184,113 292,528 188,825 180,270
Convertible subordinated debentures.............................. -- 56,475 56,370 56,475 56,475
Stockholders' equity............................................. 311,232 283,229 238,806 288,314 308,149
Purchase of property and equipment............................... 20,609 18,845 35,892 32,382 42,232
Proceeds from sale of property and equipment..................... 3,273 3,286 4,877 5,991 5,220
Depreciation and amortization.................................... 24,234 21,891 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 $277.6 million at June 30,
1995, to $298.8 million at March 31, 1996. The current ratio of 1.6 to 1 at June
30, 1995, increased to 1.8 to 1 at March 31, 1996, as current liabilities
decreased at a higher percentage than the percentage decrease of current assets.
The decreases in the individual components of current assets and current
liabilities reflect a seasonal decrease in the level of tobacco operations.
Current assets decreased primarily due to the decreases in tobacco inventories
of $66.9 million and in prepaid expenses of $19.3 million, partially offset by
increases in trade receivables of $13.2 million and advances on purchases of
tobacco of $30.1 million. Tobacco inventories decreased due primarily to the
seasonal decrease in the operations in the U.S. Current liabilities decreased
primarily due to the decreases in notes payable to banks of $132.4 million,
partially offset by increases in accounts payable-other of $27.6 million and in
advances from customers of $27.4 million.

Cash and cash equivalents decreased to $12.1 million at March 31, 1996.
Cash flows provided by operating activities increased $42.8 million to $146.5
million in the nine months ended March 31, 1996 over the same period last year,
primarily due to decreased advances from customers, increased accounts payable
and increased net income, offset partially by decreased inventories and advances
on purchases of tobacco as a result of increased sales. Cash flows used by
investing activities increased $7.5 million to $9.5 million primarily due to
decreased payments on notes receivable and receivables from investees and the
purchase of subsidiary, offset partially by increased proceeds from advances.
Cash flows used by financing activities increased $109.0 million to $164.3
million due primarily to the increased repayment of debt and by the decreased
proceeds from debt.

<PAGE>
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 March 31, 1996, the Company had borrowed $101
million under its seasonally adjusted $876 million lines of credit with interest
rates ranging from 5.65% to 22.5%. At March 31, 1996, the unused short-term
lines of credit amounted to $613 million, net of $162 million of letters of
credit and guarantees that reduce lines of credit. Total maximum outstanding
borrowings during the nine months ended March 31, 1996, were $745 million.

To ensure long-term liquidity, the Company entered into the $240 million
New Credit Facility effective March 15, 1996. The New Credit Facility replaced
the Company's $250 million Former Credit Facility. The Company used the Former
Credit Facility to reclassify $250 million of short-term debt to long-term debt
and did not borrow under it. The Company generally uses the New Credit Facility
to reclassify similarly $240 million of its short-term debt. The interest rates
available under the New Credit Facility depend on the type of advance selected
and are based either on the agent bank's base lending rate (which was 8.25% at
May 6, 1996, and is adjusted with changes in interest rates generally) or LIBOR
plus 0.75%, through March 15, 1997, and thereafter plus a spread of 0.45% to
1.25% based on the ratings assigned to the Company's outstanding senior debt or
on its consolidated interest coverage ratio. The New Credit Facility is subject
to certain commitment fees and covenants that among other things require the
Company 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 New Credit Facility terminates on March 15, 1998, but may be
extended thereafter, year to year, upon approval of the Lenders. As of March 31,
1996, there were no borrowings outstanding under the New Credit Facility.

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 March 31, 1996, the Company had no
material capital expenditure commitments. The Company believes that these
sources of funds combined with the Refinancing Plan are sufficient to fund the
Company's purchasing needs for the foreseeable future, including the remainder
of fiscal 1996 and fiscal 1997.

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.

On February 9, 1996, the Company called all of the Debentures for
redemption on March 11, 1996. As of March 4, 1996, holders of Debentures had
converted approximately 99.85% of the Debentures into 4,035,969 shares of Common
Stock. The remaining Debentures were redeemed on March 11, 1996 for $89,188. The
Company funded the redemption price for these Debentures and expenses of the
redemption from working capital.

The Board of Directors of the Company, at its meeting held on February 23,
1996, declared a quarterly dividend of $0.135 cents per share.

Tax and Repatriation Matters

The Company and its subsidiaries are subject to income tax laws in each of
the countries in which they do 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.

<PAGE>
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.

Accounting Matters

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.

<PAGE>
BUSINESS

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 and
Monk-Austin, which merged in April 1995. The Company's address is 512 Bridge
Street, Danville, Virginia 24541 and its telephone number is (804) 792-7511. See
Note G to the Company's Consolidated Financial Statements for the year ended
June 30, 1995, included herein, for detailed 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 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
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 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

<PAGE>
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. 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:

-- 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.

<PAGE>
(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 these 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.

The Refinancing Plan

Concurrent with the execution of its business strategy, the Company is
implementing the Refinancing Plan which is designed to reduce its financial
leverage, decrease its reliance on short-term uncommitted lines of credit and
diversify its sources of debt financing. The Refinancing Plan consists of the
following three components:

(Bullet) A reduction in outstanding debt achieved through the call for
redemption in March 1996 of the Debentures, 99.85% of which were
converted by holders of Debentures into the Company's Common
Stock. The conversion reduced debt and increased shareholders'
equity by $54.2 million;

(Bullet) The offering of the Notes; and

(Bullet) The execution of the New Credit Facility.

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.

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

<PAGE>
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.

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

<PAGE>
RJR, each of which contributed in excess of 10% of total tobacco sales, with
Philip Morris and RJR accounting for significantly larger portions of the
Company's sales than Japan Tobacco. No other customer accounted 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. 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
80-95% 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 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
the U.S. 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 specified 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.

<PAGE>
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.

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.

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 seasons.
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:

<TABLE>
<CAPTION>
Location Use Area in Square Feet
<S> <C> <C>
United States
Danville, VA Storage 250,000
Danville, VA Factory 494,000
Kenbridge, VA Storage 1,469,000
Greenville, NC Factory/Storage 869,000
Farmville, NC Factory/Storage 1,136,000
Kinston, NC Factory/Storage 1,069,000
Sanford, NC Storage 121,000
Greenville, TN Storage 70,000
Mullins, SC Storage 104,000
Lake City, SC Storage 252,000

South America
Santa Cruz, Brazil Factory/Storage 1,201,000
Venancio Aires, Brazil Factory/Storage 593,000
Vera Cruz, Brazil Factory/Storage 1,833,000
Mexico City, Mexico Factory 5,000
Zacapa, Guatemala Factory 15,000

Africa
Lilongwe, Malawi Factory 247,000
Harare, Zimbabwe Factories(2)/Storage 1,426,000

Europe
Karlsruhe, Germany Factory/Storage 320,000
Izmir, Turkey Factories(2)/Storage 290,000
Sparanise, Italy Factory/Storage 742,000
Thessaloniki, Greece Factories(2)/Storage 790,000
</TABLE>

<PAGE>
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. 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 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.

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

(Bullet) Expansion of sales; New distribution channels. Florimex expects to
increase its sales and revenue 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), 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.

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.

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 storage space 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 storage space. 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 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.

<PAGE>
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.

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 U.S. 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.

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 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.

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.

Legal Proceedings

Neither the Company nor any of its subsidiaries is currently involved in
any material litigation nor, to their knowledge, is any material litigation
currently threatened against them.

<PAGE>
MANAGEMENT

Directors and Principal Officers of the Company

The directors and principal officers of the Company are as follows:

<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Claude B. Owen, Jr. 50 Chairman of the Board and Chief Executive Officer
Albert C. Monk III 56 President and Director
John M. Hines 56 Executive Vice President and Director
Richard D. O'Reilly 46 Senior Vice President-Human Resources
James A. Cooley 45 Vice President and Treasurer
Brian J. Harker 45 Senior Vice President (of DIMON International)
R. Stuart Dickson 66 Director
Norman A. Scher 58 Director
Willie G. Barker, Jr. 59 Director
James E. Johnson, Jr. 66 Director
Joseph L. Lanier, Jr. 64 Director
Robert T. Monk, Jr. 48 Director
Louis N. Dibrell, III 51 Director
Henry F. Frigon 61 Director
Dr. Thomas F. Keller 64 Director
</TABLE>

Claude B. Owen, Jr. was elected Chairman of the Board and Chief Executive
Officer of the Company on October 21, 1994. He also served as Chairman, Chief
Executive Officer and President of Dibrell from July 1993 until the effective
time of the Merger and as Chairman of the Board and Chief Executive Officer of
Dibrell from February 1990 until July 1993. Mr. Owen also serves as a director
for American National Bankshares, Inc. and Richfood Holdings, Inc.

Albert C. Monk III was elected President of the Company on October 21, 1994
and President and Chief Executive Officer of DIMON International on January 23,
1995. He also served as Chairman, Chief Executive Officer and President of
Monk-Austin beginning from November 8, 1994 until the effective time of the
Merger, Chief Executive Officer and President of Monk-Austin since 1992 and
President of Monk-Austin since 1990.

John M. Hines, a director of the Company since April 1, 1995, has served as
Executive Vice President of the Company since February 22, 1995. He will retire
from the Company effective July 1, 1996 but will continue to serve as a
consultant to the Company for two years. He also served as Executive Vice
President and Chief Financial Officer of Monk-Austin from 1990 to the effective
time of the Merger.

Richard D. O'Reilly was appointed Senior Vice President -- Human Resources
May 16, 1995. From 1989 to 1995, he served as Vice President -- Human Resources
at Sweetheart Cup Company, Chicago, Illinois.

James A. Cooley was appointed Vice President and Treasurer on April 1,
1995. He also served as Vice President and Treasurer of Dibrell from January
1994 to the effective time of the Merger, and Vice President-Tax of Dibrell from
October 1988 to January 1994.

Brian J. Harker was appointed Senior Vice President of DIMON International
on April 1, 1995. He served as Senior Vice President-Director International
Operations of Monk-Austin from July 1991 to April 1995. Prior thereto he served
as Vice President of Monk-Austin.

R. Stuart Dickson, a director of the Company since November 17, 1995, has
been Chairman of the Executive Committee of Ruddick Corporation since February
1994. Ruddick Corporation owns Harris-Teeter Supermarkets and A&E Mills, a
leading thread producer. He also served as Chairman of the Board of Ruddick from
1968 to 1994. Mr. Dickson also serves as a director of First Union Corporation,
PCA International, Inc., Textron, Inc. and United Dominion Industries.

Norman A. Scher, a director of the Company since April 1, 1995, has been
Executive Vice President and Chief Financial Officer of Tredegar Industries,
Inc. since July 1989. Tredegar is a manufacturer of plastics and metal products.

Willie G. Barker, Jr., a director of the Company since April 1, 1995, is
currently retired. He served as President and Chief Operating Officer of Dibrell
from February 1989 to June 1993. Mr. Barker also serves as a director of Mutual
Savings & Loan Company.

<PAGE>
James E. Johnson, Jr., a director of the Company since April 1, 1995, has
been a partner of Womble Carlyle Sandridge & Rice, PLLC (a law firm based in
Charlotte, North Carolina) since 1989.

Joseph L. Lanier, Jr., a director of the Company since April 1, 1995, is
currently Chairman and Chief Executive Officer of Dan River, Inc. Mr. Lanier is
also a director of SunTrust Banks, Inc., Flowers Industries, Inc. and Torchmark
Corporation.

Robert T. Monk, Jr., director of the Company since April 1, 1995, is
currently Senior Vice President of DIMON International. He served as Vice
President and Director of Processing Operations of Monk-Austin since 1990. Mr.
Monk is the first cousin of Albert C. Monk III.

Louis N. Dibrell, III, a director of the Company since April 1, 1995, is
currently a Senior Vice President of DIMON International, Inc. Prior thereto he
served as Senior Vice President of Dibrell.

Henry F. Frigon, a director of the Company since April 1, 1995, is
currently retired. Prior to his retirement he served as Executive Vice President
and Chief Financial Officer of Hallmark Cards, Inc. since December 1990. Mr.
Frigon also serves as a director of H&R Block, Inc., Circle K Stores and Group
Technologies Corporation.

Dr. Thomas F. Keller, director of the Company since April 1, 1995, is Dean
and R.J. Reynolds Industries Professor, at the Fuqua School of Business at Duke
University in Durham, North Carolina. He has also served as a director of
American Business Products, LADD Furniture, Inc., Nations Funds Trust, Mentor
Series Trust, Hatteras Income Securities, Inc., and Wendy's International, Inc.

Thomas H. Faucett, the Company's Chief Financial Officer, will retire
effective July 1, 1996. Until that time, Mr. Faucett will serve in an advisory
capacity.

Board of Directors and Committees of the Board

Two meetings of the Company's Board of Directors were held between March
31, 1995, the date the initial full Board of Directors was initially elected,
and June 30, 1995, the end of the Company's fiscal year. No Director attended
less than 75 percent of the total number of meetings held by (i) the Board of
Directors and (ii) all committees of the Board on which the Director served.

The business of the Company is under the general management of a Board of
Directors as provided by the laws of Virginia, the Company's state of
incorporation. The Company's Articles of Incorporation and By-Laws provide for
an Executive Committee, composed of four directors which, unless limited by a
resolution of the Board and except to the extent limited by law, has authority
to act in all matters that the full Board may act upon when the Board is not in
session. The Executive Committee reports all of its actions to the full Board of
Directors at its next meeting. The Executive Committee is currently composed of
Claude B. Owen, Jr. (Chairman) and Willie G. Barker, Jr. (the "Dibrell
Executives") and Albert C. Monk III and John M. Hines (the "Monk-Austin
Executives"). Pursuant to the Company's Articles, if, at any time prior to the
1996 annual meeting of shareholders, a director resigns or retires from the
Executive Committee or otherwise becomes unable or unwilling to serve as a
member of the Executive Committee, then (1) if such departing member is a
Dibrell Executive, only a person designated by the Continuing Dibrell Directors
(as defined in the Company's Articles) shall be eligible to fill the vacancy
resulting from such departure, and (2) if such departing member is a Monk-Austin
Executive, only a person designated by the Continuing Monk-Austin Directors (as
defined in the Company's Articles) shall be eligible to fill the vacancy
resulting from such departure. The Executive Committee met twice between March
31, 1995, and June 30, 1995.

In addition to the Executive Committee, the Board of Directors has
designated two other standing committees, the Executive Compensation Committee
and the Audit Committee.

The Board's Executive Compensation Committee is composed of Norman A. Scher
as Chairman, James E. Johnson, Jr., Dr. Thomas F. Keller and Joseph L. Lanier,
Jr. The Executive Compensation Committee's basic functions are to review the
effectiveness of the management compensation plans of the Company, to set the
compensation of the Chief Executive Officer and the managers reporting to the
Chief Executive Officer, to review and approve the management incentive systems
of the Company and the awards granted thereunder and to administer the Company's
stock option plans. The Executive Compensation Committee did not meet between
March 31, 1995, and June 30, 1995.

The Board's Audit Committee is composed of Dr. Thomas F. Keller as
Chairman, Henry F. Frigon, James E. Johnson, Jr. and Joseph L. Lanier, Jr. The
Committee is authorized to consult with the Company's outside auditors and
recommend the selection of such auditors for each fiscal year. The Audit
Committee's basic functions are to assist the Board of Directors in

<PAGE>
preserving the integrity of the financial information published by the Company
through the review of financial and accounting controls and policies, financial
reporting requirements, alternative accounting principles that could be applied
and the quality and effectiveness of the independent accountants and the
Company's internal auditors. The Audit Committee did not meet between March 31,
1995, and June 30, 1995.

The Company's Articles provide that the Board of Directors shall establish
a Nominating Committee consisting of four members to nominate candidates to be
elected to the Board of Directors at the 1996 annual meeting of shareholders.
Only a director who is an Independent Director (as defined below) and who has
been designated to serve on the Nominating Committee by the Dibrell Designees or
the Monk-Austin Designees will be eligible to so serve, provided, that neither
the Dibrell Designees nor the Monk-Austin Designees may designate more than two
members of the Nominating Committee. Under the Company's Articles, the
nominating Committee is required to use its best efforts to cause at least 50%
of the directors of the Company in office immediately after the 1996 annual
meeting of shareholders to be Independent Directors. "Independent Director"
means any director of the Company who (1) is not a present or former employee of
the Company, Dibrell or Monk-Austin, (2) does not beneficially own 5% or more of
the outstanding voting shares of the Company and (3) is not an "affiliate" or
"associate" (as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") or any successor provision) of any person who is
a present or former employee of the Company, Dibrell or Monk-Austin or who
beneficially owns 5% or more of the outstanding voting shares of the Company.
The Board of Directors has not yet elected the members of the Nominating
Committee.

<PAGE>
Compensation of Executive Officers and Directors

The following table presents information relating to total compensation of
the Chief Executive Officer and the other executive officers of the Company
during the fiscal years ended June 30, 1995, 1994 and 1993. Prior to April 1,
1995, Messrs. Owen and Faucett were employed by Dibrell and Messrs. A.C. Monk
III and Hines were employed by Monk-Austin.

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Payouts
Other Annual Awards LTIP All Other
Name and Principal Fiscal Salary Bonus Compensation(1) Options/ Payouts Compensation
Position Year $ $ $ SARs(#) $ $

<S> <C> <C> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 1995 391,800 0 0 30,000 0 30,118(3)
Chairman of the Board 1994 340,300 0 0 12,600 0 30,080
and Chief Executive 1993 315,000 236,250 0 13,230 0 28,974
Officer and Director

Albert C. Monk III 1995 205,000 175,000 0 0 0 15,421(4)
President and Director 1994 195,000 225,000 0 0 0 26,872
1993 180,000 220,000 0 0 0 28,805

John M. Hines (7) 1995 185,000 650,000 0 0 0 12,469(5)
Executive Vice President 1994 165,000 200,000 0 0 0 26,872
and Director 1993 150,000 180,000 114,263(2) 40,000 0 28,811

Thomas H. Faucett (8) 1995 163,000 0 0 10,800 0 17,978(6)
Senior Vice President, 1994 156,000 0 0 10,800 0 17,886
Chief Financial Officer 1993 150,000 67,500 0 12,600 0 16,888
</TABLE>

(1) None of the named executive officers received other annual compensation with
an aggregate value in excess of $50,000 or 10% of the total of combined
salary and bonus for fiscal year 1995.

(2) Represents amounts paid to compensate Mr. Hines for taxable income
recognized as a result of his exercise of Monk-Austin stock options.

<TABLE>
<CAPTION>
Corporate Pension
Match Equalization
401(k) Deferred Plan
Fiscal Plans Comp. Premiums Total
Name Year $ $ $ $

<S> <C> <C> <C> <C> <C> <C>
(3) Claude B. Owen, Jr. 1995 2,149 12,144 15,825 30,118
1994 2,111 12,144 15,825 30,080
1993 1,005 12,144 15,825 28,974

(4) Albert C. Monk III 1995 15,421 -- -- 15,421
1994 26,872 -- -- 26,872
1993 28,805 -- -- 28,805

(5) John M. Hines 1995 12,469 -- -- 12,469
1994 26,872 -- -- 26,872
1993 28,811 -- -- 28,811

(6) Thomas H. Faucett 1995 2,153 0 15,825 17,978
1994 2,061 0 15,825 17,886
1993 1,063 0 15,825 16,888

(7) Mr. Hines will retire from the Company effective July 1, 1996.

(8) Mr. Faucett will retire from the Company effective July 1, 1996.
</TABLE>

Stock Option Grants

In connection with the Merger, the Company assumed Dibrell's 1990 and 1994
Omnibus Stock Incentive Plans, Monk-Austin's Long-Term Stock Investment Plan,
and all of the instruments outstanding under those plans, and adopted the DIMON
Incorporated Omnibus Stock Incentive Plan. Future grants will be made under the
Company's plan. The table below contains information concerning the grants of
stock options made during fiscal year 1995 under Dibrell's 1994 Omnibus Stock
Incentive Plan to the named executive officers (only Messrs. Owen and Faucett
were eligible to participate in this plan). No grants were made during fiscal
year 1995 to Messrs. A. C. Monk III or Hines under the Monk-Austin Long-Term
Incentive Plan or to any of the executive officers under the Company's plan.

<PAGE>
Option/SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>
Grant Date
Individual Grants Present
% of Total ($/SH) Value(2)
Number of Options/SARs Exercise Black-Scholes
Options/SAR Granted to or Base Expiration Pricing
Granted(1) Employees Price Date Valuation
<S> <C> <C> <C> <C> <C>
Claude B. Owen, Jr. 30,000 11.50% $11.50 8/25/04 $ 114,000
Albert C. Monk III -- -- -- -- --
John M. Hines -- -- -- -- --
Thomas H. Faucett 10,800 4.14% $11.50 8/25/04 $ 41,040
</TABLE>

(1) All option grants consisted of incentive and nonqualified stock options.
These grants become exercisable on August 26, 1997.

(2) The exercise price was set at the closing price of Dibrell Common Stock on
the date of the grant which was $11.50 per share, as adjusted in connection
with the Merger. Utilizing the Black-Scholes valuation method, a value of
$3.80 per share was determined. The Black-Scholes Model is a complicated
mathematical formula widely used to value exchange traded options. However,
stock options granted under the plan differ from exchange-traded options in
three key respects: the options are long-term, nontransferable and subject
to vesting restrictions while exchange-traded options are short-term and can
be exercised or sold immediately in a liquid market. In applying the
Black-Scholes pricing model, the Company has assumed an option term of ten
years, an annual dividend yield for the Company's Common Stock of 3.2
percent, a riskless rate of return of 7% and a stock price volatility of
0.96 (based on the variance of return for the Common Stock over the 60
trading days prior to June 30, 1994). No adjustment has been made to reflect
the non-transferability of options granted under the plan. Consequently,
because the Black-Scholes Model is adapted to value the options set forth in
the table and is assumption based, it may not accurately determine the grant
date present value. The actual value, if any, an optionee will realize will
depend on the excess of the market value of the Common Stock over the
exercise price on the date the option is exercised.

Option/SAR Exercises and Holdings

The following table sets forth information with respect to the named
executive officers concerning the exercise of options during fiscal year 1995
and unexercised options and SARs held by them on June 30, 1995:

Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values

<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Value Fiscal Year End Fiscal Year End
Shares Acquire Realized Exercisable/ Exercisable/
on Exercise $ Unexercisable(2) Unexercisable(1)(2)$
<S> <C> <C> <C> <C>
Claude B. Owen, Jr. 0 0 47,820/42,810 86,434/162,972
Albert C. Monk III 0 0 0 0
Thomas H. Faucett 0 0 25,200/22,200 33,197/59,526
John M. Hines 0 0 40,000 15,000
</TABLE>

(1) At year end June 30, 1995, the closing price of the Company's Common Stock
was $16.875.

(2) The options represented as unexercisable could not be exercised by the named
executive on June 30, 1995, and future exercisability is dependent upon the
named executive remaining in the employ of the Company until the vesting
date, which is up to three years from the grant date, subject to
acceleration for retirement, death or total disability.

Employment Agreements

Prior to the Merger, Dibrell and a subsidiary of Monk-Austin entered into
employment agreements with Messrs. Owen, A.C. Monk III, Hines, R.T. Monk, Jr.,
Faucett and L.N. Dibrell III. The Company agreed to honor these agreements
following the Merger. The agreements with Messrs. Owen, Faucett and Dibrell and
those with Messrs. A.C. Monk III, Hines and R.T. Monk, Jr. provide for their
employment until November 1, 1999, and June 30, 1999, respectively. All of the
agreements may be terminated early in certain circumstances and are renewable
for successive one year terms. Under the agreements, Messrs. Owen, A.C. Monk
III, Hines, R.T. Monk, Jr., Faucett and Dibrell are entitled to annual base
salaries of $391,800, $380,000, $335,000, $270,000, $163,000 and $155,000,
respectively, subject to increases to reflect cost of living adjustments, and
are eligible for cash bonuses under the Company's Cash Bonus Plan. The
agreements also provide for (a) an annual supplemental retirement benefit equal
to 50% of the executive officer's average base salary for a period of up to ten
years upon termination of the agreements for reasons other than death,
disability or cause (for Messrs. Owen, Faucett and Dibrell, reduced by amounts
payable to them under the Dibrell Pension Equalization Plan (the "PEP")), (b) an
annual death benefit equal to 25% of the executive officer's average base salary
payable to a beneficiary designated by such executive for

<PAGE>
a period of five years, and (c) annual disability payments, for Messrs. Owen,
Faucett and Dibrell, under the Dibrell Long-Term Disability Plan and, for
Messrs. A.C. Monk III, Hines and R.T. Monk, Jr., equal to 50% of their average
base salaries for a period of ten years. The agreements further provide that
from the time of termination of such executive's employment (other than by
virtue of death or for cause) until his death, each executive will be entitled
to participate in any group health plan or program provided by the Company at
the time of termination, and the Company must use its best efforts to provide
each such executive with an individual health insurance policy if such executive
is unable to participate in such plan. The agreements may be terminated by the
Company for cause and by the executive officers for Good Reason (generally
related to a failure by the Board to elect the officer to a responsible
executive position, material modifications of the officer's duties, functions
and responsibilities or breach of the agreement by the Company). In the event of
termination of employment by the Company other than for cause, by such executive
for Good Reason or upon the expiration of the agreement, each agreement provides
that the executive officer will be entitled to receive a special severance
benefit for a period of one year after the time of termination equal to a
maximum of his base salary and bonus for the employment year just completed. The
agreements further provide for the reimbursement by the Company of reasonable
business expenses. The Company is obligated to pay any additional amounts for
any taxes the executive officers would have to pay with respect to any parachute
payments under Section 280G of the Internal Revenue Code of 1986, as amended.

Retirement Plan

The following table sets forth, as of June 30, 1995, the estimated annual
benefits payable as a straight life annuity under the Dibrell Retirement Plan
upon retirement at age 65 after specified years of credited service. In the
event of early retirement prior to age 65 the following benefits are subject to
reduction.

Estimated Annual Benefits Payable at Retirement

<TABLE>
<CAPTION>
Final
Average Years of Credited Service
Earnings 10 Yrs. 20 Yrs. 30 Yrs. 40 Yrs.
<S> <C> <C> <C> <C>
$180,000 $19,800 $ 39,600 $ 59,400 $ 79,200
220,000 24,200 48,400 72,600 96,800
260,000 28,600 57,200 85,800 114,400
300,000 33,000 66,000 99,000 132,000
360,000 39,600 79,200 118,800 158,400
400,000 44,000 88,000 132,000 176,000
500,000 55,000 110,000 165,000 220,000
600,000 66,000 132,000 198,000 264,000
</TABLE>

Annual retirement benefits in excess of the limit established under the
Internal Revenue Code (currently $120,000 for tax qualified trusts) will be paid
from corporate assets and not the Retirement Plan. Such excess payments will be
made from the excess benefit plan described below. Benefits under the retirement
plans are computed on the basis of a life annuity with 60 months guaranteed
payments. The benefits reflected in the table are not subject to offset for
Social Security or other offset payments.

The Retirement Plan's normal retirement allowance is stated with reference
to the Participant's Final Average Earnings. A Participant's "Final Average
Earnings" are one-fifth of his or her Annual Earnings during the highest
consecutive five-year period within the immediately preceding ten-year period.
The term "Annual Earnings" includes all cash remuneration paid to a Participant
other than commissions, specified foreign service earnings, and amounts realized
under the Omnibus Stock Incentive Plan, not to exceed $150,000, the applicable
Internal Revenue Code limit for 1995. Annual Earnings are the calendar year
equivalent of salary and bonus shown in the Summary Compensation Table. The
Participant's normal retirement allowance is 1.10% of his or her Final Average
Earnings multiplied by credited service.

As of December 31, 1995, Messrs. Faucett and Owen had 12 and 25 years of
credited service under the Retirement Plan, respectively. Messrs. A.C. Monk III
and Hines were not participants in the Plan as of June 30, 1995.

Mr. Hines will retire from the Company effective July 1, 1996. Pursuant to
his employment agreement, he is entitled to a special annual retirement benefit
of $180,000 payable in equal monthly installments until June 2008.

<PAGE>
Excess Benefit Plan

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 considering total
compensation and the benefits actually paid as limited by regulations imposed by
the Internal Revenue Code. Employees meeting the eligibility requirements of the
Retirement Plan and who are selected by management may participate in this plan.
Such benefits are not funded and are expensed by the Company as paid.

Pension Equalization Plan

Effective January 1, 1991, Dibrell established the Pension Equalization
Plan to pay selected employees unreduced early retirement benefits coordinated
with benefit payments under the Retirement Plan. Under the PEP, some
participants receive a benefit that -- when added to their Retirement Plan
benefits -- provides them with unreduced benefits if they retire on or after age
55 (with credit to 65) with 30 years of service. For other participants, the
unreduced benefits are available if they retire on or after age 60 (with credit
to 65) with 25 years of service. An unreduced benefit is payable to Messrs. Owen
and Dibrell and certain other participants if they retire on or after age 54
(with credit to 65) with 24 years of service; provided that the sum of their age
and years of service (which will not be less than the service to be completed
during the initial term of their employment agreements) is at least 82. The PEP
also provides individual account based benefits to employees determined by the
Company in its full discretion in amounts likewise determined. In all cases, a
participant's benefits are not fully vested until that participant satisfies a
"vesting contribution" provision (satisfaction can include a direct
contribution, an indirect contribution, a waiver by the Company, any combination
of the foregoing, or other measures satisfactory to the Company) in the PEP. All
benefits are funded through a trust arrangement. The PEP also allows the Company
to provide "back-up" benefits to assure benefit payments (but not to duplicate
benefit payments) under other nonqualified retirement plans.

Remuneration of Directors

For the year ended June 30, 1995, each Director of the Company who was not
a salaried officer was paid an annual retainer of $18,000 ($20,000 in the case
of committee chairmen) and $1,500 plus travel expenses for attendance at each
meeting of the Board and $1,000 for attendance at any committee meeting thereof
on which such Director serves.

Under the Company's Non-Employee Directors' Stock Option Plan, beginning
with the 1995 annual meeting of the Board of Directors, the Company's
non-employee directors will receive an annual grant of options to purchase 1,000
shares of the Company's Common Stock at a purchase price per share equal to the
fair market value of the Common Stock on the date of grant. The options will
have a ten-year term and generally will not be transferable.

Consulting Agreements

Effective July 1, 1993, Mr. Willie G. Barker, Jr., retired from Dibrell as
President and Chief Operating Officer and entered into an advisory agreement
with Dibrell under which Mr. Barker will be paid $150,000 annually until June
30, 1995, unless extended by mutual agreement. In 1994, the agreement was
extended for one year until June 30, 1996. The agreement requires that Mr.
Barker devote sufficient time to effectively observe and oversee the worldwide
tobacco operations of the Company and assist the Chief Executive Officer and
other senior executives of the Company in those areas where his advice and
assistance is requested.

Effective July 1, 1996, Mr. Hines will retire as the Company's Executive
Vice President. He has entered into a consulting agreement with the Company
under which he will be paid approximately $14,000 monthly through June 1998 in
exchange for providing consulting and advisory services relating to purchasing,
processing, storing and selling leaf tobacco.

Compensation Committee Interlocks and Insider Participation

None of the Executive Compensation Committee members listed above is an
officer or employee or former officer or employee of the Company or any of its
subsidiaries. None of the Company's executive officers serves on the board of
any entity of which any committee member is an executive officer or director or
on the compensation committee of the board of any entity, one of whose executive
officers serves as a director of the Company.

<PAGE>
Stock Incentive Plans

In 1995 the Company's stockholders approved the DIMON Incorporated Omnibus
Stock Incentive Plan (the "Incentive Plan") and the DIMON Incorporated
Non-Employee Directors' Stock Option Plan (the "Directors' Plan"). 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 2.0 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.
As of March 31, 1996, 288,000 options had been awarded under the Incentive Plan,
none of which have been exercised.

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 50,000 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. As of March 31, 1996, 6,000
options had been awarded under the Directors' Plan, none of which have been
exercised.

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.

<PAGE>
PRINCIPAL STOCKHOLDERS

Security Ownership of Certain Beneficial Owners

The following information is furnished with respect to each person
(including any "group" as that term is used in Section 13(d) of the Exchange
Act) who is known to the Company to be the beneficial owner of more than five
percent of the outstanding Common Stock of the Company on April 30, 1996.

<TABLE>
<CAPTION>
Number of Shares Number of Shares
Name and Address of with Sole Voting with Shared Voting Percent of
Beneficial Owner and Investment Power and Investment Power Common Stock
<S> <C> <C> <C>
Agnes Q. Monk 2,206,904 -- 5.22%
301 West Church Street
Farmville, NC 27828
Albert C. Monk III(1) 2,157,603 -- 5.10
504 North Main Street
Farmville, NC 27828
Robert T. Monk, Jr.(2) 2,415,494 -- 5.71
300 West Church Street
Farmville, NC 27828
</TABLE>

(1) Mr. A. C. Monk has served as President of the Company since October 21, 1995
and as President and Chief Executive Officer of DIMON International since
January 23, 1995. He served as the Chief Executive Officer of Monk-Austin
from 1992 until the Merger.

(2) Mr. R. T. Monk has been a director of the Company since 1995 and is the
Senior Vice President of DIMON International. He was Vice President and
Director of Processing Operations for Monk-Austin prior to the Merger.

Security Ownership of Management

The following table provides information as of April 30, 1996, as to shares
of Common Stock beneficially owned by each Director, the Chief Executive Officer
and the executive officers listed in the Summary Compensation Table and by all
Directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
Number of Number of
Shares with Shares with
Name of Beneficial Sole Voting Shared Voting Total
Owner or Number of and Investment and Investment Number of Percent of Class
Persons in Group Power(1) Power Shares (if more than 1%)(2)
<S> <C> <C> <C> <C>
Willie G. Barker, Jr. 376,428 54,000 430,428 1.02%
Louis N. Dibrell III 454,095 -- 454,095 1.07
R. Stuart Dickson 2,000 -- 2,000 --
Henry F. Frigon 1,000 5,000 6,000 --
John M. Hines 40,000 50,600 90,600 --
James E. Johnson, Jr. 3,000 -- 3,000 --
Thomas F. Keller 3,000 1,000 4,000 --
Joseph L. Lanier, Jr. 8,500 3,000 11,500 --
Albert C. Monk III 2,157,603 -- 2,157,603 5.10
Robert T. Monk, Jr. 2,415,494 -- 2,415,494 5.71
Claude B. Owen, Jr. 180,416 96,396 276,812 --
Norman A. Scher 11,122 -- 11,122 --
12 executive officers and
Directors
as a group 5,652,658 209,996 5,862,654 17.95
</TABLE>

(1) The amounts in this column include shares of Common Stock with respect to
which the following persons have the right to acquire beneficial ownership
within 60 days of April 30, 1996: Mr. Barker, 48,030 shares; Mr. Dibrell,
30,744 shares; Mr. Dickson, 1,000 shares; Mr. Frigon, 1,000 shares; Mr.
Hines, 40,000 shares; Mr. Johnson, 1,000 shares; Mr. Keller, 1,000 shares;
Mr. Lanier, 1,000 shares; Mr. Owen, 56,430 shares; Mr. Scher, 1,000 shares;
and the executive officers and Directors as a group, 181,204 shares.

(2) Percentages determined include shares to which certain persons have the
right to acquire within 60 days of April 30, 1996.

<PAGE>
DESCRIPTION OF NOTES

General

The Notes will be issued pursuant to an Indenture dated as of May 29, 1996
(the "Indenture") among the Company, as issuer, DIMON International and
Florimex, as Guarantors, and Crestar Bank, as trustee (the "Trustee"). The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the Trust Indenture Act for a statement
of those terms. The following summary of certain provisions of the Notes, the
Guarantees and the Indenture does not purport to be complete and is qualified in
its entirety by reference to the Indenture. Copies of the Indenture are
available as set forth below under the caption "Additional Information." The
definitions of capitalized terms used in the following summary are set forth
below under the caption "Certain Definitions." A copy of the proposed form of
the Indenture has been filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part.

Principal, Maturity and Interest

The Notes will be general unsecured senior obligations of the Company,
limited in aggregate principal amount to $125,000,000, and will mature on June
1, 2006. Interest on the Notes will accrue at the rate per annum set forth on
the cover page of this Prospectus , and will be payable semiannually in arrears
on June 1 and December 1, commencing on December 1, 1996, to Holders of record
on the immediately preceding May 15 and November 15.

Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
original issuance. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Principal, premium, if any, and interest on
the Notes will be payable at the office or agency of the Company maintained for
such purpose within the City and State of New York or, at the option of the
Company, payment of interest may be made by check mailed to the Holders of the
Notes at their respective addresses set forth in the register of Holders of
Notes; provided that all payments with respect to the Global Note and
Certificated Notes (as such terms are defined below under the caption
" -- Book-Entry, Delivery and Form") the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. Until otherwise designated by the Company, the Company's office or
agency in New York will be in the office of the Trustee maintained for such
purpose. The Notes will be issued only in fully registered form, without
coupons, and only in denominations of $1,000 and integral multiples thereof.

Ranking

The payment of principal of, premium, if any, and interest on the Notes
will rank pari passu in right of payment with all other unsecured Indebtedness
of the Company that is not, by its terms, expressly subordinated in right of
payment to the Notes, and will rank senior to all other unsecured Indebtedness
of the Company that is, by its terms, expressly subordinated in right of payment
to the Notes. The Notes will be unconditionally guaranteed on a joint and
several basis by each of the Guarantors pursuant to the Guarantees described
below. The Guarantees will be general unsecured obligations of the Guarantors
and will rank pari passu in right of payment with all other unsecured
Indebtedness of the Guarantors that is not, by its terms, expressly subordinated
in right of payment to the Guarantees. Secured creditors of the Company or any
Guarantor will have a claim on the assets which secure the obligations of the
Company or such Guarantor, as the case may be, prior to claims of Holders of the
Notes against those assets.

The Notes will be effectively subordinated to all Indebtedness and other
liabilities, whether or not secured, of those Subsidiaries of the Company that
are not Guarantors. See the discussion below under the caption " -- Effect of
Corporate Structure."

On a pro forma basis, after giving effect to the Offering, at March 31,
1996, the principal amount of total Indebtedness outstanding of the Company and
its Subsidiaries would have been approximately $392 million, of which
approximately $171 million would have been Indebtedness of the Company or the
Guarantors, and approximately $221 million would have been Indebtedness of the
Company's Subsidiaries that are not Guarantors. The amounts of such Indebtedness
fluctuate seasonally, as discussed above under the caption "Risk
Factors -- Significant Leverage and Debt Service." On such pro forma basis, at
March 31, 1996, the Company and the Guarantors would have had approximately $1
million of secured Indebtedness and the Company's Subsidiaries that are not
Guarantors would have had approximately $27 million of secured Indebtedness. The
terms of the Indenture will permit the Company and its Subsidiaries to incur
additional Indebtedness, subject to certain

<PAGE>
limitations, including Indebtedness that may be secured by Liens on property of
the Company and its Subsidiaries. See the discussion below under the captions
" -- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock" and " -- Certain Covenants -- Liens."

The Guarantees

Each of the Guarantors will fully and unconditionally guarantee on a joint
and several basis the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all of the Company's obligations under the
Indenture and the Notes, including its obligations to pay principal, premium, if
any, and interest with respect to the Notes. The obligations of each Guarantor
under its Guarantee are 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, can be guaranteed by such 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. See
"Risk Factors -- Fraudulent Conveyance Considerations". Each of the Guarantees
shall be a guarantee of payment and not of collection. The Company is not
restricted from selling or otherwise disposing of any of the Guarantors other
than DIMON International; provided the Net Proceeds from any such Asset Sale are
applied in accordance with the provisions set forth below under the caption
" -- Repurchase at the Option of Holders -- Asset Sales."

The two Guarantors on the date of the Indenture will be DIMON International
and Florimex, each a direct, Wholly Owned Subsidiary of the Company.
Approximately 80.5% of the Company's net sales from the tobacco business for the
fiscal year ended June 30, 1995 were generated by DIMON International, while the
remaining 19.5% were generated by the direct and indirect Subsidiaries of DIMON
International. Substantially all of the Company's flower business is conducted
by direct and indirect Subsidiaries of Florimex; as a holding company, Florimex
receives substantially all of its cash flows through distributions of profits
from its Subsidiaries and does not generate significant cash flows itself. The
Indenture will provide that each Material Domestic Subsidiary formed or acquired
(and each other Person that becomes a Material Domestic Subsidiary) after the
date of the Indenture will become a Guarantor, provided that, any Material
Domestic Subsidiary acquired after the date of the Indenture which is prohibited
from entering into a Guarantee pursuant to restrictions contained in any debt
instrument or other agreement in existence at the time such Material Domestic
Subsidiary was so acquired and not entered into in anticipation or contemplation
of such acquisition shall not be required to become a Guarantor so long as any
such restriction is in existence and to the extent of any such restriction.

The Indenture provides that if the Notes are defeased in accordance with
the terms of the Indenture, or if more than 50% of the Capital Stock or
consolidated assets of Florimex or all or substantially all of the assets or all
of the Capital Stock of any other Guarantor (other than DIMON International) is
sold (including by issuance or otherwise) by the Company or any of its
Subsidiaries in one transaction or in a series of related transactions, and if
(a) such Guarantor is released from its obligations under its guarantee of the
Company's obligations under the New Credit Facility and (b)(i) the Net Proceeds
from such Asset Sale are applied in accordance with the provisions of the
Indenture described below under the caption " -- Repurchase at the Option of
Holders -- Asset Sales" or (ii) the Company delivers to the Trustee an officers'
certificate to the effect that the Net Proceeds from such Asset Sales shall be
used in accordance with the provisions of the Indenture described below under
the caption " -- Repurchase at the Option of Holders -- Asset Sales" and within
the time limits specified by such covenant, then such Guarantor shall be
released and discharged of its obligations under its Guarantee.

Effect of Corporate Structure

The Notes are obligations of the Company. Because a major portion of the
operations of the Company are currently conducted through Subsidiaries, however,
the cash flow and the consequent ability to service Indebtedness of the Company,
including the Notes, are dependent, in part, upon the earnings of its
Subsidiaries and the distribution of those earnings to the Company or upon loans
or other payments of funds by those Subsidiaries to the Company. The Company's
Subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the Notes or to make
any funds available therefor, whether by dividends, loans or other payments,
except to the extent of the Guarantees made by those Subsidiaries that are
Guarantors. In addition, the payment of dividends and the making of loans and
advances to the Company by its Subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those Subsidiaries
and are subject to various business considerations.

Although the Indenture limits the incurrence of Indebtedness by the Company
and its Subsidiaries (see the discussion below under the caption "Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock"), the
Notes will

<PAGE>
be effectively subordinated to all Indebtedness and other liabilities, including
both long-term and current liabilities, of the Company's Subsidiaries that are
not Guarantors. Any right of the Company or a Guarantor to receive assets of any
of its respective Subsidiaries which are not Guarantors upon liquidation or
reorganization of such Subsidiary (and the consequent right of the Holders of
the Notes to participate in those assets) will be effectively subordinated to
the claims of that Subsidiary's creditors (including trade creditors), except to
the extent that the Company or such Guarantor is itself recognized as a creditor
of such Subsidiary, in which case the claims of the Company or such Guarantor
would still be subordinated to any security interests in the assets of such
Subsidiary in favor of another creditor and subordinated to any Indebtedness of
such Subsidiary senior to that held by the Company or such Guarantor.

Optional Redemption

The Notes will not be redeemable at the Company's option prior to June 1,
2001. Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on June 1
of the years indicated below:

<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2001 104.4375%
2002 102.9583%
2003 101.4791%
2004 and thereafter 100.0000%
</TABLE>

If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 or less shall be redeemed in part. Notices of redemption
shall be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of Notes to be redeemed at its registered
address. If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date, interest
ceases to accrue on Notes or portions of them called for redemption.

Mandatory Redemption

The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.

Repurchase at the Option of Holders

Change of Control

Upon the occurrence of a Change of Control (as defined herein), each Holder
of Notes will have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at a
purchase price (the "Change of Control Purchase Price") in cash equal to 101% of
the aggregate principal amount thereof plus accrued and unpaid interest thereon
to the date of purchase (the "Change of Control Payment Date"). Under the terms
of the Indenture, a Change of Control is defined as such time as (i) any Person
or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act)
(other than one or more members of the Monk Family) has become, directly or
indirectly, the beneficial owner, by way of merger, consolidation or otherwise,
of 30% or more of the voting power of the Voting Stock of the Company on a
fully-diluted basis, after giving effect to the conversion and exercise of all
outstanding warrants, options and other securities of the Company convertible
into or exercisable for Voting Stock of the Company (whether or not such
securities are then currently convertible or exercisable); (ii) the sale, lease
or transfer of all or substantially all of the consolidated assets of the
Company to any Person or group; (iii) during any period of two consecutive
calendar years, individuals who at the beginning of such period constituted the
Board of Directors of the Company, together with any new members of such Board
of Directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the members of such Board of Directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the directors of the Company then in office; (iv) the Company
consolidates with or merges with or into another Person or any Person
consolidates with, or

<PAGE>
merges with or into, the Company (in each case, whether or not in compliance
with the terms of this Indenture), in any such event pursuant to a transaction
in which immediately after the consummation thereof Persons owning a majority of
the Voting Stock of the Company immediately prior to such consummation shall
cease to own a majority of the Voting Stock of the Company or the surviving
entity if other than the Company. As of April 30, 1996, members of the Monk
Family owned approximately 31% of the outstanding shares of the Company's common
stock. Under the terms of the Indenture, members of the Monk Family may acquire
any amount of additional shares of the Company's common stock without triggering
a Holder's right to require the Company to make a Change of Control Offer.

Within 30 days after the date of any Change of Control, the Company, or the
Trustee at the request and expense of the Company, will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
the Indenture and described in such notice. The Change of Control Payment Date
shall be a business day not less than 30 days nor more than 60 days after such
notice is mailed.

On the Change of Control Payment Date, the Company will (1) accept for
payment all Notes or portions thereof properly tendered pursuant to the Change
of Control Offer, (2) deposit with the Paying Agent an amount equal to the
Change of Control Purchase Price in respect of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustee the Notes so
tendered together with an officers' certificate stating the aggregate principal
amount of Notes or portions thereof being purchased by the Company. The Paying
Agent will promptly mail to each Holder of Notes so tendered the Change of
Control Purchase Price for such Notes, and the Trustee will promptly
authenticate and deliver to each Holder a new Note equal in principal amount to
any unpurchased portion of the Notes surrendered, if any; provided that each
such new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

Except as described above with respect to a Change of Control, the
Indenture does not contain provisions that permit the Holders of the Notes to
require that the Company repurchase or redeem the Notes in the event of a
takeover, recapitalization or similar restructuring. Although the existence of a
Holder's right to require the Company to repurchase the Notes in respect of a
Change of Control may deter a third party from acquiring the Company in a
transaction that constitutes a Change of Control, the provisions of the
Indenture relating to a Change of Control in and of themselves may not afford
Holders of the Notes protection in the event of a highly leveraged transaction,
reorganization, recapitalization, restructuring, merger or similar transaction
involving the Company that may adversely affect Holders, if such transaction is
not the type of transaction included within the definition of a Change of
Control.

The New Credit Facility provides that a Change of Control would constitute
a default thereunder. Any future credit agreements or other agreements that
would replace the New Credit Facility may contain similar restrictions and
provisions.

Asset Sales

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, engage in an Asset Sale
(except an Exempt Asset Sale, as defined below) unless (i) the Company (or such
Subsidiary) receives consideration at the time of such Asset Sale at least equal
to the fair market value of the assets sold or otherwise disposed of, and in the
case of a lease of assets, a lease providing for rent and other conditions which
are no less favorable to the Company (or such Subsidiary) in any material
respect than the then prevailing market conditions, evidenced in each case by a
resolution of the Board of Directors of such entity set forth in an officers'
certificate delivered to the Trustee, and (ii) at least 75% (100% in the case of
lease payments) of the consideration therefor received by the Company or such
Subsidiary is in the form of cash or Cash Equivalents. The Indenture will
prohibit the Company from selling or otherwise disposing of all or substantially
all of the assets or Capital Stock of DIMON International. An "Exempt Asset
Sale" means (a) an Asset Sale on or after the date of the Indenture (i) the Net
Proceeds of which plus the Net Proceeds of all other Asset Sales concurrently or
previously made on or after the date of the Indenture do not exceed $25.0
million and (ii) the Net Proceeds of which plus the Net Proceeds of all other
Asset Sales concurrently or previously made in the same fiscal year do not
exceed $10.0 million, and (b) the issuance after the date of the Indenture of
shares of Capital Stock in any Subsidiary of the Company which conducts the
Company's tobacco business in Greece to the Company's joint venture partner in
Georges Allamanis Tobacco International in connection with the contribution to
such Subsidiary by such partner of its interest in Georges Allamanis Tobacco
International; provided that such transaction meets the requirements set forth
above in clause (i) of the first sentence of this paragraph.

The Company may apply, and may permit its Subsidiaries to apply, Net
Proceeds of an Asset Sale (other than an Exempt Asset Sale), at its option,
within 270 days after the consummation of such an Asset Sale (a) to permanently
reduce

<PAGE>
any outstanding Indebtedness of the Company or any Guarantor (and to
correspondingly reduce the commitments, if any, with respect thereto) that ranks
pari passu with the Notes or the Guarantees or, in the case of Net Proceeds of
an Asset Sale by any Subsidiary of the Company that is not a Guarantor, to
permanently reduce (i) any outstanding Indebtedness of the Company or any
Guarantor (and to correspondingly reduce the commitments, if any, with respect
thereto) that ranks pari passu with the Notes or the Guarantees or (ii) any
outstanding Indebtedness of such Subsidiary (and to correspondingly reduce the
commitments, if any, with respect thereto), (b) to acquire another business or
other long-term assets, in each case, in, or used or useful in, the same or a
similar line of business as the Company or any of its Subsidiaries was engaged
in on the date of the Indenture and which has not been discontinued on or prior
to the date of such acquisition or any reasonable extensions or expansions
thereof (including the Capital Stock of another Person engaged in such business,
provided such other Person is, or immediately after giving effect to any such
acquisition shall become, a Wholly Owned Subsidiary of the Company or the
Investment in such Person otherwise constitutes an Investment in a Joint Venture
permitted by the provisions described below in the next to the last paragraph
under the caption "Restricted Payments"), or (c) to reimburse the Company or its
Subsidiaries for expenditures made, and costs incurred, to repair, rebuild,
replace or restore property subject to loss, damage or taking to the extent that
the Net Proceeds consist of insurance proceeds received on account of such loss,
damage or taking. Pending the final application of any such Net Proceeds, the
Company may (A) use such Net Proceeds to reduce temporarily any outstanding
Indebtedness of the Company or any Guarantor that ranks pari passu with the
Notes or the Guarantees or, in the case of Net Proceeds of an Asset Sale by any
Subsidiary of the Company that is not a Guarantor, to reduce temporarily (i) any
outstanding Indebtedness of the Company or any Guarantor that ranks pari passu
with the Notes or the Guarantees or (ii) any outstanding Indebtedness of such
Subsidiary or (B) otherwise invest such Net Proceeds temporarily in Cash
Equivalents.

Any Net Proceeds from Asset Sales (other than Exempt Asset Sales) that are
not applied as provided in the preceding paragraph within 270 days after the
consummation of such an Asset Sale will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all Holders of Notes then
outstanding (an "Asset Sale Offer") to purchase, on a pro rata basis, the
principal amount of Notes equal in amount to the Excess Proceeds (and not just
the amount thereof that exceeds $10.0 million), at a purchase price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon to the date of purchase, in accordance with the procedures set
forth in the Indenture. If the aggregate principal amount of Notes surrendered
by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis. If the aggregate principal
amount of Notes tendered pursuant to such Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds following the
completion of the Asset Sale Offer for general corporate purposes (subject to
the other provisions of the Indenture), and the amount of Excess Proceeds then
required to be otherwise applied in accordance with this covenant shall be reset
to zero, subject to any subsequent Asset Sale. These provisions will not apply
to a transaction consummated in compliance with the provisions of the Indenture
described below under the caption "Certain Covenants -- Merger, Consolidation or
Sale of Assets."

In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Subsidiaries as an entirety to a
Person in a transaction permitted under the caption "Certain
Covenants -- Merger, Consolidation or Sale of Assets" below, the successor
corporation shall be deemed to have sold the properties and assets of the
Company and its Subsidiaries not so transferred for purposes of this covenant,
and shall comply with the provisions of this covenant with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair market value of
such properties and assets of the Company or its Subsidiaries deemed to be sold
shall be deemed to be Net Proceeds for purposes of this covenant.

If at any time any non-cash consideration received by the Company or any
Subsidiary in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash, then such conversion or disposition shall be
deemed to constitute an Asset Sale hereunder and the Net Proceeds thereof shall
be applied in accordance with this covenant.

The Company will comply with the requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Notes as a result of a Change of Control or an Asset
Sale.

The Company may use Net Proceeds from Exempt Asset Sales for general
corporate purposes (subject to the other provisions of the Indenture).

<PAGE>
Certain Covenants

Ownership of and Liens on Capital Stock of Subsidiaries

The Indenture will provide that the Company (i) will not permit any Person
(other than the Company or any Wholly Owned Subsidiary of the Company or, in the
case of Subsidiaries of Florimex, Florimex) to own any Capital Stock of any
Subsidiary of the Company or any Lien thereon, (ii) will not, and will not
permit any Subsidiary of the Company to, transfer, convey, sell or otherwise
dispose of any shares of Capital Stock of such Subsidiary or any other
Subsidiary (except to the Company or to a Wholly Owned Subsidiary of the
Company), and (iii) will not permit any Subsidiary of the Company to issue
Capital Stock or securities convertible into, or warrants, rights or options to
subscribe for or purchase shares of, its Capital Stock to any Person (except to
the Company or to a Wholly Owned Subsidiary of the Company) or create, incur,
assume or suffer to exist any Lien thereon, in each case except (a) directors'
qualifying shares, (b) shares of Capital Stock issued prior to the time such
Person became a Subsidiary of the Company, provided that such Capital Stock was
not issued in anticipation of such transaction, (c) if such Subsidiary merges
with another Subsidiary of the Company, (d)(I) if such Subsidiary (other than
DIMON International) ceases to be a Subsidiary of the Company as a result of the
sale of all of the issued and outstanding shares of Capital Stock of such
Subsidiary owned by the Company or any Subsidiary of the Company, (II) shares of
Capital Stock of Florimex or any Subsidiary of Florimex which are sold or issued
to any Person (other than to a Wholly Owned Subsidiary of the Company) or (III)
shares of Capital Stock of any Subsidiary of the Company which are sold or
issued pursuant to the exercise of a contractual "call" option to any Person
(other than to a Wholly Owned Subsidiary of the Company) which owned a portion
of the Capital Stock of such Subsidiary prior to such sale or issuance; provided
that the Net Proceeds from each such sale or issuance described in this clause
(d) are applied in accordance with, and such sale or issuance otherwise complies
with, the covenant described above under the caption " -- Repurchase at the
Option of Holders -- Asset Sales"), (e) for purposes of clause (i) above, shares
of Capital Stock of Subsidiaries of the Company that are not Wholly Owned
Subsidiaries of the Company on the date of the Indenture, which shares are not
owned by the Company or any Wholly Owned Subsidiary of the Company, as set forth
in Schedule A to the Indenture and (f) for purposes of clauses (i) and (iii)
above, (X) Liens on Capital Stock of any Subsidiary of the Company granted in
accordance with the provisions of the Indenture described below in the first
sentence under the caption " -- Liens" and (Y) shares of Capital Stock in any
Subsidiary of the Company which conducts the Company's tobacco business in
Greece issued after the date of the Indenture to the Company's joint venture
partner in Georges Allamanis Tobacco International in connection with the
contribution to such Subsidiary by such partner of its interest in Georges
Allamanis Tobacco International.

Restricted Payments

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any distribution of any kind or character (whether in cash,
securities or other property) on account of any class of the Company's or any of
its Subsidiaries' Equity Interests or to the holders thereof (including, without
limitation, any payment to stockholders of the Company in connection with a
merger or consolidation involving the Company), other than (a) dividends or
distributions payable solely in Equity Interests (other than Disqualified Stock)
of the Company or (b) dividends or distributions payable solely to the Company
or any Wholly Owned Subsidiary of the Company and, if such Subsidiary is not a
Wholly Owned Subsidiary of the Company, payable simultaneously to its minority
shareholders on a pro rata basis; (ii) purchase, repurchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Company or any
Subsidiary or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Subsidiary of the Company);
(iii) make any principal payment on, or purchase, repurchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness of the Company or any
Guarantor that is pari passu with or subordinated to the Notes or the Guarantees
prior to any scheduled repayment date, sinking fund payment date or final
maturity date, except (w) the prepayment of Indebtedness of the Company or any
of its Subsidiaries from proceeds from the issuance of the Notes within 30 days
after the date on which the Company receives such proceeds, (x) the repayment of
Indebtedness from Net Proceeds of Asset Sales in accordance with the provisions
described above under the caption " -- Repurchase at the Option of
Holders -- Asset Sales," (y) the repayment of Indebtedness under the New Credit
Facility or (z) the purchase, redemption or acquisition by the Company of
Indebtedness of the Company through the issuance in exchange therefor of Equity
Interests (other than Disqualified Stock) or (iv) make any Investment (other
than Permitted Investments) (all such payments and other actions set forth in
clauses (i) through (iv) being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:

(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;

<PAGE>
(b) at the time of such Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, the Company would have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Consolidated Interest Coverage Ratio test set forth in the first
paragraph of the covenant described below under the caption "Incurrence of
Indebtedness and Issuance of Preferred Stock"; and

(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments declared or made by the Company and its
Subsidiaries on or after the date of the Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii), and (iv) of the next paragraph
and excluding Restricted Payments permitted by the next to the last
paragraph under this caption), is less than the sum of (i) $20.0 million,
plus (ii) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the fiscal quarter
commencing April 1, 1996 to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus (iii) 100% of
the aggregate net cash proceeds received by the Company from the issue or
sale after the date of the Indenture of Equity Interests of the Company or
of debt securities of the Company that have been converted into such Equity
Interests (other than Equity Interests (or convertible debt securities)
sold to a Subsidiary of the Company and other than Disqualified Stock or
debt securities that have been converted into Disqualified Stock).

The foregoing clauses (b) and (c), however, will not prohibit (i) the
payment of any dividend on any class of Capital Stock of the Company or any
Subsidiary of the Company, within 60 days after the date of declaration thereof,
if on the date when such dividend was declared such payment would have complied
with the provisions of the Indenture; (ii) the making of any Investment in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of Equity Interests of the Company
(other than Disqualified Stock); provided, that any net cash proceeds that are
used for any such Investment, and any Net Income resulting therefrom, shall be
excluded from clause (c) of the preceding paragraph; (iii) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of the
Company in exchange for, or out of the proceeds of, the substantially concurrent
sale (other than to a Subsidiary of the Company) of other Equity Interests of
the Company (other than any Disqualified Stock); provided that any net cash
proceeds that are used for any such redemption, repurchase, retirement or other
acquisition, and any Net Income resulting therefrom, shall be excluded from
clause (c) of the preceding paragraph; and (iv) the defeasance, redemption or
repurchase of pari passu or subordinated Indebtedness with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness or the substantially
concurrent sale (other than to a Subsidiary of the Company) of Equity Interests
of the Company (other than Disqualified Stock); provided, that any net cash
proceeds that are used for any such defeasance, redemption or repurchase, and
any Net Income resulting therefrom, shall be excluded from clause (c) of the
preceding paragraph.

The foregoing clause (c), however, will not prohibit the Company or any of
its Subsidiaries from making any Investment in Joint Ventures in the tobacco
business on or after the date of the Indenture provided that the amount of any
such Investment, together with the aggregate amount of all other such
Investments in Joint Ventures made on or after the date of the Indenture, shall
not at any time exceed 15% of the Consolidated Tangible Net Worth of the Company
as of the last day of the quarterly period most recently ended prior to the date
of such Investment for which internal financial statements of the Company are
available.

The amount of all Restricted Payments (other than cash) shall be the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an officers' certificate delivered to the Trustee) on the date of the Restricted
Payment of the asset(s) proposed to be transferred by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later
than the date of making any Restricted Payment, the Company shall deliver to the
Trustee an officers' certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
the covenant described under this caption were computed, which calculations may
be based upon the Company's latest available financial statements.

Incurrence of Indebtedness and Issuance of Preferred Stock

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness) and that the Company will not
issue any Disqualified Stock and will not permit any of its Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company and the
Guarantors may incur Indebtedness (including Acquired Indebtedness) and the
Company may issue shares of Disqualified Stock if: (i) the Consolidated Interest
Coverage Ratio for the Company's most recently

<PAGE>
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional Indebtedness
is incurred or such Disqualified Stock is issued would have been at least 2.25
to 1.0 if such Indebtedness is incurred on or before June 30, 1998, and 2.75 to
1.0 if such Indebtedness is incurred after June 30, 1998, in each case
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period; and (ii) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; provided, that no
guarantee may be incurred pursuant to this paragraph, unless the guaranteed
Indebtedness is incurred by the Company or a Guarantor pursuant to this
paragraph.

The foregoing provisions will not apply to:

(i) the incurrence by the Company or the Guarantors of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, any
Indebtedness described in the preceding paragraph;

(ii) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the Guarantees thereof;

(iii) the incurrence by the Company of Indebtedness under the New
Credit Facility (and the incurrence by Subsidiaries of the Company of
guarantees thereof) in an aggregate principal amount at any time
outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its
Subsidiaries thereunder) not to exceed $240 million, less the aggregate
amount of all Net Proceeds of Asset Sales applied to permanently reduce the
outstanding amount of such Indebtedness (and to correspondingly reduce the
commitments, if any, with respect thereto) pursuant to the covenant
described above under the caption " -- Repurchase at the Option of
Holders -- Asset Sales";

(iv) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in an aggregate principal amount at any time outstanding not
to exceed the sum of (A) 50% of Eligible Inventory, plus (B) 75% of
Eligible Receivables; provided that (I) the aggregate principal amount of
any such Indebtedness incurred by Subsidiaries of the Company that are not
Guarantors at any time outstanding shall not exceed the greater of (X) the
aggregate principal amount of Advances on Purchases of Tobacco outstanding
at such time and (Y) the sum of (A) 50% of Eligible Inventory of all such
Subsidiaries that are not Guarantors, plus (B) 75% of Eligible Receivables
of all such Subsidiaries that are not Guarantors, (II) no more than $50.0
million of such Indebtedness may be secured by Liens on assets or property
of Subsidiaries of the Company that are not Guarantors and (III) none of
such Indebtedness may be secured by Liens on assets or properties of the
Company or the Guarantors;

(v) the incurrence by the Company or any of its Subsidiaries of
Indebtedness used to fund Advances on Purchases of Tobacco, but only to the
extent that the aggregate principal amount of such advances outstanding at
any time to any Person and such Person's Affiliates does not exceed 15% of
the Consolidated Tangible Net Worth of the Company for the most recently
ended fiscal quarter for which internal financial statements are available;

(vi) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Purchase Money Obligations or Capital Lease
Obligations, in each case incurred for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of
property used in the business of the Company or such Subsidiary, or any
Permitted Refinancing Indebtedness thereof; provided that (a) the aggregate
principal amount of any such Indebtedness does not exceed 100% of the
purchase price or cost of the property to which such Indebtedness relates,
(b) the Indebtedness is incurred within 180 days (or 360 days, in the case
of such Indebtedness incurred to finance property used in the business of
any Subsidiary of the Company that is not organized under the laws of the
United States of America, any state thereof or the District of Columbia) of
the acquisition, construction or improvement of such property and (c) the
aggregate principal amount of such Indebtedness outstanding, together with
the aggregate principal amount of Attributable Indebtedness with respect to
Sale and Leaseback Transactions permitted under clause (vii) below, at any
time shall not exceed $15.0 million;

(vii) Attributable Indebtedness with respect to Sale and Leaseback
Transactions permitted under the caption below " -- Limitation on Sale and
Leaseback Transactions"; provided that the aggregate principal amount of
such Indebtedness outstanding, together with the aggregate principal amount
of Indebtedness permitted under clause (vi) above, at any time shall not
exceed $15.0 million;

<PAGE>
(viii) (A) the incurrence by the Company or any of its Wholly Owned
Subsidiaries of intercompany Indebtedness
owing to the Company or any of its Subsidiaries, (B) the incurrence by any
Subsidiary of the Company that is not a Wholly Owned Subsidiary of
Indebtedness owing to the Company or any of its Wholly Owned Subsidiaries,
or (C) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in an aggregate principal amount outstanding at any time not
to exceed $5.0 million for the purpose of making advances to Subsidiaries
that are not Wholly Owned Subsidiaries of the Company or to Joint Ventures
in which the Company or any of its Subsidiaries owns an interest; provided
that Indebtedness may be incurred pursuant to clauses (B) and (C) only if
and to the extent that the Investment constituting such Indebtedness shall
be permitted above under the caption " -- Restricted Payments"; and
provided further that, for purposes of clauses (A) and (B), (I) in the case
of Indebtedness of the Company or any Guarantor, such obligations and any
trade payables owed by the Company or any Guarantor to any Subsidiary of
the Company shall be unsecured and subordinated in case of an Event of
Default in all respects to the Company's obligations pursuant to the Notes
and such Guarantor's obligations under its Guarantee; and (II)(X) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a Wholly
Owned Subsidiary of the Company and (Y) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a Wholly
Owned Subsidiary of the Company shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be, to which this clause (viii) no longer
applies;

(ix) the incurrence by the Company and its Subsidiaries of Hedging
Obligations;

(x) the incurrence by the Company and its Subsidiaries of Indebtedness
with respect to letters of credit issued to customers to secure an
obligation to deliver tobacco for which the customer has prepaid the
purchase price thereof in cash, but only to the extent of the amount of
such cash prepayment; and

(xi) the incurrence by the Company and its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of
this paragraph) in an aggregate principal amount at any time outstanding
not to exceed $15.0 million.

The Company shall not, and shall not permit any Guarantor to, directly or
indirectly, in any event incur any Indebtedness that by its terms (or by the
terms of any agreement governing such Indebtedness) is subordinated to any other
Indebtedness of the Company or of such Guarantor, as the case may be, unless
such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinated in right of payment to
the Notes or the Guarantee of such Guarantor, as the case may be, to the same
extent and in the same manner as such Indebtedness is subordinated pursuant to
subordination provisions that are most favorable to the holders of any other
Indebtedness of the Company or such Guarantor, as the case may be.

Liens

The Indenture will provide that the Company will not, and will not permit
any Guarantor to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any of its assets, now owned or hereafter acquired, securing
any Indebtedness unless the Notes, in the case of the Company, or the
Guarantees, in the case of the Guarantors, are secured equally and ratably with
such other Indebtedness; provided that, if such Indebtedness is by its terms
subordinate to the Notes or the Guarantees, the Lien securing such subordinate
or junior Indebtedness shall be subordinate and junior to the Lien securing the
Notes or the Guarantees with the same relative priority as such subordinated or
junior Indebtedness shall have with respect to the Notes or the Guarantees. The
foregoing restrictions shall not apply to the following Liens:

(i) Liens securing only Existing Indebtedness, in an aggregate
principal amount not greater than $1.2 million;

(ii) Liens securing only the Notes;

(iii) Liens in favor of the Company;

(iv) Liens to secure Indebtedness incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of the property subject to such Liens and permitted by the
provisions of the Indenture described above under clause (vi) of the second
sentence under the caption " -- Incurrence of Indebtedness and Issuance of
Preferred Stock"; provided that such Lien does not extend to or cover any
property other than such item of property and any improvements on such
item;

(v) Liens on property existing immediately prior to the time of
acquisition thereof (and not created in anticipation or contemplation of
such acquisition or the financing of such acquisition) and securing
Acquired Indebtedness; provided that such Lien does not extend to or cover
any property other than such item of property and any improvements on such
item;

<PAGE>
(vi) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Guarantor (and
not created in anticipation or contemplation thereof) and securing Acquired
Indebtedness; provided that such Lien does not extend to or cover any
property other than such item of property and any improvements on such
item;

(vii) Liens securing Attributable Indebtedness of the Company or any
Guarantor incurred with respect to Sale and Leaseback Transactions;
provided that such Lien does not extend to or cover any property other than
the property sold and leased back pursuant to such Sale and Leaseback
Transaction; and

(viii) Liens to secure Permitted Refinancing Indebtedness of any
Indebtedness secured by Liens referred to in the foregoing clause (i),
(iv), (v) or (vi) so long as such Lien does not extend to any other
property.

Dividend and Other Payment Restrictions Affecting Subsidiaries

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of the Company to (i)(a) pay dividends or make any
other distributions to the Company or any of its Subsidiaries on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, or (b) pay any Indebtedness or other obligation owed to the Company
or any of its Subsidiaries, (ii) make loans or advances to the Company or any of
its Subsidiaries or (iii) sell, lease or transfer any of its properties or
assets to the Company or any of its Subsidiaries or (iv) guarantee the
obligations of the Company evidenced by the Notes or any renewals, refinancings,
exchanges, refundings or extensions thereof, except for such encumbrances or
restrictions existing under or by reason of (A) the Indenture and the Notes, (B)
applicable law, (C) any instrument governing Acquired Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Subsidiaries as in
effect at the time of such acquisition (except to the extent such Acquired
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
Net Income of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of the Indenture, (D) any document or
instrument governing Indebtedness incurred pursuant to clause (vi) or (vii) of
the second paragraph under the caption " -- Incurrence of Indebtedness and
Issuance of Preferred Stock" above, provided that any such restriction contained
therein relates only to the asset or assets constructed or acquired in
connection therewith, or (E) Permitted Refinancing Indebtedness of Indebtedness
described in clause (C) hereof, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.

Merger, Consolidation or Sale of Assets

The Indenture will provide that the Company will not, and will not permit
any Subsidiary to, in a single transaction or series of related transactions
consolidate or merge with or into (other than the consolidation or merger of a
Wholly Owned Subsidiary of the Company with another Wholly Owned Subsidiary of
the Company or into the Company and other than the consolidation or merger of
Florimex or any Subsidiary of Florimex in connection with an Asset Sale
permitted pursuant to clause (d)(II) under the caption " -- Ownership of and
Liens on Capital Stock of Subsidiaries" above) (whether or not the Company or
such Subsidiary is the surviving corporation), or directly and/or indirectly
through its Subsidiaries sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
and its Subsidiaries (determined on a consolidated basis for the Company and its
Subsidiaries taken as a whole) in one or more related transactions to, another
corporation, Person or entity unless

(i) either (a) the Company, in the case of a transaction involving the
Company, or such Subsidiary, in the case of a transaction involving a
Subsidiary of the Company, is the surviving corporation or (b) in the case
of a transaction involving the Company or a Guarantor, the entity or the
Person formed by or surviving any such consolidation or merger (if other
than the Company or such Guarantor) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States of
America, any state thereof or the District of Columbia and expressly
assumes all the obligations of the Company or such Guarantor, as the case
may be, under the Notes, the relevant Guarantee and the Indenture pursuant
to a supplemental indenture in a form reasonably satisfactory to the
Trustee;

(ii) immediately prior to and after such transaction no Default or
Event of Default exists;

(iii) the Company or, if other than the Company, the entity or Person
formed by or surviving any such consolidation or merger, or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall
have been made

<PAGE>
(A) will have a Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Interest Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption
"Incurrence of Indebtedness and Issuance of Preferred Stock";

(iv) if, as a result of any such transaction, property or assets of
the Company or a Guarantor would become subject to a Lien securing
Indebtedness not excepted from the provisions of the Indenture described
above under the caption " -- Liens," the Company, any such Guarantor or the
Surviving Entity, as the case may be, shall have secured the Notes as
required by such provisions; and

(v) the Company shall have delivered to the Trustee an officers'
certificate and, except in the case of a merger of a Subsidiary of the
Company into the Company or into a Wholly Owned Subsidiary of the Company,
an opinion of counsel, each stating that such consolidation, merger,
conveyance, lease or disposition and any supplemental indenture with
respect thereto, comply with all of the terms of this covenant and that all
conditions precedent provided for in this
provision relating to such transaction or series of transactions have been
complied with.

For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.

Limitation on Sale and Leaseback Transactions

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, enter into any Sale and Leaseback Transaction unless
(a) after giving pro forma effect to any such Sale and Leaseback Transaction,
the Company or such Subsidiary, as the case may be, could incur the Attributable
Indebtedness relating to such Sale and Leaseback Transaction under the covenants
described above under the captions " -- Incurrence of Indebtedness and Issuance
of Preferred Stock" and " -- Liens," (b) the gross cash proceeds of such Sale
and Leaseback Transaction are at least equal to the fair market value of such
property, as determined by the Board of Directors of the Company, such
determination to be evidenced by a resolution of the Board of Directors of the
Company, (c) the aggregate rent payable by the Company or such Subsidiary in
respect of such Sale and Leaseback Transaction is not in excess of the fair
market rental value of the property leased pursuant to such Sale and Leaseback
Transaction and (d) the Company applies the Net Proceeds of the property sold
pursuant to the Sale and Leaseback Transaction as provided above under the
caption " -- Repurchase at the Option of Holders -- Asset Sales."

Transactions with Affiliates

The Indenture will provide that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, after the date of the
Indenture, in any one transaction or a series of related transactions, sell,
lease, transfer or otherwise dispose of any of its properties, assets or
services to, or make any payment to, or purchase any property, assets or
services from, or enter into or make any agreement, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), other than Exempt Affiliate Transactions, unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a comparable
arms length transaction by the Company or such Subsidiary with a Person that is
not an Affiliate and (ii) the Company delivers to the Trustee (a) with respect
to any Affiliate Transaction entered into after the date of the Indenture
involving aggregate consideration in excess of $1.0 million, a resolution of the
Board of Directors of the Company set forth in an officers' certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of such Board of Directors and (b) with respect to any
Affiliate Transaction involving aggregate consideration in excess of $5.0
million, a written opinion from an independent financial advisor (as defined
below) that such Affiliate Transaction is fair to the Company or such
Subsidiary, as the case may be, from a financial point of view. "Independent
financial advisor" means a nationally recognized accounting, appraisal or
investment banking firm that is, in the reasonable judgment of the Board of
Directors of the Company, qualified to perform the task for which such firm has
been engaged and disinterested and independent with respect to the Company.

<PAGE>
Reports

The Indenture will provide that, whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the Company
will furnish to the Holders of Notes, and file with the Trustee, within 15 days
after it is, or would have been, required to file such with the Commission (i)
all quarterly and annual financial information that is or would be required to
be contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company is or were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants, and (ii) all current reports that are or
would be required to be filed with the Commission on Form 8-K if the Company is
or were required to file such reports. In addition, whether or not required by
the rules and regulations of the Commission, the Company will file a copy of all
such information and reports with the Commission for public availability (unless
the Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon written request.

Events of Default and Remedies

The Indenture will provide that each of the following constitutes an Event
of Default: (i) default for 30 days in the payment when due of interest on the
Notes; (ii) default in payment when due of the principal of or premium, if any,
on the Notes; (iii) failure by the Company to comply with the provisions
described under the captions " -- Repurchase at Option of Holders -- Change of
Control," " -- Repurchase at Option of Holders -- Asset Sales," " -- Ownership
of and Liens on Capital Stock," " -- Restricted Payments," " -- Incurrence of
Indebtedness and Issuance of Preferred Stock," or " -- Merger, Consolidation or
Sale of Assets"; (iv) failure by the Company to comply with any of its other
agreements or covenants in the Indenture or in the Notes for 30 calendar days
after written notice by the Trustee or Holders of at least 25% of the aggregate
principal amount of the Notes outstanding; (v) default under any mortgage,
indenture or instrument (including without limitation, the New Credit Facility)
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Subsidiaries
(or the payment of which is guaranteed by the Company or any of its
Subsidiaries) whether such Indebtedness or guarantee now exists, or is created
after the date of the Indenture, which default (a) is caused by a failure to pay
principal of such Indebtedness at final maturity thereof (a "Payment Default")
or (b) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness as to which
there has been a Payment Default or the maturity of which has been so
accelerated, exceeds in the aggregate $5.0 million; (vi) the rendering of a
final judgment or judgments or an order or orders against the Company or any of
its Subsidiaries for the payment of money not fully covered by insurance in an
amount in excess of $10.0 million in the aggregate and either (a) a creditor
commences an enforcement proceeding upon any such judgment or order or (b) any
such judgment or order remains undischarged or unstayed for a period of 45 days
after the date on which the right to appeal has expired; (vii) certain events of
bankruptcy, insolvency or reorganization with respect to the Company, any
Material Domestic Subsidiary or any Material Foreign Subsidiary or the approval
by stockholders of the Company of any plan or proposal for the liquidation or
dissolution of the Company; or (viii) the Guarantee of any Guarantor is held in
any judicial proceeding to be unenforceable or invalid or ceases for any reason
to be in full force and effect (other than in accordance with the terms of the
Indenture) or any Guarantor or any Person acting on behalf of any Guarantor
denies or disaffirms such Guarantor's obligations under its Guarantee (other
than by reason of a release of such Guarantor from its Guarantee in accordance
with the terms of the Indenture).

If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of all of the then
outstanding Notes may declare by written notice to the Company all the Notes to
be due and payable immediately. After such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of outstanding Notes may, under certain circumstances, rescind
and annul such acceleration if all Events of Default, other than the non-payment
of principal, interest or premium that have become due solely because of such
acceleration, have been cured or waived as provided in the Indenture.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company or any
Material Domestic Subsidiary or Material Foreign Subsidiary, all outstanding
Notes will become due and payable without any declaration or other act by the
Trustee or any Holder. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Indenture provides
that if a Default occurs and is continuing, generally the Trustee must, within
90 days after the occurrence of such Default, give to the Holders thereof notice
of such Default. The Trustee may withhold from the Holders notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, premium, if any, or interest) if it
determines that withholding notice is in their interest.

<PAGE>
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest or premium on, or the principal of, any Note (except a payment default
resulting from an acceleration that has been rescinded) or in respect of a
provision that cannot be amended or waived without the consent of the Holder of
each outstanding Note. See the discussion below under the caption "Amendment,
Supplement and Waiver."

No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and unless the Holders of at least 25% in aggregate principal amount of
the outstanding Notes shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of the outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 30 days.
However, such restrictions do not apply to a suit instituted by a Holder of a
Note for enforcement of payment of the principal of and premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note.

The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. No director, officer, employee,
incorporator or stockholder of any Guarantor, as such, shall have any liability
for any obligations of such Guarantor under such Guarantee or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes and the Guarantees. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such waiver is against public policy.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have all of the
obligations of the Company and the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance") except for (i) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest on such Notes when such payments are due from the trust
referred to below, (ii) the Company's obligations with respect to the Notes
concerning issuing temporary Notes, registration of Notes, mutilated, destroyed,
lost or stolen Notes and the maintenance of an office or agency for payment,
(iii) the rights, powers, trusts, duties and immunities of the Trustee, and the
Company's obligations in connection therewith and (iv) the Legal Defeasance
provisions of the Indenture. In addition, the Company may, at its option and at
any time, elect to have the obligations of the Company released with respect to
certain covenants that are described in the Indenture, some of which are
described above ("Covenant Defeasance"), and thereafter any omission to comply
with such obligations shall not constitute a Default or Event of Default with
respect to the Notes. In the event Covenant Defeasance occurs, certain events
(not including nonpayment, bankruptcy, receivership, rehabilitation and
insolvency events) described under "Events of Default" will no longer constitute
an Event of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Notes, cash in U.S. dollars, noncallable U.S. Government
Obligations, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest on the outstanding Notes
on the stated maturity or on the applicable redemption date, as the case may be,
and the Company must specify whether the Notes are being defeased to maturity or
to a particular redemption date; (ii) in the case of Legal Defeasance, the
Company shall have delivered to the Trustee an opinion of counsel acceptable to
the Trustee confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion of counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same

<PAGE>
times as would have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an opinion of counsel acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit; (v) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound; (vi) the Company must deliver to the Trustee an
officers' certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over other creditors of the
Company or the Guarantors or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company, the Guarantors or others;
(vii) such Legal Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the Investment Company Act of 1940, as amended, unless such trust shall be
registered under such Act or exempt from registration thereunder; and (viii) the
Company must deliver to the Trustee an officers' certificate and an opinion of
counsel, each stating that all conditions precedent to Legal Defeasance or
Covenant Defeasance, as the case may be, have been complied with.

Transfer and Exchange

A Holder may transfer or exchange Notes in accordance with the Indenture.
The Trustee will act as paying agent and registrar for the Notes. The Company,
the registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents, and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.

The registered Holder of a Note will be treated as the owner of it for all
purposes.

Amendment, Supplement and Waiver

Except as provided in the next two succeeding paragraphs, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for the
Notes), and any existing Default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the Notes).

Without the consent of each Holder, an amendment or waiver may not: (i)
reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or premium on or change the
fixed maturity of any Note or alter the provisions with respect to the
redemption of the Notes (other than provisions relating to the covenants
described above under the caption " -- Repurchase at the Option of Holders"),
(iii) reduce the rate of or change the time for payment of interest on any Note,
(iv) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on any Note (except a rescission of acceleration of
the Notes by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration), (v) make any Note payable in money other than that stated in the
Notes, (vi) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, if any, or interest on the Notes, (vii) waive a
redemption payment with respect to any Note (other than a payment required by
one of the covenants described above under the caption " -- Repurchase at the
Option of Holders"), (viii) modify the ranking or priority of the Notes or the
Guarantee of any Guarantor, (ix) release any Guarantor from any of its
obligations under its Guarantee or the Indenture other than in accordance with
the terms of the Indenture, or (x) make any change in the foregoing amendment
and waiver provisions.

Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of Certificated Notes, to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the

<PAGE>
Holders of Notes or that does not adversely affect the interests of the Holders
in any material respect, or to comply with requirements of the Commission in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act.

Payments for Consent

Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any terms or provisions of the Notes,
unless such consideration is offered to be paid or agreed to be paid to all
Holders of the Notes which so consent, waive or agree to amend in the time frame
set forth in the solicitation documents relating to such consent, waiver or
agreement.

Concerning the Trustee

The Indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain certain limitations on the rights of the Trustee,
should it become a creditor of the Company or any Guarantor, to obtain payment
of claims in certain cases, or to realize on certain property received in
respect of any such claim as security or otherwise. The Trustee will be
permitted to engage in other transactions; however, if it acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue or resign.

The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any Holder of Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.

Additional Information

Anyone who receives this Prospectus may obtain a copy of the Indenture
without charge by writing to DIMON Incorporated, 512 Bridge Street, Danville,
Virginia 24541, Attention: Secretary.

Book-Entry, Delivery and Form

The Notes will initially be issued in the form of one Global Note (the
"Global Note"). The Global Note will be deposited on the date of the closing of
the sale of the Notes offered hereby (the "Closing Date") with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee of DTC (the "Global Note Holder").

DTC is a limited-purpose trust company that was created to hold securities
for its participating organizations (collectively, the "Participants" or "DTC's
Participants") and to facilitate the clearance and settlement of transactions in
such securities between Participants through electronic book-entry changes in
accounts of its Participants. DTC's Participants include securities brokers and
dealers (including the underwriters of the Notes), banks and trust companies,
clearing corporations and certain other organizations. Access to DTC's system is
also available to other entities such as banks, brokers, dealers and trust
companies (collectively, the "Indirect Participants" or "DTC's Indirect
Participants") that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly. Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only through DTC's
Participants or DTC's Indirect Participants.

The Company expects that pursuant to procedures established by DTC (i) upon
deposit of the Global Note, DTC will credit the accounts of Participants
designated by the underwriters of the Notes with portions of the principal
amount of the Global Note and (ii) ownership of the Notes evidenced by the
Global Note will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the interests
of DTC's Participants), DTC's Participants and DTC's Indirect Participants.
Prospective purchasers are advised that the laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to own, transfer or pledge Notes evidenced
by a Global Note will be limited to such extent.

So long as the Global Note Holder is the registered owner of any Notes, the
Global Note Holder will be considered the sole Holder under the Indenture of any
Notes evidenced by the Global Note. Beneficial owners of Notes evidenced by the

<PAGE>
Global Note will not be considered the owners or Holders thereof under the
Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Company nor the Trustee will have any responsibility or liability for any aspect
of the records of DTC or for maintaining, supervising or reviewing any records
of DTC relating to the Notes.

Payments in respect of the principal of, premium, if any, and interest on
any Notes registered in the name of the Global Note Holder on the applicable
record date will be payable by the Trustee to or at the direction of the Global
Note Holder in its capacity as the registered Holder under the Indenture. Under
the terms of the Indenture, the Company and the Trustee may treat the persons in
whose names Notes, including the Global Note, are registered as the owners
thereof for the purpose of receiving such payments. Consequently, neither the
Company nor the Trustee has or will have any responsibility or liability for the
payment of such amounts to beneficial owners of Notes. The Company believes,
however, that it is currently the policy of DTC to credit immediately the
accounts of the relevant Participants with such payments, in amounts
proportionate to their respective holdings of beneficial interests in the
relevant security as shown on the records of DTC. Payments by DTC's Participants
and DTC's Indirect Participants to the beneficial owners of Notes will be
governed by standing instructions and customary practice and will be the
responsibility of DTC's Participants or DTC's Indirect Participants.

Certificated Notes

If the Company notifies the Trustee in writing that DTC is no longer
willing or able to act as a depositary and the Company is unable to locate a
qualified successor within 90 days then, upon surrender by the Global Note
Holder of the Global Note, Notes in the form of registered definitive
certificates ("Certificated Notes") will be issued in denominations of $1,000
and integral multiples thereof, in exchange for the Global Note, to each person
that the Global Note Holder and DTC identify as being the beneficial owner of
the related Notes.

Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or DTC in identifying the beneficial owners of Notes, and the
Company and the Trustee may conclusively rely on, and will be protected in
relying on, instructions from the Global Note Holder or DTC for all purposes.

Same-Day Settlement and Payment

The Indenture will require that payments in respect of the Notes
represented by the Global Note (including principal, premium, if any and
interest) be made by wire transfer of immediately available funds to the
accounts specified by the Global Note Holder. With respect to Certificated
Notes, the Company will make all payments of principal, premium, if any, and
interest, by wire transfer of immediately available funds to the accounts
specified by the Holders thereof or, if no such account is specified, by mailing
a check to each such Holder's registered address. Secondary trading in long-term
notes and debentures of corporate issuers is generally settled in clearing-house
or next-day funds. In contrast, the Notes represented by the Global Note are
expected to trade in DTC's Same-Day Funds Settlement System, and any permitted
secondary market trading activity in such Notes will, therefore, be required by
DTC to be settled in immediately available funds. The Company expects that
secondary trading in the Certificated Notes will also be settled in immediately
available funds.

Governing Law

The Indenture, the Notes and the Guarantees will be governed by the law of
the State of New York.

<PAGE>
Certain Definitions

Set forth below are certain defined terms used in the Indenture.

"Acquired Indebtedness" means, with respect to any specified Person, (i)
any Indebtedness or Disqualified Stock of any other Person existing at the time
such other Person is merged with or into or becomes a Subsidiary of such
specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Subsidiary of such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person, and in either
case for purposes of the Indenture, shall be deemed to be incurred by such
specified Person at the time such other Person is merged with or into or becomes
a Subsidiary of such specified Person or at the time such asset is acquired by
such specified Person, as the case may be.

"Advances on Purchases of Tobacco" means loans, advances and extensions of
credit made by the Company or any of its Subsidiaries to growers and other
suppliers of tobacco (including Affiliates) and tobacco growers' cooperatives,
whether short-term or long-term, in the ordinary course of business to finance
the growing or processing of tobacco.

"Affiliate" of any specified Person means (i) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any other Person who is a director or
executive officer of (a) such specified Person or (b) any Person described in
the preceding clause (i). For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of any class, or any series of any class, of
equity securities of a Person, whether or not voting, shall be deemed to be
control.

"Asset Sale" means, with respect to any Person, the sale, lease, conveyance
or other disposition, that does not constitute a Restricted Payment or an
Investment, by such Person of any of its assets (including, without limitation,
by way of a Sale and Leaseback Transaction and including the issuance, sale or
other transfer of any Equity Interests in any Subsidiary) other than to the
Company (including the receipt of proceeds of insurance paid on account of the
loss of or damage to any asset and awards of compensation for any asset taken by
condemnation, eminent domain or similar proceeding, and including the receipt of
proceeds of business interruption insurance), in each case, in one or a series
of related transactions; provided, that notwithstanding the foregoing, the term
"Asset Sale" shall not include: (a) the sale, lease, conveyance, disposition or
other transfer of all or substantially all of the assets of the Company, in
accordance with the terms of the covenant entitled "Merger, Consolidation or
Sale of Assets," (b) the sale or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business consistent with
past practice, (c) a transfer of assets by the Company to a Wholly Owned
Subsidiary of the Company or by a Wholly Owned Subsidiary of the Company to the
Company or to another Wholly Owned Subsidiary of the Company, (d) an issuance of
Equity Interests by a Wholly Owned Subsidiary of the Company to the Company or
to another Wholly Owned Subsidiary of the Company, provided that the
consideration paid by the Company or such Wholly Owned Subsidiary of the Company
for such Equity Interests shall be deemed to be an Investment or (e) the sale or
other disposition of cash or Cash Equivalents.

"Attributable Indebtedness" means, in respect of a Sale and Leaseback
Transaction at the time of determination thereof, the greater of (i) the
capitalized amount in respect of such transaction that would appear on the face
of a balance sheet of the lessee in accordance with GAAP and (ii) the present
value (discounted at the interest rate borne by the Notes, compounded annually)
of the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended).

"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.

"Capital Stock" means (i) in the case of a corporation, capital stock, (ii)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited) and (iv) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.

"Cash Equivalent" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities not more than twelve
months from the date of acquisition, (b) U.S. dollar denominated (or foreign
currency fully hedged) time deposits, certificates of deposit, Eurodollar time
deposits or Eurodollar certificates of

<PAGE>
deposit of (i) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500 million or (ii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"Approved Lender"), in each case with maturities of not more than twelve months
from the date of acquisition, (c) commercial paper issued by any Approved Lender
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within twelve months of the date of acquisition, (d) shares of money
market mutual funds having assets in excess of $2 billion and (e) deposits,
including interest-bearing deposits, maintained in the ordinary course of
business in banks.

"Change of Control" means such time as:

(i) any Person or group (within the meaning of Section 13(d) or 14(d)
of the Exchange Act) (other than one or more members of the Monk Family)
has become, directly or indirectly, the beneficial owner, by way of merger,
consolidation or otherwise, of 30% or more of the voting power of the
Voting Stock of the Company on a fully-diluted basis, after giving effect
to the conversion and exercise of all outstanding warrants, options and
other securities of the Company convertible into or exercisable for Voting
Stock of the Company (whether or not such securities are then currently
convertible or exercisable); or

(ii) the sale, lease or transfer of all or substantially all of the
consolidated assets of the Company to any Person or group; or

(iii) during any period of two consecutive calendar years, individuals
who at the beginning of such period constituted the Board of Directors of
the Company, together with any new members of such Board of Directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
members of such Board of Directors then still in office who either were
directors at the beginning of such period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority of the directors of the Company then in office; or

(iv) the Company consolidates with or merges with or into another
Person or any Person consolidates with, or merges with or into, the Company
(in each case, whether or not in compliance with the terms of the
Indenture), in any such event pursuant to a transaction in which
immediately after the consummation thereof Persons owning a majority of the
Voting Stock of the Company immediately prior to such consummation shall
cease to own a majority of the Voting Stock of the Company or the surviving
entity if other than the Company.

"Consolidated EBITDA" means, with respect to any Person for any period, the
sum, without duplication, of (i) the Consolidated Net Income for such period,
plus (ii) the Consolidated Interest Expense for such period, plus (iii)
amortization of deferred financing charges for such period, plus (iv) provision
for taxes based on income or profits for such period (to the extent such income
or profits were included in computing Consolidated Net Income for such period),
plus (v) consolidated depreciation, amortization and other noncash charges of
such Person and its Subsidiaries required to be reflected as expenses on the
books and records of such Person, minus (vi) cash payments with respect to any
nonrecurring, noncash charges previously added back pursuant to clause (v), and
excluding (vii) the impact of foreign currency translations. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization and other noncash charges of, a Subsidiary of a
Person shall be added to Consolidated Net Income to compute Consolidated EBITDA
only to the extent (and in the same proportion) that the Net Income of such
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to such Person by such Subsidiary without prior
approval (unless such approval has been obtained), pursuant to the terms of its
charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to that Subsidiary or its
stockholders.

"Consolidated Interest Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated EBITDA of such Person and its
Subsidiaries for such period to the Consolidated Interest Expense of such Person
and its Subsidiaries for such period. If the Company or any of its Subsidiaries
incurs, assumes, guarantees or repays or redeems any Indebtedness (other than
revolving credit borrowings) or issues or redeems preferred stock subsequent to
the commencement of the four-quarter reference period for which the Consolidated
Interest Coverage Ratio is being calculated but on or prior to the date on which
the event for which the calculation of the Consolidated Interest Coverage Ratio
is made (the "Calculation Date"), then the Consolidated Interest Coverage Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
guarantee, repayment or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same

<PAGE>
had occurred at the beginning of the applicable four-quarter reference period,
provided, however, that in making such computation on a pro forma basis, the
Consolidated Interest Expense of such Person attributable to interest on any
Indebtedness bearing a floating interest rate and which was not actually
outstanding during all or any part of such four-quarter reference period shall
be computed on a pro forma basis as if the rate in effect on the date of
computation (after giving effect to any hedge in respect of such Indebtedness
that will, by its terms, remain in effect until the earlier of the maturity of
such Indebtedness or the date one year after the date of such determination) had
been the applicable rate during that portion of such four-quarter reference
period when such Indebtedness was not actually outstanding. For purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period, (ii) the Consolidated EBITDA attributable
to discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation Date, shall be
excluded, and (iii) the Consolidated Interest Expense attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be obligations of the referent Person or any of its
Subsidiaries following the Calculation Date.

"Consolidated Interest Expense" means, with respect to any Person for any
period the consolidated interest expense of such Person and its Subsidiaries for
such period determined in accordance with GAAP (net of any interest income),
plus, to the extent not included in such interest expense (i) amortization of
original issue discount, noncash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations and any Attributable Indebtedness,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or banker's acceptance financings, and net payments (if any) pursuant
to Hedging Obligations, but excluding amortization of deferred financing charges
for such period, (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, (iii) any interest expense
on Indebtedness of another Person that is guaranteed by such Person or one of
its Subsidiaries or secured by a Lien on assets of such Person or one of its
Subsidiaries (whether or not such guarantee or Lien is called upon), and (iv)
the product of (a) all cash dividend payments (and noncash dividend payments in
the case of a Person that is a Subsidiary) on any series of preferred stock of
such Person payable to a party other than the Company or a Wholly Owned
Subsidiary, multiplied by (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal.

"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such
period, on a consolidated basis, determined in accordance with GAAP; provided
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary or
that is accounted for by the equity method of accounting shall be included only
to the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly Owned Subsidiary thereof, (ii) the Net Income of any
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental approval
(unless such approval has been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, and (iv) the cumulative effect of a change in
accounting principles shall be excluded.

"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups subsequent
to the date of the Indenture in the book value of any asset owned by such Person
or a consolidated Subsidiary of such Person (other than purchase accounting
adjustments made, in connection with any acquisition of any entity that becomes
a consolidated Subsidiary of such Person after the date of the Indenture, to the
book value of the assets of such entity), (y) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except, in
each case, Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the foregoing
determined on a consolidated basis in accordance with GAAP.

<PAGE>
"Consolidated Tangible Net Worth" means, with respect to any Person as of
any date, the sum of (i) Consolidated Net Worth, minus (ii) the amount of such
Person's intangible assets at such date, including, without limitation, goodwill
(whether representing the excess of cost over book value of assets acquired or
otherwise), capitalized expenses, patents, trademarks, tradenames, copyrights,
franchises, licenses and deferred charges (such as, without limitation,
unamortized costs and costs of research and development), all determined for
such Person on a consolidated basis in accordance with GAAP.

"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.

"Disqualified Stock" means (i) with respect to any Person, Capital Stock of
such Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the date which is one year after the latest
date on which the Notes mature and (ii) with respect to any Subsidiary of such
Person, any Capital Stock other than any common stock with no preference,
privileges, or redemption or repayment provisions.

"Eligible Inventory" means, as of any date, all inventory of the Company
and any of its Subsidiaries, wherever located, valued in accordance with GAAP
and shown on the balance sheet of the Company for the quarterly period most
recently ended prior to such date for which financial statements of the Company
are available.

"Eligible Receivables" means, as of any date, all accounts receivable of
the Company and any of its Subsidiaries arising out of the sale of inventory in
the ordinary course of business, valued in accordance with GAAP and shown on the
balance sheet of the Company for the quarterly period most recently ended prior
to such date for which financial statements of the Company are available.

"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock), whether outstanding prior
to, on or after the date of the Indenture.

"Exempt Affiliate Transactions" means (i) transactions between or among the
Company and/or its Wholly Owned Subsidiaries, (ii) advances to officers of the
Company or any Subsidiary of the Company in the ordinary course of business to
provide for the payment of reasonable expenses incurred by such persons in the
performance of their responsibilities to the Company or such Subsidiary or in
connection with any relocation, (iii) fees and compensation paid to and
indemnity provided on behalf of directors, officers or employees of the Company
or any Subsidiary of the Company in the ordinary course of business, (iv) any
employment agreement that is in effect on the date of the Indenture in the
ordinary course of business and any such agreement entered into by the Company
or a Subsidiary of the Company after the date of the Indenture in the ordinary
course of business of the Company or such Subsidiary and (v) any Restricted
Payment that is not prohibited by the covenant set forth under the caption
"Restricted Payments" above.

"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date of the Indenture, until such amounts are repaid.

"GAAP" means United States generally accepted accounting principles,
consistently applied, as set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, that are applicable to the circumstances as of the date of
determination, provided that, except as specifically provided in the Indenture,
all calculations made for purposes of determining compliance with the covenants
set forth in Article IV and Section 5.01 of the Indenture (which include the
covenants described above under " -- Certain Covenants") shall use GAAP as in
effect as of the date of the Indenture for financial statements for fiscal years
ending on or after December 31, 1996, but that for such purposes of determining
compliance, GAAP shall not include Statement of Financial Accounting Standards
No. 121.

"guarantee" means any obligation, contingent or otherwise, of any Person,
directly or indirectly guaranteeing any Indebtedness of any other Person,
including any such obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such other Person
(whether arising by agreement to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for purposes of assuring in any other manner the obligee of
such Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in

<PAGE>
whole or in part); provided, however, that the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb shall have a correlative meaning.

"Guarantee" means the guarantee of the Notes by each Guarantor under the
Indenture.

"Guarantors" means DIMON International, Inc., Florimex Worldwide, Inc. and
each Material Domestic Subsidiary formed or acquired (and each other Person that
becomes a Material Domestic Subsidiary) after the date of the Indenture,
provided that any Material Domestic Subsidiary so acquired which is prohibited
from entering into a Guarantee pursuant to restrictions contained in any debt
instrument in existence at the time such Material Domestic Subsidiary was so
acquired and not entered into in anticipation or contemplation of such
acquisition shall not be required to become a Guarantor so long as any such
restriction is in existence and to the extent of any such restriction.

"Hedging Obligations" means, with respect to any Person, the obligations of
such Person entered into in the ordinary course of business under (i) interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements and other similar financial agreements or arrangements designed to
protect such Person against, or manage the exposure of such Person to,
fluctuations in interest rates, (ii) forward exchange agreements, currency swap,
currency option and other similar financial agreements or arrangements designed
to protect such Person against, or manage the exposure of such Person to,
fluctuations in foreign currency exchange rates, and (iii) forward contracts,
commodity swap, commodity option and other similar financial agreements or
arrangements designed to protect such Person against, or manage the exposure of
such Person to, fluctuations in commodity prices.

"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or Attributable Indebtedness with respect
to Sale and Leaseback Transactions, or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable incurred
in the ordinary course of business, if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would appear
as a liability upon a balance sheet of such Person prepared in accordance with
GAAP, as well as all indebtedness of others secured by a Lien on any asset of
such Person (whether or not such indebtedness is assumed by such Person) and, to
the extent not otherwise included, the guarantee by such Person of any
indebtedness of any other Person.

"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or indirect
loans (including guarantees of Indebtedness or other obligations), advances or
capital contributions (excluding advances to officers and employees of the type
specified in clause (ii) of the definition of Exempt Affiliate Transactions),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment.

"Joint Venture" means a single-purpose corporation, partnership or other
legal arrangement hereafter formed by the Company or any of its Subsidiaries
with another Person in order to conduct a common venture or enterprise with such
Person through a separate legal entity.

"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

"Material Domestic Subsidiary" means any Subsidiary of the Company which is
organized under the laws of the United States of America, any state thereof or
the District of Columbia and would constitute a "significant subsidiary" of the
Company as defined in Rule 1.02 of Regulation S-X promulgated by the Commission
except that for purposes of this definition all reference therein to ten (10)
percent shall be deemed to be references to five (5) percent.

"Material Foreign Subsidiary" means any Subsidiary of the Company, other
than any Subsidiary which is organized under the laws of the United States of
America, any state thereof or the District of Columbia, which constitutes a
"significant subsidiary" of the Company as defined in Rule 1.02 of Regulation
S-X promulgated by the Commission.

<PAGE>
"Monk Family" means A.C. Monk III, R.T. Monk, Jr., W.C. Monk and their
spouses, lineal descendants (including adoptive children), parents and siblings
and their heirs, legatees, legal representatives and all trusts established by
any of them for estate planning purposes of which any such individuals are the
sole beneficiaries or grantors.

"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends, excluding,
however, (i) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (a) any Asset
Sale (including, without limitation, dispositions pursuant to any Sale and
Leaseback Transaction) or (b) the disposition of any securities by such Person
or any of its Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Subsidiaries and (ii) any extraordinary gain or loss,
together with any related provision for taxes on such extraordinary gain or
loss; provided that in calculating Net Income, the restructuring charges
incurred in connection with the merger of Dibrell and Monk-Austin on April 1,
1995, shall be excluded from such calculation to the extent such charges do not
exceed $38.4 million (which is composed of $23.4 million in various charges for
the fiscal year of the Company ended June 30, 1995, additional charges of $5.6
million for the nine months ended March 31, 1996 and an estimated $9.4 million
in additional anticipated restructuring charges).

"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any noncash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees, and sales commissions), taxes paid or payable as a result thereof,
and any reserve for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP.

"New Credit Facility" means the Credit Agreement, dated as of March 15,
1996, among the Company as borrower thereunder, NationsBank, N.A., as
administrative agent, Bank of America NT&SA, First Union National Bank of
Virginia and Crestar Bank, as co-agents, and the lenders party thereto,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced, restated or refinanced from time to time.

"Obligations" means any principal, premiums, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"Permitted Investments" means (i) any Investments in the Company; (ii) any
Investments in Cash Equivalents; (iii) Investments made as a result of the
receipt of noncash consideration from an Asset Sale that was made pursuant to
and in compliance with the covenant described above under the caption
" -- Repurchase at the Option of Holders -- Asset Sales"; (iv) Investments
(other than Advances on Purchases of Tobacco) outstanding as of the date of the
Indenture; (v) Investments in Wholly Owned Subsidiaries of the Company and any
entity that (a) is engaged in the same or a similar line of business as the
Company or any of its Subsidiaries was engaged in on the date of the Indenture
and which has not been discontinued on or prior to the date of such Investment
or any reasonable extensions or expansions thereof and (b) as a result of such
Investment, is a Wholly Owned Subsidiary of the Company; (vi) investments made
in the ordinary course of business in export notes, trade credit assignments,
bankers' acceptances, guarantees and instruments of a similar nature issued in
connection with the financing of international trading transactions by (a) any
commercial bank or trust company (or any Affiliate thereof) organized under the
laws of the United States of America, any state thereof, or the District of
Columbia having capital and surplus in excess of $100,000,000 or (b) any
international bank of recognized standing ranking among the world's 100 largest
commercial banks in terms of total assets; and (vii) any Advances on Purchases
of Tobacco, but only to the extent that the aggregate principal amount of such
advances outstanding at any time to any Person and such Person's Affiliates does
not exceed 15% of the Consolidated Tangible Net Worth of the Company for the
most recently ended fiscal quarter for which internal financial statements are
available.

"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount of such Permitted Refinancing Indebtedness does not exceed the
principal amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness (x) has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded, (y) does not have a stated maturity earlier than
the stated maturity of the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded, and (z) does not permit redemption or other
retirement (including pursuant to any required offer to purchase to be made by
the Company or a Subsidiary of the Company) of such Indebtedness at the option
of the holder thereof prior to the final stated maturity of the

<PAGE>
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, other than a redemption or other retirement at the option of the
holder of such Indebtedness (including pursuant to a required offer to purchase
made by the Company or a Subsidiary of the Company) which is conditioned upon a
change of control of the Company pursuant to provisions substantially similar to
those contained in the Indenture described under " -- Repurchase at the Option
of Holders -- Change of Control" above; (iii) if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded is subordinated in
right of payment to the Notes, such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and is subordinated
in right of payment to, the Notes on terms at least as favorable to the Holders
of Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and (iv)
such Indebtedness is incurred either by the Company or by the Subsidiary of the
Company who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.

"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

"Purchase Money Obligation" of any Person means any obligation of such
Person to any seller or any other Person incurred or assumed to finance the
construction and/or acquisition of real or personal property constituting plant
or equipment to be used in the business of such Person or any of its
Subsidiaries (excluding accounts payable to trade creditors incurred in the
ordinary course of business), which obligation is secured by a Lien on such
property constructed or acquired.

"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such
lender or investor is a party providing for the leasing by such Person of any
property or asset of such Person which has been or is being sold or transferred
by such Person more than 180 days after the acquisition thereof or the
completion of construction or commencement of operation thereof to such lender
or investor or to any Person to whom funds have been or are to be advanced by
such lender or investor on the security of such property or asset. The stated
maturity of such arrangement shall be the date of the last payment of rent or
any other amount due under such arrangement prior to the first date on which
such arrangement may be terminated by the lessee without payment of a penalty.

"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).

"U.S. Government Obligations" means (i) securities that are (a) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof; and (ii) depositary receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (i) above and held
by such bank for the account of the holder of such depositary receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such
depositary receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal or interest of
the U.S. Government Obligation evidenced by such depositary receipt.

"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the product
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payments at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.

"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or, in the
case of Subsidiaries that are not organized under the laws of the United States
of America, any state thereof or the District of Columbia, by one or more
nominees of such Person.

<PAGE>
DESCRIPTION OF OTHER INDEBTEDNESS

New Credit Facility

To ensure long-term liquidity, the Company entered into the $240 million
New Credit Facility effective March 15, 1996. The New Credit Facility replaced
the Company's $250 million Former Credit Facility. The Company used the Former
Credit Facility to reclassify $250 million of short-term debt to long-term debt
and did not borrow under it. The Company generally uses the New Credit Facility
to reclassify similarly $240 million of its short-term debt. The interest rates
available under the New Credit Facility depend on the type of advance selected
and are based either on the agent bank's base lending rate (which was 8.25% at
March 25, 1996, and is adjusted with changes in interest rates generally) or
LIBOR plus 0.75%, through March 15, 1997, and thereafter plus a spread of 0.45%
to 1.25% based on the ratings assigned to the Company's outstanding senior debt
or on its consolidated interest coverage ratio. The New Credit Facility is
subject to certain commitment fees and covenants that among other things require
the Company to maintain minimum working capital and tangible net worth amounts,
require specific liquidity and long-term solvency ratios and restrict
acquisitions by the Company. The New Credit Facility terminates on March 15,
1998, but may be extended thereafter, year to year, upon approval of the
Lenders. As of April 30, 1996, there were no borrowings outstanding under the
New Credit Facility.

Short-Term Debt

The Company incurs short-term debt to finance its seasonally adjusted
working capital needs under unsecured lines of credit with several banks. At
June 30, 1995, the Company had seasonally adjusted unsecured uncommitted
short-term lines of credit of $876 million with several banks. At such date, the
Company had borrowed $234 million under these lines of credit with interest
rates ranging from 4.3% to 9.8%. At June 30, 1995, the Company had an additional
$509 million available under the lines of credit, net of $133 million of standby
letters of credit and guarantees that reduce the amounts available under the
lines of credit.

At March 31, 1996, the Company had seasonably adjusted unsecured
uncommitted short-term lines of credit of $876 million. At such date, the
Company had borrowed $101 million under these lines of credit with interest
rates ranging from 5.65% to 22.5%. At March 31, 1996, the Company had an
additional $613 million available under the lines of credit net of $162 million
of standby letters of credit and guarantees that reduce the amounts available
under the lines of credit.

UNDERWRITING

Under the terms and subject to the conditions contained in the Underwriting
Agreement dated May 23, 1996 (the "Underwriting Agreement"), NationsBanc Capital
Markets, Inc. ("NCMI"), BA Securities, Inc. ("BA Securities") and First Union
Capital Markets Corp. ("First Union") (collectively, the "Underwriters"), have
severally agreed to purchase from the Company, and the Company has agreed to
sell to them, severally, the principal amount of Notes set forth opposite their
names below. Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for the entire principal amount of
the Notes, if any Notes are purchased.

<TABLE>
<CAPTION>
Principal
Amount
<S> <C>
NationsBanc Capital Markets, Inc. .......................................................... $ 90,000,000
BA Securities, Inc. ........................................................................ 20,000,000
First Union Capital Markets Corp. .......................................................... 15,000,000
Total....................................................................................... $125,000,000
</TABLE>

The Underwriters propose initially to offer the Notes directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of 0.25% of the
principal amount of the Notes. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of 0.125% of the principal amount of the
Notes to certain other dealers. After the initial public offering of the Notes,
the initial public offering price and such concessions may be changed.

The Company and the Guarantors in existence on the closing date of the
Offering have agreed, jointly and severally, to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act.

There is currently no trading market for the Notes. The Company does not
intend to list the Notes on any securities exchange. The Company has been
advised by the Underwriters that the Underwriters currently intend to make a
market in the

<PAGE>
Notes; however, the Underwriters are not obligated to do so and may discontinue
any such market making at any time without notice. No assurance can be given as
to the development or liquidity of any trading market for the Notes.

NCMI, BA Securities and First Union and their affiliates provide or have
provided banking, advisory, and other financial services to the Company and
certain of its affiliates in the ordinary course of business. NationsBank, N.A.,
an affiliate of NCMI, acted as a lender and Administrative Agent under the
Company's Former Credit Facility and will act as a lender and Administrative
Agent under the New Credit Facility. NCMI acted as a Co-Arranger under the
Company's Former Credit Facility, for which it has received customary fees and
will act in a similar capacity under the New Credit Facility, for which it will
receive customary fees. Bank of America NT&SA, an affiliate of BA Securities,
will act as a co-agent under the New Credit Facility. First Union National Bank
of Virginia, an affiliate of First Union, acted as a lender under the Company's
Former Credit Facility and will act as a co-agent under the New Credit Facility.
In addition, NationsBank, N.A., Bank of America NT&SA, and First Union National
Bank of Virginia provide unsecured uncommitted short-term lines of credit to the
Company which it draws on from time to time in the ordinary course of business.

Under the Rules of Fair Practice of the National Association of Securities
Dealers, Inc. (the "NASD"), if more than 10% of the net proceeds of a public
offering of debt securities, not including underwriting compensation, are
intended to be paid to members of the NASD or affiliated or associated persons
that are participating in the distribution of the offering, the yield at which
the debt securities are distributed to the public must be no lower than that
recommended by a "qualified independent underwriter", as defined in Section 2(o)
of Schedule E to the Bylaws of the NASD. NationsBank, N.A., Bank of America
NT&SA, and First Union National Bank of Virginia, are expected to receive in the
aggregate more than 10% of the net proceeds of the offering as a result of the
repayment by the Company of outstanding indebtedness under the unsecured
uncommitted short-term lines of credit provided by NationsBank, N.A., Bank of
America NT&SA and First Union National Bank of Virginia, respectively.
Accordingly, Wheat, First Securities, Inc. ("Wheat") has agreed to act as the
qualified independent underwriter in connection with this offering. The yield on
the Notes, when sold to the public at the public offering price set forth on the
cover of this Prospectus, will be no lower than that recommended by Wheat.
Wheat, as the qualified independent underwriter, has performed due diligence
with respect to the information contained herein pursuant to the applicable
requirements of the NASD and has participated in the preparation of the
Registration Statement of which this Prospectus is a part.

Wheat has, from time to time, provided financial advisory and investment
banking services to the Company and certain of its affiliates for which it
received customary fees. Wheat entered into a Standby Agreement, dated February
9, 1996, with the Company in connection with the Company's call for redemption
of the Debentures. No shares of Common Stock were purchased by Wheat pursuant to
that agreement. Investors converted approximately 99.85% of the Debentures into
shares of Common Stock. The Company funded the redemption price for the
remaining Debentures from working capital.

LEGAL MATTERS

The validity of the Notes and Guarantees offered hereby will be passed upon
for the Company by Hunton & Williams, Richmond, Virginia, and for the
Underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New York.

<PAGE>
EXPERTS

The financial statements, including financial statement schedules included
in this Prospectus for the fiscal year ended June 30, 1995, except as they
relate to the former Dibrell's financial statements as of June 30, 1994, and for
each of the two years in the period ended June 30, 1994, have been audited by
Price Waterhouse LLP, independent accountants, and insofar as they relate to
former Dibrell financial statements referred to above, by Ernst & Young LLP,
independent accountants, as stated in their respective reports appearing herein,
and have been so included on the authority of such firms as experts in auditing
and accounting.

The financial statements of Austro-Turk Tutun Anonim Sirketi for the year
ended December 31, 1994, included in this Prospectus have been audited by Omer
Baylan & Associates, independent accountants, as stated in their report
appearing herein and have been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

The financial statements of Austro Hellenique de Tabac S.A. Business Unit
for the year ended December 31, 1994, included in this Prospectus have been
audited by Deloitte & Touche, independent accountants, as stated in their report
appearing herein and have been so included in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information concerning the Company may also be inspected at
the offices of the New York Stock Exchange, Inc. at 20 Broad Street, New York,
New York 10005. The Company's Common Stock is traded on the New York Stock
Exchange under the symbol "DMN."

The Company has filed with the Commission in Washington, D.C. a
Registration Statement (herein, together with all amendments and exhibits
thereto, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Notes to which
this Prospectus relates. As permitted by the Rules and Regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement, including the exhibits and schedules thereto. Such
documents may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates or may be
examined without charge at the public reference facilities of the Commission.

<PAGE>

DIMON INCORPORATED AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Annual Report
Report of Independent Accountants.................................................................................... F-3
Statement of Consolidated Income for the years ended June 30, 1995, 1994 and 1993.................................... F-5
Consolidated Balance Sheets as of June 30, 1995 and 1994............................................................. F-6
Statement of Consolidated Stockholders' Equity for the years ended June 30, 1995, 1994
and 1993.......................................................................................................... F-8
Statement of Consolidated Cash Flows for the years ended June 30, 1995, 1994 and 1993................................ F-9
Notes to Consolidated Financial Statements........................................................................... F-10

Quarterly Financial Statements
Statement of Consolidated Income for the nine months ended March 31, 1996 and 1995 (unaudited)....................... F-43
Consolidated Balance Sheets as of March 31, 1996 (unaudited) and June 30, 1995....................................... F-44
Statement of Consolidated Cash Flows for the nine months ended March 31, 1996,
and 1995 (unaudited).............................................................................................. F-46
Notes to Consolidated Financial Statements (unaudited)............................................................... F-47

Pro Forma Condensed Consolidated Financial Information regarding the disposition of
Rio Grande Tabacalera S.A.
Pro Forma Condensed Consolidated Statement of Operations for the year ended June 30, 1995 (unaudited)................ F-59
Pro Forma Condensed Consolidated Statement of Operations for the nine months ended
March 31, 1996 (unaudited)........................................................................................ F-60
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)........................................... F-61

Pro Forma Condensed Consolidated Financial Information regarding the acquisitions of Austro-Turk Tutun A.S. and
Austro-Hellenique De Tabac S.A.
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1994 (unaudited)....................................... F-63
Pro Forma Combined Condensed Statement of Operations for the year ended June 30, 1994 (unaudited).................... F-64
Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)........................................... F-65
Report of Independent Accountant..................................................................................... F-66
Austro-Turk Tutun A.S., Balance Sheet dated December 31, 1994................................................. F-68
Austro-Turk Tutun A.S., Profit and Loss Statement for the year ended December 31, 1994........................ F-69
Austro-Turk Tutun A.S. Notes to the Financial Statements...................................................... F-70
Report of Independent Auditors....................................................................................... F-79
Austro-Hellenique De Tabac S.A. Balance Sheet dated December 31, 1994................................................ F-80
Austro-Hellenique De Tabac S.A. Profit and Loss Statements for the year ended
December 31, 1994................................................................................................. F-81
Austro-Hellenique De Tabac S.A. Notes to the Financial Statements.................................................... F-82
</TABLE>

F-1

<PAGE>
Annual Report

F-2

<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
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.

/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

F-3

<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

F-4

<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.

F-5

<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>

F-6

<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

F-7

<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

F-8

<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

F-9

<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.

F-10

<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.

F-11

<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>

F-12

<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.

F-13

<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>

F-14

<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.

F-15

<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

F-16

<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>

F-17

<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.

F-18

<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>

F-19

<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>

F-20

<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.

F-21

<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.

F-22

<PAGE>
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>

F-23

<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.

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.

F-24

<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
<S> <C> <C>
Options outstanding at beginning of year............................................... 1,354 1,074
Options and SARs granted............................................................... 231 299
Options exercised...................................................................... (5) (12)
Options cancelled...................................................................... (40) (7)
Options outstanding at end of year..................................................... 1,540 1,354
SARs included as outstanding at end of year............................................ 498 415
Options available for future grants at end of year..................................... 500 1,665
Options and SARs exercisable at end of year............................................ 926 392
Option and SAR market prices per share:
Date of grant........................................................................ $ 11.50 $ 16.67
Exercised (at lowest and highest market prices)...................................... 14.42- 18.23-
18.25 20.67
Cancelled (at lowest and highest market prices)...................................... 11.50-
13.87 10.00

1993
<S> <C>
Options outstanding at beginning of year............................................... 455
Options and SARs granted............................................................... 708
Options exercised...................................................................... (64)
Options cancelled...................................................................... (25)
Options outstanding at end of year..................................................... 1,074
SARs included as outstanding at end of year............................................ 329
Options available for future grants at end of year..................................... 914
Options and SARs exercisable at end of year............................................ 119
Option and SAR market prices per share:
Date of grant........................................................................ $ 16.50-
22.00
Exercised (at lowest and highest market prices)...................................... 21.50-
29.00
Cancelled (at lowest and highest market prices)......................................
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.

F-25

<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.

F-26

<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
8 7/8% 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:

F-27

<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.

F-28

<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) a 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) 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.

F-29

<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.

F-30

<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.

F-31

<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.

F-32

<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.

F-33

<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.

F-34

<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.

F-35

<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.

F-36

<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.

F-37

<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 67,321
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.

F-38

<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.

F-39

<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.

F-40

<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>

F-41

<PAGE>
Quarterly Financial Statements

F-42

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Income

Nine Months Ended March 31, 1996 and 1995

(in thousands, except per share amounts)

<TABLE>
<CAPTION>
(Unaudited)
1996 1995
First Nine First Nine
Months Months
<S> <C> <C>
Net sales of goods and services................................................................... $1,663,661 $1,547,534
Cost of goods and services sold................................................................... 1,481,128 1,404,544
182,533 142,990
Selling, administrative and general expenses...................................................... 102,736 94,883
Restructuring..................................................................................... 5,568 0
Operating Income........................................................................... 74,229 48,107
Other income:
Interest........................................................................................ 6,687 6,631
Sundry.......................................................................................... 9,854 4,569
16,541 11,200
Other deductions:
Interest........................................................................................ 38,036 34,139
Sundry.......................................................................................... 615 855
38,651 34,994
Income before income taxes, minority interest, equity in net income of investee
companies and extraordinary item................................................................ 52,119 24,313
Income taxes...................................................................................... 20,847 13,157
Income before minority interest, equity in net income of investee companies and extraordinary
item............................................................................................ 31,272 11,156
Income applicable to minority interest............................................................ 242 272
Equity in net income (loss) of investee companies, net of income taxes............................ (290) (1,121)
Income before extraordinary item.................................................................. 30,740 9,763
Extraordinary item:
Partial recovery of a previous extraordinary trade receivable write-off (net of
applicable income tax expense of $870).......................................................... 1,400 0
NET INCOME........................................................................................ $ 32,140 $ 9,763
Earnings Per Share, primary
Income before extraordinary item................................................................ $ .79 $ .26
Extraordinary item.............................................................................. .04 .00
Net Income...................................................................................... $ .83 $ .26
Earnings Per Share, assuming full dilution
Income before extraordinary item................................................................ $ .77 *
Extraordinary item.............................................................................. .03 *
Net Income...................................................................................... $ .80 *
Average number of shares outstanding:
Primary......................................................................................... 38,739 38,082
Assuming full dilution.......................................................................... 42,467 42,294
Cash dividends per share.......................................................................... $ .405 $ .27
See notes to consolidated financial statements
</TABLE>

* Computation of earnings per share is anti-dilutive for first nine months of
fiscal year 1995.

F-43

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet

(in thousands)

<TABLE>
<CAPTION>
March 31 June 30
1996 1995
<S> <C> <C>
(unaudited)
ASSETS
Current assets
Cash and cash equivalents....................................................................... $ 12,148 $ 42,326
Notes receivable................................................................................ 1,134 2,002
Trade receivables, net of allowances............................................................ 195,999 182,750
Inventories:
Tobacco...................................................................................... 343,484 410,431
Other........................................................................................ 20,429 14,179
Advances on purchases of tobacco................................................................ 74,470 44,379
Recoverable income taxes........................................................................ 1,320 2,007
Prepaid expenses................................................................................ 13,772 33,045
Total current assets....................................................................... 662,756 731,119
Investments and other assets
Equity in net assets of investee companies...................................................... 8,287 22,622
Other investments............................................................................... 4,242 1,749
Notes receivable................................................................................ 7,076 6,107
Other........................................................................................... 24,986 28,147
44,591 58,625
Intangible assets
Excess of cost over related net assets of business acquired..................................... 23,743 26,167
Production and supply contracts................................................................. 36,406 36,340
Pension asset................................................................................... 4,219 4,219
64,368 66,726
Property, plant, and equipment
Land............................................................................................ 20,254 19,432
Buildings....................................................................................... 141,437 135,808
Machinery and equipment......................................................................... 166,226 169,181
Allowances for depreciation..................................................................... (100,395) (101,372)
227,522 223,049
Deferred charges and taxes........................................................................ 12,054 14,089
$1,011,291 $1,093,608
</TABLE>

F-44

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet

(in thousands)

<TABLE>
<CAPTION>
March 31 June 30
1996 1995
<S> <C> <C>
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable to banks.......................................................................... $ 101,288 $ 233,736
Accounts payable:
Trade........................................................................................ 59,371 56,559
Officers and employees....................................................................... 26,411 20,714
Other........................................................................................ 40,732 13,173
Advances from customers......................................................................... 76,639 49,224
Accrued expenses................................................................................ 41,962 57,359
Income taxes.................................................................................... 8,609 11,199
Long-term debt current.......................................................................... 8,982 11,558
Total current liabilities.................................................................... 363,994 453,522

Long-term debt
Revolving Credit Notes and Other................................................................ 278,440 292,528
Convertible Subordinated Debentures............................................................. 0 56,370
278,440 348,898

Deferred credits:
Income taxes.................................................................................... 15,614 10,731
Compensation and other benefits................................................................. 41,467 40,715
57,081 51,446
Minority interest in subsidiaries................................................................. 544 936
Stockholders' equity

Serial Preferred Stock -- without par value:
Mar. 31 Jun. 30
Authorized shares..................................................... 10,000 10,000
Issued shares......................................................... -0- -0-

Common Stock -- without par value:
Mar. 31 Jun. 30
Authorized shares...................................................... 125,000 125,000
Issued shares.......................................................... 42,349 38,092
...................................... 136,693 80,030
Retained earnings............................................................................... 174,050 157,880
Equity-currency conversions..................................................................... 1,774 1,565
Additional minimum pension liability............................................................ (1,285) (1,286)
Unrealized gain on investments.................................................................. 0 617
311,232 238,806
$1,011,291 $1,093,608
</TABLE>

See notes to consolidated financial statements

F-45

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Statement of Consolidated Cash Flows

Nine Months Ended March 31, 1996 and 1995

(in thousands)

<TABLE>
<CAPTION>
March 31 March 31
1996 1995
<S> <C> <C>
(unaudited)
Operating activities
Net Income.................................................................................... $ 32,140 $ 9,763
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization.............................................................. 24,234 21,891
Deferred items............................................................................. 1,193 1,750
Loss (gain) on foreign currency transactions............................................... (73) 9,835
Gain on disposition of fixed assets........................................................ (1,385) (866)
Gain on sale of investee................................................................... (3,751) 0
Gain on sale of investment................................................................. (1,090) 0
Undistributed earnings of investees........................................................ 290 1,121
Dividends received from investees.......................................................... 289 400
Income applicable to minority interest..................................................... 242 272
Bad debt expense........................................................................... 1,078 1,469
Increase in accounts receivable............................................................ (13,994) (16,431)
Increase in inventories and advances on purchases of tobacco............................... 31,102 68,280
Decrease in recoverable taxes.............................................................. 103 3,761
Decrease (increase) in prepaid expenses.................................................... 12,965 (6,819)
Increase (decrease) in accounts payable and accrued expenses............................... 34,599 10,695
Increase in advances from customers........................................................ 26,908 (16,286)
Increase in income taxes................................................................... 1,590 10,500
Other...................................................................................... 92 4,402
Net cash provided (used) by operating activities......................................... 146,532 103,737
Investing activities
Purchase of property and equipment............................................................ (20,609) (18,845)
Proceeds from sale of property and equipment.................................................. 3,273 3,286
Payments received on notes receivable and receivable from investees........................... 1,380 18,552
Advances for notes receivable................................................................. (7,892) (3,461)
Proceeds from or advances for investees, other investments and other assets................... 20,148 (1,039)
Increase in excess of cost over net assets of business acquired............................... 787 0
Purchase of minority interest in subsidiaries................................................. 0 (484)
Purchase of subsidiary........................................................................ (6,543) 0
Net cash provided (used) by investing activities......................................... (9,456) (1,991)
Financing activities
Repayment of debt............................................................................. (218,821) (151,484)
Proceeds from debt............................................................................ 67,238 106,611
Proceeds from sale of stock................................................................... 3,287 9
Cash dividends paid to minority stockholders.................................................. 0 (237)
Cash dividends paid to DIMON Incorporated stockholders........................................ (15,969) (10,190)
Net cash provided by financing activities................................................ (164,265) (55,291)
Effect of exchange rate changes on cash......................................................... (2,989) (2,701)
Increase in cash and cash equivalents........................................................... (30,178) 43,754
Cash and cash equivalents at beginning of year.................................................. 42,326 12,471
Cash and cash equivalents at end of period............................................... $ 12,148 $ 56,225
</TABLE>

See notes to consolidated financial statements

F-46

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1. Primary earnings (loss) per share are computed by dividing earnings (loss)
by the weighted average number of shares outstanding plus any common stock
equivalents during each period. The fully diluted earnings (loss) 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. The weighted average number of shares outstanding are
further increased by common stock equivalents on employee stock options.
Also, all interest expense on the debentures for the period is added to
pre-tax income and the hypothetical additional income tax expense is
deducted.

2. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.

3. On April 1, 1995, Dibrell Brothers, Incorporated (Dibrell) and Monk-Austin,
Inc. (Monk-Austin) merged into DIMON Incorporated. The merger has been
accounted for as a pooling of interests and all prior 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.

4. In June 1995, the Company provided a restructuring reserve of $17.9 million
pre-tax related primarily to eliminating duplicative facilities of tobacco
operations and a reduction in the number of employees. During the quarter
and nine months ended March 31, 1996, an additional $2.7 million and $5.6
million, respectively, pre-tax was provided for restructuring the tobacco
operations in Brazil and corporate departments, primarily for a reduction in
the number of employees, net of recoveries of $498 thousand relating
primarily to accounts receivable of closed flower locations. As of March 31,
1996, payments for the nine months of $6.8 million have been recorded as a
reduction of the restructuring reserves.

5. The results of operations for the three months and nine months ended March
31, 1996 and 1995 are not necessarily indicative of the results to be
expected for the full year and should not be relied on as a basis for
projecting year end results. The Company's operations are seasonal and
quarterly comparisons are of little value.

6. For additional information regarding accounting principles and other
financial data, see Notes to Consolidated Financial Statements in the Annual
Report on Form 10-K for the fiscal year ended June 30, 1995.

7. Certain accounts of the prior periods have been reclassified for conformity
with the financial statements of the current period.

8. The Company called the subordinated debt outstanding as of February 9, 1996,
on Form S-3 filed with the Securities and Exchange Commission. The proforma
primary earnings per share of the conversion, assuming it had taken place at
the beginning of the period, would have been $.16 for the nine months ended
March 31, 1996, or equal to the fully diluted amounts as disclosed in the
statement of consolidated income.

9. On November 7, 1995, DIMON International, Inc., a wholly owned subsidiary of
DIMON Incorporated, completed the sale of its 50% interest in Rio Grande
Tabacalera S.A. (RGT), a Brazilian processing entity, to an unrelated third
party. The Company's investment was sold for $9,000,000 in cash, recognizing
a gain on the sale of RGT of $3,113,000, net of related taxes of $630,000.

10. DIMON International, Inc. and Florimex Worldwide, Inc. (collectively, the
"Guarantors"), wholly owned subsidiaries of DIMON Incorporated, will fully
and unconditionally guarantee on a joint and several basis DIMON
Incorporated's obligations to pay principal, premium and interest relative
to the $125,000,000 8 7/8% 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:

F-47

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Nine Months Ended March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Net sales of goods and services................... $ 34 $1,195,251 $777,232 $ (308,856)a $1,663,661
Cost of goods and services sold................... (5,116)b 1,123,897 671,203 (308,856)a 1,481,128
5,150 71,354 106,029 -- 182,533
Selling, administrative and general............... 8,491 55,787 44,954 (6,496)a 102,736
Restructuring..................................... 2,097 1,000 2,471 0 5,568
(5,438) 14,567 58,604 (6,496) 74,229
Other income:
Interest........................................ 22,015 6,570 6,393 (28,291)a 6,687
Sundry.......................................... 222 2,372 13,756 (6,496)a 9,854
22,237 8,942 20,149 (34,787) 16,541
Other deductions:
Interest........................................ 20,193 24,410 21,724 (28,291)a 38,036
Sundry.......................................... 50 (2) 567 -- 615
20,243 24,408 22,291 (28,291) 38,651
Income (loss) before income taxes, minority
interest and equity in net income of investee
company......................................... (3,444) (899) 56,462 0 52,119
Income taxes...................................... (1,378) (360) 22,585 0 20,847

Income (loss) before minority interest and equity
in net income of investee companies............. (2,066) (539) 33,877 0 31,272
Income applicable to minority interest............ 0 0 242 0 242
Equity in net income (loss) of investee companies,
net of income taxes............................. 0 202 (492) 0 (290)
Equity in net income of subsidiaries.............. 34,206 33,143 0 (67,349)a 0

Extraordinary item:
Partial recovery of a previous extraordinary
trade receivable write-off (net of applicable
income tax expense of $870)................... 0 1,400 0 0 1,400

NET INCOME........................................ $ 32,140 $ 34,206 $ 33,143 $ (67,349) $ 32,140
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Change in reserves for inter-company profit in ending inventory.

F-48

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents..................... $ 2,580 $ 4,966 $ 20,285 $ (15,683)c $ 12,148
Notes receivable.............................. 35 489 26,343 (25,733)a 1,134
Trade receivables, net of allowances.......... 22,963 170,028 154,202 (151,194)a 195,999
Inventories:
Tobacco.................................... 0 85,310 258,174 0 343,484
Other...................................... 47 1,729 18,653 0 20,429

Advances on purchases of tobacco.............. 168,076 31,743 50,468 (175,817)a 74,470
Recoverable income taxes...................... 0 0 1,320 0 1,320
Prepaid expenses.............................. 2,133 1,113 10,526 0 13,772
Total current assets..................... 195,834 295,378 539,971 (368,427) 662,756
Investments and other assets
Equity in net assets of investee companies.... 0 6,032 2,255 0 8,287
Consolidated subsidiaries..................... 278,298 299,227 (246,960) (330,565)a 0
Other investments............................. 16,243 3,810 (10,804) (5,007)a 4,242
Notes receivable.............................. 74 910 6,092 0 7,076
Other......................................... 291 4,690 20,005 0 24,986
294,906 314,669 (229,412) (335,572) 44,591
Intangible assets
Excess of cost over related net assets of
business acquired.......................... 378 8,548 14,817 0 23,743
Production and supply contracts............... 0 27,408 8,998 0 36,406
Pension asset................................. 3,132 1,088 (1) 0 4,219
3,510 37,044 23,814 0 64,368
Property, plant and equipment
Land.......................................... 1,771 1,925 16,558 0 20,254
Buildings..................................... 4,740 25,761 110,936 0 141,437
Machinery and equipment....................... 5,039 49,411 111,776 0 166,226
Allowances for depreciation................... (4,632) (31,464) (64,299) 0 (100,395)
6,918 45,633 174,971 0 227,522

Deferred taxes and other deferred charges....... 11,821 0 233 0 12,054
Total assets............................. $512,989 $692,724 $509,577 $ (703,999) $1,011,291
</TABLE>

a. Inter-company eliminations, including profit in inventory.

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

F-49

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 1996

(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......................... $ 0 $ 350 $102,863 $ (1,925) $ 101,288
Accounts payable:
Trade....................................... 808 303,576 75,644 (320,657)a 59,371
Officers and employees...................... 14,174 6,298 5,939 0 26,411
Other....................................... 898 1,280 38,554 0 40,732
Advances from customers........................ 3,450 69,024 48,919 (44,754)a 76,639
Accrued expenses............................... 1,555 6,032 34,390 (15)a 41,962
Income taxes................................... (13,550)d 3,385 18,774 0 8,609
Long-term debt current......................... 4,286 0 4,696 0 8,982
Total current liabilities................. 11,621 389,945 329,779 (367,351) 363,994
Long-term debt
Revolving Credit Notes and
Other....................................... 162,386 1,068 114,986 0 278,440
Convertible Subordinated Debentures............ 0 0 0 0 0
162,386 1,068 114,986 0 278,440
Deferred Credits
Income taxes................................... 1,547 (4,538) 18,605 0 15,614
Compensation and other benefits................ 26,517 7,790 7,160 0 41,467
28,064 3,252 25,765 0 57,081
Minority interest in subsidiaries................ (314) 0 858 0 544
Stockholders' equity
Common stock................................... 0 16,514 31,483 (47,997)a 0
Paid in Capital................................ 136,693 144,621 (30,028) (114,593)a 136,693
Retained earnings.............................. 174,050 130,996 37,195 (168,191)a 174,050
Equity-currency conversions.................... 1,774 6,328 156 (6,484) 1,774
Unrealized loss on investments................. 0 0 (617) 617a 0
Additional minimum pension liability........... (1,285) 0 0 0 (1,285)
311,232 298,459 38,189 (336,648) 311,232
Total liabilities and equity.............. $512,989 $692,724 $509,577 $ (703,999) $1,011,291
</TABLE>

a. Inter-company eliminations, including profit in inventory.

d. Current deferred tax on reserves and unallocated estimated tax payments.

F-50

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Nine Months Ended March 31, 1996

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)..................................... $ 32,140 $ 34,206 $ 33,143 $ (67,349)a $ 32,140
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................... 1,730 8,048 14,456 0 24,234
Deferred items...................................... (533) 265 1,461 0 1,193
Loss (gain) on foreign currency transactions........ 46 (65 ) (54) 0 (73)
Gain on disposition of fixed assets................. (14) (227 ) (1,144) 0 (1,385)
Gain on sale of investee............................ 0 0 (3,751) 0 (3,751)
Gain on sale of investment.......................... 0 0 (1,090) 0 (1,090)
Undistributed earnings of
investees/subsidiaries............................ (34,205) (33,346 ) 492 67,349a 290
Dividends received from investee.................... 0 0 289 0 289
Income applicable to minority interest.............. 0 0 242 0 242
Bad debt expense.................................... 0 (10 ) 1,088 0 1,078
Decrease (increase) in accounts receivable.......... 132,233 (42,334 ) 1,204 (105,097)a (13,994)
Decrease (increase) in inventories and advances on
purchases of tobacco.............................. 40,031 182,069 (132,513) (58,765)a 31,102
Decrease in recoverable taxes....................... 0 0 103 0 103
Decrease (increase) in prepaid expenses............. 8,003 (473 ) 5,435 0 12,965
Increase (decrease) in accounts payable and accrued
expenses.......................................... (8,877) 211,262 (58,647) (109,139)a 34,599
Increase (decrease) in advances
from customers.................................... (429) (339,322 ) 152,952 213,707a (26,908)
Increase (decrease) in income taxes................. (3,156) 318 4,428 0 1,590
Other............................................... 0 13 79 0 92
Net cash provided (used) by operating
activities..................................... 167,249 20,404 18,173 (59,294) 146,532
Investing activities
Purchase of property and equipment.................... (111) (5,048 ) (15,450) 0 (20,609)
Proceeds from sale of property and equipment.......... 14 320 2,939 0 3,273
Payments on notes receivable and receivable from
investees........................................... 34 827 519 0 1,380
Advances for notes receivable......................... (83) (358 ) (3,184) (4,287)a (7,892)
Advances for other investments and other assets....... 5,600 (9,820 ) 28,449 (4,081)a 20,148
Decrease in excess of cost over net assets of
businesses acquired................................. 0 1,514 (727) 0 787
Purchase of subsidiary................................ 0 (6,543 ) 0 0 (6,543)
Net cash provided (used) by
investing activities........................... $ 5,454 $ (19,108 ) $ 12,546 $ (8,348) $ (9,456)
Financing Activities
Repayment of debt..................................... $ (183,968) $ (1,769 ) $ (61,159) $ 28,075a $(218,821)
Proceeds from debt.................................... 25,243 0 41,995 0 67,238
Proceeds from sale of stock........................... 3,287 0 0 0 3,287
Cash dividends paid to DIMON Incorporated
stockholders........................................ (16,013) 0 44 0 (15,969)
Net cash provided (used) by financing
activities..................................... (171,451) (1,769 ) (19,120) 28,075 (164,265)
Effect of exchange rate changes on cash................. 0 3,560 (3,568) (2,981)a (2,989)
Increase (decrease) in cash and cash
equivalents........................................... 1,252 3,087 8,031 (42,548) (30,178)
Cash and cash equivalents at beginning of year.......... 1,328 1,879 12,254 26,865 42,326
Cash and cash equivalents at end of period............ $ 2,580 $ 4,966 $ 20,285 $ (15,683) $ 12,148
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-51

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Income

Nine Months Ended March 31, 1995

(in thousands)

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

<S> <C> <C> <C> <C> <C>
Net sales of goods and services................. $ 33 $1,092,975 495,445 $(40,919) a $1,547,534
Cost of goods and services sold................. 746b 1,021,103 423,614 (40,919) a 1,404,544
(713) 71,872 71,831 0 142,990

Selling, administrative and general............. 8,564 46,186 40,133 0 94,883
(9,277) 25,686 31,698 0 48,107
Other income:
Interest...................................... 18,735 9,534 1,025 (22,663) a 6,631
Sundry........................................ 64 2,642 1,863 0 4,569
18,799 12,176 2,888 (22,663) 11,200
Other deductions:
Interest...................................... 15,062 27,345 14,395 (22,663) a 34,139
Sundry........................................ 2 35 818 0 855
15,064 27,380 15,213 (22,663) 34,994
Income (loss) before income taxes, minority
interest, equity in net income of investee
company....................................... (5,542) 10,482 19,373 0 24,313
Income taxes (benefits)......................... (2,999) 5,674 10,482 0 13,157
Income (loss) before minority interest
and equity in net income of
investee companies............................ (2,543) 4,808 8,891 0 11,156
Income applicable to minority interest.......... 0 0 272 0 272
Equity in net income (loss) of investee
companies, net of income taxes................ 65 271 (1,457) 0 (1,121)
Equity in net income of subsidiaries............ 12,241 7,162 0 (19,403) a 0
NET INCOME...................................... $ 9,763 $ 12,241 $ 7,162 $(19,403) $ 9,763
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Change in reserves for inter-company profit in ending inventory.

F-52

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 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........................ $109,571 $(73,452) e $ 20,105 $ 1c $ 56,225
Notes receivable................................. 15 492 911 0 1,418
Trade receivables, net of allowances............. 142,803 120,731 81,913 (169,826) a 175,621
Inventories:
Tobacco....................................... (2,548) c 122,812 177,310 (1,850) a 295,724
Other......................................... 0 446 8,939 0 9,385

Advances on purchases of tobacco................. 48,024 62,868 31,849 (83,433) a 59,308
Recoverable income taxes......................... 0 0 3,076 0 3,076
Prepaid expenses................................. 4,875 5,531 13,572 0 23,978
Total current assets........................ 302,740 239,428 337,675 (255,108) 624,735
Investments and other assets
Equity in net assets of investee companies....... 0 2,422 31,225 0 33,647
Consolidated subsidiaries........................ 285,179 244,422 5,007 (534,608) a 0
Other investments................................ 12,492 60 4 0 12,556
Notes receivable................................. 49 571 12,669 0 13,289
Other............................................ 433 10,742 12,213 0 23,388
298,153 258,217 61,118 (534,608) 82,880
Intangible assets
Excess of cost over related net assets of
business acquired............................. 390 1,862 9,635 0 11,887
Production and supply contracts.................. 0 27,934 9,600 0 37,534
Pension asset.................................... 2,458 0 0 0 2,458
2,848 29,796 19,235 0 51,879
Property, plant and equipment
Land............................................. 1,771 1,475 16,213 0 19,459
Buildings........................................ 5,015 25,194 101,405 0 131,614
Machinery and equipment.......................... 5,204 54,553 104,131 0 163,888
Allowances for depreciation...................... (2,122) (42,795) (54,713) 0 (99,630)
9,868 38,427 167,036 0 215,331
Deferred taxes and other deferred charges.......... 8,050 4,524 57 0 12,631
$621,659 $570,392 $585,121 $ (789,716) $987,456
</TABLE>

a. Inter-company eliminations, including profit in inventory.

b. Change in reserves for inter-company profit in ending inventory.

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

e. Book overdraft within consolidated cash management program.

F-53

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Balance Sheet

March 31, 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.................................... $ 90,900 $ 10,000 $115,531 $ 0 $216,431
Accounts payable:
Trade......................................... 4,962 50,027 63,421 (44,937) a 73,473
Officers and employees........................ 15,075 259 3,446 0 18,780
Other......................................... 245 391 13,669 (417) a 13,888
Advances from customers.......................... 52 200,792 41,739 (200,602) a 41,981
Accrued expenses................................. 1,743 13,463 15,061 (6,783) a 23,484
Income taxes..................................... (9,411)d 10,048 15,321 0 15,958
Long-term debt current........................... 5,057 0 12,506 0 17,563
Total current liabilities................... 108,623 284,980 280,694 (252,739) 421,558
Long-term debt
Revolving Credit Notes and Other................. 153,800 3,195 27,118 0 184,113
Convertible Subordinated Debentures.............. 56,475 0 0 0 56,475
210,275 3,195 27,118 0 240,588
Deferred Credits
Income taxes..................................... 95 (1,975) 11,240 0 9,360
Compensation and other benefits.................. 19,437 7,122 5,148 0 31,707
19,532 5,147 16,388 0 41,067
Minority interest in subsidiaries.................. 0 0 1,014 0 1,014
Stockholders' equity
Common stock..................................... 79,870 108,528 150,488 (259,016) a 79,870
Retained earnings................................ 202,952 163,925 106,886 (270,811) a 202,952
Equity-currency conversions...................... 637 2,126 42 (2,168) a 637
Unrealized loss on investments................... 1,144 2,491 2,491 (4,982) a 1,144
Additional minimum pension liability............. (1,374) 0 0 0 (1,374)
283,229 277,070 259,907 (536,977) 283,229
$621,659 $ 570,392 $585,121 $ (789,716) $987,456
</TABLE>

a. Inter-company eliminations, including profit in inventory.

d. Current deferred tax on reserves and unallocated estimated tax payments.

F-54

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Supplemental Combining Statement of Cash Flows

Nine Months Ended March 31, 1995

(in thousands)

<TABLE>
<CAPTION>
DIMON
Incorporated Guarantors Non-Guarantors Eliminations Total
<S> <C> <C> <C> <C> <C>
Operating Activities
Net Income (Loss)..................................... $ 9,763 $ 12,241 $ 7,162 $ (19,403) a $ 9,763
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization....................... 80 8,526 13,285 0 21,891
Deferred items...................................... (410) 1,556 604 0 1,750
Loss (gain) on foreign currency
transactions...................................... (57) 12 9,880 0 9,835
Gain on disposition of fixed assets................. 0 (279) (587) 0 (866)
Undistributed earnings (loss) of
investees/subsidiaries............................ (12,306) (7,433) 1,457 19,403a 1,121
Dividends received from investee.................... 0 0 400 0 400
Income applicable to minority interest.............. 0 0 272 0 272
Bad debt expense.................................... 0 (30) 1,499 0 1,469
Decrease (increase) in accounts receivable.......... 151,167 20,080 (46,093) (141,585) a (16,431)
Decrease (increase) in inventories and advances on
purchases of tobacco.............................. (1,455) 11,099 42,276 16,360a 68,280
Decrease in recoverable taxes....................... 1,666 0 2,095 0 3,761
Decrease (increase) in prepaid expenses............. (3,883) (1,280) (1,656) 0 (6,819)
Increase (decrease) in accounts payable and accrued
expenses.......................................... (3,727) (90,202) (8,886) 113,510a 10,695
Increase (decrease) in advances from customers...... (885) (70,193) 39,451 15,341a (16,286)
Increase (decrease) in income taxes................. (4,501) 7,874 7,127 0 10,500
Other............................................... 195 725 3,482 0 4,402
Net cash provided (used) by operating
activities..................................... 135,647 (107,304) 71,768 3,626 103,737
Investing Activities
Purchase of property and equipment.................... (74) (6,082) (12,689) 0 (18,845)
Proceeds from sale of property and equipment.......... 0 805 2,481 0 3,286
Payments received on notes receivable and receivable
from investees...................................... 11 2,083 16,458 0 18,552
Advances for notes receivable......................... 0 (1,056) (2,405) 0 (3,461)
Proceeds from or advances for investees, other
investments and other assets........................ 364 6,912 (4,637) (3,678) a (1,039)
Purchase of minority interest in subsidiaries......... 0 0 (484) 0 (484)
Net cash provided (used) by investing
activities..................................... 301 2,662 (1,276) (3,678) (1,991)
Financing Activities
Repayment of debt..................................... (26,486) (10,690) (114,308) 0 (151,484)
Proceeds from debt.................................... 4,000 40,000 62,611 0 106,611
Cash dividends paid to DIMON Incorporated
stockholders........................................ (10,190) 0 0 0 (10,190)
Cash dividends paid to minority stockholders.......... 0 0 (237) 0 (237)
Proceeds from sale of stock........................... 9 0 0 0 9
Net cash provided (used) by financing
activities..................................... (32,667) 29,310 (51,934) 0 (55,291)

Effect of exchange rate changes on cash................. 0 0 (2,701) 0 (2,701)

Increase (decrease) in cash and cash equivalents........ 103,281 (75,332) 15,857 (52) a 43,754
Cash and cash equivalents at beginning
of year............................................... 6,290 1,880 4,248 53a 12,471
Cash and cash equivalents at end of period........ $109,571 $ (73,452) $ 20,105 $ 1 $ 56,225
</TABLE>

a. Inter-company eliminations, including profit in inventory.

F-55

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

10. continued

(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.

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.

F-56

<PAGE>
DIMON INCORPORATED AND SUBSIDIARIES

Notes to Supplemental Combining Financial Statements -- Continued

(in thousands)

<TABLE>
<CAPTION>
March 31, 1996
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 22,940 $ 69,092 $ 70,678
Advances on Purchases............................................................ 168,076 22,451 29,996

Accounts Payable................................................................. (572) (294,488) (28,783)
Advances from Customers.......................................................... (3,450) -- (44,915)
</TABLE>

<TABLE>
<CAPTION>
March 31, 1995
Debit(Credit)
DIMON
Incorporated Guarantors Non-Guarantors
<S> <C> <C> <C>
Accounts Receivable.............................................................. $ 142,803 $ 73,098 $ (45,433)
Advances on Purchases............................................................ 48,024 39,222 (3,812)

Accounts Payable................................................................. (3,787) (39,891) (1,165)
Advances from Customers.......................................................... -- (162,816) (37,786)
</TABLE>

F-57

<PAGE>
Pro Forma Condensed Consolidated Financial Information
regarding the disposition of
Rio Grande Tabacalera S.A.

F-58

<PAGE>
DIMON INCORPORATED

Pro Forma Condensed Consolidated Statement of Operations

For the Year Ended June 30, 1995

(Dollars and shares in thousands except per share amounts)

(Unaudited)

<TABLE>
<CAPTION>
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Net sales of goods and services................................................. $1,927,749 $1,927,749
Cost of goods and services sold................................................. 1,757,516 1,757,516
170,233 170,233
Selling, administrative & general............................................... 132,802 132,802
Restructuring and merger related cost........................................... 25,955 25,955
Operating income................................................................ 11,476 11,476
Other income
Interest...................................................................... 7,512 7,512
Sundry........................................................................ 5,927 5,927
13,439 13,439
Other deductions
Interest...................................................................... 45,231 45,231
Sundry........................................................................ 1,848 1,848

47,079 47,079
Income (loss) before income taxes............................................... (22,164) (22,164)
Income taxes.................................................................... 5,980 5,980
Equity in net income (loss) of investee, net of tax............................. (1,805) $ 3,201(a) 1,396
Income applicable to minority interest.......................................... 216 216
Net income (loss)............................................................... ($ 30,165) $ 3,201 ($ 26,964)
Net income (loss) per share primary*............................................ ($ 0.79) ($ 0.71)
Weighted average number of shares outstanding................................... 38,100 38,100
</TABLE>

* Computation of fully diluted earnings per share is anti-dilutive

See accompanying notes to unaudited pro forma financial information

F-59

<PAGE>
DIMON INCORPORATED

Pro Forma Condensed Consolidated Statement of Operations

For the Nine Month Period Ended March 31, 1996

(Dollars and shares in thousands except per share amounts)

(Unaudited)

<TABLE>
<CAPTION>
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Net sales of goods and service...................................................... $1,663,661 $1,663,661
Cost of goods and services sold..................................................... 1,481,128 1,481,128
182,533 182,533
Selling, administrative & general................................................... 102,736 102,736
Restructuring and merger related cost............................................... 5,568 5,568
Operating income 74,229 74,229

Other income
Interest.......................................................................... 6,687 6,687
Sundry............................................................................ 9,854 9,854
16,541 16,541
Other deductions
Interest.......................................................................... 38,036 38,036
Sundry............................................................................ 615 615
38,651 38,651
Income before income taxes.......................................................... 52,119 52,119
Income taxes........................................................................ 20,847 20,847
Equity in net income (loss) of investee, net of tax................................. (290) $ 386(a) 96
Income applicable to minority interest.............................................. 242 242
Income before extraordinary item.................................................... 30,740 386 31,126
Extraordinary item:
Partial recovery of previous extraordinary trade receivable
write-off (net of applicable income tax expense of $870)....................... 1,400 1,400
Net income.......................................................................... $ 32,140 386 $ 32,526

Net income per share, primary....................................................... 0.83 0.84
Net income per share, assuming full dilution........................................ 0.80 0.81
Weighted average number of shares outstanding
Primary........................................................................... 38,739 38,739
Assuming full dilution............................................................ 42,467 42,467
</TABLE>

See accompanying notes to unaudited pro forma financial information.

F-60

<PAGE>
DIMON INCORPORATED

Notes to Pro Forma Condensed Consolidated Financial Statements

The registrant sold its 50% interest in Rio Grande Tabacalera S.A. ("RGT")
on November 7, 1995. RGT is a tobacco processing and export operation located in
Brazil.

a. The Pro Forma Condensed Consolidated Statements of Operations for the year
ended June 30, 1995 and the nine month period ended March 31, 1996 present
results of operations as if the interest in RGT had been sold prior to the
registrant's 1995 fiscal year by eliminating the Company's equity interest in
RGT losses incurred during those periods.

F-61

<PAGE>
Pro Forma Condensed Consolidated Financial Information
regarding the acquisition of
Austro-Turk Tutun A.S. and Austro Hellenique De Tabac S.A.

F-62

<PAGE>
DIMON INCORPORATED

Pro Forma Condensed Consolidated Balance Sheet

As Of June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
Combined
DIMON Austro Austro Pro Forma Pro Forma
Incorporated Hellenique Turk Adjustment Adjusted
<S> <C> <C> <C> <C> <C>
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents.................................. $ 12,471 $ 3,154 $ 665 $ 0 $ 16,290
Trade and other accounts receivables,
net..................................................... 180,845 6,302 2,431 189,578
Tobacco inventories........................................ 403,211 19,425 11,334 433,970
Recoverable income taxes................................... 6,151 6,151
Prepaid expenses and other assets.......................... 82,765 1,833 237 84,835
Total current assets.................................. 685,443 30,714 14,667 0 730,824
Investments and other assets................................. 77,399 50 77,449
Intangible Assets............................................ 57,492 17,193(1) 74,685
Property, Plant and Equipment, net........................... 209,739 1,031 3,706 214,476
Deferred taxes and other deferred charges.................... 13,743 8 13,751
Total Assets.......................................... $1,043,816 $ 31,745 $18,431 $ 17,193 $1,111,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to banks..................................... $ 255,607 $ 19,881 $15,566 $ 13,372(1) $ 304,426
Accounts payable and accrued expenses...................... 144,168 6,987 1,058 152,213
Accrued taxes on income.................................... 4,846 1,119 5,965
Advances from customers.................................... 48,929 9,386 58,315
Current portion of long-term debt.......................... 14,226 14,226
Total current liabilities............................. 467,776 37,373 16,624 13,372 535,145
Long Term Debt............................................... 188,825 188,825
Convertible Subordinated Debentures.......................... 56,475 56,475
Deferred income taxes, compensation and other benefits....... 41,199 41,199
Minority Interests........................................... 1,227 1,227
Shareholder's Equity
Common Stock............................................... 79,861 967 (967)(1) 79,861
Retained Earnings.......................................... 203,615 (5,628) 840 4,788(1) 203,615
Cumulative translation adjustment.......................... 6,471 6,471
Minimum pension liability.................................. (1,374) (1,374)
Unrealized gain (loss) on investments...................... (259) (259)
Total shareholder's equity................................. 288,314 (5,628) 1,807 3,821 288,314
Total Liabilities and Shareholders' Equity................... $1,043,816 $ 31,745 $18,431 $ 17,193 $1,111,185
</TABLE>

See accompanying notes to unaudited pro forma financial information

F-63

<PAGE>
DIMON INCORPORATED

Pro Forma Combined Condensed Statement of Operations

For The Year Ended June 30, 1994

(in thousands)

<TABLE>
<CAPTION>
Combined
DIMON Austro Austro Pro Forma Pro Forma
Incorporated Hellenique Turk Adjustment Adjusted
<S> <C> <C> <C> <C> <C>
(unaudited)
Net sales of goods and services.............................. $1,449,078 $ 14,963 $22,725 $ 0 $1,486,766
Cost of goods and services sold.............................. 1,317,286 13,515 11,916 1,342,717

131,792 1,448 10,809 0 144,049
Selling, administrative and general
expenses................................................... 117,311 3,016 2,216 1,719(2) 124,262
Operating income (loss)...................................... 14,481 (1,568) 8,593 (1,719) 19,787
Other income:
Interest................................................... 7,025 850 99 7,974
Sundry..................................................... 8,675 2,491 571 11,737
15,700 3,341 670 19,711
Other deductions:
Interest................................................... 35,117 6,936 1,094 862 44,009
Sundry..................................................... 419 280 7,538 8,237
35,536 7,216 8,632 862 52,246
Income (loss) before income taxes, minority interest and
equity in net income of investee companies................. (5,355) (5,443) 631 (2,581) (12,748)
Income taxes................................................. 2,767 (981) 1,786
Income (loss) before minority interest and equity in net
income of investee companies............................ (8,122) (5,443) 631 (1,600) (14,534)
Income applicable to minority interest....................... 466 466
Income (loss) before equity in net income of investee
companies (8,588) (5,443) 631 (1,600) (15,000)
Equity in net income (loss) of investee companies
(net of U.S. tax expense of $589........................ 98 98
Net income (loss)............................................ $ (8,490) $ (5,443) $ 631 $ (1,600) $ (14,902)
Net income (loss) per share, primary*........................ (.22) (.39)
Weighted average number of shares outstanding................ 38,091 38,091
</TABLE>

* Computation of fully diluted earnings per share is anti-dilutive

See accompanying notes to unaudited pro forma financial information

F-64

<PAGE>
DIMON INCORPORATED

Notes to Pro Forma Condensed Consolidated Financial Statements

The registrant acquired the businesses of Austro-Hellenique De Tabac S.A.
(Hellas) and Austro-Turk Tutan A.S. (Austro-Turk). Hellas and Austro-Turk have
buying, processing and selling operations in Greece and Turkey, respectively.

These pro forma financial statements reflect a year end of December 31,
1994 for each of the businesses acquired by the registrant and a year end of
June 30, 1994 for the registrant. It is impracticable to present these financial
statements in the manner required by Rule 11-02(c)(3) of Regulation S-X. The
registrant believes that the presentation of the financial statements in the
manner required by Rule 11-02(c)(3) of Regulation S-X would not have a material
effect on these pro forma financial statements.

1. The purchase price of Hellas and Austro-Turk was $13,372,000 for net
liabilities of $3,821,000 resulting in an excess of cost over businesses
acquired of $17,193,000.

2. The excess of cost over businesses acquired from the purchase of Hellas
and Austro-Turk will be amortized over 10 years, resulting in
amortization expense of $1,719,000. Interest expense relating to the
notes payable for the purchase was $862,000. The tax benefit resulting
from amortization of the excess of cost over businesses acquired and
interest expenses on notes payable was $981,000.

F-65

<PAGE>
[OBA Letterhead]

Austro-Turk Tutun A.S.
Sohit Fathibay Cd. No: 86
Alsancak-IZMIR
TURKEY

Dear Sirs,

We have audited the balance sheet of Austro-Turk Tutun Anorium
Sirketi as of 31 December 1994 and related statement of income for the
year then ended. Our examination was made in accordance with the generally
accepted auditing standards in the United States and accordingly included such
basis of accounting records and such other auditing procedures as we considered
necessary in the circumstances.

In our opinion, the financial statements as adjusted present a true and
fair view of the financial position of Austro-Turk Tutun A.S. at 31
December 1994 and the results of its operations for the year then ended in
conformity with acceptable accounting principles in Turkey.

We have then been commissioned by DIMON Incorporated, the new shareholder
who purchased the majority shares of Austro-Turk Tutun A.S. in June 1995
to further revise the balance sheet of December 31, 1994 and the statement of
income then ended by means of:

a. Writing off the non-essential real estate properties as of December
31, 1994,

b. Re-adjusting for the hyper-inflationary environment as required by the
Generally Accepted Accounting Principles in the United States of
America and,

c. Re-phrasing in U.S. Dollars over the rate applicable at December 31,
1994.

The financial statements thus presented serve for a specific need of
shareholders and should be referred to as a supplement to our audit report dated
January 23, 1995.

Respectfully Yours,

Omer Baylan
Partner in Charge

Istanbul, August 14, 1995

F-66

<PAGE>
AUSTRO-TURK TUTUN A.S.
AUDIT REPORT
on the Revised
BALANCE SHEET
Dated December 31, 1994 and the
STATEMENT OF INCOME
For the Period then ended for
Non-Essential Properties and Hyper-inflation

F-67

<PAGE>
AUSTRO-TURK TUTUN A.S.

Balance Sheet

Dated December 31, 1994

(Adjusted for Non-Residential Properties are Expressed in US Dollars)

<TABLE>
<CAPTION>
Notes

<S> <C> <C>
FIXED ASSETS AND LONG TERM RECEIVABLES
Participation: TRA A.S................................................................... 2 49,684.78
Tangible Fixed Assets (Net) 3 3,613,890.08
Construction in Progress................................................................. 4 92,271.57
L/T Receivables.......................................................................... 5 8,160.96

Total Fixed Assets....................................................................... 3,764,007.39

CURRENT ASSETS
Inventories.............................................................................. 6 11,358,847.04
Trade Debtors............................................................................ 7 517,507.86
Other Debtors............................................................................ 8 118,923.58
Advances................................................................................. 9 64,029.33
Receivable from Authorities.............................................................. 10 1,724,289.77
Prepaid Expenses......................................................................... 11 31,121.40
Doubtful Receivables..................................................................... 12 6,107.62
Treasury Bills........................................................................... 13 180,939.33
Bank and Cash............................................................................ 14 664,884.48

Total Current Assets..................................................................... 14,666,630.41

LIABILITIES
Expense Provisions....................................................................... 15 658,040.80
Income Provisions........................................................................ 16 (305,362.43)
Trade Credits............................................................................ 17 34,836.83
Bank Loans............................................................................... 18 15,565,261.33
Other Credits............................................................................ 19 64,321.90
Group Company Payables................................................................... 20 950,495.11
Tax Accruals............................................................................. 21 (342,154.26)

Total Liabilities........................................................................ 16,623,439.28

Net Assets............................................................................... 22 1,807,198.52
</TABLE>

Accompanying notes from 1 to 21 are integral parts of the financial statements
above

F-68

<PAGE>
AUSTRO-TURK TUTUN A.S.

Profit and Loss Statement

For The Year Ended December 31, 1994

(Adjusted for Non-Residential Properties are Expressed in US Dollars)

<TABLE>
<CAPTION>
Notes

<S> <C> <C>
Sales.................................................................................... 23 22,725,463.27
Cost of Sales............................................................................ 24 (11,916,243.73)
Gross Profit............................................................................. 10,809,219.54
Other Income............................................................................. 25 365,415.96
Income Provisions........................................................................ 26 305,362.43

Operating Expenses....................................................................... 27 (881,590.61)
Sales and Marketing Expenses............................................................. 28 (1,004,967.95)
Expense Provisions....................................................................... 29 (329,149.81)
Operating Profit......................................................................... 9,264,289.56

Financing Expenses....................................................................... 30 (8,632,717.62)
Profit Before Tax........................................................................ 31 631,572.04
Taxation-(Exempted)...................................................................... 32 0
Net Profit After Taxation................................................................ 33 631,572.04
</TABLE>

Accompanying note of 1 and those from 22 to 33 are integral parts of the
financial statements above

F-69

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Financial Statements

December 31, 1994

(Expressed in US Dollars)

1. SIGNIFICANT ACCOUNTING PRINCIPLES

The foregoing financial statements have been prepared to present the assets
and liabilities of Austro-Turk Tutun A.S. as defined in the purchase
agreement concluded between Austria Tabek Einkaufs- und Handelsorganisation Gmbh
and Dimon Incorporated in accordance with the generally accepted accounting
principles in the U.S.A.

The purchase agreement concludes that the shares of Austro-Turk Tutun
A.S. are transferred with all rights and obligations except for the
effects of sale of the non-essential properties. The audited financial
statements of Austro-Turk Tutun A.S. dated December 31, 1994 are
therefore re-adjusted to write off such assets against the owners' equity and to
adjust other accounts affected by the sale of such non-essential properties.

The accounts are maintained by the company in Turkish Lira (TL) as required
by tax laws and are adjusted by ourselves for generally accepted -- but not
required -- accounting principles in Turkey. The audited statements have then
been translated into US Dollars over the official exchange rate of USD 1 = TL
38,687 applicable at December 31, 1994 unless otherwise specified in the notes
and, no further adjustment is made on the official exchange rates as they nicely
represent the market value of US Dollars against TL at the said date.

Because the local inflation was realized over 100% in the year of 1994,
Turkey is considered a hyper-inflationary environment and, the assets booked
with historical values have been re-valued by the US Dollar values applicable at
the date of acquisition and then been subjected to adjustments such as
depreciation and amortization in order to arrive to the net value at December
31, 1994, although company books included some inflation-adjustments allowed by
tax laws.

As no revaluation is allowed on inventories by law and numerous entries
were impossible to value individually in US Dollars, the inventories are
re-valued by the average selling prices in USD in the year of 1994 less the
average gross profit realized in the same period in order to eliminate an
apparent under-valuation caused by hyper-inflation.

The adjustments thus made are further detailed below in relation to the
captions presented on the re-adjusted financial statements.

F-70

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet

December 31, 1994

(Expressed in US Dollars)

ASSETS

2. PARTICIPATIONS
Audited: 7,728.69 Adjusted: 49,684.78

Valued in USD value at the date of acquisition.

3. TANGIBLE FIXED ASSETS (NET)
Audited: 3,730,645.95 Adjusted: 3,613,890.08

<TABLE>
<S> <C>
Value in USD at the date of acquisition........................... 4,934,349.84
Less: Depreciation by straight line............................... -1,320,459.81
</TABLE>

4. CONSTRUCTION IN PROGRESS
Audited: 92,271.57 Adjusted: 92,271.57

Valued at the year-end US Dollar rate and no further adjustment is made as it is
not activated yet.

5. LONG TERM RECEIVABLES
Audited: 8,160.96 Adjusted: 8,160.96

Valued at the year-end US Dollar rate without discounting.

6. INVENTORIES
Audited: 10,782,254.40 Adjusted: 11,358,847.04

6.1. Packaging Material

<TABLE>
<S> <C>
Juto: 51,908 meters..................................... 9,327.21
Tonga Ropes: 5,804 kgs.................................. 11,291.82
Balertzma Ropes: 1,785 kgs.............................. 3,881.12
24,500.15
</TABLE>

Valued by the last purchase price in USD.

6.2. Tobacco -- Pre "93 Crop by Average Selling Price

<TABLE>
<S> <C>
AG -- 210,187 kgs x 6.04................................ 1,269,529.48
BG -- 234,583 kgs x 4.89................................ 1,147,110.87
KP -- 49,805 kgs x 2.84................................. 141,446.20
KK -- 18,054 kgs x 1.51................................. 27,446.20
KIR -- 1,405 kgs x 0.79................................. 1,109.95
Total by Average Selling Price.......................... 2,568,458.04
Discounted by Average Gross
Profit Margin (43%)..................................... -1,112,176.96
Net Value for pre "93 Crop Tobacco...................... 1,474,281.08
</TABLE>

F-71

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

6.3. Tobacco -- 93 Crop by Average Selling Price

<TABLE>
<S> <C>
AG -- 2,011,455 kgs x 4.91.............................. 9,876,244.05
BG -- 1,944,280 kgs x 3.91.............................. 7,602,134.80
KP -- 963,751 kgs x 2.07................................ 2,036,364.57
KK -- 65,235 kgs x 2.36................................. 153,954.60
KIR -- 252,000 kgs x 0.49............................... 123,480.00
Total by Average Selling Price.......................... 19,792,178.02
Discounted by Average Gross
Profit Margin (50.3%)................................... -9,955,465.55
Net Value for "93 Crop Tobacco.......................... 9,836,712.47
</TABLE>

6.4. Expenses on "94 crop tobacco is valued by the average rate of USD 1 = TL
26,662.51 for 1994 and reads USD 23,353.34.

7. TRADE DEBTORS
Audited: 517,507.86 Adjusted: 517,507.86

<TABLE>
<S> <C>
Trade Debtors -- Domestic............................... 7.86
Trade Debtors -- Abroad................................. 517,500.00
517,507.86
</TABLE>

Valued by the year-end US Dollar rate.

8. OTHER DEBTORS
Audited: 7,550,360.49 Adjusted: 118,923.58

<TABLE>
<S> <C>
Related Parties......................................... 1,513.30
Participations.......................................... 109,468.56
Other................................................... 7,439,378.63
7,550,360.49
Less: Non-Essential Sale Proceed........................ -7,431,436.91
Adjusted Other Debtors.................................. 118,923.58
</TABLE>

Valued by year-end US Dollar rate.

9. ADVANCES
Audited: 64,029.33 Adjusted: 64,029.33

<TABLE>
<S> <C>
Staff................................................... 47,347.11
Other Business Advances................................. 16,682.22
64,029.33
</TABLE>

Valued by year-end US Dollar rate.

10. RECEIVABLES FROM AUTHORITIES
Audited: 1,724,289.77 Adjusted: 1,724,289.77

<TABLE>
<S> <C>
VAT and Taxes Refundable................................ 1,682.171.35
VAT Deductable.......................................... 42,118.42
1,724,289.77
</TABLE>

Valued by year-end US Dollar rate.

F-72

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

11. PREPAID EXPENSES
Audited: 31,121.40 Adjusted: 31,121.40

Valued by year-end US Dollar rate.

12. DOUBTFUL RECEIVABLES
Audited: 6,107.62 Adjusted: 6,107.62

Valued by year-end US Dollar rate.

13. TREASURY BILLS
Audited: 180,939.33 Adjusted: 180,939.33

Valued by year-end US Dollar rate.

14. BANK AND CASH
Audited: 354,682.77 Adjusted: 664,864.48

<TABLE>
<S> <C>
Bank.................................................... 354,669.41
Cash.................................................... 13.36
354,682.77
Plus: Property transfer tax............................. 310,181.71
Adjusted Bank and Cash.................................. 664,864.48
</TABLE>

Property transfer tax paid is added on the bank position in adjustment for
non-essential properties and valued by year-end US Dollar rate.

LIABILITIES

15. EXPENSE PROVISIONS
Audited: 3,399,451.68 Adjusted: 656,040.80

<TABLE>
<S> <C>
Leaving Indemnity -- pre "94............................ 323,042.18
Leaving Indemnity -- 1994............................... 326,891.00
Doubtful Receivables.................................... 6,107.62
Taxes on Corporate Income............................... 2,743,410.87
3,399,451.67
Less: Taxes Recovered on Adjusted
Financial Statements.................................... -2,743,410.87
Expense Provisions...................................... 656,040.80
</TABLE>

Although the company realizes a profit in the period even after the proceed from
property sale is written off, no tax accrues because the company enjoys an
investment allowance.

16. INCOME PROVISIONS
Audited: (305,362.43) Adjusted: (305,362.43)

This is a forex gain accrued on forex receivables but accounted with historical
exchange rate.

17. TRADE CREDITORS
Audited: 34,836.83 Adjusted: 34,836.83

Valued by the year-end US Dollar rate.

F-73

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Balance Sheet -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

18. BANK LOANS
Audited: 15,585,261.33 Adjusted: 15,565,261.33

The prefinancing foreign exchange loans with accrued interest as of December 31,
1994.

19. OTHER CREDITORS
Audited: 64,321.90 Adjusted: 64,321.90

<TABLE>
<S> <C>
Accruals for Employees.................................. 41.98
Accruals for Contractors................................ 64,279.92
64,321.90
</TABLE>

Valued at year-end US Dollar rate.

20. GROUP COMPANY PAYABLES
Audited: 950,495.11 Adjusted: 950,495.11

Accrued in US Dollar to Austria E.O. for marketing services.

21. TAX ACCRUALS
Audited: 627,163.60 Adjusted: (342,154.26)

<TABLE>
<S> <C>
Taxes Payable Including VAT............................. 627,163.60
Less: VAT on non-essential property sale................ -969,317.86
Taxes Receivable........................................ -342,154.26
</TABLE>

Taxes payable turn to be taxes receivable when adjusted for the VAT on sale of
non-essential properties.

22. NET ASSETS
Audited: 4,713,932.16 Adjusted: 1,807,198.52

<TABLE>
<S> <C>
Audited Net Assets...................................... 4,713,932.16
Less: Fixed Assets Revaluation.......................... -116,755.87
Less: Adjustment to Debtors............................. -7,431,436.92
Plus: Adjustment to Cash & Bank......................... 310,181.70
Plus: Participation Revaluation......................... 41,956.09
Plus: Inventory Revaluation............................. 576,592.64
Plus: VAT Recovered..................................... 969,317.86
Plus: Tax Provision Recovered........................... 2,743,410.87
Net Assets Adjusted..................................... 1,807,198.52
</TABLE>

F-74

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Income Statement

For The Period Ended December 31, 1994

(Expressed in US Dollars)

INCOME STATEMENT

23. SALES
Audited: 22,725,463.27 Adjusted: 22,725,463.27

<TABLE>
<S> <C>
Exports Proceed......................................... 33,407,270.02
Export Subsidy.......................................... 1,923,369.13
Rate Difference Charge.................................. 8,935.56
35,339,574.71
</TABLE>

Actual sale proceed in US Dollar is booked with the TL equivalent at the invoice
date and is valued by the year-end US Dollar rate for adjusted financial
statements.

24. COST OF SALES
Audited: (11,916,243.73) Adjusted: (11,916,243.73)

<TABLE>
<S> <C>
"91 Crop Tobacco Sold................................... 89,160.42
"92 Crop Tobacco Sold................................... 9,221,181.44
"93 Crop Tobacco Sold................................... 2,605,901.87
11,916,243.73
</TABLE>

Value by the year-end US Dollar rate.

25. OTHER INCOME
Audited: 6,162,879.10 Adjusted: 365,415.96

<TABLE>
<S> <C>
Interest Income......................................... 99,233.55
Farex Rate Income....................................... 215,327.38
Commission Income....................................... 5,860.71
Rent Income............................................. 13,903.41
Other Income............................................ 5,505.50
Profit from Asset Sales................................. 5,823,048.54
6,162,879.09
Less: Profit from Sale of
Non-essential properties................................ -5,797,463.13
Other Income Adjusted................................... 365,415.96
</TABLE>

26. INCOME PROVISIONS
Audited: 305,362.43 Adjusted: 305,362.43

Represents the foreign exchange gain on export subsidy at the year-end US Dollar
rate.

F-75

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Income Statement -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

27. OPERATING EXPENSES
Audited: (881,590.61) Adjusted: (881,590.61)

<TABLE>
<S> <C>
Admin Expenses.......................................... 403,322.44
Warehousing Expenses.................................... 241,762.58
Non-Deductable Expenses................................. 236,505.59
881,590.61
</TABLE>

Valued by the year-end US Dollar rate.

28. SALES AND MARKETING EXPENSES
Audited: (1,004,967.95) Adjusted: (1,004,967.95)

<TABLE>
<S> <C>
Marketing Fees.......................................... 903,615.03
Procedural Fees & Expenses.............................. 15,874.69
Shipping & Handling Expenses............................ 43,579.33
Freight Charges......................................... 21,047.08
FOB Expenses............................................ 20,851.81
1,004,967.95
</TABLE>

Valued by the year-end US Dollar rate.

29. EXPENSE PROVISIONS
Audited: (329,149.81) Adjusted: (329,148.81)

<TABLE>
<S> <C>
Leaving indemnity for services
belonging pre "94....................................... 323,042.18
Doubtful Receivables.................................... 6,107.62
329,149.80
</TABLE>

Valued by the year-end US Dollar rate.

30. FINANCING EXPENSES
Audited: (8,632,717.52) Adjusted: (8,632,717.52)

<TABLE>
<S> <C>
Forex Rate Losses....................................... 704,435.75
Interest on Prefinancing Loans.......................... 1,093,861.27
Forex Loss on Exports................................... 6,683,990.88
Forex Loss on Forex Interest............................ 150,429.62
8,632,717.52
</TABLE>

Valued by year and US Dollar rate.

F-76

<PAGE>
AUSTRO-TURK TUTUN A.S.

Notes to the Income Statement -- Continued

For The Period Ended December 31, 1994

(Expressed in US Dollars)

31. PROFIT BEFORE TAX
Audited: 6,429,035.18 Adjusted: 631,572.04

<TABLE>
<S> <C>
Audited Profit Before Tax............................... 6,429,035.18
Less: Profit from Non-Essential.........................
Assets Sale............................................. -5,797,463.13
Adjusted Profit Before Tax.............................. 631,572.05
</TABLE>

32. TAXATION
Audited: (2,743,410.87) Adjusted: (Nil)

Although there is a corporate profit after adjustments for non-essential
properties, no tax accrues because the investment allowance is greater than the
corporate profit.

33. NET PROFIT AFTER TAX
Audited: 3,685,624.31 Adjusted: 631,572.04

F-77

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.

TOBACCO BUSINESS UNIT
FINANCIAL STATEMENTS
DECEMBER 31, 1994

F-78

<PAGE>
INDEPENDENT AUDITORS REPORT

To the Shareholders of
DIMON Hellas S.A.

We have audited the accompanying balance sheet of the Austro Hellenique de
Tabac S.A. Business Unit (the Business Unit) at December 31, 1994 and the
related statement of income for the year then ended. 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 audit.

The Business Unit has been defined as all the assets and liabilities of
Austro Hellenique de Tabac S.A. which relate to the purchase, processing and
sale of tobacco with the exception of the land, buildings and immovable fixtures
and fittings. The Profit and Loss Statement has been prepared to include all
income and expenses relating to the purchase, processing and sale of tobacco.
Since this is the first year that such statements have been prepared,
comparative figures and a Statement of Cash Flows have not been presented.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Business Unit at December 31, 1994 and
the results of its operations for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE
July 31, 1995

F-79

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Balance Sheet

December 31, 1994

(All amounts expressed in United States Dollars)

<TABLE>
<CAPTION>
Notes
<S> <C> <C>
FIXED ASSETS

Machinery......................................................................................... 899,755
Vehicles.......................................................................................... 26,220
Furniture......................................................................................... 74,131
In progress....................................................................................... 31,545
Total fixed assets........................................................................... 2 1,031,651
CURRENT ASSETS

Inventories....................................................................................... 3 19,542,061
Trade debtors..................................................................................... 4 5,259,968
Other debtors..................................................................................... 5 1,042,361
Advances.......................................................................................... 6,954
Prepayments and accrued income.................................................................... 6 1,248,291
Treasury bills.................................................................................... 459,863
Bank and cash..................................................................................... 3,153,781
Total current assets......................................................................... 30,713,279
LIABILITIES

Provisions........................................................................................ 648,093
Trade creditors................................................................................... 77,430
Bank loans........................................................................................ 19,881,079
Other creditors................................................................................... 7 5,730,253
Group company payables............................................................................ 8 9,385,710
Social security................................................................................... 1,118,749
Accruals and deferred income...................................................................... 9 531,689
Total liabilities............................................................................ 37,373,003
Net liabilities.............................................................................. (5,628,073)
</TABLE>

The accompanying notes 1 to 13 are an integral part of these financial
statements

F-80

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Profit and Loss Statements

Year Ended December 31, 1994

(All amounts expressed in United States Dollars)

<TABLE>
<CAPTION>
Notes
<S> <C> <C>
Sales............................................................................................ 14,963,370
Cost of Sales.................................................................................... (13,515,085)
Gross profit..................................................................................... 1,448,285
Other income..................................................................................... 10 2,384,697
3,832,982

Distribution costs............................................................................... (991,906)
Administration costs............................................................................. (2,024,061)
Operating profit................................................................................. 817,015

Financial costs.................................................................................. 11 (6,260,362)
Net loss before taxation......................................................................... (5,443,347)
Taxation......................................................................................... 12 --
Net loss after taxation.......................................................................... (5,443,347)
</TABLE>

The accompanying notes 1 to 13 are an integral part of these financial
statements

F-81

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements

December 31, 1994

(All amounts expressed in United States Dollars)

1. SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared to present the assets and
liabilities of the Tobacco Business Unit (the Business Unit) of Austro
Hellenique de Tabac S.A. (the Company). The assets and liabilities have been
defined in the Purchase Agreement, dated as of April 13, 1995 (the Agreement),
by and between DIMON Incorporated (DIMON), Austria Tabakwerke AG (Austria
Tabak), Austria Tabak Einkaufs-Und Handelsorganisation GesmbH (AEO) and
Austro-Hellenique S.A. De Tabac et De Batiment (Austro-Hellenique) pursuant to
which the Business Unit was sold to Tobacco Export and Import Company, Inc., a
subsidiary of DIMON. The land, buildings and certain fixtures and fittings were
retained by Austro-Hellenique.

The profit and loss statement of the Business Unit has been prepared to
include all income and all expenses relating to the purchase, processing and
sale of tobacco. Income and expenses relating to ancillary activities have been
excluded.

The books of the company are maintained in accordance with the Greek Tax
Records Code in Greek Drachmas. For these financial statements certain
adjustments have been made to exclude non tobacco related assets, liabilities,
income and expenses as well as certain other out of book adjustments required
under U.S. generally accepted accounting principles. These statements have been
translated into United States Dollars using the exchange rate at December 31
1994 (GRD 241,49 = USD 1) for the balance sheet and the average exchange rate
(GRD 242,96 = USD 1) for the profit and loss statement. The effect of the
adjustments as of December 31, 1994 is shown in the tables which follow.

<TABLE>
<CAPTION>
Net Assets
<S> <C> <C>
Per books.............................................................................. 4,910,550
LESS: Fixed assets not part of business unit......................................... (4,603,315)
LESS: Current assets/liabilities not part of business unit........................... (24,753)
LESS: Provision for inventories...................................................... (112,599)
LESS: Provision for debtors.......................................................... (198,338)
LESS: Provision for advances......................................................... (28,591)
LESS: Subsidies receivable........................................................... 67,202
LESS: Additional staff leaving provision............................................. (113,571)
LESS: Interest accrual............................................................... (171,405)
LESS: Additional social security accrual............................................. (14,717)
LESS: Accrued costs.................................................................. (268,835)
LESS: Profit on sales not yet invoiced............................................... (5,069,701)
Per financial statements............................................................... (5,628,073)
</TABLE>

F-82

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

1. SIGNIFICANT ACCOUNTING POLICIES -- Continued

<TABLE>
<CAPTION>
Net Profit
<S> <C> <C>
Per books.............................................................................. 599,410
ADD: Non business unit expenses..................................................... 54,159
LESS: Non business unit income....................................................... (140,848)
LESS: Deferred interest income....................................................... (169,269)
LESS: Accrued interest expense....................................................... (227,579)
LESS: Accrued expenses............................................................... (168,240)
LESS: Write down of inventories...................................................... (221,611)
LESS: Write down of debtors.......................................................... (197,138)
LESS: Profit on non invoiced sales................................................... (5,039,027)
ADD: Accrued subsidies.............................................................. 66,796
Per financial statements............................................................... (5,443,347)
</TABLE>

Revenue Recognition

Sales are recognised on the issuance of a sales invoice. Where subsequent
to the issuance of an invoice, additional costs, primarily freight charges, are
expected to be incurred, an accrual has been made for these.

Bank and Cash

Bank and cash represent amounts held in current accounts.

Fixed Assets and Depreciation

Fixed assets are stated at cost less accumulated depreciation. Depreciation
is provided on the straight line basis over the estimated useful life of the
assets.

Inventory

Inventory is valued at the lower of cost and net realisable value. Cost is
determined on the average method. In these financial statements, inventory has
been valued at the net realisable value based on a valuation by Dimon and
Austria Tabak officials.

Foreign Currency Transactions

The accounting books of the company are maintained in Greek drachmas.
Transactions involving foreign currencies are converted into Greek drachmas
using exchange rates ruling at the time of the transactions. Amounts in foreign
currencies at the year end are converted into Greek drachmas at the rates of
exchange ruling at the year end.

Employee Retirement Reserve

According to Greek Law, the Company is obliged to indemnify those of its
employees who are either dismissed without cause or retire. The amount payable
is dependent on the employees final salary and the years of service. The amount
payable on retirement equals 40% of the amount payable on dismissal. The Company
provides 50% of the amount payable on dismissal for employees who will retire.
This amount is calculated based on the present salaries of all employees. The
charge for such costs is included in operating expenses.

F-83

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

2. FIXED ASSETS

Fixed assets comprise the following:

<TABLE>
<CAPTION>
Acc. Net Book
Cost Depr. Value
<S> <C> <C> <C>
Machinery............................................. 2,278,600 1,378,845 899,755
Vehicles.............................................. 77,272 51,052 26,220
Furniture............................................. 212,070 137,939 74,131
In Progress........................................... 31,545 -- 31,545
2,599,487 1,567,836 1,031,651
</TABLE>

Depreciation totalling USD 167,458 was charged to the income statement
during 1994.

3. INVENTORIES

These comprise the following:

<TABLE>
<S> <C>
Tobacco................................................................................. 19,425,054
Packing material........................................................................ 114,416
Advances................................................................................ 2,591
19,542,061
</TABLE>

All the tobacco has been pledged as security against the Business Unit
borrowings.

4. TRADE DEBTORS

These are made up as follows:

<TABLE>
<S> <C>
Local debtors............................................................................ 665,838
E.C. debtors............................................................................. 14,572
Other countries debtors.................................................................. 4,579,558
5,259,968
</TABLE>

5. OTHER DEBTORS

These comprise the following:

<TABLE>
<S> <C>
Training grants receivable............................................................... 150,777
Subsidies receivable..................................................................... 7,494
Restitution receivable................................................................... 884,090
1,042,361
</TABLE>

F-84

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

6. PREPAYMENTS AND ACCRUED INCOME

These comprise the following:

<TABLE>
<S> <C>
Prepayments.............................................................................. 27,663
Restitution receivable................................................................... 720,179
Subsidies receivable..................................................................... 145,469
Prepaid tax.............................................................................. 14,527
Insurance receivable..................................................................... 190,884
Training grants.......................................................................... 149,569
1,248,291
</TABLE>

7. OTHER CREDITORS

These comprise the following:

<TABLE>
<S> <C>
Payable to personnel..................................................................... 833,566
Payable to DIDAGEP....................................................................... 4,716,621
Other.................................................................................... 180,066
5,730,253
</TABLE>

8. GROUP COMPANY PAYABLES

These relate to prepayments received against future purchases and comprise
the following:

<TABLE>
<S> <C>
Payable to AEO........................................................................... 9,103,165
Payable to Austria Tabak................................................................. 282,545
9,385,710
</TABLE>

During the year sales to group companies amounted to USD 4,268.116.

9. ACCRUALS AND DEFERRED INCOME

These comprise the following:

<TABLE>
<S> <C>
Deferred interest income................................................................... 170,299
Bank tax accrual........................................................................... 124,229
Commission accrual......................................................................... 43,058
Electricity accrual........................................................................ 30,245
Other...................................................................................... 163,858
531,689
</TABLE>

F-85

<PAGE>
AUSTRO-HELLENIQUE DE TABAC S.A.
TOBACCO BUSINESS UNIT

Notes to the Financial Statements -- Continued

December 31, 1994

(All amounts expressed in United States Dollars)

10. OTHER INCOME

This comprises the following:

<TABLE>
<S> <C>
Subsidies and restitution................................................................ 1,996,673
Other.................................................................................... 388,024
2,384,697
</TABLE>

11. FINANCIAL COSTS

These comprise the following:

<TABLE>
<S> <C>
Interest expense......................................................................... 6,936,278
Exchange losses.......................................................................... 280,591
Interest income.......................................................................... (850,393)
Exchange gains........................................................................... (106,114)
6,260,362
</TABLE>

12. TAXATION

The Business Unit has nil taxation for the 1994 fiscal year because of the
current year loss and accumulated losses from previous years. Following the sale
of the business unit, the accumulated losses have remained with the Company and
therefore the Business Unit has no benefit from these.

13. COMMITMENTS

The Business Unit has obligations under operating leases for warehouse
space. Certain of these leases are renewed annually while the others are on a
six year lease agreement. For the annual leases, the obligation for 1995
amounted to USD 58,077. For the leases under the six year agreement the
obligation for 1995 amounted to USD 200,000 increasing by 3% annually.

F-86

<PAGE>

No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Underwriters.
This Prospectus does not constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has not been a change in the
facts set forth in this Prospectus or in the affairs of the Company since the
date hereof.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Prospectus Summary............................... 3
Risk Factors..................................... 10
Issuer and Guarantors............................ 14
Use of Proceeds.................................. 15
Capitalization................................... 15
Selected Consolidated Financial Data............. 16
Management's Discussion and Analysis of
Financial Condition and Results of
Operations..................................... 18
Business......................................... 25
Management....................................... 34
Principal Stockholders........................... 42
Description of Notes............................. 43
Description of Other Indebtedness................ 66
Underwriting..................................... 66
Legal Matters.................................... 67
Experts.......................................... 68
Available Information............................ 68
Index to Consolidated Financial Statements....... F-1
</TABLE>

[DIMON LOGO]

DIMON Incorporated

$125,000,000

8 7/8% Senior Notes due 2006

PROSPECTUS

NationsBanc Capital Markets, Inc.

BA Securities, Inc.

First Union Capital Markets Corp.

May 23, 1996