Corby Distilleries Announces Special Dividend, Increased Quarterly Dividend & Reports Earnings for Three Months Ended September

Corby Distilleries Announces Special Dividend, Increased Quarterly Dividend & 
Reports Earnings for Three Months Ended September 30, 2012 
TORONTO, Nov. 7, 2012 /CNW/ - Corby Distilleries Limited ("Corby" or the 
"Company") (TSX:CDL.A, TSX:CDL.B) declared a special dividend of $0.54 per 
share payable on January 10, 2013 on the Voting Class A Common Shares and 
Non-voting Class B Common Shares of Corby to shareholders of record as at the 
close of business on December 14, 2012. In view of the substantial impact the 
October 31, 2012 disposal transaction had on net earnings, it was deemed that 
an element of the payout be classed as a special dividend. The special 
dividend will result in a cash distribution of $15.4 million to shareholders 
and will be sourced from Corby's current surplus cash position. 
This will ensure that the regular dividend is based on Corby's net earnings 
from its core business activities and, subject to business conditions and 
opportunities and appropriate adjustment for extraordinary events, will be 
paid quarterly on the basis of an annual amount equal to the greater of 75% of 
net earnings per share in the preceding fiscal year ended June 30, and $0.60 
per share. 
The Corby Board of Directors today also declared a dividend of $0.17 per share 
payable on December 14, 2012 on the Voting Class A Common Shares and 
Non-voting Class B Common Shares of the Company to shareholders of record as 
at the close of business on November 30, 2012, which represents an increase to 
regular quarterly dividends of 13% when compared to last year. 
Net earnings for the quarter ended September 30, 2012 totaled $7.0 million (or 
$0.25 per share), representing a decrease of $2.5 million when compared with 
the same quarter last year. The financial results for the quarter were 
substantially impacted by the sale of certain non-core brands and the 
subsidiary that owned the manufacturing plant in Montreal on October 31, 2011. 
After removing the impact of the aforementioned sale transaction, net earnings 
for the quarter were $7.0 million or $0.25 per share compared to $8.0 million 
or $0.28 per share when compared with the same quarter last year. The decrease 
in net earnings is primarily the result of having made significantly higher 
investment in advertising and promotional activities phased into this quarter 
when compared with the same quarter last year. This was partially offset by a 
strong shipment volume performance from Corby's key brands, namely Wiser's 
Canadian whisky and Polar Ice vodka. The increased advertising and promotional 
investment supported the Launch of Wiser's Spiced whisky and the re-launch of 
Lamb's Black Sheep as well as strategic changes to key brand's promotional 
calendars. 
"We are happy with the strong headline growth from our priority brands, which 
continue to perform ahead of their respective categories. Our continued 
success is down to making large breakthrough investments behind these 
priorities, and as such, our first quarter earnings are impacted by a heavy 
phasing of A&P spend into this quarter." noted Patrick O'Driscoll, President 
and Chief Executive Officer of Corby. 
For further details, please refer to Corby's management's discussion and 
analysis and consolidated financial statements and accompanying notes for the 
first quarter ended September 30, 2012, prepared in accordance with 
International Financial Reporting Standards. 
About Corby
Corby Distilleries Limited is a leading Canadian marketer of spirits and 
imported wines. Corby's portfolio of owned-brands includes some of the most 
renowned brands in Canada, including Wiser's Canadian whisky, Lamb's rum, 
Polar Ice vodka and McGuinness liqueurs. Through its affiliation with Pernod 
Ricard S.A., Corby also represents leading international brands such as 
ABSOLUT vodka, Chivas Regal, The Glenlivet and Ballantine's Scotch whiskies, 
Jameson Irish whiskey, Beefeater gin, Malibu rum, Kahlúa liqueur, Mumm 
champagne, and Jacob's Creek, Wyndham Estate and Graffigna wines. 
The existing Voting Class A Common Shares and Non-voting Class B Common Shares 
of the Company are traded on the Toronto Stock Exchange under the symbols 
CDL.A and CDL.B. 
This press release contains forward-looking statements, including statements 
concerning possible or assumed future results of Corby's operations. 
Forward-looking statements typically are preceded by, followed by or include 
the words "believes", "expects", "anticipates", "estimates", "intends", 
"plans" or similar expressions. Forward-looking statements are not guarantees 
of future performance. They involve risks, uncertainties and assumptions and, 
as such, the Company's results could differ materially from those anticipated 
in these forward-looking statements. Accordingly, readers should not place 
undue reliance on forward-looking statements. All amounts above are stated in 
Canadian dollars. 
CORBY DISTILLERIES LIMITED
Management's Discussion and Analysis
September 30, 2012 
The following Management's Discussion and Analysis ("MD&A") dated November 7, 
2012, should be read in conjunction with the unaudited interim condensed 
consolidated financial statements and accompanying notes as at and for the 
three month period ended September 30, 2012, prepared in accordance with 
International Financial Reporting Standards ("IFRS"). These unaudited interim 
condensed financial statements do not contain all disclosures required by IFRS 
for annual financial statements and, accordingly, should also be read in 
conjunction with the most recently prepared annual consolidated financial 
statements for the year ended June 30, 2012. 
This MD&A contains forward-looking statements, including statements concerning 
possible or assumed future results of operations of Corby Distilleries Limited 
("Corby" or the "Company"). Forward-looking statements typically are preceded 
by, followed by or include the words "believes", "expects", "anticipates", 
"estimates", "intends", "plans" or similar expressions. Forward-looking 
statements are not guarantees of future performance. They involve risks, 
uncertainties and assumptions, including, but not limited to: the impact of 
competition; business interruption; trademark infringement; consumer 
confidence and spending preferences; regulatory changes; general economic 
conditions; and the Company's ability to attract and retain qualified 
employees. There can be no assurance that forward-looking statements will 
prove to be accurate, as actual results and future events could differ 
materially from those anticipated in such statements. Accordingly, readers 
should not place undue reliance on forward-looking statements. These factors 
are not intended to represent a complete list of the factors that could affect 
the Company. Additional factors are noted elsewhere in this MD&A. 
This document has been reviewed by the Audit Committee of Corby's Board of 
Directors and contains certain information that is current as of November 7, 
2012. Events occurring after that date could render the information contained 
herein inaccurate or misleading in a material respect. Corby will provide 
updates to material forward-looking statements, including in subsequent news 
releases and its interim management's discussion and analyses filed with 
regulatory authorities as required under applicable law. Additional 
information regarding Corby, including the Company's Annual Information Form, 
is available on SEDAR at www.sedar.com. 
The Company's fiscal year end is June 30. Unless otherwise indicated, all 
comparisons of results for the first quarter of fiscal 2013 (three months 
ended September 30, 2012) are against results for the first quarter of fiscal 
2012 (three months ended September 30, 2011). All dollar amounts are in 
Canadian dollars unless otherwise stated. 
Business Overview 
Corby is a leading Canadian marketer of spirits and importer of wines. Corby's 
national leadership is sustained by a diverse brand portfolio that allows the 
Company to drive profitable organic growth with strong, consistent cash flows. 
Corby is a publicly traded company, with its shares listed on the Toronto 
Stock Exchange under the symbols "CDL.A" (Voting Class A Common Shares) and 
"CDL.B" (Non-Voting Class B Common Shares). Corby's Voting Class A Common 
Shares are majority-owned by Hiram Walker & Sons Limited ("HWSL") (a private 
company) located in Windsor, Ontario. HWSL is a wholly-owned subsidiary of 
international spirits and wine company Pernod Ricard S.A. ("PR") (a French 
public limited company), which is headquartered in Paris, France. Therefore, 
throughout the remainder of this MD&A, Corby refers to HWSL as its parent, and 
to PR as its ultimate parent. Affiliated companies are those that are also 
subsidiaries of PR. 
The Company derives its revenues from the sale of its owned-brands ("Case 
Goods"), as well as earning commission income from the representation of 
selected non-owned brands in Canada ("Commissions"). The Company also 
supplements these primary sources of revenue with other ancillary activities 
incidental to its core business, such as logistics fees and miscellaneous bulk 
spirit sales. Revenue from Corby's owned-brands predominantly consists of 
sales made to each of the provincial liquor boards in Canada, and also 
includes sales to international markets. Comparative figures for the period 
ending September 30, 2011 also include contract bottling services which were 
derived from a formerly owned bottling facility (sold October 31, 2011). 
Corby's portfolio of owned-brands includes some of the most renowned brands in 
Canada, including Wiser's Canadian whisky, Lamb's rum, Polar Ice vodka and 
McGuinness liqueurs. Through its affiliation with PR, Corby also represents 
leading international brands such as ABSOLUT vodka, Chivas Regal, The 
Glenlivet and Ballantine's Scotch whiskies, Jameson Irish whiskey, Beefeater 
gin, Malibu rum, Kahlúa liqueur, Mumm champagne, and Jacob's Creek, Wyndham 
Estate, Stoneleigh and Graffigna wines. In addition to representing PR's 
brands in Canada, Corby also provides representation for certain selected, 
unrelated third-party brands ("Agency brands") when they fit within the 
Company's strategic direction and, thus, complement Corby's existing brand 
portfolio. 
Pursuant to a production agreement that expires in September 2016, PR produces 
Corby's owned-brands at HWSL's production facility in Windsor, Ontario. Under 
the production agreement, Corby manages PR's business interests in Canada, 
including HWSL's production facility, also until September 2016. 
The Company sources more than 80% of its spirits production requirements from 
HWSL at its production facility in Windsor, Ontario. The Company's remaining 
production requirements have been outsourced to third party vendors. The 
Company also utilizes a third-party manufacturer in the UK to produce its 
Lamb's rum products destined for sale in countries located outside North 
America. Corby's Lamb's rum products sold in North America continue to be 
manufactured at HWSL's production facility. 
In most provinces, Corby's route to market in Canada entails shipping its 
products to government-controlled liquor boards ("LBs"). The LBs then sell 
directly, or control the sale of, beverage alcohol products to end consumers. 
The exception to this model is Alberta, where the retail sector is privatized. 
In this province, Corby ships products to a bonded warehouse that is managed 
by a government-appointed service provider who is responsible for warehousing 
and distribution into the retail channel. 
Corby's shipment patterns to the LBs will not always exactly match short-term 
consumer purchase patterns. However, given the importance of monitoring 
consumer consumption trends over the long term, the Company stays abreast of 
consumer purchase patterns in Canada through its member affiliation with the 
Association of Canadian Distillers ("ACD"), which tabulates and disseminates 
consumer purchase information it receives from the LBs to its industry 
members. Corby refers to this data throughout this MD&A as "retail sales", 
which are measured both in volume (measured in nine-litre-case equivalents) 
and in retail value (measured in Canadian dollars). 
Corby's international business is concentrated in the US and UK and the 
Company has a different route to market for each. For the US market, Corby 
manufactures its products in Canada and ships directly to its US 
distributor. For the UK market, Corby utilizes a third party contract 
bottler and distribution company for the production and distribution of Lamb's 
rum. International sales typically account for less than 10% of Corby's total 
annual sales. Distributors in both markets sell to various local wholesalers 
and retailers who in turn sell directly to the consumer. Reliable consumer 
purchase data is not readily available for these international markets and is, 
therefore, not discussed in this MD&A. 
Corby's operations are subject to seasonal fluctuations: sales are typically 
strong in the first and second quarters, while third-quarter sales usually 
decline after the end of the retail holiday season. Fourth-quarter sales 
typically increase again with the onset of warmer weather as consumers tend to 
increase their purchasing levels during the summer season. 
Strategies and Outlook 
Corby's business strategies are designed to maximize sustainable long-term 
value growth, and thus deliver solid profit while continuing to produce strong 
and consistent cash flows from operating activities. The Company's portfolio 
of owned and represented brands provides an excellent platform from which to 
achieve its current and long-term objectives moving forward. 
Management believes that having a focused brand prioritization strategy will 
permit Corby to capture market share in the segments and markets that are 
expected to deliver the most growth in value over the long term. Therefore, 
the Company's strategy is to focus its investments on, and leverage the 
long-term growth potential of, its key brands. As a result, Corby will 
continue to invest behind its brands to promote its premium offerings where it 
makes the most sense and drives the most value for shareholders. 
Brand prioritization requires an evaluation of each brand's potential to 
deliver upon this strategy, and facilitates Corby's marketing and sales teams' 
focus and resource allocation. Over the long term, management believes that 
effective execution of its strategy will result in value creation for 
shareholders. Recent disposal transactions (the sale of the Seagram Coolers 
brand in March 2011, and the October 2011 sale of certain non-core brands and 
the subsidiary that owned the Montreal bottling facility) reflect this 
strategy by streamlining Corby's portfolio and thus refocusing resources on 
key brands. 
Key to brand strategies being implemented is an effective route to market 
strategy. Corby is committed to investing in its trade marketing expertise and 
ensuring that its commercial resources are focused around the differing needs 
of its customers and the selling channels they inhabit. 
In addition, management is convinced that innovation is key to seizing new 
profit and growth opportunities. Successful innovation can be delivered 
through a structured and efficient process as well as consistent investment in 
consumer insight and research and development ("R&D"). As far as R&D is 
concerned, the Company benefits from access to leading-edge practices at PR's 
North American hub, which is located in Windsor, Ontario. 
Finally, the Company is a strong advocate of social responsibility, especially 
with respect to its sales and promotional activities. Corby will continue to 
promote the responsible consumption of its products in its activities. The 
Company stresses its core values throughout its organization, including those 
of conviviality, straightforwardness, commitment, integrity and 
entrepreneurship. 
Significant Events 
Corby's Board of Directors declare a special dividend
On November 7, 2012, the Corby Board of Directors declared a special dividend 
of $0.54 per share payable on January 10, 2013 on the Voting Class A Common 
Shares and Non-voting Class B Common Shares of Corby to shareholders of record 
as at the close of business on December 14, 2012. In view of the substantial 
impact the October 31, 2012 disposal transaction had on net earnings, it was 
deemed that an element of the payout be classed as a special dividend. This 
will ensure that the regular dividend is based on Corby's net earnings from 
its core business activities and, subject to business conditions and 
opportunities and appropriate adjustment for extraordinary events, will be 
paid quarterly on the basis of an annual amount equal to the greater of 75% of 
net earnings per share in the preceding fiscal year ended June 30, and $0.60 
per share. 
In addition, also on November 7, 2012, the Corby Board of Directors declared a 
regular dividend of $0.17 per share payable on December 14, 2012 on the Voting 
Class A Common Shares and Non-voting Class B Common Shares of Corby to 
shareholders of record as at the close of business on November 30, 2012. 
The special and regular dividend will result in a cash distribution of $15.4 
million and $4.8 million, respectively, to shareholders and will be sourced 
from Corby's current surplus cash position. 
Corby Distilleries Limited and Pernod Ricard USA, LLC Announce Distribution 
Agreement
Effective as of July 1, 2012, the Company entered into a five year agreement 
with Pernod Ricard USA, LLC ("PR USA"), an affiliated company, which provides 
PR USA the exclusive rights to represent Wiser's Canadian whisky and Polar Ice 
vodka in the US. Previously, Wiser's Canadian whisky and Polar Ice vodka were 
represented by an unrelated third party in this market. The agreement provides 
these key brands with access to PR USA's extensive national distribution 
network throughout the US and complements PR USA's premium brand portfolio. 
The agreement is effective for a five year period ending June 30, 2017. Since 
the agreement with PR USA is a related party transaction between Corby and PR 
USA, the agreement was approved by the Independent Committee of the Board of 
Directors of Corby following an extensive review, in accordance with Corby's 
related party transaction policy. 
Brand Performance Review 
Corby's portfolio of owned-brands accounts for more than 80% of the Company's 
total annual revenue. Included in this portfolio are its key brands: Wiser's 
Canadian whisky, Lamb's rum, Polar Ice vodka and Corby's mixable liqueur 
brands. The sales performance of these key brands significantly impacts 
Corby's net earnings. Therefore, understanding each key brand is essential to 
understanding the Company's overall performance. 
Shipment Volume and Shipment Value Performance 
The following chart summarizes the performance of Corby's owned-brands in 
terms of both shipment volume (as measured by shipments to customers in 
equivalent nine-litre cases) and shipment value (as measured by the change in 
gross sales revenue). The chart includes results for sales in both Canada and 
international markets. Specifically, the Wiser's, Lamb's and Polar Ice brands 
are also sold to international markets, particularly in the US and UK. 
International sales typically account for less than 10% of Corby's total 
annual revenues. 


                                                             

BRAND PERFORMANCE CHART - INCLUDES BOTH CANADIAN AND INTERNATIONAL
SHIPMENTS
                                                                      
                                           Three Months Ended
                                             % Shipment     % Shipment
                 Sept. 30,     Sept. 30,         Volume          Value

(Volumes in
000's of 9L                                                
cases)                2012          2011         Growth         Growth
                                                                      

Brand                                                                 

Wiser's
Canadian                                                   
whisky                 204           196             4%             7%

Lamb's rum             150           148             1%             3%

Polar Ice                                                  
vodka                  109            94            16%            22%

Mixable                                                    
liqueurs                41            47          (13%)           (9%)
                                                                      

Total Key                                                  
Brands                 504           485             4%             7%

Other
Corby-owned                                                
brands                  58            63           (8%)           (2%)
                                                                      

Total Corby                                                
brands                 562           548             3%             6%
                                                                      

  Disposed                                                 
  brands                 -            82         (100%)         (100%)
                                                                      

Total Corby
brands
including                                                  
Disposed
Brands                 562           630          (11%)           (5%)



Note that the above chart segregates "Disposed Brands" from the other 
Corby-owned brands. Disposed Brands include brands that are no longer owned by 
Corby as a result of the sale of certain non-core brands and the subsidiary 
that owned the Montreal plant on October 31, 2011. Shipment information 
associated with these Disposed Brands has been segregated in an effort to 
display the non-recurring impact on Corby's shipments, as comparisons with 
prior periods are otherwise no longer meaningful given that Corby no longer 
owns these brands. Up until the date of their sale, the Disposed Brands sold 
in the October 31, 2011 sale transaction were showing a trend of decline of 4% 
over prior year performance.

During the quarter, Corby's brands (excluding Disposed Brands) showed 3% 
growth in shipment volume and 6% growth in shipment value when compared to the 
same quarter last year. The Canadian spirits market is trending at +3% in 
both retail volume and value based on the same three month period ended 
September 30, 2012.

Polar Ice vodka had a particularly strong quarter with shipment volume and 
value growth of +16% and +22%, respectively. The vodka category in Canada 
continued its strong growth (+5% retail volumes) while Polar Ice also 
significantly benefited from a change in its promotional calendar. Corby's 
flagship brand, Wiser's Canadian whisky, had a successful quarter with 
shipment volume and value increases of 4% and 7%, respectively. While market 
trends for Canadian whisky remained relatively flat, Wiser's continues to 
outperform its category as it too enjoyed strong support from various media 
and other promotional programmes. Additionally, the brand's new innovative 
brand extension "Wiser's Spiced" recently launched and started shipping during 
the end of the quarter. Shipment volumes for Corby's mixable liqueur brands 
were behind that of the comparative period, however, mostly reflect changes to 
the brand's promotional calendar as retail trends continue to be steady and 
outpaced results for the overall liqueur category.

Internationally, Corby's shipment volumes improved 5% on a quarter over 
quarter comparison basis. While shipments of Wiser's and Polar Ice to the US 
remained consistent, Lamb's rum volumes in the UK benefited on account of a 
changing shipment profile since moving its international production to a third 
party bottler in the UK.

Retail Volume and Retail Value Performance

It is of critical importance to understand the performance of Corby's brands 
at the retail level in Canada. Analysis of performance at the retail level 
provides insight with regards to consumers' current purchase patterns and 
trends. Retail sales data, as provided by the ACD, is set out in the following 
chart and is discussed throughout this MD&A. It should be noted that the 
retail sales information presented does not include international retail sales 
of Corby-owned brands, as this information is not readily available. 
International sales typically account for less than 10% of Corby's total 
annual revenues.
                                                                     

RETAIL SALES FOR THE CANADIAN MARKET ONLY(1)
                                                                     
                                           Three Months Ended
                                                % Retail     % Retail
                      Sep. 30,     Sep. 30,       Volume        Value

(Volumes in 000's         2012         2011       Growth       Growth
of 9L cases)
                                                                     

Brand                                                                

Wiser's Canadian           172          167           3%           3%
whisky

Lamb's rum                 108          114         (5%)         (8%)

Polar Ice vodka            101           86          18%          13%

Mixable liqueurs            43           43         (1%)           0%
                                                                     

Total Key Brands           424          410           3%           2%

Other Corby-owned           54           56         (4%)         (7%)
brands (2)
                                                                     

Total                      478          466           3%           1%
                                                                     

((1)) Refers to sales at the retail store level in Canada, as
provided by the Association of Canadian Distillers.

((2)) Brands impacted by the October 31, 2011 sales transaction have
been excluded from this chart.  



In an effort to maintain focus on Corby's continuing business activities and 
the Company's brand prioritization strategy, brands impacted by the 
aforementioned sale transactions have been excluded from the above chart.

Overall, the retail volume performance of Corby-owned brands was consistent 
with trends seen in the Canadian spirits industry as a whole. The Canadian 
spirits industry increased +3% in both retail volume and retail value. Corby's 
key brands showed retail volume growth consistent with the market at +3%, 
while retail values grew +2%.

The growth in the Canadian spirits industry continued to be led by the vodka 
and rum categories (especially spiced rum). The vodka category had growth of 
+5% in retail volume and +4% retail value for the three month period ending 
September 30, 2012. The rum category showed retail volume and value growth of 
+3% during this same period. Whereas, the Canadian whisky category remained 
relatively flat for both retail volumes and retail value.

Summary of Corby's Key Brands

Wiser's Canadian Whisky
Corby's flagship brand, Wiser's Canadian whisky, once again outperformed the 
Canadian whisky category with +3% growth in retail sales volumes and value 
during the three month period ending September 30, 2012. Meanwhile the 
Canadian whisky category remained flat during this period. The Company 
continued to build upon the brand's success and capitalize on market trends 
for premium and flavoured spirits with the launch of Wiser's Spiced during the 
quarter.

Lamb's Rum
Lamb's rum, one of the top-selling rum families in Canada, experienced a 
decline in retail volumes during the three month period ending September 30, 
2012. Specifically, retail volume decreased 5% while retail value declined 8% 
on a quarter over quarter comparison basis, while the rum category in Canada 
increased 3% on retail value and retail volume. The growth in the rum category 
has been entirely driven by the growth in the spiced rum category, while 
consumer consumption of white rum has been flat on a quarter-over-quarter 
comparison basis. The Lamb's rum family has a significant amount of its volume 
weighted in white rum, and its performance is reflective of the performance of 
the category. Most recently during the summer months of 2012, the Company 
re-launched its spiced rum variant, Lamb's Black Sheep, offering an improved 
flavour profile and new packaging.

Polar Ice Vodka
Polar Ice vodka is among the top three largest vodka brands in Canada. Changes 
to the brand's promotional calendar and strategic pricing in key markets 
during the quarter have further built upon success the brand achieved in the 
last fiscal year. Market trends show growth of +18% in retail volume and +13% 
in retail value. The vodka category in Canada was +5% for retail volume and 
+4% for retail value when compared to the same three month period of the prior 
year. Aggressive investment in key markets, specifically Alberta, supported 
with an outdoor "Canada's Vodka" media campaign and strategic pricing were key 
reasons consumers have re-engaged with the brand during the last year.

Mixable Liqueurs
Corby's portfolio of mixable liqueur brands consists of McGuinness liqueurs 
(which is Canada's largest mixable liqueur brand family) and Meaghers 
liqueurs. Retail value and volumes for Corby's mixable liqueurs portfolio 
where slightly ahead of market trends (retail volume and value at -1%) when 
compared to the same period last year, while the category as a whole declined 
-2% for volume and -3% for value over this same period.

Other Corby-Owned Brands
Other Corby-Owned brands as a group had declines in retail volume of -4% and 
-7% in retail value for the three month period ending September 30, 2012. 
Royal Reserve, a Canadian whisky, is the most significant brand in this 
grouping. This brand's performance was behind the Canadian whisky category as 
a whole, with retail volumes at -7% and retail value at -9% for the same three 
month period. The brand experienced difficulties in Western Canada as 
consumers trended toward more premium whisky offerings.

Financial and Operating Results

The following table presents a summary of certain selected consolidated 
financial information of the Company for the years ended September 30, 2012 
and 2011.
                                                                

(in millions
of Canadian     
dollars,                                   Three Months Ended
                    Sept.                                     
                      30,       Sept. 30,                             

except per                                                           %
share amounts)       2012         2011( )       $ Change       Change 
                                                                      

Revenue          $   35.9     $      44.2     $    (8.3)         (19%)
                                                                      

Cost of sales      (14.0)          (19.4)            5.4         (28%)

Marketing,
sales and                                                     
administration     (12.4)          (11.9)          (0.5)            4%

Other income                                                  
(expense)             0.0           (0.3)            0.3        (106%)
                                                                      

Earnings from                                                 
operations            9.5            12.6          (3.1)         (25%)
                                                                      

Financial                                                     
income                0.4             0.5          (0.1)         (20%)

Financial                                                     
expenses            (0.1)           (0.2)            0.1         (32%)

Net financial                                                 
income                0.3             0.3            0.0            5%
                                                                      

Earnings
before income                                                 
taxes                 9.8            12.9          (3.2)         (24%)

Income taxes        (2.8)           (3.5)            0.7         (20%)
                                                                      

Net earnings     $    7.0     $       9.5     $    (2.5)         (26%)
                                                                      

Per common                                                    
share                                                                 

  - Basic net                                                 
  earnings       $   0.25     $      0.33     $   (0.09)         (26%)

  - Diluted                                                   
  net earnings   $   0.25     $      0.33     $   (0.09)         (26%)
                                                                



Overall Financial Results

Financial results for the quarter were substantially impacted by the sale of 
certain non-core brands and the subsidiary that owned the manufacturing plant 
in Montreal on October 31, 2011. As such, from November 1, 2011 and onward, 
results are impacted by the reduction of earnings resulting from this sale 
transaction as Corby's results no longer include earnings associated with the 
brands and manufacturing facility sold. However, the comparative period for 
the quarter ended September 30, 2011 includes the financial results of those 
brands and activities related to the bottling plant for the full three month 
period, given the Company's ownership at that time. In order to effectively 
assess Corby's current year's results against those of the prior year, the 
impact of the aforementioned sale transaction has been removed from the 
discussion, where noted.

As noted in the Financial and Operating Results chart, the Company's net 
earnings decreased $2.5 million for the quarter compared to same quarter last 
year. After removing the impacts of the aforementioned sale transaction, net 
earnings decreased $1.0 million or 13%, when compared to the same quarter last 
year. Earnings per share decreases mirror these results on the same 
comparative basis.

Positive shipment value growth (+6%) from Corby's owned-brands was offset by 
the Company having made significantly higher (+$1.4 million) investment in 
advertising and promotional activities phased into this quarter when compared 
with the same quarter last year. In addition, commission income from 
represented brands was also lower (-$0.4 million), on account of reduced 
commissioned sales volumes and the receipt of a one-time termination payment 
from a formerly represented brand owner in the comparative period.

The increased advertising and promotional investment this quarter supported 
the launch of Wiser's Spiced whisky and the re-launch of Lamb's Black Sheep. 
As well, a shift in the promotional calendar versus last year related to a 
Polar Ice vodka program also contributed to the increased spend on a quarter 
over quarter comparison basis.

Revenue

The following highlights the key components of the Company's revenue streams:
                                                                 
                                            Three Months Ended
                 Sept. 30,       Sept. 30,                             

(in millions                                                          %
of Canadian           2012            2011       $ Change       Change 
dollars)
                                                                       

Revenue                                                                
streams:

 Case goods
(excluding     $      28.5     $      28.1     $      0.4            1%
Disposed
Brands)

 Commissions           4.3             4.7          (0.4)          (9%)

 Other                 3.1             1.5            1.6          107%
services

Revenue,
excluding             35.9            34.3            1.6            5%
Disposed
Brands
                                                                       

Disposed                 -             9.9          (9.9)        (100%)
Brands
                                                                       

Revenue        $      35.9     $      44.2     $    (8.3)         (19%)
                                                                 



Removing the impact of the aforementioned sale transaction (which is denoted 
in the above chart as "Disposed Brands"), revenue from the remaining Corby 
brand portfolio and other business activities increased +5% compared to the 
same period last year or $1.6 million.

As previously discussed in the "Shipment Volume and Shipment Value 
Performance" section of this MD&A, Corby's owned-brands, or "Case Goods", saw 
its gross revenue increase +6% this quarter when compared to the same quarter 
last year. Note however, that international accounting standards require that 
certain advertising and promotional activities be reported net of revenue. As 
such, the revenue chart presented above indicates a net increase in Case Goods 
revenue of +1%, or $0.4M.

The increase in Case Goods revenue is driven by new pricing strategies and 
refocused promotional activities for certain key brands, notably Polar Ice 
vodka and Wiser's Canadian whisky. Case goods also benefited from the 
introduction of new innovations, most notably Wiser's Spiced whisky, and 
increased export sales activity in the UK markets.

Commissions are earned from the representation of PR and select Agency brands 
in the Canadian market. The Company experienced a decrease of $0.4 million 
this quarter on account of reduced commissioned sales volumes combined with 
the impact of having received a one-time termination payment from a formerly 
represented Agency brand owner in the comparative period.

Other services include revenue ancillary to the sale of Case Goods, such as 
logistics fees and miscellaneous bulk spirit sales. The increase in other 
services is almost entirely the result of having a higher volume of bulk 
whisky sales to a former contract bottling customer; these sales are not 
expected to continue into future periods as Corby's contractual commitments 
have now been fulfilled.

Cost of sales

Cost of sales was $14.0 million, representing a decrease of 28%, or $5.4 
million on a quarter over quarter comparison basis. The decrease in cost of 
sales is mostly the result of the aforementioned disposal transaction, as the 
Company no longer incurred production costs associated with the disposed 
brands and bottling facility. Gross margin for the year was 55.6% versus 51.0% 
last year (note: commissions are not included in this calculation). The 
improvement in gross margin is also a result of the disposal transactions 
(i.e., sale of the Montreal plant and certain non-core brands as of October 
31, 2011). The revenues derived from the formerly owned-brands and bottling 
facility generated significantly less margin than Corby's remaining Case Goods 
business.

Marketing, sales and administration

Marketing, sales and administration expenses were $12.4 million for the 
quarter, an increase of 4% or $0.5 million compared to the same quarter last 
year. This increase is primarily driven by advertising and promotional spend 
for key brands and new product innovations. Administrative expenses have 
remained consistent with the comparative period.

Other Income and Expenses

Other income and expenses include such items as realized foreign exchange 
gains and losses, gains on sale of property and equipment, and amortization of 
actuarial gains and losses related to the Company's pension and 
post-retirement benefit plans. The comparative period includes $0.4 million in 
legal, professional and other types of fees related to the aforementioned sale 
transaction, which closed subsequent to the quarter ending September 30, 2011.

Net Financial Income

Net financial income is comprised of interest earned on deposits in cash 
management pools, offset by interest costs associated with the Company's 
pension and post-retirement benefit plans. This balance is relatively 
consistent quarter-over-quarter.

Income taxes

Income tax expense for the year was $2.8 million as compared to $3.5 million 
last year. The following chart provides a reconciliation of the effective tax 
rate to the statutory rates for the period:
                                                               
                                                   Three Months Ended
                                              Sept. 30,       Sept. 30,
                                                   2012            2011
                                                                     

Combined basic Federal and Provincial tax           27%             27%
rates

Other                                                1%              0%
                                                               

Effective tax rate                                  28%             27%
                                                               



Liquidity and Capital Resources

Corby's sources of liquidity are its deposits in cash management pools of 
$112.9 million as at September 30, 2012, and its cash generated from operating 
activities. Corby's total contractual maturities are represented by its 
accounts payable and accrued liabilities and income and other taxes payable 
balances, which totalled $25.1 million as at September 30, 2012, and are all 
due to be paid within one year. The Company does not have any liabilities 
under short- or long-term debt facilities.

In addition, and as discussed in the Related Party section of this MD&A, the 
company has a commitment to purchase the representation rights for ABSOLUT and 
Plymouth gin brands for an additional term beginning September 30, 2013. The 
additional term will commence September 30, 2013 and last until September 29, 
2021 and will require a cash payment of $10.3 million on the date of 
commencement. The cost of the additional term will be recorded as a 
definite-lived intangible asset and will be amortized on a straight-line basis 
over the 8 year term of the agreement. The amortization will be recorded net 
of commissions. This treatment is consistent with current accounting policies 
applied to long-term representation rights. Funding for the settlement of this 
commitment will be sourced from deposits in cash management pools.

The Company believes that its deposits in cash management pools, combined with 
its historically strong operational cash flows, provide for sufficient 
liquidity to fund its operations, investing activities and commitments for the 
foreseeable future. The Company's cash flows from operations are subject to 
fluctuation due to commodity, foreign exchange and interest rate risks. Please 
refer to the "Risks and Risk Management" section of this MD&A for further 
information.

Cash flows
                                                                       
                                                Three Months Ended
                                 Sept. 30,       Sept. 30,            $

(in millions of Canadian                                      
dollars)                              2012         2011( )       Change
                                                                       

Operating activities                                                   

  Net earnings, adjusted                                      
  for non-cash items           $      10.9     $      14.3     $  (3.4)

  Net change in non-cash                                      
  working capital                      2.0             2.6        (0.6)

  Net payments for interest                                   
  and income taxes                   (5.9)           (3.3)        (2.6)
                                       7.0            13.6        (6.6)
                                                                       

Investing activities                                                   

  Proceeds from disposition                                   
  of property and equipment            0.1               -          0.1

  Deposits in cash                                            
  management pools                   (2.8)           (9.6)          6.8
                                     (2.7)           (9.6)          6.9
                                                                       

Financing activities                                                   

  Dividends paid                     (4.3)           (4.0)        (0.3)
                                                                       

Net change in cash             $         -     $         -     $      -
                                                                  



Operating activities

During the quarter, net cash flows from operating activities was $7.0 million 
compared to $13.6 million in the same quarter last year, representing a 
decrease of $6.6 million. Cash flows from operating activities have been 
significantly impacted by the previously mentioned sale of the Montreal plant 
and non-core brands. Reduced net earnings, adjusted for non-cash items, have 
been further impacted by an increase in tax payments compared to the same 
period last year.

Investing activities

Cash used in investing activities was $2.7 million this quarter compared to 
$9.6 million during the same quarter last year and substantially reflects the 
amount deposited in cash management pools. Changes in the amount deposited in 
cash management pools is dependent on how much cash is available after 
operating, other investing, and financing activities are completed. In the 
current year, less cash was deposited primarily due to a lower amount of cash 
generated from operating activities and a higher amount of dividends paid.

Deposits made to cash management pools represent cash on deposit with The Bank 
of Nova Scotia via Corby's Mirror Netting Service Agreement with PR. Corby has 
daily access to these funds and earns a market rate of interest from PR on its 
deposits. For more information related to these deposits, please refer to the 
"Related Party Transactions" section of this MD&A.

Financing activities

Cash used for financing activities totals $4.3 million for the quarter and 
represents the payment of dividends to shareholders. Dividend payments 
increased over the prior year due to changes to the dividend policy which 
increased regular quarterly dividends to $0.15 per share from $0.14 per share 
effective November 9, 2011. The payment of these dividends is in accordance 
with the Company's stated dividend policy.

The following table summarizes dividends paid and payable by the Company over 
the last two fiscal years:

for           Declaration     Record Date     Payment         $ / Share
              date                            date
                                                                     


          November 7,                                         0.54
2013 -        2012            December        January 10,     $
special       (special        14, 2012        2013 
          dividend) 
2013 - Q1     November 7,     November        December            0.17 
          2012            30, 2012        14, 2012 
2012 - Q4     August 29,      September       September           0.15 
          2012            15, 2012        30, 2012 
2012 - Q3     May 10,         May 31,         June 15,            0.15 


              2012            2012            2012

2012 - Q2     February 8,     February        March 15,           0.15
              2012            29, 2012        2012


          November 9,                                         1.85
2012 -        2011            December        January 3,       
special       (special        15, 2011        2012 
          dividend) 
2012 - Q1     November 9,     November        December            0.15 
          2011            30, 2011        15, 2011 
2011 - Q4     August 24,      September       September           0.14 
          2011            15, 2011        30, 2011 
2011 - Q3     May 11,         May 31,         June 15,            0.14 
          2011            2011            2011 
2011 - Q2     February 9,     February        March 15,           0.14 
          2011            28, 2011        2011 
Outstanding Share Data 
As at November 7, 2012, Corby had 24,274,320 Voting Class A Common Shares and 
4,194,536 Non-Voting Class B Common Shares outstanding. The Company does not 
have a stock option plan, and therefore, there are no options outstanding. 
Related Party Transactions 
Transactions with parent, ultimate parent, and affiliates
Corby engages in a significant number of transactions with its parent company, 
its ultimate parent and various affiliates. Specifically, Corby renders 
services to its parent company, its ultimate parent, and affiliates for the 
marketing and sale of beverage alcohol products in Canada. Furthermore, Corby 
outsources the large majority of its distilling, maturing, storing, blending, 
bottling and related production activities to its parent company. A 
significant portion of Corby's bookkeeping, recordkeeping services, data 
processing and other administrative services are also outsourced to its parent 
company. Transactions with the parent company, ultimate parent and affiliates 
are subject to Corby's related party transaction policy. 
The companies operate under the terms of agreements that became effective on 
September 29, 2006. These agreements provide the Company with the exclusive 
right to represent PR's brands in the Canadian market for 15 years, as well as 
providing for the continuing production of certain Corby brands by PR at its 
production facility in Windsor, Ontario, for 10 years. Corby also manages PR's 
business interests in Canada, including the Windsor production facility. 
Certain officers of Corby have been appointed as directors and officers of 
PR's Canadian entities, as approved by Corby's Board of Directors. 
In addition to the aforementioned agreements, Corby signed an agreement on 
September 26, 2008, with its ultimate parent to be the exclusive Canadian 
representative for the ABSOLUT vodka and Plymouth gin brands, for a five-year 
term expiring October 1, 2013. These brands were acquired by PR subsequent to 
the original representation rights agreement dated September 29, 2006. 
Further, on November 9, 2011, Corby entered into an agreement with PR for a 
new term for Corby's exclusive right to represent ABSOLUT vodka in Canada from 
September 30, 2013 to September 29, 2021, which is consistent with the term of 
Corby's Canadian representation for the other PR brands in Corby's portfolio. 
Under the agreement, Corby will pay the present value of $10 million for the 
additional eight years of the new term to PR at its commencement. Since the 
agreement with PR is a related party transaction, the agreement was approved 
by the Independent Committee of the Corby Board of Directors, in accordance 
with Corby's related party transaction policy, following an extensive review 
and with external financial and legal advice. Pursuant to this agreement, 
Corby also agreed to continue with the mirror netting arrangement with PR and 
its affiliates, under which Corby's excess cash will continue to be deposited 
to cash management pools. The mirror netting arrangement with PR and its 
affiliates is further described below. 
On July 1, 2012, the Company entered into a five year agreement with Pernod 
Ricard USA, LLC ("PR USA"), an affiliated company, which provides PR USA the 
exclusive right to represent Wiser's Canadian whisky and Polar Ice vodka in 
the US. The agreement provides these key brands with access to PR USA's 
extensive national distribution network throughout the US and complements PR 
USA's premium brand portfolio. The agreement is effective for a five year 
period ending June 30, 2017. The agreement with PR USA is a related party 
transaction between Corby and PR USA, as such; the agreement was approved by 
the Independent Committee of the Board of Directors of Corby following an 
extensive review, in accordance with Corby's related party transaction policy. 
Deposits in cash management pools 
Corby participates in a cash pooling arrangement under a Mirror Netting 
Service Agreement, together with PR's other Canadian affiliates, the terms of 
which are administered by The Bank of Nova Scotia. The Mirror Netting Service 
Agreement acts to aggregate each participant's net cash balance for purposes 
of having a centralized cash management function for all of PR's Canadian 
affiliates, including Corby. As a result of Corby's participation in this 
agreement, Corby's credit risk associated with its deposits in cash management 
pools is contingent upon PR's credit rating. PR's credit rating as at November 
7, 2012, as published by Standard & Poor's and Moody's, was BBB- and Baa3, 
respectively. PR compensates Corby for the benefit it receives from having the 
Company participate in the Mirror Netting Service Agreement by paying interest 
to Corby based upon the 30-day LIBOR rate plus 0.40%. 
Corby accesses these funds on a daily basis and has the contractual right to 
withdraw these funds or terminate these cash management arrangements upon 
providing five days' written notice. 
Selected Quarterly Information 
Summary of Quarterly Financial Results 
                                                                               
(in
millions
of               Q1       Q4       Q3       Q2       Q1       Q4       Q3       Q2
Canadian
dollars, 
except per
share          2013     2012     2012     2012     2012     2011     2011     2011
amounts) 


                                                                                  

Revenue      $ 35.9   $ 32.4   $ 29.2   $ 40.9   $ 44.2   $ 40.1   $ 32.4   $ 45.5

Earnings
from            9.5      6.6      6.1     33.6     12.6      9.4      4.3     13.7
operations

Net
earnings,
excluding       7.0      4.9      4.6      9.0      9.9      6.8      3.1      9.8
undernoted
items (
(1))

Net             7.0      4.9      4.6     27.1      9.5      6.8      4.8      9.8
earnings

Basic EPS      0.25     0.17     0.16     0.95     0.33     0.24     0.11     0.34

Diluted        0.25     0.17     0.16     0.95     0.33     0.24     0.11     0.34
EPS

((1)) Net earnings have been adjusted for the net after-tax gain on the sale of
plant and brands of $17.7 million in
 2012 and for the net after-tax loss on the sale of Seagram Coolers of $1.7
million in 2011.

The above chart demonstrates the seasonality of Corby's business, as sales are 
typically strong in the first and second quarters, while third-quarter sales 
(January, February and March) usually decline after the end of the retail 
holiday season. Fourth-quarter sales typically increase again with the onset 
of warmer weather, as consumers tend to increase their purchasing levels 
during the summer season.

The chart also highlights the effect the aforementioned sale transactions 
(i.e., the sale of certain non-core brands and the subsidiary that owned the 
Montreal plant in Q2-2012, and the sale of the Seagram Coolers brand in 
Q3-2011) had on the quarterly results. The line item in the chart "Net 
earnings, excluding undernoted items" removes the gain or loss on sale 
impacts. Also note that revenue has been substantially impacted as well, given 
the fact the company sold various brands and a contract bottling facility and 
thus no longer recognized revenue associated with the brands and activities 
after the date of sale.

Specifically, on a quarter-over-quarter comparative basis, revenues for 
Q1-2013 are lower by $9.9 million when compared to Q1-2012 due to the 
aforementioned changes to the Company's brand portfolio. Removing the impact 
of the aforementioned sale transactions, revenue from the remaining Corby 
brand portfolio and other business activities increased 5% for Q1-2013 when 
compared with Q1-2012. In addition, the Company's net earnings were impacted 
by the gain on the sale of the Montreal plant and non-core brands in the 
amount of $18.1 million in the second quarter for 2012. The third quarter of 
2011 was impacted by a loss on the sale of the Seagram Coolers brand in the 
amount of $1.7 million.

For further information regarding these sale transactions please refer to Note 
19 to the audited consolidated financial statements for the year ending June 
30, 2012.

New Accounting Pronouncements

(a)New accounting standards

(i)Deferred Taxes - Recovery of Underlying Assets

The IASB issued an amendment to IAS 12, "Income Taxes" ("IAS 12 amendment"), 
which introduces an exception to the general measurement requirements of IAS 
12 in respect of investment properties measured at fair value. The IAS 12 
amendment is effective for annual periods beginning on or after January 1, 
2012. The IAS 12 amendment did not have an impact on the Company's results of 
operations, financial position or disclosures.

(ii)Financial Instruments - Disclosures

On June 16, 2011 the IASB issued amendments to IAS 1, "Presentation of 
Financial Statements." The amendments enhance the presentation of Other 
Comprehensive Income ("OCI") in the financial statements. A requirement has 
been added to present items in other comprehensive income grouped on the basis 
of whether they may be subsequently reclassified to earnings in order to more 
clearly show the effect the items of other comprehensive income may have on 
future earnings. The amendments are effective for annual periods beginning on 
or after July 1, 2012. The amendments have not had an impact on the Company's 
presentation of other comprehensive income.

(b)Recent accounting pronouncements

A number of new standards, amendments to standards and interpretations have 
been issued but are not yet effective for the financial year ending June 30, 
2013, and accordingly, have not been applied in preparing these consolidated 
financial statements:

(i)Consolidated Financial Statements

In May 2011 the IASB issued IFRS 10, "Consolidated Financial Statements" 
("IFRS 10"), IFRS 11, "Joint Ventures" ("IFRS 11"), and IFRS 12, "Disclosure 
of Interest in Other Entities" ("IFRS 12"). In addition, the IASB amended 
IAS 27, "Consolidated and Separate Financial Statements" ("IAS 27") and IAS 
28, "Investments in Associates and Joint Ventures" ("IAS 28"). The objective 
of IFRS 10 is to define the principles of control and establish the basis of 
determining when and how an entity should be included within a set of 
consolidated financial statements. IFRS 11 establishes principles to determine 
the type of joint arrangement and guidance for financial reporting activities 
required by entities that have an interest in an arrangement that is jointly 
controlled. IFRS 12 enables users of the financial statements to evaluate the 
nature and risks associated with its interest in other entities and the 
effects of those interests on its financial performance.

IFRS 10, 11 and 12, and the amendments to IAS 27 and 28 are all effective for 
annual periods beginning on or after January 1, 2013 and must be applied 
retrospectively. For Corby, this set of standards and amendments become 
effective July 1, 2013. The Company is currently assessing the impact of IFRS 
10, 11, and 12 and the amendments to IAS 27 and 28 on its consolidated 
financial statements.

(ii)Fair Value Measurement

On May 12, 2011 the IASB issued IFRS 13, "Fair Value Measurement" ("IFRS 13") 
which defines fair value, provides guidance in a single IFRS framework for 
measuring fair value and identifies the required disclosures pertaining to 
fair value measurement. IFRS 13 applies to all International Financial 
Reporting Standards that require or permit fair value measurements or 
disclosures. IFRS 13 defines fair value as the price that would be received to 
sell an asset or paid to transfer a liability in an orderly transaction 
between market participants at the measurement date. This standard is 
effective for annual periods beginning on or after January 1, 2013, and must 
be applied retrospectively. For Corby this standard becomes effective July 1, 
2013. The Company is currently assessing the impact of IFRS 13 on its 
consolidated financial statements.

(iii)Employee Benefits

On June 16, 2011 the IASB issued amendments to IAS 19, "Employee Benefits" 
("IAS 19"), which eliminates the option to defer the recognition of actuarial 
gains and losses through the "corridor" approach, revises the presentation of 
changes in assets and liabilities arising from defined benefit plans and 
enhances the disclosures for defined benefit plans. IAS 19 is effective for 
annual periods beginning on or after January 1, 2013, and must be applied 
retrospectively. For Corby, the revisions to this standard become effective 
July 1, 2013. The Company is currently assessing the impact of this amendment 
on its consolidated financial statements.

(iv)Financial Instruments - Asset and Liability Offsetting

The IASB has issued amendments to IFRS 7 and IAS 32, "Financial Instruments: 
Presentation" ("IAS 32"), which clarify the requirements for offsetting 
financial instruments and require new disclosures on the effect of offsetting 
arrangements on an entity's financial position. The amendments to IFRS 7 are 
effective for annual periods beginning on or after January 1, 2013 and must be 
applied retrospectively. For Corby, this standard will become effectively July 
1, 2013. The Company is assessing the impact of the amendments to IFRS 7 and 
IAS 32 on its consolidated financial statements.

(v)Financial Instruments

The IASB has issued a new standard, IFRS 9, "Financial Instruments" ("IFRS 
9"), which will ultimately replace IAS 39, "Financial Instruments: Recognition 
and Measurement" ("IAS 39"). The replacement of IAS 39 is a multi-phase 
project with the objective of improving and simplifying the reporting for 
financial instruments and the issuance of IFRS 9 is part of the first phase of 
this project. IFRS 9 uses a single approach to determine whether a financial 
asset or liability is measured at amortized cost or fair value, replacing the 
multiple rules in IAS 39. For financial assets, the approach in IFRS 9 is 
based on how an entity manages its financial instruments in the context of its 
business model and the contractual cash flow characteristics of the financial 
assets. IFRS 9 requires a single impairment method to be used, replacing 
multiple impairment methods in IAS 39. For financial liabilities measured at 
fair value, fair value changes due to changes in an entity's credit risk are 
presented in other comprehensive income. IFRS 9 is effective for annual 
periods beginning on or after January 1, 2015 and must be applied 
retrospectively. For Corby, this standard will become effective July 1, 2015. 
The Company is currently assessing the impact of the new standard on its 
consolidated financial statements.

Internal Controls Over Financial Reporting

The Company maintains a system of disclosure controls and procedures to 
provide reasonable assurance that all material information relating to the 
Company is gathered and reported to senior management on a timely basis so 
that appropriate decisions can be made regarding public disclosure.

In addition, the CEO and CFO have designed, or caused to be designed under 
their supervision, internal controls over financial reporting to provide 
reasonable assurance regarding the reliability of financial reporting and the 
preparation of financial statements for external purposes in accordance with 
IFRS. Internal control systems, no matter how well designed, have inherent 
limitations. Therefore, even those systems determined to be designed 
effectively can provide only reasonable assurance with respect to financial 
reporting and financial statement preparation.

There were no changes in internal control over financial reporting during the 
Company's most recent interim period that have materially affected, or are 
reasonably likely to materially affect, the Company's internal controls over 
financial reporting.

Risks & Risk Management

The Company is exposed to a number of risks in the normal course of its 
business that have the potential to affect its operating and financial 
performance.

Industry and Regulatory

The beverage alcohol industry in Canada is subject to government policy, 
extensive regulatory requirements and significant rates of taxation at both 
the federal and provincial levels. As a result, changes in the government 
policy, regulatory and/or taxation environments within the beverage alcohol 
industry may affect Corby's business operations, causing changes in market 
dynamics or changes in consumer consumption patterns. In addition, the 
Company's provincial LB customers have the ability to mandate changes that can 
lead to increased costs, as well as other factors that may impact financial 
results.

The Company continuously monitors the potential risk associated with any 
proposed changes to its government policy, regulatory and taxation 
environments and, as an industry leader, actively participates in trade 
association discussions relating to new developments.

Consumer Consumption Patterns

Beverage alcohol companies are susceptible to risks relating to changes in 
consumer consumption patterns. Consumer consumption patterns are affected by 
many external influences, not the least of which is the economic outlook and 
overall consumer confidence in the stability of the economy as a whole. Corby 
offers a diverse portfolio of products across all major spirits categories and 
at various price points, which complements consumer desires and offers 
exciting innovation.

Distribution/Supply Chain Interruption

The Company is susceptible to risks relating to distributor and supply chain 
interruptions. Distribution in Canada is largely accomplished through the 
government-owned provincial LBs and, therefore, an interruption (e.g., a 
labour strike) for any length of time may have a significant impact on the 
Company's ability to sell its products in a particular province and/or market.

Supply chain interruptions, including a manufacturing or inventory disruption, 
could impact product quality and availability. The Company adheres to a 
comprehensive suite of quality programs and proactively manages production and 
supply chains to mitigate any potential risk to consumer safety or Corby's 
reputation and profitability.

Environmental Compliance

Environmental liabilities may potentially arise when companies are in the 
business of manufacturing products and, thus, required to handle potentially 
hazardous materials. As Corby outsources its production, including all of its 
storage and handling of maturing alcohol, the risk of environmental 
liabilities is considered minimal. Corby currently has no significant recorded 
or unrecorded environmental liabilities.

Industry Consolidation

In recent years, the global beverage alcohol industry has experienced a 
significant amount of consolidation. Industry consolidation can have varying 
degrees of impact and, in some cases, may even create exceptional 
opportunities. Either way, management believes that the Company is well 
positioned to deal with this or other changes to the competitive landscape in 
Canada.

Competition

The Canadian beverage alcohol industry is extremely competitive. Competitors 
may take actions to establish and sustain a competitive advantage through 
advertising and promotion and pricing strategies in an effort to maintain 
market share. Corby constantly monitors the market and adjusts its own 
strategies as appropriate. Competitors may also affect Corby's ability to 
attract and retain high-quality employees. The Company's long heritage attests 
to Corby's strong foundation and successful execution of its strategies. Being 
a leading Canadian beverage alcohol company helps facilitate recruitment 
efforts.

Credit Risk

Credit risk arises from deposits in cash management pools held with PR via 
Corby's participation in the Mirror Netting Service Agreement (as previously 
described in the "Related Party Transactions" section of this MD&A), as well 
as credit exposure to customers, including outstanding accounts and note 
receivable. The maximum exposure to credit risk is equal to the carrying value 
of the Company's financial assets. The objective of managing counter-party 
credit risk is to prevent losses in financial assets. The Company assesses the 
credit quality of its counter-parties, taking into account their financial 
position, past experience and other factors. As the large majority of Corby's 
accounts receivable balances are collectable from government-controlled LBs, 
management believes the Company's credit risk relating to accounts receivable 
is at an acceptably low level. The Company's note receivable is secured.

Exposure to Interest Rate Fluctuations

The Company does not have any short- or long-term debt facilities. Interest 
rate risk exists, as Corby earns market rates of interest on its deposits in 
cash management pools and also has a note receivable that earns a fixed rate 
of interest. An active risk management program does not exist, as management 
believes that changes in interest rates would not have a material impact on 
Corby's financial position over the long term.

Exposure to Commodity Price Fluctuations

Commodity risk exists, as the manufacture of Corby's products requires the 
procurement of several known commodities, such as grains, sugar and natural 
gas. The Company strives to partially mitigate this risk through the use of 
longer-term procurement contracts where possible. In addition, subject to 
competitive conditions, the Company may pass on commodity price changes to 
consumers through pricing over the long term.

Foreign Currency Exchange Risk

The Company has exposure to foreign currency risk, as it conducts business in 
multiple foreign currencies; however, its exposure is primarily limited to the 
US dollar ("USD") and UK pound sterling ("GBP"). Corby does not utilize 
derivative instruments to manage this risk. Subject to competitive conditions, 
changes in foreign currency rates may be passed on to consumers through 
pricing over the long term.

USD Exposure
The Company's demand for USD has traditionally outpaced its supply, due to USD 
sourcing of production inputs exceeding that of the Company's USD sales. 
Therefore, decreases in the value of the Canadian dollar ("CAD") relative to 
the USD will have an unfavourable impact on the Company's earnings.

GBP Exposure
The Company's exposure to fluctuations in the value of the GBP relative to the 
CAD was reduced as both sales and cost of production are denominated in GBP. 
While Corby's exposure has been minimized, increases in the value of the CAD 
relative to the GBP will have an unfavourable impact on the Company's earnings.

Third-Party Service Providers

HWSL, which Corby manages on behalf of PR, provides more than 80% of the 
Company's production requirements, among other services including 
administration and information technology. However, the Company is reliant 
upon certain third-party service providers in respect of certain of its 
operations. It is possible that negative events affecting these third-party 
service providers could, in turn, negatively impact the Company. While the 
Company has no direct control over how such third parties are managed, it has 
entered into contractual arrangements to formalize these relationships. In 
order to minimize operating risks, the Company actively monitors and manages 
its relationships with its third-party service providers.

Brand Reputation and Trademark Protection

The Company promotes nationally branded, non-proprietary products as well as 
proprietary products. Damage to the reputation of any of these brands, or to 
the reputation of any supplier or manufacturer of these brands, could 
negatively impact consumer opinion of the Company or the related products, 
which could have an adverse impact on the financial performance of the 
Company. The Company strives to mitigate such risks by selecting only those 
products from suppliers that strategically complement Corby's existing brand 
portfolio and by actively monitoring brand advertising and promotion 
activities. The Company registers trademarks, as applicable, while constantly 
watching for and responding to competitive threats, as necessary.

Valuation of Goodwill and Intangible Assets

Goodwill and intangible assets account for a significant amount of the 
Company's total assets. Goodwill and intangible assets are subject to 
impairment tests that involve the determination of fair value. Inherent in 
such fair value determinations are certain judgments and estimates including, 
but not limited to, projected future sales, earnings and capital investment; 
discount rates; and terminal growth rates. These judgments and estimates may 
change in the future due to uncertain competitive market and general economic 
conditions, or as the Company makes changes in its business strategies. Given 
the current state of the economy, certain of the aforementioned factors 
affecting the determination of fair value may be impacted and, as a result, 
the Company's financial results may be adversely affected.

The following chart summarizes Corby's goodwill and intangible assets and 
details the amounts associated with each brand (or basket of brands) and 
market:
                                                                        
                                    Carrying Values as at September 30,
                                                    2012
                                                                        

Associated       Associated       Goodwill       Intangibles       Total
Brand            Market
                                                                        

Various PR       Canada         $        -     $        40.8     $  40.8
brands


             United
Lamb's rum       Kingdom(                                          


                 (1))                  1.4              11.8        13.2

Corby            Canada 
domestic                               1.9                 -         1.9
brands
                                                                        
                                $      3.3     $        52.6     $  55.9
                                                                        

((1)) The international business for Lamb's rum is primarily focused in
the UK, however, the trademarks and licences purchased, relate to all
international markets outside of Canada, as Corby previously owned the
Canadian rights.



Therefore, economic factors (such as consumer consumption patterns) specific 
to these brands and markets are primary drivers of the risk associated with 
their respective goodwill and intangible assets valuations.

Employee Future Benefits

The Company has certain obligations under its registered and non-registered 
defined benefit pension plans and other post-retirement benefit plan. There is 
no assurance that the Company's benefit plans will be able to earn the assumed 
rate of return. New regulations and market-driven changes may result in 
changes in the discount rates and other variables, which would result in the 
Company being required to make contributions in the future that differ 
significantly from estimates. An extended period of depressed capital markets 
and low interest rates could require the Company to make contributions to 
these plans in excess of those currently contemplated, which, in turn, could 
have an adverse impact on the financial performance of the Company. Somewhat 
mitigating the impact of a potential market decline is the fact that the 
Company monitors its pension plan assets closely and follows strict guidelines 
to ensure that pension fund investment portfolios are diversified in-line with 
industry best practices. For further details related to Corby's defined 
benefit pension plans, please refer to Note 15 of the consolidated financial 
statements for the year ended June 30, 2012.

CORBY
DISTILLERIES                                               
LIMITED                                                                

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS                      
                                                                       

(Unaudited)                                                            

(in thousands
of Canadian                                                
dollars)                                                               
                                                                       
                               Sept. 30,       June 30,       Sept. 30,
                    Note            2012           2012            2011
                                                                       

ASSETS                                                                 

Deposits in
cash                                                       
management
pools                        $   112,920     $  110,113     $   106,244

Accounts                                                   
receivable            4           30,126         28,611          29,171

Inventories           5           47,040         47,760          58,578

Prepaid                                                    
expenses                             280            555           1,607

Current
portion of                                                 
note
receivable            6              600            600             600

Assets held                                                
for sale              7                -              -          11,060
                                                                       

Total current                                              
assets                           190,966        187,639         207,260

Note                                                       
receivable            6            1,200          1,200           1,800

Deferred                                                   
income taxes                           -              -           1,604

Property and                                               
equipment                          7,245          7,524           6,754

Goodwill                           3,278          3,278           3,278

Intangible                                                 
assets                            52,639         53,771          57,169
                                                                       

Total assets                 $   255,328     $  253,412     $   277,865
                                                               

LIABILITIES                                                            

Accounts
payable and                                                
accrued
liabilities           8      $    24,430     $   22,400     $    18,696

Income and
other taxes                                                
payable                              712          3,656             433

Liabilities                                                
held for sale         7                -              -           1,201
                                                                       

Total current                                              
liabilities                       25,142         26,056          20,330

Provision for                                              
pensions                          10,719         10,550          12,822

Deferred                                                   
income taxes                         923            983               -
                                                                       

Total                                                      
liabiliites                       36,784         37,589          33,152
                                                                       

Shareholders'                                              
equity                                                                 

Share capital                     14,304         14,304          14,304

Retained                                                   
earnings                         204,240        201,519         230,409
                                                                       

Total
shareholders'                                              
equity                           218,544        215,823         244,713
                                                                       

Total
liabilities
and                                                        
shareholders'
equity                       $   255,328     $  253,412     $   277,865


                                                              
                                                              

CORBY DISTILLERIES LIMITED                                             

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS      
                                                                       

(Unaudited)                                                            

(in thousands of Canadian
dollars, except per share                                 
amounts)                                                               
                                                                       
                                            For the Three Months Ended
                                                                       
                                             Sept. 30,        Sept. 30,
                                 Note             2012             2011
                                                                       

Revenue                            9      $     35,940     $     44,223
                                                                       

Cost of sales                                 (14,038)         (19,378)

Marketing, sales and                                      
administration                                (12,413)         (11,921)

Other income and expense          10              (18)            (311)
                                                                       

Earnings from operations                         9,471           12,613
                                                                       

Financial income                                   452              495

Financial expenses                               (137)            (162)

Net financial income              11               315              333
                                                                       

Earnings before income                                    
taxes                                            9,786           12,946
                                                                       

Current income taxes                           (2,855)          (3,633)

Deferred income taxes                               60              147

Income taxes                                   (2,795)          (3,486)
                                                                       

Net earnings                              $      6,991     $      9,460
                                                                       

Basic earnings per share                  $       0.25     $       0.33

Diluted earnings per share                $       0.25     $       0.33
                                                                       

Weighted average common                                   
shares outstanding                                                     

Basic                                       28,468,856       28,468,856

Diluted                                     28,468,856       28,468,856


                                                      
                                                      

CORBY DISTILLERIES LIMITED                                            

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                      

(Unaudited)                                                            

(in thousands of Canadian dollars)                                    
                                                                       
                                            For the Three Months Ended
                                                                      
                                            Sept 30,          Sept 30,
                                                2012              2011
                                                                      

Net earnings                              $    6,991      $      9,460
                                                                      

Other comprehensive income                         -                 -
                                                                      

Total comprehensive income                $    6,991      $      9,460
                                                                         
                                                                               

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                                               

(Unaudited)                                                                    

(in thousands
of Canadian                                                            
dollars)                                                                       
                                                                               
                                           Accumulated
                                                 Other                 
                               Share     Comprehensive     Retained
                    Note     Capital            Income     Earnings       Total
                                                                               

Balance as at              $           $                 $            $
July 1, 2012                  14,304                 -      201,519     215,823

Net earnings                       -                 -        6,991       6,991

Other
comprehensive                                                          
income                             -                 -            -           -

Dividends                          -                 -      (4,270)     (4,270)
                                                                               

Balance as at
September 30,              $           $                 $            $
2012                          14,304                 -      204,240     218,544
                                                                               

Balance as at              $           $                 $            $
July 1, 2011                  14,304                 -      224,935     239,239

Net earnings                       -                 -        9,460       9,460

Other
comprehensive                                                          
income                             -                 -            -           -

Dividends                          -                 -      (3,986)     (3,986)
                                                                               

Balance as at
September 30,              $           $                 $            $
2011                          14,304                 -      230,409     244,713


                                                           
                                                           

CORBY DISTILLERIES                                         
LIMITED                                                               

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW      
                                                                      

(Unaudited)                                                           

(in thousands of Canadian                                  
dollars)                                                              
                                                                      
                                            For the Three Months Ended
                                                                      
                                            Sept. 30,        Sept. 30,
                                Notes            2012             2011
                                                                      

Operating activities                                                  

Net earnings                              $     6,991     $      9,460

Adjustments for:                                                      

Amortization and                                           
depreciation                      12            1,372            1,568

Net financial income              11            (315)            (333)

Gain on disposal of                                        
property and equipment                           (69)                -

Income tax expense                              2,795            3,486

Provision for pensions                             77              152
                                               10,851           14,333

Net change in non-cash                                     
working capital balances          13            2,020            2,556

Interest received                                 385              434

Income taxes paid                             (6,288)          (3,729)
                                                                      

Net cash from operating                                    
activities                                      6,968           13,594
                                                                      

Investing activities                                                  

Additions to property and                                  
equipment                                        (46)                -

Proceeds from disposition                                  
of property and equipment                         155                -

Deposits in cash                                           
management pools                              (2,807)          (9,608)
                                                                      

Net cash used in                                           
investing activities                          (2,698)          (9,608)
                                                                      

Financing activity                                                    

Dividends paid                                (4,270)          (3,986)
                                                                      

Net cash used in                                           
financing activity                            (4,270)          (3,986)
                                                                      

Net increase in cash                                -                -

Cash, beginning of period                           -                -
                                                                      

Cash, end of period                       $         -     $          -


    

CORBY DISTILLERIES LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

(Unaudited)
(in thousands of Canadian dollars, except per share amounts)

1. GENERAL INFORMATION

Corby Distilleries Limited ("Corby" or the "Company") is a leading Canadian 
marketer of spirits and importer of wines. The Company derives its revenues 
from the sale of its owned-brands in Canada and other international markets, 
as well as earning commissions from the representation of selected non-owned 
brands in the Canadian marketplace. Revenues predominantly consist of sales 
made to each of the provincial liquor boards in Canada.

Corby is controlled by Hiram Walker & Sons Limited ("HWSL"), which is a wholly 
owned subsidiary of Pernod Ricard, S.A. ("PR"), a French public limited 
company that owned 51.6% of the outstanding Voting Class A Common Shares of 
Corby as at June 30, 2012.

Corby is a public company incorporated and domiciled in Canada, whose shares 
are traded on the Toronto Stock Exchange. The Company's registered address is 
225 King Street West, Suite 1100, Toronto, ON M5V 3M2.

2. BASIS OF PREPARATION

Statement of compliance
These interim condensed consolidated financial statements have been prepared 
in accordance with International Accounting Standard 34, "Interim Financial 
Reporting" ("IAS 34"), as issued by the International Accounting Standards 
Board ("IASB"). They have been prepared using the accounting policies that 
were described in Note 3 to the Company's annual consolidated financial 
statements as at and for the year ended June 30, 2012, except as described in 
Note 3(a) to these condensed consolidated financial statements.

These interim condensed consolidated financial statements should be read in 
conjunction with the Company's 2012 annual financial statements.

These interim condensed consolidated financial statements were approved by the 
Company's Board of Directors on November 7, 2012.

Functional and presentation currency
The Company's interim condensed consolidated financial statements are 
presented in Canadian dollars, which is the Company's functional and 
presentation currency.

Foreign currency translation
Transactions denominated in foreign currencies are translated into the 
functional currency using the exchange rate applying at the transaction date. 
Non-monetary assets and liabilities denominated in foreign currencies are 
recognized at the historical exchange rate applicable at the transaction date. 
Monetary assets and liabilities denominated in foreign currencies are 
translated at the exchange rate applying at the balance sheet date. Foreign 
currency differences related to operating activities are recognized in 
earnings from operations for the period; foreign currency differences related 
to financing activities are recognized within net financial income.

Basis of Measurement
These interim condensed consolidated financial statements are prepared in 
accordance with the historical cost model, except for certain categories of 
assets and liabilities, which are measured in accordance with other methods 
provided for by IFRS as described in Note 3 to the Company's annual 
consolidated financial statements as at and for the year ended June 30, 2012. 
Historical cost is generally based on the fair value of the consideration 
given in exchange for assets.

Seasonality
The interim condensed consolidated financial statements should not be taken as 
indicative of the performance to be expected for the full year due to the 
seasonal nature of the spirits business. Corby's operations are subject to 
seasonal fluctuations as sales are typically strong in the first and second 
quarters, while third-quarter sales usually decline after the end of the 
retail holiday season. Fourth-quarter sales typically increase again with the 
onset of warmer weather as consumers tend to increase their purchasing levels 
during the summer season.

Use of Estimates and Judgements 
The preparation of the interim condensed consolidated financial statements in 
conformity with IFRS requires management to make certain judgements, estimates 
and assumptions that affect the application of accounting policies, the 
reported amounts of assets and liabilities, disclosure of contingent assets 
and liabilities at the date of the consolidated financial statements, and the 
reported amounts of revenues and expenses during the reporting period. These 
estimates are made on the assumption the Company will continue as a going 
concern and are based on information available at the time of preparation. 
Estimates may be revised where the circumstance on which they were based 
change or where new information becomes available. Future outcomes can differ 
from these estimates.

Judgement is commonly used in determining whether a balance or transaction 
should be recognized in the consolidated financial statements and estimates 
and assumptions are more commonly used in determining the measurement of 
recognized transactions and balances. However, judgement and estimates are 
often interrelated.

The Company has applied judgement in determining the tax rates used for 
measuring deferred taxes and identifying the indicators of impairment for 
property and equipment, goodwill and intangible assets. In the absence of 
standards or interpretations applicable to a specific transaction, management 
uses its judgement to define and apply accounting policies that provide 
relevant and reliable information in the context of the preparation of the 
financial statements.

Estimates are used when estimating the useful lives of property and equipment 
and intangible assets for the purpose of depreciation and amortization, when 
accounting for or measuring items such as allowances for uncollectible 
accounts receivable and inventory obsolescence, assumptions underlying the 
actuarial determination of provision for pensions, income and other taxes, 
provisions, certain fair value measures including those related to the 
valuation of share-based payments and financial instruments, and when testing 
goodwill, intangible assets and other assets for impairment. Actual results 
may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. 
Revisions to accounting estimates are recognized in the period in which the 
estimates are revised and in any future periods affected.

3. SIGNIFICANT ACCOUNTING POLICIES

(a)New accounting standards

(i)Deferred Taxes - Recovery of Underlying Assets

The IASB issued an amendment to IAS 12, "Income Taxes" ("IAS 12 amendment"), 
which introduces an exception to the general measurement requirements of IAS 
12 in respect of investment properties measured at fair value. The IAS 12 
amendment is effective for annual periods beginning on or after January 1, 
2012. The IAS 12 amendment did not have an impact on the Company's results of 
operations, financial postion or disclosures.

(ii)Financial Instruments - Disclosures

On June 16, 2011 the IASB issued amendments to IAS 1, "Presentation of 
Financial Statements." The amendments enhance the presentation of Other 
Comprehensive Income ("OCI") in the financial statements. A requirement has 
been added to present items in other comprehensive income grouped on the basis 
of whether they may be subsequently reclassified to earnings in order to more 
clearly show the effect the items of other comprehensive income may have on 
future earnings. The amendments are effective for annual periods beginning on 
or after July 1, 2012. The amendments have not had an impact on the Company's 
presentation of other comprehensive income.

(b)Recent accounting pronouncements

A number of new standards, amendments to standards and interpretations have 
been issued but are not yet effective for the financial year ending June 30, 
2013, and accordingly, have not been applied in preparing these consolidated 
financial statements:

(i)Consolidated Financial Statements

In May 2011 the IASB issued IFRS 10, "Consolidated Financial Statements" 
("IFRS 10"), IFRS 11, "Joint Ventures" ("IFRS 11"), and IFRS 12, "Disclosure 
of Interest in Other Entities" ("IFRS 12"). In addition, the IASB amended 
IAS 27, "Consolidated and Separate Financial Statements" ("IAS 27") and IAS 
28, "Investments in Associates and Joint Ventures" ("IAS 28"). The objective 
of IFRS 10 is to define the principles of control and establish the basis of 
determining when and how an entity should be included within a set of 
consolidated financial statements. IFRS 11 establishes principles to determine 
the type of joint arrangement and guidance for financial reporting activities 
required by entities that have an interest in an arrangement that is jointly 
controlled. IFRS 12 enables users of the financial statements to evaluate the 
nature and risks associated with its interest in other entities and the 
effects of those interests on its financial performance.

IFRS 10, 11 and 12, and the amendments to IAS 27 and 28 are all effective for 
annual periods beginning on or after January 1, 2013 and must be applied 
retrospectively. For Corby, this set of standards and amendments become 
effective July 1, 2013. The Company is currently assessing the impact of IFRS 
10, 11, and 12 and the amendments to IAS 27 and 28 on its consolidated 
financial statements.

(ii) Fair Value Measurement

On May 12, 2011 the IASB issued IFRS 13, "Fair Value Measurement" ("IFRS 13") 
which defines fair value, provides guidance in a single IFRS framework for 
measuring fair value and identifies the required disclosures pertaining to 
fair value measurement. IFRS 13 applies to all International Financial 
Reporting Standards that require or permit fair value measurements or 
disclosures. IFRS 13 defines fair value as the price that would be received to 
sell an asset or paid to transfer a liability in an orderly transaction 
between market participants at the measurement date. This standard is 
effective for annual periods beginning on or after January 1, 2013, and must 
be applied retrospectively. For Corby this standard becomes effective July 1, 
2013. The Company is currently assessing the impact of IFRS 13 on its 
consolidated financial statements.

(iii)Employee Benefits

On June 16, 2011 the IASB issued amendments to IAS 19, "Employee Benefits" 
("IAS 19"), which eliminates the option to defer the recognition of actuarial 
gains and losses through the "corridor" approach, revises the presentation of 
changes in assets and liabilities arising from defined benefit plans and 
enhances the disclosures for defined benefit plans. IAS 19 is effective for 
annual periods beginning on or after January 1, 2013, and must be applied 
retrospectively. For Corby, the revisions to this standard become effective 
July 1, 2013. The Company is currently assessing the impact of this amendment 
on its consolidated financial statements.

(iv)Financial Instruments - Asset and Liability Offsetting

The IASB has issued amendments to IFRS 7 and IAS 32, "Financial Instruments: 
Presentation" ("IAS 32"), which clarify the requirements for offsetting 
financial instruments and require new disclosures on the effect of offsetting 
arrangements on an entity's financial position. The amendments to IFRS 7 are 
effective for annual periods beginning on or after January 1, 2013 and must be 
applied retrospectively. For Corby, this standard will become effectively July 
1, 2013. The Company is assessing the impact of the amendments to IFRS 7 and 
IAS 32 on its consolidated financial statements.

(v)Financial Instruments

The IASB has issued a new standard, IFRS 9, "Financial Instruments" ("IFRS 
9"), which will ultimately replace IAS 39, "Financial Instruments: Recognition 
and Measurement" ("IAS 39"). The replacement of IAS 39 is a multi-phase 
project with the objective of improving and simplifying the reporting for 
financial instruments and the issuance of IFRS 9 is part of the first phase of 
this project. IFRS 9 uses a single approach to determine whether a financial 
asset or liability is measured at amortized cost or fair value, replacing the 
multiple rules in IAS 39. For financial assets, the approach in IFRS 9 is 
based on how an entity manages its financial instruments in the context of its 
business model and the contractual cash flow characteristics of the financial 
assets. IFRS 9 requires a single impairment method to be used, replacing 
multiple impairment methods in IAS 39. For financial liabilities measured at 
fair value, fair value changes due to changes in an entity's credit risk are 
presented in other comprehensive income. IFRS 9 is effective for annual 
periods beginning on or after January 1, 2015 and must be applied 
retrospectively. For Corby, this standard will become effective July 1, 2015. 
The Company is currently assessing the impact of the new standard on its 
consolidated financial statements.

4. ACCOUNTS RECEIVABLE
                                                         
                         Sept. 30,       June 30,       Sept. 30,
                              2012           2012            2011
                                                                 

Trade receivables      $    18,720     $   19,722     $    19,890

Due from related                                       
parties                     11,346          8,852           7,860

Other receivables               60             37           1,421
                                                                 
                       $    30,126     $   28,611     $    29,171

As at September 30, 2011, other receivables included amounts owing from Brick 
Brewing Co., Limited for inventory transferred as part of the sale of the 
Seagram Coolers brand on March 15, 2011, and also includes interest accrued on 
the secured promissory note receivable also due from Brick Brewing Co., 
Limited as described in Note 6 of these financial statements. The amount owing 
from Brick related to inventory was paid in full during the year ended June 
30, 2012. For additional information regarding the sale of the Seagram Coolers 
brand, please refer to Note 19 of the most recently prepared annual 
consolidated financial statements for the year ended June 30, 2012.

5. INVENTORIES
                                                               
                       Sept. 30,       June 30,       Sept. 30,
                            2012           2012            2011
                                                               

Raw materials        $     1,969     $    1,597     $     5,414

Work-in-progress          38,759         40,703          44,478

Finished goods             6,312          5,460           8,686
                                                               
                     $    47,040     $   47,760     $    58,578



The cost of inventory recognized as an expense and included in cost of goods 
sold for the three months ended September 30, 2012 was $11,354 (2011 - 
$16,695). During the three month periods ended September 30, 2012 and 2011, 
the Company did not record any significant write-downs of inventory as a 
result of net realizable value being lower than cost. During the three month 
periods ending September 30, 2012 and 2011, the Company did not reverse any 
significant inventory write-downs recognized in previous periods.

6. NOTE RECEIVABLE
                                                                    
                            Sept. 30,       June 30,       Sept. 30,
                                 2012           2012            2011
                                                                    

Note receivable           $     1,800     $    1,800     $     2,400

Less: current portion             600            600             600
                                                                    
                          $     1,200     $    1,200     $     1,800



As part of the Company's sale of the Seagram Coolers brand on March 15, 2011, 
the purchase price was satisfied in part by a promissory note secured by 
specific property and issued by the purchaser in favour of Corby for $2,400, 
which will be paid in equal annual instalments of $600 plus interest of 5% per 
annum, with the final payment due January 31, 2015. For additional 
information regarding this disposal transaction, please refer to Note 19 of 
the most recently prepared annual consolidated financial statements for the 
year ended June 30, 2012.

7. ASSETS HELD FOR SALE

On September 27, 2011, the Company announced that it had entered into an 
agreement to sell certain owned-brands as well as the shares of its 
wholly-owned subsidiary that owns the manufacturing and bottling facility 
located in Montréal, Québec. The transaction closed on October 31, 
2011.The transaction involved the sale of 17 brands, as well as the 
Montréal-based manufacturing facility where a significant portion of the 
brands are produced. The assets and liabilities associated with this 
transaction have been presented as assets and liabilities held for sale in the 
statement of financial position at September 30, 2011.

At September 30, 2011, the disposal group classified as held for sale 
comprised of the following:

Property, plant and equipment                               $   8,452

Goodwill                                                        2,608
                                                                     

Assets classifed as held for sale                           $  11,060
                                                                     
                                                                     

Deferred income tax liabiities related to assets held      
for sale                                                    $   1,201
                                                                     

Liabilities classified as held for sale                     $   1,201



8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
                                                             
                             Sept. 30,       June 30,       Sept. 30,
                                  2012           2012            2011
                                                             

Trade payables and         $    19,425     $   16,584     $    13,340
accruals

Due to related parties           5,005          5,816           5,356
                                                                     
                           $    24,430     $   22,400     $    18,696



9. REVENUE

The Company's revenue consists of the following streams:
                                            
                                                 Three months ended
                                           Sept. 30,        Sept. 30,
                                                2012             2011
                                                                     

Case good sales                          $    28,520      $    31,037

Commissions (net of amortization of                     
representation rights)                         4,289            4,682

Other services                                 3,131            8,504
                                                                     
                                         $    35,940      $    44,223



Commissions are shown net of long-term representation rights amortization of 
$1,133, (2011 - $1,133). Other services include revenues incidental to the 
manufacture of case goods, logistics fees and miscellaneous bulk spirit sales 
(the comparative period also includes contract bottling revenues).

10. OTHER INCOME AND EXPENSE

The Company's other income (expense) consist of the following amounts:
                                                                    
                                                Three months ended
                                           Sept. 30,       Sept. 30,
                                                2012            2011
                                                                    

Foreign exchange gains                   $        17     $        81

Selling costs related to assets held                      
for sale                                           -           (404)

Gains on disposal of property and                         
equipment                                         69               -

Amortization of actuarial (losses)                        
gains under defined benefit plans              (104)              12
                                                                    
                                         $      (18)     $     (311)



11. NET FINANCIAL INCOME

The Company's financial income (expense) consists of the following amounts:
                                           
                                                Three months ended
                                          Sept. 30,        Sept. 30,
                                               2012             2011
                                                                    

Interest income                         $       452      $       495

Interest expense                               (44)             (13)

Net financial impact of pensions               (93)            (149)
                                                                    
                                       $        315      $       333



12. EXPENSES BY NATURE

Earnings from operations include depreciation and amortization, as well as 
personnel expenses as follows:
                                         
                                              Three months ended
                                        Sept. 30,         Sept. 30,
                                             2012              2011
                                                                   

Depreciation of property and          $                 $
equipment                                     239               435

Amortization of intangible assets           1,133             1,133

Salary and payroll costs                    4,953             6,144

Expenses related to pensions and                         
benefits                                      574               491
                                                                   
                                      $     6,899       $     8,203



13. NET CHANGE IN NON-CASH WORKING CAPITAL BALANCES
                                              
                                                   Three months ended
                                             Sept. 30,        Sept. 30,
                                                  2012             2011
                                                                       

Accounts receivable                        $   (1,515)      $     1,834

Inventories                                        720            1,076

Prepaid expenses                                   275              124

Income tax and other taxes recoverable                       
/ payable                                          489              318

Accounts payable and accrued                                 
liabilities                                      2,051            (796)
                                                                       
                                           $     2,020      $     2,556



14. DIVIDENDS

On November 7, 2012, subsequent to the quarter ended September 30, 2012, the 
Board of Directors declared a regular quarterly dividend of $0.17 per common 
share, payable December 14, 2012, to shareholders of record as at the close of 
business on November 30, 2012. The Board of Directors also declared a special 
dividend of $0.54 per common share, payable January 10, 2013, to shareholders 
of record as at the close of business on December 14, 2012. The dividends are 
in accordance with the Company's dividend policy.

15. RELATED PARTY TRANSACTIONS

Transactions with parent, ultimate parent, and affiliates
The majority of Corby's issued and outstanding voting Class A shares are owned 
by HWSL. HWSL is a wholly-owned subsidiary of PR. Therefore, HWSL is Corby's 
parent and PR is Corby's ultimate parent. Affiliated companies are 
subsidiaries which are controlled by Corby's parent and/or ultimate parent.

The companies operate under the terms of agreements that became effective on 
September 29, 2006. These agreements provide the Company with the exclusive 
right to represent PR's brands in the Canadian market for 15 years, as well as 
providing for the continuing production of certain Corby brands by PR at its 
production facility in Windsor, Ontario, for 10 years. Corby also manages PR's 
business interests in Canada, including the Windsor production facility. 
Certain officers of Corby have been appointed as directors and officers of 
PR's Canadian entities, as approved by Corby's Board of Directors.

In addition to the aforementioned agreements, Corby signed an agreement on 
September 26, 2008, with its ultimate parent to be the exclusive Canadian 
representative for the ABSOLUT vodka and Plymouth gin brands, for a five-year 
term expiring October 1, 2013. These brands were acquired by PR subsequent to 
the original representation rights agreement dated September 29, 2006.

On November 9, 2011, the Company announced that it has entered into an 
agreement with PR for a new term for Corby's exclusive right to represent 
ABSOLUT vodka and Plymouth gin brands in Canada from September 30, 2013 to 
September 29, 2021, which is consistent with the term of Canadian 
representation for the other PR brands in Corby's portfolio. Under the 
agreement, Corby will pay the present value of $10 million for the additional 
eight years of the new term to PR at its commencement.

Effective as of July 1, 2012, the Company entered into a five year agreement 
with Pernod Ricard USA, LLC ("PR USA"), an affiliated company, which provides 
PR USA the exclusive rights to represent Wiser's Canadian whisky and Polar Ice 
vodka in the US. Previously, Wiser's Canadian whisky and Polar Ice vodka were 
represented by an unrelated third party in this market. The agreement is 
effective for a five year period ending June 30, 2017. Since the agreement 
with PR USA is a related party transaction between Corby and PR USA, the 
agreement was approved by the Independent Committee of the Board of Directors 
of Corby following an extensive review, in accordance with Corby's related 
party transaction policy.

Related party transactions are recorded at the exchange amount. Transactions 
between Corby and its parent, ultimate parent and affiliates during the period 
are as follows:
                                               
                                                   Three months ended
                                              Sept. 30,       Sept. 30,
                                                   2012            2011
                                                                       

Sales to related parties                                               

Commissions - parent, ultimate parent                      
and affiliated companies                    $     4,755     $     4,861

Blending and bottling services - parent               -             184

Products for resale at an export level                     
- affiliated companies                              766             129

Bulk spirits - parent                                 3             113
                                                                       
                                            $     5,524     $     5,287
                                                                       

Cost of goods sold, purchased from                         
related parties                                                        

Distilling, blending, and production                       
services - parent                           $     5,056     $     4,421

Bulk spirits - parent                                 -             552
                                                                       
                                            $     5,056     $     4,973
                                                                       

Administrative services purchased from                     
related parties                                                        

Marketing, selling and administraton                       
services- parent                            $       511     $       511



Balances outstanding with related parties are due within 60 days, are to be 
settled in cash and are unsecured.

Corby has a number of defined benefit pension plans; contributions to these 
plans totaled $330 for the three month period ending September 30, 2012 (2011 
- $322).

During the three month period ending September 30, 2012, Corby sold casks to 
its parent company for net proceeds of $150 (2011 - $nil).

Deposits in cash management pools
Corby participates in a cash pooling arrangement under the Mirror Netting 
Service Agreement together with PR's other Canadian affiliates, the terms of 
which are administered by The Bank of Nova Scotia. The Mirror Netting Services 
Agreement acts to aggregate each participant's net cash balance for the 
purposes of having a centralized cash management function for all of PR's 
Canadian affiliates, including Corby.

As a result of Corby's participation in this agreement, Corby's credit risk 
associated with its deposits in cash management pools is contingent upon PR's 
credit rating. PR's credit rating as at November 7, 2012, as published by 
Standard & Poor's and Moody's, was BBB- and Baa3, respectively. PR compensates 
Corby for the benefit it receives from having the Company participate in the 
Mirror Netting Services Agreement by paying interest to Corby based upon the 
30-day LIBOR rate plus 0.40%. During the three month period ending September 
30, 2012, Corby earned interest income of $430 from PR (2011 - $387). Corby 
has the right to terminate its participation in the Mirror Netting Services 
Agreement at any time, subject to five days' written notice.

16. SEGMENT INFORMATION

Corby has two reportable segments: Case Goods and Commissions. Corby's Case 
Goods segment derives its revenue from the production and distribution of its 
owned beverage alcohol brands. Corby's portfolio of owned-brands includes some 
of the most renowned and respected brands in Canada, such as Wiser's Canadian 
whisky, Lamb's rum, Polar Ice vodka, and McGuinness liqueurs.

Corby's Commissions segment earns commission income from the representation of 
non-owned beverage alcohol brands in Canada. Corby represents leading 
international brands such as ABSOLUT vodka, Chivas Regal, The Glenlivet and 
Ballantine's scotches, Jameson Irish whiskey, Beefeater gin, Malibu rum, 
Kahlúa liqueur, Mumm champagne, and Jacob's Creek and Wyndham Estate wines.

The Commissions segment's financial results are fully reported as 
"Commissions" in Note 9 of these consolidated statements. Therefore, a chart 
detailing operational results by segment has not been provided as no 
additional meaningful information would result.

17. SUBEQUENT EVENTS

On November 7, 2012, subsequent to the first quarter ended September 30, 2012, 
the Board of Directors of Corby declared a special dividend in the amount of 
$0.54 per common share. This dividend will be paid on January 10, 2012, on 
Voting Class A Common Shares and Non-voting Class B Common Shares of the 
Company to shareholders of record as at the close of business on December 14, 
2012. This dividend will be in addition to Corby's regular dividend of $0.17 
per share which was also declared by the Corby's Board of Directors on the 
same day. The special dividend will result in a cash distribution of 
approximately $15.4 million to shareholders and will be sourced from the 
Company's current surplus cash deposits.





CORBY DISTILLERIES LIMITED John Leburn, Vice-President and Chief Financial 
Officer Tel.: 416-479-2400 investors@corby.ca www.Corby.ca

SOURCE: Corby Distilleries Limited

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CO: Corby Distilleries Limited
ST: Ontario
NI: ERN DIV 

-0- Nov/07/2012 16:45 GMT