Corby Distilleries announces quarterly dividend and reports second quarter financial results

Corby Distilleries announces quarterly dividend and reports second quarter 
financial results 
TORONTO, Feb. 6, 2013 /CNW/ - Corby Distilleries Limited ("Corby" or the 
"Company") (TSX:CDL.A), (TSX:CDL.B) today reported its dividend and 
financial results for the second quarter ended December 31, 2012. The Corby 
Board of Directors today also declared a dividend of $0.17 per share payable 
on March 15, 2013 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 February 28, 2013. 
Comparative period results include the substantial impact of a sale 
transaction whereby the Company sold certain non-core brands and the 
subsidiary that owned the manufacturing plant in Montréal, Québec on October 
31, 2011. After excluding such sale transaction impacts, on a like-for-like 
basis, for the quarter: 


    --  shipments decreased -1%
    --  revenue was consistent with prior year, and
    --  net earnings increased +3%.

The increased net earnings this quarter benefited from the strong performance 
of the Company's flagship brand, Wiser's Canadian whisky, as it continued to 
build upon the brand's success and capitalize on market trends for premium and 
flavoured spirits with the launch of the Wiser's Spiced brand extension. Other 
key factors were a positive phasing impact on advertising and promotional 
spend, which was mostly offset by a reduction in bulk whisky sales.

On a year-to-date basis, positive shipment volume and value growth (+1% and 
+4%, respectively) from Corby's owned-brands was not sufficient to offset the 
reduction in bulk sales and a higher effective tax rate, which accounted for 
the -5% reduction in year-to-date earnings.

"While the market remains highly competitive, we remain confident in our 
strategy of continued focus on priority brands, route to market and 
innovation, including the successful launch of the Wiser's Spiced brand 
extension", 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 interim consolidated financial statements and accompanying notes 
for the three- and six-month periods ended December 31, 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®, Stoneleigh® 
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, respectively.

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 financial results are 
reported in Canadian dollars.


CORBY DISTILLERIES LIMITED
Management's Discussion and Analysis
December 31, 2012 
The following Management's Discussion and Analysis ("MD&A") dated February 6, 
2013, should be read in conjunction with the unaudited interim condensed 
consolidated financial statements and accompanying notes as at and for the 
three and six month periods ended December 31, 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 February 6, 
2013. 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 second quarter of fiscal 2013 (three months 
ended December 31, 2012) are against results for the second quarter of fiscal 
2012 (three months ended December 31, 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 six-month 
period ended December 31, 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 
formerly owned plant in Montréal, Québec, continues to manufacture most of 
the Corby products that were produced there prior to the sale. 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. Past disposal transactions (i.e., 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 eliminating brands with 
below average performance trends 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. Building upon 
Corby's success as a leader in the Canadian whisky category, Corby has 
recently launched Wiser's Spiced, a variant of the iconic Wiser's Canadian 
whisky brand, and introduced two premium small-batch Canadian whiskies, "Pike 
Creek" and "Lot 40". 
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. 
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               Six Months Ended
                      Shipment Shipment               Shipment Shipment
            Dec. Dec. % Volume  % Value    Dec.  Dec. % Volume  % Value
             31,  31,                       31,   31,

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

Brand                                                                  

Wiser's
Canadian     244  230       6%       7%     448   426       5%       7%
whisky

Lamb's rum   166  172     (3%)       0%     316   320     (1%)       1%

Polar Ice     98  113    (14%)    (14%)     207   207       0%       2%
vodka

Mixable       57   56       2%       5%      98   103     (5%)     (1%)
liqueurs
                                                                       

Total Key    565  571     (1%)       1%   1,068 1,056       1%       4%
Brands

All other
Corby-owned   60   58       4%       7%     119   122     (2%)       2%
brands
                                                                       

Total Corby  625  629     (1%)       2%   1,187 1,178       1%       4%
brands
                                                                       

  Disposed     -   26   (100%)   (100%)       -   108   (100%)   (100%)
  brands
                                                                       

Total Corby
brands                                                                 
including 

  disposed   625  655     (5%)     (1%)   1,187 1,286     (8%)     (3%)
  brands
                                                                



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. The sale of these non-core brands supports 
management's brand prioritization strategy, allowing Corby to focus resources 
to drive long-term value growth for key brands.

For the three-month period ended December 31, 2012, Corby's brands (excluding 
Disposed Brands) showed a -1% decline in shipment volume while shipment 
value increased +2% when compared to the same period last year. While Wiser's 
continued its exceptional growth trend (+6% in shipment volume and +7% in 
shipment value), Polar Ice shipments, as anticipated, pulled back in the 
second quarter after first quarter shipments were +16%. The brand's uneven 
shipment volume performance over the first two quarters of the year were 
simply the result of planned changes to its promotional calendar when compared 
to the same six-month period last year.

For the six-month period ended December 31, 2012, Corby brands (excluding 
Disposed Brands) showed +1% growth in volumes and +4% growth in value when 
compared to the same period last year. Wiser's Canadian Whisky, Corby's 
flagship brand, is driving these positive results with shipment volume and 
value increases of +5% and +7%, respectively. While market trends for Canadian 
whisky are in decline, Wiser's continues to outperform its category with 
strong support from various media and other promotional programmes. In 
addition, Wiser's new innovative brand extension 'Wiser's Spiced' was also a 
significant contributor to the brand's overall shipment performance with 
shipments of ten thousand 9-litre cases during the period. Corby's mixable 
liqueur brands saw its volumes lag behind that of the comparative period as 
production delays at our third-party bottling supplier in Montreal have 
impacted the brands' shipment patterns.

Internationally, Corby's shipment volumes declined -11% and -5% for the three- 
and six-month periods, respectively, when compared to the same periods last 
year. The decline is predominately due to declines in Lamb's rum volumes in 
the UK market. Supply-change improvements were implemented to improve 
efficiency and responsiveness to market demands with the Company's third-party 
UK bottling supplier and have impacted shipment volumes.

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                 Six Months Ended
                            %      %                  % Retail % Retail
                       Retail Retail
            Dec. Dec.  Volume  Value    Dec. Dec. 31,   Volume    Value
             31,  31,                    31,

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

Brand                                                                  

Wiser's
Canadian     235  235      0%     1%     407      402       1%       2%
whisky

Lamb's       138  149    (8%)   (7%)     246      265     (7%)     (5%)
rum

Polar Ice     97  112   (13%)   (9%)     200      200       0%       1%
vodka

Mixable       62   65    (5%)   (5%)     104      107     (3%)     (3%)
liqueurs
                                                                       

Total Key    532  561    (5%)   (3%)     957      973     (2%)     (1%)
Brands

All other
Corby-owned   61   61    (0%)   (3%)     117      118     (2%)     (5%)
brands
                                                                       

Total        593  623    (5%)   (3%)   1,074    1,091     (2%)     (1%)
                                                                       

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



In an effort to maintain focus on Corby's continuing business activities and 
the Company's brand prioritization strategy, Disposed Brands have been 
excluded from the above chart.

The Canadian spirits industry as a whole delivered moderate growth during the 
six-month period ending December 31, 2012, with retail volume increases of +1% 
and retail value increases of +2% when compared to the same period last year. 
Even the typically dynamic vodka and rum (driven by spiced rum) categories 
experienced only moderate growth of +1% in retail volume and +2% in retail 
value during the six-month period.

As the retail sales chart above denotes, Corby's brand portfolio fell short of 
its overall retail volume and retail value performance attained during the 
same three- and six-month periods last year. While Wiser's continued to 
outperform its category in Canada, the rest of the portfolio did not match 
their respective categories' performance. Further discussion of each of 
Corby's key brands is noted below.

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 +1% growth in retail sales volumes and +2% 
growth in retail sales value during the six-month period ending December 31, 
2012. Meanwhile the Canadian whisky category declined -1% in both retail 
volume and retail value 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, which was a significant 
contributor to the overall brand's growth this quarter.

Lamb's Rum
Lamb's rum, one of the top-selling rum families in Canada, experienced a 
decline in retail volumes during the six-month period ending December 31, 
2012. Specifically, retail volume and retail value decreased -7% and -5%, 
respectively, on a year-over-over comparison basis, while the rum category in 
Canada increased +1% in retail volume and +2% in retail value. The growth in 
the rum category has been entirely driven by spiced rum, while consumer 
consumption of white rum has been on a decline. 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 that category. While Lamb's volumes have 
remained strong in its key markets, volume decreases are due to non-repeat of 
promotional activity in Alberta. 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. Since the re-launch, 
Lamb's Black Sheep has had promising results with retail value and retail 
volume growth of +3% and +5%, respectively.

Polar Ice Vodka
Polar Ice vodka is among the top three largest vodka brands in Canada. On a 
year-to-date basis, the brand saw its retail volumes remain consistent while 
its retail sales increased +1% when compared to the same six-month period last 
year. The vodka category reported slightly more positive trends with retail 
volumes +1% and retail values +2% for the same period. Management believes 
results for the three-month period are more of an anomaly rather than being 
reflective of the start of a longer-term trend. The performance shift between 
second quarter and first quarter (as first quarter posted +18% growth in 
retail volume) is reflective of planned changes to the brand's promotional 
calendar. Specifically, the Company moved key programming from second quarter 
in the prior year to first quarter in the current year. As such, retail 
results over the six-month period will be more reflective of actual 
performance. Polar Ice benefited from aggressive investment in key markets, 
specifically Alberta, and continues to be supported with an outdoor "Canada's 
Vodka" media campaign.

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 fell 
behind market trends (retail volume and value at -3%) when compared to the 
same six-month period last year, while the category as a whole declined -2% 
for volume and value over this same period. In addition to the soft overall 
liqueur category in Canada, Corby's mixable liqueur brands were adversely 
impacted during the period by production delays at our third party bottling 
supplier. Management is monitoring and actively taking steps to mitigate 
recurrence in the future.

Other Corby-Owned Brands
Other Corby-Owned brands as a group had declines in retail volume and retail 
value of -2% and -5%, respectively, for the six-month period ending December 
31, 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 -4% and retail value at -6% for 
the same six-month period. Retail performance for the brand experienced 
difficulties in Western Canada as consumers trended toward more premium whisky 
offerings. Also included in this group are two new premium small-batch 
Canadian whisky innovations introduced during the quarter, "Pike Creek" and 
"Lot 40", both of which have been well received by the whisky community. Lot 
40 recently was named "Canadian Whisky of the Year" by Whisky Advocate 
magazine.

Financial and Operating Results

The following table presents a summary of certain selected consolidated 
financial information of the Company for the three- and six-month periods 
ended December 31, 2012 and 2011.
                                                                                           
                                                                                    
                             Three Months Ended                       Six Months Ended

(in millions       Dec.      Dec.                          Dec.      Dec.
of Canadian         31,       31,                           31,       31,                  
dollars,

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

Revenue        $   37.7  $   40.9  $  (3.3)     (8%)   $   73.6  $   85.1 $ (11.5)    (14%)
                                                                                           

Cost of sales    (13.8)    (16.8)       3.0    (18%)     (27.8)    (36.1)      8.3    (23%)

Marketing,
sales and        (11.8)    (12.5)       0.7     (6%)     (24.2)    (24.4)      0.2     (1%)
administration

Gain on sale
of plant and          -      21.9    (21.9)   (100%)          -      21.5   (21.5)   (100%)
brands

Other income      (0.1)         -     (0.1)      N/A      (0.1)       0.1    (0.2)   (255%)
(expense)
                                                                                           

Earnings from      12.0      33.6    (21.6)    (64%)       21.5      46.2   (24.7)    (53%)
operations
                                                                                           

Financial           0.5       0.5     (0.1)    (10%)        0.9       1.0    (0.1)     (9%)
income

Financial         (0.1)     (0.1)     (0.0)       1%      (0.3)     (0.3)      0.0     (9%)
expenses

Net financial       0.3       0.4     (0.1)    (13%)        0.6       0.7    (0.1)    (10%)
income
                                                                                           

Earnings
before income      12.3      34.0    (21.6)    (64%)       22.1      46.9   (24.8)    (53%)
taxes

Income taxes      (3.3)     (6.9)       3.5    (51%)      (6.1)    (10.4)      4.2    (41%)
                                                                                           

Net earnings   $    9.0  $   27.1  $ (18.1)    (67%)   $   16.0  $   36.5 $ (20.5)    (56%)
                                                                                           

Per common                                                                                 
share

  - Basic net  $   0.32  $   0.95  $ (0.63)    (67%)   $   0.56  $   1.28 $ (0.72)    (56%)
  earnings

  - Diluted    $   0.32  $   0.95  $ (0.63)    (67%)   $   0.56  $   1.28 $ (0.72)    (56%)
  net earnings
                                                                                      



Overall Financial Results 
Comparison of current quarter and six month period results with those of the 
same periods last year are complicated by a sale transaction completed on 
October 31, 2011 whereby Corby sold certain non-core brands and the subsidiary 
that owned the manufacturing plant in Montréal, Quebec. Therefore, in order 
to make comparisons on a like for like basis, the chart below removes the 
effects the aforementioned sale transaction had on net earnings by excluding 
the Disposed Brands and earnings related to the subsidiary that owned the 
manufacturing plant in Montreal, Quebec:
                                                      
                                                      
                           Three Months Ended                       Six Months Ended
                Dec.      Dec.                         Dec.     Dec.                      
                 31,       31,                          31,      31,

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

Net earnings  $  9.0    $ 27.1   $ (18.1)    (67%)   $ 16.0   $ 36.5   $ (20.5)      (56%)
                                                                                          

Less
transaction                                                                               
impacts:                                                            

  Net gain on
  sale             -      18.0     (18.0)   (100%)        -     17.7     (17.7)     (100%)
  transaction                                                  

  Earnings
  from brands      -       0.3      (0.3)   (100%)        -      2.1      (2.1)     (100%)
  and plant                                                    
                   -      18.3     (18.3)   (100%)        -     19.7     (19.7)     (100%)
                                                                                          

Net earnings,
excl.         $         $        $              3%   $        $        $  (0.8)       (5%)
transaction      9.0       8.8        0.2              16.0     16.8
                                                                                          



After excluding the significant impacts the sale transaction had on the 
comparative periods, net earnings for the quarter increased 3% or $0.2 
million. However, year-to-date results declined 5% or $0.8 million. The 
increase quarter-over-quarter was primarily on account of lower advertising 
and promotional expense due to planned changes in Corby's promotional calendar 
(i.e., certain activities were shifted to first quarter which occurred in 
second quarter last year). This increase was mostly offset by a reduction in 
bulk whisky sales as the Company fulfilled its contractual commitments to a 
former contract bottling customer on September 30, 2012.

On a year-to-date basis, net earnings decreased -5% (after removing the impact 
of the aforementioned sale transaction). Positive shipment volume and value 
growth (+1% and +4%, respectively) from Corby's owned-brands was more than 
offset by a reduction in earnings from the sale of bulk whisky. As previously 
mentioned, the Company completed its requirements to supply bulk whisky to a 
former contract bottling customer on September 30, 2012.

Revenue

The following highlights the key components of the Company's revenue streams:
                                                                                         
                                                                                    
                            Three Months Ended                      Six Months Ended
                  Dec.     Dec.                         Dec.     Dec.                    
                   31,      31,                          31,      31,

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

Revenue                                                                                  
streams:

 Case goods
(ex.           $  31.3   $ 30.5   $    0.8       3%   $ 59.8   $ 58.6   $    1.2       2%
disposed
brands)

 Commissions       4.9      4.8        0.1       2%      9.2      9.4      (0.2)     (2%)

 Other             1.5      2.5      (1.0)    (41%)      4.6      4.0        0.6      15%
services

Revenue, ex.
disposed          37.7     37.8      (0.1)       0%     73.6     72.0        1.6       2%
brands
                                                                                         

Disposed             -      3.1      (3.1)   (100%)        -     13.1     (13.1)   (100%)
brands
                                                                                         

Revenue        $  37.7   $ 40.9   $  (3.2)     (8%)   $ 73.6   $ 85.1   $           (14%)
                                                                          (11.5)
                                                                                    



Revenue for the quarter, excluding the impact of the aforementioned sale 
transaction (which is denoted in the above chart as "Disposed Brands"), saw 
its Case Goods business lift +3%, Commissions +2%, while revenue from other 
services declined as expected (-41%), when compared with the same quarter last 
year. The $1.0 million decrease in other services was the result of the 
Company completing its contractual commitments to sell bulk whisky to a former 
contract bottling customer on September 30, 2012.

For the six-month period ended December 31, 2012, revenues (excluding Disposed 
Brands) increased +2% when compared to the same six-month period last year, or 
$1.6 million. The increase was mostly delivered by the Company's Case Goods 
business, and reflects solid volume increases from its Wiser's Canadian whisky 
brand (+5% shipment volumes when compared to the same six-month period last 
year) as well as favourable product mix and general price increases. For 
further discussion on Corby's brand performance please refer to the "Brand 
Performance Review" section of this MD&A.

Cost of sales

Significant decreases in cost of sales for both the quarter (-$3.0 million) 
and six-month period (-$8.3 million) ended December 31, 2012, were primarily 
the result of the aforementioned sale transaction, as the Company no longer 
incurred production costs associated with the Disposed Brands and the formerly 
owned bottling facility.

Gross margins were 57.7% and 58.5% for the three- and six-month periods ended 
December 31, 2012, respectively, versus 53.6% and 52.3% for the same three- 
and six-month periods last year (note: commissions are not included in this 
calculation). The improved gross margin is a result of the sale transaction. 
The revenues derived from the Disposed Brands and the formerly owned bottling 
facility generated significantly less margin than Corby's remaining Case Goods 
business.

Marketing, sales and administration

On a quarter-over-quarter comparison basis, marketing, sales and 
administration expenses decreased 6% or $0.7 million. The decrease was 
primarily driven by a reduction in advertising and promotional spend during 
the period due to planned changes to Corby's promotional calendar. On a 
year-to-date basis, marketing, sales and administration expenses were 
consistent at $24.2 million, representing only a slight decrease of 1% or $0.2 
million compared to the same six-month period last year. Administrative 
expenses have remained relatively consistent in both the quarter and six-month 
periods when compared to the same periods last year. Management continues to 
target spend towards market opportunities, innovation (Wiser's Spiced) and 
consumer trends.

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. Other income and expenses remained consistent 
on both a three- and six-month year over year comparison basis.

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 for both the three- and six-month comparative periods.

Income taxes

Income tax expense for the three- and six-month periods was $3.3 million and 
$6.1 million, respectively, as compared to $6.9 million and $10.4 million for 
the same periods last year. Income tax expense in the comparative periods was 
substantially impacted by the aforementioned sale transaction. The following 
chart provides a reconciliation of the effective tax rate to the statutory 
rates for each period:
                                                              
                                                              
                                Three Months Ended   Six Months Ended
                                Dec. 31    Dec. 31   Dec. 31  Dec. 31
                                   2012       2011      2012     2011
                                                                   

Combined basic Federal and          27%        27%       27%      27%
Provincial tax rates

Net capital gain on disposal of      0%       (6%)        0%     (4%)
plant and non-core brands

Other                                0%       (1%)        1%     (1%)
                                                              

Effective tax rate                  27%        20%       28%      22%
                                                              



Liquidity and Capital Resources

Corby's sources of liquidity are its deposits in cash management pools of 
$116.4 million as at December 31, 2012, and its cash generated from operating 
activities. Corby's total contractual maturities are represented by its 
accounts payable and accrued liabilities and dividend payable balances, which 
totalled $39.7 million as at December 31, 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                Six Months Ended
                   Dec.       Dec.          $      Dec.       Dec.          $
                    31,        31,                  31,        31,

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

Operating                                                                    
activities

  Net
  earnings,
  adjusted      $  13.5   $   10.6   $    2.9   $  24.3   $   25.3   $  (1.0)
  for
  non-cash
  items

  Net change
  in non-cash     (2.1)        9.5     (11.6)     (0.0)       12.0     (12.0)
  working
  capital

  Net
  payments
  for             (2.9)      (2.0)      (0.9)     (8.8)      (5.2)      (3.6)
  interest
  and income
  taxes
                    8.5       18.1      (9.6)      15.5       32.1     (16.6)
                                                                             

Investing                                                                    
activities

  Additions
  to capital      (0.2)      (0.3)        0.1     (0.2)      (0.3)        0.1
  assets

  Net
  proceeds
  from sale           -       38.5     (38.5)         -       38.1     (38.1)
  of plant
  and brands

  Proceeds
  from
  disposition         -        0.2      (0.2)       0.2        0.2      (0.0)
  of capital
  assets

  Deposits in
  cash            (3.5)     (52.2)       48.7     (6.3)     (61.8)       55.5
  management
  pools
                  (3.7)     (13.8)       10.1     (6.4)     (23.8)       17.4
                                                                             

Financing                                                                    
activities

  Dividends       (4.8)      (4.3)      (0.5)     (9.1)      (8.3)      (0.8)
  paid
                                                                             

Net change in   $     -   $      -   $      -   $     -   $      -   $      -
cash
                                                                        



Operating activities

Cash flows from operating activities for the quarter were $8.5 million 
compared to $18.1 million in the same quarter last year. Net earnings 
(adjusted for non-cash items), benefited from higher Case Good volumes, 
however, was more than offset by unfavourable movements in non-cash working 
capital, specifically inventories and accounts payable. Working capital was 
significantly impacted by the previously mentioned sale of the Montreal plant 
and Disposed Brands.

During the six-month period, net cash flows from operating activities was 
$15.5 million compared to $32.1 million in the same period last year, 
representing a decrease of $16.6 million. Similar to the quarter discussion, 
the aforementioned sale transaction significantly impacted non-cash working 
capital balances. In addition, income taxes due on the sale transaction 
resulted in an increase in tax payments (+$3.9 million) compared to the same 
six-month period last year.

Investing activities

Cash used in investing activities was $3.7 million for the quarter and $6.4 
million for the six-month period ending December 31, 2012, compared to $13.8 
million and $23.8 for the same three- and six-month periods last year. Current 
year activities substantially reflect the amount deposited in cash management 
pools during the respective periods. 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. In the comparative 
three- and six-month periods, deposits to cash management pools totalled $52.2 
million and $61.8 million, respectively. The prior year amounts are reflective 
of the proceeds received on the sale of the Montreal bottling plant and 
Disposed Brands which were received during those periods.

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 $4.8 million for the quarter and 
$9.1 million on a year-to-date basis and represents the payment of dividends 
to shareholders. Dividend payments increased over the prior year due to 
changes to the dividend policy effective November 9, 2011 as depicted in the 
chart below. 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:
                                                                       

Declaration date   Record Date         Payment date           $ / Share
                                                                       

February 6, 2013   February 28, 2013   March 15, 2013      $       0.17

November 7, 2012                                                   0.54
(special           December 14, 2012   January 10, 2013     
dividend)

November 7, 2012   November 30, 2012   December 14, 2012           0.17

August 29, 2012    September 15,       September 30,               0.15
                   2012                2012

May 10, 2012       May 31, 2012        June 15, 2012               0.15

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

November 9, 2011                                                   1.85
(special           December 15, 2011   January 3, 2012      
dividend)

November 9, 2011   November 30, 2011   December 15, 2011           0.15

August 24, 2011    September 15,       September 30,               0.14
                   2011                2011

May 11, 2011       May 31, 2011        June 15, 2011               0.14
                                                                       



Outstanding Share Data

As at February 6, 2013, 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 February 
6, 2013, 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 Canadian      Q2       Q1       Q4       Q3       Q2       Q1       Q4       Q3
dollars,

except per
share          2013     2013     2012     2012     2012     2012     2011     2011
amounts)
                                                                                  

Revenue      $ 37.7   $ 35.9   $ 32.4   $ 29.2   $ 40.9   $ 44.2   $ 40.1   $ 32.4

Earnings
from           12.0      9.5      6.6      6.1     33.6     12.6      9.4      4.3
operations

Net
earnings,                                                                         
excluding

  undernoted    9.0      7.0      4.9      4.6      9.0      9.9      6.8      3.1
items ((1))

Net earnings    9.0      7.0      4.9      4.6     27.1      9.5      6.8      4.8

Basic EPS      0.32     0.25     0.17     0.16     0.95     0.33     0.24     0.11

Diluted EPS    0.32     0.25     0.17     0.16     0.95     0.33     0.24     0.11
                                                                                  

((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 the Disposed 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 and ongoing net earnings have 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.

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 December 31, 2012
                                                                       

Associated   Associated         Goodwill     Intangibles          Total
Brand        Market
                                                                       

Various PR   Canada           $        -   $        39.7   $       39.7
brands

Lamb's rum   United Kingdom          1.4            11.8           13.2
             ((1))

Corby        Canada
domestic                             1.9               -            1.9
brands
                                                                       
                              $      3.3   $        51.5   $       54.8
                                                                       

((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)
                                                                       
                            December 31,      June 30,     December 31,
                   Note             2012          2012             2011
                                                                       

ASSETS                                                                 

Deposits in cash          $      116,436    $  110,113   $      158,427
management pools

Accounts             4            30,731        28,611           30,271
receivable  

Income and other                     701             -                -
taxes recoverable

Inventories          5            46,706        47,760           49,089

Prepaid expenses                     590           555              806

Current portion of   6               600           600              600
note receivable
                                                                       

Total current                    195,764       187,639          239,193
assets

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

Property and                       7,159         7,524            6,691
equipment

Goodwill                           3,278         3,278            3,278

Intangible assets                 51,506        53,771           56,037
                                                                          

Total assets              $      258,907    $  253,412   $      306,999
                                                                       
                                                                       

LIABILITIES                                                            

Accounts payable     7
and accrued               $       24,330    $   22,400   $       25,135
liabilities

Income and other                       -         3,656            2,774
taxes payable

Dividend payable     8            15,373             -           52,667
                                                                       

Total current                     39,703        26,056           80,576
liabilities

Provision for                     10,903        10,550           10,695
pensions

Deferred income                      976           983              884
taxes  
                                                                       

Total liabilities                 51,582        37,589           92,155
                                                                          

Shareholders'                                                          
equity  

Share capital                     14,304        14,304           14,304

Retained earnings                193,021       201,519          200,540
                                                                          

Total                 
shareholders'                    207,325       215,823          214,844
equity
                                                                       

Total liabilities     
and shareholders'         $      258,907    $  253,412   $      306,999
equity
                                                                       

See accompanying notes to the interim condensed consolidated financial
statements    
                                                                       

   

CORBY DISTILLERIES LIMITED    

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS  
                                                             

(Unaudited)          

(in thousands of Canadian dollars, except per share amounts)      
                                                                             
                         For the Three Months       For the Six Months Ended
                                Ended 
                                                                             
                        December       December       December       December
                             31,            31,            31,            31,
               Note         2012           2011           2012           2011
                                                                             

Revenue          9  $     37,668   $     40,919   $     73,608   $     85,142
                                                                             

Cost of sales           (13,776)       (16,758)       (27,814)       (36,136)

Marketing,        
sales and               (11,803)       (12,521)       (24,216)       (24,442)
administration

Disposal        10             -         21,936              -         21,532
transaction

Other income    11          (92)           (22)          (110)             71
and expense
                                                                             

Earnings from             11,997         33,554         21,468         46,167
operations
                                                                             

Financial                    450            501            902            996
income

Financial                  (116)          (115)          (253)          (277)
expenses

Net financial   12           334            386            649            719
income
                                                                             

Earnings          
before income             12,331         33,940         22,117         46,886
taxes
                                                                             

Current income           (3,283)        (5,585)        (6,138)        (9,218)
taxes

Deferred                    (54)        (1,287)              6        (1,140)
income taxes

Income taxes             (3,337)        (6,872)        (6,132)       (10,358)
                                                                             

Net earnings        $      8,994   $     27,068   $     15,985   $     36,528
                                                                             

Basic earnings      $       0.32   $       0.95   $       0.56   $       1.28
per share

Diluted           
earnings per        $       0.32   $       0.95   $       0.56   $       1.28
share
                                                                             

Weighted          
average common                                                               
shares
outstanding

  Basic               28,468,856     28,468,856     28,468,856     28,468,856

  Diluted             28,468,856     28,468,856     28,468,856     28,468,856


See accompanying notes to the interim condensed consolidated financial
statements



CORBY DISTILLERIES LIMITED     
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME   


             

(Unaudited)            

(in thousands of Canadian dollars)          
           
                 For the Three Months      For the Six Months Ended
                        Ended
                                                                    
                  December    December     December     December 31,
                       31,         31,          31,
                      2012        2011         2012             2011
                                                                    

Net earnings    $    8,994  $   27,068   $   15,985   $       36,528
                                                                    

Other
comprehensive            -           -            -                -
income
                                                                    

Total
comprehensive   $    8,994  $   27,068   $   15,985   $       36,528
income
                                                                    

See accompanying notes to the interim condensed consolidated
financial statements  
                                                                    



INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
                                                                     

(Unaudited)            

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

Balance as at   $           $             -   $            $
June 30, 2012      14,304                        201,519      215,823

Net earnings                              -                 
                        -                         15,985       15,985

Other
comprehensive                             -                 
income                  -                              -            -

Dividends               -                 -     (24,483)     (24,483)
                                                                     

Balance as at
December 31,    $           $             -   $            $
2012               14,304                        193,021      207,325
                                                                     
                                                                     

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

Net earnings                              -                 
                        -                         36,528       36,528

Other
comprehensive                             -                 
income                  -                              -            -

Dividends               -                 -     (60,923)     (60,923)
                                                                     

Balance as at
December 31,    $           $             -   $            $
2011               14,304                        200,540      214,844
                                                                     

See accompanying notes to the interim condensed consolidated
financial statements    


    CORBY DISTILLERIES LIMITED  

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW  
     

(Unaudited)  

(in thousands of Canadian dollars)          
     
                      For the Three Months   For the Six Months Ended
                             Ended 
                                                                     
                     December     December     December      December
                          31,          31,          31,           31,
             Notes       2012         2011         2012          2011
                                                                     

Operating                                                            
activities

Net earnings       $    8,994   $   27,068   $   15,985   $    36,528

Adjustments                                                          
for:

Amortization
and            13       1,375        1,423        2,747         2,991
depreciation

Net
financial      12       (334)        (386)        (649)         (719)
income

Disposal       10           -     (21,936)            -      (21,532)
transaction

Gain on
disposal of                 -         (86)         (69)          (86)
property and
equipment

Income tax              3,337        6,872        6,132        10,358
expense

Provision                  91      (2,383)          168       (2,231)
for pensions
                       13,463       10,572       24,314        25,309

Net change
in non-cash
working        14     (2,050)        9,458         (30)        12,014
capital
balances

Interest                  405          481          790           915
received

Income taxes          (3,305)      (2,411)      (9,593)       (6,140)
paid
                                                                     

Net cash
from                    8,513       18,100       15,481        32,098
operating
activities
                                                                     

Investing                                                            
activities

Additions to
property and            (157)        (309)        (203)         (309)
equipment

Net proceeds
on disposal                 -       38,491            -        38,087
transaction

Proceeds
from
disposition                 -          171          155           171
of property
and
equipment

Deposits in
cash                  (3,516)     (52,183)      (6,323)      (61,791)
management
pools
                                                                     

Net cash
used in               (3,673)     (13,830)      (6,371)      (23,842)
investing
activities
                                                                     

Financing                                                            
activity

Dividends             (4,840)      (4,270)      (9,110)       (8,256)
paid 
                                                                     

Net cash
used in               (4,840)      (4,270)      (9,110)       (8,256)
financing
activity
                                                                     

Net increase                -            -            -             -
in cash

Cash,
beginning of                -            -            -             -
period
                                                                     

Cash, end of       $        -   $        -   $        -   $         -
period
                                                                     

See accompanying notes to the interim condensed consolidated
financial statements    



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 February 6, 2013.

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 effective 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
                                 Dec. 31,     June 30,     Dec. 31,
                                     2012         2012         2011
                                                                   

Trade receivables              $   19,133   $   19,722   $   20,707

Due from related parties           11,516        8,852        8,113

Other receivables                      82           37        1,451
                                                                   
                               $   30,731   $   28,611   $   30,271



Other receivables included amounts owing from Brick Brewing Co., Limited 
related to the sale of the Seagram Coolers brand on March 15, 2011. At 
December 31, 2012 the balance represents interest accrued on the secured 
promissory note receivable as described in Note 6 of these financial 
statements. At December 31, 2011 this balance also included amounts owing for 
inventory transferred as part of the Seagram Coolers' sale transaction. 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
                         Dec. 31,     June 30,     Dec. 31,
                             2012         2012         2011
                                                           

Raw materials          $    1,860   $    1,597   $    2,087

Work-in-progress           38,098       40,703       42,388

Finished goods              6,748        5,460        4,614
                                                           
                       $   46,706   $   47,760   $   49,089



The cost of inventory recognized as an expense and included in cost of goods 
sold for the three and six months ended December 31, 2012 were $10,844 and 
$22,198, (2011 - $13,652 and $30,347), respectively. During the six month 
periods ended December 31, 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 six month periods ending December 31, 2012 and 
2011, the Company did not reverse any significant inventory write-downs 
recognized in previous periods.

6. NOTE RECEIVABLE
                              Dec. 31,     June 30,     Dec. 31,
                                  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. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
                                  Dec. 31,     June 30,     Dec. 31,
                                      2012         2012         2011
                                                             

Trade payables and accruals     $   17,619   $   16,584   $   18,285

Due to related parties               6,711        5,816        6,850
                                $   24,330   $   22,400   $   25,135



8. DIVIDENDS

On November 7, 2012, the Board of Directors 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. Subsequent to the quarter-ended 
December 31, 2012, and in line with the terms of the dividend declaration just 
described, the Company paid the full amount of the dividend of $15,373 on 
January 10, 2013. The payment was sourced from the Company's deposits in cash 
management pools.

On February 6, 2013, subsequent to the quarter-ended December 31, 2012, the 
Board of Directors declared its regular quarterly dividend of $0.17 per common 
share, payable March 15, 2013, to the shareholders of record as at the close 
of business on February 28, 2013.

All dividends are in accordance with the Company's dividend policy.

9. REVENUE

The Company's revenue consists of the following streams:
                        Three Months Ended         Six Months Ended
                      Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                          2012         2011         2012         2011
                                                              

Case good sales     $   31,304   $   31,054   $   59,824   $   62,081

Commissions              4,886        4,782        9,175        9,465

Other services           1,478        5,083        4,609       13,596
                                                                     
                    $   37,668   $   40,919   $   73,608   $   85,142



Commissions for the three and six month periods are shown net of long-term 
representation rights amortization of $1,133 and $2,265, (2011 - $1,133 and 
$2,265), respectively. 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. DISPOSAL TRANSACTION

On October 31, 2011, the Company completed a transaction to sell the shares of 
the wholly-owned subsidiary that owned the manufacturing and bottling facility 
located in Montreal, Quebec. The transaction resulted in the sale of 17 
brands, as well as the Montreal-based manufacturing facility where a 
significant portion of the brands were produced, for a total purchase price of 
$39,660; including the cost of inventory and other working capital items 
associated with the brands and manufacturing facility sold. For the six months 
ended December 31, 2011 the gain on sale was calculated as follows:

Proceeds, including inventory and other working        $   39,660
capital items
                                                                 

Book value of assets sold, including inventory and       (17,820)
other working capital items

Curtailment gain with respect to employee future            2,168
benefit plans 

Transaction costs                                         (2,476)
                                                                 

Gain on sale before income taxes                           21,532

Income taxes                                              (3,855)
                                                                 

Net gain on sale                                       $   17,677



Transaction costs includes $404 of costs expensed during the first quarter 
ended September 30, 2011, where at that time they were classified as "Other 
income and expenses" given the transaction had not yet closed.

The agreement contains customary representations, warranties and covenants. In 
addition, as part of the agreement, Corby agreed to indemnify the purchaser, 
Sazerac Company, Inc. ("Sazerac"), in respect of a misrepresentation, breach 
of covenant, pre-closing liabilities and certain environmental matters. Based 
on current facts and circumstances, no material liability is anticipated in 
respect of this indemnification, and no provision has been made in the 
financial results for this contingency.

11. OTHER INCOME AND EXPENSE

The Company's other income (expense) consist of the following amounts:
                          Three Months Ended         Six Months Ended
                        Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                            2012         2011         2012         2011
                                                                

Foreign exchange      $       12   $     (48)   $       29   $       33
gains (losses) 

Gains on disposal of
property and            -                  86           69           86
equipment

Amortization of
actuarial
(losses) gains 
under defined
  benefit plans            (104)         (60)        (208)         (48)
                                                                       
                      $     (92)   $     (22)   $    (110)   $       71



12. NET FINANCIAL INCOME

The Company's financial income (expense) consists of the following amounts:
                      Three Months Ended         Six Months Ended
                    Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                        2012         2011         2012         2011
                                                            

Interest          $      456   $      501   $      912   $      996
income

Interest                (29)          (8)         (77)         (21)
expense

Net financial
impact of               (93)        (107)        (186)        (256)
pensions
                                                                   
                  $      334   $      386   $      649   $      719



13. EXPENSES BY NATURE

Earnings from operations include depreciation and amortization, as well as 
personnel expenses as follows:
                         Three Months Ended         Six Months Ended
                       Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                           2012         2011         2012         2011
                                                               

Depreciation of
property and         $      242   $      290   $      482   $      726
equipment

Amortization of           1,133        1,133        2,265        2,265
intangible assets

Salary
and                       4,740        4,719        9,693       10,863
payroll
costs

Expenses
(recoveries)
related to                  564      (1,743)        1,138      (1,252)
pensions and
benefits
                                                                      
                     $    6,679   $    4,399   $   13,578   $   12,602



14. NET CHANGE IN NON-CASH WORKING CAPITAL BALANCES
                         Three Months Ended         Six Months Ended
                       Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                           2012         2011         2012         2011
                                                                      

Accounts             $    (605)   $  (1,100)   $  (2,120)   $      734
receivable

Inventories                 334        3,272        1,054        4,348

Prepaid                   (310)          801         (35)          925
expenses

Income tax and other
taxes recoverable /     (1,380)      (1,279)        (891)        (961)
payable

Accounts payable and       (89)        7,764        1,962        6,968
accrued liabilities
                                                                      
                     $  (2,050)   $    9,458   $     (30)   $   12,014



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 (determined as at 
the agreement date) 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.

Transactions between Corby and its parent, ultimate parent and affiliates 
during the period are as follows:
                          Three Months Ended         Six months ended
                        Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                            2012         2011         2012         2011
                                                                       

Sales to
related                                                                
parties

Commissions - parent,
ultimate parent and   $    5,180   $    5,012   $    9,935   $    9,873
affiliated companies

Blending and bottling          -           33            -          217
services - parent

Products for resale
at an export level -         913          119        1,679          248
affiliated companies

Bulk
spirits -                      -           37            3          150
parent
                                                                       
                      $    6,093   $    5,201   $   11,617   $   10,488
                                                                       

Cost of goods sold,
purchased from                                                         
related parties

Distilling, blending,
and production        $    5,264   $    4,652   $   10,320   $    9,073
services - parent 

Bulk
spirits -                      -          148            -          700
parent
                                                                       
                      $    5,264   $    4,800   $   10,320   $    9,773
                                                                       

Administrative
services purchased                                                     
from related parties

Marketing, selling
and administraton     $      511   $      511   $    1,022   $    1,022
services- parent



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; for the three and six 
month periods ending December 31, 2012, contributions to these plans totaled 
$306 and $636, (2011 - $322 and $639), respectively.

During the three and six month periods ending December 31, 2012, Corby sold 
casks to its parent company for net proceeds of $nil and $150 (2011 - $168 and 
$168), respectively.

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 February 6, 2013, 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 and six month periods ending 
December 31, 2012, Corby earned interest income of $429 and $861 from PR (2011 
- $463 and $850), respectively. 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 interim condensd consolidated statements. 
Therefore, a chart detailing operational results by segment has not been 
provided as no additional meaningful information would result.







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- Feb/06/2013 18:55 GMT