Corby Spirit and Wine announces quarterly dividend and reports second quarter financial results

Corby Spirit and Wine announces quarterly dividend and reports second quarter 
financial results 
TORONTO, Feb. 5, 2014 /CNW/ - Corby Spirit and Wine Limited ("Corby" or the 
"Company") (TSX: CSW.A, TSX: CSW.B) today reported its financial results for 
the second quarter ended December 31, 2013. The Corby Board of Directors today 
also declared a dividend of $0.18 per share payable on March 14, 2014 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, 
2014. 
Net earnings for the quarter ended December 31, 2013 totaled $7.5 million or 
$0.26 per share, representing a decrease of $1.4 million or $0.05 per share 
when compared with the same quarter last year. Strong international sales in 
both the US and UK were offset by a weaker domestic performance caused by a 
soft Canadian spirit's category, and the severe Ontario weather over the 
holiday period. Revenues grew by 2%, enabling higher investment behind our 
brand portfolio platform for future growth - primarily a significant step-up 
advertising and promotional investment in the US, and an increase in structure 
costs. Increased US shipments were the result of the Company's first quarter 
launch of its new JP Wiser's whisky brand in the US market. The UK market 
benefited this quarter from a shift in production timing at our third party 
bottling facility (whereby shipments normally occurring in the first quarter 
shifted into the second quarter). Lastly, shipments in Canada were down 5%, 
mostly reflecting soft market conditions in the key categories in which 
Corby's portfolio is heavily weighted (i.e., Canadian whisky, dark and white 
rum, and vodka). 
On a year-to-date basis, net earnings decreased $0.7 million or $0.03 per 
share, when compared to the same six-month period last year. Top-line revenue 
growth of 2% or $1.7 million (driven from the launch of JP Wiser's in the US), 
was more than offset by higher advertising and promotional investment in the 
US, a decrease in Canadian shipments as markets softened leading up to the 
holiday period, non-repeat bulk whisky sales earned in the comparative period, 
and an increase in structure costs. 
"Although the US launch of JP Wiser's remains in the early stages, we are 
certainly encouraged and genuinely committed to continue our investment and 
build momentum behind this brand. While the Canadian market softened this 
quarter, we noted that our key brands held market share in each of their 
competitive sets." 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 condensed consolidated financial statements and 
accompanying notes for the three- and six-month periods ended December 31, 
2013, prepared in accordance with International Financial Reporting Standards. 
About Corby
Corby Spirit and Wine 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®, Campo Viejo® 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 
CSW.A and CSW.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 SPIRIT AND WINE LIMITED
Management's Discussion and Analysis
December 31, 2013 
------------------------------ 
The following Management's Discussion and Analysis ("MD&A") dated February 5, 
2014, 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, 2013, 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, 2013. Effective November 7, 2013 the 
Company changed its name from Corby Distilleries Limited to Corby Spirit and 
Wine Limited. 
This MD&A contains forward-looking statements, including statements concerning 
possible or assumed future results of operations of Corby Spirit and Wine 
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 5, 
2014. 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. 
Unless otherwise indicated, all comparisons of results for the second quarter 
of fiscal 2014 (three months ended December 31, 2013) are against results for 
the second quarter of fiscal 2013 (three months ended December 31, 2012). 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 "CSW.A" (Voting Class A Common Shares) and 
"CSW.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. Revenue from Corby's 
owned-brands predominantly consists of sales made to each of the provincial 
liquor boards ("LBs") in Canada, and also includes sales to international 
markets. 
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. 
The Company expanded its agency portfolio, particularly with regard to our 
strategic priority of wines, through an agreement (which began April 2013) 
with The Wine Group LLC ("The Wine Group"), providing Corby with the exclusive 
rights to represent The Wine Group brands in Canada for the next five years 
(expiring May 2018). The agreement complements Corby's owned and represented 
brands and expands Corby offerings in the premium wine sector. Corby now 
represents all The Wine Group brands, including Cupcake Vineyards, Big House 
Wine Co., Concannon Vineyard, Grayfox Vineyards and Mogen David Wine Co. 
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 various third party vendors; 
including a formerly owned bottling plant in Montreal, Quebec. The Company 
also utilizes a third-party manufacturer in the United Kingdom ("UK") to 
produce its Lamb's rum products destined for sale in countries located outside 
North America. 
In most provinces, Corby's route to market in Canada entails shipping its 
products to government-controlled 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 United States ("US") and 
UK and the Company has a different route to market for each. For the US 
market, Corby manufactures the majority of its products in Canada and ships to 
its US distributor, Pernod Ricard USA, LLC ("PR USA"), an affiliated company. 
For the UK market, Corby utilizes a third party contract bottler and 
distribution company for the production and distribution of Lamb's rum. 
Distributors sell to various local wholesalers and retailers who in turn sell 
directly to the consumer. 
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, thus focusing resources on key brands. 
Pursuing new growth opportunities outside of Canada is also a key strategic 
priority. Our agreement with PR USA to represent certain of Corby's owned 
brands in the US is an important step towards expanding our Canadian whisky 
business into this market where we see growth potential in both volume and 
margin. 
Of primary importance to the successful implementation of our brand strategies 
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 all areas of the business, management believes setting clear 
strategies which optimize organization structure and increase efficiencies is 
key to Corby's overall success. 
In addition, management is convinced that innovation is essential to seizing 
new profit and growth opportunities. Successful innovation can be delivered 
through a structured and efficient process as well as consistent investment in 
consumer insight and research and development ("R&D"). As far as R&D is 
concerned, the Company benefits from access to leading-edge practices at PR's 
North American hub, which is located in Windsor, Ontario. 
Finally, the Company is a strong advocate of social responsibility, especially 
with respect to its sales and promotional activities. Corby will continue to 
promote the responsible consumption of its products in its activities. Most 
recently, Corby partnered with the Toronto Transit Commission to provide free 
transit on New Year's Eve for the next three years. The Company stresses its 
core values throughout its organization, including those of conviviality, 
straightforwardness, commitment, integrity and entrepreneurship. 
Significant Events 
Corby Distilleries Limited changes its name to Corby Spirit and Wine Limited
Effective November 7, 2013, Corby Distilleries Limited began operating under 
the name Corby Spirit and Wine Limited. The new name was approved at the 
Company's annual and special meetings held November 7(th), 2014, and 
reflecting the change, Corby now trades on the TSX under the symbols CSW.A and 
CSW.B. The new name coincided with a completely redesigned corporate branding 
and logos. The new name and branding better reflect Corby's growing activities 
with a strong focus on product, service and marketing. 
Corby Launches J.P. Wiser's Rye and J.P. Wiser's Spiced Canadian Whisky in the 
US Market
In July 2012, the Company reached a new agreement with PR USA to represent 
Corby brands in the United States for a five year period, giving Corby access 
to one of the strongest spirits distribution networks in the US market. 
Since signing the agreement, Corby and PR USA have been readying Corby's 
whisky portfolio for a national launch which began in the first quarter of 
this fiscal year. Specifically, Corby has developed two new Wiser's brand 
extensions under the names J.P. Wiser's Rye and J.P. Wiser's Spiced Whisky. 
The launch is still in the early phases, but already has had an impact on our 
financial results and will be discussed throughout this MD&A. 
Corby Continues its Exclusive Canadian Representation of the Iconic ABSOLUT 
Vodka Brand 
On September 30, 2013, Corby paid $10.3 million to continue its exclusive 
rights to represent the ABSOLUT vodka brand in Canada for an eight-year period 
ending September 29, 2021. The previous representation period expired 
September 29, 2013. The terms of this agreement are further described in the 
"Related Party Transactions" section of this MD&A. The transaction was 
accounted for as an increase in Intangible Assets and will be amortized, 
straight-line, over the eight-year term of the agreement. Amortization expense 
will be recorded net of commission revenues. The payment was funded from the 
Company's deposits in cash management pools. 
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 (i.e., 
Case Goods) 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. 


     
     
    BRAND PERFORMANCE CHART - INCLUDES BOTH CANADIAN AND INTERNATIONAL SHIPMENTS
                                                                                       
                                                                                         
                             Three Months Ended                     Six Months Ended
                                Shipment   Shipment                   Shipment   Shipment
                  Dec.   Dec.                          Dec.    Dec.             
                   31,    31,   % Volume    % Value     31,     31,   % Volume    % Value
    Volumes (in
    000's of 9L                                                                 
    cases)        2013   2012     Change     Change    2013    2012     Change     Change
                                                                                         
    Brand                                                                                
    Wiser's
    Canadian                                                                    
    whisky         237    244       (3%)         3%     479     448         7%        14%
    Lamb's rum     175    166         5%         3%     299     316       (5%)       (5%)
    Polar Ice                                                                   
    vodka          102     98         4%         6%     198     207       (4%)       (4%)
    Mixable                                                                     
    liqueurs        60     57         5%         7%     107      98         9%        12%
                                                                                         
    Total Key                                                                   
    Brands         574    565         2%         4%   1,083   1,068         1%         6%
    All other
    Corby-owned                                                                 
    brands          57     60       (5%)         8%     114     119       (4%)         6%
                                                                                         
    Total Corby                                                                 
    brands         631    625         1%         4%   1,197   1,187         1%         6%

Overall, Corby owned-brands experienced a modest level of growth in both the 
three- and six- month periods ended December 31, 2013. However, trends in 
Corby's domestic market (i.e., Canada - in which 86% of the Company's brands 
are sold) differ significantly from international markets as highlighted in 
the following chart:
                                                                                           
                                                                                           
                               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     2013   2012     Change     Change    2013    2012     Change     Change
    cases)
                                                                                           
    Domestic         536    562       (5%)       (2%)   1,035   1,067       (3%)       (1%)
    International     95     63        51%       106%     162     120        35%       105%
                                                                                           
    Total Corby      631    625         1%         4%   1,197   1,187         1%         6%
    brands

Corby's performance was impacted by soft market conditions in key spirit 
categories (i.e., Canadian whisky, rum and vodka). Additionally, severe 
weather conditions impacted shipments and inventory levels in Ontario, and the 
effects of cycling against heavy Polar Ice vodka promotional programming in 
Alberta in the first quarter of last year. Partially offsetting these factors 
were a strong shipment performance from Corby's liqueur brands as they cycled 
against prior year production delays at our third-party bottling supplier. 
Shipment value performed ahead of volume as a result of our premiumization 
strategy, price increases and effective management of our promotional 
programming. A more in-depth discussion of Corby's key brands in the Canadian 
market is provided in the "Summary of Corby's Key Brands" section of this MD&A.

In international markets, Corby's portfolio of owned brands increased 
significantly in both the three and six month periods ended December 31, 2013. 
The growth in shipment volumes (+51% for the quarter, +35% for the six month 
period) were mostly driven by the Company's first quarter launch of its JP 
Wiser's Rye Canadian whisky brand in the US. Corby is also benefiting from the 
more premium nature of this brand, as is evidenced by value growth 
significantly outpacing the growth in volume. Shipments of Lamb's rum in the 
UK market were relatively consistent for the six month period, however, second 
quarter volumes were significantly higher than normal as a result of a shift 
in production timing at our third-party bottling facility. This shift 
effectively moved volumes that normally would have occurred in the first 
quarter (as previously described in the first quarter MD&A) into the second 
quarter. , Shipments have now evened out over the full six month period ended 
December 31, 2013.

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:
     
     
    RETAIL SALES FOR THE CANADIAN MARKET ONLY(1)
                      
                                                                  
                      
                      
                                                                                 
                          Three Months Ended                 Six Months Ended
                                     %        %                        %        %
                                Retail   Retail                   Retail   Retail
                  Dec.   Dec.                      Dec.    Dec.           
                   31,    31,   Volume    Value     31,     31,   Volume    Value
    Volumes (in
    000's of 9L                                                           
    cases)        2013   2012   Change   Change    2013    2012   Change   Change
                                                                                 
    Brand                                                                        
    Wiser's
    Canadian                                                              
    whisky         230    235     (2%)       0%     403     407     (1%)       1%
    Lamb's rum     132    138     (4%)     (3%)     236     246     (4%)     (2%)
    Polar Ice                                                             
    vodka           98     97       1%       2%     188     200     (6%)     (2%)
    Mixable                                                               
    liqueurs        62     62       0%       2%     104     104       0%       1%
                                                                                 
    Total Key                                                             
    Brands         522    532     (2%)       0%     931     957     (3%)       0%
                                                                                 
    All other
    Corby-owned                                                           
    brands          62     61       2%       5%     115     117     (2%)       2%
                                                                                 
    Total          584    593     (2%)       0%   1,046   1,074     (3%)       0%
                                                                                 
    (1)Refers to sales at the retail store level in Canada, as provided by the
    Association of Canadian Distillers.

The Canadian spirits industry as a whole saw retail sales volumes decline 1% 
during both the quarter and the six month period ended December 31, 2013, 
while industry retail sales value increased 1% over the same periods. As 
illustrated in the above chart, Corby's brand portfolio experienced retail 
volume below that of the spirits market on both a three and six month 
comparison basis.

Corby's portfolio is heavily weighted in the Canadian whisky, rum and vodka 
categories; as together they combined to make up over 80% of the Company's 
total retail volumes. For the six month period ended December 31, 2013 all 
three categories showed declines in retail volume and retail value.

Summary of Corby's Key Brands

Wiser's Canadian Whisky
Corby's flagship brand, Wiser's Canadian whisky, continued to outperform the 
Canadian whisky category and gained market share despite a slight decline in 
retail volumes of 1% when compared to the same six-month period last year. The 
Canadian whisky category declined 2% during the same six month comparative 
period. As well, Wiser's experienced 1% retail value growth while the category 
declined slightly on a year-to-date comparative basis. Corby continued its 
strong investment behind the brand, with a new version of its highly 
successful Welcome to the Wiserhood television commercial. In addition, 
Wiser's Spiced, launched last year in Canada in the new innovative spiced 
whisky category, continued to be supported by the That's Spiced Up campaign.

Lamb's Rum
Lamb's rum, one of the top-selling rum families in Canada, experienced a 4% 
decline in retail volumes and a 2% decline in retail value when compared to 
the same six month period last year. The rum category in Canada decreased 2% 
in retail volume and was off only slightly on retail value when compared to 
the same six month period last year. The rum category in Canada has been 
driven entirely by the spiced segment (+7% in retail volumes), while the dark 
and white rum segments are in decline (-4% and -7%, in retail volumes 
respectively over the same six month period last year). Corby's Lamb's rum 
product line is heavily weighted in the dark and white segments, with its 
spiced product (i.e., Lamb's Black Sheep) continuing to build off of its small 
base.

Polar Ice Vodka
Polar Ice vodka is among the top three largest vodka brands in Canada. On a 
year-to-date comparative basis, the brand's retail volumes and retail value 
fell 6% and 2%, respectively. The decline is the result of timing of 
promotional activity, specifically in the province of Alberta, conducted 
during the first quarter last year. Excluding Alberta, the brand's retail 
performance is consistent year over year in the rest of Canada. The vodka 
category reported an overall decline of 1% in retail volume and a slight 
decrease in retail value this period when compared to the same six month 
period last year.

Mixable Liqueurs
Corby's portfolio of mixable liqueur brands consists of McGuinness liqueurs 
(which is Canada's largest mixable liqueur brand family) and Meaghers 
liqueurs. Retail volume and retail value for Corby's mixable liqueurs 
portfolio is slightly ahead of market trends (retail volume was flat and 
retail value was +1%), as the category as a whole declined 2% for retail 
volume and 1% for retail value when compared to the same six month period last 
year. The brands benefited from improved on-shelf availability during the 
holiday sales period.

Other Corby-Owned Brands
Corby's other-owned brands grew in retail value by 2% as it benefited from 
continued innovation, in particular, Pike Creek, Lot 40, Criollo Chocolate Sea 
Salted Caramel and Criollo® Chocolate Raspberry Truffle. Lot 40 was most 
recently named "Canadian Whisky of the Year" at the Canadian Whisky Awards. 
Additionally, the launch of the Criollo range of luxury liqueurs was well 
received by key customers and consumers. The performance of our new 
innovations helped offset the category driven decline of Royal Reserve 
Canadian whisky (the largest brand in this grouping).

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, 2013 and 2012.
                                   
                                   
                                            Three Months Ended                            Six Months Ended
    (in millions
    of Canadian          Dec.       Dec.                             Dec.       Dec.               
    dollars,              31,        31,          $         %         31,        31,         $          % 
    except per                      2012                                        2012               
    share amounts)      2013         (1)     Change     Change      2013         (1)     Change     Change
                                                                                                          
    Revenue          $   38.5   $   37.7   $    0.8         2%   $   75.3   $   73.6   $    1.7         2%
                                                                                                          
    Cost of sales      (14.4)     (13.8)      (0.6)         4%     (27.2)     (27.8)        0.6       (2%)
    Marketing,
    sales and                                                                                      
    administration     (14.2)     (11.9)      (2.3)        19%     (28.3)     (24.4)      (3.9)        16%
    Other income                                                                                   
    (expense)             0.3          -        0.3        N/A        0.3        0.1        0.2       200%
                                                                                                          
    Earnings from                                                                                  
    operations           10.2       12.0      (1.8)      (15%)       20.1       21.5      (1.4)       (7%)
                                                                                                          
    Financial                                                                                      
    income                0.4        0.5      (0.1)      (20%)        0.9        0.9          -         0%
    Financial                                                                                      
    expenses            (0.3)      (0.3)          -         0%      (0.6)      (0.6)          -         0%
    Net financial                                                                                  
    income                0.1        0.2      (0.1)      (50%)        0.3        0.3          -         0%
                                                                                                          
    Earnings
    before income                                                                                  
    taxes                10.3       12.2      (1.9)      (16%)       20.4       21.8      (1.4)       (6%)
    Income taxes        (2.8)      (3.3)        0.5      (15%)      (5.3)      (6.0)        0.7      (12%)
                                                                                                          
    Net earnings     $    7.5   $    8.9   $  (1.4)      (16%)   $   15.1   $   15.8   $  (0.7)       (5%)
                                                                                                          
    Per common                                                                                     
    share                                                                                                 
      - Basic net                                                                                  
      earnings       $   0.26   $   0.31   $ (0.05)      (16%)   $   0.53   $   0.56   $ (0.03)       (5%)
      - Diluted                                                                                    
      net earnings   $   0.26   $   0.31   $ (0.05)      (16%)   $   0.53   $   0.56   $ (0.03)       (5%)
                                                                                                          
    1 In preparing its comparative information, the Company has adjusted amounts reported previously in
    the condensed consolidated
     financial statements as a result of the retrospective application of the amendments to IAS 19,
    Employee Benefits. Refer to Note 3
    for details regarding adjusted amounts.

Overall Financial Results

For the three-month period ended December 31, 2013, net earnings decreased 
$1.4 million or $0.05 per share, when compared to the same three month period 
last year. Increased shipments to international customers both in the US and 
UK markets were more than offset by higher advertising and promotional 
investment in the US, a decrease in Canadian shipments, and an increase in 
certain employee related costs and inflationary-type expenses.

On a year-to-date basis, net earnings decreased $0.7 million or 5%, when 
compared to the same six-month period last year. Increased shipments to the 
US, which had been driven from the first quarter launch of JP Wiser's, was 
more than offset by higher advertising and promotional investment in the US, a 
decrease in Canadian shipments, non-repeat bulk whisky sales earned in the 
comparative period, and an increase in employee related costs and 
inflationary-type expenses.

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        2013       2012      Change   Change      2013       2012      Change   Change
    dollars)
                                                                                                     
    Revenue                                                                                          
    streams:
      Case goods    $   32.8   $   31.3   $    1.5       5%   $   63.4   $   59.8   $    3.5       6%
      Commissions        4.5        4.9      (0.4)     (8%)        9.6        9.2        0.4       4%
      Other              1.2        1.5      (0.3)    (20%)        2.4        4.6      (2.3)    (49%)
      services
                                                                                                     
    Revenue             38.5       37.7        0.8       2%       75.3       73.6        1.7       2%
                    $          $          $                   $          $          $           

Case goods revenue for the quarter increased $1.5 million on account of 
increased shipments to both the US and UK markets. The increase in the US 
market has been driven by the first quarter launch of JP Wiser's whisky 
brands, while the UK market benefited from a shift in production timing at our 
third party bottling facility (simply a shift from first quarter to second 
quarter as year-to-date revenues are relatively consistent). Offsetting the 
growth in revenues from international markets was a decrease in shipments 
domestically, as the Canadian spirit market softened in the months leading up 
to the holiday period, especially in the categories for which Corby is heavily 
weighted (i.e., Canadian whisky, dark and white rum, and vodka).

Year-to-date Case Goods revenue grew $3.5 million when compared to the same 
six month period last year on account of increased shipments to the US, 
resulting from the launch and distribution build-up of JP Wiser's. The growth 
in US revenue was partially offset by the aforementioned reduction in 
shipments to Canadian customers and is mostly reflective of market conditions 
discussed previously. In addition to general market conditions in Canada, the 
Company's Polar Ice vodka brand is cycling against heavy promotional 
programming conducted in the first quarter of last year, thus unfavourably 
impacting year-to-date revenues.

Commissions decreased $0.4 million or 8% on a quarter-over-quarter comparative 
basis. Commission revenues are generated through the representation of many 
international brands in Canada through Corby's affiliation with PR as well as 
a select number of unrelated third-party agency brands. The decrease in 
commission this quarter was mostly the result of having higher amortization 
expense on account of the representation rights acquired on September 30, 
2013, whereby Corby secured the exclusive rights to represent the ABSOLUT 
vodka brand in Canada for a further eight-year term.

On a year-to-date basis, Commissions increased $0.4 million or 4% when 
compared with the same six month period last year. The growth experienced in 
the year-to-date period was driven by the addition of a new third-party agency 
partner, The Wine Group. Affiliated PR brands performance was consistent with 
the same six-month period last year. Offsetting the increased commissions 
earned from the new third-party agency partner was the aforementioned increase 
in representation rights amortization expense.

On another matter, a third-party contract to represent the Stolichnaya vodka 
brand expired December 31, 2013 and was not renewed. In the prior fiscal year, 
commissions earned from our representation of this brand in Canada were $0.8 
million on a net earnings basis.

Other services represents ancillary revenue incidental to Corby's core 
business activities such as logistical fees and bulk whisky sales. The 
year-to-date decrease of $2.3 million in other services revenue is primarily 
due to the fact the Company ceased selling bulk whisky in September 2012.

Cost of sales

Cost of sales was $14.4 million for the quarter, representing an increase of 
4%, or $0.6 million when compared to the same quarter last year. The increase 
in cost of sales is mostly the result of increased shipment volumes, 
particularly into the US market supporting the launch of JP Wiser's brands. 
Gross margin was comparable on a quarter-over-quarter basis at 58% for the 
same quarter last year (note: commissions are not included in this 
calculation).

On a year-to-date basis, cost of sales was $27.2 million compared to $27.8 
million last year, a decrease of $0.6 million, or 2%. Gross margin for the 
year-to-date period was 59% versus 57% last year (note: commissions are not 
included in this calculation). The improved gross margin reflects the fact 
that the comparative period included bulk whisky sales, which are typically 
lower margin than case goods.

Marketing, sales and administration

Marketing, sales and administration expenses were $14.2 million for the second 
quarter ended December 31, 2013, which is an increase of 19% or $2.3 million 
compared to the same quarter last year. The increase is most significantly 
driven by increased advertising and promotional investment behind the 
Company's owned-brands in the US market as well as certain employee related 
costs and inflationary-type expenses.

On a year-to-date basis marketing, sales and administration expenses increased 
$3.9 million, or 16% over the same six month period last year. As previously 
mentioned, Corby has made significant investments behind the launch of the JP 
Wiser's brand in the US market through increased advertising and promotional 
spend. In addition, certain employee related costs and inflationary-type 
expenses also contributed to the increase.

Other income and expenses

Other income and expenses include such items as realized foreign exchange 
gains and losses, and gains on sale of property and equipment. Favourable 
movements in the US dollar compared to the Canadian dollar have resulted in 
foreign exchange gains in the quarter and year-to-date periods. Other balances 
comprising this account were consistent over these periods.

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 were $2.8 million and 
$5.3 million as compared to $3.3 million and $6.0 million last year. The 
reduced income tax is the result of having lower earnings in both the three- 
and six-month periods when compared to the same periods last year. A 
reconciliation of the effective tax rate to the statutory rates for each 
period is presented below. Note that the effective tax rate is impacted by 
permanent differences between financial income and income reported for 
taxation purposes as well as the impact of other adjustments that arise upon 
the completion of annual tax filings.
                                                                          
                                                                          
                               Three Months Ended        Six Months Ended
                               Dec. 31     Dec. 31     Dec. 31     Dec. 31
                                  2013        2012        2013        2012
                                                                          
    Combined basic Federal
    and Provincial tax                                            
    rates                          27%         27%         27%         27%
    Other                           0%          0%        (1%)          1%
                                                                          
    Effective tax rate             27%         27%         26%         28%
                                                                    

Liquidity and Capital Resources

Corby's sources of liquidity are its deposits in cash management pools of 
$102.2 million as at December 31, 2013, and its cash generated from operating 
activities. Corby's total contractual maturities are represented by its 
accounts payable and accrued liabilities, which totalled $26.3 million as at 
December 31, 2013, and are all due to be paid within one year. The Company 
does not have any liabilities under short- or long-term debt facilities.

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                                $                               $
    dollars)           2013      2012     Change       2013      2012     Change
                                                                                
    Operating                                                          
    activities                                                                  
      Net
      earnings,
      adjusted                                                         
      for
      non-cash             
      items         $  11.9   $  13.5   $  (1.6)   $   23.3   $  24.3   $  (1.1)
      Net change
      in non-cash                                                      
      working
      capital           2.5     (2.1)        4.5      (4.4)     (0.0)      (4.3)
      Net
      payments
      for                                                              
      interest
      and income
      taxes           (2.1)     (2.9)        0.8      (4.5)     (8.8)        4.3
                       12.3       8.5        3.7       14.4      15.5      (1.1)
                                                                                
    Investing                                                          
    activities                                                                  
      Additions
      to capital                                                       
      assets          (0.1)     (0.2)        0.0      (0.3)     (0.2)      (0.1)
      Net
      proceeds
      from sale                                                        
      of plant
      and brands          -         -          -     (10.3)         -     (10.3)
      Proceeds
      from
      disposition                                                      
      of capital
      assets            0.2         -        0.2        0.2       0.2        0.1
      Deposits in
      cash                                                             
      management
      pools           (7.2)     (3.5)      (3.7)        5.9     (6.3)       12.2
                      (7.1)     (3.7)      (3.5)      (4.4)     (6.4)        1.9
                                                                                
    Financing                                                          
    activities                                                                  
      Dividends                                                        
      paid            (5.1)     (4.8)      (0.3)     (10.0)     (9.1)      (0.9)
                                                                                
    Net change in                                                      
    cash            $     -   $     -   $      -   $      -   $     -   $      -
                                                                                

Operating activities

Net cash from operating activities was $12.3 million during the quarter ended 
December 31, 2013 compared to $8.5 million in the same quarter last year, 
representing an increase of $3.7 million. The quarter-over-quarter change is 
mostly attributable to the net change in non-cash working capital and was 
impacted by the timing of payments to vendors at the end of the period.

For the year-to-date period, net cash from operating activities was $14.4 
million, a decrease of $1.1 million when compared to the same period last year 
and is representative of lower net earnings after adjustment for non-cash 
items. The impacts of working capital fluctuations were offset by lower tax 
instalments in the current year compared to the same six month period last 
year.

Investing activities

Cash used in investing activities was $7.1 million for the quarter and $4.4 
million for the six month period ending December 31, 2013, compared to $3.7 
million and $6.4 million for the same three and six month periods last year. 
Activities during the current and prior year quarter substantially reflect the 
amount deposited in cash management pools. 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. Changes in cash management 
pools reflect amounts either deposited in or withdrawn from these bank 
accounts and are simply a function of Corby's cash requirements during the 
period of time being reported on. For more information related to these 
deposits, please refer to the "Related Party Transactions" section of this 
MD&A.

The year-to-date period includes a payment of $10.3 million to PR for the 
exclusive right to represent the ABSOLUT vodka brand in Canada for an eight 
year term, as discussed in the "Related Party Transaction" section of this 
MD&A. The payment was made on September 30, 2013 and was funded through 
withdrawals from cash management pools.

Financing activities

Cash used for financing activities was $5.1 million this quarter and $10.0 
million on a year-to-date basis and represents the payment of dividends to 
shareholders. Year-over-year higher dividends per share were paid when 
compared with the same three and six month periods of the prior year. The 
payment of these dividends is in accordance with the Company's previously 
disclosed dividend policy.

The following table summarizes dividends paid and payable by the Company over 
the last two fiscal years:
    for           Declaration     Record Date     Payment         $ / Share
                  date                            date
    2014 - Q2     February 5,     February        March 14,       $   0.18
                  2014            28, 2014        2014
    2014 - Q1     November 6,     November        December            0.18
                  2014            29, 2013        13, 2013
    2013 - Q4     August 28,      September       September           0.17
                  2013            13, 2013        30, 2013
    2013 - Q3     May 9, 2013     May 31,         June 14,            0.17
                                  2013            2013
    2013 - Q2     February 6,     February        March 15,           0.17
                  2013            28, 2013        2013
                  November 7,                                         0.54
    2013 -        2012            December        January 10,      
    special       (special        14, 2012        2013
                  dividend)
    2013 - Q1     November 7,     November        December            0.17
                  2012            30, 2012        14, 2012
    2012 - Q4     August 29,      September       September           0.15
                  2012            15, 2012        30, 2012
    2012 - Q3     May 10,         May 31,         June 15,            0.15
                  2012            2012            2012

Outstanding Share Data

As at February 5(th), 2014, 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, which requires such 
transactions to undergo an extensive review and receive approval from an 
Independent Committee of the Board of Directors.

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 fifteen years, as 
well as providing for the continuing production of certain Corby brands by PR 
at its production facility in Windsor, Ontario, for ten 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 a PR 
affiliate 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 of the other PR 
brands in Corby's portfolio. On September 30, 2013, Corby paid the present 
value of $10 million, or $10.3 million, for the additional eight years of the 
new term pursuant to an agreement entered into between Corby and The Absolut 
Company, an affiliate of PR and owner of the Absolut brand, to satisfy the 
parties' obligations under the 2011 agreement. Since the agreement 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 the November 9, 2011 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 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 
5, 2014, 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 Canadian Dealer Offered Rate ("CDOR") plus 
0.40% (previous to June 2013, LIBOR plus 0.40% was used, as the Canadian LIBOR 
rate was discontinued). 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                                                          Q4      Q3
    Canadian
    dollars,         Q2     Q1     Q4     Q3     Q2     Q1
    except per                                               2012    2012
    share                                                      (1)     (1)
    amounts)       2014   2014   2013   2013   2013   2013
                                                                          
                      $      $      $      $      $      $       $       $
    Revenue        38.5   36.7   33.5   25.7   37.7   35.9    32.4    29.2
    Earnings
    from                                                       6.6     6.1
    operations     10.2    9.9   10.0    5.3   12.0    9.5
    Net                                                        4.9     4.6
    earnings        7.5    7.5    7.3    3.9    8.9    6.9
    Basic EPS      0.26   0.26   0.26   0.14   0.31   0.24    0.17    0.16
    Diluted                                                   0.17    0.16
    EPS            0.26   0.26   0.26   0.14   0.31   0.24
                                                                          
    (1) The selected information that is presented for quarterly periods
    in fiscal 2012 does not reflect the impact of
    the adoption of the amendments to IAS 19, Employee Benefits.

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.

New Accounting Pronouncements

New accounting standards

The following new and revised standards and interpretations were effective for 
Corby on July 1, 2013:

(i)     Fair Value Measurement

The IASB issued a new standard, 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 prospectively. For Corby, this standard became effective July 1, 
2013. The Company determined that the adoption of IFRS 13 had no impact on its 
results of operations and financial position. Certain additional information 
for assets and liabilities not measured at fair value, but for which fair 
value is disclosed is included in Note 3 of the unaudited condensed 
consolidated interim financial statements for the second quarter ended 
December 31, 2013.

(ii)     Financial Instruments - Asset and Liability Offsetting

The IASB has issued amendments to IFRS 7, "Financial Instruments: Disclosures" 
("IFRS 7 amendment") 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 IFRS 7 amendment is 
effective for annual periods beginning on or after January 1, 2013 and must be 
applied retrospectively. For Corby, this amendment became effective July 1, 
2013.  The adoption of the IFRS 7 amendment did not have an impact on the 
Company's consolidated results of operations and financial position.

(iii)     Consolidated Financial Statements

The IASB issued new standards, IFRS 10, "Consolidated Financial Statements" 
("IFRS 10"), IFRS 11, "Joint Arrangements" ("IFRS 11"), and IFRS 12, 
"Disclosure of Interest in Other Entities" ("IFRS 12"). In addition, the IASB 
amended IAS 27, "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 effective for 
annual periods beginning on or after January 1, 2013 and must be applied 
retrospectively. For Corby, this set of standards and amendments became 
effective July 1, 2013. The adoption of IFRS 10, 11, and 12 and the amendments 
to IAS 27 and 28 did not have an impact on the Company's results of 
operations, financial position and disclosures.

(iv)     Employee Benefits

The IASB issued amendments to IAS 19, "Employee Benefits" ("IAS 19 (Amended 
2011)"), which eliminate the option to defer the recognition of actuarial 
gains and losses through the "corridor" approach, replaces the expected return 
on plan assets calculation with a discount rate methodology in calculating 
pension expense for defined benefit plans, revises the presentation of changes 
in assets and liabilities arising from defined benefit plans and enhances the 
disclosures for defined benefit plans. IAS 19 (Amended 2011) is effective for 
annual periods beginning on or after January 1, 2013, and must be applied 
retrospectively.

The adoption IAS 19 (Amended 2011), primarily the elimination of the 
"corridor" approach and the impact of the replacement of the expected return 
on plan assets with a discount rate methodology in calculating pension 
expense, has impacted the Company's net earnings and comprehensive income and 
it financial position in the comparative periods. The Company has provided a 
detailed explanation of the impacts in Note 3 of the Company's unaudited 
condensed consolidated interim financial statements for the second quarter 
ended December 31, 2013.

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, 
2014, and accordingly, have not been applied in preparing these interim 
condensed consolidated financial statements:

(v)     Financial Instruments - Asset and Liability Offsetting

The IASB has issued amendments to IAS 32, "Financial Instruments: 
Presentation" ("IAS 32"), which clarify the requirements which permit 
offsetting a financial asset and liability in the financial statements. The 
amendments to IAS 32 are effective for annual periods beginning on or after 
January 1, 2014 and must be applied retrospectively. For Corby, this amendment 
will become effective July 1, 2014. The Company is assessing the impact of the 
amendments IAS 32 on its consolidated financial statements.

(vi)     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,
                                                         2013
                                                                             
    Associated       Associated                                      
    Brand                Market        Goodwill       Intangibles       Total
                                                                             
    Various PR           Canada                                      
    brands                           $        -     $        45.6     $  45.6
                         United                                      
    Lamb's rum       Kingdom(1)             1.4              11.8        13.2
    Corby
    domestic            Canada                                       
    brands                                  1.9                 -         1.9
                                                                             
                                     $      3.3     $        57.4     $  60.7
                                                                             
    (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 16 of the consolidated financial 
statements for the year ended June 30, 2013.
    CORBY SPIRIT
    AND WINE
    LIMITED                                                                
    INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS            
                                                                           
    (Unaudited)                                                            
    (in thousands
    of Canadian
    dollars)                                                               
                                                                           
                                 Dec.        Dec.
                                  31,         31,     June 30,     June 30,
                    Notes        2013     2012(1)      2013(1)      2012(1)
                                                                           
    ASSETS                                                                 
    Deposits in
    cash
    management
    pools                   $ 102,185   $ 116,436   $  108,043   $  110,113
    Accounts
    receivable         4       28,828      30,731       23,642       28,611
    Income and
    other taxes
    recoverable                 1,589         701        1,055            -
    Inventories        5       50,009      46,706       49,083       47,760
    Prepaid
    expenses                      301         590          533          555
    Current
    portion of
    note
    receivable         6          600         600          600          600
                                                                           
    Total current
    assets                    183,512     195,764      182,956      187,639
    Note
    receivable         6          600       1,200          600        1,200
    Deferred
    income taxes                1,567       1,791        1,699        1,753
    Property and
    equipment                   7,620       7,159        8,092        7,524
    Goodwill                    3,278       3,278        3,278        3,278
    Intangible
    assets             7       57,456      51,506       49,665       53,771
                                                                           
    Total assets            $ 254,033   $ 260,698   $  246,290   $  255,165
                                                                           
    LIABILITIES                                                            
    Accounts
    payable and
    accrued
    liabilities        8    $  26,333   $  24,330   $   24,185   $   22,400
    Income and
    other taxes
    payable                         -           -            -        3,656
    Dividend
    payable                         -      15,373            -            -
                                                                           
    Total current
    liabilities                26,333      39,703       24,185       26,056
    Provision for
    employee
    benefits                   20,950      21,310       20,794       20,837
                                                                           
    Total
    liabilities                47,283      61,013       44,979       46,893
                                                                           
    Shareholders'
    equity                                                                 
    Share capital              14,304      14,304       14,304       14,304
    Accumulated
    other
    comprehensive
    loss                      (7,023)     (7,457)      (7,363)      (7,551)
    Retained
    earnings                  199,469     192,838      194,370      201,519
                                                                           
    Total
    shareholders'
    equity                    206,750     199,685      201,311      208,272
                                                                           
    Total
    liabilities
    and
    shareholders'
    equity                  $ 254,033   $ 260,698   $  246,290   $  255,165
                                                                           
    1 In preparing its comparative information, the Company has adjusted
      amounts reported previously in the condensed consolidated financial
      statements as a result of the retrospective application of the
      amendments to IAS 19, Employee Benefits. Refer to Note 3 for details
      regarding adjusted amounts.
     
    The accompanying notes are an integral part of these condensed
    consolidated financial statements.
                                                                              
    CORBY SPIRIT
    AND WINE
    LIMITED                                                                            
    INTERIM CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS                            
                                                                                       
    (Unaudited)                                                                        
    (in thousands of Canadian dollars, except per share amounts)                      
         
                                                                                       
                               For the Three Months Ended     For the Six Months Ended
                                                                                       
                                 Dec. 31,        Dec. 31,       Dec. 31,       Dec. 31,
                     Notes           2013         2012(1)           2013        2012(1)
                                                                                       
    Revenue             9    $     38,536    $     37,668   $     75,271   $     73,608
                                                                                       
    Cost of sales                (14,393)        (13,776)       (27,192)       (27,814)
    Marketing,
    sales and
    administration               (14,244)        (11,876)       (28,271)       (24,351)
    Other income       10             316              12            339             98
                                                                                       
    Earnings from
    operations                     10,215          12,028         20,147         21,541
                                                                                       
    Financial
    income                            422             450            881            902
    Financial
    expenses                        (319)           (277)          (638)          (575)
    Net financial
    income             11             103             173            243            327
                                                                                       
    Earnings
    before income
    taxes                          10,318          12,201         20,390         21,868
                                                                                       
    Current income
    taxes                         (2,864)         (3,283)        (5,319)        (6,138)
    Deferred
    income taxes                       90            (20)            (8)             72
    Income taxes                  (2,774)         (3,303)        (5,327)        (6,066)
                                                                                       
    Net earnings             $      7,544   $       8,898   $     15,063   $     15,802
                                                                                       
    Basic earnings
    per share                $       0.26   $        0.31   $       0.53   $       0.56
    Diluted
    earnings per
    share                    $       0.26   $        0.31   $       0.53   $       0.56
                                                                                       
    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
                                                                                       
    1 In preparing its comparative information, the Company has adjusted
      amounts reported previously in the condensed consolidated financial
      statements as a result of the retrospective application of the
      amendments to IAS 19, Employee Benefits. Refer to Note 3 for details
      regarding adjusted amounts.
     
    The accompanying notes are an integral part of these condensed
    consolidated financial statements.
                                                                      
    CORBY SPIRIT
    AND WINE
    LIMITED                                                                  
    INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME        
                   
                                                                             
    (Unaudited)                                                              
    (in thousands
    of Canadian
    dollars)                                                                 
                                                                             
                       For the Three Months Ended         For the Six Months
                                                                Ended
                                                                             
                          Dec.
                           31,           Dec. 31,      Dec. 31,      Dec. 31,
                          2013            2012(1)          2013       2012(1)
                                                                             
    Net earnings     $   7,544   $          8,898   $    15,063   $    15,802
                                                                             
    Amounts that
    will not be
    subsequently
    reclassified
    to earnings:                                                             
      Net
      actuarial
      gains                233                 64           465           128
      Income
      taxes               (63)               (17)         (125)          (34)
                           170                 47           340            94
                                                                             
    Total
    comprehensive
    income          $    7,714   $          8,945    $   15,403   $    15,896
                                                                             
                                                                             
                                                                             
                                                                             
    INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
    EQUITY                        
                                                                             
    (Unaudited)                                                              
    (in thousands of
    Canadian dollars)                                                        
                                                                             
                                      Accumulated
                                            Other
                         Share      Comprehensive      Retained
                       Capital               Loss      Earnings         Total
                                                                             
    Balance as at
    June 30, 2013
    (1)              $  14,304   $        (7,363)   $   194,370   $   201,311
    Total
    comprehensive
    income                   -                340        15,063        15,403
    Dividends                -                  -       (9,964)       (9,964)
                                                                             
    Balance as at
    December 31,
    2013(1)          $  14,304   $        (7,023)   $   199,469    $  206,750
                                                                             
    Balance as at
    June 30, 2012
    (1)              $  14,304   $        (7,551)   $   201,519    $  208,272
    Total
    comprehensive
    income                   -                 94        15,802        15,896
    Dividends                -                  -      (24,483)      (24,483)
                                                                             
    Balance as at
    December 31,
    2012(1)          $  14,304   $        (7,457)   $   192,838   $   199,685
    1 In preparing its comparative information, the Company has adjusted
      amounts reported previously in the condensed consolidated financial
      statements as a result of the retrospective application of the
      amendments to IAS 19, Employee Benefits. Refer to Note 3 for details
      regarding adjusted amounts.
     
    The accompanying notes are an integral part of these condensed
    consolidated financial statements.
                                                                           
    CORBY SPIRIT
    AND WINE
    LIMITED                                                                
    INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW            
                                                                           
    (Unaudited)                                                            
    (in
    thousands of
    Canadian
    dollars)                                                               
                                                                           
                             For the Three Months        For the Six Months
                                            Ended                     Ended
                                                                           
                                Dec.
                                 31,     Dec. 31,     Dec. 31,     Dec. 31,
                   Notes        2013      2012(1)         2013      2012(1)
                                                                           
    Operating
    activities                                                             
    Net earnings           $   7,544   $    8,898   $   15,063   $   15,802
    Adjustments
    for:                                                                   
    Amortization
    and
    depreciation               1,792        1,375        3,236        2,747
    Net
    financial
    income           11        (103)        (173)        (243)        (327)
    Gain on
    disposal of
    property and
    equipment                   (92)            -        (107)         (69)
    Income tax
    expense                    2,774        3,303        5,327        6,066
    Provision
    for pensions                (15)           60         (17)           95
                              11,900       13,463       23,259       24,314
    Net change
    in non-cash
    working
    capital
    balances         13        2,471      (2,050)      (4,375)         (30)
    Interest
    received                     406          405          850          790
    Income taxes
    paid                     (2,523)      (3,305)      (5,322)      (9,593)
                                                                           
    Net cash
    from
    operating
    activities                12,254        8,513       14,412       15,481
                                                                           
    Investing
    activities                                                             
    Additions to
    property and
    equipment                  (149)        (157)        (259)        (203)
    Additions to
    intangible
    assets            7            -            -     (10,293)            -
    Proceeds
    from
    disposition
    of property
    and
    equipment                    210            -          246          155
    Deposits in
    cash
    management
    pools                    (7,191)      (3,516)        5,858      (6,323)
                                                                           
    Net cash
    used in
    investing
    activities               (7,130)      (3,673)      (4,448)      (6,371)
                                                                           
    Financing
    activity                                                               
    Dividends
    paid                     (5,124)      (4,840)      (9,964)      (9,110)
                                                                           
    Net cash
    used in
    financing
    activity                 (5,124)      (4,840)      (9,964)      (9,110)
                                                                           
    Net increase
    in cash                        -            -            -            -
    Cash,
    beginning of
    period                         -            -            -            -
                                                                           
    Cash, end of
    period                 $       -   $        -   $        -   $        -
    1 In preparing its comparative information, the Company has adjusted
      amounts reported previously in the condensed consolidated financial
      statements as a result of the retrospective application of the
      amendments to IAS 19, Employee Benefits. Refer to Note 3 for details
      regarding adjusted amounts.
     
    The accompanying notes are an integral part of these condensed
    consolidated financial statements.
     

CORBY SPIRIT AND WINE LIMITED
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

------------------------------

1. GENERAL INFORMATION

Corby Spirit and Wine 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 controls 51.6% of the outstanding Voting Class A Common Shares of 
Corby as at December 31, 2013.

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.

Effective November 7, 2013, Corby changed its name and began operating as 
Corby Spirit and Wine Limited. Prior to this date, Corby operated as Corby 
Distilleries Limited. Reflecting the change Corby began trading on the TSX 
under the symbols CSW.A and CSW.B.

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"). These interim condensed consolidated financial statements 
follow the same accounting policies as the most recent annual consolidated 
financial statements, except for changes in accounting policies and methods 
described in Note 3 to these condensed consolidated financial statements. 
These interim condensed consolidated financial statements should be read in 
conjunction with the Company's 2013 annual financial statements.

These interim condensed consolidated financial statements were approved by the 
Company's Board of Directors on February 05, 2014.

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 International Financial Reporting Standards ("IFRS") as 
described in Note 4 to the Company's annual consolidated financial statements 
as at and for the year ended June 30, 2013. Historical cost is generally based 
on the fair value of the consideration given in exchange for assets.

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. ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

New accounting standards

The following new and revised standards and interpretations were effective for 
Corby on July 1, 2013:

(i)     Fair Value Measurement

The IASB issued a new standard, 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 prospectively. For Corby, this standard became effective July 1, 
2013. The Company determined that the adoption of IFRS 13 had no impact on its 
results of operations and financial position.

The Company has no financial instruments carried at fair value on its balance 
sheet. Certain additional information for assets and liabilities not measured 
at fair value, but for which fair value is disclosed is as follows:

The carrying amount of the Company's deposits in cash management pools, 
accounts receivable, accounts payable and accrued liabilities approximate 
their fair value at each balance sheet date due to their short-term 
maturities. Fair value is determined using Level 2 inputs.

The carrying value of the note receivable approximates fair value based on the 
present value of future cash flows, based on estimated market rates for 
instruments of similar terms and conditions. Fair value is determined using 
Level 2 inputs.

(ii)     Financial Instruments - Asset and Liability Offsetting

The IASB has issued amendments to IFRS 7, "Financial Instruments: Disclosures" 
("IFRS 7 amendment") 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 IFRS 7 amendment is 
effective for annual periods beginning on or after January 1, 2013 and must be 
applied retrospectively. For Corby, this amendment became effective July 1, 
2013.  The adoption of the IFRS 7 amendment did not have an impact on the 
Company's consolidated results of operations and financial position.

(iii)     Consolidated Financial Statements

The IASB issued new standards, IFRS 10, "Consolidated Financial Statements" 
("IFRS 10"), IFRS 11, "Joint Arrangements" ("IFRS 11"), and IFRS 12, 
"Disclosure of Interest in Other Entities" ("IFRS 12"). In addition, the IASB 
amended IAS 27, "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 effective for 
annual periods beginning on or after January 1, 2013 and must be applied 
retrospectively. For Corby, this set of standards and amendments became 
effective July 1, 2013. The adoption of IFRS 10, 11, and 12 and the amendments 
to IAS 27 and 28 did not have an impact on the Company's results of 
operations, financial position and disclosures.

(iv)     Employee Benefits

The IASB issued amendments to IAS 19, "Employee Benefits" ("IAS 19 (Amended 
2011)"), which eliminate the option to defer the recognition of actuarial 
gains and losses through the "corridor" approach, replaces the expected return 
on plan assets calculation with a discount rate methodology in calculating 
pension expense for defined benefit plans, revises the presentation of changes 
in assets and liabilities arising from defined benefit plans and enhances the 
disclosures for defined benefit plans. IAS 19 (Amended 2011) is effective for 
annual periods beginning on or after January 1, 2013, and must be applied 
retrospectively.

As a result of adoption IAS 19 (Amended 2011), primarily the elimination of 
the "corridor" approach and the impact of the replacement of the expected 
return on plan assets with a discount rate methodology in calculating pension 
expense, the following are the impacts on the Company's net earnings and 
comprehensive income for the three and six month periods ended December 31, 
2012 and its financial position as at July 1, 2012, December 31, 2012 and June 
30, 2013:
                                                                           
                                                                           
                                          3 months ended     6 months ended
                                                 Dec. 31            Dec. 31
    Net earnings and
    total                                                 
    comprehensive
    income impacts                                  2012               2012
    Marketing, sales
    and                                                   
    administration                                  (72)              (134)
    Other income                                     104                208
    Earnings from                                         
    operations                                        32                 74
                                                                           
    Financial expense                                     
                                                   (161)              (322)
    Earnings before                                       
    income taxes                                   (129)              (248)
                                                                           
    Income taxes                                      34                 66
    Net earnings                                    (95)              (182)
                                                                           
    Other
    comprehensive                                         
    income                                            64                128
    Tax impact of
    other                                                 
    comprehensive
    income                                          (17)               (34)
    Net comprehensive                                     
    income                                            47                 94
                                                                           
    Total
    comprehensive                                         
    income                                          (48)               (88)
                                                                           
    Decrease in basic
    and diluted                                           
    earnings per
    common share                        $         (0.01)   $              -
    Basic and diluted
    earnings per                                          
    common share, as
    restated                            $           0.31   $           0.56
                                                                           
                                                                           
                               Dec.31           June 30,            July 1,
    Balance sheet                                         
    impacts                      2012               2013               2012
    Provision for                                         
    pensions               $ (10,406)   $       (10,345)   $       (10,287)
    Deferred income                                       
    taxes                       2,767              2,752              2,736
    Retained earnings                                     
                                  182                230                  -
    Accumulated other
    comprehensive                                         
    loss                        7,457              7,363              7,551

Certain additional information with respect to the net defined benefit expense 
and liability associated with the Company's pension and post-employment 
benefit plans, as restated for the impact of IAS 19 (Amended 2011), for the 
financial year ended June 30, 2013 is as follows:
                                                                     2013
                                                                         
    Net defined benefit pension expense recognized in                    
    total comprehensive income
    Current service cost                                        $   2,128
    Interest cost                                                   1,016
    Past service cost                                               (638)
                                                                         
    Net expense recognized in net earnings                          2,506
                                                                         
    Actuarial gains recognized in other comprehensive               (256)
    income
                                                                         
    Total net expense recognized in total comprehensive         $   2,250
    income
                                                                           
                                                                           
                                 Pension       Other Benefit               
                                   Plans               Plans          Total
                                                                           
    Fair value of plan                                          
    assets                                                                 
    Fair value of plan
    assets, beginning of                                        
    year                     $    43,470     $             -     $   43,470
      Interest income              1,584                   -          1,584
      Actuarial gains                                           
      (losses)                       903                   -            903
      Company                                                   
      contributions                1,629                   -          1,629
      Plan participants'                                        
      contributions                  154                   -            154
      Benefits paid              (3,622)                   -        (3,622)
      Administrative costs         (265)                   -          (265)
                                                                           
    Fair value of plan                                          
    assets, end of year       $   43,853     $             -     $   43,853
                                                                           
    Present value of
    defined benefit                                             
    obligation                                                             
    Defined benefit
    obligation, beginning                                       
    of year                   $   53,830     $        10,477     $   64,307
      Current service cost         1,601                 262          1,863
      Interest cost                2,179                 421          2,600
      Curtailment                      -               (638)          (638)
      Plan participants'                                        
      contributions                  154                   -            154
      Actuarial (gains)                                         
      losses                         554                  94            648
      Benefits paid              (3,671)               (616)        (4,287)
    Present value of the
    defined benefit                                             
    obligations, end of
    year                      $   54,647     $        10,000     $   64,647
                                                                           
    Net defined benefit                                         
    liability                 $   10,794     $        10,000     $   20,794

The significant actuarial assumptions are as follows:
                                                  Pension     Other Benefit
                                                    Plans             Plans
                                                                           
    Accrued benefit obligation, end of                       
    year                                                                   
    Discount rate                                    4.1%              4.1%
    Compensation increase                      3.0 - 3.5%               N/A
    Inflation rate                                   2.0%               N/A
    Medical cost trend rate                           N/A              6.1%
                                                                           
    Benefit expense, for the year                                          
    Discount rate                                    4.2%              4.2%
    Compensation increase                      3.0 - 3.5%               N/A
    Inflation rate                                   2.0%               N/A
    Medical cost trend rate                           N/A              6.0%
                                                                           

The discount rate has been set based on current market rates at the end of the 
Company's financial year, assuming a rate of return comparable to high quality 
fixed income securities of equivalent currency and term that approximate the 
terms of the pension plan liabilities. A 25 basis points ("bp") increase in 
the assumed discount rate would decrease the amount of the Company's provision 
for pensions and pension expense in respect of its registered and 
non-registered defined benefit plans by $2,274 and $115, respectively.

Conversely, a 25bp decrease in the assumed discount rate would increase the 
amount of the Company's provision for pensions and pension expense in respect 
of its registered and non-registered defined benefit plans by $2,374 and $124, 
respectively.

A 25bp increase in the assumed rate of inflation, which also impacts 
compensation rates and medical cost trend rates, would increase the amount of 
the Company's provision for pensions and pension expense in respect of its 
registered and non-registered defined benefit plans by $678 and $51, 
respectively. Conversely, a 25bp decrease in the assumed rate of inflation 
would increase the amount of the Company's provision for pensions and pension 
expense in respect of its registered and non-registered defined benefit plans 
by $626 and $51, respectively.

The medical cost trend rate is based on historical trends and external data. 
The medical cost trend rate used was 6.1% for 2013, 6.0% being the trend rate 
for 2014, with 4.6% being the ultimate for 2026 and later years. A 1% increase 
the assumed medical cost trend rate would result in an increase of $1,220 to 
the provision for pensions and an increase of $128 on the net benefit expense 
in respect of its other benefit plans.

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, 
2014, and accordingly, have not been applied in preparing these interim 
condensed consolidated financial statements:

(v)     Financial Instruments - Asset and Liability Offsetting

The IASB has issued amendments to IAS 32, "Financial Instruments: 
Presentation" ("IAS 32"), which clarify the requirements which permit 
offsetting a financial asset and liability in the financial statements. The  
amendments to IAS 32 are effective for annual periods beginning on or after 
January 1, 2014 and must be applied retrospectively. For Corby, this amendment 
will become effective July 1, 2014. The Company is assessing the impact of the 
amendments to IAS 32 on its consolidated financial statements.

(vi)     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,     Dec. 31,     June 30,     June 30,
                                2013         2012         2013         2012
                                                                    
    Trade                $    19,538   $   19,215   $   16,491   $   19,759
    receivables
    Due from related           9,290       11,516        7,151        8,852
    parties
                                                                           
                          $   28,828   $   30,731   $   23,642   $   28,611

5. INVENTORIES
                            Dec. 31,     Dec. 31,     June 30,     June 30,
                                2013         2012         2013         2012
                                                                           
    Raw materials         $    2,476   $    1,860   $    2,132   $    1,597
    Work-in-progress          40,098       38,098       39,669       40,703
    Finished goods             7,435        6,748        7,282        5,460
                                                                           
                          $   50,009   $   46,706   $   49,083   $   47,760

The cost of inventory recognized as an expense and included in cost of goods 
sold for the three and  six months ended December 31, 2013 was $11,318 and 
$22,141 (2012 - $10,844 and $22,198), respectively. During the three and six 
month periods ended December 31, 2013 and 2012, there were no significant 
write-downs of inventory as a result of net realizable value being lower than 
cost, and no inventory write-downs recognized in previous years were reversed.

6. NOTE RECEIVABLE
                           Dec. 31,     Dec. 31,     June 30,     June 30,
                               2013         2012         2013         2012
                                                                   
    Note receivable     $     1,200   $    1,800   $    1,200   $    1,800
    Less: current               600          600          600          600
    portion
                                                                          
                         $      600   $    1,200   $      600   $    1,200

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 is to be paid in equal annual instalments of $600 plus interest of 5% 
per annum, with the final payment due January 31, 2015.

7. INTANGIBLE ASSETS

On September 30, 2013, Corby purchased the exclusive rights to represent 
ABSOLUT vodka brand in Canada for an eight year period ending September 29, 
2021 for a purchase price of $10,293. The terms of this agreement are further 
described in Note 15 - "Related Party Transactions". The transaction was 
accounted for as an increase to Intangible Assets and the purchase price will 
be amortized, straight-line, over the eight-year term of the agreement 
beginning on October 1, 2013:
                                                        Movements in the six month period ending December 31, 2013
                        Opening                                                                            Ending 
                            Book                                                                              Book
                          Value       Additions       Amortization       Impairments       Disposals        Value 
                                                                                                                  
    Long-term
    representation                                                                                     
    rights           $    37,439   $      10,293   $        (2,587)   $             -   $           -   $   45,145
    Trademarks and                                                                                     
    licenses              11,801               -                  -                 -               -       11,801
    Non-refundable                                                                                     
    upfront fees             425             142               (57)                 -               -          510
                                                                                                                  
                     $    49,665   $      10,435   $        (2,644)   $             -   $           -   $   57,456
                                                        Movements in the six month period ending December 31, 2012
                        Opening                                                                            Ending 
                            Book                                                                              Book
                          Value       Additions       Amortization       Impairments       Disposals        Value 
                                                                                                                  
    Long-term
    representation                                                                                     
    rights           $    41,970   $           -   $        (2,265)   $             -   $           -   $   39,705
    Trademarks and                                                                                     
    licenses              11,801               -                  -                 -               -       11,801
    Non-refundable                                                                                     
    upfront fees               -               -                  -                 -               -            -
                                                                                                                  
                     $    53,771   $           -   $        (2,265)   $             -   $           -   $   51,506

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
                          Dec. 31,     Dec. 31,     June 30,     June 30,
                              2013         2012         2013         2012
                                                                  
    Trade payables      $   19,580   $   17,619   $   17,715   $   16,584
    and accruals
    Due to related           6,753        6,711        6,470        5,816
    parties
                                                                         
                        $   26,333   $   24,330   $   24,185   $   22,400

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,
                                2013         2012         2013         2012
                                                                           
    Case goods sales      $   32,815   $   31,304   $   63,355   $   59,824
    Commissions (net
    of amortization
    of                                                            
    representation
    rights)                    4,540        4,886        9,563        9,175
    Other services             1,181        1,478        2,353        4,609
                                                                           
                         $    38,536   $   37,668   $   75,271   $   73,608

Commissions for the three and six month periods are shown net of long-term 
representation rights and non-refundable upfront fees of $1,483 and $2,643, 
(2012 - $1,133 and $2,265), respectively. Other services include revenues 
incidental to the manufacture of case goods, such as logistics fees and 
miscellaneous bulk spirit sales.

10. OTHER INCOME

The Company's other income consists of the following amounts:
                             Three months ended         Six months ended
                           Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,
                               2013         2012         2013         2012
                                                                          
    Foreign exchange     $      224   $       12   $      232   $       29
    gain
    Gain on disposal
    of property and              92            -          107           69
    equipment
                                                                          
                         $      316   $       12   $      339   $       98

11. NET FINANCIAL INCOME AND EXPENSE

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,
                                2013         2012         2013         2012
                                                                           
    Interest income       $      422   $      450   $      881   $      902
    Interest expense               -         (24)            -         (68)
    Net financial
    impact of                  (319)        (253)        (638)        (507)
    pensions
                                                                           
                         $       103   $      173   $      243   $      327

12. 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,
                                2013         2012         2013         2012
                                                                           
    Depreciation of
    property and          $      308   $      242   $      592   $      482
    equipment
    Amortization of            1,484        1,133        2,644        2,265
    intangible assets
    Salary and                 5,103        4,740       10,310        9,693
    payroll costs
    Expenses related
    to pensions and              445          491          890        1,023
    benefits
                                                                           
                          $    7,340   $    6,606   $   14,436   $   13,463

14. NET CHANGE IN NON-CASH WORKING CAPITAL BALANCES
                             Three months ended          Six months ended
                           Dec. 31,     Dec. 31,      Dec. 31,     Dec. 31,
                               2013         2012          2013         2012
                                                                           
    Accounts             $      423   $    (605)   $   (5,156)   $  (2,120)
    receivable
    Inventories               1,496          334         (926)        1,054
    Prepaid expenses            119        (310)           232         (35)
    Income and other
    taxes                   (1,246)         (89)         (532)        (891)
    recoverable /
    payable
    Accounts payable
    and accrued               1,679      (1,380)         2,007        1,962
    liabilities
                                                                           
                         $    2,471   $  (2,050)   $   (4,375)   $     (30)

14. DIVIDENDS

On February 5, 2014 subsequent to the quarter ended December 31, 2013, the 
Board of Directors declared its regular quarterly dividend of $0.18 per common 
share, to be paid on March 14, 2014, to shareholders of record as at the close 
of business on February 28, 2014. This dividend is in accordance with the 
Company's dividend policy.

15. RELATED PARTY TRANSACTIONS

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

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

In addition to the aforementioned agreements, Corby signed an agreement on 
September 26, 2008, with its ultimate parent to be the exclusive Canadian 
representative for the ABSOLUT vodka and Plymouth gin brands, for a five-year 
term which expired 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 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 
Canadian representation for the other PR brands in Corby's portfolio. Under 
this agreement, on September 30, 2013, Corby paid $10.3 million for the 
additional eight years of the new term to PR.

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.

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,
                                2013         2012         2013         2012
                                                                           
    Sales to related                                            
    parties                                                                
    Commissions -
    parent, ultimate
    parent and                                                  
    affiliated
    companies             $    5,011   $    5,180   $   10,113   $    9,935
    Products for
    resale at an
    export level -                                              
    affiliated
    companies                  2,846          913        6,616        1,679
    Bulk spirits -                                              
    parent                         -            -            -            3
                                                                           
                          $    7,857   $    6,093   $   16,729   $   11,617
                                                                           
    Cost of goods
    sold, purchased                                             
    from related
    parties                                                                
    Distilling,
    blending, and
    production                                                  
    services -
    parent                $    4,960   $    5,264   $   11,483   $   10,320
                                                                           
    Administrative
    services                                                    
    purchased from
    related parties                                                        
                                                                           
    Marketing,
    selling and
    administration
    services -                                                  
    parent and
    affiliated
    companies             $    2,290   $      511   $    3,608   $    1,022

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, 2013, contributions to these plans totaled 
$295 and $613, (2012- $306 and $636), respectively.

During the three and six month periods ending December 31, 2013, Corby sold 
casks to its parent company for net proceeds of $210 and $246 (2012 - nil and 
$150), 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 05, 2014, 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 CDOR rate plus 0.40%. During the three and six month periods ending 
December 31, 2013, Corby earned interest income of $409 and $855 from PR (2012 
- $429 and $861), 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 condensed consolidated statements. 
Therefore, a table detailing operational results by segment has not been 
provided as no additional meaningful information would result.



SOURCE  Corby Spirit and Wine Limited 
CORBY SPIRIT AND WINE LIMITED John Leburn, Vice-President and Chief Financial 
Officer Tel.: 416-479-2400 investors@corby.ca www.Corby.ca 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2014/05/c7669.html 
CO: Corby Spirit and Wine Limited
ST: Ontario
NI: FBR FOD ERN DIV  
-0- Feb/05/2014 16:30 GMT
 
 
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