Canada Dividend Investor: CDL.A - <span class="simulate_din_font">Corby Distilleries Announces Quarterly Dividend and Reports Strong Third Quarter Results</span> (CAD 0.15)

Company: Corby Distill
Stock Name: CDL.A
Amount: CAD 0.15
Announcement Date: 10/05/2012
Record Date: 29/05/2012

Dividend Detail:

TORONTO, May 10, 2012 /CNW/ - Corby Distilleries Limited ("Corby" or the
"Company") (TSX:��CDL.A, TSX:��CDL.B) today reported its dividend and
financial results for the third quarter ended March 31, 2012. The Corby
Board of Directors today also declared a dividend of $0.15 per share
payable on June 15, 2012 on the Voting Class A Common Shares and
Non-voting Class B Common Shares of the Company to shareholders of
record as at the close of business on May 31, 2012. All financial
results are reported in Canadian dollars.

Corby's third quarter net earnings increased $1.6 million when compared
to the same quarter last year, while on a year-to-date basis; net
earnings increased $19.2 million. Two disposal transactions had a
substantial impact on the financial results for the quarter and
year-to-date periods. Specifically, the sale of the Montreal plant and
non-core brands on October 31, 2011 and the sale of the Seagram Coolers
brand on March 16, 2011 (hereafter the "Disposal Transactions"). Due to
the Disposal Transactions, year-to-date net earnings include a net gain
on sale of $17.7 million and the prior year quarter and year-to-date
period reflect a net loss on sale of $1.7 million. Accordingly, the
following provides a comparison on a like-for-like basis and excludes
the impact of the aforementioned Disposal Transactions and related
activities:

Third quarter shipments grew by 7%; shipments grew 3% on a year-to-date
basis,

Revenue increased 21% and 8% for the three- and nine-month periods, and

Net earnings increased 42% and 15% for the current three- and nine-month
periods.

This strong showing in the third quarter is partially reflective of our
shipments phasing significantly ahead of consumer trends (7% versus
4%), and as such, a better reflection of the underlying business trend
can be seen in our year to date performance. The growth in net earnings
for the nine months was the result of encouraging volume growth in our
focus and agency brands offset by continued increase in advertising and
promotional ("A&P") investment, combined with the effect of bulk
inventory sales, earning higher interest on cash deposits and having
lower statutory rates of corporate income tax.

Without adjustment for the Disposal Transactions, Corby's third quarter
revenue decreased 10% (or $3.2 million) when compared with the same
three month period last year, while on a year-to-date comparison basis,
revenue decreased 4% (or $5.2 million).

"This quarter is clear evidence that our improved focus post the
disposal of non-strategic brands is producing tangible results
including significantly improved margins. We continue to build strong
momentum behind our focus and agency brands, achieving growth ahead of
category trends. We look forward with confidence as we continue to
increase our investment behind our focus brands, innovation and
servicing the specific needs of our customers", noted Patrick
O'Driscoll, President and Chief Executive Officer of Corby.

For further details, please refer to Corby's management's discussion and
analysis and interim consolidated financial statements and accompanying
notes for the three- and nine-month periods ended March 31, 2012,
prepared in accordance with International Financial Reporting
Standards.

About Corby

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, Kahl��a
liqueur, Mumm champagne, and Jacob's Creek, Wyndham Estate, Stoneleigh
and Graffigna wines.

The existing Voting Class A Common Shares and Non-voting Class B Common
Shares of the Company are traded on the Toronto Stock Exchange under
the symbols CDL.A and CDL.B, respectively.

This press release contains forward-looking statements, including
statements concerning possible or assumed future results of Corby's
operations. Forward-looking statements typically are preceded by,
followed by or include the words "believes", "expects", "anticipates",
"estimates", "intends", "plans" or similar expressions. Forward-looking
statements are not guarantees of future performance. They involve
risks, uncertainties and assumptions and, as such, the Company's
results could differ materially from those anticipated in these
forward-looking statements. Accordingly, readers should not place undue
reliance on forward-looking statements.

CORBY DISTILLERIES LIMITED

Management's Discussion and Analysis

March 31, 2012

The following Management's Discussion and Analysis ("MD&A") dated May
10, 2012, should be read in conjunction with the unaudited interim
condensed consolidated financial statements and accompanying notes as
at and for the three and nine month periods ended March 31, 2012,
prepared in accordance with International Financial Reporting Standards
("IFRS"). (See "Transition to International Financial Reporting
Standards" under "New Accounting Pronouncements" in this MD&A). 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, 2011, which have been prepared in accordance with Canadian
generally accepted accounting principles ("Canadian GAAP"), with
consideration given to the IFRS transition disclosures and the
additional annual disclosures included in Note 16 to the interim
condensed consolidated financial statements as at and for the three
months ended September 30, 2011.

This MD&A contains forward-looking statements, including statements
concerning possible or assumed future results of operations of Corby
Distilleries Limited ("Corby" or the "Company"). Forward-looking
statements typically are preceded by, followed by or include the words
"believes", "expects", "anticipates", "estimates", "intends", "plans"
or similar expressions. Forward-looking statements are not guarantees
of future performance. They involve risks, uncertainties and
assumptions, including, but not limited to: the impact of competition;
business interruption; trademark infringement; consumer confidence and
spending preferences; regulatory changes; general economic conditions;
and the Company's ability to attract and retain qualified employees.
There can be no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking statements.
These factors are not intended to represent a complete list of the
factors that could affect the Company. Additional factors are noted
elsewhere in this MD&A.

This document has been reviewed by the Audit Committee of Corby's Board
of Directors and contains certain information that is current as of May
10, 2012. Events occurring after that date could render the information
contained herein inaccurate or misleading in a material respect. Corby
will provide updates to material forward-looking statements, including
in subsequent news releases and its interim management's discussion and
analyses filed with regulatory authorities as required under applicable
law. Additional information regarding Corby, including the Company's
Annual Information Form, is available on SEDAR at www.sedar.com.

The Company's fiscal year end is June 30. Unless otherwise indicated,
all comparisons of results for the third quarter of fiscal 2012 (three
months ended March 31, 2012) are against results for the third quarter
of fiscal 2011 (three months ended March 31, 2011). Results for the
three and nine months ended March 31, 2011 have been restated to
conform to IFRS. All dollar amounts are in Canadian dollars unless
otherwise stated.

Business Overview

Corby is a leading Canadian marketer of spirits and importer of wines.
Corby's national leadership is sustained by a diverse brand portfolio
that allows the Company to drive profitable organic growth with strong,
consistent cash flows. Corby is a publicly traded company, with its
shares listed on the Toronto Stock Exchange under the symbols "CDL.A"
(Voting Class A Common Shares) and "CDL.B" (Non-Voting Class B Common
Shares). Corby's Voting Class A Common Shares are majority-owned by
Hiram Walker & Sons Limited ("HWSL") (a private company) located in
Windsor, Ontario. HWSL is a wholly-owned subsidiary of international
spirits and wine company Pernod Ricard S.A. ("PR") (a French public
limited company), which is headquartered in Paris, France. Therefore,
throughout the remainder of this MD&A, Corby refers to HWSL as its
parent, and to PR as its ultimate parent. Affiliated companies are
those that are also subsidiaries of PR.

The Company derives its revenues from the sale of its owned-brands
("Case Goods"), as well as earning commission income from the
representation of selected non-owned brands in Canada ("Commissions").
The Company also supplements these primary sources of revenue with
other ancillary activities incidental to the manufacture of case goods,
such as logistics fees and miscellaneous bulk spirit sales. Revenue
from Corby's owned-brands predominately consists of sales made to each
of the provincial liquor boards in Canada, and also includes sales to
international markets. As noted in the "Significant Events" section of
this MD&A, Corby sold its bottling facility on October 31, 2011. As a
result of this transaction Corby no longer derives revenue from
contract bottling services. All other activities remain in place.

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, Kahl��a liqueur, Mumm
champagne, and Jacob's Creek, Wyndham Estate, Stoneleigh and Graffigna
wines. In addition to representing PR's brands in Canada, Corby also
provides representation for certain selected, unrelated third-party
brands ("Agency brands") when they fit within the Company's strategic
direction and, thus, complement Corby's existing brand portfolio.

Pursuant to a production agreement that expires in September 2016, PR
produces Corby's owned-brands at HWSL's production facility in Windsor,
Ontario. Under the production agreement, Corby manages PR's business
interests in Canada, including HWSL's production facility, also until
September 2016.

The Company sources more than 80% of its spirits production requirements
from HWSL at its production facility in Windsor, Ontario. The Company's
remaining production requirements have been outsourced to third party
vendors. The formerly owned plant in Montreal continues to manufacture
most of the Corby products that were produced there prior to the sale.
The Company also utilizes a third-party manufacturer in the UK to
produce its Lamb's rum products destined for sale in countries located
outside North America. Corby's Lamb's rum products sold in North
America continue to be manufactured at HWSL's production facility.

In most provinces, Corby's route to market in Canada entails shipping
its products to government-controlled liquor boards ("LBs"). The LBs
then sell directly, or control the sale of, beverage alcohol products
to end consumers. The exception to this model is Alberta, where the
retail sector is privatized. In this province, Corby ships products to
a bonded warehouse that is managed by a government-appointed service
provider who is responsible for warehousing and distribution into the
retail channel.

Corby's shipment patterns to the LBs will not always exactly match
short-term consumer purchase patterns. However, given the importance of
monitoring consumer consumption trends over the long term, the Company
stays abreast of consumer purchase patterns in Canada through its
member affiliation with the Association of Canadian Distillers ("ACD"),
which tabulates and disseminates consumer purchase information it
receives from the LBs to its industry members. Corby refers to this
data throughout this MD&A as "retail sales", which are measured both in
volume (measured in nine-litre-case equivalents) and in retail value
(measured in Canadian dollars).

Corby's route to market for its international business primarily entails
direct shipment of its products to international distributors, located
mainly in the US. In the UK, Corby utilizes a third party contract
bottler and distribution company for the production and distribution of
Lamb's rum for the UK and select markets. International sales typically
account for less than 10% of Corby's total annual sales. Distributors
sell to various local wholesalers and retailers who in turn sell
directly to the consumer. Reliable consumer purchase data is not
readily available for these international markets and is, therefore,
not discussed in this MD&A.

Corby's operations are subject to seasonal fluctuations: sales are
typically strong in the first and second quarters, while third-quarter
sales usually decline after the end of the retail holiday season.
Fourth-quarter sales typically increase again with the onset of warmer
weather as consumers tend to increase their purchasing levels during
the summer season.

Strategies and Outlook

Corby's business strategies are designed to maximize sustainable
long-term value growth, and thus deliver solid profit while continuing
to produce strong and consistent cash flows from operating activities.
The Company's portfolio of owned and represented brands provides an
excellent platform from which to achieve its current and long-term
objectives moving forward.

Management believes that having a focused brand prioritization strategy
will permit Corby to capture market share in the segments and markets
that are expected to deliver the most growth in value over the long
term. Therefore, the Company's strategy is to focus its investments on,
and leverage the long-term growth potential of, its key brands. As a
result, Corby will continue to invest behind its brands to promote its
premium offerings where it makes the most sense and drives the most
value for shareholders.

Brand prioritization requires an evaluation of each brand's potential to
deliver upon this strategy, and facilitates Corby's marketing and sales
teams' focus and resources allocation. Over the long term, management
believes that effective execution of its strategy will result in value
creation for shareholders. Recent disposal transactions (Seagram
Coolers brand in March 2011 and the October 2011 sale of the Montreal
bottling facility and certain non-core brands, discussed below) reflect
this strategy by streamlining Corby's portfolio and thus refocusing
resources on key brands.

Key to brand strategies being implemented is an effective route to
market strategy. Corby is committed to investing in its trade marketing
expertise and ensuring that its commercial resources are focused around
the differing needs of their customers and the selling channels they
inhabit.

In addition, management is convinced that innovation is key to seizing
new profit and growth opportunities. Successful innovation can be
delivered through a structured and efficient process as well as
consistent investment on consumer insight and research and development
("R&D"). As far as R&D is concerned, the Company benefits from access
to leading-edge practices at PR's North American hub, which is located
in Windsor, Ontario.

Finally, the Company is a strong advocate of social responsibility,
especially with respect to its sales and promotional activities. Corby
will continue to promote the responsible consumption of its products in
its activities. The Company stresses its core values throughout its
organization, including those of conviviality, straightforwardness,
commitment, integrity and entrepreneurship.

Significant Events

Corby sells its Montreal bottling facility and certain non-core brands

On October 31, 2011, the Company sold certain owned-brands as well as
the shares of its subsidiary, Corby Manufacturing Inc., the owner of
the manufacturing and bottling facility in Montr��al, Qu��bec, to Sazerac
Company, Inc. ("Sazerac") for an aggregate purchase price of $39.7
million, including the cost of inventory and other working capital
items associated with the brands and manufacturing facility sold and
other related adjustments.

The transaction involved the sale of 17 brands, including De Kuyper
Geneva gin, De Kuyper Peachtree schnapps, Red Tassel vodka and Silk
Tassel Canadian whisky, as well as the Montr��al-based manufacturing
facility where a significant portion of the brands are produced. As a
result of this transaction, Corby recognized a gain on closing of $17.7
million, net of taxes and transaction costs. The book value of the
assets disposed, including working capital items, was $17.8 million.

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

This transaction allows the Company to streamline its portfolio with a
more focused and targeted collection of brands, and to focus resources
on the long term growth of its core portfolio of premium spirits and
wines as part of its brand prioritization strategy. The bottling
facility in Montreal had been increasingly underutilized with
Corby-owned brand production in recent years, and thus increased the
Company's reliance on ancillary and low margin contract bottling
activities to fill this capacity. Corby will continue its relationship
with the facility and source the production of certain brands with the
new ownership.

In Corby's most recently completed annual financial statements for the
year ended June 30, 2011, the brands and manufacturing facility
disposed of contributed a combined $5.7 million to net earnings on
sales of $32.2 million. Therefore, the transaction will have a material
impact on Corby's future operating results. Direct comparisons to prior
periods will be less meaningful, and as such, the impacts of the
transaction will be explained throughout this MD&A, where applicable.

Corby secures new term for ABSOLUT representation rights

On November 9, 2011, Corby entered into an agreement with PR for a new
term for Corby's exclusive right to represent ABSOLUT vodka in Canada
from September 30, 2013 to September 29, 2021, which is consistent with
the term of Corby's Canadian representation for the other PR brands in
Corby's portfolio. Under the agreement, Corby will pay the present
value of $10 million for the additional eight years of the new term to
PR at its commencement. Since the agreement with PR is a related party
transaction, the agreement was approved by the Independent Committee of
the Corby Board of Directors following an extensive review and with
external financial and legal advice. Pursuant to this agreement, Corby
also agreed to continue with the mirror netting arrangement with PR and
its affiliates, under which Corby's excess cash will continue to be
deposited to cash management pools, as further described in the
"Related Party Transactions" section of this MD&A.

ABSOLUT is the number one premium vodka brand worldwide with around 11
million nine litre cases sold in 2011 and is an iconic brand with an
image built around values of creativity, innovation and cultural
leadership. It is one of only four international spirits brands in the
world which sells more than 10 million cases a year and has an
especially attractive growth profile. ABSOLUT vodka complements Corby's
strategy, while further enhancing the Company's premium brands
portfolio. With ABSOLUT vodka in the Corby portfolio, Corby is the
number two player in the vodka category in Canada with a 21% volume
share - combining ABSOLUT with other key Corby vodka brands, such as
Polar Ice vodka.

Brand Performance Review

Corby's portfolio of owned-brands accounts for approximately 80% of the
Company's total annual revenues. Included in this portfolio are its key
brands: Wiser's Canadian whisky, Lamb's rum, Polar Ice vodka, and
Corby's mixable liqueur brands. The sales performance of these key
brands significantly impacts Corby's net earnings. Therefore,
understanding each key brand is essential to understanding the
Company's overall performance.

Shipment Volume and Shipment Value Performance

The following chart summarizes the performance of Corby's owned-brands
in terms of both shipment volume (as measured by shipments to customers
in equivalent nine-litre cases) and shipment value (as measured by the
change in sales revenue). The chart includes results for sales in both
Canada and international markets. Specifically, the Wiser's, Lamb's and
Polar Ice brands are also sold to international markets, particularly
in the US and UK. International sales typically account for less than
10% of Corby's total annual revenues.

��

BRAND PERFORMANCE CHART - INCLUDES BOTH CANADIAN AND INTERNATIONAL SHIPMENTS

��

Three Months Ended

��

Nine Months Ended

��

Shipment

��

Shipment

��

Shipment

��

Shipment

��

Mar. 31,

��

Mar. 31,

��

% Volume

��

% Value

��

Mar. 31,

��

Mar. 31,

��

% Volume

��

% Value

Volumes (in 000's of 9L cases)

��

2012

��

2011

��

Change

��

Change

��

2012

��

2011

��

Change

��

Change

��

Brand

��

Wiser's Canadian whisky

��

171

��

146

��

17%

��

21%

��

597

��

572

��

Lamb's rum

��

118

��

113

��

438

��

435

��

Polar Ice vodka

��

(3%)

��

(4%)

��

292

��

267

��

13%

Mixable liqueurs

��

11%

��

137

��

134

��

Total Key Brands

��

408

��

379

��

10%

��

1,464

��

1,408

��

All other Corby-owned brands

��

174

��

176

��

(1%)

��

Total Corby brands

��

460

��

429

��

1,638

��

1,584

��

�� Disposed brands

��

(100%)

��

(100%)

��

108

��

343

��

(69%)

��

(63%)

��

Total Corby brands including��

��

��disposed brands

��

460

��

511

��

(10%)

��

(3%)

��

1,746

��

1,927

��

(9%)

��

(3%)

��

Note that the above chart segregates "Disposed Brands" from the other
Corby-owned brands. Disposed Brands include brands that are no longer
owned by Corby as a result of two sale transactions. Specifically, the
Company sold its Montreal plant and certain non-core brands on October
31, 2011 (further described in the "Significant Event" section of this
MD&A) and in the prior fiscal year the Company sold the Seagram Coolers
brand effective March 16, 2011. Therefore, shipment information
associated with these Disposed Brands has been segregated in an effort
to display their non-recurring impact on Corby's shipments, as
comparisons with prior periods are otherwise no longer meaningful. Up
until the date of their sale, the Disposed Brands sold in the October
31, 2011 sale transaction were showing a trend of decline of 4% over
prior year performance.

As previously discussed in the "Strategies and Outlook" section of this
MD&A, the Company has implemented a brand prioritization strategy that
requires focused investments in key brands and in key markets, with the
long-term objective of maximizing value growth. This strategy is
designed to leverage the long-term growth potential of Corby's key
brands.

The Canadian economy continued to show indicators of improvement. The
overall spirits market in Canada experienced strong growth this quarter
with retail volume increases of 6% and retail value increases of 7%,
when compared to the same three month period of the prior year. The
trend for the nine months ended March 31, 2012 shows retail volumes and
retail value growing at 3% and 4%, respectively, when compared to the
same nine month period last year.

Corby's brand portfolio, excluding Disposed Brands, saw its shipment
performance increase 7% for volume and 9% for value on a
quarter-over-quarter comparison basis. In particular, Wiser's Canadian
whisky, Corby's flagship brand, enjoyed a strong quarter due to
refocused promotional activity in Western Canada and favourable
shipment phasing. Lamb's rum also experienced an increase this quarter
as the brand benefited from strong international shipments; mostly as
the result of a changing shipment profile since its international
production was moved to a third party bottler in the UK. Partially
offsetting the growth from these brands was Polar Ice vodka, as its
shipments pulled back in Q3 from its exceptional Q1 and Q2 performance.
This was largely the result of planned changes in the brand's
promotional calendar (i.e., promotions occurring in Q3 last year
occurred in Q1 and Q2 of the current year).

On a year-to-date basis, Polar Ice vodka led Corby's key brand portfolio
with a 9% increase in shipment volume as a result of successful new
market strategies, including the aforementioned changes to the brands
promotional calendar. Wiser's Canadian whisky also contributed to the
year-to-date growth trend as this brand shipped an additional
twenty-five thousand cases so far this fiscal year when compared to the
same nine month period last year. Wiser's performance represents a 4%
improvement within the Canadian whisky category which generated only a
1% increase in volumes over the same nine month period.

Retail Volume and Retail Value Performance

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

��

RETAIL SALES FOR THE CANADIAN MARKET ONLY¹ ��

��

Three Months Ended

��

Nine Months Ended

��

% Retail

��

% Retail

��

% Retail

��

% Retail

��

Mar. 31,

��

Mar. 31,

��

Volume

��

Value

��

Mar. 31,

��

Mar. 31,

��

Volume

��

Value

Volumes (in 000's of 9L cases)

��

2012

��

2011

��

Change

��

Change

��

2012

��

2011

��

Change

��

Change

��

Brand

��

Wiser's Canadian whisky

��

155

��

143

��

556

��

536

��

Lamb's rum

��

353

��

352

��

Polar Ice vodka

��

(3%)

��

274

��

247

��

11%

��

12%

Mixable liqueurs

��

142

��

140

��

Total Key Brands

��

356

��

342

��

1,325

��

1,275

��

All other Corby-owned brands

��

165

��

161

��

Total

��

405

��

389

��

1,490

��

1,436

��

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

��

In an effort to maintain focus on Corby's continuing business activities
and the Company's brand prioritization strategy, brands impacted by the
aforementioned sale transaction which closed on October 31, 2011, in
addition to Seagram Coolers (which was sold in Q3 last year), have been
excluded from the above chart.

Overall, the performance of Corby-owned brands was consistent with
trends seen in the Canadian spirits industry as a whole, with total
retail volume and value increases of 4% on a year-to-date basis. The
Canadian spirits industry saw volume and value growth of 3% and 4%,
respectively, during the same nine month period.

The nine-month growth trend currently experienced in the Canadian
spirits industry continued to be led by the vodka and rum categories
(especially spiced and dark rums). While the Company benefited by the
growing vodka category, Corby's portfolio is heavily weighted in the
Canadian whisky and white rum categories; these categories are trending
significantly below the Canadian spirit industry average. Specifically,
the Canadian whisky category volumes grew by only 1%, while volumes in
the white rum category declined 2%. However, Corby's key brand in the
Canadian whisky segment, Wiser's, continued to outperform and gain
market share from its competitors. The Company's strategy to
significantly increase its investment levels behind key brands and in
key markets (especially Western Canada) is showing positive results.

Summary of Corby's Key Brands

Wiser's Canadian Whisky

Corby's flagship brand, Wiser's Canadian whisky, benefited from focused
advertising and promotional activity this quarter which drove retail
volume growth of 9% and retail value growth of 8%, while the Canadian
whisky category as a whole grew at 4% and 5% in retail volume and
retail value, respectively. On a year-to-date basis, the brand has
continued to gain market share from both a retail volume and value
perspective, at the expense of its direct competitors in Canada.
Specifically, the brand had retail value and volume growth of 4%
compared to its category which showed 2% value and 1% volume growth for
the nine month period. This year, the Company continued to build upon
the brand's popular and award winning "Welcome to the Wiserhood"
television campaign, as it launched new versions of its popular
television commercials.

Lamb's Rum

Lamb's rum, one of the top-selling rum families in Canada, saw its
retail volumes hold steady for the nine month period ended March 31,
2012 versus the same period last year, while retail volumes for the rum
category in Canada increased 4%. The growth in the rum category has
been entirely driven by the growth in spiced and dark rum categories,
while consumer consumption of white rum has been experiencing declines
(-2% on a nine month comparison basis). The Lamb's rum family has a
significant amount of its volume weighted in white rum, and its
performance is reflective of the decline in the category. Compared to
the white rum category, Lamb's rum is performing slightly ahead of the
market. Corby continued to invest behind the brand this year as it
launched a new campaign entitled "Lamb's Nation", which is focused in
its key markets of Newfoundland and Labrador.

Polar Ice Vodka

Polar Ice vodka is among the top three largest vodka brands in Canada.
As a result of achieving considerable growth in the first and second
quarters, the brand's year-to-date growth trend (+11% volume, +12%
value) continued to significantly outpace the vodka category in Canada
which was +3% during the same nine month period. Aggressive investment
in key markets, specifically BC and Alberta, supported with an outdoor
"Canada's Vodka" media campaign and strategic pricing were key reasons
that consumers have re-engaged with the brand.

Mixable Liqueurs

Corby's portfolio of mixable liqueur brands consists of McGuinness
liqueurs (which is Canada's largest mixable liqueur brand family) and
Meaghers liqueurs. Retail value and volumes for Corby's mixable
liqueurs portfolio grew 2% during the nine month period compared to the
same period last year, while the category as a whole remained
relatively flat. Quarterly trends were similar, and show Corby brands
remained slightly ahead of the overall market for the mixable liqueurs
category. Specifically, Corby's mixable liqueur brands grew 3% for
volume and 4% for value while the category shows growth of 2% in volume
and 3% in value over the same three month period. The liqueur category
is most affected by changes in consumer spending, particularly as it
relates to consumption at licensed establishments, such as bars and
restaurants.

Other Corby-Owned Brands

Royal Reserve, a Canadian whisky, is the most significant brand in this
grouping and achieved growth of 3% in both retail volume and value
compared to the same nine month period last year. On a quarterly basis
the brand's retail sales grew 4% when compared to the same period last
year. The brand's performance exceeded its Canadian whisky category in
Canada on a year-to-date basis and matched the category on a
quarter-over-quarter basis.

Financial and Operating Results

The following table presents a summary of certain selected consolidated
financial information of the Company for the three and nine month
periods ended March 31, 2012 and 2011.

��

Three Months Ended ��

��

Nine Months Ended

(in millions of Canadian dollars,

��

Mar. 31,

��

Mar. 31,

��

Mar. 31,

��

Mar. 31,

��

except per share amounts)

��

��2012

��

2011⁽¹⁾

��

$ Change

��

% Change

��

��2012

��

2011⁽¹⁾

��

$ Change

��

% Change

��

Revenue

��

29.2

��

��$

32.4

��

��$

(3.2)

��

(10%)

��

114.3

��

��$

119.5

��

��$

(5.2)

��

(4%)

��

Cost of sales

��

(11.7)

��

(16.1)

��

4.4

��

(27%)

��

(47.9)

��

(52.9)

��

5.0

��

(9%)

Marketing, sales and administration

��

(11.5)

��

(10.2)

��

(1.3)

��

13%

��

(35.9)

��

(34.0)

��

(1.9)

��

Disposal transactions

��

(2.2)

��

2.2

��

N/A

��

21.5

��

(2.2)

��

23.7

��

N/A

Other income (expense)

��

0.1

��

0.3

��

(0.2)

��

(67%)

��

0.2

��

0.6

��

(0.4)

��

(67%)

��

Earnings from operations

��

6.1

��

4.2

��

1.9

��

45%

��

52.2

��

31.0

��

21.2

��

68%

��

Financial income

��

0.5

��

0.4

��

0.1

��

25%

��

1.5

��

0.9

��

0.6

��

67%

Financial expenses

��

(0.2)

��

(0.3)

��

0.1

��

(33%)

��

(0.4)

��

(0.7)

��

0.3

��

(43%)

Net financial income

��

0.3

��

0.1

��

0.2

��

200%

��

1.1

��

0.2

��

0.9

��

450%

��

Earnings before income taxes

��

6.4

��

4.3

��

2.1

��

49%

��

53.3

��

31.2

��

22.1

��

71%

Income taxes

��

(1.8)

��

(1.3)

��

(0.5)

��

38%

��

(12.1)

��

(9.2)

��

(2.9)

��

32%

��

Net earnings

��

4.6

��

��$

3.0

��

��$

1.6

��

53%

��

41.2

��

��$

22.0

��

��$

19.2

��

87%

��

Per common share

��

��- Basic net earnings

��

0.16

��

��$

0.11

��

��$

0.05

��

45%

��

��$

1.45

��

��$

0.77

��

��$

0.68

��

88%

��- Diluted net earnings

��

0.16

��

��$

0.11

��

��$

0.05

��

45%

��

1.45

��

��$

0.77

��

��$

0.68

��

88%

⁽¹⁾ In preparing the comparative information, the Company has adjusted amounts previously reported in financial statements prepared in accordance with

Canadian GAAP.�� See Note 16 to the interim condensed consolidated financial statements for an�� explanation of the transition to IFRS.

��

Overall Financial Results

Financial results were substantially impacted by three factors:

The gain on sale of the Company's manufacturing plant and certain
non-core brands on October 31, 2011. An after-tax gain on sale of $17.7
million was recognized in the year-to-date financial results. Please
refer to the "Significant Event" of this MD&A for further details
regarding the sale transaction.

The reduction of earnings resulting from the aforementioned October 31,
2011 sale transaction, as from November 1, 2011 onward, Corby's results
no longer include earnings associated with the brands and manufacturing
facility sold. However, the comparative periods will include the
financial results of those brands for the full period, given the
Company's ownership of the brands at that time.

The sale of the Company's formerly owned Seagram Coolers brand which
occurred on March 16, 2011. There are no earnings associated with this
brand in the current quarter and year-to-date period, however, the
comparative periods include the financial results of this brand given
the Company's ownership at that time.

In order to effectively assess Corby's current period results against
those of the comparative three and nine-month periods, the impacts of
the aforementioned three factors have been removed from the discussion,
where noted.

As noted in the Financial and Operating Results chart, the Company's net
earnings increased $1.6 and $19.2 million for the three and nine month
periods, respectively. After removing the impacts of the aforementioned
three factors, net earnings increased 42% and 15% for the quarter and
nine-month periods ending March 31, 2012, respectively, when compared
to the same periods in the prior year. Earnings per share increases
mirror these results on the same comparative basis.

These increases were primarily the result of having higher case good
sales (driven by Polar Ice vodka in Canada, and Wiser's Canadian whisky
in Canada and internationally), increased bulk whisky sales activity,
increased interest income earned on cash deposits, and lastly, the
impact of having lower statutory corporate tax rates this period versus
the same periods last year. The aforementioned growth in earnings was
partially offset by increased selling and administrative costs and
higher advertising and promotional investment in the Company's key
brands in the current year.

Revenue

Revenue declined 10% (or $3.2 million) when compared with the same
quarter last year and 4% (or $5.2 million) on a year-to-date
comparative basis. This decrease is the result of the revenues from
brands and activities no longer included in Corby's portfolio in the
current year due to the aforementioned sale transactions (i.e., sale of
the Montreal plant and certain non-core brands as of October 31, 2011,
and the sale of the Seagram Coolers brand in March 2011). These
disposed brands and activities accounted for an $8.2 million decrease
in revenues for the quarter and $12.8 million decrease year-to-date.

The following highlights the key components of the Company's revenue
streams:

��

Three Months Ended ��

��

Nine Months Ended

��

Mar. 31,

��

Mar. 31,

��

Mar. 31,

��

Mar. 31,

��

(in millions of Canadian dollars)

��

��2012

��

2011

��

Change

��

��Change

��

��2012

��

2011

��

Change

��

��Change

��

Revenue streams:

��

��Case goods (ex. disposed brands)

��

23.1

��

20.7

��

2.4

��

12%

��

80.9

��

77.8

��

3.1

��

��Commissions

��

2.9

��

2.4

��

0.5

��

21%

��

12.4

��

11.5

��

0.9

��

��Other services

��

3.2

��

1.1

��

2.1

��

191%

��

7.9

��

4.3

��

3.6

��

84%

Revenue, ex. disposed brands

��

29.2

��

24.2

��

5.0

��

21%

��

101.2

��

93.6

��

7.6

��

Disposed brands

��

8.2

��

(8.2)

��

(100%)

��

13.1

��

25.9

��

(12.8)

��

(49%)

��

Revenue

��

29.2

��

32.4

��

(3.2)

��

(10%)

��

114.3

��

119.5

��

(5.2)

��

(4%)

��

Removing the impact of the aforementioned sale transactions (which is
denoted in the above chart as "Disposed brands"), revenue from the
remaining Corby brand portfolio and other business activities increased
21% for the quarter and 8% year-to-date when compared with the same
periods in the prior year.

Revenue (excluding Disposed brands) for the three month period ended
March 31, 2012 reflects strong Case Goods shipments (increased shipment
volume of 7%) and a significant increase in sales of bulk whisky to a
former contract bottling customer. Commission income also increased on
a quarter-over-quarter comparative basis and is reflective of the
overall improvement in the Canadian spirits market.

Year- to-date revenue increased 8% or $7.6 million (excluding Disposed
brands) when compared to the same nine month period of the prior year.
This increase is a result of the same factors influencing the quarter
and is largely attributable to increased Case Good shipment volume of
3% and the aforementioned bulk whisky sales. The increase in net Case
Goods revenue is driven by new pricing strategies and refocused
promotional activities for certain key brands, notably Polar Ice vodka
and Wiser's Canadian whisky. Case Goods revenue also benefited from the
impact of general price increases across most of Corby's brand
portfolio in Canada. These trends are a continuation of results seen
earlier in this fiscal year. The aforementioned bulk whisky sales are
to a former contract bottling customer and currently are not expected
to continue past December 31, 2012. The supply of the liquid has no
impact upon Corby's own supply requirements.

Cost of sales

Cost of sales was $11.7 million, representing a decrease of 27% compared
to the same three month period last year. Gross margin was 55.6% this
quarter, versus 46.5% for the same three month period last year. The
substantial increase in gross margin this quarter when compared with
the same quarter last year is a direct result of the two disposal
transactions. More specifically, the disposal transactions consisted of
the sale of the Seagram Coolers brand (sold March 16, 2011) and the
Montreal bottling facility and certain non-core brands (sold October
31, 2011). The revenue derived from the brands and Montreal bottling
facility generated significantly less margin than Corby's remaining
business.

Gross margin for the nine month period was 53.1% versus 51.0%, showing
an improvement this period versus last and is driven by the same
factors influencing the quarter as noted above. However, the gross
margin increase is not as pronounced as was experienced from a
quarter-over-quarter perspective. This is due to the fact that the
current nine month period includes four months of operations from the
non-core brands and Montreal bottling facility up to the date of
disposal on October 31, 2011.

Marketing, sales and administration

Marketing, sales and administration expenses were $11.5 million, as
compared to $10.2 million during the same quarter last year, reflecting
an increase of $1.3 million. A portion of the increase relates to a
project the Company has undertaken to transform its sales and
trade-marketing organization in Canada. Additionally, the increase this
quarter also reflects higher advertising and promotional spending
levels over the prior year in support of its key brands.

On a year-to-date basis, marketing, sales and administration expenses
were $35.9 million, an increase of 6% or $1.9 million compared to the
same period last year. In addition to the aforementioned
quarter-over-quarter impacts (i.e., sales and trade-marketing project
and advertising and promotional investments), the year-to-date increase
is also on account of inflationary type increases associated with
headcount and other related costs.

Other Income and Expenses

Other income and expenses include such items as realized foreign
exchange gains and losses, gains on sale of property plant and
equipment and amortization of actuarial gains and losses related to the
Company's pension and post retirement benefit plans. The balances
comprising this account were relatively consistent on both a three and
nine month comparison basis.

Net Financial Income

Net financial income is comprised of interest earned on deposits in cash
management pools, offset by interest costs associated with the
Company's pension and other post-employment obligations. The increased
net financial income this quarter and year-to-date is primarily the
result of increased market interest rates applicable to the Company's
cash deposits in addition to having higher average amounts of cash on
deposit.

Income taxes

Income tax expense was $1.8 million as compared to $1.3 million for the
same quarter last year. The effective tax rates approximate the
statutory rates for both periods. The effective tax rate for the nine
month period ending March 31, 2012 is substantially impacted by the
sale of the Montreal plant and the non-core brands which resulted in a
tax impact of $3.9 million. Partially offsetting the increased tax as a
result of the aforementioned sale transaction, were tax savings as a
result of previously announced reductions in statutory income tax
rates. Both the Canadian federal and Ontario provincial governments
enacted reductions to corporate taxation rates.

Liquidity and Capital Resources

Corby's sources of liquidity are its deposits in cash management pools
of $106.4 million as at March 31, 2012, and its cash generated from
operating activities. The Company does not have any liabilities under
short or long-term debt facilities.

Cash flows

��

Three Months Ended

��

Nine Months Ended

��

Mar. 31,

��

Mar. 31,

��

Mar. 31,

��

Mar. 31,

��

(in millions of Canadian dollars)

��

2012

��

2011

��

Change

��

2012

��

2011

��

Change

��

Operating activities

��

�� Net earnings, adjusted for non-cash items

��

7.4

��

7.5

��

(0.1)

��

32.7

��

36.4

��

(3.7)

�� Net change in non-cash working capital

��

(1.2)

��

(3.5)

��

2.3

��

10.9

��

(2.9)

��

13.8

�� Net payments for interest and income taxes

��

(1.0)

��

(1.5)

��

0.5

��

(6.2)

��

(7.3)

��

1.1

��

5.2

��

2.5

��

2.7

��

37.4

��

26.2

��

11.2

��

Investing activities

��

�� Additions to capital assets

��

(0.3)

��

(0.3)

��

(0.6)

��

(0.6)

��

�� Net proceeds from sale of plant and brands

��

(0.7)

��

4.8

��

(5.5)

��

37.3

��

4.8

��

32.5

�� Proceeds from disposition of capital assets

��

0.1

��

0.1

��

0.3

��

0.3

�� Deposits in cash management pools

��

52.0

��

(3.0)

��

55.0

��

(9.8)

��

(18.4)

��

8.6

��

51.1

��

1.5

��

49.6

��

27.2

��

(14.2)

��

41.4

��

Financing activities

��

�� Proceeds from note receivable

��

0.6

��

0.6

��

0.6

��

0.6

�� Dividends paid

��

(56.9)

��

(4.0)

��

(52.9)

��

(65.2)

��

(12.0)

��

(53.2)

��

(56.3)

��

(4.0)

��

(52.3)

��

(64.6)

��

(12.0)

��

(52.6)

��

Net change in cash

��

Operating activities

Net cash from operating activities was $5.2 million this quarter,
representing an increase of $2.7 million when compared with the same
quarter last year. The quarter-over-quarter change is mostly
attributable to the net change in non-cash working capital, which
generated $2.3 million of cash, and was driven mostly by a reduction in
accounts receivable balances compared to the same period last year and
due to the aforementioned sale transactions.

On a year-to-date basis, net cash from operating activities was $37.4
million compared to $26.2 million from the same nine month period of
the prior year. Non-cash changes in working capital have increased
$13.8 million compared to the prior year due to the reduction of
accounts receivable and inventory balances. Similar to the quarter,
these reductions are related to brands impacted in the aforementioned
sale transactions. In addition, the Company's relocation of production
of its Lamb's rum international business to the UK effectively reduced
the amount of bulk rum inventory levels this quarter when compared with
the same period last year.

Investing activities

Cash from investing activities increased $49.6 million this quarter when
compared with the same quarter last year. On a year-to-date basis the
increase was $41.4 million. During the quarter, cash from investing
activities is significantly impacted by draws from deposits in cash
management pools which funded the payment of the special dividend
discussed further below under "Financing Activities". On a year-to-date
basis, investing activities primarily reflect cash flows from the sale
of the Montreal plant and non-core brands, which generated $37.3
million year-to-date in net proceeds. For the nine-month period, there
was a net increase to deposits in cash management pools of $8.6 million
when compared to same nine month period of the prior year.

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

Financing activities

Cash used for financing activities totals $56.3 million for the quarter
and represents the payment of dividends to shareholders and proceeds
received from the long-term note receivable paid to the Company during
the period. Dividend payments increased over the third quarter last
year due to a special dividend of $1.85 per common share paid January
3, 2012, which totalled $52.7 million. A special dividend did not occur
in the prior year. In addition, regular dividends increased from $0.14
per share to $0.15 per share effective November 9, 2011, or from
approximately $4.0 million per quarter to $4.3 million per quarter. For
the nine month period, dividends paid totalled $65.2 million versus
$12.0 million for the same nine month period in the prior year; again,
the year over year increase is driven by the special dividend paid and
the increase to regular quarterly dividend payments from $0.14 per
share to $0.15 per share. The payment of these dividends is in
accordance with the Company's stated dividend policy.

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

��

Declaration Date

��

Record Date

��

Payment date

��

Dividend per Share

��

May 10, 2012

��

May 31, 2012

��

June 15, 2012

��

0.15

February 8, 2012

��

February 29, 2012

��

March 15, 2012

��

0.15

November 9, 2011 (special dividend)

��

December 15, 2011

��

January 3, 2012

��

1.85

November 9, 2011

��

November 30, 2011

��

December 15, 2011

��

0.15

August 24, 2011

��

September 15, 2011

��

September 30, 2011

��

0.14

May 11, 2011

��

May 31, 2011

��

June 15, 2011

��

0.14

February 9, 2011

��

February 28, 2011

��

March 15, 2011

��

0.14

November 10, 2010

��

November 30, 2010

��

December 15, 2010

��

0.14

��

Outstanding Share Data

There has been no change in Corby's share data since June 30, 2011. As
at May 10, 2012, Corby had 24,274,320 Voting Class A Common Shares and
4,194,536 Non-Voting Class B Common Shares outstanding. The Company
does not have a stock option plan, and therefore, there are no options
outstanding.

Related Party Transactions

Transactions with parent, ultimate parent, and affiliates

Corby engages in a significant number of transactions with its parent
company, its ultimate parent and various affiliates. Specifically,
Corby renders services to its parent company, its ultimate parent, and
affiliates for the marketing and sale of beverage alcohol products in
Canada. Furthermore, Corby sub-contracts 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 is also outsourced to its parent company.

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

In addition to the aforementioned agreements, Corby signed an agreement
on September 26, 2008, with its ultimate parent to be the exclusive
Canadian representative for the ABSOLUT vodka and Plymouth gin brands,
for a five-year term expiring October 1, 2013. These brands were
acquired by PR subsequent to the original representation rights
agreement dated September 29, 2006. As noted in the "Significant
Events" section of this MD&A, the Company entered into an agreement
with PR on November 9, 2011, for a new term for Corby's exclusive right
to represent ABSOLUT vodka and Plymouth gin brands in Canada from
September 30, 2013 to September 29, 2021, which is consistent with the
term of Canadian representation for the other PR brands in Corby's
portfolio.

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 May 10, 2012, as published by
Standard & Poor's and Moody's, was BBB- and Baa3, respectively. PR
compensates Corby for the benefit it receives from having the Company
participate in the Mirror Netting Service Agreement by paying interest
to Corby based upon the 30-day LIBOR rate plus 0.40%.

Corby accesses these funds on a daily basis and has the contractual
right to withdraw these funds or terminate these cash management
arrangements upon providing five days' written notice.

Selected Quarterly Information

Summary of Quarterly Financial Results

��

(in millions of Canadian dollars,

��

except per share amounts)

��

2012

��

2012

��

2012

��

2011

��

2011

��

2011

��

2011

��

2010 ⁽¹⁾

��

Revenue

��

29.2

��

40.9

��

44.2

��

40.0

��

32.4

��

45.5

��

41.6

��

42.0

Earnings from operations

��

6.1

��

33.6

��

12.6

��

9.4

��

4.3

��

13.7

��

13.1

��

9.4

Net earnings, excluding undernoted items ⁽²⁾

��

4.6

��

9.0

��

9.9

��

6.8

��

3.1

��

9.8

��

9.2

��

6.6

Net earnings

��

4.6

��

27.1

��

9.5

��

6.8

��

4.8

��

9.8

��

9.2

��

6.6

Basic EPS

��

0.16

��

0.95

��

0.33

��

0.24

��

0.11

��

0.34

��

0.32

��

0.23

Diluted EPS

��

0.16

��

0.95

��

0.33

��

0.24

��

0.11

��

0.34

��

0.32

��

0.23

⁽¹⁾ The selected information that is presented for quarterly periods in fiscal 2010 does not
reflect the impact of the adoption

of IFRS.

⁽²⁾ Net earnings have been adjusted for the net after-tax gain on the sale of plant and brands of $17.7 million in the current year

and for the net after-tax loss on the sale of Seagram Coolers of $1.7 million in 2011

��

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

Also highlighted in the chart is the effect the aforementioned sale
transactions (i.e., the sale of the Montreal plant and non-core brands
in Q2-2012, and the sale of the Seagram Coolers brand in Q3-2011) had
on the quarterly results. Specifically, on a quarter-over-quarter
comparative basis, revenues for Q3-2012 are lower by $3.2 million
compared to Q2-2011 due to these aforementioned changes to the
Company's brand portfolio. Removing the impact of the aforementioned
sale transactions, revenue from the remaining Corby brand portfolio and
other business activities increased 21% for the quarter when compared
with the same period in the prior year. In addition, the Company's net
earnings were impacted by the gain on the sale of the Montreal plant
and non-core brands in the amount of $18.1 million in the second
quarter for 2012. The third quarter of 2011 was impacted by a loss on
the sale of the Seagram Coolers brand in the amount of $1.7 million.

For further information regarding the sale of the Montreal plant and
non-core brands please refer to the interim condensed consolidated
financial statements for the period ending March 31, 2012. For further
information regarding the sale of the Seagram Coolers brand please
refer to the most recently completed annual report for the year ended
June 30, 2011.

New Accounting Pronouncements

Transition to International Financial Reporting Standards

The Company has adopted International Financial Reporting Standards
("IFRS") for its 2012 fiscal year as required by the Accounting
Standards Board of the Canadian Institute of Chartered Accountants. The
Company provided information on its transition to IFRS in its 2011
Annual MD&A. The assessments and impacts discussion in the 2011 Annual
MD&A remain largely unchanged.

The most significant impact of the transition to IFRS is the revaluation
of the Company's provision for pensions to conform to Corby's parent
company's measurement basis. Upon transition to IFRS, the Company's
opening July 1, 2010 retained earnings balance has been reduced by
$14.6 million, including the impact of taxes, due to the revaluation of
its pension obligations.

The Company has provided a detailed explanation of the impacts of this
transition in Note 16 of the Company's first quarter 2012 unaudited
interim condensed period financial statements ("Note 16"). Note 16
includes reconciliations of the Company's balance sheet and
shareholders' equity from Canadian GAAP to IFRS as at June 30, 2011and
July 1, 2010 and its fiscal 2011 net earnings and comprehensive income
for the year ending June 30, 2011. Explanation of the individual
impacts of adopting IFRS identified in the reconciliations is also
provided, as are the Company's elections under IFRS 1 "First-time
Adoption of International Financial Reporting Standards".�� Note 16 to
the Company's third quarter 2012 unaudited condensed consolidated
financial statements includes reconciliations of the Company's balance
sheet and shareholders' equity from Canadian GAAP to IFRS as at March
31, 2011 and its net earnings and comprehensive income for the three
and nine months ended March 31, 2011.

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, 2012, and accordingly, have not been applied in
preparing the interim condensed consolidated financial statements for
the three and nine month periods ending March 31, 2012:

(i)��Deferred Taxes - Recovery of Underlying Assets

The IASB has issued an amendment to IAS 12, "Income Taxes" ("IAS 12
amendment"), which introduces an exception to the general measurement
requirements of IAS 12 in respect of investment properties measured at
fair value. The IAS 12 amendment is effective for annual periods
beginning on or after January 1, 2012. For Corby, this amendment
becomes effective July 1, 2012. Corby does not anticipate the
implementation of this amendment to have a significant impact on its
results of operations, financial position and disclosures.

(ii)��Presentation of Financial Statements

On June 16, 2011 the IASB issued amendments to IAS 1, "Presentation of
Financial Statements." The amendments enhance the presentation of Other
Comprehensive Income ("OCI") in the financial statements. A requirement
has been added to present items in other comprehensive income grouped
on the basis of whether they may be subsequently reclassified to
earnings in order to more clearly show the effect the items of other
comprehensive income may have on future earnings.�� The amendments are
effective for annual periods beginning on or after July 1, 2012. As the
amendments only relate to presentation, Corby's results of operations
and financial position will not be impacted. Further, Corby does not
anticipate the amendment will have a significant impact on disclosure.

(iii)��Consolidated Financial Statements

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

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

(iv)��Fair Value Measurement

On May 12, 2011 the IASB issued IFRS 13, "Fair Value Measurement" ("IFRS
13") which defines fair value, provides guidance in a single IFRS
framework for measuring fair value and identifies the required
disclosures pertaining to fair value measurement. This standard is
effective for annual periods beginning on or after January 1, 2013. For
Corby this standard becomes effective July 1, 2013. The Company is
currently assessing the impact of the new standard on its consolidated
financial statements.

(v)��Employee Benefits

On June 16, 2011 the IASB revised IAS 19, "Employee Benefits" ("IAS
19"). The revisions include the elimination of the option to defer the
recognition of actuarial gains and losses, enhancing the guidance
around measurement of plan assets and defined benefit obligations,
streamlining the presentation of changes in assets and liabilities
arising from defined benefit plans and introduces enhanced disclosure
for defined benefit plans. The amendments are effective for annual
periods beginning on or after January 1, 2013. For Corby, the revisions
to this standard become effective July 1, 2013. The Company is
currently assessing the impact of this amendment on its consolidated
financial statements.

(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. This standard becomes effective for
fiscal years beginning on or after January 1, 2015. For Corby, this
standard will become effective July 1, 2015. The Company is currently
assessing the impact of the new standard on its results of operations,
financial position and disclosures.

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 has been reduced to an acceptably low
level. 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. They 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. Corby appreciates and invests in its employees to partner with
them in achieving corporate objectives and creating value.

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 LB s, 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 supply of GBP outpaces demand, as Corby's sales into the
UK market are denominated in GBP, while it has only an insignificant
amount of GBP purchases. Therefore, increases in the value of the CAD
relative to the GBP will have an unfavourable impact on the Company's
earnings. As a result of the Company's recent relocation of its Lamb's
international production from Canada to the UK, Corby's exposure to
fluctuations in GBP relative to the CAD will be significantly reduced.

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 March 31, 2012

��

Associated Brand

��

Associated Market

��

Goodwill

��

Intangibles

��

Total

��

Various PR brands

��

Canada

��

43.1

��

43.1

Lamb's rum

��

United Kingdom⁽¹⁾

��

1.4

��

11.8

��

13.2

Corby domestic brands

��

Canada ⁽²⁾

��

1.9

��

1.9

��

3.3

��

54.9

��

58.2

⁽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.

⁽²⁾ Goodwill related to Corby domestic brands has been adjusted to reflect the impact of the sale of

certain DeKuyer brands as discussed in the "Significant Events" section of this MD&A.

��

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.

Provision for pensions

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 21 of the interim condensed consolidated financial
statements for the quarter ended September 30, 2011 which includes
details of the provision for pensions under IFRS as at June 30, 2011.

CORBY DISTILLERIES LIMITED

��

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

��

(Unaudited)

��

(in thousands of Canadian dollars)

��

March 31,

��

March 31,

��

June 30,

��

July 1,

��

Note

��

2012

��

2011⁽¹⁾

��

2011⁽¹⁾

��

2010⁽¹⁾

��

ASSETS

��

Deposits in cash management pools

��

�� 106,430

��

�� 93,045

��

�� 96,636

��

�� 74,685

Accounts receivable

��

26,309

��

29,567

��

31,005

��

28,340

Income and other taxes recoverable

��

1,070

Inventories

��

50,048

��

62,759

��

59,654

��

60,502

Prepaid expenses

��

326

��

919

��

1,731

��

1,551

Current portion of note receivable

��

600

��

600

��

600

��

Total current assets

��

183,713

��

186,890

��

189,626

��

166,148

Note receivable

��

1,200

��

1,800

��

1,800

��

Deferred income taxes

��

596

��

256

��

Property and equipment

��

6,721

��

14,509

��

15,646

��

15,238

Goodwill

��

3,278

��

5,886

��

5,886

��

6,857

Intangible assets

��

54,904

��

59,435

��

58,302

��

70,571

��

Total assets

��

249,816

��

269,116

��

�� 271,516

��

258,814

��

LIABILITIES

��

Accounts payable and accrued liabilities

��

�� 18,916

��

�� 17,463

��

19,492

��

�� 18,285

Income and other taxes payable

��

3,979

��

1,873

��

115

��

Total current liabilities

��

22,895

��

19,336

��

19,607

��

18,285

Provision for pensions

��

10,856

��

13,384

��

12,670

��

14,175

Deferred income taxes

��

853

��

Total liabiliites

��

34,604

��

32,720

��

32,277

��

32,501

��

Shareholders' equity

��

Share capital

��

14,304

��

14,304

��

14,304

��

14,304

Retained earnings

��

200,908

��

222,092

��

224,935

��

212,009

��

Total shareholders' equity

��

215,212

��

236,396

��

239,239

��

226,313

��

Total liabilities and shareholders' equity

��

�� 249,816

��

�� 269,116

��

�� 271,516��

��

258,814

��

⁽¹⁾ In preparing its comparative information, the Company has adjusted
amounts reported previously in financial statements

prepared in accordance with Canadian Generally Accepted Accounting
Principles ("Canadian GAAP").�� See Note 16 to the

first interim condensed consolidated financial statements for the three
month periods ending September 30, 2011 and 2010

for an explanation of the transition to IFRS on the balance sheet at
July 1, 2010 and Note 16 to these condensed

consolidated financial statements for an explanation of the impact on
the three and nine month periods ending March 31, 2011.

��

The accompanying notes are an integral part of these interim condensed
consolidated financial statements. ��

��

CORBY DISTILLERIES LIMITED

��

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

��

(Unaudited)

��

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

��

For the Three Months Ended

��

For the Nine Months Ended

��

March 31,

��

March 31,

��

March 31,

��

March 31,

��

Note

��

2012

��

2011⁽¹⁾

��

2012

��

2011⁽¹⁾

��

Revenue

7,14

��

29,171

��

32,374

��

114,313

��

��$ 119,485

��

Cost of sales

8,14

��

(11,681)

��

(16,062)

��

(47,817)

��

(52,900)

Marketing, sales and administration

8,14

��

(11,528)

��

(10,186)

��

(35,970)

��

(34,011)

Disposal transactions

��

(2,233)

��

21,532

��

(2,233)

Other income and expenses

��

103

��

335

��

174

��

676

��

Earnings from operations

��

6,065

��

4,228

��

52,232

��

31,017

��

Financial income

��

514

��

356

��

1,510

��

905

Financial expenses

��

(151)

��

(252)

��

(428)

��

(734)

Net financial income

��

363

��

104

��

1,082

��

171

��

Earnings before income taxes

��

6,428

��

4,332

��

53,314

��

31,188

��

Current income taxes

��

(1,820)

��

(2,009)

��

(11,038)

��

(9,784)

Deferred income taxes

��

727

��

(1,109)

��

637

Income taxes

��

(1,789)

��

(1,282)

��

(12,147)

��

(9,147)

��

Net earnings

��

�� 4,639

��

�� 3,050

��

�� 41,167

��

�� 22,041

��

Basic earnings per share

��

�� 0.16

��

�� 0.11

��

�� 1.45

��

0.77

Diluted earnings per share

��

0.16

��

�� 0.11

��

�� 1.45

��

0.77

��

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 financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles ("Canadian GAAP").�� See Note 16 to the first interim condensed consolidated financial statements for the three month periods ending September 30, 2011 and 2010 for an explanation of the transition to IFRS on the balance sheet at July 1, 2010 and Note 16 to these condensed consolidated financial statements for an explanation of the impact on the three and nine month periods ending March 31, 2011. ��
��	��	��	��	��	��	��
The accompanying notes are an integral part of these interim condensed consolidated financial statements. ��						��

��

CORBY DISTILLERIES LIMITED

��

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

��

(Unaudited)

��

(in thousands of Canadian dollars)

��

For the Three Months Ended

��

For the Nine Months Ended

��

March 31,

��

March 31,

��

March 31,

��

March 31,

��

2012

��

2011⁽¹⁾

��

2012

��

2011⁽¹⁾

��

Net earnings

��

�� 4,639

��

�� 3,050

��

�� 41,167

��

�� 22,041

��

Other comprehensive income

��

Total comprehensive income

��

�� 4,639

��

�� 3,050

��

41,167

��

�� 22,041

��	��	��	��	��	��
⁽¹⁾ In preparing its comparative information, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles ("Canadian GAAP").�� See Note 16 to the first interim condensed consolidated financial statements for he three month periods ending September 30, 2011 and 2010 for an explanation of the transition to IFRS on the balance sheet at July 1, 2010 and Note 16 to these condensed consolidated financial statements for an explanation of the impact on the three and nine month periods ending March 31, 2011.
��	��	��	��	��	��
The accompanying notes are an integral part of these interim condensed consolidated financial statements.					��

��

CORBY DISTILLERIES LIMITED

��

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ��

��

(Unaudited) ��

��

(in thousands of Canadian dollars)

��

Note

��

Share Capital

��

Accumulated

Other

Comprehensive

Income

��

Retained Earnings

��

Total

��

Balance as at July 1, 2011 ⁽¹⁾

��

�� 14,304

��

�� -

��

�� 224,935

��

�� 239,239

Net earnings ��

��

41,167

��

41,167

Other comprehensive income

��

Dividends ��

��

(65,194)

��

(65,194)

��

Balance as at March 31, 2012

��

�� 14,304

��

�� -

��

�� 200,908

��

�� 215,212

��

Balance as at July 1, 2010 ⁽¹⁾

��

�� 14,304

��

�� -

��

�� 212,009

��

�� 226,313

Net earnings ��

��

22,041

��

22,041

Other comprehensive income

��

Dividends ��

��

(11,958)

��

(11,958)

��

Balance as at March 31, 2011 ⁽¹⁾

��

�� 14,304

��

�� -

��

�� 222,092

��

�� 236,396

The accompanying notes are an integral part of these interim condensed
consolidated financial statements.

��

CORBY DISTILLERIES LIMITED

��

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

��

(Unaudited)

��

(in thousands of Canadian dollars)

��

For the Three Months Ended

��

For the Nine Months Ended

��

March 31,

��

March 31,

��

March 31,

��

March 31,

��

Notes

��

2012

��

2011⁽¹⁾

��

2012

��

2011⁽¹⁾

��

Operating activities

��

Net earnings

��

�� 4,639

��

�� 3,050

��

�� 41,167

��

�� 22,041

Adjustments for:

��

Amortization and depreciation

��

1,340

��

1,542

��

4,331

��

4,675

Net financial income

��

(363)

��

(104)

��

(1,082)

��

(171)

Disposal transactions

��

2,233

��

(21,532)

��

2,233

(Gain) loss on disposal of property and equipment

��

(42)

��

(128)

��

Income tax expense

��

1,789

��

1,282

��

12,147

��

9,147

Provision for pensions

��

(515)

��

(2,218)

��

(1,514)

��

7,376

��

7,488

��

32,685

��

36,415

Net change in non-cash working capital balances

��

(1,164)

��

(3,468)

��

10,850

��

(2,883)

Interest received

��

486

��

345

��

1,401

��

890

Income taxes paid

��

(1,446)

��

(1,854)

��

(7,586)

��

(8,249)

��

Net cash from operating activities

��

5,252

��

2,511

��

37,350

��

26,173

��

Investing activities

��

Additions to property and equipment

��

(310)

��

(298)

��

(619)

��

(628)

Net (payments) proceeds on disposal transactions

��

(711)

��

4,756

��

37,376

��

4,756

Proceeds from disposition of property and equipment

��

110

��

281

��

Deposits in cash management pools

��

51,997

��

(2,983)

��

(9,794)

��

(18,360)

��

Net cash from (used) in investing activities

��

51,086

��

1,475

��

27,244

��

(14,215)

��

Financing activities

��

Proceeds from note receivable

��

600

��

600

��

Dividends paid��

��

(56,938)

��

(3,986)

��

(65,194)

��

(11,958)

��

Net cash used in financing activities

��

(56,338)

��

(3,986)

��

(64,594)

��

(11,958)

��

Net change in cash

��

Cash, beginning of period

��

Cash, end of period

��

�� -

��

�� -

��

�� -

��

�� -

⁽¹⁾ In preparing its comparative information, the Company has adjusted
amounts reported previously in financial statements

prepared in accordance with Canadian Generally Accepted Accounting
Principles ("Canadian GAAP").�� See Note 16

to the first interim condensed consolidated financial statements for the
three month periods ending September 30,

2011 and 2010 for an explanation of the transition to IFRS on the
balance sheet at July 1, 2010 and Note 16 to these

condensed consolidated financial statements for an explanation of the
impact on the three and nine month periods

ending March 31, 2011.

The accompanying notes are an integral part of these interim condensed
consolidated financial statements.

��

CORBY DISTILLERIES LIMITED

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS��

(Unaudited)

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

1. GENERAL INFORMATION��

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

Corby is controlled by Hiram Walker & Sons Limited ("HWSL"), which is a
wholly owned subsidiary of Pernod Ricard, S.A. ("PR"), a French public
limited company that owned 51.6% of the outstanding Voting Class A
Common Shares of Corby as at May 10, 2012.

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

2. .BASIS OF PREPARATION

Statement of compliance

These interim condensed consolidated financial statements have been
prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board
("IASB"). They have been prepared using the accounting policies the
Company expects to adopt in its consolidated financial statements as at
and for the financial year ending June 30, 2012 that were described in
Note 3 to the Company's first quarter interim condensed consolidated
financial statements as at and for the three months ended September 30,
2011 and 2010.

As these interim condensed consolidated financial statements are
prepared using International Financial Reporting Standards ("IFRS"),
certain disclosures that are required to be included in the annual
financial statements prepared in accordance with IFRS that were not
included in the Company's most recent annual financial statements
prepared in accordance with Canadian Generally Accepted Accounting
Principles ("Canadian GAAP"), were included in Note 3 to the Company's
first quarter interim condensed consolidated financial statements as at
and for the three months ended September 30, 2011 and 2010.

These interim condensed consolidated financial statements should be read
in conjunction with the Company's 2011 annual financial statements and
in consideration of the IFRS transitional disclosures included in Note
16 to these interim condensed consolidated financial statements and
Note 16 to the first quarter interim condensed consolidated financial
statements as at and for the three months ended September 30, 2011 and
2010 and the additional annual disclosures included in the Company's
interim condensed consolidated financial statements as at and for the
three months ended September 30, 2011 and 2010 (Notes 17 through 25).

These interim condensed consolidated financial statements were approved
by the Company's Board of Directors on May 10, 2012.

Functional and presentation currency

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

Foreign currency translation

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

Basis of Measurement

These interim condensed consolidated financial statements are prepared
in accordance with the historical cost model, except for certain
categories of assets and liabilities, which are measured in accordance
with the methods provided for by IFRS and as described in Note 3 of the
first quarter interim condensed consolidated financial statements for
the three months ended September 30, 2011 and 2010. Historical cost is
generally based on the fair value of the consideration given in
exchange for assets.

Seasonality

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

Use of Estimates and Judgements��

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

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

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

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

3. SIGNIFICANT ACCOUNTING POLICIES

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, 2012, and accordingly, have not been applied in
preparing these consolidated financial statements:

(i)��Deferred Taxes - Recovery of Underlying Assets

The IASB has issued an amendment to IAS 12, "Income Taxes" ("IAS 12
amendment"), which introduces an exception to the general measurement
requirements of IAS 12 in respect of investment properties measured at
fair value. The IAS 12 amendment is effective for annual periods
beginning on or after January 1, 2012. Corby does not anticipate the
implementation of this amendment to have a significant impact on its
results of operations, financial position and disclosures.

(ii)��Presentation of Financial Statements

(iii)��Consolidated Financial Statements

In May 2011 the IASB issued IFRS 10, "Consolidated Financial Statements"
("IFRS 10"), IFRS 11, "Joint Ventures" ("IFRS 11"), and IFRS 12,
"Disclosure of Interest in Other Entities" ("IFRS 12"). In addition,
the IASB amended IAS 27, "Consolidated and Separate Financial
Statements" ("IAS27") and IAS 28, "Investments in Associates and Joint
Ventures" ("IAS 28"). The objective of IFRS 10 is to define the
principles of control and establish the basis of determining when and
how an entity should be included within a set of consolidated financial
statements. IFRS 11 establishes principles to determine the type of
joint arrangement and guidance for financial reporting activities
required by entities that have an interest in an arrangement that is
jointly controlled. IFRS 12 enables users of the financial statements
to evaluate the nature and risks associated with its interest in other
entities and the effects of those interests on its financial
performance.

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

(iv)��Fair Value Measurement

(v)��Employee Benefits

(vi)��Financial Instruments

4. DISPOSAL TRANSACTIONS

Sale of Montreal manufacturing facility and non-core brands

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

��

��	��	��	��	��	��
��	��	��	��	��	For the nine month period ended March 31, 2012
��	��	��	��	��	��
Proceeds, including inventory and other working capital items		��	��	��	��$ ��39,660
��	��	��	��	��	��
Book value of assets sold, including inventory and other working capital items				��	(17,820)
Curtailment gain with respect to employee benefit plans��		��	��	��	2,168
Transaction costs	��	��	��	��	(2,476)
��	��	��	��	��	��
Gain on sale before income taxes	��	��	��	��	21,532
Income taxes	��	��	��	��	(3,855)
��	��	��	��	��	��
Net gain on sale	��	��	��	��	��$ 17,677
��	��	��	��	��

Sale of Seagram Coolers

On March 16, 2011, the Company entered into an agreement with Brick
Brewing Co. Ltd ("Brick"), pursuant to which Brick purchased from Corby
the Canadian rights to the Seagram Coolers brand, for a purchase price
of $7,300. The transaction resulted in a loss on sale during the three
and nine month periods ending March 31, 2011, as follows:

��	��	��	��	��	��
��	��	�� ��	�� ��	�� ��	For the nine month period ended March 31, 2011
��	��	��	��	��	��
Proceeds��	��	��	��	��	��$ 7,300
��	��	��	��	��	��
Book value of assets sold	��	��	��	��	(9,061)
Transaction costs	��	��	��	��	(472)
��	��	��	��	��	��
Loss on sale before income taxes	��	��	��	��	(2,233)
Income taxes	��	��	��	��	500
��	��	��	��	��	��
Net loss on sale	��	��	��	��	��$ (1,733)
��	��	��	��	��

The purchase price was satisfied in part by a secured promissory note
issued by Brick in favour of Corby for $2,400, which will be paid in
equal annual instalments of $600 plus interest of 5% per annum, with
the final payment due January 31, 2015.

5. ACCOUNTS RECEIVABLE

��

March 31,

��

March 31,

��

June 30,

��

July 1,

��

��2012��

��

��2011��

��

��2011��

��

��2010��

��

Trade receivables

��

�� 17,992

��

�� 22,367

��

�� 21,398

��

22,144

Due from related parties

��

8,302

��

5,839

��

8,216

��

6,196

Other receivables

��

1,361

��

1,391

��

$ 26,309

��

�� 29,567

��

31,005

��

28,340

��

Other receivables included amounts owing from Brick Brewing Co., Limited
for inventory transferred as part of the sale of the Seagram Coolers
brand, and also includes interest accrued on the secured promissory
note receivable also due from Brick Brewing Co., Limited previously
described in Note 4 of these interim financial statements. The amount
owing from Brick related to inventory was paid in full during the three
month period ending March 31, 2012.

6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

��	��	��	��	��	��	��	��	��	��	��
��	�� ��	�� ��	�� ��	March 31, ��2012��	��	March 31, ��2011��	�� ��	June 30, ��2011��	�� ��	July 1, ��2010��
��	��	��	��	��	��	��	��	��	��	��
Trade payables and accruals			$	�� 12,388	��$��	12,743	��$��	�� 13,375	��$��	12,554
Due to related parties		��	��	6,528	��	4,720	��	6,117	��	5,731
��	��	��	��	��	��	��	��	��	��	��
��	��	��	$	�� 18,916	��$��	�� 17,463	��$��	19,492	��$��	18,285
��	��	��	��	��	��	��	��	��	��	��

7. REVENUE

The Company's revenue consists of the following streams:

��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	Three Months Ended			��	Nine Months Ended
��	�� ��	�� ��	�� ��	March 31, ��2012��	��	March 31, ��2011��	�� ��	March 31, ��2012��	��	March 31, ��2011��
��	��	��	��	��	��	��	��	��	��	��
Case good sales		��	��$��	�� 23,131	��$��	�� 23,486	��$��	�� 85,212	��$��	�� 89,300
Commissions		��	��	2,885	��	2,381	��	12,350	��	11,454
Other services		��	��	3,155	��	6,507	��	16,751	��	18,731
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��$��	�� 29,171	��$��	�� 32,374	��$��	�� 114,313	��$��	�� 119,485

Commissions for the three and nine month periods are shown net of the
long-term representation rights amortization of $1,133 and $3,398 (2011
- $1,133 and $3,398). Other services include revenues incidental to the
manufacture of case goods, such as contract bottling revenues,
logistics fees and miscellaneous bulk spirit sales.

8. EXPENSES BY NATURE

Earnings from operations include depreciation and amortization, as well
as personnel expenses as follows:

��	��	��	��	��	��	��	��				��
��	��	��	��	��	Three Months Ended			��	Nine Months Ended
��	�� ��	�� ��	�� ��	�� ��	March 31, ��2012��	��	March 31, ��2011��	�� ��	March 31, ��2012��	��	March 31, ��2011��
��	��	��	��	��	��	��	��	��	��	��	��
Depreciation of property and equipment				��$��	�� 207	��$��	409	��$��	�� 933	��$��	�� 1,277
Amortization of intangible assets			��	��	1,133	��	1,133	��	3,398	��	3,398
Salary and payroll costs			��	��	5,161	��	6,009	��	16,024	��	16,800
Expenses (recoveries) related to pensions and benefits					490	��	211	��	(762)	��	633
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��$��	�� 6,991	��$��	7,762	��$��	�� 19,593	��$��	�� 22,108

��

9. OTHER INCOME AND EXPENSE

The Company's other income (expense) consist of the following amounts:

��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	Three Months Ended			��	Nine Months Ended
�� ��	��	�� ��	�� ��	�� ��	March 31, ��2012��	��	March 31, ��2011��	�� ��	March 31, ��2012��	��	March 31, ��2011��
��	��	��	��	��	��	��	��	��	��	��	��
Foreign exchange gain		��	��	��$��	�� 50	��$��	�� 120	��$��	83	��$��	�� 36
Gain (loss) on disposal of property and equipment					42	��	-	��	128	��	(4)
Amortization of actuarial gains (losses) under				��	��	��	��	��	��	��	��
�� defined benefit plans		��	��	��	11	��	215	��	(37)	��	644
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��$��	103	��$��	�� 335	��$��	�� 174	��$��	�� 676

��

10. NET FINANCIAL INCOME

The Company's financial income (expense) consists of the following
amounts:

��	��	��	��	��	��	��
��	��	��	��	Three Months Ended			��	Nine Months Ended
��	�� ��	�� ��	�� ��	March 31, ��2012��	��	March 31, ��2011��	�� ��	March 31, ��2012��	��	March 31, ��2011��
��	��	��	��	��	��	��	��	��	��	��
Interest income		��	��$��	514	��$��	356	��$��	�� 1,510	��$��	905
Interest expense		��	��	(2)	��	(11)	��	(23)	��	(11)
Net financial impact of pensions			��	(149)	��	(241)	��	(405)	��	(723)
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��$��	�� 363	��$��	�� 104	��$��	1,082	��$��	�� 171

��

11. INCOME TAXES

The effective tax rate for the nine month period ended March 31, 2012
differs substantially from the statutory rate due to the effect of the
October 31, 2011 sale transaction, whereby the Company sold its
Montreal bottling facility and certain non-core brands. For further
details regarding the aforementioned sale transaction, including the
income tax impact, please refer to Note 4 of these interim condensed
consolidated financial statements. For all other periods presented, the
effective tax rates approximate the statutory rates.

12. NET CHANGE IN NON-CASH WORKING CAPITAL BALANCES

��

Three Months Ended

��

Nine Months Ended

��

��

March 31,

��2012��

��

March 31,

��2011��

��

��

March 31,

��2012��

��

March 31,

��2011��

��

Accounts receivable

��

3,962

�� 1,203

��$��

�� 4,696

��$��

�� (1,227)

Inventories

��

(959)

��

(1,580)

��

3,389

��

(2,550)

Prepaid expenses

��

480

��

(292)

��

1,405

��

632

Other taxes payable��

��

830

��

786

��

(131)

��

1,408

Accounts payable and accrued liabilities

��

(5,477)

��

(3,585)

��

1,491

��

(1,146)

��

�� (1,164)

�� (3,468)

��$��

�� 10,850

��$��

(2,883)

��

13. DIVIDENDS

On May 10, 2012 subsequent to the quarter ended March 31, 2012, the
Board of Directors declared its regular quarterly dividend of $0.15 per
common share, to be paid on June 15, 2012, to shareholders of record as
at the close of business on May 31, 2012. This dividend is in
accordance with the Company's dividend policy.

14. 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.

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

Transactions between Corby and its parent, ultimate parent and
affiliates during the period are as follows:

��

Three Months Ended

��

Nine Months Ended

��

��

March 31,

��2012��

��

March 31,

��2011��

��

��

March 31,

��2012��

��

March 31,

��2011��

��

Sales to related parties

��

��Commissions - parent, ultimate parent and affiliated companies

�� 3,408

2,936

�� 13,281

�� 12,454

��Blending and bottling services - parent

��

217

��

179

��Products for resale at an export level - affiliated companies

��

118

��

340

��

319

��Bulk spirits - parent ��

��

170

��

�� 3,520

�� 3,096

�� 14,008

12,952

��

Cost of goods sold, purchased from related parties

��

��Distilling, blending, and production services - parent��

�� 5,301

�� 5,661

�� 14,374

�� 16,093

��Bulk spirits - parent

��

408

��

700

��

1,416

��

�� 5,301

�� 6,069

�� 15,074

17,509

��

Administrative services purchased from related parties

��

��Marketing, selling and administraton services- parent

�� 511

�� 511

��$

�� 1,533

�� 1,619

Outstanding balances with these related parties are priced on an arm's
length basis and are to be settled in cash within two months of the
reporting date. None of the balances are secured.��

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 May 10,
2012, as published by Standard & Poor's and Moody's, was BBB- and Baa3,
respectively. PR compensates Corby for the benefit it receives from
having the Company participate in the Mirror Netting Services Agreement
by paying interest to Corby based upon the 30-day LIBOR rate plus
0.40%. During the three and nine month periods ending March 31, 2012,
Corby earned interest income of $486 and $1,336 from PR (2011 - $339
and $888). Corby has the right to terminate its participation in the
Mirror Netting Services Agreement at any time, subject to five days'
written notice.

Corby has a number of defined benefit pension plans; for the three and
nine month periods ending March 31, 2012, contributions to these plans
totaled $303 and $942, (2010 - $541 and $1635), respectively.

During the three and nine month periods ending March 31, 2012, Corby
sold machinery and equipment to its parent company for net proceeds of
$109 and $277 (2011 - $nil).

15. 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, Kahl��a liqueur, Mumm champagne, and Jacob's
Creek and Wyndham Estate wines.

The Commissions segment's financial results are fully reported as
"Commissions" in Note 7 of these consolidated statements. Therefore, a
chart detailing operational results by segment has not been provided as
no additional meaningful information would result.

16. EXPLANATION OF TRANSITION TO IFRS

As stated in Note 2 to these interim condensed consolidated financial
statements, the Company adopted IFRS effective July 1, 2010. Prior to
the adoption of IFRS, the Company prepared its financial statements in
accordance with Canadian Generally Accepted Accounting Principles
("Canadian GAAP" or "previous GAAP"). The Company's financial
statements for the financial year ending June 30, 2012 will be the
first annual financial statements that comply with IFRS. Accordingly,
the Company will make an unreserved statement of compliance with IFRS
beginning with its 2012 annual financial statements.

The accounting policies set out in Note 3 to the Company's first quarter
interim condensed consolidated financial statements as at and for the
three month periods ending September 30, 2011 and 2010 have been
applied in preparing the interim condensed consolidated financial
statements for the three and nine months ended March 31, 2012, the
comparative information presented in these financial statement for the
three and nine months ended March 31, 2011 and in the preparation of an
opening IFRS balance sheet at July 1, 2010 (the Company's date of
transition). The Company will ultimately prepare its opening IFRS
statement of financial position and the financial statements for 2011
and 2012 by applying existing IFRS with an effective date of June 30,
2012. Accordingly, the opening IFRS statement of financial position and
the financial statements for 2011 and 2012 may differ from these
interim condensed consolidated financial statements.

The Company has provided a detailed explanation of the impacts of this
transition in Note 16 of the Company's first quarter interim condensed
consolidated financial statements as at and for the three months ended
September 30, 2011 and 2010 ("Note 16"). Note 16 includes
reconciliations of the Company's balance sheet and shareholders' equity
from previous Canadian GAAP as at July 1, 2010, June 30, 2011 and
September 30, 2010, and its fiscal 2011 net earnings and comprehensive
income for the year ended June 30, 2011 and the three months ended
September 30, 2010. Explanation of the individual impacts of adopting
IFRS identified in the reconciliations are also provided, as are the
Company's elections under IFRS 1 "First-time Adoption of International
Financial Reporting Standards." Accordingly, these disclosures have not
been repeated within these financial statements.

An explanation of how the transition from previous GAAP to IFRS has
affected the Company's financial position and financial performances as
at March 31, 2011 and for the three and nine months ended March 31,
2011 is set out in the following tables and the notes that accompany
the tables.

The adoption of IFRS has had no impact on the net cash flows of the
Company. The changes made to the statements of financial position,
statements of earnings, statements of comprehensive income and
statements of equity have resulted in reclassifications of various
amounts on the statements of cash flows, however, as there has been no
change to net cash flows, no reconciliations have been presented.

Reconciliation of Consolidated Statement of Earnings for the Three Months Ended March 31, 2011
(in thousands of Canadian dollars, except per share amounts)
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	Presentation	��	��	��	��
��	��	��	��	��	��	adjustments from	��	��	��	��
��	��	��	��	��	��	previous GAAP	��	Employee	��	��
��	��	Note	��	Previous GAAP	��	to IFRS	��	benefits	��	IFRS
��	��	��	��	��	��	��	��	��	��	��
Revenue		b)	��$	32,157	��$	217	��$	-	��$	32,374
��	��	��	��	��	��	��	��	��	��	��
Cost of sales		b)	��	(15,993)	��	(69)	��	-	��	(16,062)
Marketing, sales and administration		a); b)	��	(10,196)	��	(557)	��	567	��	(10,186)
Amortization and depreciation		b)	��	(409)	��	409	��	-	��	-
Disposal transactions		b)	��	-	��	(2,233)	��	-	��	(2,233)
Other income		a); b)	��	-	��	120	��	215	��	335
��	��	��	��	��	��	��	��	��	��	��
Earnings from operations		��	��	5,559	��	(2,113)	��	782	��	4,228
��	��	��	��	��	��	��	��	��	��	��
Financial income		b)	��	-	��	356	��	-	��	356
Financial expense		a); b)	��	-	��	(11)	��	(241)	��	(252)
Interest income		b)	��	345	��	(345)	��	-	��	-
Foreign exchange loss		b)	��	120	��	(120)	��	-	��	-
Loss on sale of Seagram Coolers		��	��	(2,233)	��	2,233	��	-	��	-
Net financial income		��	��	(1,768)	��	2,113	��	(241)	��	104
��	��	��	��	��	��	��	��	��	��	��
Earnings before income taxes		��	��	3,791	��	-	��	541	��	4,332
��	��	��	��	��	��	��	��	��	��	��
Current income taxes		��	��	(2,009)	��	-	��	-	��	(2,009)
Deferred income taxes		a)	��	865	��	-	��	(138)	��	727
Income taxes		��	��	(1,144)	��	-	��	(138)	��	(1,282)
��	��	��	��	��	��	��	��	��	��	��
Net earnings		��	��$	2,647	��$	-	��$	403	��$	3,050
��	��	��	��	��	��	��	��	��	��	��
Basic earnings per share		��	��$	0.09	��	��	��	��	��$	0.11
Diluted earnings per share		��	��$	0.09	��	��	��	��	��$	0.11
��	��	��	��	��	��	��	��	��	��	��

Reconciliation of Consolidated Comprehensive Income for the Three Months Ended March 31, 2011
(in thousands of Canadian dollars) ��
��	��	��	��	��	��	��	��
��	��	��	��	��	Effect of	��	��
��	��	��	��	��	transition to	��	��
��	��	��	Previous GAAP	��	IFRS	��	IFRS
��	��	��	��	��	��	��	��
NET EARNINGS		��$	2,647	��$	403	��$	3,050
OTHER COMPREHENSIVE INCOME		��	-	��	-	��	-
��	��	��	��	��	��	��	��
COMPREHENSIVE INCOME		��$	��2,647	��$	403	��$	3,050
��	��	��	��	��	��

��

Reconciliation of Consolidated Statement of Earnings for the Nine Months Ended March 31, 2011
(in thousands of Canadian dollars, except per share amounts)
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	Presentation	��	��	��	��
��	��	��	��	��	��	adjustments from��	��	��	��	��
��	��	��	��	��	��	previous GAAP	��	Employee	��	��
��	��	Note	��	Previous GAAP	��	to IFRS	��	benefits	��	IFRS
��	��	��	��	��	��	��	��	��	��	��
Revenue		��b)��	��$	118,868	��$	617	��$	-	��$	119,485
��	��	��	��	��	��	��	��	��	��	��
Cost of sales		��b)��	��	(53,391)	��	491	��	-	��	(52,900)
Marketing, sales and administration		��a); b)��	��	(33,333)	��	(2,385)	��	1,707	��	(34,011)
Amortization and depreciation		��b)��	��	(1,277)	��	1,277	��	-	��	-
Disposal transactions		��b)��	��	-	��	(2,233)	��	-	��	(2,233)
Other income		��a); b)��	��	-	��	32	��	644	��	676
��	��	��	��	��	��	��	��	��	��	��
Earnings from operations		��	��	30,867	��	(2,201)	��	2,351	��	31,017
��	��	��	��	��	��	��	��	��	��	��
Financial income		��b)��	��	-	��	905	��	-	��	905
Financial expenses		��a); b)��	��	-	��	(11)	��	(723)	��	(734)
Interest income		��b)��	��	894	��	(894)	��	-	��	-
Foreign exchange loss		��b)��	��	36	��	(36)	��	-	��	-
Loss on sale of Seagram Coolers		��	��	(2,233)	��	2,233	��	-	��	-
Loss on disposal of property, plant and equipment		��b)��	��	(4)	��	4	��	-	��	-
Net financial income		��	��	(1,307)	��	2,201	��	(723)	��	171
��	��	��	��	��	��	��	��	��	��	��
Earnings before income taxes		��	��	29,560	��	-	��	1,628	��	31,188
��	��	��	��	��	��	��	��	��	��	��
Current income taxes		��	��	(9,784)	��	-	��	-	��	(9,784)
Deferred income taxes		��a)��	��	1,052	��	-	��	(415)	��	637
Income taxes		��	��	(8,732)	��	-	��	(415)	��	(9,147)
��	��	��	��	��	��	��	��	��	��	��
Net earnings		��	$	20,828	��$	-	��$	1,213	��$	22,041
��	��	��	��	��	��	��	��	��	��	��
Basic earnings per share		��	$	0.73	��	��	��	��	��$	0.77
Diluted earnings per share		��	$	0.73	��	��	��	��	��$	0.77
��	��	��	��	��	��	��	��	��	��	��

Reconciliation of Consolidated Comprehensive Income for the Nine Months Ended March 31, 2011
(in thousands of Canadian dollars)
��	��	��	��	��	��	��	��
��	��	��	��	��	Effect of	��	��
��	��	��	��	��	transition to	��	��
��	��	��	Previous GAAP	��	IFRS	��	IFRS
��	��	��	��	��	��	��	��
NET EARNINGS		$	�� 20,828	��$	1,213	$	�� 22,041
OTHER COMPREHENSIVE INCOME		��	-	��	-	��	-
��	��	��	��	��	��	��	��
COMPREHENSIVE INCOME		$	20,828	��$	1,213	$	22,041
��	��	��

��

Reconciliation of Consolidated Balance Sheet as at March 31, 2011
(in thousands of Canadian dollars)
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	Presentation	��	��	��	��
��	��	��	��	��	��	adjustments from	��	��	��	��
��	��	��	��	Previous	��	previous GAAP	��	Employee	��	��
��	��	Notes	��	GAAP	��	to IFRS	��	benefits	��	IFRS
��	��	��	��	��	��	��	��	��	��	��
ASSETS	��	��	��	��	��	��	��	��	��	��
Deposits in cash management pools	��	��	$	�� 93,045	$	�� -	$	�� -	$	�� 93,045
Accounts receivable	��	��	��	29,567	��	-	��	-	��	29,567
Note receivable	��	��	��	600	��	-	��	-	��	600
Inventories	��	��	��	62,759	��	-	��	-	��	62,759
Prepaid expenses	��	��	��	919	��	-	��	-	��	919
Deferred income taxes	��	a); b)	��	301	��	(301)	��	-	��	-
��	��	��	��	��	��	��	��	��	��	��
Total current assets	��	��	��	187,191	��	(301)	��	-	��	186,890
Note receivable	��	��	��	1,800	��	-	��	-	��	1,800
Deferred income taxes	��	��	��	-	��	-	��	596	��	596
Property, plant and equipment	��	��	��	14,509	��	-	��	-	��	14,509
Provision for pensions	��	a)	��	11,924	��	-	��	(11,924)	��	-
Goodwill	��	��	��	5,886	��	-	��	-	��	5,886
Intangible assets	��	��	��	59,435	��	-	��	-	��	59,435
��	��	��	��	��	��	��	��	��	��	��
Total assets	��	��	$	�� 280,745	$	�� (301)	$	�� (11,328)	$	�� 269,116
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
LIABILITIES	��	��	��	��	��	��	��	��	��	��
Accounts payable and accrued liabilities	��	��	$	�� 17,463	$	�� -	��$	-	$	�� 17,463
Income and other taxes payable	��	��	��	1,873	��	-	��	-	��	1,873
��	��	��	��	��	��	��	��	��	��	��
Total current liabilities	��	��	��	19,336	��	-	��	-	��	19,336
Provision for pensions	��	a)	��	7,217	��	-	��	6,167	��	13,384
Deferred income taxes	��	a); b)	��	4,360	��	(301)	��	(4,059)	��	-
��	��	��	��	��	��	��	��	��	��	��
Total liabilities	��	��	��	30,913	��	(301)	��	2,108	��	32,720
��	��	��	��	��	��	��	��	��	��	��
Shareholders' equity	��	��	��	��	��	��	��	��	��	��
Share capital	��	��	��	14,304	��	-	��	-	��	14,304
Retained earnings	��	a)	��	235,528	��	-	��	(13,436)	��	222,092
��	��	��	��	��	��	��	��	��	��	��
Total shareholders' equity	��	��	��	249,832	��	-	��	(13,436)	��	236,396
��	��	��	��	��	��	��	��	��	��	��
Total liabilities and shareholders' equity	��	��	$	�� 280,745	$	�� (301)	��$	(11,328)	$	�� 269,116
��	��	��	��	��	��	��	��	��	��	��

��

Reconciliation of Consolidated Shareholders' Equity as at March 31, 2011
(in thousands of Canadian dollars)
��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	Effect of	��	��
��	��	��	��	Previous	��	transition to	��	��
��	��	Note	��	GAAP	��	IFRS	��	IFRS
��	��	��	��	��	��	��	��	��
Share capital		��	��$	14,304	��$	-	��$	14,304
Accumulated other comprehensive income		��	��	-	��	-	��	-
Retained earnings		��a)��	��	235,528	��	(13,436)	��	222,092
��	��	��	��	��	��	��	��	��
Total shareholders' equity		��	��$	249,832	��$	(13,436)	��$	236,396
��	��	��	��	��	��	��	��	��

Notes to Reconciliations

(a)�� Financial Impacts of Adopting IFRS

Employee benefits

The Company has elected under IFRS 1 - First-time Adoption of International Financial Reporting Standards ("IFRS 1") to measure its assets and liabilities in its financial
statements at the carrying amounts that would be included in the
parent's consolidated financial statements, if no adjustments were made
for consolidation procedures and the effect of the business combination
in which the parent acquired the subsidiary. As a result, the Company
revalued the provision for pensions to the carrying amounts recorded by
the parent company.

Deferred income tax assets and liabilities have been re-measured for the
IFRS transition adjustments related to employee future benefits, as
described above.

The following is the impact of electing under IFRS 1 to measure its
provision for pensions and the associated impact to deferred tax
liabilities based on the parent company's carrying values on the
Company's net earnings and other comprehensive income for the three and
nine months ended March 31, 2011 and the Company's financial position
as at March 31, 2011.

��

��	��	��	��	��	��	��
��	��	��	��	Three Months	��	Nine Months
��	��	��	��	Ended	��	Ended
��	��	��	��	March 31,	��	March 31,
Net earnings impact		��	��	2011	��	2011
��	��	��	��	��	��	��
Marketing, sales and administration		��	��$	567	��$	1,707
Other income and expense		��	��	215	��	644
Earnings from operations		��	��	782	��	2,351
��	��	��	��	��	��	��
Financial expense		��	��	(241)	��	(723)
Earnings before income taxes		��	��	541	��	1,628
��	��	��	��	��	��	��
Income tax expense		��	��	(138)	��	(415)
��	��	��	��	��	��	��
Increase in net earnings		��	��$	�� 403	��$	1,213
��	��	��	��	��	��	��
��	��	��	��	��	��	��
��	��	��	��	��	��	as at
��	��	��	��	��	��	March 31,
Balance sheet impact		��	��	��	��	2011
��	��	��	��	��	��	��
Provision for pensions		��	��	��	��$	(18,091)
Deferred tax liabilities		��	��	��	��	4,655
��	��	��	��	��	��	��
Decrease in retained earnings		��	��	��	��$	(13,436)
��	��	��	��	��	��	��

��

(b) Presentation Impacts of Adopting IFRS

Certain presentation differences between Canadian GAAP and IFRS have no
impact on reported earnings or shareholder's equity. Certain assets and
liabilities have been reclassified into another line item under IFRS at
the date of transition. Certain line items are described differently
(renamed) under IFRS compared to Canadian GAAP, although the asset and
liability amounts included in these items are unaffected. The following
summarizes these changes:

"Deferred taxes" was previously described as future income taxes under
Canadian GAAP. As well, under IFRS, deferred tax assets and liabilities
may not be presented as current. The Company has reclassified deferred
taxes into non-current assets and liabilities based on the net asset
and liability positions of the entities that have generated the
balances.

"Air miles" under previous GAAP were deemed to be a sales discount and
reflected on the statement of earnings as a reduction in Net Revenues.
IFRIC 13 - Customer Loyalty Programmes ("IFRIC 13"), requires the value of Air Miles to be presented at gross
fair value in revenues, with an offsetting cost reflected in marketing,
sales and administration expenses.

These IFRS financial statements follow the principles of "Functional
presentation." As a result certain expenses, such as depreciation
expense, interest income and foreign exchange gains and losses, have
been reclassified by function. Depreciation of property, plant and
equipment is reported in costs of goods sold and in marketing, sales
and administrative expenses. Foreign exchange gains and losses are
included in earnings from operations as they relate to operating assets
and liabilities. Interest earned on deposits in cash management pools
is recorded in net financial income.��

��

For further information:

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

Canada Dividend Investor

Thursday, May 10, 2012

CDL.A - <span class="simulate_din_font">Corby Distilleries Announces Quarterly Dividend and Reports Strong Third Quarter Results</span> (CAD 0.15)

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