Canada Dividend Investor: CDL.A - Corby Distilleries Announces Quarterly Dividend and Reports Fourth Quarter & Year End Results (CAD 0.15)

Company: Corby Distill
Stock Name: CDL.A
Amount: CAD 0.15
Announcement Date: 28/08/2012
Record Date: 13/09/2012

Dividend Detail:

TORONTO, Aug. 28, 2012 /CNW/ - Corby Distilleries Limited ("Corby" or
the "Company") (TSX:��CDL.A) (TSX:��CDL.B) today reported its financial
results for the fourth quarter ended June 30, 2012. The Corby Board of
Directors today also declared a dividend of $0.15 per share payable on
September 30, 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 September 15, 2012.

Net earnings for the fourth quarter and year ended June 30, 2012 totaled
$4.9 million (or $0.17 per share) and $46.0 million ($1.62 per share).
Year over year, net earnings increased $17.1 million. Two disposal
transactions, the sale of certain non-core brands and the subsidiary
that owned the Montreal plant on October 31, 2011 and the sale of the
Seagram Coolers brand on March 16, 2011, had a substantial impact on
the financial results in both the current and prior years (hereafter
the "Disposal Transactions"). The following provides a comparison on a
like-for-like basis as it excludes the impact of the aforementioned
Disposal Transactions:

Case good shipments grew 3% on an annual basis; quarterly, shipments
grew 1%

Revenue increased 7% on an annual basis; 3% during the quarter

Net earnings increased 11% on an annual basis; net earnings decreased 5%
during the quarter

Fourth quarter case goods shipments showed modest growth, despite being
impacted by the exceptional results experienced in the third quarter
where shipment phasing was significantly ahead of consumer trends.
Corby's commission business and its continued sale of bulk whisky
combined to improve revenue this quarter. Given these shipment phasing
impacts, our full year results are a better reflection of actual
performance. The growth in net earnings for the year was driven by
encouraging volumes and reflected the delivery of strong advertising
and promotional ("A&P") programs which drove market share growth in our
key focus areas. The Company continues to increase its A&P investment
and new product innovation. Net earnings for the year (and fourth
quarter) also benefited from increased commissions from the
representation of Pernod Ricard brands in Canada, higher interest on
cash deposits, and having lower statutory rates of corporate income
tax. In addition, bulk inventory sales continue to have a positive
impact while we continue to invest in our route to market capabilities.

Without adjustment for the Disposal Transactions, Corby's fourth quarter
revenue decreased $7.7 million when compared with the same three month
period last year, while on a year over year comparison basis, revenue
decreased 8% (or $12.9 million).

"I am pleased to report excellent progress in a year where we have
clearly made great strides in implementing our core strategy of
focusing our investments on, and leveraging the long-term growth
potential of, our key brands. We continue to achieve growth ahead of
category in our areas of focus, deliver new products to market on
schedule, increase investment behind key brands and re-shape our route
to market capabilities. What is particularly pleasing, is achieving all
this while delivering strong growth to our bottom-line", noted Patrick
O'Driscoll, President and Chief Executive Officer of Corby.

For further details, please refer to Corby's management's discussion and
analysis and consolidated financial statements and accompanying notes
for the year ended June 30, 2012, prepared in accordance with
International Financial Reporting Standards.

About Corby

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

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

CORBY DISTILLERIES LIMITED

Management's Discussion and Analysis

June 30, 2012

The following Management's Discussion and Analysis ("MD&A") dated August
28, 2012, should be read in conjunction with the audited consolidated
financial statements and accompanying notes for the year ended June 30,
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).

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
August 28, 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.

Unless otherwise indicated, all comparisons of results for the fourth
quarter of fiscal 2012 (three months ended June 30, 2012) are against
results for the fourth quarter of fiscal 2011 (three months ended June
30, 2011). All dollar amounts are in Canadian dollars unless otherwise
stated. The results for the three months and year ended June 30, 2011
have been restated to conform to IFRS.

Business Overview

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

The Company derives its revenues from the sale of its owned-brands
("Case Goods"), as well as earning commission income from the
representation of selected non-owned brands in Canada ("Commissions").
The Company also supplements these primary sources of revenue with
other ancillary activities incidental to its core business, such as
logistics fees and miscellaneous bulk spirit sales. Revenue from
Corby's owned-brands 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 (the sale of
the Seagram Coolers brand in March 2011, in the prior fiscal year, and
the October 2011 sale of certain non-core brands and the subsidiary
that owned the Montreal bottling facility, 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 fiscal 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 is expected to 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 declares special dividend and increases regular dividend amount

On November 9, 2011, the Corby Board of Directors declared a special
dividend of $1.85 per share which was paid on January 3, 2012 on the
Voting Class A Common Shares and Non-voting Class B Common Shares of
Corby to shareholders of record as at the close of business on December
15, 2011. The special dividend resulted in an aggregate cash
distribution of approximately $52.7 million to shareholders and was
sourced from Corby's surplus cash position.

Further, on November 9, 2011, the Corby Board of Directors announced an
amendment to its dividend policy. Subject to business conditions and
opportunities, the regular dividend shall be adjusted from $0.14 per
share to $0.15 per share, representing a 7% increase in the Company's quarterly dividend.�� On an annualized basis,
the regular dividend will increase from $0.56 per share to $0.60 per
share. Further, subject to business conditions and opportunities,
effective as of fiscal 2013, regular dividends for the fiscal year will
be paid quarterly, on the basis of an annual amount equal to the
greater of 75% of net earnings per share in the preceding fiscal year
ended June 30, and $0.60 per share.

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, in accordance with Corby's related party
transaction policy, following an extensive review and with external
financial and legal advice. Pursuant to this agreement, Corby also
agreed to continue with the mirror netting arrangement with PR and its
affiliates, under which Corby's excess cash will continue to be
deposited to cash management pools, 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 22% volume
share - combining ABSOLUT with other key Corby vodka brands, such as
Polar Ice vodka.

Three-Year Review of Selected Financial Information

The following table provides a summary of certain selected consolidated
financial information for the Company. This information has been
prepared in accordance with IFRS.

��		��	��	��	��	��	��
(in millions of Canadian dollars, except per share amounts)		��	2012	��	2011	��	2010 ⁽²⁾
��		��	��	��	��	��	��
Revenue		$	146.7	$	159.6	$	162.2
��		��	��	��	��	��	��
Earnings from operations		��	58.8	��	40.5	��	43.0
��	- Earnings from operations per common share	��	2.07	��	1.42	��	1.51
��		��	��	��	��	��	��
Net earnings		��	46.0	��	28.9	��	20.7
��	- Basic earnings per share	��	1.62	��	1.01	��	0.73
��	- Diluted earnings per share	��	1.62	��	1.01	��	0.73
��		��	��	��	��	��	��
Net earnings adjusted for unusual items and disposed brands⁽¹⁾		��	26.3	��	23.8	��	23.4
��	- Basic earnings per share,adjusted as noted above ⁽¹⁾	��	0.92	��	0.84	��	0.82
��	- Diluted earnings per share, adjusted as noted above ⁽¹⁾	��	0.92	��	0.84	��	0.82
��		��	��	��	��	��	��
Total assets		��	253.4	��	271.5	��	271.2
Total liabilities		��	37.6	��	32.3	��	30.3
��		��	��	��	��	��	��
Regular dividends paid per share		��	0.59	��	0.56	��	0.56
Special dividends paid per Share		��	1.85	��	-	��	-
⁽¹⁾�� Net earnings are adjusted in 2012 for the net after-tax gain from the sale of the Montreal plant and non-core brands of $17.7 million and in 2011 for the net after-tax loss from the sale of Seagram Coolers which amounted to $1.7 million. In 2010 net earnings are adjusted for the net after-tax impairment charge of $9.4 million. All three years have been further adjusted for net after-tax earnings related to brands disposed of in 2012 and 2011. ⁽²⁾ The finanical information presented for 2010 does not reflect the impact of the adoption of IFRS.

��

In general, the global economic environment has been challenging over
this three year period, and, while the spirits industry is more
resilient than others, the impact was still quite evident. More
recently, however, the Canadian spirits industry is experiencing growth
with retail volumes up by 3% in 2012 when compared with retail volumes
in 2011.

Despite the economic challenges, Corby has stayed true to its core
strategy to leverage the long-term growth potential of its key brands
by increasing its advertising and promotional expenditures in each of
the last three years. In addition, the Company has actively carried out
strategies to streamline and focus its portfolio. Two significant
events, namely the sale of the Seagram Cooler's brand in 2011 and the
sale of certain non-core brands and the subsidiary that owned the
Montreal manufacturing facility in October of this fiscal year, have
been instrumental in carrying out these strategies. As a result of
these actions, the Company exited low-growth and low-margin sectors,
simplified and focused its brand portfolio (and thus focused its Sales
and Marketing Teams) to its key brands, and sold an under-utilized
bottling plant.

Given the significant structural changes in the business over this three
year period, the chart above removed the net earnings impact of these
events to allow for a proper like-for-like comparison of Corby's
remaining core business (denoted in the chart above as "Net earnings
adjusted for unusual items and disposed brands").

Net earnings (as adjusted for unusual items and disposed brands) has
held strong over the three year period with a compounded annual growth
rate of 4%. When reviewing the three year period individually, a
noticeable increase occurred in 2012 over 2011, and was primarily the
result of a strong contribution from the Company's Case Goods business,
with additional positive contributions from Corby's representation of
PR brands and higher sales of bulk whisky this year versus last.

The three year review chart also highlights the increased dividends paid
to shareholders in 2012 when compared with 2011 and 2010. This year,
the Board of Directors amended Corby's dividend policy to increase the
regular quarterly dividend amount and also declared a significant
special dividend, thus returning significant value to shareholders
during the year. The new dividend policy also provided for a new
mechanism whereby the greater of 75% of the prior year annual net
earnings (or a minimum $0.60 per share) will be paid to shareholders
beginning in fiscal 2013. For more information regarding Corby's
dividend policy, please refer to the "Significant Event" section of
this MD&A.

Brand Performance Review

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

Shipment Volume and Shipment Value Performance

The following chart summarizes the performance of Corby's owned-brands
in terms of both shipment volume (as measured by shipments to customers
in equivalent nine-litre cases) and shipment value (as measured by the
change in 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				��	Year Ended
�� �� Volumes (in 000's of 9L cases)		�� ��	�� Jun. 30, 2012	�� Jun. 30, 2011	Shipment % Volume Change	Shipment % Value Change	�� �� ��	�� Jun. 30, 2012	�� Jun. 30, 2011	Shipment % Volume Change	Shipment % Value Change
��		��	��	��	��	��	��	��	��	��	��
Brand		��	��	��	��	��	��	��	��	��	��
Wiser's Canadian whisky		��	189	203	(7%)	(5%)	��	786	775	1%	3%
Lamb's rum		��	126	114	11%	9%	��	564	549	3%	2%
Polar Ice vodka		��	102	96	6%	10%	��	394	363	9%	12%
Mixable liqueurs		��	45	41	10%	10%	��	182	175	4%	5%
��		��	��	��	��	��	��	��	��	��	��
Total Key Brands		��	462	454	2%	2%	��	1,926	1,862	3%	4%
All other Corby-owned brands		��	51	54	(6%)	(3%)	��	225	230	(2%)	0%
��		��	��	��	��	��	��	��	��	��	��
Total Corby brands		��	513	508	1%	2%	��	2,151	2,092	3%	4%
��		��	��	��	��	��	��	��	��	��	��
��	Disposed Brands	��	-	78	(100%)	(100%)	��	108	421	(74%)	(71%)
��		��	��	��	��	��	��	��	��	��	��
Total Corby brands including��		��	��	��	��	��	��	��	��	��	��
��	Disposed Brands	��	513	586	(12%)	(8%)	��	2,259	2,513	(10%)	(8%)

��

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

From a year-over-year perspective, Corby's brand portfolio (excluding
Disposed Brands), saw its shipment performance effectively match that
of the overall Canadian spirits market with a 3% increase in volume. In
fact, all of Corby's Key Brands achieved positive shipment volume and
shipment value growth when compared against last year's results.
Corby's Polar Ice vodka brand led the way with a 9% increase in
shipment volumes (+12% in shipment value) on account of successful new
market strategies, and changes to the brand's promotional calendar.
Wiser's Canadian whisky, Corby's flagship brand, also posted a modest
1% increase in shipment volumes (+3% in shipment value), which exceeded
the performance of the Canadian whisky category as a whole. In
addition, shipments of Wiser's to the US market were strong, increasing
8% this year versus last. The Brand Performance Chart also confirms a
3% shipment volume increase in Lamb's rum. Lamb's benefited this year
from strong international shipments; mostly the result of a changing
shipment profile since its international production was moved to a
third party bottler in the UK.

From a quarter-over-quarter perspective, Corby's brand volumes remained
relatively consistent with an overall shipment volume increase of 1%
and shipment value increase of 2%. As anticipated, fourth quarter
shipments for Wiser's Canadian whisky pulled back on account of changes
to the brand's promotional calendar in the current year.. However, as
previously noted the brand's annual shipment performance exceeded that
of the prior year in addition to exceeding the Canadian whisky category
as a whole. Lamb's rum continued to benefit from strong international
shipments on account of a changing shipment profile since moving
production to a third party bottler in the UK. Polar Ice vodka and the
Mixable Liqueurs brands experienced strong fourth quarter shipment
volume and value primarily due to new promotional activities as well as
the launch of new product innovations.

Retail Volume and Retail Value Performance

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

��	��	��	��	��	��	��	��	��	��	��
RETAIL SALES FOR THE CANADIAN MARKET ONLY⁽¹⁾
��	��	��	��	��	��	��	��	��	��	��
��	��	Three Months Ended				��	Year Ended
�� �� Volumes (in 000's of 9L cases)	�� ��	Jun. 30 2012	Jun. 30 2011	% Retail Volume Change	% Retail Value Change	��	Jun. 30 2012	Jun. 30 2011	% Retail Volume Change	% Retail Value Change
��	��	��	��	��	��	��	��	��	��	��
Brand	��	��	��	��	��	��	��	��	��	��
Wiser's Canadian whisky	��	160	157	2%	5%	��	717	695	3%	4%
Lamb's rum	��	100	102	(2%)	0%	��	454	455	0%	1%
Polar Ice vodka	��	75	74	2%	5%	��	350	321	9%	10%
Mixable liqueurs	��	39	36	9%	8%	��	182	176	3%	3%
��	��	��	��	��	��	��	��	��	��	��
Total Key Brands	��	374	369	1%	4%	��	1,703	1,647	3%	4%
��	��	��	��	��	��	��	��	��	��	��
All other Corby-owned brands	��	53	51	4%	3%	��	218	212	3%	3%
��	��	��	��	��	��	��	��	��	��	��
Total��	��	427	420	2%	4%	��	1,921	1,859	3%	4%
⁽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 transactions have been excluded from the above
chart.

Overall, the year-over-year performance of Corby-owned brands was
relatively consistent with trends seen in the Canadian spirits industry
as a whole, with total retail volume increases of 3% and retail value
increases of 4%. The Canadian spirits industry saw retail volume and
retail value growth of 3% and 5%, respectively, during the same twelve
month period. The year-over-year growth trend currently experienced in
the Canadian spirits industry continued to be led by the vodka and rum
categories (especially spiced and dark rums); as both categories
boasted growth of 4% in retail volume and 5% in retail value. The
Canadian whisky category experienced only a modest increase in retail
volume growth of just under 1%, while retail value grew 2% this year
versus last.

The quarter over quarter overall retail trend for Corby-owned brands
were relatively consistent with annual results. Polar Ice vodka's
retail volume was somewhat less than that of the year-to-date results,
and is attributed to changes in timing to the brand's promotional
calendar. The Company's Mixable Liqueur brands benefited from strategic
pricing and additional promotional support, in addition to new product
innovations.

Summary of Corby's Key Brands

Wiser's Canadian Whisky

On an annual basis, Corby's flagship brand, Wiser's Canadian whisky,
continued to gain market share from both a retail volume and retail
value perspective, at the expense of its direct competitors in Canada.
Specifically, the brand had retail volume growth of 3% and retail value
growth of 4% compared to its category which showed 1% volume and 2%
value growth during the same annual period. During the quarter, the
brand continued to show strong performance against the market category
with retail volume and retail value growth of 2% and 5%, respectively,
whereas the Canadian whisky category was flat for volume and showed
retail value growth of 2% compared to the same three month period in
the prior year. 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 this year versus last, 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 year-over-year 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. However, 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-over-year growth trend (+9% retail volume,
+10% retail value) continued to significantly outpace the vodka
category in Canada which was +4% for volume and +6% for value when
compared to the prior year. 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. As well, the Company recently
introduced "Polar Ice Cube", a new ready-to-drink innovation for 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 3% during the year when compared to last year,
while the category as a whole grew at only 1% over prior year retail
volumes. During the quarter, Corby brands experienced heavy retail
sales as a result of strategic pricing and promotional activity.
Specifically, Corby's mixable liqueur brands grew 9% for volume and 8%
for value while the category shows growth of 5% in volume and value
over the same three month period. Corby recently launched McGuinness
Ice Storm, a unique liqueur innovation which has been well received by
consumers across Canada.

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 retail
value compared to last year. On a quarterly basis the brand's retail
sales grew 4% when compared to the same quarter last year. The brand's
performance exceeded its Canadian whisky category in Canada on both a
year-to-date and 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 years ended June 30, 2012
and 2011.

��	��	��
(in millions of Canadian dollars, except per share amounts)	��	2012	��	2011	��	$ Change	��	% Change
��	��	��	��	��	��	��	��	��
Revenue	$	146.7	$	159.6	$	(12.9)	��	(8%)
��	��	��	��	��	��	��	��	��
Cost of sales	��	(60.9)	��	(70.5)	��	9.6	��	(14%)
Marketing, sales and administration	��	(48.7)	��	(46.6)	��	(2.1)	��	4%
Disposal transactions	��	21.5	��	(2.2)	��	23.7	��	N/A
Other income (expense)	��	0.2	��	0.3	��	(0.1)	��	(33%)
��	��	��	��	��	��	��	��	��
Earnings from operations	��	58.8	��	40.5	��	18.4	��	45%
��	��	��	��	��	��	��	��	��
Financial income	��	2.0	��	1.3	��	0.7	��	50%
Financial expenses	��	(0.6)	��	(0.9)	��	0.3	��	(35%)
Net financial income	��	1.4	��	0.4	��	1.0	��	256%
��	��	��	��	��	��	��	��	��
Earnings before income taxes	��	60.2	��	40.8	��	19.4	��	47%
Income taxes	��	(14.2)	��	(12.0)	��	(2.2)	��	19%
��	��	��	��	��	��	��	��	��
Net earnings	$	46.0	$	28.9	$	17.1	��	59%
��	��	��	��	��	��	��	��	��
Per common share	��	��	��	��	��	��	��	��
��-Basic net earnings	$	1.62	$	1.01	$	0.61	��	60%
��-Diluted net earnings	$	1.62	$	1.01	$	0.61	��	60%
⁽¹⁾ In preparing the comparative information, the Company has adjusted amounts previously reported in financial statements prepared in accordance with Canadian GAAP.�� See Note 32 to the 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 certain non-core brands and the subsidiary that
owned the manufacturing plant on October 31, 2011. An after-tax gain on
sale of $17.7 million was recognized in the fiscal 2012 financial
results. Please refer to the "Significant Events" section 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 fiscal 2012; however, the comparative period includes the
financial results of this brand given the Company's ownership at that
time.

In order to effectively assess Corby's current year's results against
those of the prior year the impact of the aforementioned 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 $17.1 million for the year ended June 31, 2012
compared to 2011. After removing the impacts of the aforementioned
three factors, net earnings increased 11%, when compared to last 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 and Wiser's in Canada,), increased
bulk whisky sales activity, increased interest income earned on cash
deposits, and lastly, the impact of having lower statutory corporate
tax rates this year versus 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.

Revenue

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

��

(in millions of Canadian dollars)

��

��2012

��

2011

��

$ Change

��

��% Change

��

Revenue streams:

��

Case goods (excluding Disposed Brands)

��

107.9

��

�� 105.1

��

2.8

��

Commissions

��

16.3

��

15.2

��

1.1

��

Other services

��

9.4

��

4.7

��

4.7

��

100%

Revenue, excluding Disposed Brands

��

133.6

��

125.0

��

8.6

��

Disposed Brands

��

13.1

��

34.6

��

(21.5)

��

(62%)

��

Revenue

��

146.7

��

159.6

��

(12.9)

��

(8%)

��

Removing the impact of the aforementioned sale transactions (which are
denoted in the above chart as "Disposed Brands"), revenue from the
remaining Corby brand portfolio and other business activities increased
7% compared to the prior year.

The increase in Case Goods revenue is driven by new pricing strategies
and refocused promotional activities for certain key brands, notably
Polar Ice vodka and Wiser's Canadian whisky. Case Goods revenue also
benefited from the impact of general price increases across most of
Corby's brand portfolio in Canada. Commission income also increased on
a year-over-year comparative basis and reflects the strong performance
from Corby's international brand portfolio, including ABSOLUT vodka and
Jameson Irish whiskey. Corby's portfolio of represented wine brands
also experienced strong growth during 2012. Other services primarily
include revenue ancillary to the sale of Case Goods, such as logistics
fees and miscellaneous bulk spirit sales. The increase in other
services is almost entirely the result of having a higher volume of
bulk whisky sales to a former contract bottling customer; these sales
are currently not expected to continue past December 31, 2012.

Cost of sales

Cost of sales was $60.9 million, representing a decrease of 14%, or $9.6
million on an annual basis. The decrease in cost of sales is mostly the
result of the aforementioned disposal transactions, as the Company no
longer incurred production costs associated with the disposed brands
and bottling facility. Gross margin for the year was 53.3% versus 51.1%
last year (note: commissions are not included in this calculation). The
improvement in gross margin is also a result of the two disposal
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). The revenues derived from the formerly owned
brands and bottling facility generated significantly less margin than
Corby's remaining Case Goods business.

Marketing, sales and administration

Marketing, sales and administration expenses were $48.7 million for the
year ended June 30, 2012, an increase of 4% or $2.1 million compared to
the prior year. A significant portion of the increase relates to a
project the Company has undertaken to improve its route-to-market and
transform its sales and trade-marketing organization in Canada.
Additionally, the increase reflects year-over-year 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 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 year-over-year.

Net Financial Income

Net financial income is comprised of interest earned on deposits in cash
management pools, offset by interest costs associated with the
Company's pension and post-retirement benefit plans. The increased net
financial income 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 for the year was $14.2 million as compared to $12.0
million last year. The effective tax rate for the year 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
this increase are 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.

��	��	��	��	��	��	��	��
��		��	��	��	2012	��	2011
��	��	��	��	��	��	��	��
Combined basic Federal and Provincial tax rates	��	��	��	��	27%	��	29%
Net capital gain on disposal of plant and non-core brands	��	��	��	��	(4%)	��	0%
Other	��	��	��	��	1%	��	0%
Effective tax rate	��	��	��	��	24%	��	29%

��

Liquidity and Capital Resources

Corby's sources of liquidity are its deposits in cash management pools
of $110.1 million as at June 30, 2012, and its cash generated from
operating activities. Corby's total contractual maturities are
represented by its accounts payable and accrued liabilities and income
and other taxes payable balances, which totalled $26.1 million as at
June 30, 2012, and are all due to be paid within one year. The Company
does not have any liabilities under short or long-term debt facilities.

The Company also has funding obligations related to its employee future
benefit plans, which include defined benefit pension plans. As at June
30, 2012, certain of the Company's defined benefit pension plans were
in a deficit position. Of those plans in a funded deficit position, the
unfunded accrued benefit obligation totalled $4.3 million.

The Company has identified the area of employee future benefits as a
critical accounting estimate in that accounting policies related to
employee future benefits include various assumptions that incorporate a
high degree of judgment and complexity. These assumptions may change in
the future and may have a material impact on the accrued benefit
obligations of the Company and the cost of these plans, which is
reflected in the Company's consolidated statements of earnings. In
addition, the actual rate of return on plan assets and changes in
interest rates could result in changes in the Company's funding
requirements for its defined benefit pension plans.

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. Nonetheless, pension
fund assets are not immune to market fluctuations and, as a result, the
Company may be required to make additional cash contributions in the
future. For more information regarding Corby's employee future benefit
plans, please refer to Note 15 to the consolidated financial
statements.

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

Cash flows

��		��	��	��	��	��	��	��	��
(in millions of Canadian dollars)		��	��2012	��	��	2011	��	��	Change
��		��	��	��	��	��	��	��	��
Operating activities		��	��	��	��	��	��	��	��
��	Net earnings, adjusted for non-cash items	$	40.2	��	$	46.6	��	$	(6.4)
��	Net change in non-cash working capital	��	13.6	��	��	(1.0)	��	��	14.6
��	Net payments for interest and income taxes	��	(7.5)	��	��	(10.3)	��	��	2.8
��		��	46.3	��	��	35.3	��	��	11.0
��		��	��	��	��	��	��	��	��
Investing activities		��	��	��	��	��	��	��	��
��	Additions to property and equipment	��	(1.6)	��	��	(2.3)	��	��	0.7
��	Proceeds from disposition of property and equipment	��	0.3	��	��	0.1	��	��	0.2
��	Proceeds from sale of plant and brands	��	37.4	��	��	4.8	��	��	32.6
��	Deposits in cash management pools	��	(13.5)	��	��	(22.0)	��	��	8.5
��		��	22.6	��	��	(19.4)	��	��	42.0
��		��	��	��	��	��	��	��	��
Financing activities		��	��	��	��	��	��	��	��
��	Proceeds from note receivable	��	0.6	��	��	-	��	��	0.6
��	Dividends paid	��	(69.5)	��	��	(15.9)	��	��	(53.6)
��		��	(68.9)	��	��	(15.9)	��	��	(53.0)
��		��	��	��	��	��	��	��	��
Net change in cash		$	-	��	$	-	��	$	-

��

Operating activities

On an annual basis, net cash from operating activities was $46.3 million
compared to $35.3 million of the prior year, representing an increase
of $11.0 million. Cash flows from operating activities have been
significantly impacted by the previously mentioned sale of the Montreal
plant and non-core brands. Reduced net earnings, adjusted for non-cash
items, have been offset by lower inventory and accounts receivable
levels driven by the Disposed Brands. Further, cash flows from
operating activities has benefited from lower levels of maturing
inventories compared to the prior year due to bulk whisky sales and
lower tax payments.

Investing activities

Cash from investing activities increased $42.0 million this year
compared to last year. The year-over-year change in cash from investing
activities was primarily impacted by the Disposal Transactions and
changes to the amount deposited in cash management pools. The change in
cash associated with the Disposal Transactions reflects the difference
in proceeds received from the sale of the Montreal plant and non-core
brands completed in 2012 versus the proceeds received from the sale of
the Seagram Coolers brand completed in 2011.

Changes in the amount deposited in cash management pools is dependent on
how much cash is available after operating, other investing, and
financing activities are completed. In the current year, less cash was
deposited primarily due to the higher amount of dividends paid,
partially offset by cash generated from operating activities and
proceeds received from the sale of the Montreal plant and non-core
brands.

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 $68.9 million for the year and
primarily represented the payment of dividends to shareholders. Also
included in this balance are proceeds received from the long-term note
receivable paid to the Company during the year. Dividend payments
increased over the prior year due to a special dividend of $1.85 per
share and changes to the dividend policy which increased regular
quarterly dividends to $0.15 per share from $0.14 per share effective
November 9, 2011. The payment of these dividends is in accordance with
the Company's stated dividend policy.

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

��	��	��	��	��	��	��	��	��
for	��	Declaration date	��	Record Date	��	Payment date	��	$ / Share
2012 - Q4	��	August 29, 2012	��	September 15, 2012	��	September 30, 2012	��	��$ 0.15
2012 - Q3	��	May 10, 2012	��	May 31, 2012	��	June 15, 2012	��	0.15
2012 - Q2	��	February 8, 2012	��	February 29, 2012	��	March 15, 2012	��	0.15
2012 - special	��	November 9, 2011 (special dividend)	��	December 15, 2011	��	January 3, 2012	��	1.85
2012 - Q1	��	November 9, 2011	��	November 30, 2011	��	December 15, 2011	��	0.15
2011 - Q4	��	August 24, 2011	��	September 15, 2011	��	September 30, 2011	��	0.14
2011 - Q3	��	May 11, 2011	��	May 31, 2011	��	June 15, 2011	��	0.14
2011 - Q2	��	February 9, 2011	��	February 28, 2011	��	March 15, 2011	��	0.14
2011 - Q1	��	November 10, 2010	��	November 30, 2010	��	December 15, 2010	��	0.14

��

Outstanding Share Data

As at August 28, 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.

Contractual Obligations

The following table presents a summary of the maturity periods of the
Company's contractual obligations as at June 30, 2012:

��

��

��

��

��

Payments

During

2013

��

Payments

due in 2014

and 2015

��

Payments

due in 2016

and 2017

��

Payments

due after

2017

��

Obligations

with no fixed

maturity

��

Total

��

Operating lease obligations

��

1.8

��

2.9

��

1.6

��

0.8

��

7.1

Employee benefits

��

20.9

��

20.9

��

1.8

��

2.9

��

1.6

��

0.8

��

20.9

��

��28.0

��

Operating lease obligations represent future minimum payments under
long-term operating leases for premises and office equipment as at June
30, 2012. Employee benefits represent the Company's unfunded pension
and other post-retirement benefit plan obligations as at June 30, 2012.
For further information regarding Corby's employee future benefit
plans, please refer to Note 15 to the audited consolidated financial
statements.

Related Party Transactions

Transactions with parent, ultimate parent, and affiliates

Corby engages in a significant number of transactions with its parent
company, its ultimate parent and various affiliates. Specifically,
Corby renders services to its parent company, its ultimate parent, and
affiliates for the marketing and sale of beverage alcohol products in
Canada. Furthermore, Corby outsources the large majority of its
distilling, maturing, storing, blending, bottling and related
production activities to its parent company. A significant portion of
Corby's bookkeeping, recordkeeping services, data processing and other
administrative services are also outsourced to its parent company.
Transactions with the parent company, ultimate parent and affiliates
are subject to Corby's related party transaction policy.

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

In addition to the aforementioned agreements, Corby signed an agreement
on September 26, 2008, with its ultimate parent to be the exclusive
Canadian representative for the ABSOLUT vodka and Plymouth gin brands,
for a five-year term expiring October 1, 2013. These brands were
acquired by PR subsequent to the original representation rights
agreement dated September 29, 2006. 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 August 28, 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.

Results of Operations - Fourth Quarter of Fiscal 2012

The following table presents a summary of certain selected consolidated
financial information for the Company for the three month periods ended
June 30, 2012 and 2011:

��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��
��	��	Three Months Ended			��	��	��	��
��	��	��
��	��	June 30,	��	June 30,	��	��	��	��
(in millions of Canadian dollars, except per share amounts)	��	2012	��	2011��	��	$ Change��	��	% Change��
��	��	��	��	��	��	��	��	��
Revenue	$	32.4	$	40.1	$	(7.7)	��	(19%)
��	��	��	��	��	��	��	��	��
Cost of sales	��	(13.0)	��	(17.7)	��	4.7	��	(27%)
Marketing, sales and administration	��	(12.8)	��	(12.6)	��	(0.2)	��	2%
Other income (expense)	��	-	��	(0.4)	��	0.4	��	(100%)
��	��	��	��	��	��	��	��	��
Earnings from operations	��	6.6	��	9.4	��	(2.8)	��	(30%)
��	��	��	��	��	��	��	��	��
Financial income	��	0.4	��	0.4	��	-	��	0%
Financial expenses	��	(0.1)	��	(0.2)	��	0.1	��	(50%)
Net financial income	��	0.3	��	0.2	��	0.1	��	50%
��	��	��	��	��	��	��	��	��
Earnings before income taxes	��	6.9	��	9.6	��	(2.7)	��	(28%)
Income taxes	��	(2.0)	��	(2.8)	��	0.8	��	(29%)
��	��	��	��	��	��	��	��	��
Net earnings	$	4.9	$	6.8	$	(1.9)	��	(28%)
��	��	��	��	��	��	��	��	��
Per common share	��	��	��	��	��	��	��	��
��-Basic net earnings	$	0.17	$	0.24	$	(0.07)	��	(28%)
��-Diluted net earnings	$	0.17	$	0.24	$	(0.07)	��	(28%)
��	��	��	��	��	��	��	��	��
⁽¹⁾ In preparing the comparative information, the Company has adjusted amounts previously reported in financial statements prepared in accordance with Canadian GAAP.�� See Note 32 to the consolidated financial statements for an explanation of the transition to IFRS.

��

The financial results for the quarter have been substantially impacted
by the sale of certain non-core brands and the subsidiary that owned
the Montreal plant in October 2011. The following discussion identifies
the impact of this transaction in order to facilitate comparison with
the prior year quarter, where noted.

Revenue

The following table highlights the various components of the Company's
revenue streams for the quarter:

��		��	��	��	��	��	��	��	��
��		��	��	��	��	��	��	��	��
��		��	Three Months Ended			��	��	��	��
��		��	June 30,	��	June 30,	��	��	��	��
(in millions of Canadian dollars)		��	2012��	��	2011	��	$ Change	��	��% Change��
Revenue streams:		��	��	��	��	��	��	��	��
��	Case goods (excluding Disposed Brands)	$	25.9	$	26.3	$	(0.4)	��	(2%)
��	Commissions	��	4.0	��	3.8	��	0.2	��	5%
��	Other services	��	2.5	��	1.3	��	1.2	��	92%
Revenue, excluding Disposed Brands		��	32.4	��	31.4	��	1.0	��	3%
��		��	��	��	��	��	��	��	��
Disposed Brands		��	-	��	8.7	��	(8.7)	��	(100%)
��		��	��	��	��	��	��	��	��
Revenue		$	32.4	$	40.1	$	(7.7)	��	(19%)
��		��	��	��	��	��	��	��	��

��

Excluding the impact of Disposed Brands, like-for-like revenues
increased 3% quarter over quarter, or $1.0 million. While Case Goods
experienced a 2% increase in shipment value (as previously discussed in
the "Brand Performance Review" section), these sales were offset by
increased promotional investment behind key brands as accounting rules
require certain types of promotional expenses to be reported net of
revenues. As a result, the increase in revenue this quarter versus the
same quarter last year was mostly derived from the Company's other
activities, which are predominately comprised of bulk whisky sales to a
former contract bottling customer. Note that these bulk whisky sales
are not expected to continue past December 2012.

Cost of Sales

Cost of goods sold is significantly lower this quarter due to the
reduced Case Goods volume as a result of the aforementioned sale
transaction (i.e., Disposed Brands). Gross margin was 54.1% this
quarter compared to 51.4% for the same quarter last year (note:
commissions are not included in this calculation). The substantial
increase in gross margin this quarter is a direct result of the
aforementioned disposal transaction. The revenue derived from Disposed
Brands and the Montreal bottling facility generated significantly less
margin than Corby's remaining business.

Net earnings and earnings per share

Net earnings for the fourth quarter were $4.9 million, or $0.17 per
share, which is a decrease from the same quarter last year of $1.9
million. Removing the impact of Disposed Brands, net earnings on a
like-for-like comparison basis decreased $0.2 million when compared to
the same quarter last year.

Selected Quarterly Information

Summary of Quarterly Financial Results

��

(in millions of Canadian dollars,

except per share amounts)

��

��

Q4

2012

��

��

��

Q3

2012

��

��

��

Q2

2012

��

��

��

Q1

2012

��

��

��

Q4

2011

��

��

��

Q3

2011

��

��

��

Q2

2011

��

��

��

Q1

2011

��

Revenue

32.4

��

29.2

��

40.9

��

44.2

��

40.1

��

32.4

��

45.5

��

41.6

Earnings from operations

��

6.6

��

6.1

��

33.6

��

12.6

��

9.4

��

4.3

��

13.7

��

13.1

Net earnings, excluding undernoted items ⁽¹⁾

��

4.9

��

4.6

��

9.0

��

9.9

��

6.8

��

3.1

��

9.8

��

9.2

Net earnings

��

4.9

��

4.6

��

27.1

��

9.5

��

6.8

��

4.8

��

9.8

��

9.2

Basic EPS

��

0.17

��

0.16

��

0.95

��

0.33

��

0.24

��

0.11

��

0.34

��

0.32

Diluted EPS

��

0.17

��

0.16

��

0.95

��

0.33

��

0.24

��

0.11

��

0.34

��

0.32

⁽¹⁾ 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 certain non-core brands and the
subsidiary that owned the Montreal plant in Q2-2012, and the sale of
the Seagram Coolers brand in Q3-2011) had on the quarterly results.
Specifically, on a quarter-over-quarter comparative basis, revenues for
Q4-2012 are lower by $7.7 million compared to Q4-2011 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
3% 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 these sale transactions please refer
to Note 19 to the audited consolidated financial statements.

Critical Accounting Estimates

The Company's consolidated financial statements are prepared in
accordance with IFRS, which require management to make certain
estimates, judgments and assumptions that affect the reported amounts
of assets and liabilities and related disclosures as at the date of the
consolidated financial statements. The Company bases its estimates,
judgments and assumptions on historical experience, current trends and
other factors that management believes to be important at the time the
consolidated financial statements are prepared. The Company reviews its
accounting policies and how they are applied on a regular basis. While
the Company believes that the historical experience, current trends and
other factors considered support the preparation of its consolidated
financial statements in accordance with IFRS, actual results could
differ from its estimates and such differences could be material.

The Company's significant accounting policies are discussed in Note 3 to
the consolidated financial statements. The following accounting
policies incorporate a higher degree of judgment and/or complexity and,
accordingly, are considered to be critical accounting policies.

Goodwill and Indefinite-Lived Intangible Assets

The Company records as goodwill the excess amount of the purchase price
of an acquired business over the fair value of the underlying net
assets, including intangible assets, at the date of acquisition.
Indefinite-lived intangible assets represent the value of trademarks
and licences acquired. Goodwill and indefinite-lived intangible assets
account for $15.1 million of the Company's total assets. These balances
are evaluated annually for impairment. The process of evaluating these
items for impairment involves 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 a result of
changes in the business strategies and outlook of the Company.

An impairment loss would be recognized to the extent that the carrying
value of the goodwill or trademarks and licences exceeds the implied
fair value. Any impairment would result in a reduction in the carrying
value of these items on the consolidated balance sheets of the Company
and the recognition of a non-cash impairment charge in net earnings.
Based on analysis performed, the Company has not identified any
impairment.

Employee Future Benefits

The cost and accrued benefit plan obligations of the Company's defined
benefit pension plans and its other post-retirement benefit plan are
accrued based on actuarial valuations that are dependent upon
assumptions determined by management. These assumptions include the
discount rate, the expected long-term rate of return on plan assets,
the rate of compensation increases, retirement ages, mortality rates
and the expected inflation rate of health care costs. These assumptions
are reviewed annually by the Company's management and its actuary.
These assumptions may change in the future and may have a material
impact on the accrued benefit obligations of the Company and the cost
of these plans, which is reflected in the Company's consolidated
statement of earnings. In addition, the actual rate of return on plan
assets and changes in interest rates could result in changes in the
Company's funding requirements for its defined benefit pension plans.
See Note 15 to the consolidated financial statements for detailed
information regarding the major assumptions utilized.

Income and Other Taxes

The Company accounts for income taxes using the liability method of
accounting. Under the liability method, deferred income tax assets and
liabilities are determined based on differences between the carrying
amounts of balance sheet items and their corresponding tax values. The
determination of the income tax provision requires management to
interpret regulatory requirements and to make certain judgments. While
income, capital and commodity tax filings are subject to audits and
reassessments, management believes that adequate provisions have been
made for all income and other tax obligations. However, changes in the
interpretations or judgments may result in an increase or decrease in
the Company's income, capital or commodity tax provisions in the
future. The amount of any such increase or decrease cannot be
reasonably estimated.

New Accounting Pronouncements

Transition to International Financial Reporting Standards

The Company has adopted International Financial Reporting Standards
("IFRS") for its fiscal year ended June 30, 2012 as required by the
Accounting Standards Board of the Canadian Institute of Chartered
Accountants.

The Company has provided a detailed explanation of the impacts of this
transition in Note 32 to the Company's consolidated financial
statements ("Note 32").�� Note 32 includes reconciliations of the
Company's balance sheet and shareholders' equity from previous Canadian
GAAP to IFRS as at June 30, 2011 and July 1, 2010, and its net earnings
and comprehensive income for the year ended June 30, 2011.��
Explanations 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."

Future Accounting Standards

(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

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" ("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

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.

Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures
that has been designed to provide reasonable assurance that information
required to be disclosed by the Company in its public filings is
recorded, processed, summarized and reported within required time
periods and includes controls and procedures designed to ensure that
all relevant information is accumulated and communicated to senior
management, including the Company's Chief Executive Officer ("CEO") and
Chief Financial Officer ("CFO"), to allow timely decisions regarding
required disclosure.

Management, with the participation of the CEO and CFO, has evaluated the
effectiveness of the Company's disclosure controls and procedures (as
defined in National Instrument 52-109) as at June 30, 2012, and has
concluded that such disclosure controls and procedures are effective
based upon such evaluation.

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.

Management, with the participation of the CEO and CFO, has evaluated the
effectiveness of the Company's internal controls over financial
reporting as at June 30, 2012, and has concluded that internal control
over financial reporting is designed and operating effectively to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with IFRS. Management's assessment was based on
the framework established in Internal Control - Integrated Framework,
published by the Committee of Sponsoring Organizations of the Treadway
Commission.

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

Risks & Risk Management

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

Industry and Regulatory

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

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

Consumer Consumption Patterns

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

Distribution/Supply Chain Interruption

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

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

Environmental Compliance

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

Industry Consolidation

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

Competition

The Canadian beverage alcohol industry is extremely competitive.
Competitors may take actions to establish and sustain a competitive
advantage. 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 LBs, management believes the Company's credit
risk relating to accounts receivable is at an acceptably low level. The
Company's note receivable is secured.

Exposure to Interest Rate Fluctuations

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

Exposure to Commodity Price Fluctuations

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

Foreign Currency Exchange Risk

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

USD Exposure

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

GBP Exposure

As a result of the relocation of its Lamb's international production
from Canada to the UK (transition completed in Q1-2012), the Company's
exposure to fluctuations in the value of the GBP relative to the CAD
have been significantly reduced as both sales and cost of production
are now denominated in GBP. While Corby's exposure has been minimized,
increases in the value of the CAD relative to the GBP will have an
unfavourable impact on the Company's earnings.

Third-Party Service Providers

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

Brand Reputation and Trademark Protection

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

Valuation of Goodwill and Intangible Assets

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

The following chart summarizes Corby's goodwill and intangible assets
and details the amounts associated with each brand (or basket of
brands) and market:

��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	Carrying Values as at June 30, 2012
��	��	��	��	��	��	��	��	��	��	��	��
Associated Brand	��	Associated Market	��	��	Goodwill	��	��	Intangibles	��	��	Total
��	��	��	��	��	��	��	��	��	��	��	��
Various PR brands	��	Canada	��	$	�� -	��	$	42.0	��	$	42.0
Lamb's rum	��	United Kingdom⁽¹⁾	��	��	1.4	��	��	11.8	��	��	13.2
Corby domestic brands	��	Canada	��	��	1.9	��	��	-	��	��	1.9
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	$	3.3	��	$	53.8	��	$	57.1
��	��	��	��	��	��	��	��	��	��	��	��
⁽¹⁾ The international business for Lamb's rum is primarily focused in the UK, however, the trademarks and licenses purchased, relate to all international markets outside of Canada, as Corby previously owned the Canadian rights.

��

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

Employee Future Benefits

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

CORBY DISTILLERIES LIMITED ��
CONSOLIDATED BALANCE SHEETS ��
as at June 30, 2012, June 30, 2011 and July 1, 2010 ��
��	��	��	��	��	��	��	��	��
(Unaudited)	��	��	��	��	��	��	��	��
(in thousands of Canadian dollars) ��					��
��	��	��	��	��	��	��	��	��
��	��	��	��	June 30,	��	June 30,	��	July 1,
��	��	Note	��	2012	��	2011⁽¹⁾	��	2010⁽¹⁾
��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��
ASSETS	��	��	��	��	��	��	��	��
Deposits in cash management pools		��	��$	110,113	��$	96,636	��$	74,685
Accounts receivable	��	6	��	28,611	��	31,005	��	28,340
Income and other taxes recoverable		��	��	-	��	-	��	1,070
Inventories	��	7	��	47,760	��	59,654	��	60,502
Prepaid expenses	��	��	��	555	��	1,731	��	1,551
Current portion of note receivable		8	��	600	��	600	��	-
��	��	��	��	��	��	��	��	��
Total current assets	��	��	��	187,639	��	189,626	��	166,148
Note receivable	��	8	��	1,200	��	1,800	��	-
Deferred income taxes	��	16	��	-	��	256	��	-
Property and equipment		9	��	7,524	��	15,646	��	15,238
Goodwill	��	10	��	3,278	��	5,886	��	6,857
Intangible assets	��	11	��	53,771	��	58,302	��	70,571
��	��	��	��	��	��	��	��	��
Total assets	��	��	��$	253,412	��$	271,516	��$	258,814
��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��
LIABILITIES	��	��	��	��	��	��	��	��
Accounts payable and accrued liabilities		13	��$	22,400	��$	19,492	��$	18,285
Income and other taxes payable		��	��	3,656	��	115	��	-
��	��	��	��	��	��	��	��	��
Total current liabilities		��	��	26,056	��	19,607	��	18,285
Provision for pensions		15	��	10,550	��	12,670	��	14,175
Deferred income taxes	��	16	��	983	��	-	��	41
��	��	��	��	��	��	��	��	��
Total liabiliites	��	��	��	37,589	��	32,277	��	32,501
��	��	��	��	��	��	��	��	��
Shareholders' equity	��	��	��	��	��	��	��	��
Share capital	��	17	��	14,304	��	14,304	��	14,304
Retained earnings	��	��	��	201,519	��	224,935	��	212,009
��	��	��	��	��	��	��	��	��
Total shareholders' equity		��	��	215,823	��	239,239	��	226,313
��	��	��	��	��	��	��	��	��
Total liabilities and shareholders' equity		��	��$	253,412	��$	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 32 to these consolidated financial statements for an explanation of the transition to IFRS.
��
The accompanying notes are an integral part of these consolidated financial statements. ��

��

CORBY DISTILLERIES LIMITED

��

CONSOLIDATED STATEMENTS OF EARNINGS

��

(Unaudited)

��

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

��

�� For the Three Months Ended

For the Year Ended

��

�� June 30,

June 30,

June 30,

June 30,

��

Note

2012

2011⁽¹⁾

2012

2011⁽¹⁾

��

Revenue

�� 32,433

�� 40,081

��$

146,746

��$

159,566

��

Cost of sales

��

(13,068)

��

(17,641)

��

(60,885)

��

(70,541)

Marketing, sales and administration

��

(12,774)

��

(12,624)

��

(48,744)

��

(46,635)

Disposal transactions

��

21,532

��

(2,233)

Other income and expenses

��

(377)

��

202

��

299

��

Earnings from operations

��

6,619

��

9,439

��

58,851

��

40,456

��

Financial income

��

453

��

403

��

1,963

��

1,308

Financial expenses

��

(184)

��

(191)

��

(612)

��

(925)

Net financial income

��

269

��

212

��

1,351

��

383

��

Earnings before income taxes

��

6,888

��

9,651

��

60,202

��

40,839

��

Current income taxes

��

(1,877)

��

(2,482)

��

(12,915)

��

(12,266)

Deferred income taxes

��

(130)

��

(340)

��

(1,239)

��

297

Income taxes

��

(2,007)

��

(2,822)

��

(14,154)

��

(11,969)

��

Net earnings

��

�� 4,881

�� 6,829

��$

46,048

��$

28,870

��

Basic earnings per share

�� 0.17

�� 0.24

��$

1.62

��$

1.01

Diluted earnings per share

�� 0.17

�� 0.24

��$

1.62

��$

1.01

��

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 32 to these consolidated financial statements for an explanation of the transition to IFRS.
��
The accompanying notes are an integral part of these consolidated financial statements.

��

CORBY DISTILLERIES LIMITED

��

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

��

(Unaudited)

��

(in thousands of Canadian dollars)

��

For the Three Months Ended

For the Year Ended

��

June 30,

June 30,

June 30,

June 30,

��

2012

2011⁽¹⁾

2012

2011⁽¹⁾

��

Net earnings

��$

4,881

��$

6,829

��$

��

46,048

��$

��

28,870

��

Other comprehensive income

��

Total comprehensive income

��$

4,881

��$

6,829

��$

��

46,048

��$

��

28,870

⁽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 32 to these consolidated financial statements for an explanation of the transition to IFRS.
��
The accompanying notes are an integral part of these consolidated financial statements.

��

CORBY DISTILLERIES LIMITED

��

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

��

For the years ended June 30, 2012 and 2011

��

(Unaudited)

��

(in thousands of Canadian dollars)

��

Note

�� Share Capital

Accumulated

Other

Comprehensive

Income

Retained

Earnings

Total

��

Balance as at July 1, 2011

��

��$

14,304

��$

224,935

��$

239,239

Net earnings

��

46,048

��

46,048

Other comprehensive income

��

Dividends

��

(69,464)

��

(69,464)

��

Balance as at June 30, 2012

��

��$

14,304

��$

201,519

��$

215,823

��

Balance as at July 1, 2010 ⁽¹⁾

��

��$

14,304

��$

212,009

��$

226,313

Net earnings

��

28,870

��

28,870

Other comprehensive income

��

Dividends

��

(15,944)

��

(15,944)

��

Balance as at June 30, 2011 ⁽¹⁾

��

��$

14,304

��$

224,935

��$

239,239

⁽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 32 to these consolidated financial statements for an explanation of the transition to IFRS.

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

��

CORBY DISTILLERIES LIMITED				��		��	��	��	��
CONSOLIDATED STATEMENTS OF CASH FLOW							��	��	��	��
��			��		��		��	��	��	��
(Unaudited)					��		��	��	��	��
(in thousands of Canadian dollars)					��		��	��	��	��
��				��		��	��	��	��	��
��	��	��	For the Three Months Ended				For the Year Ended
��	��	��	��	��			��		��
��	��	��	��	June 30,	��	June 30,	��	June 30,	��	June 30,
��	��	Notes	��	2012	��	2011⁽¹⁾	��	2012	��	2011⁽¹⁾
��	��	��	��	��	��	��	��	��	��	��
Operating activities		��	��	��	��	��	��	��	��	��
Net earnings		��	��$	4,881	��$	6,829	��$	46,048	��$	28,870
Adjustments for:		��	��	��	��	��	��	��	��	��
Amortization and depreciation		22	��	1,357	��	1,549	��	5,688	��	6,224
Net financial income		21	��	(269)	��	(212)	��	(1,351)	��	(383)
Disposal transactions		19	��	-	��	-	��	(21,532)	��	2,233
(Gain) loss on disposal of property and equipment		��	��	(47)	��	48	��	(175)	��	52
Income tax expense		16	��	2,007	��	2,822	��	14,154	��	11,969
Provision for pensions		��	��	(456)	��	(896)	��	(2,674)	��	(2,410)
��	��	��	��	7,473	��	10,140	��	40,158	��	46,555
Net change in non-cash working capital balances		25	��	2,763	��	1,926	��	13,613	��	(957)
Interest received		��	��	396	��	398	��	1,797	��	1,288
Income taxes paid		��	��	(1,704)	��	(3,287)	��	(9,290)	��	(11,536)
��	��	��	��	��	��	��	��	��	��	��
Net cash from operating activities		��	��	8,928	��	9,177	��	46,278	��	35,350
��	��	��	��	��	��	��	��	��	��	��
Investing activities		��	��	��	��	��	��	��	��	��
Additions to property and equipment		9	��	(1,029)	��	(1,660)	��	(1,648)	��	(2,288)
Net proceeds on disposal transactions		19	��	-	��	-	��	37,376	��	4,756
Proceeds from disposition of property and equipment			��	54	��	60	��	335	��	77
Deposits in cash management pools		��	��	(3,683)	��	(3,591)	��	(13,477)	��	(21,951)
��	��	��	��	��	��	��	��	��	��	��
Net cash (used) from in investing activities		��	��	(4,658)	��	(5,191)	��	22,586	��	(19,406)
��	��	��	��	��	��	��	��	��	��	��
Financing activities		��	��	��	��	��	��	��	��	��
Proceeds from note receivable		8	��	-	��	-	��	600	��	-
Dividends paid��		26	��	(4,270)	��	(3,986)	��	(69,464)	��	(15,944)
��	��	��	��	��	��	��	��	��	��	��
Net cash used in financing activities		��	��	(4,270)	��	(3,986)	��	(68,864)	��	(15,944)
��	��	��	��	��	��	��	��	��	��	��
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 32 to these consolidated financial
statements for an explanation of the transition to IFRS.

��

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

��

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ��

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011

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

1. GENERAL INFORMATION��

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

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

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

2. BASIS OF PREPARATION

Statement of compliance

These consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS") and using the
accounting policies described herein.

These are the Company's first annual consolidated financial statements
reported under IFRS for the year ended June 30, 2012 with comparatives
for the year ended June 30, 2011. IFRS 1 - First-time Adoption of IFRS ("IFRS 1") has been applied in the preparation of these financial
statements. Consolidated financial statements of the Company had been
prepared under previous Canadian Generally Accepted Accounting
Principles ("Canadian GAAP"), which differs in certain respects from
IFRS. When preparing the Company's 2011 consolidated financial
statements as presented here, management has amended certain of the
Company's previous accounting methods in order to comply with IFRS. The
comparative consolidated financial statements presented reflect the
adoption of IFRS.

An explanation of how the transition from previous Canadian GAAP to IFRS
has affected the reported financial position, financial performance and
cash flows of the Company, including the mandatory exceptions and
optional exemptions under IFRS, is provided in Note 32 to these
consolidated financial statements.

These consolidated financial statements were approved by the Company's
Board of Directors on August 28, 2012.

Functional and presentation currency

The Company's 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 dominated 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 consolidated financial statements are prepared in accordance with
the historical cost model, except for certain categories of assets and
liabilities, which are measured in accordance with other methods
provided for by IFRS as explained in the accounting policies below.
Historical cost is generally based on the fair value of the
consideration given in exchange for assets.

Use of Estimates and Judgements��

The preparation of the 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 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

The accounting policies set out below have been applied consistently to
all years presented in these consolidated financial statements.

Basis of Consolidation

Subsidiaries are entities controlled by the Company.�� Control exists
where the Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities.��
The financial statements of subsidiaries are included in the Company's
consolidated financial statement from the date that the control
commences until the date that control ceases.

Intra-company balances and transactions and any unrealized income and
expenses arising from intra-company transactions are eliminated in
preparing the consolidated financial statements.

Deposits in Cash Management Pools

Corby participates in a cash pooling arrangement under a Mirror Netting
Services 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.

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.

Inventories

Inventories are measured at the lower of cost (acquisition cost and cost
of production, including indirect production overheads) and net
realizable value. Net realizable value is the selling price less the
estimated cost of completion and sale of the inventories. Most
inventories are valued using the average cost method. The cost of
long-cycle inventories is calculated using a single method which
includes distilling and ageing maturing costs but excludes finance
costs. These inventories are classified in current assets, although a
substantial part remains in inventory for more than one year before
being sold in order to undergo the ageing maturing process used for
certain spirits.

Property and equipment

Property and equipment are recognized at acquisition cost and broken
down by component.�� Cost includes expenditures that are directly
attributable to the acquisition of the asset.

Depreciation is calculated on a straight-line basis over the estimated
useful life of the assets.�� Land is not depreciated.�� Useful life and
depreciation methods are reviewed at each reporting date. Items of
property and equipment are written down when impaired

The range of depreciable lives for the major categories of property and
equipment are as follows:

Buildings

��

��40 to 50 years��

Machinery and equipment

��

��3 to 12 years��

Casks

��

��12 years��

Other��

��

��3 to 20 years��

Depreciation of property and equipment is recognized within earnings
from operations.�� The Company commences recognition of depreciation in
earnings when the item of property and equipment is ready for its
intended use.

Gains and losses on disposal of an item of property and equipment are
determined by comparing the proceeds from disposal with the carrying
amount of property and equipment and are recognized net, within
earnings from operations.

Fully-depreciated items of property and equipment that are still in use
continue to be recognized in the cost and accumulated depreciation.

The cost of replacing part of an item of property and equipment is
recognized in the carrying amount of the item if it is probable that
the future economic benefits embodied within the part will flow to the
Company and its cost can be measured reliably.�� The carrying amount of
the replaced part is de-recognized.�� The costs of repairs and
maintenance of property and equipment are recognized in earnings from
operations as incurred.

Leases

The Company leases certain premises and equipment. Terms vary in length
and typically permit renewal for additional periods. These leases are
classified as operating leases under which minimum rent, including
scheduled escalations, is expensed on a straight-line basis over the
term of the lease.

Leases are classified as finance leases whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the
lessee.�� All other leases are classified as operating leases. The
Company currently has no financing leases.

Goodwill ��

Goodwill arising in a business combination is recognized as an asset at
the date that control is acquired.�� For acquisitions on or after July
1, 2010, goodwill is measured as the excess of the sum of the fair
value of the consideration transferred over the fair value of the
identifiable assets acquired less the fair value of the liabilities
assumed.�� Goodwill is tested for impairment at least annually and
whenever there is an indication that the asset may be impaired.

As described in Note 32, as part of its transition to IFRS, the Company
elected to apply IFRS 3 - Business Combinations ("IFRS 3"), only to those business combinations that occurred on or
after July 1, 2010.�� In respect of acquisitions prior to July 1, 2010,
goodwill represents the amount recognized under Canadian GAAP.

Goodwill is measured at cost less any accumulated impairment losses.

Intangible Assets

Intangible assets are comprised of long-term representation rights and
trademarks and licenses:

(i)��Long-term Representation Rights

Long-term representation rights represent the cost of the Company's
exclusive right to represent PR's brands in Canada. These
representation rights are carried at cost, less accumulated
amortization. Amortization is provided for on a straight-line basis
over the 15-year term of the agreement, which began on October 1, 2006,
and is scheduled to expire on September 30, 2021 and recognized within
earnings from operations.

(ii)��Trademarks and licences

Trademarks and licences represent the value of trademarks and licences
of businesses acquired and are measured at cost on initial recognition.
These intangible assets are deemed to have an indefinite life and are,
therefore, not amortized. Trademarks and licences are tested for
impairment on an annual basis or more frequently if events or changes
in circumstances indicate that the assets might be impaired.

Impairment

(i)��Financial Assets

A financial asset is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired.�� A
financial asset is considered to be impaired if objective evidence
indicates that one or more events have occurred that have had a
negative effect on the estimated future cash flows of that asset.

Objective evidence that a financial asset is impaired includes, but is
not limited to, default or delinquency by a debtor, restructuring of an
amount due to the Company on terms the Company would not consider
otherwise, indicators the debtor will enter bankruptcy, or adverse
changes in the status of the debtor's economic conditions.

An impairment loss in respect of a financial asset measured at amortized
cost is calculated as the difference between its carrying amount and
the present value of the estimated future cash flows, discounted at the
original effective interest rate.

Individually significant financial assets are tested for impairment on
an individual basis.�� The remaining financial assets are assessed
collectively in groups that share similar credit risk characteristics.

All impairment losses are recognized in net earnings.

(ii)���� Non-financial assets

The carrying amount of the Company's non-financial assets are reviewed
at each reporting date to determine whether there is any indication of
impairment.�� If any such indications exist, the asset's recoverable
amount is estimated.

Intangible assets and property and equipment are subject to impairment
tests whenever there is an indication that the value of the asset has
been impaired and at least once a year for non-current assets with
indefinite useful lives (goodwill and trademarks and licences).

Assets subject to impairment tests are included in Cash-Generating Units
("CGUs"), corresponding to linked groups of assets, which generate
identifiable cash flows.�� For the purpose of impairment testing, assets
are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the
cash inflows of other assets or CGUs.�� CGUs to which goodwill has been
allocated are aggregated so that the level at which impairment testing
is performed reflects the lowest level at which goodwill is monitored
for internal reporting purposes.�� When the recoverable amount of a CGU
is less than its carrying amount, an impairment loss is recognized
within earnings from operations.�� The recoverable amount of the CGU is
the higher of its fair value less costs to sell and its value in use.

In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset or CGU. Projected cash flows are discounted
to present based on annual budgets and multi-year strategies,
extrapolated into subsequent years based on the medium and long-term
trends for each market and brand. The calculation includes a terminal
value derived by capitalizing the cash flows generated in the last
forecasted year. Assumptions applied to sales and advertising spending
are determined by management based on previous results and long-term
development trends in the markets concerned.�� The present values of
discounted cash flows are sensitive to these assumptions as well as to
consumer trends and economic factors.

Fair value is based either on the sale price, net of selling costs,
obtained under normal market conditions or earnings multiples observed
in recent transactions concerning similar assets.

Impairment losses are recognized in the statement of earnings.��
Impairment losses recognized in respect of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to the CGU and
then to reduce the carrying amounts of the other assets in the CGU on a
pro rata basis.

An impairment loss in respect of goodwill is not reversed.�� With respect
to other assets, impairment losses recognized in prior periods are
assessed at each reporting date for any indicators that the loss has
decreased or no longer exists.�� An impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable
amount.�� An impairment loss is reversed only to the extent that the
carrying amount of the assets does not exceed the carrying amount that
would have been determined, net of depreciation and amortization, if no
impairment loss had been recognized.

Provisions

Provisions are recognized when there is a present legal or constructive
obligation as a result of a past event, it is probable that an outflow
of economic benefits will be required to settle the obligation and that
obligation can be measured reliably.�� If the effect of the time value
of money is material, provisions are discounted using a current pre-tax
rate that reflects the risk specific to the liability.�� Provisions are
reviewed on a regular basis and adjusted to reflect management's best
current estimates.�� Due to the judgmental nature of these items, future
settlements may differ from amounts recognized.�� Provisions notably
include: provisions for pensions and provisions for uncertain tax
positions.

Provisions for pensions

The Company maintains registered defined benefit pension plans under
which benefits are available to certain employee groups.�� The Company
also makes supplementary retirement benefits available to certain
employees under a non-registered defined benefit pension plan.�� The
Company also provides a defined contribution plan.

(i)��Defined Benefit Plans

For defined benefit plans, the projected unit credit method is used to
measure the present value of defined benefit obligations, current
service cost and, if applicable, past service cost.�� The measurement is
made at each balance sheet date and the personnel data concerning
employees is revised at least every three years.�� The calculation
requires the use of economic assumptions (inflation rate, discount
rate, expected return on plan assets) and assumptions concerning
employees (mainly: average salary increase, rate of employee turnover,
life expectancy).�� Plan assets are measured at their market value at
each annual balance sheet date. The provision in the balance sheet
corresponds to the discounted value of the defined benefit obligation,
adjusted for unrecognized past service cost and unrecognized actuarial
gains and losses, and net of the fair value of plan assets.�� Actuarial
gains and losses mainly arise where estimates differ from actual
outcomes (for example between the expected value of plan assets and
their actual value at the balance sheet date) or when changes are made
to long-term actuarial assumptions (for example: discount rate, rate of
increase of salaries). Actuarial gains and losses are only recognized
when, for a given plan, they represent more than 10% of the greater of
the present value of the benefit obligation and the fair value of plan
assets at the end of the prior year (termed the "corridor" method).
Recognition of the provision is on a straight-line basis over the
average number of remaining years' service of the employees in the plan
in question (amortization of actuarial gains and losses).

The expense recognized in respect of the benefit obligation described
above incorporates:

expenses corresponding to the acquisition of an additional year's
rights;

interest costs;

income corresponding to the expected return on plan assets;

income or expense corresponding to the amortization of actuarial gains
and losses;

past service costs; recognized on a straight-line basis over the average
residual period until the corresponding benefits vest with employees;

income or expense related to changes to existing plans or the creation
of new plans;

income or expense related to any plan curtailments or settlements.

The expense arising from the change in net obligations for pensions and
other long-term employee benefits is recognized within earnings from
operations or within net financial income on the basis of the nature of
the underlying balances

(ii)��Defined contributions plans

Contributions are recognized as expenses when the employees have
rendered services. As the Company is not committed beyond the amount of
such contributions, no provision is recognized in respect of defined
contribution plans.

Income Taxes

Income tax expense comprises current and deferred income tax.�� Income
tax expense is recognized in net earnings except to the extent that it
relates to items recognized either in other comprehensive income or
directly in equity, in which case it is recognized in other
comprehensive income or in equity, respectively.

Current income tax expense comprises the tax payable on the taxable
income for the current financial year using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to
income taxes payable in respect of previous years.

Deferred tax is recognized on temporary differences between the tax and
book value of assets and liabilities in the consolidated balance sheet
and is measured using the balance sheet approach. Deferred tax is
measured at the tax rates that are expected to apply to temporary
differences when they reverse, using tax rates enacted or substantively
enacted at the reporting date.�� Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset the recognized
amounts and the Company intends to settle on a net basis or to realize
the asset and settle the liability simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits
and deductible temporary differences to the extent that it is probable
that future taxable earnings will be available against which they can
be utilized.�� Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that all or
part of the related tax benefit will be realized.

In determining the amount of current and deferred tax the Company takes
into account the impact of uncertain tax positions and whether
additional taxes and interest may be due.�� The Company believes that
its accruals for tax liabilities are adequate for all open tax years
based on its assessment of many factors, including interpretations of
tax law and prior experience.�� This assessment relies on estimates and
assumptions and may involve a series of judgements about future
events.�� New information may become available that causes the Company
to change its judgement regarding the adequacy of existing tax
liabilities; such changes to tax liabilities will impact tax expense in
the period that such a determination is made.

Revenue Recognition��

Revenue is comprised of case good sales, commissions and revenues from
ancillary activities and is measured at the fair value of the
consideration received or to be received, after deducting trade
discounts, volume rebates and sales-related taxes and duties. Sales are
recognized when the significant risks and rewards of ownership have
been transferred, generally at the date of transfer of ownership
title.��

(i)��Costs of services rendered in connection with sales

In accordance with IAS 18 - Revenue ("IAS 18"), certain costs of services rendered in connection with
sales, such as advertising programmes in conjunction with distributors,
listing costs for new products, and promotional activities at point of
sale, are deducted directly from sales if there is no separately
identifiable service whose fair value can be reliably measured.

(ii)��Commissions

When the Company acts in the capacity of an agent rather than as the
principal in a transaction, the revenue recognized is the net amount of
commissions made by the Company. Commissions are reported net of
long-term representation rights amortization. The long-term
representation rights represent the Company's exclusive right to
represent PR's brands in Canada and are being amortized over the
15-year term of the agreement.

(iii)��Interest

Interest income is recognized on an accrual basis using the effective
interest method. Primarily interest income is earned on deposits in
cash management pools.

Stock-Based Compensation Plans

The Company utilizes a Restricted Share Units Plan as its long-term
incentive plan. Through this plan, restricted share units ("RSUs") will
be granted to certain officers and employees at a grant price equal to
the market closing price of the Company's Voting Class A Common Shares
on the last day prior to grant. RSUs vest at the end of a three-year
term, subject to the achievement of pre-determined corporate
performance targets. The related compensation expense is recognized
over this period.

Unvested RSUs will attract dividend-equivalent units whenever dividends
are paid on the Voting Class A Common Shares of the Company and will be
immediately reinvested into additional RSUs, which will vest and become
payable at the end of the three-year vesting period, subject to the
same performance conditions as the original RSU award.�� On the date of
vesting, the holder will be entitled to the cash value of the number of
RSUs granted, plus any RSUs received from reinvested
dividend-equivalents. RSUs do not entitle participants to acquire any
rights or entitlements as a shareholder of the Company.

Earnings per Common Share

The Company presents basic and diluted earnings per share ("EPS")
amounts for its common shares.�� Basic and diluted EPS is calculated by
dividing the net earnings attributable to common shareholders of the
Company by the weighted average number of common shares outstanding
during the period. Dilutive EPS is calculated by adjusting the net
income attributable to shareholders and the weighted average number of
shares outstanding for the effect of potentially dilutive shares.��
There are no potentially dilutive shares as at June 30, 2012.

Classification of Financial Instruments

Financial instruments are classified into one of the following five
categories: fair value through profit or loss, held-to-maturity
investments, loans and receivables, available-for-sale financial
assets, or other financial liabilities. The classification determines
the accounting treatment of the instrument. The classification is
determined by the Company when the financial instrument is initially
recorded, based on the underlying purpose of the instrument.

Corby's financial assets and liabilities are classified and measured as
follows:

��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��
Financial Asset/Liability		��	��	��	��Category��	��	��Measurement��
��	��	��	��	��	��	��	��
Deposits in cash management pools			��	��	��Loans and receivables��	��	��Amortized cost��
Accounts receivable and note receivable			��	��	��Loans and receivables��	��	��Amortized cost��
Accounts payable and accrued liabilities			��	��	��Other financial liabilities��	��	��Amortized cost��

��

Financial instruments measured at amortized cost are initially
recognized at fair value plus any directly attributable transaction
costs and then, subsequently, at amortized cost using the effective
interest method, less any impairment losses, with gains and losses
recognized in earnings in the period in which the gain or loss occurs.

All financial assets are recognized and derecognized on the trade date.
A financial asset is derecognized when the contractual rights to the
cash flows from the asset expired or when the Company transferred the
financial asset to another party without retaining control or
substantially all the risks and rewards of ownership of the asset.�� Any
interest in transferred financial assets that is created or retained by
the Company is recognized as a separate asset or liability.

A financial liability is derecognized when its contractual obligations
are discharged, cancelled or expire.

Common shares issued by the Company are recorded in the amount of the
proceeds received, net of direct issues costs.

Transaction costs are added to the initial fair value of financial
assets and liabilities when those financial assets and liabilities are
not measured at fair value subsequent to initial measurement.��
Transaction costs are amortized to net earnings, in finance expense,
using the effective interest method.

Segmented Reporting

An operating segment is a component of the Company that engages in
business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of
the Company's other operations.�� Segment operating results are reviewed
regularly by the Company's CEO to make decisions about resources to be
allocated to the segment and assess its performance, and for which
discrete financial information is available.

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

(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" ("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.

(iv)��Fair Value Measurement

(v)��Employee Benefits

(vi)��Financial Instruments

4. FINANCIAL INSTRUMENTS

Corby's financial instruments consist of its deposits in cash management
pools, accounts and note receivable and accounts payable and accrued
liabilities balances. Corby does not use derivative financial
instruments.

Financial Risk Management Objectives and Policies

In the normal course of business, the Company is exposed to financial
risks that have the potential to negatively impact its financial
performance. The Company does not use derivative financial instruments
to manage these risks, as management believes that the risks arising
from the Company's financial instruments are already at an acceptably
low level. These risks are discussed in more detail below.

Credit Risk

Credit risk arises from cash held with PR via Corby's participation in
the Mirror Netting Services Agreement (further described in Note 27),
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 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 liquor boards, management
believes that the Company's credit risk relating to accounts receivable
is at an acceptably low level. With respect to Corby's deposits in PR's
cash management pools, the Company monitors PR's credit rating in the
normal course of business and has the right to terminate its
participation in the Mirror Netting Services Agreement at any time,
subject to five days' written notice. The note receivable is secured as
described in Note 8.

Liquidity Risk

Corby's sources of liquidity are its deposits in cash management pools
of $110,113 and its cash generated by operating activities. Corby's
total contractual maturities are represented by its accounts payable
and accrued liabilities balances which totaled $22,400 as at June 30,
2012, and are all due to be paid within one year. The Company believes
that its deposits in cash management pools, combined with its
historically strong and consistent operational cash flows, is more than
sufficient to fund its operations, investing activities and commitments
for the foreseeable future.

Corby does not have any investments in asset-backed commercial paper
("ABCP") and, therefore, has no exposure to this type of liquidity
risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in market
interest rates. 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 earning a fixed rate of interest.

As the note receivable earns interest at a fixed rate, there is no cash
flow exposure associated with this instrument. However, the fair value
of the note receivable will fluctuate with changes in market interest
rates.

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.

Foreign Currency 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.

GBP Exposure

The Company's supply of GBP outpaces demand, as Corby's sales into the
UK market are denominated in GBP, while having only certain production
inputs denominated in GBP. Therefore, increases in the value of the CAD
relative to the GBP will have an unfavourable impact on the Company's
earnings.

Commodity Risk

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 via pricing.

Fair Value of Financial Instruments

The Company uses a fair value hierarchy in order to classify the fair
value disclosures related to the Company's financial assets and
financial liabilities recognized in the balance sheets at fair value.

The fair value hierarchy has the following levels:

Level 1 - Quoted market prices in active markets for identical assets or
liabilities;

Level 2 - Inputs other than quoted market prices included in Level 1
that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices); and

Level 3 - Unobservable inputs such as inputs for the asset or liability
that are not based on observable market data.

The level in the fair value hierarchy within which the fair value
measurement is categorized in its entirety is determined on the basis
of the lowest level input that is significant to the fair value
measurement in its entirety.

The Company has no financial instruments carried at fair value on its
balance sheet. For financial assets and liabilities that are valued at
other than fair value on its balance sheets (i.e., deposits in cash
management pools, accounts receivable, accounts payable and accrued
liabilities), fair value approximates their carrying value at each
balance sheet date due to their short-term maturities.

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

5. CAPITAL MANAGEMENT

The Company's objectives when managing capital are:

To ensure sufficient capital exists to allow management the flexibility
to execute its strategic plans; and

To ensure shareholders receive a reasonable return on their investment
in the form of quarterly dividends.

Management includes the following items in its definition of capital:

��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	June 30,	��	June 30,	��	July 1,
��	��	��	��	��	��	��2012��	��	��2011��	��	��2010��
��	��	��	��	��	��	��	��	��	��	��
Share capital		��	��	��	��$	14,304	��$	14,304	��$	14,304
Retained earnings		��	��	��	��	201,519	��	224,935	��	212,009
��	��	��	��	��	��	��	��	��	��	��
Net capital under management		��	��	��	��$	215,823	��$	239,239	��$	226,313

��

The Company is not subject to any externally imposed capital
requirements.

Beginning in fiscal 2013, the Company's dividend policy stipulates that,
barring any unanticipated developments, regular dividends will be paid
quarterly, on the basis of an annual amount equal to the greater of 75%
of net earnings per share in the preceding fiscal year ended June 30,
and $0.60 per share.

The Company is meeting all of its objectives and stated policies with
respect to its management of capital.

6. ACCOUNTS RECEIVABLE

��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	June 30,	��	June 30,	��	July 1,
��	��	��	��	��	��	��2012��	��	��2011��	��	��2010��
��	��	��	��	��	��	��	��	��	��	��
Trade receivables		��	��	��	��$	19,722	��$	21,398	��$	22,144
Due from related parties		��	��	��	��	8,852	��	8,216	��	6,196
Other receivables		��	��	��	��	37	��	1,391	��	-
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��$	28,611	��$	31,005	��$	28,340

��

As at June 30, 2011, other receivables included amounts owing from Brick
Brewing Co., Limited for inventory transferred as part of the sale of
the Seagram Coolers brand, and also includes interest accrued on the
secured promissory note receivable also due from Brick Brewing Co.,
Limited as described in Note 8 of these financial statements. The
amount owing from Brick related to inventory was paid in full during
the year ended June 30, 2012.

7. INVENTORIES

��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	June 30,	��	June 30,	��	July 1,
��	��	��	��	��	��	��2012��	��	��2011��	��	��2010��
��	��	��	��	��	��	��	��	��	��	��
Raw materials		��	��	��	��$	1,597	��$	5,429	��$	6,390
Work-in-progress		��	��	��	��	40,703	��	45,079	��	43,990
Finished goods		��	��	��	��	5,460	��	9,146	��	10,122
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��$	47,760	��$	59,654	��$	60,502

��

The cost of inventory recognized as an expense and included in cost of
goods sold during the year ended June��30, 2012 was $50,373 (2011 -
$60,010). During the current and prior year, there were no significant
write-downs of inventory as a result of net realizable value being
lower than cost, and no inventory write-downs recognized in previous
years were reversed.

8. NOTE RECEIVABLE

��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	June 30,	��	June 30,	��	July 1,
��	��	��	��	��	��	��2012��	��	��2011��	��	��2010��
��	��	��	��	��	��	��	��	��	��	��
Note receivable		��	��	��	��$	1,800	��$	2,400	��$	-
Less: current portion		��	��	��	��	600	��	600	��	-
��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��$	1,200	��$	1,800	��$	-

��

As part of the Company's sale of the Seagram Coolers brand on March 15,
2011, the purchase price was satisfied in part by a promissory note
secured by specific property and issued by the purchaser in favour of
Corby for $2,400, which will be paid in equal annual instalments of
$600 plus interest of 5% per annum, with the final payment due January
31, 2015.�� The disposal transaction is further described in Note 19 to
these consolidated financial statements.

9. PROPERTY AND EQUIPMENT

��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	July 1,	��	��	��	��	��	��	��	��June 30,��
��	��	��	2011	��	Additions��	��	��Depreciation��	��	Disposals��	��	��2012��
��	��	��	��	��	��	��	��	��	��	��	��
Land	��	��$	638	��$	-	��$	-	��$	(638)	��$	-
Buildings		��	8,125	��	39	��	-	��	(7,268)	��	896
Machinery and equipment		��	14,395	��	792	��	-	��	(10,591)	��	4,596
Casks		��	6,122	��	799	��	-	��	(222)	��	6,699
Other��		��	455	��	18	��	-	��	(273)	��	200
Gross value		��	29,735	��	1,648	��	-	��	(18,992)	��	12,391
��	��	��	��	��	��	��	��	��	��	��	��
Land	��	��	-	��	-	��	-	��	-	��	-
Buildings		��	(5,106)	��	-	��	(130)	��	4,912	��	(324)
Machinery and equipment		��	(7,049)	��	-	��	(516)	��	5,332	��	(2,233)
Casks		��	(1,752)	��	-	��	(478)	��	69	��	(2,161)
Other		��	(182)	��	-	��	(33)	��	66	��	(149)
Accum.�� depreciation		��	(14,089)	��	-	��	(1,157)	��	10,379	��	(4,867)
��	��	��	��	��	��	��	��	��	��	��	��
Property, plant and equipment		��$	15,646	��$	1,648	��$	(1,157)	��$	(8,613)	��$	7,524
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��	��	��
��	��	��	July 1,	��	��	��	��	��	��	��	��June 30,��
��	��	��	2010	��	Additions��	��	��Depreciation��	��	Disposals��	��	��2011��
��	��	��	��	��	��	��	��	��	��	��	��
Land	��	��$	638	��$	-	��$	-	��$	-	��$	638
Buildings		��	7,931	��	194	��	-	��	-	��	8,125
Machinery and equipment		��	13,954	��	1,359	��	-	��	(918)	��	14,395
Casks		��	5,387	��	735	��	-	��	-	��	6,122
Other��		��	538	��	-	��	-	��	(83)	��	455
Gross value		��	28,448	��	2,288	��	-	��	(1,001)	��	29,735
��	��	��	��	��	��	��	��	��	��	��	��
Land	��	��	-	��	-	��	-	��	-	��	-
Buildings		��	(4,864)	��	-	��	(242)	��	-	��	(5,106)
Machinery and equipment		��	(6,765)	��	-	��	(992)	��	708	��	(7,049)
Casks		��	(1,331)	��	-	��	(421)	��	-	��	(1,752)
Other		��	(250)	��	-	��	(38)	��	106	��	(182)
Accum.�� depreciation		��	(13,210)	��	-	��	(1,693)	��	814	��	(14,089)
��	��	��	��	��	��	��	��	��	��	��	��
Property, plant and equipment		��$	15,238	��$	2,288	��$	(1,693)	��$	(187)	��$	15,646

��

10. GOODWILL

Changes in the carrying amount of goodwill are as follows:

��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	��	��2012��	��	��2011��
��	��	��	��	��	��	��	��	��	��
Balance, beginning of year		��	��	��	��	��$	5,886	��$	6,857
Decreases in goodwill		��	��	��	��	��	(2,608)	��	(971)
��	��	��	��	��	��	��	��	��	��
Balance, end of year		��	��	��	��	��$	3,278	��$	5,886

��

The decrease in goodwill recognized in fiscal 2012 was the result of the
sale of certain brands included with the disposal of the Montreal
manufacturing facility and non-core brands as described in Note 19 of
these financial statements. In 2011, the decrease relates to the sale
of Seagram Coolers, also described in Note 19. There have been no
impairment losses recognized with respect to Goodwill during 2012 (2011
-$nil).

11. INTANGIBLE ASSETS

��

��2012

��

Movements in the Year

��

��Opening

��

��Ending

��

��Book Value

��

Amortization

��

Impairments

��

��Disposals

��

��Book Value

��

Long-term representation rights

��

46,501

��

(4,531)

��

41,970

Trademarks and licenses

��

11,801

��

11,801

��

58,302

��

(4,531)

��

53,771

��

��2011

��

Movements in the Year

��

��Opening

��

��Ending

��

��Book Value

��

Amortization

��

��Impairments

��

Disposals

��

Book Value

��

Long-term representation rights

��

51,032

��

(4,531)

��

46,501

Trademarks and licenses

��

19,539

��

(7,738)

��

11,801

��

70,571

��

(4,531)

��

(7,738)

��

58,302

��

Disposals in fiscal 2011 reflect the Company's decision to sell the
trademark and licenses associated with Seagram Coolers, as described in
Note 19 of these financial statements. �� There have been no impairment
losses recognized with respect to intangible assets during 2012 (2011-
$nil).

12. IMPAIRMENT

In accordance with the Company's accounting policies, the Company tests
goodwill and indefinite-lived intangibles (trademarks and licences) for
impairment on an annual basis.�� The carrying value of goodwill and
indefinite-lived intangibles at June 30, 2012, along with the data and
assumptions applied to the Cash Generating Units ("CGUs") of the Case
Goods Segment are as follows:

��

��Carrying

��

��Carrying

��

��Value

��

Terminal

��

��Value

��

Trademarks

��

��Discount

��

��Growth

��

��Goodwill

��

��& Licences

��

��Rate

��

��Rate

��

Case Goods Segment

��

3,278

��

11,801

��

7.8% to 11.5%

��

2% to 3%

��

The Company's commissions segment has no goodwill or indefinite lived
intangibles.

For purposes of impairment testing, goodwill and intangibles with an
indefinite life (trademarks and licences) were allocated to the group
of CGUs which represent the lowest level within the group at which the
goodwill is monitored for internal management purposes.

During the financial year ended June 30, 2012, the Company performed
impairment testing on goodwill and indefinite-lived intangible assets
in accordance with its accounting policy and identified no impairment.

The discount rate used for these calculations is a pre-tax rate which
corresponds to the weighted average cost of capital. Different discount
rates were used to allow for risks specific to certain markets or
geographical areas in calculating cash flows. Assumptions made in terms
of future changes in sales and of terminal values are reasonable and in
accordance with market data available for each of the CGUs.�� Additional
impairment tests are applied where events or specific circumstances
suggest that a potential impairment exists.

A 50 basis points ("bp") increase in the discount rates would result in
no impairment to goodwill or the indefinite-lived intangibles. A 50bp
decrease in the terminal growth rate would result in no impairment to
goodwill or indefinite-lived intangibles.

13. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

��

June 30,

��

June 30,

��

July 1,

��

��2012

��

��2011

��

��2010

��

Trade payables and accruals

��

16,584

��

13,375

��

12,554

Due to related parties

��

5,816

��

6,117

��

5,731

��

22,400

��

19,492

��

18,285

��

14. PROVISIONS

Provisions include the provisions for uncertain tax risks and pensions
and other long-term employee benefits.�� See Note 15 for details of
changes in provision for pensions for the year ended June 30, 2011.��
Provision for uncertain tax risk is included in "Income and other taxes
payable," in the amount of $1,000 at June 30, 2012 (at June 30, 2011
and July 1, 2010 - $1,000).�� There was no activity in this balance
during the course of the year.

15. PROVISION FOR PENSIONS

The Company has two defined benefit pension plans for executives and
salaried employees, two supplementary executive retirement plans for
retired and current senior executives of the Company, and a
post-retirement benefit plan covering retiree life insurance, health
care and dental care. Benefits under these plans are based on years of
service and compensation levels. The latest valuations completed for
these plans are dated December��31, 2010. The next required valuations
must be completed with an effective date no later than December 31,
2013.

Employees hired after July 1, 2010 are no longer offered enrolment into
the Company's defined benefit pension plans. Instead, the Company
provides these employees a defined contribution pension plan.�� To
become eligible, most employees must first accrue one year of service
before joining the new plan. For the year ended June 30, 2012, the
Company recognized contributions of $63 as expense (2011 - $nil as the
plan had no active participants at June 30, 2011).

Details of the Company's defined benefit pension and other
post-retirement benefit plans as at and for the years ended June 30,
2012 and 2011 are as follows:

��

2012

��

2011

��

Pension

Other Benefit

��

Pension

��

Other Benefit

��

Plans

��

Plans

��

Plans

��

Fair value of plan assets

��

Fair value of plan assets, beginning of year

��

��$

46,380

��$

��

��$

43,478

��$

��

Expected return on plan assets

��

2,336

��

2,140

��

Actuarial (loss) /gain on plan assets

��

(1,795)

��

1,484

��

Company contributions

��

1,637

��

2,920

��

Plan participants' contributions

��

205

��

221

��

Settlement

��

(2,495)

��

Benefits paid

��

(2,798)

��

(3,863)

��

Fair value of plan assets, end of year

��

��$

43,470

��$

��

��$

46,380

��$

��

Present value of defined benefit obligation

��

Defined benefit obligation, beginning of year

��

��$

48,279

��$

11,613

��

��$

46,226

��$

13,490

��

Current service cost

��

1,534

��

286

��

1,380

��

341

��

Interest cost

��

2,358

��

532

��

2,441

��

604

��

Curtailment

��

(1,231)

��

(1,525)

��

Settlement

��

(2,435)

��

Plan participants' contributions

��

205

��

221

��

Actuarial loss (gain)

��

7,968

��

239

��

1,927

��

(2,131)

��

Benefits paid

��

(2,848)

��

(668)

��

(3,916)

��

(691)

Present value of the defined benefit obligations, end of year

��$

53,830

��$

10,477

��

��$

48,279

��$

11,613

Present value of funded status

��

10,360

��

10,477

��

1,899

��

11,613

��

Unrecognized actuarial (losses) / gains��

��

(11,399)

��

(2,321)

��

173

��

Unrecognized past service costs

��

1,054

��

1,306

��

Net defined benefit (asset) / liability

��

��$

(1,039)

��$

11,589

��

��$

(422)

��$

13,092

��

Only the Company's pension plans are partially funded.�� For the fiscal
year ending June 30, 2013 total Company contributions to the pension
plans is expected to be $1,693.

The table below presents a roll-forward of the net defined benefit
liability:

��

2012

��

2011

��

Defined benefit liability��

��

Net defined benefit liability, beginning of year

��

12,670

��

14,175

�� Expenses for the period

��

2,407

��

2,160

�� Curtailment and settlement

��

(2,168)

��

�� Employer contributions

��

(1,637)

��

(2,920)

�� Benefits paid directly by the employer

��

(722)

��

(745)

��

Net defined benefit liability, end of year

��

10,550

��

12,670

��

The curtailment and settlement was recognized as part of the sale of the
Montreal manufacturing facility as described in Note 19 of these
financial statements and included in earnings from operations under
"Disposal Transactions."

Significant actuarial assumptions adopted for the year ended June 30,
2012 and 2011 are as follows:

��

2012

��

2011

��

Pension

��

Other Benefit

��

Pension

��

Other Benefit

��

Plans

��

Plans

��

Plans

��

Plans

��

Accrued benefit obligation, end of year

��

Discount rate

��

4.2%

��

4.2%

��

5.5%

��

5.5%

Compensation increase

��

3.0 - 3.5%

��

N/A

��

3.5%

��

N/A

Benefit expense, for the year

��

Discount rate

��

5.2%

��

5.2%

��

5.2%

��

5.2%

Expected long term return on assets

��

3.5 - 6.5%

��

N/A

��

6.3%

��

N/A

Compensation increase

��

3.5 - 4.0%

��

N/A

��

3.5%

��

N/A

��

The medical cost trend rate used was 8.0% for 2012 (2011 - 9%), with
5.0% being the ultimate trend rate for 2014 and years thereafter. The
dental cost trend rate used was 5.0% for 2012 (2011 - 5.0%).

The experience adjustments are as follows:

��

2012

��

2011

��

Pension

��

Other Benefit

��

Pension

��

Other Benefit

��

Plans

��

Plans

��

Plans

��

Plans

��

Asset experience adjustments

��

Asset (loss)/gain during the year

��

��$

(1,795)

��$

��

��$

1,484

��$

Liability experience adjustments

��

Liability (loss)/gain during the year

��

��$

(845)

��$

(1,336)

��

��$

127

��$

766

Liability assumptions

��

Liability (loss)/gain during the year

��

��$

(7,124)

��$

1,097

��

��$

(2,054)

��$

(2,897)

��

The expected long-term rate of return on plan assets is determined based
on asset mix, active management and a review of historical returns.��
The expected long-term rate of return is based on the portfolio as a
whole and not on the sum of the individual asset categories. The actual
return on plan assets for 2012 was 6.46%.

Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. A one-percentage-point
change in assumed health care cost trend rates would have the following
effects:

��

2012

��

2011

��

Increase

��

Decrease

��

Increase

��

Decrease

��

Service and interest cost

��

155

��

(121)

��

155

��

(121)

Accrued benefit obligation

��

1,197

��

(964)

��

1,451

��

(1,189)

��

The net expense (income) recognized in profit and loss in respect of
defined benefit pensions and other long-term employee benefits are
broken down as follows:

��

2012

��

2011

��

Net defined benefit pension expense recognized in profit and loss for
the year

��

Service cost

��

1,820

��

1,721

Interest costs��

��

2,890

��

3,045

Expected return on plan assets

��

(2,336)

��

(2,140)

Amortization of past service cost

��

(103)

��

(529)

Amortization of actuarial losses

��

136

��

Net expense recognized in profit and loss

��

2,407

��

2,160

��

Plan assets by category were as follows:

��

2012

��

2011

��

Equity

��

48.0%

��

52.0%

Fixed income

��

42.0%

��

37.0%

Other

��

10.0%

��

11.0%

��

100.0%

��

100.0%

��

16. INCOME TAXES

��

��2012

��

��2011

Current income tax expense

��

Current period

��

13,101

��

12,328

Adjustments with respect to prior period tax estimates

��

(186)

��

(62)

��

12,915

��

12,266

��

Deferred income tax expense

��

Origination and reversal of temporary differences

��

723

��

991

Change in tax rate

��

(73)

��

Impact of disposal transactions

��

449

��

(1,158)

Adjustments with respect to prior period tax estimates

��

140

��

(133)

��

1,239

��

(297)

��

Total income tax expense

��

14,154

��

11,969

��

There are no capital loss carry-forwards available for tax purposes.

The Company's effective tax rates are comprised of the following items:

��

2012

��

2011

��

Net earnings for the financial year

��

46,048

��

28,870

��

Total income tax expense

��

14,154

��

11,969

��

Earnings before income tax expense

��

60,202

��

40,839

��

Income tax using the combined Federal and Provincial

��

�� statutory tax rates

��

16,465

��

27.4%

��

11,843

��

29.0%

��

Non-deductible expenses

��

145

��

0.2%

��

330

��

0.8%

Net capital gains��

��

(2,765)

��

(4.6%)

��

0.0%

Adjustments with respect to prior period tax estimates

��

(46)

��

(0.1%)

��

(195)

��

(0.5%)

Other

��

355

��

0.6%

��

(9)

��

(0.0%)

��

Effective income tax rate

��

14,154

��

23.5%

��

11,969

��

29.3%

��

Deferred tax assets (liabilities) are broken down by nature as follows:

��

��July 1,

��

Recognized in

��

��June 30,

��

��2011

��

��Earnings

��

Equity

��

��2012

Provision for pensions

��

3,476

��

(462)

��

3,014

Property, plant and equipment

��

(2,051)

��

987

��

(1,064)

Inventory

��

(581)

��

(539)

Intangibles

��

(750)

��

(1,857)

��

(2,607)

Other

��

162

��

213

��

256

��

(1,239)

��

(983)

��

��July 1,

��

Recognized in

��

��June 30,

��

��2010

��

��Earnings

��

��Equity

��

��2011

Provision for pensions

��

3,895

��

(419)

��

3,476

Property, plant and equipment

��

(1,772)

��

(279)

��

(2,051)

Inventory

��

(681)

��

100

��

(581)

Intangibles

��

(1,618)

��

868

��

(750)

Other

��

135

��

162

��

(41)

��

297

��

256

��

17. SHARE CAPITAL

��

June 30,

��

June 30,

��

July 1,

��

��2012

��

��2011

��

��2010

��

Number of shares authorized:

��

Voting Class A Common Shares - no par value

��

��Unlimited

��

��Unlimited

��

��Unlimited

��

Non-voting Class B Common Shares - no par value

��

��Unlimited

��

��Unlimited

��

��Unlimited

��

Number of shares issued and fully paid:

��

Voting Class A Common Shares

��

24,274,320

��

24,274,320

��

24,274,320

��

Non-voting Class B Common Shares

��

4,194,536

��

4,194,536

��

4,194,536

��

28,468,856

��

28,468,856

��

28,468,856

��

Stated value

��

14,304

��

14,304

��

14,304

��

18. REVENUE

The Company's revenue consists of the following streams:

��

��2012

��

��2011

��

Case good sales

��

110,857

��

118,381

Commissions (net of amortization of representation rights)

��

16,314

��

15,246

Other services

��

19,575

��

25,939

��

146,746

��

159,566

��

Commissions for the year are shown net of the long-term representation
rights amortization of $4,531, (2011 - $4,531). Other services include
revenues incidental to the manufacture of case goods, such as contract
bottling revenues, logistics fees and miscellaneous bulk spirit sales.

19. 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 year ended
��	��	��	��	��	��	June 30, 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 and settlement 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

��

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

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 year ended June
30, 2011, as follows:

��	��	��	��	��	��	��	��	��	��
��	��	��	��	��	��	For the year ended
��	��	��	��	��	��	June 30, 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)

��

20. OTHER INCOME AND EXPENSE

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

��

��2012

��

��2011

��

Foreign exchange gains (losses)

��

(115)

Gains (losses) on disposal of property and equipment

��

175

��

(52)

Amortization of actuarial (losses) gains under defined benefit plans

��

(34)

��

466

��

202

��

299

��

21. NET FINANCIAL INCOME

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

��

��2012

��

2011

��

Interest income

��

1,963

��

1,308

Interest expense

��

(58)

��

(20)

Net financial impact of pensions

��

(554)

��

(905)

��

1,351

��

383

��

22. EXPENSES BY NATURE

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

��

��2012

��

��2011

��

Depreciation of property and equipment

��

1,157

��

1,693

Amortization of intangible assets

��

4,531

��

4,531

Salary and payroll costs

��

21,689

��

23,083

Expenses related to pensions and benefits

��

1,852

��

1,721

��

29,229

��

31,028

��

23. RESTRICTED SHARE UNITS PLAN

��

��2012

��

��2011

��

��Weighted

��

��Weighted

��

��Restricted

��

��Average

��

��Restricted

��

��Average

��

��Share

��

��Grant Date

��

��Share

��

��Grant Date

��

��Units

��

Fair Value

��

��Units

��

��Fair Value

��

Non-vested, beginning of year

��

53,768

��

17.17

��

57,414

��

21.73

��

Granted

��

23,012

��

15.89

��

24,474

��

15.10

��

Reinvested dividend equivalent units

��

7,412

��

16.42

��

2,044

��

16.07

��

Vested

��

(28,434)

��

19.38

��

(30,164)

��

24.09

��

Non-vested, end of year

��

55,758

��

15.42

��

53,768

��

17.17

��

Compensation expense related to this plan for the year ended June 30,
2012, was $332 (2011 - $292).

24. EARNINGS PER SHARE

The following table sets forth the numerator and denominator utilized in
the computation of basic and diluted earnings per share:

��

��2012

��

��2011

��

Numerator:

��

Net earnings

��

46,048

��

28,870

Denominator:

��

Weighted average shares outstanding

��

28,468,856

��

28,468,856

��

25. NET CHANGE IN NON-CASH WORKING CAPITAL BALANCES

��

��2012

��

��2011

��

Accounts receivable

��

2,394

��

(2,665)

Inventories

��

5,677

��

555

Prepaid expenses

��

1,176

��

(180)

Income tax and other taxes recoverable / payable

��

(627)

��

455

Accounts payable and accrued liabilities

��

4,993

��

878

��

13,613

��

(957)

��

26. DIVIDENDS

On August 29, 2012 subsequent to the year ended June 30, 2012, the Board
of Directors declared its regular quarterly dividend of $0.15 per
common share, to be paid on September 15, 2012, to shareholders of
record as at the close of business on September 30, 2012. This dividend
is in accordance with the Company's dividend policy.

27. 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.

Related party transactions are recorded at the exchange amount.
Transactions between Corby and its parent, ultimate parent and
affiliates during the period are as follows:

��

��2012

��

��2011

��

Sales to related parties

��

Commissions - parent, ultimate parent and affiliated companies

��

17,680

��

16,650

Blending and bottling services - parent

��

217

��

227

Products for resale at an export level - affiliated companies

��

450

��

393

Bulk spirits - parent

��

174

��

18,521

��

17,270

��

Cost of goods sold, purchased from related parties

��

Distilling, blending, and production services - parent��

��

18,562

��

20,371

Bulk spirits - parent

��

700

��

1,807

��

19,262

��

22,178

��

Administrative services purchased from related parties

��

Marketing, selling and administraton services- parent

��

2,044

��

2,118

��

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

Corby has a number of defined benefit pension plans; for the year ending
June 30, 2012, contributions to these plans totaled $1,637, (2011 -
$2,920), respectively.

During the year ending June 30, 2012, Corby sold casks to its parent
company for net proceeds of $277 (2011 - $nil).

Deposits in cash management pools

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

As a result of Corby's participation in this agreement, Corby's credit
risk associated with its deposits in cash management pools is
contingent upon PR's credit rating. PR's credit rating as at August 28,
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 year ending June 30, 2012, Corby earned interest
income of $1,759 from PR (2011 - $1,250). Corby has the right to
terminate its participation in the Mirror Netting Services Agreement at
any time, subject to five days' written notice.

Key management personnel

Key management personnel are those individuals having authority and
responsibility for planning, directing and controlling the activities
of the Company, including members of the Company's Board of Directors.��
The Company considers key management to be the members of the Board of
Directors and the Senior Management Team (which includes the CEO, CFO,
and Vice Presidents).

Key management personnel also participate in the company's RSU plan.

Key management personnel compensation is comprised of:

��

��2012

��

��2011

��

Wages, salaries and short term employee benefits

��

4,054

��

3,470

Other long term benefits

��

344

��

329

Share-based payment transactions

��

363

��

403

��

4,761

��

4,202

��

Certain members of the board and key management personnel are provided
benefits and or salary and wages through the parent company or the
ultimate parent company in addition to the amounts reported above.

28. 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 18 of these consolidated statements. Therefore, a
chart detailing operational results by segment has not been provided as
no additional meaningful information would result.

Geographic information regarding the Company is as follows:

��

2012

��

United States

��

United

��

��Rest of

��

Canada

��

of America

��

Kingdom

��

��World

��

��Total

��

Revenue

��

137,438

��

4,555

��

4,291

��

462

��

146,746

Property, equipment and goodwill

��

9,392

��

1,410

��

10,802

��

2011

��

United States

��

United

��

��Rest of

��

Canada

��

of America

��

Kingdom

��

��World

��

��Total

��

Revenue

��

149,549

��

5,862

��

3,712

��

443

��

159,566

Property, equipment and goodwill

��

20,122

��

1,410

��

21,532

��

In 2012, revenue to three major customers accounted for 32%, 17% and
14%, respectively (2011 - 29%, 15%, and 14%).

29. COMMITMENTS

Future minimum payments under operating leases for premises and
equipment for the next five years and thereafter are as follows:

��

2013

��

1,804

2014

��

1,588

2015

��

1,300

2016

��

899

2017

��

705

Thereafter

��

775

��

7,071

��

Total lease payments of $2,312 (2011 - $2,056) have been recognized as
an expense in cost of sales and marketing, sales and administration.

30. GUARANTEES

The Company may enter into agreements that may contain features that
meet the definition of a guarantee. A guarantee is defined to be a
contract (including an indemnity) that contingently requires the
Company to make payments to the guaranteed party in certain situations.

In the ordinary course of business, the Company provides indemnification
commitments to counter-parties in transactions such as leasing and
service arrangements. These indemnification agreements require the
Company to compensate the counter-parties for certain amounts and costs
incurred as a result of litigation claims. The terms of the
indemnification agreements will vary based on the contract and do not
provide any limit on the maximum potential liability.

31. CONTINGENCIES

The Company is contingently liable with respect to pending litigation
and claims arising in the normal course of business. Although the
ultimate outcome of these matters is not presently determinable, at
this point in time, management believes that the resolution of all such
pending matters will not have a material adverse effect on the
Company's financial position or results of operations.

32. EXPLANATION OF TRANSITION TO IFRS

As stated in Note 2, these are the Company's first consolidated
financial statements prepared in accordance with IFRS.�� 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 accounting policies set out in Note 3 to these consolidated
financial statements have been applied in preparing the financial
statements for the year ended June 30, 2012, the comparative
information presented in these financial statements for the financial
year ended June 30, 2011 and in the preparation of an opening IFRS
balance sheet at July 1, 2010 (the Company's date of transition).

In preparing its opening IFRS balance sheet, the Company has adjusted
amounts reported previously in financial statements prepared in
accordance with previous GAAP based on IFRS 1 - First-time Adoption of
International Financial Reporting Standards ("IFRS 1"), elections and
exception and IFRS policy choices. An explanation of how the transition
from previous GAAP to IFRS has affected the Company's financial
performance and financial position 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 balance sheets, 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 year ended
June 30, 2011

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

��

Presentation

��

adjustments from

��

previous GAAP

��

Employee

��

Note

��

Previous GAAP

��

to IFRS

��

benefits

��

IFRS

��

Revenue

��

��c)

��

158,790

��

776

��

159,566

��

Cost of sales

��

��c)

��

(71,336)

��

795

��

(70,541)

Marketing, sales and administration

��

��b) i); c)

��

(45,764)

��

(3,264)

��

2,393

��

(46,635)

Amortization and depreciation

��

��c)

��

(1,693)

��

1,693

��

Disposal transactions

��

��c)

��

(2,233)

��

(2,233)

Other income and expenses

��

��b) i); c)

��

(167)

��

466

��

299

��

Earnings from operations

��

39,997

��

(2,400)

��

2,859

��

40,456

��

Financial income

��

��c)

��

1,308

��

1,308

Financial expenses

��

��b) i); c)

��

(20)

��

(905)

��

(925)

Loss on sale of Seagram Coolers

��

��c)

��

(2,233)

��

2,233

��

Interest income

��

��c)

��

1,288

��

(1,288)

��

Foreign exchange loss

��

��c)

��

(115)

��

115

��

Loss on disposal of property, plant

��

�� and equipment

��

��c)

��

(52)

��

Net financial income

��

(1,112)

��

2,400

��

(905)

��

383

��

Earnings before income taxes

��

38,885

��

1,954

��

40,839

��

Current income taxes

��

(12,266)

��

(12,266)

Deferred income taxes

��

804

��

(507)

��

297

Income taxes

��

(11,462)

��

(507)

��

(11,969)

��

Net earnings

��

27,423

��

1,447

��

28,870

��

Basic earnings per share

��

0.96

��

1.01

Diluted earnings per share

��

0.96

��

1.01

��

Reconciliation of Consolidated Comprehensive Income for the period ended
June 30, 2011 ��

(in thousands of Canadian dollars) ��

��

Effect of

��

transition to

��

Previous GAAP

��

IFRS

��

IFRS

��

NET EARNINGS

��

27,423

��

1,447

��

28,870

OTHER COMPREHENSIVE INCOME

��

COMPREHENSIVE INCOME

��

27,423

��

1,447

��

28,870

��

Reconciliation of Consolidated Balance Sheet as at June 30, 2011

(in thousands of Canadian dollars)

��

��Presentation

��

adjustments from

��

previous GAAP

��

��Employee

��

Notes

��

GAAP

��

to IFRS

��

��benefits

��

IFRS

��

ASSETS

��

Deposits in cash management pools

��

96,636

��

96,636

Accounts receivable

��

31,005

��

31,005

Inventories

��

59,654

��

59,654

Prepaid expenses

��

1,731

��

1,731

Current portion of note receivable

��

600

��

600

Deferred income taxes

��

161

��

(161)

��

Total current assets

��

189,787

��

(161)

��

189,626

Note receivable

��

1,800

��

1,800

Deferred income taxes

��

b) i), c)

��

256

��

256

Property and equipment

��

15,646

��

15,646

Provision for pensions

��

b) i)

��

12,516

��

(12,516)

��

Goodwill

��

5,886

��

5,886

Intangible assets

��

58,302

��

58,302

��

Total assets

��

283,937

��

(12,516)

��

271,516

��

LIABILITIES

��

Accounts payable and accrued liabilities

��

19,492

��

19,492

Income and other taxes payable

��

115

��

115

��

Total current liabilities

��

19,607

��

19,607

Provision for pensions

��

b) i)

��

7,421

��

5,249

��

12,670

Deferred income taxes

��

b) i); c)

��

4,468

��

(4,563)

��

Total liabilities

��

31,496

��

686

��

32,277

��

Shareholders' equity

��

Share capital

��

14,304

��

14,304

Retained earnings

��

b) i)

��

238,137

��

(13,202)

��

224,935

��

Total shareholders' equity

��

252,441

��

(13,202)

��

239,239

��

Total liabilities and shareholders' equity

��

283,937

��

(12,516)

��

271,516

��

Reconciliation of Consolidated Shareholders' Equity as at June 30, 2011 ��

(in thousands of Canadian dollars) ��

��

Effect of

��

transition to

��

Note

��

GAAP

��

IFRS

��

IFRS

��

Share capital

��

14,304

��

14,304

Accumulated other comprehensive income

��

Retained earnings

��

��b) i)

��

238,137

��

(13,202)

��

224,935

��

Total shareholder's equity

��

252,441

��

(13,202)

��

239,239

��

Reconciliation of Consolidated Balance Sheet as at July 1, 2010

(in thousands of Canadian dollars) ��

��

Presentation

��

adjustments from

��

previous GAAP

��

Employee

��

Notes

��

GAAP

��

to IFRS

��

benefits

��

IFRS

��

ASSETS

��

Deposits in cash management pools

��

74,685

��

74,685

Accounts receivable

��

28,340

��

28,340

Income and other taxes recoverable

��

1,070

��

1,070

Inventories

��

60,502

��

60,502

Prepaid expenses

��

1,551

��

1,551

Deferred income taxes

��

135

��

(135)

��

Total current assets

��

166,283

��

(135)

��

166,148

Property and equipment

��

15,238

��

15,238

Provision for pensions

��

b) i)

��

12,292

��

(12,292)

��

Goodwill

��

6,857

��

6,857

Intangible assets

��

70,571

��

70,571

��

Total assets

��

271,241

��

(135)

��

(12,292)

��

258,814

��

LIABILITIES

��

Accounts payable and accrued liabilities

��

18,285

��

18,285

��

Total current liabilities

��

18,285

��

18,285

Provision for pensions

��

��b) i)��

��

6,748

��

7,427

��

14,175

Deferred income taxes

��

b) i); c)

��

5,246

��

(135)

��

(5,070)

��

Total liabilities

��

30,279

��

(135)

��

2,357

��

32,501

��

Shareholders' equity

��

Share capital

��

14,304

��

14,304

Retained earnings

��

b) i)

��

226,658

��

(14,649)

��

212,009

��

Total shareholders' equity

��

240,962

��

(14,649)

��

226,313

��

Total liabilities and shareholders' equity

��

271,241

��

(135)

��

(12,292)

��

258,814

��

Reconciliation of Consolidated Shareholders' Equity as at July 1, 2010 ��

(in thousands of Canadian dollars) ��

��

Effect of

��

transition to

��

Note

��

GAAP

��

IFRS

��

IFRS

��

Share capital

��

14,304

��

14,304

Accumulated other comprehensive income

��

Retained earnings

��

��b) i)

��

226,658

��

(14,649)

��

212,009

��

Total shareholder's equity

��

240,962

��

(14,649)

��

226,313

��

Notes to Reconciliations

(a)��Elections under IFRS 1

IFRS 1 provides a protocol for converting a set of financial statements
from another basis of preparation.�� IFRS 1 generally requires that a
first-time adopter apply IFRS accounting principles retrospectively to
all periods presented in its first IFRS financial statements.�� However,
IFRS 1 also provides certain mandatory and optional exemptions to
alleviate the complication of full retrospective application.

In addition to this, IFRS 1 permits a subsidiary that becomes a
first-time adopter later than its parent to elect 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 PR, the Company's ultimate parent, adopted IFRS on
July 1, 2004 the Company has chosen this option under IFRS 1.�� This
decision impacts the optional exemptions available to the Company on
transition.�� The following accounting policies have been impacted by
the transition to IFRS and the adoption of the parent company's
measurement basis:

(i)��Business Combinations

Certain of the Company's business combinations are outside of the option
discussed above, which allows the Company to adopt the parent company's
measurement basis, as certain business combinations are subject to
adjustments by the parent company for consolidation procedures and for
the effects of the business combination in which the parent company
acquired Corby.�� Therefore, the IFRS 1 optional elections related to
business combinations are applicable to Corby.

IFRS 1 permits a first-time adopter to elect not to apply IFRS 3 - Business Combinations ("IFRS 3"), to business combinations that occurred prior to the date of
transition to IFRS.�� A first-time adopter can also elect to choose a
date prior to the date of transition and apply IFRS 3 to all subsequent
business combinations.�� The Company has elected to apply IFRS 3
prospectively to business combinations that occurred on or after July
1, 2010 (or "the date of transitions to IFRS").�� No change has been
made to the recognition and measurement of business combinations that
occurred prior to this date.

(ii)��Employee benefits

IFRS 1 permits a first-time adopter to account for its employee benefits
under the "corridor" approach as measured retrospectively under IFRS or
to recognize all cumulative actuarial gains and losses in retained
earnings at the date of transition to IFRS.�� Since the Company has
elected to adopt the measurement basis of its ultimate parent company,
as described above, Corby will revalue the accrued benefit assets and
liabilities related to its pension and other employee benefit defined
benefit plans to reflect the carrying values recorded by the parent
company.

Further, to comply with the parent's policies with respect to the
provision for pensions, the Company will continue to use the "corridor"
approach option under IAS 19 - Employee Benefits ("IAS 19").�� As well, to be consistent with accounting policies of the
parent, the Company will present the amount of actuarial gains and
losses recognized during the reporting period in "Other income and
expenses" as well as past service costs and the impact of plan
settlements or curtailments. Pension interest cost and expected return
on plan assets is included in "Financial expenses" on the statement of
earnings.�� All other costs related to pensions and other employee
benefits under defined benefit plans is reflected in marketing, sales
and administration expenses.

The Company has also elected to use the exemption not to disclose the
defined benefit plan surplus/deficit and experience adjustments before
the date of transition.

(iii)��Deemed Cost

IFRS 1 allows a first-time adopter to elect to measure an item of
property and equipment or intangible asset at the date of transition to
IFRS at fair value and use that fair value as deemed cost at that
date.�� As described above, the Company has elected to adopt the
measurement basis of its parent company and therefore is unable to
utilize this election.�� However, the Company has determined that
adoption of the parent company's measurement basis for property and
equipment will have no impact on the Company's financial position or
results of operations, as there are no differences between the parent
company's carrying values and accounting policies and those of the
Company.

(b)��Financial Impacts of Adopting IFRS

(i)��Employee benefits

The Company has elected under 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 will revalue 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 year
ended June 30, 2011 and the Company's financial position as at June 30,
2011 and July 1, 2010.

��

Year ended

��

June 30,

Net earnings impact

��

2011

��

Marketing, sales and administration

��

(2,393)

Other income

��

(466)

Earnings from operations

��

2,859

��

Financial expense

��

(905)

Earnings before income taxes

��

1,954

��

Income tax expense

��

507

��

Increase in net earnings

��

1,447

��

June 30,

��

July 1,

Balance sheet impact

��

2011

��

2010

��

Provision for pensions

��

(17,765)

��

(19,719)

Deferred tax liabilities

��

4,563

��

5,070

��

Decrease in retained earnings

��

(13,202)

��

(14,649)

��

(ii)��Impairment

The Company performed an impairment test under IFRS on goodwill and
intangibles as at July 1, 2010.�� No impairment was identified.

(c) 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 Air Miles were deemed to be a sales
discount and reflected on the statement of profit and loss 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.

"Functional presentation" these IFRS financial statements have been
presented by function.�� 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
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.

��

SOURCE: Corby Distilleries Limited

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

Tuesday, August 28, 2012

CDL.A - Corby Distilleries Announces Quarterly Dividend and Reports Fourth Quarter & Year End Results (CAD 0.15)

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