SECURITIES AND EXCHANGE COMMISSION

FORM 40-F



| ̈  | Registration statement pursuant to Section 12 of the Securities
              Exchange Act of 1934                 
|-- | -------------------------------------------------------------------------------------------------------------------
|or
|þ  | Annual
              report pursuant to Section 13(a) or 15(d) of the Securities
              Exchange Act of 1934

|                                                        |                                
|------------------------------------------------------- | -------------------------------
|For
              Fiscal year ended: September 30, 2007 | Commission File number: 1-14830

|                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------
|GILDAN ACTIVEWEAR INC.                                                                                                               
|(Exact name of registrant as
              specified in its charter)                                                                 
|                                                                                                                                     
|Canada                                                                                                                               
|(Province or other
              jurisdiction of incorporation or organization)                                                      
|                                                                                                                                     
|2200, 2250, 2300                                                                                                                     
|(Primary standard industrial
              classification code number, if applicable)                                                
|                                                                                                                                     
|Not Applicable                                                                                                                       
|(I.R.S. employer
              identification number, if applicable)                                                                 
|                                                                                                                                     
|725 Montée de Liesse,
              Montréal, Québec, Canada H4T 1P5, (514) 735-2023                                                 
|(Address and telephone number
              of registrant's principal executive office)                                              
|                                                                                                                                     
|Puglisi & Associates, 850
              Library Avenue, Suite 204, P.O. Box 885, Newark, Delaware 19715,
              (302) 738-6680
|(Name, address and telephone
              number of agent for service in the United States)                                         
|                                                                                                                                     
|Securities registered pursuant
              to Section 12(b) of the Act:                                                            

|                    |                                                        
|------------------- | -------------------------------------------------------
|Title of each class | Name of each exchange
              on which registered
|Common Shares       | New York Stock
              Exchange                  
|                    | Toronto Stock Exchange                                 

Securities registered or to be registered pursuant to Section
12(g) of the Act:

For annual reports, indicate by check mark the information
filed with this form:

|þ | Annual Information Form | þ | Audited Annual
              Financial Statements
|- | ----------------------- | - | -------------------------------------------------

Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period
covered by the annual report:

Common Shares: 
120,419,461

Indicate by check mark whether the registrant by filing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934 (the "Exchange Act"). If "Yes" is marked, indicate the file number assigned
to the registrant in connection with such rule.

|Yes | No
              þ
|--- | ------------------

Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.

|Yes
              þ | No
|------------------- | --

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GILDAN ACTIVEWEAR INC.

ANNUAL INFORMATION FORM

for the year ended September 30, 2007

December 19, 2007

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GILDAN ACTIVEWEAR INC.

TABLE OF CONTENTS

|                                                            |                                         | Page                           
|----------------------------------------------------------- | --------------------------------------- | -------------------------------
|1.                                                          | CORPORATE STRUCTURE                     | 1                              
|                                                            | 1.1                                     | Name, Address and Incorporation
|                                                            | 1.2                                     | Intercorporate Relationships   
|2.                                                          | GENERAL DEVELOPMENT OF THE
    BUSINESS | 2                              
|                                                            | 2.1                                     | Developments in Fiscal 2007    
|                                                            | 2.2                                     | Developments in Fiscal 2006    
|                                                            | 2.3                                     | Developments in Fiscal 2005    
|3.                                                          | DESCRIPTION OF THE BUSINESS             | 5                              
|                                                            | 3.1                                     | Business Overview              
|                                                            | 3.2                                     | Risk Factors                   
|                                                            | 3.3                                     | Employees                      
|4.                                                          | DIVIDEND POLICY                         | 12                             
|5.                                                          | CAPITAL STRUCTURE                       | 12                             
|6.                                                          | MARKET FOR SECURITIES                   | 13                             
|7.                                                          | DIRECTORS AND OFFICERS                  | 14                             
|8.                                                          | AUDIT COMMITTEE DISCLOSURE              | 17                             
|9.                                                          | LEGAL PROCEEDINGS                       | 18                             
|10.                                                         | TRANSFER AGENT AND REGISTRAR            | 18                             
|11.                                                         | MATERIAL CONTRACTS                      | 18                             
|12.                                                         | INTERESTS OF EXPERTS                    | 18                             
|13.                                                         | FORWARD - LOOKING INFORMATION           | 18                             
|14.                                                         | ADDITIONAL INFORMATION                  | 19                             
|APPENDIX A - MANDATE OF THE
    AUDIT AND FINANCE COMMITTEE | 21                                     

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This Annual Information Form is dated December 19, 2007 and,
except as otherwise indicated, the information contained herein is given as of
December 19, 2007.
Unless otherwise indicated, all dollar amounts set forth
herein are expressed in U.S. dollars and all financial information set forth
herein is prepared in accordance with Canadian generally accepted accounting
principles.
Unless otherwise indicated, all references to share prices,
trading volumes and per share measures are adjusted, on a retroactive basis, to
reflect all stock splits, including the two-for-one stock split effective in May
2007.
In this Annual Information Form, "Gildan", the "Corporation",
or the words "we", "our" and "us" refer, depending on the context, either to
Gildan Activewear Inc. or to Gildan Activewear Inc. together with its
subsidiaries and joint venture.
The information appearing in the extracts of the documents
listed below and specifically referred to in this Annual Information Form is
incorporated herein by reference:
- 2007 Annual Report;

- 2007 Notice of Annual Meeting of
Shareholders and Management Proxy Circular (the "Circular"); and

-Material
Change Report filed through SEDAR on September 27, 2007.

The foregoing documents are available on the SEDAR website at
www.sedar.com, on the EDGAR website at www.sec.gov and on the Corporation's
website at www.gildan.com.

This Annual Information Form contains certain forward-looking
statements, which are based on Gildan's current expectations, estimates,
projections and assumptions and were made by Gildan in light of its experience
and its perception of historical trends. Results indicated in forward-looking
statements may differ materially from the actual results. Please refer to the
cautionary statement at page 18 of this Annual Information Form for further
explanation.

1.

CORPORATE STRUCTURE

1.1

Name, Address and Incorporation

We were incorporated on May 8, 1984 pursuant to the Canada
Business Corporations Act under the name of Textiles Gildan Inc. At our
inception, we focused our activities on the manufacture of textiles and produced
and sold finished fabric as a principal product-line. In 1992, we redefined our
operating strategy and, by 1994, our operations focused exclusively on the
manufacture and sale of activewear for the wholesale imprinted sportswear
market. In March 1995, we changed our name to Gildan Activewear Inc./Les
Vêtements de Sports Gildan Inc. In 2005, we changed our French name to Les
Vêtements de Sport Gildan Inc.

In June 1998, in conjunction with a planned initial public
offering, we filed Articles of Amendment to, among other things, remove the
private company restrictions contained in our charter documents and change the
structure of our authorized share capital. On June 17, 1998, we completed our
initial public offering of an aggregate of 3,000,000 Class A Subordinate Voting
shares at Cdn$10.29 per share, on a pre-split basis, for total gross proceeds of
Cdn$30,880,500.

On February 2, 2005, we filed Articles of Amendment in order
to, among other things, (i) create a new class of common shares (the "Common
Shares"), (ii) change each of the issued and outstanding Class A Subordinate
Voting shares into one of the newly-created Common Shares, and (iii) remove the
Class B Multiple Voting shares and the Class A Subordinate Voting shares as well
as the rights, privileges, restrictions and conditions attaching thereto.

Our principal executive offices and registered office are
located at 725 Montée de Liesse, Montreal, Québec, Canada H4T 1P5, and our
telephone number at that address is (514) 735-2023.

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1.2
Intercorporate Relationships

The following table indicates our principal subsidiaries, their jurisdiction
of incorporation and the percentage of voting securities that we beneficially
own or over which we exercise direct or indirect control:

| |                                              |                               | Percentage of Voting
    Securities or      
| | -------------------------------------------- | ----------------------------- | --------------------------------------------
| | Subsidiary                                   | Jurisdiction of Incorporation | Partnership Interest that
    Gildan held as
| |                                              |                               | at December 19, 2007                        
| | Gildan Activewear SRL                        | Barbados                      | 100%                                        
| | Kentucky Derby Hosiery Co., Inc.             | Kentucky                      | 100%                                        
| | Gildan Choloma Textiles, S. de R.L.          | Honduras                      | 100%                                        
| | Gildan Activewear Dominican Republic Textile | Barbados                      | 100%                                        
| | Company Inc.                                 |                               |                                             
| | Gildan Activewear Honduras Textiles          | Honduras                      | 100%                                        
| | Company, S. de R.L.                          |                               |                                             
| | Gildan Honduras Hosiery Factory, S. de R.L.  | Honduras                      | 100%                                        
| | Gildan Activewear Properties (Dominican      | Barbados                      | 100%                                        
| | Republic) Inc.                               |                               |                                             
| | Gildan Activewear (Eden) Inc.                | North Carolina                | 100%                                        
| | Gildan Activewear (UK) Limited               | United Kingdom                | 100%                                        
| | V.I. Prewett & Son, Inc.                     | Alabama                       | 100%                                        

The subsidiaries that have been omitted do not represent
individually more than 10% of the consolidated assets and the consolidated sales
and operating revenues of Gildan, and in the aggregate more than 20% of the
total consolidated assets and the consolidated sales and operating of revenues
as at September 30, 2007.

2.

GENERAL DEVELOPMENT OF THE BUSINESS

The following section describes how our business has evolved
in the last three completed financial years and lists key events that have
influenced the development of our business.

2.1

Developments in
Fiscal 2007

Growth Strategy

Over the past fiscal year, we have continued to achieve
higher market share gains in the U.S. wholesale screenprint market and in
international screenprint markets. We are also making progress in our plans to
penetrate the U.S. mass retail market for high-volume, basic, frequently
replenished, non-fashion family apparel. Our acquisition of Kentucky Derby
Hosiery Co., Inc. ("Kentucky Derby") in July 2006 provided us with enhanced
distribution to major U.S. mass-market retailers, and permitted us to achieve,
in March 2007, our first national branded sock program for men's and boys' socks
with a U.S. national retailer. In June 2007, we began shipments of a major
private label sock program to a second U.S. national mass-market retailer. The
acquisition of V.I. Prewett & Son, Inc. ("Prewett") in October 2007, as
described below, is intended to further strengthen our positioning as a
full-product supplier of socks, activewear and underwear for the retail channel.

Acquisition of U.S. Sock Manufacturer

On October 15, 2007, we acquired 100% of the common shares of
Prewett, a large U.S. supplier of basic family socks to U.S. mass-market
retailers. Prewett's corporate headquarters are located in Fort Payne, Alabama.
The initial purchase price was $125 million, subject to post-closing
adjustments, with further contingent payments of up to $10 million. The purchase
price was paid in cash at closing and was financed out of our revolving
long-term credit facility. With this acquisition, we are now one of the leading
suppliers of socks in the U.S. mass-market retail channel.

2

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Manufacturing Operations

In March 2007, consistent with our ongoing strategy to
enhance our overall cost structure by maximizing large-scale production of
T-shirts, fleece, sport shirts and underwear at our vertically-integrated
textile manufacturing operations in Honduras and the Dominican Republic, we
announced the restructuring of our Canadian manufacturing operations, which
included the closure of our two remaining textile facilities in Montreal and our
cutting facility in Bombay, New York, effective in the fourth quarter. We also
announced the immediate closure of our two sewing facilities in Mexico, which
had been supplied with fabric from our Canadian textile operations. Concurrent
with the restructuring of the Canadian textile operations, we announced plans to
relocate our corporate office, which is currently located in the same building
as was the Montreal knitting facility, into leased premises in the Montreal
area. In May 2007, consistent with our strategy to consolidate our sock
production at our new integrated facility in Honduras, we announced the closure
of two sock facilities in Mount Airy, North Carolina.

In fiscal 2007, we began production at a new integrated
manufacturing facility in Rio Nance, Honduras for the large-scale production of
socks and we expect to ramp up this facility to full capacity by the third
quarter of fiscal 2008. In August 2007, we announced plans for a second sock
facility to support our projected continuing growth in sales, which is expected
to be constructed and ramped up over twenty-four months.

We also began production, in the second half of fiscal 2007, at a new
large-scale integrated textile manufacturing facility for the production of
activewear in Rio Nance, Honduras, which we expect to fully ramp up by the third
quarter of fiscal 2008.

Distribution

In fiscal 2007, we completed the consolidation of Kentucky
Derby's distribution facilities into our retail distribution centre located in
Martinsville, Virginia. This new distribution centre supports our retail
distribution for all product-lines. Our distribution centre in Eden, North
Carolina continues to be dedicated to supporting our customers in the wholesale
distribution channel. During fiscal 2007, we expanded our distribution
facilities by adding a distribution centre in our Caribbean Basin hub to
facilitate and service certain of our international markets more efficiently.

In addition, in the fourth quarter, we opened a new third-party distribution
centre in Shenzhen, China to service customers in China and the Asia Pacific
region.

Stock Split

On May 2, 2007, our Board of Directors approved a two-for-one
stock split effected in the form of a stock dividend. The split was applicable
to all shareholders of record on May 18, 2007. The Common Shares commenced
trading on a post-split basis on May 16, 2007 on the Toronto Stock Exchange and
on May 28, 2007 on the New York Stock Exchange, in accordance with the
respective requirements of these exchanges.

FLA Accreditation

In June 2007, the Fair Labor Association (the "FLA"), a
leading labour rights organization, accorded us accreditation status on our
labour compliance program following an extensive three-year review of our
compliance with its workplace code of conduct requirements. Since its inception
in 1999, the FLA has only accredited ten labour compliance programs of various
companies worldwide, the majority of which are consumer apparel brands that
outsource their manufacturing. We are the first vertically-integrated
manufacturer of basic activewear apparel to receive this accreditation, which is
the FLA's most advanced recognition of a company's labour compliance program.

2.2

Developments in Fiscal 2006

- 

- Operations Restructuring: We
  announced the restructuring of our Canadian and U.S. textile manufacturing
  operations, which included the closure of our textile manufacturing facility
  in Valleyfield, Québec and the reduction in the operations of our knitting
  facility in Montreal, Québec and in our cutting facility in Bombay, New York.
  We also announced the closure and downsizing of sock manufacturing capacity
  located in North Carolina and Virginia to take effect during the first half of
  fiscal 2007.

3

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Textile and Sock Manufacturing:
  We completed the construction of a building for a sock manufacturing facility
  in Rio Nance, Honduras, and began the construction of an integrated
  manufacturing facility for the production of activewear at the same site.

- Sewing: We commenced operations in a
  new sewing facility located in Villanueva, Honduras. During the last quarter
  of fiscal 2006, we signed lease agreements for an integrated cutting, sewing
  and distribution facility in Port-au-Prince, Haiti, as well as for a building
  in Rivas, Nicaragua.

- Distribution: We added a new
  distribution centre in Choloma, Honduras to better serve our European
  customers, and two new third-party distribution centres located in Monterrey,
  Mexico and Mississauga, Ontario to better serve our Mexican and Canadian
  customers, respectively. In the fourth quarter, we announced the closure of
  our distribution centre located in Montreal, Québec effective October 2006. We
  also announced plans to relocate and consolidate Kentucky Derby's existing
  distribution centres, located at multiple sites in Danville, Virginia and
  Mount Airy, North Carolina, to a new 400,000 square foot retail distribution
  centre in Martinsville, Virginia.

2.3

Developments in Fiscal 2005

- 

- Yarn-Spinning: We closed our Canadian
  yarn-spinning plants in Long Sault, Ontario and Montreal, Québec. Concurrent
  with the Canadian yarn-spinning plant closures, the yarn-spinning operations
  of CanAm Yarns, LLC ("CanAm"), our joint venture company with Frontier
  Spinning Mills, Inc. ("Frontier"), were expanded to include a new
  yarn-spinning facility in Clarkton, North Carolina. In conjunction with the
  development of the new Clarkton facility, CanAm acquired certain assets of our
  yarn-spinning facility in Long Sault, Ontario, the transfer of which occurred
  in the second quarter of fiscal 2005, and the new Clarkton facility became
  fully operational by the end of the third quarter of fiscal 2005.

- Textile and Sock Manufacturing: We
  purchased additional land adjacent to our Rio Nance facility in Honduras for
  the purpose of constructing two new integrated world-scale facilities, one for
  the production of activewear, and one for the production of athletic socks.

- Sewing: We began production in three new sewing
  facilities located in Choloma, Honduras, Rivas, Nicaragua and Port-au-Prince,
  Haiti.

- Distribution: We completed a major expansion of our
  distribution centre in Eden, North Carolina.

- Stock Split: Our Board of Directors
  approved a two-for-one stock split effected in the form of a stock dividend.
  The split was applicable to all shareholders of record on May 20, 2005. The
  Common Shares commenced trading on a post-split basis on May 18, 2005 on the
  Toronto Stock Exchange and on June 1, 2005 on the New York Stock Exchange.

- Share Structure: At the annual and
  special meeting of the shareholders on February 2, 2005, our shareholders
  approved a special resolution to amend our Articles in order to change each of
  the issued and outstanding Class A Subordinate Voting shares into one
  newly-created Common Share and to remove the Class B Multiple Voting shares
  and the Class A Subordinate Voting shares, effectively eliminating our dual
  class voting structure.

4

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3.

DESCRIPTION OF THE
BUSINESS

3.1

Business Overview

Gildan is a vertically-integrated marketer and manufacturer
of activewear, underwear and socks. The Corporation operates in one business
segment, being high-volume, basic, frequently replenished, non-fashion apparel.
We are the leading supplier of activewear for the wholesale imprinted sportswear
market in the U.S. and Canada, and also a leading supplier for this market in
Europe. As part of our growth strategy to sell our products into the mass-market
retail channel in North America, in 2006, we expanded our product-line to
include socks and underwear. We are now one of the leading suppliers of socks in
the U.S. mass-market retail channel.

Over the past several years, we have significantly increased our sales and
earnings. From fiscal 1993 through fiscal 2007, our sales have grown from $24.0
million to $964.4 million, representing a compounded annual growth rate of
30.2%.

Strategy and Objectives

We believe that our success in developing our
vertically-integrated manufacturing hubs has allowed us to provide our customers
with low prices, consistent product quality and a reliable supply chain, and has
been the main reason that we have been able to continue to increase our market
presence and establish our market leadership in the imprinted sportswear market.
These are the same factors that management believes will support Gildan's
success in building a consumer brand in the retail channel.

We are able to price our products competitively because of our success in
reducing operating costs. We accomplish this by:

- investing in modern, automated equipment and facilities;

- increasing our capacity through the development of
  integrated regional hubs in Central America and the Caribbean Basin, where we
  benefit from strategic locations and favourable international trade
  agreements; and

- focusing on producing a narrow range of basic, high-volume
  product-lines, which allows us to maximize production efficiencies.

We intend to continue to expand capacity through the acquisition of modern,
automated equipment for all aspects of our manufacturing process to maximize
productivity and achieve high efficiency rates.

Our growth strategy comprises the following four initiatives:

1.

Continue to
increase market share in the U.S. wholesale imprinted sportswear market in all
product categories

During fiscal 2007, we further increased our leading market
share position in the U.S. wholesale distributor network in the T-shirt and
sport shirts categories as reported in the S.T.A.R.S. report produced by
ACNielsen Market Decisions (the "S.T.A.R.S. Report"). In addition, we gained
significant market share in the fleece category, also reaching the leading
market share position in this category in fiscal 2007. We believe we will
continue to increase market share in this channel due to our competitive
strengths and the addition of low cost production capacity.

2.

Leverage our successful
business model to penetrate the mass-market retail channel and develop Gildan as
a consumer brand

We plan to continue to sell the same basic undecorated
activewear apparel products into the retail channel, as well as our new
products, socks and underwear, which leverage our existing core competencies,
successful business model and competitive strengths. Our goal is to continue to
provide a value proposition, combining quality, service and competitive pricing.
We intend to follow the same pricing strategy as in the wholesale market, by
using our cost efficiencies to offer lower selling prices. Our main competitors
in the retail channel for basic family apparel products are essentially the same
as in the wholesale channel.

In fiscal 2006, we continued with our initial entry into the retail channel,
concentrating at that time on regional retailers that we were able to service
well with the production capacity that we had available. Our acquisition of
Kentucky Derby in July 2006 provided us with enhanced distribution to major U.S.
mass-market retailers. This allowed us to achieve our first national branded
program for men's and boys' socks with a U.S. national retailer, for which
shipments began in March 2007. In June 2007, we began shipments of a major
private label sock program to a second U.S. mass-market retailer. On October 15,
2007, we completed the acquisition of Prewett, a large U.S. supplier of basic
family socks to U.S. mass-market retailers. We expect that the acquisition of
Prewett will further strengthen Gildan's positioning as a full-product supplier
of socks, activewear and underwear for the retail channel. Furthermore, as we
ramp up our major capacity expansion projects in Central America, we are
increasingly better positioned to service large replenishment programs for major
mass-market customers.

5

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3.

Pursue international growth
opportunities

We expect to pursue further market penetration within our
existing wholesale markets in Europe, Mexico and Australia, in addition to
pursuing further international market expansion opportunities. During fiscal
2007, we achieved significant unit volume growth in Europe and other
international markets. We continue to see opportunities for growth in Europe as
additional production capacity comes on stream from the ramp up of our major
capacity expansion projects in Central America and as we expand our
product-lines for the European market. In Mexico, we continued to expand our
presence in the wholesale imprinted sportswear market and now service several
distributors. In fiscal 2007, we began to sell our products through a
distributor in Japan, which services the wholesale channel and is also selling
Gildan branded underwear and activewear products in the retail channel. In
addition, we established a distributor in China to position Gildan to service
both the imprinted and retail markets.

4.

Reinvest free cash flow to
pursue selective complementary acquisitions

We will seek opportunities to reinvest our free cash flow in
organic capacity expansion and evaluate further selective acquisitions, which
could complement our organic strategic growth opportunities in the U.S. retail
market and in international markets. We will seek opportunities where we believe
we can lever our core competencies and which position us in markets that offer
the potential for superior economic returns.

We are subject to a variety of business risks that may affect
our ability to maintain our current market share and profitability, as well as
our ability to achieve our long-term strategic objectives. These risks are
described in the "Risks and Uncertainties" section of our management's
discussion and analysis on pages 38 to 42 of the 2007 Annual Report.

Our Products

We specialize in marketing and large-scale manufacturing of basic,
non-fashion apparel products for customers requiring an efficient supply chain
and consistent product quality for high-volume automatic replenishment programs.

We sell activewear, namely T-shirts, fleece and sport shirts,
in large quantities to wholesale distributors as undecorated "blanks", which are
subsequently decorated by screenprinters with designs and logos. We sell our
products to wholesale distributors under the Gildan brand. Consumers ultimately
purchase the Corporation's products in venues such as sports, entertainment and
corporate events, and travel and tourism destinations. The Corporation's
products are also utilized for work uniforms and other end-uses to convey
individual, group and team identity.

In the retail channel, we have complemented our activewear
product-line with a variety of styles of socks and men's and boys' underwear. We
sell these products to mass-market and regional retailers in North America under
the Gildan brand and under various retailer private label programs.

Activewear, which includes underwear, represented 86% of our sales in fiscal
2007 and 96% of our sales in fiscal 2006. Socks represented 14% of our sales in
fiscal 2007 and 4% of our sales in fiscal 2006.

For the first nine months of calendar 2007, we achieved the
leading overall market share in the U.S. wholesale distributor network of 47.8%.
In calendar 2006, our overall market share in this network was 42.9%. All U.S.
market share data is based on the S.T.A.R.S. Report.

6

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Market Overview

Our target market for activewear, socks and underwear is
characterized by low fashion risk compared to many other apparel markets, since
our products are basic and produced in a limited range of sizes, colours and
styles, and since logos and designs for the screenprint market are not imprinted
or embroidered by Gildan.

The apparel market for our products is highly competitive.
Competition is generally based upon price, with reliable quality and service
also being key requirements for success. Our primary competitors in North
America are the major U.S.-based manufacturers of basic family apparel for the
wholesale and retail channels, such as the Hanes, Fruit of the Loom and Jerzees
brands. The competition in the European wholesale imprinted activewear market is
similar to that in North America, as we compete primarily with the European
divisions of the larger U.S.-based manufacturers. In Europe, we also have large
competitors, which do not have integrated manufacturing operations and source
products from contractors in Asia. In addition, we face the threat of increasing
global competition. In particular, the U.S. sock industry is subject to global
competition, including significant imports from Asia.

We believe that growth for activewear products has been
driven by several market trends such as the following:

- continued use of activewear for event merchandising (such
  as concerts, festivals, etc.);

- continued evolution of the entertainment/sports licensing
  and merchandising businesses;

- the growing use of activewear for uniform applications;

- the growing use of activewear for corporate promotions;

- continued increase in use of activewear products for travel
  and tourism;

- an increased emphasis on physical fitness;

- and a greater use and acceptance of casual dress in the
  workplace.

In addition, reductions in manufacturing costs, combined with
quality enhancements in activewear apparel, such as preshrunk fabrics, improved
fabric weight, blends and construction, as well as an increased range of colours
and styles, have provided consumers with superior products at lower prices.

We believe that providing a superior value proposition
predicated on reliable product quality and comfort, combined with efficient
customer service and competitive pricing, will continue to be key drivers of
success in both the wholesale and retail channels.

Due to wholesaler and retailer consolidation, the customer
base to which we sell and are targeting to sell our products is composed of a
relatively small number of significant customers. This concentration is not
unusual in the mass-market retail channel.

The continued consolidation of the number of suppliers by
retailers looking for the convenience of a full-line supplier of a product
category for the entire family could create growth opportunities for our
products.

Marketing and Sales

Our wholesale activewear marketing strategy concentrates
primarily on the wholesale distribution channel catering to screenprinters,
embroiderers and advertising specialty distributors. We also promote our
products through appearances at tradeshows and trade magazine advertising and
also engage in various forms of co-operative advertising with our major
customers, including print advertising, catalogues and mailings and product
sampling programs. Our competitive strategy in the retail channel is based on
delivering consistent, reliable product quality to our customers at competitive
prices.

7

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Customers

In fiscal 2007, we sold our products in the United States,
Canada and Europe and other international markets, which accounted for 88.4%,
5.5% and 6.1% of total sales, respectively. For a breakdown of our total sales
by geographic market for each of the last three financial years, reference is
made to Note 20(b) (ii) to the audited annual consolidated financial statements
of the Corporation included in our 2007 Annual Report, which is incorporated
herein by reference.

Our customer base is composed of a relatively small number of
significant customers. We currently sell our products to approximately 200customers. In fiscal 2007, our largest customer accounted for 23.1% of total
sales, and our top ten customers accounted for 62.8% of total sales.

The large majority of total sales in fiscal 2007 continued to
be made through our wholesale distributors. Although we have long-term ongoing
relationships with many of our wholesale distributor customers, our contracts
with our customers do not require them to purchase a minimum quantity of our
products. Instead, we ascertain their projected requirements and then plan our
production and marketing strategy accordingly.

Our Manufacturing and Distribution Facilities

Textile and Sock Manufacturing

To support our sales in the various markets, we have built
and are continuing to build modern manufacturing facilities located in Central
America and the Caribbean Basin. Our largest manufacturing hub in Central
America includes our first integrated knitting, bleaching, dyeing, finishing and
cutting facility in Rio Nance, Honduras, which became operational in 2002. In
addition, during 2007, we commenced production at our new state-of-the-art
integrated sock manufacturing facility and at our new integrated textile
facility for the production of activewear, both in Rio Nance, Honduras. We
expect to ramp up our sock and activewear facilities to full capacity by the
third quarter of fiscal 2008. In August 2007, we announced plans for a second
sock facility to support our projected continuing growth in sales, which is
expected to be constructed and ramped up over twenty-four months. In addition,
we are also evaluating the timing and geographical location for future textile
capacity expansion to support our ongoing growth initiatives in the U.S.
mass-market retail and international markets.

We also have established a vertically-integrated Caribbean
Basin manufacturing hub with a textile facility for the production of activewear
in Bella Vista, Dominican Republic, which began commercial operations in fiscal
2005 and is currently running at a comparable scale of production to our mature
textile facility in Honduras.

Our land and infrastructure in Central America and the Caribbean Basin can
accommodate further capacity expansion on the same sites.

During the fourth quarter of fiscal 2007, we closed our
remaining textile facilities in Montreal, Québec, and our cutting facility in
Bombay, New York. In addition, we closed our two sewing facilities in Mexico in
March 2007, which had been supplied with fabric from our Canadian textile
operations. As a result, all of our manufacturing for T-shirts, fleece, sport
shirts and underwear has been consolidated into our vertically-integrated
manufacturing hubs in Central America and the Caribbean Basin, where we have
invested and continue to invest in major capacity expansion projects, as
described above.

With the acquisition of Kentucky Derby in fiscal 2006, we now
operate a sock manufacturing facility in Hillsville, Virginia. Following the
Prewett acquisition in October 2007, we also operate sock manufacturing
facilities in Alabama and a sock finishing facility in Honduras.

Yarn-Spinning

We currently conduct yarn-spinning operations at facilities
located in Cedartown, Georgia and Clarkton, North Carolina through CanAm, our
50%/50%-owned joint venture with Frontier. These yarn-spinning facilities supply
our textile manufacturing facilities with 100% cotton U.S. origin yarn.

Sewing

We conduct our sewing operations primarily through four owned
facilities in Honduras, one owned facility in Haiti and two owned facilities in
Nicaragua. In addition to these seven sewing facilities, we supplement our
production by using third-party contractors, primarily in Haiti.

8

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Distribution

We distribute our products to wholesale customers in the
United States from a company-owned distribution centre in Eden, North Carolina
as well as from a distribution centre operated by a third party in California.
The third-party warehouse in California was added in fiscal 2004 for the purpose
of providing next day service to customers on the U.S. west coast.

In fiscal 2007, we completed the consolidation of Kentucky
Derby's distribution facilities into a new retail distribution centre located in
Martinsville, Virginia. This distribution centre is dedicated to supporting our
retail distribution for all of our product-lines. Our existing distribution
centre in Eden, North Carolina continues to be fully dedicated to supporting the
requirements of our customers in the wholesale distribution channel.

Our Canadian wholesale and retail customers are serviced from
a third-party distribution centre located in Mississauga, Ontario. Customers in
Europe are serviced from distribution centres operated by third parties in Meer,
Belgium and Manchester, United Kingdom and, since the fourth quarter of fiscal
2006, from our distribution centre in Choloma, Honduras. Customers in Australia
and New Zealand are serviced with full container shipments from our Eden, North
Carolina distribution centre. Our Mexican customers are serviced from a
third-party distribution centre located in Tultitlan, Mexico and, in the fourth
quarter of fiscal 2007, a new third-party distribution centre was opened in
Shenzhen, China to support sales in China and Asia Pacific.

Raw Materials

Cotton and polyester fibres are the main raw materials used
in the manufacturing of our products. Cotton is used in the manufacturing of
100% cotton yarn while polyester is added in the manufacturing of
cotton-polyester blend yarn. Polyester pricing is negotiated on an annual basis,
while cotton fibre pricing is fixed under futures contracts as deemed
appropriate by management.

During fiscal 2007, all of our yarn requirements for the
production of our product-lines were met by our long-term supply agreements with
third-party suppliers, as well as by our jointly owned CanAm yarn-spinning
facilities in Cedartown, Georgia and Clarkton, North Carolina. We expect that
our yarn requirements will continue to be met by these sources.

We also purchase chemicals, dyestuffs and trims through a variety of
suppliers. These products have historically been available in sufficient supply.

Quality Control

Our quality control team has adopted strict standards and
procedures to ensure the quality of our products. This team enforces
plant-specific quality control standards at the facilities we own and monitors
quality control at the facilities run by third-party contractors. As a result of
our quality control team's efforts, we have not experienced any significant
quality claims from our customers or end users.

Management Information Systems

Our Enterprise Resource Planning ("ERP") system supports all
of our operations in the areas of finance, manufacturing and customer service.
This system is centralized and is accessed from all of our locations through
secure networks. Our ERP system is linked to servers supporting both local
processes and specialized applications, including payroll and distribution. We
continue to leverage our existing ERP system by adding new functionality in the
areas of Supply Chain Planning, Demand Forecasting and Business Intelligence.
Due to our increasing dependence on the availability of our computer systems to
support our operations, we plan to continue, in fiscal 2008, to implement
initiatives to enhance our information technology ("IT") processes and
infrastructure based on the Information Technology Infrastructure Library, a
framework of best practices approaches intended to facilitate the delivery of
high quality IT services.

Seasonality

The activewear business is seasonal. Typically, demand for
T-shirts is highest in the third quarter of each fiscal year, when distributors
purchase inventory for the peak summer selling season, and lowest in the first
quarter of each fiscal year. Demand for fleece is typically highest, as a result
of cooler weather, in the third and fourth quarters of each fiscal year. Demand
for our sock products is typically highest in the first and fourth quarters of
each fiscal year, stimulated largely by the cooler weather, the need to support
requirements for the back-to-school period and the peak retail selling during
the Christmas holiday season.

9

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Trade and Regulatory Environment

Although the textile and apparel industry worldwide has
historically been the subject of significant protection, in recent years, trade
liberalization, through the enactment of free trade agreements and trade
preference programs, has diminished this protection. For instance, Chinese
originating textiles and apparel products are expected to be granted
unrestricted access to the U.S. market as of January 1, 2009. Our increasingly
globalized production and sourcing as well as our increased global market
coverage has allowed us to leverage the benefits of the international regulatory
climate by shifting our manufacturing capabilities to strategic locations.

United States

There exist a number of regional trade agreements and
programs, such as the North American Free Trade Agreement ("NAFTA"), the
Caribbean Basin Trade Partnership Act ("CBTPA"), the Dominican Republic-Central
America-United States Free Trade Agreement ("CAFTA-DR") and the Haitian
Hemispheric Opportunity through Partnership Encouragement Act ("HOPE") which
allow qualifying textiles and apparel from participating countries duty-free
access to developed countries' markets. Two of the newest programs, CAFTA-DR and
HOPE, were adopted to strengthen and develop economic relations among countries
which are party to the agreement. In addition, the above-mentioned international
trade legislation contains provisions that may apply tariffs, quotas and/or
safeguards, as necessary. Specifically, CAFTA-DR provides for the application of
safeguards in the form of reinstatement of normal duties if increased imports
cause or threaten to cause substantial injury to a domestic industry. The United
States is considering such a safeguard against socks imported from Honduras,
which, if enacted, could affect our imports of socks from our integrated
Honduran sock facility. Under the current legislation, a safeguard under CAFTA-DR
may be imposed for a period of up to three years and not extending beyond March
31, 2011. While we believe that there is no basis to support a conclusion that
sock imports from Honduras have caused or threatened to cause serious damage to
the U.S. domestic sock industry, there can be no assurance that the United
States will not make such a determination nor can there be any assurances that
safeguards under CAFTA-DR or other developments in trade legislation would not
adversely impact our business.

Canada

Textile and apparel imports into Canada benefit from both
free trade agreements and trade preference programs, such as NAFTA and the
Canada's Least Developed Countries ("LDC") initiative, which provides trade
benefits to 48 least developed countries. As such, apparel products originating
from Mexico and LDC member countries are eligible for import into Canada
duty-free and quota-free should the rules of origin provided in such trade
agreements and trade preference programs be met.

Mexico

Imports into the Mexican market may qualify for trade
preferences from various free trade agreements such as NAFTA, the
Mexico-Nicaragua Free Trade Agreement, and the Mexico-Northern Triangle Regional
Trade Agreement which includes El Salvador, Guatemala and Honduras as member
countries.

European Union

In addition to free trade arrangements among the individual
countries within the European Union, the European Union also has preferential
trade agreements with other European countries and with countries outside of
Europe, such as the free trade agreement between the European Union and Mexico.
Furthermore, the European Union also enacted a Generalized System of Preferences
and an Africa-Caribbean-Pacific program that allow duty-free and quota-free
entry into the European Union of qualifying articles, including apparel, from
developing countries and least developed countries such as Honduras, Nicaragua
and Haiti.

A safeguard agreement limiting imports of Chinese textile and apparel into
the European Union will expire at the end of 2007.

10

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Australia

Australia has a free trade agreement with the United States.
Additionally, Australia has adopted legislation similar to the legislation in
force in Canada to allow duty-free and quota-free entry of textiles and apparel
articles from least developed countries, subject to meeting Australia's specific
set of rules of origin.

Intellectual Property

We own several registered trademarks including, among others,
"Gildan" in Canada and the United States, the Gildan "logo" in Canada, and "Gildan
Activewear" in Canada, the United States and many countries in Europe, Central
America, South America and Asia, as well as in Australia. Applications for the
registration of a number of other trademarks, including "Gildan Activewear" and
"Gildan", are pending in several countries. We have and intend to continue to
maintain our trademarks and the relevant registrations, and will actively pursue
the registration of trademarks in Canada, the United States and abroad.

Environmental Regulation

All of our operations are subject to various environmental
and occupational health and safety laws and regulations. Because we monitor,
control and manage environmental issues, we believe that we are in compliance in
all material respects with the regulatory requirements of those jurisdictions in
which our facilities are located. In line with our commitment to the environment
as well as to the health and safety of our employees, we will continue to make
expenditures to comply with these requirements, and we do not believe that
compliance will have a material adverse effect on our business. As is the case
with manufacturers in general, if a release of hazardous substances occurs on or
from our properties or any associated offsite disposal locations, or if
contamination from prior activities is discovered at any of our properties, we
may be held liable. While the amount of such liability could be material, we
endeavour to conduct our operations in a manner that reduces such risks.

Labour Practices

We offer positive and beneficial working conditions for all
employees. We have implemented various mechanisms to monitor compliance with
local labour laws, as well as with internationally recognized labour standards.
In addition to having our own Code of Conduct, which is available on our website
at www.gildan.com, we have obtained WRAP (Worldwide Responsible Apparel
Production) certification for most of our company-owned sewing facilities in
Honduras and for our two sewing facilities in Nicaragua. We also actively
encourage and are in the process of contractually obligating all of our
third-party contractors to follow prescribed employment policies as well as our
Code of Conduct. By the end of fiscal 2007, 90% of our third-party sewing
contractors have contractually undertaken to abide by our social compliance
standards and 66% have obtained WRAP certification.

In November 2003, we joined the FLA as a "Participating
Company". The FLA is internationally recognized and respected as a non-profit
organization whose goal is to promote adherence to international labour
standards and to improve working conditions for employees worldwide. In June
2007, the FLA accorded accreditation status to our labour compliance program.

Until 2007, the majority of our social compliance monitoring
was performed by external third-party auditors. With the appointment of an
internationally respected Director of Social Compliance in 2006 and of two
internal auditors in 2007, we have successfully begun internal monitoring audits
that complement the external independent audits.

3.2

Risk Factors

Please see the "Risks and Uncertainties" section of our management's
discussion and analysis on pages 38 to 42 of the 2007 Annual Report.

3.3

Employees

As at October 1, 2007, we employed 15,372 full-time employees
worldwide. We consider our relations with our employees to be very good and, as
of the date hereof, we have not experienced any work stoppages that have had a
material impact on our operations.

11

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4.

DIVIDEND POLICY

We do not currently, and have not in the past three years,
paid dividends because we have chosen to retain all of our earnings to maximize
our financing capacity to develop and expand our business. The Board of
Directors periodically reviews the Corporation's policy towards paying
dividends. Although our revolving term credit facility requires compliance with
lending covenants in order to pay dividends, these covenants are not currently,
and are not expected to be, a constraint to the future payment of dividends.

5.

CAPITAL STRUCTURE

First Preferred Shares

Issuance in Series

The First Preferred shares are issuable in series and the
Board of Directors has the right, from time to time, to fix the number of, and
to determine the designation, rights, privileges, restrictions and conditions
attaching to, the First Preferred shares of each series subject to the
limitations, if any, set out in the Articles of the Corporation.

Rank

The First Preferred shares rank senior to the Second
Preferred shares and the Common Shares with respect to the payment of dividends,
return of capital and the distribution of assets in the event of the
liquidation, dissolution or winding-up of Gildan. The First Preferred shares in
each series rank equally with the First Preferred shares of any other series.

Voting Rights

Unless the Articles otherwise provide with respect to any
series of the First Preferred shares, the holders of the First Preferred shares
are not entitled to receive any notice of or attend any meeting of the
shareholders of Gildan and are not entitled to vote at any such meeting.

Second Preferred Shares

Issuance in Series

The Second Preferred shares are issuable in series and the
Board of Directors has the right, from time to time, to fix the number of, and
to determine the designation, rights, privileges, restrictions and conditions
attaching to, the Second Preferred shares of each series subject to the
limitations, if any, set out in the Articles of the Corporation.

Rank

The Second Preferred shares are subject and subordinate to
the rights, privileges, restrictions and conditions attaching to the First
Preferred shares. The Second Preferred shares rank senior to the Common Shares
with respect to payment of dividends, return of capital and distribution of
assets in the event of the liquidation, dissolution or winding-up of Gildan. The
Second Preferred shares in each series rank equally with the Second Preferred
shares of any other series.

Voting Rights

Unless the Articles otherwise provide with respect to any
series of the Second Preferred shares, the holders of the Second Preferred
shares are not entitled to receive any notice of or attend any meeting of the
shareholders of Gildan and are not entitled to vote at any such meeting.

Common Shares

Following the conversion of all of the Corporation's Class B
Multiple Voting shares into Class A Subordinate Voting shares, the Corporation's
shareholders approved a special resolution on February 2, 2005 to amend the
Corporation's Articles in order to change each of the issued and outstanding
Class A Subordinate Voting shares into one newly-created Common Share and to
remove the Class B Multiple Voting shares and the Class A Subordinate Voting
shares.

12

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The Common Shares are subject and subordinate to the rights,
privileges, restrictions and conditions attaching to the First Preferred shares
and the Second Preferred shares. Each holder of Common Shares shall have the
right to receive any dividend declared by the Corporation and the right to
receive the remaining property and assets of the Corporation on dissolution.

Each holder of Common Shares is entitled to receive notice of
and to attend all meetings of shareholders of the Corporation, except meetings
of which only holders of another particular class or series shall have the right
to vote. Each Common Share entitles the holder thereof to one (1) vote.

6.

MARKET FOR
SECURITIES

The Common Shares are listed on the New York Stock Exchange
(the "NYSE") and the Toronto Stock Exchange (the "TSX") under the symbol "GIL".
The Class A Subordinate Voting shares (now the Common Shares), which were issued
at an offering price of $0.88 (Cdn$1.29), began trading on the TSX, the Montreal
Exchange (the "ME") and the American Stock Exchange ("AMEX") on June 17, 1998.
Prior to that date, there was no public market for the Class A Subordinate
Voting shares. We delisted such shares from AMEX on August 31, 1999. On
September 1, 1999, the Class A Subordinate Voting shares (now the Common Shares)
commenced trading on the NYSE. As a result of a restructuring of Canada's stock
exchanges, which took effect on December 7, 1999, we are no longer listed on the
ME.

The table below shows the monthly price range per share and the trading
volume of the Common Shares for the fiscal year ended September 30, 2007 on the
TSX (in Cdn$) and on the NYSE (in US$).

|COMMON SHARES               
|----------------------------
|Toronto Stock Exchange (TSX)
|Month                       
|October 2006                
|November 2006               
|December 2006               
|January 2007                
|February 2007               
|March 2007                  
|April 2007                  
|May 2007                    
|June 2007                   
|July 2007                   
|August 2007                 
|September 2007              

13

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7.

DIRECTORS AND
OFFICERS

Listed below is certain information about the current
directors of Gildan. The directors have served in their respective capacities
since their election and/or appointment and will continue to serve until the
next annual meeting of shareholders or until a successor is duly elected.

|Name and Municipality of Residence                                | Principal Occupation                                         | Director Since
|----------------------------------------------------------------- | ------------------------------------------------------------ | --------------
|                                                                  |                                                              |               
|Robert M. Baylis (2)(3)(4)                                        |                                                              |               
|Darien, Connecticut, United States                                | Corporate Director                                           | February 1999 
|                                                                  |                                                              |               
|Glenn J. Chamandy                                                 |                                                              |               
|Westmount, Québec, Canada                                         | President and Chief Executive Officer of the
    Corporation | May 1984      
|                                                                  |                                                              |               
|William D. Anderson(1)(3)                                         |                                                              |               
|Toronto, Ontario, Canada                                          | Corporate Director                                           | June 2006     
|                                                                  |                                                              |               
|Sheila O'Brien (2)(3)                                             |                                                              |               
|Calgary, Alberta, Canada                                          | Corporate Director and Business Advisor                      | June 2005     
|                                                                  |                                                              |               
|Pierre Robitaille(1)(2)                                           |                                                              |               
|St-Lambert, Québec, Canada                                        | Business Advisor and Corporate Director                      | February 2003 
|                                                                  |                                                              |               
|Richard P. Strubel (1)(3)                                         | Corporate Director                                           |               
|Chicago, Illinois, United States                                  |                                                              | February 1999 
|                                                                  |                                                              |               
|Gonzalo F. Valdes-Fauli(1)(2)                                     | Chairman of BroadSpan Capital LLC (investment
    banking    |               
|Key Biscayne, Florida, United States                              | firm)                                                        | October 2004  
|                                                                  |                                                              |               
|(1) Member of the Audit and Finance Committee.                    |                                                              |               
|(2) Member of the Corporate Governance Committee.                 |                                                              |               
|(3) Member of the Human Resources and Compensation
    Committee. |                                                             
|(4) Chairman of the Board.                                        |                                                              |               

Listed below is certain information about the current executive officers of
Gildan.

|Name and Municipality of Residence  | Position Held Within the
    Corporation and Principal Occupation       
|----------------------------------- | ------------------------------------------------------------------------
|                                    |                                                                         
|Glenn J. Chamandy (1) (2)           |                                                                         
|Westmount, Québec, Canada           | President, Chief Executive Officer and Director                         
|                                    |                                                                         
|Laurence G. Sellyn (1) (2)          |                                                                         
|Beaconsfield, Québec, Canada        | Executive Vice-President, Chief Financial and
    Administrative Officer
|                                    |                                                                         
|Michael R. Hoffman (1)              |                                                                         
|St. James, Barbados                 | President, Gildan Activewear SRL                                        
|                                    |                                                                         
|Georges Sam Yu Sum (1) (2)          |                                                                         
|Hampstead, Québec, Canada           | Executive Vice-President, Operations                                    
|                                    |                                                                         
|Benito Masi (1) (2)                 |                                                                         
|Laval, Québec, Canada               | Executive Vice-President, Manufacturing                                 
|                                    |                                                                         
|Cam Gentile (1) (2)                 | Executive Vice-President, Organizational
    Development and Change     
|Hudson, Québec, Canada              | Management                                                              
|                                    |                                                                         
|Claude Guay (1) (2)                 |                                                                         
|Westmount, Québec, Canada           | Executive Vice-President, Chief Information
    Officer                 
|                                    |                                                                         
|Eric R. Lehman(1) (2)               |                                                                         
|Montreal, Québec, Canada            | Executive Vice-President, Supply Chain                                  
|                                    |                                                                         
|(1) Executive Management Committee. |                                                                         
|(2) Officer of the Corporation.     |                                                                         

14

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Glenn J. Chamandy is one of the founders of the
Corporation and has devoted his business career to leading the development of
Gildan into an industry leader. Prior to February 2004, Mr. Chamandy held the
position of President and Chief Operating Officer. He was then named President
and Co-Chief Executive Officer and, in August 2004, he was appointed to the
position of President and Chief Executive Officer.

Robert M. Baylis

William D. Anderson

Sheila O'Brien, CM

Pierre Robitaille is a business advisor and a corporate
director. Mr. Robitaille previously pursued his career at SNC-Lavalin Group
Inc., a global engineering-construction firm, where he was Executive
Vice-President and Chief Financial Officer from 1990 to 1998. Prior to this, Mr.
Robitaille was in public practice for more than twenty years with the public
accounting and management consulting firm of Ernst & Whinney, where he held the
positions of Managing Partner of the Montreal office, President of the firm in
Québec, and member of its national board of directors. Mr. Robitaille also
serves on the boards of directors of Nav Canada (civil air navigation services
provider), Swiss Re Company of Canada and Swiss Re Life & Health Co. Canada
(reinsurance companies) and National Public Relations Capital Partnership Inc.
(national public relations consulting firm). Mr. Robitaille is a Fellow member
of the Québec Order of Chartered Accountants. He was educated at HEC-University
of Montreal and McGill Business School.

Richard P. Strubel is a corporate director and is
Vice-Chairman of the Board of Cardean Learning Group (formerly known as Unext),
a provider of advanced education over the Internet, where from 1999 to 2004 he
served as President and Chief Operating Officer. From 1990 to 1999, Mr. Strubel
was Managing Director of Tandem Partners, Inc., a privately-held management
services firm, and from 1984 to 1994, he served as President and Chief Executive
Officer of Microdot, Inc. Prior to that, Mr. Strubel served as President of
Northwest Industries, then a NYSE-listed company, which included Fruit of the
Loom and BVD among its operating entities. Mr. Strubel also serves on the boards
of directors of the mutual funds of Goldman Sachs & Co., Goldman Sachs Hedge
Fund Partners and Mutual Funds of Northern Trust. Mr. Strubel is also Trustee of
the University of Chicago and Chairman of its Audit Committee. Mr. Strubel was
educated at Harvard Business School.

Gonzalo F. Valdes-Fauli is Chairman of the Board of
BroadSpan Capital LLC, an investment banking firm specializing in financial
advisory services. Mr. Valdes-Fauli retired from Barclays Bank PLC (major
UK-based global bank) in 2001, where he held the position of Vice-Chairman,
Barclays Capital, and Group CEO, Latin America. Mr. Valdes-Fauli also serves on
the board of directors of Blue Cross Shield of Florida (health insurance
provider), where he is Lead Chairman. Mr. Valdes-Fauli also served as Chairman
of the Board of Republic Bank of Dominican Republic (financial services
provider) until November 2007. He is also Trustee Emeritus of the University of
Miami and Spring Hill College in Mobile, Alabama. Mr. Valdes-Fauli holds a
Master's Degree in international finance from Thunderbird Graduate School for
International Management.

15

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Laurence G. Sellyn was appointed to the position of
Executive Vice-President, Chief Financial and Administrative Officer of the
Corporation in November 2005. He joined Gildan as Executive Vice-President,
Finance and Chief Financial Officer of the Corporation in April 1999. He is a
Fellow of the Institute of Chartered Accountants of England and Wales. Prior to
joining Gildan, Mr. Sellyn served as Senior Vice-President, Finance and
Corporate Development and Chief Financial Officer of Wajax Limited, an
industrial distribution company, where he was employed from October 1992 to
March 1999. Prior to joining Wajax, he was employed by Domtar Inc., where he
held various positions, including Corporate Controller and Vice-President,
Business Planning and Development.

Michael R. Hoffman joined Gildan in November 1997. He
served as Vice-President, Sales and Marketing for the international division
until his appointment as President of Gildan Activewear SRL in February 2001.
Prior to joining Gildan, Mr. Hoffman was employed by Fruit of the Loom, Inc.,
where he last served as Divisional Vice-President of the Activewear Division.

Georges Sam Yu Sum has been Executive Vice-President,
Operations of the Corporation since 2000. From 1998 to 2000, he served as
Vice-President, Operations of the Corporation and from 1995 to 1998, he served
as Director of Operations of the Corporation. Prior to joining Gildan in 1995,
Mr. Sam Yu Sum spent sixteen years with Dominion Textiles, where he served in
various managerial capacities, from manufacturing to sales.

Benito Masi has been involved in apparel manufacturing in
North America for over twenty-five years. He joined Gildan in 1986, where he
held various positions. He was appointed Vice-President, Apparel Manufacturing
in February 2001 and his title was changed to Vice-President, Corporate Apparel
Operations in September 2003. In August 2004, he was appointed Executive
Vice-President, Apparel Manufacturing and was appointed Executive
Vice-President, Manufacturing in January 2005.

Cam Gentile joined the Corporation in 2006 as Executive
Vice-President, Organizational Development and Change Management. He has over
thirty years of experience in the pulp and paper industry in senior management
positions at Domtar Inc., Transcontinental Printing Inc., Paperboard Industries
International Inc. and Uniboard Canada Inc. He is currently a member of the
Order of Engineers of Québec, President and Chairman of the Board of Directors
of the Québec Institute of Graphic Communications, a member of the External
Advisory Board to the Faculty of Arts and Science of Concordia University, as
well as Vice-President and member of the Board of Directors of Village Theatre
in Hudson, Québec.

Claude Guay joined the Corporation as Executive
Vice-President, Chief Information Officer in October 2006. His career spans more
than twenty years in international executive management at IBM Corporation and
Accovia Inc., as well as at MTI Services, a company he founded in 2005. Mr. Guay
is a graduate of Industrial Engineering from l'École Polytechnique de Montréal
and has been a professional engineer since 1984. He also acts as the Networking
Officer for the Québec Chapter Board of Directors of the Young Presidents'
Organization.

Eric R. Lehman joined the Corporation in December 2006 as
Executive Vice-President, Supply Chain. He has over twenty years of experience
in the supply chain function with major national apparel brands. Prior to
joining Gildan, Mr. Lehman was employed by Russell Corporation, where he last
served as Vice President of Supply Chain. Prior to that, he held senior supply
chain planning positions at both Fruit of the Loom, Inc. and the Hanes Division
of Sara Lee Corporation.

As at December 19, 2007, the executive officers and directors of the
Corporation as a group own 7,625,196 Common Shares, which represents 6.3% of the
voting rights attached to all Common Shares.

16

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8.

AUDIT COMMITTEE
DISCLOSURE

Mandate of the Audit and Finance Committee

The mandate of the Audit and Finance Committee is included herewith as
Appendix A.

Composition of the Audit and Finance Committee

The Audit and Finance Committee is composed of four
independent and financially literate directors, as those terms are defined in
the rules of the Canadian Securities Administrators and the U.S. Securities and
Exchange Commission as well as the standards of the NYSE. Their education and
experience that are relevant to the performance of their responsibilities as
members of the Audit and Finance Committee are as follows:

Pierre Robitaille - Mr. Robitaille is a business
advisor and corporate director. He is retired from SNC-Lavalin Group Inc., a
global engineering-construction firm, where he was Executive Vice-President and
Chief Financial Officer from 1990 to 1998. Prior to this, Mr. Robitaille was in
public practice for more than twenty years with the public accounting and
management consulting firm of Ernst & Whinney, where he held the positions of
Managing Partner of the Montreal office, President of the firm in Québec and
member of the firm's national board of directors. Over the course of his career,
Mr. Robitaille has acquired competence in the audit of major public and private
companies and a familiarity with internal controls and financial reporting
procedures. Mr. Robitaille is a Fellow member of the Québec Order of Chartered
Accountants. He was educated at HEC-University of Montreal and McGill Business
School.

William D. Anderson - Mr. Anderson is a chartered
accountant and has had a business career spanning over thirty years. From 1998
to 2001, he served as Chief Financial Officer of BCE Inc., Canada's largest
telecommunications company. Most recently, Mr. Anderson served as President of
BCE Ventures (the strategic investment unit of BCE Inc.) and previously he was
the Chairman and Chief Executive Officer of Bell Canada International Inc. (a
subsidiary of BCE that was formed to invest in telecommunications operations
outside Canada). Prior to joining the Bell Canada organization in 1992, Mr.
Anderson was in public practice for nearly twenty years with the accounting firm
KPMG, where he was a partner for eleven years. Mr. Anderson was educated at the
University of Western Ontario and is a member of the Institute of Chartered
Accountants of Ontario.

Richard P. Strubel - Mr. Strubel is a corporate
director and is Vice-Chairman of the Board of Cardean Learning Group, where he
previously served as President and Chief Operating Officer. Prior to that, Mr.
Strubel served as Managing Director of Tandem Partners, Inc., a privately-held
management services firm, President and Chief Executive Officer of Microdot,
Inc. and President of Northwest Industries, then a NYSE-listed company with
sales in excess of $3 billion. Mr. Strubel also serves on the audit committees
of all the institutional and retail mutual funds managed by Goldman Sachs & Co.,
as well as the institutional funds of the Northern Trust Company and he serves
as the Chairman of the Audit Committee of the University of Chicago. Mr. Strubel
has more than twenty-five years of experience in executive positions overseeing
large operating corporations. Mr. Strubel was educated at Harvard Business
School.

Gonzalo F. Valdes-Fauli - Mr. Valdes-Fauli is a
retired Vice-Chairman of Barclays Capital, the investment banking division of
Barclays Bank, London, England. Mr. Valdes-Fauli served as a member of the
management committee of Barclays Capital from 1988 to 2001. He was Group CEO of
Barclays Bank Latin America from 1988 to 2001. He is Chairman of BroadSpan
Capital LLC and served as Chairman of the Board of Republic Bank of Dominican
Republic until November 2007. Mr. Valdes-Fauli has more than thirty years of
experience in finance and holds a Master's Degree in international finance from
Thunderbird Graduate School for International Management.

Pre-Approval of Non-Audit Services

In accordance with the Canadian Institute of Chartered
Accountants' independence standards for auditors, the Sarbanes-Oxley Act of
2002 and rules of the U.S. Securities and Exchange Commission, the
Corporation is restricted from engaging the auditors to provide certain
non-audit services to the Corporation and its subsidiaries, including
bookkeeping or other services related to the accounting records or financial
statements, information technology services, valuation services, actuarial
services, internal audit services, corporate finance services, management
functions, human resources functions, legal services and expert services
unrelated to the audit. The Corporation does engage the auditors from time to
time to provide certain non-audit services other than the restricted services.
All non-audit services must be specifically pre-approved by the Audit and
Finance Committee.

17

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External Auditor Service Fees

The aggregate fees billed by KPMG LLP ("KPMG"), the
Corporation's external auditor, for various audit-related and non-audit services
rendered for the fiscal years 2007 and 2006 were as follows:

Audit Fees  The aggregate audit fees billed by KPMG for
professional services rendered for the annual audit of the Corporation's
consolidated financial statements, quarterly reviews of the Corporation's
financial statements and services provided in connection with statutory and
regulatory filings or engagements were Cdn$1,214,402 for fiscal 2007 and
Cdn$1,196,100 for fiscal 2006. The audit fees include fees relating to KPMG's
audit of the effectiveness of the Corporation's internal control over financial
reporting.

Audit-Related Fees  The aggregate audit-related fees
billed by KPMG were Cdn$112,800 for fiscal 2007 and Cdn$94,025 for fiscal 2006.
These services consisted of miscellaneous assurance services.

Tax Fees  The aggregate tax fees billed by KPMG were
Cdn$935,066 for fiscal 2007 and Cdn$322,785 for fiscal 2006. These services
consisted of tax compliance, including the review of tax returns, assistance
regarding income, capital and sales tax audits, the preparation of annual
transfer pricing studies, tax advisory services relating to domestic and
international taxation and customs and duties.

All Other Fees  The aggregate fees billed by KPMG for
all other professional services rendered were nil for fiscal 2007 and
Cdn$169,860 for fiscal 2006 for services associated with financial due
diligence.

9.

LEGAL
PROCEEDINGS

The Corporation is a party to claims and litigation arising
in the normal course of its operations. Management does not expect the
resolution of these matters to have a materially adverse effect on the financial
position or results of operations of the Corporation.

10.

TRANSFER AGENT AND
REGISTRAR

The transfer agent and registrar of the Corporation is
Computershare Investor Services Inc., having offices in Montreal and Toronto at
which the register of transfer of the Common Shares is held. The co-transfer
agent and co-registrar of the Corporation is Computershare Trust Company, N.A.,
having an office in Golden, Colorado.

11.

MATERIAL CONTRACTS

Other than the agreements entered into the normal course of
business, the only material agreements entered into in fiscal 2007, or before
fiscal 2007 and which are still in force are the following:

1.

The Agreement and
Plan of Merger dated September 17, 2007 among Gildan, Prewett, Prewett's
shareholders and two wholly-owned subsidiaries of Gildan, Gildan USA Inc. and
Swing Merger Sub, Inc. This agreement was filed through SEDAR on September 27,
2007.

2.

The Shareholder
Rights Plan Agreement approved by the Board of Directors on December 1, 2004 and
subsequently ratified by the Corporation's shareholders on February 2, 2005.
This agreement was filed through SEDAR on December 2, 2004.

12.

INTERESTS OF
EXPERTS

KPMG, the external auditors of the Corporation, reported on
the fiscal 2007 audited consolidated financial statements of the Corporation,
which were filed with the securities regulatory authorities. We are advised
that, as at the date hereof, the members of KPMG are independent in accordance
with the Code of Ethics of Chartered Accountants (Québec).

13.

FORWARD - LOOKING
INFORMATION

Certain statements included in this Annual Information Form
may constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities
legislation and regulations, and are subject to important risks, uncertainties
and assumptions. This forward-looking information includes, amongst others,
information with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs, plans,
expectations, anticipations, estimates and intentions. Forward-looking
statements generally can be identified by the use of conditional or
forward-looking terminology such as "may", "will", "expect", "intend",
"estimate", "anticipate", "plan", "foresee", "believe" or "continue" or the
negatives of these terms or variations of them or similar terminology. We refer
you to the Corporation's filings with the Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission, as well as the
"Risks and Uncertainties" section of the management's discussion and analysis on
pages 38 to 42 of the 2007 Annual Report, for a discussion of the various
factors that may affect the Corporation's future results. Material factors and
assumptions that were applied in drawing a conclusion or making a forecast or
projection are also set out throughout this document.

18

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The results or events predicted in such forward-looking
information may differ materially from actual results or events. Material
factors, which could cause actual results or events to differ materially from a
conclusion, forecast or projection in such forward-looking information, include,
but are not limited to:

- 

the impact of economic, social and business
  conditions, industry trends and other external and political factors in the
  countries in which we operate;

the intensity of competitive activity;

changes in environmental, tax, trade, labour
  and other laws and regulations;

our ability to implement our strategies and
  plans;

our ability to complete and successfully
  integrate acquisitions;

our reliance on a small number of
  significant customers;

changes in consumer preferences, customer
  demand for our products and our ability to maintain customer relationships and
  grow our business;

our customers do not commit to minimum
  quantity purchases the seasonality of our business;

our ability to attract and retain key
  personnel;

high reliance on computerized information
  systems;

changes in accounting policies and
  estimates;

and disruption to manufacturing and
  distribution activities due to labour disruptions, bad weather, natural
  disasters and other unforeseen adverse events.

This may cause the Corporation's actual performance and
financial results in future periods to differ materially from any estimates or
projections of future performance or results expressed or implied by such
forward-looking statements. Forward-looking statements do not take into account
the effect that transactions or non-recurring or other special items announced
or occurring after the statements are made have on the Corporation's business.
For example, they do not include the effect of dispositions, acquisitions, other
business transactions, asset writedowns or other charges announced or occurring
after forward-looking statements are made. The financial impact of such
transactions and non-recurring and other special items can be complex and
necessarily depends on the facts particular to each of them.

We believe that the expectations represented by our
forward-looking statements are reasonable, yet there can be no assurance that
such expectations will prove to be correct. Furthermore, unless otherwise
stated, the forward-looking statements contained in this Annual Information Form
are made as of the date hereof, and we do not undertake any obligation to update
publicly or to revise any of the included forward-looking statements, whether as
a result of new information, future events or otherwise unless required by
applicable legislation or regulation. The forward-looking statements contained
in this Annual Information Form are expressly qualified by this cautionary
statement.

14.

ADDITIONAL INFORMATION

Additional information, including directors' and officers'
remuneration and indebtedness, principal holders of the Corporation's securities
and securities authorized for insurance under the Corporation's equity
compensation plans is contained in the Circular, and additional financial
information is provided in the Corporation's comparative consolidated financial
statements and management's discussion and analysis for its most recently
completed financial year, both of which are contained in the 2007 Annual Report.

19

---



Copies of these documents and additional information relating
to Gildan may be found on the SEDAR website at www.sedar.com and the EDGAR
website at www.sec.gov and may also be obtained upon request to the Secretary of
Gildan at the following address:

725 Montée de Liesse 
Montreal, Québec 
H4T 1P5 
Telephone: (514) 735-2023

The documents mentioned above, as well as Gildan's news releases, are also
available on the Corporation's website at www.gildan.com.

20

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APPENDIX A - MANDATE OF THE AUDIT AND FINANCE
COMMITTEE

The following description of the mandate of the Audit and
Finance Committee of the Corporation complies with applicable Canadian laws and
regulations, such as the rules of the Canadian Securities Administrators, and
with the disclosure and listing requirements of the Toronto Stock Exchange
(collectively, the "Canadian Corporate Governance Standards"), as they
exist on the date hereof. In addition, this mandate complies with applicable
U.S. laws, such as the Sarbanes-Oxley Act of 2002,and rules and
regulations adopted thereunder, and with the New York Stock Exchange's corporate
governance standards (collectively, the "US Corporate Governance Standards"),
as they exist on the date hereof. The mandate of the Audit and Finance Committee
of the Corporation (the "Audit Committee") shall be reviewed annually by
the Board in order to ensure on-going compliance with such standards.

1.

Membership and Quorum

- 

- only "independent" (as contemplated by
  Canadian Corporate Governance Standards and US Corporate Governance Standards)
  directors shall be appointed, the whole as determined by the Board; no
  affiliate of the Corporation or any of its subsidiaries (including any person
  who, directly or indirectly, controls or is controlled by, or is under common
  control with the Corporation, or any director, executive officer, partner,
  member, principal or designee of such affiliate) may serve on the Audit
  Committee; a member of the Audit Committee shall receive no compensation from
  the Corporation or any of its affiliates other than compensation as a director
  and committee member of the Corporation; prohibited compensation includes fees
  paid, directly or indirectly, for services as a consultant or as legal or
  financial advisor, regardless of the amount;

- each member must be "financially literate" (as contemplated
  by Canadian Corporate Governance Standards and US Corporate Governance
  Standards), as determined by the Board;

- at least one member must be an "audit committee financial
  expert" (as contemplated by US Corporate Governance Standards), as determined
  by the Board;

- members of the Audit Committee shall be
  appointed annually by the Board upon recommendation of the Corporation's
  Corporate Governance Committee; such members may be removed or replaced, and
  any vacancies on the Audit Committee shall be filled by the Board upon
  recommendation of the Corporation's Corporate Governance Committee; membership
  on the Audit Committee shall automatically end at such time the Board
  determines that a member ceases to be "independent" as determined in the
  manner set forth above;

- quorum of majority of members.

2.

Frequency and Timing of
Meetings

- 

- at least four times a year and as necessary.

3.

Mandate

The responsibilities of the Audit Committee include the following:

(a)

Overseeing financial reporting

> monitoring the integrity and quality of
>     the Corporation's accounting and financial reporting process, disclosure
>     controls and procedures, and systems of internal control, through
>     independent discussions with management, the external auditors and the
>     internal auditors;

21

---

reviewing, with management and the
    external auditors, the annual audited consolidated financial statements as
    well as the report of the auditors thereon to be included in the Annual
    Report of the Corporation, including the Corporation's MD&A disclosure and
    annual earnings press release, prior to their release, filing and
    distribution;

- reviewing, with management and the
    external auditors, quarterly consolidated financial statements of the
    Corporation and accompanying information, including the Corporation's MD&A
    disclosure and quarterly earnings press release, prior to their release,
    filing and distribution;

- reviewing, with management and external
    auditors, the financial information contained in prospectuses, offering
    memoranda, Annual Information Forms, Management Proxy Circulars, Forms 6-K
    (including Supplemental Disclosure) and 40-F and any other document required
    to be disclosed or filed by the Corporation before their public disclosure
    or filing with regulatory authorities in Canada or the United States of
    America;

- reviewing, with management, the level and
    type of financial information (including earnings guidance and other
    material forward-looking information) provided from time to time to
    analysts, investors, rating agencies and other stakeholders;

- reviewing, with management, that adequate
    procedures are in place for the review of the Corporation's disclosure of
    financial information extracted or derived from the Corporation's financial
    statements, such as annual reports and investor presentations, and
    periodically assessing the adequacy of those procedures;

- reviewing, with the external auditors and
    management, the quality, appropriateness and disclosure of the Corporation's
    accounting principles and policies, underlying assumptions and reporting
    practices, and any proposed changes thereto;

- reviewing any analysis or other written
    communications prepared by management, the internal auditors or external
    auditors setting forth significant financial reporting issues and judgments
    made in connection with the preparation of the financial statements,
    including analyses of the effect of alternative generally accepted
    accounting principles methods;

- reviewing the external auditors' quarterly review
    engagement report;

- overseeing the procedures to review management
    certifications filed with applicable securities regulators;

- reviewing the potential impact of any
    litigation, claim or other contingency and any regulatory or accounting
    initiatives that could have a material effect upon the financial position or
    operating results of the Corporation and the appropriateness of the
    disclosure thereof in the documents reviewed by the Audit Committee;

- overseeing the procedures to monitor the public
    disclosure of information by the Corporation;

- reviewing at least annually the Corporation's disclosure
    policy;

- reviewing the results of the external
    audit, any significant problems encountered in performing the audit, and
    management's response and/or action plan related to any Management Letter
    issued by the external auditors and any significant recommendations
    contained therein.

(b)

Monitoring risk management and
internal controls

> 

22

---



> 

- overseeing the processes in place to identify business
    risks and opportunities and overseeing the implementation of processes to
    manage these risks and opportunities;

- reviewing policies and their parameters
    regarding such items as interest rate, foreign exchange risks, commodity
    purchases and any similar transactions where the Corporation enters into
    derivatives contracts;

- assisting the Board with the oversight of the
    Corporation's compliance with, and reviewing the Corporation's processes for
    complying with, applicable legal and regulatory requirements;

- overseeing the confidential, anonymous
    procedures for the receipt, retention and treatment of complaints or
    concerns received by the Corporation regarding accounting, internal
    accounting controls or auditing matters or employee concerns regarding
    accounting or auditing matters;

- requesting the performance of any specific audit, as
    required.

(c)

Monitoring internal auditors

> 

- overseeing the access by internal auditors
    to all levels of management in order to carry out their duties;

- regularly monitoring the internal audit
    function's performance, its responsibilities, staffing and budget;

- approving the appointment and termination
    of the Corporation's chief internal auditor;

- ensuring the ongoing accountability of the internal audit
    function to the Audit Committee and to the Board.

(d)

Monitoring external auditors

> 

- overseeing all relationships between the
    external auditors and the Corporation including, determining which non-audit
    services the external auditors are prohibited from providing, approving, or
    pre-approving policies defining audit and permitted non-audit services
    provided by the external auditors, overseeing the disclosure of all audit
    and permitted non-audit services provided by the external auditors, and
    reviewing the total amount of fees paid by the Corporation to the external
    auditors for all audit and non-audit services;

- overseeing the direct reporting and accountability of the
    external auditors to the Audit Committee and to the Board;

- directly overseeing the external auditors
    and discussing with them the quality and not just the acceptability of the
    Corporation's accounting principles, including (i) critical accounting
    policies and practices used, (ii) alternative treatments of financial
    information that have been discussed with management, the ramification of
    their use and the treatment preferred by the external auditors, as well as
    (iii) other material written communications between the Corporation and the
    external auditors (including any disagreement with management and the
    resolution thereof);

23

---

reviewing at least annually, representations by the external auditors
    describing their internal quality-control procedures, as well as significant
    results arising from regulatory and professional quality-control
    examinations;

- reviewing at
    least annually, the external auditors' representations as to independence
    and holding discussions with the external auditors as to any relationship or
    services that may impact their objectivity or independence;

- reviewing hiring policies for
    employees or former employees of the Corporation's firm of external
    auditors;

- overseeing the rotation of
    lead, concurring and other audit partners, to the extent required by
    Canadian and U.S. securities law standards.

(e)

Reviewing financings

> 

(f)

Evaluating the performance of the
Audit Committee

> 

Because of the Audit Committee's demanding role and
responsibilities, the Board chair, together with the Corporate Governance
Committee chair, reviews any invitation to Audit Committee members to join the
audit committee of another publicly-listed entity. Where a member of the Audit
Committee simultaneously serves on the audit committee of more than three public
companies, including the Corporation, the Board determines whether such
simultaneous service impairs the ability of such member to effectively serve on
the Audit Committee and either requires a correction to the situation or
discloses in the Corporation's Management Proxy Circular that there is no such
impairment.

As appropriate, the Audit Committee may obtain advice and
assistance from outside legal, accounting or other advisors and set and pay
their compensation, and so advise the Board chair and, if appropriate, the
external auditors; the Audit Committee makes arrangements for the appropriate
funding for payment of the external auditors and any advisors retained by it. In
addition, the Corporation will provide appropriate funding for the Audit
Committee, including the payment of all outside legal, accounting and other
advisors retained by the Audit Committee.

The internal auditors and the external auditors will have at
all times a direct line of communication with the Audit Committee. In addition,
each meets separately with the Audit Committee, without management, at least
once a quarter, during which the Corporation's financial statements and control
environment must be discussed; the Audit Committee also meets separately with
management at least once a quarter, and more frequently as required.

The Audit Committee reports annually to the Board on the adequacy of its
mandate. In addition, the chair of the Audit Committee reports regularly to the
Board on the business of the Audit Committee.

Nothing contained in the above mandate is intended to
transfer to the Audit Committee the Board's responsibility to ensure the
Corporation's compliance with applicable laws or regulations or to expand
applicable standards of liability under statutory or regulatory requirements for
the directors or the members of the Audit Committee. Even though the Audit
Committee has a specific mandate and its members may have financial experience,
they do not have the obligation to act as auditors or to perform auditing, or to
determine that the Corporation's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. Such
matters are the responsibility of management, the internal auditors and the
external auditors. Members of the Audit Committee are entitled to rely, absent
knowledge to the contrary, on (i) the integrity of the persons and organizations
from whom they receive information, (ii) the accuracy and completeness of the
information provided, and (iii) representations made by management as to the
non-audit services provided to the Corporation by the external auditors. The
Audit Committee's oversight responsibilities are not established to provide an
independent basis to determine that (i) management has maintained appropriate
accounting and financial reporting principles or appropriate internal controls
and procedures, or (ii) the Corporation's financial statements have been
prepared and, if applicable, audited in accordance with generally accepted
accounting principles.

* * * * * * *

24

---



A.

Undertaking

Gildan Activewear Inc. (the
"Registrant") undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the staff of the Securities and
Exchange Commission ("SEC"), and to furnish promptly, when requested to do so by
the SEC staff, information relating to the securities in relation to which the
obligation to file an annual report on Form 40-F arises or transactions in said
securities.

B.

Consent to Service
of Process

The Registrant has previously filed
with the SEC a written irrevocable consent and power of attorney on Form F-X in
connection with the Class A Subordinate Voting Shares (now Common Shares).

C.

Evaluation of
disclosure controls and procedures

Our disclosure controls and
procedures are designed to ensure that information required to be disclosed in
our reports filed with the SEC is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms and is
accumulated and communicated to our management, including our principal
executive officer and our principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.

An evaluation was carried out under
the supervision of, and with the participation of, our management, including our
principal executive officer and our principal financial officer, of the
effectiveness of our disclosure controls and procedures (as such term is defined
in the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, Rules
13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual
Report on Form 40-F. Based on that evaluation, our principal executive officer
and our principal financial officer concluded that our disclosure controls and
procedures were effective as of the end of such period.

D.

Management's
annual report on internal control over financial reporting

Our management is responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control over financial
reporting includes those policies and procedures that: (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of our assets; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect
on the financial statements.

Under the supervision and with the
participation of our principal executive officer and our principal financial
officer, management conducted an evaluation of the effectiveness of our internal
control over financial reporting, as of September 30, 2007, based on the
framework set forth in

E.

Attestation report
of the registered public accounting firm.

KPMG LLP ("KPMG"), an independent
registered public accounting firm, who audited and reported on our financial
statements attached as Exhibit 99.2 to this Annual Report on Form 40-F, has
issued an attestation report on the effectiveness of our internal control over
financial reporting as of September 30, 2007. The attestation report is included
on page 48 of the financial statements attached as Exhibit 99.2

F.

Changes in
internal controls over financial reporting.

There have been no changes during
fiscal year 2007 in our internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

---

The design of any system of controls
and procedures is based in part upon certain assumptions about the likelihood of
certain events. There can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote.
G.
Audit Committee
Financial Experts

The Registrant's board of directors
has determined that it has at least three (3) audit committee financial experts
serving on its audit committee. Mr. Pierre Robitaille, Mr. Gonzalo F. Valdes-Fauli
and Mr. William D. Anderson have been determined to be such audit committee
financial experts and are independent, as that term is defined by the New York
Stock Exchange's listing standards applicable to the Registrant. The SEC has
indicated that the designation of Mr. Robitaille, Mr. Valdes-Fauli and Mr.
Anderson as audit committee financial experts does not make Mr. Robitaille, Mr.
Valdes-Fauli and Mr. Anderson "experts" for any purpose, impose any duties,
obligations or liability on Mr. Robitaille, Mr. Valdes-Fauli and Mr. Anderson
that are greater than those imposed on members of the audit committee and board
of directors who do not carry this designation or affect the duties, obligations
or liability of any other member of the audit committee.
H.
Code of Ethics

The Registrant has adopted a Code of
Ethics and Business Conduct (the "Code of Conduct") that applies to all
employees and officers, including its principal executive officer, principal
financial officer and principal accounting officer. The Code of Conduct is
available at the Registrant's Internet website, www.gildan.com, and is available in print to any shareholder who
requests it.
I.
Principal
Accountant Fees and Services
In addition to retaining KPMG to
report upon the annual consolidated financial statements of the Registrant, the
Registrant retained KPMG to provide various audit-related and non-audit services
in fiscal 2007. The aggregate fees billed for professional services by KPMG for
each of the last two (2) fiscal years, were as follows:
Audit Fees  The aggregate audit
fees billed by KPMG for professional services rendered for the annual audit of
the Registrant's consolidated financial statements, quarterly reviews of the
Registrant's financial statements and services provided in connection with
statutory and regulatory filings or engagements were CDN$1,214,402 for fiscal
2007 and CDN$1,196,100 for fiscal 2006. The audit fees include fees relating to
KPMG's audit of the effectiveness of the Registrant's internal control over
financial reporting.
Audit-Related Fees  The
aggregate audit-related fees billed by KPMG were CDN$112,800 for fiscal 2007 and
CDN$94,025 for fiscal 2006. These services consisted of miscellaneous assurance
services.
Tax Fees  The aggregate tax fees
billed by KPMG were CDN$935,066 for fiscal 2007 and CDN$322,785 for fiscal 2006.
These services consisted of tax compliance, including the review of tax returns,
assistance regarding income, capital and sales tax audits, the preparation of
annual transfer pricing studies, tax advisory services relating to domestic and
international taxation and customs and duties.
All Other Fees  The aggregate
fees billed by KPMG for all other professional services rendered were nil for
fiscal 2007 and CDN$169,860 for fiscal 2006 for services associated with
financial due diligence.
All fees billed to the Registrant by
KPMG in fiscal 2007 were pre-approved by the Registrant's Audit and Finance
Committee pursuant to the procedures and policies set forth in the Audit and
Finance Committee mandate and pursuant to applicable legislation. The mandate of
the Audit and Finance Committee is available on the Registrant's Internet
website at www.gildan.com.
J.
Off-Balance Sheet
Arrangements
Operating leases and commitments

The Registrant has no commitments
that are not reflected in its balance sheets except for operating leases and
other purchase obligations, which are included in the table of contractual
obligations on page 34 of its MD&A (see Exhibit 99.1). As disclosed in Note 13
to the Registrant's Consolidated Financial Statements (see Exhibit 99.2), the
Registrant has issued standby letters of credit and corporate guarantees
primarily from various servicing agreements amounting to $8.1 million at
September 30, 2007.

---

Derivative Financial InstrumentsFrom time to time, the Registrant
uses forward foreign exchange contracts, primarily in Canadian dollars, British
pounds and Euros, to hedge cash flows related to sales and operating expenses in
foreign currencies (non-U.S. dollar). A forward foreign exchange contract
represents an obligation to exchange a foreign currency with a counterparty at a
predetermined rate. Credit risk exists in the event of failure by a counterparty
to meet its obligations. The Registrant reduces this risk by dealing only with
highly rated counterparties, normally major North American and European
financial institutions. The Registrant's exposure to foreign currency
fluctuations is described in more detail in the "Risks and Uncertainties"
section of its MD&A beginning on page 38 (see Exhibit 99.1).
The Registrant does not use
derivative financial instruments for speculative purposes. Forward foreign
exchange contracts are entered into with maturities not exceeding twenty-four
months.
For the years ended September 30,
2007 and October 1, 2006, net earnings included recognized gains relating to
derivative financial instruments of $1.9 million and $4.6 million, respectively.
The following table summarizes the
Registrant's commitments to buy and sell foreign currencies as at September 30,
2007 and October 1, 2006:

|                            | Notional       | Exchange         |                       | Notional US dollar
|--------------------------- | -------------- | ---------------- | --------------------- | ------------------
|                            | Amount         | Rate             | Maturity              | Equivalent        
|                            |                |                  |                       |                   
|                            | (in thousands) |                  |                       | (in thousands)    
|2007:                       |                |                  |                       |                   
|Buy contracts:              |                |                  |                       |                   
|Foreign exchange contracts: | 4,425         | 1.3390 to 1.4222 | Oct. 2007 - Dec. 2007 | $6,025            
|Sell contracts:             |                |                  |                       |                   
|Foreign exchange contracts: | 13,980        | 1.3410 to 1.3899 | Oct. 2007 - Oct. 2008 | $19,096           
|                            | £10,801        | 1.9640 to 2.0331 | Oct. 2007 - Oct. 2008 | $21,501           
|                            | CA$3,800       | 0.9945           | Oct. 2007             | $3,821            
|2006:                       |                |                  |                       |                   
|Buy contracts:              |                |                  |                       |                   
|Foreign exchange contracts: | 9,756         | 1.2056 to 1.2696 | Oct. 2006 - June 2007 | $11,934           
|                            | CA$6,250       | 0.8961           | Oct. 2006             | $5,600            
|                            |                |                  |                       |                   

The fair value of the forward foreign
exchange contracts, based on quoted market values, was $(0.8) million as at
September 30, 2007 and $0.5 million as at October 1, 2006.

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K.
Tabular Disclosure
of Contractual Obligations

See page 34 of Exhibit 99.1.
L.
Corporate
Governance Guidelines

The Registrant has adopted Corporate
Governance Guidelines as well as mandates for its board of directors and each of
its three committees which are available at the Registrant's Internet website,
www.gildan.com, and are available in print
to any shareholder who requests them.
M.
Identification of
the Audit Committee
The Registrant has a standing
Audit Committee established in accordance with Section 3 (a) (58) (A) of the
Exchange Act. The members of the Registrant's Audit Committee are Pierre
Robitaille, William D. Anderson, Richard P. Strubel and Gonzalo F. Valdez-Fauli.
See the Audit Committee Disclosure section of our Annual Information Form
included herein for additional information.





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SIGNATURES

Pursuant to the requirements of the
Exchange Act, the Registrant certifies that it meets all of the requirements for
filing on Form 40-F and has duly caused this annual report to be signed on its
behalf by the undersigned, thereto duly authorized.
DATED: December 19, 2007

GILDAN
                     ACTIVEWEAR INC.By:
                     /s/
                     Lindsay
                     MatthewsName:
                     Lindsay MatthewsTitle:
                     Director, Legal Services and CorporateSecretary






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|             
|-------------
|EXHIBIT INDEX
|             
|Exhibit No.  
|             
|99.1         
|             
|99.2         
|             
|99.3         
|             
|99.4         
|             
|99.5         
|             
|99.6         
|             
|99.7         



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