|  | CONSOLIDATED FINANCIAL STATEMENTS |
|--|-----------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.52 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|   | CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-----------------------------------|

|   | *CPA auditor, CA, public accountancy permit No. A110592      KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                          independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                       KPMG Canada provides services to KPMG LLP. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.53 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|   | CONSOLIDATED FINANCIAL STATEMENTS |
|--------|-----------------------------------|

|   | *CPA auditor, CA, public accountancy permit No. A110592              KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                          independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                      KPMG Canada provides services to KPMG LLP. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | GILDAN 2014 REPORT TO SHAREHOLDERS P.54 |
|--------|-----------------------------------------|

----

|  | CONSOLIDATED FINANCIAL STATEMENTS |
|--|-----------------------------------|

| GILDAN ACTIVEWEAR INC.                                       |
|--------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION                |
| (in thousands of U.S. dollars)                               |
|                                                         |   |   |   |   |   |   |   |   |
|                                                         |   |   |   | October 5, |   | September 29, |
|                                                         |   |   |   | 2014 |   | 2013 |
|                                                         |   |   |   |   |   |   |   |   |
| Current assets:                                              |   |   |   |   |   |   |   |
|                                                         | Cash and cash equivalents (note 6) |   |   | $ |  65,163 |   | $ |  97,368 |
|                                                         | Trade accounts receivable (note 7) |   |   |   |  354,265 |   |   |  255,018 |
|                                                         | Income taxes receivable |   |   |   |  1,439 |   |   |  700 |
|                                                         | Inventories (note 8) |   |   |   |  779,407 |   |   |  595,794 |
|                                                         | Prepaid expenses and deposits |   |   |   |  17,507 |   |   |  14,959 |
|                                                         | Assets held for sale (note 18) |   |   |   |  5,839 |   |   |  5,839 |
|                                                         | Other current assets |   |   |   |  23,784 |   |   |  11,034 |
| Total current assets                                         |   |   |   |  1,247,404 |   |   |  980,712 |
|                                                         |   |   |   |   |   |   |   |   |
| Non-current assets:                                          |   |   |   |   |   |   |   |
|                                                         | Property, plant and equipment (note 9) |   |   |   |  873,726 |   |   |  655,869 |
|                                                         | Intangible assets (note 10) |   |   |   |  287,353 |   |   |  247,537 |
|                                                         | Goodwill (note 10) |   |   |   |  176,445 |   |   |  150,099 |
|                                                         | Deferred income taxes (note 19) |   |   |   |  - |   |   |  1,443 |
|                                                         | Other non-current assets |   |   |   |  8,116 |   |   |  7,991 |
| Total non-current assets                                     |   |   |   |  1,345,640 |   |   |  1,062,939 |
|                                                         |   |   |   |   |   |   |   |   |
| Total assets                                                 |   |   | $ |  2,593,044 |   | $ |  2,043,651 |
|                                                         |   |   |   |   |   |   |   |   |
| Current liabilities:                                         |   |   |   |   |   |   |   |
|                                                         | Accounts payable and accrued liabilities |   |   | $ |  374,671 |   | $ |  289,414 |
| Total current liabilities                                    |   |   |   |  374,671 |   |   |  289,414 |
|                                                         |   |   |   |   |   |   |   |   |
| Non-current liabilities:                                     |   |   |   |   |   |   |   |
|                                                         | Long-term debt (note 11) |   |   |   |  157,000 |   |   |  - |
|                                                         | Deferred income taxes (note 19) |   |   |   |  349 |   |   |  - |
|                                                         | Employee benefit obligations (note 12) |   |   |   |  19,565 |   |   |  18,486 |
|                                                         | Provisions (note 13) |   |   |   |  17,926 |   |   |  16,325 |
| Total non-current liabilities                                |   |   |   |  194,840 |   |   |  34,811 |
|                                                         |   |   |   |   |   |   |   |   |
| Total liabilities                                            |   |   |   |  569,511 |   |   |  324,225 |
|                                                         |   |   |   |   |   |   |   |   |
| Commitments, guarantees and contingent liabilities (note 24) |
|                                                         |   |   |   |   |   |   |   |   |
| Equity:                                                      |   |   |   |   |   |   |   |
|                                                         | Share capital |   |   |   |  124,595 |   |   |  107,867 |
|                                                         | Contributed surplus |   |   |   |  20,778 |   |   |  28,869 |
|                                                         | Retained earnings |   |   |   |  1,885,892 |   |   |  1,583,346 |
|                                                         | Accumulated other comprehensive income |   |   |   |  (7,732) |   |   |  (656) |
| Total equity attributable to shareholders of the Company     |   |   |  2,023,533 |   |   |  1,719,426 |
|                                                         |   |   |   |   |   |   |   |   |
| Total liabilities and equity                                 |   |   | $ |  2,593,044 |   | $ |  2,043,651 |
|                                                         |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements. |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |
| On behalf of the Board of Directors:                         |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |
| (S) Glenn J. Chamandy                                        |   |   | (S) Russell Goodman |
| Glenn J. Chamandy                                            |   |   | Russell Goodman |
| Director                                                     |   |   | Director |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.55 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | CONSOLIDATED FINANCIAL STATEMENTS |
|--|-----------------------------------|

|                                                           |                                                            |   |   |            |           |   |            |        |
|----------------------------------------------------------------|-----------------------------------------------------------------|--------|--------|-----------------|----------------|--------|-----------------|-------------|
|                                                           |                                                            |   |   | 2014            |           |   | 2013            |
|                                                           |                                                            |   |   |            |           |   |            |        |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Net sales                                                      |                                                            |   | $      |  2,359,994 |           | $      |  2,184,303 |
| Cost of sales                                                  |                                                            |   |   |  1,701,311 |           |   |  1,550,266 |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Gross profit                                                   |                                                            |   |   |  658,683   |           |   |  634,037   |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Selling, general and administrative expenses (note 17(a))      |                                                            |   |   |  286,015   |           |   |  282,563   |
| Restructuring and acquisition-related costs (note 18)          |                                                            |   |   |  3,247     |           |   |  8,788     |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Operating income                                               |                                                            |   |   |  369,421   |           |   |  342,686   |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Financial expenses, net (note 15(c))                           |                                                            |   |   |  2,897     |           |   |  12,013    |
| Equity earnings in investment in joint venture                 |                                                            |   |   |  -         |           |   |  (46)      |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Earnings before income taxes                                   |                                                            |   |   |  366,524   |           |   |  330,719   |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Income tax expense (note 19)                                   |                                                            |   |   |  6,972     |           |   |  10,541    |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Net earnings                                                   |                                                            |   |   |  359,552   |           |   |  320,178   |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Other comprehensive income (loss), net of related income taxes |                                                            |   |   |            |           |   |            |
|                                                           | Cash flow hedges (note 15(d))                                   |   |   |            |  (7,076)  |   |            |  6,419 |
|                                                           | Actuarial (loss) gain on employee benefit obligations (note 12) |   |   |            |  (3,614)  |   |            |  436   |
|                                                           |                                                            |   |   |            |  (10,690) |   |            |  6,855 |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Comprehensive income                                           |                                                            |   | $      |  348,862   |           | $      |  327,033   |
|                                                           |                                                            |   |   |            |           |   |            |        |
|                                                           |                                                            |   |   |            |           |   |            |        |
| Earnings per share:                                            |                                                            |   |   |            |           |   |            |
|                                                           | Basic (note 20)                                                 |   |   | $               |  2.95     |   | $               |  2.64  |
|                                                           | Diluted (note 20)                                               |   |   | $               |  2.92     |   | $               |  2.61  |
|                                                           |                                                            |   |   |            |           |   |            |        |
|                                                           |                                                            |   |   |            |           |   |            |        |
| See accompanying notes to consolidated financial statements.   |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.56 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | CONSOLIDATED FINANCIAL STATEMENTS |
|--|-----------------------------------|

|                                                         |          |   |        |           |          |   |           |   | Accumulated |          |   |   |            |   |   |
|--------------------------------------------------------------|---------------|--------|-------------|----------------|---------------|--------|----------------|--------|-------------|---------------|--------|--------|-----------------|--------|--------|
|                                                         |          |   |        |           |          |   |           |   | other       |          |   |   |            |   |   |
|                                                         | Share capital |   | Contributed |           | comprehensive |   | Retained       |   | Total       |
|                                                         | Number        |   | Amount      |           |  surplus |   | income (loss)  |   | earnings    |          | equity |
|                                                         |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
| Balance, September 30, 2012                                  |  121,386 |   | $           |  101,113  |          | $      |  25,579   |   | $           |  (7,075) |   | $      |  1,306,724 |   | $      |  1,426,341 |
|                                                         |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
| Share-based compensation                                     |  -       |   |        |  -        |          |   |  8,179    |   |        |  -       |   |   |  -         |   |   |  8,179 |
| Shares issued under employee share                           |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   purchase plan                                    |  24      |   |        |  927      |          |   |  -        |   |        |  -       |   |   |  -         |   |   |  927 |
| Shares issued pursuant to exercise of                        |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   stock options                                    |  195     |   |        |  6,955    |          |   |  (1,779)  |   |        |  -       |   |   |  -         |   |   |  5,176 |
| Shares issued or distributed pursuant to                     |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   vesting of restricted share units                |  299     |   |        |  8,493    |          |   |  (8,493)  |   |        |  -       |   |   |  -         |   |   |  - |
| Share repurchases for future settlement                      |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   of non-Treasury RSUs (note 14(e))                |  (278)   |   |        |  (9,621)  |          |   |  5,114    |   |        |  -       |   |   |  -         |   |   |  (4,507) |
| Dividends declared                                           |  -       |   |        |  -        |          |   |  269      |   |        |  -       |   |   |  (43,992)  |   |   |  (43,723) |
| Transactions with shareholders of the                        |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   Company recognized directly in equity            |  240     |   |        |  6,754    |          |   |  3,290    |   |        |  -       |   |   |  (43,992)  |   |   |  (33,948) |
|                                                         |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
| Cash flow hedges (note 15(d))                                |  -       |   |        |  -        |          |   |  -        |   |        |  6,419   |   |   |  -         |   |   |  6,419 |
| Actuarial gain on employee benefit                           |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   obligations (note 12)                            |  -       |   |        |  -        |          |   |  -        |   |        |  -       |   |   |  436       |   |   |  436 |
| Net earnings                                                 |  -       |   |        |  -        |          |   |  -        |   |        |  -       |   |   |  320,178   |   |   |  320,178 |
| Comprehensive income                                         |  -       |   |        |  -        |          |   |  -        |   |        |  6,419   |   |   |  320,614   |   |   |  327,033 |
| Balance, September 29, 2013                                  |  121,626 |   | $           |  107,867  |          | $      |  28,869   |   | $           |  (656)   |   | $      |  1,583,346 |   | $      |  1,719,426 |
|                                                         |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
| Share-based compensation                                     |  -       |   |        |  -        |          |   |  10,099   |   |        |  -       |   |   |  -         |   |   |  10,099 |
| Shares issued under employee share                           |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   purchase plan                                    |  21      |   |        |  1,117    |          |   |  -        |   |        |  -       |   |   |  -         |   |   |  1,117 |
| Shares issued pursuant to exercise of                        |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   stock options                                    |  118     |   |        |  4,617    |          |   |  (1,310)  |   |        |  -       |   |   |  -         |   |   |  3,307 |
| Shares issued or distributed pursuant to                     |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   vesting of restricted share units                |  859     |   |        |  25,475   |          |   |  (25,475) |   |        |  -       |   |   |  -         |   |   |  - |
| Share repurchases for future settlement                      |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   of non-Treasury RSUs (note 14(e))                |  (300)   |   |        |  (14,481) |          |   |  8,383    |   |        |  -       |   |   |  -         |   |   |  (6,098) |
| Dividends declared                                           |  -       |   |        |  -        |          |   |  212      |   |        |  -       |   |   |  (53,392)  |   |   |  (53,180) |
| Transactions with shareholders of the                        |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   Company recognized directly in equity            |  698     |   |        |  16,728   |          |   |  (8,091)  |   |        |  -       |   |   |  (53,392)  |   |   |  (44,755) |
|                                                         |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
| Cash flow hedges (note 15(d))                                |  -       |   |        |  -        |          |   |  -        |   |        |  (7,076) |   |   |  -         |   |   |  (7,076) |
| Actuarial loss on employee benefit                           |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
|   obligations (note 12)                            |  -       |   |        |  -        |          |   |  -        |   |        |  -       |   |   |  (3,614)   |   |   |  (3,614) |
| Net earnings                                                 |  -       |   |        |  -        |          |   |  -        |   |        |  -       |   |   |  359,552   |   |   |  359,552 |
| Comprehensive income                                         |  -       |   |        |  -        |          |   |  -        |   |        |  (7,076) |   |   |  355,938   |   |   |  348,862 |
| Balance, October 5, 2014                                     |  122,324 |   | $           |  124,595  |          | $      |  20,778   |   | $           |  (7,732) |   | $      |  1,885,892 |   | $      |  2,023,533 |
|                                                         |          |   |        |           |          |   |           |   |        |          |   |   |            |   |   |   |
| See accompanying notes to consolidated financial statements. |          |   |        |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.57 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | CONSOLIDATED FINANCIAL STATEMENTS |
|--|-----------------------------------|

|                                                                          |                                                       |   |           |   | 2014            |            | 2013   |
|-------------------------------------------------------------------------------|------------------------------------------------------------|--------|----------------|--------|-----------------|-----------------|--------|
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| Cash flows from (used in) operating activities:                               |                                                       |   |           |   |            |            |   |   |
|                                                                          | Net earnings                                               |   |           |   | $               |  359,552   |   | $ |  320,178 |
|                                                                          | Adjustments to reconcile net earnings to cash flows from   |   |           |   |            |            |   |   |   |
|                                                                          |   operating activities (note 22(a))              |   |           |   |            |  93,629    |   |   |  109,023 |
|                                                                          |                                                       |   |           |   |            |  453,181   |   |   |  429,201 |
|      Changes in non-cash working capital balances:   |                                                       |   |           |   |            |            |   |   |
|                                                                          |   Trade accounts receivable                      |   |           |   |            |  (90,549)  |   |   |  2,986 |
|                                                                          |   Income taxes                                   |   |           |   |            |  (628)     |   |   |  (392) |
|                                                                          |   Inventories                                    |   |           |   |            |  (149,231) |   |   |  (38,092) |
|                                                                          |   Prepaid expenses and deposits                  |   |           |   |            |  (1,863)   |   |   |  (1,098) |
|                                                                          |   Other current assets                           |   |           |   |            |  (8,144)   |   |   |  (1,896) |
|                                                                          |   Accounts payable and accrued liabilities       |   |           |   |            |  61,334    |   |   |  36,447 |
| Cash flows from operating activities                                          |                                                       |   |           |   |  264,100   |            |   |  427,156 |
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| Cash flows from (used in) investing activities:                               |                                                       |   |           |   |            |            |   |   |
|                                                                          | Purchase of property, plant and equipment                  |   |           |   |            |  (286,553) |   |   |  (162,643) |
|                                                                          | Purchase of intangible assets                              |   |           |   |            |  (6,150)   |   |   |  (4,315) |
|                                                                          | Business acquisitions (note 5)                             |   |           |   |            |  (101,732) |   |   |  (8,027) |
|                                                                          | Proceeds on disposal of assets held for sale and property, |   |           |   |            |            |   |   |   |
|                                                                          |    plant and equipment                      |   |           |   |            |  4,894     |   |   |  2,849 |
| Cash flows used in investing activities                                       |                                                       |   |           |   |  (389,541) |            |   |  (172,136) |
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| Cash flows from (used in) financing activities:                               |                                                       |   |           |   |            |            |   |   |
|                                                                          | Increase (decrease) in amounts drawn under revolving       |   |           |   |            |            |   |   |   |
|                                                                          |    long-term bank credit facility           |   |           |   |            |  157,000   |   |   |  (181,000) |
|                                                                          | Dividends paid                                             |   |           |   |            |  (53,180)  |   |   |  (43,723) |
|                                                                          | Proceeds from the issuance of shares                       |   |           |   |            |  4,316     |   |   |  6,014 |
|                                                                          | Share repurchases for future settlement of non-Treasury    |   |           |   |            |            |   |   |   |
|                                                                          |    RSUs (note 14(e))                        |   |           |   |            |  (14,481)  |   |   |  (9,621) |
| Cash flows from (used in) financing activities                                |                                                       |   |           |   |  93,655    |            |   |  (228,330) |
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                  |                                                       |   |           |   |            |            |   |   |
|   denominated in foreign currencies                                 |                                                       |   |           |   |  (419)     |            |   |  268 |
| Net (decrease) increase in cash and cash equivalents during the year          |                                                       |   |  (32,205) |   |            |  26,958    |
| Cash and cash equivalents, beginning of year                                  |                                                       |   |           |   |  97,368    |            |   |  70,410 |
| Cash and cash equivalents, end of year                                        |                                                       |   |           | $      |  65,163    |            | $      |  97,368 |
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| Cash paid during the year (included in cash flows from operating activities): |                                                       |   |           |   |            |            |
|                                                                          | Interest                                                   |   |           |   | $               |  2,108     |   | $ |  4,278 |
|                                                                          | Income taxes                                               |   |           |   |            |  10,704    |   |   |  9,340 |
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| Supplemental disclosure of cash flow information (note 22)                    |                                                       |   |           |   |            |            |   |   |
|                                                                          |                                                       |   |           |   |            |            |   |   |   |
| See accompanying notes to consolidated financial statements.                  |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.58 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a)   | Statement of compliance: |
|-----------------|--------------------------|

| (b)   | Basis of measurement: |
|-----------------|-----------------------|

| ·   | Derivative financial instruments which are measured at fair value; |
|--------------------|--------------------------------------------------------------------|

| ·   | Assets held for sale which are stated at the lower of carrying amount and fair value less costs to sell; |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | Liabilities for cash-settled share-based payment arrangements which are measured at fair value; |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | Employee benefit obligations related to defined benefit plans which are measured as the net total of the fair value of plan assets and the present value of the defined benefit obligations; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provisions for decommissioning, site restoration costs and onerous contracts which are measured at the present value of the expenditures expected to be required to settle the obligation; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Contingent consideration in connection with a business combination which is measured at fair value; and |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | Identifiable assets acquired and liabilities assumed in connection with a business combination which are initially measured at fair value. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Initial application of new or amended accounting standards: |
|-----------------|-------------------------------------------------------------|

| (i)   | IFRS 10, Consolidated Financial Statements replaces SIC-12, Consolidation - Special Purpose Entities and parts of IAS 27, Consolidated and Separate Financial Statements. The new standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included in a company’s consolidated financial statements. The standard provides additional guidance to assist in the determination of control where it is difficult to assess. The adoption of IFRS 10 did not have an impact on the Company’s consolidated financial statements. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | IFRS 11, Joint Arrangements supersedes IAS 31, Interests in Joint Ventures and SIC-13, Jointly Controlled Entities - Non-monetary Contributions by Venturers. IFRS 11 focuses on the rights and obligations of a joint arrangement, rather than its legal form as was the case under IAS 31. The adoption of IFRS 11 did not have an impact on the Company’s consolidated financial statements. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.59 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (c)   | Initial application of new or amended accounting standards (continued): |
|-----------------|-------------------------------------------------------------------------|

| (iii)   | IFRS 12, Disclosure of Interests in Other Entities is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates, and unconsolidated structured entities. The required disclosures are provided in note 3(a)(ii) and note 23 in these consolidated financial statements. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv)   | IFRS 13, Fair Value Measurement improves consistency and reduces complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRS. The adoption of IFRS 13 did not result in any measurement adjustments or changes to our valuation techniques to determine fair value. The required disclosures are provided in note 15 to these consolidated financial statements. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (v)   | IAS 19 (Revised), Employee Benefits requires, among other changes, entities to compute the financing cost component of defined benefit plans by applying the discount rate used to measure post-employment benefit obligations to the net post-employment benefit obligations (usually, the present value of defined benefit obligations less the fair value of plan assets). Furthermore, the amendments to IAS 19 (Revised) enhance the disclosure requirements for defined benefit plans, providing additional information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans. The adoption of the amendments to IAS 19 (Revised) did not have an impact on the Company’s consolidated financial statements. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                                     | Category under IAS 39       | Category under IFRS 9 |
|--------|--------------------------------------------------------------------------|-----------------------------|-----------------------|
|   |                                                                     |                        |                  |
|   | Financial assets:                                                        |                        |                  |
|   |     Cash and cash equivalents                        | Loans and receivables       | Amortized cost        |
|   |     Trade accounts receivable                        | Loans and receivables       | Amortized cost        |
|   |     Other current assets                             | Loans and receivables       | Amortized cost        |
|   |     Long-term non-trade receivables                  |                        |                  |
|   |       included in other non-current assets | Loans and receivables       | Amortized cost        |
|   |                                                                     |                        |                  |
|   | Financial liabilities:                                                   |                        |                  |
|   |     Accounts payable and accrued                     |                        |                  |
|   |       liabilities                          | Other financial liabilities | Amortized cost        |
|   |     Long-term debt - bearing interest                |                        |                  |
|   |       at variable rates                    | Other financial liabilities | Amortized cost        |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.60 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (c)   | Initial application of new or amended accounting standards (continued): |
|-----------------|-------------------------------------------------------------------------|

| (a)   | Basis of consolidation: |
|-----------------|-------------------------|

|   | Subsidiary                                             | Jurisdiction of Incorporation | Ownershippercentage |
|--------|--------------------------------------------------------|-------------------------------|---------------------|
|   | Gildan Activewear SRL                                  | Barbados                      | 100%                |
|   | Gildan USA Inc.                                        | Delaware                      | 100%                |
|   | Gildan Yarns, LLC                                      | Delaware                      | 100%                |
|   | Gildan Honduras Properties, S. de R.L.                 | Honduras                      | 100%                |
|   | Gildan Apparel (Canada) LP                             | Ontario                       | 100%                |
|   | Gildan Hosiery Rio Nance, S. de R.L.                   | Honduras                      | 100%                |
|   | Gildan Mayan Textiles, S. de R.L.                      | Honduras                      | 100%                |
|   | Gildan Apparel USA Inc.                                | Delaware                      | 100%                |
|   | Gildan Activewear Honduras Textile Company, S. de R.L. | Honduras                      | 100%                |
|   | Gildan Activewear (UK) Limited                         | United Kingdom                | 100%                |
|   | A.K.H., S. de R. L.                                    | Honduras                      | 100%                |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.61 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a)   | Basis of consolidation (continued): |
|-----------------|-------------------------------------|

| (b)   | Foreign currency translation: |
|-----------------|-------------------------------|

| (c)   | Cash and cash equivalents: |
|-----------------|----------------------------|

| (d)   | Trade accounts receivable: |
|-----------------|----------------------------|

| (e)   | Inventories: |
|-----------------|--------------|

| (f)   | Assets held for sale: |
|-----------------|-----------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.62 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (g)   | Property, plant and equipment: |
|-----------------|--------------------------------|

|   | Asset                               | Useful life   |
|--------|-------------------------------------|---------------|
|   | Buildings and improvements          | 5 to 40 years |
|   | Manufacturing equipment             | 3 to 10 years |
|   | Other equipment, including aircraft | 2 to 25 years |

| (h)   | Intangible assets: |
|-----------------|--------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.63 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (h)   | Intangible assets (continued): |
|-----------------|--------------------------------|

|   | Asset                                         | Useful life   |
|--------|-----------------------------------------------|---------------|
|   | Customer contracts and customer relationships | 7 to 20 years |
|   | License agreements                            | 7 to 10 years |
|   | Computer software                             | 4 to 7 years  |
|   |                                          |          |

| ·   | it is technically feasible to complete the software product so that it will be available for use; |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   | management intends to complete the software product and use it; |
|--------------------|-----------------------------------------------------------------|

| ·   | there is an ability to use the software product; |
|--------------------|--------------------------------------------------|

| ·   | it can be demonstrated how the software product will generate probable future economic benefits; |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | adequate technical, financial and other resources to complete the development and to use the software product are available; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | the expenditures attributable to the software product during its development can be reliably measured. |
|--------------------|--------------------------------------------------------------------------------------------------------|

| (i)   | Goodwill: |
|-----------------|-----------|

| (j)   | Impairment of non-financial assets: |
|-----------------|-------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.64 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (j)   | Impairment of non-financial assets (continued): |
|-----------------|-------------------------------------------------|

| (k)   | Financial instruments: |
|-----------------|------------------------|

| (i)   | Financial assets measured at amortized cost |
|-----------------|---------------------------------------------|

| ·   | The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and/or interest. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | Financial assets measured at fair value |
|------------------|-----------------------------------------|

| (iii)   | Financial liabilities measured at amortized cost |
|-------------------|--------------------------------------------------|

| (iv)   | Financial liabilities measured at fair value |
|------------------|----------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.65 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (k)   | Financial instruments (continued): |
|-----------------|------------------------------------|

| ·   | Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3: inputs for the asset or liability that are not based on observable market data. |
|--------------------|------------------------------------------------------------------------------------------|

| (l)   | Derivative financial instruments and hedging relationships: |
|-----------------|-------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.66 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (l)   | Derivative financial instruments and hedging relationships (continued): |
|-----------------|-------------------------------------------------------------------------|

| (m)   | Accounts payable and accrued liabilities: |
|-----------------|-------------------------------------------|

| (n)   | Long-term debt: |
|-----------------|-----------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.67 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (o)   | Employee benefits: |
|-----------------|--------------------|

| (p)   | Provisions: |
|-----------------|-------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.68 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (q)   | Share capital: |
|-----------------|----------------|

| (r)   | Dividends declared: |
|-----------------|---------------------|

| (s)   | Revenue recognition: |
|-----------------|----------------------|

| (t)   | Cost of sales and gross profit: |
|-----------------|---------------------------------|

| (u)   | Selling, general and administrative expenses: |
|-----------------|-----------------------------------------------|

| (v)   | Product introduction expenditures: |
|-----------------|------------------------------------|

| (w)   | Restructuring and acquisition-related costs: |
|-----------------|----------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.69 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (x)   | Cotton and cotton-based yarn procurements: |
|-----------------|--------------------------------------------|

| (y)   | Government assistance: |
|-----------------|------------------------|

| (z)   | Financial expenses (income): |
|-----------------|------------------------------|

| (aa)   | Income taxes: |
|------------------|---------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.70 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (bb)   | Earnings per share: |
|------------------|---------------------|

| (cc)   | Share based payments: |
|------------------|-----------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.71 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (cc)   | Share based payments (continued): |
|------------------|-----------------------------------|

| (dd)   | Leases: |
|------------------|---------|

| (ee)   | Use of estimates and judgments: |
|------------------|---------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.72 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (ee)   | Use of estimates and judgments (continued): |
|------------------|---------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.73 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (ee)   | Use of estimates and judgments (continued): |
|------------------|---------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.74 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                                   |                                     |   |   |   |   |          |         |   |          |           |
|----------------------------------------|------------------------------------------|--------|--------|--------|--------|---------------|--------------|--------|---------------|----------------|
| Assets acquired:                       |                                     |   |   |   |   |          |         |   |          |
|                                   | Trade accounts receivable                |   |   |   |   | $             |  10,504 |
|                                   | Inventories                              |   |   |   |   |          |         |   |          |  28,214   |
|                                   | Other current assets                     |   |   |   |   |          |         |   |          |  685      |
|                                   | Property, plant and equipment            |   |   |   |   |          |         |   |          |  5,951    |
|                                   | Intangible assets (i)                    |   |   |   |   |          |         |   |          |  50,892   |
|                                   |                                     |   |   |   |   |          |         |   |          |  96,246   |
|                                   |                                     |   |   |   |   |          |         |   |          |           |
| Liabilities assumed:                   |                                     |   |   |   |   |          |         |   |          |
|                                   | Accounts payable and accrued liabilities |   |   |   |   |          |         |   |          |  (9,570)  |
|                                   | Deferred income taxes                    |   |   |   |   |          |         |   |          |  (4,890)  |
|                                   |                                     |   |   |   |   |          |         |   |          |  (14,460) |
|                                   |                                     |   |   |   |   |          |         |   |          |           |
| Goodwill                               |                                     |   |   |   |   |          |         |   |  26,346  |
| Net assets acquired at fair value      |                                     |   |   |   |   |  108,132 |
|                                   |                                     |   |   |   |   |          |         |   |          |
| Cash consideration paid at closing     |                                     |   |   |   |   |          |         |   |  101,732 |
| Fair value of contingent consideration |                                     |   |   |   |   |          |         |   |  6,400   |
|                                   |                                     |   |   |   | $      |  108,132 |

| (i) | The intangible assets acquired are comprised of customer relationships in the amount of $33.0 million, which are being amortized on a straight line basis over their estimated useful lives of twenty years, license agreements in the amount of $2.3 million, which are being amortized on a straight line basis over their estimated useful lives of ten years and trademarks in the amount of $15.6 million, which are not being amortized as they are considered to be indefinite life intangible assets. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.75 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.76 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                                                          |                                     |   |         |          | New Buffalo   |         |          | CanAm         |            |          | Total         |
|---------------------------------------------------------------|------------------------------------------|--------|--------------|---------------|---------------|--------------|---------------|---------------|-----------------|---------------|---------------|
|                                                          |                                     |   |         |          |          |         |          |          |            |          |          |
| Assets acquired:                                              |                                     |   |         |          |          |         |          |          |            |
|                                                          | Cash and cash equivalents                |   | $            |  -       |          | $            |  8,817   |          | $               |  8,817   |
|                                                          | Trade accounts receivable                |   |         |  5,506   |          |         |  -       |          |            |  5,506   |
|                                                          | Inventories                              |   |         |  2,033   |          |         |  2,227   |          |            |  4,260   |
|                                                          | Prepaid expenses and deposits            |   |         |  69      |          |         |  62      |          |            |  131     |
|                                                          | Other current assets                     |   |         |  25      |          |         |  401     |          |            |  426     |
|                                                          | Property, plant and equipment            |   |         |  1,990   |          |         |  12,404  |          |            |  14,394  |
|                                                          | Other non-current assets                 |   |         |  -       |          |         |  75      |          |            |  75      |
|                                                          |                                     |   |         |          |  9,623   |         |          |  23,986  |            |          |  33,609  |
|                                                          |                                     |   |         |          |          |         |          |          |            |          |          |
| Liabilities assumed:                                          |                                     |   |         |          |          |         |          |          |            |
|                                                          | Accounts payable and accrued liabilities |   |         |  (3,286) |          |         |  (3,556) |          |            |  (6,842) |
|                                                          | Deferred income taxes                    |   |         |  -       |          |         |  (914)   |          |            |  (914)   |
|                                                          |                                     |   |         |          |  (3,286) |         |          |  (4,470) |            |          |  (7,756) |
|                                                          |                                     |   |         |          |          |         |          |          |            |          |          |
| Goodwill                                                      |                                     |   |  3,958  |          |          |  2,308  |          |          |  6,266     |
| Net assets acquired at fair value                             |                                     | $      |  10,295 |          | $             |  21,824 |          | $             |  32,119    |
|                                                          |                                     |   |         |          |          |         |          |          |            |          |          |
| Cash consideration paid at closing                            |                                     | $      |  5,757  |          | $             |  11,087 |          | $             |  16,844(i) |
| Fair value of the equity interest in CanAm held by the        |                                     |   |         |          |          |         |          |          |            |
|   Company immediately prior to the acquisition date |                                     |   |  -      |          |          |  11,087 |          |          |  11,087    |
| Balance due                                                   |                                     |   |  500    |          |          |  -      |          |          |  500       |
| Settlement of pre-existing relationships                      |                                     |   |  4,038  |          |          |  (350)  |          |          |  3,688     |
|                                                          |                                     |   |         | $             |  10,295  |         | $             |  21,824  |            | $             |  32,119  |

| (i) | The cash consideration paid has been presented in the 2013 consolidated statement of cash flows as a cash outflow from investing activities of $8.0 million, which represents the cash consideration paid of $16.8 million, net of cash acquired of $8.8 million. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.77 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|          |   |   |   | October 5, |   | September 29, |
|---------------|--------|--------|--------|------------|--------|---------------|
|          |   |   |   | 2014       |   | 2013          |
|          |   |   |   |       |   |          |   |   |   |
| Bank balances |   |   |   |       | $      |  65,099  |   | $ |  96,493 |
| Term deposits |   |   |   |       |   |  64      |   |   |  875 |
|          |   |   |   |       | $      |  65,163  |   | $ |  97,368 |

|                            |   |   |   | October 5, |   | September 29, |
|---------------------------------|--------|--------|--------|------------|--------|---------------|
|                            |   |   |   | 2014       |   | 2013          |
|                            |   |   |   |       |   |          |   |   |   |
| Trade accounts receivable       |   |   |   |       | $      |  358,688 |   | $ |  258,685 |
| Allowance for doubtful accounts |   |   |   |       |   |  (4,423) |   |   |  (3,667) |
|                            |   |   |   |       | $      |  354,265 |   | $ |  255,018 |

|                                           |   |   |   |   |   | 2014          |   |   | 2013          |
|------------------------------------------------|--------|--------|--------|--------|--------|---------------|--------|--------|---------------|
|                                           |   |   |   |   |   |          |   |   |          |
| Balance, beginning of year                     |   |   |   |   | $      |  (3,667) |   | $      |  (4,495) |
| Bad debt expense                               |   |   |   |   |   |  (2,420) |   |   |  (713)   |
| Write-off of trade accounts receivable         |   |   |   |   |   |  1,834   |   |   |  1,607   |
| Increase due to business acquisitions (note 5) |   |   |   |   |   |  (170)   |   |   |  (66)    |
| Balance, end of year                           |   |   |   |   | $      |  (4,423) |   | $      |  (3,667) |

|                                      |   |   |   | October 5, |   | September 29, |
|-------------------------------------------|--------|--------|--------|------------|--------|---------------|
|                                      |   |   |   | 2014       |   | 2013          |
|                                      |   |   |   |       |   |          |   |   |   |
| Raw materials and spare parts inventories |   |   |   |       | $      |  94,946  |   | $ |  69,508 |
| Work in progress                          |   |   |   |       |   |  52,010  |   |   |  36,507 |
| Finished goods                            |   |   |   |       |   |  632,451 |   |   |  489,779 |
|                                      |   |   |   |       | $      |  779,407 |   | $ |  595,794 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.78 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                        | Land   |         | Buildings and improvements |   | Manufacturing equipment |   | Other equipment |          | Assets not yet utilized in operations |   | Total         |
|-----------------------------|--------|--------------|----------------------------|--------|-------------------------|--------|-----------------|---------------|---------------------------------------|--------|---------------|
|                        |   |         |                       |   |                    |
| 2014                        |   |         |                       |   |                    |
|                        |   |         |                       |   |                    |   |            |          |                                  |   |          |   |   |   |   |   |   |
| Cost                        |   |         |                       |   |                    |   |            |          |                                  |   |          |   |   |   |   |   |   |
| Balance, September 29, 2013 | $      |  39,922 |                       | $      |  249,230           |   | $               |  532,557 |                                  | $      |  114,628 |   | $ |  114,030 |   | $ |  1,050,367 |
| Additions                   |   |  5,759  |                       |   |  48,524            |   |            |  61,881  |                                  |   |  17,510  |   |   |  166,872 |   |   |  300,546 |
| Additions through business  |   |         |                       |   |                    |   |            |          |                                  |   |          |   |   |   |   |   |   |
|   acquisitions    |   |  -      |                       |   |  32                |   |            |  5,780   |                                  |   |  139     |   |   |  - |   |   |  5,951 |
| Transfers                   |   |  -      |                       |   |  17,369            |   |            |  95,848  |                                  |   |  813     |   |   |  (114,030) |   |   |  - |
| Disposals                   |   |  (140)  |                       |   |  (332)             |   |            |  (8,697) |                                  |   |  (3,402) |   |   |  - |   |   |  (12,571) |
| Balance, October 5, 2014    | $      |  45,541 |                       | $      |  314,823           |   | $               |  687,369 |                                  | $      |  129,688 |   | $ |  166,872 |   | $ |  1,344,293 |
|                        |   |         |                       |   |                    |   |            |          |                                  |   |          |   |   |   |   |   |   |
| Accumulated depreciation    |   |         |                       |   |                    |   |            |          |                                  |   |          |   |   |   |   |
| Balance, September 29, 2013 | $      |  -      |                       | $      |  72,465            |   | $               |  262,785 |                                  | $      |  59,248  |   | $ |  - |   | $ |  394,498 |
| Depreciation                |   |  -      |                       |   |  14,337            |   |            |  58,816  |                                  |   |  11,408  |   |   |  - |   |   |  84,561 |
| Disposals                   |   |  -      |                       |   |  (191)             |   |            |  (5,035) |                                  |   |  (3,266) |   |   |  - |   |   |  (8,492) |
| Balance, October 5, 2014    | $      |  -      |                       | $      |  86,611            |   | $               |  316,566 |                                  | $      |  67,390  |   | $ |  - |   | $ |  470,567 |
| Carrying amount,            |   |         |                       |   |                    |   |            |          |                                  |   |          |   |   |   |   |   |   |
| October 5, 2014             | $      |  45,541 |                       | $      |  228,212           |   | $               |  370,803 |                                  | $      |  62,298  |   | $ |  166,872 |   | $ |  873,726 |

|                           | Land   |         | Buildings and improvements |   | Manufacturing equipment |   | Other equipment |           | Assets not yet utilized in operations |   | Total         |
|--------------------------------|--------|--------------|----------------------------|--------|-------------------------|--------|-----------------|----------------|---------------------------------------|--------|---------------|
|                           |   |         |                       |   |                    |
| 2013                           |   |         |                       |   |                    |
|                           |   |         |                       |   |                    |   |            |           |                                  |   |          |   |   |   |   |   |   |
| Cost                           |   |         |                       |   |                    |   |            |           |                                  |   |          |   |   |   |   |
| Balance, September 30, 2012    | $      |  38,936 |                       | $      |  231,032           |   | $               |  532,341  |                                  | $      |  96,624  |   | $ |  11,769 |   | $ |  910,702 |
| Additions                      |   |  648    |                       |   |  13,889            |   |            |  18,158   |                                  |   |  23,498  |   |   |  114,030 |   |   |  170,223 |
| Additions through business     |   |         |                       |   |                    |   |            |           |                                  |   |          |   |   |   |   |   |   |
|   acquisitions       |   |  338    |                       |   |  4,613             |   |            |  9,320    |                                  |   |  123     |   |   |  - |   |   |  14,394 |
| Transfers                      |   |  -      |                       |   |  435               |   |            |  9,144    |                                  |   |  2,190   |   |   |  (11,769) |   |   |  - |
| Disposals                      |   |  -      |                       |   |  (739)             |   |            |  (36,406) |                                  |   |  (7,807) |   |   |  - |   |   |  (44,952) |
| Balance, September 29, 2013    | $      |  39,922 |                       | $      |  249,230           |   | $               |  532,557  |                                  | $      |  114,628 |   | $ |  114,030 |   | $ |  1,050,367 |
|                           |   |         |                       |   |                    |   |            |           |                                  |   |          |   |   |   |   |   |   |
| Accumulated depreciation       |   |         |                       |   |                    |   |            |           |                                  |   |          |   |   |   |   |
| Balance, September 30, 2012    | $      |  -      |                       | $      |  65,168            |   | $               |  242,923  |                                  | $      |  50,174  |   | $ |  - |   | $ |  358,265 |
| Depreciation                   |   |  -      |                       |   |  7,721             |   |            |  54,551   |                                  |   |  16,811  |   |   |  - |   |   |  79,083 |
| Disposals                      |   |  -      |                       |   |  (424)             |   |            |  (34,689) |                                  |   |  (7,737) |   |   |  - |   |   |  (42,850) |
| Balance, September 29, 2013    | $      |  -      |                       | $      |  72,465            |   | $               |  262,785  |                                  | $      |  59,248  |   | $ |  - |   | $ |  394,498 |
| Carrying amount,               |   |         |                       |   |                    |   |            |           |                                  |   |          |   |   |   |   |   |   |
|   September 29, 2013 | $      |  39,922 |                       | $      |  176,765           |   | $               |  269,772  |                                  | $      |  55,380  |   | $ |  114,030 |   | $ |  655,869 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.79 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| 2014                        |   | Customer contracts and customer relationships | Trademarks    | License agreements | Computer software |          | Non-compete agreements |         | Total        |
|-----------------------------|--------|-----------------------------------------------|---------------|--------------------|-------------------|---------------|------------------------|--------------|--------------|
|                        |   |                                          |          |               |              |          |                   |         |         |   |   |   |   |   |   |   |   |   |
| Cost                        |   |                                          |          |               |              |          |                   |         |         |   |   |   |   |   |   |   |   |   |
| Balance, September 29, 2013 |   | $                                             |  133,866 |               | $                 |  102,045 |                   | $            |  51,000 |   | $ |  31,740 |   | $ |  1,700 |   | $ |  320,351 |
| Additions                   |   |                                          |  -       |               |              |  -       |                   |         |  -      |   |   |  6,150 |   |   |  - |   |   |  6,150 |
| Additions through business  |   |                                          |          |               |              |          |                   |         |         |   |   |   |   |   |   |   |   |   |
|   acquisitions    |   |                                          |  32,965  |               |              |  15,627  |                   |         |  2,300  |   |   |  - |   |   |  - |   |   |  50,892 |
| Disposals                   |   |                                          |  -       |               |              |  -       |                   |         |  -      |   |   |  (959) |   |   |  - |   |   |  (959) |
| Balance, October 5, 2014    | $      |  166,831                                 |          | $                  |  117,672     |          | $                      |  53,300 |         | $ |  36,931 |   | $ |  1,700 |   | $ |  376,434 |
|                        |   |                                          |          |               |              |          |                   |         |         |   |   |   |   |   |   |   |   |   |
| Accumulated amortization    |   |                                          |          |               |              |          |                   |         |         |   |   |   |   |   |   |
| Balance, September 29, 2013 |   | $                                             |  30,451  |               | $                 |  -       |                   | $            |  18,689 |   | $ |  21,974 |   | $ |  1,700 |   | $ |  72,814 |
| Amortization                |   |                                          |  7,556   |               |              |  -       |                   |         |  7,660  |   |   |  2,009 |   |   |  - |   |   |  17,225 |
| Disposals                   |   |                                          |  -       |               |              |  -       |                   |         |  -      |   |   |  (958) |   |   |  - |   |   |  (958) |
| Balance, October 5, 2014    | $      |  38,007                                  |          | $                  |  -           |          | $                      |  26,349 |         | $ |  23,025 |   | $ |  1,700 |   | $ |  89,081 |
| Carrying amount,            |   |                                          |          |               |              |          |                   |         |         |   |   |   |   |   |   |   |   |   |
|   October 5, 2014 | $      |  128,824                                 |          | $                  |  117,672     |          | $                      |  26,951 |         | $ |  13,906 |   | $ |  - |   | $ |  287,353 |

| 2013                           |   | Customer contracts and customer relationships | Trademarks    | License agreements | Computer software |          | Non-compete agreements |   | Total        |
|--------------------------------|--------|-----------------------------------------------|---------------|--------------------|-------------------|---------------|------------------------|--------|--------------|
|                           |   |                                          |          |               |              |          |                   |   |         |   |   |   |   |   |   |   |   |   |
| Cost                           |   |                                          |          |               |              |          |                   |   |         |   |   |   |   |   |   |   |   |   |
| Balance, September 30, 2012    |   | $                                             |  133,866 |               | $                 |  102,045 |                   | $      |  51,000 |   | $ |  28,105 |   | $ |  1,700 |   | $ |  316,716 |
| Additions                      |   |                                          |  -       |               |              |  -       |                   |   |  -      |   |   |  4,315 |   |   |  - |   |   |  4,315 |
| Disposals                      |   |                                          |  -       |               |              |  -       |                   |   |  -      |   |   |  (680) |   |   |  - |   |   |  (680) |
| Balance, September 29, 2013    |   | $                                             |  133,866 |               | $                 |  102,045 |                   | $      |  51,000 |   | $ |  31,740 |   | $ |  1,700 |   | $ |  320,351 |
|                           |   |                                          |          |               |              |          |                   |   |         |   |   |   |   |   |   |   |   |   |
| Accumulated amortization       |   |                                          |          |               |              |          |                   |   |         |   |   |   |   |   |   |
| Balance, September 30, 2012    |   | $                                             |  23,299  |               | $                 |  -       |                   | $      |  11,087 |   | $ |  21,109 |   | $ |  1,240 |   | $ |  56,735 |
| Amortization                   |   |                                          |  7,152   |               |              |  -       |                   |   |  7,602  |   |   |  1,541 |   |   |  460 |   |   |  16,755 |
| Disposals                      |   |                                          |  -       |               |              |  -       |                   |   |  -      |   |   |  (676) |   |   |  - |   |   |  (676) |
| Balance, September 29, 2013    |   | $                                             |  30,451  |               | $                 |  -       |                   | $      |  18,689 |   | $ |  21,974 |   | $ |  1,700 |   | $ |  72,814 |
| Carrying amount,               |   |                                          |          |               |              |          |                   |   |         |   |   |   |   |   |   |   |   |   |
|   September 29, 2013 |   | $                                             |  103,415 |               | $                 |  102,045 |                   | $      |  32,311 |   | $ |  9,766 |   | $ |  - |   | $ |  247,537 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.80 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                         |   |   | 2014   |          | 2013   |
|------------------------------|--------|--------|--------|---------------|--------|
|                         |   |   |   |          |   |   |   |
| Balance, beginning of period |   |   | $      |  150,099 |   | $ |  143,833 |
| Goodwill acquired (note 5)   |   |   |   |  26,346  |   |   |  6,266 |
| Balance, end of period       |   |   | $      |  176,445 |   | $ |  150,099 |
|                         |   |   |   |          |   |   |   |

|            |       |   |   |   | October 5, |   | September 29, |
|-----------------|------------|--------|--------|--------|------------|--------|---------------|
|            |       |   |   |   | 2014       |   | 2013          |
|            |       |   |   |   |       |   |          |   |   |   |
| Branded Apparel |       |   |   |   |       |   |          |   |   |
|            | Goodwill   |   |   |   |       | $      |  170,649 |   | $ |  144,303 |
|            | Trademarks |   |   |   |       |   |  112,972 |   |   |  97,345 |
|            |       |   |   |   |       |   |  283,621 |   |   |  241,648 |
|            |       |   |   |   |       |   |          |   |   |   |
| Printwear       |       |   |   |   |       |   |          |   |   |
|            | Goodwill   |   |   |   |       |   |  5,796   |   |   |  5,796 |
|            | Trademarks |   |   |   |       |   |  4,700   |   |   |  4,700 |
|            |       |   |   |   |       | $      |  10,496  |   | $ |  10,496 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.81 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                           |   |   |   | October 5, |   | September 29, |
|--------------------------------|--------|--------|--------|------------|--------|---------------|
|                           |   |   |   | 2014       |   | 2013          |
|                           |   |   |   |       |   |          |   |   |   |
| Defined benefit pension plan   |   |   |   |       | $      |  -       |   | $ |  5,776 |
| Statutory severance obligation |   |   |   |       |   |  17,556  |   |   |  10,935 |
| Defined contribution plan      |   |   |   |       |   |  2,009   |   |   |  1,775 |
|                           |   |   |   |       | $      |  19,565  |   | $ |  18,486 |

| (a)   | Defined benefit pension plan: |
|-----------------|-------------------------------|

|   |                                                          |   |   |    | 2014   |   | 2013           |
|--------|---------------------------------------------------------------|--------|--------|---------|--------|--------|----------------|
|   |                                                          |   |   |    |   |   |           |   |   |   |
|   | Benefit obligation, beginning of year                         |   |   |    |   | $      |  8,807    |   | $ |  9,571 |
|   | Interest cost                                                 |   |   |    |   |   |  -        |   |   |  315 |
|   | Actuarial gain                                                |   |   |    |   |   |  -        |   |   |  (529) |
|   | Settlement loss                                               |   |   |    |   |   |  1,898    |   |   |  - |
|   | Benefits paid                                                 |   |   |    |   |   |  (57)     |   |   |  (550) |
|   | Plan settlements                                              |   |   |    |   |   |  (10,648) |   |   |  - |
|   | Benefit obligation, end of year                               |   |   |    |   | $      |  -        |   | $ |  8,807 |
|   |                                                          |   |   |    |   |   |           |   |   |   |
|   | Fair value of plan assets, beginning of year                  |   |   |    |   | $      |  3,031    |   | $ |  3,700 |
|   | Employer contributions                                        |   |   |    |   |   |  7,674    |   |   |  - |
|   | Plan settlements                                              |   |   |    |   |   |  (10,648) |   |   |  - |
|   | Expected return on plan assets                                |   |   |    |   |   |  -        |   |   |  101 |
|   | Actuarial loss                                                |   |   |    |   |   |  -        |   |   |  (220) |
|   | Benefits paid                                                 |   |   |    |   |   |  (57)     |   |   |  (550) |
|   | Fair value of plan assets, end of year                        |   |   |    |   | $      |  -        |   | $ | 3,031 |
|   |                                                          |   |   |    |   |   |           |   |   |   |
|   | Plan deficit / defined benefit pension liability, end of year |   | $      |  - |   | $      |  5,776    |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.82 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a)   | Defined benefit pension plan (continued): |
|-----------------|-------------------------------------------|

| (b)   | Statutory severance obligation: |
|-----------------|---------------------------------|

|   |                                  |   |   |   |   |   | 2014           |   |   | 2013           |
|--------|---------------------------------------|--------|--------|--------|--------|--------|----------------|--------|--------|----------------|
|   |                                  |   |   |   |   |   |           |   |   |           |
|   | Benefit obligation, beginning of year |   |   |   |   | $      |  10,935   |   | $      |  12,246   |
|   | Service cost                          |   |   |   |   |   |  9,312    |   |   |  8,242    |
|   | Interest cost                         |   |   |   |   |   |  5,232    |   |   |  3,650    |
|   | Actuarial loss (gain)                 |   |   |   |   |   |  3,614    |   |   |  (127)    |
|   | Foreign exchange gain                 |   |   |   |   |   |  (880)    |   |   |  (1,195)  |
|   | Benefits paid                         |   |   |   |   |   |  (10,657) |   |   |  (11,881) |
|   | Benefit obligation, end of year       |   |   |   |   | $      |  17,556   |   | $      |  10,935   |

| (c)   | Defined contribution plan: |
|-----------------|----------------------------|

| (d)   | Actuarial losses recognized in other comprehensive income: |
|-----------------|------------------------------------------------------------|

|                                |   | Decommissioning   |         |       |   |        |   |
|-------------------------------------|--------|-------------------|--------------|------------|--------|-------------|--------|
|                                |   | and site          |         | Lease exit |   |        |   |
|                                |   | restoration costs |         | costs      |   |        | Total  |
|                                |   |              |         |       |   |        |   |   |   |
| Balance, September 29, 2013         |   | $                 |  13,853 |       | $      |  2,472 |   | $ |  16,325 |
| Provisions made during the year     |   |              |  1,968  |       |   |  -     |   |   |  1,968 |
| Provisions utilized during the year |   |              |  -      |       |   |  (690) |   |   |  (690) |
| Accretion of interest               |   |              |  323    |       |   |  -     |   |   |  323 |
| Balance, October 5, 2014            |   | $                 |  16,144 |       | $      |  1,782 |   | $ |  17,926 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.83 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a)   | Shareholder rights plan: |
|-----------------|--------------------------|

| (b) | Accumulated other comprehensive income (“AOCI”): |
|-----|--------------------------------------------------------------|

| (c) | Share capital: |
|-----|----------------|

| (d) | Normal course issuer bid: |
|-----|---------------------------|

| (e) | Common shares purchased as settlement for non-Treasury RSUs: |
|-----|--------------------------------------------------------------|

|   |                       |      |        | 2014   |        | 2013           |
|--------|----------------------------|-----------|-------------|--------|-------------|----------------|
|   |                       |      |        | Shares |        |           | Amount |   |   | Average cost |   | Shares |   |   | Amount |   |   | Average Cost |
|   |                       |      |        |   |        |           |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Balance, beginning of year |  283 |        | $      |  9,747 |           | $ |  34.44 |   |  210 |   | $ |  5,990 |   | $ |  28.52 |
|   | Purchased                  |      |  300   |   |        |  14,481   |   |   |  48.27 |   |  278 |   |   |  9,621 |   |   |  34.61 |
|   | Distributed                |      |  (436) |   |        |  (17,173) |   |   |  39.39 |   |  (205) |   |   |  (5,864) |   |   |  28.60 |
|   | Balance, end of year       |      |  147   |   | $           |  7,055    |   | $ |  47.99 |   |  283 |   | $ |  9,747 |   | $ |  34.44 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.84 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (f) | Contributed surplus: |
|-----|----------------------|

| (a)   | Financial instruments – carrying amounts and fair values: |
|-----------------|-----------------------------------------------------------------|

|                                                                        |   | October 5, |          | September 29, |
|-----------------------------------------------------------------------------|--------|------------|---------------|---------------|
|                                                                        |   |       | 2014          |          |   | 2013 |
|                                                                        |   |       |          |          |   |   |
| Financial assets                                                            |   |       |          |          |   |   |
| Amortized cost:                                                             |   |       |          |          |   |   |
|     Cash and cash equivalents                           |   | $          |  65,163  |          | $ |  97,368 |
|     Trade accounts receivable                           |   |       |  354,265 |          |   |  255,018 |
|     Other current assets                                |   |       |  17,824  |          |   |  9,931 |
|     Long-term non-trade receivables included in other   |   |       |          |          |   |   |
|       non-current assets                      |   |       |  4,008   |          |   |  3,400 |
| Derivative financial instruments designated as effective                    |   |       |          |          |   |   |
|   hedging instruments included in other current assets            |   |       |  920     |          |   |  1,103 |
|                                                                        |   |       |          |          |   |   |
| Financial liabilities                                                       |   |       |          |          |   |   |
| Amortized cost:                                                             |   |       |          |          |   |   |
|     Accounts payable and accrued liabilities            |   | $          |  361,377 |          | $ |  287,382 |
|     Long-term debt - bearing interest at variable rates |   |       |  157,000 |          |   |  - |
| Derivative financial instruments designated as effective                    |   |       |          |          |   |   |
|   hedging instruments included in accounts payable                |   |       |          |          |   |   |
|   and accrued liabilities                                         |   |       |  7,335   |          |   |  2,032 |
| Contingent consideration included in accounts payable                       |   |       |          |          |   |   |
|   and accrued liabilities                                         |   |       |  5,959   |          |   |  - |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.85 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a)   | Financial instruments – carrying amounts and fair values (continued): |
|-----------------|-----------------------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.86 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                                |             |           |           |       |         |   |          |                    | Carrying and fair value |   | Maturity  |
|-------------------------------------|------------------|----------------|----------------|------------|--------------|--------|---------------|-------------------------|-------------------------|--------|-----------|
|                                |             | Notional       |           |       |         |   |          |                    |                    |   |      | Accounts |   |   |   |
|                                |             |  foreign  |           |       |         |   |          |                    |                    |   |      | payable |   |   |   |
|                                |             |  currency | Average        |       | Notional     |   | Other         |                    | and                     |   |      |   |
|                                |             |  amount   |  exchange |       |  U.S. $ |   |  current |                    | accrued                 |   | 0 to 12   |
|                                | equivalent       | rate           |           | equivalent |         | assets |          |   liabilities |                    | months |
|                                |             |           |           |       |         |   |          |                    |                    |   |      |   |   |   |   |   |   |
| Cash flow hedges:                   |             |           |           |       |         |   |          |                    |                    |   |      |   |   |   |   |   |
| Forward foreign exchange contracts: |             |           |           |       |         |   |          |                    |                    |   |      |   |   |   |
|                                | Sell GBP/Buy USD |           |  3,229    |       |  1.6668 |   |          |  5,382             |                    |   |  173 |   |   |  - |   |   |  173 |
|                                | Sell EUR/Buy USD |           |  7,386    |       |  1.3693 |   |          |  10,114            |                    |   |  747 |   |   |  - |   |   |  747 |
|                                |             |           |           |       |         |   |          |                    |                    |   |      |   |   |   |   |   |   |
| Fair value hedges:                  |             |           |           |       |         |   |          |                    |                    |   |      |   |   |   |   |   |
| Forward foreign exchange contracts: |             |           |           |       |         |   |          |                    |                    |   |      |   |   |   |
|                                | Sell USD/Buy CHF |           |  28,854   |       |  1.1350 |   |          |  32,749            |                    |   |  -   |   |   |  (2,397) |   |   |  (2,397) |
|                                | Sell USD/Buy EUR |           |  32,375   |       |  1.3252 |   |          |  42,902            |                    |   |  -   |   |   |  (1,832) |   |   |  (1,832) |
|                                |             |           |           |       |         |   | $             |  91,147            |                    | $      |  920 |   | $ |  (4,229) |   | $ |  (3,309) |

|              |   |         |     |   |                      |          |     |    |          |   |
|-------------------|--------|--------------|----------|--------|---------------------------|---------------|----------|---------|---------------|--------|
|              |   |         |     |   | Carrying and fair value   |          | Maturity |
|              |   |         | Notional |   |                      | Accounts      |     |    |          |
|              |   |         | amount   |   |                      | payable and   |     | 0 to 12 |
|              |   | (pounds)     |     |   |  accrued liabilities |          | months   |
|              |   |         |     |   |                      |          |     |    |          |   |
| Cash flow hedges: |   |         |     |   |                      |          |     |    |          |
|              |   |         |     |   |                      |          |     |    |          |   |
| Zero-cost collars |   |  23,000 |     |   | $                         |  (3,106) |     | $       |  (3,106) |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.87 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                  |               |               |            |        |               |               |   |               |            |   |   | Change in                                |    |    | Cash   |
|-----------------------|--------------------|--------------------|-----------------|-------------|--------------------|--------------------|--------|--------------------|-----------------|--------|--------|------------------------------------------|---------|---------|--------|
|                  |               |               |            |        |               |               |   | Accumulated amount |            |   |   | value used                               |    |    | flow   |
|                  |               | Carrying amount of |            |        | of FVH adjustments |               |   |               | for calculating |   |   | hedge                                    |
|                  |               |               | the hedged item |        |               | on the hedged item |   | Line               |            | hedge  |   |                                     | reserve |
|                  |               | Assets             |            | Liabilities |               | Assets             |   | Liabilities        |            | item   |   | ineffectiveness      |    | (AOCI)  |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |   |
| Cash flow hedges:     |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |   |
| Foreign currency risk |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |
|                  | Forecast sales     |               |  -         |        |               |  -            |   |               |  -         |   |   |  -                                  |    |    |   | $ |  426 |   | $ |  (426) |
|                  | Forecast expenses  |               |  -         |        |               |  -            |   |               |  -         |   |   |  -                                  |    |    |   |   |  - |   |   |  - |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |   |
| Commodity risk        |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |
|                  | Forecast purchases |               |  -         |        |               |  -            |   |               |  -         |   |   |  -                                  |    |    |   |   |  (8,158) |   |   |  8,158 |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |   |
| Fair value hedges:    |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |   |
| Foreign currency risk |               |               |            |        |               |               |   |               |            |   |   |                                     |    |    |   |   |   |   |   |
|                  | Firm commitment    | $                  |  5,040     |        | $                  |  -            |   | $                  |  5,040     |   | $      |  -                                  |    | Other   |   |   |  (5,040) |   |   |  - |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    | current |   |   |   |   |   |   |
|                  |               |               |            |        |               |               |   |               |            |   |   |                                     |    | assets  |   |   |   |   |   |   |

| (c) | Financial expenses, net: |
|-----|--------------------------|

|                                                                 |   |   | 2014          |        | 2013   |
|----------------------------------------------------------------------|--------|--------|---------------|-------------|--------|
|                                                                 |   |   |          |        |   |   |   |
| Interest expense on financial liabilities recorded at amortized cost |   | $      |  2,061   |        | $      |  3,899 |
| Recognition of deferred hedging loss on interest rate swaps (i)      |   |   |  -       |        |   |  4,734 |
| Bank and other financial charges                                     |   |   |  3,299   |        |   |  3,674 |
| Interest accretion on discounted provisions                          |   |   |  323     |        |   |  312 |
| Foreign exchange (gain) loss                                         |   |   |  (2,786) |        |   |  239 |
| Derivative gain on financial instruments not designated for          |   |   |          |        |   |   |
|   hedge accounting                                         |   |   |  -       |        |   |  (845) |
|                                                                 |   |   | $             |  2,897 |   | $ |  12,013 |

| (i)   | During the fourth quarter of fiscal 2013, the Company concluded that the majority of the designated interest payments for which interest rate swap contracts has been entered into were no longer expected to occur, and that it was no longer economic to maintain the interest rate swaps as the borrowings under the credit facility were fully repaid at the end of fiscal 2013. Therefore, the interest rate swaps were unwound, and the corresponding deferred loss on interest rate swaps remaining in accumulated other comprehensive income of $4.7 million was recognized immediately in net earnings, under the financial expenses caption. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.88 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (d) | Hedging components of other comprehensive income (“OCI”): |
|-----|-----------------------------------------------------------------------|

|                                                                             |   |   | 2014          |   |   | 2013        |
|----------------------------------------------------------------------------------|--------|--------|---------------|--------|--------|-------------|
|                                                                             |   |   |          |   |   |        |
| Net (loss) gain on derivatives designated as cash flow hedges                    |   |   |          |   |   |        |
|       Foreign currency risk                        |   | $      |  (1,307) |   | $      |  1,168 |
|       Commodity price risk                         |   |   |  (8,158) |   |   |  -     |
|                                                                             |   |   |          |   |   |        |
| Income taxes                                                                     |   |   |  95      |   |   |  (12)  |
|                                                                             |   |   |          |   |   |        |
| Amounts reclassified from OCI to net earnings, related to foreign                |   |   |          |   |   |        |
|   currency risk, and included in:                                      |   |   |          |   |   |        |
|       Net sales                                    |   |   |  3,272   |   |   |  469   |
|       Cost of sales                                |   |   |  -       |   |   |  (321) |
|       Selling, general and administrative expenses |   |   |  113     |   |   |  -     |
|       Financial expenses, net                      |   |   |  (67)    |   |   |  5,110 |
|       Income taxes                                 |   |   |  (33)    |   |   |  5     |
|                                                                             |   |   |          |   |   |        |
| Amounts reclassified from OCI to property, plant and equipment,                  |   |   |          |   |   |        |
|   related to foreign currency risk                                     |   |   |  (991)   |   |   |  -     |
|                                                                             |   |   |          |   |   |        |
| Hedging loss                                                                     |   | $      |  (7,076) |   | $      |  6,419 |

| (a) | Employee share purchase plans: |
|-----|--------------------------------|

| (b) | Stock options and restricted share units: |
|-----|-------------------------------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.89 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (b) | Stock options and restricted share units: |
|-----|-------------------------------------------|

|                                          |      |   |   |   |   |        |        |   | Weighted average |
|-----------------------------------------------|-----------|--------|--------|--------|--------|-------------|-------------|--------|------------------|
|                                          |      |   |   |   |   |        |        |   |             | exercise price |
|                                          |      |   |   |   |   |        | Number      |   | (CA$)            |
|                                          |      |   |   |   |   |        |        |   |             |   |
| Stock options outstanding, September 30, 2012 |      |   |   |   |   |  1,054 |        | $      | 25.18            |
| Changes in outstanding stock options:         |      |   |   |   |   |        |        |   |             |
|                                          | Granted   |   |   |   |   |        |  191   |   |             | 31.17 |
|                                          | Exercised |   |   |   |   |        |  (195) |   |             | 27.18 |
|                                          | Forfeited |   |   |   |   |        |  (4)   |   |             | 29.72 |
| Stock options outstanding, September 29, 2013 |      |   |   |   |   |  1,046 |        |   | 25.88            |
| Changes in outstanding stock options:         |      |   |   |   |   |        |        |   |             |
|                                          | Granted   |   |   |   |   |        |  173   |   |             | 48.43 |
|                                          | Exercised |   |   |   |   |        |  (118) |   |             | 30.36 |
| Stock options outstanding, October 5, 2014    |      |   |   |   |   |  1,101 |        | $      | 28.95            |

|                    |   |   |   |   |   | 2014       |   |   | 2013       |
|-------------------------|--------|--------|--------|--------|--------|------------|--------|--------|------------|
|                    |   |   |   |   |   |       |   |   |       |
| Exercise price          |   |   |   |   |   | $ 48.43    |   |   | $ 31.17    |
| Risk-free interest rate |   |   |   |   |   | 1.87%      |   |   | 1.30%      |
| Expected volatility     |   |   |   |   |   | 50.65%     |   |   | 54.70%     |
| Expected life           |   |   |   |   |   | 5.25 years |   |   | 5.25 years |
| Expected dividend yield |   |   |   |   |   | 0.77%      |   |   | 0.95%      |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.90 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (b) | Stock options and restricted share units (continued): |
|-----|-------------------------------------------------------|

|                  |   | Options issued and outstanding |   | Options exercisable    |
|-----------------------|--------|--------------------------------|--------|------------------------|
|                  |   |                           |   | Remaining              |   |   |
| Exercise prices (CA$) |   | Number                         |   | contractual life (yrs) |   | Number |
|                  |   |                           |   |                   |   |   |
| $ 20.12               |   | 43                             |   |  2                |   |  43 |
| $ 22.13               |   | 410                            |   |  5                |   |  410 |
| $ 23.49               |   | 62                             |   |  1                |   |  62 |
| $ 27.20               |   | 168                            |   |  4                |   |  79 |
| $ 28.64               |   | 51                             |   |  3                |   |  36 |
| $ 31.17               |   | 191                            |   |  5                |   |  48 |
| $ 39.39               |   | 3                              |   |  0                |   |  3 |
| $ 48.43               |   | 173                            |   |  6                |   |  - |
|                  |   | 1,101                          |   |                   |   |  681 |

|                                          |                                          |   |   |   |   |      |        |   | Weighted average    |
|-----------------------------------------------|-----------------------------------------------|--------|--------|--------|--------|-----------|-------------|--------|---------------------|
|                                          |                                          |   |   |   |   |      | Number      |   | fair value per unit |
|                                          |                                          |   |   |   |   |      |        |   |                |   |
| Treasury RSUs outstanding, September 30, 2012 |                                          |   |   |   |   |  884 |        | $      |  23.13         |
| Changes in outstanding Treasury RSUs:         |                                          |   |   |   |   |      |        |   |                |
|                                          | Granted                                       |   |   |   |   |      |  21    |   |                |  38.28 |
|                                          | Granted for dividends declared                |   |   |   |   |      |  7     |   |                |  40.06 |
|                                          | Settled through the issuance of common shares |   |   |   |   |      |  (93)  |   |                |  28.38 |
|                                          | Forfeited                                     |   |   |   |   |      |  (47)  |   |                |  30.31 |
| Treasury RSUs outstanding, September 29, 2013 |                                          |   |   |   |   |  772 |        |   |  22.64         |
| Changes in outstanding Treasury RSUs:         |                                          |   |   |   |   |      |        |   |                |
|                                          | Granted                                       |   |   |   |   |      |  10    |   |                |  51.95 |
|                                          | Granted for dividends declared                |   |   |   |   |      |  5     |   |                |  52.89 |
|                                          | Settled through the issuance of common shares |   |   |   |   |      |  (423) |   |                |  21.54 |
|                                          | Forfeited                                     |   |   |   |   |      |  (31)  |   |                |  35.29 |
| Treasury RSUs outstanding, October 5, 2014    |                                          |   |   |   |   |  333 |        | $      |  24.14         |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.91 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (b) | Stock options and restricted share units (continued): |
|-----|-------------------------------------------------------|

|                                             |                           |   |   |   |   |   | 2014   |   |   | 2013   |
|--------------------------------------------------|--------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                             |                           |   |   |   |   |   |   |   |   |   |
| Non-Treasury RSUs outstanding, beginning of year |                           |   |   |   | 569    |   |   | 529    |
| Changes in outstanding non-Treasury RSUs:        |                           |   |   |   |   |   |   |   |
|                                             | Granted                        |   |   |   |   |   | 169    |   |   | 223    |
|                                             | Granted for performance        |   |   |   |   |   | 102    |   |   | 38     |
|                                             | Granted for dividends declared |   |   |   |   |   | 5      |   |   | 6      |
|                                             | Settled                        |   |   |   |   |   | (443)  |   |   | (210)  |
|                                             | Forfeited                      |   |   |   |   |   | (18)   |   |   | (17)   |
| Non-Treasury RSUs outstanding, end of year       |                           |   |   |   | 384    |   |   | 569    |

| (c)   | Deferred share unit plan: |
|-----------------|---------------------------|

|                                |   |   |   |   |   | 2014      |   |   | 2013       |
|-------------------------------------|--------|--------|--------|--------|--------|-----------|--------|--------|------------|
|                                |   |   |   |   |   |      |   |   |       |
| DSUs outstanding, beginning of year |   |   |   |   |   |  122 |   |   |  110  |
| Granted                             |   |   |   |   |   |  18  |   |   |  22   |
| Granted for dividends declared      |   |   |   |   |   |  1   |   |   |  1    |
| Redeemed                            |   |   |   |   |   |  (5) |   |   |  (11) |
| DSUs outstanding, end of year       |   |   |   |   |   |  136 |   |   |  122  |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.92 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| 17. SUPPLEMENTARY INFORMATION RELATING TO THE NATURE OF EXPENSES: |
|-------------------------------------------------------------------|

| (a) | Selling, general and administrative expenses: |
|-----|-----------------------------------------------|

|                    |   |   |   | 2014   |         | 2013          |
|-------------------------|--------|--------|--------|--------|--------------|---------------|
|                    |   |   |   |   |         |          |   |   |   |
| Selling expenses        |   |   |   |   | $            |  104,680 |   | $ |  99,666 |
| Administrative expenses |   |   |   |   |         |  107,543 |   |   |  115,526 |
| Distribution expenses   |   |   |   |   |  73,792 |          |   |  67,371 |
|                    |   |   |   |   | $            |  286,015 |   | $ |  282,563 |

| (b) | Employee benefit expenses: |
|-----|----------------------------|

|                                                   |   |   | 2014   |          | 2013   |
|--------------------------------------------------------|--------|--------|--------|---------------|--------|
|                                                   |   |   |   |          |   |   |   |
| Salaries, wages and other short-term employee benefits |   |   | $      |  362,724 |   | $ |  310,862 |
| Share-based payments                                   |   |   |   |  18,618  |   |   |  15,483 |
| Post-employment benefits                               |   |   |   |  19,698  |   |   |  16,244 |
|                                                   |   |   | $      |  401,040 |   | $ |  342,589 |

| (c) | Lease expense: |
|-----|----------------|

|                  |   |   |   |   |   | October 5, |
|-----------------------|--------|--------|--------|--------|--------|------------|
|                  |   |   |   |   |   |       |   |   | 2014 |
|                  |   |   |   |   |   |       |   |   |   |
| Within 1 year         |   |   |   |   |   |       |   | $ |  14,893 |
| Between 1 and 5 years |   |   |   |   |   |       |   |   |  26,758 |
| More than 5 years     |   |   |   |   |   |       |   |   |  2,783 |
|                  |   |   |   |   |   |       |   | $ |  44,434 |

|                                             |   |         |        | Business       |   |        |
|--------------------------------------------------|--------|--------------|-------------|----------------|--------|-------------|
|                                             |   |         |        | acquisitions   |   |        |   |
|                                             |   | Facility     |        | and changes in |   |        |   |
|                                             |   | closures and |        | management     |   |        |   |
| 2014                                             |   | relocations  |        | structure      |   | Total       |
|                                             |   |         |        |           |   |        |   |   |   |
| Gains on disposal of assets held for sale and    |   |         |        |           |   |        |   |   |   |
|   property, plant and equipment        |   | $            |  (345) |           | $      |  -     |   | $ |  (345) |
| Employee termination and benefit costs           |   |         |  429   |           |   |  92    |   |   |  521 |
| Loss on settlement on wind-up of defined benefit |   |         |        |           |   |        |   |   |   |
|   pension plan                         |   |         |  1,898 |           |   |  -     |   |   |  1,898 |
| Exit, relocation and other costs                 |   |         |  100   |           |   |  310   |   |   |  410 |
| Acquisition-related transaction costs            |   |         |  -     |           |   |  763   |   |   |  763 |
|                                             |   | $            |  2,082 |           | $      |  1,165 |   | $ |  3,247 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.93 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                                                     |   |         |        | Business       |         |        |
|----------------------------------------------------------|--------|--------------|-------------|----------------|--------------|-------------|
|                                                     |   |         |        |           | acquisitions |        |   |   |
|                                                     |   | Facility     |        | and changes in |         |        |   |
|                                                     |   | closures and |        | management     |         |        |   |
| 2013                                                     |   | relocations  |        | structure      |         | Total       |
|                                                     |   |         |        |           |         |        |   |   |   |
| Write-downs and losses on disposal of assets held        |   |         |        |           |         |        |   |   |   |
|   for sale and property, plant and equipment   |   | $            |  552   |           | $            |  -     |   | $ |  552 |
| Employee termination and benefit costs                   |   |         |  1,436 |           |         |  -     |   |   |  1,436 |
| Net pension expense                                      |   |         |  -     |           |         |  214   |   |   |  214 |
| Exit, relocation and other costs                         |   |         |  3,864 |           |         |  1,830 |   |   |  5,694 |
| Remeasurement of contingent consideration in             |   |         |        |           |         |        |   |   |   |
|   connection with a business acquisition       |   |         |  -     |           |         |  (950) |   |   |  (950) |
| Loss on business acquisition achieved in stages (note 5) |   |         |  -     |           |         |  1,518 |   |   |  1,518 |
| Acquisition-related transaction costs                    |   |         |  -     |           |         |  324   |   |   |  324 |
|                                                     |   | $            |  5,852 |           | $            |  2,936 |   | $ |  8,788 |

|                                                |                                                              |   |   | 2014           |        | 2013   |
|-----------------------------------------------------|-------------------------------------------------------------------|--------|--------|----------------|-------------|--------|
|                                                |                                                              |   |   |           |        |   |   |   |
| Earnings before income taxes                        |                                                              |   | $      |  366,524  |        | $      |  330,719 |
| Applicable tax rate                                 |                                                              |   |   | 26.9%          |        |   | 26.9% |
| Income taxes at applicable statutory rate           |                                                              |   |   |  98,412   |        |   |  88,801 |
|                                                |                                                              |   |   |           |        |   |   |   |
| (Decrease) increase in income taxes resulting from: |                                                              |   |   |           |        |   |   |
|                                                | Effect of different tax rates on earnings of foreign subsidiaries |   |   |  (89,258) |        |   |  (84,037) |
|                                                | Income tax (recovery) expense related to prior taxation years     |   |   |  (1,597)  |        |   |  25 |
|                                                | Non-recognition of tax benefits related to tax losses             |   |   |           |        |   |   |   |
|                                                |  and temporary differences                                   |   |   |           |  -     |   |   |  6,064 |
|                                                | Effect of non-deductible expenses and other                       |   |   |           |  (585) |   |   |  (312) |
| Total income tax expense                            |                                                              |   | $      |  6,972    |        | $      |  10,541 |
| Average effective tax rate                          |                                                              |   |   | 1.9%           |        |   | 3.2% |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.94 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                                                               |                                                         |   |   |   |          | 2014         |          | 2013        |
|--------------------------------------------------------------------|--------------------------------------------------------------|--------|--------|--------|---------------|--------------|---------------|-------------|
| Current income taxes, includes $430 (2013 - $25) relating to prior |                                                         |   |   |   |          |         |
|                                                               |                                                         |   |   |   |          |
|   taxation years                                         |                                                         |   |   |   | $             |  10,052 |          | $           |  8,352 |
|                                                               |                                                         |   |   |   |          |         |          |        |   |   |
| Deferred income taxes:                                             |                                                         |   |   |   |          |         |          |        |   |
|                                                               | Origination and reversal of temporary differences            |   |   |   |          |         |  (1,053) |        |   |  (3,621) |
|                                                               | Recognition of tax benefits relating to prior taxation years |   |   |   |  (2,027) |         |          |  -     |
|                                                               | Non-recognition of tax benefits related to tax losses        |   |   |   |          |         |          |        |
|                                                               |    and temporary differences                  |   |   |   |          |         |  -       |        |   |  6,064 |
|                                                               | Effect of substantively enacted income tax rates changes     |   |   |   |  -       |         |          |  (254) |
|                                                               |                                                         |   |   |   |          |         |  (3,080) |        |   |  2,189 |
|                                                               |                                                         |   |   |   |          |         |          |        |   |   |
| Total income tax expense                                           |                                                         |   |   |   | $             |  6,972  |          | $           |  10,541 |

|                      |                                 |   |   |   | October 5, |           | September 29,  |
|---------------------------|--------------------------------------|--------|--------|--------|------------|----------------|----------------|
|                      |                                 |   |   |   |       |           | 2014           |   |   | 2013 |
|                      |                                 |   |   |   |       |           |           |   |   |   |
| Deferred tax assets:      |                                 |   |   |   |       |           |           |   |   |
|                      | Non-capital losses                   |   |   |   |       | $              |  62,909   |   | $ |  61,342 |
|                      | Non-deductible reserves and accruals |   |   |   |       |           |  24,999   |   |   |  35,030 |
|                      | Property, plant and equipment        |   |   |   |       |           |  7,335    |   |   |  6,816 |
|                      | Other items                          |   |   |   |       |           |  6,301    |   |   |  4,839 |
|                      |                                 |   |   |   |       |           |  101,544  |   |   |  108,027 |
|                      | Unrecognized deferred tax assets     |   |   |   |       |           |  (14,954) |   |   |  (17,771) |
| Deferred tax assets       |                                 |   |   |   | $          |  86,590   |           | $ |  90,256 |
|                      |                                 |   |   |   |       |           |           |   |   |   |
| Deferred tax liabilities: |                                 |   |   |   |       |           |           |   |   |
|                      | Property, plant and equipment        |   |   |   |       | $              |  (4,896)  |   | $ |  (6,062) |
|                      | Intangible assets                    |   |   |   |       |           |  (82,043) |   |   |  (82,751) |
| Deferred tax liabilities  |                                 |   |   |   | $          |  (86,939) |           | $ |  (88,813) |
| Deferred income taxes     |                                 |   |   |   | $          |  (349)    |           | $ |  1,443 |

|                                      |                                 |   |   |   |          | 2014          |   |        | 2013          |
|-------------------------------------------|--------------------------------------|--------|--------|--------|---------------|---------------|--------|-------------|---------------|
|                                      |                                 |   |   |   |          |          |   |        |          |
| Balance, beginning of year, net           |                                 |   |   | $      |  1,443   |          | $      |  4,471 |
|                                      |                                 |   |   |   |          |          |   |        |          |
| Recognized in the statements of earnings: |                                 |   |   |   |          |          |   |        |
|                                      | Non-capital losses                   |   |   |   |          |  2,211   |   |        |  (5,044) |
|                                      | Non-deductible reserves and accruals |   |   |   |          |  (9,853) |   |        |  2,806   |
|                                      | Property, plant and equipment        |   |   |   |          |  1,685   |   |        |  2,104   |
|                                      | Intangible assets                    |   |   |   |          |  5,316   |   |        |  4,784   |
|                                      | Other                                |   |   |   |          |  1,694   |   |        |  (775)   |
|                                      | Unrecognized deferred tax assets     |   |   |   |          |  2,027   |   |        |  (6,064) |
|                                      |                                 |   |   |   |          |  3,080   |   |        |  (2,189) |
|                                      |                                 |   |   |   |          |          |   |        |          |
| Business acquisitions                     |                                 |   |   |   |  (4,890) |          |   |  (914) |
| Other                                     |                                 |   |   |   |  18      |          |   |  75    |
| Balance, end of year, net                 |                                 |   |   | $      |  (349)   |          | $      |  1,443 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.95 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                             |                                                            |   |          | 2014          |   |          | 2013          |
|----------------------------------|-----------------------------------------------------------------|--------|---------------|---------------|--------|---------------|---------------|
|                             |                                                            |   |          |          |   |          |          |
| Net earnings - basic and diluted |                                                            | $      |  359,552 |          | $      |  320,178 |
|                             |                                                            |   |          |          |   |          |          |
| Basic earnings per share:        |                                                            |   |          |          |   |          |
|                             | Basic weighted average number of common shares outstanding      |   |          |  121,765 |   |          |  121,455 |
| Basic earnings per share         |                                                            | $      |  2.95    |          | $      |  2.64    |
|                             |                                                            |   |          |          |   |          |          |
| Diluted earnings per share:      |                                                            |   |          |          |   |          |
|                             | Basic weighted average number of common shares outstanding      |   |          |  121,765 |   |          |  121,455 |
|                             | Plus dilutive impact of stock options, Treasury RSUs and common |   |          |          |   |          |          |
|                             |   shares held in trust                                |   |  1,414   |          |   |  1,253   |
|                             | Diluted weighted average number of common shares outstanding    |   |          |  123,179 |   |          |  122,708 |
| Diluted earnings per share       |                                                            | $      |  2.92    |          | $      |  2.61    |

|                                                                               |   |   |          |         | 2014   |         | 2013         |
|------------------------------------------------------------------------------------|--------|--------|---------------|--------------|--------|--------------|--------------|
|                                                                               |   |   |          |         |   |         |         |   |
| Depreciation of property, plant and equipment                                      |   | $      |  84,561  |         | $      |  78,897 |
| Adjustment for the variation of depreciation of property, plant and                |   |   |          |         |   |         |
|   equipment included in inventories at the beginning and end of the year |   |   |  (6,168) |         |   |  (374)  |
| Depreciation of property, plant and equipment included in net earnings             |   |   |  78,393  |         |   |  78,523 |
| Amortization of intangible assets, excluding software                              |   |   |          |  15,216 |   |         |  15,214 |
| Amortization of software                                                           |   |   |          |         |   |  2,009  |         |   |  1,541 |
| Depreciation and amortization included in net earnings                             |   |   | $             |  95,618 |   | $            |  95,278 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.96 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a) | Adjustments to reconcile net earnings to cash flows from operating activities: |
|-----|--------------------------------------------------------------------------------|

|   |                                                                     |   |   | 2014          |   | 2013   |
|--------|--------------------------------------------------------------------------|--------|--------|---------------|--------|--------|
|   |                                                                     |   |   |          |   |   |   |
|   | Depreciation and amortization (note 21)                                  |   | $      |  95,618  |   | $      |  95,278 |
|   | Loss on business acquisition achieved in stages (note 5 and 18)          |   |   |  -       |   |   |  1,518 |
|   | Restructuring charges related to assets held for sale and property,      |   |   |          |   |   |   |
|   |   plant and equipment (note 18)                                |   |   |  (345)   |   |   |  552 |
|   | Gain on remeasurement of contingent consideration (note 18)              |   |   |  -       |   |   |  (950) |
|   | (Gain) loss on disposal of property, plant and equipment                 |   |   |  (548)   |   |   |  1,002 |
|   | Share-based compensation                                                 |   |   |  10,207  |   |   |  8,268 |
|   | Deferred income taxes (note 19)                                          |   |   |  (3,080) |   |   |  2,189 |
|   | Equity earnings in investment in joint venture                           |   |   |  -       |   |   |  (46) |
|   | Unrealized net (gain) loss on foreign exchange and financial derivatives |   |   |  (1,783) |   |   |  428 |
|   | Timing differences between settlement of financial derivatives           |   |   |          |   |   |   |
|   |   and transfer of deferred loss in AOCI to net earnings        |   |   |  (5,863) |   |   |  - |
|   | Other non-current assets                                                 |   |   |  (125)   |   |   |  (2,032) |
|   | Employee benefit obligations                                             |   |   |  (2,053) |   |   |  (467) |
|   | Provisions                                                               |   |   |  1,601   |   |   |  3,283 |
|   |                                                                     |   | $      |  93,629  |   | $      |  109,023 |

| (b) | Variations in non-cash transactions: |
|-----|--------------------------------------|

|   |                                                                      |   |   | 2014   |          | 2013   |
|--------|---------------------------------------------------------------------------|--------|--------|--------|---------------|--------|
|   |                                                                      |   |   |   |          |   |   |   |
|   | Additions to property, plant and equipment included in accounts           |   |   |   |          |   |   |   |
|   |   payable and accrued liabilities                               |   |   | $      |  13,993  |   | $ |  1,754 |
|   | Addition to property, plant and equipment transferred from                |   |   |   |          |   |   |   |
|   |   prepaid expenses and deposits and other non-current assets    |   |   |   |  -       |   |   |  5,826 |
|   | Proceeds on disposal of property, plant and equipment included            |   |   |   |          |   |   |   |
|   |   in other current assets                                       |   |   |   |  (79)    |   |   |  - |
|   | Amounts payable relating to business acquisitions (note 5)                |   |   |   |  (6,400) |   |   |  (500) |
|   | Settlement of pre-existing relationship (note 5)                          |   |   |   |  -       |   |   |  (4,038) |
|   | Transfer from accounts payable and accrued liabilities to                 |   |   |   |          |   |   |   |
|   |   contributed surplus in connection with share repurchases for  |   |   |   |          |   |   |   |
|   |   future settlement of non-Treasury RSUs                        |   |   |   |  8,383   |   |   |  5,114 |
|   | Non-cash ascribed value credited to contributed surplus for               |   |   |   |          |   |   |   |
|   |   dividends attributed to Treasury RSUs                         |   |   |   |  212     |   |   |  269 |
|   | Non-cash ascribed value credited to share capital from shares             |   |   |   |          |   |   |   |
|   |   issued or distributed pursuant to vesting of restricted share |   |   |   |          |   |   |   |
|   |   units and exercise of stock options                           |   |   |   |  26,785  |   |   |  10,272 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.97 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (a)   | Joint ventures: |
|-----------------|-----------------|

| (b)   | Key management personnel compensation: |
|-----------------|----------------------------------------|

|   |                         |   |   |   |   |   | 2014         |   |   | 2013         |
|--------|------------------------------|--------|--------|--------|--------|--------|--------------|--------|--------|--------------|
|   |                         |   |   |   |   |   |         |   |   |         |
|   | Short-term employee benefits |   |   |   |   | $      |  5,149  |   | $      |  6,906  |
|   | Post-employment benefits     |   |   |   |   |   |  189    |   |   |  129    |
|   | Share-based payments         |   |   |   |   |   |  11,909 |   |   |  11,373 |
|   |                         |   |   |   |   | $      |  17,247 |   | $      |  18,408 |

|   |              |   |   |   | October 5, |   | September 29, |
|--------|-------------------|--------|--------|--------|------------|--------|---------------|
|   |              |   |   |   |       |   | 2014          |   |   | 2013 |
|   |              |   |   |   |       |   |          |   |   |   |
|   | Non-Treasury RSUs |   |   |   |       | $      |  1,031   |   | $ |  1,857 |
|   | DSUs              |   |   |   |       |   |  6,906   |   |   |  5,716 |
|   |              |   |   |   |       | $      |  7,937   |   | $ |  7,573 |

| (c)   | Other: |
|-----------------|--------|

| (a) | Claims and litigation |
|-----|-----------------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.98 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| (b)   | Guarantees: |
|-----------------|-------------|

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.99 |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|                                                         |                                                  |   |   |   | 2014   |            | 2013            |
|--------------------------------------------------------------|-------------------------------------------------------|--------|--------|--------|--------|-----------------|-----------------|
|                                                         |                                                  |   |   |   |   |            |            |   |   |   |
| Segmented net sales:                                         |                                                  |   |   |   |   |            |            |   |   |
|                                                         | Printwear                                             |   |   |   |   | $               |  1,559,549 |   | $ |  1,468,659 |
|                                                         | Branded Apparel                                       |   |   |   |   |            |  800,445   |   |   |  715,644 |
| Total net sales                                              |                                                  |   |   |   | $      |  2,359,994 |            | $ |  2,184,303 |
|                                                         |                                                  |   |   |   |   |            |            |   |   |   |
| Segment operating income:                                    |                                                  |   |   |   |   |            |            |   |   |
|                                                         | Printwear                                             |   |   |   |   | $               |  389,022   |   | $ |  364,363 |
|                                                         | Branded Apparel                                       |   |   |   |   |            |  73,236    |   |   |  78,444 |
| Total segment operating income                               |                                                  |   |   |   | $      |  462,258   |            | $ |  442,807 |
|                                                         |                                                  |   |   |   |   |            |            |   |   |   |
| Reconciliation to consolidated earnings before income taxes: |                                                  |   |   |   |   |            |
|                                                         | Total segment operating income                        |   |   |   |   | $               |  462,258   |   | $ |  442,807 |
|                                                         | Amortization of intangible assets, excluding software |   |   |   |   |  (15,216)  |            |   |  (15,214) |
|                                                         | Corporate expenses                                    |   |   |   |   |            |  (74,374)  |   |   |  (76,119) |
|                                                         | Restructuring and acquisition-related costs           |   |   |   |   |            |  (3,247)   |   |   |  (8,788) |
|                                                         | Financial expenses, net                               |   |   |   |   |            |  (2,897)   |   |   |  (12,013) |
|                                                         | Equity earnings in investment in joint venture        |   |   |   |   |            |  -         |   |   |  46 |
| Earnings before income taxes                                 |                                                  |   |   |   | $      |  366,524   |            | $ |  330,719 |

| Additions to property, plant and equipment and intangible assets            |                                                    |   |   |         |   |          |
|-----------------------------------------------------------------------------|---------------------------------------------------------|--------|--------|--------------|--------|---------------|
|   (including additions from business acquisitions and transfers): |                                                    |   |   |         |   |          |
|                                                                        | Printwear                                               |   |   |         |   | $             |  185,665 |   | $ |  50,354 |
|                                                                        | Branded Apparel                                         |   |   |         |   |          |  116,754 |   |   |  10,693 |
|                                                                        | Corporate                                               |   |   |         |   |          |  3,145 |   |   |  25,624 |
|                                                                        | Assets not yet utilized in operations, net of transfers |   |   |  57,975 |   |          |  102,261 |
|                                                                        |                                                    |   |   |         | $      |  363,539 |   | $ |  188,932 |
|                                                                        |                                                    |   |   |         |   |          |   |   |   |   |
| Depreciation of property, plant and equipment:                              |                                                    |   |   |         |   |          |
|                                                                        | Printwear                                               |   |   |         |   | $             |  46,361 |   | $ |  50,759 |
|                                                                        | Branded Apparel                                         |   |   |         |   |          |  29,393 |   |   |  25,277 |
|                                                                        | Corporate                                               |   |   |         |   |          |  2,639 |   |   |  2,487 |
|                                                                        |                                                    |   |   |         | $      |  78,393  |   | $ |  78,523 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.100 |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

| The reconciliation of total assets to segmented assets is as follows: |
|-----------------------------------------------------------------------|

|                   |                                  |   |   |         |   | October 5,      |            | September 29, |
|------------------------|---------------------------------------|--------|--------|--------------|--------|-----------------|-----------------|---------------|
|                   |                                  |   |   |         | 2014   |            | 2013            |
|                   |                                  |   |   |         |   |            |            |          |   |   |
| Segmented assets (i):  |                                  |   |   |         |   |            |            |          |   |
|                   | Printwear                             |   |   |         |   | $               |  1,157,855 |          | $ |  915,253 |
|                   | Branded Apparel                       |   |   |         |   |            |  1,151,005 |          |   |  866,067 |
| Total segmented assets |                                  |   |   |         |   |  2,308,860 |            |          |  1,781,320 |
| Unallocated assets:    |                                  |   |   |         |   |            |            |          |   |
|                   | Cash and cash equivalents             |   |   |         |   |            |  65,163    |          |   |  97,368 |
|                   | Income taxes receivable               |   |   |         |   |            |  1,439     |          |   |  700 |
|                   | Assets held for sale                  |   |   |         |   |            |  5,839     |          |   |  5,839 |
|                   | Deferred income taxes                 |   |   |         |   |            |  -         |          |   |  1,443 |
|                   | Assets not yet utilized in operations |   |   |         |   |            |  172,005   |          |   |  114,030 |
|                   | Other - primarily corporate assets    |   |   |  39,738 |   |            |  42,951    |
| Consolidated assets    |                                  |   |   |         | $      |  2,593,044 |            | $             |  2,043,651 |

|            |   |   |   | October 5, |   | September 29, |
|-----------------|--------|--------|--------|------------|--------|---------------|
|            |   |   |   |       |   | 2014          |   |   | 2013 |
|            |   |   |   |       |   |          |   |   |   |
| United States   |   |   |   |       | $      | 691,601       |   | $ | 534,523 |
| Canada          |   |   |   |       |   | 117,036       |   |   | 37,544 |
| Honduras        |   |   |   |       |   | 408,485       |   |   | 354,039 |
| Caribbean Basin |   |   |   |       |   | 92,336        |   |   | 98,257 |
| Bangladesh      |   |   |   |       |   | 19,297        |   |   | 19,507 |
| Other           |   |   |   |       |   | 8,769         |   |   | 9,635 |
|            |   |   |   |       | $      | 1,337,524     |   | $ | 1,053,505 |

|                     |   |   |   |   | 2014   |      |   | 2013   |
|--------------------------|--------|--------|--------|--------|--------|-----------|--------|--------|
|                     |   |   |   |   |   |      |   |   |   |
| Activewear and underwear |   |   |   |   | $      | 1,870,892 |   | $      | 1,717,869 |
| Socks                    |   |   |   |   |   | 489,102   |   |   | 466,434 |
|                     |   |   |   |   | $      | 2,359,994 |   | $      | 2,184,303 |

|             |   |   |   |   | 2014   |      |   | 2013   |
|------------------|--------|--------|--------|--------|--------|-----------|--------|--------|
|             |   |   |   |   |   |      |   |   |   |
| United States    |   |   |   |   | $      | 2,088,938 |   | $      | 1,957,904 |
| Canada           |   |   |   |   |   | 84,212    |   |   | 65,959 |
| Europe and other |   |   |   |   |   | 186,844   |   |   | 160,440 |
|             |   |   |   |   | $      | 2,359,994 |   | $      | 2,184,303 |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.101 |
|--------|-----------------------------------------------------------------------------------------------------------------------------|

----

|  | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
|--|--------------------------------------------|

|       |   |   |   |   | 2014   |   |   | 2013   |
|------------|--------|--------|--------|--------|--------|--------|--------|--------|
|       |   |   |   |   |   |   |   |   |   |
| Customer A |   |   |   |   |   | 17.7%  |   |   | 17.9% |
| Customer B |   |   |   |   |   | 10.7%  |   |   | 11.3% |

|   |            GILDAN 2014 REPORT TO SHAREHOLDERS   P.102 |
|--------|-----------------------------------------------------------------------------------------------------------------------------|