**EXHIBIT 99.2**



| | **CONSOLIDATED FINANCIAL STATEMENTS** | 
| | ------------------------------------- | 
| |                                       | 
| | **51**                                | 
| |                                       | 
| | **52**                                | 
| |                                       | 
| | **53**                                | 
| |                                       | 
| | **54**                                | 
| |                                       | 
| | **54**                                | 
| |                                       | 
| | **55**                                | 
| |                                       | 
| | **56**                                | 
| |                                       | 



---



| | **MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The accompanying consolidated financial statements have been prepared by management and approved by the Board of Directors of the Company. The consolidated financial statements were prepared in accordance with accounting principles generally accepted in Canada and, where ppropriate, reflect management’s best estimates and judgements. Management is responsible for the accuracy, integrity and objectivity of the consolidated financial statements within reasonable limits of materiality, and for the consistency of financial data included in the text of the Annual Report with that contained in the consolidated financial statements.
        To assist management in the discharge of these responsibilities, the Company maintains a system of internal controls designed to provide reasonable assurance that its assets are safeguarded, that only valid and authorized transactions are executed and that accurate, timely and comprehensive financial information is prepared.
        The Company’s Audit and Finance Committee is appointed by the Board of Directors annually and is comprised exclusively of outside, independent directors. The Audit and Finance Committee meets with management as well as with the independent auditors to satisfy itself that management is properly discharging its financial reporting responsibilities and to review the consolidated financial statements and the independent auditors’ report. The Audit and Finance Committee reports its findings to the Board of Directors for consideration in approving the consolidated financial statements for presentation to the shareholders. The independent auditors have direct access to the Audit and Finance Committee of the Board of Directors.
        The consolidated financial statements have been independently audited by KPMG LLP, Chartered Accountants, on behalf of the shareholders, in accordance with Canadian generally accepted auditing standards. Their report outlines the nature of their audit and expresses their opinion on the consolidated financial statements of the Company.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Glenn J. Chamandy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | President and Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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| | November 26, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  







|**51** | Gildan 2004 Annual Report
|------ | -------------------------



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| | **AUDITORS’ REPORT TO THE SHAREHOLDERS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | We have audited the consolidated balance sheets of Gildan Activewear Inc. as at October 3, 2004 and October 5, 2003 and the consolidated statements of earnings, retained earnings and cash flows for the years ended October 3, 2004, October 5, 2003 and September 29, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
        We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
        In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at October 3, 2004 and October 5, 2003 and the results of its operations and its cash flows for the years ended October 3, 2004, October 5, 2003 and September 29, 2002 in accordance with Canadian generally accepted accounting principles.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | Chartered Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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| | Montreal, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | November 26, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         







|Gildan 2004 Annual Report | **52**
|------------------------- | ------



---



| | **CONSOLIDATED BALANCE SHEETS**      
| | -------------------------------------
| |                                      
| | *October 3, 2004 and October 5, 2003*
| | *(In US dollars)*                    

|                                                |  |                  
|----------------------------------------------- |  | -----------------
|                                                |  | **2004**         
|                                               
|**ASSETS**                                      |  |                  
|Current assets:                                 |  |                  
|****Cash and cash equivalents                   |  | **$  60,670,810**
|****Accounts receivable                         |  | **85,317,148**   
|****Inventories                                 |  | **116,614,770**  
|****Prepaid expenses and deposits               |  | **3,432,435**    
|****Future income taxes (note 11)               |  | **8,148,893**    
|                                               
|                                                |  | **274,184,056**  
|Fixed assets (note 3)                           |  | **211,692,899**  
|Other assets (note 4)                           |  | **3,127,503**    
|                                               
|                                                |  | **$489,004,458** 
|                                                |  |                  
|**LIABILITIES AND SHAREHOLDERS' EQUITY**        |  |                  
|Current liabilities:                            |  |                  
|****Accounts payable and accrued liabilities    |  | **$  74,795,857**
|****Income taxes payable                        |  | **1,966,461**    
|****Current portion of long-term debt (note 5)  |  | **18,610,443**   
|                                               
|                                                |  | **95,372,761**   
|                                                |  |                  
|Long-term debt (note 5)                         |  | **37,978,562**   
|Future income taxes (note 11)                   |  | **28,058,293**   
|                                                |  |                  
|                                                |  |                  
|Shareholders' equity:                           |  |                  
|****Share capital (note 6)                      |  | **78,170,474**   
|****Contributed surplus                         |  | **680,511**      
|****Cumulative translation adjustment           |  | **26,248,267**   
|****Retained earnings                           |  | **222,495,590**  
|                                               
|                                                |  | **327,594,842**  
|Commitments and contingent liabilities (note 9) |  |                  
|                                               
|                                                |  | **$489,004,458** 
|                                               



| | *See accompanying notes to consolidated financial statements.*
| | --------------------------------------------------------------
| |                                                               
| | On behalf of the Board:                                       
| |                                                               
| |                                                               
| |                                                               
| | Glenn J. Chamandy                                             
| | Director                                                      





|**53** | Gildan 2004 Annual Report
|------ | -------------------------



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| | **CONSOLIDATED STATEMENTS OF EARNINGS**                              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    



|                                             |  |                                  | 
|-------------------------------------------- |  | -------------------------------- | 
|                                             |  | **2004**                         | 
|                                            
|Sales                                        |  | **$          533,367,537**       | 
|Cost of sales                                |  | **378,695,819**                  | 
|                                            
|Gross profit                                 |  | **154,671,718**                  | 
|Selling, general and administrative expenses |  | **62,897,875**                   | 
|Earnings before the undernoted items         |  | **91,773,843**                   | 
|Depreciation and amortization                |  | **22,274,524**                   | 
|Interest                                     |  | **6,170,071**                    | 
|                                            
|                                             |  | **28,444,595**                   | 
|                                            
|Earnings before income taxes                 |  | **63,329,248**                   | 
|Income taxes (note 11)                       |  | **3,078,000**                    | 
|                                            
|**Net earnings**                             |  | **$            60,251,248**      | 
|                                            
|Earnings per share (note 12):                |  |                                  | 
|Basic                                        |  | **$                       2.04** | 
|Diluted                                      |  | **2.02**                         | 
|                                            

| | *See accompanying notes to consolidated financial statements.*
| | --------------------------------------------------------------





| | **CONSOLIDATED STATEMENTS OF RETAINED EARNINGS**                     
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    



|                                     |  |                            | 
|------------------------------------ |  | -------------------------- | 
|                                     |  | **2004**                   | 
|                                    
|Retained earnings, beginning of year |  | **$          162,244,342** | 
|Net earnings                         |  | **60,251,248**             | 
|                                    
|Retained earnings, end of year       |  | **$          222,495,590** | 
|                                    

| | *See accompanying notes to consolidated financial statements.*
| | --------------------------------------------------------------



|Gildan 2004 Annual Report | **54**
|------------------------- | ------



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| | **CONSOLIDATED STATEMENTS OF CASH FLOWS**                            
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    



|                                                                 |  |                             |      
|---------------------------------------------------------------- |  | --------------------------- | -----
|                                                                 |  | **2004**                    |      
|                                                                
|**CASH FLOWS FROM OPERATING ACTIVITIES:**                        |  |                             |      
|Net earnings                                                     |  | **$            60,251,248** |      
|Adjustments for:                                                 |  |                             |      
|****Depreciation and amortization                                |  | **22,274,524**              |      
|****Stock-based compensation charges                             |  | **476,586**                 |      
|****Future income taxes                                          |  | **2,946,671**               |      
|****Loss on disposal of fixed assets                             |  | **1,949,648**               |      
|****Unrealized foreign exchange loss (gain)                      |  | **585,946**                 |      
|Changes in non-cash working capital balances:                    |  |                             |      
|****Accounts receivable                                          |  | **(20,236,219**             | **)**
|****Inventories                                                  |  | **(13,111,851**             | **)**
|****Prepaid expenses and deposits                                |  | **419,745**                 |      
|****Accounts payable and accrued liabilities                     |  | **5,436,007**               |      
|****Income taxes payable                                         |  | **(2,072,617**              | **)**
|                                                                
|                                                                 |  | **58,919,688**              |      
|                                                                 |  |                             |      
|**CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:**              |  |                             |      
|Decrease in revolving bank loan                                  |  | **—**                       |      
|Repayment of capital leases                                      |  | **(1,158,104**              | **)**
|Increase in other long-term debt                                 |  | **4,125,000**               |      
|Repayment of other long-term debt                                |  | **(19,980,860**             | **)**
|Proceeds from the issuance of shares                             |  | **2,664,255**               |      
|                                                                
|                                                                 |  | **(14,349,709**             | **)**
|                                                                 |  |                             |      
|**CASH FLOWS USED IN INVESTING ACTIVITIES:**                     |  |                             |      
|Purchase of fixed assets, net of disposals                       |  | **(53,683,958**             | **)**
|Increase in other assets                                         |  | **(135,697**                | **)**
|                                                                
|                                                                 |  | **(53,819,655**             | **)**
|                                                                 |  |                             |      
|**Effect of exchange rate changes on cash and**                  |  |                             |      
|**cash equivalents denominated in foreign currencies**           |  | **580,533**                 |      
|                                                                
|**Net (decrease) increase in cash and cash equivalents**         |  |                             |      
|**during the year**                                              |  | **(8,669,143**              | **)**
|                                                                
|**Cash and cash equivalents, beginning of year**                 |  | **69,339,953**              |      
|                                                                
|**Cash and cash equivalents, end of year**                       |  | **$            60,670,810** |      
|                                                                 |  |                             |      
|*Supplemental disclosure of cash flow information (note 13 (e))* |  |                             |      
|                                                                

| | *See accompanying notes to consolidated financial statements.*
| | --------------------------------------------------------------



|**55** | Gildan 2004 Annual Report
|------ | -------------------------



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| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | *(In US dollars)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | Gildan Activewear Inc. (the “Company”) is incorporated under the Canada Business Corporations Act. Its principal business activity is the manufacture and sale of activewear apparel. The Company’s fiscal year ends on the first Sunday following September 28. All references to 2004, 2003 and 2002 represent the fiscal years ended October 3, 2004, October 5, 2003 and September 29, 2002, respectively. Fiscal 2003 includes 53 weeks instead of the normal 52 weeks. The inclusion of an extra week occurs in every sixth fiscal year due to the Company’s floating year-end date.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | **CHANGE IN FUNCTIONAL AND REPORTING CURRENCY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | **1**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | **SIGNIFICANT ACCOUNTING POLICIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | **2**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|                               |              
|------------------------------ | -------------
|Asset                          | Rate         
|                              
|Buildings and improvements     | 2 1/2% to 20%
|Equipment                      | 6 2/3% to 25%
|Equipment under capital leases | 6 2/3% to 25%
|                              





|Gildan 2004 Annual Report | **56**
|------------------------- | ------



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| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      
| |                                                                      
| |                                                                      
| | **SIGNIFICANT ACCOUNTING POLICIES (cont’d)**                         
| |                                                                      
| |                                                                      
| |                                                                      
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| |                                                                      

|**57** | Gildan 2004 Annual Report
|------ | -------------------------



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| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      
| |                                                                      
| |                                                                      
| | **SIGNIFICANT ACCOUNTING POLICIES (cont’d)**                         
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      
| |                                                                      



|Gildan 2004 Annual Report | **58**
|------------------------- | ------



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| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | *(In US dollars)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | **SIGNIFICANT ACCOUNTING POLICIES (cont’d)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | In accordance with the transitional options permitted under Section 3870, the Company has elected to early adopt the new recommendations effective with the commencement of its 2004 fiscal year and prospectively apply the standard for employee stock awards granted after October 6, 2003. Previously, the Company applied the settlement method of accounting to employee stock options. There were no options granted during fiscal 2004. As required under the standard, the following disclosure is required to report the pro forma net earnings and earnings per share as if the fair value-based method had been used to account for employee stock options granted during fiscal 2003.

|                                                                          |  |                               
|------------------------------------------------------------------------- |  | ------------------------------
|                                                                          |  | **2004**                      
|                                                                         
|Net earnings, as reported                                                 |  | **$           60,251,248**    
|Deduct:                                                                   |  |                               
|****Total stock-based employee compensation recovery (expense) determined |  |                               
|********under fair value-based method for awards granted in fiscal 2003   |  | **101,118**                   
|                                                                         
|Pro forma net earnings                                                    |  | **$           60,352,366**    
|                                                                         
|Earnings per share:                                                       |  |                               
|****Basic:                                                                |  |                               
|********As reported                                                       |  | **$                     2.04**
|********Pro forma                                                         |  | **2.04**                      
|****Diluted:                                                              |  |                               
|********As reported                                                       |  | **2.02**                      
|********Pro forma                                                         |  | **2.02**                      
|                                                                         

| | During fiscal 2004, 86,877 options granted in fiscal 2003 were cancelled which reduced the amount of stock-based compensation for the year, presented above, by $195,715, since the Company only accounts for forfeitures as they occur.
            The weighted average grant-date fair value per share of the remaining 34,329 options granted in fiscal 2003 is CAD$10.86 per share, which is recognized as compensation cost over the vesting period for purposes of calculating pro forma net earnings.
            The weighted average fair value of each option granted in fiscal 2003 is estimated on the date of grant using the Black-Scholes pricing model with the following weighted average assumptions:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        | 
|----------------------- | 
|                       
|Risk free interest rate | 
|Expected volatility     | 
|Expected life           | 
|Expected dividend yield | 
|                       



|**59** | Gildan 2004 Annual Report
|------ | -------------------------



---





| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| |                                             
| | --------------------------------------------
| | **SIGNIFICANT ACCOUNTING POLICIES (cont’d)**
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             
| |                                             





|Gildan 2004 Annual Report | **60**
|------------------------- | ------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

|      | **FIXED ASSETS**
|----- | ----------------
|**3** |                 



|                               |  |                              | 
|------------------------------ |  | ---------------------------- | 
|                               |  |                              | 
|                              
|                               |  | **Cost**                     | 
|                              
|Land                           |  | **$             14,524,019** | 
|Buildings and improvements     |  | **61,667,119**               | 
|Equipment                      |  | **182,036,376**              | 
|Equipment under capital leases |  | **1,927,809**                | 
|Construction in progress       |  | **18,209,426**               | 
|                              
|                               |  | **$            278,364,749** | 
|                              

| |  |          |  |                                                            |  | **2003**                 
| |  | -------- |  | ---------------------------------------------------------- |  | -------------------------
|
| |  | **Cost** |  | **Accumulated
      depreciation and 
      amortization** |  | **Net book 
      value**
|

|                                                                                                                                                                                                           |  |                       | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | 
|Land                                                                                                                                                                                                       |  | $          10,856,245 | 
|Buildings and improvements                                                                                                                                                                                 |  | 53,845,192            | 
|Equipment                                                                                                                                                                                                  |  | 149,270,693           | 
|Equipment under capital leases                                                                                                                                                                             |  | 16,787,119            | 
|                                                                                                                                                                                                          
|                                                                                                                                                                                                           |  | $         230,759,249 | 
|                                                                                                                                                                                                          
|                                                                                                                                                                                                           |  |                       | 
|During fiscal 2004, fixed assets were acquired at an aggregate cost of $57,930,880 (2003 $42,179,925; 2002 $47,309,695), none of which were acquired by means of capital leases (2003 nil; 2002 $650,357).

|      | **OTHER ASSETS**
|----- | ----------------
|**4** |                 

|                                                                  |                                                                                                                                                                                                                                                                   |                      
|----------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------
|                                                                  |                                                                                                                                                                                                                                                                   | **2004**             
|                                                                 
|Loan to director and officer (CAD$300,000 — 2003 CAD$750,000) (a) |                                                                                                                                                                                                                                                                   | **$         237,906**
|Deferred charges, net of accumulated amortization                 |                                                                                                                                                                                                                                                                   |                      
|of $4,900,552 (2003 — $4,136,954)                                 |                                                                                                                                                                                                                                                                   | **1,459,385**        
|Prepaid equipment rental                                          |                                                                                                                                                                                                                                                                   | **555,837**          
|Deposits                                                          |                                                                                                                                                                                                                                                                   | **583,660**          
|Other                                                             |                                                                                                                                                                                                                                                                   | **290,715**          
|                                                                 
|                                                                  |                                                                                                                                                                                                                                                                   | **$      3,127,503** 
|                                                                 
|                                                                 
|(a)                                                               | The loan to director and officer is non-interest bearing and the balance is repayable in annual installments of CAD$75,000 (US$59,477). During fiscal 2004, the balance of a loan due from a former director and officer in the amount of CAD$375,000 was repaid.



|**61** | Gildan 2004 Annual Report
|------ | -------------------------

---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

|      | **LONG–TERM DEBT**
|----- | ------------------
|**5** |                   

|                                                                               |                        | 
|------------------------------------------------------------------------------ | ---------------------- | 
|                                                                               | **2004**               | 
|                                                                              
|**Secured:**                                                                   |                        | 
|Senior notes                                                                   | **$     52,500,000**   | 
|Obligations under capital leases, bearing interest at rates varying from       |                        | 
|to 16.08%, maturing at various dates through 2005 which include an amount      |                        | 
|in Canadian dollars of $250,208 (2003 — CAD$1,750,955)                         | **342,787**            | 
|Term loan, repayable in monthly installments, bearing interest at 30-day LIBOR |                        | 
|plus 3%, maturing in October 2006                                              | **3,368,750**          | 
|Term loan, bearing interest at 7.58%, maturing in 2004                         | **—**                  | 
|                                                                              
|                                                                               | **56,211,537**         | 
|Current portion of secured debt                                                | **18,494,650**         | 
|                                                                              
|                                                                               | **$     37,716,887**   | 
|                                                                              
|**Unsecured:**                                                                 |                        | 
|Term loans, bearing interest at rates up to 6% per annum, maturing             |                        | 
|at various dates through 2008 which include an amount                          |                        | 
|in Canadian dollars of CAD$2,094,333 in 2003                                   | **$          377,468** | 
|Current portion of unsecured debt                                              | **115,793**            | 
|                                                                              
|                                                                               | **261,675**            | 
|                                                                              
|Total unsecured and secured long-term debt                                     | **$     37,978,562**   | 
|                                                                              

| | The senior notes are repayable in four equal annual installments commencing in June 2004, bear interest at 9.51% on $41,250,000 and 9.88% on $11,250,000, and are secured by tangible and intangible property of the Company. The combined effective interest rate on the senior notes for fiscal 2004 was 9.59% (2003 — 9.59%).
        The Company has a revolving term credit facility for a maximum of CAD$150,000,000 which matures in May 2007. The facility is secured by a first ranking moveable hypothec and security interest on the majority of the Company’s accounts receivable, inventories, intangible assets, equipment and tangible moveable assets. There was no balance outstanding under this facility at October 3, 2004 and October 5, 2003.
        Under various financing arrangements with its bankers and other long-term lenders, the Company is required to meet certain covenants. The Company was in compliance with all of these covenants as at October 3, 2004 and October 5, 2003.
        During fiscal 2004, as a result of the change in functional currency, the Company cancelled a $15 million cross-currency interest rate swap arrangement. The cancellation did not impact the net earnings for the year.
        Principal payments due on long-term debt, other than obligations under capital leases, are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|            | 
|----------- | 
|Fiscal year | 
|           
|2005        | 
|2006        | 
|2007        | 
|2008        | 
|2009        | 
|           
|            | 
|           



|Gildan 2004 Annual Report | **62**
|------------------------- | ------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **LONG–TERM DEBT(cont’d)**                                        
| | ------------------------------------------------------------------
| |                                                                   
| | Future minimum lease payments under capital leases are as follows:

|                             | 
|---------------------------- | 
|Fiscal year                  | 
|                            
|2005                         | 
|2006                         | 
|2007                         | 
|                            
|Total minimum lease payments | 
|Less imputed interest        | 
|                            
|                             | 
|                            

|      | **SHARE CAPITAL**
|----- | -----------------
|**6** |                  

|                                                                                                                                                                                                                                                                                                                                                                                                                                      |                |       |                      |      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | ----- | -------------------- | -----
|                                                                                                                                                                                                                                                                                                                                                                                                                                      |                |       | **2004**             |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                      | **Shares**     |       | **Book
      value** |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Authorized without limit as to number 
     and without par value: 
          First preferred shares, issuable 
               in series, non-voting 
          Second preferred shares, issuable 
               in series, non-voting
          Class A subordinate voting shares, 
               participating, one vote per share
          Class B multiple voting shares, 
               participating, eight votes per share |                |       |                      |      
|Issued and outstanding:                                                                                                                                                                                                                                                                                                                                                                                                               |                |       |                      |      
|Class A subordinate voting shares:                                                                                                                                                                                                                                                                                                                                                                                                    |                |       |                      |      
|Total outstanding, beginning of year                                                                                                                                                                                                                                                                                                                                                                                                  | **23,425,966** |       | **72,022,820**       |      
|Conversion of Class B shares into                                                                                                                                                                                                                                                                                                                                                                                                     |                |       |                      |      
|Class A shares (c)                                                                                                                                                                                                                                                                                                                                                                                                                    | **6,094,000**  |       | **3,467,118**        |      
|Shares issued under employee                                                                                                                                                                                                                                                                                                                                                                                                          |                |       |                      |      
|share purchase plan                                                                                                                                                                                                                                                                                                                                                                                                                   | **5,587**      |       | **163,411**          |      
|Shares issued pursuant to exercise                                                                                                                                                                                                                                                                                                                                                                                                    |                |       |                      |      
|of stock options                                                                                                                                                                                                                                                                                                                                                                                                                      | **173,153**    |       | **2,517,125**        |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Total outstanding, end of year                                                                                                                                                                                                                                                                                                                                                                                                        | **29,698,706** |       | **78,170,474**       |      
|Class B multiple voting shares:                                                                                                                                                                                                                                                                                                                                                                                                       |                |       |                      |      
|Total outstanding, beginning of year                                                                                                                                                                                                                                                                                                                                                                                                  | **6,094,000**  |       | **3,467,118**        |      
|Conversion of Class B shares                                                                                                                                                                                                                                                                                                                                                                                                          |                |       |                      |      
|into Class A shares (c)                                                                                                                                                                                                                                                                                                                                                                                                               | **(6,094,000** | **)** | **(3,467,118**       | **)**
|Total outstanding, end of year                                                                                                                                                                                                                                                                                                                                                                                                        | **—**          |       | **—**                |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                      | **29,698,706** |       | **78,170,474**       |      
|                                                                                                                                                                                                                                                                                                                                                                                                                                     

|**63** | Gildan 2004 Annual Report
|------ | -------------------------



---





| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **SHARE CAPITAL(cont’d)**
| | -------------------------
| |                          
| | (a)                      
| |                          
| | (b)                      
| |                          
| | (c)                      



|      | **LONG-TERM INCENTIVE PLAN**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**7** |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      | Under the Company’s Long-Term Incentive Plan (LTIP), the Company may grant options to purchase Class A subordinate voting shares at the current market price on the date of grant to officers, other key employees and directors of the Company. Stock options vest ratably over a two to four-year period from the date of grant, and expire no more than ten years after the date of grant. The LTIP provides that the number of Class A subordinate voting shares reserved for issuance upon the exercise of options granted thereunder shall not exceed 2,768,888 shares. As at October 3, 2004, all stock options had been granted pursuant to the LTIP.
        Changes in outstanding stock options were as follows:

|                                        |           |  
|--------------------------------------- | --------- | -
|                                        | Number    |  
|                                       
|Options outstanding, September 29, 2002 | 1,428,954 |  
|Granted                                 | 121,206   |  
|Exercised                               | (593,641  | )
|Cancelled                               | (116,333  | )
|                                       
|Options outstanding, October 5, 2003    | 840,186   |  
|Exercised                               | (173,153  | )
|Cancelled                               | (95,710   | )
|                                       
|Options outstanding, October 3, 2004    | 571,323   |  
|                                       



|Gildan 2004 Annual Report | **64**
|------------------------- | ------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **LONG-TERM INCENTIVE PLAN(cont’d)**                                                                          
| | --------------------------------------------------------------------------------------------------------------
| |                                                                                                               
| | The following table summarizes information about stock options outstanding and exercisable at October 3, 2004:

|                        |                                                                                                   |                                                    |                                                                |                                                  |                                                            
|----------------------- | ------------------------------------------------------------------------------------------------- | -------------------------------------------------- | -------------------------------------------------------------- | ------------------------------------------------ | -----------------------------------------------------------
|                        | Options outstanding                                                                               | Options exercisable                               
|                       
|Range ofexercise prices | Number                                                                                            | Weighted 
      average
      exercise
      price | Weighted average remaining
      contractual 
      life (yrs) | Number                                           | Weighted 
      average 
      exercise 
      price       
|                       
|CAD $                   | 5.15 —   9.75
      $14.38 — 19.70
      $20.00 — 25.68
      $27.50 — 34.58
      $34.80 — 40.89 | 60,19422,300263,167191,66234,000                   | CAD$            7.59
      15.0424.5132.0638.98                | 4.25
      5.45
      6.24
      6.44
      8.44 | 60,194
      19,500
      152,126
      112,333
      1,267
|                       
|                        |                                                                                                   | 571,323                                            | CAD$          25.75                                            | 6.20                                             | 345,420                                                    
|                       

|      | **RESTRICTED SHARE UNITS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|**8** | Effective February 2004, shareholders approved an amendment to the Company’s stock option plan to change the name to Long-Term Incentive Plan and to allow the Board of Directors to grant restricted share units (RSU) under the LTIP. An RSU is the right of an individual to whom a grant of such unit is made to receive one Class A subordinate voting share at the end of the vesting periods of up to a maximum of ten years, if certain conditions have been achieved, which include the employee’s continued employment during that period and achievement of specified performance objectives, if any. Grant levels of RSUs are determined by the Board of Directors on the basis of merit and relative contribution of the participant to the Company. The RSUs may be subject to the attainment of performance objectives established by the Board of Directors at the time of grant. At the end of the vesting period, the C lass A subordinate voting shares to which a holder of RSUs is entitled will be issued from treasury under the share limit provided in the LTIP. The fair value of each RSU is calculated at the date of the grant. Compensation expense relating to the RSU plan is recognized in the financial statements over the vesting period. As of October 3, 2004, there were 112,000 RSUs awarded and outstanding of which none were vested. The compensation expense recorded for fiscal 2004, in respect to the LTIP, was $331,305. The counterpart has been recorded as contributed surplus. When the shares are issued to the employees, the amounts previously credited to contributed surplus as the compensation costs are being charged to income, are credited to share capital.







|**65** | Gildan 2004 Annual Report
|------ | -------------------------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

|      | **COMMITMENTS AND CONTINGENT LIABILITIES**                                                          
|----- | ----------------------------------------------------------------------------------------------------
|      |                                                                                                     
|**9** | (a)           The minimum annual lease payments under operating leases are approximately as follows:
|      |                                                                                                     

|            |                            
|----------- | ---------------------------
|Fiscal year |                            
|           
|2005        | $                 2,729,000
|2006        | 1,830,000                  
|2007        | 1,474,000                  
|2008        | 1,015,000                  
|2009        | 833,000                    
|Thereafter  | 1,150,000                  
|           
|            | $                 9,031,000
|           

| | (b) | As at October 3, 2004, there were contractual obligations outstanding of approximately $27,560,000 for the acquisition of fixed assets (2003  – $2,335,000).                                                                                                  
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                               
| | (c) | The Company is a party to claims and litigation arising in the normal course of operations. The Company does not expect the resolution of these matters to have a materially adverse effect on the financial position or results of operations of the Company.

|       | **GUARANTEES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|**10** | As at October 3, 2004, significant guarantees that have been provided to third parties are the following:
        The Company, and some of its subsidiaries, have granted irrevocable standby letters of credit and surety bonds, issued by highly rated financial institutions, to third parties to indemnify them in the event the Company does not perform its contractual obligations. As at October 3, 2004, the maximum potential liability under these guarantees was $26.8 million, of which $10.9 million was surety bonds and $15.9 million was for standby letters of credit and corporate guarantees. The standby letters of credit mature at various dates during fiscal 2005, the surety bonds are automatically renewed on an annual basis and the corporate guarantees mature upon 30 days notice.
        As at October 3, 2004, the Company has not recorded a liability with respect to these guarantees, as the Company does not expect to make any payments for the aforementioned items.







|Gildan 2004 Annual Report | **66**
|------------------------- | ------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

|       | **INCOME TAXES**                                                                                                                                                                                                                        
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                         
|**11** | The income tax provision differs from the amount computed by applying the combined Canadian federal and provincial tax rates to earnings before income taxes. The reasons for the difference and the related tax effects are as follows:
|       |                                                                                                                                                                                                                                         

|                                                                  |  |                         |      
|----------------------------------------------------------------- |  | ----------------------- | -----
|                                                                  |  | **2004**                |      
|                                                                 
|Combined basic Canadian federal and                               |  |                         |      
|provincial income taxes                                           |  | **$      20,012,067**   |      
|Increase (decrease) in income taxes resulting from:               |  |                         |      
|Effect of different tax rates on earnings of foreign subsidiaries |  | **(19,934,907**         | **)**
|Effect of non-deductible expenses and other                       |  | **3,000,840**           |      
|                                                                 
|                                                                  |  | **$         3,078,000** |      
|                                                                 
|                                                                  |  |                         |      
|The components of income tax expense are as follows:              |  |                         |      

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                          | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | **2004**                 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Current income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | **$            131,329** | 
|Future income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | **2,946,671**            | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | **$         3,078,000**  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|The Company has not recognized a future income tax liability for the undistributed earnings of its subsidiaries in the current or prior years, because the Company currently does not expect to sell those investments, and for those undistributed earnings that would become taxable, there is no intention to repatriate the earnings.
        Future income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s future tax position are as follows:

|                                                                                                                                                        |  |                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------
|                                                                                                                                                        |  | **2004**                          
|                                                                                                                                                       
|Future income tax assets:                                                                                                                               |  |                                   
|Non-capital losses                                                                                                                                      |  | **$                    4,098,638**
|Inventory                                                                                                                                               |  | **1,346,703**                     
|Reserves and accruals                                                                                                                                   |  | **1,453,276**                     
|Share issue costs and other                                                                                                                             |  | **1,250,276**                     
|                                                                                                                                                       
|                                                                                                                                                        |  | **8,148,893**                     
|                                                                                                                                                        |  |                                   
|Future income tax liabilities:                                                                                                                          |  |                                   
|Fixed assets and other                                                                                                                                  |  | **28,058,293**                    
|                                                                                                                                                       
|Net future income tax liability                                                                                                                         |  | **$                  19,909,400** 
|                                                                                                                                                       
|                                                                                                                                                       
|Management believes that all future income tax assets will more likely be realized than not and, accordingly, no valuation allowance has been provided.



|**67** | Gildan 2004 Annual Report
|------ | -------------------------



---





| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

|       | **EARNINGS PER SHARE**                                                      
|------ | ----------------------------------------------------------------------------
|       |                                                                             
|**12** | A reconciliation between basic and diluted earnings per share is as follows:
|       |                                                                             

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | **2004**                  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Basic earnings per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                           | 
|Basic weighted average number                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                           | 
|of common shares outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | **29,590,805**            | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Basic earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | **$               2.04**  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Diluted earnings per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                           | 
|Basic weighted average number of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                           | 
|common shares outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | **29,590,805**            | 
|Plus impact of stock options and restricted share units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | **244,784**               | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Diluted weighted average number of common                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                           | 
|shares outstanding                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | **29,835,589**            | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Diluted earnings per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | **$                2.02** | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Excluded from the above calculation are 32,000 (2002 – 144,800) stock options ranging in prices from CAD$36.50 to CAD$40.89 (2002 – CAD$34.58 to CAD$35.12) which were deemed to be antidilutive because the exercise prices were greater than the average market price of the common shares. All stock options outstanding for fiscal 2003 were dilutive. In addition, there are 56,000 restricted share units that have certain performance vesting triggers tied to the market price of the Company’s shares, and the attainment of future earnings that were excluded from the above calculation of diluted earnings per share for fiscal 2004.

|       | **OTHER INFORMATION**                                                                        
|------ | ---------------------------------------------------------------------------------------------
|       |                                                                                              
|**13** | (a) ****The following items were included in the determination of the Company’s net earnings:
|       |                                                                                              

|                                                   |  |                 | 
|-------------------------------------------------- |  | --------------- | 
|                                                   |  | **2004**        | 
|                                                  
|Depreciation expense of fixed assets               |  | **$21,510,926** | 
|Interest expense on long-term debt                 |  | **6,226,283**   | 
|Foreign exchange gain (loss)                       |  | **47,310**      | 
|Defined contribution plan expense                  |  | **441,924**     | 
|Amortization expense of deferred start-up costs    |  | **376,698**     | 
|Amortization of deferred financing costs and other |  | **386,900**     | 
|Investment income                                  |  | **248,253**     | 
|                                                  

|b)**** | An amount of approximately $0.5 million is included as compensation costs in “Selling, general and administration” expenses in the consolidated statements of earnings for fiscal 2004 in respect to the employee share purchase plans, restricted share units granted in the year, and a modification to the vesting period of certain options.
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







|Gildan 2004 Annual Report | **68**
|------------------------- | ------



---





| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **OTHER INFORMATION (cont’d)**
| | ------------------------------
| |                               
| |                               
| | (c)                           
| |                               
| | (d)                           
| |                               
| | (e)                           
| |                               
| |                               

|                                               |  |                           | 
|---------------------------------------------- |  | ------------------------- | 
|                                               |  | **2004**                  | 
|                                              
|Cash paid during the year for:                 |  |                           | 
|Interest                                       |  | **$          6,404,429**  | 
|Income taxes                                   |  | **1,811,941**             | 
|Non-cash transactions:                         |  |                           | 
|Additions to fixed assets included             |  |                           | 
|in accounts payable and accrued liabilities    |  | **$           3,473,007** | 
|Cash and cash equivalents consist of:          |  |                           | 
|Cash balances with banks                       |  | **$         33,570,810**  | 
|Short-term investments, bearing                |  |                           | 
|interest at 1.72% (2003 — 1.65%; 2002 — 2.75%) |  | **27,100,000**            | 
|                                              
|                                               |  | **$         60,670,810**  | 
|                                              

|       | **FINANCIAL INSTRUMENTS**
|------ | -------------------------
|       |                          
|**14** | (a)                      



|**69** | Gildan 2004 Annual Report
|------ | -------------------------



---





| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **FINANCIAL INSTRUMENTS**
| | -------------------------
| |                          
| |                          
| | (a)                      

|                            |          |                | 
|--------------------------- | -------- | -------------- | 
|                            |          | Notionalamount | 
|                           
|**2004:**                   |          |                | 
|Sell contracts:             |          |                | 
|Foreign exchange contracts: | **€**    | **1,409,000**  | 
|                            | **£**    | **1,002,000**  | 
|Buy contracts:              |          |                | 
|Foreign exchange contracts: | **CAD$** | **38,990,000** | 
|                            |          |                | 

|                            |   |           | 
|--------------------------- | - | --------- | 
|**2003:**                   |   |           | 
|Sell contracts:             |   |           | 
|Foreign exchange contracts: | € | 1,570,000 | 
|                           



| |     | A forward foreign exchange contract represents an obligation to buy or sell a foreign currency with a counterparty. Credit risk exists in the event of failure by a counterparty to meet its obligations. The Company reduces this risk by dealing only with highly rated counterparties, normally major European and North American financial institutions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (b) | Credit risk:
        The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and trade receivables.
        The Company invests available cash in short-term deposits with North American financial institutions.
        The Company’s extension of credit involves considerable judgment and is based on an evaluation of each customer’s financial condition and payment history. The Company regularly monitors its credit risk exposure to its customers and takes steps to mitigate the risk of loss, including obtaining credit insurance. As at October 3, 2004, the Company’s top ten customers accounted for approximately 52% (2003 – 52%) of the trade receivable balance of which one customer represented 19.5% (2003 – 25%). The remaining trade receivable balances are dispersed amongst a large number of customers across many geographic areas within Canada, the United States, the United Kingdom and Europe.
        An allowance for doubtful accounts is maintained for potential credit losses consistent with the credit risk, historical trends, general economic conditions and other information.





|Gildan 2004 Annual Report | **70**
|------------------------- | ------



---





| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **FINANCIAL INSTRUMENTS****(cont’d)**
| | -------------------------------------
| |                                      
| |                                      
| | (c)                                  
| |                                      
| | (d)                                  



|       | **SEGMENTED INFORMATION**                                                                           
|------ | ----------------------------------------------------------------------------------------------------
|       |                                                                                                     
|**15** | The Company manufactures and sells activewear apparel. The Company operates in one business segment.
|       | (a)                                                                                                 
|       |                                                                                                     

|          |  |           |      
|--------- |  | --------- | -----
|          |  | **2004**  | 2003 
|         
|Company A |  | **25.0%** | 13.9%
|Company B |  | **—**     | 13.6%
|         

| |  | During September 2003, Company A acquired Company B.
| |  | ----------------------------------------------------
| |  | (ii)                                                

|                 |  |                  |  |                       |  |                      
|---------------- |  | ---------------- |  | --------------------- |  | ---------------------
|                 |  | **2004**         |  | 2003                  |  | 2002                 
|                
|United States    |  | **$452,060,382** |  | $         362,231,222 |  | $         318,809,905
|Canada           |  | **44,826,642**   |  | 40,310,429            |  | 40,168,745           
|Europe and other |  | **36,480,513**   |  | 28,652,951            |  | 23,333,578           
|                
|                 |  | **$533,367,537** |  | $         431,194,602 |  | $         382,312,228
|                

|**71** | Gildan 2004 Annual Report
|------ | -------------------------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **SEGMENTED INFORMATION (cont’d)**
| | ----------------------------------
| |                                   
| |                                   
| |                                   

| | (b) | Fixed assets by geographic areas are as follows:
| | --- | ------------------------------------------------

|                                    |                           |                      
|----------------------------------- | ------------------------- | ---------------------
|                                    | **2004**                  | 2003                 
|                                   
|Canada                              | **$          82,033,982** | $          93,246,643
|Caribbean basin and Central America | **96,099,258**            | 62,501,910           
|United States                       | **28,006,261**            | 18,532,618           
|Mexico                              | **5,553,398**             | 6,068,222            
|                                   
|                                    | **$        211,692,899**  | $        180,349,393 

|       | **CANADIAN AND UNITED STATES ACCOUNTING DIFFERENCES**                                                                                                                                                                                                                                                  
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                        
|**16** | The consolidated financial statements of the Company are expressed in US dollars and are prepared in accordance with Canadian generally accepted accounting principles ("GAAP"), which conform, in all material respects, with those generally accepted in the United States except as described below:
|       | (a)                                                                                                                                                                                                                                                                                                    

|                                                   |  |                               |      
|-------------------------------------------------- |  | ----------------------------- | -----
|                                                   |  | **2004**                      |      
|                                                  
|Net earnings in accordance with Canadian GAAP      |  | **$        60,251,248**       |      
|Swap (expense) revenue (i)                         |  | **(586,109**                  | **)**
|Start-up costs (ii)                                |  | **(347,456**                  | **)**
|Stock-based compensation (iii)                     |  | **106,363**                   |      
|Tax effect of above adjustments                    |  | **31,664**                    |      
|                                                  
|Net earnings in accordance with United States GAAP |  | **59,455,710**                |      
|Other comprehensive income:                        |  |                               |      
|Mark-to-market adjustments on foreign exchange     |  |                               |      
|contracts, net of tax of $655,000 (note 16 (d))    |  | **1,457,009**                 |      
|Comprehensive income                               |  | **$        60,912,719**       |      
|                                                  
|Earnings per share under United States GAAP:       |  |                               |      
|Basic                                              |  | **$                    2.01** |      
|Diluted                                            |  | **1.99**                      |      
|                                                  
|Weighted average number of common shares           |  |                               |      
|outstanding under United States GAAP:              |  |                               |      
|Basic                                              |  | **29,590,805**                |      
|Diluted                                            |  | **29,835,589**                |      
|                                                  





|Gildan 2004 Annual Report | **72**
|------------------------- | ------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **CANADIAN AND UNITED STATES ACCOUNTING DIFFERENCES(cont’d)**
| | -------------------------------------------------------------
| |                                                              
| |                                                              
| | (i)                                                          
| |                                                              
| | (ii)                                                         
| |                                                              
| | (iii)                                                        



|**73** | Gildan 2004 Annual Report
|------ | -------------------------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **CANADIAN AND UNITED STATES ACCOUNTING DIFFERENCES(cont’d)**
| | -------------------------------------------------------------
| |                                                              
| | (b)                                                          

|                                                           |  |                                |      
|---------------------------------------------------------- |  | ------------------------------ | -----
|                                                           |  | **2004**                       |      
|                                                          
|Cash and cash equivalents, United States GAAP,             |  |                                |      
|beginning of year                                          |  | **$               69,339,953** |      
|Changes due to United States GAAP:                         |  |                                |      
|Operating activities on a Canadian basis                   |  | **58,919,688**                 |      
|Start-up costs                                             |  | **(347,456**                   | **)**
|                                                          
|Operating activities cash flow, United States GAAP         |  | **58,572,232**                 |      
|                                                           |  |                                |      
|Investing activities on a Canadian basis                   |  | **(53,819,655**                | **)**
|Start-up costs                                             |  | **347,456**                    |      
|                                                          
|Investing activities cash flow, United States GAAP         |  | **(53,472,199**                | **)**
|                                                           |  |                                |      
|Financing activities on a Canadian basis                   |  |                                |      
|and under United States GAAP                               |  | **(14,349,709**                | **)**
|Effect of exchange rate changes on                         |  |                                |      
|cash and cash equivalents                                  |  | **580,533**                    |      
|                                                          
|Cash and cash equivalents, United States GAAP, end of year |  | **$               60,670,810** |      
|                                                          

| | (c) | Consolidated balance sheets:
      A reconciliation of shareholders’ equity under Canadian GAAP to United States GAAP is as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------

|                                              |  |                  
|--------------------------------------------- |  | -----------------
|                                              |  | **2004**         
|                                             
|Shareholders' equity under Canadian GAAP      |  | **$ 327,594,842**
|United States GAAP adjustments:               |  |                  
|Start-up costs                                |  | **(760,344**     
|Foreign exchange contracts                    |  | **2,112,009**    
|Cross–currency swap                           |  | **298,000**      
|Tax effect on above terms                     |  | **(747,000**     
|                                             
|                                              |  | **902,665**      
|                                             
|Shareholders' equity under United States GAAP |  | **$ 328,497,507**
|                                             



|Gildan 2004 Annual Report | **74**
|------------------------- | ------



---



| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **CANADIAN AND UNITED STATES ACCOUNTING DIFFERENCES(cont’d)**
| | -------------------------------------------------------------
| |                                                              
| | (b)                                                          
| |                                                              
| |                                                              
| |                                                              
| |                                                              

|                                  |                                     |                               |                            
|--------------------------------- | ----------------------------------- | ----------------------------- | ---------------------------
|                                  | **2004**                            | 2003                          | 2002                       
|                                 
|Opening balance                   | **$                    26,248,267** | $                           — | $                         —
|Change during the year            | **1,457,009**                       | $                           — | —                          
|Cumulative translation adjustment | **—**                               | 26,248,267                    | —                          
|                                 
|                                  | **$                    27,705,276** | $                 26,248,267  | $                         —
|                                 

| | Under Canadian generally accepted accounting principles, the cumulative translation adjustments account is disclosed as a separate component of shareholders’ equity.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|**75** | Gildan 2004 Annual Report
|------ | -------------------------



---







| | **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont’d)**              
| | ---------------------------------------------------------------------
| |                                                                      
| | *Years ended October 3, 2004, October 5, 2003 and September 29, 2002*
| | *(In US dollars)*                                                    
| |                                                                      

| | **CANADIAN AND UNITED STATES ACCOUNTING DIFFERENCES(cont’d)**
| | -------------------------------------------------------------
| |                                                              
| | (e)                                                          
| |                                                              

|                                                             |  |                      | 
|------------------------------------------------------------ |  | -------------------- | 
|                                                             |  | **2004**             | 
|                                                            
|Statements of earnings:                                      |  |                      | 
|Rental expenses                                              |  | **$      2,825,598** | 
|Advertising expenses                                         |  | **5,147,523**        | 
|                                                             |  |                      | 
|Balance sheets:                                              |  |                      | 
|Accounts payable                                             |  | **$    40,040,047**  | 
|Accrued liabilities                                          |  | **34,457,810**       | 
|Allowance for doubtful accounts, price discounts and rebates |  | **23,460,095**       | 
|                                                            

|       | **COMPARATIVE FIGURES**                                                                                     
|------ | ------------------------------------------------------------------------------------------------------------
|       |                                                                                                             
|**17** | Certain comparative figures have been reclassified in order to conform with the current year’s presentation.















|Gildan 2004 Annual Report | **76**
|------------------------- | ------



---



| | **Head Office***Gildan Activewear Inc.
        725 Montée de Liesse 
        Montreal, Quebec 
        Canada H4T 1P5 
        Tel.: (514) 735-2023 
        www.gildan.com*
        
        **Stock Transfer Agent and Registrar***Computershare Trust Company of Canada 
        Computershare Trust Company, Inc. 
        United States*
        
        **Auditors**
        KPMG *LLP*
        
        **Investor Information***Tel.: (514) 340-8791*
        **Annual and Special Meeting of Shareholders***Wednesday, February 2, 2005 
        At 11:00 a.m.
        Hotel Omni Mont-Royal 
        Salon des Saisons A 
        1050 Sherbrooke Street West 
        Montreal, Quebec*                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | We are committed to adopting and adhering to corporate governance practices that either meet or exceed Canadian and U.S. corporate governance standards. As Gildan is a “foreign private issuer” in the U.S., its chief executive officer is not required to certify the compliance of the Company with all of the New York Stock Exchange Corporate Governance Listing Standards (the NYSE Standards). In addition, certain equity compensation plans, such as the Company’s Restricted Share Unit Plan (more fully described in the Company’s management proxy circular dated December 17, 2004) do not need to be approved by the Company’s shareholders. Otherwise, we believe that our corporate governance practices are substantially on par with or exceed those followed by U.S. domestic companies under the NYSE Standards.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |