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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 40-F

[  ] Registration statement pursuant to Section 12 of the
Securities Exchange Act of 1934

or

[X] Annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934

|For Fiscal year ended: October 2, 2011 | Commission File number: 01-14830
|-------------------------------------- | --------------------------------

GILDAN ACTIVEWEAR INC.(Exact
name of registrant as specified in its charter)

Canada(Province or other jurisdiction of
incorporation or organization)

2200, 2250, 2300(Primary standard industrial
classification code number, if applicable)

Not Applicable(I.R.S. employer identification
number, if applicable)

600 de Maisonneuve Boulevard West, Montreal, Quebec, Canada
H3A 3J2, (514) 735-2023(Address and telephone number of registrants
principal executive office)

Puglisi & Associates, 850 Library Avenue, Suite 204, P.O.
Box 885, Newark, Delaware 19715, (302) 738-6680(Name, address and
telephone number of agent for service in the United States)

Securities registered pursuant to Section 12(b) of the Act:

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

Securities registered or to be registered pursuant to Section
12(g) of the
Act:NoneSecurities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:None

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

| | [X] Annual Information Form | [X] Audited Annual Financial Statements | 
| | --------------------------- | --------------------------------------- | 

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

Common Shares:121,330,544

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

|Yes [  ] | No [X]
|-------- | ------

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

|Yes [X] | No [  ]
|------- | -------

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****

****

****

GILDAN ACTIVEWEAR INC.

ANNUAL INFORMATION FORM

for the year ended October 2, 2011







December 9, 2011

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GILDAN ACTIVEWEAR INC. 2011

ANNUAL INFORMATION FORM

TABLE OF CONTENTS

|1.                                                            | CORPORATE STRUCTURE                                      |   
|------------------------------------------------------------- | -------------------------------------------------------- | --
|                                                              | 1.1 Name, Address and Incorporation                      | 1 
|                                                              | 1.2 Intercorporate
      Relationships                   | 2 
|                                                              |                                                          |   
|2.                                                            | GENERAL DEVELOPMENT OF THE
      BUSINESS                |   
|                                                              | 2.1 Recent Developments                                  | 2 
|                                                              | 2.2 Developments in Fiscal
      2011                    | 3 
|                                                              | 2.3 Developments in Fiscal 2010                          | 4 
|                                                              | 2.4 Developments in Fiscal
      2009                    | 5 
|                                                              |                                                          |   
|3.                                                            | DESCRIPTION OF THE
      BUSINESS                        |   
|                                                              | 3.1 Business Overview                                    | 5 
|                                                              | 3.2 Risk Factors                                         | 15
|                                                              | 3.3 Employees                                            | 15
|                                                              |                                                          |   
|4.                                                            | DIVIDEND POLICY                                          | 15
|                                                              |                                                          |   
|5.                                                            | CAPITAL STRUCTURE                                        |   
|                                                              | 5.1 First Preferred
      Shares                         | 15
|                                                              | 5.2 Second Preferred Shares                              | 16
|                                                              | 5.3 Common Shares                                        | 16
|                                                              |                                                          |   
|6.                                                            | MARKET FOR SECURITIES                                    | 17
|                                                              |                                                          |   
|7.                                                            | DIRECTORS AND OFFICERS                                   | 17
|                                                              |                                                          |   
|8.                                                            | AUDIT COMMITTEE
      DISCLOSURE                         |   
|                                                              | 8.1 Mandate of the Audit and Finance
      Committee     | 21
|                                                              | 8.2 Composition of the Audit
      and Finance Committee | 21
|                                                              | 8.3 Pre-Approval of Non-Audit Services                   | 22
|                                                              | 8.4 External Auditor Service
      Fees                  | 22
|                                                              |                                                          |   
|9.                                                            | LEGAL PROCEEDINGS                                        | 23
|                                                              |                                                          |   
|10.                                                           | TRANSFER AGENT AND
      REGISTRAR                       | 23
|                                                              |                                                          |   
|11.                                                           | MATERIAL CONTRACTS                                       | 23
|                                                              |                                                          |   
|12.                                                           | INTERESTS OF EXPERTS                                     | 24
|                                                              |                                                          |   
|13.                                                           | FORWARD-LOOKING
      STATEMENTS                         | 24
|                                                              |                                                          |   
|14.                                                           | ADDITIONAL INFORMATION                                   | 25
|                                                              |                                                          |   
|APPENDIX A  MANDATE OF THE
      AUDIT AND FINANCE COMMITTEE | 26                                                      

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This Annual Information Form is dated December 9, 2011 and,
except as otherwise indicated, the information contained herein is given as of
December 9, 2011.

Unless otherwise indicated, all dollar amounts set forth
herein are expressed in U.S. dollars and all financial information set forth
herein is prepared in accordance with Canadian generally accepted accounting
principles.

Unless otherwise indicated, all references to share prices,
trading volumes and per share measures are adjusted, on a retroactive basis, to
reflect all stock splits.

In this Annual Information Form, Gildan, the Company or
the words we, our and us refer, depending on the context, either to Gildan
Activewear Inc. or to Gildan Activewear Inc. together with its subsidiaries and
joint venture.

The information appearing in the extracts of the documents
listed below and specifically referred to in this Annual Information Form is
incorporated herein by reference:

- Audited Consolidated Financial Statements as at and for the year ended
  October 2, 2011 (the 2011 Financial Statements);
- Managements Discussion and Analysis for the year ended October 2, 2011
  (the 2011 Annual MD&A);
- The Business Acquisition Report filed on June 27, 2011 in connection
  with the acquisition of Gold Toe Moretz Holdings Corp. on April 15,
  2011; and
- The latest Notice of Annual Meeting of Shareholders and Management
  Proxy Circular filed on SEDAR.

The foregoing documents are available on the SEDAR website
at www.sedar.com, on the EDGAR website at www.sec.gov and on the Companys
website at www.gildan.com/corporate.

This Annual Information Form contains certain
forward-looking statements that are based on Gildans current expectations,
estimates, projections and assumptions and that were made by Gildan in light of
its experience and its perception of historical trends. Results indicated in
forward-looking statements may differ materially from the actual results. Please
refer to the cautionary statement on pages 24 and 25 of this Annual Information
Form for further explanation.

|1.  | CORPORATE STRUCTURE            
|--- | -------------------------------
|    |                                
|1.1 | Name, Address and
Incorporation

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

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

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

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thereto. On February 10, 2011, we filed Articles of Amendment
in order to change the maximum number of directors from ten to twelve.

Our principal executive offices and registered office are
located at 600 de Maisonneuve Boulevard West, 33rdFloor, Montreal,
Québec, Canada H3A 3J2, and our telephone number at that address is (514)
735-2023.



|1.2 | Intercorporate
Relationships
|--- | ----------------------------

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

|Subsidiary                                                   | Jurisdiction
      ofIncorporation | Percentage of Voting Securities or
      PartnershipInterests that Gildan held as atDecember
      9, 2011
|------------------------------------------------------------ | ---------------------------------- | ----------------------------------------------------------------------------------------------------------
|Gildan Activewear SRL                                        | Barbados                           | 100%                                                                                                      
|Gildan USA Inc.                                              | Delaware                           | 100%                                                                                                      
|Gildan Choloma Textiles, S. de R.L.                          | Honduras                           | 100%                                                                                                      
|Gildan Activewear Dominican Republic Textile Company Inc.    | Barbados                           | 100%                                                                                                      
|Gildan Activewear Honduras Textile Company,
      S. de R.L. | Honduras                           | 100%                                                                                                      
|Gildan Honduras Hosiery Factory, S. de R.L.                  | Honduras                           | 100%                                                                                                      
|Gildan Activewear Properties (Dominican
      Republic) Inc. | Barbados                           | 100%                                                                                                      
|Gildan Activewear (UK) Limited                               | United Kingdom                     | 100%                                                                                                      
|Gildan Hosiery Rio Nance, S. de R.L.                         | Honduras                           | 100%                                                                                                      
|GoldToeMoretz, LLC                                           | Delaware                           | 100%                                                                                                      
|Gildan Honduras Properties, S. de R.L.                       | Honduras                           | 100%                                                                                                      
|Gildan Mayan Textiles, S. de R.L.                            | Honduras                           | 100%                                                                                                      

The subsidiaries that have been omitted do not represent
individually more than 10% of the consolidated assets and 10% of the
consolidated revenue of Gildan, or in the aggregate more than 20% of the total
consolidated assets and the consolidated revenue as at and for the year ended
October 2, 2011.

|2. | GENERAL DEVELOPMENT OF THE
  BUSINESS
|-- | -------------------------------------

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

|2.1 | Recent Developments
|--- | -------------------

- Short-term promotional discounting in the U.S. wholesale distributor
  channel began to increase at the end of the fourth quarter of fiscal 2011 and
  has continued to increase in the first quarter of fiscal 2012 despite the fact
  that industry suppliers have not yet consumed high cost cotton inventories. In
  addition, in the first quarter of fiscal 2012, distributors have been
  supplying screenprinter demand without replenishing inventory levels, which we
  believe was mainly due to the anticipation by distributors of selling price
  reductions from suppliers. Weak market conditions in the retail channel are
  also reflecting delayed replenishment of inventories by retailers. In order to
  enable distributors to plan their business and to stimulate screenprinter
  demand for Gildan products, on November 30, 2011, Gildan announced a reduction
  in selling prices in the U.S. distributor channel, effective December 5, 2011.
  In addition, Gildan concurrently announced its intention to apply the benefit
  of the price reduction to existing distributor inventories, which is projected
  to result in a distributor

2

---

- On November 30, 2011, Gildans Board of Directors declared a cash dividend
  of $0.075 per share for an expected aggregate payment of $9.1 million, which
  will be paid on January 6, 2012 on all of the issued and outstanding Common
  Shares, rateably and proportionately to the shareholders of record on December
  15, 2011.
- On December 2, 2011, the Toronto Stock Exchange (TSX) approved the
  renewal of Gildans normal course issuer bid to purchase up to a maximum of
  1,000,000 Common Shares, representing approximately 0.8% of its issued and
  outstanding Common Shares as at November 30, 2011. Any purchases under the
  renewed bid will be made during the period from December 6, 2011 to December
  5, 2012, or until such time as the bid is completed or terminated at the
  Companys option. Purchases will be made on the open market on both the TSX
  and the New York Stock Exchange (NYSE). Under the bid, the Company may
  purchase up to a maximum of 107,619 Common Shares daily, which represents 25%
  of the average daily trading volume on the TSX for the most recently completed
  six calendar months. The price to be paid will be the market price of the
  Common Shares on the stock exchange on which such Common Shares are purchased
  at the time of acquisition. Common Shares purchased under the bid will be
  cancelled. As at November 30, 2011, there were 121,410,406 Common Shares
  issued and outstanding.
- In the event that, during the course of the normal course issuer bid, the
  Common Shares trade at a price range that does not adequately reflect their
  value in relation to the Companys assets, business and future business
  prospects, the Company believes that the purchase of up to 1,000,000 of its
  outstanding Common Shares made under the normal course issuer bid will
  represent an appropriate use of the Companys corporate funds, while still
  preserving its financing flexibility to pursue potential growth opportunities.
- Beginning in the first quarter of fiscal 2012, the Company will begin
  reporting its business under two separate operating business segments, in line
  with the new operating and internal financial reporting structure of the
  Company. Gildan is now structured as two operating businesses that reflect the
  major customer market segments that it serves, each of which has
  accountability for its financial performance and return on capital.
  Previously, we managed and reported our operating performance under one
  reportable business segment, being high-volume, basic, frequently-replenished,
  non-fashion apparel. The following summary describes the operations of each of
  the Companys reportable segments starting in fiscal 2012:  
  Screenprint: The screenprint business, headquartered in Barbados,
    designs, manufactures and distributes undecorated activewear products
    primarily to wholesale distributors and other screenprint markets in the
    U.S., Canada and international markets such as Europe, Mexico and the
    Asia-Pacific region.Retail: The retail business, headquartered in Charleston, South
    Carolina, designs, manufactures, sources and distributes socks, underwear,
    as well as activewear products, primarily to U.S. retailers.
- Screenprint: The screenprint business, headquartered in Barbados,
    designs, manufactures and distributes undecorated activewear products
    primarily to wholesale distributors and other screenprint markets in the
    U.S., Canada and international markets such as Europe, Mexico and the
    Asia-Pacific region.
- Retail: The retail business, headquartered in Charleston, South
    Carolina, designs, manufactures, sources and distributes socks, underwear,
    as well as activewear products, primarily to U.S. retailers.

|2.2 | Developments in Fiscal
2011
|--- | ---------------------------

- In the first half of fiscal 2011, we experienced a recovery
  in demand in our target screenprint markets. However, starting with the third
  quarter of fiscal 2011, market conditions weakened and demand in the U.S.
  wholesale distributor channel declined approximately 8% in the second half of
  fiscal 2011. Towards the latter part of fiscal 2010 we began to see a dramatic
  increase in cotton prices which peaked to historical new highs during fiscal
  2011. In response to the significant increase in cotton costs, apparel
  suppliers, including Gildan, implemented successive price increases beginning
  in the fourth quarter of fiscal 2010 and during fiscal 2011. During the second
  half of fiscal 2011, cotton future prices began a rapid and significant
  decline, but with no immediate benefit on industry costs as existing
  manufacturer inventories continue to reflect cotton purchased at the
  previously higher levels of cotton prices. Despite existing high cost cotton
  in manufacturer inventories, short-term promotional discounting began to
  increase in the U.S. distributor channel at the end of the fourth quarter of
  fiscal 2011. Please see update provided under Recent Developments
  above.

3

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- On December 1, 2010, the Companys Board of Directors approved the
  introduction of a quarterly cash dividend in the amount of U.S. $0.075 per
  share payable on all issued and outstanding Common Shares. During fiscal 2011,
  the Company paid an aggregate of $27.5 million of dividends.
- On December 1, 2010, the Companys Board of Directors also approved the
  reinstatement of a normal course issuer bid to repurchase up to 1,000,000
  outstanding Common Shares of the Company on the TSX and the NYSE. The Company
  was authorized to make purchases under the bid during the period from December
  6, 2010 to December 5, 2011 or until such time as the bid was completed or
  terminated at the Companys option. The price paid was the market price of the
  Common Shares on the stock exchange on which the shares were purchased at the
  time of acquisition. During fiscal 2011, the Company purchased 400,000 Common
  Shares under the bid for an aggregate amount of approximately $10.5 million.
  The Common Shares purchased under the bid were cancelled.
- On April 15, 2011, the Company acquired 100% of the capital stock of Gold
  Toe Moretz Holdings Corp. (Gold Toe Moretz), for an aggregate cash
  consideration of $349.6 million. Gold Toe Moretz is a leading supplier of
  high-quality branded athletic, casual and dress socks for national chains,
  mass-market retailers, price clubs, department stores and specialty sporting
  goods stores in the United States. The acquisition was initially financed
  using $100 million of cash on hand and $250 million drawn on Gildans
  revolving credit facility. An additional purchase price consideration of up to
  150,000 common shares is contingent on specified future events. The
  acquisition of Gold Toe Moretz represents an important step in our ongoing
  strategic development in retail. In addition to the introduction of leading
  consumer brands, the acquisition significantly expands and diversifies our
  channels of distribution across the broad spectrum of the U.S. retail channel.
- During fiscal 2011, the Company completed the construction of its third
  textile manufacturing facility in Honduras, Rio Nance 5, and commenced
  operations at the end of the fiscal year.
- During fiscal 2011, the Company consolidated U.S. sock manufacturing
  operations from its V.I. Prewett & Son, Inc. (Prewett) subsidiary, which
  was acquired in fiscal 2008, to its Central American manufacturing hub.
- During fiscal 2011, the Company increased its long-term unsecured
  revolving bank credit facility to $800 million from $400 million and extended
  the maturity date to June 2016 from June 2013.

|2.3 | Developments in Fiscal
2010
|--- | ---------------------------

- Following the severe economic downturn in 2009, we began to experience a
  recovery in demand in our target screenprint markets in the second quarter of
  fiscal 2010. This recovery contributed in part to the Companys significant
  sales growth in fiscal 2010. The recessionary conditions from the severe
  economic downturn in fiscal 2009 followed by the economic recovery, however,
  created challenging conditions for the apparel marketplace, including global
  yarn shortages and freight distribution shortages, compounded by volatility in
  cotton prices. Towards the latter part of fiscal 2010, we began to see a
  dramatic increase in cotton prices which continued to increase in fiscal 2011
  and led to the commencement of selling price increases by apparel suppliers in
  order to mitigate the impact of increased raw material and other input costs.
- During fiscal 2010, we commenced the ramp-up of production at our new sock
  manufacturing facility in Honduras, Rio Nance 4.
- As an initial step towards the establishment of a manufacturing hub to
  support our growth in target markets in Asia and Europe, on March 31, 2010, we
  acquired a vertically-integrated manufacturing facility for the production of
  activewear in Bangladesh.
- During fiscal 2010, we made progress with our strategic initiative to
  penetrate the retail channel. We obtained new activewear and underwear
  programs, including our first major mens underwear program for Walmart under
  the Starter brand.
- During fiscal 2010, we completed the construction of a biomass steam
  generation system in the Dominican Republic, which became operational during
  the year and initiated the construction of similar biomass steam

4

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- On November 17, 2009, we completed the acquisition of a distribution
  centre and office building in Charleston, South Carolina, for approximately
  $20 million. During fiscal 2010, we began to consolidate our retail sales,
  marketing and distribution activities at this location and proceeded with the
  closure of our distribution centres at Martinsville, Virginia and Fort Payne,
  Alabama.
- During fiscal 2010, the Company acquired a new office building in Barbados
  for approximately $20 million, and moved its offices, including the sales and
  marketing functions of its screenprint business, to this location.
- On January 12, 2010, Haiti was devastated by a massive earthquake, which
  had an impact on Gildans third- party contractor operations in Haiti which
  are used to sew the majority of the fabric produced at our Dominican Republic
  textile facility. The impact on the Companys operations included a temporary
  loss of production, primarily during the second quarter, which subsequently
  resulted in lost sales opportunities as well as supply chain inefficiencies
  during the balance of the fiscal year. The Company received insurance proceeds
  of $8 million during the fourth quarter of fiscal 2010 which compensated in
  part for losses sustained as a result of the impact of the Haiti earthquake.

|2.4 | Developments in Fiscal
2009
|--- | ---------------------------

- During fiscal 2009, the  severe downturn in the overall economic environment resulted in a dramatic  curtailment of consumer and corporate spending, which negatively impacted  demand for our products in the U.S., Canadian and international screenprint  markets, and which also resulted in significant inventory destocking at the  U.S. distributor level.  Weaker demand  and customer inventory reductions also occurred in the mass-market retail  channel. In response to the downturn in the economy, we took a number of steps  in order to prudently manage our receivables, inventory levels and capital  expenditures. We took short intervals of production downtime during the year at  most of our production facilities in order to better align our inventory levels  with the weaker sales demand. In the context of the weak economic environment,  we managed our credit risk cautiously, as we balanced short-term market share  considerations in relation to increased customer credit exposure, including  carefully managing our customer accounts and promotional programs.  Consequently, during fiscal 2009, we took a decision to temporarily stop  replenishing our largest wholesale distributor as it underwent a process to  restructure its debt financing. Furthermore, the Company proceeded cautiously  on capacity expansion projects previously announced by delaying certain  projects until the economic outlook in support of further major capacity  expansion became clearer.
- During fiscal  2009, we continued to consolidate our U.S.  manufacturing operations to our manufacturing hub in Central America, including  the transition of our U.S.  sock finishing operations, which were purchased as part of the Prewett  acquisition.
- In early fiscal 2009, we were granted a business  license by the Chinese government to operate as Gildan (China) Trading Co., Ltd. This  corporation has been established to import and sell Gildan products to  customers in mainland China.  In fiscal 2009, we moved our distribution activities from Shenzhen,  China to a new distribution  centre in China near Shanghai to better service the initial customer base  predominantly located in the Northern provinces  of China.  Gildan is focusing on building its brand in both the retail and screenprint  channels in China.

|3.  | DESCRIPTION OF THE BUSINESS
|--- | ---------------------------
|    |                            
|3.1 | Business Overview          

We are a marketer and global low-cost vertically-integrated
manufacturer of quality branded basic apparel. We service customers requiring an
efficient supply chain and consistent product quality for high-volume
replenishment programs. Gildan® is the leading brand of activewear for the
screenprint channel in the U.S. and Canada and the Company is continuing to grow
its presence in Europe, Mexico and the Asia-Pacific region. We are also one of
the worlds largest suppliers of branded and private label athletic, casual and
dress socks sold to a broad spectrum of retailers in the U.S. For the year ended
October 2, 2011 and prior years, the Company operated in one business segment,
being high-volume, basic and frequently replenished apparel. Beginning in the
first quarter of fiscal 2012, the Company began managing and reporting the
operating results of its business under two separate financial reporting
segments, Screenprint and Retail.

The Companys net sales for fiscal 2011 reached $1,726.0
million.

5

---

Strategy and Objectives

Our growth strategy comprises the following initiatives:

- Maximize screenprint market penetration and
  opportunitiesWhile we have achieved a leadership position in
  the screenprint distributor channel in the U.S. and in Canada, we continue to
  pursue further growth opportunities in the North American screenprint market.
  In particular, we intend to continue to pursue further penetration of the
  Gildan® brand in the U.S. distributor screenprint channel as we expand our
  production capacity. The introduction of new products such as softer T- shirts
  and sport shirts and new styles tailored for women could enable us to further
  increase our market share by servicing certain niches of the screenprint
  channel in which we previously did not participate.We intend to
  continue to expand our presence in international screenprint markets,
  specifically Europe, Mexico and the Asia-Pacific region, and we also plan to
  continue to grow our sales to large branded apparel companies and retailers
  that sell imprinted activewear and are currently not serviced by our existing
  U.S. wholesale distributors. We are continuing to expand our integrated
  manufacturing hubs in Central America to support our projected growth, and
  allocate more capacity to service product categories and geographical
  locations where our growth was previously constrained by capacity
  availability. In addition, the acquisition of our first vertically-integrated
  facility for the manufacture of ring-spun T-shirts in Bangladesh during fiscal
  2010, combined with the potential development over time of a
  vertically-integrated manufacturing hub in Bangladesh, is intended to support
  our strategy to grow our international business in Asia and Europe.
- Leverage our successful business model to further penetrate the retail
  channelWe intend to continue to leverage our existing core
  competencies, successful business model and competitive strengths to further
  penetrate the U.S. retail channel. As in the screenprint channel, success
  factors in penetrating the retail channel include consistent quality,
  competitive pricing and fast and flexible replenishment due to our
  geographical proximity to our markets, together with our commitment to
  corporate social responsibility and environmental sustainability. We are a
  leading supplier of socks in the U.S. mass- market retail channel, and intend
  to continue to build our market share position in socks, activewear and
  underwear in retail. Within the mass-market retail channel, we have positioned
  the Company as a strategic supplier of products sold under selective national
  retailers private label brands. We also sell our products in the retail
  channel under the Gildan® brand and, with the acquisition of Gold Toe Moretz,
  we have significantly expanded our brand portfolio as described under the
  section entitled Our Products and Markets. We are increasingly focusing on
  the steady development of our company-owned and exclusively licensed brands,
  including the sale of products with the Gildan® label to retailers. The
  acquisition of Gold Toe Moretz represents an important step in our ongoing
  strategic development in retail. In addition to the introduction of leading
  consumer brands, the acquisition significantly expands and diversifies our
  channels of distribution across the broad spectrum of the U.S. retail channel.
  Additionally, this acquisition provides enhanced brand management expertise
  which can be utilized to further the development of the Gildan® brand.
  Furthermore, we intend to leverage Gildans manufacturing scale and expertise
  to support the further development of Gold

6

---

- Continue to generate manufacturing and distribution cost
  reductionsWe continuously seek to improve our manufacturing
  and distribution processes and cost structure by developing and investing in
  projects for cost-reduction, as well as for further product quality
  enhancement. We continue to execute our plans to reduce our reliance on
  high-cost fossil fuels and further reduce our impact on the environment by
  installing additional biomass facilities as an alternate source of natural
  renewable energy, and other initiatives to increase the efficiency of our
  energy-intensive equipment and processes, which reflect the Companys
  commitment to environmental sustainability. The acquisition of Gold Toe Moretz
  also creates the potential to achieve cost synergies by combining the
  operations of both companies and integrating certain high-volume products
  supplied by Gold Toe Moretz into Gildans vertically-integrated sock
  manufacturing in Honduras.
- Reinvest cash flow We will continue to evaluate
  opportunities to reinvest our cash flows generated from operations. Our
  primary use of cash will continue to be to finance our working capital and
  capital expenditure requirements to support our organic growth, as well as our
  dividend requirements, but at the same time we will be open to evaluating
  complementary strategic acquisition opportunities which meet our return on
  investment criteria, based on our risk-adjusted cost of capital.

Our Products and Markets

In the screenprint channel, we manufacture and distribute
T-shirts, fleece and sport shirts in undecorated blank form primarily under
our industry leading Gildan® brand in large quantities which are primarily sold
to wholesale distributors, which are subsequently sold to screenprinters and
embroiderers who decorate the products with designs and logos. Screenprinters
and embroiderers then sell the imprinted activewear to a highly diversified
range of end-use markets, including educational institutions, athletic dealers,
event merchandisers, promotional product distributors, charity organizations,
entertainment promoters, and travel and tourism venues. Our activewear products
are used in a variety of daily activities by individuals, including work and
school uniforms and athletic team wear, and for various other purposes to convey
individual, group and team identity. We also provide undecorated products to
large branded apparel companies and retailers that sell imprinted activewear and
are currently not supplied by our existing U.S. wholesale distributors.

In the U.S. mass-market and other retailer channels, the
majority of our sales consist of a variety of styles and brands of socks. We
supply various private label and branded sock programs and we are increasingly
focused on developing the Gildan® brand within the retail channel. With the
recent acquisition of Gold Toe Moretz effective April 15, 2011, we now sell a
variety of branded athletic, casual and dress socks to national chains,
mass-market retailers, price clubs, department stores and specialty sporting
goods stores in the United States. The Gold Toe Moretz brand portfolio includes
the core Gold Toe® brand, which has high consumer brand recognition in national
chains, department stores, and price clubs; the SilverToe® brand for a national
chain; the GT® brand which we believe has potential for development in the
mass-market; the PowerSox® athletic performance brand which is mainly
distributed through sports specialty retailers and national chains; the Auro®
dress and casual brand for the mass-market; and, All Pro®, an athletic sock
brand for the mass-market. In addition, we have licensing relationships with
Under Armour® and New Balance® as the exclusive U.S. sock licensee for these
brands. We are also pursuing a strategy to grow our sales of underwear and
activewear products in the U.S. retail market, particularly under our
company-owned brands.

The vast majority of our products are made of 100% cotton or of
blends of cotton and synthetic fibres. Our products are characterized by
low-fashion risk compared to other apparel categories since these products are
basic, frequently replenished, and since logos and designs for the screenprint
market are not imprinted or embroidered by Gildan. The vast majority of our
product styles continue from year to year and any variations to products are
usually limited to colour assortment, fabric weight, blends and enhancements,
with limited design changes.

Our value proposition is based on providing consistent high
quality, competitive pricing and fast and flexible replenishment together with
our commitment to corporate social responsibility and environmental
sustainability.

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As a vertically-integrated producer which owns and operates the
majority of its manufacturing facilities, we are able to provide premium
products to customers in a broad range of sizes, colours and styles with
enhanced product features, such as pre-shrunk fabrics, and a selection of fabric
weights, blends and construction. Our vertical integration has allowed us to
reduce costs and ensure consistency of quality for the products we produce.
Continued innovations in our manufacturing process have allowed us to ensure
colour/shade consistency and high performance of our activewear garments. In
addition, innovations in the sock manufacturing process, such as higher needle
count machines and seamless toe closing operations allow Gildan to deliver
enhanced product features for its sock products. These innovations have resulted
in further improving the value proposition of both our activewear and sock
products to our customers.

Activewear and underwear represented 81% of our sales in fiscal
2011, whereas they represented 83% in fiscal 2010. Socks represented 19% of our
sales in fiscal 2011, whereas they represented 17% in fiscal 2010.

Competitive Environment

The market for our products is highly competitive. Competition
is generally based upon price, with reliable quality and service also being
critical requirements for success. Our competitive strengths include our
expertise in building and operating large-scale, vertically-integrated,
strategically-located manufacturing hubs which allows us to increase the
efficiency of our operations and reduce costs, and to offer competitive pricing,
consistent product quality, and a reliable supply chain which efficiently
services replenishment programs with short production/delivery cycle times. Our
acquisition of Gold Toe Moretz complements Gildans competitive strengths with
enhanced brand management experience and expertise, merchandising, technical
innovation, design and sourcing capabilities. Our commitment to leading
environmental and social responsibility practices is also an increasingly
important factor for our customers.

Our primary competitors in North America are the major
manufacturers for the screenprint and retail channels, such as Hanesbrands Inc.,
Berkshire Hathaway Inc. through its subsidiaries Fruit of the Loom, Inc. and
Russell Corporation, and smaller U.S.-based manufacturers, including Anvil
Knitwear Inc., Alstyle Apparel, a division of Ennis Corp., and Delta Apparel
Inc. In addition, our Gold Toe Moretz and licensed sock brands for the retail
channel, compete with brands which are owned or licensed by companies that
manufacture and/or source socks, such as Renfro Corporation, as well as brands
from well-established U.S. fashion apparel and athletic companies, which
primarily source their products from Asia. The competitive landscape in the
European screenprint channel is similar to that in North America, as we compete
primarily with the European divisions of the major U.S.-based manufacturers
mentioned above. In Europe, we also have large competitors that do not have
integrated manufacturing operations and source products from suppliers in
Asia.

Customers

In fiscal 2011, we sold our products in the United States,
Canada and Europe and other international markets, which accounted for 89%, 4%
and 7% of total sales, respectively. For a breakdown of our total sales by
geographic market for each of the last three financial years, reference is made
to Note 24 to the 2011 Financial Statements, which note is incorporated herein
by reference. Our customer base is composed of a relatively small number of
significant customers. We currently sell our products to approximately 300
customers. In fiscal 2011, our largest customer accounted for 19.4% of our total
sales, and our top ten customers accounted for 61.1% of our total sales in the
retail and screenprint channels.

The large majority of total sales in fiscal 2011 continued to
be made in the screenprint channel through our wholesale distributors. Although
we have long-term ongoing relationships with many of our customers, our
contracts with our customers do not require them to purchase a minimum quantity
of our products. Instead, we assess their projected requirements and then plan
our production and marketing strategy accordingly.

Manufacturing Operations

To support our sales in the North American and international
markets in which we compete, we have developed two main manufacturing hubs in
Central America and the Caribbean Basin where we have built modern textile
manufacturing facilities for the production of activewear and underwear fabric,
as well as sock manufacturing facilities. We also operate sewing facilities
which support the fabric production from our textile facilities. The Company
also owns a vertically-integrated manufacturing facility for the production of
activewear in Bangladesh,

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which was acquired in fiscal 2010 as an initial step towards
the potential establishment of a manufacturing hub to support our growth in
targeted markets in Asia and Europe.

Central American Manufacturing Hub

Our largest manufacturing hub is based in Honduras and includes
three vertically-integrated textile facilities (Rio Nance 1, Rio Nance 2 and Rio
Nance 5). During fiscal 2011, we completed the construction of our Rio Nance 5
textile facility and commenced operations at the end of the fiscal year. The
textiles produced at the Rio Nance complex are sewn in our sewing facilities in
Honduras and Nicaragua. At the same complex, we have also constructed and
operate two integrated sock manufacturing facilities (Rio Nance 3 and Rio Nance
4). Rio Nance 4 is our most recent sock facility which began production in April
2010 and is expected to support future sales growth in the sock category,
provide the opportunity to consolidate some of the third-party sourced products
sold under the Gold Toe Moretz brands and position us to reduce our sock
manufacturing costs.

Caribbean Basin Manufacturing Hub

Our Caribbean Basin manufacturing hub includes a
vertically-integrated textile facility for the production of activewear fabric
in Bella Vista, Dominican Republic. Textiles produced at our manufacturing
facility in the Dominican Republic are sewn at third-party contractor operations
in Haiti and at our sewing facility in the Dominican Republic.

Sourcing Operations

The acquisition of Gold Toe Moretz significantly expands our
sourcing capabilities. Gold Toe Moretz has longstanding product sourcing network
relationships and expertise which are expected to complement Gildans large
scale, vertically-integrated manufacturing. The majority of the Gold Toe Moretz
products are currently sourced from third-party suppliers, primarily in Asia.
Gold Toe Moretz operates sourcing offices in Asia to facilitate sourcing
decisions and supply chain management. Gildan is exploring opportunities to
utilize Gold Toe Moretzs sourcing network to introduce new products within its
existing channels of distribution.

Yarn-Spinning

We source our yarn requirements primarily from the U.S., from
third-party yarn suppliers with whom we have supply agreements, as well as from
our joint venture, CanAm Yarns, LLC (CanAm), which operates yarn-spinning
facilities in Georgia and North Carolina, United States.

Sales, Marketing and Distribution

Our sales and marketing office which services our global
screenprint markets is located in Christ Church, Barbados. We operate our retail
sales and marketing activities primarily from our Charleston, South Carolina
location. Our sales and marketing offices are responsible for customer-related
functions, including sales management, marketing, customer service, credit
management, sales forecasting, and inventory control and logistics for each of
their respective markets.

We distribute our activewear products for the screenprint
channel primarily out of our distribution centre in Eden, North Carolina. We
also use third-party warehouses in the western United States, Canada, Mexico,
Europe and Asia to service our customers in these markets. Distribution
activities related to servicing retail customers are primarily conducted out of
our distribution centre in Charleston, South Carolina. In addition, with the
acquisition of Gold Toe Moretz, we service some of our retail customers from
retail distribution facilities in North Carolina, some of which are expected to
be consolidated and transitioned to the Charleston distribution centre. Gold Toe
Moretz also owns and operates retail stores located in outlet malls throughout
the United States. Since the acquisition of Gold Toe Moretz, two additional
outlet stores were opened bringing the total number of retail stores to 31.

Raw Materials

Cotton and polyester fibres are the main raw materials used in
the manufacturing of our products. Cotton is used in the manufacturing of both
100% cotton yarn and blended yarn, while polyester is used in the manufacturing
of blended yarn only. The majority of the cotton fibre used in the manufacturing
of yarn for Gildan is typically

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purchased on Gildans behalf by our yarn suppliers for future
delivery at pre-determined prices under contracts as deemed appropriate by
management. Polyester pricing is negotiated directly with suppliers on an annual
basis subject to the price variability of certain polyester components.

During fiscal 2011, most of our yarn requirements for the
production of our product-lines were met by our long-term supply agreements with
third-party suppliers, as well as by our jointly-owned CanAm yarn-spinning
facilities in Cedartown, Georgia and Clarkton, North Carolina. Our yarn
requirement for our Bangladesh operations is supplied by local and regional
spinners. We expect that most of our yarn requirements will continue to be met
by these sources.

The primary sources of energy consumed in our manufacturing
facilities are (i) bunker fuel, natural gas, and biomass, which are used to
generate steam required in the production process, and (ii) electricity which is
used to power production equipment. The bunker fuel used in our operations is
supplied by local third-party suppliers, and the pricing is highly dependent on
international market prices for bunker fuel. Natural gas is used in our
operations in the Dominican Republic and Bangladesh, and is obtained from local
third-party suppliers. Biomass, derived from agricultural waste, is sourced from
private third-party suppliers, and provides an increasingly significant source
of energy for our operations in both the Dominican Republic and Honduras. We
anticipate that our consumption needs of biomass will increase progressively
over the next few years. During fiscal 2009, we began construction of a biomass
steam generation system in the Dominican Republic, which began operating as of
March 2010 and has contributed to the reduction of the energy costs associated
with our textile production in the Dominican Republic. In addition, during
fiscal 2010, we completed similar biomass steam generation projects for our sock
manufacturing facilities in Honduras. The biomass facility for Rio Nance 3
became operational at the end of fiscal 2010, and the second biomass facility
for Rio Nance 4 became operational during the first quarter of fiscal 2011. In
the third quarter of 2011, we began the construction of a biomass steam
generation facility to support our textile facilities in Honduras, which is
expected to be completed and operational in the second quarter of 2012. The
electricity requirements at our two main production complexes, located in
Honduras and the Dominican Republic, are provided by public utility companies.
Electricity rates are variable and are, in part, related to underlying oil
prices.

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

Management Information Systems

Our Enterprise Resource Planning (ERP) system supports the
majority of our operations in the areas of finance, manufacturing and customer
service. This system is centralized and is accessed from all of our locations
through secure networks. Our ERP system is linked to servers supporting both
local processes and specialized applications, including payroll and
distribution. Due to our increasing dependence on the availability of our
computer systems to support our operations, we plan to continue, in fiscal 2012,
to implement initiatives to enhance our information technology (IT) processes
and infrastructure based on the Information Technology Infrastructure Library, a
framework of best practices approaches intended to facilitate the delivery of
high-quality IT services.

The Gildan JD Edwards ERP World system has been in place since
1999. In fiscal 2010, we initiated a process to upgrade to the current release,
Enterprise One. The upgrade will facilitate the strategic objective of improving
and modernizing system functionality and business agility. We expect to
implement the first phase of the upgrade in fiscal 2012.

Seasonality and Other Factors Affecting the Variability of
Results and Financial Condition

Our results of operations for interim periods and for full
fiscal years are impacted by the variability of certain factors, including, but
not limited to, changes in end-use demand and customer demand, our customers
decision to increase or decrease their inventory levels, changes in our sales
mix, and fluctuations in selling prices and raw material costs. While our
products are sold on a year-round basis, our business experiences seasonal
changes in demand which result in quarterly fluctuations in operating results.
Typically, demand for our T-shirts is highest in the third quarter of each
fiscal year, when distributors purchase inventory for the peak summer selling
season, and lowest in the first quarter of each fiscal year. Demand for fleece
is typically highest, in advance of the fall and winter seasons, in the third
and fourth quarters of each fiscal year. For our sock products, demand is
typically highest in the first and fourth quarters of each fiscal year,
stimulated largely by the cooler weather and the need to support requirements
for the back-to-school period and the holiday season.

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Historically, we have typically operated our mature facilities
at full capacity throughout the year in order to be cost efficient.
Consequently, with the seasonal sales trends of our business, we experience
fluctuations in our inventory levels throughout the year, in particular a
build-up of inventory levels in the first half of the year. During fiscal 2010,
the massive earthquake that struck Haiti impacted our sewing contractors
operations resulting in a temporary loss of production. This, combined with the
recovery in demand during fiscal 2010, prevented the Company from adequately
rebuilding inventories to optimal levels by the end of the year. Fiscal 2011
began with sub optimal levels of inventories and the continuation of the strong
recovery in demand in the first half of the year did not allow the Company to
rebuild its inventories until the fourth quarter of fiscal 2011.

Our results are also impacted by fluctuations in the price of
raw materials and other input costs. Cotton and polyester fibres are the primary
raw materials used in the manufacture of our products, and we also use
chemicals, dyestuffs and trims which we purchase from a variety of suppliers.
Cotton prices, which directly affect the cost of the cotton fibres we purchase,
are affected by weather, consumer demand, speculation on the commodities market,
the relative valuations and fluctuations of the currencies of producer versus
consumer countries and other factors that are generally unpredictable. While we
enter into contracts in advance of delivery to establish firm prices for cotton
and cotton yarn, our realized cotton costs can fluctuate significantly between
interim and annual reporting periods. Energy costs in our results of operations
are also affected by fluctuations in crude oil and petroleum prices, which can
also influence transportation costs and the cost of related items used in our
business, such as polyester fibres, chemicals, dyestuffs and trims.

Management decisions to consolidate or reorganize operations,
including the closure of facilities, may also result in significant
restructuring costs in an interim or annual period. Refer to the section of the
2011 Annual MD&A entitled Restructuring and Acquisition-Related Costs for
the details of restructuring costs incurred during fiscal 2011, 2010 and 2009.
In addition, the effect of asset write-downs, including provisions for bad debts
and slow moving inventories, can affect the variability of our results.

Our reported amounts for sales, selling, general and
administrative expenses, and financial expense/income are impacted by
fluctuations in the U.S. dollar versus certain other currencies as described in
the Financial Risk Management section of the 2011 Annual MD&A. The Company
may periodically use derivative financial instruments to manage risks related to
fluctuations in foreign exchange rates.

Trade Regulation

As a multinational corporation, we are affected by
international trade legislation and bilateral trade agreements in the countries
in which we operate and source products. Although the textile and apparel
industries of developed countries such as Canada, the United States and the
European Union have historically received a relatively higher degree of trade
protection than other industries, trade liberalization has diminished this
protection in recent years. In order to remain globally competitive, we have
situated our manufacturing facilities in strategic locations to leverage the
benefits of the trade liberalization climate. Furthermore, management
continuously monitors new developments and risks relating to duties, tariffs and
quotas in our approach to global manufacturing and sourcing and makes
adjustments as needed.

The United States, Canada and Mexico have implemented several
free trade agreements and trade preference programs to enhance trade with their
trading partners. There exist a number of regional trade agreements and
preference programs, such as the Caribbean Basin Trade Partnership Act, the
Dominican Republic-Central America-United States Free Trade Agreement
(CAFTA-DR) and the Haitian Hemispheric Opportunity through Partnership
Encouragement Act (HOPE), which allow qualifying textiles and apparel from
participating countries duty-free access to certain developed countries
markets.

The United States adopted two of the newest programs, CAFTA-DR
and HOPE (as amended by HOPE II legislation in 2008 and by the Haitian Economic
Lift Program legislation in 2010), to strengthen and develop U.S. economic
relations with Central America, the Dominican Republic and Haiti.

Proposed legislation in the U.S. Congress would, if adopted,
extend duty-free treatment to qualifying apparel imported from lesser developed
countries, including Bangladesh and Cambodia, extend duty-free or reduced duty
treatment to certain qualifying apparel imported from the Philippines, and
extend duty-free treatment to certain apparel manufactured in reconstruction
opportunity zones in Afghanistan and Pakistan. In addition, the United States
Congress has approved and the president has signed three new free trade
agreements with South Korea, Colombia and Panama. These agreements are pending
final implementing steps in the affected countries and a

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U.S. presidential proclamation before they will become
effective. The United States also launched free trade negotiations with a group
of countries under the umbrella of the Trans-Pacific Partnership ("TPP").
Countries participating in the TPP negotiations at this time are Australia,
Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Any of these
proposals or agreements may negatively affect our competitive position in the
United States.

Furthermore, U.S. domestic industry groups have threatened to
seek various trade remedies, including a section 421 action, under the terms of
the U.S.-China World Trade Organization accession agreement, against apparel
imports from China which could result in higher duty rates or tariff rate quotas
for Chinese apparel and improve our competitive position in affected product
classifications. Since the expiration of U.S. safeguard actions that imposed
quotas on annual imports of certain categories of Chinese originating textiles
and apparel at the end of 2008, ordinary import duties have been in effect. Any
action taken by the United States under section 421 would be required to expire
under the terms of the accession agreement in 2013.

In August 2011, the governments of Canada and Honduras
announced the signing of a free trade agreement between the two countries. Once
ratified, the agreement will enable qualifying textiles and apparel from
Honduras to benefit from duty-free access into the Canadian market.

Imports into the Mexican market may qualify for trade
preferences from various free trade agreements such as the Mexico-Costa Rica
Free Trade Agreement, the Mexico-Nicaragua Free Trade Agreement, and the
Mexico-Northern Triangle Regional Trade Agreement, which includes El Salvador,
Guatemala and Honduras as member countries. Furthermore, the import tariff rates
on textile and apparel articles imported into Mexico will gradually be reduced
by 2013. Special safeguard measures (Medidas Transitorias) in Mexico, which
are currently in effect on China-originating apparel, will be gradually
eliminated on December 11, 2011.

In addition to free trade arrangements among the individual
countries within the European Union, the European Union also has preferential
trade agreements with other European countries and with countries outside of
Europe. The European Union also maintains a Generalized System of Preferences
(GSP) and the Africa-Caribbean-Pacific programs that allow duty-free entry
into the European Union of qualifying articles, including apparel, from
developing countries such as Honduras and Nicaragua, and least developed
countries, including Haiti. Recent amendments regarding the reform of certain of
the GSP provisions including the rules of origin have not yet come into effect.
The new provisions will further enhance duty-free access to the European Union
of qualifying apparel articles. However, the European Union and the Central
American countries, such as Honduras and Nicaragua, completed the legal text of
an EU-Central America Association Agreement in April 2011, also allowing duty
free entry into the European Union of qualifying apparel articles. The
Association Agreement, once enacted, would supersede the eligibility for the GSP
trade preference of the signatory Central American countries. Also in April
2011, the European Union completed legal texts of similar agreements with
Colombia and Peru. The impact of the enactment of the Association Agreement and
the agreements with Colombia and Peru on our operations cannot be ascertained at
this time. Other European Union trade agreements, known as Economic Partnership
Agreements, are already in effect with Mexico and several of the Caribbean
states.

Proposed legislation in the European Union would, if adopted,
extend duty-free treatment to qualifying apparel imported from Pakistan. Such
legislation, if enacted, could negatively affect our competitive position in the European
Union.

As of July 2010, The Peoples Republic of China extended
duty-free and quota-free trade benefits awarded to Bangladesh under the
Asia-Pacific Trade Agreement to include certain chief-weight cotton apparel
articles made in Bangladesh.

The likelihood that any of these measures will be adopted and
the extent of their impact on our business cannot be determined with
certainty.

Product Safety Regulation

We are subject to consumer product safety laws and regulations
that could affect our business. In the United States, we are subject to the
Consumer Product Safety Act, as amended by the Consumer Product Safety
Improvement Act of 2008, to the Federal Hazardous Substances Act, to the
Flammable Fabrics Act, and to the rules and regulations promulgated pursuant to
such statutes. Such laws provide for substantial penalties for non-compliance.
These statutes and regulations include requirements for testing and
certification for flammability of wearing apparel, for lead content and lead in
surface coatings in childrens products, and for phthalate content in

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child care articles, including plasticized components of
childrens sleepwear. As of December 31, 2011, when the Consumer Product Safety
Commission (the CPSC) lifts its stay of enforcement with respect to phthalate
testing and certification, the CPSC should be actively enforcing all of the
requirements listed above. In addition, we are also subject to similar laws and
regulations in the various individual states in which our products are sold.

In Canada, we are subject to similar laws and regulations, the
most significant of which are the Hazardous Products Act (the HPA) and the
Canada Consumer Product Safety Act (the CCPSA). The CCPSA came into force on
June 20, 2011. It is aimed at emphasizing industry's responsibility to provide
safe products, strengthening enforcement authorities, providing more and better
information for the public, improving the safety of imported products, ensuring
better record keeping, and instituting mandatory reporting. Regulations
currently in place under the HPA will be incorporated into the CCPSA or, where
necessary because of structural differences between the two statutes, replaced
by new CCPSA regulations. For example, the CCPSAs Childrens Sleepwear
Regulations replaced the HPAs Hazardous Products (Children's Sleepwear)
Regulations. The CCPSA also provides for new regulations, such as the textile
flammability regulations. As under U.S. laws, surface coatings and phthalates
are also regulated under the CCPSA.

In the European Union, we are also subject to product safety
regulations, the most significant of which are imposed pursuant to the General
Product Safety Directive. We are also subject to similar laws and regulations in
the other jurisdictions in which our products are sold.

Although we believe that we are in compliance in all material
respects with applicable product safety laws and regulations in the
jurisdictions in which we operate, the extent of our liability, if any, for past
failures to comply with laws, regulations and permits applicable to our
operations cannot be reasonably determined.

Intellectual Property

We own several registered trademarks including, among others,
the Gildan® trademark in Canada, the United States and in the European Community
as well as in many countries in Central America, South America and Asia-Pacific,
including Australia. Applications for the registration of the Gildan® trademark,
as well as for the Ultra Cotton, DryBlend and Gildan Softstyle trademarks,
are also pending in several countries. As a result of the acquisition of Gold
Toe Moretz, we now also own the iconic Gold Toe® trademark, as well as the
Silver Toe®, GT®, Auro®, PowerSox®, All Pro® and Soleution® trademarks, and we
will further expand registration of these marks internationally. Gold Toe Moretz
is also the exclusive licensee for Under Armour® branded socks in the U.S.,
Canada, the United Kingdom and Ireland and the exclusive U.S. licensee for New
Balance® branded socks.

We have and intend to continue to maintain our trademarks and
the relevant registrations, and will actively pursue the registration of
trademarks in Canada, the United States and abroad.

Social and Environmental Responsibility

Our social and environmental responsibility program encompasses
four major areas of focus:

- People well-being:Commitment to industry-leading working
  conditions and labour practices at each of our worldwide locations;
- Community engagement:Commitment to our neighbours through
  dedicated support for youth and humanitarian aid;
- Environmental protection:Commitment to the development and
  implementation of leading and innovative environmental solutions that reduce
  the impact of our operations throughout our entire supply chain; and
- Product sustainability:Commitment to a responsible product line
  through sustainable solutions.

Social Compliance

We provide favourable working conditions for all our employees.
All of Gildans operations are governed by the Companys Code of Conduct, which
is based on the International Labour Organization Conventions and which also
encompasses elements set forth by the Fair Labor Association (FLA) and the
Worldwide Responsible Accredited Production (WRAP), as well as best practices
commonly agreed upon in the area of corporate responsibility.

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We have implemented internal and external monitoring programs
that permit us to verify compliance with local labour laws, as well as with
internationally recognized labour standards. Until 2007, the majority of our
social compliance monitoring was performed by external third-party auditors. In
fiscal 2007, we successfully began internal monitoring audits that complement
these external independent audits. Independent third-party monitors also
regularly audit our plants, both on an announced and unannounced basis. During
fiscal 2011, 63 audits were performed in our facilities and in the facilities of
our third-party contractors. Over 35% of these audits were carried out by
third-party auditors, 43% of which were mandated by our customers.

Since 2002, all of our mature sewing facilities, and our
contractors facilities in Haiti have been certified by WRAP, an independent,
non-profit organization dedicated to the promotion and certification of lawful,
humane and ethical manufacturing throughout the world. WRAP, through independent
third-party verification, certifies facilities that comply with its Code of
Conduct. All of our third-party sewing contractors are contractually required to
follow prescribed employment policies as well as our Code of Conduct.

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

Environmental Compliance

Gildan operates within the guidelines and practices set forth
in its Environmental Code of Practice. The thrust of our environmental program
is to reduce our environmental impact and to preserve the external natural
resources the Company utilizes. Innovative systems such as the biotop, a
biological wastewater treatment system, and our biomass steam generation systems
are some of the sustainable practices we have put in place. The Company
monitors, controls and manages other environmental issues through policies which
include, but are not limited to, the recycling and creation of measures for
waste prevention, minimization, recovery and treatment at all stages of the
production cycle including the off-site disposal of any hazardous waste.

We are subject to various federal, state and local
environmental and occupational health and safety laws and regulations in the
jurisdictions in which we operate, concerning, among other things, wastewater
discharges, storm water flows, and solid waste disposal. Our manufacturing
plants generate small quantities of hazardous waste, which are either recycled
or disposed of off-site. As part of our Corporate Environmental Policy, we
monitor, control and manage environmental issues through policies including, but
not limited to, recycling and creation of measures for waste prevention,
minimization, recovery and treatment at all stages of the production cycle,
including the off-site disposal of any hazardous waste. We believe that we are
in compliance in all material respects with the regulatory requirements of those
jurisdictions in which our facilities are located.

In line with our commitment to the environment as well as to
the health and safety of our employees we incur capital and other expenditures
each year that are aimed at achieving compliance with current environmental
standards. For example, Gildan renews annually its OEKO-TEX® Standard 100
certification for its entire product line, including socks, underwear, t-shirts,
sport shirts and fleece products. OEKO-TEX® Standard 100 is an internationally
recognized testing and certification system, the goal of which is to ensure that
products are free of harmful substances. Companies which have their products
certified under the Oeko-Tex® Standard 100 can demonstrate to consumers that
their products are totally safe in terms of human ecology, and have been
manufactured in environmentally conscious companies.

For fiscal 2011, the requirements with regard to environmental
protection did not have a significant financial or operational impact on the
Company's capital expenditures, earnings and competitive position. Although we
do not expect that the amount of these expenditures in the future will have a
material adverse effect on our operations, financial condition or liquidity,
there can be no assurance that future changes in federal, state, or local
regulations, interpretations of existing regulations or the discovery of
currently unknown problems or conditions will not require substantial additional
environmental remediation expenditures or result in a disruption to our supply
chain that could have a material adverse effect on our business. Although we
believe that we are in compliance in all material respects with the regulatory
requirements of the jurisdictions in which our facilities are located, the
extent of our liability, if any, for past failures to comply with laws,
regulations and permits applicable to our operations cannot be reasonably
determined.

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For more information on our Gildan Genuine Stewardship program,
you can visit www.genuinegildan.com.

|3.2 | Risk Factors
|--- | ------------

Please see the Critical Accounting Estimates, Financial Risk
Management and the Risks and Uncertainties sections of our 2011 Annual
MD&A beginning on page 26, page 21 and page 38, respectively, which are
incorporated herein by reference.

|3.3 | Employees
|--- | ---------

As at October 2, 2011, we employed approximately 29,500
full-time employees worldwide. We consider our relations with our employees to
be good and, as of the date hereof, we have not experienced any work stoppages
that have had a material impact on our operations. During fiscal 2010, a union
membership drive at our textile manufacturing facility in the Dominican Republic
led to the execution of a collective bargaining agreement with a union
registered with the Dominican Ministry of Labor, covering approximately 900
employees. The collective bargaining agreement was terminated in February 2011
upon the mutual consent of the Company and the union, although the union
continues to claim to represent a majority of the factory workers.
Notwithstanding the termination of the agreement, the Company is continuing to
provide all of the benefits to the employees covered by the original agreement.
A second union is also claiming that it represents the majority of the workers
at the plant and has filed a third-party complaint alleging violation of freedom
of association with the FLA. The Company collaborated with the FLA in the
verification of the majority representation claim of the second union and has
now agreed to enter into negotiations with this union for the purposes of
completing a collective bargaining agreement.

|4. | DIVIDEND POLICY
|-- | ---------------

In December 2010, the Company announced the adoption of a
dividend policy which aims to declare and pay cash dividends on a quarterly
basis beginning in fiscal 2011. Prior to fiscal 2011, the Board of Directors of
the Company had never declared a dividend and had retained the Companys
earnings to take advantage of opportunities to develop and expand its business.
The Board of Directors will consider several factors when deciding to declare
quarterly cash dividends, which factors shall include the Companys present and
future earnings, cash flows, capital requirements and present and/or future
regulatory and legal restrictions. There can be no assurance as to the
declaration of future quarterly cash dividends. Although our revolving term
credit facility requires compliance with lending covenants in order to pay
dividends, these covenants are not currently, and are not expected to be, a
constraint to the payment of dividends under our dividend policy.

|5.  | CAPITAL STRUCTURE     
|--- | ----------------------
|    |                       
|5.1 | First Preferred Shares

Issuance in Series

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

Rank

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

Voting Rights

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

15

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|5.2 | Second Preferred Shares
|--- | -----------------------

Issuance in Series

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

Rank

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

Voting Rights

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

|5.3 | Common Shares
|--- | -------------

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

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

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

16

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|6. | MARKET FOR SECURITIES
|-- | ---------------------

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

The table below shows the monthly price range per share and the
trading volume of the Common Shares for the fiscal year ended October 2, 2011 on
the TSX (in Cdn$) and on the NYSE (in US$).

COMMON SHARESToronto Stock Exchange (TSX)
    New York Stock Exchange
      (NYSE)Month
    High
    Low
    **Trading Volume
      (1)**
    Month
    High
    Low
    **Trading Volume
      (2)**October 4 to 31, 2010
    30.30
    26.97
    6,966,237
    October 4 to 31, 2010
    29.92
    26.24
    2,594,080November 2010
    31.22
    26.52
    14,869,069
    November 2010
    30.40
    26.29
    3,469,880December 2010
    31.55
    28.05
    10,131,016
    December 2010
    31.04
    27.59
    3,765,114January 2011
    29.61
    27.50
    7,824,153
    January 2011
    29.59
    27.51
    2,447,788February 2011
    31.85
    28.75
    12,883,444
    February 2011
    32.33
    29.09
    3,064,169March 2011
    32.47
    29.45
    5,929,394
    March 2011
    33.17
    30.18
    2,614,318April 2011
    36.12
    30.45
    10,488,327
    April 2011
    37.92
    31.83
    3,141,748May 2011
    36.47
    33.70
    6,785,932
    May 2011
    38.07
    34.54
    2,848,109June 2011
    36.46
    31.79
    6,086,796
    June 2011
    37.55
    32.35
    4,238,693July 2011
    36.00
    28.36
    8,753,506
    July 2011
    37.41
    29.62
    4,655,065August 2011
    28.18
    23.80
    14,001,474
    August 2011
    30.13
    24.05
    7,413,166September 2011
    29.07
    24.90
    9,498,123
    September 2011
    29.32
    25.08
    3,179,143


(1)
    The trading volumes do not reflect any trades done on
      alternative trading systems and only represent approximately 66% of all
      trades executed in Canada.(2)
    The trading volumes do not reflect any trades done on
      alternative trading systems and only represent approximately 32% of all
      trades executed in United States.


|7. | DIRECTORS AND OFFICERS
|-- | ----------------------

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

|Name and Municipality of Residence                                 | Principal Occupation                                       | Director Since
|------------------------------------------------------------------ | ---------------------------------------------------------- | --------------
|Robert M. Baylis
      (2)(3)(4)Darien, Connecticut, United States | Corporate
      Director                                   | February 1999 
|Glenn J. Chamandy Westmount, Québec,
      Canada                  | President and Chief Executive
      Officer of the Company | May 1984      
|William D.
      Anderson(1)(3)Toronto, Ontario, Canada            | Corporate
      Director                                   | May 2006      
|Russell Goodman(1) (2)Mont
      Tremblant, Québec, Canada         | Corporate Director                                         | December 2010 

17

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|Name and Municipality of Residence                                      | Principal Occupation                                                                                                       | Director Since
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | --------------
|George Heller(1)(3)Toronto, Ontario, Canada                             | Corporate
      Director                                                                                                   | December 2009 
|Sheila OBrien (2)(3)Calgary,
      Alberta, Canada                     | Corporate Director and Business
      Advisor President of Belvedere 1 Investments Ltd. (private
      investment company) | June 2005     
|Pierre
      Robitaille(1)(2)St-Lambert, Québec, Canada                 | Corporate
      Director                                                                                                   | February 2003 
|James R. Scarborough(2)(3)Wolfeboro, New Hampshire, United States       | Corporate Director                                                                                                         | December 2009 
|Richard P. Strubel
      (1)(3)Chicago, Illinois, United States         | Corporate
      Director                                                                                                   | February 1999 
|Gonzalo F. Valdes-Fauli(1)(2)Key
      Biscayne, Florida, United States | Corporate Director Chairman
      of BroadSpan Capital LLC (investment banking firm)                                       | October 2004  

|(1) | Member of the Audit and Finance Committee.                     
|--- | ---------------------------------------------------------------
|(2) | Member of the Corporate Governance Committee.                  
|(3) | Member of the Compensation and Human Resources
      Committee.
|(4) | Chairman of the Board.                                         

Listed below is certain information about the executive
officers of Gildan in office as of the date hereof.

|Name and Municipality of Residence                           | Position Held Within the Company and
      Principal Occupation           
|------------------------------------------------------------ | --------------------------------------------------------------------------
|Glenn J. Chamandy (1)Westmount, Québec, Canada               | President, Chief Executive
      Officer and Director                     
|Laurence G. Sellyn (1)Beaconsfield, Québec,
      Canada     | Executive Vice-President, Chief Financial
      and Administrative Officer
|Michael R. Hoffman St. James, Barbados                       | President, Gildan
      Activewear SRL                                    
|Georges Sam Yu Sum (1)Hampstead, Québec,
      Canada        | Executive Vice-President, Operations                                      
|Benito Masi (1)Laval,
      Québec, Canada                   | Executive Vice-President,
      Manufacturing                             
|Eric R. Lehman Charleston, South Carolina, United
    States | President, Retail Sales                                                   

(1)
    Officer of the Company.


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

Robert M. Baylisis Chairman of the Board of the Company
and will be retiring from the Board of Directors in February 2012. Mr. Baylis is
also Lead Director of Host Hotels & Resorts, Inc.,a major
corporation operating luxury hotels and resorts. Mr. Baylis serves as Trustee
and Chairman of the Executive Committee of the Rubin Museum of Art in New York
City and as Trustee and Chairman of the Audit Committee of the Woods Hole
Oceanographic Institution. Mr. Baylis is also a member of the Board of Overseers
of the University of Pennsylvania Museum of Archaeology and Anthropology. He was
formerly a director of the New York Life Insurance Company (life insurance
provider), Covance Inc. (drug development), Partner Re Limited (reinsurance),
Gryphon Holdings, Inc. (insurance company) and of the Wharton International
Forum (an executive education program). Mr. Baylis retired from Credit Suisse
First Boston as Vice-Chairman in 1996, after thirty-three years with the
investment banking firm and its associated corporations, including a term as the
Chairman and Chief

18

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Executive Officer of Credit Suisse First Boston (Pacific). Mr.
Baylis was educated at Princeton University and at Harvard Business School, and
is a Chartered Financial Analyst.

William D. Andersonhas had a career as a business
leader in Canada spanning over thirty years. Mr. Anderson joined the Bell Canada
organization in 1992 where, from 1998 to 2001, he served as Chief Financial
Officer of BCE Inc., Canadas largest telecommunications company. From 2001 to
2005, Mr. Anderson served as President of BCE Ventures, the strategic investment
unit of BCE Inc. and, from 2001 to 2007, he was the Chairman and Chief Executive
Officer of Bell Canada International Inc., a subsidiary of BCE Inc. formed to
invest in telecommunications operations outside Canada. Prior to joining the
Bell Canada organization, Mr. Anderson was in public practice for nearly twenty
years with the accounting firm KPMG, where he was a partner for eleven years.
Mr. Anderson is also Chairman of the Board of Nordion Inc., formerly known as
MDS Inc. (global life sciences company) and serves on the board of directors of
TransAlta Corporation (power generation and energy marketing firm), where he is
also Chairman of the Audit and Risk Committee. He also serves on the board of
directors of Sun Life Financial Inc., an international financial services
organization. The Board of Directors intends to appoint Mr. Anderson as the
Chairman of the Board following the retirement of Robert M. Baylis in February
2012. Mr. Anderson was educated at the University of Western Ontario and is a
Fellow of the Institute of Chartered Accountants of Ontario.

Russell Goodmanis a corporate director. From 1998 to
June 2011, Mr. Goodman was a senior partner of PricewaterhouseCoopers LLP, where
he served successively as Managing Partner of Project Finance and Privatization
for the Americas, Managing Partner of the Montreal office, and Canadian Managing
Partner of the Transactions business. Prior to the formation of
PricewaterhouseCoopers in 1998, Mr. Goodman served for twenty-one years with
Price Waterhouse LLP, including eleven years as a partner. Mr. Goodman is a
member of the board of directors of Forth Ports Limited, which owns and operates
major sea and container ports in the United Kingdom, and is also a member of the
board of directors of Whistler Blackcomb Holdings Inc. (North America's largest
ski resort), where he is also Chairman of the Audit Committee and a member of
the Compensation Committee. Mr. Goodman is, as well, a member of the Independent
Review Committee of Investors Group Inc. (mutual funds). He also serves on a
number of advisory and not-for-profit boards, including the Pointe-à-Callière
Foundation, where is Chairman of the Board. He previously served as President of
the Canadian Club of Montreal. He is a Fellow of the Order of Chartered
Accountants of Quebec and is certified by the Institute of Corporate Directors.
Mr. Goodman was educated at McGill University.

George Hellerhas had a career as a business leader in
the retail sector that spans over forty years. From 1999 to 2006, Mr. Heller
served as President and Chief Executive Officer of the Hudsons Bay Company,
Canadas largest diversified general merchandise retailer, operating more than
600 retail outlets in Canada under four banners: the Bay, Zellers, Home
Outfitters and Fields. Prior to that, Mr. Heller was President and Chief
Executive Officer of Zellers, the mass merchandise retailer of the Hudsons Bay
Company and a leading Canadian mass merchandise department store. Mr. Heller has
also held a number of other key positions in the retail industry, including as
President and Chief Executive Officer of Kmart Canada (discount department
stores), President, North America & Europe of Bata Industries Ltd.
(international footwear manufacturer) and Executive Vice-President of Woodwards
Department Stores (department store chain). Mr. Heller also served as President
and Chief Executive Officer of the Victoria Commonwealth Games. Mr. Heller
currently serves as President of the Commonwealth Games of Canada Foundation (a
fundraising organization for amateur athletes) and is a member of its board of
directors. Mr. Heller also serves on the board of the Asia Pacific Foundation of
Canada, a not-for-profit think-tank on Canadas relations with Asia, where he is
Chair of the Investment Committee. Mr. Heller has acted since 2008 as Honorary
Consul General of Thailand and as Honorary Trade Advisor to the Government of
Thailand since 2000. Mr. Heller has received Honorary Doctorates from Ryerson
University and the University of Victoria.

Sheila OBrien, CM, is President of Belvedere 1
Investments Ltd., and serves as a business advisor and corporate director. She
has had a thirty-year career as a senior executive in the oil and gas and
petrochemical sectors in the areas of human resources, investor relations and
public and government relations in Canada, the United States and Europe. Prior
to 2004, Ms. OBrien was Senior Vice-President, Human Resources, Public Affairs,
Investor and Government Relations at NOVA Chemicals Corporation, a producer of
commodity plastics and chemicals, where she was the architect of a corporate
restructuring practice that was designated a worldwide best practice by Watson
Wyatt Consulting Firm. She has also been active on the boards of directors of
over thirty public sector and not-for-profit organizations, and was awarded the
Order of Canada for her community leadership in 1998. Ms. OBrien also serves on
the board of directors of MaRS (Medical and Related Sciences), where she is
Chair of the Human Resources and Corporate Governance Committee and she serves
on the board of Advantage Energy Corporation, a Calgary-based oil and gas
company. In addition to her corporate career, she has acted as a special advisor
to the president at the University of Calgary. Ms. OBrien is the co-author of
two books, An Extraordinary West  A Narrative Exploration of Western Canadas
Future published in November

19

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2010, and Catching a Rising Tide: A Western Energy Vision for
Canada published in November 2011. She is a graduate of the MTC program at the
University of Western Ontario, and completed a one-year sabbatical on creativity
and innovation at various U.S. schools in 1990.

Pierre Robitailleis a corporate director. Mr.
Robitaille previously pursued his career at SNC-Lavalin Group Inc., a global
engineering and construction firm, where he was Executive Vice-President and
Chief Financial Officer from 1990 to 1998. Prior to this, Mr. Robitaille was in
public practice for more than twenty years with the public accounting and
management consulting firm Ernst & Whinney, where he held the positions of
Managing Partner of the Montreal office, President of the firm in Québec, and
member of its national board of directors. Mr. Robitaille also serves on the
board of directors and is the Chair of the Audit Committee of Nav Canada, a
civil air navigation services provider. Mr. Robitaille is a Fellow member of the
Québec Order of Chartered Accountants. He was educated at HEC-Montreal and
McGill University Business School.

James R. Scarboroughhas had a career as a business
leader in the retail industry that spans over thirty-eight years. Mr.
Scarborough retired in June 2010 as Chairman of the Board of Stage Stores, Inc.,
a U.S.-based specialty department store retailer that operates over 780
department stores in thirty-nine states under five banners: Bealls, Goodys,
Palais Royal, Peebles, and Stage. Mr. Scarborough joined Stage Stores in 2000 as
its President and Chief Executive Officer, and held this position until his
retirement in 2008. Mr. Scarborough previously held other senior positions in
the retail sector, including President and Chief Executive Officer of Busy Body,
Inc., a specialty retailer of premium fitness equipment, and Seattle Lighting,
Inc., a supplier of lighting fixtures to the homebuilder, commercial and retail
markets, as well as President and Chief Operating Officer of Enstar Specialty
Retail, Inc., a footwear and womens apparel retailer, and its subsidiary AMRET,
Inc. Mr. Scarborough began his retail career in 1972, at Filenes of Boston, a
division of Federated Department Stores. Mr. Scarborough also serves on the
board of directors and is Chair of the Compensation Committee of Charming
Charlie, Inc., a womens fashion accessories house. Mr. Scarborough was educated
at St. Michaels College in Vermont, United States.

Richard P. Strubelis a corporate director. Prior to
2008, he was Vice-Chairman of the Board of Cardean Learning Group (formerly
known as Unext), a provider of advanced education over the Internet, where from
1999 to 2004 he served as President and Chief Operating Officer. From 1990 to
1999, Mr. Strubel was Managing Director of Tandem Partners, Inc., a
privately-held management services firm, and from 1984 to 1994, he served as
President and Chief Executive Officer of Microdot, Inc. Prior to that, Mr.
Strubel served as President of Northwest Industries, then a NYSE-listed company,
which included Fruit of the Loom and BVD among its operating entities. Mr.
Strubel also serves on the board of directors of the mutual funds of Goldman
Sachs & Co. and is Chairman of the Board of the Northern Funds of Northern
Trust. Mr. Strubel is also Trustee of the University of Chicago. Mr. Strubel was
educated at Williams College and Harvard Business School.

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

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

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

20

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

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

Eric R. Lehmanjoined Gildan in December 2006 as
Executive Vice-President, Supply Chain. In November 2008, Mr. Lehmans
responsibilities were expanded to include information technology and operational
excellence and his title changed to Executive Vice-President, Supply Chain,
Information Technology and Operational Excellence until his appointment as
President, Retail Sales in January 2011. He has over twenty years of experience
in the supply chain function with major national apparel brands. Prior to
joining Gildan, Mr. Lehman was employed by Russell Corporation, where he last
served as Vice-President of Supply Chain. Prior to that, he held senior supply
chain planning positions at both Fruit of the Loom, Inc. and the Hanes Division
of Sara Lee Corporation.

As at December 9, 2011, the executive officers and directors of
the Company as a group own 10,282,477 Common Shares, which represents 8.5% of
the voting rights attached to all Common Shares.

|8.  | AUDIT AND FINANCE COMMITTEE DISCLOSURE      
|--- | --------------------------------------------
|    |                                             
|8.1 | Mandate of the Audit and Finance
  Committee

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

|8.2 | Composition of the Audit and Finance
    Committee
|--- | --------------------------------------------------

The Audit and Finance Committee is composed of six independent
and financially literate directors, as such terms are defined under Canadian and
U.S. securities laws and regulations, and in accordance with the NYSE Corporate
Governance Standards. Their education and experience relevant to the performance
of their responsibilities as members of the Audit and Finance Committee are as
follows:

William D. Anderson Mr. Anderson is the Chairman of
the Audit and Finance Committee. He is a chartered accountant and has a business
career spanning over thirty years. He joined the Bell Canada organization in
1992, and from 1998 to 2001 he served as Chief Financial Officer of BCE Inc.
From 2001 to 2005 he was the President of BCE Ventures, and from 2001 to 2007
served as the Chairman and Chief Executive Officer of Bell Canada International
Inc. Prior to his career at the Bell Canada organization, Mr. Anderson was with
the accounting firm KPMG for nearly twenty years, including eleven years as a
partner. Mr. Anderson is also the Chairman of the Audit and Risk Committee of
TransAlta Corporation, and serves on the Audit and Risk Review Committees of Sun
Life Financial Inc. Mr. Anderson is a Fellow of the Institute of Chartered
Accountants of Ontario.

Russell Goodman Mr. Goodman is a corporate director.
He was previously a senior partner at PricewaterhouseCoopers, where he served
successively until June 2011 as Managing Partner of Project Finance and
Privatization for the Americas, as Managing Partner of the Montreal office, and
as Canadian Managing Partner of the Transactions Advisory Services group. Prior
to the formation of PricewaterhouseCoopers in 1998, he served twenty-one years
with Price Waterhouse, including eleven years as a partner. Mr. Goodman is also
the Chairman of the Audit Committee of Whistler Blackcomb Holdings Inc. Mr.
Goodman is a Fellow of the Order of Chartered Accountants of Quebec, a Certified
Fraud Examiner, and is certified by the Institute of Corporate Directors.

George Heller Mr. Heller is a corporate director. He
is the retired President and Chief Executive Officer of the Hudsons Bay
Company, a position he held from 1999 to 2006. Prior to his career at the
Hudsons Bay Company, Mr. Heller held several key executive positions in the
retail industry, including President and Chief Executive Officer of Zellers,
President and Chief Executive Officer of Kmart, President  North America and
Europe of Bata Industries Ltd., and Executive Vice-President of Woodwards
Department Stores. He also served as President and Chief Executive Officer of
the Victoria Commonwealth Games, and is currently President of the Commonwealth
Games of Canada Foundation.

21

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Pierre Robitaille Mr. Robitaille is a business advisor
and corporate director. He was previously Executive Vice-President and Chief
Financial Officer at SNC-Lavalin Group Inc., a position he held from 1990 to
1998. Prior to his career at SNC-Lavalin Group Inc., Mr. Robitaille worked more
than twenty years with the public accounting and management services firm Ernst
& Whinney, including ten years as Audit Partner, and served as Managing
Partner of the Montreal office and as President of the firm in Quebec. He has
served on audit committees of several listed companies, and is currently the
Chair of the Audit Committee of Nav Canada. Mr. Robitaille is a Fellow of the
Order of Chartered Accountants of Quebec. He was educated at HEC-Montreal and
McGill Business School.

Richard P. Strubel Mr. Strubel is a corporate
director. He was previously President and Chief Operating Officer of Cardean
Learning Group, a position he held from 1999 to 2004, and served as
Vice-Chairman of its Board until 2008. Prior to this, Mr. Strubel had an
extensive career as a business executive. He served as Managing Director of
Tandem Partners Inc., as President and Chief Executive Officer of Microdot Inc.,
and as President of Northwest Industries. Mr. Strubel also has extensive
experience serving on several boards of directors, including as a member of
audit committees. Mr. Strubel was educated at Williams College and Harvard
Business School.

Gonzalo F. Valdes-Fauli Mr. Valdes-Fauli is a
corporate director. He retired from Barclays Bank PLC in 2001, where he held the
position of Vice-Chairman, Barclays Capital, and served as Group Chief Executive
Officer of Barclays Bank Latin America from 1988 to 2001. Mr. Valdes-Fauli is
Chairman of BroadSpan Capital LLC, and served as Chairman of the Board of
Republic Bank of Dominican Republic until November 2007. Mr. Valdes-Fauli has
more than thirty years of experience in finance and holds a Masters Degree in
international finance from Thunderbird Graduate School for International
Management.

|8.3 | Pre-Approval of Non-Audit
  Services
|--- | ------------------------------------

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

|8.4 | External Auditor Service
Fees
|--- | -----------------------------

The aggregate fees billed by KPMG LLP (KPMG), the Companys
external auditor, for various audit-related and non-audit services rendered for
the fiscal years 2011 and 2010 were as follows:

Audit Fees The aggregate audit fees billed by KPMG
were Cdn$1,752,531 for fiscal 2011 and Cdn$1,500,608 for fiscal 2010. These
services consisted of professional services rendered for the annual audit of the
Companys consolidated financial statements and the quarterly reviews of the
Companys interim financial statements, consultation concerning financial
reporting and accounting standards, including assistance in preparing the
Company for compliance with the requirements of International Financial
Reporting Standards, and services provided in connection with statutory and
regulatory filings or engagements. The fees for the annual audit of the
Companys consolidated financial statements include fees relating to KPMGs
audit of the effectiveness of the Companys internal control over financial
reporting.

Audit-Related Fees The aggregate audit-related fees
billed by KPMG were Cdn$418,610 for fiscal 2011 and Cdn$786,003 for fiscal 2010.
These services consisted of due diligence services relating to actual and
potential acquisitions and also translation services in both years. Such due
diligence services related primarily to financial accounting and internal
control issues.

Tax Fees The aggregate tax fees billed by KPMG were
Cdn$795,810 for fiscal 2011 and Cdn$416,780 for fiscal 2010. These services
consisted of tax compliance, including the review of tax returns, assistance
regarding income, capital and sales tax audits, the preparation of annual
transfer pricing studies, and tax advisory services relating to domestic and
international taxation.

22

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All Other Fees The aggregate fees billed by KPMG for
all other professional services rendered were nil for both fiscal 2011 and
fiscal 2010.

|9. | LEGAL PROCEEDINGS
|-- | -----------------

With the exception of the legal proceedings mentioned below,
the Company is only a party to claims and litigation arising in the normal
course of its operations. While we cannot predict the final outcome of the
claims and litigation arising in the normal course of the Companys operations,
management does not currently expect the resolution of these matters to have a
material adverse effect on the consolidated financial position or results of
operations of Gildan.

As of the date hereof, the proceedings with respect to which
Gildan was a party to or involved in during fiscal 2011, for claimed damages in
excess of 10% of its current assets, were the following:

Class Action Suits

The Company and certain of its senior officers were named as
defendants in a number of class action lawsuits filed in the United States
District Court for the Southern District of New York, which were subsequently
consolidated, alleging claims under the U.S. securities laws, as well as in
class action lawsuits filed in the Ontario Superior Court of Justice and in the
Quebec Superior Court. Each of these U.S. and Canadian lawsuits alleged, among
other things, that the defendants misrepresented the Companys financial
condition and its financial prospects in its earnings guidance concerning the
2008 fiscal year, which guidance was subsequently revised on April 29, 2008. The
Ontario suit claimed damages of Cdn$500 million, punitive damages of Cdn$5
million and other monetary relief. The Québec suit was for unspecified damages
and other monetary relief and the claims in the U.S. suit were for unspecified
damages.

On August 3, 2010, the Company announced that it had entered
into an agreement to settle all claims raised in these class action lawsuits,
subject to final approval from the courts, on behalf of all persons who acquired
the Companys Common Shares between August 2, 2007 and April 29, 2008 (the
Class Members). Final court approval of the settlement was obtained from each
of the courts in February and March 2011 and all of the actions have been
dismissed on terms including releases from Class Members of the claims against
the Company and the named senior officers. The settlement agreement provided for
a total settlement amount of $22.5 million, which has been entirely funded by
the Companys insurers. Therefore no provision has been recorded in the
consolidated financial statements and no amounts have been disbursed by the
Company in respect of the settlement.

|10. | TRANSFER AGENT AND
REGISTRAR
|--- | ----------------------------

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

|11. | MATERIAL CONTRACTS
|--- | ------------------

Other than the agreements entered into during the normal course
of business, the only material agreements entered into in fiscal 2011, or before
fiscal 2011 and which are still in force, are the following:

- The Merger Agreement dated April 11, 2011 by and among Gildan USA Inc.,
  Midas Acquisition Corp., Gold Toe Moretz Holdings Corp. and Blackstone Capital
  Partners V L.P. This agreement was filed through SEDAR on June 28, 2011; and
- The Shareholder Rights Plan Agreement approved by the Board of Directors
  on December 1, 2010, and which was subsequently submitted to the Companys
  shareholders for ratification at the annual shareholders meeting on February
  9, 2011. This agreement was filed through SEDAR on December 3, 2010.

23

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|12. | INTERESTS OF EXPERTS
|--- | --------------------

KPMG, the external auditor of the Company, reported on the 2011
Financial Statements, which were filed with the securities regulatory
authorities. We are advised that, as at the date hereof, the members of KPMG are
independent in accordance with the Code of Ethics of the Ordre des Comptables
agréés du Québec. These rules are equivalent or similar to Rules of
Professional Conduct applicable to chartered accountants in the other provinces
of Canada.

|13. | FORWARD  LOOKING
STATEMENTS
|--- | ----------------------------

Certain statements included in this Annual Information Form
constitute forward-looking statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995and Canadian securities
legislation and regulations, and are subject to important risks, uncertainties
and assumptions. This forward-looking information includes, amongst others,
information with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs, plans,
expectations, anticipations, estimates and intentions. Forward-looking
statements generally can be identified by the use of conditional or
forward-looking terminology such as may, will, expect, intend,
estimate, project, assume, anticipate, plan, foresee, believe or
continue or the negatives of these terms or variations of them or similar
terminology. We refer you to the Companys filings with the Canadian securities
regulatory authorities and the U.S. Securities and Exchange Commission, as well
as the Critical Accounting Estimates and Financial Risk Management sections
beginning on page 26 and page 21 of the 2011 Annual MD&A, respectively, and
the risks described under the section Risks and Uncertainties beginning on
page 38 of the 2011 Annual MD&A for a discussion of the various factors that
may affect the Companys future results. Material factors and assumptions that
were applied in drawing a conclusion or making a forecast or projection are also
set out throughout this document.

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

- our ability to implement our growth strategies and plans, including
  achieving market share gains, implementing cost reduction initiatives and
  completing and successfully integrating acquisitions;
- the intensity of competitive activity and our ability to compete
  effectively;
- adverse changes in general economic and financial conditions globally or
  in one or more of the markets we serve;
- our reliance on a small number of significant customers;
- the fact that our customers do not commit contractually to minimum
  quantity purchases;
- our ability to anticipate changes in consumer preferences and trends;
- our ability to manage production and inventory levels effectively in
  relation to changes in customer demand;
- fluctuations and volatility in the price of raw materials used to
  manufacture our products, such as cotton and polyester fibres;
- our dependence on key suppliers and our ability to maintain an
  uninterrupted supply of raw materials and finished goods;
- the impact of climate, political, social and economic risks in the
  countries in which we operate or from which we source production;
- disruption to manufacturing and distribution activities due to labour
  disruptions, political instability, bad weather, natural disasters, pandemics
  and other unforeseen adverse events;
- changes to international trade legislation that the Company is currently
  relying on in conducting its manufacturing operations or the application of
  safeguards thereunder;
- factors or circumstances that could increase our effective income tax
  rate, including the outcome of any tax audits or changes to applicable tax
  laws or treaties;
- compliance with applicable environmental, tax, trade, employment, health
  and safety, and other laws and regulations in the jurisdictions in which we
  operate;
- our significant reliance on computerized information systems for our
  business operations;
- changes in our relationship with our employees or changes to domestic and
  foreign employment laws and regulations;

24

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- negative publicity as a result of violation of local labour laws or
  international labour standards, or unethical labour or other business
  practices by the Company or one of its third-party contractors;
- our dependence on key management and our ability to attract and/or retain
  key personnel;
- changes to and failure to comply with consumer product safety laws and
  regulations;
- adverse changes in third party licensing arrangements and licensed brands;
- our ability to protect our intellectual property rights;
- changes in accounting policies and estimates; and
- exposure to risks arising from financial instruments, including credit
  risk, liquidity risk, foreign currency risk and interest rate risk, as well as
  risks arising from commodity prices.

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

There can be no assurance that the expectations represented by
our forward-looking statements will prove to be correct. The purpose of the
forward-looking statements is to provide the reader with a description of
managements expectations regarding the Companys fiscal 2012 financial
performance and may not be appropriate for other purposes. Furthermore, unless
otherwise stated, the forward-looking statements contained in this Annual
Information Form are made as of the date hereof, and we do not undertake any
obligation to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or otherwise
unless required by applicable legislation or regulation. The forward-looking
statements contained in this Annual Information Form are expressly qualified by
this cautionary statement.

|14. | ADDITIONAL INFORMATION
|--- | ----------------------

Additional information, including directors and officers
remuneration and indebtedness, principal holders of the Companys securities and
securities authorized for issuance under the Companys equity compensation plans
is contained in the management proxy circular for its most recent annual meeting
of security holders that involve the election of directors. Additional financial
information is provided in the 2011 Financial Statements and the 2011 Annual
MD&A for its most recently completed financial year, both of which are
incorporated herein by reference.

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

600 de Maisonneuve Boulevard West,
33rdFloor Montreal, Québec H3A 3J2 Telephone: (514)
735-2023

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

25

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APPENDIX A - MANDATE OF THE AUDIT AND FINANCE COMMITTEE

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

|1. | Membership and Quorum
|-- | ---------------------

- a minimum of three directors;
- only independent (as contemplated by Canadian Corporate Governance
  Standards and US Corporate Governance Standards) directors shall be appointed,
  the whole as determined by the Board; no affiliate of the Company or any of
  its subsidiaries (including any person who, directly or indirectly, controls
  or is controlled by, or is under common control with the Company, or any
  director, executive officer, partner, member, principal or designee of such
  affiliate) may serve on the Audit Committee; a member of the Audit Committee
  shall receive no compensation from the Company or any of its affiliates other
  than compensation as a director and committee member of the Company;
  prohibited compensation includes fees paid, directly or indirectly, for
  services as a consultant or as legal or financial advisor, regardless of the
  amount;
- each member must be financially literate (as contemplated by Canadian
  Corporate Governance Standards and US Corporate Governance Standards), as
  determined by the Board;
- at least one member must be an audit committee financial expert (as
  contemplated by US Corporate Governance Standards), as determined by the
  Board;
- members of the Audit Committee shall be appointed annually by the Board
  upon recommendation of the Companys Corporate Governance Committee; such
  members may be removed or replaced, and any vacancies on the Audit Committee
  shall be filled by the Board upon recommendation of the Companys Corporate
  Governance Committee; membership on the Audit Committee shall automatically
  end at such time the Board determines that a member ceases to be independent
  as determined in the manner set forth above;
- the chair of the Compensation and Human Resources committee of the
  Corporation is a member of the Audit Committee;
- quorum of majority of members.

|2. | Frequency and Timing of
Meetings
|-- | --------------------------------

- normally contemporaneously with the Companys Board meetings;
- at least four times a year and as necessary.

26

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|3. | Mandate
|-- | -------

The responsibilities of the Audit Committee include the
following:

| | (a) | Overseeing financial
reporting
| | --- | ------------------------------

- monitoring the integrity and quality of the Companys accounting and
  financial reporting process, disclosure controls and procedures, and systems
  of internal control, through independent discussions with management, the
  external auditors and the internal auditors;
- reviewing, with management and the external auditors, the annual audited
  consolidated financial statements of the Corporation and accompanying
  information, including the report of the auditors thereon to be included in
  the Annual Report of the Corporation, the Corporations MD&A disclosure
  and annual earnings press release, prior to their release, filing and
  distribution;
- reviewing, with management and the external auditors, quarterly
  consolidated financial statements of the Company and accompanying information,
  including the Companys MD&A disclosure and quarterly earnings press
  release, prior to their release, filing and distribution;
- reviewing, with management and, where appropriate the external auditors,
  the financial information contained in prospectuses, offering memoranda,
  Annual Information Forms, Management Proxy Circulars, Forms 6-K (including
  Supplemental Disclosure) and 40-F and any other document required to be
  disclosed or filed by the Company before their public disclosure or filing
  with regulatory authorities in Canada or the United States of America;
- reviewing, with management, the level and type of financial information
  (including earnings guidance and other material forward-looking information)
  provided from time to time to analysts, investors and other stakeholders;
- reviewing, with management, that adequate procedures are in place for the
  review of the Companys disclosure of financial information extracted or
  derived from the Companys financial statements, such as annual reports and
  investor presentations, and periodically assessing the adequacy of those
  procedures;
- reviewing, with the external auditors and management, the quality,
  appropriateness and disclosure of the Companys accounting principles and
  policies, underlying assumptions and reporting practices, and any proposed
  changes thereto;
- reviewing any analysis or other written communications prepared by
  management, the internal auditors or external auditors setting forth
  significant financial reporting issues and judgments made in connection with
  the preparation of the financial statements, including analyses of the effect
  of alternative generally accepted accounting principles methods;
- reviewing the external auditors quarterly review engagement report;
- overseeing the procedures to review management certifications filed with
  applicable securities regulators;
- reviewing the potential impact of any litigation, claim or other
  contingency and any regulatory or accounting initiatives that could have a
  material effect upon the financial position or operating results of the
  Company and the appropriateness of the disclosure thereof in the documents
  reviewed by the Audit Committee;
- overseeing the procedures to monitor the public disclosure of information
  by the Company;
- reviewing at least annually the Companys disclosure policy;

27

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

| | (b) | Monitoring risk management and internal
      controls
| | --- | ------------------------------------------------------

- receiving periodically managements report assessing the adequacy and
  effectiveness of the Companys disclosure controls and procedures;
- receiving periodically managements reports assessing the adequacy and
  effectiveness of the Corporations systems of internal control over financial
  reporting; and reviewing the report of the auditors thereon;
- reviewing insurance coverage (annually and as may otherwise be
  appropriate);
- overseeing the processes in place to identify business risks and
  opportunities and overseeing the implementation of processes to manage these
  risks and opportunities;
- reviewing the Corporations policies and parameters regarding hedging
  activity and derivatives contracts entered into by management in order to
  address risks associated with foreign exchange fluctuations, commodity prices,
  interest rates and any other risks where the Corporation enters into
  derivatives contracts;
- assisting the Board with the oversight of the Companys compliance with,
  and reviewing the Companys processes for complying with, applicable legal and
  regulatory requirements;
- overseeing the confidential, anonymous procedures for the receipt,
  retention and treatment of complaints or concerns received by the Company
  regarding accounting, internal accounting controls or auditing matters or
  employee concerns regarding accounting or auditing matters;
- requesting the performance of any specific audit, as required.

| | (c) | Monitoring internal
auditors
| | --- | ----------------------------

- ensuring that the head of internal audit has a functional reporting
  relationship with the Audit Committee;
- overseeing the access by internal auditors to all levels of management in
  order to carry out their duties;
- regularly monitoring the internal audit functions performance, its
  responsibilities, staffing and budget;
- approving the appointment and termination of the Companys chief internal
  auditor;
- ensuring the ongoing accountability of the internal audit function to the
  Audit Committee and to the Board.

| | (d) | Monitoring external
auditors
| | --- | ----------------------------

- recommending the retention and, if appropriate, the removal of external
  auditors (both subject to shareholder approval), their compensation, as well
  as evaluating and monitoring their qualifications, performance and
  independence;
- overseeing all relationships between the external auditors and the Company
  including, determining which non-audit services the external auditors are
  prohibited from providing, approving, or pre-approving policies defining audit
  and permitted non-audit services provided

28

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- overseeing the direct reporting and accountability of the external
  auditors to the Audit Committee and to the Board;
- directly overseeing the external auditors and discussing with them the
  quality and not just the acceptability of the Companys accounting principles,
  including (i) critical accounting policies and practices used, (ii)
  alternative treatments of financial information that have been discussed with
  management, the ramification of their use and the treatment preferred by the
  external auditors, as well as (iii) other material written communications
  between the Company and the external auditors (including any disagreement with
  management and the resolution thereof);
- reviewing at least annually, representations by the external auditors
  describing their internal quality-control procedures, as well as significant
  results arising from regulatory and professional quality-control examinations;
- reviewing at least annually, the external auditors representations as to
  independence and holding discussions with the external auditors as to any
  relationship or services that may impact their objectivity or independence;
- reviewing hiring policies for employees or former employees of the
  Companys firm of external auditors;
- overseeing the rotation of lead, concurring and other audit partners, to
  the extent required by Canadian and U.S. securities law standards.

| | (e) | Reviewing financings
| | --- | --------------------

- reviewing the adequacy of the Companys financing, including terms and
  conditions of all new material financing arrangements.

| | (f) | Evaluating the performance of the Audit
      Committee
| | --- | -------------------------------------------------------

- overseeing the existence of processes to annually evaluate the performance
  of the Audit Committee.

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

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

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

29

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meets separately with management and also without management or
any non-independent directors present.

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

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

* * *

30

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| | A. | Undertaking
| | -- | -----------

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

| | B. | Consent to Service of
Process
| | -- | -----------------------------

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

| | C. | Evaluation of disclosure controls and
      procedures
| | -- | ------------------------------------------------------

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

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

| | D. | Managements annual report on internal control over
      financial reporting
| | -- | -----------------------------------------------------------------------------

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

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

Under the supervision and with the participation of our
principal executive officer and our principal financial officer, management
conducted an evaluation of the effectiveness of our internal control over
financial reporting, as of October 2, 2011, based on the framework set forth
inInternal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Based on its
evaluation under this framework, management concluded that our internal control
over financial reporting was effective as of that date.

Managements assessment of the effectiveness of our internal
control over financial reporting as of October 2, 2011 excluded Gold Toe Moretz
Holdings Corp. (Gold Toe Moretz), which we acquired on April 15, 2011. Gold
Toe Moretz is a wholly-owned subsidiary of ours whose total assets and total net
sales represented approximately 24% of our consolidated total assets and
approximately 7% of our consolidated net sales, respectively, as of and for the
year ended October 2, 2011.

| | E. | Attestation report of the registered public accounting
      firm.
| | -- | ------------------------------------------------------------------

KPMG LLP (KPMG), an independent registered public accounting
firm, that audited and reported on our financial statements attached as Exhibit
99.2 to this Annual Report on Form 40-F, has issued an attestation report on the
effectiveness of our internal control over financial reporting as of October 2,
2011. The attestation report is included on page 52 of the financial statements
attached as Exhibit 99.2 to this Annual Report on Form 40-F.

---

| | F. | Changes in internal controls over financial
      reporting.
| | -- | ------------------------------------------------------------

There have been no changes during fiscal year 2011 in our
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

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

| | G. | Audit Committee Financial
Experts
| | -- | ---------------------------------

The Registrants board of directors has determined that it has
at least four (4) audit committee financial experts serving on its Audit and
Finance Committee. Mr. William D. Anderson, Mr. Russell Goodman, Mr. Pierre
Robitaille, and Mr. Gonzalo F. Valdes-Fauli have been determined to be such
audit committee financial experts and are independent, as that term is defined
by the New York Stock Exchanges listing standards applicable to the Registrant.
The SEC has indicated that the designation of Mr. Anderson, Mr. Goodman, Mr.
Robitaille, and Mr. Valdes-Fauli as audit committee financial experts does not
make Mr. Anderson, Mr. Goodman, Mr. Robitaille, and Mr. Valdes-Fauli experts
for any purpose, impose any duties, obligations or liability on Mr. Anderson,
Mr. Goodman, Mr. Robitaille, and Mr. Valdes-Fauli that are greater than those
imposed on members of the Audit and Finance Committee and Board of Directors who
do not carry this designation or affect the duties, obligations or liability of
any other member of the Audit and Finance Committee.

| | H. | Code of Ethics
| | -- | --------------

The Registrant has adopted a Code of Ethics and Code of Conduct
(the Code of Ethics) that applies to all employees and officers, including its
principal executive officer, principal financial officer and principal
accounting officer. The Code of Ethics is available at the Registrants Internet
website, www.gildan.com/corporate/IR/corporateGovernance.cfm,
and is available, without charge, in print to any shareholder who requests it.

| | I. | Principal Accountant Fees and
  Services
| | -- | ----------------------------------------

In addition to retaining KPMG to report upon the annual
consolidated financial statements of the Registrant, the Registrant retained
KPMG to provide various audit-related and non-audit services in fiscal 2011. The
aggregate fees billed for professional services by KPMG for each of the last two
(2) fiscal years, were as follows:

Audit Fees  The aggregate audit
fees billed by KPMG were Cdn$1,752,531 for fiscal 2011 and Cdn$1,500,608 for
fiscal 2010. These services consisted of professional services rendered for the
annual audit of the Companys consolidated financial statements and the
quarterly reviews of the Companys interim financial statements, consultation
concerning financial reporting and accounting standards, including assistance in
preparing the Company for compliance with the requirements of International
Financial Reporting Standards, and services provided in connection with
statutory and regulatory filings or engagements. The fees for the annual audit
of the Companys consolidated financial statements include fees relating to
KPMGs audit of the effectiveness of the Companys internal control over
financial reporting.

Audit-Related Fees  The
aggregate audit-related fees billed by KPMG were Cdn$418,610 for fiscal 2011 and
Cdn$786,003 for fiscal 2010. These services consisted of due diligence services
relating to actual and potential acquisitions and also translation services in
both years. Such due diligence services related primarily to financial
accounting and internal control issues.

Tax Fees  The aggregate tax
fees billed by KPMG were Cdn$795,810 for fiscal 2011 and Cdn$416,780 for fiscal
2010. These services consisted of tax compliance, including the review of tax
returns, assistance regarding income, capital and sales tax audits, the
preparation of annual transfer pricing studies, and tax advisory services
relating to domestic and international taxation.

All Other Fees  The aggregate
fees billed by KPMG for all other professional services rendered were nil for
both fiscal 2011 and fiscal 2010.

---

All fees billed to the Registrant by KPMG in fiscal 2011 were
pre-approved by the Registrants Audit and Finance Committee pursuant to the
procedures and policies set forth in the Audit and Finance Committee mandate and
pursuant to applicable legislation. The mandate of the Audit and Finance
Committee is available on the Registrants Internet website at www.gildan.com/corporate/IR/corporateGovernance.cfm.

In fiscal 2011 and fiscal 2010, the Companys Audit and Finance
Committee did not approve any audit-related, tax or other services pursuant to
paragraph (c) (7) (i) (C) of Rule 2-01 of Regulation S-X.

| | J. | Off-Balance Sheet
Arrangements
| | -- | ------------------------------

Operating Leases and Commitments

The Registrant has no commitments that are not reflected in its
balance sheets except for operating leases and other purchase obligations, which
are included in the table of contractual obligations on page 19 of its
Managements Discussion and Analysis (see Exhibit 99.1) (the MD&A). As
disclosed in Note 14 to the Registrants Consolidated Financial Statements (see
Exhibit 99.2), the Registrant has issued standby letters of credit and corporate
guarantees primarily from various servicing agreements amounting to $15.1
million at October 2, 2011.

Derivative Financial Instruments

From time to time, the Registrant uses forward foreign exchange
contracts and zero-cost collar options to hedge cash flows related to sales and
operating expenses in foreign currencies (non-U.S. dollar). A forward foreign
exchange contract represents an obligation to exchange a foreign currency with a
counterparty at a predetermined rate whereas a zero-cost collar option
represents an option to convert foreign currency within a range on a specific
date. The Registrant has also entered into a series of interest rate swap
contracts to fix the variable interest rates on a designated portion of the
borrowings under the revolving long-term credit facility. The Registrant is
subject to financial risks related to its exposure to interest rate and foreign
currency fluctuations, as well as credit risk in the event of failure by a
counterparty to meet its obligations. The Registrants exposure to financial
risks is described in more detail in the Financial Risk Management section of
its MD&A beginning on page 21 (see Exhibit 99.1) .

The Registrant does not use derivative financial instruments
for speculative purposes. Forward foreign exchange contracts and zero-cost
collar options are entered into with maturities not exceeding twelve months and
interest rate swap contracts are entered into with maturities not exceeding the
maturity date of the revolving long-term credit facility.

For the years ended October 2, 2011 and October 3, 2010, net
earnings included a recognized loss of $7.0 million and a recognized gain of
$3.9 million, respectively, both relating to derivative financial instruments.

As disclosed in Note 22 to the Registrants Consolidated
Financial Statements (see exhibit 99.2), at October 2, 2011 the Registrant had
outstanding derivative financial instruments relating to commitments to buy and
sell foreign currencies through forward foreign exchange contracts and zero-cost
collar options and instruments to fix the variable interest rates on the
revolving long-term credit facility. The fair value of the forward foreign
exchange contracts, zero-cost collar options and interest rate swap contracts,
determined using observable market inputs, was a net liability of $0.7 million
as at October 2, 2011 and a net liability of $2.0 million as at October 3, 2010.

| | K. | Tabular Disclosure of Contractual
    Obligations
| | -- | -------------------------------------------------

See page 19 of Exhibit 99.1.

| | L. | Corporate Governance
Guidelines
| | -- | -------------------------------

The Registrant has adopted Corporate Governance Guidelines as
well as mandates for its board of directors and each of its three committees
which are available at the Registrants Internet website, www.gildan.com/corporate/IR/corporateGovernance.cfm,
and are available in print to any shareholder who requests them.

| | M. | Identification of the Audit
  Committee
| | -- | ---------------------------------------

The Registrant has a standing audit committee
established in accordance with Section 3 (a) (58) (A) of the Exchange Act. The
members of the Registrants Audit and Finance Committee are William D. Anderson,
George Heller, Pierre Robitaille, Richard P. Strubel, Gonzalo F.
Valdez-Fauli, and Russell Goodman, who joined the Audit and Finance Committee in
August 2011. Please refer to the section 8 of our Annual Information Form
entitled Audit and Finance Committee Disclosure, included herein, for
additional information.

---

| | N. | Summary of Significant Differences from NYSE Corporate
      Governance Rules
| | -- | -----------------------------------------------------------------------------

The Registrant is committed to adopting and adhering to
corporate governance practices that either meet or exceed applicable Canadian
and U.S. corporate governance standards. As a Canadian reporting issuer with
securities listed on the Toronto Stock Exchange (TSX) and the New York Stock
Exchange (NYSE), the Registrant complies with all applicable rules adopted by
the Canadian Securities Administrators as well as the rules of the U.S.
Securities and Exchange Commission giving effect to the provisions of the U.S.
Sarbanes-Oxley Act of 2002.

Although many of the NYSE Corporate Governance Standards do not
apply to the Registrant, it nevertheless voluntarily complies with most of the
NYSE Standards. In fact, the Registrants corporate governance practices differ
significantly in only one respect from those required of U.S. domestic issuers
under the NYSE Standards, which is with respect to the approval of equity
compensation plans. The NYSE Standards require shareholder approval of all
equity compensation plans and material revisions to such plans, regardless of
whether the securities to be delivered under such plans are newly issued or
purchased on the open market, subject to a few limited exceptions. The TSX
Rules, however, do not require shareholder approval in all those circumstances.
Hence, only the creation or material amendments to equity compensation plans
that provide for new issuances of securities are subject to shareholder
approval. The Registrant has in place plans which did not require the approval
of its shareholders under the TSX Rules but which could have required the
approval of its shareholders under the NYSE Standards as applicable to U.S.
domestic issuers.

---

SIGNATURES

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

DATED: December 9, 2011

| | GILDAN ACTIVEWEAR INC.
| | ----------------------
| |                       
| |                       
| | /s/ Lindsay Matthews  
| | Name:                 
| | Title:                

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EXHIBIT INDEX

|Exhibit No. | Description                                                                                                                                           
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|99.1        | Managements Discussion and
      Analysis of the Registrant for the year ended October 2, 2011                                                       
|99.2        | Audited comparative consolidated financial
      statements of the Registrant as at and for the year ended October 2, 2011                            
|99.3        | Consent of KPMG LLP                                                                                                                                   
|99.4        | Reconciliation to United States GAAP                                                                                                                  
|99.5        | Officers Certifications
      Required by Rule 13a-14(a) or Rule 15d-14(a)                                                                           
|99.6        | Officers Certifications Required by Rule
      13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of
      the United States Code

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