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UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 
FORM 40-F 

 ̈              Registration statement pursuant to Section 12 of the Securities              Exchange Act of 1934or
þAnnual              report pursuant to Section 13(a) or 15(d) of the Securities              Exchange Act of 1934  **For              Fiscal year ended: October 5, 2008****Commission File number: 1-14830 **GILDAN ACTIVEWEAR INC.***(Exact name of registrant as              specified in its charter)* **Canada***(Province or other              jurisdiction of incorporation or organization)* **2200, 2250, 2300***(Primary standard industrial              classification code number, if applicable)* **Not Applicable***(I.R.S. employer              identification number, if applicable)* **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 className of each exchange              on which registered**Common Shares****New York Stock              Exchange** **Toronto Stock Exchange**
Securities registered or to be registered pursuant to Section12(g) of the Act:                    **None**Securities for which there is a reporting obligation pursuant to Section 15(d)of the Act:**  None**
For annual reports, indicate by check mark the informationfiled with this form: 
þAnnual Information Form
þAudited Annual              Financial Statements
Indicate the number of outstanding shares of each of theissuer's classes of capital or common stock as of the close of the periodcovered by the annual report: 
**Common Shares: 120,536,501**
Indicate by check mark whether the registrant by filing theinformation contained in this form is also thereby furnishing the information tothe Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of1934 (the "Exchange Act"). If "Yes" is marked, indicate the file number assignedto the registrant in connection with such rule. 
Yes                ̈No              þ
Indicate by check mark whether the registrant: (1) has filedall reports required to be filed by Section 13 or 15(d) of the Exchange Actduring the preceding 12 months (or for such shorter period that the registrantwas required to file such reports); and (2) has been subject to such filingrequirements for the past 90 days. 
Yes              þNo                ̈**GILDAN ACTIVEWEAR INC. 

ANNUAL INFORMATION FORM 

for the year ended October 5, 2008 
December 18, 2008 

 

 

GILDAN ACTIVEWEAR INC.  

TABLE OF CONTENTS   **Page****1.****CORPORATE STRUCTURE****1** **1.1****Name, Address and    Incorporation****1** **1.2****Intercorporate    Relationships****2****2.****GENERAL DEVELOPMENT OF THE    BUSINESS****2** **2.1****Recent Developments****2** **2.2****Developments in Fiscal    2008****3** **2.3****Developments in Fiscal    2007****4** **2.4****Developments in Fiscal    2006****5****3.****DESCRIPTION OF THE BUSINESS****5** **3.1****Business Overview****5** **3.2****Risk Factors****12** **3.3****Employees****12****4.****DIVIDEND POLICY****12****5.****CAPITAL STRUCTURE****13****6.****MARKET FOR SECURITIES****14****7.****DIRECTORS AND OFFICERS****14****8.****AUDIT COMMITTEE DISCLOSURE****17****9.****LEGAL PROCEEDINGS****18****10.****TRANSFER AGENT AND REGISTRAR****19****11.****MATERIAL CONTRACTS****19****12.****INTERESTS OF EXPERTS****19****13.****FORWARD – LOOKING INFORMATION****19****14.****ADDITIONAL INFORMATION****20****APPENDIX A - MANDATE OF THE    AUDIT AND FINANCE COMMITTEE****22***This Annual Information Form is dated December 18, 2008 and,except as otherwise indicated, the information contained herein is given as ofDecember 18, 2008. 

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

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

In this Annual Information Form, "Gildan", the "Corporation"or the words "we", "our" and "us" refer, depending on the context, either toGildan Activewear Inc. or to Gildan Activewear Inc. together with itssubsidiaries and joint venture. 

The information appearing in the extracts of the documentslisted below and specifically referred to in this Annual Information Form isincorporated herein by reference: 

-*2008 Annual Report; and*
- *2008 Notice of Annual Meeting of Shareholders andManagement Proxy Circular (the "Circular"). 
The foregoing documents are available on the SEDAR website atwww.sedar.com, on the EDGAR website at www.sec.gov and on the Corporation'swebsite at www.gildan.com. 

This Annual Information Form contains certain forward-lookingstatements, which are based on Gildan's current expectations, estimates,projections and assumptions and were made by Gildan in light of its experienceand its perception of historical trends. Results indicated in forward-lookingstatements may differ materially from the actual results. Please refer to thecautionary statement at pages 19 and 20 of this Annual Information Form forfurther explanation.***1. 

CORPORATE STRUCTURE 

1.1 

Name, Address and Incorporation 
We were incorporated on May 8, 1984 pursuant to the *CanadaBusiness Corporations Act* under the name of Textiles Gildan Inc. At ourinception, we focused our activities on the manufacture of textiles and producedand sold finished fabric as a principal product-line. In 1992, we redefined ouroperating strategy and, by 1994, our operations focused exclusively on themanufacture and sale of activewear in the screenprint channel. In March 1995, wechanged 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 publicoffering, we filed Articles of Amendment to, among other things, remove theprivate company restrictions contained in our charter documents and change thestructure of our authorized share capital. On June 17, 1998, we completed ourinitial public offering of an aggregate of 3,000,000 Class A Subordinate Votingshares at Cdn$10.29 per share, on a pre-split basis, for total gross proceeds ofCdn$30,880,500. 

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

Our principal executive offices and registered office are located at 600 deMaisonneuve Boulevard West, 33rd Floor, Montreal, Québec, Canada H3A3J2, and our telephone number at that address is (514) 735-2023. 
**1.2 

Intercorporate Relationships**
The following table indicates our principal subsidiaries, their jurisdictionof incorporation and the percentage of voting securities that we beneficiallyown or over which we exercise direct or indirect control: 
**Subsidary**** Jurisdiction    of Incorporation****Percentage of Voting Securities or     Partnership Interest that Gildan held     as    at     December 18, 2008**Gildan Activewear SRLBarbados100%Gildan USA Inc.Delaware100%Gildan Choloma Textiles, S.    de R.L.Honduras100%Gildan Activewear Dominican    Republic TextileBarbados100%Company Inc.  Gildan Activewear Honduras    TextilesHonduras100%Company, S. de R.L.  Gildan Honduras Hosiery    Factory, S. de R.L.Honduras100%Gildan Activewear Properties    (DominicanBarbados100%Republic) Inc.  Gildan Activewear (Eden) Inc.North Carolina100%Gildan Activewear (UK)    LimitedUnited Kingdom100%V.I. Prewett &    Son, Inc.    Alabama    100%
The subsidiaries that have been omitted do not representindividually more than 10% of the consolidated assets and 10% of theconsolidated sales and operating revenues of Gildan, or in the aggregate morethan 20% of the total consolidated assets and the consolidated sales andoperating revenues as at and for the year ended October 5, 2008. 
**2.

**GENERAL DEVELOPMENT OF THEBUSINESS**
The following section describes how our business has evolved in the lastthree completed financial years and lists key events that have influenced thedevelopment of our business. 
**2.1 

Recent Developments 

Renewable Energy Projects**
In an effort to produce the energy used in our manufacturingprocess in a more cost-effective and environmentally responsible fashion, Gildanis currently evaluating plans to build two biomass combustion facilities locatedin Honduras and the Dominican Republic. 
**China Sales and Distribution**
In early fiscal 2009, we were granted a business license bythe Chinese government to operate as Gildan (China) Trading Co., Ltd. Thiscorporation has been established exclusively to import and sell Gildan productsto customers in mainland China. In fiscal 2009, we plan to open a distributioncentre near Shanghai, China to service the initial customer base predominantlylocated in the northern provinces of China. Later in fiscal 2009, Gildan isplanning to open another distribution centre in the southeast region of China.Gildan is focusing on building our brand in both the retail and screenprintchannels in China. 
**Restructuring of U.S. Sock Manufacturing**
On December 11, 2008, we announced plans to phase out sockfinishing operations in the U.S. by the end of June 2009 and consolidateoperations in Honduras, in order to remain globally competitive in the currenteconomic conditions. As part of this restructuring, the Corporation will also beclosing a sock knitting facility in Hillsville, Virginia. 

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**Tax**
The Canada Revenue Agency ("CRA") has been conducting anaudit of our income tax returns for our 2000, 2001, 2002 and 2003 fiscal years,the scope of which included a review of transfer pricing and the allocation ofincome between the Corporation's Canadian legal entity and its foreignsubsidiaries. In the third quarter of fiscal 2008, management met with the CRAfor the first time to discuss preliminary transfer pricing audit issues and, inparticular, explain the roles and responsibilities performed in our foreignsubsidiaries where the majority of our taxable income is earned. On December 10,2008, the Corporation reached a final agreement with the CRA and concluded theaudit for the 2000, 2001, 2002 and 2003 fiscal years. In connection with theterms of the agreement, we agreed to a tax reassessment related to therestructuring of our international wholesale business and the related transferof our assets to our Barbados subsidiary, which occurred in fiscal 1999. Basedon the results of the audit, we continue to believe that our income taxprovisions for fiscal years subsequent to the periods covered by the audit areappropriate. 
**2.2 

Developments in Fiscal 2008 

Growth Strategy**
Over the past fiscal year, we have continued to achievemarket share gains in the U.S. screenprint market. We are also making progressin our plans to penetrate the U.S. mass retail market for high-volume, basic,frequently replenished, non-fashion family apparel. The acquisition of V.I.Prewett & Son, Inc. ("Prewett") in fiscal 2008, as described below, is intendedto further strengthen our positioning as a supplier of socks for the retailchannel. During fiscal 2008, we began shipments under our first underwearprogram with a U.S. national mass-market retailer. The Corporation has alsocontinued to implement its strategy to rationalize its sock product-mix, inorder to focus on basic higher-volume products and programs which capitalize onGildan's large-scale sock manufacturing facility in Honduras. 
**Acquisition of U.S. Sock Manufacturer**
On October 15, 2007, we acquired 100% of the common shares ofPrewett, a large U.S. supplier of basic family socks to U.S. mass-market andregional retailers. Prewett's corporate headquarters are located in Fort Payne,Alabama. The aggregate purchase price was $128 million, which was comprised ofcash consideration of $125.3 million, a fixed payment of $1.2 million payable infiscal 2009 and transaction costs of $1.5 million. The purchase agreementprovides for an additional purchase consideration of $10 million contingent onspecified future events, which was paid into escrow by the Corporation. Thepurchase price was paid in cash at closing and was financed out of our revolvinglong-term credit facility. With this acquisition, we are now one of the leadingsuppliers of socks in the U.S. mass-market retail channel. 
**Manufacturing Operations**
In fiscal 2008, we completed the ramp up of our second activewear facilityand of our integrated sock manufacturing facility, both located in Rio Nance,Honduras. 

In August 2007, we announced plans for the construction of a second sockfacility in Rio Nance, Honduras which is currently expected to begin productionin fiscal 2009. 
**Distribution**
In fiscal 2008, we continued to service our retail activewear,sock and underwear distribution through our distribution facility inMartinsville, Virginia. In addition, with our acquisition of Prewett in fiscal2008, two Prewett facilities, located in Fort Payne, Alabama, were added to ourdistribution network. These two Prewett facilities also service our sockdistribution in the retail channel. Our distribution centre in Eden, NorthCarolina, continues to be dedicated to supporting our customers in thescreenprint channel. 

In May 2008, the Corporation announced its intention to builda new distribution centre in Honduras which is currently expected to becomeoperational in fiscal 2010. In addition to supporting the Corporation'scontinuing sales growth, the new distribution facility in Honduras willfacilitate direct shipments to both U.S. and international customers, whereappropriate, and is expected to provide a lower cost structure to handle labour-intensiveactivities for mass-market retail customers. ****
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**Corporate Office**
In fiscal 2008, we moved our corporate head office to leased premises locatedin Montreal, Québec. 
**2.3 

Developments in Fiscal 2007 

Growth Strategy**-  We continued to achieve market  share gains in the U.S. screenprint market. We also made progress in our plans  to penetrate the U.S. mass retail market for high-volume, basic, frequently  replenished, non-fashion family apparel. Our acquisition of Kentucky Derby  Hosiery Co., Inc. ("Kentucky Derby") provided us with enhanced distribution to  major U.S. mass-market retailers, and permitted us to achieve our first  national branded sock program for men's and boys' socks with a U.S. national  retailer. We began shipments of a major  private label sock program to a U.S. national mass-market retailer. **Manufacturing Operations**-  We announced the restructuring of  our Canadian and U.S. manufacturing operations, which included the closure of  our two remaining textile facilities in Montreal and our cutting facility in  Bombay, New York and announced the closure of two sock facilities in Mount  Airy, North Carolina. We also announced the closure of our two sewing  facilities in Mexico, which had been supplied with fabric from our Canadian  textile operations. We began production at a new  integrated manufacturing facility in Rio Nance, Honduras for the large-scale  production of socks and announced plans for a second sock facility in Honduras  to support our projected continuing growth in sales. We also began production at our  second large-scale integrated textile manufacturing facility for the  production of activewear in Rio Nance, Honduras. **Distribution**-  We completed the consolidation of  Kentucky Derby's distribution facilities into our retail distribution centre  located in Martinsville, Virginia. This new distribution centre supports the  distribution of all product lines for the retail channel. Our distribution  centre in Eden, North Carolina continues to be dedicated to supporting our  customers in the screenprint channel. We began operations at a new  third-party distribution centre in Shenzhen, China. **Stock Split**-  Our Board  of Directors approved a two-for-one stock split effected in the form of a  stock dividend. The split was applicable to all shareholders of record on May  18, 2007. The Common Shares commenced trading on a post-split basis on May 16,  2007 on the Toronto Stock Exchange and on May 28, 2007 on the New York Stock  Exchange. **FLA Accreditation**-  In June  2007, the Fair Labor Association (the "FLA"), a leading labour rights  organization, accorded us accreditation status on our labour compliance  program following an extensive three-year review of our compliance with its  workplace code of conduct requirements. We became the first  vertically-integrated manufacturer of basic activewear apparel to receive this  accreditation, which is the FLA's most advanced recognition of a company's  labour compliance program.****
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**2.4 

Developments in Fiscal 2006 

Retail Market Initiative 
We expanded our product-line of  existing undecorated activewear products for sale to U.S. and Canadian  regional retailers to include underwear and basic athletic socks. In July 2006, we acquired 100% of  the common shares of Kentucky Derby for a total purchase price of $20.4  million. **Textile and Sock Manufacturing 
We completed the  construction of a building for a sock manufacturing facility in Rio Nance,  Honduras, and began the construction of an integrated manufacturing facility  for the production of activewear at the same site. 
**Sewing 
In fiscal 2006, we  expanded our sewing capacity in Honduras, Haiti and Nicaragua. 
**Distribution 
In the  fourth quarter, we completed the closure of our distribution centre located in  Montreal, Québec effective October 2006. We also relocated and began  consolidation of Kentucky Derby's existing distribution centres, located at  multiple sites in Danville, Virginia and Mount Airy, North Carolina, to a new  400,000 square foot retail distribution centre in Martinsville, Virginia. **3.

DESCRIPTION OF THE BUSINESS

3.1 

Business Overview 
Gildan is a vertically-integrated marketer and manufacturerof quality branded basic apparel. The Corporation is the leading supplier ofactivewear for the screenprint market in the U.S. and Canada. It is also aleading supplier to this market in Europe, and is establishing a growingpresence in Mexico and the Asia-Pacific region. The Corporation sells T-shirts,sport shirts and fleece in large quantities to wholesale distributors asundecorated "blanks", which are subsequently decorated by screenprinters andembroiderers with designs and logos. Consumers ultimately purchase theCorporation's products, with the Gildan label, in venues such as sports,entertainment and corporate events, and travel and tourism destinations. TheCorporation's products are also utilized for work uniforms and other end-uses toconvey individual, group and team identity. The Corporation is also a leadingsupplier of private label and Gildan branded socks primarily sold to mass-marketretailers. In addition, Gildan has an objective to become a significant supplierof men's and boys' underwear and undecorated activewear products to mass-marketretailers in North America. 

The Corporation's sales for fiscal 2008 reached $1,249.7 million. 
**Strategy and Objectives**
We believe that our success in developing ourvertically-integrated manufacturing hubs has allowed us to provide our customerswith low prices, consistent product quality and a reliable supply chain, and hasbeen the main reason that we have been able to continue to increase our marketpresence and establish our market leadership in the imprinted sportswear market.These are the same factors that management believes will support Gildan'sstrategy to expand its presence in international screenprint markets and furtherpenetrate the retail channel. 

We are able to price our products competitively because of our success inreducing operating costs, as a result of our investments in newstrategically-located, large-scale, capital-intensive manufacturing facilitieswith modern equipment.
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Our growth strategy comprises the following initiatives: 
*1.

*Continue to increase market share inthe U.S. screenprint channel in all product categories*
During fiscal 2008, we further increased our leading marketshare position in the U.S. screenprint channel in all of our product categoriesas reported in the S.T.A.R.S. report produced by ACNielsen Market Decisions (the"S.T.A.R.S. Report"). We intend to seek to continue gaining market share in allof the product categories that we serve within the U.S. screenprint channel,namely T-shirts, sport shirts and fleece, by producing consistent high qualityproducts, reliable customer service and competitive pricing. In addition, theintroduction of new products such as softer T-shirts and sport shirts made ofring-spun cotton and new styles tailored for women, should enable us to furtherincrease our market share by serving certain niches of the screenprint channelin which we previously did not participate. 
*2.

*Leverage our successful businessmodel to further penetrate the mass-market retail channel and develop Gildan asa consumer brand*
The acquisitions of Kentucky Derby and Prewett, combined withthe addition of new branded and private label sock programs, have positioned usas a leading supplier of basic family socks in the U.S. mass-market retailchannel. We intend to build on our market position in socks to also establish asignificant presence in the mass-market retail channel with our activewear andunderwear product lines. During fiscal 2008, we obtained our first retailprivate label underwear program with a U.S. national mass-market retailer.Shipments under this program began in the third quarter of this fiscal year. Ourgoal is to continue to provide a value proposition, combining quality, serviceand competitive pricing. Our main competitors in the retail channel for basicfamily apparel products are essentially the same as in the screenprint channel.
*3.

*Pursue international growthopportunities*
We expect to pursue further market penetration primarilywithin our existing screenprint channels in Europe, Mexico and the Asia/Pacificregion. We continue to seek opportunities for growth in Europe, as we expand ourproduct-lines, including the introduction of ring-spun cotton activewearproducts. In Mexico, we intend to expand our presence in the screenprint channelby building on the sales and distribution infrastructure that we have recentlyestablished in the country. In addition, in fiscal 2007, we began selling ourproducts in Japan in both the screenprint and retail channels and during fiscal2008, we established a sales and distribution network in China to positionGildan to service both the screenprint and retail channels. We have had adistributor network to service both the screenprint and retail markets inAustralia and New Zealand since 2001. 
*4.

*Continue to generate manufacturingand distribution cost reductions*
We seek to continuously improve our manufacturing anddistribution processes and cost structure by developing and investing incost-reduction initiatives. In addition to our continuing consolidation of ourmanufacturing operations in our Central American and Caribbean Basin hubs, ourcost reduction initiatives include, among others, our plans in fiscal 2009 toinstall biomass facilities as an alternate source of natural renewable energy inorder to reduce our reliance on high-cost fossil fuels and further reduce ourenvironmental footprint, as well as our plans to build a new distribution centrein Rio Nance, Honduras to handle labour intensive activities for mass-marketretail customers. 
*5.

*Pursue selective complementaryacquisitions*
We will evaluate further selective acquisitions, which couldcomplement our organic strategic growth opportunities. In addition, we willcontinue to seek opportunities where we believe we can lever our corecompetencies and position us in markets that offer the potential for superioreconomic returns. 
**Our Products **
We specialize in marketing and large-scale low-cost manufacturing of basic,non-fashion apparel products for customers requiring an efficient supply chainand consistent product quality for high-volume automatic replenishment programs.

In the screenprint channel, we sell activewear products,namely T-shirts, sport shirts and fleece in large quantities to wholesaledistributors as undecorated "blanks", which are subsequently decorated byscreenprinters and embroiderers with designs and logos. Consumers ultimatelypurchase the Corporation's products, with the Gildan label, in venues such as sports, entertainment and corporate events, and travel andtourism destinations. The Corporation's products are also utilized for workuniforms and other end-uses to convey individual, group and team identity. Ourproducts are made of cotton and of blends of cotton and synthetic fibres. Wesell our products to wholesale distributors under the Gildan brand.

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For the first nine months of calendar 2008, we achieved theleading overall market share in the U.S. screenprint channel of 51.9%. Incalendar 2007, our overall market share in this channel was 48.1%. All U.S.market share data is based on the S.T.A.R.S. Report. 

In the retail channel, we sell a variety of styles of socksand, to a much lesser extent at this stage, men's and boys' underwear andundecorated activewear products. We sell these products to mass-market andregional retailers in North America under various retailer private labelprograms and under the Gildan brand. 

Activewear and underwear represented 77% of our sales in fiscal 2008 and 86%of our sales in fiscal 2007. Socks represented 23% of our sales in fiscal 2008and 14% of our sales in fiscal 2007.**Market Overview***Target Market
Our markets for activewear, socks and underwear arecharacterized by low fashion risk compared to many other apparel markets, sinceour products are basic, frequently replenished and produced in a limited rangeof sizes, colours and styles, and since logos and designs for the screenprintmarket are not imprinted or embroidered by Gildan. 

The demand for activewear products in the screenprint channel has been drivenby several market trends such as: 
-  the use of activewear for uniform  applications; the use of activewear for corporate  promotions; the use of activewear for event  merchandising (such as concerts, festivals, etc.); the evolution of the  entertainment/sports licensing and merchandising businesses; the use of activewear products for  travel and tourism; the emphasis on physical fitness;  and the use and acceptance of  casual dress in the workplace. 
In addition, reductions in manufacturing costs, combined withquality enhancements in activewear apparel, such as pre-shrunk fabrics, improvedfabric weight, blends and construction, as well as an increased range of coloursand styles have provided consumers with superior products at lower prices. 

In the U.S. screenprint channel, T-shirt unit shipments havegrown at a compounded annual rate of 6.5%, between 1998 and 2007, according toS.T.A.R.S. reports produced by ACNielsen Market Decisions which tracks unitvolume shipments from U.S. wholesale distributors to U.S. screenprinters. Overthe same 10-year period, industry volume for T-shirts declined only once, in2001, by 3.4%. More recently, unit shipments for T-shirts decreased by 3.5% forthe nine-month period ended September 30, 2008. While T-shirt shipments fromU.S. distributors to screenprinters declined in 2001 and in the first ninemonths of calendar 2008, unit sales of Gildan T-shirts from U.S. distributors toscreenprinters increased by 8.1% and 4.7%, respectively, as a result ofcontinued market share gains. As noted in the "Outlook" section of themanagement's discussion and analysis on pages 34 to 35 of the 2008 AnnualReport, recent market conditions in the screenprint channel have deterioratedwith overall industry shipments from U.S. wholesale distributors toscreenprinters across all product categories down significantly in the months ofOctober and November 2008. 
While we have, in the past, achieved unit sales growth evenduring economic downturns, there can be no assurance that the current globalfinancial market crisis and the global economic slowdown will not negativelyimpact demand and sales for our products in the U.S. screenprint channel, whichaccounted for more than 75% of our total sales in fiscal 2008. The potential negative impact of a major economic downturn and decline incorporate and consumer spending could not only reduce unit sales volumes for theCorporation's activewear products in the screenprint channel, but result inlower unit selling prices due to a more unfavourable supply-demand andcompetitive environment. The same market and competitive factors and risks whichcould impact the U.S. screenprint channel may impact our sales and earnings inour other international screenprint markets. Similarly, while the basicreplenishment nature of our products sold into the mass-market retail channelmay moderate the negative impact of a downturn in overall economic conditionsand consumer spending, there is no assurance that our unit sales and sellingprices will not be negatively impacted by the current economic uncertainty. 

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*Competitive Environment*
The market for our products is highly competitive.Competition is generally based upon price, with reliable quality and servicealso being key requirements for success. Our primary competitors in NorthAmerica both in the screenprint and retail channels are major U.S.-basedmanufacturers of basic family apparel, such as the Hanes, Fruit of the Loom, andJerzees brands. Competition in socks in the U.S. mass-market retail channel ismore fragmented, with a higher proportion of private label programs which arefrequently outsourced from Asian contractors by their retail vendors. 

The competition in the European screenprint channel issimilar to that in North America, as we compete primarily with the U.S.-basedmanufacturers mentioned above. We also have large European-based competitorsthat do not have integrated manufacturing operations and source products fromsuppliers in Asia. In addition, we may face the threat of increasing globalcompetition. In particular, the U.S. sock industry is already subject to globalcompetition, including significant imports from Asia. 
**Sales and Marketing**
Our global sales and marketing office is located in St.Michael, Barbados where we employ more than 160 full-time employees. Our salesand marketing team is responsible for all customer-related functions includingsales management, marketing, customer service, credit management and salesforecasting. 

Our marketing strategy for the screenprint channelconcentrates primarily on the wholesale distributor catering to screenprinters,embroiderers and advertising specialty firms. We also promote our productsthrough appearances at tradeshows and trade magazine advertising and also engagein various forms of co-operative advertising with our major customers, includingprint advertising, catalogues and mailings and product sampling programs. Ourcompetitive strategy in the retail channel is based on delivering consistent,reliable product quality to our customers at competitive prices. 
**Customers**
In fiscal 2008, we sold our products in the United States,Canada and Europe and other international markets, which accounted for 90%, 5%and 5% of total sales, respectively. For a breakdown of our total sales bygeographic market for each of the last three financial years, reference is madeto Note 21(b) (ii) to the audited annual consolidated financial statements ofthe Corporation included in our 2008 Annual Report, which note is incorporatedherein by reference. 

Our customer base is composed of a relatively small number ofsignificant customers. We currently sell our products to approximately 200****customers. In fiscal 2008, our largest customer accounted for 23.1%of total sales, and our top ten customers accounted for 67.9% of total sales inthe retail and screenprint channel.****

The large majority of total sales in fiscal 2008 continued tobe made in the screenprint channel through our wholesale distributors. Althoughwe have long-term ongoing relationships with many of our customers, ourcontracts with our customers do not require them to purchase a minimum quantityof our products. Instead, we assess their projected requirements and then planour production and marketing strategy accordingly. 
**Our Manufacturing and Distribution Facilities***Manufacturing ****
To support our sales in the various markets, we have builtand are continuing to build modern manufacturing facilities located in CentralAmerica and the Caribbean Basin where we manufacture T-shirts, fleece, sportshirts, socks and underwear. Our largest manufacturing hub in Central Americaincludes our first integrated knitting, bleaching, dyeing, finishing and cutting textile facility (Rio Nance 1) to produce activewear and,more recently, underwear fabric. This facility, located in Rio Nance, Honduras,became operational in 2002. During 2007, we commenced production at anintegrated sock manufacturing facility (Rio Nance 3) and a new integratedtextile facility for the production of activewear fabric (Rio Nance 2), in RioNance, Honduras. In August 2007, we announced plans for the construction of asecond sock facility (Rio Nance 4) in Rio Nance, Honduras which is currentlyexpected to begin production during fiscal 2009. During Fiscal 2008, weannounced plans to construct another integrated textile facility for theproduction of activewear in Rio Nance (Rio Nance 5).

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We have also established a vertically-integrated CaribbeanBasin manufacturing hub with a textile facility for the production of activewearfabric in Bella Vista, Dominican Republic, which became operational in fiscal2005. We plan to undertake an incremental capacity expansion of our DominicanRepublic textile facility and we also intend to incrementally expand our "RioNance 1" textile facility in Honduras. 

In addition to our integrated sock manufacturing facilitylocated in our Central America hub, we operate U.S. sock manufacturingfacilities in Hillsville, Virginia and Fort Payne, Alabama, purchased as part ofthe sock manufacturing acquisitions in fiscal 2006 and fiscal 2008. 

Our sewing facilities are strategically located in closeproximity to our textile manufacturing facilities. We own and operate sewingfacilities in Nicaragua and Honduras to support our textile manufacturing hub inCentral America. To support our vertically-integrated production in theDominican Republic, we utilize third-party contractors in Haiti, and we are inthe process of establishing a sewing facility in the Dominican Republic which weexpect to be operational in fiscal 2009.*Yarn-Spinning*
CanAm Yarns, LLC ("CanAm"), our joint-venture company withFrontier Spinning Mills, Inc. ("Frontier"), operates yarn-spinning facilities inGeorgia and North Carolina. CanAm's yarn-spinning operations, together withsupply agreements currently in place with Frontier and other third-party yarnproviders, serve to meet our yarn requirements. 
*Distribution 
We distribute our products for the screenprint channel towholesale distributors in the United States from a company-owned distributioncentre in Eden, North Carolina as well as from a distribution centre operated bya third party in California. The third-party warehouse in California was addedin fiscal 2004 for the purpose of providing next day service to customerslocated on the U.S. west coast. We continue to distribute products for theretail channel from a facility in Martinsville, Virginia. In addition, with ouracquisition of Prewett in fiscal 2008, two Prewett facilities, located in FortPayne, Alabama, were added to our distribution network. These two Prewettfacilities also service our retail sock distribution channel. Our distributioncentre in Eden, North Carolina continues to be dedicated to supporting ourcustomers in the screenprint channel. 

Our Canadian wholesale and retail customers are serviced froma third-party distribution centre located in Mississauga, Ontario. Customers inEurope are serviced from distribution centres operated by third parties in Meer,Belgium and Manchester, United Kingdom.****Customers in Australia andNew Zealand are serviced with full container shipments from our Eden, NorthCarolina distribution centre. Our Mexican customers are serviced from athird-party distribution centre located in Tultitlan, Mexico and customers inthe Asia-Pacific region are serviced from a third-party distribution centre inShenzhen, China. **Raw Materials**
Cotton and polyester fibres are the main raw materials usedin the manufacturing of our products. Cotton is used in the manufacturing of100% cotton yarn while polyester is added in the manufacturing ofcotton-polyester blend yarn. Polyester pricing is negotiated on an annual basis,while cotton fibre is typically purchased for future delivery at pre-determinedprices under contracts as deemed appropriate by management. 

During fiscal 2008, most of our yarn requirements for theproduction of our product lines were met by our long-term supply agreements withthird-party suppliers, as well as by our jointly owned CanAm yarn-spinningfacilities in Cedartown, Georgia and Clarkton, North Carolina. We expect thatmost of our yarn requirements will continue to be met by these sources. 

The two primary sources of energy consumed in our manufacturing facilitiesare electricity, which is used to power production equipment, and bunker fuel,which is used to generate steam required in the production process. Theelectricity requirements at our two main production complexes areprovided by a public utility in Honduras and from a private supplier in theDominican Republic. Electricity rates are variable and are in part related tounderlying oil prices. The bunker fuel used in our operations is supplied fromlocal third-party suppliers, and the pricing is highly dependant oninternational market prices for bunker fuel. We expect to reduce our bunker fuelrequirements and generate cost savings upon the completion of two biomasscombustion facilities, which are expected to be built during fiscal 2009. 

9

We also purchase chemicals, dyestuffs and trims through a variety ofsuppliers. These products have historically been available in sufficient supply.
**Management Information Systems**
Our Enterprise Resource Planning ("ERP") system supports themajority of our operations in the areas of finance, manufacturing and customerservice. This system is centralized and is accessed from all of our locationsthrough secure networks. Our ERP system is linked to servers supporting bothlocal processes and specialized applications, including payroll anddistribution. We continue to leverage our existing ERP system by adding newfunctionality in the areas of supply chain planning, demand forecasting andbusiness intelligence. Due to our increasing dependence on the availability ofour computer systems to support our operations, we plan to continue, in fiscal2009, to implement initiatives to enhance our information technology ("IT")processes and infrastructure based on the Information Technology InfrastructureLibrary, a framework of best practices approaches intended to facilitate thedelivery of high quality IT services.**Seasonality**
The activewear business is seasonal and we have historicallyexperienced quarterly fluctuations in operating results. Typically, demand forour T-shirts is highest in the third quarter of each fiscal year, whendistributors purchase inventory for the peak summer selling season, and lowestin the first quarter of each fiscal year. Demand for fleece is typicallyhighest, as a result of cooler weather, in the third and fourth quarters of eachfiscal year. The seasonality of specific product lines is consistent with thatexperienced by other companies in the activewear industry. During the year, weoperate our mature facilities at full capacity in order to be cost efficient.Consequently, with the seasonal sales trends of our business, we experiencefluctuations in our inventory levels throughout the year. For our sock products,demand is typically highest in the first and fourth quarters of each fiscalyear, stimulated largely by the cooler weather, the need to support requirementsfor the back-to-school period and the peak retail selling during the Christmasholiday season. Management anticipates that the seasonality we have historicallyexperienced will continue in the future, although it is expected to be somewhatmitigated by our product diversification. 
**Trade and Regulatory Environment**
Although the textile and apparel industry has historicallybeen the subject of significant worldwide protection, trade liberalization hasdiminished this protection in recent years. For example, U.S. safeguardsimposing quotas on annual imports of certain categories of Chinese originatingtextiles and apparel will expire at the end of 2008, although import duties willremain. The United States, Canada, and Mexico have also implemented several freetrade agreements and trade preference programs to enhance trade with theirtrading partners. We have attempted to leverage the benefits of the tradeliberalization climate by shifting our manufacturing capabilities to strategiclocations. 
*United States
A number of regional trade agreements and preferenceprograms, such as the North American Free Trade Agreement ("NAFTA"), theCaribbean Basin Trade Partnership Act ("CBTPA"), the Dominican Republic-CentralAmerica-United States Free Trade Agreement ("CAFTA-DR") and the HaitianHemispheric Opportunity through Partnership Encouragement Act ("HOPE"), allowqualifying textiles and apparel from participating countries duty-free access tothe U.S. market. The United States adopted two of the newest programs, CAFTA-DRand HOPE (as amended by HOPE II legislation in 2008), to strengthen and developU.S. economic relations with Central America, the Dominican Republic, and Haiti.CAFTA-DR provides for the application of safeguards in the form of reinstatementof normal duties if increased imports cause or threaten to cause substantialinjury to a domestic industry. In 2008, the United States imposed such asafeguard against socks imported from Honduras. The safeguard is in the form ofa 5% duty on socks imported from Honduras from July through December 2008, whichaffects our imports of socks from our integrated Honduran sock facility. TheUnited States has agreed with Honduras not to extend or reimpose the sockssafeguard beyond 2008. Under the provisions of the CAFTA-DR agreement, asafeguard, upon expiration, cannot be renewed. CAFTA-DR and HOPE benefit ourimports from participating countries, but there can be no assurance that futuredevelopments in trade legislation will not adversely impact our business. 

10
*Canada
Textile and apparel imports into Canada benefit from bothfree trade agreements and trade preference programs, such as NAFTA and Canada'sLeast Developed Developing Countries ("LDDC") Initiative. NAFTA provides dutyfree treatment of qualifying goods from the United States and Mexico. The LDDCInitiative provides trade benefits to 48 least developed countries. Our apparelproducts from the LDDC's are eligible for importation into Canada duty-free andquota-free if they meet applicable rules of origin. Our apparel productsimported into Canada are also eligible for duty remission under the CanadianOutward Processing Initiative, adopted in 2008, if they are produced in GeneralPreferential Tariff beneficiary developing countries with Canadian textiles andotherwise meet the requirements of this initiative. 
*Mexico
Imports into the Mexican market may qualify for tradepreferences from various free trade agreements such as NAFTA, theMexico-Nicaragua Free Trade Agreement, and the Mexico-Northern Triangle RegionalTrade Agreement which includes El Salvador, Guatemala and Honduras as membercountries. 
*European Union
In addition to free trade arrangements among the individualcountries within the European Union, the European Union also has preferentialtrade agreements with other European countries and with countries outside ofEurope, such as the free trade agreement between the European Union and Mexico.Furthermore, the European Union also enacted a Generalized System of Preferences("GSP") and an Africa-Caribbean-Pacific program that allow duty-free andquota-free entry into the European Union of qualifying articles, includingapparel, from developing countries and least developed countries such asHonduras, Nicaragua and Haiti. However, discussions are ongoing at the EuropeanUnion level regarding the reform of certain of the GSP rules of origin. 
*Asia-Pacific
Australia has a free trade agreement with the United States.Additionally, Australia has adopted legislation similar to the legislation inforce in Canada to allow duty-free and quota-free entry of textiles and apparelarticles from least developed countries, subject to applicable rules of origin.

A safeguard agreement limiting annual imports of Chinese textiles and apparelinto the European Union expired at the end of 2007, although import duties willremain. 
**Intellectual Property**
We own several registered trademarks including, among others,the Gildan "logo" in Canada, "Gildan" and "Gildan Activewear" in Canada, theUnited States and many countries in Europe, Central America, South America andAsia, as well as in Australia. Applications for the registration of the "Gildan"trademark are also pending in certain countries. We have and intend to continueto maintain our trademarks and the relevant registrations, and will activelypursue the registration of trademarks in Canada, the United States and abroad.
**Environmental Regulation
We are subject to various federal, state and localenvironmental and occupational health and safety laws and regulations in thejurisdictions in which we operate concerning, among other things, wastewaterdischarges, storm water flows, and solid waste disposal. Our manufacturingplants generate small quantities of hazardous waste, which are either recycledor disposed of off-site. As part of our Corporate Environmental Policy, wemonitor, control and manage environmental issues through policies including, butnot limited to, the recycling and creation of measures for waste prevention,minimization, recovery and treatment at all stages of the production cycleincluding the off-site disposal of any hazardous waste. We believe that we arein compliance in all material respects with the regulatory requirements of thosejurisdictions in which our facilities are located. 

11

In line with our commitment to the environment as well as tothe health and safety of our employees we incur capital and other expenditureseach year that are aimed at achieving compliance with current environmentalstandards. For fiscal 2008, the requirements with regard to environmentalprotection did not have a significant financial or operational impact on theCorporation's capital expenditures, earnings and competitive position. Althoughwe do not expect that the amount of these expenditures in the future will have amaterial adverse effect on our operations, financial condition or liquidity,there can be no assurance that future changes in federal, state, or localregulations, interpretations of existing regulations or the discovery ofcurrently unknown problems or conditions will not require substantial additionalenvironmental remediation expenditures or manufacturing interruption that couldhave a material adverse effect on our business. Similarly, the extent of ourliability, if any, for past failures to comply with laws, regulations andpermits applicable to our operations cannot be determined. 
**Labour Practices**
We seek to provide favourable working conditions for allemployees. We have implemented internal and external monitoring programs thatpermit us to verify compliance with local labour laws, as well as withinternationally recognized labour standards. In addition to having our own Codeof Conduct, which is available on our website at www.gildan.com, we haveobtained Worldwide Responsible Apparel Production ("WRAP") re-certification forall our Gildan-owned sewing facilities. Furthermore, our newer sewing facilityin Nicaragua was successfully certified under WRAP for the first time in fiscal2008. Three quarters of the facilities of our contractors located in Haiti arealso WRAP certified. We actively encourage and are in the process ofcontractually obligating all of our third-party contractors to follow prescribedemployment policies as well as our Code of Conduct. 

In November 2003, we joined the FLA as a "ParticipatingCompany". The FLA is internationally recognized and respected as a non-profitorganization whose goal is to promote adherence to international labourstandards and to improve working conditions for employees worldwide. In fiscal2007, the FLA accorded accreditation status to our labour compliance program.

Until 2007, the majority of our social compliance monitoringwas performed by external third-party auditors. In fiscal 2007, we successfullybegan internal monitoring audits that complement these external independentaudits. Independent third party monitors also regularly audit our plants,announced or unannounced. During fiscal 2008, over 30% of our audits werecarried out by third-party auditors. 
**3.2 

Risk Factors**
Please see the "Financial Risk Management" and the "Risks and Uncertainties"sections of our management's discussion and analysis on pages 35 to 39 and 43 to46, respectively, of the 2008 Annual Report. 
**3.3 

Employees**
As at October 5, 2008, we employed 20,116 full-time employeesworldwide. We consider our relations with our employees to be very good and, asof the date hereof, we have not experienced any work stoppages that have had amaterial impact on our operations. 
**4.

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

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**5. 

CAPITAL STRUCTURE

First Preferred Shares*Issuance in Series*
The First Preferred shares are issuable in series and theBoard of Directors has the right, from time to time, to fix the number of, andto determine the designation, rights, privileges, restrictions and conditionsattaching to, the First Preferred shares of each series subject to thelimitations, if any, set out in the Articles of the Corporation. 
*Rank*
The First Preferred shares rank senior to the SecondPreferred shares and the Common Shares with respect to the payment of dividends,return of capital and the distribution of assets in the event of theliquidation, dissolution or winding-up of Gildan. The First Preferred shares ineach series rank equally with the First Preferred shares of any other series.
*Voting Rights*
Unless the Articles otherwise provide with respect to anyseries of the First Preferred shares, the holders of the First Preferred sharesare not entitled to receive any notice of or attend any meeting of theshareholders of Gildan and are not entitled to vote at any such meeting. 
**Second Preferred Shares***Issuance in Series*
The Second Preferred shares are issuable in series and theBoard of Directors has the right, from time to time, to fix the number of, andto determine the designation, rights, privileges, restrictions and conditionsattaching to, the Second Preferred shares of each series subject to thelimitations, if any, set out in the Articles of the Corporation. 
*Rank*
The Second Preferred shares are subject and subordinate tothe rights, privileges, restrictions and conditions attaching to the FirstPreferred shares. The Second Preferred shares rank senior to the Common Shareswith respect to payment of dividends, return of capital and distribution ofassets in the event of the liquidation, dissolution or winding-up of Gildan. TheSecond Preferred shares in each series rank equally with the Second Preferredshares of any other series. 
*Voting Rights*
Unless the Articles otherwise provide with respect to anyseries of the Second Preferred shares, the holders of the Second Preferredshares are not entitled to receive any notice of or attend any meeting of theshareholders of Gildan and are not entitled to vote at any such meeting. 
**Common Shares**
Following the conversion of all of the Corporation's Class BMultiple Voting shares into Class A Subordinate Voting shares, the Corporation'sshareholders approved a special resolution on February 2, 2005 to amend theCorporation's Articles in order to change each of the issued and outstandingClass A Subordinate Voting shares into one newly-created Common Share and toremove the Class B Multiple Voting shares and the Class A Subordinate Votingshares.****
The Common Shares are subject and subordinate to the rights,privileges, restrictions and conditions attaching to the First Preferred sharesand the Second Preferred shares. Each holder of Common Shares shall have theright to receive any dividend declared by the Corporation and the right toreceive the remaining property and assets of the Corporation on dissolution. 

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

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**6.

**MARKET FOR SECURITIES**
The Common Shares are listed on the New York Stock Exchange(the "NYSE") and the Toronto Stock Exchange (the "TSX") under the symbol "GIL".The Class A Subordinate Voting shares (now the Common Shares), which were issuedat an offering price of $0.88 (Cdn$1.29), on a post-split basis, began tradingon 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 forthe Class A Subordinate Voting shares. We delisted such shares from AMEX onAugust 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 arestructuring 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 tradingvolume of the Common Shares for the fiscal year ended October 5, 2008 on the TSX(in Cdn$) and on the NYSE (in US$). 

**COMMON SHARES**Toronto Stock Exchange (TSX)New York Stock Exchange (NYSE) Month HighLowTrading VolumeMonthHigh LowTrading VolumeOctober 200744.5538.3612,500,800October 200746.1738.398,605,800November 200743.2134.1713,316,000November 200746.4736.3911,338,200December 200742.1436.799,512,300December 200741.9936.3813,623,200January 200841.8930.0015,628,500January 200841.8428.8219,762,400February 200842.7336.7510,363,800February 200842.7436.5612,962,300March 200840.0832.2512,026,200March 200839.2932.6012,703,000April 200839.5324.0719,556,000April 200838.6023.7529,493,000May 200830.0125.2022,279,800May 200830.3624.7624,601,400June 200830.5225.2812,387,600June 200829.9025.0118,598,400July 200828.4022.0913,993,300July 200827.9921.8630,844,800August 200829.9522.9312,272,100August 200828.1421.9124,332,100September 200828.9722.6115,427,100September 200827.8221.7123,037,900October 1 to 5, 200824.5323.091,719,500October 1 to 5, 200823.1021.502,170,600**7.

**DIRECTORS AND OFFICERS**
Listed below is certain information about the currentdirectors of Gildan. The directors have served in their respective capacitiessince their election and/or appointment and will continue to serve until thenext 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    StatesCorporate DirectorFebruary 1999Glenn J. Chamandy  Westmount, Québec, CanadaPresident and Chief Executive    Officer of the CorporationMay 1984William D. Anderson(1)(3)  Toronto, Ontario, CanadaCorporate DirectorMay 2006Sheila O'Brien (2)(3)  Calgary, Alberta, CanadaCorporate Director and Business    AdvisorJune 2005Pierre Robitaille(1)(2)  St-Lambert, Québec, CanadaCorporate Director and Business    Advisor    February 2003
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**Name and Municipality of Residence **Principal Occupation****Director Since**   Richard P. Strubel (1)(3)  Chicago, Illinois, United StatesCorporate DirectorFebruary 1999   Gonzalo F. Valdes-Fauli(1)(2)  Key Biscayne, Florida, United StatesChairman 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 Human Resources and Compensation Committee. (4) Chairman of the Board. 

Listed below is certain information about the executive officers of Gildan inoffice as of the date hereof. 
**Name and Municipality of Residence****Position Held Within the    Corporation and Principal Occupation**  Glenn J. Chamandy (1) Westmount, Québec, CanadaPresident, Chief Executive Officer and    Director  Laurence G. Sellyn (1) Beaconsfield, Québec, CanadaExecutive Vice-President, Chief Financial and    Administrative Officer  Michael R. Hoffman St. James, BarbadosPresident, Gildan Activewear SRL  Georges Sam Yu Sum (1) Hampstead, Québec, CanadaExecutive Vice-President, Operations  Benito Masi (1) Laval, Québec, CanadaExecutive Vice-President, Manufacturing  Cam Gentile (1)Executive Vice-President, Organizational    Development and ChangeHudson, Québec, CanadaManagement  Eric R. Lehman(1) Montreal, Québec, CanadaExecutive Vice-President, Supply Chain
________________________ (1) Officer of the Corporation. 
*Glenn J. Chamandy is one of the founders of theCorporation and has devoted his business career to leading the development ofGildan into an industry leader. Prior to February 2004, Mr. Chamandy held theposition of President and Chief Operating Officer. He was then named Presidentand Co-Chief Executive Officer and, in August 2004, he was appointed to theposition of President and Chief Executive Officer. *Robert M. Baylis, Chairman of theBoard of the Corporation, serves as a director of several large corporations,including the New York Life Insurance Company (life insurance provider), HostHotels & Resorts Inc*.*(luxury hotels and resorts) and PartnerRe Ltd.(multi-line reinsurance provider). He is also a trustee of the Rubin Museum ofArt in New York City, a trustee of the Woods Hole Oceanographic Institution, anoverseer of the University of Pennsylvania Museum, and a member of the AdvisoryCouncil of the Economics Department of Princeton University. He was formerly adirector of Covance Inc. (drug development), Gryphon Holdings, Inc. (insurancecompany) 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 this investment banking firm and its associatedcorporations, including a term as the Chairman and Chief Executive Officer ofCredit Suisse First Boston (Pacific). Mr. Baylis was educated at PrincetonUniversity and Harvard Business School and is a chartered financial analyst. *William D. Anderson has had a career as a business leaderin Canada spanning over thirty years. Mr. Anderson joined the Bell Canadaorganization in 1992, where from 1998 to 2001 he served as Chief FinancialOfficer of BCE Inc., Canada's largest telecommunications company. From 2001 to2005, Mr. Anderson served as President of BCE Ventures (the strategic investmentunit of BCE Inc.) and he was previously, from 2001 to 2007, the Chairman andChief Executive Officer of Bell Canada International Inc. (a subsidiary of BCEthat was formed to invest in telecommunications operations outside Canada).Prior to joining the Bell Canada organization, Mr. Anderson was in publicpractice for nearly twenty years with the accounting firm KPMG, where he was apartner for eleven years. Mr. Anderson also serves on the boards of directors of TransAlta Corporation (power generation and energy marketing firm) and MDS Inc.(global life sciences company). Mr. Anderson was educated at the University ofWestern Ontario and is a member of the Institute of Chartered Accountants ofOntario.**
15 
*Sheila O'Brien, CM is President ofBelvedere 1 Investments Ltd., a private investment company, and is also abusiness advisor and corporate director. She has had a thirty-year career as asenior executive in the oil and gas and petrochemical sectors in the areas ofhuman resources, investor relations and public and government relations. Priorto 2004, Ms. O'Brien was Senior Vice-President, Human Resources, Public Affairs,Investor and Government Relations at NOVA Chemicals Corporation, a producer ofcommodity plastics and chemicals, where she was the architect of a corporaterestructuring practice that was designated a worldwide best practice by WatsonWyatt Consulting Firm. She has also been active on the boards of directors ofover thirty public sector and not-for-profit organizations and was awarded theOrder of Canada for her community leadership in 1998. Ms. O'Brien also serves onthe boards of directors of MaRS (Medical and Related Sciences) (Toronto-basedbiotechnology accelerator), Advantage Energy Income Fund (oil and gas royaltytrust) and, Skye Resources Inc. (nickel mining company), which merged withHudbay Minerals in August 2008. In addition to her corporate career, she hasacted as special advisor to the president at the University of Calgary. She is agraduate of the MTC program at the University of Western Ontario and completed aone-year sabbatical on creativity and innovation at various U.S. schools in1990. *Pierre Robitaille is a business advisor and a corporatedirector. Mr. Robitaille previously pursued his career at SNC-Lavalin GroupInc., a global engineering-construction firm, where he was ExecutiveVice-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 publicaccounting and management consulting firm of Ernst & Whinney, where he held thepositions of Managing Partner of the Montreal office, President of the firm inQuébec, and member of its national board of directors. Mr. Robitaille alsoserves on the boards of directors of Nav Canada (civil air navigation servicesprovider), Swiss Re Company of Canada and Swiss Re Life & Health Co. Canada(reinsurance companies). Mr. Robitaille is a Fellow member of the Québec Orderof Chartered Accountants. He was educated at HEC-Montreal and McGill BusinessSchool. 
*Richard P. Strubel is a corporate director. Prior to2008, he was Vice-Chairman of the Board of Cardean Learning Group (formerlyknown as Unext), a provider of advanced education over the Internet, where from1999 to 2004 he served as President and Chief Operating Officer. From 1990 to1999, Mr. Strubel was Managing Director of Tandem Partners, Inc., aprivately-held management services firm, and from 1984 to 1994, he served asPresident and Chief Executive Officer of Microdot, Inc. Prior to that, Mr.Strubel served as President of Northwest Industries, then a NYSE-listed company,which included Fruit of the Loom and BVD among its operating entities. Mr.Strubel also serves on the boards of directors of the mutual funds of GoldmanSachs & Co. and Goldman Sachs Hedge Fund Partners, and is Chairman of the Boardof the Mutual Funds of The Northern Trust. Mr. Strubel is also Trustee of theUniversity of Chicago and Chairman of its Audit Committee. He was educated atWilliams College and Harvard Business School.*****Gonzalo F. Valdes-Fauli is Chairman of the Board ofBroadSpan Capital LLC, an investment banking firm specializing in financialadvisory services. Mr. Valdes-Fauli retired from Barclays Bank PLC (majorUK-based global bank) in 2001, where he held the position of Vice-Chairman,Barclays Capital, and Group CEO, Latin America. Mr. Valdes-Fauli also serves onthe board of directors of Blue Cross Shield of Florida (health insuranceprovider), where he is Lead Chairman. Mr. Valdes-Fauli also served as Chairmanof the Board of Republic Bank of Dominican Republic (financial servicesprovider) until November 2007. He is also Trustee Emeritus of the University ofMiami and Spring Hill College in Mobile, Alabama. Mr. Valdes-Fauli holds aMaster's Degree in international finance from Thunderbird Graduate School forInternational Management. 
*Laurence G. Sellyn was appointed to the position ofExecutive Vice-President, Chief Financial and Administrative Officer of theCorporation in November 2005. He joined Gildan as Executive Vice-President,Finance and Chief Financial Officer of the Corporation in April 1999. Since June2008, Mr. Sellyn is on the advisory board of Héritage Montréal and is theChairman of its 2008 Fundraising Campaign. He is also a Fellow of the Instituteof Chartered Accountants of England and Wales. Prior to joining Gildan, Mr.Sellyn served as Senior Vice-President, Finance and Corporate Development andChief 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, includingCorporate Controller and Vice-President, Business Planning and Development. 
*Michael R. Hoffman joined Gildan in October 1997. Heserved as Vice-President, Sales and Marketing for the international divisionuntil 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.

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*Georges Sam Yu Sum has been Executive Vice-President,Operations of the Corporation since 2000. From 1998 to 2000, he served asVice-President, Operations of the Corporation and from 1995 to 1998, he servedas Director of Operations of the Corporation. Prior to joining Gildan in 1995,Mr. Sam Yu Sum spent sixteen years with Dominion Textiles, where he served invarious managerial capacities, from manufacturing to sales. 
*Benito Masi has been involved in apparel manufacturing inNorth America for over twenty-five years. He joined Gildan in 1986, where heheld various positions. He was appointed Vice-President, Apparel Manufacturingin February 2001 and his title was changed to Vice-President, Corporate ApparelOperations in September 2003. In August 2004, he was appointed ExecutiveVice-President, Apparel Manufacturing and was appointed ExecutiveVice-President, Manufacturing in January 2005. 
*Cam Gentile joined the Corporation in 2006 as ExecutiveVice-President, Organizational Development and Change Management. He has overthirty years of experience in the pulp and paper industry in senior managementpositions at Domtar Inc., Transcontinental Printing Inc., Paperboard IndustriesInternational Inc. and Uniboard Canada Inc. He is currently a member of theOrder of Engineers of Québec, President and Chairman of the Board of Directorsof the Québec Institute of Graphic Communications, as well as Vice-President andmember of the Board of Directors of Village Theatre in Hudson, Québec. 
*Eric R. Lehman joined the Corporation in December 2006 asExecutive Vice-President, Supply Chain. He has over twenty years of experiencein the supply chain function with major national apparel brands. Prior tojoining Gildan, Mr. Lehman was employed by Russell Corporation, where he lastserved as Vice President of Supply Chain. Prior to that, he held senior supplychain planning positions at both Fruit of the Loom, Inc. and the Hanes Divisionof Sara Lee Corporation. 

As at December 18, 2008, the executive officers and directorsof the Corporation as a group own 8,312,609 Common Shares, which represents 6.9%of the voting rights attached to all Common Shares. 
**8. 

AUDIT COMMITTEE DISCLOSURE 

Mandate of the Audit and Finance Committee**
The mandate of the Audit and Finance Committee is included herewith asAppendix A. 
**Composition of the Audit and Finance Committee**
The Audit and Finance Committee is composed of fourindependent and financially literate directors, as those terms are defined inthe rules of the Canadian Securities Administrators and the U.S. Securities andExchange Commission as well as the standards of the NYSE. Their education andexperience that are relevant to the performance of their responsibilities asmembers of the Audit and Finance Committee are as follows: 
***Pierre Robitaille – Mr. Robitaille is a businessadvisor and corporate director. He is retired from SNC-Lavalin Group Inc., aglobal engineering-construction firm, where he was Executive Vice-President andChief Financial Officer from 1990 to 1998. Prior to this, Mr. Robitaille was inpublic practice for more than twenty years with the public accounting andmanagement consulting firm of Ernst & Whinney, where he held the positions ofManaging Partner of the Montreal office, President of the firm in Québec andmember of the firm's national board of directors. Over the course of his career,Mr. Robitaille has acquired competence in the audit of major public and privatecompanies and a familiarity with internal controls and financial reportingprocedures. Mr. Robitaille is a Fellow member of the Québec Order of CharteredAccountants. He was educated at HEC-University of Montreal and McGill BusinessSchool. 
***William D. Anderson – Mr. Anderson is a charteredaccountant and has had a business career spanning over thirty years. From 1998to 2001, he served as Chief Financial Officer of BCE Inc., Canada's largesttelecommunications company. Most recently, Mr. Anderson served as President ofBCE Ventures (the strategic investment unit of BCE Inc.) and previously he wasthe Chairman and Chief Executive Officer of Bell Canada International Inc. (asubsidiary of BCE that was formed to invest in telecommunications operationsoutside Canada). Prior to joining the Bell Canada organization in 1992, Mr.Anderson was in public practice for nearly twenty years with the accounting firmKPMG, where he was a partner for eleven years. Mr. Anderson was educated at theUniversity of Western Ontario and is a member of the Institute of CharteredAccountants of Ontario. 
***Richard P. Strubel – Mr. Strubel is a corporatedirector. Prior to 2008, he was Vice-Chairman of the Board of Cardean LearningGroup, where he previously served as President and Chief Operating Officer.Prior to that, Mr. Strubel served as 

17 

Managing Director of Tandem Partners, Inc., a privately-heldmanagement services firm, President and Chief Executive Officer of Microdot,Inc. and President of Northwest Industries, then a NYSE-listed company whichincluded Fruit of the Loom and BVD among its operating entities. Mr. Strubelalso serves on the boards of directors of the mutual funds of Goldman Sachs &Co., and Goldman Sachs Hedge Fund Partners and is Chairman of the Board of theMutual Funds of The Northern Trust. Mr. Strubel is also Trustee of theUniversity of Chicago and Chairman of its Audit Committee. He was educated atWilliams College and Harvard Business School. 
***Gonzalo F. Valdes-Fauli – Mr. Valdes-Fauli is aretired Vice-Chairman of Barclays Capital, the investment banking division ofBarclays Bank, London, England. Mr. Valdes-Fauli served as a member of themanagement committee of Barclays Capital from 1988 to 2001. He was Group CEO ofBarclays Bank Latin America from 1988 to 2001. He is Chairman of BroadSpanCapital LLC and served as Chairman of the Board of Republic Bank of DominicanRepublic until November 2007. Mr. Valdes-Fauli has more than thirty years ofexperience in finance and holds a Master's Degree in international finance fromThunderbird Graduate School for International Management. 
**Pre-Approval of Non-Audit Services**
In accordance with the Code of Ethics of CharteredAccountants of Quebec's independence standards for auditors, the *Sarbanes-Oxley Act of 2002* and rules of the U.S. Securities and ExchangeCommission, the Corporation is restricted from engaging its external auditor toprovide certain non-audit services to the Corporation and its subsidiaries,including bookkeeping or other services related to the accounting records orfinancial statements, information technology services, valuation services,actuarial services, internal audit services, corporate finance services,management functions, human resources functions, legal services and expertservices unrelated to the audit. The Corporation does engage its externalauditor from time to time to provide certain non-audit services other than therestricted services. All non-audit services must be specifically pre-approved bythe Audit and Finance Committee. 
**External Auditor Service Fees**
The aggregate fees billed by KPMG LLP ("KPMG"), theCorporation's external auditor, for various audit-related and non-audit servicesrendered for the fiscal years 2008 and 2007 were as follows: 
*Audit Fees — The aggregate audit fees billed by KPMG forprofessional services rendered for the annual audit of the Corporation'sconsolidated financial statements, quarterly reviews of the Corporation'sfinancial statements and services provided in connection with statutory andregulatory filings or engagements were Cdn$1,237,028 for fiscal 2008 andCdn$1,214,402 for fiscal 2007. The audit fees include fees relating to KPMG'saudit of the effectiveness of the Corporation's internal control over financialreporting. 
*Audit-Related Fees — The aggregate audit-related feesbilled by KPMG were Cdn$166,400 for fiscal 2008 and Cdn$112,800 for fiscal 2007.These services consisted of miscellaneous assurance services. 
*Tax Fees — The aggregate tax fees billed by KPMG wereCdn$484,817 for fiscal 2008 and Cdn$935,066 for fiscal 2007. These servicesconsisted of tax compliance, including the review of tax returns, assistanceregarding income, capital and sales tax audits, the preparation of annualtransfer pricing studies, tax advisory services relating to domestic andinternational taxation and customs and duties. 
*All Other Fees — The aggregate fees billed by KPMG forall other professional services rendered were nil for fiscal 2008 and nil forfiscal 2007. 
**9.

**LEGALPROCEEDINGS**
With the exception of the legal proceedings mentioned below,the Corporation is only a party to claims and litigation arising in the normalcourse of its operations. While we cannot predict the final outcome of theclaims and litigation arising in the normal course of its operations, managementdoes not currently expect the resolution of these matters to have a materialadverse effect on the consolidated financial position or results of operationsof Gildan. 

As of the date hereof, the claims with respect to which Gildan was a party toor involved in, for damages in excess of 10% of its current assets, are thefollowing: 

18 
**Canadian Class Action Suits**
On June 12, 2008, a proposed class action lawsuit on behalfof persons who acquired Common Shares between August 2, 2007 and April 29, 2008was filed in the Ontario Superior Court of Justice alleging negligence andnegligent/reckless misrepresentation in respect of the Corporation's priorstatements concerning its financial guidance for the 2008 fiscal year andcomments regarding the scale of production of its Dominican Republic facility.The claim further proposes to seek leave from the Ontario court to bringstatutory misrepresentation civil liability claims under Ontario's *SecuritiesAct*. The Ontario suit claims damages of Cdn$500 million, punitive damages ofCdn$5 million and other monetary relief. 

A motion has also been filed on June 17, 2008 before theQuébec Superior Court for authorization to commence a class proceeding on behalfof persons who acquired Common Shares between August 2, 2007 and April 29, 2008.It makes similar allegations as the Ontario Action and alleges negligence andnegligent/reckless misrepresentation. The Québec motion seeks to proceed with aclaim for unspecified damages and other monetary relief. 

Both Canadian proceedings have yet to be certified as classactions by their respective courts. The Corporation strongly contests the basisupon which these actions are predicated and intends to vigorously defend itsposition. However, due to the inherent uncertainties of litigation, it is notpossible to predict the final outcome of these lawsuits or determine the amountof any potential losses, if any. 
**United States Class Action Suits**
On June 9, 2008, Gildan and certain of its senior officerswere named as defendants in several proposed class action lawsuits filed in theUnited States District Court for the Southern District of New York on behalf ofpersons who purchased or otherwise acquired Common Shares between August 2, 2007and April 29, 2008. The lawsuits allege violations of United States federalsecurities laws and assert that the Corporation issued a series of materiallyfalse and misleading statements concerning the Corporation's financialperformance and prospects. These U.S. lawsuits have been consolidated, and aconsolidated amended complaint was filed on November 17, 2008. The claims in theU.S. suit are for unspecified damages. 

The U.S. proceeding has yet to be certified as a class actionby the court. The Corporation strongly contests the basis upon which theseactions are predicated and intends to vigorously defend its position. However,due to the inherent uncertainties of litigation, it is not possible to predictthe final outcome of these lawsuits or determine the amount of any potentiallosses, if any. 
**10. 

TRANSFER AGENT AND REGISTRAR**
The transfer agent and registrar of the Corporation isComputershare Investor Services Inc., having offices in Montreal and Toronto atwhich the register of transfer of the Common Shares is held. The co-transferagent and co-registrar of the Corporation is Computershare Trust Company, N.A.,having an office in Golden, Colorado. 
**11. 

MATERIAL CONTRACTS**
Other than the agreements entered into the normal course ofbusiness, the only material agreement entered into in fiscal 2008, or beforefiscal 2008 and which is still in force is the Shareholder Rights Plan Agreementapproved by the Board of Directors on December 1, 2004 and subsequently ratifiedby the Corporation's shareholders on February 2, 2005. This agreement was filedthrough SEDAR on December 2, 2004. 
**12. 

INTERESTS OF EXPERTS**
KPMG, the external auditor of the Corporation, reported onthe fiscal 2008 audited consolidated financial statements of the Corporation,which were filed with the securities regulatory authorities. We are advisedthat, as at the date hereof, the members of KPMG are independent in accordancewith the Code of Ethics of Chartered Accountants of Québec. 
**13. 

FORWARD – LOOKING INFORMATION**
Certain statements included in this Annual Information Formconstitute "forward-looking statements" within the meaning of the U.S. *Private Securities Litigation Reform Act of 1995* and Canadian securitieslegislation and regulations, and are subject to important risks, uncertaintiesand assumptions. This forward-looking information includes, amongst others,information with respect to our objectives and the strategies to achieve theseobjectives, as well as information with respect to our beliefs, plans,expectations, anticipations, estimates and intentions. Forward-lookingstatements generally can be identified by the use of conditional orforward-looking terminology such as "may", "will", "expect", "intend","estimate", "anticipate", "plan", "foresee", "believe" or "continue" or thenegatives of these terms or variations of them or similar terminology. We referyou to the Corporation's filings with the Canadian securities regulatoryauthorities and the U.S. Securities and Exchange Commission, as well as the"Financial Risk Management" and "Risks and Uncertainties" sections of themanagement's discussion and analysis on pages 35 to 39 and 43 to 46,respectively, of the 2008 Annual Report, for a discussion of the various factorsthat may affect the Corporation's future results. Material factors andassumptions that were applied in drawing a conclusion or making a forecast orprojection are also set out throughout this document. 

19 

Forward-looking information is inherently uncertain and theresults or events predicted in such forward-looking information may differmaterially from actual results or events. Material factors, which could causeactual results or events to differ materially from a conclusion, forecast orprojection in such forward-looking information, include, but are not limited to:
-  general economic conditions such as commodity prices, currency  exchange rates, interest rates and other factors over which we have no  control; the impact of economic and business conditions, industry trends  and other external, political and social factors in the countries in which we  operate; the  intensity of competitive activity;   changes in environmental, tax, trade, employment and other laws and  regulations; our  ability to implement our strategies and plans; our  ability to complete and successfully integrate acquisitions; our  reliance on a small number of significant customers;   changes in consumer preferences, customer demand for our products and our  ability to maintain customer relationships and grow our business; the  fact that our customers do not commit to minimum quantity purchases; the  seasonality of our business; our  ability to attract and retain key personnel; our  reliance on computerized information systems;   changes in accounting policies and estimates; and   disruption to manufacturing and distribution activities due to labour  disruptions, bad weather, natural disasters and other unforeseen adverse  events. 
These factors may cause the Corporation's actual performanceand financial results in future periods to differ materially from any estimatesor projections of future performance or results expressed or implied by suchforward-looking statements. Forward-looking statements do not take into accountthe effect that transactions or non-recurring or other special items announcedor occurring after the statements are made have on the Corporation's business.For example, they do not include the effect of business dispositions,acquisitions, other business transactions, asset write-downs or other chargesannounced or occurring after forward-looking statements are made. The financialimpact of such transactions and non-recurring and other special items can becomplex and necessarily depends on the facts particular to each of them. 

We believe that the expectations represented by ourforward-looking statements are reasonable, yet there can be no assurance thatsuch expectations will prove to be correct. The purpose of the forward-lookingstatements is to provide the reader with a description of management'sexpectations regarding the Corporation's fiscal 2009 financial performance andmay not be appropriate for other purposes. Furthermore, unless otherwise stated,the forward-looking statements contained in this Annual Information Form aremade as of the date hereof, and we do not undertake any obligation to updatepublicly or to revise any of the included forward-looking statements, whether asa result of new information, future events or otherwise unless required byapplicable legislation or regulation. The forward-looking statements containedin this report are expressly qualified by this cautionary statement. 
**14. 

ADDITIONAL INFORMATION**
Additional information, including directors' and officers'remuneration and indebtedness, principal holders of the Corporation's securitiesand securities authorized for insurance under the Corporation's equitycompensation plans is contained in the Circular. Additional financialinformation is provided in the Corporation's comparative consolidated financialstatements and management's discussion and analysis for its most recentlycompleted financial year, both of which are contained in the 2008 Annual Report.

20 

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

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

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

21
**APPENDIX A - MANDATE OF THE AUDIT AND FINANCE COMMITTEE**
The following description of the mandate of the Audit andFinance Committee of the Corporation complies with applicable Canadian laws andregulations, such as the rules of the Canadian Securities Administrators, andwith the disclosure and listing requirements of the Toronto Stock Exchange(collectively, the "**Canadian Corporate Governance Standards**"), as theyexist on the date hereof. In addition, this mandate complies with applicableU.S. laws, such as the *Sarbanes-Oxley Act of 2002*,**and rules andregulations adopted thereunder, and with the New York Stock Exchange's corporategovernance standards (collectively, the "**US Corporate Governance Standards**"),as they exist on the date hereof. The mandate of the Audit and Finance Committeeof the Corporation (the "**Audit Committee**") shall be reviewed annually bythe 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 Corporation or any of its subsidiaries (including any person  who, directly or indirectly, controls or is controlled by, or is under common  control with the Corporation, or any director, executive officer, partner,  member, principal or designee of such affiliate) may serve on the Audit  Committee; a member of the Audit Committee shall receive no compensation from  the Corporation or any of its affiliates other than compensation as a director  and committee member of the Corporation; prohibited compensation includes fees  paid, directly or indirectly, for services as a consultant or as legal or  financial advisor, regardless of the amount;  each member must be "financially literate" (as contemplated by  Canadian Corporate Governance Standards and US Corporate Governance  Standards), as determined by the Board;  at least one member must be an "audit committee financial  expert" (as contemplated by US Corporate Governance Standards), as determined  by the Board;  members of the Audit Committee shall be appointed  annually by the Board upon recommendation of the Corporation's Corporate  Governance Committee; such members may be removed or replaced, and any  vacancies on the Audit Committee shall be filled by the Board upon  recommendation of the Corporation's Corporate Governance Committee; membership  on the Audit Committee shall automatically end at such time the Board  determines that a member ceases to be "independent" as determined in the  manner set forth above;  quorum of majority of members. **2.

**Frequency and Timing ofMeetings**-  normally contemporaneously with the Corporation's Board  meetings;  at least four times a year and as necessary. **3.

**Mandate**
The responsibilities of the Audit Committee include the following: 
*(a) Overseeing financial reporting*-  monitoring  the integrity and quality of the Corporation's accounting and financial  reporting process, disclosure controls and procedures, and systems of internal  control, through independent discussions with management, the external  auditors and the internal auditors; 
22 
-  reviewing, with management and the external auditors,  the annual audited consolidated financial statements as well as the report of  the auditors thereon to be included in the Annual Report of the Corporation,  including the Corporation's MD&A disclosure and annual earnings press release,  prior to their release, filing and distribution;  reviewing, with management and the external auditors,  quarterly consolidated financial statements of the Corporation and  accompanying information, including the Corporation's MD&A disclosure and  quarterly earnings press release, prior to their release, filing and  distribution;  reviewing, with management and external auditors, the  financial information contained in prospectuses, offering memoranda, Annual  Information Forms, Management Proxy Circulars, Forms 6-K (including  Supplemental Disclosure) and 40-F and any other document required to be  disclosed or filed by the Corporation before their public disclosure or filing  with regulatory authorities in Canada or the United States of America;  reviewing, with management, the level and type of  financial information (including earnings guidance and other material  forward-looking information) provided from time to time to analysts,  investors, rating agencies and other stakeholders;  reviewing, with management, that adequate procedures are  in place for the review of the Corporation's disclosure of financial  information extracted or derived from the Corporation's financial statements,  such as annual reports and investor presentations, and periodically assessing  the adequacy of those procedures;  reviewing, with the external auditors and management,  the quality, appropriateness and disclosure of the Corporation's accounting  principles and policies, underlying assumptions and reporting practices, and  any proposed changes thereto;  reviewing any analysis or other written communications  prepared by management, the internal auditors or external auditors setting  forth significant financial reporting issues and judgments made in connection  with the preparation of the financial statements, including analyses of the  effect of alternative generally accepted accounting principles methods;  reviewing the external auditors' quarterly review  engagement report;  overseeing the procedures to review management  certifications filed with applicable securities regulators;  reviewing the potential impact of any litigation, claim  or other contingency and any regulatory or accounting initiatives that could  have a material effect upon the financial position or operating results of the  Corporation and the appropriateness of the disclosure thereof in the documents  reviewed by the Audit Committee;  overseeing the procedures to monitor the public  disclosure of information by the Corporation;  reviewing at least annually the Corporation's disclosure  policy;  reviewing the results of the external audit, any  significant problems encountered in performing the audit, and management's  response and/or action plan related to any Management Letter issued by the  external auditors and any significant recommendations contained therein. *(b*) Monitoring riskmanagement and internal controls*-  receiving  periodically management's report assessing the adequacy and effectiveness of  the Corporation's disclosure controls and procedures and systems of internal  control over financial reporting; 
23 
-  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 policies and their parameters regarding such  items as interest rate, foreign exchange risks, commodity purchases and any  similar transactions where the Corporation enters into derivatives contracts;   assisting the Board with the oversight of the Corporation's  compliance with, and reviewing the Corporation's processes for complying with,  applicable legal and regulatory requirements;  overseeing the confidential, anonymous procedures for  the receipt, retention and treatment of complaints or concerns received by the  Corporation regarding accounting, internal accounting controls or auditing  matters or employee concerns regarding accounting or auditing matters;  requesting the performance of any specific audit, as required.  *(c) Monitoring internal auditors*-  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 Corporation's  chief internal auditor;  ensuring the ongoing accountability of the internal audit  function to the Audit Committee and to the Board. *(d) Monitoring external auditors*-  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 Corporation including, determining which non-audit services  the external auditors are prohibited from providing, approving, or  pre-approving policies defining audit and permitted non-audit services  provided by the external auditors, overseeing the disclosure of all audit and  permitted non-audit services provided by the external auditors, and reviewing  the total amount of fees paid by the Corporation to the external auditors for  all audit and non-audit services;  overseeing the direct reporting and accountability of the  external auditors to the Audit Committee and to the Board;  directly overseeing the external auditors and discussing  with them the quality and not just the acceptability of the Corporation's  accounting principles, including (i) critical accounting policies and  practices used, (ii) alternative treatments of financial information that have  been discussed with management, the ramification of their use and the  treatment preferred by the external auditors, as well as (iii) other material  written communications between the Corporation and the external auditors  (including any disagreement with management and the resolution thereof); 
24 
-  reviewing at least annually, representations by the  external auditors describing their internal quality-control procedures, as  well as significant results arising from regulatory and professional  quality-control examinations;  reviewing at least annually, the external auditors'  representations as to independence and holding discussions with the external  auditors as to any relationship or services that may impact their objectivity  or independence;  reviewing hiring policies for employees or former employees of  the Corporation's firm of external auditors;  overseeing the rotation of lead, concurring and other audit  partners, to the extent required by Canadian and U.S. securities law  standards. *(e) Reviewing financings*-  reviewing the adequacy of the  Corporation'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'sdemanding role and responsibilities, the Board chair, together with theCorporate Governance Committee chair, reviews any invitation to Audit Committeemembers to join the audit committee of another publicly-listed entity. Where amember of the Audit Committee simultaneously serves on the audit committee ofmore than three public companies, including the Corporation, the Boarddetermines whether such simultaneous service impairs the ability of such memberto effectively serve on the Audit Committee and either requires a correction tothe situation or discloses in the Corporation's Management Proxy Circular thatthere is no such impairment. 

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

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

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

Nothing contained in the abovemandate is intended to transfer to the Audit Committee the Board'sresponsibility to ensure the Corporation's compliance with applicable laws orregulations or to expand applicable standards of liability under statutory orregulatory requirements for the directors or the members of the Audit Committee.Even though the Audit Committee has a specific mandate and its members may havefinancial experience, they do not have the obligation to act as auditors or toperform auditing, or to determine that the Corporation's financial statementsare complete and accurate and are in accordance with generally acceptedaccounting principles. Such matters are the responsibility of management, theinternal auditors and the external auditors. Members of the Audit Committee areentitled to rely, absent knowledge to the contrary, on (i) the integrity of thepersons and organizations from whom they receive information, (ii) the accuracyand completeness of the information provided, and (iii) representations made bymanagement as to the non-audit services provided to the Corporation by theexternal auditors. The Audit Committee's oversight responsibilities are notestablished to provide an independent basis to determine that (i) management hasmaintained appropriate accounting and financial reporting principles orappropriate internal controls andprocedures, or (ii) the Corporation's financial statements have been preparedand, if applicable, audited in accordance with generally accepted accountingprinciples. 
* * * * * * * 

25 
**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 andExchange Commission ("SEC"), and to furnish promptly, when requested to do so bythe SEC staff, information relating to the securities in relation to which theobligation to file an annual report on Form 40-F arises or transactions in saidsecurities. 
**B. 

Consent to Service of Process**
The Registrant has previously filed with the SEC awritten irrevocable consent and power of attorney on Form F-X in connection withthe Class A Subordinate Voting Shares (now Common Shares). 
**C. 

Evaluation of disclosurecontrols and procedures**
Our disclosure controls andprocedures are designed to ensure that information required to be disclosed inour reports filed with the SEC is recorded, processed, summarized and reportedwithin the time periods specified in the SEC's rules and forms and isaccumulated and communicated to our management, including our principalexecutive officer and our principal financial officer, as appropriate, to allowtimely decisions regarding required disclosure. 

An evaluation was carried out underthe supervision of, and with the participation of, our management, including ourprincipal executive officer and our principal financial officer, of theeffectiveness of our disclosure controls and procedures (as such term is definedin the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, Rules13a-15(e) and 15d-15(e)) as of the end of the period covered by this AnnualReport on Form 40-F. Based on that evaluation, our principal executive officerand our principal financial officer concluded that our disclosure controls andprocedures were effective as of the end of such period. 
**D. 

Management's annual report oninternal control over financial reporting**
Our management is responsible for establishing andmaintaining adequate internal control over financial reporting, as such term isdefined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. 

Our internal control over financialreporting includes those policies and procedures that: (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of our assets; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and (3) providereasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of our assets that could have a material effecton the financial statements. 

Under the supervision and with theparticipation of our principal executive officer and our principal financialofficer, management conducted an evaluation of the effectiveness of our internalcontrol over financial reporting, as of October 5, 2008, based on the frameworkset forth in*****InternalControl-Integrated Framework* issued by the Committee of SponsoringOrganizations of the Treadway Commission (COSO). Based on its evaluation underthis framework, management concluded that our internal control over financialreporting was effective as of that date. 
**E. 

Attestation report of theregistered public accounting firm.**
KPMG LLP ("KPMG"), an independentregistered public accounting firm, who audited and reported on our financialstatements attached as Exhibit 99.2 to this Annual Report on Form 40-F, hasissued an attestation report on the effectiveness of our internal control overfinancial reporting as of October 5, 2008. The attestation report is included onpage 52 of the financial statements attached as Exhibit 99.2to this Annual Report on Form 40-F. 
**F. 

Changes in internal controlsover financial reporting.**
There have been no changes during fiscal year 2008 inour internal control over financial reporting that have materially affected, orare reasonably likely to materially affect, our internal control over financialreporting. 

The design of any system of controls and proceduresis based in part upon certain assumptions about the likelihood of certainevents. There can be no assurance that any design will succeed in achieving itsstated goals under all potential future conditions, regardless of how remote.
**A.****G. 

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

Code of Ethics**
The Registrant has adopted a Code ofEthics and Business Conduct (the "Code of Conduct") that applies to allemployees and officers, including its principal executive officer, principalfinancial officer and principal accounting officer. The Code of Conduct isavailable 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 andServices
In addition to retaining KPMG toreport upon the annual consolidated financial statements of the Registrant, theRegistrant retained KPMG to provide various audit-related and non-audit servicesin fiscal 2008. The aggregate fees billed for professional services by KPMG foreach of the last two (2) fiscal years, were as follows: 
*Audit Fees — The aggregate audit fees billed byKPMG for professional services rendered for the annual audit of the Registrant'sconsolidated financial statements, quarterly reviews of the Registrant'sfinancial statements and services provided in connection with statutory andregulatory filings or engagements were Cdn$1,237,028 for fiscal 2008 andCdn$1,214,402 for fiscal 2007. The audit fees include fees relating to KPMG'saudit of the effectiveness of the Registrant's internal control over financialreporting. *Audit-Related Fees — The aggregate audit-related feesbilled by KPMG were Cdn$166,400 for fiscal 2008 and Cdn$112,800 for fiscal 2007.These services consisted of miscellaneous assurance services. *Tax Fees— The aggregate tax fees billed by KPMG were Cdn$484,817 for fiscal 2008 andCdn$935,066 for fiscal 2007. These services consisted of tax compliance,including the review of tax returns, assistance regarding income, capital andsales tax audits, the preparation of annual transfer pricing studies, taxadvisory services relating to domestic and international taxation and customsand duties. *All Other Fees — The aggregate fees billed by KPMGfor all other professional services rendered were nil for fiscal 2008 and nilfor fiscal 2007. 
All fees billed to the Registrant byKPMG in fiscal 2008 were pre-approved by the Registrant's Audit and FinanceCommittee pursuant to the procedures and policies set forth in the Audit andFinance Committee mandate and pursuant to applicable legislation. The mandate ofthe Audit and Finance Committee is available on the Registrant's Internetwebsite at www.gildan.com/corporate/IR/corporateGovernance.cfm. 
**J. 

Off-Balance Sheet Arrangements***Operating leases and commitments*
The Registrant has no commitmentsthat are not reflected in its balance sheets except for operating leases andother purchase obligations, which are included in the table of contractualobligations on page 33 of its MD&A (see Exhibit 99.1). As disclosed in Note 13to the Registrant's Consolidated Financial Statements (see Exhibit 99.2), theRegistrant has issued standby letters of credit and corporate guaranteesprimarily from various servicing agreements amounting to $9.6 million at October5, 2008. 
*Derivative Financial Instruments*
From time to time, the Registrantuses forward foreign exchange contracts, primarily in Canadian dollars, Britishpounds and Euros, to hedge cash flows related to sales and operating expenses inforeign currencies (non-U.S. dollar). A forward foreign exchange contractrepresents an obligation to exchange a foreign currency with a counterparty at apredetermined rate. Credit risk exists in the event of failure by a counterpartyto meet its obligations. The Registrant's exposure to foreign currencyfluctuations is described in more detail in the "Financial Risk Management"section of its MD&A beginning on page 37 (see Exhibit 99.1). 

The Registrant does not use derivative financialinstruments for speculative purposes. Forward foreign exchange contracts areentered into with maturities not exceeding twenty-four months. 

For the years ended October 5, 2008 and September 30,2007, net earnings included a recognized loss of $2.1 million and a recognizedgain of $1.9 million, both relating to derivative financial instruments. 

The following table summarizes the Registrant's commitments to buy and sellforeign currencies as at October 5, 2008 and September 30, 2007: 
     Notional    Exchange     Notional US dollar     AmountRate    Maturity    Equivalent      (in thousands)  (in thousands)**2008:
 
 
 
 Buy contracts:    
Foreign exchange contracts:CA$5,4830.9302Oct. 2008$5,100     €9621.3740Oct. 2008$1,322Sell contracts:    
Foreign exchange contracts:€5,6501.4455 to 1.4757Oct. 2008 – Apr. 2009$8,244 £2,9511.7627 to 2.0339Oct. 2008 – Jan. 2009$5,659**2007:**    Buy contracts:    
Foreign exchange contracts:€4,4251.3390 to 1.4222Oct. 2007 – Dec. 2007$6,025     Sell contracts:    
Foreign exchange contracts:€13,9801.3410 to 1.3899Oct. 2007 – Oct. 2008$19,096 £10,8011.9640 to 2.0331Oct. 2007 – Oct. 2008$21,501 CA$3,8001.0055Oct. 2007$3,821
The fair value of the forward foreign exchangecontracts, determined using observable market inputs, was $0.9 million as atOctober 5, 2008 and ($0.8) million as at September 30, 2007. 
**K. 

Tabular Disclosure ofContractual Obligations**
See page 33 of Exhibit 99.1. 
**L. 

Corporate Governance Guidelines**
The Registrant has adopted CorporateGovernance Guidelines as well as mandates for its board of directors and each ofits 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 AuditCommittee 

The Registrant has a standing AuditCommittee established in accordance with Section 3 (a) (58) (A) of the ExchangeAct. The members of the Registrant's Audit Committee are Pierre Robitaille,William D. Anderson, Richard P. Strubel and Gonzalo F. Valdez-Fauli. See theAudit Committee Disclosure section of our Annual Information Form includedherein for additional information. 
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**SIGNATURES**
Pursuant to the requirements of theExchange Act, the Registrant certifies that it meets all of the requirements forfiling on Form 40-F and has duly caused this annual report to be signed on itsbehalf by the undersigned, thereto duly authorized. 

DATED: December 22,  2008
**GILDAN                     ACTIVEWEAR INC.**    By: */s/** Jean-François                     Legault*Name: Jean-François                     Legault                      Title:                     Vice-President, Legal, Public and Government Affairs
 
 **EXHIBIT INDEX**  **Exhibit No.****Description 
 99.1
Management's              Discussion and Analysis of the Registrant for the year ended              October 5, 2008  
 99.2
Audited              comparative consolidated financial statements of the Registrant as              at and for the year ended October 5, 2008  
 99.3
Consent of KPMG LLP 
 99.4
Schedule "D" – Statement of Corporate              Governance Practices to the Registrant's Notice of Annual Meeting              of Shareholders and Management Proxy Circular dated as of December              16, 2008   
 99.5
Reconciliation to United States GAAP 
 99.6
Officers' Certifications Required by Rule              13a-14(a) or Rule 15d-14(a) 
 99.7
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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