Edgar Filing: Gildan Activewear Inc. (2024)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

or

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, Suite204, 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:

Securities registered or to be registered pursuant to Section 12(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 information filed with this form:

þ Annual Information Form þ Audited Annual Financial Statements

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

Common Shares:
121, 351, 998

Indicate by check mark whether the Registrant by filing the information contained in this Form isalso thereby furnishing the information to the Commission pursuant to Rule12g3-2(b) under theSecurities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate the file numberassigned to the Registrant in connection with such Rule.

Yes oNo þ

Indicate by check mark whether the Registrant: (1)has filed all reports required to be filed bySection13 or 15(d) of the Exchange Act during the preceding 12months (or for such shorter periodthat the registrant was required to file such reports); and (2)has been subject to such filingrequirements for the past 90days.

Yes þ No o

GILDAN ACTIVEWEAR INC.

ANNUAL INFORMATION FORM

for the year ended October3, 2010

December6, 2010

GILDAN ACTIVEWEAR INC.

2010 ANNUAL INFORMATION FORM

TABLE OF CONTENTS

This Annual Information Form is dated December6, 2010 and, except as otherwise indicated, theinformation contained herein is given as of December6, 2010.

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

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

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

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

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

This Annual Information Form contains certain forward-looking statements, which are based onGildan’s current expectations, estimates, projections and assumptions and were made by Gildan inlight of its experience and its perception of historical trends. Results indicated inforward-looking statements may differ materially from the actual results. Please refer to thecautionary statement on pages 25 and 26 of this Annual Information Form for furtherexplanation.

1. CORPORATE STRUCTURE

1.1 Name, Address and Incorporation

We were incorporated on May8, 1984 pursuant to the Canada Business Corporations Act under the nameof Textiles Gildan Inc. At our inception, we focused our activities on the manufacture of textilesand produced and sold finished fabric as a principal product-line. In 1992, we redefined ouroperating strategy and, by 1994, our operations focused exclusively on the manufacture and sale ofactivewear in the screenprint channel. In March1995, we changed our name to Gildan ActivewearInc./Les Vêtements de Sports Gildan Inc. In 2005, we changed our French name to Les Vêtements deSport Gildan Inc.

In June1998, in conjunction with a planned initial public offering, we filed Articles of Amendmentto, among other things, remove the private company restrictions contained in our charter documentsand change the structure of our authorized share capital. On June17, 1998, we completed ourinitial public offering of an aggregate of 3,000,000 ClassA Subordinate Voting shares at Cdn$10.29per share, on a pre-split basis, for total gross proceeds of Cdn$30,880,500.

On February2, 2005, we filed Articles of Amendment in order to, among other things, (i)create anew class of common shares (the “Common Shares”), (ii)change each of the issued and outstandingClassA Subordinate Voting shares into one of the newly-created Common Shares, and (iii)remove theClassB Multiple Voting shares and the ClassA Subordinate Voting shares as well as the rights,privileges, restrictions and conditions attaching thereto.

Our principal executive offices and registered office are located at 600 de Maisonneuve BoulevardWest, 33^rd Floor, Montreal, Québec, Canada H3A 3J2, and our telephone number at thataddress is (514)735-2023.

1.2 Intercorporate Relationships

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

The subsidiaries that have been omitted do not represent individually more than 10% of theconsolidated assets and 10% of the consolidated sales and operating revenues of Gildan, or in theaggregate more than 20% of the total consolidated assets and the consolidated sales and operatingrevenues as at and for the year ended October3, 2010.

2. GENERAL DEVELOPMENT OF THE BUSINESS

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

2.1 Recent Developments

Declaration of Dividend and Initiation of Normal Course Issuer Bid

On December2, 2010, the Company announced that its Board of Directors had approved theintroduction of a quarterly cash dividend. The initial quarterlydividend of U.S. $0.075 pershare will be paid on all issued and outstanding Common Shares of the Company listed on the NewYork Stock Exchange (the “NYSE”) and the equivalent amount in Canadian dollars (using the Bank ofCanada’s latest noon conversion rate at the time of payment)will be paid for Common Shares listed on theToronto Stock Exchange (the “TSX”). The initial dividendwill be paid on March18, 2011,rateably and proportionately to the holders of record on February23, 2011, being the recorddate. The dividend policy will be reviewed annually by the Board of Directors.

The Company also announced the reinstatement of a normal course issuer bid to repurchase up to onemillion outstanding Common Shares of the Company on the TSX and the NYSE (the “NCIB”). The Companyis authorized to make purchases under the NCIB during the period from December6, 2010 to December5, 2011 or until such time as the NCIB is completed or terminated at the Company’s option. Theprice to be paid will be the

2

marketprice of the Common Shares on the stock exchange on which the shares are purchased at the time ofacquisition. Common shares purchased under the NCIB will be cancelled.

2.2 Developments in Fiscal 2010

Economic Environment

Progress on Strategic Initiatives

Acquisition of New Sales Offices and Distribution Facility

3

Impact of Haiti Earthquake

2.3 Developments in Fiscal 2009

Economic Environment

Progress on Strategic Initiatives

4

Canadian Revenue Agency Tax Audit

2.4 Developments in Fiscal 2008

Acquisition of U.S. Sock Manufacturer

Growth Strategy

Tax

5

Manufacturing Operations

Distribution

Corporate Office

3. DESCRIPTION OF THE BUSINESS

3.1 Business Overview

We are a marketer and vertically-integrated globally cost-competitive manufacturer of basic,non-fashion apparel products for customers requiring an efficient supply chain and consistentproduct quality for high-volume replenishment programs. We sell activewear products to screenprintmarkets in North America, Europe and other international markets. Gildan is the leading supplier ofactivewear for the screenprint channel in the U.S. and Canada, and also a leading supplier for thismarket in Europe and Mexico. We sell socks and underwear, in addition to our activewear products,to mass market and regional retailers in North America. In the U.S. mass market retail channel,Gildan is one of the leading suppliers of socks. The Company operates in one business segment,being high-volume, basic, frequently replenished, non-fashion apparel.

The Company’s net sales for fiscal 2010 reached $1,311.5million.

STRATEGY AND OBJECTIVES

Our growth strategy comprises the following initiatives:

6

7

Our Products and Markets

In the screenprint channel, we sell activewear products, namely T-shirts, fleece and sport shirtsin undecorated “blank” form under the Gildan brand in large quantities to wholesale distributors,which are subsequently sold to screenprinters and embroiderers who decorate the products withdesigns and logos. Screenprinters then sell the imprinted activewear to a highly diversified rangeof end-use markets, including educational institutions, athletic dealers, event merchandisers,promotional product distributors, charity organizations, entertainment promoters, and travel andtourism venues. Our activewear products are used in a variety of daily activities by individuals,including work and school uniforms and athletic team wear, and for various other purposes to conveyindividual, group and team identity. We are also providing undecorated products to large branded apparel companies and retailers which sellimprinted activewear and are currently not supplied by our existing U.S. wholesale distributors.In the North American mass-market and regional retailer channel, we sell a variety of styles ofsocks and men’s and boys’ underwear, in addition to our undecorated activewear products, under theGildan brand and under various retailer exclusively licensed and private label brands.

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

Our value proposition is based on providing consistent high quality, competitive pricing and fastand flexible replenishment combined with our leadership in corporate social responsibility andenvironmental sustainability. As a vertically-integrated manufacturer, Gildan is able to providepremium products to customers in a broad range of sizes, colours and styles with enhanced productfeatures, such as pre-shrunk fabrics, and a selection of fabric weights, blends and construction.Our vertical integration has allowed us to reduce costs and ensure consistency of quality as wecontrol essentially all aspects of our manufacturing. Continued innovations in our manufacturingprocess have allowed us to ensure colour/shade consistency and high performance of our activeweargarments. In addition, innovations in the sock manufacturing process, such as higher needle countmachines and seamless toe closing operations have allowed Gildan to deliver enhanced sock productfeatures at lower prices. These

8

innovations have resulted in further improving the value proposition of our activewear and sockproducts to our customers.

Activewear and underwear represented 83% of our sales in fiscal 2010 whereas they represented 77%in fiscal 2009. Socks represented 17% of our sales in fiscal 2010 whereas they represented 23% infiscal 2009.

Competitive Environment

The market for our products is highly competitive. Competition is generally based upon price, withreliable quality and service also being critical requirements for success. Our competitivestrengths include our expertise in building and operating large-scale, vertically-integratedoffshore manufacturing hubs which allows us to offer competitive pricing, consistent productquality, and a supply chain which efficiently services replenishment programs with shortproduction/delivery cycle times. Our investments combined with our commitment to leadingenvironmental and social responsibility practices are also increasingly becoming important factorsfor our customers.

Our primary competitors in North America are the major manufacturers for the screenprint and retailchannels, such as Hanesbrands Inc., Berkshire Hathaway Inc. through its subsidiaries Fruit of theLoom, Inc. and Russell Corporation, and smaller U.S.-based manufacturers, including Anvil KnitwearInc., Alstyle Apparel, a division of Ennis Corp., and Delta Apparel Inc. The competitive landscapein the European screenprint channel is similar to that in North America, as we compete primarilywith the European divisions of the major U.S.-based manufacturers mentioned above. In Europe, wealso have large competitors that do not have integrated manufacturing operations and sourceproducts from suppliers in Asia. In addition, many of Gildan’s U.S. competitors servicing theretail apparel industry currently source products from Asia.

Customers

In fiscal 2010, we sold our products in the United States, Canada and Europe and otherinternational markets, which accounted for 88%, 4% and 8% of total sales, respectively. For abreakdown of our total sales by geographic market for each of the last three financial years,reference is made to Note 22 to the 2010 Consolidated Financial Statements, which note isincorporated herein by reference. Our customer base is composed of a relatively small number ofsignificant customers. We currently sell our products to approximately 300 customers. In fiscal2010, our largest customer accounted for 21.0% of our total sales, and our top ten customersaccounted for 66.4% of our total sales in the retail and screenprint channels.

The large majority of total sales in fiscal 2010 continued to be made in the screenprint channelthrough our wholesale distributors. Although we have long-term ongoing relationships with many ofour customers, our contracts with our customers do not require them to purchase a minimum quantityof our products. Instead, we assess their projected requirements and then plan our production andmarketing strategy accordingly.

Our Facilities

Textile and Sock Manufacturing

To support our sales in the various markets, we have developed two main manufacturing hubs locatedin Central America and the Caribbean Basin where we have built our own modern manufacturingfacilities which include textile manufacturing facilities for theproduction of activewear and underwear fabric andsock manufacturing facilities. We also operate sewing facilities which support the fabric productionfrom our textile facilities. Our Central American and Caribbean Basin manufacturing hubs servicethe North American and international markets in which we compete. As an initial step towards theestablishment of a third manufacturing hub to support our growth in targeted markets inAsia and Europe, during fiscal 2010, we acquired a vertically-integrated manufacturing facility forthe production of activewear in Bangladesh.

Central American manufacturing hub

Our largest manufacturing hub is based in Central America.Manufacturing operations include two vertically-integrated knitting, bleaching, dyeing, finishingand cutting textile facilities (Rio Nance 1 and Rio Nance 2) which produce activewear and underwearfabric located in Rio Nance, Honduras. We

9

currently intend to begin the construction of a third textile facility (Rio Nance 5) for theproduction of activewear and underwear fabric at the same location. We operate sewing facilities inHonduras and Nicaragua which sew the textiles produced at Rio Nance 1 and Rio Nance 2. We have alsoconstructed and operate two integrated sock manufacturing facilities in Rio Nance (Rio Nance 3 and4). The construction of Rio Nance 4 was essentially completed during fiscal 2010 and the ramp-up ofproduction began in April2010. Rio Nance 4 is expected to further support future sales growth inthe sock category and position us to continue to reduce our sock manufacturing costs. In additionto our integrated sock manufacturing operations located in our Central American hub, we operateU.S. sock knitting facilities in Fort Payne, Alabama which were purchased as part of a sockmanufacturing acquisition in fiscal 2008.

Caribbean Basin manufacturing hub

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

On January12, 2010, Haiti was devastated by a massive earthquake which had a major impact onGildan’s third-party contractor operations in Haiti which are used to sew the majority of thefabric produced at our Dominican Republic textile facility. WhileGildan immediately established a program for humanitarian aidefforts, we also took steps to minimize the impact of the disruption of contractor production inHaiti, including the addition of overtime sewing shifts atGildan’s Central American sewing operations and the useof additional third-party contractors. Contractor operations in Haiti began to resume operations shortly after the earthquakeand by the end of the second quarter of fiscal 2010, contractor operations had returned toproduction levels substantially similar to those prior to the impact of the earthquake. The impacton the Company’s operations included a temporary loss of production primarily during the secondquarter, which subsequently resulted in lost sales opportunities as well as supply chaininefficiencies during the balance of the fiscal year. During the fourth quarter of fiscal 2010, the Companyreceived insurance proceeds of $8.0million, reflecting the maximum insurance recovery availableunder its insurance policy related to the earthquake in Haiti, which have been recorded as areduction of cost of sales in the consolidated statement of earnings.

Yarn-Spinning

CanAm Yarns, LLC (CanAm), our joint-venture company with Frontier Spinning Mills, Inc. (Frontier),operates yarn-spinning facilities in Georgia and North Carolina. We source our yarn requirementsfrom CanAm, as well as from Frontier and other third-party yarn providers, with whom we have supplyagreements.

Sales, Marketing and Distribution

Our sales and marketing office which services our global screenprint markets is located in St.Michael, Barbados. During fiscal 2010 we also began to consolidate all of our retail sales andmarketing activities at a single location at our office in Charleston, South Carolina. Theseoffices are responsible for customer-related functions, including sales management, marketing,customer service, credit management, sales forecasting, and inventory control and logistics foreach of their respective markets.

We distribute our activewear products for the screenprint channel primarily out of our distributioncentre in Eden, North Carolina, and also use third-party warehouses in the western United States,Canada, Mexico, Europe and Asia to service our customers in these markets. The Company has begun anexpansion and further automation of the Eden, North Carolina distribution centre to service demandin the U.S. screenprint channel and further reduce distribution costs.

All distribution activities related to servicing retail customers are now in the process of beingconsolidated at our distribution centre in Charleston, South Carolina which was acquired in thefirst quarter of fiscal 2010, resulting in the closure of our distribution centres located inMartinsville, Virginia and Fort Payne, Alabama.

Raw Materials

Cotton and polyester fibres are the main raw materials used in the manufacturing of our products.Cotton is used in the manufacturing of 100% cotton yarn, while polyester is added in themanufacturing of cotton-polyester blend yarn. Cotton fibre is typically purchased for futuredelivery at pre-determined prices under contracts as deemed

10

appropriate by management, while polyester pricing is negotiated on an annual basis subject to theprice variability of certain polyester components.

During fiscal 2010, most of our yarn requirements for the production of our product-lines were metby our long-term supply agreements with third-party suppliers, as well as by our jointly ownedCanAm yarn-spinning facilities in Cedartown, Georgia and Clarkton, North Carolina. We expect thatmost of our yarn requirements will continue to be met by these sources.

The three primary sources of energy consumed in our manufacturing facilities are bunker fuel andbiomass, which are used to generate steam required in the production process and electricity, whichis used to power production equipment. The bunker fuel used in our operations is supplied fromlocal third-party suppliers, and the pricing is highly dependent on international market prices forbunker fuel. During fiscal 2009 we began construction of a biomass steam generation system in theDominican Republic, which began operating as of March2010 andis expected to contribute to the reduction ofour energy consumption and related costs associated with the textile production in the DominicanRepublic. In addition, during the year, we initiated similar biomass steam generation projects forour sock manufacturing facilities in Honduras. The biomass facility for Rio Nance 3 becameoperational at the end of fiscal 2010 and the second biomass facility for Rio Nance 4 becameoperational during the first quarter of fiscal 2011. We are also planning to implement similarsystems for our textile facilities in Honduras in fiscal 2011. The electricity requirements at ourtwo main production complexes are provided by a public utility in Honduras and from a privatesupplier in the Dominican Republic. Electricity rates are variable and are in part related tounderlying oil prices.

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

Management Information Systems

Our Enterprise Resource Planning (“ERP”) system supports the majority of our operations in theareas of finance, manufacturing and customer service. This system is centralized and is accessedfrom all of our locations through secure networks. Our ERP system is linked to servers supportingboth local processes and specialized applications, including payroll and distribution. We continueto leverage our existing ERP system by adding new functionality in the areas of supply chainplanning, demand forecasting and business intelligence. Due to our increasing dependence on theavailability of our computer systems to support our operations, we plan to continue, in fiscal2011, to implement initiatives to enhance our information technology (“IT”) processes andinfrastructure based on the Information Technology Infrastructure Library, a framework of bestpractices approaches intended to facilitate the delivery of high quality IT services.

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

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

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

Historically, we have operated our mature facilities at full capacity throughout the year in orderto be cost efficient. Consequently, with the seasonal sales trends of our business, we experiencefluctuations in our inventory levels throughout the year, in particular a build-up of inventorylevels in the first half of the year.

11

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

Management decisions to consolidate or reorganize operations, including the closure of facilities,may also result in significant restructuring and other charges in an interim or annual period. Inaddition, the effect of asset write-downs, including provisions for bad debts and slow movinginventories, can affect the variability of our results.

Our reported amounts for sales, selling, general and administrative expenses, and financial expense(income)are impacted by fluctuations in the U.S. dollar versus certain other currencies asdescribed in the “Financial Risk Management” section of the 2010 Annual MD&A. The Company mayperiodically use derivative financial instruments to manage risks related to fluctuations inforeign exchange rates.

Trade Regulation

As a multinational corporation, we are exposed to international trade legislation and bilateraltrade agreements in the countries in which we operate and source products. Although the textile andapparel industries of developed countries such as Canada, the United States and the European Unionhave historically received a relatively higher degree of trade protection than other industries,trade liberalization has diminished this protection in recent years. In order to remain globallycompetitive, we have situated our manufacturing facilities in strategic locations to leverage thebenefits of the trade liberalization climate. Furthermore, management continuously monitors newdevelopments and risks relating to duties, tariffs and quotas in our approach to globalmanufacturing and sourcing and makes adjustments as needed.

The United States, Canada and Mexico have implemented several free trade agreements and tradepreference programs to enhance trade with their trading partners. There exist a number of regionaltrade agreements and preference programs, such as the Caribbean Basin Trade Partnership Act, theDominican Republic-Central America-United States Free Trade Agreement (“CAFTA-DR”) and the HaitianHemispheric Opportunity through Partnership Encouragement Act (“HOPE”), which allow qualifyingtextiles and apparel from participating countries duty-free access to certain developed countries’markets.

The United States adopted two of the newest programs, CAFTA-DR and HOPE (as amended by HOPE IIlegislation in 2008 and by the Haitian Economic Lift Program (“HELP”) legislation in 2010), tostrengthen and develop U.S. economic relations with Central America, the Dominican Republic andHaiti. Most trade agreements, such as CAFTA-DR, provide for the application of safeguards in theform of reinstatement of normal duties if increased imports cause or threaten to cause substantialinjury to a domestic industry. In 2008, the United States imposed such a safeguard under CAFTA-DRagainst socks imported from Honduras. The safeguard was in the form of a 5% duty on socks importedfrom Honduras from July through December2008, which affected our imports of socks from ourintegrated Honduran sock facility. The socks safeguard is no longer in effect, and the UnitedStates has agreed with Honduras not to extend or reimpose the socks safeguard beyond 2008. Underthe provisions of the CAFTA-DR agreement, a safeguard, upon expiration, cannot be renewed.

Proposed legislation in the U.S. Congress would, if adopted, extend duty-free treatment toqualifying apparel imported from lesser developed countries, including Bangladesh and Cambodia,extend duty-free or reduced duty treatment to certain qualifying apparel imported from thePhilippines, and extend duty-free treatment to certain apparel manufactured in “reconstructionopportunity zones” in Afghanistan and Pakistan. In addition, the United States has completednegotiations for three new free trade agreements (“FTA”) with South Korea, Colombia and Panama.These agreements are pending approval of the U.S. Congress. The United States also launched freetrade negotiations with a group of countries under the umbrella of the Trans-Pacific Partnership(“TPP”). Countries participating in the TPP negotiations at this time are Australia, Brunei,Chile, Malaysia, New Zealand,

12

Peru, Singapore and Vietnam. Any of these proposals or agreements may negatively affect ourcompetitive position in the United States.

Furthermore, U.S. domestic industry groups have threatened to seek various trade remedies,including “section 421”, under the terms of the U.S.-China World Trade Organization (“WTO”)accession agreement, against apparel imports from China which could result in higher duty rates ortariff rate quotas for Chinese apparel and improve our competitive position in affected productclassifications. Since the expiration of U.S. safeguard actions that imposed quotas on annualimports of certain categories of Chinese originating textiles and apparel at the end of 2008,ordinary import duties have been in effect. The likelihood that any of these measures will beadopted and the extent of their impact on our business cannot be determined with certainty.

Imports into the Mexican market may qualify for trade preferences from various free tradeagreements such as the Mexico-Nicaragua Free Trade Agreement, and the Mexico-Northern TriangleRegional Trade Agreement, which includes El Salvador, Guatemala and Honduras as member countries.Furthermore, the import tariff rates on textile and apparel articles imported into Mexico willgradually be reduced by 2013. Special safeguard measures (“Mevidas Transitorias”) in Mexico whichare currently in effect on China originating apparel will be gradually eliminated by the end ofDecember2011.

In addition to free trade arrangements among the individual countries within the European Union,the European Union also has preferential trade agreements with other European countries and withcountries outside of Europe. The European Union also enacted a Generalized System of Preferences(“GSP”) and the Africa-Caribbean-Pacific (“ACP”) programs that allow duty-free and quota-free entryinto the European Union of qualifying articles, including apparel, from developing countries suchas Honduras and Nicaragua and least developed countries including Haiti. Recent amendmentsregarding the reform of certain of the GSP provisions including the rules of origin are scheduledto become effective in 2011. The new provisions will further enhanceduty-free access to the European Union ofqualifying apparel articles. However, discussions are ongoing at the European Union level regardingthe establishment of a Economic Partnership Agreement (“EPA”) with Central American countries suchas Honduras and Nicaragua. The EPA, once enacted, would supersede the eligibility to the GSP tradepreference of the signatory Central America countries. The impact of the enactment of the EuropeanUnion — Central America EPA on our operations cannot be ascertained at this time.

Proposed legislation in the European Union would, if adopted, extend duty-free treatment toqualifying apparel imported from Pakistan. Such a proposal could negatively affect our competitiveposition in the European Union.

As of July2010, The People’s Republic of China extended the duty-free trade benefits awarded toBangladesh under the Asia-Pacific Trade Agreement (“APTA”) to include certain chief-weight cottonapparel articles made in Bangladesh.

Product Safety Regulation

We are subject to consumer product safety laws and regulations that could affect our business. Inthe United States, we are subject to the Consumer Product Safety Act,as amended by the ConsumerProduct Safety Improvement Act of 2008, to the Flammable Fabrics Act, and to the rules andregulations promulgated pursuant to such statutes. Such laws provide for substantial penalties fornon-compliance. Although enforcement of certain requirements is currently stayed, these statutesand regulations include requirements for testing and certification for flammability of wearingapparel, for lead content and lead in surface coatings in children’s products, and for phthalatecontent in children’s sleepwear. Most recently, the Consumer Product Safety Commission announcedimplementation of third party testing and certification requirements for flammability of children’sapparel manufactured on or after November16, 2010.

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

We believe that we are in compliance in all material respects with applicable product safety lawsand regulations in the jurisdictions in which we operate.

13

Intellectual Property

We own several registered trademarks including, among others, the “Gildan” trademark in Canada, theUnited States and in the European Community as well as in many countries in Central America, SouthAmerica and Asia/Pacific, including Australia. Applications for the registration of the “Gildan”trademark are also pending in certain countries. We have and intend to continue to maintain ourtrademarks and the relevant registrations, and will actively pursue the registration of trademarksin Canada, the United States and abroad.

Environmental Regulation

We are subject to various federal, state and local environmental and occupational health and safetylaws and regulations in the jurisdictions in which we operate concerning, among other things,wastewater discharges, storm water flows, and solid waste disposal. Our manufacturing plantsgenerate small quantities of hazardous waste, which are either recycled or disposed of off-site. Aspart of our Corporate Environmental Policy, we monitor, control and manage environmental issuesthrough policies including, but not limited to, the recycling and creation of measures for wasteprevention, minimization, recovery and treatment at all stages of the production cycle includingthe off-site disposal of any hazardous waste. We believe that we are in compliance in all materialrespects with the regulatory requirements of those jurisdictions in which our facilities arelocated.

In line with our commitment to the environment as well as to the health and safety of our employeeswe incur capital and other expenditures each year that are aimed at achieving compliance withcurrent environmental standards. For fiscal 2010, the requirements with regard to environmentalprotection did not have a significant financial or operational impact on the Company’s capitalexpenditures, earnings and competitive position. Although we do not expect that the amount of theseexpenditures in the future will have a material adverse effect on our operations, financialcondition or liquidity, there can be no assurance that future changes in federal, state, or localregulations, interpretations of existing regulations or the discovery of currently unknown problemsor conditions will not require substantial additional environmental remediation expenditures orresult in a disruption to our supply chain that could have a material adverse effect on our business. Similarly,the extent of our liability, if any, for past failures to comply with laws, regulations and permitsapplicable to our operations cannot be reasonably determined.

Labour Practices

We provide favourable working conditions for all our employees. We have implemented internal andexternal monitoring programs that permit us to verify compliance with local labour laws, as well aswith internationally recognized labour standards. In addition to having our own Code of Conduct,which is available on our website at www.gildan.com, we have obtained Worldwide Responsible ApparelProduction (“WRAP”) certification for all our Gildan-owned mature sewing facilities. Two facilitiesof our sewing contractors located in Haiti are also WRAP certifiedand the others are expected to becertified by the end of the fiscal year. All of our third-party sewing contractors arecontractually required to follow prescribed employment policies as well as our Code of Conduct.

InNovember2003, we joined the Fair Labour Association (“FLA”)as a “Participating Company”. The FLA is internationallyrecognized and respected as a non-profit organization whose goal is to promote adherence tointernational labour standards 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 monitoring was performed by external third-partyauditors. In fiscal 2007, we successfully began internal monitoring audits that complement theseexternal independent audits. Independent third party monitors also regularly audit our plants,announced or unannounced.

During fiscal 2008, 57 audits were performed in our facilities and those of our third-partycontractors. Over 25% of these audits were carried out by third-party auditors, half of which weremandated by our customers.

During fiscal 2009, 50 audits were performed in our facilities and those of our third-partycontractors. Over 13% of these audits were carried out by third-party auditors, with 46% of whichwere mandated by our customers.

During fiscal 2010, 73 audits were performed in our facilities and those of our third partycontractors. Over 30% of these audits were carried out by third-party auditors, with 44% of whichwere mandated by our customers.

14

3.2 Risk Factors

Please see the “Financial Risk Management” and the “Risks and Uncertainties” sections of our 2010Annual MD&A beginning on page 22 and page 36, respectively, which are incorporated hereinby reference.

3.3 Employees

As at October3, 2010, we employed more than 28,000 full-time employees worldwide. We consider ourrelations with our employees to be good and, as of the date hereof, we have not experienced anywork stoppages that have had a material impact on our operations. A union membership drive at ourtextile manufacturing facility in the Dominican Republic led to the execution of a three yearcollective bargaining agreement which outlines terms of employment for approximately 1,000employees.

4. DIVIDEND POLICY

While the Board of Directors of the Company has not in the last three years declared a dividend inorder to retain the Company’s earnings to take advantage of opportunities to develop and expand itsbusiness, the Board of Directors recently adopted a dividend policy which aims to declare and paycash dividends on a quarterly basis beginning in fiscal 2011. The Board of Directors will considerseveral factors when deciding to declare quarterly cash dividends, including the Company’s presentand future earnings, cash flows, capital requirements and future regulatory restrictions, whilecomplying with laws governing the Company. Although our revolving term credit facility requirescompliance with lending covenants in order to pay dividends, these covenants are not currently, andare not expected to be, a constraint to the payment of dividends under our dividend policy. Therecan be no assurance as to the declaration of future quarterly cash dividends. Please see theheading “Declaration of Dividend and Initiation of Normal Course Issuer Bid” in section 2.1entitled “Recent Developments” for further information on the Company’s introduction of a quarterlycash dividend.

5. CAPITAL STRUCTURE

First Preferred Shares

Issuance in Series

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

Rank

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

Voting Rights

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

Second Preferred Shares

Issuance in Series

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

15

Rank

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

Voting Rights

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

Common Shares

Following the conversion of all of the Company’s ClassB Multiple Voting shares into ClassASubordinate Voting shares, the Company’s shareholders approved a special resolution on February2,2005 to amend the Company’s Articles in order to change each of the issued and outstanding ClassASubordinate Voting shares into one newly-created Common Share and to remove the ClassB MultipleVoting shares and the ClassA Subordinate Voting shares.

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

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

16

6. MARKET FOR SECURITIES

The Common Shares are listed on the NYSE and the TSX under the symbol “GIL”. The ClassASubordinate Voting shares (now the Common Shares), which were issued at an offering price of $0.88(Cdn$1.29), on a post-split basis, began trading on the TSX, the Montreal Exchange (the “ME”) andthe American Stock Exchange (“AMEX”) on June17, 1998. Prior to that date, there was no publicmarket for the ClassA Subordinate Voting shares. We delisted such shares from AMEX on August31,1999. On September1, 1999, the ClassA Subordinate Voting shares (now the Common Shares) commencedtrading on the NYSE. As a result of a restructuring of Canada’s stock exchanges, which took effecton December7, 1999, we are no longer listed on the ME.

The table below shows the monthly price range per share and the trading volume of the Common Sharesfor the fiscal year ended October3, 2010 on the TSX (in Cdn$) and on the NYSE (in US$).

17

7. DIRECTORS AND OFFICERS

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

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

18

Glenn J. Chamandy is one of the founders of the Company and has devoted his entire career tobuilding Gildan into an industry leader. Prior to February2004, Mr.Chamandy held the position ofPresident and Chief Operating Officer. He was then named President and Co-Chief Executive Officerand, in August2004, he was appointed to the position of President and Chief Executive Officer.

Robert M. Baylis, Chairman of the Board of the Company, serves as a director of two largecorporations, the New York Life Insurance Company (life insurance provider), where he is Chairmanof the Investment Committee, and Host Hotels & Resorts, Inc. (luxury hotels and resorts), where heis Lead Director. He is also a Trustee and Chairman of the Executive Committee of the Rubin Museumof Art in New York City and a Trustee and Chairman of the Audit Committee of the Woods HoleOceanographic Institution. He was formerly a director of Covance Inc. (drug development), PartnerRe Limited (reinsurance), Gryphon Holdings, Inc. (insurance company) and of the WhartonInternational Forum, an executive education program. Mr.Baylis retired from Credit Suisse FirstBoston as Vice-Chairman in 1996, after thirty-three years with this investment banking firm and itsassociated corporations, including a term as the Chairman and Chief Executive Officer of CreditSuisse First Boston (Pacific). Mr.Baylis was educated at Princeton University and Harvard BusinessSchool and is a chartered financial analyst.

William D. Anderson has had a career as a business leader in Canada spanning over thirty years. Mr.Anderson joined the Bell Canada organization in 1992, where from 1998 to 2001 he served as ChiefFinancial Officer of BCE Inc., Canada’s largest telecommunications company. From 2001 to 2005, Mr.Anderson served as President of BCE Ventures (the strategic investment unit of BCE Inc.) and he waspreviously, from 2001 to 2007, the Chairman and Chief Executive Officer of Bell CanadaInternational Inc. (a subsidiary of BCE that was formed to invest in telecommunications operationsoutside 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 a partner for elevenyears. Mr.Anderson is also Chairman of the Board of Nordion Inc., formerly known as MDS Inc.(global life sciences company) and serves on the boards of directors of TransAlta Corporation(power generation and energy marketing firm), where he is also Chairman of the Audit and RiskCommittee, as well as on the board of directors of Sun Life Financial Inc. (international financial services organization). Mr.Anderson was educated at the University of Western Ontario and is a member of the Institute ofChartered Accountants of Ontario.

Russell Goodman is a senior partner of PricewaterhouseCoopers, where he has served successively asManaging Partner of Project Finance and Privatization for the Americas, Managing Partner of the Montrealoffice, and Canadian Managing Partner of the Transactions Advisory Services group during the past twelveyears. Prior to the formation of PricewaterhouseCoopers in 1998, Mr. Goodman served for twenty-one yearswith Price Waterhouse, including 11 as a partner. Mr. Goodman is a member of the board of directors ofWhistler Blackcomb Holdings Inc. (ski resorts), where he is also a member of the Audit Committee, andserves on a number of advisory and not-for-profit boards. He is the past-president of the Canadian Club ofMontreal. He is a Fellow of the Order of Chartered Accountants of Quebec, is certified by the Institute ofCorporate Directors and is a Certified Fraud Examiner. Mr. Goodman was educated at McGill University.

George Heller has had a career as a business leader in the retail sector that spans over fortyyears. From 1999 to 2006, Mr.Heller served as President and Chief Executive Officer of theHudson’s Bay Company, Canada’s largest diversified general merchandise retailer, operating morethan 600 retail outlets in Canada under four banners: the Bay, Zellers, Home Outfitters and Fields.Prior to that, Mr.Heller was President and Chief Executive Officer of Zellers, the massmerchandise retailer of the Hudson’s Bay Company and a leading Canadian mass merchandise departmentstore. Mr.Heller has also held a number of other key positions in the retail industry, includingas President and Chief Executive Officer of Kmart Canada (discount department stores), President,North America & Europe of Bata Industries Ltd. (international footwear manufacturer) and ExecutiveVice-President of Woodwards Department Stores (department store chain). Mr.Heller also served asPresident and Chief Executive Officer of the Victoria Commonwealth Games. Mr.Heller currentlyserves as President of the Commonwealth Games of Canada Foundation (fundraiser for amateurathletes) and is a member of its board of directors. Mr.Heller also serves as Chairman of theBoard of the Asia Pacific Foundation of Canada (not-for-profit think-tank on Canada’s relationswith Asia) and sits on the board of directors of Sport BC (advocate for amateur sports in BritishColumbia). Mr.Heller has received Honorary Doctorates from Ryerson University and the Universityof Victoria. Mr.Heller has acted as Honorary Consul General of Thailand since 2008 and HonoraryTrade Advisor to the Government of Thailand since 2000.

19

Sheila O’Brien, CM, is President of Belvedere 1 Investments Ltd., a private investment company, andis also a business advisor and corporate director. She has had a thirty-year career as a seniorexecutive in the oil and gas and petrochemical sectors in the areas of human resources, investorrelations and public and government relations. Prior to 2004, Mrs.O’Brien was SeniorVice-President, Human Resources, Public Affairs, Investor and Government Relations at NOVAChemicals Corporation, a producer of commodity plastics and chemicals, where she was the architectof a corporate restructuring practice that was designated a worldwide best practice by Watson WyattConsulting Firm. She has also been active on the boards of directors of over thirty public sectorand not-for-profit organizations and was awarded the Order of Canada for her community leadershipin 1998. Mrs.O’Brien also serves on the boards of directors of MaRS (Medical and Related Sciences)(biotechnology accelerator), where she is Chair of the Human Resources Committee and AdvantageEnergy Income Fund (oil and gas royalty trust). In addition to her corporate career, she has actedas a special advisor to the president at the University of Calgary. Mrs.O’Brien is the co-authorof the book “An Extraordinary West — A Narrative Exploration of Western Canada’s Future” publishedin November2010. She is a graduate of the MTC program at the University of Western Ontario andcompleted a one-year sabbatical on creativity and innovation at various U.S. schools in 1990.

Pierre Robitaille is a business advisor and a corporate director. Mr.Robitaille previously pursuedhis career at SNC-Lavalin Group Inc., a global engineering-construction firm, where he wasExecutive Vice-President and Chief Financial Officer from 1990 to 1998. Prior to this, Mr.Robitaille was in public practice for more than twenty years with the public accounting andmanagement consulting firm of Ernst & Whinney, where he held the positions of Managing Partner ofthe Montreal office, President of the firm in Québec, and member of its national board ofdirectors. Mr.Robitaille also serves on the board of directors of Nav Canada (civil air navigationservices provider). Mr.Robitaille is a Fellow member of the Québec Order of Chartered Accountants.He was educated at HEC-Montreal and McGill Business School.

James R. Scarborough has had a career as a business leader in the retail industry that spans overthirty-eight years. Mr.Scarborough retired in June2010 as Chairman of the Board of Stage Stores,Inc., a U.S. based specialty department store retailer that operates over 780 department stores inthirty-nine states under five banners: Bealls, Goody’s, Palais Royal, Peebles, and Stage. Mr.Scarborough joined Stage Stores in 2000 as its President and Chief Executive Officer, and held thisposition until his retirement in 2008. Mr.Scarborough previously held other senior positions inthe retail sector, including President and Chief Executive Officer of Busy Body, Inc. (a specialtyretailer of premium fitness equipment) and Seattle Lighting, Inc. (a supplier of lighting fixturesto the homebuilder, commercial and retail markets), as well as President and Chief OperatingOfficer of Enstar Specialty Retail, Inc. (a footwear and women’s apparel retailer) and itssubsidiary AMRET, Inc. Mr.Scarborough began his retail career in 1972, at Filene’s of Boston, adivision of Federated Department Stores. Mr.Scarborough also serves on the board of directors ofCharming Charlie, Inc. (a women’s fashion accessories house). Mr.Scarborough was educated at St.Michael’s College.

Richard P. Strubel is a corporate director. Prior to 2008, he was Vice-Chairman of the Board ofCardean Learning Group (formerly known as Unext), a provider of advanced education over theInternet, where from 1999 to 2004 he served as President and Chief Operating Officer. From 1990 to1999, Mr.Strubel was Managing Director of Tandem Partners, Inc., a privately-held managementservices firm, and from 1984 to 1994, he served as President and Chief Executive Officer ofMicrodot, Inc. Prior to that, Mr.Strubel served as President of Northwest Industries, then aNYSE-listed company, which included Fruit of the Loom and BVD among its operating entities. Mr.Strubel also serves on the boards of directors of the mutual funds of Goldman Sachs & Co. and isChairman of the Board of the Mutual Funds of The Northern Trust. Mr.Strubel is also Trustee ofthe University of Chicago. Mr Srubel was educated at Williams College and Harvard Business School.

Gonzalo F. Valdes-Fauli is Chairman of the Board of BroadSpan Capital LLC, an investment bankingfirm specializing in financial advisory services. Mr.Valdes-Fauli retired from Barclays Bank PLC(major UK-based global bank) in 2001, where he held the position of Vice-Chairman, BarclaysCapital, and Group CEO, Latin America. Mr.Valdes-Fauli also serves on the board of directors ofBlue Cross Shield of Florida (health insurance provider). Mr.Valdes-Fauli also served as Chairmanof the Board of Republic Bank of Dominican Republic (financial services provider) until November2007. He is also Trustee Emeritus of the University of Miami and Spring Hill College in Mobile,Alabama. Mr.Valdes-Fauli holds a Master’s Degree in international finance from ThunderbirdGraduate School for International Management.

Laurence G. Sellyn was appointed to the position of Executive Vice-President, Chief Financial andAdministrative Officer of the Company in November2005. He joined Gildan as ExecutiveVice-President, Finance and Chief

20

Financial Officer of the Company in April1999. Prior to joining Gildan, Mr.Sellyn served asSenior Vice-President, Finance and Corporate Development and Chief Financial Officer of WajaxLimited, an industrial distribution company, where he was employed from October1992 to March1999.Prior to joining Wajax, he was employed by Domtar Inc., where he held various positions, includingCorporate Controller and Vice-President, Business Planning and Development. Mr.Sellyn is a Fellowof the Institute of Chartered Accountants of England and Wales and a graduate of Oxford University.Mr.Sellyn is on the Advisory Board of Héritage Montréal, and acts as Co-Chairman of theircampaigns.

Michael R. Hoffman joined Gildan in October1997. He served as Vice-President, Sales and Marketingfor the international division until his appointment as President of Gildan Activewear SRL inFebruary2001. Prior to joining Gildan, Mr.Hoffman was employed by Fruit of the Loom, Inc., wherehe last served as Divisional Vice-President of the Activewear Division.

Georges Sam Yu Sum has been Executive Vice-President, Operations of the Company since 2000. From1998 to 2000, he served as Vice-President, Operations of the Company and from 1995 to 1998, heserved as Director of Operations of the Company. Prior to joining Gildan in 1995, Mr.Sam Yu Sumspent sixteen years with Dominion Textiles, where he served in various managerial capacities, frommanufacturing to sales.

Benito Masi has been involved in apparel manufacturing in North America for over twenty-five years.He joined Gildan in 1986, where he held various positions. He was appointed Vice-President, ApparelManufacturing in February2001 and his title was changed to Vice-President, Corporate ApparelOperations in September2003. In August2004, he was appointed Executive Vice-President, ApparelManufacturing and was appointed Executive Vice-President, Manufacturing in January2005.

Eric R. Lehman joined Gildan in December2006 as Executive Vice-President, Supply Chain. InNovember2008, Mr.Lehman’s responsibilities were expanded to include information technology andoperational excellence and his title changed to Executive Vice-President, Supply Chain, InformationTechnology and Operational Excellence. He has over twenty years of experience in the supply chainfunction with major national apparel brands. Prior to joining Gildan, Mr.Lehman was employed byRussell Corporation, where he last served as Vice President of Supply Chain. Prior to that, he heldsenior supply chain planning positions at both Fruit of the Loom, Inc. and the Hanes Division ofSara Lee Corporation.

Richard Petersen joined Gildan in May2010 as Executive Vice-President, Corporate Citizenship.Prior to joining Gildan, Mr.Petersen established a corporate responsibility practice at NATIONALPublic Relations, a practice ranked among the Top 10 in the world for communications firms byCorporate Responsibility Officer magazine. In 2009, Mr.Petersen was recognized as one of Quebec’s10 Environmental Leaders by Les Affaires newspaper.

As at December6, 2010, the executive officers and directors of the Company as a group own10,274,692 Common Shares, which represents 8.5% of the voting rights attached to all CommonShares.

8. AUDIT COMMITTEE DISCLOSURE

Mandate of the Audit and Finance Committee

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

Composition of the Audit and Finance Committee

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

William D. Anderson — Mr.Anderson, the Chairman of the Audit and Finance Committee, is achartered accountant and has had a business career spanning over thirty years. From 1998 to 2001,he served as Chief Financial Officer of BCE Inc., Canada’s largest telecommunications company.From 2001 to 2005, Mr.Anderson served as President of BCE Ventures (the strategic investment unit of BCEInc.) and he was previously the Chairman and

21

Chief Executive Officer of Bell Canada International Inc. (a subsidiary of BCE that was formed toinvest in telecommunications operations outside Canada). Prior to joining the Bell Canadaorganization in 1992, Mr.Anderson was in public practice for nearly twenty years with theaccounting firm KPMG, 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 Chartered Accountants of Ontario.

George Heller — Mr.Heller is the retired President and Chief Executive Officer of the Hudson’sBay Company, Canada’s largest diversified general merchandise retailer, a position he held from1999 to 2006. Mr.Heller’s career in the retail sector spans over forty years and he has held anumber of key executive positions in that industry, including as President and Chief ExecutiveOfficer of Zellers, the mass merchandise retailer of the Hudson’s Bay Company, President and ChiefExecutive Officer of Kmart Canada (discount department stores), President, North America & Europeof Bata Industries Ltd. (international footwear manufacturer) and Executive Vice-President ofWoodwards Department Stores (department store chain).

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

Richard P. Strubel — Mr.Strubel is a corporate director. Prior to 2008, he was Vice-Chairman ofthe Board of Cardean Learning Group, a provider of advanced education over the Internet, where hepreviously served as President and Chief Operating Officer. Prior to that, Mr.Strubel served asManaging Director of Tandem Partners, Inc., a privately-held management services firm, and from1984 to 1994, he served as President and Chief Executive Officer of Microdot, Inc. and President ofNorthwest Industries, then a NYSE-listed company which included Fruit of the Loom and BVD among itsoperating entities. Mr.Strubel also serves on the boards of directors of the mutual funds ofGoldman Sachs & Co., and is Chairman of the Board of theMutual Funds of The Northern Trust. Mr.Strubel is also Trustee of the University of Chicago.He was educated at Williams College and Harvard Business School.

Gonzalo F. Valdes-Fauli — Mr.Valdes-Fauli is a retired Vice-Chairman of Barclays Capital, theinvestment banking division of Barclays Bank, London, England. Mr.Valdes-Fauli served as a memberof the management committee of Barclays Capital from 1988 to 2001. He was Group CEO of BarclaysBank Latin America from 1988 to 2001. He is Chairman of BroadSpan Capital LLC, an investmentbanking firm, and served as Chairman of the Board of Republic Bank of Dominican Republic untilNovember2007. Mr.Valdes-Fauli has more than thirty years of experience in finance and holds aMaster’s Degree in international finance from Thunderbird Graduate School for InternationalManagement.

Pre-Approval of Non-Audit Services

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

22

External Auditor Service Fees

The aggregate fees billed by KPMG LLP (“KPMG”), the Company’s external auditor, for variousaudit-related and non-audit services rendered for the fiscal years 2010 and 2009 were as follows:

Audit Fees — The aggregate audit fees billed by KPMG were Cdn$1,500,608 for fiscal 2010 andCdn$1,373,897 for fiscal 2009. These services consisted of professional services rendered for theannual audit of the Company’s consolidated financial statements and the quarterly reviews of theCompany’s interim financial statements, consultation concerning financial reporting and accountingstandards, including assistance in preparing the Company for compliance with the requirements of International FinancialReporting Standards, and services provided in connection with statutory and regulatory filings orengagements. The fees for the annual audit of the Company’s consolidated financial statementsinclude fees relating to KPMG’s audit of the effectiveness of the Company’s internal control overfinancial reporting.

Audit-Related Fees — The aggregate audit-related fees billed by KPMG were Cdn$786,003 for fiscal2010 and Cdn$118,500 for fiscal 2009. These services consisted of due diligence services relatingto actual and potential acquisitions totalling Cdn$650,376 for fiscal 2010 (nil for fiscal 2009),and translation services in both years. Such due diligence services related primarily to financialaccounting and internal control issues.

Tax Fees — The aggregate tax fees billed by KPMG were Cdn$416,780 for fiscal 2010 and Cdn$261,474for fiscal 2009. These services consisted of tax compliance, including the review of tax returns,assistance regarding income, capital and sales tax audits, the preparation of annual transferpricing studies, and tax advisory services relating to domestic and international taxation.

All Other Fees — The aggregate fees billed by KPMG for all other professional services renderedwere nil for fiscal 2010 and nil for fiscal 2009.

9. LEGAL PROCEEDINGS

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

As of the date hereof, the claims with respect to which Gildan was a party to or involved in, fordamages in excess of 10% of its current assets, are the following:

Canadian ClassAction Suits

On June12, 2008, Gildan and certain of its senior officers were named defendants in a proposedclass action lawsuit filed in the Ontario Superior Court of Justice on behalf of persons whoacquired Common Shares between August2, 2007 and April29, 2008, alleging negligence andnegligent/reckless misrepresentation in respect of the Company’s prior statements concerning itsfinancial guidance for the 2008 fiscal year and comments regarding the scale of production of itsDominican Republic facility. The claim further proposes to seek leave from the Ontario court tobring statutory misrepresentation civil liability claims under Ontario’s Securities Act. A motion,along with affidavit evidence, for leave to pursue such statutory liability claims and classcertification have been filed by the plaintiff. No date has been set yet for the hearing of thatmotion. The Ontario suit claims damages of Cdn$500million, punitive damages of Cdn$5million andother monetary relief.

A motion has also been filed on June17, 2008 against the same defendants before the QuébecSuperior Court for authorization to commence a class proceeding on behalf of persons who acquiredCommon Shares between August2, 2007 and April29, 2008. It makes similar allegations as theOntario action and alleges negligence and negligent/reckless misrepresentation. No date has beenset yet for the hearing of that motion. The Québec motion seeks to proceed with a claim forunspecified damages and other monetary relief. A motion requesting permission to amend the petitionwas filed on April6, 2010 to align allegations in said petition with those pleaded in the Ontarioaction. A case management judge has been appointed but no date has been set yet for the caseconference.

23

Both Canadian proceedings have yet to be certified as class actions by their respective courts.The Company strongly contests the basis upon which these actions are predicated and intends tovigorously defend its position. However, due to the inherent uncertainties of litigation, it isnot possible to predict the final outcome of these lawsuits or determine the amount of anypotential losses, if any.

United States ClassAction Suits

On June9, 2008, Gildan and certain of its senior officers were named as defendants in severalproposed class action lawsuits filed in the United States District Court for the Southern Districtof New York on behalf of persons who purchased or otherwise acquired Common Shares between August2, 2007 and April29, 2008. The lawsuits allege violations of United States federal securities lawsand assert that the Company issued a series of materially false and misleading statementsconcerning the Company’s financial performance and prospects. These U.S. lawsuits have beenconsolidated, and a consolidated amended complaint was filed on November17, 2008. The claims inthe U.S. suit are for unspecified damages.

On July1, 2009, the United States District Court granted the motion by Gildan and other defendantsto dismiss the action in its entirety, holding that the consolidated amended complaint failed toadequately allege the essential elements of a claim under the applicable provisions of the UnitedStates federal securities laws, including the existence of a material misstatement and fraudulentintent. On July17, 2009, plaintiffs filed a motion seeking reconsideration of this decision onlyinsofar as it declined to grant plaintiffs an opportunity to file a second amended complaint. OnJuly31, 2009, Gildan and the other defendants filed a response to plaintiffs’ motion seekingreconsideration. On December4, 2009, plaintiff’s motion seeking reconsideration was denied. Theplaintiffs have appealed the decision on the motion for reconsideration and the motion to dismiss,but no date has been set yet for the appeal.

The U.S. proceeding has yet to be certified as a class action by the court. The Company stronglycontests the basis upon which these actions are predicated and intends to vigorously defend itsposition. 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 potential losses, if any.

Proposed settlement agreement

On August3, 2010, the Company announced it had entered into an agreement to settle all claimsraised in these proposed class action lawsuits in both Canada and the United States, subject tofinal approval from the courts. In consideration of the dismissal of the proposed class actionscurrently pending before all three courts and releases from the proposed class members of theclaims against the Company and certain of its senior executives, the settlement agreement providesfor a total amount of $22.5million to be paid into an escrow account for distribution to theproposed class members. The settlement is conditional on the court’s approval and subject to theCompany’s option to terminate the settlement in the event valid opt-outs by the proposed classmembers exceed a pre-agreed confidential opt-out threshold. Under the agreement, the Company wouldhave no financial obligation as the settlement would be entirely funded by the Company’s insurers,and therefore no provision has been recorded in the 2010 Financial Statements.

In the event the Company were to elect to terminate the settlement agreement because valid opt-outsby proposed class members exceed the pre-agreed opt-out threshold, or if the courts do not providefinal approval of the settlement, the parties would revert to their litigation position immediatelyprior to the execution of the settlement agreement. If such event were to occur, the Company wouldcontinue to strongly contest the basis upon which these actions are predicated and would vigorouslydefend its position. Under this scenario, due to the inherent uncertainties of litigation, it wouldnot be possible to predict the final outcome of these lawsuits or determine the amount of anypotential losses, if any.

10. TRANSFER AGENT AND REGISTRAR

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

24

11. MATERIAL CONTRACTS

Other than the agreements entered into the normal course of business, the only material agreemententered into in fiscal 2010, or before fiscal 2010 and which is still in force is the ShareholderRights Plan Agreement approved by the Board of Directors on December1, 2010 and which will besubsequently submitted to the Company’s shareholders for ratification at the annual shareholders’meeting on February9, 2011. This agreement was filed through SEDAR on December3, 2010.

12. INTERESTS OF EXPERTS

KPMG, the external auditor of the Company, reported on the 2010 Financial Statements,which were filed with the securities regulatory authorities. We are advised that, as at the datehereof, the members of KPMG are independent in accordance with the Code of Ethics of the Ordre desComptables agréés du Québec. These rules are equivalent or similar to Rules of ProfessionalConduct applicable to chartered accountants in the other provinces of Canada.

13. FORWARD-LOOKING STATEMENTS

Certain statements included in this Annual Information Form constitute “forward-looking statements”within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadiansecurities legislation and regulations, and are subject to important risks, uncertainties andassumptions. This forward-looking information includes, amongst others, information with respect toour objectives and the strategies to achieve these objectives, as well as information with respectto our beliefs, plans, expectations, anticipations, estimates and intentions, including, without limitation, our expectation with regards to unit volume growth, sales revenue, cost reductions andefficiencies, gross margins, selling, general and administrative expenses, capital expenditures and the impact of non-recurring items.Forward-looking statements generally can be identified by the use of conditional or forward-lookingterminology such as “may”, “will”, “expect”, “intend”, “estimate”, “project”, “assume”,“anticipate”, “plan”, “foresee”, “believe” or “continue” or the negatives of these terms orvariations of them or similar terminology. We refer you to the Company’s filings with the Canadiansecurities regulatory authorities and the U.S. Securities and Exchange Commission, as well as the“Financial Risk Management” section beginning on page 22 of the 2010 Annual MD&A, and therisks described under the section “Risks and Uncertainties” beginning on page 36 of the 2010Annual MD&A for a discussion of the various factors that may affect the Company’s future results.Material factors and assumptions that were applied in drawing a conclusion or making a forecast orprojection are also set out throughout this document.

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

25

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

We believe that the expectations represented by our forward-looking statements are reasonable, yetthere can be no assurance that such expectations will prove to be correct. The purpose of theforward-looking statements is to provide the reader with a description of management’s expectationsregarding the Company’s fiscal 2011 financial performance and may not be appropriate for otherpurposes. Furthermore, unless otherwise stated, the forward-looking statements contained in thisAnnual Information Form are made as of the date hereof, and we do not undertake any obligation toupdate publicly or to revise any of the included forward-looking statements, whether as a result ofnew information, future events or otherwise unless required by applicable legislation orregulation. The forward-looking statements contained in this Annual Information Form are expresslyqualified by this cautionary statement.

14. ADDITIONAL INFORMATION

Additional information, including directors’ and officers’ remuneration and indebtedness, principalholders of the Company’s securities and securities authorized for insurance under the Company’sequity compensation plans is contained in the Circular. Additional financial information isprovided in the 2010 Financial Statements and the 2010 Annual MD&A for its most recently completedfinancial year, both of which are incorporated herein by reference.

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

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

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

26

APPENDIX A — MANDATE OF THE AUDIT AND FINANCE COMMITTEE

The following description of the mandate of the Audit and Finance Committee of the Company complieswith applicable Canadian laws and regulations, such as the rules of the Canadian SecuritiesAdministrators, and with the disclosure and listing requirements of the Toronto Stock Exchange(collectively, the “Canadian Corporate Governance Standards”), as they exist on the date hereof. Inaddition, this mandate complies with applicable U.S. laws, such as the Sarbanes-Oxley Act of 2002,and rules and regulations adopted thereunder, and with the New York Stock Exchange’s corporategovernance standards (collectively, the “US Corporate Governance Standards”), as they exist on thedate hereof. The mandate of the Audit and Finance Committee of the Company (the “Audit Committee”)shall be reviewed annually by the Board in order to ensure on-going compliance with such standards.

27

The responsibilities of the Audit Committee include the following:

28

29

30

* * *

31

A. Undertaking

Gildan Activewear Inc. (the “Registrant”) undertakes to make available, in person or bytelephone, representatives to respond to inquiries made by the staff of the Securities and ExchangeCommission (“SEC”), and to furnish promptly, when requested to do so by the SEC staff, informationrelating to the securities in relation to which the obligation to file an annual report on Form40-F arises or transactions in said securities.

B. Consent to Service of Process

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

C. Evaluation of disclosure controls and procedures

Our disclosure controls and procedures are designed to ensure that information required to bedisclosed in our reports filed with the SEC is recorded, processed, summarized and reported withinthe time periods specified in the SEC’s rules and forms and is accumulated and communicated to ourmanagement, including our principal executive officer and our principal financial officer, asappropriate, to allow timely decisions regarding required disclosure.

An evaluation was carried out under the supervision of, and with the participation of, ourmanagement, including our principal executive officer and our principal financial officer, of theeffectiveness of our disclosure controls and procedures (as such term is defined in the SecuritiesExchange Act of 1934 (the “Exchange Act”), as amended, Rules13a-15(e) and 15d-15(e)) as of the endof the period covered by this Annual Report on Form 40-F. Based on that evaluation, our principalexecutive officer and our principal financial officer concluded that our disclosure controls andprocedures were effective as of the end of such period.

D. Management’s annual report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control overfinancial reporting, as such term is defined in Rules13a-15(f) and 15d-15(f) under the ExchangeAct.

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

Under the supervision and with the participation of our principal executive officer and ourprincipal financial officer, management conducted an evaluation of the effectiveness of ourinternal control over financial reporting, as of October3, 2010, based on the framework set forthin Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO). Based on its evaluation under this framework, management concluded thatour internal control over financial reporting was effective as of that date.

E. Attestation report of the registered public accounting firm.

KPMG LLP (“KPMG”), an independent registered public accounting firm, that audited and reportedon our financial statements attached as Exhibit99.2 to this Annual Report on Form 40-F, has issuedan attestation report on the effectiveness of our internal control over financial reporting as ofOctober3, 2010. The attestation report is included on page 48 of the financial statements attachedas Exhibit99.2 to this Annual Report on Form 40-F.

F. Changes in internal controls over financial reporting.

There have been no changes during fiscal year 2010 in our internal control over financialreporting that have materially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.

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

G. Audit Committee Financial Experts

The Registrant’s board of directors has determined that it has at least three (3)auditcommittee financial experts serving on its audit committee. Mr.Pierre Robitaille, Mr.Gonzalo F.Valdes-Fauli and Mr.William D. Anderson have been determined to be such audit committee financialexperts and are independent, as that term is defined by the New York Stock Exchange’s listingstandards applicable to the Registrant. The SEC has indicated that the designation of Mr.Robitaille, Mr.Valdes-Fauli and Mr.Anderson as audit committee financial experts does not makeMr.Robitaille, Mr.Valdes-Fauli and Mr.Anderson “experts” for any purpose, impose any duties,obligations or liability on Mr.Robitaille, Mr.Valdes-Fauli and Mr.Anderson that are greater thanthose imposed on members of the audit committee and board of directors who do not carry thisdesignation or affect the duties, obligations or liability of any other member of the auditcommittee.

H. Code of Ethics

I. Principal Accountant Fees and Services

In addition to retaining KPMG to report upon the annual consolidated financial statements ofthe Registrant, the Registrant retained KPMG to provide various audit-related and non-auditservices in fiscal 2010. The aggregate fees billed for professional services by KPMG for each ofthe last two (2)fiscal years, were as follows:

Audit Fees — The aggregate audit fees billed by KPMG were Cdn$1,500,608 for fiscal 2010 andCdn$1,373,897 for fiscal 2009. These services consisted of professional services renderedfor the annual audit of the Company’s consolidated financial statements and the quarterlyreviews of the Company’s interim financial statements, consultation concerning financialreporting and accounting standards, including assistance in preparing the Company forcompliance with the requirements of International Financial Reporting Standards, andservices provided in connection with statutory and regulatory filings or engagements. Thefees for the annual audit of the Company’s consolidated financial statements include feesrelating to KPMG’s audit of the effectiveness of the Company’s internal control overfinancial reporting.

Audit-Related Fees — The aggregate audit-related fees billed by KPMG were Cdn$786,003 forfiscal 2010 and Cdn$118,500 for fiscal 2009. These services consisted of due diligenceservices relating to actual and potential acquisitions totalling Cdn$650,376 for fiscal 2010(nil for fiscal 2009), and translation services in both years. Such due diligence servicesrelated primarily to financial accounting and internal control issues.

Tax Fees — The aggregate tax fees billed by KPMG were Cdn$416,780 for fiscal 2010 andCdn$261,474 for fiscal 2009. These services consisted of tax compliance, including thereview of tax returns, assistance regarding income, capital and sales tax audits, thepreparation of annual transfer pricing studies, and tax advisory services relating todomestic and international taxation.

All Other Fees — The aggregate fees billed by KPMG for all other professional servicesrendered were nil for fiscal 2010 and nil for fiscal 2009.

J. Off-Balance Sheet Arrangements

Operating leases and commitments

The Registrant has no commitments that are not reflected in its balance sheets except foroperating leases and other purchase obligations, which are included in the table of contractualobligations on page 20 of its MD&A (see Exhibit99.1). As disclosed in Note 13 to the Registrant’sConsolidated Financial Statements (see Exhibit99.2), the Registrant has issued standby letters ofcredit and corporate guarantees primarily from various servicing agreements amounting to $21.8million at October3, 2010.

Derivative Financial Instruments

From time to time, the Registrant uses forward foreign exchange contracts to hedge cash flowsrelated to sales and operating expenses in foreign currencies (non-U.S. dollar). A forward foreignexchange contract represents an obligation to exchange a foreign currency with a counterparty at apredetermined rate. Credit risk exists in the event of failure by a counterparty to meet itsobligations. The Registrant’s exposure to foreign currency fluctuations is described in more detailin the “Financial Risk Management” section of its MD&A beginning on page 22 (see Exhibit99.1).

The Registrant does not use derivative financial instruments for speculative purposes. Forwardforeign exchange contracts are entered into with maturities not exceeding twenty-four months.

For the years ended October3, 2010 and October4, 2009, net earnings included a recognizedgain of $3.8million and a recognized loss of $0.1million, respectively, both relating toderivative financial instruments.

As disclosed in Note 20 to the Registrant’s Consolidated Financial Statements (see exhibit99.2), at October3, 2010 the Registrant had outstanding derivative financial instruments relatingto commitments to buy and sell foreign currencies through forward foreign exchange contracts. Thefair value of the forward foreign exchange contracts, determined using observable market inputs,was a net liability of $2.0million as at October3, 2010 and nil as at October4, 2009.

K. Tabular Disclosure of Contractual Obligations

See page 20 of Exhibit99.1.

L. Corporate Governance Guidelines

M. Identification of the Audit Committee

The Registrant has a standing audit committee established in accordance with Section3 (a)(58) (A)of the Exchange Act. The members of the Registrant’s audit committee are PierreRobitaille, William D. Anderson, Richard P. Strubel, Gonzalo F. Valdez-Fauli and George Heller, whojoined the audit committee in December2009. See the Audit Committee Disclosure section of ourAnnual Information Form included herein for additional information.

N. Summary of Significant Differences from NYSE Corporate Governance Rules

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

Although many of the NYSE Corporate Governance Standards do not apply to the Registrant, itnevertheless voluntarily complies with most of the NYSE Standards. In fact, the Registrant’scorporate governance practices differ significantly in only one respect from those required of U.S.domestic issuers under the NYSE Standards,

which is with respect to the approval of equity compensation plans. The NYSE Standards requireshareholder approval of all equity compensation plans and material revisions to such plans,regardless of whether the securities to be delivered under such plans are newly issued or purchasedon the open market, subject to a few limited exceptions. The TSX Rules, however, do not require ashareholder approval in all those circ*mstances. Hence, only the creation or material amendments toequity compensation plans that provide for new issuances of securities are subject to shareholderapproval. The Registrant has in place plans which did not require the approval of its shareholdersunder the TSX Rules but which could have required the approval of its shareholders under the NYSEStandards as applicable to U.S. domestic issuers.

SIGNATURES

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

DATED: December6, 2010

EXHIBIT INDEX