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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Gildan Activewear Inc | NYSE:GIL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.07 | -0.20% | 34.59 | 35.16 | 34.37 | 34.64 | 728,272 | 01:00:00 |
o
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Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934
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Or
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|
þ
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Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
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Title of each class
|
Name of each exchange on which registered
|
Common Shares
|
New York Stock Exchange
|
Rights to Purchase Common Shares
|
New York Stock Exchange
|
Yes þ
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No o
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Yes þ
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No o
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Emerging Growth Company o
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|
-
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Audited Consolidated Financial Statements for the fiscal year ended December 29, 2019 (the “2019 Annual Financial Statements”);
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-
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Management’s Discussion and Analysis for the fiscal year ended December 29, 2019 (the “2019 Annual MD&A”); and
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-
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The latest Notice of Annual Meeting of Shareholders and Management Information Circular filed on SEDAR.
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This Annual Information Form contains certain forward-looking statements that are based on Gildan’s current expectations, estimates, projections and assumptions and that were made by Gildan in light of its experience and its perception of historical trends. Results indicated in forward-looking statements may differ materially from the actual results. Please refer to the cautionary statement on pages 29 to 31 of this Annual Information Form for further explanation.
|
Subsidiary
|
Jurisdiction of Incorporation or Formation
|
Ownership percentage
|
Gildan Activewear SRL
|
Barbados
|
100%
|
Gildan Yarns, LLC
|
Delaware
|
100%
|
Gildan Branded Apparel SRL
|
Barbados
|
100%
|
Gildan Honduras Properties, S. de R.L.
|
Honduras
|
100%
|
Gildan Apparel (Canada) LP
|
Ontario
|
100%
|
Gildan Activewear (UK) Limited
|
United Kingdom
|
100%
|
Gildan Textiles de Sula, S. de R.L.
|
Honduras
|
100%
|
G.A.B. Limited
|
Bangladesh
|
100%
|
Gildan Activewear Honduras Textile Company, S. de R.L.
|
Honduras
|
100%
|
Gildan Activewear (Eden) Inc.
|
North Carolina
|
100%
|
Gildan Hosiery Rio Nance, S. de R.L.
|
Honduras
|
100%
|
Gildan Mayan Textiles, S. de R.L.
|
Honduras
|
100%
|
Gildan Charleston Inc.
|
Delaware
|
100%
|
Gildan Activewear Dominican Republic Textile Company Inc.
|
Barbados
|
100%
|
Gildan Honduras Trading, S. de R.L.
|
Honduras
|
100%
|
•
|
On February 19, 2020, Gildan’s Board of Directors approved a 15% increase in the amount of the current quarterly dividend and declared a cash dividend of $0.154 per Common Share payable on April 6, 2020 to shareholders of record on March 12, 2020.
|
•
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On February 19, 2020, the Company received approval from the Toronto Stock Exchange (“TSX”) to renew its normal course issuer bid (“NCIB”) commencing on February 27, 2020 to purchase for cancellation up to 9,939,154 Common Shares, representing approximately 5% of the Company’s issued and outstanding Common Shares. As of February 13, 2019 (the reference date for the NCIB), the Company had 198,783,090 Common Shares issued and outstanding. The Company is authorized to make purchases under the NCIB until February 26, 2021 in accordance with the requirements of the TSX. Purchases will be made by means of open market transactions on both the TSX and the New York Stock Exchange (“NYSE”), or alternative trading systems, if eligible, or by such other means as may be permitted by securities regulatory authorities, including pre-arranged crosses, exempt offers, private agreements under an issuer bid exemption order issued by securities regulatory authorities and block purchases of Common Shares. Under the NCIB, Gildan may purchase up to a maximum of 149,602 Common Shares daily through the facilities of the TSX, which represents 25% of the average daily trading volume on the TSX for the most recently completed six calendar months. The price to be paid by Gildan for any Common Shares will be the market price at the time of the acquisition, plus brokerage fees, and purchases made under an issuer bid exemption order will be at a discount to the prevailing market price in accordance with the terms of the order.
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•
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On February 19, 2020, Gildan’s Board of Directors approved the renewal and adoption of a shareholder rights plan (the “Rights Plan”), which will become effective upon confirmation and approval by the shareholders of the Company at the annual meeting of shareholders to be held on April 30, 2020. The Rights Plan will ensure that the Company and its shareholders continue to receive the benefits associated with the Company’s current shareholder rights plan, which is due to expire at the close of business on the date of the Company’s 2020 annual meeting of shareholders. The Rights Plan is designed to ensure that all shareholders of the Company are treated fairly in connection with any take-over offer or other acquisition of control of the Company. The Rights Plan was not adopted in response to any specific proposal to acquire control of the Company, nor is the Board of Directors aware of any pending or threatened take-over bid for the Company. The Rights Plan is similar to plans recently adopted by other Canadian companies and approved by their shareholders. If approved by the shareholders, the Rights Plan will remain in effect until the close of business on the date of the Company’s annual meeting of shareholders in 2023, with one renewal option subject to shareholder approval, and subject to earlier termination or expiration of the Rights Plan in accordance with its terms. A complete copy of the Rights Plan will be filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
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•
|
As part of the Company’s efforts to optimize its global manufacturing system, over the course of fiscal 2019, the Company began to consolidate some of its textile, sock and sewing operations, and announced plans to expand capacity in certain regions:
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–
|
During the second quarter of 2019, the Company completed the purchase of land in close proximity to its existing facility in Bangladesh. The land is intended to be used as part of the construction and development of a large multi-plant manufacturing complex, which is currently expected to include two large textile facilities and related sewing operations, to service international markets and support other key sales growth drivers.
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–
|
During the third quarter of 2019, the Company consolidated sheer hosiery manufacturing within its global supply chain through the closure of its sheer hosiery facility in Canada.
|
–
|
During the fourth quarter of 2019, the Company began to execute on plans for the closure of its textile and sewing operations in Mexico and began to ramp down production and relocate the equipment at these facilities to its operations in Central America and the Caribbean Basin. Operations in Mexico are expected to cease at the end of the first quarter of 2020.
|
•
|
At the end of the fourth quarter of 2019, the Company decided to significantly reduce its imprintables product line stock-keeping unit (“SKUs”) base by exiting all ship to-the-piece activities and discontinuing overlapping and less productive styles and SKUs between brands. This strategic product line initiative is an important part of the Company's “Back to Basics” strategy, with the goal of simplifying the Company’s product portfolio and reducing complexity in its manufacturing and distribution activities. Consequently, in connection with this initiative, the Company recorded charges of $55 million in the fourth quarter of 2019 consisting of inventory write-downs of approximately $48 million, and a net $7 million reversal of gross profit relating to anticipated product returns of discontinued SKUs.
|
•
|
On February 20, 2019, Gildan’s Board of Directors approved a 20% increase in the amount of the quarterly dividend and declared a cash dividend of $0.134 per Common Share payable on April 1, 2019 to shareholders of record on March 7, 2019.
|
•
|
On February 20, 2019, the Company received approval from the TSX to renew its NCIB commencing on February 27, 2019 to purchase for cancellation up to 10,337,017 Common Shares, representing approximately 5% of the Company’s issued and outstanding Common Shares. As of February 14, 2019 (the reference date for the NCIB), the Company had 206,740,357 Common Shares issued and outstanding. The Company was authorized to make purchases under the NCIB until February 26, 2020 in accordance with the requirements of the TSX. During the twelve-month period ended February 13, 2020, the Company repurchased and cancelled a total of 8,251,026 Common Shares under the NCIB through the facilities of the TSX and the NYSE for a total of cost of $256.8 million.
|
•
|
Effective January 1, 2018, the Company implemented executive leadership changes and consolidated its organizational structure to better leverage its go-to-market strategy across its brand portfolio and drive greater operational efficiency across the organization. The Company combined its Printwear and Branded Apparel operating businesses into one consolidated divisional operating structure. Consequently, starting in fiscal 2018 the Company began reporting under one reportable business segment. As part of this organizational consolidation, we centralized marketing, merchandising, sales, and administrative functions and streamlined our distribution network.
|
•
|
During 2018, the Company consolidated and reduced some of its sock manufacturing capacity. In the third quarter of fiscal 2018, the Company closed a smaller sock facility in North Carolina, U.S., which was acquired as part of the acquisition of Peds Legwear Inc. (“Peds”), and transitioned the production to its Rio Nance 4 sock facility in Honduras. During the fourth quarter of fiscal 2018, Gildan also began consolidating its sock operations in Honduras into one facility by integrating the majority of its sock production into its Rio Nance 4 facility. The Rio Nance 3 facility, previously the Company’s other sock facility, is now largely focusing on its garment dyeing operations. In the fourth quarter of fiscal 2018, the Company also decided to close the AKH textile facility in Honduras, which was acquired as part of the Anvil acquisition in 2012, operating in leased premises outside of the Company’s large manufacturing complex in Rio Nance. Textile production
|
•
|
On February 21, 2018, Gildan’s Board of Directors approved a 20% increase in the amount of the current quarterly dividend and declared a cash dividend of $0.112 per Common Share payable each quarter of fiscal 2018.
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•
|
On February 21, 2018, the Company received approval from the TSX to renew its NCIB commencing on February 27, 2018 to purchase for cancellation up to 10,960,391 Common Shares, representing approximately 5% of the Company’s issued and outstanding Common Shares. As of February 15, 2018 (the reference date for the NCIB), the Company had 219,207,838 Common Shares issued and outstanding. The Company was authorized to make purchases under the NCIB until February 26, 2019. On July 31, 2018, the Company received approval from the TSX to amend its NCIB in order to increase the maximum number of Common Shares that may be repurchased to 21,575,761 Common Shares, representing approximately 10% of the Company’s public float as at February 15, 2018. No other terms of the NCIB were amended. During the twelve-month period ended February 20, 2019, the Company repurchased and cancelled a total of 12,634,692 Common Shares under the NCIB through the facilities of the TSX and the NYSE for a total of cost of $367.5 million.
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•
|
On February 8, 2017, the Company acquired the American Apparel® brand and certain assets from American Apparel, LLC, (“American Apparel”) which filed for Chapter 11 bankruptcy protection on November 14, 2016. The total consideration for this acquisition was $98.5 million, including $10.5 million for inventory. The acquisition was financed by the utilization of the Company’s long-term bank credit facilities. The American Apparel® brand is a highly recognized brand among consumers and within the North American imprintables channel.
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•
|
On February 22, 2017, Gildan’s Board of Directors approved a 20% increase in the amount of the quarterly dividend and declared a cash dividend of $0.0935 per Common Share payable each quarter of fiscal 2017.
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•
|
On February 22, 2017, the Company received approval from the TSX to renew its NCIB commencing on February 27, 2017 to purchase for cancellation up to 11,512,267 Common Shares representing approximately 5% of the Company’s issued and outstanding Common Shares. As at February 17, 2017 (the reference date for the NCIB), the Company had 230,245,359 Common Shares issued and outstanding. The Company was authorized to make purchases under the NCIB until February 26, 2018. On November 2, 2017, the Company received approval from the TSX to amend its NCIB in order to increase the maximum number of Common Shares that may be repurchased to 16,117,175 Common Shares, representing 7.2% of the Company’s public float or 7% of the issued and outstanding Common Shares as at February 17, 2017. During the twelve-month period ended February 21, 2018, the Company repurchased and cancelled a total of 11,512,267 Common Shares under the NCIB through the facilities of the TSX and the NYSE for a total cost of $328.6 million, of which a total of 877,000 Common Shares were repurchased by way of private agreements with arm’s length third party sellers.
|
•
|
On February 22, 2017, the Company’s Board of Directors approved a new shareholder rights plan (the “Existing Rights Plan”) which became effective upon confirmation and approval by the shareholders of the Company at the annual general meeting of shareholders held on May 4, 2017. The Existing Rights Plan is designed to ensure that all shareholders of the Company are treated fairly in connection with any take-over offer or other acquisition of control of the Company. The Existing Rights Plan was not adopted in response to any specific proposal to acquire control of the Company, nor is the Board of Directors aware of any pending or threatened take-over bid for the Company. The Existing Rights Plan will remain in effect until the close of business on the date of the Company’s annual meeting of shareholders in 2020, with one renewal option subject to shareholder approval, and subject to earlier termination or expiration of the Existing Rights Plan in accordance with its terms. A complete copy of the Rights Plan can be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
|
•
|
On July 17, 2017, the Company acquired substantially all of the assets of a ring-spun yarn manufacturer with two facilities located in Columbus, Georgia for cash consideration of $13.5 million. Production from the yarn facilities, which manufacture combed and carded ring spun yarns will be used to support our sales of fashion basics products.
|
•
|
On April 4, 2017, the Company acquired a 100% interest in an Australian based activewear distributor for cash consideration of $5.7 million. This business is part of the Company’s international sales strategy.
|
Primary product categories
|
Product-line details
|
Brands
|
Activewear
|
T-shirts, fleece tops and bottoms, and sport shirts
|
Gildan®, Gildan Performance®, Gildan Platinum®(1), Gildan® Hammer™, Comfort Colors®(2), American Apparel®, Anvil® by Gildan®, Alstyle®(2), Prim + Preux®, GoldToe®
|
Hosiery
|
athletic, dress, casual and workwear socks, liner socks, socks for therapeutic purposes(4), sheer panty hose(5), tights(5), and leggings(5)
|
Gildan®, Gildan Platinum®(1), Under Armour®(3), GoldToe®, PowerSox®, GT a GoldToe Brand®, Silver Toe®, Signature Gold by Goldtoe®, Peds®, MediPeds®, Kushyfoot®(1), Therapy Plus®(1), All Pro®, Secret®(1), Silks®(1), Secret Silky®, American Apparel®
|
Underwear
|
men's and boys' underwear (tops and bottoms) and ladies panties
|
Gildan®, Gildan Platinum®(1)
|
Intimates
|
ladies' shapewear, intimates, and accessories
|
Secret®(1), Secret Silky®
|
|
United States
|
Central America
|
Caribbean Basin
|
Mexico
|
Asia
|
Yarn-spinning facilities(1):
conversion of cotton, polyester and other fibres into yarn |
■ Clarkton, NC
■ Cedartown, GA ■ Columbus, GA ■ Salisbury, NC (2 facilities) ■ Mocksville, NC ■ Eden, NC |
|
|
|
|
Textile facilities: knitting yarn into fabric, dyeing and cutting fabric
|
|
■ Honduras
(4 facilities) |
■ Dominican
Republic |
■ Agua Prieta(4)
|
■ Bangladesh
|
Sewing facilities(2):
assembly and sewing of cut goods |
|
■ Honduras
(3 facilities) ■ Nicaragua (3 facilities) |
■ Dominican
Republic (3 facilities) |
■Hermosillo(4)
|
■ Bangladesh
|
Garment-dyeing(3):
pigment dyeing or reactive dyeing process |
|
■ Honduras
|
|
|
|
Hosiery manufacturing facilities:
conversion of yarn into finished socks/sheer hosiery |
|
■ Honduras
|
|
|
|
COMMON SHARES
|
|||||||||||
Toronto Stock Exchange (TSX)(1)
|
New York Stock Exchange (NYSE)(2)
|
||||||||||
|
Month
|
High
(Cdn$)
|
Low
(Cdn$)
|
Trading Volume
|
|
Month
|
High
|
Low
|
Trading Volume
|
||
|
December(3)
|
41.71
|
41.05
|
230,845
|
|
|
December(3)
|
30.56
|
30.08
|
99,439
|
|
|
January
|
45.10
|
40.01
|
8,626,835
|
|
|
January
|
34.00
|
29.67
|
2,474,084
|
|
|
February
|
47.49
|
42.40
|
9,956,632
|
|
|
February
|
36.11
|
32.19
|
3,700,339
|
|
|
March
|
49.50
|
46.95
|
11,851,768
|
|
|
March
|
36.94
|
35.08
|
2,478,045
|
|
|
April
|
51.20
|
47.87
|
8,933,832
|
|
|
April
|
37.95
|
35.85
|
2,587,782
|
|
|
May
|
51.52
|
48.50
|
14,065,163
|
|
|
May
|
38.27
|
35.92
|
3,118,554
|
|
|
June
|
52.95
|
47.85
|
9,495,905
|
|
|
June
|
39.55
|
35.60
|
2,126,486
|
|
|
July
|
52.82
|
50.43
|
7,864,392
|
|
|
July
|
40.40
|
38.49
|
2,330,180
|
|
|
August
|
53.33
|
47.19
|
9,560,684
|
|
|
August
|
40.29
|
35.51
|
2,923,972
|
|
|
September
|
50.22
|
45.93
|
9,897,387
|
|
|
September
|
37.90
|
34.64
|
2,142,726
|
|
|
October
|
47.55
|
30.81
|
21,142,968
|
|
|
October
|
35.76
|
23.48
|
6,544,840
|
|
|
November
|
39.24
|
33.59
|
18,372,320
|
|
|
November
|
29.36
|
25.53
|
3,782,836
|
|
|
December
|
39.15
|
37.58
|
10,643,599
|
|
|
December
|
29.67
|
29.40
|
3,426,385
|
|
Name and Municipality of Residence
|
Principal Occupation
|
Director Since
|
Glenn J. Chamandy
Westmount, Québec, Canada |
President and Chief Executive Officer of the Company
|
May 1984
|
William D. Anderson(2)(3)
Toronto, Ontario, Canada
|
Corporate Director
|
May 2006
|
Donald C. Berg(4)
Lakewood Ranch, Florida, United States |
President of DCB Advisory Services (consulting services to food and beverage companies)
|
February 2015
|
Maryse Bertrand(1)(2)
Westmount, Québec, Canada |
Corporate Director
|
May 2018
|
Marc Caira(1)(2)
Toronto, Ontario, Canada |
Vice-Chairman of the Board of Directors of Restaurant Brands International Inc. (multinational quick service restaurant company)
|
May 2018
|
Shirley E. Cunningham(1)(3)
Estero, Florida, United States
|
Corporate Director
|
February 2017
|
Russell Goodman(1)(3)
Mont Tremblant, Québec, Canada
|
Corporate Director
|
December 2010
|
Charles Herington(2)(3)
Miami, Florida, United States
|
Chief Operating Officer, Vice-Chairman and President of Global Operations at Zumba Fitness LCC (worldwide provider of dance fitness classes)
|
May 2018
|
Luc Jobin(1)(3)
Westmount, Québec, Canada |
Corporate Director
|
February 2020
|
Craig Leavitt(1)(3)
New York, New York, United States
|
Corporate Director
|
May 2018
|
Anne Martin-Vachon(2)(3)
Mississauga, Ontario, Canada
|
Chief Retail Officer of Rogers Communications Inc. (a Canadian technology and media company)
|
February 2015
|
(1)
|
Member of the Audit and Finance Committee.
|
(2)
|
Member of the Corporate Governance and Social Responsibility Committee.
|
(3)
|
Member of the Compensation and Human Resources Committee.
|
(4)
|
Chairman of the Board.
|
Name and Municipality of Residence
|
Position Held Within the Company and Principal Occupation
|
Glenn J. Chamandy(1)
Westmount, Québec, Canada |
President, Chief Executive Officer and Director
|
Rhodri J. Harries(1)
Westmount, Québec, Canada |
Executive Vice‑President, Chief Financial and Administrative Officer
|
Michael R. Hoffman
St. Peter, Barbados |
President, Sales, Marketing and Distribution
|
Benito A. Masi
Panama City, Panama |
President, Manufacturing
|
Chuck J. Ward
Hickory, North Carolina, United States
|
Senior Vice-President, Yarn Spinning
|
•
|
The shareholder rights plan approved by the Board of Directors on February 22, 2017, ratified by the Company’s shareholders at the annual shareholders’ meeting on May 4, 2017. This agreement will expire on the date on which the annual meeting of the Company’s shareholders will be held in 2020, with one renewal option subject to shareholder approval, and subject to earlier termination or expiration in accordance with the plan’s terms. This agreement was filed on SEDAR on February 23, 2017, and is available at www.sedar.com.
|
•
|
our ability to implement our growth strategies and plans;
|
•
|
our ability to successfully integrate acquisitions and realize expected benefits and synergies;
|
•
|
the intensity of competitive activity and our ability to compete effectively;
|
•
|
changes in general economic and financial conditions globally or in one or more of the markets we serve;
|
•
|
our reliance on a small number of significant customers;
|
•
|
the fact that our customers do not commit to minimum quantity purchases;
|
•
|
our ability to anticipate, identify, or react to changes in consumer preferences and trends;
|
•
|
our ability to manage production and inventory levels effectively in relation to changes in customer demand;
|
•
|
fluctuations and volatility in the price of raw materials used to manufacture our products, such as cotton, polyester fibres, dyes and other chemicals;
|
•
|
our reliance on key suppliers and our ability to maintain an uninterrupted supply of raw materials and finished goods;
|
•
|
the impact of climate, political, social, and economic risks, natural disasters, and pandemics in the countries in which we operate or sell to, or from which we source production;
|
•
|
disruption to manufacturing and distribution activities due to such factors as operational issues, disruptions in transportation logistic functions, labour disruptions, political or social instability, bad weather, natural disasters, pandemics, such as the coronavirus, and other unforeseen adverse events;
|
•
|
compliance with applicable trade, competition, taxation, environmental, health and safety, product liability, employment, patent and trademark, corporate and securities, licensing and permits, data privacy, bankruptcy, anti-corruption, and other laws and regulations in the jurisdictions in which we operate;
|
•
|
the imposition of trade remedies, or changes to duties and tariffs, international trade legislation, bilateral and multilateral trade agreements and trade preference programs that the Company is currently relying on in conducting its manufacturing operations or the application of safeguards thereunder;
|
•
|
factors or circumstances that could increase our effective income tax rate, including the outcome of any tax audits or changes to applicable tax laws or treaties;
|
•
|
changes to and failure to comply with consumer product safety laws and regulations;
|
•
|
changes in our relationship with our employees or changes to domestic and foreign employment laws and regulations;
|
•
|
negative publicity as a result of actual, alleged, or perceived violations of labour and environmental laws or international labour standards, or unethical labour or other business practices by the Company or one of its third-party contractors;
|
•
|
changes in third-party licensing arrangements and licensed brands;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
operational problems with our information systems as a result of system failures, viruses, security and cyber security breaches, disasters, and disruptions due to system upgrades or the integration of systems;
|
•
|
an actual or perceived breach of data security;
|
•
|
our reliance on key management and our ability to attract and/or retain key personnel;
|
•
|
changes in accounting policies and estimates; and
|
•
|
exposure to risks arising from financial instruments, including credit risk on trade accounts receivables and other financial instruments, liquidity risk, foreign currency risk, and interest rate risk, as well as risks arising from commodity prices.
|
•
|
a minimum of three directors;
|
•
|
only “independent” (as contemplated by Canadian Corporate Governance Standards and US Corporate Governance Standards) directors shall be appointed, the whole as determined by the Board; no affiliate of the Company or any of its subsidiaries (including any person who, directly or indirectly, controls or is controlled by, or is under common control with the Company, or any director, executive officer, partner, member, principal or designee of such affiliate) may serve on the Audit Committee;
|
•
|
a member of the Audit Committee shall receive no compensation from the Company or any of its affiliates other than compensation as a director and committee member of the Company; prohibited compensation includes fees paid, directly or indirectly, for services as a consultant or as legal or financial advisor, regardless of the amount;
|
•
|
each member must be “financially literate” (as contemplated by Canadian Corporate Governance Standards and US Corporate Governance Standards), as determined by the Board;
|
•
|
at least one member must be an “audit committee financial expert” (as contemplated by US Corporate Governance Standards), as determined by the Board;
|
•
|
members of the Audit Committee shall be appointed annually by the Board upon recommendation of the Company’s Corporate Governance and Social Responsibility Committee (the “Corporate Governance Committee”); such members may be removed or replaced, and any vacancies on the Audit Committee shall be filled by the Board upon recommendation of the Company’s Corporate Governance Committee; membership on the Audit Committee shall automatically end at such time the Board determines that a member ceases to be “independent” as determined in the manner set forth above;
|
•
|
the Chair of the Compensation and Human Resources Committee of the Company is a member of the Audit Committee;
|
•
|
quorum of majority of members.
|
(a)
|
Overseeing financial reporting
|
(1)
|
monitoring the integrity and quality of the Company’s accounting and financial reporting process, disclosure controls and procedures, and systems of internal control over financial reporting, through independent discussions with management, the external auditors and the internal auditors;
|
(2)
|
reviewing, with management and the external auditors, the annual audited consolidated financial statements of the Company and accompanying information, (including the report of the auditors thereon to be included in the annual report of the Company), the Company’s management’s discussion and analysis (“MD&A”) and annual earnings press release, prior to their release, filing and distribution;
|
(3)
|
reviewing, with management and the external auditors, the condensed interim consolidated financial statements of the Company and accompanying information, including the Company’s quarterly MD&A and quarterly earnings press release, prior to their release, filing and distribution;
|
(4)
|
reviewing, with management and where appropriate, the external auditors, the financial information contained in prospectuses, registration statements, offering memoranda, annual information forms, management information circulars, Form 6‑K (including Supplemental Disclosure) and Form 40‑F and any other document required to be disclosed or filed by the Company before their public disclosure or filing with regulatory authorities in Canada or the U.S.;
|
(5)
|
reviewing, with management, the type, presentation, controls and processes relating to financial information to be included in earnings press releases and other documents required to be filed with regulatory authorities in Canada or the U.S. (including earnings guidance and other material forward-looking information, as well as any use of pro-forma or non-GAAP financial information);
|
(6)
|
reviewing, with management, that adequate procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the Company’s financial statements, such as annual reports and investor presentations, and periodically assessing the adequacy of those procedures;
|
(7)
|
reviewing, with the external auditors and management, the quality, appropriateness and disclosure of the Company’s accounting principles and policies, underlying assumptions and reporting practices, and any proposed changes thereto;
|
(8)
|
reviewing any analysis or other written communications prepared by management setting forth significant financial reporting issues, including the method used to account for significant unusual transactions or events and disclosures relating thereto, critical accounting estimates and judgments made in connection with the preparation of the financial statements, the analyses of the effect of alternative acceptable accounting policy choices, and the disclosure of sensitive matters such as related party transactions;
|
(9)
|
reviewing a copy of the representation letter provided to the external auditors from management and any additional representations required by the Audit Committee;
|
(10)
|
reviewing the external auditors’ quarterly review engagement report;
|
(11)
|
overseeing the procedures to review management certifications filed with applicable securities regulators;
|
(12)
|
reviewing the potential impact of any litigation, claim or other contingency and any regulatory or accounting initiatives that could have a material effect upon the financial position or operating results of the Company and the appropriateness of the disclosure thereof in the documents reviewed by the Audit Committee;
|
(13)
|
overseeing the procedures to monitor the public disclosure of information by the Company;
|
(14)
|
reviewing the Company’s disclosure policy on a regular basis;
|
(15)
|
reviewing the results of the external audit, any significant problems encountered in performing the audit, and management’s response and/or action plan related to any Management Letter issued by the external auditors and any significant recommendations contained therein.
|
(b)
|
Monitoring risk management and internal controls
|
(1)
|
receiving periodically management’s report assessing the adequacy and effectiveness of the Company’s disclosure controls and procedures;
|
(2)
|
receiving periodically management’s reports assessing the adequacy and effectiveness of the Company’s systems of internal control over financial reporting and reviewing the report of the auditors thereon;
|
(3)
|
reviewing insurance coverage (annually and as may otherwise be appropriate);
|
(4)
|
reviewing and approving the Company’s policies and parameters regarding hedging activity and derivatives contracts entered into by management in order to address risks associated with foreign exchange fluctuations, commodity prices, interest rates and any other risks where the Company enters into derivatives contracts;
|
(5)
|
assisting the Board with the oversight of the Company’s compliance with, and reviewing the Company’s processes for complying with, applicable legal and regulatory requirements, including securities law and tax compliance;
|
(6)
|
overseeing the confidential, anonymous procedures for the receipt, retention and treatment of complaints or concerns received by the Company regarding accounting, internal accounting controls or auditing matters or employee concerns regarding accounting or auditing matters;
|
(7)
|
requesting the performance of any specific audit, as required.
|
(c)
|
Monitoring internal auditors
|
(1)
|
ensuring that the head of internal audit has a functional reporting relationship with the Audit Committee;
|
(2)
|
overseeing the access by internal auditors to all levels of management in order to carry out their duties;
|
(3)
|
regularly monitoring the internal audit function’s performance, its responsibilities, staffing and budget;
|
(4)
|
obtaining periodic reports from the head of internal audit regarding internal audit findings and reviewing periodic reports from management on the progress of management’s action plans for the remediation of control deficiencies related to such findings.
|
(5)
|
approving the appointment and termination of the Company’s chief internal auditor;
|
(6)
|
ensuring the ongoing accountability of the internal audit function to the Audit Committee and to the Board.
|
(d)
|
Monitoring external auditors
|
(1)
|
performing annual evaluations of the performance of the external auditors, including assessing their qualifications and compensation as well as the quality and independence of their audits;
|
(2)
|
monitoring at least annually the results of the periodic regulatory and professional quality-control examinations of the quality of the external audits, including any required remedial action to be taken by the external auditors and any internal control implications for the Company;
|
(3)
|
recommending the retention and, if appropriate, the removal and replacement of external auditors (all of which is subject to shareholder approval);
|
(4)
|
overseeing all relationships between the external auditors and the Company including, determining which non-audit services the external auditors are prohibited from providing, approving or pre-approving policies defining audit and permitted non-audit services provided by the external auditors, overseeing the disclosure of all audit and permitted non-audit services provided by the external auditors, and reviewing and approving the total amount of fees paid by the Company to the external auditors for all audit and non-audit services;
|
(5)
|
overseeing the direct reporting and accountability of the external auditors to the Audit Committee and to the Board;
|
(6)
|
reviewing with external auditors and approving their annual audit plan document for the audit of the Company’s consolidated financial statements and internal controls over financial reporting.
|
(7)
|
overseeing the work of the external auditors, including the review of the external auditors’ quarterly and annual findings report presentations to the Audit Committee, and overseeing the resolution of any disagreement between the auditors and management regarding accounting and financial reporting;
|
(8)
|
discussing with the external auditors the quality and not just the acceptability of the Company’s accounting principles, including (i) critical accounting policies and practices used, (ii) critical accounting estimates and matters involving significant uncertainty, (iii) alternative treatments of financial information that have been discussed with management, the ramification of their use and the treatment preferred by the external auditors, as well as (iv) other material written communications between the Company and the external auditors with respect thereto;
|
(9)
|
reviewing at least annually, representations by the external auditors describing their internal quality-control procedures;
|
(10)
|
reviewing at least annually, the external auditors’ representations as to independence and holding discussions with the external auditors as to any relationship or services that may impact their objectivity or independence;
|
(11)
|
reviewing hiring policies for employees or former employees of the Company’s firm of external auditors;
|
(12)
|
overseeing the selection and rotation of lead, concurring and other partners involved in the audit.
|
(e)
|
Reviewing financings and capital allocation plans
|
(1)
|
reviewing the Company’s capital allocation plans, including dividend policies, share buyback programs, overall debt structure, and target leverage ratio, and making recommendations to the Board for approval thereon;
|
(2)
|
reviewing the adequacy, terms and conditions, and compliance relating to the Company’s material financing arrangements, including sales of accounts receivable, supplier factoring and hedging, and making recommendations to the Board for approval thereon.
|
(f)
|
Evaluating the performance of the Audit Committee
|
(1)
|
overseeing the existence of processes to annually evaluate the performance of the Audit Committee.
|
A.
|
Undertaking
|
B.
|
Consent to Service of Process
|
Name:
|
Lindsay Matthews
|
Title:
|
Vice-President, General Counsel and Corporate Secretary
|
Exhibit No.
|
Description
|
|
99.1
|
Management’s Discussion and Analysis of the Registrant for the year ended December 29, 2019
|
|
99.2
|
Audited comparative consolidated financial statements of the Registrant as at and for the year ended December 29, 2019
|
|
99.3
|
Consent of KPMG LLP
|
|
99.4
|
Officers’ Certifications Required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
99.5
|
Officers’ Certifications Required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code
|
|
101
|
XBRL Instance Document
|
|
1 Year Gildan Activewear Chart |
1 Month Gildan Activewear Chart |
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