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FORM 10-K

Commission File Number: 000-49713

ACCENTURE SCA
(Exact name of Registrant as specified in its charter)

1 rue Guillaume Kroll
L-1882 Luxembourg
(Address of principal executive offices)

(352) 26 42 35 00
(Registrant’s telephone number, including area code)

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

None.

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

Class I common shares, par value €1.25 per share

     Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

     Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) Yes  x  No  o

     The aggregate market value of the common equity of the Registrant held by non-affiliates of the Registrant on February 28, 2003 was approximately $10.8 billion dollars based on the closing price of the Accenture Class A common shares, par value $0.0000225 per share, reported on the New York Stock Exchange on such date of $15.34 per share, for which the Registrant’s Class I common shares, par value €1.25 per share, are redeemable. There is no established public trading market for the Registrant’s Class I common shares.

     The number of shares of the Registrant’s Class I common shares, par value €1.25 per share, outstanding as of October 31, 2003 was 889,480,662 (which number does not include 81,812,792 issued shares held by subsidiaries of the Registrant).

     Portions of the Annual Report on Form 10-K of Accenture Ltd, the general partner of the Registrant, filed on November 18, 2003, are incorporated by reference in Part II.

Table of Contents

PART I

Disclosure Regarding Forward-Looking Statements

          This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to our operations and our results of operations that are based on our current expectations, estimates and projections. Words such as “expects,” “intends,” “plans,” “projects,” believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. The reasons for this include changes in general economic and political conditions, including fluctuations in exchange rates, and the factors discussed below under the section entitled “Business — Risk Factors.”

Available Information

          We do not maintain a website, so we do not make our filings available by website. We will provide, however, free of charge to any person who makes a request, electronic or printed copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (the “SEC”). You may find, however, reports relating to our shares filed under Section 16(a) of the Exchange Act, by the directors and officers of Accenture Ltd, our general partner, on the Investor Relations section of its website at http://www.accenture.com/investor. We do not have a separate code of business ethics for Accenture SCA, nor do we have a board of directors or officers. All persons acting on our behalf, including the directors and executive officers of our general partner, Accenture Ltd, are subject to the terms of the Accenture Ltd Code of Business Ethics, a copy of which can be accessed on the Investor Relations section of Accenture Ltd’s website. Any amendments to, or waivers granted to the directors or officers of Accenture Ltd from a provision of the Accenture Ltd Code of Business Ethics will be disclosed, under existing Accenture Ltd policy, through the Investor Relations section of Accenture Ltd’s website. Requests for all materials should be made to the Investor Relations group of Accenture Ltd, 1235 Avenue of the Americas, 18th Floor, New York, New York 10105, telephone +1 877.ACN.5659 in the United States and Puerto Rico, +1.703.797.1711 outside the United States and Puerto Rico, fax +1.917.527.6126, email: investor.relations@accenture.com.

          We use the terms “Accenture,” “we,” “our,” and “us” in this report to refer to Accenture SCA and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year. We use the term “partner” to refer to the executive employees of Accenture with the “partner” title.

ITEM 1.   BUSINESS

Overview

          Accenture is one of the world’s leading management consulting, technology services and outsourcing organizations. We had approximately $11.82 billion of revenues before reimbursements for fiscal 2003. As of August 31, 2003, we had more than 83,000 employees based in over 110 offices in 48 countries delivering to our clients a wide range of management consulting, technology and outsourcing services and solutions. We operate globally with one common brand and business model designed to enable us to serve our clients on a consistent basis around the world. We work with clients of all sizes and have extensive relationships with the world’s leading companies and governments.

          Our leading position results from the fact that we are one of the largest management consulting, technology services and outsourcing companies in the world in terms of number of employees, industries served and revenues. Based on our knowledge of our business and the business of our competitors, we believe that few other organizations provide as broad a range of management consulting, technology services and outsourcing solutions to as many industries in as many geographic markets as we do.

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          Our business consists of using our industry and business-process knowledge, our service offering expertise and our insight into and access to existing and emerging technologies to identify new business and technology trends and formulate and implement solutions for clients under demanding time constraints. We help clients identify and enter new markets, increase revenues in existing markets, improve operational performance and deliver their products and services more effectively and efficiently.

Management Consulting, Technology and Outsourcing Services and Solutions

          Our business is structured around five operating groups, which together comprise 18 industry groups serving clients in every major industry. Our industry focus gives us an understanding of industry evolution, business issues and applicable technologies, enabling us to deliver innovative solutions tailored to each client or, as appropriate, more-standardized capabilities that we offer to multiple clients.

          Our capability groups, business process outsourcing (“BPO”) businesses and technology businesses are the innovation engines through which we develop our knowledge capital; build world-class skills and capabilities; and create, acquire and manage key assets central to our delivery of solutions to our clients.

          Our two capability groups, Business Consulting and Technology & Outsourcing, develop and deliver a full spectrum of services and solutions that address business opportunities and challenges common across industries. The subject matter experts within our capability groups support the industry experts working within our operating groups. Our Technology & Outsourcing capability group also manages our alliances with technology companies and oversees our intellectual property program.

          Our BPO businesses provide function-specific and/or industry-specific business services to multiple clients on an outsourced basis through standard operating models. Our technology businesses provide specialized technology and infrastructure capabilities focused on particular technology platforms, such as Microsoft Windows and .NET, as well as technology infrastructures designed from Accenture-owned-and-operated capabilities.

          Client engagement teams typically consist of industry experts, capability specialists and professionals with local market knowledge. Our client teams are complemented by professionals in our delivery centers, who capture replicable components of methodologies and technologies to create client solutions quickly, predictably and cost-effectively.

Operating Groups

          The following table shows the organization of our five operating groups and their 18 industry groups. For financial reporting purposes, our operating groups are our reportable operating segments. For certain historical financial information regarding our operating groups, please see Footnote 18 (Segment Reporting) to our consolidated financial statements below under “Financial Statements and Supplementary Data.”

     Communications & High Tech

          We are a leading provider of management consulting, technology, BPO and new-business development services and solutions to the communications, high technology, media and entertainment industries. We help our clients achieve

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the results made possible by the convergence of computing, content and communications. Examples of our services and solutions include the application of mobile technology, advanced communications network optimization, broadband and Internet protocol solutions as well as systems integration, customer care and workforce transformation services. In support of these services, we have developed an array of assets, methodologies and research facilities to demonstrate how new technologies can be applied in new and innovative ways to enhance our clients’ business performance.

          Our Communications & High Tech operating group comprises the following industry groups:

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Communications. Our Communications industry group serves many of the world’s leading wireline, wireless, cable and satellite communications companies. We provide a wide range of services designed to help our communications clients increase margins, improve asset utilization, improve customer retention, increase revenues, reduce overall costs and accelerate sales cycles.

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Electronics & High Tech. Our Electronics & High Tech industry group serves the aerospace, defense, consumer electronics, software, semiconductor, high technology manufacturing and network equipment industries. This industry group provides services in areas such as electronic commerce and strategy, enterprise resource management, customer relationship management and supply chain management.

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Media & Entertainment. Our Media & Entertainment industry group serves entertainment (television, music and movie), print and publishing companies. Professionals in this industry group provide a wide array of services, including digital content solutions designed to help companies effectively manage and distribute content across numerous media channels.

     Financial Services

          Our Financial Services operating group focuses on the opportunities created by our clients’ need to adapt to changing market conditions, including increased cost pressures, industry consolidation, regulatory changes, the creation of common industry standards and protocols, and the move to a more seamless and interconnected industry model. We help clients meet these challenges through a variety of services and solutions, including outsourcing strategies to increase cost efficiency and transform businesses, and customer-relationship-management initiatives that enable them to acquire new customers, retain profitable customers and improve their cross-selling capabilities.

          Our Financial Services operating group comprises the following industry groups:

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Banking. Our Banking industry group works with traditional retail and commercial banks, diversified financial enterprises and a variety of niche players and innovators. We help these organizations develop and execute strategies to target, acquire and retain customers more effectively, expand product and service offerings, comply with new regulatory initiatives, and leverage new technologies and distribution channels.

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Capital Markets. As the reinvention of the securities industry continues, our Capital Markets industry group helps investment banks, broker/dealers, asset management firms, depositories, clearing organizations and exchanges improve operational efficiency and transform their businesses to remain competitive.

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Insurance. Our Insurance industry group helps property and casualty insurers, life insurers, reinsurance firms and insurance brokers improve business processes, develop Internet insurance businesses and improve the quality and consistency of risk selection decisions. Our Insurance industry group has also developed a claims management capability that enables insurers to provide better customer service while optimizing claims costs. And, through Solutions Assurance Vie (“S.A.V.”), one of Accenture’s BPO businesses, we provide a variety of outsourced solutions to help insurers improve working capital and cash flow, deliver permanent cost savings and enhance long-term growth.

     Products

          Our Products operating group comprises the following industry groups: Automotive, Health Services, Industrial Equipment, Pharmaceuticals & Medical Products, Retail & Consumer, and Transportation & Travel Services.

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Automotive. Our Automotive industry group works with auto manufacturers, suppliers, dealers, retailers and service providers. Professionals in this industry group help clients develop and implement solutions focused on customer service and retention, channel strategy and management, branding, buyer-driven business models, cost reduction, customer relationship management and integrated supplier partnerships.

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Health Services. Our Health Services industry group serves integrated health care providers, health insurers, managed care organizations, biotech and life sciences companies and policy-making authorities. We are helping our clients in the health plan and health insurance areas in North America accelerate their businesses by connecting consumers, physicians and other stakeholders through electronic commerce. In Europe, we are helping create new connections between governments, physicians and insurers.

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Industrial Equipment. Our Industrial Equipment industry group serves the industrial and electrical equipment, construction, consumer durable and heavy equipment industries. We help our clients increase operating and supply chain efficiency by improving processes and leveraging technology. We also work with clients to generate value from strategic mergers and acquisitions. Our Industrial Equipment industry group also develops and deploys innovative solutions in the areas of channel management, collaborative product design, remote field maintenance, enterprise application integration and outsourcing.

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Pharmaceuticals & Medical Products. Our Pharmaceuticals & Medical Products industry group serves pharmaceuticals, biotechnology, medical products and other industry-related companies. With knowledge in discovery, development, manufacturing, supply chain, and sales and marketing issues, we help companies identify and exploit opportunities for value creation, such as reducing the time required to develop and deliver new drugs to market through process improvements and implementation of technology. Our Pharmaceuticals & Medical Products industry group also helps clients integrate new discovery technologies, realize the potential of genomics and biotechnology, become more patient-centric and create new business models that deliver medical breakthroughs more rapidly.

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Retail & Consumer. Our Retail & Consumer industry group serves a wide spectrum of retailers and consumer goods companies, including supermarkets, specialty premium retailers and large mass-merchandise discounters, as well as food, beverage, tobacco, household products, cosmetics and apparel companies. This industry group adds value to companies through innovative service offerings that address, among other things, new ways of reaching the retail trade and consumers through precision consumer marketing, maximizing brand synergies and cost reductions in mergers and acquisitions, improving supply chain efficiencies through collaborative commerce business models, and enhancing the efficiency of their internal operations.

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Transportation & Travel Services. Our Transportation & Travel Services industry group serves companies in the airline, freight transportation, third-party logistics, hospitality, gaming, car rental, passenger rail and travel distribution industries. We help clients develop and implement strategies and solutions to improve customer relationship management capabilities, operate more-efficient networks, integrate supply chains, develop procurement and electronic business marketplace strategies, and more effectively manage maintenance, repair and overhaul processes and expenses. And through Navitaire, Inc., one of Accenture’s BPO businesses, we provide airlines with reservations, revenue accounting and revenue management services on an outsourced basis.

     Resources

          Our Resources operating group serves the energy, chemicals, utilities, metals, mining, forest products and related industries. With market conditions driving energy companies to seek new ways of creating value for shareholders, deregulation fundamentally reforming the utilities industry and yielding cross-border opportunities, and an intensive focus on productivity and portfolio management in the chemicals industry, we are working with clients to create innovative solutions that are designed to help them differentiate themselves in the marketplace and gain competitive advantage.

          Our Resources operating group comprises the following industry groups:

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Chemicals. Our Chemicals industry group works with a wide cross-section of industry segments, including petrochemicals, specialty chemicals, polymers and plastics, gases and life science companies. We also have long-term outsourcing contracts with many of the industry leaders.

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Energy. Our Energy industry group serves a wide range of companies in the oil and gas industry, including upstream, downstream and oil services companies. Key areas of focus include helping clients to optimize production, manage the hydrocarbon supply chain, streamline retail operations and realize the full potential of third-party enterprise-wide technology solutions. In addition, our multi-client outsourcing centers enable clients to increase operational efficiencies and to exploit cross-industry synergies.

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Forest Products. The Forest Products industry group helps our clients in the lumber, pulp, papermaking, converting and packaging segments of the industry develop and implement new business strategies, manage complex change initiatives, and integrate processes and technologies to improve business performance.

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Metals & Mining. Our Metals & Mining industry group serves clients in metals industry segments ranging from steel and aluminum to copper, zinc and precious metals. We help clients develop innovative business strategies, redesign business processes, exploit technologies and improve their organizational performance and value.

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Utilities. Our Utilities industry group works with electric, gas and water utilities around the world to respond to an evolving and highly competitive marketplace. Our work includes helping utilities transform themselves from regulated, and sometimes state-owned, local entities to global deregulated corporations, as well as developing diverse products and service offerings to help our clients deliver higher levels of service to their customers. These offerings include customer relationship management, workforce enablement, supply chain optimization, and trading and risk management. In addition, through Accenture Business Services for Utilities, one of Accenture’s BPO businesses, we provide outsourced customer-care services to utilities, municipalities and retail energy companies in North America.

     Government

          As the world’s largest employers, governments face the challenge of improving the efficiency of their service delivery by creating new citizen-centric business models that leverage the power of new technologies. Our Government operating group works with government agencies in 24 countries, helping them transform to meet the demands of citizens and businesses. We typically work with defense, revenue, human services, justice, postal, education and electoral authorities, and our clients are national, provincial or state-level government organizations, as well as cities and other municipalities.

          We advise on, implement and in some cases operate government services, enabling our clients to use their resources more efficiently and to deliver citizen-centric services. We are also working with clients to transform their back-office operations, build Web interfaces and enable services to be delivered over the Internet. And, as governments are pressed to operate at higher levels with reduced resources, Accenture is introducing innovative contract models from the private sector that are becoming increasingly popular with governments. For instance, Accenture pioneered Public Sector Value, a patent-pending approach that enables governments to measure outcomes and make decisions that directly improve citizen satisfaction, much as public-sector companies measure shareholder value to enhance the value they deliver to shareholders.

          In addition, through Accenture eDemocracy Services, one of Accenture’s BPO businesses, we provide comprehensive election services that help governments manage, build and deploy election solutions, reduce time to deployment and mitigate the risks associated with the election process.

Capability Groups

          Our two capability groups, Business Consulting and Technology & Outsourcing, develop and deliver a full spectrum of services and solutions that address business opportunities and challenges common across industries. The professionals dedicated full-time to our capability groups help develop knowledge and assets for clients across all of the industries we serve.

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     Business Consulting Capability Group

          Our Business Consulting capability group comprises five service lines and two solution units. The five Business Consulting service lines are Customer Relationship Management, Finance & Performance Management, Human Performance, Strategy & Business Architecture and Supply Chain Management. Our two Business Consulting solution units are Accenture Customer Contact Solutions and Accenture Procurement Solutions; these solution units are responsible for creating, managing and growing certain BPO capabilities before they reach the mature stage of development in terms of client base, opportunities, and sales and execution capability.

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Customer Relationship Management. The professionals in our Customer Relationship Management service line help companies acquire, develop and retain more profitable customer relationships. We offer a full range of innovative capabilities that address every aspect of customer relationship management, including marketing, direct sales, customer service and field support. These capabilities include rigorous approaches to improving the return on marketing investment, methods for building insight into customers’ purchase habits and service preferences, tailoring offers and service treatment based on that insight, and unique methods of optimizing the quality, cost and revenue impact of sales and service operations. Together with our alliance partners, we bring these skills to our clients to help them increase the value of their customer relationships and enhance the economic value of their brands.

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Finance & Performance Management. The professionals in our Finance & Performance Management service line work with our clients’ finance and business unit executives to develop financial transaction processing, risk management and business performance reporting capabilities. Among the services we provide are strategic consulting with regard to the design and structure of the finance function, particularly acquisition and post-merger integration, the establishment of shared service centers, and the configuration of enterprise resource planning platforms for streamlining transaction processing. Our professionals, who often leverage the resources of our Accenture Finance Solutions BPO business, work with finance executives to develop and implement solutions that help them align their companies’ investments with their business objectives and establish security relating to the exchange of information to reporting institutions. Our finance capability services also address pricing and yield management, billing, credit risk and collection effectiveness, lending and debt recovery. Our performance management services address shareholder value targeting, scorecard and performance metrics development, and performance reporting solutions.

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Human Performance. The professionals in our Human Performance service line work with clients to solve human performance issues that are crucial to operational success, including recruiting and motivating key employees and management. Our integrated approach provides human resources, knowledge management, and learning and performance management solutions that increase the efficiency and effectiveness of our clients’ employees and operations, while reducing recruiting and training costs. Professionals in our Human Performance service line, who often work closely with professionals in our Accenture Learning and Accenture HR Services BPO businesses, help companies and governments reduce employees’ time to competency, increase knowledge retention, lower the costs of administering complex training content, and manage multiple learning delivery vehicles and vendors.

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Strategy & Business Architecture. The professionals in our Strategy & Business Architecture service line work with individuals at the highest levels of our clients’ organizations to help them strike the right balance between delivering current earnings and investing for the future. Our Strategy & Business Architecture professionals deliver independent, fact-based analyses that identify value-led strategies and solutions in shareholder value analysis, mergers and acquisitions, alliances and partnerships, corporate governance, marketing strategy, the strategic use of technology, optimization of information technology investments, and transformational programs where information technology is a significant component. In addition, our professionals analyze current and emerging market trends to help clients identify new business opportunities.

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Supply Chain Management. The professionals in our Supply Chain Management service line help clients across a broad range of industries to plan and implement innovative operating models that support strategies to enhance revenues, reduce costs, increase asset productivity and improve customer service. Our professionals combine their skills and leading-edge approaches to sourcing and procurement, supply chain planning, manufacturing and design, fulfillment and new solutions — such as supply chain and outsourcing, service parts management, radio frequency identification (RFID) technologies and supply chain education — to help our clients improve their operational performance.

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Accenture Customer Contact Solutions. The professionals in our Accenture Customer Contact Solutions solution unit deliver an end-to-end customer relationship management solution that uses advanced technologies and business process innovations to help clients revitalize sales and service capabilities. We help clients increase revenues while reducing the cost of sales and service by targeting five critical dimensions of customer interaction: executing marketing and customer strategy; building and integrating deep customer-insight capabilities; transforming customer contact and self-service capabilities; implementing high-performance operating models; and leveraging global labor sourcing strategies.

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Accenture Procurement Solutions. The professionals in our Accenture Procurement Solutions solution unit provide a comprehensive range of procurement services that are tightly integrated with Accenture consulting capabilities. We help clients quickly realize significant cost savings, effectively control expenditures and make better business decisions via improved management visibility and accountability. Our solutions include strategic sourcing, procurement effectiveness, compliance and electronic procurement solutions.

     Technology & Outsourcing Capability Group

          Our Technology & Outsourcing capability group comprises four service lines: Technology & Research, Global Business Solutions, Global Technology Solutions, and Outsourcing & Infrastructure Delivery. The group also manages our alliances with technology companies and oversees our intellectual property program.

          The four Technology & Outsourcing service lines are responsible for developing and delivering our full suite of technology and outsourcing capabilities. Client engagements typically incorporate professionals from several or all of these service lines, with the specific resources being used at a given time dependent on the requirements of the specific phase of each project.

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Technology & Research. Our Technology & Research service line comprises two main components, one focusing on designing, building and deploying complex technology solutions for clients; and the other focusing on technology research and development. Professionals in the former provide specialized capabilities that focus on particular technology platforms, such as Microsoft.NET and J2EE, as well as on supporting technology architectures. This group has expertise and capabilities in a wide range of areas, including infrastructure planning and transformation; security; operations management; network management; and mobility and messaging. These professionals also maintain and enhance Accenture’s methods, tools and architectures for building technology-based solutions in an efficient, predictable and cost-effective manner. The Technology & Research service line also includes Accenture Technology Labs, a dedicated technology research and development organization that identifies and develops new technologies that we believe will be drivers of our clients’ growth and will enable clients to be first to market with a unique capability or service offering.

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Global Business Solutions. Professionals in our Global Business Solutions service line design, build and deploy complex industry-specific, reusable and scalable solutions that typically integrate business processes, technology and human-performance components. The group leads all of our packaged development efforts around applications suites such as SAP, PeopleSoft, Siebel and Oracle, among others. Our Global Business Solutions professionals have expertise and capabilities in a wide range of areas, including enterprise resource planning, enterprise integration, data warehousing and pre-packaged business solution delivery.

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Global Technology Solutions. Our Global Technology Solutions service line comprises specialists who build, deploy and maintain technology-based solutions, focusing on application development, systems administration work and software maintenance. Working in concert with the other service lines within Accenture, Global Technology Solutions professionals apply a systematic approach to solutions delivery that capitalizes on proven repeatable processes, methods, tools and architectures. They also possess deep expertise on a range of hardware and software technologies. The Global Technology Solutions service line includes Avanade, Inc., our technology business that focuses on large-scale technology integration based on Microsoft’s enterprise platform. Combining Microsoft’s understanding of operating platforms and technologies with our experience in delivering solutions to our clients, Avanade, Inc. capitalizes on the advanced capabilities of the Microsoft Windows and .NET platforms to build customized, scalable solutions for complex electronic business and enterprise infrastructures.

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Outsourcing & Infrastructure Delivery. Professionals in our Outsourcing and Infrastructure Delivery service line provide full-service outsourcing solutions, from technology infrastructure to applications and business process outsourcing. Services offered include communications; technical support; desktop management and mobility; messaging and collaboration; hosting; applications development and management; and delivery services for both customized and industrialized business process outsourcing solutions.

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Alliances

          Alliances are central to our strategy, our client service business, and the way we deliver value to our clients. We have more than 100 sales and delivery alliances with companies whose capabilities complement our own, either by enhancing a service offering, delivering a new technology, or helping us extend our services to new geographies. By combining our alliance partners’ products and services together with our own capabilities and expertise, we create innovative, high-value business solutions for our clients.

          Due to the highly focused nature of these business relationships, some alliances are specifically aligned with one of our service lines, adding skills, technology and insights that are applicable across many of the industries we serve. Other alliances extend and enhance our offerings specific to a single industry group. Our alliances help us to sell and deliver innovative solutions far faster than we could do alone.

          Almost all of our alliances are non-exclusive. While individual alliance agreements do not involve direct payments to us that are material to our business, overall our alliance relationships generate revenues for us in the form of consulting services for implementing our alliance partners’ products and our related services.

BPO Businesses

          We continue to position ourselves to achieve a greater percentage of our revenues and growth through outsourcing, including BPO. We work with clients to develop and deliver business process innovations that transform their businesses or deliver higher performance levels at lower costs. To date, we have created eight BPO businesses, each providing services directly to clients through separate, dedicated delivery teams and, in some cases, through separate subsidiaries. Each of these BPO businesses provides function-specific and/or industry-specific business services to multiple clients on an outsourced basis through standard operating models. Some of our BPO businesses offer services to clients across many industries, while others offer services only to clients in a specific industry.

          Our function-specific BPO businesses, which serve clients in numerous industries, currently are Accenture Finance Solutions, Accenture HR Services, Accenture Learning and Connection to eBay. Our industry-specific BPO businesses currently are Accenture Business Services for Utilities, Accenture eDemocracy Services, Navitaire, Inc. and S.A.V.

     Accenture HR Services

          Our Accenture HR Services business provides outsourced human resources services to global enterprises seeking higher levels of employee performance, productivity and satisfaction at a lower cost. With a network of resources service centers and self-service delivery tools such as Web-based technology, Accenture HR Services offers efficient, secure, integrated human resources services across the employee lifecycle, from recruitment to payroll to pensions, providing large organizations with more efficient and effective human resources management systems.

     Accenture Learning

          Accenture Learning works with companies and governments to provide outsourced transformational learning solutions that cover all areas of a client’s learning needs, including learning delivery, processes and technologies, as well as multi-language delivery and content. Accenture Learning helps clients improve the productivity and performance of their workforces by reducing employees’ time to competency, increasing knowledge retention, lowering the costs of administering complex training content, and managing multiple learning delivery vehicles and vendors.

     Accenture Finance Solutions

          Accenture Finance Solutions provides outsourced financial management services to help clients streamline financial management, improve working capital and cash flow, and deliver permanent cost savings from operational activities. Professionals in this BPO business provide finance operations, applications management, financial accounting and management reporting services that help clients transform their finance organizations from internal cost centers to client-focused service providers. We also leverage our global network of Accenture delivery centers to bring our high-volume transaction processing capabilities and extensive experience in financial shared services to enhance clients’ service capabilities.

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     Connection to eBay

          Connection to eBay is an end-to-end service we created that enables large resellers to liquidate unsold inventory by building a significant sales channel on eBay. Connection to eBay customers are able to tap into eBay’s vast marketplace and operate an additional, efficient online channel, quickly and cost effectively, without having to change their internal processes and organizations. Developed with assistance from eBay, the Connection to eBay service offers capabilities ranging from listing management and customer support to warehousing and logistics management. By increasing efficiencies in the listing, sales and order-management processes, Connection to eBay can help sellers earn greater revenues than through traditional liquidation channels.

     Accenture Business Services for Utilities

          Accenture Business Services for Utilities offers a full suite of outsourced business services to utilities across North America to help them respond to the challenges of rising customer-service costs, inefficient operations and demands for better service at reduced costs. Among the business services we provide are customer care, finance and accounting, human resources, supply chain and information technology, as well as facilities and field services. We leverage our industry experience and network to provide clients with high-quality business services at significantly enhanced service levels while improving their cost structures.

     Accenture eDemocracy Services

          Accenture eDemocracy Services combines Accenture’s experience in elections process consulting with our recently acquired assets of election.com, a global election software and services company, to provide a comprehensive suite of services to election agencies and private-sector entities around the world. For public agencies we provide strategy and planning, program management, election systems management, voter registration systems development, and transformational outsourcing services and solutions to help them manage, build and deploy election solutions, reduce time to deployment and mitigate the risks associated with the election process. For private-sector entities — including corporations, business and professional associations, unions and cooperatives — we operate an Internet voting service that enables these clients to run Internet elections in multiple geographies and languages.

     Solutions Assurance Vie (S.A.V.)

          Our S.A.V. subsidiary provides outsourced life insurance policy design and management services to help insurers accelerate the marketing of life insurance products. S.A.V. provides high-volume transaction processing capabilities and has extensive experience in the insurance market in enhancing clients’ service capabilities.

     Navitaire, Inc.

          Our Navitaire, Inc. subsidiary offers a full range of business services to the airline industry, including reservations, direct ticket distribution, revenue protection, decision support, passenger revenue accounting and revenue management services. Through its application service provider (ASP) delivery model, Navitaire, Inc. offers industry-leading applications with reduced implementation time and risk, ensured operational reliability, and cost-effective fee structures. Navitaire, Inc.’s customer base includes more than 40 airlines worldwide, including some of the world’s largest airlines as well as a growing number of low-fare and midsize airlines.

Strategic Delivery Approach

          Our global strategic delivery approach emphasizes quality, reduced risk, speed to market and predictability. Our ultimate goal is to deliver price-competitive solutions and services that improve performance. One of our key strengths is our ability to create and capture replicable components of processes, methodologies, tools and technology assets that we can use to create tailored solutions for our clients in a cost-effective manner and under demanding time constraints. Our global network of more than 40 delivery centers — facilities where teams of Accenture professionals use these proven assets to create business and technology solutions for clients — enhance our ability to capitalize on a vast array of methodologies, tools and technology to deliver value to our clients. Client teams use these centers to deliver comprehensive, large-scale and customized solutions in less time than would be required to build them from the ground up. Our delivery centers improve the efficiency of our engagement teams through the reuse of solution designs, infrastructure and software, and by leveraging the experience of delivery center professionals. Reuse also increases solution longevity and reduces delivery risks and application maintenance.

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Research and Innovation

          We are committed to developing leading-edge ideas. We believe that research and innovation have been major factors in our success and will help us continue to grow in the future. We use our investment in research to help create, commercialize and disseminate innovative business strategies and technology. Our research and innovation program is designed to generate early insights into how knowledge can be harnessed to create innovative business solutions for our clients and to develop business strategies with significant value. We spent $250 million, $235 million and $271 million on research and development in fiscal 2003, fiscal 2002 and fiscal 2001, respectively, primarily through our operating groups and our capability groups to develop market-ready solutions for our clients. We also promote the creation of knowledge capital and thought leadership through the Accenture Technology Labs and the Accenture Institute for High Performance Business (formerly known as the Accenture Institute for Strategic Change).

Accenture Organizational Structure

          Accenture SCA, a Luxembourg partnership limited by shares, is a subsidiary of Accenture Ltd. Accenture Ltd is a Bermuda holding company with no material assets other than Class I and Class II common shares in Accenture SCA. Accenture Ltd’s only business is to hold these shares and to act as the sole general partner of Accenture SCA. Accenture Ltd owns a majority voting interest in Accenture SCA. As the general partner of Accenture SCA and as a result of Accenture Ltd’s majority voting interest in Accenture SCA, Accenture Ltd controls Accenture SCA’s management and operations and consolidates Accenture SCA’s results in its financial statements. Accenture operates its business through subsidiaries of Accenture SCA. Accenture SCA reimburses Accenture Ltd for its expenses but does not pay Accenture Ltd any fees.

          Prior to our transition to a corporate structure in fiscal 2001, we operated as a series of related partnerships and corporations under the control of our partners. In connection with our transition to a corporate structure, our partners generally exchanged all of their interests in these partnerships and corporations for Accenture Ltd Class A common shares or, in the case of partners in certain countries, Accenture SCA Class I common shares or exchangeable shares issued by Accenture Canada Holdings Inc., an indirect subsidiary of Accenture SCA (“Accenture Canada Holdings”). Generally, partners who received Accenture SCA Class I common shares or Accenture Canada Holdings exchangeable shares also received a corresponding number of Accenture Ltd Class X common shares, which entitle their holders to vote at Accenture Ltd shareholders’ meetings but do not carry any economic rights.

          Each Class A common share and each Class X common share of Accenture Ltd entitles its holder to one vote on all matters submitted to a vote of shareholders of Accenture Ltd. The holder of a Class X common share is not, however, entitled to receive dividends or to receive payments upon a liquidation of Accenture Ltd.

          Each Class I common share and each Class II common share of Accenture SCA entitles its holder to one vote on all matters submitted to a vote of shareholders of Accenture SCA. Each Accenture SCA Class II common share entitles Accenture Ltd to receive a dividend or liquidation payment equal to 10% of any dividend or liquidation payment to which an Accenture SCA Class I common share entitles its holder. Accenture Ltd holds all of the Class II common shares of Accenture SCA.

          Subject to contractual transfer restrictions, Accenture SCA is obligated, at the option of the holder, to redeem any outstanding Accenture SCA Class I common share at any time at a redemption price per share generally equal to the market price of an Accenture Ltd Class A common share at the time of the redemption. Accenture SCA may, at its option, pay this redemption price with cash or by delivering Accenture Ltd Class A common shares on a one-for-one basis. In addition, each of our partners in the United States, Australia and Norway has agreed that we may cause that partner to exchange that partner’s Accenture SCA Class I common shares for Accenture Ltd Class A common shares on a one-for-one basis if Accenture Ltd holds more than 40% of the issued share capital of Accenture SCA and we receive a satisfactory opinion from counsel or a professional tax advisor that such exchange should be without tax cost to that partner. This one-for-one redemption price and exchange ratio will be adjusted if Accenture Ltd holds more than a de minimis amount of assets (other than its interest in Accenture SCA and assets it holds only transiently prior to contributing them to Accenture SCA) or incurs more than a de minimis amount of liabilities (other than liabilities for which Accenture SCA has a corresponding liability to Accenture Ltd). We have been advised by our legal advisors in Luxembourg that there is no relevant legal precedent in Luxembourg quantifying or defining the term “de minimis.” In the event that a question arises in this regard, we expect that management will interpret “de minimis” in light of the facts and circumstances existing at the time in question. At this time, Accenture Ltd does not intend to hold any material assets other than its interest in Accenture

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SCA or to incur any material liabilities such that this one-for-one redemption price and exchange ratio would require adjustment and will disclose any change in its intentions that could affect this ratio. In order to maintain Accenture Ltd’s economic interest in Accenture SCA, Accenture Ltd will acquire additional Accenture SCA common shares each time it issues additional Accenture Ltd Class A common shares.

          Holders of Accenture Canada Holdings exchangeable shares may exchange their shares for Accenture Ltd Class A common shares at any time on a one-for-one basis. Accenture may, at its option, satisfy this exchange with cash at a price per share generally equal to the market price of an Accenture Ltd Class A common share at the time of the exchange. Each exchangeable share of Accenture Canada Holdings entitles its holder to receive distributions equal to any distributions to which an Accenture Ltd Class A common share entitles its holder.

          Accenture Ltd may, at its option, redeem any Class X common share for a redemption price equal to the par value of the Class X common share, or $0.0000225 per share. Accenture Ltd may not, however, redeem any Class X common share of a person who is a party to the Accenture Ltd Voting Agreement if such redemption would reduce the number of Class X common shares held by that person to a number that is less than the number of Accenture SCA Class I common shares or Accenture Canada Holdings exchangeable shares held by that person, as the case may be. Accenture Ltd will redeem Accenture Ltd Class X common shares upon redemption or exchange of Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares so that the aggregate number of Class X common shares outstanding at any time does not exceed the aggregate number of Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares outstanding. See “Certain Transactions — Accenture Ltd Voting Agreement” in the Annual Report on Form 10-K of Accenture Ltd, which is incorporated by reference in Item 13 of this Annual Report on Form 10-K for a description of the material terms of that agreement.

Prior Relationship with Andersen Worldwide and Arthur Andersen Firms

          As a result of a restructuring in 1989, the predecessors to many of what are now our subsidiaries became legally separate and distinct from all Arthur Andersen firms. In August 2000, following an arbitration proceeding we initiated in 1997, the arbitration tribunal terminated all remaining contractual relationships with Andersen Worldwide and all Arthur Andersen firms. On January 1, 2001, we began to conduct business under the name Accenture. See “Certain Transactions and Relationships—Prior Relationship with Andersen Worldwide and Arthur Andersen Firms” in the Annual Report on Form 10-K of Accenture Ltd, which is incorporated by reference in Item 13 of this Annual Report on Form 10-K.

Employees

          Our most important asset is our people. We are deeply committed to the development of our employees. Each professional receives extensive and focused technical and managerial skills development training appropriate to his or her career with us. We seek to reinforce our employees’ commitments to our clients, culture and values through a comprehensive performance review system and a competitive compensation philosophy that rewards individual performance and teamwork. We strive to maintain a work environment that reinforces our historic partnership culture and the collaboration, motivation, alignment of interests and sense of ownership and reward that this partnership culture has fostered.

          As of August 31, 2003, we had more than 83,000 employees worldwide. Currently approximately 2,300 of our employees are partners.

Competition

          We operate in a highly competitive and rapidly changing global marketplace and compete with a variety of organizations that offer services competitive with those we offer. Our clients typically retain us on a non-exclusive basis. In addition, a client may choose to use its own resources rather than engage an outside firm for the types of services we provide. Our competitors include global information technology service firms offering a full range of consulting and outsourcing services, as well as consulting services firms, information technology services providers and application service providers. Additionally, customers in the markets we serve continue to be receptive to engaging smaller service providers with numerous geographic, service or industry-specific niches.

          Our revenues are derived primarily from Fortune Global 500 and Fortune 1000 companies, medium-sized companies, governmental organizations and other large enterprises. We believe that the principal competitive factors in the industries in which we compete include:

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skills and capabilities of people;

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innovative service and product offerings;

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perceived ability to add value;

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reputation and client references;

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price;

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scope of services;

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service delivery approach;

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technical and industry expertise;

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quality of services and solutions;

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focus on achieving results on a timely basis;

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availability of appropriate resources; and

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global reach and scale.

Intellectual Property

          Our success has resulted in part from our proprietary methodologies, software, reusable knowledge capital, assets and other intellectual property rights. We rely upon a combination of nondisclosure and other contractual arrangements as well as upon trade secret, copyright, patent and trademark laws to protect our intellectual property rights and the rights of third parties from whom we license intellectual property. We have promulgated policies related to confidentiality and ownership and to the use and protection of Accenture’s and third parties’ intellectual property, and we also enter into agreements with our employees as appropriate.

          We recognize the value of intellectual property in the marketplace and vigorously create, harvest and protect our intellectual property. As of the end of fiscal 2003, we had 969 patent applications currently pending in the United States and other jurisdictions and have been issued 111 U.S. patents and 40 non-U.S. patents in, among others, the following areas: goal-based educational simulation; virtual call centers; hybrid telecommunications networks; development architecture frameworks; emotion-based voice processing; mobile communications networks; location-based information filtering; and computerized multimedia asset systems. We will continue to vigorously identify, create, harvest and protect our intellectual property.

Risk Factors

Risks That Relate to Our Business

Our results of operations are materially affected by economic conditions, levels of business activity and levels of change in the industries we serve.

          Uncertain global economic and political conditions continue to affect many of our clients’ businesses and many clients continue to reduce or defer expenditures for consulting services. In addition, our business tends to lag behind economic cycles and, consequently, the benefits of any economic recovery to our business may take longer to realize. We continue to experience pricing pressures, which are eroding our revenues. Further deterioration of global economic or political conditions could increase these effects.

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Our business will be negatively affected if we are not able to anticipate and keep pace with rapid changes in technology or if growth in the use of technology in business is not as rapid as in the past.

          Our success depends, in part, on our ability to develop and implement management consulting, technology and outsourcing services and solutions that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client preferences. We may not be successful in anticipating or responding to these developments on a timely basis, and our offerings may not be successful in the marketplace. Also, services, solutions and technologies developed by our competitors may make our service or solution offerings uncompetitive or obsolete. Any one of these circumstances could have a material adverse effect on our ability to obtain and successfully complete client engagements.

          Our business is also dependent, in part, upon continued growth in the use of technology in business by our clients and prospective clients and their customers and suppliers. The growth in the use of technology slows down in challenging economic environments. There is currently no significant new technology wave to stimulate spending. Use of new technology for commerce generally requires the understanding and acceptance of a new way of conducting business and exchanging information. Companies that have already invested substantial resources in traditional means of conducting commerce and exchanging information may be particularly reluctant or slow to adopt a new approach that may make some of their existing personnel, processes and infrastructure obsolete.

We may face damage to our professional reputation or legal liability if our clients are not satisfied with our services.

          As a professional services firm, we depend to a large extent on our relationships with our clients and our reputation for high-caliber professional services and integrity to attract and retain clients. As a result, if a client is not satisfied with our services or solutions, including those of subcontractors we employ, it may be more damaging in our business than in other businesses. Moreover, if we fail to meet our contractual obligations or fail to disclose our financial or other arrangements with our alliance partners, we could be subject to legal liability or loss of client relationships. Our exposure to legal liability may be increased in the case of outsourcing contracts in which we become more involved in our clients’ operations. Our contracts typically include provisions to limit our exposure to legal claims relating to our services and the solutions we develop, but these provisions may not protect us or may not be enforceable in all cases.

Our services or solutions may infringe upon the intellectual property rights of others.

          We cannot be sure that our services and solutions, or the solutions of others that we offer to our clients, do not infringe on the intellectual property rights of third parties, and we may have infringement claims asserted against us or against our clients. These claims may harm our reputation, cost us money and prevent us from offering some services or solutions. Historically in our contracts, we have generally agreed to indemnify our clients for any expenses or liabilities resulting from claimed infringements of the intellectual property rights of third parties. In some instances, the amount of these indemnities may be greater than the revenues we receive from the client. Any claims or litigation in this area, whether we ultimately win or lose, could be time-consuming and costly, injure our reputation or require us to enter into royalty or licensing arrangements. We may not be able to enter into these royalty or licensing arrangements on acceptable terms.

Our engagements with clients may not be profitable.

          Unexpected costs or delays could make our contracts unprofitable. We have many types of contracts, including time-and-materials contracts, fixed-price contracts and contracts with features of both of these contract types. While the risks associated with all of these types of contracts are often similar, an increasing number of outsourcing contracts entailing the coordination of operations, diverse geographic and competency workforces and geographically distributed service centers further complicate the delivery of our services and increase the magnitude of these risks. When making proposals for engagements, we estimate the costs and timing for completing the projects. These estimates reflect our best judgment regarding the efficiencies of our methodologies and professionals as we plan to deploy them on projects. Any increased or unexpected costs or unanticipated delays in connection with the performance of these engagements, including delays caused by factors outside our control, could make these contracts less profitable or unprofitable, which would have an adverse effect on our profit margin.

          Under many of our contracts, the payment of some or all of our fees is conditioned upon our performance. We are increasingly moving away from contracts that are priced solely on a time-and-materials basis and toward contracts that also include incentives related to factors such as costs incurred, benefits produced, goals attained and adherence to schedule. For example, we are entering into an increasing number of outsourcing contracts, including business transformation outsourcing contracts, under which payment of all or a portion of our fees is contingent upon our clients

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meeting revenue-enhancement, cost-saving or other contractually defined goals which are increasing in complexity and often dependent in some measure on our clients’ actual levels of business activity. We estimate that a majority of our contracts have some fixed-price, incentive-based or other pricing terms that condition some or all of our fees on our ability to deliver these defined goals. The trend to include greater incentives in our contracts related to additional revenues generated, costs incurred, benefits produced or our adherence to schedule may increase the variability in revenues and margins earned on such contracts.

          Our contracts can be terminated by our clients with short notice. Our clients typically retain us on a non-exclusive, engagement-by-engagement basis, rather than under exclusive long-term contracts. A majority of our consulting engagements are less than 12 months in duration. While our accounting systems identify the duration of our engagements, these systems do not track whether contracts can be terminated upon short notice and without penalty. However, we estimate that the majority of our contracts can be terminated by our clients with short notice and without significant penalty. The advance notice of termination required for contracts of shorter duration and lower revenues is typically 30 days. Longer-term, larger and more complex contracts generally require a longer notice period for termination and may include an early termination charge to be paid to us. Additionally, large client projects involve multiple engagements or stages, and there is a risk that a client may choose not to retain us for additional stages of a project or that a client will cancel or delay additional planned engagements. These terminations, cancellations or delays could result from factors unrelated to our work product or the progress of the project, but could be related to business or financial conditions of the client or the economy generally. When contracts are terminated, we lose the associated revenues and we may not be able to eliminate associated costs in a timely manner.

          We may fail to collect amounts extended to clients. In limited circumstances we extend financing to our clients, which we may fail to collect. A client must meet established criteria to receive financing, and any significant extension of credit requires approval by senior levels of our management. We had extended $336 million of such financing as of August 31, 2003.

If our alliances do not succeed, we may not be successful in implementing our growth strategy.

          Our alliances are an important component of our growth strategy. If these relationships do not succeed, we may fail to obtain the benefits we hope to derive from these endeavors. Similarly, we may be adversely affected by the failure of one or more of our alliances, which could lead to reduced marketing exposure, diminished sales and a decreased ability to develop and gain access to solutions. As most of our alliance relationships are non-exclusive, our alliance partners are not prohibited from forming closer or preferred arrangements with our competitors. Poor performance or failures of our alliances could have a material adverse impact on our growth strategy, which, in turn, could adversely affect our financial condition and results of operations.

Our global operations pose complex management, foreign currency, legal, tax and economic risks, which we may not adequately address.

          We have offices in 48 countries around the world. In fiscal 2003, approximately 48% of our revenues before reimbursements were attributable to our activities in the Americas, 45% were attributable to our activities in Europe, the Middle East and Africa, and 7% were attributable to our activities in the Asia/Pacific region. As a result, we are subject to a number of risks, including:

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the absence in some jurisdictions of effective laws to protect our intellectual property rights;

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multiple and possibly overlapping and conflicting laws;

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restrictions on the movement of cash;

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the burdens of complying with a wide variety of national and local laws;

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political instability;

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currency exchange rate fluctuations;

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longer payment cycles;

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restrictions on the import and export of certain technologies;

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price controls or restrictions on exchange of foreign currencies; and

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trade barriers.

The consulting, technology and outsourcing markets are highly competitive and the pace of consolidation, as well as vertical integration, among our competitors continues to increase. As a result, we may not be able to compete effectively if we cannot efficiently respond in a timely manner.

          The pace of consolidation among our competitors continues, with vertical integration of hardware and software vendors and service providers continuing. Some of our competitors have sought access to public and private capital and others have merged or consolidated with better-capitalized partners. Larger and better-capitalized competitors have enhanced abilities to compete for both clients and skilled professionals. In addition, one or more of our competitors may develop and implement methodologies that result in superior productivity and price reductions without adversely affecting their profit margins. Historically, we have not relied to any material degree on mergers or acquisitions to increase our market share, revenues, number of market offerings or scope of services. We intend to consider acquisitions that are financially and operationally compatible with our business. Our limited experience with mergers and acquisitions could affect our ability to efficiently consummate and/or integrate acquisitions into our ongoing operations. Any of these circumstances could have an adverse effect on our revenues and profit margin or our ability to aggressively grow our business.

If we are unable to attract, retain and motivate employees, we will not be able to compete effectively and will not be able to grow our business.

          Our success and ability to grow are dependent, in part, on our ability to hire, retain and motivate sufficient numbers of talented people with the increasingly diverse skills needed to grow our business. The inability to attract qualified employees in sufficient numbers to meet particular demands or the loss of a significant number of our employees could have a serious negative effect on us, including our ability to obtain and successfully complete important client engagements and thus maintain or increase our revenues.

          We continue to extend a variable component of compensation, the payment of which is dependent upon our performance, to larger proportions of our global workforce. Due in part to the continuing difficult global economic environment, this has resulted, and could continue to result, in decreases in the total cash compensation received by many of our employees. We are also expanding the use of equity-based incentives as a component of our senior executives’ variable compensation, which may also affect the amount of cash compensation these senior executives receive. While we adjust compensation levels in individual geographic markets to reflect market forces, including the demand for technical talent, we may have to adjust our compensation levels or adopt different methods of compensation in certain markets in order to attract and retain appropriate numbers of employees with the diverse skills we need to grow our business and to motivate these employees’ performance. Doing so could adversely affect our operating margins.

          Additionally, our partners at the time of our transition to a corporate structure received our equity in lieu of the interests in the partnerships and corporations that they previously held. Their ownership of this equity is not dependent upon their continued employment. There is no guarantee that the non-competition agreements we have entered into with our partners are sufficiently broad to prevent them from leaving us for our competitors or other opportunities or that these agreements will be enforceable in all cases.

We have only a limited ability to protect our intellectual property rights, which are important to our success.

          Our success depends, in part, upon our ability to protect our proprietary methodologies and other intellectual property. Existing laws of some countries in which we provide services or solutions may offer only limited protection of our intellectual property rights. We rely upon a combination of trade secrets, confidentiality policies, nondisclosure and other contractual arrangements, and patent, copyright and trademark laws to protect our intellectual property rights. The steps we take in this regard may not be adequate to prevent or deter infringement or other misappropriation of our intellectual property, and we may not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights.

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          Depending on the circumstances, we may be required to grant a specific client greater rights in intellectual property developed in connection with an engagement than we otherwise generally do, in which case we would seek to cross license the use of the intellectual property. However, in very limited situations, we forego rights to the use of intellectual property we help create, which limits our ability to reuse that intellectual property for other clients. Any limitation on our ability to provide a service or solution could cause us to lose revenue-generating opportunities and require us to incur additional expenses to develop new or modified solutions for future projects.

Our profitability will suffer if we are not able to maintain our pricing and utilization rates and control our costs. A continuation of current pricing pressures could result in permanent changes in pricing policies and delivery capabilities.

          Our profit margin, and therefore our profitability, is largely a function of the rates we are able to recover for our services and the utilization rate, or chargeability, of our professionals. Accordingly, if we are not able to maintain the pricing for our services or an appropriate utilization rate for our professionals without corresponding cost reductions, our profit margin and our profitability will suffer. The rates we are able to recover for our services are affected by a number of factors, including:

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our clients’ perceptions of our ability to add value through our services;

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competition;

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introduction of new services or products by us or our competitors;

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pricing policies of our competitors;

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our ability to accurately estimate, attain and sustain engagement revenues, margins and cash flows over increasingly longer contract periods;

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the use of globally sourced, lower-cost service delivery capabilities by our competitors and our clients; and

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general economic and political conditions.

          Our utilization rates are also affected by a number of factors, including:

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seasonal trends, primarily as a result of our hiring cycle;

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our ability to transition employees from completed projects to new engagements;

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our ability to forecast demand for our services and thereby maintain an appropriate headcount in each of our workforces; and

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our ability to manage attrition.

          Our profitability is also a function of our ability to control our costs and improve our efficiency. As the continuation of current pricing pressures could result in permanent changes in pricing policies and delivery capabilities, we must continuously improve our management of costs. Our short-term cost-reduction initiatives, which focus primarily on reducing variable costs, may not be sufficient to deal with all pressures on our pricing and utilization rates. Our long-term cost-reduction initiatives, which focus on global reductions in infrastructure and other costs, rely upon our successful introduction and coordination of multiple geographic and competency workforces and a growing number of geographically distributed delivery centers. As we increase the number of our professionals and execute our strategies for growth, we may not be able to manage significantly larger and more diverse workforces, control our costs or improve our efficiency.

          Despite increased cost savings, including reduced variable compensation and severance costs, we may continue to experience erosion of operating income as a percentage of revenues before reimbursements if present trends continue.

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Our quarterly revenues, operating results and profitability will vary from quarter to quarter, which may result in increased volatility of the share price of the Accenture Ltd Class A common shares.

          Our quarterly revenues, operating results and profitability have varied in the past and are likely to vary significantly from quarter to quarter, making them difficult to predict. This may lead to volatility in the share price of the Accenture Ltd Class A common shares. The factors that are likely to cause these variations are:

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seasonality, including number of workdays and holiday and summer vacations;

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the business decisions of our clients regarding the use of our services;

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periodic differences between our clients’ estimated and actual levels of business activity associated with ongoing engagements;

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the stage of completion of existing projects and/or their termination;

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our ability to transition employees quickly from completed projects to new engagements;

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the introduction of new products or services by us or our competitors;

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changes in our pricing policies or those of our competitors;

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our ability to manage costs, including personnel costs, support-services costs and severance costs;

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acquisition and integration costs related to possible acquisitions of other businesses;

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changes in, or the application of changes in, accounting principles or pronouncements under accounting principles generally accepted in the United States, particularly those related to revenue recognition;

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currency exchange rate fluctuations;

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changes in estimates, accruals and payments of variable compensation to our employees; and

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global economic and political conditions and related risks, including acts of terrorism.

We continue to position ourselves to achieve greater percentages of revenues and growth through outsourcing. This strategy could result in higher concentrations of revenues and contributions to income from a smaller number of larger clients on customized outsourcing solutions or, in the case of our BPO businesses, from larger portfolios of clients for whom we provide similar services and solutions utilizing standard operating models. As we continue to accelerate the growth of new outsourcing contracts, we may experience increased pressure on our overall margins during the early stages of these contracts.

          We continue to position ourselves to achieve a greater percentage of our revenues and growth through business transformation outsourcing, our approach that combines outsourcing, including business process outsourcing, with our other capabilities to help clients transform key processes, applications and infrastructure to improve business performance. This strategy could result in higher concentrations of revenues and contributions to income from a smaller number of larger clients on customized outsourcing solutions or, in the case of our BPO businesses, from larger portfolios of clients for whom we provide similar services and solutions utilizing standard operating models.

          Outsourcing contracts typically have longer contract terms than consulting contracts and may have lower margins and not generate revenues as quickly in the early stages of the contract. The typical length of our outsourcing contracts is three to 10 years. Generally we begin to recognize revenues within six months after beginning work on these contracts. As we continue to accelerate the growth of new outsourcing contracts, including BPO contracts, we may experience increased pressure on our overall margins during the early stages of these contracts.

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On certain complex engagements where we partner with others, clients are increasingly demanding that we guarantee the performance of our business partners whom we do not control. New accounting pronouncements may also affect when and how we report revenues associated with certain engagements.

          Some engagements are complex and may require unique structures and alliances to meet client demands. We will continue to manage liabilities or risks on such engagements through rigorous transaction review, but we expect that clients may increasingly demand that we assume certain additional contractual obligations and potential, but reimbursable, liabilities for the performance of our business partners whom we do not control. These liabilities may be subject to the disclosure, recognition and measurement provisions of recently issued Financial Accounting Standards Board Interpretation No. 45.

          In November 2002, the Emerging Issues Task Force (“EITF”) issued a final consensus on Issue 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables.” In May 2003, the EITF issued additional interpretive guidance regarding the application of Issue 00-21. Issue 00-21 provides guidance on how and when to recognize revenues on arrangements requiring delivery of more than one product or service. Issue 00-21 is effective prospectively for arrangements entered into in fiscal periods beginning after June 15, 2003. Companies may also elect to apply the provisions of Issue 00-21 to existing arrangements and record the income statement impact as a cumulative effect of a change in accounting principle.

          Effective September 1, 2003, we adopted Issue 00-21 on a prospective basis and began accounting for all new contracts in accordance with Issue 00-21, potentially changing the timing of revenues recognition and affecting margins in some situations, depending on our ability to structure contracts to accommodate the requirements of Issue 00-21. We will continue to account for contracts signed on or before August 31, 2003, under the previous accounting principles generally accepted in the United States.

We may be named in lawsuits as a result of Arthur Andersen’s current legal and financial situation based on misconceptions about the nature of our past relationship with Arthur Andersen firms.

          We may be named as a defendant in lawsuits arising from audits or other services provided by Arthur Andersen firms as a result of concerns of plaintiffs as to the current legal and financial situation of Arthur Andersen LLP and the breakup of the global network of Arthur Andersen firms. Such actions would be based on misconceptions about the nature of our past relationship with Arthur Andersen LLP and the other Arthur Andersen firms. We may be more likely to be named in these lawsuits if Arthur Andersen firms are, or are perceived to be, unable to satisfy judgments against them for any reason. If commenced, litigation of this nature could divert management time and attention and we could incur defense costs that we might not be able to recover from Arthur Andersen LLP and other Arthur Andersen firms under existing indemnification agreements, given the financial condition of Arthur Andersen LLP and the breakup of the global network of Arthur Andersen firms.

Negative publicity about Bermuda companies, such as our parent, Accenture Ltd, may lead to new tax or other legislation that could increase our tax burden and may affect our relationships with our clients.

          Members of the U.S. Congress have introduced legislation relating to the tax treatment of U.S. companies that have undertaken certain types of expatriation transactions. It is possible that legislation enacted in this area could reduce the tax benefits of our structure and materially increase our future tax burden, or otherwise adversely affect our business. Other legislative proposals, if enacted, could limit or even prohibit our eligibility to be awarded U.S. government contracts in the future. In addition, similar state legislative proposals, if enacted, could adversely affect our eligibility to be awarded U.S. state government contracts in the future. We are unable to predict with any level of certainty the likelihood or final form in which any proposed legislation might become law or the nature of regulations that may be promulgated under any such future legislative enactments. As a result of these uncertainties, we are unable to assess the impact on us of any proposed legislation in this area. In addition, there have recently been negative comments regarding Bermuda companies, such as our parent, Accenture Ltd, in the media. This negative publicity could harm our reputation and impair our ability to generate new business if companies or government agencies decline to do business with us as a result of the negative public image of Bermuda companies or the possibility of our clients receiving negative media attention from doing business with a Bermuda company, such as Accenture Ltd.

Risks That Relate to Ownership of Our Class I Common Shares

We will continue to be controlled by Accenture Ltd, which in turn will continue to be controlled by our partners, whose interests may differ from those of our other shareholders.

          As the general partner of Accenture SCA and as a result of Accenture Ltd’s majority voting interest in Accenture SCA, Accenture Ltd controls Accenture SCA’s management and operations and consolidates Accenture SCA’s results in

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its financial statements. As of October 31, 2003, our partners owned or controlled shares representing, in the aggregate, a 45% voting interest in Accenture Ltd. These shares are subject to a voting agreement, which requires our partners to vote as a group with respect to all matters submitted to shareholders. Our partners’ voting interest in Accenture Ltd may increase to the extent additional employees we name as partners are required to become parties to the voting agreement and/or our partners receive additional equity.

          As long as our partners continue to own or control a significant block of voting rights, they will control us. This enables them, without the consent of the other shareholders, to:

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elect Accenture Ltd’s board of directors and remove directors;

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control our management and policies;

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determine the outcome of most corporate transactions or other matters submitted to the Accenture Ltd shareholders for approval, including mergers, amalgamations and the sale of all or substantially all of our assets; and

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act in their own interests as partners, which may conflict with or not be the same as the interests of shareholders who are not partners.

          Furthermore, as a result of a partner matters agreement, our partners will continue to have influence with respect to a variety of matters over which neither shareholders nor employees of a public company typically have input. Under the partner matters agreement our partners:

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have, since our initial public offering, selected five partner nominees for membership on the board of directors of Accenture Ltd as well as their replacements, should any of these partner-nominated directors fail to complete their specified terms of office;

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will make a non-binding recommendation to the board of directors of Accenture Ltd through a committee of partners regarding the selection of a chief executive officer of Accenture Ltd in the event a new chief executive officer needs to be appointed within the first four years after our initial public offering;

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vote on new partner admissions;

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approve the partners’ income plan as described below; and

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hold non-binding votes with respect to any decision to eliminate or materially change the current practice of allocating partner compensation on a relative, or “unit,” basis.

          Under the terms of the partner matters agreement, a partners’ income committee, consisting of the chief executive officer and partners he or she appoints, reviews evaluations and recommendations concerning the performance of partners and determines relative levels of income participation, or unit allocation. Based on its review, the committee prepares a partners’ income plan, which then must be submitted to the partners in a partner matters vote. If the plan is approved by a 66 2/3% partner matters vote, it is: (1) binding with respect to the income participation or unit allocation of all partners other than the principal executive officers of Accenture Ltd (including the chief executive officer), subject to the impact on overall unit allocation of determinations by the board of directors or the compensation committee of the board of directors of Accenture Ltd of the unit allocation for the executive officers, unless otherwise determined by the board of directors; and (2) submitted to the compensation committee of the board of directors of Accenture Ltd as a recommendation with respect to the income participation or unit allocation of the chief executive officer and the other principal executive officers of Accenture Ltd.

The share price of the Accenture Ltd Class A common shares may decline due to the large number of Class A common shares eligible for future sale.

          Sales of substantial amounts of Accenture Ltd Class A common shares, or the perception of these sales, may adversely affect the price of the Class A common shares and impede our ability to raise capital through the issuance of

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equity securities in the future. A substantial number of Class A common shares are eligible for future sale as described below:

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As of October 31, 2003, substantially all of the Accenture Ltd Class A common shares, Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares still held by our partners, former partners and certain of their permitted transferees and previously received in connection with our transition to a corporate structure were directly or indirectly subject to the provisions of a voting agreement and/or a transfer rights agreement that permit sales by our partners and our former partners in increasing amounts over seven years beginning July 24, 2002 and/or other contractually agreed transfer restrictions of comparable durations. Equity awards received by partners under Accenture’s share incentive plan after our transition to a corporate structure, while not subject to the transfer restrictions of the voting agreement and the transfer rights agreement, are subject to vesting and/or delivery on various deferred schedules. Current and former partners, and their permitted transferees, holding as of October 31, 2003 an aggregate of more than 577,500,000 Accenture Ltd Class A common shares, Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares, including substantially all of such shares remaining directly or indirectly subject to the transfer restrictions applicable to partners and former partners under the voting agreement and/or the transfer rights agreement, have separately agreed not to transfer any equity interests in Accenture acquired from Accenture until July 24, 2005, except for sales in transactions approved by Accenture. We expect that all of our employees who become partners in the future will agree to these separate July 24, 2005 transfer restrictions. While the transfer restrictions in the voting agreement and the transfer rights agreement will continue to apply, such transfer restrictions will be waived to permit Accenture-approved transactions. From time to time, pursuant to the terms of the voting agreement and/or transfer rights agreement, we may also approve limited relief from the existing share transfer restrictions for specified partners or groups of partners in connection with particular retirement, employment and severance arrangements that we determine to be important to the execution of our business strategy. After July 24, 2005, however, only the provisions of the voting agreement and/or the transfer rights agreement, as well as the deferred vesting and/or delivery schedules that govern equity awards under Accenture’s share incentive plan and other agreements with permitted transferees, will apply. Commencing in the first quarter of fiscal 2003, we began affording partners and former partners and their permitted transferees who have agreed not to transfer their equity interests in Accenture until July 24, 2005 except in specified Accenture-approved transactions with regular opportunities to sell or redeem their shares. These transactions have included sales of Accenture Ltd Class A common shares in accordance with the manner of sale provisions of Rule 144 under the Securities Act by the holders of these shares, as well as redemptions and purchases by Accenture of Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares from the holders of those shares. These redemptions and purchases, to date, have been at ratable volume levels and equivalent price levels with the sales of the Class A common shares. We expect to continue to enable these partner share transactions. We also expect that such partners and former partners and their permitted transferees will be permitted to transfer shares in connection with future underwritten public offerings or private placements. The contractual restrictions on transfer described in this paragraph may not be enforceable in all cases.

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In addition, as of October 24, 2003, 46,968,386 Class A common shares underlying restricted share units generally were scheduled to be delivered during the calendar year indicated below: