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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





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FORM 10-K


FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





(Mark One)


|x |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ------------------------------------------------------------------------------------




For the fiscal year ended August 31, 2002





OR





| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ----------------------------------------------------------------------------------------




Commission File Number: 001-16565





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ACCENTURE LTD





Bermuda

98-0341111(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





Cedar House


41 Cedar Avenue


Hamilton HM12, Bermuda


(Address Of Principal Executive Offices)





(441) 296-8262


(Registrants Telephone Number, Including Area Code)





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





Title of Each Class

Name of Exchange on Which RegisteredClass A common shares, par value $0.0000225 per share

New York Stock Exchange





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





Class X common shares, par value
$0.0000225 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  ̈





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





The aggregate market value of the common equity of the Registrant held by
non-affiliates of the Registrant on October 29, 2002 was approximately $6.9 billion, based on the closing price of the Registrants Class A common shares, par value $0.0000225 per share, reported on the New York Stock Exchange on such date of
$16.75 per share and on the par value of the Registrants Class X common shares, par value $0.0000225 per share.





The number of shares of the Registrants Class A common shares, par value $0.0000225 per share, outstanding as of October 29, 2002 was 411,303,410 (which number does not include 28,122,237 issued shares held by subsidiaries of
the Registrant). The number of shares of the Registrants Class X common shares, par value $0.0000225 per share, outstanding as of October 29, 2002 was 524,094,456.





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TABLE OF CONTENTS





PagePart IItem 1.

Business

1Item 2.

Properties

24Item 3.

Legal Proceedings

24Item 4.

Submission of Matters to a Vote of Security Holders

24Part IIItem 5.

Market for Registrants Common Equity and Related Shareholder Matters

26Item 6.

Selected Financial Data

27Item 7.

Managements Discussion and Analysis of Financial Condition and Results of Operations

28Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

49Item 8.

Financial Statements and Supplementary Data

51Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

51Part IIIItem 10.

Directors and Executive Officers of the Registrant

52Item 11.

Executive Compensation

57Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

59Item 13.

Certain Transactions and Relationships

62Item 14.

Controls and Procedures

76Part IVItem 15.

Exhibits, Financial Statement Schedules, and Reports on Form 8-K

77Index to Combined and Consolidated Financial Statements

F-1Signatures

S-1




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PART I





ITEM 1.    
BUSINESS





Overview





Accenture is one of the worlds leading management consulting and technology services organizations. We had approximately $11.6 billion of revenues before
reimbursements for the fiscal year ended August 31, 2002. As of August 31, 2002, we had more than 75,000 employees based in over 110 offices in 47 countries delivering to our clients a wide range of consulting, technology and outsourcing services.
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 business consists of using our industry 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 around the world identify and
enter new markets, increase revenues in existing markets and deliver their products and services more effectively and efficiently.





Management Consulting and Technology Services and Solutions





Our management consulting and
technology services and solutions business is structured around five operating groups (formerly referred to as global market units), which together comprise 18 industry groups. Our industry focus enables our professionals to provide business and
management consulting, technology and outsourcing services with an understanding of industry evolution, business issues and applicable technologies, and ultimately to deliver solutions tailored to each clients industry. Two capability groups,
Business Consulting and Technology & Outsourcing, support the operating groups and provide access to the full spectrum of business and information technology solutions. Our capability groups comprise service lines and solution units: service
lines are responsible for developing our knowledge capital, world-class skills and innovative capabilities, and solution units  which are either Accenture affiliate companies or separate groups within Accenture  are
responsible for creating, acquiring and managing certain key assets that are central to our delivery of innovative solutions to clients.





Client engagement teams typically consist of industry experts, service line and solution unit specialists, and professionals with local market knowledge. Our client teams are complemented by professionals in our delivery
centers, part of our strategic delivery capability, who help us capture replicable components of methodologies and technologies to create tailored solutions for clients quickly, predictably and cost-effectively.




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Operating Groups





The following table shows the organization of our five operating groups and their 18 industry groups.





Operating GroupsCommunications & High Tech

Financial Services

Products

Resources

GovernmentCommunications Electronics & High Tech Media & Entertainment

Banking Capital Markets Health Services Insurance

Automotive Industrial Equipment Pharmaceuticals & Medical Products Retail & Consumer Transportation & Travel Services

Chemicals Energy Forest Products Metals & Mining Utilities

Government





Communications & High Tech





We are a leading provider of management and technology consulting, business transformation outsourcing and new-business development
services and solutions to the communications, high technology and media and entertainment industries. We offer services that help our clients exploit and stay ahead of major technology and industry trends, including mobile technology, enterprise
services, advanced network optimization, systems integration services, customer care and workforce transformation, and we help our clients exploit the opportunities presented by the convergence of new technologies. We have also established research
facilities that study how new technologies can be applied in new and innovative ways.





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





| |  |  | 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 and market share, improve customer retention, increase revenues, reduce overall costs and accelerate sales cycles.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Electronics & High Tech.    Our Electronics & High Tech industry group serves the aerospace, defense, electronics,
high technology and network communications industries. This industry group provides services in areas such as electronic commerce and strategy and supply chain management.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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 channels.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Financial Services





Our Financial Services operating group focuses on the growth 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
offerings, including outsourcing strategies to increase cost efficiency and transform businesses, and




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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:





| |  |  | 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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Capital Markets.    With a reinvention of the securities industry underway, 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.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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 area in North America accelerate their business by connecting consumers, physicians and other
stakeholders through electronic commerce. In Europe, we are helping create new connections between governments, physicians and insurers. As of September 1, 2002, we began transitioning the Health Services industry group to the Products operating
group in recognition of the increasing synergy between the healthcare and pharmaceutical industries.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Products





Our Products operating group comprises the following industry groups: Automotive, Industrial Equipment,
Pharmaceuticals & Medical Products, Retail & Consumer, and Transportation & Travel Services. As of September 1, 2002, we began transitioning the Health Services industry group to the Products operating group in recognition of the
increasing synergy between the healthcare and pharmaceutical industries.





| |  |  | 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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 it takes 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Transportation & Travel Services.    Our Transportation & Travel Services industry group serves clients 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.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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:





| |  |  | Chemicals.    Our Chemicals industry group has significant resources in Europe, Asia, Japan and the Americas and works with a
wide cross-section of industry segments, including specialty chemicals, industrial chemicals, polymers and plastics, gases and life science companies. We also have long-term operations contracts with many of the industry leaders.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Energy.    Our Energy industry group serves a wide range of companies in the oil and gas industry, including upstream,
downstream and oil services companies. We help clients create cross-industry synergies and operational efficiencies through our multi-client outsourcing centers, forge alliances to advance integrated industry solutions, build and enhance trading and
risk management operations, and exploit new business technologies.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Forest Products.    The Forest Products industry group helps our clients in the pulp and paper business achieve improvements
in business performance. We also help our Forest Products clients use electronic commerce and the Internet to drive incremental value.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Metals & Mining.    Our Metals & Mining industry group serves metals industry companies located in the worlds
key mining regions, including North America, Latin America, South Africa, Australia and South East Asia, working with clients in areas such as electronic commerce, including procurement, supply-chain management and customer service.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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 state-owned, regulated local entities to global deregulated corporations, as well as developing diverse products and service offerings to help
our clients deliver higher levels of convenience and service to their customers. These offerings include trading and risk management, supply chain optimization and customer relationship management.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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 harness the power of new technologies. Our Government
operating group works with government agencies in 22 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 typically are national, provincial or state-level government organizations, and to a lesser extent, cities and other local governments.





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 do more with less, Accenture is introducing innovative contract models from the private
sector that are becoming increasingly popular with governments.





Capability Groups





Our two capability groups, Business Consulting and Technology & Outsourcing, are the innovation engines through which we develop and
deliver a full spectrum of services and solutions that address business opportunities and challenges common across industries. Together, our two capability groups comprise eight service lines and five solution units. Our service lines are
responsible for developing our knowledge capital, world-class skills and innovative capabilities. As of August 31, 2002, more than 8,000 Accenture professionals were dedicated full-time to specific service lines, helping to develop knowledge and
assets for clients across all of the industries we serve. These subject matter experts complement the approximately 54,000 professionals working within our operating groups who apply their knowledge of specific service lines to clients within
specific industry groups.





Through our solution units we develop asset-based scalable solutions that can be
offered to multiple clients, often incorporating the capabilities of our service lines, alliance partners and affiliates. Our solution units, which are either Accenture affiliate companies or separate groups within Accenture, are responsible for
creating, acquiring and managing key assets that are central to our delivery of innovative solutions to clients. The five solution units within the capability groups serve clients across multiple industries. We also have solution units that are
dedicated to specific industries; these are managed through the respective operating groups.




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Business Consulting Capability Group





Our Business Consulting capability group comprises five service lines and three solution units. The five Business Consulting service lines
are Strategy & Business Architecture, Customer Relationship Management, Supply Chain Management, Human Performance and Finance & Performance Management. Our three Business Consulting solution units are Accenture HR Services, Accenture
Learning Solutions and Accenture Finance Solutions.





Strategy & Business Architecture





The professionals within our Strategy & Business Architecture service line work with individuals at the highest levels of
our clients organizations on their most crucial strategy and information technology issues. To help clients unlock new sources of value, we provide a wide array of strategic planning and design services and advise clients on significant
decisions relating to corporate governance, post-merger and acquisition integration, information technology organization and governance, marketing strategy and other transformational issues. In addition, our professionals analyze current and
emerging market trends to help clients identify new business opportunities.





Customer Relationship Management





Professionals in our Customer Relationship Management service line help companies increase the value of their
customer relationships and enhance the economic value of their brands to acquire new customers and retain existing ones. We offer a full range of capabilities that have positioned us as a pioneer in the reinvention of marketing and customer
relationship management. These include proprietary approaches to improving the return on marketing investments, innovative methods for uncovering insight into customers purchasing preferences and habits and tailoring products and services
based on that insight, and sophisticated techniques for integrating information so that it is available to customers at any point of interaction. Together with our alliance partners, we bring in-depth skills to our clients, helping them create
superior customer experiences and enhance the value of their customer relationships.





Supply Chain Management





We help clients gain competitive advantage by working with them to optimize their supply chains and build
networks to facilitate collaboration with suppliers and business partners. Professionals in our Supply Chain Management service line are dedicated to developing innovative approaches to solve supply chain problems across a broad range of industries.
This includes designing more-efficient procurement processes, optimizing product planning, strengthening supplier relationships, and streamlining product development cycles. In addition, our Supply Chain Management service line uses its expertise in
areas such as strategic sourcing, manufacturing strategy and operations, and logistics to provide strategic advice and technology solutions that leverage the Web for procurement, fulfillment and product design.





Human Performance





The professionals in our Human Performance service line help our clients solve human performance issues that are crucial to their operational success, including recruiting and motivating key employees and management. Our
integrated approach provides human resources, knowledge management, 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 work closely with professionals in the Accenture Learning Solutions and




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Accenture HR Services solution units, 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.





Finance & Performance Management





The professionals in our Finance & Performance Management service line work with our clients key
financial managers, including chief financial officers, treasurers and controllers, to support management of and reporting by finance departments. Among the services we provide are strategic consulting with regard to the design and structure of the
finance function, particularly post-merger or acquisition, and the establishment of shared service centers for streamlining transaction processing. Our professionals, who often leverage the resources of Accenture Finance Solutions, work with
financial executives to develop and implement solutions that help them align their companies investments with their business objectives, use the Internet to manage the treasury functions, and establish security around the exchange of
information to reporting institutions. Our services also address pricing and yield management, billing, credit, lending and debt recovery.





Accenture HR Services (formerly e-peopleserve)





Launched in August 2000 as an
Accenture affiliate, our Accenture HR Services solution unit is a provider of outsourced human resources services, which it delivers through self-service tools such as Web-based technology, Accenture HR Services network of resources service
centers, and counseling from skilled caseworkers. Often working closely with professionals in our Human Performance service line and in Accenture Learning Solutions, Accenture HR Services offers efficient, secure, integrated human resources services
across the employee lifecycle, from recruitment and payroll to pensions, providing large organizations with more efficient and effective human resources management systems.





Accenture Learning Solutions





Accenture Learning Solutions draws on Accentures extensive experience with enterprise-wide workforce performance transformation, including the capabilities of professionals in our Human Performance service line and Accenture HR
Services solutions unit; the strength of our business processing outsourcing capabilities; our internal training and knowledge management solution, myLearning; and the expertise of our Indeliq affiliate, which develops scalable performance
simulation electronic learning applications. Professionals in this solution unit work with companies and governments to provide outsourced transformational learning solutions that reduce employees time to competency, increase knowledge
retention, lower the costs of administering complex training content, and manage 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 solution unit, who work closely with the professionals
in our Finance & Performance Management service line, provide finance operations, applications management, financial accounting and management reporting services, helping 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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Technology & Outsourcing Capability Group





Our Technology & Outsourcing capability group comprises three service lines and two solution units and also manages our
more than 100 alliances with technology companies. The three Technology & Outsourcing service lines are Technology Research & Innovation, Solutions Engineering and Solutions Operations. Our Technology & Outsourcing solution units are
Avanade and Accenture Technology Infrastructure Services.





Technology Research & Innovation





Professionals in our Technology Research & Innovation service line research, invent and commercialize
cutting-edge business solutions using new and emerging technologies. We continually identify and dedicate significant resources to the new technologies that we believe will be drivers of our clients growth and sources of first-mover advantage
by enabling clients to be first to market with a unique capability or service offering. The Technology Research & Innovation service line includes Accenture Technology Labs, a dedicated technology R&D organization within Accenture.





Solutions Engineering





Professionals in our Solutions Engineering service line design, build and deploy complex industry-specific, reusable and scalable solutions that typically integrate
business processes, technology and human performance components. Among other things, they maintain and enhance our methods and practices for building technology-based solutions in an efficient and predictable manner. We have expertise and
capabilities in a wide range of areas, including electronic commerce infrastructure, security, enterprise resource planning, enterprise application integration, data warehousing and pre-packaged business solution delivery.





Solutions Operations





Our Solutions Operations service line provides a range of outsourcing solutions for managing technology infrastructure, applications and business processes. This service line is also our primary source of strategy and
capability for executing initiatives in transformational outsourcing, which is the term we coined to describe Accentures combination of outsourcing, consulting and other capabilities to help clients improve key business functions and achieve
significant, sustainable improvements in enterprise-level performance. We are differentiated in our delivery of outsourcing services through our creation of solutions that help transform the way industries work and our ability to combine industry,
technology and functional expertise with outsourcing capabilities. In addition, we are expanding our outsourcing capabilities through a variety of shared-service solutions, including customer information, billing systems, information technology
services, supply chain management and human resources administration.





Avanade





Our Avanade solution unit, which is also an Accenture affiliate, focuses on large-scale technology integration surrounding
Microsofts enterprise platform. Combining Microsofts understanding of operating platforms and technologies with our experience in delivering solutions to our clients, Avanade capitalizes on the advanced capabilities of the Microsoft
Windows and .NET platforms to build customized, scalable solutions for complex electronic business and enterprise infrastructure. With development centers in Europe, Asia-Pacific and the Americas, Avanade delivers secure, reliable, scalable
Microsoft-based solutions to help large global companies optimize their technology investments.




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Accenture Technology Infrastructure Services





Our Accenture Technology Infrastructure Services solution unit combines Accenture-owned and -operated capabilities with select products
and services from our preferred supplier network to design, develop and deliver an end-to-end set of IT infrastructure services. The solution unit utilizes a global network of delivery assets and capabilities to enable Accentures
transformational outsourcing strategy.





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 alliances with established and
early-stage technology 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 eight 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 deliver innovative solutions far faster than we  or any other company  could do alone.





Almost all of our alliances are non-exclusive. While individually none of our alliances is material to our
business, overall our alliance relationships generate revenue for us, primarily in the form of consulting services to implement the alliance-based business solutions.





Strategic Delivery Capability





Our global strategic
delivery approach emphasizes quality, reduced risk, speed to market and predictability. Our ultimate goal is to deliver to clients price-competitive solutions and services that create value. One of our key strengths is our ability to create and
capture replicable components of methodologies and technologies, which we can customize to create tailored solutions for our clients in a cost-effective manner and under demanding time constraints. Our global network of delivery
centers facilities where teams of Accenture professionals use proven methodologies and existing assets to create business solutions for clients  enhances our ability to capitalize on our vast array of methodologies, tools
and technology to deliver value to our clients. Client teams use these centers to complete comprehensive, effective and customized implementations in less time than would be required to develop solutions 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 technology
risks and application maintenance.





Affiliates





We may form a new business, sometimes with one or more third parties, to develop a capability that we do not already possess. We call these businesses affiliates. If an
affiliate provides a service or solution across many industries, it serves as a solution unit or part of a solution unit within one of our capability groups. If an affiliate provides a service or solution specific to only one industry, it may serve
as a solution unit within one of our operating groups. These entities can rapidly advance a particular opportunity by building upon our global platform of clients, professionals and business expertise. Our affiliates include Avanade, Accenture HR
Services, Imagine Broadband, Indeliq and Navitaire. Avanade




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focuses on large-scale technology integration surrounding Microsofts enterprise platform. Accenture HR Services (formerly e-peopleserve) is a provider of outsourced human resources
services. Imagine Broadband provides interactive broadband solutions and platform implementation to cable, satellite and telecommunications network operators worldwide. Indeliq develops scalable performance simulation electronic learning
applications based on our patents and technology, which we contributed to the company. Navitaire provides airlines with reservations, ticketing and revenue management services.





Avanade, Accenture HR Services, Imagine Broadband, Indeliq and Navitaire are consolidated in our financial statements and headcount. Individually none of our affiliates is
material to our business.





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 $252 million, $271 million and $235 million on research and development in fiscal years 2000, 2001 and 2002, 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 Strategic Change.





Accenture Organizational Structure





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. 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




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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. Accenture Ltd does not intend
to hold any material assets other than its interest in Accenture 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 holder if such redemption would reduce the number of Class X common shares held by that holder 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 holder, 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.





We use the term partner to refer to the executive employees of Accenture with the partner
title.





Employees





Our most important asset is our people. We are deeply committed to the long-term development of our employees. Each professional receives extensive and focused technical and managerial skills




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development training throughout his or her career with us. We seek to reinforce our employees commitment to our clients, culture and values through a comprehensive performance review system
and a competitive compensation philosophy that reward individual performance and teamwork. We strive to maintain a work environment that reinforces our 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, 2002, we had more than 75,000
employees worldwide, including employees of our consolidated affiliates. Approximately 2,600 of our more than 75,000 employees are partners.





Competition





We operate in a highly competitive and rapidly changing global market and
compete with a variety of organizations that offer services similar to those that 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 consulting and other professional services firms; information technology services providers, including providers of outsourcing services; application service providers; and professional
services groups of packaged software vendors, resellers and computer equipment companies.





Our revenues are
derived primarily from Fortune Global 500 and Fortune 1000 companies, medium-sized companies, governmental organizations and other large enterprises. There is an increasing number of professional services firms seeking consulting
engagements with these organizations. We believe that the principal competitive factors in the consulting industry in which we operate include:





| |  |  | skills and capabilities of people;
| | - |  | ----------------------------------




| |  |  | reputation and client references;
| | - |  | ---------------------------------




| |  |  | price;
| | - |  | ------




| |  |  | scope of services;
| | - |  | ------------------




| |  |  | service delivery approach;
| | - |  | --------------------------




| |  |  | technical and industry expertise;
| | - |  | ---------------------------------




| |  |  | perceived ability to add value;
| | - |  | -------------------------------




| |  |  | quality of services and solutions;
| | - |  | ----------------------------------




| |  |  | focus on achieving results on a timely basis;
| | - |  | ---------------------------------------------




| |  |  | availability of appropriate resources; and
| | - |  | ------------------------------------------




| |  |  | global reach and scale.
| | - |  | -----------------------




Intellectual Property





Our success has resulted in part from our proprietary methodologies,
software, reusable knowledge capital 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 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.




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We recognize the value of intellectual property in the new marketplace and
vigorously create, harvest and protect our intellectual property. We have approximately 1,000 patent applications currently pending in the United States and other jurisdictions and have been issued 68 U.S. patents and 21 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.





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 and Section 21E of the Exchange Act relating to our 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 Risk Factors.





Risk Factors





Risks That Relate to Our Business





Should the
current significant economic downturn continue to affect our clients, it could have a material adverse effect on our results of operations.





Our results of operations are affected by the level of business activity of our clients, which in turn is affected by the levels of economic activity in the industries and markets that they serve. In
addition, our business tends to lag behind economic cycles in an industry. As a result of the continuing difficult economic environment, some clients have reduced or deferred expenditures for consulting services and we have also experienced
increasing pricing pressure over the last year, which has eroded our revenues. Should the significant economic downturn continue to affect the levels of business activity of our clients, it could continue to adversely affect our revenues. Further
deterioration of global economic or political conditions could increase these effects.





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 and technology 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.




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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 a challenging economic environment, such as the one we are experiencing now. There is currently no 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 business transformation 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. 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 do, in which case we 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 and in these cases, this 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 engagements with clients may not be profitable.





Unexpected costs or delays could make our contracts unprofitable.While we have many types of contracts, including time-and-materials contracts, fixed-price
contracts and contracts with features of both of these contract types, the risks associated with all of these types of contracts are often similar. 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




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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 have been moving away from
contracts that are priced solely on a time-and-materials basis 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 business transformation outsourcing contracts under which payment of all or a portion of our fees is contingent upon our clients meeting cost-saving or other contractually defined goals. 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 defined goals. Our failure to meet contractually defined goals or a clients expectations in any type of
contract may result in an unprofitable engagement.





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 twelve 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 revenue 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 $265 million of financing as of August
31, 2002.





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





We have committed a substantial amount of time and financial resources to our affiliates
and our relationships with our alliance partners, and we plan to commit substantial additional financial resources in the future. The benefits we anticipate from these relationships 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 or lose the financial resources we have committed. Similarly, we may be adversely affected by the failure of one or more of our affiliates or alliances, which could
lead to reduced marketing exposure, diminished sales and a decreased ability to develop and gain access to solutions. Moreover, because most of our alliance relationships are non-exclusive, our alliance partners are able to form closer or preferred
arrangements with our competitors. Poor performance or failures of our affiliates or alliances could have a material and adverse impact on our growth strategy, which, in turn, could adversely affect our financial condition and results of operations.




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





We have offices in 47 countries around the
world. In fiscal 2002, approximately 50% of our revenues before reimbursements were attributable to our activities in the Americas, 43% 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:





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




| |  |  | multiple and possibly overlapping and conflicting tax laws;
| | - |  | -----------------------------------------------------------




| |  |  | restrictions on the movement of cash;
| | - |  | -------------------------------------




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




| |  |  | political instability;
| | - |  | ----------------------




| |  |  | currency fluctuations;
| | - |  | ----------------------




| |  |  | longer payment cycles;
| | - |  | ----------------------




| |  |  | restrictions on the import and export of certain technologies;
| | - |  | --------------------------------------------------------------




| |  |  | price controls or restrictions on exchange of foreign currencies; and
| | - |  | ---------------------------------------------------------------------




| |  |  | trade barriers.
| | - |  | ---------------




The consulting, technology and outsourcing markets are highly competitive, and we may not be able to compete effectively.





The consulting, technology and outsourcing markets in which we operate include a large number of participants and are highly competitive. Our primary competitors include:





| |  |  | consulting and other professional services firms;
| | - |  | -------------------------------------------------




| |  |  | information technology services providers, including providers of outsourcing services;
| | - |  | ---------------------------------------------------------------------------------------




| |  |  | application service providers; and
| | - |  | ----------------------------------




| |  |  | professional services groups of packaged software vendors, resellers and computer equipment companies.
| | - |  | ------------------------------------------------------------------------------------------------------




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 marketplace is experiencing rapid changes in its competitive landscape. Some of our competitors have sought access to public and
private capital and others have merged or consolidated with better-capitalized partners. These changes may create more or larger and better-capitalized competitors with enhanced abilities to compete for market share generally and our clients
specifically, in some cases, through significant economic incentives to clients to secure contracts. These competitors may also be better able to compete for skilled professionals by offering them large compensation incentives. In addition, one or
more of our competitors may develop and implement methodologies which result in superior productivity and price reductions without adversely affecting the competitors profit margins. Many of our competitors are taking greater advantage of the
lower labor costs in certain countries to allow them to reduce prices. Any of these circumstances may impose additional pricing pressure on us, which would have an adverse effect on our revenues and profit margin.




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If we are unable to attract and retain employees in appropriate numbers, 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 and retain large numbers of talented people. The inability to attract qualified employees in sufficient numbers to meet demand 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 regularly benchmark our employee compensation to the marketplace in all countries in which we operate. We make annual adjustments to remain competitive based on the
individual markets and the demand for top talent. We also adjust compensation levels within some of our larger countries, such as the United States and the United Kingdom, to reflect different labor pools. In some cases these increases are greater
than the general rate of inflation due to other market forces, including the demand for technical talent. To attract and retain the number of employees we need to grow our business, we may have to increase our compensation levels in the future. This
would adversely affect our operating margins.





Our transition to a corporate structure may adversely affect
our ability to recruit, retain and motivate our partners and other key employees, which in turn could adversely affect our ability to compete effectively and to grow our business.





We face additional retention risk because of our transition to a corporate structure in fiscal 2001. 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. Each of these partners, on average, received approximately 329,000 Accenture Ltd Class A common shares, Accenture SCA Class I common shares
or Accenture Canada Holdings exchangeable shares (with a value of approximately $5,510,750, at an assumed price per share of $16.75), and the median number of Accenture Ltd Class A common shares, Accenture SCA Class I common shares or Accenture
Canada Holdings exchangeable shares received by each of these partners was approximately 355,000 (with a value of approximately $5,946,250, at an assumed price per share of $16.75). Their ownership of this equity is not dependent upon their
continued employment. In addition, in connection with our transition to a corporate structure, our partners accepted significant reductions in their cash compensation. The substitution of equity, equity-based incentives and other employee benefits
in lieu of higher cash compensation may not be sufficient to retain and motivate these individuals in the near or long term. 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.





In connection with our initial public offering and our transition to a corporate structure in fiscal 2001, our non-partner employees also received equity-based incentives. These incentives to attract, retain and motivate
employees may not be as effective as the opportunity, which existed prior to our transition to a corporate structure, to hold a partnership interest in Accenture. If these incentives and others adopted from time to time are not as effective, our
ability to hire, retain and motivate skilled professionals will suffer.





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




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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.





Our profitability will suffer if we are not able to maintain our pricing and utilization rates and control our costs.





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:





| |  |  | our clients perceptions of our ability to add value through our services;
| | - |  | --------------------------------------------------------------------------




| |  |  | competition;
| | - |  | ------------




| |  |  | introduction of new services or products by us or our competitors;
| | - |  | ------------------------------------------------------------------




| |  |  | pricing policies of our competitors;
| | - |  | ------------------------------------




| |  |  | the use of globally sourced, lower-cost service delivery capabilities within our industry; and
| | - |  | ----------------------------------------------------------------------------------------------




| |  |  | general economic conditions.
| | - |  | ----------------------------




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





| |  |  | seasonal trends, primarily as a result of our hiring cycle and holiday and summer vacations;
| | - |  | --------------------------------------------------------------------------------------------




| |  |  | our ability to transition employees from completed projects to new engagements;
| | - |  | -------------------------------------------------------------------------------




| |  |  | our ability to forecast demand for our services and thereby maintain an appropriate headcount in the appropriate areas of our workforce; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | our ability to manage attrition.
| | - |  | --------------------------------




Our profitability is also a function of our ability to control our costs and improve our efficiency. Our short-term cost-reduction initiatives, which focus primarily on reducing variable costs, may not
be capable of reacting to 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 solution centers. As we increase the number of our professionals and execute our strategies for growth, we may not be able to manage a significantly
larger and more diverse workforce, control our costs or improve our efficiency.





The current significant economic
downturn continues to generate pricing pressures from our clients and our competitors that could result in permanent changes in pricing policies and delivery capabilities and expectations in certain sectors of the marketplace in which we compete.
Consequently, current and future cost-reduction initiatives may not be sufficient to maintain our profit margins.





Our quarterly revenues, operating results and profitability will vary from quarter to quarter, which may result in increased volatility of our share price.





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 our share price. The factors that are likely to cause these variations are:





| |  |  | seasonality;
| | - |  | ------------



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| |  |  | the business decisions of our clients regarding the use of our services;
| | - |  | ------------------------------------------------------------------------




| |  |  | the timing of projects and their termination;
| | - |  | ---------------------------------------------




| |  |  | the timing and extent of gains and losses on our portfolio of investments;
| | - |  | --------------------------------------------------------------------------




| |  |  | the timing of revenue or income or loss from affiliates;
| | - |  | --------------------------------------------------------




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




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




| |  |  | changes in our pricing policies or those of our competitors;
| | - |  | ------------------------------------------------------------




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




| |  |  | costs related to possible acquisitions of other businesses;
| | - |  | -----------------------------------------------------------




| |  |  | changes in, or the application of changes in, accounting principles or pronouncements under U.S. generally accepted accounting principles, particularly those
related to revenue recognition; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




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




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 for Enron Corporation or other companies as a result of concerns of the plaintiffs as to the current legal and financial situation 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, particularly given the public and media attention focused on the Enron and Arthur Andersen situations, could divert management time and attention,
and we could incur defense costs that we might not be able to recover.





Negative publicity about Bermuda
companies 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 United States 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 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.




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Risks That Relate to Ownership of Our Class A Common Shares





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





As of August 31, 2002, our partners owned or controlled shares representing, in the aggregate, a 69%
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.





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 public shareholders, to:





| |  |  | elect Accenture Ltds board of directors and remove directors;
| | - |  | --------------------------------------------------------------




| |  |  | control our management and policies;
| | - |  | ------------------------------------




| |  |  | 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
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | act in their own interest 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. The partner matters agreement provides mechanisms for our partners to:





| |  |  | select, for three to five years after our initial public offering, five partner nominees for election to membership on the board of directors of Accenture Ltd;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | vote on new partner admissions;
| | - |  | -------------------------------




| |  |  | approve the partners income plan as described below; and
| | - |  | ---------------------------------------------------------




| |  |  | hold a non-binding vote 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 662/3% 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.




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





| |  |  | As of August 31, 2002, substantially all of the Class A common shares still held by our partners and former partners or issuable upon redemption or exchange of
Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares held by our partners and former partners and previously received by them in connection with our transition to a corporate structure were subject to the provisions
of a voting agreement and/or a transfer rights agreement that permit sales in increasing amounts over seven years beginning July 24, 2002. Approximately 3,000 of our current and former partners, holding as of August 31, 2002 an aggregate of more
than 706,355,893 Accenture Ltd Class A common shares, Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares, including substantially all of such shares subject to the transfer restrictions of the voting agreement
and/or the transfer rights agreement, have separately agreed not to transfer any equity interests in Accenture and 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 transfer restrictions. While the transfer restrictions in the voting agreement and the transfer rights agreement will continue to apply, these transfer restrictions will be
waived to permit Accenture-approved transactions. After July 24, 2005, however, only the provisions of the voting agreement and the transfer rights agreement will apply. In calendar year 2002, we expect to enable partners and former partners who
have agreed not to transfer their equity interests in Accenture until July 24, 2005 except in specified Accenture-approved transactions with quarterly opportunities to sell or redeem shares in transactions with us or third parties at or below market
prices. These quarterly transactions are expected to include sales of Class A common shares pursuant to Rule 144 under the Securities Act by those of our partners and former partners holding these shares. We also expect that such partners and former
partners will be permitted to transfer shares in connection with future underwritten public offerings. The contractual restrictions on transfer described in this paragraph may not be enforceable in all cases.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | In addition, 58,753,272 Class A common shares underlying restricted share units granted in connection with the initial public offering of the Class A common
shares generally are scheduled to be delivered as follows:
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Number of Shares

Scheduled Delivery Date17,275,032

January 19, 20038,160,454

July 19, 200319,322,313

July 19, 20042,194,266

July 19, 20052,177,464

July 19, 20062,066,094

July 19, 20071,959,697

July 19, 20084,946,752

July 19, 2009651,200

After July 19, 2009





In addition, 4,428,881 Class A common shares underlying restricted
share units granted since the initial public offering of the Class A common shares generally are scheduled to be delivered over a period of seven years, beginning on January 19, 2003; 33,984 Class A common shares underlying restricted share units
granted to non-employee directors generally




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are scheduled to be delivered 12 months after their grant dates; and 91,000 Class A common shares underlying restricted share units granted since the initial public offering generally are
scheduled to be delivered eight years after their grant dates.





21,560,270 of all Class A common shares issuable
pursuant to restricted share units underlie restricted share units granted to current and former partners, and we expect that, when delivered, these Class A common shares will be subject to the contractual transfer restrictions lasting until July
24, 2005 described above. Class A common shares delivered pursuant to restricted share units held by our non-partner employees and non-employee directors are not subject to contractual restrictions on transfer.





| |  |  | In addition, 82,201,013 Class A common shares are issuable pursuant to options granted in connection with the initial public offering of the Class A common
shares, of which:
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | options to purchase an aggregate of 20,533,523 Class A common shares are exercisable;
| | - |  | -------------------------------------------------------------------------------------




| |  |  | options to purchase an aggregate of 10,901,000 Class A common shares generally will become exercisable in four equal annual installments beginning on July 19,
2003;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | options to purchase an aggregate of 50,466,490 Class A common shares generally will become exercisable in three equal annual installments beginning on July 19,
2003; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | options to purchase an aggregate of 300,000 Class A common shares generally will become exercisable on January 19, 2004.
| | - |  | ------------------------------------------------------------------------------------------------------------------------




In addition, 1,620,000 Class A common shares are issuable pursuant to options granted since the initial public offering of the
Class A common shares. These options generally will become exercisable in five equal annual installments beginning on the first anniversary of their grant dates.





In addition, 2,135,477 Class A common shares are issuable pursuant to options granted since our initial public offering. 8,614 of these options are exercisable and 2,126,863 of these options generally
will become exercisable in four equal annual installments beginning on the first anniversary of their grant dates.





In addition, 175,000 Class A common shares are issuable pursuant to options granted since the initial public offering to non-employee directors. These options generally will become exercisable 12 months after their grant dates.





15,640,000 of all Class A common shares issuable pursuant to options are issuable pursuant to options that have
been granted to current partners, and we expect that, when purchased, these Class A common shares will be subject to the contractual transfer restrictions lasting until July 24, 2005 described above. Class A common shares delivered under
options held by our non-partner employees and non-employee directors are not subject to contractual restrictions on transfer.





We may need additional capital in the future, and this capital may not be available to us. The raising of additional capital may dilute your ownership in us.





We may need to raise additional funds through public or private debt or equity financings in order to:





| |  |  | take advantage of opportunities, including more rapid expansion;
| | - |  | ----------------------------------------------------------------




| |  |  | acquire complementary businesses or technologies;
| | - |  | -------------------------------------------------




| |  |  | develop new services and solutions; or
| | - |  | --------------------------------------




| |  |  | respond to competitive pressures.
| | - |  | ---------------------------------



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Any additional capital raised through the sale of equity may dilute your
ownership percentage in us. Furthermore, any additional financing we may need may not be available on terms favorable to us, or at all. Also, in connection with a previous offering of Class A common shares, we agreed, among other things, not to
offer or sell Class A common shares in a firm commitment underwritten public offering until May 17, 2003, without the prior consent of Morgan Stanley & Co. Incorporated.





We are registered in Bermuda, and a significant portion of our assets are located outside the United States. As a result, it may not be possible for shareholders to
enforce civil liability provisions of the federal or state securities laws of the United States.





We are
organized under the laws of Bermuda, and a significant portion of our assets are located outside the United States. It may not be possible to enforce court judgments obtained in the United States against us in Bermuda or in countries, other than the
United States, where we have assets based on the civil liability provisions of the federal or state securities laws of the United States. In addition, there is some doubt as to whether the courts of Bermuda and other countries would recognize or
enforce judgments of United States courts obtained against us or our directors or officers based on the civil liabilities provisions of the federal or state securities laws of the United States or would hear actions against us or those persons based
on those laws. We have been advised by our legal advisors in Bermuda that the United States and Bermuda do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore,
a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not based solely on United States federal or state securities laws, would not automatically be enforceable in
Bermuda. Similarly, those judgments may not be enforceable in countries, other than the United States, where we have assets.





Bermuda law differs from the laws in effect in the United States and may afford less protection to shareholders.





Our shareholders may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction of the United States. As a Bermuda company, we are governed
by the Companies Act 1981 of Bermuda. The Companies Act differs in some material respects from laws generally applicable to United States corporations and shareholders, including the provisions relating to interested directors, mergers and
acquisitions, takeovers, shareholder lawsuits and indemnification of directors.





Under Bermuda law, the duties of
directors and officers of a company are generally owed to the company only. Shareholders of Bermuda companies do not generally have rights to take action against directors or officers of the company, and may only do so in limited circumstances.
Officers of a Bermuda company must, in exercising their powers and performing their duties, act honestly and in good faith with a view to the best interests of the company and must exercise the care and skill that a reasonably prudent person would
exercise in comparable circumstances. Directors have a duty not to put themselves in a position in which their duties to the company and their personal interests may conflict and also are under a duty to disclose any personal interest in any
contract or arrangement with the company or any of its subsidiaries. If a director or officer of a Bermuda company is found to have breached his duties to that company, he may be held personally liable to the company in respect of that breach of
duty. A director may be liable jointly and severally with other directors if it is shown that the director knowingly engaged in fraud or dishonesty. In cases not involving fraud or dishonesty, the liability of the director will be determined by the
Bermuda courts on the basis of their estimation of the percentage of responsibility of the director for the matter in question, in light of the nature of the conduct of the director and the extent of the causal relationship between his conduct and
the loss suffered.




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ITEM 2.    
PROPERTIES





We have major offices in the worlds leading business centers,
including New York, Chicago, Dallas, Los Angeles, San Francisco, London, Frankfurt, Madrid, Milan, Paris, Sydney and Tokyo. In total, we have more than 110 offices in 47 countries around the world. We do not own any material real property.
Substantially all of our office space is leased under long-term leases with varying expiration dates. We believe that our facilities are adequate to meet our needs in the near future.





ITEM 3.    
LEGAL PROCEEDINGS





We are involved in a number of judicial and arbitration proceedings
concerning matters arising in the ordinary course of our business. We do not expect that any of these matters, individually or in the aggregate, will have a material impact on our results of operations or financial condition.





In 1998, the bankruptcy trustee of FoxMeyer Corporation filed a lawsuit against us in the District Court of Harris County
(Houston), Texas. The lawsuit, which has been disclosed previously in Accenture Ltds filings with the Securities and Exchange Commission, arose out of our work for FoxMeyer to assist in the implementation of an enterprise resource planning
software package, SAP R/3, developed by SAP AG, and other related projects during the period from 1993 to 1996. On June 27, 2002, the bankruptcy trustee and Accenture entered into a settlement of the litigation, and on July 15, 2002, the bankruptcy
court approved the settlement. The trial judge dismissed the lawsuit with prejudice on August 8, 2002.





As
described under Legal Proceedings in Accenture Ltds Form 10-Q for the quarter ended May 31, 2002, we had previously signed agreements with the lead plaintiffs in the Houston class actions on behalf of shareholders and employees of
Enron and with the plaintiff in a lawsuit involving Sunbeam Corporation extending any statute of limitations or similar deadlines by which we had to be added as a party to such lawsuits. These lawsuits all involved allegations concerning the
auditing and other services provided by separate and independent Arthur Andersen firms, and we entered into these tolling agreements so that we would have time to inform the plaintiffs that adding us as a defendant in such actions would be
misdirected and without merit. Subsequently, certain Arthur Andersen firms and/or Andersen Worldwide entered into agreements to settle all claims and disputes in these lawsuits. Although we were not a party to these agreements, we have confirmed
that, under the terms of the proposed settlement with the Enron class plaintiffs, Accenture will be released from all claims that were brought, or might have been brought, by these plaintiff groups once the settlement is finally approved by the
court. The Enron settlements are subject to normal contingencies, including the negotiation of a definitive agreement and final approval by the federal court in Houston. Under the terms of the settlement with the plaintiff in the lawsuit involving
Sunbeam Corporation, Accenture has been released from all claims that were brought or might have been brought by the plaintiff; no court approval is required for this settlement.





We maintain the types and amounts of insurance customary in the industries and countries in which we operate, including coverage for professional liability, general
liability and management liability. We consider our insurance coverage to be adequate both as to the risks and amounts for the businesses we conduct.





ITEM 4.    
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





On July 11, 2002, Accenture Ltd
held its 2002 Annual General Meeting of Shareholders, at which the shareholders voted upon: (1) the appointment of Joe W. Forehand, Joel P. Friedman, Blythe J. McGarvie, Sir Mark Moody-Stuart and Masakatsu Mori as Class I directors for terms
expiring at the 2005 Annual General Meeting of Shareholders, the re-appointment of Steven A. Ballmer and Dina Dublon as




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Class II directors for terms expiring at the 2003 Annual General Meeting of Shareholders, and the re-appointment of Robert I. Lipp and Wulf von Schimmelmann as Class III directors for terms
expiring at the 2004 Annual General Meeting of Shareholders; and (2) the appointment of KPMG LLP as independent auditors of Accenture Ltd for a term expiring at the 2003 Annual General Meeting of Shareholders and the authorization of the board of
directors to determine their remuneration.





Accenture Ltds shareholders appointed or re-appointed all nine
nominees as directors. Accenture Ltds shareholders also appointed KPMG LLP as independent auditors of Accenture Ltd and authorized the board of directors to determine their remuneration. The number of votes cast for, against or withheld and
the number of abstentions and broker non-votes with respect to each matter voted upon, as applicable, is set forth below.





For

Against/Withheld

Abstain

Broker Non-Votes1. Appointment of Directors:Joe W. Forehand

886,187,851

2,328,673

*

*Joel P. Friedman

885,261,773

3,254,751

*

*Blythe J. McGarvie

887,008,565

1,507,959

*

*Sir Mark Moody-Stuart

886,300,641

2,215,883

*

*Masakatsu Mori

885,634,082

2,882,442

*

*Steven A. Ballmer

887,005,052

1,511,472

*

*Dina Dublon

886,975,134

1,541,390

*

*Robert I. Lipp

886,404,276

2,112,248

*

*Wulf von Schimmelmann

887,009,758

1,506,766

*

*2. Appointment of KPMG LLP

874,954,064

1,600,804

11,961,655

0


---

|* |  | Not applicable
|- |  | --------------




The terms of William D. Green, Stephan A. James, Diego Visconti, Karl-Heinz Flöther and Jackson L. Wilson, Jr. as directors continued after the 2002 annual meeting.




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##### Table of Contents

PART II





ITEM 5.    
MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED SHAREHOLDER MATTERS





Price Range of Class A Common
Shares





Trading in the Accenture Ltd Class A common shares commenced on the New York Stock Exchange on July
19, 2001 under the symbol ACN. The table below sets forth, on a per share basis for the periods indicated, the high and low sale prices for the Class A common shares as reported by the New York Stock Exchange.





Price RangeHigh

LowFiscal Year 2001Fourth Quarter (commencing July 19, 2001)

$
15.50

$
14.05Fiscal Year 2002First Quarter

$
22.75

$
11.61Second Quarter

$
28.34

$
22.50Third Quarter

$
30.50

$
19.50Fourth Quarter

$
20.99

$
13.70Fiscal Year 2003First Quarter (through October 29, 2002)

$
17.25

$
11.30





The closing sale price of Class A common shares as reported by the
New York Stock Exchange on October 29, 2002 was $16.75. As of October 29, 2002, there were 1,564 holders of record of the Class A common shares.





There is no trading market for the Accenture Ltd Class X common shares. As of October 29, 2002, there were 1,468 holders of record of the Class X common shares.





Dividend Policy





We
currently do not anticipate that Accenture Ltd or Accenture SCA will pay dividends.





We may from time to time
enter into financing agreements that contain financial covenants and restrictions, some of which may limit the ability of Accenture Ltd and Accenture SCA to pay dividends.





Future dividends on the Class A common shares of Accenture Ltd, if any, will be at the discretion of its board of directors and will depend on, among other things, our
results of operations, cash requirements and surplus, financial condition, contractual restrictions and other factors that the board of directors may deem relevant.





Recent Sales of Unregistered Securities





On June 20, 2002,
as a result of a notice of election for redemption issued by Accenture Foundation, Inc., Accenture SCA redeemed 1,690,322 Class I common shares held by Accenture Foundation, Inc. and settled the redemption with Accenture Ltd Class A shares pursuant
to a settlement agreement, dated June 20, 2002, under which Accenture SCA transferred the redeemed shares to Accenture Ltd and Accenture Ltd issued 1,690,322 Class A common shares to Accenture Foundation, Inc. These Class A common shares were issued
in reliance on the exemption from registration contained in Section 4(2) of the Securities Act of 1933 on the basis that the transaction did not involve any public offering.




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ITEM 6.    
SELECTED FINANCIAL DATA





The following selected financial data have been presented on a
historical cost basis for all periods presented. The data as of August 31, 2001 and 2002 and for the years ended August 31, 2000, 2001 and 2002 are derived from the audited historical financial statements and related notes which are included
elsewhere in this report. The data as of August 31, 1999 and for the year ended August 31, 1998 are derived from audited historical financial statements and related notes which are not included in this report. The data as of August 31, 1998 is
derived from unaudited historical financial statements and related notes which are not included in this report. The selected financial data should be read in conjunction with Managements Discussion and Analysis of Financial Condition and
Results of Operations and our historical financial statements and related notes included elsewhere in this report.


Year ended August 31,1998


1999


2000


2001


2002(in millions, except share and per share amounts)Income Statement Data:Revenues:Revenues before reimbursements

$
8,215


$
9,550


$
9,752


$
11,444


$
11,574Reimbursements


1,296



1,326



1,579



1,618



1,531Revenues


9,511



10,876



11,331



13,062



13,105Operating expenses:Cost of services:*Cost of services before reimbursable expenses*


4,700



5,457



5,486



6,199



6,897Reimbursable expenses


1,296



1,326



1,579



1,618



1,531Cost of services*


5,996



6,783



7,065



7,817



8,428Sales and marketing*


696



790



883



1,217



1,566General and administrative costs*


1,036



1,271



1,296



1,516



1,616Restructuring, reorganization and rebranding costs














849



111Restricted share unit-based compensation














967



Total operating expenses*


7,728



8,844



9,245



12,366



11,720Operating income*


1,783



2,032



2,086



696



1,385Gain (loss) on investments, net






92



573



107



(321
)Interest income






60



67



80



46Interest expense


(17
)


(27
)


(24
)


(43
)


(49
)Other income (expense)


(6
)


(5
)


51



17



15Equity in losses of affiliates


(1
)


(6
)


(47
)


(61
)


(9
)Income before taxes*


1,759



2,146



2,707



795



1,068Provision for taxes (1)


74



123



243



503



491Income before minority interest and accounting change*


1,685



2,023



2,464



292



576Minority interest














577



(332
)Income before accounting change*


1,685



2,023



2,464



869



245Cumulative effect of accounting change














188



Partnership income before partner distributions* (2)

$
1,685


$
2,023


$
2,464Net income*













$
1,057


$
245Weighted Average Class A Common Shares:Basic


















425,941,809Diluted


















1,023,789,546Earnings Per Class A Common Share:Basic

















$
0.57Diluted

















$
0.56As of August 31,1998


1999


2000


2001


2002(in millions)Balance Sheet Data:Cash and cash equivalents

$
736


$
1,111


$
1,271


$
1,880


$
1,317Working capital


531



913



1,015



401



734Total assets


3,704



4,615



5,451



6,061



5,479Long-term debt


157



127



99



1



3Total partners capital


1,507



2,208



2,368







Shareholders equity














282



439


---

|* |  | Excludes payments for partner distributions in respect of periods ended on or prior to May 31, 2001.
|- |  | ----------------------------------------------------------------------------------------------------

|(1) |  | For periods ended on or prior to May 31, 2001, we operated through partnerships in many countries. Therefore, we generally were not subject to income taxes in
those countries. Taxes related to income earned by our partnerships were the responsibility of the individual partners. In other countries, we operated through corporations, and in these circumstances we were subject to income taxes.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Partnership income before partner distributions is not comparable to net income of a corporation similarly determined. Partnership income in respect of periods
ended on or prior to May 31, 2001 is not executive compensation in the customary sense because partnership income is comprised of distributions of current earnings. Accordingly, compensation and benefits for services rendered by partners have not
been reflected as an expense in our historical financial statements for periods prior to May 31, 2001.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

ITEM 7.    
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





The following discussion and analysis should be read in conjunction with our Combined and Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K. The pro forma information
presented is not necessarily indicative of the results of operations or financial position that might have occurred had the events described herein actually taken place as of the dates specified or that may be expected to occur in the future.





We use the terms Accenture, we, our, and us in this report
to refer to Accenture Ltd and its subsidiaries. All references to years, unless otherwise noted, refer to our fiscal year, which ends on August 31. For example, a reference to 2002 or fiscal year 2002 means the 12-month
period that ended on August 31, 2002. All references to quarters, unless otherwise noted, refer to the quarters of our fiscal year.





Overview





The results of our operations are affected by the economic conditions, level of
business activity and level of change in the industries we serve. Our business is also driven, in part, by the pace of technological change and the type and level of technology spending by our clients. The ability to identify and capitalize on
technological and market changes early in their cycles is a key driver of our performance. Prior to May 31, 2001, we operated as a series of related partnerships and corporations under the control of our partners. We now operate in a corporate
structure. As a business, whether in partnership form or in a corporate structure, our profitability is driven by many of the same factors.





Revenues are driven by our partners and senior executives ability to secure contracts for new engagements and to deliver solutions and services that add value to our clients. Our ability to
add value to clients and therefore drive revenues depends in part on our ability to offer market-leading service offerings and to deploy skilled teams of professionals quickly and on a global basis.





Cost of services is primarily driven by the cost of client service personnel, which consists mainly of compensation and other personnel
costs. Cost of services as a percentage of revenues is driven by the productivity of our client service workforces. Chargeability, or utilization, represents the percentage of our professionals time spent on billable work. Sales and marketing
expense is driven primarily by business development activities; the development of new service offerings; the level of concentration of clients in a particular industry or market; and client-targeting, image-development and brand-recognition
activities. General and administrative costs primarily include costs for non-client facing personnel, information systems and office space, which we seek to manage in line with changes in activity levels in our business.





Although new contract bookings were strong in fiscal 2002, current economic conditions continue to cause pricing pressures from
competitors and clients and have resulted in some clients reducing or deferring their expenditures or deferring the start of work already contracted. The consulting and systems integration markets are depressed due to the economic environment and
the lack of a new wave of technology to stimulate spending. We are positioning ourselves to achieve revenue growth through our business transformation outsourcing offerings. Business transformation outsourcing contracts typically have longer
contract terms than consulting contracts and may not as quickly generate revenue in the early stages of the contract. Further, because we cannot predict the long-term impact that the current economic environment and/or pricing pressures will have on
the markets in which we compete, we must continuously improve our management of costs.





Our cost-management
strategy is to anticipate changes in demand for our services and to identify cost-management initiatives that enable us to manage costs as a percentage of revenues. We aggressively




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plan and manage our headcount to meet the anticipated demand for our services, and we have implemented cost-management programs that have generally enabled us to maintain or improve consolidated
operating margins, excluding one-time charges. For instance, we have taken actions to reduce our consulting workforce, primarily at the executive level, in markets where both supply and demand and skill level imbalances have not been resolved, while
continuing our hiring at entry-level positions. We have also taken actions to reduce our administrative headcount. The majority of these reductions affected personnel in Australia, the United Kingdom and the United States. We have also consolidated
office space in certain of our facilities around the world. We continue to build and use our network of delivery centers and capabilities around the world as part of a more cost-effective delivery model. The growing use of globally sourced lower
cost service delivery capabilities within our industry will likely be a source of continuing pressure on our revenues and operating margins. Current and future cost-management initiatives may not be sufficient to maintain our consolidated operating
margins if the current challenging economic environment continues for several quarters.





Presentation





As a result of a restructuring in 1989, we and our member firms, which are now our subsidiaries, became legally
separate and distinct from the Arthur Andersen firms. Thereafter, until August 7, 2000, we had contractual relationships with an administrative entity, Andersen Worldwide, and indirectly with the separate Arthur Andersen firms. Under these
contracts, called member firm agreements, we and our member firms, on the one hand, and the Arthur Andersen firms, on the other hand, were two stand-alone business units linked through such agreements to Andersen Worldwide for administrative and
other services. In addition, during this period our partners individually were members of Andersen Worldwide. Following arbitration proceedings between us and Andersen Worldwide and the Arthur Andersen firms that were completed in August 2000, the
tribunal terminated our contractual relationships with Andersen Worldwide and all the Arthur Andersen firms. On January 1, 2001, we began to conduct business under the name Accenture. See Certain Transactions and
RelationshipsRelationship with Andersen Worldwide and Arthur Andersen Firms.





Because we historically
operated as a series of related partnerships and corporations under the control of our partners, our partners generally participated in profits, rather than having received salaries. Therefore, our historical financial statements for periods ended
on or prior to May 31, 2001 do not reflect any compensation or benefit costs for services rendered by them. Following our transition to a corporate structure, operating expenses include partner compensation, which consists of base salary, variable
cash compensation, restricted stock compensation, stock options and benefits. Similarly, in periods when we operated primarily in the form of partnerships, our partners paid income tax on their shares of the partnerships income. Therefore, our
historical financial statements for periods ended on or prior to May 31, 2001 do not reflect the income tax liability that we would have paid as a corporation. Following our transition to a corporate structure, we are subject to corporate tax on our
income. For purposes of comparing our results for fiscal periods ended on or prior to August 31, 2001 with our results for subsequent fiscal periods, we have included pro forma financial information below.





Segments





Our five reportable operating segments are our operating groups (formerly referred to as global market units), which are Communications & High Tech, Financial Services, Government, Products and Resources. Operating groups are
managed on the basis of revenues before reimbursements because our management believes it is a better indicator of operating group performance than revenues. Generally, operating expenses for each operating group have similar characteristics and are
subject to the same drivers, pressures and challenges. However, the current economic environment and its continuing effects




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on the industries served by our operating segments impacts operating expenses within our operating segments to different degrees. Personnel reductions have not been taken uniformly across our
operating segments in part due to an increased need on behalf of some of our operating groups to tailor their workforces to the needs of their business. Our segments shift to business transformation outsourcing engagements is not uniform and,
consequently, neither are the impacts on operating group revenues caused by these transitions. Local currency fluctuations also tend to affect our operating groups differently, depending on the historical and current geographic concentrations and
locations of their businesses.





In the first quarter of fiscal 2002 we made certain changes in the format of
information presented to the chief executive officer. The most significant of these changes was the elimination of interest expense from the five operating groups operating income and the elimination of interest credit from Others
operating income. In addition, the consolidated affiliated companies revenue and operating income (loss) results are included in the five operating groups results rather than being reported in the Other line item. Segment results for all
periods presented have been revised to reflect these changes.





Revenues





Revenues include all amounts that are billable to clients. Revenues are recognized on a time-and-materials basis, straight-line, or on a
percentage-of-completion basis, depending on the contract, as services are provided by employees and subcontractors. In fiscal 2002, approximately 50% of our revenues before reimbursements were attributable to activities in the Americas, 43% were
attributable to our activities in Europe, the Middle East and Africa, and 7% were attributable to our activities in the Asia/Pacific region.





Revenues before reimbursements include the margin earned on computer hardware and software resale contracts, as well as revenues from alliance agreements, neither of which is material to us.
Reimbursements, including those relating to travel and out-of-pocket expenses, and other similar third-party costs, such as the cost of hardware and software resales, are included in revenues, and an equivalent amount of reimbursable expenses is
included in cost of services.





Client prepayments (even if nonrefundable) are deferred, i.e., classified as a
liability, and recognized over future periods as services are delivered or performed.





Generally, our contracts
are terminable by the client on short notice or without notice. Accordingly, we do not believe it is appropriate to characterize these contracts as backlog. Normally if a client terminates a project, the client remains obligated to pay for
commitments we have made to third parties in connection with the project, services performed and reimbursable expenses incurred by us through the date of termination.





While we have many types of contracts, including time-and-materials contracts, fixed-price contracts and contracts with features of both of these contract types, we have
been moving away from contracts that are priced solely on a time-and-materials basis toward contracts that also include incentives related to costs incurred, benefits produced and our adherence to schedule. We estimate that a majority of our
contracts have some fixed-price, incentive-based or other pricing terms that condition our fee on our ability to deliver defined goals. The trend to include greater incentives in our contracts related to costs incurred, benefits produced or
adherence to schedule may increase the variability in revenues and margins earned on such contracts. We conduct rigorous reviews prior to signing such contracts to evaluate whether these incentives are reasonably achievable.




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Operating Expenses





Operating expenses include variable and fixed direct and indirect costs that are incurred in the delivery of our solutions and services to clients. The primary categories
of operating expenses include cost of services, sales and marketing, and general and administrative costs.





We
award variable compensation and bonuses to our partners and other senior employees based on our quarterly and annual results as compared to our budgets and taking into account other factors, including industry-wide results and the general economic
environment. Beginning in fiscal 2003, we will extend a variable component of compensation to our managers on the same basis. In the fourth quarter of 2002, as a result of the difficult economic environment and higher expenses partly relating to
increased severance costs, we reversed $140 million of previously accrued 2002 variable partner compensation. This reduced 2002 variable compensation to approximately 35% of the 2002 planned amount. For fiscal 2003 we have reduced planned variable
partner cash compensation and have not awarded performance option grants for partners in fiscal 2003.





Cost of
Services





Cost of services includes the direct costs to provide services to our clients. Such costs generally
consist of compensation for client service personnel, the cost of subcontractors hired as part of client service teams, costs directly associated with the provision of client service, such as facilities for outsourcing contracts, and the recruiting,
training, personnel development and scheduling costs of our client service personnel. Reimbursements, including those relating to travel and other out-of-pocket expenses, and other similar third-party costs, such as the cost of hardware and software
resales, are included in revenues, and an equivalent amount of reimbursable expenses is included in cost of services.





Sales and Marketing





Sales and marketing expense is affected by economic conditions and is
driven primarily by business development activities; the development of new service offerings; the level of concentration of clients in a particular industry or market; and client-targeting, image-development and brand-recognition activities.





General and Administrative Costs





General and administrative costs primarily include costs for non-client service personnel, information systems and office space. Through various cost-management
initiatives, we seek to manage general and administrative costs proportionately in line with or below anticipated changes in revenues.





Restructuring, Reorganization and Rebranding Costs





In 2002, we incurred
restructuring costs to consolidate certain office space facilities around the world. In 2001, we incurred one-time reorganization and rebranding costs to rename our organization Accenture and other costs to transition to a corporate structure.





Restricted Share Unit-based Compensation





Restricted share unit-based compensation reflects restricted share unit awards granted at the time of the initial public offering of the Accenture Ltd Class A common shares
on July 19, 2001, and vested prior to August 31, 2001. These restricted share units were granted to some of our partners, former partners, employees and former employees pursuant to a formula adopted by the board of directors of Accenture Ltd.
Restricted share unit-based compensation subsequent to the initial public offering is included in Cost of Services, Sales and Marketing and General and Administrative Costs.




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Gain (Loss) on Investments





Gain (loss) on investments primarily represents gains and losses on the sales of marketable securities and writedowns on investments in securities. These fluctuate over
time, are not predictable, and may not recur. Beginning on September 1, 2000, they also include changes in the fair market value of equity holdings considered to be derivatives in accordance with Statement of Financial Accounting Standard
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities. In 2002 they include writedowns incurred in connection with our decision to sell substantially all of our minority interests in our venture and
investment portfolio.





Interest Income





Interest income represents interest earned on cash and cash equivalents. Interest income also includes interest earned on a limited number of client engagement receivables
when we agree in advance to finance those receivables for our clients beyond the normal billing and collection period.





Interest
Expense





Interest expense reflects interest incurred on borrowings, retirement obligations and other
non-current liabilities.





Other Income (Expense)





Other income (expense) consists of currency exchange gains (losses) and the recognition of income from the vesting of options for services by our personnel on boards of
directors of some of those companies in which we have invested. In general, we earn revenues and incur related costs in the same currency. We hedge significant planned movements of funds between countries, which potentially give rise to currency
exchange gains (losses).





Equity in Income (Losses) of Affiliates





Equity income (losses) of affiliates represents our share of the operating results of non-consolidated companies over which we have significant influence.





Provision for Taxes





Prior to our transition to a corporate structure, we were generally not subject to income taxes in most countries because we operated in partnership form in those countries. Since taxes related to
income earned by the partnerships were the responsibility of the individual partners, our partners reported and paid taxes on their share of the partnerships income on their individual tax returns. In other countries, however, we operated in
the form of a corporation or were otherwise subject to entity-level taxes on income and withholding taxes. As a result, prior to our transition to a corporate structure, we paid some entity-level taxes, with the amount varying from year to year
depending on the mix of earnings among the countries. Where applicable, we accounted for these taxes under the asset and liability method. Therefore, our historical financial statements for periods ended on or prior to May 31, 2001 do not reflect
the income tax liability that we would have paid as a corporation. Subsequent to May 31, 2001 Accenture is subject to corporate income tax.





Minority Interest





Minority interest eliminates the income earned or expense
incurred attributable to the equity interest that some of our partners and former partners have in our subsidiary Accenture SCA and the




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equity interest that some of our partners and former partners have in our subsidiary Accenture Canada Holdings Inc. See Business  Accenture Organizational Structure.
The resulting net income of Accenture Ltd represents the income attributable to the shareholders of Accenture Ltd. Effective in January 2002, minority interest also includes immaterial amounts attributable to minority shareholders in one of our
subsidiaries, Avanade, Inc.





Partnership Income Before Partner Distributions





Our historical financial statements for periods ended on or prior to May 31, 2001 reflect our organization as a series of related
partnerships and corporations under the control of our partners. The income of our partners in historical periods is not executive compensation in the customary sense because in those periods partner compensation was comprised of distributions of
current earnings, out of which our partners were responsible for their payroll taxes and benefits.





Net Income





Net income reflects the earnings of our organization in a corporate structure. We have provided pro forma
financial results that include adjustments to exclude one-time items and other adjustments to include partner compensation and income taxes necessary to present our historical financial statements for periods ended on or prior to May 31, 2001, in
corporate structure as if the transition had occurred on September 1, 2000.





Critical Accounting Policies and Estimates





Revenue Recognition





Revenues from contracts for management consulting and technology service offerings that we develop and implement for our clients are recognized on a time-and-materials
basis or on a percentage-of-completion basis as services are provided by our employees and, to a lesser extent, subcontractors. Revenues from time-and-materials service contracts are recognized as the services are provided. Revenues from long-term
system integration contracts are recognized based on the percentage of services provided during the period compared to the total estimated services to be provided over the duration of the contract. This method is followed where reasonably dependable
estimates of the revenues and costs applicable to various elements of a contract can be made. Estimates of total contract revenues and costs are continuously monitored during the term of the contract, and recorded revenues and costs are subject to
revision as the contract progresses. Such revisions, which may result in increases or decreases to revenues and income, are reflected in the financial statements in the period in which they are first identified.





Each contract has different terms based on the scope, deliverables and complexity of the engagement, the terms of which frequently require
us to make judgments and estimates about recognizing revenue. While we have many types of contracts, including time-and-materials contracts, fixed-price contracts and contracts with features of both of these contract types, we have been moving away
from contracts that are priced solely on a time-and-materials basis toward contracts that also include incentives related to costs incurred, benefits produced, goals attained and our adherence to schedule. 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 defined goals. For systems integration contracts, estimated revenues for applying the percentage-of-completion
method include estimated incentives for which achievement of defined goals is deemed probable. Incentives relating to non-systems integration projects are recorded when the contingency is satisfied.




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In recent years, our outsourcing business has increased significantly. Revenues
for contracts with multiple elements are allocated based on the fair value of the elements. Determining revenue and costs on outsourcing contracts requires judgment. Typically the terms of these contracts span several years. In a number of these
arrangements we hire client employees and become responsible for client obligations. Revenues are recognized on a straight-line basis as services are performed or as transactions are processed in accordance with contractual terms. Costs on
outsourcing contracts are generally charged to expense as incurred. Outsourcing contracts can also include incentive payments for benefits delivered to clients and/or charges for failure to meet schedule or deliver agreed benefits, which may create
variability in these revenues and related margin percentages. Revenues relating to such incentive payments are recorded when the contingency is satisfied.





Income Taxes





Determining the consolidated provision for
income tax expense, deferred tax assets and liabilities and related valuation allowance involves judgment. As a global company with offices in 47 countries, we are required to calculate and provide for income taxes in each of the tax jurisdictions
where we operate. This involves estimating current tax exposures in each jurisdiction as well as making judgments regarding the recoverability of deferred tax assets. Tax exposures can involve complex issues and may require an extended period to
resolve. Changes in the geographic mix or estimated level of annual pre-tax income can affect the overall effective tax rate.





Valuation of Investments





Gains and losses on investments are not predictable and can cause
fluctuations in net income. Management conducts periodic impairment reviews of each investment in our portfolio, including historical and projected financial performance, expected cash needs and recent funding events. Gains and losses on marketable
equity securities are included in Other Comprehensive Income unless losses are considered to be other-than-temporary. Other-than-temporary impairments are recognized in the income statement if the market value of the investment is below its cost
basis for an extended period or the issuer has experienced significant financial declines or difficulties in raising capital to continue operations. Judgment is required to first determine the market value of each investment and then to assess
whether impairments are temporary or other-than-temporary. Net unrealized losses on temporary impairments included in Other Comprehensive Income at August 31, 2002 totaled $17 million. Changes in the market value of equity derivatives are reflected
in the income statement in the current period. Adverse changes in the financial condition of our investments could result in impairment charges.





In 2002, after exploring a number of alternatives, we entered into an agreement to sell substantially all of the minority ownership interests in our venture and investment portfolio that could cause
volatility in our future earnings. We will retain a modest percentage of ownership in the venture and investment portfolio and expect to enter into an ongoing alliance with the buyer. We expect to complete the transaction by the end of the 2002
calendar year. Related to this decision, our loss on investments includes a charge of $212 million, before and after tax, related to investment writedowns of our venture and investment portfolio and the loss we expect to incur on this sale
transaction. We will continue to make investments and will accept equity and equity-linked securities using guidelines intended to eliminate volatility, but we have discontinued venture capital investing and no longer accept illiquid securities from
clients or alliance partners.





Variable Compensation





We record compensation expense for payments to be made in later periods to our partners and other senior employees under the variable compensation portions of our
overall compensation programs. Determining the amount of expense to recognize as operating expenses for variable compensation at




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interim and annual reporting dates involves judgment. Expenses accrued for variable compensation are based on actual quarterly and annual performance versus plan targets and other factors.
Amounts accrued are subject to change in future periods if future performance is below plan targets or is below the performance levels anticipated in prior periods. Management believes it makes reasonable judgments using all significant information
available.





Pro Forma Results of Operations





The following pro forma consolidated income statements for the years ended August 31, 2000 and 2001 are based on our historical financial statements included elsewhere in
this report.





The pro forma consolidated income statements give effect to the following as if they occurred on
September 1, 1999:





| |  |  | the transactions related to our transition to a corporate structure described under Certain Transactions and RelationshipsReorganization and Related
Transactions;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | compensation payments to employees who were partners prior to our transition to a corporate structure;
| | - |  | ------------------------------------------------------------------------------------------------------




| |  |  | provision for corporate income taxes; and
| | - |  | -----------------------------------------




| |  |  | Accenture Ltds initial public offering in July 2001.
| | - |  | -----------------------------------------------------




The pro forma consolidated income statements also give effect to the exclusion of one-time rebranding costs of $304 million incurred in connection with our name change to
Accenture. Management believes that this pro forma information provides useful supplemental information in understanding its results of operations.





The pro forma consolidated income statements exclude one-time events directly attributable to Accenture Ltds initial public offering because of their nonrecurring nature. These one-time events
include:





| |  |  | net compensation cost of approximately $967 million resulting from the grant of restricted share units in connection with Accenture Ltds initial public
offering; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | approximately $544 million for costs associated with our transition to a corporate structure.
| | - |  | ---------------------------------------------------------------------------------------------




The pro forma consolidated income statement for the year ended August 31, 2001 excludes the effect of a cumulative change in accounting
principle to implement SFAS 133.





The pro forma adjustments are based upon available information and assumptions
that management believes are reasonable.





This information and the accompanying notes should be read in conjunction with our
historical financial statements and the related notes included elsewhere in this report. The information presented is not necessarily indicative of the results of operations or financial position that might have occurred had the events described
above actually taken place as of the dates specified or that may be expected to occur in the future.




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Year Ended August 31, 2000


Year ended August 31, 2001As reported


Pro forma


% of revenues


As reported


Pro forma


% of revenues(in millions, except share and per share data)Revenues:Revenues before reimbursements

$
9,752


$
9,752


86
%

$
11,444


$
11,444


88
%Reimbursements


1,579



1,579


14



1,618



1,618


12Revenues


11,331



11,331


100



13,062



13,062


100Operating expenses:Cost of services:Cost of services before reimbursable expenses


5,486



6,127


54



6,200



6,925


53Reimbursable expenses


1,579



1,579
(a)

14



1,618



1,618
(a)

12Cost of services


7,065



7,706


68



7,818



8,543


65Sales and marketing


883



1,187
(a)

10



1,217



1,507
(a)

11General and administrative costs


1,297



1,438
(a)

13



1,516



1,560
(a)

12Reorganization and rebranding costs













848




(g)(h)

n/mRestricted share compensation













967




(i)

n/mTotal operating expenses


9,245



10,331


91



12,366



11,610


89Operating income


2,086



1,000


9



696



1,452


11Gain on investments, net


573



573


5



107



107


1Interest income


67



67


n/m



80



80


n/mInterest expense


(24
)


(35
)(b)

n/m



(44
)


(59
)(b)

n/mOther income


51



51


n/m



17



17


n/mEquity in losses of affiliates


(46
)


(46
)

n/m



(61
)


(61
)

n/mIncome before taxes


2,707



1,610


14



795



1,536Provision for taxes


243



644
(c)

6



503



614
(c)

5Income before minority interest and accounting change


2,464



966


8



292



922


7Minority interest






(571
)(d)

(5
)


577



(545
)(d)

(4
)Income before accounting change

$
2,464


$
395


3
%

$
869


$
377


3
%Earnings per share:basic





$
0.96
(e)








$
0.91diluted





$
0.96
(e)








$
0.91
(e)Outstanding shares at August 31, 2001:basic






412,705,954
(f)









412,705,954
(f)diluted






1,008,163,290
(f)









1,008,163,290
(f)


---

n/m = not meaningful


|(a) |  | Adjustments totaling $1,086 million and $1,059 million for the years ended August 31, 2000 and 2001, respectively, reflect the effects of partner compensation
and benefit costs as if our transition to a corporate structure had occurred on September 1, 1999. Prior to our transition to a corporate structure, payments to our partners were generally accounted for as distributions of partners income,
rather than compensation expense. For the years ended August 31, 2000 and 2001, compensation and benefit costs of partners have been allocated 69% to cost of services, 27% to sales and marketing, and 4% to general and administrative costs based on
an estimate of the time spent on each activity at the appropriate cost rates.  The compensation plan adopted upon our transition to a corporate structure includes a fixed salary, benefits and performance-based bonuses. All elements of the new
compensation plan, including bonuses, have been reflected in the pro forma adjustments because our partners would have earned the bonuses based on our results of operations for the historical periods. Benefit costs are medical, dental and payroll
taxes, all of which are based on estimated costs that would have been incurred had these benefits been in place during the historical periods.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) |  | Reflects adjustments of $11 million and $15 million for the years ended August 31, 2000 and 2001, respectively, representing estimated interest expense on
early-retirement benefits payable to partners.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | Reflects adjustments for an estimated income tax provision as if we had operated in a corporate structure at a pro forma tax rate of 40%. The adjustment for the
year ended August 31, 2001 is net of $222 million relating to the revaluation of deferred tax liabilities upon change in tax status, including income taxes relating to mandatory changes in tax accounting methods, from a partnership to a corporate
structure. As a series of related partnerships and corporations under the control of our partners, we generally were not subject to income taxes. However, some of the corporations were subject to income taxes in their local jurisdictions.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(d) |  | Minority interests for the years ended August 31, 2000 and 2001 are based on the assumption that minority interests as of August 31, 2001 existed throughout
such fiscal years. As of August 31, 2001 partners owned a 59% minority interest in Accenture SCA and Accenture Canada Holdings Inc. Since Accenture Ltd is the sole general partner of Accenture SCA and owns the majority of the voting shares,
Accenture Ltd consolidates Accenture SCA and its subsidiaries. Although the other shareholders of Accenture SCA hold more than 50% of the economic interest in Accenture SCA, they do not have voting control and therefore are considered to be a
minority interest.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(e) |  | Excluding gains and losses on investments, and the related tax effect, pro forma as adjusted earnings per share for the years ended August 31, 2000 and 2001,
respectively, would have been $0.62 and $0.85.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) |  | Earnings per share calculations for the years ended August 31, 2000 and 2001 are based on the assumption that shares and share equivalents outstanding as of
August 31, 2001 were outstanding throughout such years. For the purposes of the pro forma earnings per share calculation, diluted outstanding shares include Accenture Class A common shares issuable or exchangeable upon redemption or exchange of
shares held by SCA Class I common shareholders and Accenture Canada Holdings Inc. shareholders. The weighted average shares outstanding, basic and diluted, were calculated based on:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Share issuances

Basic

DilutedAccenture Ltd Class A common shares

343,307,238

343,307,238Accenture SCA Class I common shares



587,296,594Accenture Canada Holdings Inc. exchangeable shares



8,160,742Restricted share units

69,398,716

69,398,716Weighted average shares outstanding

412,705,954

1,008,163,290





|(g) |  | One-time reorganization costs were incurred during the year ended August 31, 2001. Reorganization costs for the year ended August 31, 2001 include $89 million
of restructuring costs relating to our transition to a corporate structure and $455 million of indirect taxes, such as capital and stamp duty imposed on transfers of assets to the new corporate holding company structure.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(h) |  | One-time rebranding costs were incurred during the year ended August 31, 2001. Rebranding costs for the year ended August 31, 2001 include $157 million for the
amortization of intangible assets relating to the final resolution of arbitration with Andersen Worldwide and Arthur Andersen as well as $147 million from changing our name to Accenture. These amounts are considered pro forma as adjusted adjustments
due to their nonrecurring nature.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(i) |  | In connection with Accenture Ltds initial public offering, 68,481,815 fully vested restricted share units at $14.50 per share were granted in July 2001 to
certain partners, former partners and employees. The $967 million expense represents the fair value of fully vested restricted share units less $26 million relating to canceled liabilities for a deferred bonus plan for employees. Each restricted
share unit represents an unfunded, unsecured right, which is nontransferable except in the event of death, of a participant to receive an Accenture Ltd Class A common share on the date specified in the participants award agreement.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Historical Revenues by Operating Group





We provide services through five operating groups. The following table provides revenues for each of these operating groups.





Year ended August 31,2000


2001


2002(in millions, except for percentages)Revenues:Communications & High Tech

$
2,806


$
3,238


$
3,182Financial Services


2,542



2,894



2,621Government


797



1,003



1,316Products


1,932



2,357



2,441Resources


1,661



1,933



2,005Other


14



19



9Total revenues before reimbursements


9,752



11,444



11,574Reimbursements


1,579



1,618



1,531Total

$
11,331


$
13,062


$
13,105Revenues as a percentage of total:Communications & High Tech


25
%


25
%


24
%Financial Services


22



22



20Government


7



8



10Products


17



18



19Resources


15



15



15Other


n/m



n/m



n/mTotal revenues before reimbursements


86



88



88Reimbursements


14



12



12Total


100
%


100
%


100
%


---

n/m = not meaningful





Year Ended August 31, 2002 Compared to Year Ended August 31, 2001





Our results of operations for periods ended on or prior to May 31, 2001 reflect the fact that we operated as a series of related partnerships and corporations prior to that
date, and our results of operations for periods ending after May 31, 2001 reflect that we commenced operations in corporate structure on that date. Accordingly, in order to provide a more meaningful comparison of our results for fiscal year 2002
compared to fiscal year 2001, we comment below on our results for those periods both on a historical basis and a pro forma as adjusted basis.





Revenues





Revenues for 2002 were $13,105 million, an increase of $43 million over
2001. Revenues before reimbursements for 2002 were $11,574 million, an increase of $131 million, or 1%, over 2001 in U.S. dollars. In local currency terms, revenues before reimbursements in 2002 grew by 2% over 2001. In the fourth quarter of 2002
revenues decreased by 3% in U.S. dollars and 6% in local currency from the fourth quarter 2001. Our 2002 revenues before reimbursements in Europe, the Middle East and Africa grew by 11% in U.S. dollars and by 9% in local currency terms, revenues
before reimbursements in the Americas declined by 5% in U.S. dollars and 3% in local currency terms and revenues before reimbursements in Asia/Pacific declined by 8% in U.S. dollars and 4% in local currency terms. Outsourcing revenues grew




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by 33% for the year and 38% for the fourth quarter from the fourth quarter of 2001 and represented 23% of revenue before reimbursements for fiscal 2002 up from 17% last year. Consulting revenues
declined by 7% for the year and 15% for the fourth quarter from the fourth quarter of 2001.





As a result of the
difficult economic environment, revenue growth slowed during 2002. Some clients have reduced or deferred expenditures for our services and we have also experienced pricing pressure over the last year, which has eroded our revenues. However, we have
also implemented cost-management programs such that operating margins for fiscal year 2002, excluding one-time items, were improved. Current and future cost-management initiatives may not be sufficient to maintain our margins if the current
challenging economic environment continues for several quarters.





Despite the challenging environment and an
unusually high number of bankruptcies among their clients, our Communications & High Tech operating group achieved revenues before reimbursements of $3,182 million in 2002, a decrease of 2% from 2001. This decrease was primarily due to global
economic weakening in the electronics and high technology industries which this operating group serves, partly offset by growth in our Communications industry group. Despite a decrease of 2% year over year, Communications & High Tech revenues
showed an 8% increase in the fourth quarter of 2002 compared with fourth quarter 2001. The communications industry within this sector led growth in the fourth quarter due to increased revenues from several large transformational outsourcing
contracts. Our Financial Services operating group achieved revenues before reimbursements of $2,621 million in 2002, a decrease of 9% from 2001, primarily due to the impact of the economic downturn in the capital markets industry. Financial Services
fourth quarter revenue declined by 10% from the fourth quarter of 2001. Our Government operating group achieved revenues before reimbursements of $1,316 million in 2002, an increase of 31% over 2001, primarily driven by strong growth in North
America and Europe. Despite year over year growth of 31%, growth slowed to 19% in fourth quarter 2002 compared to fourth quarter 2001. Our Products operating group achieved revenues before reimbursements of $2,441 million in 2002, an increase of 4%
over 2001. This reflects strong growth in our Retail industry group in Europe led by a series of engagements with a large retail client. Year over year revenue increased 4%, however fourth quarter 2002 revenues decreased 9% compared with fourth
quarter 2001. All industries in this sector contributed to the fourth quarter decline due to economic conditions, with the exception of Travel & Transportation. Our Resources operating group achieved revenues before reimbursements of $2,005
million in 2002, an increase of 4% over 2001, as a result of strong growth in our Chemicals and Utilities industry groups. Net revenues for Resources for the fourth quarter of 2002 declined 14% from fourth quarter 2001, due in large part to lower
revenues in our Chemicals industry group in North America and a slowdown in North America resulting from economic problems in the U.S. energy and utilities industries, including the collapse of the energy trading industry and the slowing of
utilities work due to regulatory actions.





Operating Expenses





Operating expenses in 2002 were $11,720 million, a decrease of $646 million, or 5%, from 2001 and a decrease as a percentage of revenues from 95% in 2001 to 89% in 2002.
These decreases primarily resulted because one-time expenses of $848 million for reorganization and rebranding and $967 million for restricted share unit-based compensation costs were incurred in 2001 but not in 2002. These reductions from 2001 were
partially offset by higher employee compensation costs following our transition to a corporate structure. Prior to our transition to a corporate structure, payments to our partners were generally accounted for as distributions of partners
income, rather than compensation expense.





Operating expenses for 2002 increased $110 million, or 1%, over the pro
forma as adjusted operating expenses for 2001, and remained constant as a percentage of revenues at 89%. Excluding a charge of $111 million in 2002 relating to the consolidation of office facilities, operating expenses as a percentage of revenues
remained constant at 89% in 2002.




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We continue to implement long-term and short-term cost-management initiatives
aimed at keeping overall growth in operating expenses less than the growth in revenues. In the fourth quarter of 2002 we consolidated certain office facilities around the world and recorded a charge of $111 million. Our long-term initiatives focus
on global reductions in infrastructure costs. In addition, increasing our use of Web-enabled and other lower-cost distribution methods has enabled us to reduce the costs of delivering training. Our short-term initiatives focus on reducing variable
costs, such as limiting travel and meeting costs, reducing infrastructure and corporate expenses principally through a hiring freeze and the deferral of non-critical initiatives.





In response to the continued difficult economic conditions affecting our business and the faster growth in outsourcing, we have increased our focus on reducing our cost
structure and on correcting supply-and-demand, skill and pay level imbalances in our workforce. In the fourth quarter of 2002, we recorded costs of $93 million related to severance and $32 million for retention payments. In addition, annual bonus
expense and variable compensation recorded in prior quarters was reduced by $140 million. The net effect of these actions was to reduce fourth quarter operating expenses by $15 million.





Cost of Services





Cost of
services was $8,428 million in 2002, an increase of $611 million, or 8%, over 2001 and an increase as a percentage of revenues from 60% in 2001 to 64% in 2002. Cost of services before reimbursable expenses was $6,897 million in 2002, an increase of
$698 million, or 11%, over 2001. Cost of services before reimbursable expenses increased as a percentage of revenues before reimbursements from 54% in 2001 to 60% in 2002. These increases were primarily attributable to the exclusion of partner
compensation from the prior period results.





Cost of services before reimbursable expenses for 2002 decreased $27
million over the pro forma as adjusted cost of services before reimbursable expenses for 2001. Cost of services before reimbursable expenses decreased as a percentage of revenues before reimbursements from 61% in 2001 to 60% in 2002. The slowdown in
the global economy has led us to reduce variable costs and redirect some of our resources to selling and marketing efforts in order to promote our business. However, these cost reductions were partially offset by higher employee compensation and
severance costs partly attributable to workforce imbalances that resulted from the difficult economic environment and shift in the relative proportion of our business from consulting to outsourcing.





Sales and Marketing





Sales and marketing expense was $1,566 million in 2002, an increase of $348 million, or 29%, over 2001 and an increase as a percentage of revenues from 9% for 2001 to 12% in 2002. These increases were primarily due to not
expensing partner compensation prior to our transition to a corporate structure.





Sales and marketing expense for
2002 increased $59 million, or 4%, over the pro forma as adjusted sales and marketing expense for 2001 and increased as a percentage of revenues before reimbursements from 13% in 2001 to 14% in 2002. Since the second half of fiscal 2001, the
slowdown in the global economy has resulted in longer selling cycles and led us to increase our selling and marketing efforts in order to promote our business.





General and Administrative Costs





General and
administrative costs were $1,616 million in 2002, an increase of $100 million, or 7%, over 2001 and remained constant as a percentage of revenues at 12%. The exclusion of partner compensation prior to May 31, 2001 accounted for $44 million of this
increase.




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General and administrative costs for 2002 increased $56 million, or 4%, over the
pro forma as adjusted general and administrative costs for 2001, and remained constant as a percentage of revenues before reimbursements at 14%. Expense reductions from cost management initiatives were offset by the addition of the general and
administrative expenses of Accenture HR Services (formerly e-peopleserve) and Avanade as a result of consolidating those affiliates beginning in the second quarter of 2002. We incurred bad debt expense of $80 million in 2002 that also contributed to
the cost increase in 2002.





Restructuring, Reorganization and Rebranding Costs





Restructuring costs of $111 million in 2002 represent costs to consolidate certain office facilities around the world,
including costs for losses on operating leases and write-downs of assets such as leasehold improvements resulting from abandoned office space.





Reorganization and rebranding costs were $848 million, or 7% of revenues for 2001. Reorganization costs include $89 million of restructuring costs relating to our transition to a corporate structure
and $455 million of indirect taxes and other costs imposed on transfers of assets to the new corporate holding company structure. Rebranding costs include $157 million for the amortization on intangible assets related to the final resolution of the
arbitration with Andersen Worldwide and Arthur Andersen and $147 million resulting from changing our name to Accenture. These costs are excluded from our pro forma financial results as they are considered to be one-time items.





Restricted Share Unit-based Compensation





Grants of Accenture Ltds restricted share units to partners, former partners and employees resulted in compensation cost of $967 million in the fourth quarter of
fiscal 2001. These costs are excluded from our pro forma as adjusted financial results as they are considered to be one-time items. In 2002, restricted share unit based compensation expense totaled $59 million. This is included in Cost of Services,
Sales and Marketing and General and Administrative expense.





Operating Income





Operating income was $1,385 million in 2002, an increase of $690 million, or 99%, from 2001. Operating income increased as a percentage of
revenues before reimbursements from 6% in 2001 to 12% in 2002.





Operating income of $1,385 million for 2002,
decreased $67 million, or 5%, compared with pro forma 2001 operating income. Excluding 2002 costs associated with consolidating offices, 2002 operating income as a percentage of revenues before reimbursements remained constant at 13% based on 2001
pro-forma results.





Gain (Loss) on Investments





Losses on investments totaled $321 million for 2002. This loss includes a charge of $212 million recorded in the second quarter of 2002 for the anticipated loss on the
planned disposal of substantially all of our minority ownership interests in our venture and investment portfolio. The loss of $321 million also includes other-than-temporary impairment writedowns of $90 million recorded in the first quarter of
2002.





Gains on investments totaled $107 million for 2001. This gain represents the sale of $382 million of a
marketable security purchased in 1995 and $11 million from the sale of other marketable securities, net




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of other-than-temporary impairment investment writedowns of $94 million, and unrealized investment losses of $192 million. Other-than-temporary impairment writedowns consisted of $19 million in
publicly traded equity securities and $75 million in privately traded equity securities. The writedowns relate to investments in companies where the market value has been less than our cost for an extended time period, or the issuer has experienced
significant financial declines or difficulties in raising capital to continue operations.





Interest Income





Interest income was $46 million in 2002, a decrease of $34 million, or 42%, from 2001. The decrease resulted primarily from the
impact of lower interest rates in 2002.





Interest Expense





Interest expense was $49 million in 2002, an increase of $6 million, or 13%, over 2001. Interest expense on a pro forma basis decreased $10 million, or 17%, from 2001. The
decrease resulted primarily from lower interest rates in 2002 and a decrease in short-term bank borrowings in 2002 as compared to 2001.





Other Income (Expense)





Other income (expense) was $15 million in 2002, a decrease
of $2 million from 2001, primarily resulting from lower income from the vesting of options partially offset by currency exchange gains. As of August 31, 2002, the fair value of foreign currency exchange contracts was approximately $1 million and we
did not have any interest rate derivative contracts.





Equity in Gains (Losses) of Affiliates





Equity in losses of affiliates totaled $9 million in 2002, compared to losses of $61 million in 2001, primarily due to the consolidation
of the investment in our subsidiaries, Avanade Inc. and Accenture HR Services (formerly e-peopleserve), commencing as of January 1, 2002 and March 1, 2002, respectively, which were previously accounted for under the equity method.





Provision for Taxes





The effective tax rate for 2002 was 46%. Excluding certain charges for investment write-downs, the effective tax rate for 2002 was 38%. On a pro forma as adjusted basis, the effective tax rate for 2001 was 40%. The actual
effective tax rate for 2001 is not comparable to the effective tax rate for 2002 because, prior to May 31, 2001, we operated as a series of related partnerships and corporations and, therefore, generally did not pay income taxes as a corporation.





Minority Interest





Minority interest was $332 million in 2002. Minority interest for 2002 decreased $213 million, or 39%, from the pro forma as adjusted minority interest for 2001, and decreased as a percentage of income
from 59% to 58%. The pro forma as adjusted minority interest in 2001 was based on the assumption that the 59% minority interest as of August 31, 2001 existed throughout that fiscal year. In 2002, minority interest declined from 59% at the beginning
of 2002 to 53% as of August 31, 2002, primarily as a result of transactions associated with a secondary offering of Accenture Ltd shares in May 2002.





Cumulative Effect of Accounting Change





In 2001, the adoption of SFAS 133 resulted
in cumulative income of $188 million on September 1, 2000 representing the cumulative unrealized gains resulting from changes in the fair market value of equity holdings considered to be derivatives.




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Earnings Per Share





Diluted earnings per share in 2002 was 56 cents. Historical earnings per share was not determinable in respect of periods ended on or prior to May 31, 2001 because
Accenture operated as a series of related partnerships. Pro forma diluted earnings per share in 2001, adjusted to include partner compensation expense and to exclude items related to our transition to a corporate structure, was 91 cents.





In 2002, diluted earnings per share excluding gains and losses on investments and restructuring costs related to
office space consolidation, was 91 cents, up 7% from pro-forma earnings per share excluding net investment gains and losses of 85 cents in 2001.





Year Ended August 31, 2001 Compared to Year Ended August 31, 2000





Our results of
operations for periods ended on or prior to May 31, 2001 reflect the fact that we operated as a series of related partnerships and corporations prior to that date, and our results of operations in respect of periods ending after May 31, 2001 reflect
that we commenced operations in corporate structure on that date. Accordingly, in order to provide a more meaningful comparison of our results for fiscal year 2001 as compared to fiscal year 2000, we comment below on our results for those periods
both on a historical basis and a pro forma as adjusted basis.





Revenues





Revenues for 2001 were $13,062 million, an increase of $1,731 million, or 15%, over 2000. Revenues before reimbursements for 2001 were
$11,444 million, an increase of $1,692 million, or 17%, over 2000 in U.S. dollars. In local currency terms, revenues before reimbursements grew by 23% in 2001 over 2000.





In 2001, our revenues grew significantly, continuing a trend that began in the second half of 2000 as our clients began to focus on new transformation and implementation
initiatives after Year 2000 disruptions proved to be minimal. In addition, demand for our services grew as clients began to explore Web-enablement and electronic commerce strategies and solutions both in the business-to-business and
business-to-consumer areas. We believe that this strong revenue growth is the result of our rapid response to changes in the marketplace and our creation and refinement of relevant service offerings. In addition, by focusing on the retraining of our
client service personnel during the Year 2000-related slowdown, we positioned ourselves to take advantage of the growth opportunities in these new markets. We achieved this strong revenue growth in 2001 despite the difficult economic conditions that
many of our clients industries experienced. We experienced continued growth in revenues in the fourth quarter of 2001, though at a slower rate of growth than in the third quarter of 2001.





Our Communications & High Tech market unit achieved revenues before reimbursements of $3,238 million in 2001, an increase of 15% over 2000, primarily due to strong
growth in our Communications and Electronics & High Tech industry groups in North America. Operations in Europe and Latin America also experienced significant growth. Our Financial Services market unit achieved revenues before reimbursements of
$2,894 million in 2001, an increase of 14% over 2000, primarily due to strong growth in our Banking industry group in Europe and North America and our Health industry group in North America. Our Government market unit achieved revenues before
reimbursements of $1,003 million in 2001, an increase of 26% over 2000, primarily driven by strong growth in North America and the United Kingdom. Our Products market unit achieved revenues before reimbursements of $2,357 million in 2001, an
increase of 22% over 2000, as a result of strong growth in our Retail and Consumer Goods & Services industry groups in Europe. Our Resources market unit achieved revenues before reimbursements of $1,933 million in 2001, an increase of 16% over
2000, as a result of strong growth in the Chemicals, Forest Products, Metals & Mining and Utilities industry groups in North America.




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Operating Expenses





Operating expenses in 2001 were $12,366 million, an increase of $3,121 million, or 34%, over 2000 and an increase as a percentage of revenues from 82% in 2000 to 95% in
2001.





Pro forma as adjusted operating expenses were $11,610 million for 2001, an increase of $1,279 million, or
12%, over pro forma operating expenses of $10,331 million for 2000 and a decrease as a percentage of revenues from 91% in 2000 to 89% in 2001.





We continue to implement long-term and short-term cost-management initiatives aimed at keeping overall growth in operating expenses less than the growth in revenues. The long-term initiatives focus on
global reductions in infrastructure costs. Such infrastructure costs primarily include occupancy costs, administrative expenses and information technology operating and development costs. In addition, the costs of delivering training have been
reduced by moving toward Web-enabled and other lower cost distribution methods. The short-term initiatives focus on reducing variable costs, such as headcount in select administrative areas, and limiting travel and meeting costs.





Cost of Services





Cost of services was $7,818 million in 2001, an increase of $753 million, or 11%, over 2000 and a decrease as a percentage of revenues from 63% in 2000 to 60% in 2001. Cost of services before
reimbursable expenses was $6,200 million in 2001, an increase of $714 million, or 13%, over 2000 and a decrease as a percentage of revenues before reimbursements from 56% in 2000 to 54% in 2001. This decrease as a percentage of revenues and revenues
before reimbursements resulted from increased demand for our services and lower employee compensation costs resulting from the promotion of 1,286 employees to partner effective September 1, 2000. The increase in partner admissions was designed to
incentize our professionals at an earlier stage in their careers with us.





Pro forma as adjusted cost of services
before reimbursable expenses was $6,925 million in 2001, an increase of $798 million, or 13%, over pro forma cost of service before reimbursable expenses of $6,127 million for 2000 and a decrease as a percentage of revenues from 54% in 2000 to 53%
in 2001. This decrease as a percentage of revenues can be attributed primarily to a favorable mix in the composition of our workforce, reduced costs related to recruiting and training and redirected efforts to sales and marketing in the second half
of 2001. Lower attrition has enabled us to retain a more experienced workforce, which commands a higher margin. While overall employee chargeability declined in 2001 versus 2000, chargeable hours for our experienced employees as a percentage of
total chargeable hours has increased. Lower attrition has enabled us to reduce our expenditures in recruiting, and the move to Web-enabled and other lower cost distribution methods has reduced our costs of delivering training.





Sales and Marketing





Sales and marketing expense was $1,217 million in 2001, an increase of $334 million, or 38%, over 2000 and an increase as a percentage of revenues from 8% in 2000 to 9% in 2001.





Pro forma as adjusted sales and marketing expense was $1,507 million in 2001, an increase of $320 million, or 27%, over pro
forma sales and marketing expense of $1,187 million in 2000 and an increase as a percentage of revenues from 10% in 2000 to 12% in 2001.





The increase as a percentage of revenues in 2001 is due to higher than normal business development and market development activities during the second half of the year, as the slowdown in the global economy in the second
half of the year led us to increase our selling and marketing efforts in order to generate revenue opportunities.




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General and Administrative Costs





General and administrative costs were $1,516 million in 2001, an increase of $219 million, or 17%, over 2000 and increased as a percentage
of revenues from 11% in 2000 to 12% in 2001.





Pro forma as adjusted general and administrative expenses were
$1,560 million in 2001, an increase of $122 million, or 8%, over pro forma general and administrative expenses of $1,438 million in 2000 and a decrease as a percentage of revenues from 13% in 2000 to 12% in 2001.





Our short-term cost-management initiatives in this period of significant growth in revenues enabled us to reduce general and
administrative expenses as a percentage of revenues.





Reorganization and Rebranding Costs





Reorganization and rebranding costs were $848 million, or 7% of revenues for 2001. Reorganization costs include $89 million of
restructuring costs relating to our transition to a corporate structure and $455 million of indirect taxes and other costs imposed on transfers of assets to the new corporate holding company structure. Rebranding costs include $157 million for the
amortization of intangible assets related to the final resolution of the arbitration with Andersen Worldwide and Arthur Andersen and $147 million resulting from changing our name to Accenture. These costs are excluded from our pro forma financial
results as they are considered to be one-time items.





Restricted Share Unit-based Compensation





Grants of Accenture Ltds restricted share units to partners, former partners and employees resulted in
compensation cost of $967 million in the quarter ended August 31, 2001. These costs are excluded from our pro forma as adjusted financial results as they are considered to be one-time items.





Operating Income





Operating income was
$696 million in 2001, a decrease of $1,390 million, or 67%, from 2000 and a decrease as a percentage of revenues from 18% in 2000 to 5% in 2001. Operating income decreased as a percentage of revenues before reimbursements from 21% in 2000 to 6% in
2001.





Pro forma adjusted operating income was $1,452 million in 2001, an increase of $452 million, or 45%, over
pro forma operating income of $1,000 million in 2000 (which reflects the effects of $1,086 million of partner compensation and benefit costs as if our transition to a corporate structure had occurred on September 1, 1999) and an increase as a
percentage of revenues from 9% in 2000 to 11% in 2001. Pro forma as adjusted operating income increased as a percentage of revenues before reimbursements from 10% in 2000 to 13% in 2001.





Gain on Investments





Gain on investments
totaled $107 million in 2001, compared to a gain of $573 million in 2000. The gain in 2001 is comprised of $382 million from the sale of a marketable security purchased in 1995 and $11 million from the sale of other securities, net of
other-than-temporary impairment investment writedowns of $94 million and unrealized investment losses recognized according to SFAS 133 of $192 million. Other-than-temporary impairment writedowns consisted of $19 million in publicly traded equity
securities and $75 million in privately traded equity securities. The writedowns relate to investments in companies where the market value has been less than our cost for an extended time period, or the issuer has experienced significant financial
declines or difficulties in raising capital to continue operations.




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Interest Income





Interest income was $80 million in 2001, an increase of $13 million, or 19%, over 2000. The increase resulted primarily from the investment of the proceeds of the sale of a
portion of a marketable security purchased in 1995 and the investment of cash proceeds received from our initial public offering.





Interest Expense





Interest expense was $44 million in 2001, an increase of $20
million, or 83%, over 2000. Interest expense on a pro forma basis was $59 million for 2001, an increase of $24 million, or 69% over interest expense on a pro forma basis of $35 million in 2000 (which reflects an adjustment of $11 million
representing estimated interest expense on early-retirement benefits payable to partners). The increase resulted primarily from the increase in short-term bank borrowings during the third and fourth quarters of 2001.





Other Income (Expense)





Other income was $17 million in 2001, a decrease of $34 million from 2000, primarily resulting from foreign exchange translations.





Equity in Losses of Affiliates





Equity in losses of affiliates was a $61 million
loss in 2001, compared to a $46 million loss in 2000. In 2001, amortization of a negative basis difference arising on the formation of a joint venture of $32 million was reflected as a component of equity in losses of affiliates, compared to $1
million in 2000.





Provision for Taxes





Taxes were $503 million in 2001, an increase of $260 million over 2000. Pro forma as adjusted taxes were $614 million in 2001, a decrease of $30 million, or 5% over pro
forma taxes of $644 million in 2000 (which reflects an adjustment of $401 million for an estimated income tax provision as if we had operated in a corporate structure at a pro forma tax rate of 40%). This decrease was due to lower pro forma as
adjusted income before taxes for 2001 as compared to 2000. Net deferred tax assets totaling $300 million at August 31, 2001 have been recognized following our transition to a corporate structure. These net deferred tax assets included a valuation
allowance of $76 million, relating to our ability to recognize the tax benefits associated with capital losses on certain U.S. investments and with specific tax net operating loss carryforwards and tax credit carryforwards of certain non-U.S.
operations. Management concluded that the realizability of the remaining net deferred tax assets is more likely than not.





Minority
Interest





Minority interest was a credit of $577 million in 2001, which represents minority interest since
our transition to a corporate structure as of May 31, 2001. Minority interest on a pro forma as adjusted basis was an expense of $545 million for 2001, or a 5% decrease over pro forma minority interest expense of $571 million in 2000 (which is based
on the assumption that minority interests as of August 31, 2001 existed throughout 2000).





Cumulative Effect of Accounting Change





The adoption of SFAS 133 resulted in cumulative income of $188 million on September 1, 2000, which
represents the cumulative unrealized gains resulting from changes in the fair market value of equity holdings considered to be derivatives by that statement.




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Liquidity and Capital Resources





Our primary sources of liquidity are cash flows from operations, debt capacity available under various credit facilities and available cash reserves. Cash flow generated by
operating activities in 2002 totaled $1,063 million. Cash and cash equivalents was $1,317 million at August 31, 2002 and total debt was $67 million. We may also be able to raise additional funds through public or private debt or equity financings in
order to:





| |  |  | take advantage of opportunities, including more rapid expansion;
| | - |  | ----------------------------------------------------------------




| |  |  | acquire complementary businesses or technologies;
| | - |  | -------------------------------------------------




| |  |  | develop new services and solutions; or
| | - |  | --------------------------------------




| |  |  | respond to competitive pressures.
| | - |  | ---------------------------------




Prior to our transition to a corporate structure on May 31, 2001, we historically relied on cash flow from operations, partner capital contributions and bank credit facilities to satisfy our liquidity
and capital requirements. In addition, a portion of the distributions to our partners was made on a deferred basis, which significantly strengthened our working capital and enabled us to limit our external borrowings.





Our balance of cash and cash equivalents was $1,317 million and $1,880 million at August 31, 2002 and 2001, respectively, a decrease of
$563 million, or 30%. The decrease is largely attributable to distributions of partnership income earned in periods prior to our transition to a corporate structure and purchases of treasury shares. Our balance of cash and cash equivalents at August
31, 2001 increased $609 million or 48% from $1,271 million at August 31, 2000. This increase is largely attributable to proceeds from the initial public offering of Accenture Ltd Class A common shares, earnings and the sale of marketable securities,
which were partially offset by distributions to partners, return of capital to partners and purchases of equity investments.





Net cash provided by operating activities was $1,063 million in 2002, a decrease of $1,217 million from 2001. This decrease is largely due to lower net income in 2002 as compared with 2001 partnership income before partner
distributions and 2001 net income following our transition to a corporate structure. As a result of our transition to a corporate structure, net income includes partner compensation and income taxes not included in partnership income before partner
distributions. Net cash used by investing activities was $248 million in 2002, a decrease of $163 million from 2001, due to lower capital expenditures and higher proceeds from the sale of property and equipment in 2002. Net cash used by financing
activities was $1,415 million in 2002, a decrease of $248 million from 2001 primarily due to lower partner distributions in 2002.





Net cash provided by operating activities was $2,281 million for 2001, an increase of $150 million from 2000. Net cash used by investing activities was $411 million for 2001, a increase of $518 million over 2000 as proceeds from the
sales of investments of $428 million were partially offset by purchases of new investments and by capital expenditures. Net cash used in financing activities was $1,167 million for 2001, a decrease of $867 million from 2000. This included net
proceeds of $1,791 million from the initial public offering and sale of the Accenture Class A common shares in the fourth quarter of 2001 offset by earnings distributions to partners of $2,282 million, repayments of partners capital totaling
$524 million, and a payment of $314 million to Andersen Worldwide and Arthur Andersen of amounts due in connection with the final resolution of arbitration.





On June 21, 2002 we entered into two new syndicated facilities of $537.5 million each providing unsecured revolving borrowing capacity for general working capital purposes. These replaced comparable
$450 million and $420 million facilities. Similar to the prior facilities, the new facilities consist of 364-




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day and three-year committed facilities. Financing is provided under these facilities at the prime rate or at the London Interbank Offered Rate plus a spread, and bid option financing is
available. These facilities require us to (1) limit liens placed on our assets to (a) liens incurred in the ordinary course of business (subject to certain limitations) and (b) other liens securing aggregate amounts not in excess of 30% of our total
assets and (2) maintain a debt to cash flow ratio not exceeding 1.75 to 1.00. We are in compliance with these terms. As of August 31, 2002, we had no borrowings under either facility and $21 million in letters of credit outstanding under the
three-year facility.





We also maintain four separate bilateral, uncommitted, unsecured multicurrency revolving
credit facilities. As of August 31, 2002, these facilities provided for up to $375 million of local currency financing in countries where we cannot readily access our syndicated facilities. We also maintain local guaranteed and non-guaranteed lines
of credit. As of August 31, 2002, amounts available under these facilities totaled $185 million. At August 31, 2002, we had $58 million outstanding under these various facilities. Interest rate terms on the bilateral revolving facilities and local
lines of credit are at market rates prevailing in the relevant local markets.





During 2000, 2001 and 2002 we
invested $315 million, $378 million and $263 million, respectively, in capital expenditures, primarily for technology assets, furniture and equipment and leasehold improvements to support our operations. We expect that our capital expenditures in
fiscal 2003 will approximate 2002 spending levels.





During November 1999, we formed Accenture Technology Ventures
to select, structure and manage a portfolio of equity investments. Accenture has made equity investments of $153 million, $326 million and $70 million during 2000, 2001 and 2002, respectively. See Critical Accounting Policies and
Estimates  Valuation of Investments for a discussion of our plans with respect to our investment portfolio.





We also received $118 million and $7 million in 2001 and 2002, respectively, in equity from our clients as compensation for current and future services. Amounts ultimately realized from these equity securities may be higher or lower
than amounts recorded on the measurement dates.





In limited circumstances, we agree to extend financing to
clients. The terms vary by engagement, but generally we contractually link payment for services to the achievement of specified performance milestones. We finance these client obligations primarily with existing working capital and bank financing in
the country of origin. As of August 31, 2000, 2001 and 2002, $223 million, $182 million and $265 million were outstanding for 14, 17 and 25 clients, respectively. These outstanding amounts are included in unbilled services and other non-current
assets on our historical balance sheets.





On April 17, 2002, Accenture Ltds board of directors authorized
the creation of a share employee compensation trust (SECT) and approved the contribution of up to $300 million to the SECT. At August 31, 2002, Accenture had contributed $300 million to the SECT. The SECT has made repurchases of 13
million Accenture Ltd Class A common shares totaling $221 million as of August 31, 2002. The remaining $79 million continues to be available to the SECT for share repurchases, and is segregated as restricted cash on the consolidated balance sheet at
August 31, 2002.





In addition to our ongoing open-market share repurchases and the activities of the SECT, we
expect to repurchase shares pursuant to our Share Management Plan. See Certain Transactions and Relationships  Share Management Plan. On July 11, 2002, Accenture Ltds board of directors authorized up to $600 million
for use in repurchasing shares from our partners through 2005.




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The cost of shares repurchased, not including those repurchased by the SECT,
during the year ended August 31, 2002 was $327 million. The cost of shares repurchased by the SECT during the same period was $221 million. In certain countries we must use previously issued shares rather than newly issued shares to satisfy our
obligations upon the maturity of a restricted share unit or the exercise of an option in order for the transaction to receive the available tax deductibility. We expect that we will use 10 million, 9 million and 6 million previously issued shares
for these purposes in fiscal 2003, 2004 and 2005, respectively.





Obligations and Commitments





As of August 31, 2002, except for the payment to Andersen Worldwide/Arthur Andersen discussed below, we had the following obligations and
commitments to make future payments under contracts, contractual obligations and commercial commitments:





Payments due by periodContractual Cash Obligations

Total

Less than 1 year

1-3 years

4-5 years

After 5 years(in thousands)Long-term debt

$
8,605

$
5,177

$
3,428

$


$
Operating leases


2,091,795


255,454


412,909


313,641


1,109,800Training facility services agreement


129,667


32,000


61,917


35,750


Payment to Andersen Worldwide/Arthur Andersen


190,290


190,290








Retirement obligations


308,787


44,047


51,100


78,589


135,051





In October 2002, Accenture and Arthur Andersen LLP renegotiated the
service arrangements and training facility use arrangement they entered into in 2001. The new facility services agreement provides Accenture with the use of Arthur Andersen LLPs training facility in St. Charles, Illinois, at market rates
through July 1, 2007. Accenture and Arthur Andersen LLP have terminated the prior St. Charles facility services agreement, as well as the services agreements by which Arthur Andersen LLP and other Arthur Andersen firms were to provide services,
including tax services, to Accenture and by which Accenture was to provide Arthur Andersen LLP and other Arthur Andersen firms with consulting services. The final payment by Accenture to Arthur Andersen LLP in connection with the termination of
these agreements is within the amounts Accenture had previously accrued and will not have a material impact on Accentures income statement.





ITEM 7A.    
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Foreign Currency Risk





We are exposed to foreign currency risk in the ordinary course of business. We hedge cash flow exposures for our major
countries using a combination of forward and option contracts. These instruments are generally short-term in nature, with typical maturities of less than one year. From time to time, we enter into forward or option contracts of a long-term nature.





For purposes of specific risk analysis, we use sensitivity analysis to determine the effects that market risk
exposures may have on the fair value of our hedge portfolio. The foreign currency exchange risk is computed based on the market value of future cash flows as affected by the changes in the rates attributable to the market risk being measured. The
sensitivity analysis represents the hypothetical changes in value of the hedge position and does not reflect the opposite gain or loss on the underlying transaction. As of August 31, 2001, a 10% decrease in the levels of foreign currency exchange
rates




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against the U.S. dollar with all other variables held constant would result in a decrease in the fair value of our financial instruments of $4 million, while a 10% increase in the levels of
foreign currency exchange rates against the U.S. dollar would result in an increase in the fair value of our financial instruments of $4 million. As of August 31, 2002, a 10% decrease in the levels of foreign currency exchange rates against the U.S.
dollar with all other variables held constant would result in a decrease in the fair value of our financial instruments of $1.5 million, while a 10% increase in the levels of foreign currency exchange rates against the U.S. dollar would result in an
increase in the fair value of our financial instruments of $1.5 million.





Interest Rate Risk





During the last three years, the majority of our debt obligations have been short-term in nature and the associated interest obligations
have floated relative to major interest rate benchmarks, such as the London Interbank Offered Rate. While we have not entered into any derivative contracts to hedge interest rate risks during this period, we may do so in the future.





The interest rate risk associated with our borrowing and investing activities at August 31, 2002 is not material in relation to
our consolidated financial position, results of operations or cash flows. We have not used derivative financial instruments to alter the interest rate characteristics of our investment holdings or debt instruments.





Equity Price Risk





We have marketable equity securities that are subject to market price volatility. Marketable equity securities include common stock, warrants and options. Our investment portfolio includes warrants and options in both publicly traded
and privately held companies. Warrants in public companies and those that can be net share settled in private companies are deemed derivative financial instruments and are recorded on the Consolidated Balance Sheet at fair value. The privately held
investments are inherently risky because the markets for the technologies or products they develop are less established than those of most publicly traded companies and we may be unable to liquidate our investments if desired. Beginning September 1,
2000, warrants are deemed derivative financial instruments by SFAS 133. As such, they are recorded on the balance sheet at fair value with unrealized gains or losses recorded on the income statement. As of August 31, 2002, we owned marketable equity
securities totaling $30 million. We have entered into a forward contract to offset the equity price risks associated with $17 million of options included in our marketable equity securities portfolio at August 31, 2002. Gains and losses associated
with changes in the fair value of that forward contract offset changes in the fair value of the underlying options. As of August 31, 2002, the fair value of the underlying options was $17 million, while the forward contract had a cumulative net gain
of approximately $43 million. The forward contract allows net cash settlement and is being accounted for as a derivative. Pursuant to SFAS 133, changes in the fair value of the forward contract are recorded on the income statement in the periods
they arise and unrealized gains or losses are included in other current assets or other accrued liabilities.




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The following analysis presents the hypothetical change in the fair value of our
marketable equity securities at August 31, 2001 and 2002, assuming the same hypothetical price fluctuations of plus or minus 10%, 20% and 30%.





Valuation of investments assuming indicated decrease

August 31, 2001 fair value

Valuation of investments assuming indicated increase-30%

-20%

-10%


+10%

+20%

+30%(in thousands)Marketable Equity Securities and Warrants Deemed Derivatives by SFAS 133

$
60,618

$
69,278

$
77,937

$
86,597

$
95,257

$
103,916

$
112,576Valuation of investments assuming indicated decrease

August 31, 2002 fair value

Valuation of investments assuming indicated increase-30%

-20%

-10%


+10%

+20%

+30%(in thousands)Marketable Equity Securities and Warrants Deemed Derivatives by SFAS 133


21,067


24,077


27,086


30,096


33,106


36,115


39,125





Newly Issued Accounting Standards





In June 2001, the Financial Accounting Standards Board approved SFAS No. 141, Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS 141 requires that the purchase method of accounting be used for all combinations initiated after June 30, 2001. Under the transition provisions of SFAS 142, goodwill acquired in business
combinations for which the acquisition date is after June 30, 2001 are not to be amortized but will be subject to annual impairment reviews. The entire goodwill balance of $168 million at August 31, 2002 related to acquisitions subsequent to June
30, 2001. During fiscal 2003, we will perform the required impairment tests of goodwill. We do not expect adoption of SFAS 142 to materially affect our results of operations.





In June 2002, the Financial Accounting Standards Board issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Exit or disposal
activities addressed by the standard include one-time involuntary employee termination benefits, contract termination costs and costs to consolidate facilities or relocate employees. Existing accounting guidelines (principally Emerging Issue Task
Force Issue 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity) require companies to recognize a liability when management commits itself or announces plans to exit or dispose of an
activity. SFAS 146 will prohibit companies from recognizing an exit or disposal liability until the liability has been incurred, generally the communication date for one-time termination benefits and the contract termination or
cease use date for contract costs, and will require these liabilities to be measured at fair value. The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002 and we plan to adopt
on January 1, 2003. We do not expect adoption of SFAS 146 to materially affect our results of operations.





ITEM
8.    
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





See the index included on page F-1, Index
to Combined and Consolidated Financial Statements.





ITEM 9.    
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





Not applicable.




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PART III





ITEM 10.    
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT





Directors and Executive Officers





The following table presents information regarding the directors and executive officers of Accenture Ltd.





Name

Age

Years with Accenture

Position with Accenture LtdJoe W. Forehand

54

30

Chief Executive Officer and Chairman of the Board of DirectorsStephan A. James

56

34

Chief Operating Officer and DirectorSteven A. Ballmer

46



DirectorDina Dublon

49



DirectorKarl-Heinz Flöther

50

23

Group Chief Executive  Financial Services Operating Group and DirectorJoel P. Friedman

54

30

DirectorWilliam D. Green

49

24

Group Chief Executive  Communications & High Tech Operating Group and DirectorRobert I. Lipp

64



DirectorBlythe J. McGarvie

45



DirectorMark Moody-Stuart

62



DirectorMasakatsu Mori

55

33

DirectorDiego Visconti

53

26

DirectorWulf von Schimmelmann

55



DirectorJackson L. Wilson, Jr.

55

27

Corporate Development Officer and DirectorArnaud André

48

23

Managing Partner  People Matters & EnablementR. Timothy S. Breene

53

7

Chief Strategy Officer and Group Chief Executive  Business Consulting Capability GroupPamela J. Craig

45

23

Managing Partner  Global Business OperationsMark Foster

43

18

Group Chief Executive  Products Operating GroupGregg G. Hartemayer

49

26

Group Chief Executive  Technology & Outsourcing Capability GroupDavid R. Hunter

52

29

Group Chief Executive  Government Operating Group and Managing Partner  Asia PacificJose Luis Manzanares

50

27

Managing Partner  Global Technology Solutions and AlliancesMichael G. McGrath

56

29

Chief Risk OfficerGill Rider

48

23

Chief Leadership OfficerDouglas G. Scrivner

51

22

General Counsel, Secretary and Compliance OfficerMary A. Tolan

42

20

Group Chief Executive  Resources Operating GroupCarlos Vidal

48

27

Managing Partner  Financial Services, NEWS Operating Unit; Country Managing Director, Spain; and Chairman, Partner Income
CommitteeHarry L. You

43

1

Chief Financial Officer




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Joe W. Forehand has been Chairman of the Board of Directors since February
2001 and has been our Chief Executive Officer since November 1999. He currently serves as Chairman of our Management Committee, our Executive Committee and our Global Leadership Council. From June 1998 to November 1999, Mr. Forehand was responsible
for our Communications & High Tech operating group. From September 1997 to June 1998, he was responsible for our Products operating group. From September 1994 to September 1997, Mr. Forehand was responsible for our Products group in the
Americas.





Stephan A. James has been a Director since February 2001 and our Chief Operating Officer since
July 2000. From November 1999 to June 2000, he was responsible for our Resources operating group. From September 1997 to October 1999, Mr. James was responsible for our Financial Services operating group. From September 1994 to September 1997, he
was responsible for our Financial Services group in the Americas.





Steven A. Ballmer has been a Director
since October 2001. He is chief executive officer and a director of Microsoft Corp., the worlds leading manufacturer of software for personal and business computing. Since joining Microsoft in 1980, Mr. Ballmer has headed several Microsoft
divisions, including operations, operating systems development, and sales and support. He was promoted to president in July 1998 and was named CEO in January 2000, assuming full management responsibility for the company. Mr. Ballmer serves on the
Nominating and Governance Committee of the Board of Directors.





Dina Dublon has been a Director since
October 2001. She is executive vice president and chief financial officer of J.P. Morgan Chase & Co., a leading global financial services firm created by the merger of Chase Manhattan and J.P. Morgan & Co. Ms. Dublon is also a director and
member of the compensation committee of the board of directors of The Hartford Financial Services Group, Inc. She spent most of her professional career with J.P. Morgan Chase & Co. and its predecessor merging firms, starting as a trader. Prior
to being named CFO, she held numerous other positions, including senior vice president and corporate treasurer; managing director of the Financial Institutions Division; and senior vice president of corporate finance. Ms. Dublon serves on the
Compensation Committee of the Board of Directors.





Karl-Heinz Flöther has been a Director since June
2001 and our Group Chief Executive    Financial Services Operating Group since December 1999. From June 1998 to February 2000, he was the Country Managing Partner of our Germany practice. From September 1997 to December 1999, he
was responsible for our banking practice in continental Europe. From September 1996 to September 1997, Mr. Flöther was responsible for our practice services in Western Europe.





Joel P. Friedman has been a Director since June 2001, Managing General Partner  Accenture Technology Ventures since March 2002 and Managing General
Partner  Accenture Technology Ventures, Americas since May 2001. From 1997 to 2000, he was responsible for our Banking industry group globally. Mr. Friedman serves on the Nominating and Governance Committee of the Board of Directors.





William D. Green has been a Director since June 2001 and our Group Chief Executive   
 Communications & High Tech Operating Group since December 1999 and the Country Managing Director of our United States practice since August 2000. From September 1997 to December 1999, Mr. Green was responsible for our Resources operating
group. From September 1996 to September 1997, he was responsible for our manufacturing group in the Americas. Mr. Green serves on the Compensation Committee of the Board of Directors.




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Robert I. Lipp has been a Director since October 2001. He is chairman and
chief executive officer of Travelers Property Casualty Co. Until December 2000, he was Vice Chairman and Member of the Office of the Chairman of Citigroup, Member of the Board of Directors, and CEO of Citigroups Global Consumer Business. He
joined Travelers Group in 1986 and held a number of senior positions there, including the CEO and chairman title from 1993 to 2000. From 1991 to 1993 he served as CEO and chairman of CitiFinancial Credit Company. Mr. Lipp serves on the Audit
Committee of the Board of Directors and as Lead Outside Director.





Blythe J. McGarvie has been a Director
since October 2001. She is executive vice president and chief financial officer of BIC Group, one of the worlds leading manufacturers of writing instruments, correction fluids, disposable lighters and shavers. The company also manufactures
sailboards. Ms. McGarvie is also a member of the board of directors of The Pepsi Bottling Group, Inc. Prior to joining BIC, she was senior vice president and CFO of Hannaford Bros. Co., a supermarket retailer, for five years. She has also held
senior financial positions at Sara Lee Corp. and Kraft General Foods. Ms. McGarvie serves as the Chair of the Audit Committee of the Board of Directors.





Mark Moody-Stuarthas been a Director since October 2001. He is former chairman of The Shell Transport and Trading Company and former chairman of the Committee of Managing Directors of the Royal
Dutch/Shell Group of Companies. He was managing director of Shell Transport and a managing director of Royal Dutch/Shell Group, a major global oil and gas enterprise, from 1991 to 2001. Mr. Moody-Stuart is a director of HSBC Holdings PLC, Shell
Transport & Trading PLC and Anglo American plc. Mr. Moody-Stuart serves as the Chairman of the Compensation Committee and on the Nominating and Governance Committee of the Board of Directors.





Masakatsu Mori has been a Director since June 2001. He has been the Country Managing Partner of our Japan Practice (now the Country Managing Director, Japan)
since 1989. Mr. Mori serves on the Nominating and Governance Committee of the Board of Directors.





Diego
Visconti has been responsible for our Communications & High Tech operating unit in Europe and Latin America since 1995 and has been a Director since June 2001. From 1997 until May 2002, he was also the Country Managing Partner of our Italy
practice.





Wulf von Schimmelmann has been a Director since October 2001. He is chief executive officer of
Deutsche Postbank AG, Germanys largest independent retail bank and among the largest commercial banks in the German market. He is also a member of the board of directors of Deutsche Post World Net Group. Mr. von Schimmelmann serves as the
Chairman of the Nominating and Governance Committee and on the Audit Committee of the Board of Directors.





Jackson L. Wilson, Jr. has been a Director and our Corporate Development Officer since February 2001. He was the Managing General Partner  Accenture Technology Ventures, our venture capital business, from
November 1999 to March 2002. From June 1997 to November 1999, he was responsible for our operating groups. From June 1995 to June 1997, Mr. Wilson was responsible for industry markets strategies and market and technology solutions.





Arnaud André has been our Managing Partner  People Matters & Enablement since September 2000.
From September 1997 to August 2000, he was responsible for the development of our health services market in continental Europe. Prior to September 1997, Mr. André led our Change Management competency in France and the Benelux countries.





R. Timothy S. Breene has been our Chief Strategy Officer and Group Chief Executive
   Business Consulting Capability Group since March 2002. From August 2000 to March 2002 he was




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Managing Partner  Global Service Lines. From December 1999 to August 2000, he was responsible for our capabilities development organization. From May 1998 to January 2000, Mr.
Breene was responsible for our strategic services practice worldwide. From October 1997 to May 1998, he was responsible for our strategic services practice in our Products operating group. From June 1995 to October 1997, Mr. Breene was a client
partner.





Pamela J. Craig has been our Managing Partner  Global Business Operations since
June 2001. From February 2000 to June 2001, she was responsible for our Media & Entertainment industry group globally and was also a general partner in Accenture Technology Ventures Japan. From August 1998 to November 2000, Ms. Craig was
responsible for our Media & Entertainment global operating unit. From 1996 to August 1998, she was responsible for our Media & Entertainment group in North America.





Mark Foster has been our Group Chief Executive  Products Operating Group since March 2002. From September 2000 to March 2002 he was responsible for
our Products operating group in Europe. From August 1999 to September 2000 Mr. Foster was global managing partner of our Automotive, Industrial and Travel & Transportation industry groups. From May 1999 to August 1999 he was the head of our
Pharmaceuticals & Medical Products client group in Europe. From September 1997 to May 1999 Mr. Foster was the managing partner of our Change Management competency in our Pharmaceuticals & Medical Products industry group. From 1994 to
September 1997 he was a client partner with responsibility for clients in the pharmaceuticals, food manufacturing, consumer goods and retail industries.





Gregg G. Hartemayer has been our Group Chief Executive  Technology & Outsourcing Capability Group since March 2002. He was our Group Chief Executive  Products
Operating Group from July 1998 to March 2002. From September 1997 to July 1998, Mr. Hartemayer was responsible for the consumer industry group within our Products operating group. From May 1996 to September 1997, he was responsible for the consumer
industry group for the Americas.





David R. Hunter has been our Group Chief
Executive  Government Operating Group since September 1997 and our Managing Partner  Asia Pacific since April 2002. From 1994 to September 1997, he was responsible for our Government industry group.





Jose Luis Manzanares has been our Managing Partner  Global Technology Solutions and Alliances since
April 2002. He was our Managing Partner  Geographic Services & CIO Organization from December 1999 to April 2002. From September 1997 to December 1999, he was responsible for competency-related operations across Europe, the
Middle East, Africa and India. From 1990 to September 1997, Mr. Manzanares was the chief executive officer of Coritel, S.A., an information technology services company and wholly owned subsidiary of Accenture.





Michael G. McGrath has been our Chief Risk Officer since March 2002. He was our Capital Risk Officer from November 2001 to March
2002. He was our Treasurer from June 2001 to November 2001. From September 1997 to June 2001, Mr. McGrath was our Chief Financial Officer. From 1992 to September 1997, he was responsible for quality and practice methodologies.





Gill Rider has been our Chief Leadership Officer since March 2002. From July 2000 to March 2002, Ms. Rider had
responsibility for our Resources operating unit in Europe, the Middle East, Africa and Latin America. From 1999 to 2000 she was chairman of our UK and Ireland geographic unit. From 1996 to 1999 she had operational responsibility for our Utilities
group in Europe and South Africa.





Douglas G. Scrivner has been our General Counsel and Secretary since
January 1996 and Compliance Officer since September 2001.




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Mary A. Tolan has been our Group Chief
Executive  Resources Operating Group since August 2000. From December 1999 to August 2000, she was responsible for our firmwide strategy. From August 1998 to December 1999, Ms. Tolan was responsible for our Retail industry group
globally and for an operating unit within the Products operating group. From April 1996 to August 1998, she was responsible for our Retail industry group in North America.





Carlos Vidal has been our Managing Partner  Financial Services, NEWS Operating Unit, which includes the UK and Ireland, since 2002, and Italy,
Greece, Eastern Europe, Latin America and Spain, since 2000. In addition, Mr. Vidal has been our Country Managing Director, Spain since 1998, Chairman of the Geographic Council for Spain, Portugal, South Africa, Nigeria and Israel since 2000 and
Chairman of the Partner Income Committee since December 2001. From September 1995 to October 1997 he was responsible for our consulting services across all industries in Spain, Portugal and Italy.





Harry L. You has been our Chief Financial Officer since June 2001. From March 1996 to June 2001, he was a Principal in the General
Industrial Group and then a Managing Director at Morgan Stanley, responsible for the Computer and Business Services Group in the Investment Banking Division.





Section 16(a) Beneficial Ownership Reporting Compliance





Under the federal
securities laws, our directors, executive officers and 10% shareholders are required within a prescribed period of time to report to the Securities and Exchange Commission transactions and holdings in Accenture Ltd Class A common shares and Class X
common shares. Our directors and executive officers are also required to report transactions and holdings in Accenture SCA Class I common shares. Based solely on a review of the copies of such forms received by us and on written representations from
certain reporting persons that no annual corrective filings were required for those persons, we believe that, except as previously reported in our proxy statement for the 2002 Annual General Meeting of Shareholders, during fiscal year 2002 all these
filing requirements were timely satisfied.




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ITEM 11.    
EXECUTIVE COMPENSATION





Summary Compensation Table





The following table sets forth, for fiscal 2002, 2001 and 2000, the compensation for such periods for our chief executive officer and for
each of our four most highly compensated executive officers, other than the chief executive officer, serving as executive officers at the end of fiscal 2002. These five persons are referred to, collectively, as the Named Executive
Officers.





Annual Compensation

Long-Term Compensation AwardsYear

Salary(1) ($)

Bonus ($)

Other Annual Compensation ($)

Restricted Share Unit Award(s) ($)

Securities Underlying Options (#)

All Other Compensation ($)Joe W. Forehand

2002

2,112,000

40,624







Chief Executive Officer and

2001

5,294,095









Chairman of the Board of Directors

2000

4,000,000









Jackson L. Wilson, Jr.

2002

1,848,000

35,546







Corporate Development Officer

2001

4,395,697









2000

4,600,000









Stephan A. James

2002

1,782,000

34,277







Chief Operating Officer

2001

4,476,101









2000

4,200,000









Michael G. McGrath

2002

1,716,000

33,007







Chief Risk Officer

2001

4,309,092









2000

3,900,000









W\illiam D. Green

2002

1,518,000

29,199







Group Chief Executive  

2001

3,317,096









Communications & High Tech

2000

3,500,000









Operating Group


---

|(1) |  | Amounts in the table with respect to periods prior to the consummation of Accentures transition to a corporate structure on May 31, 2001 consist of
distributions of partnership income, including realized gains on investments and return on capital at risk. These amounts are not comparable to executive compensation in the customary sense. With respect to the period subsequent to May 31, 2001,
amounts in this table reflect the salary actually paid to the Named Executive Officers with respect to the period subsequent to May 31, 2001.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Compensation Committee Interlocks and Insider Participation





For fiscal 2002, our
partners compensation, including the compensation of our executive officers, was determined based on the unit level of the individual partner. At the beginning of fiscal 2002, a partners income committee, consisting of our
chief executive officer and 54 partners he appointed, reviewed evaluations and recommendations concerning the performance of partners and determined relative levels of compensation, or unit allocation. Based on its review, the committee prepared a
partners income plan, which was then submitted to the partners for their approval. Following approval, the plan was submitted to the board of directors as a recommendation with respect to the unit allocation of the chief executive officer and
the other principal executive officers of Accenture Ltd. The board of directors approved the unit allocation of the chief executive officer and the other principal executive officers pursuant to the partners income plan in September
2001. Our compensation committee was formed in October 2001.





As part of Accentures budgeting
process, the board of directors approves budgeted amounts for Accentures results and cash compensation to the partners, with each partner receiving his or her compensation based on his or her unit allocation. Accenture pays a portion of the
total budgeted compensation to partners as a fixed component of compensation and may pay the remainder of the budgeted amount, or more, as a bonus based on actual operating results compared to budgeted amounts.





Mr. Moody-Stuart, Mr. Green and Ms. Dublon served as members of the compensation committee in 2002. Mr. Green is an executive officer of
Accenture Ltd.




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Compensation of Outside Directors





Each director who is not an employee of Accenture Ltd or its subsidiaries receives an annual retainer of $50,000, which may be deferred in whole or in part, through receipt
of fully-vested restricted share units; an initial grant of an option to purchase 25,000 Class A common shares upon election to the board of directors; and an annual grant of an option to purchase 10,000 Class A common shares. Each grant of options
will vest fully after one year (or sooner upon death, disability or involuntary termination, or removal from the board of directors) and will generally expire after 10 years. Robert I. Lipp has received an additional annual retainer of $75,000 for
his service as Lead Outside Director, and Steven A. Ballmer has elected not to receive compensation for his service as a director.





Employment Contracts





Each of our Chief Executive Officer and our four most highly
compensated named executive officers has entered into an annual employment agreement which is renewed automatically. The employment agreements, which are standard employment contracts for Accenture partners, provide that these executive officers
will receive compensation as determined by Accenture. Pursuant to the employment agreements, each of the executive officers have also entered into a non-competition agreement whereby each agreed that, for a specified period, he or she will not (1)
associate with and engage in consulting services for any competitive enterprise or (2) solicit or assist any other entity in soliciting any client or prospective client for the purposes of providing consulting services, perform consulting services
for any client or prospective client, or interfere with or damage any relationship between us and a client or prospective client. In addition, each of the executive officers has agreed that for the restricted period he or she will not solicit or
employ any Accenture employee or any former employee who ceased working for us within an eighteen-month period before or after the date on which the partners employment with us or our affiliates terminated.




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ITEM 12.    
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS





Beneficial
Ownership of More than Five Percent





As of October 29, 2002, the only persons known by us to be beneficial
owners of more than 5% of Accenture Ltds Class A or Class X common shares were as follows:





Accenture Ltd Class A common shares

Accenture Ltd Class X common shares

Percentage of the total number of Class A and Class X common shares beneficially ownedName and Address of Beneficial Owner

shares beneficially owned

% of shares beneficially owned

shares beneficially owned

% of shares beneficially ownedParties to the voting provisions of theVoting Agreement c/o Accenture Ltd Cedar House, 41 Cedar Avenue Hamilton HM12, Bermuda (1)

174,976,445

42.5%

466,770,257

89.1%

68.6%Stichting Naritaweg INaritaweg 155 1043 BW Amsterdam The Netherlands





30,863,299

5.9%

3.3%Stichting Naritaweg IINaritaweg 155 1043 BW Amsterdam The Netherlands





38,354,588

7.3%

4.1%


---

|(1) |  | Each party to the Voting Agreement disclaims beneficial ownership of the shares subject to the Voting Agreement owned by any other party to the agreement. See
Certain Transactions and Relationships  Voting Agreement.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Two
Dutch foundations, Stichting Naritaweg I and Stichting Naritaweg II, hold Accenture Ltd Class X common shares that would otherwise have been held by some of our partners. These foundations shares will be voted in any vote of Accenture Ltd
shareholders in accordance with the preliminary vote taken by our partners, although the foundations will not participate in the preliminary vote. See Voting Agreement under Item 13 below for a discussion of the preliminary vote.





As of October 29, 2002, Accenture SCA, certain of its wholly-owned subsidiaries and the Accenture Share Employee
Compensation Trust directly and indirectly beneficially owned an aggregate of 28,122,237 Accenture Ltd Class A common shares, or 6.3% of the outstanding Class A common shares. Accenture SCA, these subsidiaries and the Accenture Share Employee
Compensation Trust expect to exercise their power to vote or direct the vote of the Class A common shares beneficially owned by them in a manner which will have no impact on the outcome of any vote of the shareholders of Accenture Ltd.





Security Ownership of Directors and Executive Officers





The following table sets forth, as of October 29, 2002, information regarding beneficial ownership of Accenture Ltd Class A and Class X common shares and of Accenture SCA Class I common shares held by
(1) each of our directors and executive officers named in the Summary Compensation table in this Annual Report on Form 10-K and (2) all of our directors and executive officers as a group. To our knowledge, except as otherwise indicated, the persons
or entities listed below have sole voting and investment power with respect to the shares beneficially owned by them. For purposes of the table below beneficial ownership is determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, pursuant to which a person or group of persons is deemed to have beneficial ownership of any shares that such person has the right to acquire within 60 days after October 29, 2002. For purposes of




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computing the percentage of outstanding Accenture Ltd Class A and/or Class X common shares and/or Accenture SCA Class I common shares held by each person or group of persons named above, any
shares that such person or persons has the right to acquire within 60 days after the date of this Annual Report on Form 10-K are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of
any other person.





Accenture SCA Class I common shares


Accenture Ltd Class A common shares


Accenture Ltd Class X common shares


Percentage of the total number of Class A and Class X common shares beneficially
ownedName

shares beneficially owned

% of shares beneficially owned


shares beneficially owned

% of shares beneficially owned


shares beneficially owned

% of shares beneficially ownedDirectors, director nominees and named executive officers:Joe W. Forehand(1)(2)

1,406,889

*
%

1,000

**
%

1,406,889

***
%

****
%Stephan A. James(1)(2)

1,148,676

*




**


1,148,676

***


****Steven A. Ballmer



*




**




***


****Dina Dublon (3)



*


27,977

**




***


****Karl-Heinz Flöther (1)



*


852,247

**




***


****Joel P. Friedman(1)(2)

810,257

*




**


810,257

***


****William D. Green(1)(2)

1,000,947

*




**


1,000,947

***


****Robert I. Lipp (3)



*


157,442

**




***


****Blythe J. McGarvie (3)



*


27,977

**




***


****Mark Moody-Stuart (3)



*


27,977

**




***


****Masakatsu Mori (1)



*


892,495

**




***


****Wulf von Schimmelmann (3)



*


27,977

**




***


****Diego Visconti (1)(2)

870,582

*




**




***


****Jackson L. Wilson, Jr. (1)(2)

1,127,063

*




**


1,127,063

***


****Michael G. McGrath (1)(2)

1,057,938

*




**


1,057,938

***


****All directors, director nominees and executive officers as a group (27 persons)

14,859,220

1.6
%

3,566,123

0.9
%

12,221,400

2.3
%

1.7
%


---

|* |  | Less than 1% of Accenture SCAs Class I common shares outstanding.
|- |  | ------------------------------------------------------------------

|** |  | Less than 1% of Accenture Ltds Class A common shares outstanding.
|-- |  | ------------------------------------------------------------------

|*** |  | Less than 1% of Accenture Ltds Class X common shares outstanding.
|--- |  | ------------------------------------------------------------------

|**** |  | Less than 1% of the total number of Accenture Ltds Class A common shares and Class X common shares outstanding.
|---- |  | ----------------------------------------------------------------------------------------------------------------

|(1) |  | c/o Accenture, 1661 Page Mill Road, Palo Alto, California 94304 USA. Excludes the common shares subject to the voting agreement referred to below that are owned
by other parties to the voting agreement. Each of Joe W. Forehand, Stephan A. James, Karl-Heinz Flöther, Joel P. Friedman, William D. Green, Masakatsu Mori, Diego Visconti, Jackson L. Wilson, Jr. and Michael G. McGrath is a party to the Voting
Agreement. Each of these individuals, however, disclaims beneficial ownership of the common shares subject to the voting agreement other than those specified above for him individually. See Certain Transactions and
Relationships  Voting Agreement.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Subject to contractual transfer restrictions, Accenture SCA is obligated, at the option of the holder of its shares and at any time, to redeem any outstanding
Accenture SCA Class I common shares held by the holder. The redemption price per share generally is equal to the market price of an Accenture Class A common share at the time of the redemption. Accenture SCA has the option to pay this redemption
price with cash or by delivering Accenture Class A common shares on a one-for-one basis. Each time an Accenture SCA Class I common share is redeemed from a holder, Accenture has the option, and intends to, redeem an Accenture Class X common share
from that holder, for a redemption price equal to the par value of the Accenture Class X common share, or $.0000225.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes 25,000 Class A common shares that could be acquired through the exercise of share options within 60 days from October 29, 2002.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------



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Equity Compensation Plan Information





The following table sets forth, as of August 31, 2002, certain information related to our compensation plans under which Class A common shares of Accenture Ltd may be
issued.





Plan category

(a) Number of shares to be issued upon exercise of outstanding options, warrants and rights


(b) Weighted average exercise price of outstanding options, warrants and rights

(c) Number of shares remaining available for future issuance (excluding securities reflected in 1st column)Equity compensation plans approved by shareholders:2001 Share Incentive Plan

149,438,627
(1)

$
8.49

214,061,8422001 Employee Share Purchase Plan

0



N/A

68,887,401
(2)Equity compensation plans not approved by shareholders

0



N/A

0Total

149,438,627





282,949,243


---

|(1) |  | Includes 86,131,490 options, with a weighted average exercise price of $14.73 per share, and 63,307,137 restricted share units.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Since August 31, 2002, an additional 6,376,119 Class A common shares were issued as of September 30, 2002 at the conclusion of the offering period under the
2001 Employee Share Purchase Plan that commenced on April 1, 2002.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ITEM 13.    
CERTAIN TRANSACTIONS AND RELATIONSHIPS





Reorganization and Related Transactions





We completed a number of transactions in fiscal 2001 and 2002 in order to have Accenture assume a corporate structure. The
principal reorganization transactions and related transactions are summarized below.





| |  |  | Our partners received shares in our global corporate structure in lieu of their interests in our local business operations. Our partners in Australia, Denmark,
France, Italy, Norway, Spain, Sweden and the United States received Accenture SCA Class I common shares in lieu of their interests in our local operations in those countries. Our partners in Canada and New Zealand received Accenture Canada Holdings
exchangeable shares in lieu of their interests in our local operations in those countries. Our partners elsewhere received Accenture Ltd Class A common shares in lieu of their interests in our local operations in the relevant countries. Most of our
partners receiving Accenture SCA Class I common shares or Accenture Canada Holdings exchangeable shares received a corresponding number of Accenture Ltd Class X common shares.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | In connection with our transition to a corporate structure, each partners paid-in capital was returned to that partner.
| | - |  | ------------------------------------------------------------------------------------------------------------------------




| |  |  | We distributed to our partners earnings undistributed as of the date of the consummation of our transition to a corporate structure.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------




Share Management Plan





We recognize the need to address three important objectives related to the ownership of Accenture Ltd Class A common shares: increased public float, broader ownership of the Accenture Ltd Class A
common shares and the orderly entry of Accenture Ltd Class A common shares held by our partners into the market. We also recognize the needs of our partners to diversify their portfolios and to achieve additional liquidity over time. To balance
these objectives, and to effectively incentivize our current and future partners, we have implemented a number of arrangements which we refer to collectively as our Share Management Plan and which currently include the components described below.





Common Agreements





Following are descriptions of the material terms of the Accenture Ltd common agreement and the Accenture SCA common agreement, the forms of which have been filed as exhibits to this Annual Report on
Form 10-K.





Accenture Ltd Common Agreement





Accenture Ltd and certain of the covered persons under the voting agreement described below under  Voting Agreement have entered into a common
agreement, and each other person who becomes a partner in the future will be required to enter into the common agreement, under which each such covered person agrees not to transfer any of his or her covered shares under the voting agreement until
July 24, 2005, except:





| |  |  | to participate as a seller in underwritten public offerings, share repurchases, sales or redemptions or other transactions, in each case as approved in writing
by Accenture Ltd; and/or
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | to estate and/or tax planning vehicles, family members and charitable organizations that become bound by the terms of the common agreement, in each case as
approved in writing by Accenture Ltd as further described below under  Approved Family Transfers.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Notwithstanding these limitations, a covered person may (1) exchange Accenture
Canada Holdings exchangeable shares for Accenture Ltd Class A common shares and (2) pledge his or her covered shares subject to the terms described under  Voting Agreement  Transfer Restrictions below. These
limitations are not affected by a covered persons retirement status.





Partners and former partners party to
the voting agreement continue to be subject to the voting agreement, including provisions that require covered persons to comply with share transfer restrictions imposed by Accenture from time to time in connection with offerings of Accenture Ltd
securities, whether or not they enter into the Accenture Ltd common agreement.





Accenture SCA Common Agreement





Accenture SCA and certain of the covered persons under the transfer rights agreement described below under
 Accenture SCA Transfer Rights Agreement have entered into a common agreement under which each such covered person agrees not to transfer any of his or her covered shares under the transfer rights agreement until July 24,
2005, except:





| |  |  | to participate as a seller in underwritten public offerings, share repurchases, sales or redemptions or other transactions, in each case as approved in writing
by Accenture SCA or Accenture Ltd; and/or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | to estate and/or tax planning vehicles, family members and charitable organizations that become bound by the terms of the common agreement, in each case as
approved in writing by Accenture SCA or Accenture Ltd as further described below under  Approved Family Transfers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Notwithstanding these limitations, (1) a covered person may redeem Accenture SCA Class I common shares, provided that any securities that may be received by such covered person in respect of such
redemption shall be subject to the above-described restrictions on transfer and (2) at any time after May 31, 2004, covered persons may require Accenture SCA to redeem their Class I common shares for a redemption price per share generally equal to
the lower of the market price of an Accenture Ltd Class A common share and $1, and a covered person may pledge his or her covered shares, in each case subject to the terms described under  Accenture SCA Transfer Rights
Agreement  Transfer Restrictions below. These limitations are not affected by a covered persons retirement status.





We expect that any transfers described above will be approved under Accenture SCAs articles of association.





Partners and former partners party to the transfer rights agreement continue to be subject to the transfer rights agreement, whether or not they enter into the Accenture SCA common agreement.





Approved Family Transfers





We intend to approve estate and/or tax planning strategies that will allow the value of a partners shares to be transferred to a partners heirs or charitable donees in tax efficient manners
directly or indirectly through tax planning vehicles which may reduce estate, gift, wealth, or income taxes of either the partner or the recipient of the shares. We expect these strategies to be implemented with minimal involvement or expense by
Accenture. Partners wishing to use these approved family transfers will be required to work with identified local tax and legal advisors to assure that the transfers comply with Accentures requirements.





We intend to impose conditions on these transfers, such as requiring that (1) any transferee be bound by the transfer restrictions of the
common agreements, the voting agreement and/or the transfer




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rights agreement, as applicable, (2) sole voting power over transferred shares be retained by partners, and (3) Accenture be indemnified for any legal or tax liability arising from the use of the
approved family transfer. Approved family transfers will only be permitted to the extent that such transfers do not impair the required collateral of shares previously pledged by partners pursuant to the applicable non-competition agreement.





Quarterly Partner Share Transactions





Commencing in calendar year 2002, we expect to enable partners and former partners who are bound by the common agreements with quarterly opportunities to sell or redeem
shares in transactions with us or third parties at or below market prices. These quarterly transactions are expected to include sales of Class A common shares pursuant to Rule 144 under the Securities Act by those of our partners and former partners
holding these shares, as well as redemptions, repurchases or exchanges by Accenture of Accenture SCA Class I common shares and Accenture Canada Holdings exchangeable shares from our partners and former partners holding these shares. These
redemptions, repurchases and exchanges will be at ratable levels with the sales of Class A common shares by our partners and former partners pursuant to Rule 144. To be eligible for these opportunities, the transfer restrictions in the voting
agreement or transfer rights agreement applicable to such shares must no longer be in effect. The number of covered shares a partner or former partner may be permitted to sell or redeem will be reduced by the number of covered shares sold by the
partner or former partner in any underwritten public offering. Accenture Ltds board of directors has authorized up to $600 million for use in acquiring shares from our partners through 2005.





Partner Payments





We expect that certain of our partners and former partners will, any time they sell shares in Accenture-approved underwritten public offerings, pay to us an amount equal to 3% of the gross proceeds from the sale of the shares, less
the amount of any underwriting discount. Similarly, certain of our partners and former partners participating in any quarterly share transactions will pay to us an amount equal to 31/2% of the gross proceeds, less any brokerage costs. We will apply these amounts to cover our expenses in connection with these transactions, with the excess being applied to fund
the share employee compensation trust.





Accenture Share Employee Compensation Trust





In order to preserve Accentures partnership culture and sense of stewardship, we have created a share employee compensation trust to
provide select Accenture employee benefits, such as equity awards to future partners. We may contribute any shares repurchased or acquired in connection with any of the various aspects of the Share Management Plan to the trust. The trust is
consolidated in our financial statements.





Future Possibilities





We have designed the common agreements with the flexibility to accommodate changes and additions to the Share Management Plan. We will
continue to review other opportunities that are compatible with the objectives of the Share Management Plan. These opportunities may include, among other things, strategies to permit partners to participate in Accenture-approved exchange funds and
risk-management arrangements.




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Voting Agreement





Following is a description of the material terms of the voting agreement, the form of which has been filed as an exhibit to this Annual Report on Form 10-K.





Persons and Shares Covered





Accenture Ltd and each of our partners who owns Accenture Ltd Class A or Class X common shares have entered into a voting agreement and each other person who becomes a partner will be required to enter
into the voting agreement. We refer to the parties to the voting agreement, other than Accenture Ltd, as covered persons.





The Accenture Ltd shares covered by the voting agreement generally include (1) any Accenture Ltd Class X common shares that are held by a partner, (2) any Accenture Ltd Class A common shares beneficially owned by a partner
at the time in question and also as of or prior to the initial public offering of the Accenture Ltd Class A common shares in July 2001 and (3) any Accenture Ltd Class A common shares if they are received from us while an employee, a partner or in
connection with becoming a partner or otherwise acquired if the acquisition is required by us. We refer to the shares covered by the voting agreement as covered shares. Accenture Ltd Class A common shares purchased by a covered person in
the open market or, subject to certain limitations, in an underwritten public offering, will generally not be subject to the voting agreement. When a covered person ceases to be an employee of Accenture, the shares held by that covered person will
no longer be subject to the voting provisions of the voting agreement described below under  Voting.





Each partner elected after the initial public offering of the Accenture Ltd Class A common shares in July 2001 will agree in the voting agreement to own at least 5,000 Accenture Ltd Class A common shares by the end of the third year
after that covered person becomes a partner and to hold at least that number of shares for so long as that covered person is a partner.





Transfer Restrictions





By entering into the voting agreement, each covered person
has agreed, among other things, to:





| |  |  | except as described below, maintain beneficial ownership of his or her covered shares received on or prior to July 24, 2001 for a period of eight years
thereafter;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | maintain beneficial ownership of at least 25% of his or her covered shares received on or prior to July 24, 2001 as long as he or she is an employee of
Accenture; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | comply with certain additional transfer restrictions imposed by or with the consent of Accenture from time to time, including in connection with offerings of
securities by Accenture Ltd.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Notwithstanding the transfer restrictions described in this summary, covered
persons who continue to be employees of Accenture will be permitted to transfer a percentage of the covered shares received by them on or prior to July 24, 2001 and owned by them commencing on July 24, 2002 as follows:





Cumulative percentage of shares permitted to be transferred

Years after July 24, 200110%

1 year25%

2 years35%

3 years45%

4 years55%

5 years65%

6 years75%

7 years100%

The later of (a) 8 years and (b) end of employment at Accenture





Partners retiring from Accenture at the age of 50 or above will be
permitted to transfer covered shares they own on an accelerated basis commencing on July 24, 2002 as follows:





Age at retirement

Percentage of remaining transfer restricted shares permitted to be transferred56 or older

100%55

87.5%54

75%53

62.5%52

50%51

37.5%50

25%





In addition, beginning on July 24, 2002, a retired partner who reaches the age of 56 will
be permitted to transfer any covered shares he or she owns. Any remaining shares owned by retiring partners for which transfer restrictions are not released on an accelerated basis will be eligible to be transferred as if the retiring partner
continued to be employed by Accenture.





Partners who became disabled before our transition to a corporate
structure will be permitted to transfer all of their covered shares commencing on July 24, 2002. Partners who become disabled following our transition to a corporate structure will be subject to the general transfer restrictions applicable to our
employees or, if disabled after the age of 50, will benefit from the accelerated lapses of transfer restrictions applicable to retired partners.





If Accenture approves in writing a covered persons pledge of his covered shares to a lender, foreclosures by the lender on those shares, and any subsequent sales of those shares by the lender,
are not restricted, provided that the lender must give Accenture a right of first refusal to buy any shares at the market price before they are sold by the lender.





All transfer restrictions applicable to a covered person under the voting agreement terminate upon death.





Notwithstanding the transfer restrictions described in this summary, Class X common shares of Accenture Ltd may not be transferred at any time, except upon the death of a
holder of Class X common shares or with the consent of Accenture Ltd.




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Accenture Canada Holdings exchangeable shares held by covered persons are also
subject to the transfer restrictions in the voting agreement.





We expect that the above-described transfer
restrictions will be waived to permit sales in underwritten public offerings, share repurchases or redemptions or other transactions approved by Accenture and to permit transfers to estate and/or tax planning vehicles approved by Accenture by those
partners that have agreed to restrictions on any other transfers of their equity interests until July 24, 2005. See  Share Management Plan for a discussion of the terms of this restriction on transfer. For a description of the
waiver provisions relating to these transfer restrictions, see  Waivers and Adjustments below.





Other
Restrictions





The voting agreement also prevents covered persons who are employees of Accenture from
engaging in the following activities with any person who is not a covered person who is an employee of Accenture or a director, officer or employee of Accenture:





| |  |  | participating in a proxy solicitation with respect to shares of Accenture;
| | - |  | --------------------------------------------------------------------------




| |  |  | depositing any covered shares in a voting trust or subjecting any of these shares to any voting agreement or arrangement;
| | - |  | -------------------------------------------------------------------------------------------------------------------------




| |  |  | forming, joining or in any way participating in a group that agrees to vote or dispose of shares of Accenture in a particular manner;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------




| |  |  | except as provided in the partner matters agreement, proposing certain transactions with Accenture;
| | - |  | ---------------------------------------------------------------------------------------------------




| |  |  | seeking the removal of any member of the board of directors of Accenture Ltd or any change in the composition of Accenture Ltds board of directors;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | making any offer or proposal to acquire any securities or assets of Accenture; or
| | - |  | ---------------------------------------------------------------------------------




| |  |  | participating in a call for any special meeting of the shareholders of Accenture Ltd.
| | - |  | -------------------------------------------------------------------------------------




Voting





Under the voting agreement, prior
to any vote of the shareholders of Accenture Ltd, a separate, preliminary vote of the covered shares owned by covered persons who are employees of Accenture will be taken on each matter upon which a vote of the shareholders is proposed to be taken.
Subsequently, all of these covered shares will be voted in the vote of the shareholders of Accenture Ltd in accordance with the majority of the votes cast in the preliminary vote.





Notwithstanding the foregoing, in elections of directors, all covered shares owned by covered persons who are our employees will be voted in favor of the election of those
persons receiving the highest numbers of votes cast in the preliminary vote. In the case of a vote for an amendment to Accenture Ltds constituent documents, or with respect to an amalgamation, liquidation, dissolution, sale of all or
substantially all of its property and assets or any similar transaction with respect to Accenture Ltd, all covered shares owned by covered persons who are our employees will be voted against the proposal unless at least 66  2/3% of the votes in the preliminary vote are cast in favor of that proposal, in which case all of these covered shares will be voted in favor of the proposal.





As of May 15, 2002, our partners owned or controlled approximately 80% of the voting interest in Accenture Ltd. However, immediately following a recent offering of
Accenture Ltd Class A common




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shares by Accenture Ltd and certain selling shareholders and the transactions related to the offering, our partners will own or control approximately 73% of the voting interest in Accenture Ltd,
or approximately 72% if the underwriters in the offering exercise in full their option to purchase additional Accenture Ltd Class A common shares from Accenture Ltd.





So long as the covered shares owned by covered persons that are our employees represent a majority of the outstanding voting power of Accenture Ltd, partners from any one
country will not have more than 50% of the voting power in any preliminary vote under the voting agreement.





Term and Amendment





The voting agreement will continue in effect until the earlier of April 18, 2051 and the time it is
terminated by the vote of 66  2/3% of the votes represented by the covered shares owned by covered persons who are our employees. The transfer restrictions will not terminate upon the expiration or termination
of the voting agreement unless they have been previously waived or terminated under the terms of the voting agreement. The voting agreement may generally be amended at any time by the affirmative vote of 662/3%
of the votes represented by the covered shares owned by covered persons who are our employees. Amendment of the transfer restrictions also requires the consent of Accenture Ltd.





Waivers and Adjustments





The transfer
restrictions and the other provisions of the voting agreement may be waived at any time by the partners representatives to permit covered persons to:





| |  |  | participate as sellers in underwritten public offerings of common shares and tender and exchange offers and share repurchase programs by Accenture;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | transfer covered shares to charities, including charitable foundations;
| | - |  | -----------------------------------------------------------------------




| |  |  | transfer covered shares held in employee benefit plans; and
| | - |  | -----------------------------------------------------------




| |  |  | transfer covered shares in particular situations (for example, to immediate family members and trusts).
| | - |  | -------------------------------------------------------------------------------------------------------




Subject to the foregoing, the provisions of the voting agreement may generally be waived by the affirmative vote of 662/3% of the votes represented by the covered shares owned by covered persons who are our employees. A general waiver
of the transfer restrictions also requires the consent of Accenture Ltd.





Administration and Resolution of Disputes





The terms and provisions of the voting agreement will be administered by the partners representatives,
which will consist of persons who are both partners of Accenture and members of Accenture Ltds board of directors and who agree to serve in such capacity. The partners representatives will have the sole power to enforce the provisions of the
voting agreement. No persons not a party to the voting agreement are beneficiaries of the provisions of the voting agreement.





Accenture SCA Transfer Rights Agreement





Following is a description of the material terms
of the transfer rights agreement, the form of which has been filed as an exhibit to this Annual Report on Form 10-K.




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Persons and Shares Covered





Accenture SCA and each of our partners who own shares of Accenture SCA have entered into a transfer rights agreement. We refer to parties to the transfer rights agreement,
other than Accenture SCA, as covered persons.





The Accenture SCA shares covered by the transfer rights
agreement generally include all Class I common shares of Accenture SCA owned by a covered person. We refer to the shares covered by the transfer rights agreement as covered shares.





Transfer Restrictions





The articles of
association of Accenture SCA provide that shares of Accenture SCA (other than those held by Accenture Ltd) may be transferred only with the consent of the Accenture SCA supervisory board or its delegate, the Accenture SCA partners committee. In
addition, by entering into the transfer rights agreement, each party (other than Accenture Ltd) agrees, among other things, to:





| |  |  | except as described below, maintain beneficial ownership of his or her covered shares received on or prior to July 24, 2001 for a period of eight years
thereafter;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | maintain beneficial ownership of at least 25% of his or her covered shares received on or prior to July 24, 2001 as long as he or she is an employee of
Accenture; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | comply with certain other transfer restrictions when requested to do so by Accenture.
| | - |  | -------------------------------------------------------------------------------------




Notwithstanding the transfer restrictions described in this summary, covered persons who continue to be employees of Accenture will be permitted to transfer a
percentage of the covered shares received by them on or prior to July 24, 2001 and owned by them commencing on July 24, 2002 as follows:





Cumulative percentage ofshares permitted tobe transferred

Years after July 24, 200110%

1 year25%

2 years35%

3 years45%

4 years55%

5 years65%

6 years75%

7 years100%

The later of (a) 8 years and (b) end of employment at Accenture





Partners retiring from Accenture at the age of 50 or above will be
permitted to transfer covered shares they own on an accelerated basis commencing on July 24, 2002 as follows:





Age at retirement

Percentage of remaining transfer restricted shares permitted to be transferred56 or older

100%55

87.5%54

75%53

62.5%52

50%51

37.5%50

25%




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In addition, beginning on July 24, 2002, a retired partner who reaches the age of 56 will be permitted
to transfer any covered shares he or she owns. Any remaining shares owned by retiring partners for which transfer restrictions are not released on an accelerated basis will be eligible to be transferred as if the retiring partner continued to be
employed by Accenture.





Partners who became disabled before our transition to a corporate structure will be
permitted to transfer all of their covered shares commencing on July 24, 2002. Partners who become disabled following our transition to a corporate structure will be subject to the general transfer restrictions applicable to our employees or, if
disabled after the age of 50, will benefit from the accelerated lapses of transfer restrictions applicable to retired partners.





In addition, at any time after the third anniversary of the date of the consummation of our transition to a corporate structure, covered persons holding Accenture SCA Class I common shares may, without restriction, require Accenture
SCA to redeem any Accenture SCA Class I common share held by such holder for a redemption price per share generally equal to the lower of the market price of an Accenture Ltd Class A common share and $1. Accenture SCA may, at its option, pay this
redemption price in cash or by delivering Accenture Ltd Class A common shares.





If Accenture approves in writing a
covered persons pledge of his or her covered shares to a lender, foreclosures by the lender on those shares, and any subsequent sales of those shares by the lender, are not restricted, provided that the lender must give Accenture a right of
first refusal to buy any shares at the market price before they are sold by the lender.





All transfer restrictions
applicable to a covered person under the transfer rights agreement terminate upon death.





We expect that the
above-described transfer restrictions will be waived to permit sales in underwritten public offerings, share repurchases or redemptions or transfers in other transactions approved by Accenture and to permit transfers to estate and/or tax planning
vehicles approved by Accenture by those partners that have agreed to restrictions on any other transfers of their equity interests until July 24, 2005. See  Share Management Plan for a discussion of the terms of this
restriction on transfer. For a description of the waiver provisions relating to these transfer restrictions, see  Waivers and Adjustments below.





Term and Amendment





The transfer rights agreement
will continue in effect until the earlier of April 18, 2051 and the time it is terminated by the vote of 662/3%
of the votes represented by the covered shares owned by covered persons who are our employees. The transfer restrictions will not terminate upon the expiration or termination of the transfer rights agreement unless they have been previously waived
or terminated under the terms of the transfer rights agreement. The transfer rights agreement may generally be amended at any time by the affirmative vote of 662/3% of the votes represented by the covered shares owned by covered persons who are our employees. Amendment of the transfer restrictions also requires the consent of Accenture
SCA.





Waivers and Adjustments





The transfer restrictions and the other provisions of the transfer rights agreement may be waived at any time by the Accenture SCA partners committee to permit covered
persons to:





| |  |  | participate as sellers in underwritten public offerings of common shares and tender and exchange offers and share repurchase programs by Accenture;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | transfer covered shares to charities, including charitable foundations;
| | - |  | -----------------------------------------------------------------------




| |  |  | transfer covered shares held in employee benefit plans; and
| | - |  | -----------------------------------------------------------




| |  |  | transfer covered shares in particular situations (for example, to immediate family members and trusts).
| | - |  | -------------------------------------------------------------------------------------------------------




Subject to the foregoing, the provisions of the transfer rights agreement may generally be waived by the affirmative vote of 662/3% of the votes represented by the covered shares owned by covered persons who are employees of Accenture. A general
waiver of the transfer restrictions also requires the consent of Accenture SCA.





Administration and Resolution of Disputes





The terms and provisions of the transfer rights agreement will be administered by the Accenture SCA
partners committee, which will consist of persons who are both partners of Accenture and members of the supervisory board of Accenture SCA and who agree to serve in such capacity. The Accenture SCA partners committee will have the sole power to
enforce the provisions of the transfer rights agreement. No persons not a party to the transfer rights agreement are beneficiaries of the provisions of the transfer rights agreement.





Partner Matters Agreement





Following is a description of
the material terms of the partner matters agreement, the form of which has been filed as an exhibit to this Annual Report on Form 10-K.





General; Persons and Shares Covered





Accenture Ltd and, with limited exceptions,
each of our partners have entered into a partner matters agreement and each other person who becomes a partner will be required to enter into the partner matters agreement. The purpose of the partner matters agreement is to establish procedures for
continued involvement of our partners in certain Accenture governance issues. Partners will vote in partner matters votes held in accordance with the partner matters agreement based on, generally, (1) all Accenture Ltd common shares, restricted
share units and options to acquire Accenture Ltd common shares held by a partner if they were received from us as a partner or in connection with becoming a partner and (2) all Accenture Ltd common shares otherwise acquired by a partner if the
acquisition is required by us. Accenture Ltd common shares, restricted share units and options to acquire Accenture Ltd common shares acquired as our employee, prior to becoming a partner, will not be relevant to a partners vote in a partner
matters vote. Accenture Ltd common shares purchased by partners in the open market will also not be relevant to a partners vote in a partner matters vote, unless such purchase was required by us.





The partner matters agreement provides, among other things, mechanisms for our partners to:





| |  |  | select, for three to five years after July 24, 2001, five partner nominees for membership on the board of directors of Accenture Ltd;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------




| |  |  | 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 is appointed within the first four years after July 24, 2001;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | vote on new partner admissions;
| | - |  | -------------------------------




| |  |  | approve the partners income plan as described below; and
| | - |  | ---------------------------------------------------------



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| |  |  | hold a non-binding vote 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 will prepare a partners income plan, which then must be submitted to the partners in a partner matters vote. If the plan is approved by a 662/3% 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 of Accenture Ltd 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.





Partners continue to vote on the admission of new partners. New partners will be approved by a 662/3% partner matters vote.





Term and Amendment; Waivers and Adjustments





The partner matters agreement will continue in effect until it is terminated by a 662/3% partner matters vote.





Any partner who ceases to be a partner of Accenture will no longer be a party to the partner matters agreement. The partner matters agreement may generally be amended or waived at any time by a 662/3% partner matters vote.





Administration and Resolution of Disputes





The terms
and provisions of the partner matters agreement will be administered by the partner matters representatives, who will consist of persons who are both partners of Accenture and members of Accenture Ltds board of directors and who agree to serve
in such capacity. The partner matters representatives will have the sole power to enforce the provisions of the partner matters agreement. No persons not a party to the partner matters agreement are beneficiaries of the provisions of the partner
matters agreement.





Non-Competition Agreement





Following is a description of the material terms of the non-competition agreements, the forms of which have been filed as exhibits to this Annual Report on Form 10-K .





Persons Covered





Each of our partners as of the date of the consummation of our transition to a corporate structure has entered into a non-competition agreement.





Restricted Activities





Each partner party
to a non-competition agreement has agreed that, for a restricted period ending on the later of five years following the date of the initial public offering of the Accenture Ltd Class A




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common shares in July 2001 or 18 months following the termination of that partners employment with us or our affiliates, he or she will not (1) associate with and engage in consulting
services for any competitive enterprise or (2) solicit or assist any other entity in soliciting any client or prospective client for the purposes of providing consulting services, perform consulting services for any client or prospective client, or
interfere with or damage any relationship between us and a client or prospective client.





In addition, each
partner has agreed that for the restricted period he or she will not solicit or employ any Accenture employee or any former employee who ceased working for us within an eighteen-month period before or after the date on which the partners
employment with us or our affiliates terminated.





Enforcement





Each partner has agreed that if the partner were to breach any provisions of the non-competition agreement, we would be entitled to equitable relief restraining that
partner from committing any violation of the non-competition agreement. In addition, each partner has agreed that if the partner were to breach any provisions of the non-competition agreement, he or she will pay to us a predetermined amount as and
for liquidated damages and that those liquidated damages will be secured by that partners shares pursuant to a pledge agreement, which has been entered into by the parties. Notwithstanding the pledge agreement, partners will be permitted to
dispose of their pledged securities in accordance with the terms of the Accenture Ltd common agreement, the Accenture SCA common agreement, the voting agreement or the transfer rights agreement, as the case may be, and to receive the proceeds from
such dispositions.





Because the laws concerning the enforcement of non-competition agreements vary, we may not be
able to strictly enforce these terms in all jurisdictions.





Waiver and Termination





We may waive non-competition agreements or any portion thereof with the consent of, and in the discretion of, the chief executive officer
of Accenture Ltd. The non-competition agreements will terminate upon a change in control of Accenture Ltd.





Advances to Partners





In March 2002, in connection with a revision to our variable compensation program for partners, which had the
effect of deferring payment of variable compensation and imposing additional conditions on ultimate payment, all partners received a one-time advance against their quarterly variable compensation. In connection with this revision, the executive
officers identified below received advances in excess of $60,000. Such advances will be repaid prior to the payment of future variable compensation.





Joe W. Forehand, Chief Executive Officer and Chairman of the Board of Directors, had a maximum advance of $112,000 under the program and, as of August 31, 2002, a remaining balance of $71,376.





Jackson L. Wilson, Jr., Corporate Development Officer and Director, had a maximum advance of $98,000 under the
program and, as of August 31, 2002, a remaining balance of $62,454.





Stephan A. James, Chief Operating Officer and
Director, had a maximum advance of $94,500 under the program and, as of August 31, 2002, a remaining balance of $60,223.





Michael G. McGrath, Chief Risk Officer, had a maximum advance of $91,000 under the program and, as of August 31, 2002, a remaining balance of $57,993.




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William D. Green, Group Chief Executive  Communications &
High Tech Operating Group and Director, had a maximum advance of $80,500 under the program and, as of August 31, 2002, a remaining balance of $51,301.





R. Timothy S. Breene, Chief Strategy Officer and Group Chief Executive  Business Consulting Capability Group, had a maximum advance of $72,800 under the program and, as of August 31,
2002, a remaining balance of $46,394.





Gregg G. Hartemayer, Group Chief Executive  Technology
& Outsourcing Capability Group, had a maximum advance of $71,750 under the program and, as of August 31, 2002, a remaining balance of $45,725.





Joel P. Friedman, Managing General PartnerAccenture Technology Ventures and Director, had a maximum advance of $68,950 under the program and, as of August 31, 2002, a remaining balance of
$43,941.





Masakatsu Mori, Country Managing Director, Japan and Director, had a maximum advance of $61,103 under
the program and, as of August 31, 2002, a remaining balance of $38,940.





Partner Liquidity Arrangements





We have entered into agreements with Salomon Smith Barney, Inc. that enable certain of our partners (not including any of our executive
officers) to borrow from Salomon Smith Barney up to the lesser of a years salary or approximately ten percent of the partners equity interest in Accenture. The loans are obligations of the individual partners, and not Accenture, and are
secured by the individual partners equity interest in Accenture, which, as discussed under  Non-Competition Agreement, also secure the partners obligations under a non-competition agreement. These loans are
intended for the purpose of increasing the personal liquidity of those partners for the four-year period following the initial public offering of the Accenture Ltd Class A common shares in July 2001 and may not exceed $150 million in the aggregate
without the consent of Salomon Smith Barney. The agreements provide that the proceeds of any sale of shares securing a partners loan will be applied first to reduce the outstanding loan balance. Salomon Smith Barney can declare any loan
immediately repayable in certain circumstances. As of August 31, 2002, an aggregate of $18 million was authorized to be drawn by 67 partners under these arrangements. We do not intend to expand or otherwise modify this program.





Partner Tax Costs





We have informed our partners that if a partner reports for tax purposes the reorganization transactions described in this Annual Report on Form 10-K, we will provide a legal defense to that partner if his or her reporting position
is challenged by the relevant tax authority. In the event such a defense is unsuccessful, and the partner is then subject to extraordinary financial disadvantage, we will review such circumstances for any individual partner and find an appropriate
way to avoid severe financial damage to an individual partner.





Relationship with Andersen Worldwide and Arthur Andersen Firms





Arbitration Award and Termination of Contracts





In light of Arthur Andersen LLPs and Andersen Worldwides current circumstances, Accenture and Arthur Andersen LLP have renegotiated the service arrangements and
training facility use arrangement they entered into in 2001, as described below. Accenture and Arthur Andersen LLP have entered into a




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new facility services agreement which provides Accenture with the use of Arthur Andersen LLPs training facility in St. Charles, Illinois, at market rates through July 1, 2007. Accenture and
Arthur Andersen LLP have terminated the prior St. Charles facility services agreement, as well as the services agreements by which Arthur Andersen LLP and other Arthur Andersen firms were to provide services, including tax services, to Accenture and
by which Accenture was to provide Arthur Andersen LLP and other Arthur Andersen firms with consulting services. The final payment by Accenture to Arthur Andersen LLP in connection with the termination of these agreements is within the amounts
Accenture had previously accrued and will not have a material impact on Accenture Ltds income statement.





As
a result of a restructuring in 1989, we and our member firms, which are now our subsidiaries, became legally separate and distinct from the Arthur Andersen firms. Thereafter, until August 7, 2000, we had contractual relationships with an
administrative entity, Andersen Worldwide, and indirectly with the separate Arthur Andersen firms. Under these contracts, called member firm agreements, we and our member firms, on the one hand, and the Arthur Andersen firms, on the other hand, were
two stand-alone business units linked through such agreements to Andersen Worldwide for administrative and other services. In addition, during this period our partners individually were members of the administrative entity, Andersen Worldwide. On
December 17, 1997, the Accenture member firms began a binding arbitration seeking the termination of these contractual relationships and other relief.





On August 7, 2000, the parties to the arbitration were notified that the tribunal appointed by the International Chamber of Commerce in its final award, dated July 28, 2000, had terminated our
contractual relationships with Andersen Worldwide and all the Arthur Andersen firms as of August 7, 2000. Under the terms of the final award, Accenture, and each of the member firms comprising it, was required to cease using the Andersen name or any
derivative thereof, no later than December 31, 2000. On January 1, 2001, we began to conduct business under the name Accenture.





On December 19, 2000, Andersen Worldwide and Arthur Andersen LLP, on behalf of themselves and all other Arthur Andersen firms, partners, shareholders and others, and Accenture Partners, S.C. and Accenture LLP, on behalf of themselves
and all other Accenture member firms, partners, shareholders and others, executed a binding memorandum of understanding agreement to settle and resolve all existing and potential disputes among the parties concerning the implementation of the final
award and the termination of our contractual relationships with Andersen Worldwide and the Arthur Andersen firms, including the discharge and release of all obligations of the parties under the terminated member firm agreements between the Accenture
member firms and Andersen Worldwide. The memorandum of understanding agreement provided for the parties to enter into a number of definitive agreements with respect to services, subleases, releases and indemnities and to finalize other contractual
arrangements among the parties. It also contained provisions for specified uses by Accenture of its former name. On March 1, 2001, Andersen Worldwide, Arthur Andersen LLP and all other Arthur Andersen firms, on behalf of themselves and their
respective affiliates and representatives, on the one hand, and Accenture Partners, S.C., Accenture LLP and all other Accenture firms, on behalf of themselves and their respective affiliates and representatives, on the other, completed
implementation of the memorandum of understanding agreement by entering into a closing agreement, releases and indemnities, and by finalizing other contractual arrangements among the parties, including services agreements under which:





| |  |  | Arthur Andersen LLP and other Arthur Andersen firms that agree to provide services, including tax services, will provide such services to Accenture for six
years for $60 million per year;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  |  | Arthur Andersen LLP will provide accommodations and related facility-use services to Accenture at its training facility in St. Charles, Illinois, for specified
occupancy rates for five years for $60 million per year; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Accenture will provide Arthur Andersen LLP and other Arthur Andersen firms that agree to receive consulting services with such services at no cost to Arthur
Andersen for five years up to $22.5 million per year at our published billing rate.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Under the terms of the
indemnities, Andersen Worldwide, Arthur Andersen LLP and all other Arthur Andersen firms have indemnified us against and in respect of, among other things, liability for claims brought against us and any damages or losses we incur which relate to
the conduct of Andersen Worldwide, Arthur Andersen LLP or the other Arthur Andersen firms prior to March 1, 2001, and we have indemnified Andersen Worldwide, Arthur Andersen LLP and the other Arthur Andersen firms against and in respect of, among
other things, liability for claims brought against these entities and any damages or losses such entities incur which relate to our conduct prior to March 1, 2001.





Tax Sharing Agreement





During our association with
Andersen Worldwide and Arthur Andersen, we agreed to allocate specified responsibilities and obligations relating to the preparation and filing of tax returns, the payment of tax liabilities and the control and contest of administrative or legal
proceedings relating to tax matters between our two groups. On March 1, 2001, in connection with the settlement described above, Accenture entered into a tax sharing agreement with Andersen Worldwide and Arthur Andersen which describes how any
unresolved tax matters will be addressed following the termination of our contractual relationships. In general, liability for specified additional taxes relating to joint business returns of Accenture and Andersen Worldwide and Arthur Andersen for
taxable periods ending on or before the termination of our contractual relationships will be allocated between us and Andersen Worldwide and Arthur Andersen as if we had no contractual relationships with one another at the time the taxes arose.
Liability for all other taxes relating to taxable periods ending on or before the termination of our agreements will be allocated to the party responsible for preparing and filing the tax return with respect to those taxes. The contest of audits and
administrative or court proceedings relating to these taxes will generally be controlled by the party responsible for filing the tax returns that are the subject of the audit or proceeding.





ITEM 14.    
CONTROLS AND PROCEDURES





(a)  Based on their evaluation as of a date within
90 days of the filing date of this Annual Report on Form 10-K, the chief executive officer and the chief financial officer of Accenture Ltd have concluded that Accenture Ltds disclosure controls and procedures (as defined in Rules 13a-14(c)
and 15d-14(c) under the Securities Exchange Act of 1934 (the Exchange Act)) are effective to ensure that information required to be disclosed by Accenture Ltd in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.





(b)  There were no significant changes in Accenture Ltds internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. There were no significant
deficiencies or material weaknesses, and therefore there were no corrective actions taken.




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PART IV





ITEM 15.    
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K





(a)  List
of documents filed as part of this report:





|1. |  | Financial Statements as of August 31, 2001 and August 31, 2002 and for the three years ended August 31, 2002  Included in Part II of this Form
10-K:
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------




Consolidated Balance Sheets





Combined Income Statement Before Partner Distributions and Consolidated Income Statements





Combined Statement of Partners Capital and Comprehensive Income and Consolidated Shareholders Equity Statements





Combined and Consolidated Cash Flows Statements





Notes to Combined and Consolidated Financial Statements





|2. |  | Financial Statement Schedules:
|-- |  | ------------------------------




None.





|3. |  | Exhibit Index:
|-- |  | --------------




Exhibit Number

Exhibit3.1

Memorandum of Continuance of the Registrant, dated February 21, 2001 (incorporated by reference to Exhibit 3.1 to the Registrants Registration
Statement on Form S-1/A filed on July 2, 2001 (the July 2, 2001 Form S-1/A)).3.2

Form of Bye-laws of the Registrant (incorporated by reference to Exhibit 3.2 to the July 2, 2001 Form S-1/A).9.1

Form of Voting Agreement, dated as of April 18, 2001, among the Registrant and the covered persons party thereto (incorporated by reference to Exhibit 9.1 to
the Registrants Registration Statement on Form S-1 filed on April 19, 2001 (the April 19, 2001 Form S-1)).10.1

Form of Partner Matters Agreement, dated as of April 18, 2001, among the Registrant and the partners party thereto (incorporated by reference to Exhibit 10.1
to the April 19, 2001 Form S-1).10.2

Form of Non-Competition Agreement, dated as of April 18, 2001, among the Registrant and certain employees (incorporated by reference to Exhibit 10.2 to the
April 19, 2001 Form S-1).10.3

2001 Share Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrants Registration Statement on Form S-1/A filed on June 8, 2001 (the
June 8, 2001 S-1/A)).10.4

2001 Employee Share Purchase Plan (incorporated by reference to Exhibit 10.4 to the June 8, 2001 S-1/A).10.5

Articles of Association of Accenture SCA (incorporated by reference to Exhibit 10.5 to the November 30, 2001 10-Q).




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Exhibit Number

Exhibit10.6

Form of Accenture SCA Transfer Rights Agreement, dated as of April 18, 2001, among Accenture SCA and the covered persons party thereto (incorporated by
reference to Exhibit 10.6 to the April 19, 2001 Form S-1).10.7

Form of Non-Competition Agreement, dated as of April 18, 2001, among Accenture SCA and certain employees (incorporated by reference to Exhibit 10.7 to the
April 19, 2001 Form S-1).10.8

Form of Letter Agreement, dated April 18, 2001, between Accenture SCA and certain shareholders of Accenture SCA (incorporated by reference to Exhibit 10.8 to
the April 19, 2001 Form S-1).10.9

Form of Support Agreement, dated as of May 23, 2001, between the Registrant and Accenture Canada Holdings Inc. (incorporated by reference to Exhibit 10.9 to
the July 2, 2001 Form S-1/A).10.10

Form of Employment Agreement of Messrs. Forehand, James, Green, Wilson, McGrath, Hartemayer, Scrivner, Friedman and You and Mmes. Craig and Tolan
(incorporated by reference to Exhibit 10.10 to the June 8, 2001 S-1/A).10.11

Form of Employment Agreement of Karl-Heinz Flöther (incorporated by reference to Exhibit 10.3 to the November 30, 2001 10-Q).10.12

Form of Employment Agreement of Masakatsu Mori (English translation) (incorporated by reference to Exhibit 10.5 to the November 30, 2001 10-Q).10.13

Form of Employment Agreement of Diego Visconti (English translation) (incorporated by reference to Exhibit 10.6 to the November 30, 2001 10-Q).10.14

Form of Employment Agreement of Arnaud André (English translation) (incorporated by reference to Exhibit 10.7 to the November 30, 2001
10-Q).10.15

Form of Employment Agreement of Messrs. Breene and Foster and Ms. Rider (incorporated by reference to Exhibit 10.8 to the November 30, 2001
10-Q).10.16

Form of Employment Agreement of David R. Hunter (incorporated by reference to Exhibit 10.9 to the November 30, 2001 10-Q).10.17

Form of Employment Agreement of Jose Luis Manzanares (incorporated by reference to Exhibit 10.10 to the November 30, 2001 10-Q).10.18

Form of Articles of Association of Accenture Canada Holdings Inc. (incorporated by reference to Exhibit 10.11 to the July 2, 2001 Form S-1/A).10.19

Form of Exchange Trust Agreement by and between the Registrant and Accenture Canada Holdings Inc. and CIBC Mellon Trust Company, made as of May 23, 2001
(incorporated by reference to Exhibit 10.12 to the July 2, 2001 Form S-1/A).10.20

Form of Letter Agreement, dated May 21, 2001, between the Registrant and Stichting Naritaweg I (incorporated by reference to Exhibit 10.13 to the July 2,
2001 Form S-1/A).10.21

Form of Letter Agreement, dated May 21, 2001, between the Registrant and Stichting Naritaweg II (incorporated by reference to Exhibit 10.14 to the July 2,
2001 Form S-1/A).10.22

Form of Accenture Ltd Common Agreement (incorporated by reference to Exhibit 10.22 to the Registrants Registration Statement on Form S-1 filed on April
26, 2002 (the April 26, 2002 Form S-1/A)).




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Exhibit Number

Exhibit10.23

Form of Accenture SCA Common Agreement (incorporated by reference to Exhibit 10.23 to the April 26, 2002 Form S-1/A).21.1

Subsidiaries of the Registrant (filed herewith).23.1

Consent of KPMG LLP (filed herewith).23.2

Consent of PricewaterhouseCoopers LLP (filed herewith).24.1

Power of Attorney (included on the signature page hereto).99.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).99.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).





(b)  Reports on Form 8-K.





During the quarter ended August 31, 2002, no reports on Form 8-K were filed by the Registrant.





(c)  See Item 14(a)(3) above.





(d)  See Item 14(a)(2) above.




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ACCENTURE LTD AND SUBSIDIARIES





INDEX TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS





PageIndependent Auditors Report

F-2Report of Independent Accountants

F-3Financial Statements as of August 31, 2001 and August 31, 2002 and for the three years ended August 31,
2002:Consolidated Balance Sheets

F-4Combined Income Statement Before Partner Distributions and Consolidated Income Statements

F-5Combined Statement of Partners Capital and Comprehensive Income and Consolidated Shareholders Equity and
Comprehensive Income Statements

F-6Combined and Consolidated Cash Flows Statements

F-8Notes to Combined and Consolidated Financial Statements

F-9




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##### Table of Contents

INDEPENDENT AUDITORS REPORT





To the Board of Directors and Shareholders of Accenture Ltd:





We have audited the
accompanying consolidated balance sheet of Accenture Ltd and its subsidiaries as of August 31, 2002, and the related consolidated statements of income, shareholders equity and comprehensive income, and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.





We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.





In our opinion, the consolidated financial statements referred to above present fairly, in
all material respects, the financial position of Accenture Ltd and its subsidiaries as of August 31, 2002, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted
in the United States of America.





/S/    KPMG LLP


Chicago, Illinois


October 10, 2002







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##### Table of Contents

REPORT OF INDEPENDENT ACCOUNTANTS





To the Board of Directors and Shareholders of Accenture Ltd:





In our opinion, the
accompanying consolidated balance sheet and the related combined income statement before partner distributions/consolidated income statement, combined statement of partners capital and comprehensive income/consolidated shareholders
equity and comprehensive income statement and combined and consolidated cash flows statements present fairly, in all material respects, the financial position of Accenture Ltd and its subsidiaries at August 31, 2001, and the results of their
operations and their cash flows for each of the two years in the period ended August 31, 2001 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the
Companys management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.





As discussed in Note 2 to the consolidated financial statements, in 2001 the Company changed its
method of accounting for derivative instruments and hedging activities.





/S/    PricewaterhouseCoopers LLP


October 11, 2001, except as to Note 20


which is as of March 15, 2002


Chicago, Illinois







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##### Table of Contents

ACCENTURE LTD





CONSOLIDATED BALANCE SHEETS





August 31, 2001 and 2002





(In thousands of U.S. dollars except share and per share amounts)





2001


2002ASSETSCURRENT ASSETS:Cash and cash equivalents

$
1,880,083


$
1,316,976Restricted cash






79,445Receivables from clients, net


1,498,812



1,330,642Unbilled services


731,802



774,214Due from related parties


69,500



39,488Deferred income taxes, net


166,372



189,976Other current assets


233,068



330,347Total current assets


4,579,637



4,061,088NON-CURRENT ASSETS:Due from related parties


23,800



Investments


324,139



76,017Property and equipment, net


822,318



716,504Goodwill






167,603Deferred income taxes, net


213,617



283,969Other non-current assets


97,845



173,767Total non-current assets


1,481,719



1,417,860TOTAL ASSETS

$
6,061,356


$
5,478,948LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Short-term bank borrowings

$
189,872


$
57,922Current portion of long-term debt


797



5,177Accounts payable


371,794



450,208Due to related parties


818,888



Deferred revenue


810,043



543,917Accrued payroll and related benefits


1,050,385



1,139,887Income taxes payable


515,304



459,836Deferred income taxes, net


29,373



18,884Other accrued liabilities


392,364



651,231Total current liabilities


4,178,820



3,327,062NON-CURRENT LIABILITIES:Long-term debt


1,090



3,428Retirement obligation


343,249



382,180Deferred income taxes, net


50,969



16,674Other non-current liabilities


797,114



791,582Total non-current liabilities


1,192,422



1,193,864MINORITY INTEREST


407,926



519,396SHAREHOLDERS EQUITY:Preferred shares, 2,000,000,000 shares authorized, 0 shares issued and outstanding






Class A common shares, par value $0.0000225 per share, 20,000,000,000 shares authorized, 343,307,238 and 433,695,621
shares issued as of August 31, 2001 and 2002, respectively


8



10Class X common shares, par value $0.0000225 per share, 1,000,000,000 shares authorized, 591,161,472 and 524,094,456
shares issued and outstanding as of August 31, 2001 and 2002, respectively


13



13Restricted share units (related to Class A common shares), 68,481,815 and 58,265,829 units issued and outstanding as of
August 31, 2001 and 2002, respectively


993,380



848,218Additional paid-in capital


832,731



1,397,828Treasury shares, at cost, 13,726,885 Class A common shares






(315,486
)Treasury shares owned by Share Employee Compensation Trust, at cost, 12,562,300 Class A commonshares






(221,110
)Retained deficit


(1,435,310
)


(1,190,415
)Accumulated other comprehensive loss


(108,634
)


(80,432
)Total shareholders equity


282,188



438,626TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
6,061,356


$
5,478,948





The accompanying notes are an integral part of these financial statements.







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##### Table of Contents

ACCENTURE LTD





COMBINED INCOME STATEMENT BEFORE PARTNER DISTRIBUTIONS





CONSOLIDATED INCOME STATEMENTS





For the Years Ended August 31, 2000, 2001 and 2002


(In thousands of U.S. dollars except share and per share amounts)





Combined Income Statement 2000


Consolidated Income Statement 2001


Consolidated Income Statement 2002REVENUES:Revenues before reimbursements

$
9,752,085


$
11,443,720


$
11,574,269Reimbursements


1,578,599



1,618,152



1,530,755Revenues


11,330,684



13,061,872



13,105,024OPERATING EXPENSES:Cost of services*:Cost of services before reimbursable expenses*


5,486,292



6,199,213



6,896,975Reimbursable expenses


1,578,599



1,618,152



1,530,755Cost of services*


7,064,891



7,817,365



8,427,730Sales and marketing*


883,276



1,217,343



1,565,616General and administrative costs*


1,296,398



1,515,683



1,615,703Restructuring, reorganization and rebranding costs*






848,615



110,524Restricted share unit-based compensation at initial public offering






967,110



Total operating expenses*


9,244,565



12,366,116



11,719,573OPERATING INCOME*


2,086,119



695,756



1,385,451Gain (loss) on investments, net


573,220



107,016



(321,127
)Interest income


67,244



79,778



46,185Interest expense


(24,071
)


(43,278
)


(48,864
)Other income (expense)


51,042



16,973



14,993Equity in losses of affiliates


(46,853
)


(61,388
)


(9,080
)INCOME BEFORE TAXES*


2,706,701



794,857



1,067,558Provision for taxes


242,807



502,616



491,071INCOME BEFORE MINORITY INTEREST AND ACCOUNTING CHANGE*


2,463,894



292,241



576,487Minority interest






577,188



(331,592
)INCOME BEFORE ACCOUNTING CHANGE*


2,463,894



869,429



244,895Cumulative effect of accounting change






187,974



PARTNERSHIP INCOME BEFORE PARTNER DISTRIBUTIONS*

$
2,463,894NET INCOME*





$
1,057,403


$
244,895Weighted Average Class A Common Shares:Basic










425,941,809Diluted










1,023,789,546Earnings Per Class A Common Shares:Basic









$
0.57Diluted









$
0.56


---

|* |  | Excludes payments for partner distributions for periods ended on or prior to May 31, 2001.
|- |  | ------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these financial statements.







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##### Table of Contents

ACCENTURE LTD





COMBINED STATEMENT OF PARTNERS CAPITAL AND COMPREHENSIVE INCOME


CONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE
INCOME STATEMENTS





For the Years Ended August 31, 2000, 2001 and 2002


(In thousands of U.S. dollars and in thousands of share amounts)





Preferred Shares

Class ACommon Shares

Class XCommon Shares

Restricted Share Units Common Shares

Additional Paid-in
Capital


TreasuryShares

TreasurySharesSECT

Retained Earnings (Deficit)


Paid-in Capital


Undistributed Earnings


Accumulated Other Comprehensive Income (Loss)


Total$

No. Shares

$

No. Shares

$

No. Shares


$

No. Shares

$

No. SharesBalance at August 31, 1999

$


$




$




$




$



$




$




$



$
351,505


$
1,603,486


$
253,142


$
2,208,133Comprehensive incomePartnership income before partner distributions










































2,463,894







2,463,894Other comprehensive incomeUnrealized gains on marketable securities, net of reclassification adjustment














































408,998



408,998Foreign currency translation














































(45,075
)


(45,075
)Other comprehensive income














































363,923Comprehensive income


















































2,827,817Capital paid in by partners






































99,895











99,895Repayment of paid-in capital to partners






































(47,917
)










(47,917
)Distribution to AW-SC










































(826,156
)






(826,156
)Distribution of partners income










































(1,893,319
)






(1,893,319
)Balance at August 31, 2000






































403,483



1,347,905



617,065



2,368,453Comprehensive incomePartnership income before partner distributions for the nine months ended May 31, 2001










































1,427,185







1,427,185Net loss for the three months ended August 31, 2001


































(369,782
)














(369,782
)Other comprehensive income (loss)Unrealized losses on marketable securities, net of reclassification adjustment














































(700,857
)


(700,857
)Foreign currency translation














































(24,842
)


(24,842
)Other comprehensive income (loss)














































(725,699
)Comprehensive income


















































331,704Capital paid in by partners






































146,328











146,328Repayment of paid-in capital to partners






































(549,811
)










(549,811
)Distribution to AW-SC










































(268,781
)






(268,781
)Distribution of partners income










































(3,106,350
)






(3,106,350
)Partner retirement and vacation benefits










































(465,487
)






(465,487
)Transfer to retained earnings (deficit)


































(1,065,528
)






1,065,528







Issuance of shares:Shares issued upon reorganization to corporate structure





5

212,257


13

591,161





































18Initial public offering, net





3

131,050












1,791,441





























1,791,444Restricted share units















993,380

68,482
































993,380Minority interest




















(958,710
)




























(958,710
)Balance at August 31, 2001





8

343,307


13

591,161


993,380

68,482


832,731













(1,435,310
)










(108,634
)


282,188





The accompanying notes are an integral part of these financial statements.




F-6




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##### Table of Contents

ACCENTURE LTD





COMBINED STATEMENT OF PARTNERS CAPITAL AND COMPREHENSIVE INCOME


CONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE
INCOME STATEMENTS(Continued)





For the Years Ended August 31, 2000, 2001 and 2002


(In thousands of U.S. dollars and in thousands of share amounts)





Preferred Shares

Class ACommon Shares

Class XCommon Shares


Restricted Share Units Common Shares


Additional Paid-in
Capital


TreasuryShares


TreasurySharesSECT


Retained Earnings (Deficit)


Paid-in Capital

Undistributed Earnings

Accumulated Other Comprehensive Income (Loss)


Total$

No. Shares

$

No. Shares


$


No. Shares



$


No. Shares


$


No. SharesComprehensive incomeNet income









































244,895













244,895Other comprehensive income (loss)Unrealized gains on marketable securities, net of reclassification adjustment



















































4,469



4,469Foreign currency translation



















































36,298



36,298Minimum pension liability



















































(12,565
)


(12,565
)Other comprehensive income (loss)



















































28,202Comprehensive income























































273,097Income tax benefit on stock-based compensation plans























17,651































17,651Repurchases of common shares



























(327,417
)

(14,968
)


(221,110
)

(12,562
)
















(548,527
)Vesting of restricted share units, net
















20,488


1,012







2


(1
)























20,490Redemption of partners SCA Class I common shares























(11,943
)






























(11,943
)Issuance of Class A common shares:At carryover basis to minority shareholders





2

69,937




(67,067
)









72,707































72,709In May 2002 offering







3,910















75,858































75,858Employee Share Purchase Plan







5,026















52,608



(10,581
)

165
























42,027Employee Stock Options







235















2,992



987


38
























3,979Restricted share units







10,022








(165,650
)

(11,228
)


142,168



21,523


1,039
























(1,959
)For acquisitions







1,259















31,350































31,350Minority interest























181,706































181,706Balance at August 31, 2002

$


$
10

433,696

$
13

524,094


$
848,218


58,266


$
1,397,828


$
(315,486
)

(13,727
)

$
(221,110
)

(12,562
)

$
(1,190,415
)

$


$


$
(80,432
)

$
438,626





The accompanying notes are an integral part of these financial statements.




F-7




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##### Table of Contents

ACCENTURE LTD





COMBINED AND CONSOLIDATED CASH FLOWS STATEMENTS





For the Years Ended August 31, 2000,
2001 and 2002


(In thousands of U.S. dollars)





Combined Cash Flow 2000


Consolidated Cash Flow 2001


Consolidated Cash Flow 2002CASH FLOWS FROM OPERATING ACTIVITIES:Partnership income before partnership distributions

$
2,463,894Net income





$
1,057,403


$
244,895Adjustments to reconcile partnership income and net income for the year to the net cash provided by operating
activities Depreciation and amortization


237,078



414,072



285,361(Gain) loss on investments, net


(573,220
)


(107,016
)


321,127Equity in losses of affiliates


46,853



61,388



9,080Losses on disposal of property and equipment


31,557



24,725



20,679Restricted share unit-based compensation






967,110



54,729Deferred income taxes






(299,647
)


(138,740
)Minority interest






(577,188
)


331,592Other items, net


(30,749
)


(25,646
)


(2,851
)Cumulative effect of accounting change






(187,974
)


Change in assets and liabilities (Increase) decrease in receivables from clients


(211,867
)


(48,257
)


207,240Increase in unbilled services


(184,957
)


(48,867
)


(35,357
)Decrease (increase) in other current assets


28,343



(91,696
)


(30,504
)Decrease (increase) in other non-current assets


28,468



44,814



(52,135
)Increase in accounts payable


14,183



138,057



34,419(Increase) decrease in due to related parties


17,294



(89,180
)


(629
)Increase (decrease) in deferred revenue


67,415



(114,942
)


(246,807
)Increase (decrease) in accrued payroll and employee benefits


339



250,968



(1,887
)Increase (decrease) in income taxes payable


46,817



231,573



(55,468
)Increase in other accrued liabilities


149,816



11,418



177,132Increase (decrease) in other non-current liabilities






669,499



(58,494
)Net cash provided by operating activities


2,131,264



2,280,614



1,063,382CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of investments


575,806



427,561



16,233Proceeds from sales of property and equipment






22,778



68,309Purchases of business and investments, net of cash acquired


(153,050
)


(326,086
)


(69,743
)Purchase of intangible assets






(157,000
)


Property and equipment additions


(315,426
)


(377,930
)


(262,831
)Net cash provided by (used in) investing activities


107,330



(410,677
)


(248,032
)CASH FLOWS FROM FINANCING ACTIVITIES:Capital paid in by partners


99,895



146,328



Repayment of paid-in capital to partners


(47,917
)


(524,130
)


Distribution of partners pre-incorporation income


(1,893,319
)


(2,282,141
)


(765,631
)Payment to AW-SC


(229,776
)


(313,832
)


Issuance of Class A common stock






1,791,444



121,864Purchase of treasury shares  Class A










(548,527
)Purchase of Accenture SCA Class I common shares










(12,191
)Proceeds from issuance of long-term debt


1,384



1,787



8,476Repayment of long-term debt


(1,605
)


(19,653
)


(2,017
)Proceeds from issuance of short-term bank borrowings


283,747



876,495



364,552Repayments of short-term bank borrowings


(246,004
)


(843,264
)


(501,836
)Increase in restricted cash of Share Employee Compensation Trust










(79,445
)Net cash used in financing activities


(2,033,595
)


(1,166,966
)


(1,414,755
)Effect of exchange rate changes on cash and cash equivalents


(45,075
)


(93,404
)


36,298NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


159,924



609,567



(563,107
)CASH AND CASH EQUIVALENTS, beginning of period


1,110,592



1,270,516



1,880,083CASH AND CASH EQUIVALENTS, end of period

$
1,270,516


$
1,880,083


$
1,316,976Supplemental cash flow informationInterest paid

$
23,727


$
37,091


$
32,876Income taxes paid

$
144,410


$
187,640


$
716,578





The accompanying notes are an integral part of these financial statements.




F-8




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS


(In thousands of U.S. dollars except share and
per share amounts or as otherwise disclosed)







1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Description of Business





Accenture is one of the worlds leading management and technology consulting organizations, with more than 75,000 employees in 47 countries delivering a wide range of specialized capabilities and solutions to clients across all
industries. Accenture operates globally with one common brand and business model designed to enable the company to serve clients on a consistent basis around the world. The principal markets for Accenture are North America, Western Europe, Japan and
Australia.





Principles of Consolidation and Combination





The consolidated financial statements include the accounts of Accenture Ltd, a Bermuda company, and its controlled subsidiary companies (together Accenture or
the Company). In May 2001, the Accenture Worldwide Organization completed a transition to a corporate structure with Accenture Ltd becoming the holding company.





Accenture Ltds only business is to hold shares and to act as the sole general partner of its subsidiary, Accenture SCA, a Luxembourg partnership limited by shares.
Accenture operates its business through Accenture SCA and subsidiaries of Accenture SCA. Accenture Ltd controls Accenture SCAs management and operations and consolidates Accenture SCAs results in its financial statements.





Prior to the transition to a corporate structure, the Accenture Worldwide Organization operated as a series of related
partnerships and corporations under the control of the partners and shareholders of these entities. Partners, who became employees following the transition, received Accenture Ltd Class A common shares or, in the case of partners resident in
specified countries, Class I common shares issued by Accenture SCA or exchangeable shares issued by Accenture Canada Holdings Inc., an indirect subsidiary of Accenture SCA, in lieu of their interests in these partnerships and corporations. The
transition to a corporate structure was accounted for as a reorganization at carryover basis.





The shares of
Accenture SCA and Accenture Canada Holdings Inc. held by the partners are treated as a minority interest in the consolidated financial statements of Accenture Ltd. However, the future exchange and/or redemption of Accenture SCA shares or Accenture
Canada Holdings Inc. exchangeable shares will be accounted for at carryover basis.





The accompanying financial
statements for periods ended on or prior to May 31, 2001 have been prepared on a combined basis and reflect the accounts of the Accenture Worldwide Organization which prior to May 31, 2001, included Accenture Partners Société
Coopérative (Geneva, Switzerland  the administrative coordinating entity, APSC) and a number of entities, many of which operated as partnerships, that had entered into Member Firm Interfirm Agreements (MFIAs)
with APSC (Member Firms), together with all entities controlled by them. Prior to January 1, 2001, Accenture was known as Andersen Consulting. Prior to August 7, 2000, the Accenture Member Firms and the entities controlled by them were
parties to MFIAs with Andersen Worldwide Société Coopérative (AW-SC). AW-SC also contracted with the Member Firms of Arthur Andersen (hereinafter, AA and AA Member Firms) and other entities
controlled by them. APSC was incorporated to implement the agreement of the Accenture Member Firms and the partners of Accenture to remain together, on substantially the same terms as with AW-SC, as a result of the successful outcome of the
arbitration described in Note 17.




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







The equity method of accounting is used for unconsolidated
investments in which Accenture exercises significant influence. All other investments are accounted for under the cost method. All significant intercompany/interfirm transactions and profits have been eliminated.





The Combined financial statements for periods ended on or prior to May 31, 2001 and the Consolidated financial statements from May 31,
2001 onward are collectively referred to as the Consolidated financial statements in these footnotes.





Revenue Recognition





Revenues from contracts for management consulting and technology service offerings that we develop and
implement for our clients are recognized on a time-and-materials basis or on a percentage-of-completion basis as services are provided by our employees and, to a lesser extent, subcontractors. Revenues from time-and-materials service contracts are
recognized as the services are provided. Revenues from long-term system integration contracts are recognized based on the percentage of services provided during the period compared to the total estimated services to be provided over the duration of
the contract. This method is followed where reasonably dependable estimates of the revenues and costs applicable to various elements of a contract can be made. Estimates of total contract revenues and costs are continuously monitored during the term
of the contract, and recorded revenues and costs are subject to revision as the contract progresses. Such revisions, which may result in increases or decreases to revenues and income, are reflected in the financial statements in the period in which
they are first identified. For systems integration contracts, estimated revenues for applying the percentage-of-completion method include estimated incentives for which achievement of defined goals is deemed probable.





Typically the terms of outsourcing contracts span several years. In a number of these arrangements we hire client employees and become
responsible for client obligations. Revenues are recognized on a straight-line basis or as services are performed or as transactions are processed in accordance with contractual terms. Costs on outsourcing contracts are charged to expense as
incurred. Outsourcing contracts can also include incentive payments for benefits delivered to clients. Revenues relating to such incentive payments are recorded when the contingency is satisfied.





Revenues for contracts with multiple elements are allocated based on the fair value of the elements. Losses on contracts are recognized during the period in which the
loss first becomes probable and reasonably estimable. Contract losses are determined to be the amount by which the estimated direct and indirect costs of the contract exceed the estimated total revenues that will be generated by the contract. Losses
recognized during each of the three years ended August 31, 2002 were insignificant. Revenue recognized in excess of billings is recorded as Unbilled services. Billings in excess of revenue recognized are recorded as Deferred revenue until the above
revenue recognition criteria are met. Reimbursements, including those relating to travel and other out-of-pocket expenses, and other similar third-party costs, such as the cost of hardware and software resales, are included in Revenues, and an
equivalent amount of reimbursable expenses are included in Cost of services.





Operating Expenses





Subcontractor costs are included in Cost of services when they are incurred. Training costs were $553,698, $691,513 and $433,566 in 2000,
2001 and 2002, respectively. Research and development




F-10




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




and advertising costs are expensed as incurred. Research and development costs were $251,764, $271,336 and $234,558 in 2000, 2001 and 2002, respectively. Advertising costs were $69,000, $149,900
and $74,722 in 2000, 2001 and 2002, respectively. The Provision for doubtful accounts was $541, $1,587 and $80,100 in 2000, 2001 and 2002, respectively. The related Allowance for doubtful accounts was $25,242 and $51,496 at August 31, 2001 and 2002,
respectively.





Translation of Non-U.S. Currency Amounts





The net assets and operations of entities outside of the United States are translated into U.S. dollars using appropriate exchange rates. Assets and liabilities are
translated at year-end exchange rates and income and expense items are translated at average exchange rates prevailing during the year.





Foreign currency translations on assets and liabilities denominated in currencies other than their functional currency resulted in gains/(losses) of $27,567 in 2000, ($1,279) in 2001, and $9,832 in 2002, which are included
in Other income (expense).





Provision for Taxes





Tax provisions are recorded at statutory rates for taxable items included in the Consolidated Income Statements regardless of the period for which such items are reported
for tax purposes. Deferred income taxes are recognized for temporary differences between the financial reporting and income tax bases of assets and liabilities.





Partnership Income Before Partner Distributions





Partnership Income Before Partner
Distributions is not comparable to net income of a corporation similarly determined. Also, partnership income is not executive compensation in the customary sense of that term because partnership income is comprised of distributions of current
earnings. Accordingly, compensation and benefits for services rendered by partners have not been reflected as an expense in the combined financial statements for periods ended on or prior to May 31, 2001.





Cash and Cash Equivalents





Cash and cash equivalents consist of all cash balances and highly liquid investments with original maturities of three months or less, including time deposits and certificates of deposit of $224,278 and $406,574 at August 31, 2001
and 2002, respectively. As a result of certain subsidiaries cash management systems, checks issued but not presented to the banks for payments may create negative book cash payables. Such negative balances are classified as Short-term bank
borrowings. Restricted cash represents cash available to the Accenture Share Employee Compensation Trust (SECT) for share repurchases that will be used to fund equity-based awards for Accenture employees.





Concentrations of Credit Risk





Accentures financial instruments that are exposed to concentrations of credit risk consist primarily of Cash and cash equivalents, foreign exchange derivatives and Receivables from clients. Accenture places its Cash and cash
equivalents and foreign exchange derivatives with highly rated financial




F-11




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




institutions, limits the amount of credit exposure with any one financial institution and constantly evaluates the credit worthiness of the financial institutions with which we do business. The
Receivables from clients, net are dispersed across many different industries and geographies; therefore, concentrations of credit risk are limited.





Investments





Investments in marketable equity securities are recorded at fair value and are
classified as available-for-sale. The difference between cost and fair value is recorded in Accumulated other comprehensive income (loss). The cost of securities sold is determined on an average cost basis.





Accenture receives warrants issued by other companies primarily in exchange for services, alliances and directorships. At the measurement
date, these warrants are recorded at fair value. Warrants received in connection with services and alliances are recorded as Revenues. Warrants received in connection with directorships are recorded as Other income (expense). Warrants in public
companies and those that can be net share settled in private companies are deemed derivative financial instruments and are recorded on the Consolidated Balance Sheet at fair value. Changes in fair value of these warrants are recognized in the
Consolidated Income Statement and included in Gain (loss) on investments, net.





Management conducts a quarterly
impairment review of each investment in the portfolio, including historical and projected financial performance, expected cash needs and recent funding events. Other-than-temporary impairments for investments are recognized if the market value of
the investment is below its cost basis for an extended period or the issuer has experienced significant financial declines or difficulties in raising capital to continue operations.





Foreign Exchange Instruments





In the normal course of
business, Accenture uses derivative financial instruments to manage foreign currency exchange rate risk. These instruments are generally short term in nature, with maturities of less than one year and are subject to fluctuations in foreign exchange
rates and credit risk. Credit risk is managed through careful selection of sound financial institutions as counterparties.





Accenture does not designate any of its derivatives as hedges as defined by SFAS 133, Accounting for Derivative Instruments and Hedging Activities. Therefore, the changes in fair market value of all derivatives are
included in Gain (loss) on investments, net.





Property and Equipment





Property and equipment is stated at cost, less accumulated depreciation. Depreciation of property and equipment is computed on a straight-line basis over the following
useful lives:





Buildings

20 to 25 yearsLeasehold improvements

Term of lease, 15 years maximumComputers, related equipment and software

2 to 5 yearsFurniture and fixtures

7 to 10 years




F-12




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







Long-Lived Assets





Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of long-lived assets is assessed by a comparison of the carrying amount of the asset to the estimated future net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the
carrying amount of the asset or group of assets, the asset is considered impaired and expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value.





Earnings Per Share





For periods ended on or
prior to May 31, 2001, Accenture operated as a series of related partnerships and corporations under the control of the partners. There was no single capital structure upon which to calculate historical earnings per share information. Accordingly,
for the period ended August 31, 2001 earnings per share information has only been presented in Note 21, Quarterly Data for periods following Accentures transition to a corporate structure, and has not been presented in the
Consolidated financial statements.





Use of Estimates





The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
amounts that are reported in the Consolidated financial statements and accompanying disclosures. Although these estimates are based on managements best knowledge of current events and actions that Accenture may undertake in the future, actual
results may be different from the estimates.





Reclassifications





Certain amounts reported in previous years have been reclassified to conform to the 2002 presentation.





2.    ACCOUNTING CHANGE





Effective
September 1, 2000, Accenture adopted SFAS 133, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. All derivatives are
required to be recorded on the Consolidated Balance Sheet at fair value. The adoption of SFAS 133 resulted in an increase to Net Income of $187,974 based upon the recognition of the fair value at September 1, 2000, of Accentures warrants and
options in public companies and those that can be net share settled in private companies. For the years ended August 31, 2001 and 2002, Gain (loss) on investments, net includes $191,892 and $1,470, respectively, of unrealized investment losses
recognized in accordance with SFAS 133.




F-13




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







3.    ACCUMULATED OTHER COMPREHENSIVE LOSS





The components of Accumulated other comprehensive loss at August 31, are:





2001


2002Foreign currency translation adjustments

$
(99,943
)

$
(63,645
)Unrealized gains (losses) on securities:Unrealized holding losses


(159,394
)


(28,961
)Less: reclassification adjustments


(541,463
)


33,430Net unrealized gains (losses)


(700,857
)


4,469Unrealized gains (losses) on securities, beginning of year


692,166



(8,691
)Net unrealized losses, end of year


(8,691
)


(4,222
)Minimum pension liability, net of tax






(12,565
)Accumulated other comprehensive loss

$
(108,634
)

$
(80,432
)





4.    PROPERTY AND EQUIPMENT





Property and equipment, net at August 31, is composed of the following:





2001


2002Buildings and land

$
75,371


$
10,699Leasehold improvements


332,126



374,969Computers, related equipment and software


837,878



933,702Furniture and fixtures


272,512



249,832Total accumulated depreciation


(695,569
)


(852,698
)$
822,318


$
716,504





5.    INVESTMENTS





Investments held at August 31, are as follows:





2001

2002Marketable equity securities

$
85,516

$
53,291Non-marketable and other


238,623


31,503Total

$
324,139

$
84,794





Marketable Equity Securities





Marketable equity securities include common stock, warrants and options, all of which are classified as available-for-sale. The unrealized gains and losses on these
investments included in Accumulated other comprehensive income (loss) at August 31, is as follows:





2001


2002Fair value

$
85,516


$
53,291Cost


94,207



59,803Gross unrealized gains


633



1,100Gross unrealized losses


(9,324
)


(7,612
)




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







Equity Method Investments





As a result of a negative basis difference arising from the formation of a joint venture accounted for at carryover basis, the underlying equity in net assets of a joint
venture exceeded Accentures carrying value by approximately $154,455 at August 31, 2001 and $94,895 at August 31, 2002. The negative basis difference is being amortized over three years on a straight-line basis. Amortization of the negative
basis difference of $1,376, $31,545, and $66,211 was reflected in the accompanying Consolidated Income Statements for the years ended August 31, 2000, 2001 and 2002, respectively.





Other Than Temporary Writedowns





For the years ended August
31, 2000, 2001 and 2002, Accenture recorded other-than-temporary impairment writedowns of $0, $94,489, and $325,335, respectively. Of the $325,335 recorded in 2002, $36,288 was reclassified from Other comprehensive income to Gain (loss) on
investments, net and $289,047 was charged directly to Gain (loss) on investments, net.





After exploring a number
of alternatives, the Company has entered into an agreement to sell substantially all of its minority ownership interests in its venture and investment portfolio. The Company will retain an immaterial interest in the venture and investment portfolio.
The Company expects to complete the transaction by the end of the 2002 calendar year.





6.    BORROWINGS AND
INDEBTEDNESS





Lines of Credit





On June 21, 2002, Accenture entered into two new syndicated credit facilities for $537,500 each that replace $450,000 and $420,000 facilities. Similar to the prior facilities, the new facilities
consist of 364-day and three-year committed facilities. Financing is provided under these facilities at the prime rate or at the London Interbank Offered Rate plus a spread, and bid option financing is available. These facilities require us to (1)
limit liens placed on our assets to (a) liens incurred in the ordinary course of business (subject to certain limitation) and (b) other liens recurring aggregate amounts not in excess of 30% of our total assets and (2) maintain a debt to cash flow
ratio not exceeding 1.75 to 1.00. As of August 31, 2002, we are in compliance with these terms. As of August 31, 2002 we had no borrowings under either facility and $21 million in letters of credit outstanding under the three-year facility. These
facilities are subject to annual commitment fees. There were one-time costs paid for an arrangement fee and a syndication fee totaling $1,760. These fees are being amortized over three years.





At August 31, 2002, Accenture also has in place unsecured multicurrency credit agreements and local lines of credit of $375,000 and $185,000, respectively, in the form
of committed and non-committed facilities at interest rates that vary from country to country depending on local market conditions. Borrowings under these facilities were $187,533 and $57,922 at August 31, 2001 and 2002, respectively. Certain of the
agreements are subject to annual commitment fees.





The weighted average interest rate on borrowings under the
multicurrency credit agreements and lines of credit, based on the average annual balances, was approximately 7% in 2000, 8% in 2001, and 5% in 2002. Commitment fees paid on all facilities for the year ended August 31, 2002 were approximately $1
million.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







7.    FINANCIAL INSTRUMENTS





At August 31, 2001 and 2002, the carrying amount of Cash and cash equivalents, Accounts receivable, Accounts payable and Short-term bank
borrowings approximates their fair value because of their short maturities. For all other financial instruments, the following methods and assumptions were used to approximate fair value. At August 31, 2002, Accenture has not designated any of its
derivatives as hedges as defined by SFAS 133.





Investments





Quoted market prices are used to determine the fair value for the common equity and debt securities that were issued by publicly traded entities. Those debt and equity
securities issued by non-public entities were valued by reference to the most recent round of financing as an approximation of the market value. The fair value and cost of the warrants and options were approximated using the Black-Scholes valuation
model after considering restrictions on exercisability or sale.





2001

2002Type of Investment

Cost

Fair Value

Cost

Fair ValueDebt and equity securities (cost method)Issued by public entities, non- current

$
41,787

$
33,096

$
34,741

$
30,519Issued by non-public entities


271,532


298,523


37,389


35,423WarrantsIssued by public entities, non- current


52,420


52,420


18,852


18,852Issued by non-public entities


1,081


1,081











Foreign Exchange Instruments





Market quoted exchange rates are used to determine the fair value of the instruments. The notional values and fair values of derivative foreign exchange instruments at
August 31, are as follows:





2001


2002Notional Value

Fair Value


Notional Value

FairValueForeign currency forward exchange contracts:To sell

$
87,563

$
1,542


$
133,695

$
(1,405
)To buy


127,067


(513
)


147,958


2,117





8.    INCOME TAXES





Prior to its transition to a corporate structure, Accenture operated through partnerships in many countries and generally was not subject
to income taxes in those countries. Taxes related to income earned by the partnerships were the responsibility of the individual partners. In some non-U.S. countries, Accenture operated through corporations and was subject to local income taxes. In
addition, Accenture was subject to local unincorporated business taxes in some jurisdictions. Effective with the transition to a




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




corporate structure on May 31, 2001, Accenture became subject to U.S. federal and other national, state and local corporate income taxes.





The provision for taxes includes the following:





2001


2002Current taxes:U.S. federal

$
382,690


$
241,228U.S. state and local


66,080



34,461Non-U.S.


330,590



358,055Total current tax expense


779,360



633,744Deferred taxes:U.S. federal


(85,520
)


(143,035
)U.S. state and local


(19,612
)


(20,434
)Non-U.S.


(171,612
)


20,796Total deferred tax (benefit) expense


(276,744
)


(142,673
)Total

$
502,616


$
491,071





For the year ended August 31, 2002, $247,271 of income before taxes
was from U.S. sources and $820,287 was from non-U.S. sources.





A reconciliation of the U.S. federal statutory
income tax rate to Accentures effective income tax rate is set forth below:





2001


2002U.S. federal statutory income tax rate

35.0
%

35.0
%U.S. state and local taxes, net

1.0


1.2Non-deductible investment losses

0.2


11.7Rate benefit for partnership period

(49.0
)

Revaluation of deferred tax liabilities (1)

13.6


Costs of transition to a corporate structure

59.6


Other

2.8


(1.9
)Effective income tax rate

63.2
%

46.0
%


---

|(1) |  | The revaluation of deferred tax liabilities upon change in tax status is a deferred tax expense recognized upon Accentures change in tax status from
partnership to corporate form.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







Significant components of Accentures deferred tax assets and
liabilities include the following:





2001


2002Deferred tax assets:Pensions

$
122,376


$
94,481Revenue recognition


78,336



97,126Compensation and benefits


190,799



117,570Investments


54,473



69,832Tax credit carryforwards


16,632



17,448Net operating loss carryforwards


15,935



104,288Depreciation and amortization


70,028



113,908Other


37,410



60,533585,989



675,186Valuation allowance


(76,187
)


(180,304
)Total deferred tax assets


509,802



494,882Deferred tax liabilities:Pensions


(21,822
)


(2,174
)Revenue recognition


(55,787
)


(22,041
)Compensation and benefits


(17,482
)


Investments


(30,717
)


(452
)Depreciation and amortization


(56,961
)


(17,562
)Other


(27,386
)


(14,266
)Total deferred tax liabilities


(210,155
)


(56,495
)Net deferred tax assets

$
299,647


$
438,387





Accenture recorded a valuation allowance of $76,187 and $180,304 at
August 31, 2001 and 2002, respectively, against deferred tax assets associated with capital losses on certain investments and certain tax net operating loss and tax credit carryforwards, as the Company believes it is more likely than not that these
assets will not be realized. At August 31, 2002, $63,060 of the valuation allowance relates to pre-acquisition tax attributes recorded under purchase accounting, the reversal of which in future years will be allocated first to reduce goodwill and
then to reduce other non-current intangible assets of the acquired entity.





Accenture has net operating loss
carryforwards at August 31, 2002 of $298,848. Of this amount, $251,135 expires at various dates through 2022 and $47,713 has an indefinite carryforward period. Accenture has tax credit carryforwards at August 31, 2002 of $17,448, that expire at
various dates through 2012.





If Accenture or one of its non-U.S. subsidiaries were classified as a foreign
personal holding company, Accentures U.S. shareholders would be required to include in income, as a dividend, their pro rata share of Accentures (or Accentures relevant non-U.S. subsidiarys) undistributed foreign personal
holding company income.





Because of the application of complex U.S. tax rules regarding attribution of ownership,
Accenture meets the definition of a foreign personal holding company this year. However, there is no foreign personal holding company income that its U.S. shareholders are required to include in income this year.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




In the event that Accenture has net foreign personal holding company income, Accenture may distribute a dividend to shareholders to avoid having taxable income imputed under these rules. Under
certain circumstances, such a distribution could create additional income tax costs to Accenture. Since Accenture does not have any foreign personal holding company income this year, no such taxes have been provided.





9.    PARTNERS CAPITAL





Partners capital represented the capital of partners who were the owners of Accenture Member Firms. Interest was paid to the partners on their paid-in capital accounts and recorded as a
distribution of partners income. Undistributed earnings, contained within Partners capital, represented Partnership Income Before Distributions which had not been paid to the partners. Partners were not paid interest on Undistributed
earnings. In connection with the transition to a corporate structure, Accenture returned partners paid-in-capital of $549,811. In addition, undistributed earnings as of May 31, 2001 were paid to the partners in one or more installments on or
prior to December 31, 2001. At August 31, 2001 and 2002, $818,888 and $0, respectively, of undistributed earnings was included in Due to related parties on the Consolidated Balance Sheet.





Upon retirement, all qualifying Accenture partners or their qualifying surviving spouses were entitled to receive basic retirement benefits for life. This plan was
eliminated for active partners after May 15, 2001 in connection with the transition to a corporate structure. All qualifying participants prior to May 15, 2001 will receive basic retirement benefits for life. The amount of annual benefit payments is
periodically adjusted for cost-of-living adjustments at the beginning of each calendar year. Basic retirement benefits of $1,759 in 2000, $2,268 in 2001 and $5,433 in 2002 were paid to retired partners. The projected benefit obligation
(PBO) is $81,221 at August 31, 2002. The accumulated benefit obligation and accrued benefit cost of the basic retirement benefits at August 31, 2002 were $75,984, as the plan is not funded. The accrued benefit cost of $75,984 includes
the recognition of an additional minimum pension liability of $11,859, which was recorded as a charge to Accumulated other comprehensive income. The PBO was estimated based on a discount rate of 7.25% and an assumed rate of increase in future
benefits of 1.9%.





For periods ended on or prior to May 15, 2001 partners retiring after age 56 and prior to age
62 received early retirement benefits based on two years earnings on a straight-line declining basis that resulted in no payout to partners retiring at age 62. Retired partners could elect to receive benefits in the form of a lump-sum payment
or ten-year installment payments. Partners electing installment payments accrue interest based on a US Treasury bond index. This plan was eliminated for active partners after May 15, 2001, in connection with the transition to a corporate structure.
Early retirement benefits of $28,967 in 2000, $37,685 in 2001 and $34,614 in 2002 were paid to retired partners. The amount due for early retirement benefits is $245,509 at August 31, 2002, which is being paid out over the period through 2011.





Both the basic and early retirement benefit liabilities were recorded as reductions of Partners capital as
of May 31, 2001, as payments related to these obligations were previously recorded as distributions of partners income.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







10.    SHAREHOLDERS EQUITY





On July 24, 2001, Accenture Ltd issued 115,000,000 Class A common shares in an initial public offering. Accentures proceeds from the
initial public offering, net of underwriting discounts of $78,200 and other estimated expenses of $19,667, were $1,569,633. On August 14, 2001, an additional 16,050,000 Class A common shares were issued in connection with the exercise of the
underwriters over allotment option, resulting in net proceeds of $221,811. Of these net proceeds, $355,000 were used to repay amounts outstanding under revolving credit facilities, a portion was used to cover the costs incurred in connection
with the transition to a corporate structure, and the balance was used for working capital, which was previously funded by the partners, and for general corporate purposes.





On May 22, 2002, the Company issued an aggregate of approximately 72,157,587 Class A common shares, of which (i) approximately 12,923,675 shares were issued upon the
redemption or exchange of Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares and (ii) approximately 59,233,912 shares were issued and sold by the Company in a public offering of the Class A common shares. Net
proceeds from the offering of $1,149,171 were used to acquire or redeem an aggregate of approximately 59,233,912 Accenture Ltd Class A common shares, Accenture SCA Class I common shares and Accenture Canada Holdings Inc. exchangeable shares from
certain partners and former partners who, for various reasons, did not participate directly in the secondary offering. Underwriting discounts of $29,617 and other estimated expenses of $5,890 were recouped from these partners and former partners. As
a result of these transactions, Accenture Ltds economic ownership interest in Accenture SCA increased with minority shareholders interests correspondingly reduced. To give effect to these transactions, approximately 68,247,483 of the
newly issued Accenture Ltd Class A common shares were accounted for at carryover basis. This increased shareholders equity by $72,707 and reduced minority interest by $72,707.





The cost of Class A common shares repurchased by Accenture Ltd during the year ended August 31, 2002 was $327,417, which was $249,073 of public shares and $78,344 of shares
redeemed or repurchased from partners in connection with the secondary offering. On July 11, 2002, Accenture Ltds board of directors authorized up to $600,000 for use in repurchasing shares from our partners through 2005.





In addition, on April 17, 2002 the Companys board of directors approved the creation of a share employee compensation
trust (SECT) and approved the contribution of up to $300,000 to the SECT. The purpose of the SECT is to acquire Accenture Ltd Class A common shares to be used to fund equity-based awards for Accenture employees, including future
Accenture partners. The SECT is a non-qualified grantor trust whose financial statements are consolidated with the Companys. During the period ended August 31, 2002, the SECT purchased 12,562,300 Accenture Ltd Class A common shares with an
aggregate purchase price totaling $221,110. The remaining $78,890 continues to be available to the SECT for share repurchases.





Class
A Common Shares





Holders of Accenture Ltds Class A common shares are entitled to one vote per share.
Shareholders of Accenture Ltd do not have cumulative voting rights. Each Class A common share is entitled to a pro rata part of any dividend at the times and in the amounts, if any, which Accenture Ltds board of directors from time to time
determines to declare, subject to any preferred dividend rights attaching to any




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




preferred shares. Finally, each Class A common share is entitled on a winding-up of Accenture Ltd to be paid a pro rata part of the value of the assets of Accenture Ltd remaining after payment of
its liabilities, subject to any preferred rights on liquidation attaching to any preferred shares.





Class X Common Shares





Holders of Accenture Ltds Class X common shares are entitled to one vote per share. Class X common
shares are not entitled to dividends and are not entitled to be paid any amount upon winding up of Accenture Ltd. Most of Accentures partners receiving Accenture SCA Class I common shares or Accenture Canada Holdings Inc. exchangeable shares
in connection with the transition to a corporate structure received a corresponding number of Accenture Ltd Class X common shares. 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. Accenture Ltd may not, however, redeem any Class X common share of a holder if such redemption would reduce the number of Class X common shares held by that holder to a number that is less than the number of Accenture SCA Class
I common shares or Accenture Canada Holdings Inc. exchangeable shares held by that holder, 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 Inc. 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 Inc.
exchangeable shares outstanding.





Voting Agreement and Share Transfer Restrictions





Accenture Ltd and each of the Accenture partners who own Accenture Ltd Class A or Class X common shares have entered into a voting
agreement and each other person who becomes a partner will be required to enter into the voting agreement. The parties to the voting agreement, other than Accenture Ltd, are referred to as covered persons. The shares covered by the
voting agreement are referred as covered shares and generally include all Class A and Class X shares held by covered persons that were received from Accenture.





Each covered person receiving covered shares prior to the initial public offering has agreed to maintain beneficial ownership of such shares, except as described below, for
a period of eight years subsequent to the initial public offering and to maintain beneficial ownership of at least 25 percent of such shares for as long as he or she is an employee of Accenture. Covered persons who continue to be Accenture employees
are permitted to transfer a percentage of such shares annually. These transfer restrictions lapse on an accelerated basis upon retirement and generally terminate upon death.





Class X common shares of Accenture Ltd may not be transferred at any time, except upon the death of a holder of Class X common shares or with the consent of Accenture Ltd.
Accenture Canada Holdings Inc. exchangeable shares held by covered persons are also subject to the transfer restrictions in the voting agreement.





Under the voting agreement, prior to any vote of the shareholders of Accenture Ltd, a separate, preliminary vote of the covered shares owned by covered persons who are employees of Accenture will be
taken on each matter upon which a vote of the shareholders is proposed to be taken. Subsequently, all of these covered shares will, with certain exceptions, be voted in the vote of the shareholders of Accenture Ltd in accordance with the majority of
the votes cast in the preliminary vote.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







The voting agreement will continue in effect until the earlier of 50
years from the date of the voting agreement and the time it is terminated by the vote of 662/3% of the votes
represented by the covered shares owned by covered persons who are employees of Accenture. The transfer restrictions and other provisions of the voting agreement may be waived in certain circumstances.





Accenture Ltd Common Agreement





Accenture Ltd and certain of the covered persons under the voting agreement described above under  Voting Agreement and Share Transfer Restrictions have entered into a common agreement, and each other person
who becomes a partner in the future will be required to enter into the common agreement, under which each such covered person agrees not to transfer any of his or her covered shares under the voting agreement until July 24, 2005, except to
participate as a seller in underwritten public offerings, share repurchases, sales or redemptions or other transactions, in each case as approved in writing by Accenture Ltd; and/or to transfer to estate and/or tax planning vehicles, family members
and charitable organizations that become bound by the terms of the common agreement, in each case as approved in writing by Accenture Ltd.





11.    MINORITY INTEREST





Accenture SCA Class I Common Shares





Partners in Australia, Denmark, France, Italy, Norway, Spain, Sweden and the United States received Accenture SCA Class I common shares in
connection with the transition to a corporate structure. Each Class I common share of Accenture SCA entitles its holder to one vote on all matters submitted to a vote of shareholders 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 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. 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). Accenture Ltd does not intend to hold any material assets other than its interest in Accenture SCA or to incur any material liabilities such that this one-for-one exchange
ratio would require an adjustment.





Accenture SCA Transfer Rights Agreement





Persons and Shares Covered





Accenture SCA and each of the partners who own shares of Accenture SCA have entered into a transfer rights agreement. The parties to the transfer rights agreement, other than Accenture SCA, are referred to as covered
persons. The Accenture SCA shares covered by the transfer rights agreement generally include all Class I common shares of Accenture SCA owned by a covered person. The shares covered by the transfer rights agreement are referred to as
covered shares. The restrictions on transfer are comparable to those applicable to covered persons under the voting agreement among Accenture Ltd and each of the Accenture partners who own Accenture Ltd Class A or Class X common shares
described above under Voting Agreement and Share Transfer Restrictions.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







The articles of association of Accenture SCA provide that shares of
Accenture SCA (other than those held by Accenture Ltd) may be transferred only with the consent of the Accenture SCA supervisory board or its delegate, the Accenture SCA partners committee.





At any time after the third anniversary of the date of the consummation of the transition to a corporate structure, covered persons holding Accenture SCA Class I common
shares may, without restriction, require Accenture SCA to redeem any Accenture SCA Class I common share held by such holder for a redemption price per share generally equal to the lower of the market price of an Accenture Ltd Class A common share
and $1. Accenture SCA may, at its option, pay this redemption price in cash or by delivering Accenture Ltd Class A common shares. All transfer restrictions applicable to a covered person under the transfer rights agreement, terminate upon death.





Accenture Canada Holdings Inc. Exchangeable Shares





Partners resident in Canada and New Zealand received Accenture Canada Holdings Inc. exchangeable shares and Accenture Ltd Class X common shares in connection with the
transition to a corporate structure. Holders of Accenture Canada Holdings Inc. exchangeable shares may exchange their shares for Accenture Ltd Class A common shares on a one-for-one basis. Accenture Canada Holdings Inc. 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 Inc. entitles its holder to receive
distributions equal to any distributions to which an Accenture Ltd Class A common share entitles its holder.





Minority Interest





The minority interest percentage was 59% at August 31, 2001 and declined to 53% at August 31, 2002. The
calculation of the minority interest percentages at August 31, 2001 and 2002 reflect the assumed issuance to Accenture Ltd of Accenture SCA Class I common shares that will be issued in connection with the delivery of Accenture Ltd Class A common
shares underlying the restricted share units, which generally are considered fully vested and will be issued for no consideration solely upon the passage of time.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







12.    EARNINGS PER SHARE (EPS)





Year ended August 31,
2002Basic

DilutedNet income available for Class A common shareholders

$
244,895

$
244,895Minority interest (1)





331,592Net income for per share calculation

$
244,895

$
576,487Basic weighted average Class A common shares


425,941,809


425,941,809Class A common shares issuable upon redemption of minority interest (1)





575,874,473Employee compensation related to Class A common shares





21,595,499Employee share purchase program related to Class A common shares





377,765Weighted average Class A common shares


425,941,809


1,023,789,546Earnings per Class A common share

$
0.57

$
0.56


---

|(1) |  | Accenture Class A common shares issuable or exchangeable upon redemption or exchange of Accenture SCA Class I common shares and Accenture Canada Holdings Inc.
exchangeable shares not held by Accenture.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




13.    EMPLOYEE SHARE PLANS





Share Incentive Plan





The Accenture Ltd 2001 Share Incentive Plan (the share incentive plan) permits the grant of nonqualified share options, incentive stock options, share appreciation rights, restricted shares, restricted share units and
other share-based awards to employees, directors, third-party consultants, former United States employees or former partners of, or other persons who perform services for, Accenture Ltd and its affiliates. A maximum of 375,000,000 Class A common
shares may be subject to awards under the share incentive plan. At August 31, 2002, 214,061,842 shares were available for future grants under the share incentive plan. Class A common shares covered by awards that expire, terminate or lapse will
again be available for the grant of awards under the share incentive plan. The share incentive plan is administered by a committee of the board of directors of Accenture Ltd, which may delegate its duties and powers in whole or in part as it
determines.





Employee Share Purchase Plan





The Accenture Ltd 2001 Employee Share Purchase Plan is a nonqualified plan established during the fiscal year ended August 31, 2002 that allows eligible employee participants to purchase Class A common
shares at a discount through payroll deductions. Under this plan, substantially all employees may elect to contribute 1% to 10% of their compensation each offering period (up to a per participant maximum of $25 per calendar year) to purchase Class A
common shares. The purchase price of Class A common shares is 85% of the lower of its beginning of offering period or end of offering period market price. A maximum of 75,000,000 Class A common shares may be issued under the plan.




F-24




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







The first offering period under this plan was from October 1, 2001
through March 31, 2002. Under the plan, the Company sold 6,112,599 Class A common shares to employees at the conclusion of that offering period. This plans second offering period began on April 1, 2002 and will end on September 30, 2002. The
weighted-average fair value of share purchase rights granted under this plan was $5.19 in fiscal 2002.





Stock Options





Accenture shall determine the exercise price for each option, provided, however, that an incentive share
option must generally have an exercise price that is at least equal to the fair market value of the Class A common shares on the date the option is granted.





Options currently outstanding under the share incentive plan have a maximum term of ten years. Options vest under varying schedules. Stock option activity for fiscal 2001 and 2002 was as follows:





2001

2002Number

Weighted Average Exercise Price per
Option

Number

Weighted Average Exercise Price per
OptionOptions outstanding, beginning of year



$


95,820,431

$
14.54Granted

96,360,395


14.54

3,993,818


18.78Exercised






273,931


14.53Forfeited

539,964


14.51

13,408,828


14.55Expired









Options outstanding, end of year

95,820,431

$
14.54

86,131,490

$
14.73Exercisable at year end






20,542,137Weighted average fair value of options granted during the year



$
7.74



$
9.44








The following table
summarizes information about stock options outstanding at August 31, 2002:








Options Outstanding

Options ExercisableRange of Exercise Prices

Options Outstanding

Weighted Avg. Contractual Life Remaining

Weighted Average Exercise
Price

Options Exercisable

Weighted Average Exercise
Price$12.82 - $15.31

82,246,271

8.8

$
14.53

20,518,918

$
14.54$15.32 - $18.32

1,055,997

9.5


15.98

15,155


15.50$18.33 - $27.23

2,829,222

9.8


20.01

8,064


18.3486,131,490

8.8

$
14.73

20,542,137

$
14.54




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##### Table of Contents



ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







Pro Forma Impact of SFAS No. 123





Accenture elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, (APB
25) in accounting for its employee share options and purchase rights rather than, as discussed below, the alternative fair value accounting provided for under SFAS 123, Accounting for Stock-Based Compensation. Under APB 25, no
compensation expense is recognized in Accentures financial statements for its employee share purchase rights granted under its employee share options and employee share purchase plan.





Had compensation cost for the Companys employee stock options and employee stock purchase plan been determined based on the fair value at the grant date under those
plans consistent with the method of SFAS 123, the Companys net income and earnings per share would have been reduced to the pro forma amounts indicated below:





2001

2002Net incomeAs reported

$
1,057,403

$
244,895Pro forma

$
1,052,202

$
139,804Basic earnings per Class A common shareAs reported


n/m

$
0.57Pro forma


n/m

$
0.33Diluted earnings per Class A common shareAs reported


n/m

$
0.56Pro forma


n/m

$
0.32


---

n/m    not meaningful





The fair value of each option grant and grant of employee share purchase right is estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted-average assumptions:





2001


2002Stock Options

Partners


Non-partners


Partners


Non-partnersExpected life (in years)

6


5


6


5Risk-free interest rate

4.93
%

4.73
%

4.59
%

3.35
%Expected volatility

50
%

50
%

50
%

50
%Expected dividend yield

0
%

0
%

0
%

0
%





2001

2002Employee Share Purchase Plan

All Participants

All ParticipantsExpected life (in years)

N/A

0.5Risk-free interest rate

N/A

2.50
%Expected volatility

N/A

50
%Expected dividend yield

N/A

0
%




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







Restricted Share Units and Other Share-Based Awards





Under the share incentive plan, the committee may grant awards of restricted share units, Class A common shares, restricted shares and
awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, Class A common shares. The restricted share units and other share-based awards will be subject to the terms and conditions established by
the committee.





Under the share incentive plan, participants may be granted restricted share units without cost to
the participant. Each restricted share unit awarded to a participant represents an unfunded, unsecured right, which is nontransferable except in the event of death, of the participant to receive a Class A common share on the date specified in the
participants award agreement. The restricted share units granted under this plan vest at various times, generally ranging from immediate vesting to vesting over a five-year period. Compensation expense was recognized using a graded-vesting
attribution method. Information with respect to restricted share units is as follows:





2001

2002Shares granted


68,481,815


5,124,912Weighted average fair value of shares

$
14.98

$
20.58Before-tax compensation expense charged to earnings (1)

$
967,110

$
59,158


---

|(1) |  | FY 2001 amount is net of $26,270 related to cancelled liabilities on the deferred bonus plan for employees.
|--- |  | -----------------------------------------------------------------------------------------------------------




14.    PROFIT SHARING AND RETIREMENT PLANS





In the United States, Accenture maintains and administers a trusteed profit sharing plan that includes 18,900 active Accenture employees. The annual profit sharing contribution is determined by
management. The contribution to the profit sharing plan was $87,189 in 2000, $97,439 in 2001, and $92,515 in 2002, which approximated 6% of plan members compensation.





In the United States, and certain other countries, Accenture also maintains and administers noncontributory retirement and postretirement medical plans for active, retired
and resigned Accenture employees. Benefits under the noncontributory employee retirement plans are based on years of service and compensation during the years immediately preceding retirement. Plan assets of the noncontributory employee retirement
plans consist of investments in equities, fixed income securities and cash equivalents. Annual contributions are made at such times and in amounts as required by law and may, from time to time, exceed minimum funding requirements.





In addition, certain postemployment benefits are provided to former or inactive employees after employment but before
retirement, including severance benefits, disability-related benefits (including workers compensation) and continuation of benefits such as healthcare benefits and life insurance coverage. These costs are substantially provided for on an
accrual basis.





The following schedules provide information concerning the material defined benefit pension and
postretirement benefit plans.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




Pension Benefits


Other Benefits2001


2002


2001


2002Changes in projected benefit obligationProjected benefit obligation, beginning of year

$
308,599


$
387,595


$
30,463


$
51,762Adjustment cost






14,153







Service cost


39,825



43,777



4,136



5,277Interest cost


21,465



27,027



2,426



3,824Amendments


1,558











(3,498
)Special termination benefits






1,903







Participants contributions


223



244







Acquisitions/divestitures






(1,447
)






Curtailment loss






(4,366
)






(1,065
)Special termination charge














759Actuarial loss


33,082



1,787



14,895



22,385Benefits paid


(9,867
)


(4,663
)


(158
)


(461
)Exchange rate (gain)/loss


(7,290
)


13,358







Projected benefit obligation, end of year

$
387,595


$
479,368


$
51,762


$
78,983Changes in plan assetsFair value of plan assets, beginning of year

$
310,066


$
373,979


$
15,126


$
20,155Expected return on plan assets


23,964



29,888



1,147



1,380Actuarial loss


(53,617
)


(56,630
)


(265
)


(721
)Acquisitions/divestitures cost






40







Employer contributions


108,349



28,438



4,305



2,530Participants contributions


223



244







Benefits paid


(9,867
)


(4,663
)


(158
)


(461
)Exchange rate gain/(loss)


(5,139
)


5,578







Fair value of plan assets, end of year

$
373,979


$
376,874


$
20,155


$
22,883Reconciliation of funded statusFunded status

$
(13,616
)

$
(102,493
)

$
(31,607
)

$
(56,100
)Unrecognized transitional obligation


1,717



1,216



997



835Unrecognized loss


22,788



77,842



17,324



38,678Unrecognized prior service cost


11,419



8,389







(3,498
)Prepaid/(accrued) benefit cost as of August 31


22,308



(15,046
)


(13,286
)


(20,085
)Contribution between June 30  August 31










2,261



Adjusted Prepaid/(accrued) benefit cost as of August 31

$
22,308


$
(15,046
)

$
(11,025
)

$
(20,085
)Amounts recognized in the Combined and Consolidated Balance Sheets consist of:Prepaid benefit cost

$
60,023


$
51,956


$



$
Accrued benefit liability


(37,715
)


(69,406
)


(11,025
)


(14,892
)Intangible asset






966







Accumulated other comprehensive income






1,438







Net amount recognized at year-end

$
22,308


$
(15,046
)

$
(11,025
)

$
(14,892
)Components of pension expenseService cost

$
39,825


$
43,777


$
4,136


$
5,277Interest cost


21,465



27,027



2,426



3,824Expected return on plan assets


(23,964
)


(29,888
)


(1,147
)


(1,380
)Amortization of transitional obligation


601



564



87



79Amortization of loss/(gain)


(5,230
)


473







686Amortization of prior service cost


2,293



2,269







Curtailment loss cost






761







83Special termination benefits charge cost






1,903







759Total

$
34,990


$
46,885


$
5,502


$
9,328




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







Pension Benefits

Other Benefits2001

2002

2001


2002Weighted-average assumptionsDiscount rate

6.83%

6.53%

7.50
%

7.25
%Expected return on plan assets

7.99%

7.91%

8.00%/6.00
%

8.00%/5.00
%Rate of increase in future compensation

7.62%

5.17%

N/A


N/A





The projected benefit obligations and fair value of plan assets for
defined benefit pension plans with projected benefit obligations in excess of plan assets were $136,120 and $84,923, respectively, as of August 31, 2001 and $479,368 and $376,874, respectively, as of August 31, 2002. The accumulated benefit
obligations and fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets were $41,000 and $17,300, respectively, as of August 31, 2001 and $74,092 and $23,213, respectively, as of August 31, 2002.





Assumed Health Care Cost Trend





Annual rate increases in the per capita cost of health care benefits of 11.2% (under 65) and 13.0% (over 65) were assumed for the plan year ending June 30, 2003. The trend rate assumptions are changed
beginning for the plan year ending June 30, 2003. The rate is assumed to decrease on a straight-line basis to 5% for the plan year ending June 30, 2011 and remain at that level thereafter. Assumed health care cost trend rates have a significant
effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend would have the following effects:





One Percentage Point Increase2001


2002Effect on total of service and interest cost components

$
1,445


$
2,468Effect on year-end postretirement benefit obligation


7,336



13,827One Percentage Point Decrease2001


2002Effect on total of service and interest cost components

$
(1,256
)

$
(2,000
)Effect on year-end postretirement benefit obligation


(6,367
)


(11,254
)





Deferred Bonus Plan





On September 1, 2000, Accenture implemented a deferred bonus plan for employees based on tenure and performance. The plan provided for a loyalty award, which vested
immediately, and a performance award, which vested over a period of three years. In connection with the grant of restricted share units, Accenture terminated the deferred bonus plan for employees on July 19, 2001. At August 31, 2001, the liability
for the liquidated investments was $73,218, which was paid out in the first quarter of fiscal 2002 in partial settlement of vested benefits. For the remaining vested and unvested benefits, 7,968,826 restricted share units were granted to employees
on July 19, 2001.





15.    LEASE COMMITMENTS





Accenture has various lease agreements, principally for office space, with various renewal options. Rental expense (net of sublease income from third parties of $3,273 in
2000, $12,911 in 2001, and




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




$13,824 in 2002) including operating costs and taxes, was $217,675 in 2000, $207,757 in 2001, and $264,982 in 2002. Future minimum rental commitments under non-cancelable operating leases as of
August 31, 2002, are as follows:





2003

$   255,4452004

212,2742005

200,6352006

166,4142007

147,227Thereafter

1,109,800$2,091,795





16.    RESTRUCTURING, REORGANIZATION AND REBRANDING





In the fourth quarter of 2002, Accenture recognized restructuring costs of $110,524 related to a global
consolidation of office space. Global office consolidation costs are comprised of $67,112 related to exiting operating leases and $43,412 in write-downs of assets such as leasehold improvements and furniture and fixtures. Liabilities associated with
exiting operating leases and related obligations represent the net present value of rental or termination obligations and other contractual obligations associated with leased space abandoned in the fourth quarter of fiscal year 2002 or leased space
that will be abandoned during the first quarter of fiscal year 2003, less anticipated sublease proceeds. Included in the August 31, 2002 consolidated balance sheet is $32,630 in current other accrued liabilities and $34,482 in other non-current
liabilities representing the net present value of the estimated remaining obligations.





Reorganization and
rebranding costs for 2001 include one-time costs, beginning September 2000, to rename the organization Accenture and other costs related to the transition to a corporate structure. Reorganization and rebranding costs were $848,615 for the year ended
August 31, 2001 and included $157,000 of amortization of intangible assets acquired in connection with the Memorandum of Understanding with AW-SC and AA, as described in Note 17. The intangible assets related to the forbearance by AW-SC and Arthur
Andersen to use, and the limited use by Accenture of, the Andersen Consulting name or variations of that name and related domain names. The intangible assets were amortized over periods ranging from three to six months.





17.    RELATED PARTIES





Amounts due to/due from related parties at August 31, 2001 and 2002 are payable to/receivable from those individuals who were partners of Accenture prior to May 31, 2001 in relation to pre-incorporation matters.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







In prior years, Accenture engaged in various transactions with
AA/AW-SC, which was then a related party as described in Note 1. Below is a summary of those transactions.





2000Nature of TransactionRental expense

$
23,948Andersen Worldwide costs allocated


18,975Professional education and development costs


38,577Professional services


34,710Interest expense


3,950





The Combined Income Statements Before Partner Distributions include
expenses that were allocated to Accenture by AW-SC on a specific identification basis. In addition, AW-SC incurred certain costs on behalf of Accenture which were allocated to Accenture primarily based on square footage, partner units, net assets
employed or number of training participants.





Until August 7, 2000, AW-SC, as an agent for the Accenture and AA
Member Firms, facilitated various MFIAs among the individual Accenture and AA Member Firms. The amount due to AW-SC from Accenture Member Firms under these MFIAs was $313,832 in 2000.





In response to a request for binding arbitration by the Accenture Member Firms, the International Chamber of Commerce (ICC) appointed a Tribunal, by its Final
Award dated July 28, 2000, and notified to the parties on August 7, 2000, the Tribunal ruled that AW-SC had breached its material obligations under the MFIAs in fundamental respects and the Accenture Member Firms were excused from any further
obligations to AW-SC and AA Member Firms under the MFIAs as of August 7, 2000. The ruling stated that amounts due under MFIAs, which were escrowed between 1998 and 1999 of $512,324 plus accrued interest, should be paid to AA as directed by AW-SC and
allocated the costs of the proceeding among the parties. The escrowed funds, along with net accumulated interest on investments, were transferred to AA by the escrow agent on various dates in September, 2000. Accenture, AW-SC and AA entered into a
Memorandum of Understanding (MOU), which provided for payments to AA of $556,000, including the payment of $313,832 for amounts due to AW-SC from Accenture Member Firms, the purchase of intangible assets for $157,000 and the payment of
$85,000 for the settlement of all interfirm payables.





Pursuant to the MOU, Accenture and AA entered into (1) a
six-year services agreement under which AA would provide certain services to Accenture for payments to AA of $60,000 per year, (2) a five-year agreement under which AA would provide certain training facilities to Accenture for payments to AA of
$60,000 per year, and (3) a five-year agreement under which Accenture would provide $22,500 per year of certain services at no cost to AA; each agreement was effective January 1, 2001.





Accenture recorded all elements of the MOU at fair value. Accenture recorded an accrual of $190,962 equal to the excess of the contractual obligations under the service
agreements referred to above over the fair value of the services to be provided thereunder and recorded a reduction of undistributed earnings of $268,781 for the accrual for the services contracts and other cash payments. Payments due under the
five-year and six-year services agreements will be based upon rates established




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)




by AA that Accenture has determined will exceed the rates that they charge for similar services to unrelated parties (the fair value of those services). The excess of the present value of the
amounts payable to AA over the fair value of those services has been recorded as a liability and a distribution to partners as of December 2000. Accenture is obligated to provide AA up to $22,500 per year of services valued at then current retail
billing rates for five years. The present value of the fair value of these services determined by reference to the fees usually received for such services has been recorded as a liability and as a distribution to partners as of December 2000. These
liabilities, which aggregated $190,962, are reported as distributions to partners because the liabilities were incurred in connection with Accentures separation from AA. At August 31, 2001, amounts due to/from AA/AW-SC and Accenture are no
longer classified as related party balances.





In October 2002, Accenture and Arthur Andersen LLP have entered into
a new facility services agreement, which provides Accenture with the use of Arthur Andersen LLPs training facility in St. Charles, Illinois, at market rates through July 1, 2007. Accenture and Arthur Andersen LLP have terminated the prior St.
Charles facility services agreement, as well as the services agreements by which Arthur Andersen LLP and other Arthur Andersen firms were to provide services, including tax services, to Accenture and by which Accenture was to provide Arthur Andersen
LLP and other Arthur Andersen firms with consulting services. The final payment by Accenture to Arthur Andersen LLP in connection with the termination of these agreements is within the amounts Accenture had previously accrued and will not have a
material impact on Accentures income statement.





18.    BUSINESS COMBINATIONS





On February 28, 2002, Accenture increased its ownership interest in Accenture HR Services (formerly e-peopleserve Ltd.), a human resource
outsourcing business, from approximately 50 to 100 percent. The purchase price for the additional interest, including assumed liabilities, was $115,000 primarily consisting of a $70,000 cash payment and $35,000 to be paid over a five-year period.
The contract also includes an earn-out provision, which could result in up to $187,500 of additional purchase price over a five-year period. The allocation of the purchase price to acquired assets and liabilities, determined in accordance with
Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations, resulted in an allocation of $115,003 to non tax-deductible goodwill and $10,250 to finite-lived intangibles. The pro forma effects on
operations are not material.





On December 31, 2001, Accenture increased its ownership interest in Avanade, Inc.
from approximately 50 percent to 78 percent. The purchase price for the additional interest was $81,350, of which $31,350 represented 1,259,272 Class A common shares of Accenture Ltd and $49,995 represented Accentures interest in Avanade, Inc.
shares repurchased by Avanade, Inc. The allocation of the purchase price to acquired assets and liabilities, determined in accordance with SFAS 141, resulting in an allocation of $52,600 to non tax-deductible goodwill and $3,976 to finite-lived
intangibles. The pro forma effects on operations are not material.





19.    COMMITMENTS AND CONTINGENCIES





At August 31, 2002, Accenture or its present personnel had been named as a defendant in various litigation
matters involving present or former clients. All of these are civil in nature. Based on the present status of these litigation matters, the management of Accenture believes the liability will not ultimately have a material effect on the results of
operations or the financial position and cash flows of Accenture.




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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







20.    SEGMENT REPORTING





Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated
regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.





Accentures chief operating decision maker is the Chief Executive Officer. The operating segments are managed separately because each operating segment represents a strategic business unit that
serves different markets. The reportable operating segments are the five operating groups (formerly known as global market units), which are Communications & High Tech, Financial Services, Government, Products and Resources.





Certain changes have been made to the prior-period amounts in order to conform with the current-period presentation. The most
significant of these changes was the elimination of interest expense from the five operating groups operating income and the elimination of interest credits from Others operating income. Also, certain consolidated affiliated
companies revenues and operating income (loss) results are included in the five operating groups results rather than being reported in Other.





Reportable Segments





Year ended August 31,
2000

Comm. & High Tech

Financial Services

Government

Products

Resources

Other


TotalRevenues before reimbursement

$
2,806,506

$
2,541,900

$
796,862

$
1,932,302

$
1,660,868

$
13,647


$
9,752,085Depreciation (1)


65,425


62,633


19,005


43,805


46,210






237,078Operating income (loss)


671,111


666,620


79,618


416,053


264,070


(11,353
)


2,086,119Assets at August 31 (2)

$
492,220

$
302,138

$
123,933

$
188,252

$
178,750

$
6,418


$
1,291,711Year ended August 31,
2001

Comm. & High Tech

Financial Services

Government

Products

Resources

Other (3)


TotalRevenues before reimbursements

$
3,238,256

$
2,893,567

$
1,003,235

$
2,356,440

$
1,933,225

$
18,997


$
11,443,720Depreciation (1)


76,901


65,897


21,053


45,316


47,905






257,072Operating income (loss)


448,452


536,783


75,292


363,085


235,126


(962,982
)


695,756Assets at August 31 (2)

$
500,762

$
325,641

$
161,584

$
219,486

$
258,146

$
17,523


$
1,483,142Year ended August 31,
2002

Comm. & High Tech

Financial Services

Government

Products

Resources

Other


TotalRevenues before reimbursements

$
3,181,658

$
2,621,086

$
1,315,819

$
2,441,319

$
2,005,045

$
9,342


$
11,574,269Depreciation (1)


100,341


81,663


30,737


58,854


61,672






333,267Operating income (loss)


236,107


279,358


206,881


469,448


194,457


(800
)


1,385,451Assets at August 31 (2)

$
434,805

$
329,929

$
312,270

$
247,673

$
302,653

$
39,769


$
1,667,099


---

|(1) |  | This amount includes depreciation on property and equipment controlled by each operating segment as well as an allocation for depreciation on property and
equipment they do not directly control.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Operating segment assets directly attributed to an operating segment and provided to the chief operating decision maker include Receivables from clients,
Unbilled services, Deferred revenue and a portion of Other long-term assets that represent balances for clients with extended payment terms.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | In 2001, Other includes the one-time cost of the restricted share-units that were granted and vested as of August 31, 2001, as this amount was not charged to
the global market units.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







The accounting policies of the operating segments are the same as
those described in Note 1, Summary of Significant Accounting Policies, except for the one-time cost of restricted share units and interest expense as described above.





Geographic Information





Revenues are attributed to
geographic areas based on where client services are supervised.





Americas

EMEA (1)

Asia Pacific

TotalFiscal 2000Revenues before reimbursements

$
5,223,120

$
3,713,818

$
815,147

$
9,752,085Reimbursements


964,758


506,068


107,773


1,578,599Revenues


6,187,878


4,219,886


922,920


11,330,684Long lived assets at August 31


500,133


158,184


47,191


705,508Americas

EMEA (1)

Asia Pacific

TotalFiscal 2001Revenues before reimbursements

$
6,112,986

$
4,484,075

$
846,659

$
11,443,720Reimbursements


987,947


516,567


113,638


1,618,152Revenues


7,100,933


5,000,642


960,297


13,061,872Long lived assets at August 31


567,987


199,296


55,035


822,318Americas

EMEA (1)

Asia Pacific

TotalFiscal 2002Revenues before reimbursements

$
5,835,992

$
4,962,942

$
775,335

$
11,574,269Reimbursements


872,019


530,534


128,202


1,530,755Revenues


6,708,011


5,493,476


903,537


13,105,024Long lived assets at August 31


403,915


265,023


47,566


716,504


---

|(1) |  | EMEA includes Europe, Middle East and Africa.
|--- |  | ---------------------------------------------



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ACCENTURE LTD





NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS(Continued)


(In thousands of U.S. dollars
except share and per share amounts or as otherwise disclosed)







21.    QUARTERLY DATA (unaudited)





First Quarter

Second Quarter

Third Quarter


Fourth Quarter


AnnualFiscal 2001Revenues before reimbursements

$
2,831,298

$
2,881,698

$
2,953,289


$
2,777,435


$
11,443,720Reimbursements


377,714


409,213


458,403



372,822



1,618,152Revenues


3,209,012


3,290,911


3,411,692



3,150,257



13,061,872Operating income (loss)


839,403


522,698


115,572



(781,917
)


695,756Income (loss) before accounting change


1,010,467


419,539


(190,795
)


(369,782
)


869,429Partnership income (loss) before partner distributions


1,198,441


419,539


(190,795
)






1,427,185Net loss












(369,782
)


(369,782
)Earnings per share:Basic and diluted (1)


n/a


n/a


n/a



(1.25
)


n/aCommon stock prices per share:High


n/a


n/a


n/a



15.50



n/aLow


n/a


n/a


n/a



14.05



n/aFiscal 2002Revenues before reimbursements

$
2,988,630

$
2,913,289

$
2,980,678


$
2,691,672


$
11,574,269Reimbursements


352,692


415,148


369,982



392,933



1,530,755Revenues


3,341,322


3,328,437


3,350,660



3,084,605



13,105,024Operating income


414,257


388,279


434,986



147,929



1,385,451Net income


81,676


10,611


114,461



38,147



244,895Earnings per Class A common share: Basic


0.20


0.03


0.28



0.08



0.57 Diluted


0.20


0.02


0.27



0.08



0.56Weighted average Class A common shares: Basic


410,488,771


409,576,609


414,463,440



468,829,346



425,941,809 Diluted


1,014,448,500


1,035,794,758


1,027,990,942



1,006,394,255



1,023,789,546Common stock prices per share: High


22.75


28.34


30.50



20.99 Low


11.61


22.50


19.50



13.70


---

n/a = not applicable





|(1) |  | Certain common share equivalents have been excluded from the earnings (loss)-per-share calculation as their effect is antidilutive. In addition, for the purpose
of the above calculation of earnings (loss)-per-share, the weighted average number of shares is based upon the periods the shares have been outstanding. The weighted average basic shares were 295,392,338 and the diluted shares were 899,711,420.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents




SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf on November 7, 2002 by the undersigned, thereunto duly authorized.





ACCENTURE LTDBy:

/S/    JOE W. FOREHANDName: Joe W. Forehand Title: Chief Executive Officer and Chairman of the Board





POWER OF ATTORNEY





KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Joe W. Forehand, Harry
L. You, and Douglas G. Scrivner, and each of them, as his true and lawful attorneys-in-fact and agents, with power to act with or without the others and with full power of substitution and resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents and each of them may deem necessary or desirable to enable the registrant to comply with the U.S. Securities Exchange Act of 1934, as amended, and any rules, regulations and
requirements of the U.S. Securities and Exchange Commission thereunder in connection with the registrants Annual Report on Form 10-K for the fiscal year ended August 31, 2002 (the Annual Report), including specifically, but without
limiting the generality of the foregoing, power and authority to sign the name of the registrant and the name of the undersigned, individually and in his or her capacity as a director or officer of the registrant, to the Annual Report as filed with
the U.S. Securities and Exchange Commission, to any and all amendments thereto, and to any and all instruments or documents filed as part thereof or in connection therewith; and each of the undersigned hereby ratifies and confirms all that said
attorneys and agents and each of them shall do or cause to be done by virtue hereof.





Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below on November 7, 2002 by the following persons on behalf of the registrant and in the capacities indicated.





Signature

Title/S/    JOE W. FOREHAND Joe W. Forehand

Chief Executive Officer and Chairman of the Board (principal executive officer)/S/    STEPHAN A. JAMES Stephan A. James

Director/S/    STEVEN A. BALLMER Steven A. Ballmer

Director/S/    DINA DUBLON Dina Dublon

Director




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##### Table of Contents

Signature

Title/S/    KARL-HEINZ FLÖTHER Karl-Heinz Flöther

Director/S/    JOEL P. FRIEDMAN Joel P. Friedman

Director


/S/    WILLIAM D. GREEN William D. Green

Director/S/    ROBERT I. LIPP Robert I. Lipp

Director/S/    BLYTHE J. MCGARVIE Blythe J. McGarvie

Director/S/    SIR MARK
MOODY-STUART Sir Mark Moody-Stuart

Director/S/    MASAKATSU MORI Masakatsu Mori

Director/S/    DIEGO VISCONTI Diego Visconti

Director/S/    WULF VON SCHIMMELMANN Wulf von Schimmelmann

Director/S/    JACKSON L. WILSON, JR. Jackson L. Wilson, Jr.

Director/S/    HARRY L. YOU Harry L. You

Chief Financial Officer (principal financial and accounting officer)







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##### Table of Contents

CHIEF EXECUTIVE OFFICER CERTIFICATION





I, Joe W. Forehand, Chief Executive Officer and Chairman of the Board of Accenture Ltd, certify that:





| | 1. |  | I have reviewed this Annual Report on Form 10-K of Accenture Ltd (the Registrant);
| | -- |  | ------------------------------------------------------------------------------------




| | 2. |  | Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Annual Report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 4. |  | The Registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b) |  | evaluated the effectiveness of the Registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual
Report (the Evaluation Date); and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | c) |  | presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 5. |  | The Registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrants auditors and the audit
committee of Registrants board of directors (or persons performing the equivalent functions):
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrants ability to record, process,
summarize and report financial data and have identified for the Registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------




| | 6. |  | The Registrants other certifying officers and I have indicated in this Annual Report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Dated:    November 7, 2002





/S/    JOE W. FOREHANDChief Executive Officer and Chairman of the Board (principal executive officer)







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##### Table of Contents

CHIEF FINANCIAL OFFICER CERTIFICATION





I, Harry L. You, Chief Financial Officer of Accenture Ltd, certify that:





| | 1. |  | I have reviewed this Annual Report on Form 10-K of Accenture Ltd (the Registrant);
| | -- |  | ------------------------------------------------------------------------------------




| | 2. |  | Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual Report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Annual Report;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 4. |  | The Registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is
made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b) |  | evaluated the effectiveness of the Registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual
Report (the Evaluation Date); and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | c) |  | presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 5. |  | The Registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrants auditors and the audit
committee of Registrants board of directors (or persons performing the equivalent functions):
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrants ability to record, process,
summarize and report financial data and have identified for the Registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------




| | 6. |  | The Registrants other certifying officers and I have indicated in this Annual Report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Dated:    November 7, 2002





/S/    HARRY L. YOUChief Financial Officer (principal financial and accounting officer)







S-4