1. MAKING YOUR BUSINESS STRONGER
www.lawlerpartners.com.au
AUTUMN 2006
LawlerLink
A QUARTERLY PUBLICATION OUTLINING RELEVANT BUSINESS ISSUES FOR YOU
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CONSULTING
Executive Share
Plans
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BUSINESS SERVICES
Investment &
Support
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HAPPENINGS @
LAWLER PARTNERS
Thank you! For Your Recognition...
Lawler Partners have been recognised with two
National Awards - Best Accounting Firm and Best
Professional Services Firm 2006 (turnover under $
20 million) at this year’s BRW - St George Client
Choice Awards.
Exceeding client expectations is the
philosophy underpinning the Lawler
Partners business, and it is with much
gratitude and thanks to our clients that we
accept this prestigious acknowledgement.
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Not only do the two awards highlight the firm’s
commitment to exceeding client expectations, they
also reinforce the value placed on the relationships
we hold with clients.
PICTURE GALLERY
Kerry O’Keeffe Aussie BBQ
Director and founding Partner, Terry Lawler, said
that the awards recognised the culture developed in
the firm of understanding a clients business.
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CLIENT PROFILE
The Bavarian
Hospitality Group
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CLIENT PROFILE
Continued
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TAX CALENDAR
WORKCHOICES
The New Regime
Issue 9
“It sounds simple enough but it takes
considerable commitment and energy to
understand another business well enough
to bring further success to them. We are
very proud of our team of professionals
and their focus on service delivery.”
The national awards were presented by respected
business magazine Business Review Weekly and
recognise the achievements of Australia’s outstanding
professional service firms, including legal, accounting,
engineering and business consulting firms.
Below: Terry accepts the Award on behalf of the firm.
The results are based on independent research
conducted by Melbourne firm Beaton Consulting,
and clients were surveyed along with more than
6,500 business leaders. Respondents were asked
to rate firms on a number of key attributes including
technical advice, responsiveness and value for
money.
Terry Lawler said Lawler Partners growth in the
Sydney market would also continue.
“We are growing away from the image of a regional
company with an office in Sydney to one of a midtier firm in the wider market place.”
For further information visit
www.brw.com.au

2. Consulting
Executive
Share
PLANS
LOOK OUT FOR THE ‘SOFT’ ISSUES!!
Following on from Kylee Dare’s article “Is An Employee
Share Ownership Plan Appropriate For Your Business?”
The Linchpin Group look at Executive Share Plans in this
first of a two part series.
Executive Share Plans are select plans offered to a
businesses Senior Management. This article discusses
some of the important soft issues that arise within a
Business when an Executive Share Plan is introduced.
The Linchpin Group are a multidisciplinary management
consultancy firm based in Sydney.
THE CONTEXT
Many businesses set the foundations for their Executive
Share Plans within the context of broader organisational
transition.
This will often include at least one - if not more - of the
following:
• As a step in the implementation of a succession
programme - where the introduction of the Executive
Share Plan is (perhaps) a key step in the owner’s
transition from owner or owner/manager;
• As a means of achieving a level of protection of
intellectual capital and the retention of human capital
- where there is high business risk attached to the
loss of both people and IC;
ISSUE/PERCEPTION
•
As a stimulus to engagement with strategies and plans
aimed at enhancing productivity, or successfully
driving re-engineering processes;
• As a means of dealing with significant changes in
competitive dynamics.
WHAT (GENERALLY) WILL CREATE ‘SOFT’ PROBLEMS FOR
BUSINESSES WHEN AN ESP IS INTRODUCED?
Generally there are three core dimensions which require
careful management in the transition to ESP’s. These are:
• Communication of the ESP - how is the creation,
implementation and management of the ESP to be
communicated? The intentions behind the offer of
an ESP are one thing; what is said at this stage is
critical to cementing the ‘right’ perceptions and
engagement with the Plan.
• Criteria for the award and distribution of shares - who
will get them? On what basis? When will they become
‘my’ shares. Am I expected to pay for them?
• A change in company (or, executive team) dynamics executives who become ‘owners’ suddenly see the world
through a different lens. Beware the ‘big doggie’ syndrome
lest it changes irreparably the dynamics of the group.
HEADING OFF SOME OF THE ISSUES WITH THOUGHTFUL
PLANNING
We’ll deal with each of these in turn by looking at likely
causes and some solutions which can be readily found in
the right tactical planning.
COMMUNICATION OF THE ESP
Some commonly experienced problems arise with ESPs
through the perceptions of those to whom the Plan is offered.
Clear communication of the rationale, benefits, rules, rewards
and mechanics of the ESP is required to positively influence those
perceptions. Some common issues and their solutions include:
TACTICAL SOLUTION
1 Lack of understanding of an Executive Share Plan.
Careful explanation in written form and through
presentations/road-shows explaining the ‘what’ and the
‘why’. Some emphasis on the ‘how’. Check for meaning
and understanding before the offer is made.
2 The ESP is seen as offering a trade-off between likely
shareholder ‘value’ and team/company ‘values’.
Explain that the ESP is no different to other performance
incentives (e.g. bonuses).
3 Perceptibly little value or a leap of faith requiring
personal investment.
(a) The ESP will deliver little additional value to the
participants.
(b) “What? You’re asking us to pay for the shares?”.
Reinforce the meaningful benefits of participation - an
asset with significant potential for growth.
4 The vesting period is too long/unfair/unclear (the danger
of which is cynicism and a lack of engagement).
Regular communication of vesting rules and CEOindividual letter on passing vesting milestones.
5 Too complicated from a tax point of view.
The offer documents and presentations should highlight
the need for appropriate financial advice. The business
might even consider engaging a financial adviser to provide
initial personal advice to the executive team (individually).
Lawler Partners along with their business partners have the skill and the precedents to assist you in this area.
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3. Business Services
AND
Investment
SUPPORT
FOR GROWING BUSINESSES
Souls Private Equity Limited (SPEL) is an
investment initiative sponsored by Washington
H. Soul Pattinson and Company Limited (Soul
Pattinson) which focuses on long term
investments in unlisted & listed small to medium
sized enterprises with the goal of achieving
returns in excess of stock market returns.
The Soul Pattinson Group has been successfully
investing in Australian and Asian private equity
businesses for a number of years including New Hope
Corporation Limited, SP Telemedia Limited and NBN
Enterprises Pty Limited.
In the main, SPEL invests in and supports unlisted
SME’s which offer high prospects for capital growth
over the long term (ranging from 3 to 10 years).
Investment in unlisted securities has traditionally been
the domain of larger financial institutions while private
equity investment entities have suffered from lack of
liquidity.
SPEL offers investors access to, and
liquidity in, the investment class which it
considers can generate higher returns in the
long term than those available from
traditional equity investments.
Mr Andrew Fairfull, the General Manager Private
Equity advised that SPEL is presently specifically
focused at private equity investments related to expansion
capital, succession planning and management buyouts.
“as in all investment decisions the quality of the
management is a critical issue and we are keen
to support the growth and development of
private entities that have quality management
teams in place. It should also be highlighted
that we provide a range of debt and equity
solutions with security being taken over the
business not the owner’s personal assets.”
Soul Pattinson is Australia’s third oldest public
company and has had an involvement with the private
equity market for most of its existence. Their philosophy
has and continues to be one of longer term investment
and support adopting a “partnership approach” to
achieve a mutually beneficial result.
Lawler Partners have been pleased to work with 2
clients in which SPEL have taken an equity position and
we also have a business relationship with Pitt Capital
Partners Limited. Pitt Capital, which is part of the Soul
Pattinson Group, is a merchant bank providing a full
range of corporate advisory services which include:
• Mergers and acquisitions
The company listed on 16 December 2004 with a
public equity raising of $130 million. The deal flow since
this time has been significant however only a very
limited number of projects have been invested in or
continue to be under review. The investment range that
is considered is up to approximately $20 million per
entity. Projects investigated have included a wide range
of investments being start up, venture capital, IPO preinvestment, Bio-tech, life sciences, including small
through to large mature businesses.
Private equity investments to date include businesses
in the building industry, consumer hair products,
merchant banking, specialist medical services,
engineering and aquaculture. Quite a number of these
equity investments have been in country areas and
cover a number of Australian states.
• Equity and debt raisings
• Underwriting of equity raisings
• Restructures
For further information please contact Director
Terry Lawler via
tlawler@lawlerpartners.com.au
or phone 02 4935 6115
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4. @
Lawler
Happenings
Partners
Lawler Partners Sydney Morning Herald “Good
Living” Restaurant of the Month Club.
•
In October 2005, we launched the concept of
the Restaurant of the Month Club as a way to
reward introducers of business to the firm.
At the beginning of a month an email is sent out
advising the restaurant given the highest number
of points for the month in the “Good Living”
section of Tuesday’s SMH. The email also
advises that a luncheon time has been booked
and that for a cost of $50 per head the recipient
is invited to attend and bring along a guest. That
guest can be any person either spouse, business
partner, associate or client, and the luncheon
provides an opportunity to relax and enjoy the
cuisine of a top restaurant for a fraction of the
normal cost.
The operative word is “relax” - no speeches, no
“stand up and introduce your guest” - just sit
down and if you want to just gorge and guzzle.
So far we have visited Becasse Restaurant in
Kerry O’Keeffe
On February 2nd, former test cricketer, media
personality and ABC commentator Kerry O’Keeffe
entertained 200 of the firms’ clients & colleagues at
our ‘Aussie BBQ’ function in Sydney.
Above: Kerry O’Keeffe delivers his speech.
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Clarence Street, (twice - as it was our first luncheon),
Bennelong - at the Opera House, and Cru Dining Quay Passenger Terminal.
In all, eighty guests have enjoyed the fine food and
wine these restaurants have offered.
These lunches have caused a bit of movement along
the F3 but with the aid of the team at the SMH we
will be choosing some fine eateries in Newcastle
and on the Central Coast. Notwithstanding the
distance however, those Novocastrians who have
come to the lunches have found it a splendid excuse
to catch up and visit Sydney connections. Late
March will see us dine at Restaurant II, Bolton Street
Newcastle.
This calendar year the club will also continue with
the luncheon concept but will acquire block bookings
at special sporting events and concerts so keep your
eye on your email.
If you would like further information about the Lunch
Club contact Clive Chambers on 02 8346 6000 or email
cchambers@lawlerpartners.com
Wit, Wisdom
& LARGER THAN LIFE
Kerry kept guests captivated with witty stories
from his test playing days, and shared some thoughts
on Australian cricket in general. His trademark
infectious laugh was also a hit.
Above: All Guests at the Lawler Aussie BBQ.

5. Picture Gallery
Kerry O’Keeffe Function
Above: Tony Marsden & Phil Young
(Australian Financial Risk Management).
Above: Leah Young & Claire Robbs
(Life Without Barriers).
Above: Alistair Little (Tress Cox) &
Charles Bavin (Hunt & Hunt).
Above: Mark Sample (ANZ Banking Group Ltd.)
& Rob Whitton.
Above: Peter Grealish, Stuart Westgarth & Mark
Wilks (Corrs Chambers Westgarth).
Above: Rob Westphal (Souls Private Equity Ltd.)
& David Fairfull (Pitt Capital Partners).
Above: Ben Skinner & Kerry O’Keeffe.
Above: Brad Tonks & Craig Milne (Craig Milne & Co.).
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6. Client Profile
The Bavarian
Hospitality
GROUP
John Szangolies has been involved in hospitality all
his life. He began in the restaurant industry when he
opened ‘The Cauldron’ in Darlinghurst in 1970. Then
followed ‘The Rocks Push’ in 1972, before purchasing
‘Argyle Events & Catering’ in 1982. Since then, John has
built their unique offering into an extensive complex known
as The Bavarian Hospitality Group, an umbrella company
for several restaurants, bars and function venues in the
Sydney area.
TODAY THERE ARE A NUMBER OF BUSINESSES WHICH
OPERATE WITHIN BHG:
Löwenbräu Keller is the most authentic Bavarian
restaurant and bar in Sydney, Winner of the 2005 NSW
Restaurant and Catering Awards for “Best European
Restaurant” and second consecutive year “Best
Entertainment Restaurant”. Here, patrons can experience
the most traditional Bavarian hospitality outside of
Munich, with German speaking staff in dirndl and
lederhosen, authentic décor, and traditional oompah
band.
Above the Löwenbräu Keller is the modern European
style Überbar, offering exclusive biers, mouth watering
cuisine and cocktails.
Argyle Events & Catering has five very unique venues
in the magnificent Argyle Stores heritage building at
the Rocks. The function centre is continually growing
with two additional levels of the old Argyle stores
recently negotiated from the Sydney Harbour Foreshore
Authority. After extensive refurbishment this area will
open in October 2006, accommodating up to 3000
people and making it one of the largest function venues
in Sydney.
German Beverage Imports (GBI) is the sole company
in Australia importing six exclusive Bavarian biers Löwenbräu Original, Löwenbräu Dunkel, Spaten
Münchener Hell, Franziskaner Hefe-Weissbier Hell,
Franziskaner Hefe-Weissbier Dunkel and Löwenbräu
alcohol-free. These biers are available on tap in various
sizes of original steins at all of BHG’s venues.
After selling his interest in Jordons Seafood
Restaurant in 2001, John embarked on developing a
five year strategic plan which included formalising the
structure of the business for future expansion. A Board
of Management was put in place to assist with the
implementation, and it was at this time that John began
his relationship with Lawler Partners.
John says “I was looking for assistance not
only in relation to the businesses
compliance needs but also some strong
commercial and strategic advice”.
Plans for expansion included the successful Bavarian
Bier Cafés, now operating out of York Street and Manly
Wharf in Sydney and opening soon at O’Connell Street.
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7. IT’S NOT JUST ABOUT THE BIER!
John Szangolies, Tourism Legend and Managing Director of
the Bavarian Hospitality Group (BHG) talks to LawlerLink about
his business and its plans for further expansion.
“Out of the Löwenbräu experience, we
decided to expand the concept to new
locations and new markets, with the
same focus on the key ingredients (the
food, the bier and Bavarian theme) that
make the Bavarian Hospitality Group
the success it is.” says John.
As with the Löwenbräu, the designer space of the cafés
is filled with long wooden tables, edged with cosy booths,
and is dominated by the stunning bar. However, whilst
the name indicates that the cafés are all about bier - they
aim to also take their food and coffee just as seriously.
Over the next five years the company plans to open 20 cafés
across Australia, with a number of sites already identified.
When asked about the secret to BHG’s success in the
industry, John gives credit to the skills of innovative
designer Michael McCann who has worked on the overall
look and feel of the venues.
“I also believe that customer service is
paramount so we have a thorough staff
selection and training process in place.”
For almost five years, Lawler Partners Directors Kylee
Dare and Terry Lawler have guided BHG management in
a number of areas including business planning and
development, commercial negotiations, compliance
matters and strategy.
John comments, “We have doubled our
turnover in less than two years and now
employ over 250 staff. A small company
going through rapid growth like we did
requires business advisers with a high
level of commercial experience”.
“It is important not to scrimp in the design
area. We spend a significant amount of
money on the fit out of each location”.
For further information visit
www.lowenbrau.com.au
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8. Tax Calendar
CONTACTS
March 2006
21 Due date for lodgement and payment of
February 2006 monthly BAS and IAS.
31 End of the 2006 Fringe Benefits Tax (FBT)
year.
31 Due date for lodgement of income tax return
and payment of tax for company and
April 2006
superannuation fund taxpayers
(turnover more than $2 million but
less than $10 million) in the latest year
lodged.
31 Due date for lodgement of initial NSW
Land Tax returns for land held as at 31
December 2005.
May 2006
21 Due date for lodgement and payment of
March 2006 monthly BAS and IAS.
28 Last day for payment of March quarter
employee superannuation contributions to
avoid liability for the Superannuation
Guarantee Charge.
28 Due date for lodgement and payment of
March 2006 quarterly BAS and IAS.
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21
21
Due date for lodgement of income tax returns
(where a tax liability exists) and payment of
tax for all tax returns for the June 2005 year
end not previously required to be lodged.
Due date for lodgement and payment of
April 2006 monthly BAS and IAS.
Due date for lodgement and payment of FBT
returns for the FBT year ended 31 March 2006.
WorkChoices THE NEW REGIME
Upon the Bill’s introduction, Lawler Partners have
released a number of Alerts outlining the major changes
and their impact, followed by seminars held in Newcastle
and the Central Coast which were attended by many of
our clients. Further seminars are also proposed.
The seminars separated fact from fiction in an
informative, practical, interactive session. Your positive
feedback and comments regarding our updates and
the subsequent presentations have been very much
appreciated and are assisting us to prepare content
for future communications.
The changes will impact on payroll systems,
particularly leave accrual and payment systems, on
leave entitlements for all employees, disciplinary and
termination processes and on industrial relations
matters, such as the negotiation of enterprise
agreements and rights of entry of union officials.
These new requirements will affect any employer
who is an incorporated entity.
If you missed out on the presentation and are
responsible for payroll, employee relations, industrial
relations, employee policies and processes within
your organisation, contact Kimberley Evans on
telephone 02 4935 6191 for a copy of the updates
and presentation notes.
Above: Darren Shone, Geoff Beesley & Greg
Jesson at the Newcastle seminar.
We will continue to keep you informed as the new
workplace relations system progresses.
SYDNEY
763 Hunter Street
Newcastle West NSW 2302 Australia
PO BOX 2368 Dangar 2309
T 02 4962 2688 F 02 4962 3245 DX 4303
E mail@lawlerpartners.com.au
BUSINESS RECOVERY &
INSOLVENCY
Sydney: Rob Whitton
T 02 8346 6000
Newcastle: Paul Gidley
T 02 4935 6184
BUSINESS SERVICES
Sydney: Glenn Harris
T 02 8346 6000
Newcastle: Simon Rutherford
T 02 4935 6109
HOSPITALITY & GAMING
Peter McLean
T 02 4928 7009
CORPORATE ADVISORY
Simon Rutherford & Terry Lawler
T 02 4935 6109 T 02 4935 6115
EQUIPMENT FINANCE,
INSURANCE PREMIUM FUNDING
& MORTGAGE BROKING
Brett Derwin
T 02 4927 5799
FINANCIAL PLANNING &
INVESTMENT ADVICE
Mark Arnold
T 02 4928 7000
FIRM & STRATEGY MATTERS
Terry Lawler
T 02 4935 6115
FORENSIC ACCOUNTING &
LITIGATION SUPPORT
Ray Tolcher
T 02 4935 6112
INFORMATION TECHNOLOGY
Steve Meyn
T 02 4935 6199
MANAGEMENT CONSULTING GOVERNMENT
Keith Rogers
T 02 4969 6610
SUPERANNUATION
Damien Passmore
T 02 4935 6157
SMALL BUSINESS
Peter Coughlan
T 02 4935 6113
TAXATION
Darren Shone
T 02 4935 6116
NEWCASTLE
Level 7, 1 Margaret Street
Sydney NSW 2000 Australia
PO Box 5446 Sydney 2001
T 02 8346 6000 F 02 8346 6099
E info@lawlerpartners.com
AUDIT
Jeff Abela
T 02 8346 6064
www.lawlerpartners.com.au
“Liability limited by a scheme approved
under Professional Standards Legislation”