TZ LIMITED — Management Reports 2010

Aug 30, 2010

TZ Limited ABN 26 073 979 272

31 August 2010

Lodged by ASX Online

The Manager Company Announcemen t Office ASX Ltd Level 4, 20 Bridge Street Sydney, NSW 2000

Dear Sir/Madam

REVIEW OF OPENING BALANCE SHEET 1 JULY 2009

When the board of Direc t ors of TZ Limited (“ TZL ”) was appointed on 18 June 2009 it was faced with a n umber of issues. The primary concern f a cing the board was the default that had o ccurred in relation to TZL’s payment obligations to QVT, the previously over s tated cash position and TZL’s general operational and cash flow deficiencies. A n other issue was to recreate the account i ng records for the parent entity for the 2 009 financial year with the limited books and records that were available.

The Directors together w i th TZL’s accountants, legal advisors an d auditor worked closely with the A ustralian Securities and Investments Co m mission and the ASX during this time. Reporting extensions were granted, and the financial statements were compiled with the information available.

The comparative figures f or the year ended 30 June 2008 had be e n audited at the time by TZL’s previo u s auditor Taylor & Co. Given the lack of b ooks and records available, no opi n ion could be formed by TZL’s current a u ditors BDO Audit (NSW-VIC) Pty Li m ited (“ BDO ”) resulting in a disclaimer of o pinion being issued for the 2009 Annual Report and for the half yearly financial report for the period ended 31 Decem b er 2009.

Because of the disclaim e rs of opinion issued by BDO, the Directo r s have undertaken a review of t h e past financial statements of TZL with a view to substantiating the assets and liabilities to be reported in the finan c ial statements for the year ended 30 Ju n e 2010.

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Sydney (Registered Office) Level 11, 1 Chifley Square Sydney, NSW 2000 Australia

Chicago (Operational Headquarters) ASX: TZL 520 West Erie Street, Suite 100 Web: www.tz.net Chicago, IL 60654 United States Email: info@tz.net

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The purpose of this revie w was to gain a level of comfort that the i nformation being provided to the market for the financial year ended 30 June 2010 could be presented in a true and f a ir manner, and that once this was estab l ished, TZL could work with their acc o untant and auditor to achieve an un-qu a lified audit opinion in respect of the 3 0 June 2010 Balance Sheet or, to the g r eatest extent possible, for the year en d ed 30 June 2010.

This has been an ongoin g process which has involved TZL’s acc o untants, auditor and other key management personnel. The lack of books a nd records has made this exercise difficult, and as of today, the process rem a ins ongoing.

The investigative work p e rformed to date has included going bac k as far as the back door listing of Telezygology Inc. in 2004 and scrutinizing the accounting entries that were recorded at the time that have impacted TZL’s fi n ancial statements on and since that date.

As a consequence of the preliminary results of this investigative w ork, the Directors will be writing t o former Directors and the former auditor of TZL seeking additional information re g arding the accounting for:

• the acquisition of T elezygology Inc .in 2004;

• the acquisition of PDT Holdings Inc. in 2005;

• the re-acquisition of the Intevia Licence in 2007, and

• various consolida t ion entries that have been recorded ove r the years. The investigative work th a t has been performed so far indicates t h e accounting for these transactions w a s either done incorrectly, or that sufficie n t records have not been maintained to enable the substantiation of the amounts r ecorded.

For the purpose of the P r eliminary Final Report for the financial y e ar ended 30 June 2010 that will be su b mitted to the ASX later today, the Direc t ors have decided to take a conser v ative view of the abovementioned trans a ctions in light of the investigative work p erformed, and to reflect in the consolid a ted Balance Sheet of TZL as at 30 Ju n e 2010, adjustments in the order of $26.5million relating to mis-stated int a ngible assets. These amounts will be bo o ked as prior period adjustments and t h erefore there will be no expected impac t on the current years trading results.

In the event that new inf o rmation becomes available as a result o f the enquiries to the former Directors a n d former auditor, any necessary changes to the Preliminary Final Report c an be incorporated into the audited fina n cial statements of TZL for th e financial year ended 30 June 2010 for l o dgement on or before 30 September 20 1 0.

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The Directors remain co n fident in the future success of TZL, and t hese prior period adjustments will p r ovide a clean slate with which sharehol d ers will be able to reliably measure performance over the coming years.

Yours faithfully, TZ LIMITED

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Mark Bouris Director