TZ LIMITED — Management Reports 2011

Aug 31, 2011

TZ Limited ABN 26 073 979 272

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SHAREHOLDER UPDATE – Year End Review

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• The Board is pleased to advise that TZ Limited (TZL) has delivered on its top line revenue expectations for the fiscal year even though the US economy remained weak during the fiscal year ended 30 June 2011.

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• The result was underpinned by strong and above plan performance from Product Development Technologies Inc. (PDT) which benefited from a higher rate of outsourcing by US corporates due to the weak US economy.

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• Telezygology Inc. (TZI) set its internal revenue target for the fiscal year assuming a recovery of the US economy. The US economy did not recover as expected and as a result TZI did not meet its internal revenue target. However, the revenue shortfall was offset by PDT’s strong revenue performance.

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• TZI has shown significant revenue growth in the last quarter of the fiscal year and currently has a very healthy pipeline of revenue generating trials with major customers globally which, if successful, will translate into significant sales in the short to medium term. The Board believes that this will place the business unit in a strong position to meet shareholder’s revenue growth expectations during the 2012 financial year.

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• Overall the results represent a year of focused rebuilding and the establishment of solid enabling conditions to support sustainable revenue growth across the TZ Group.

TELEZYGOLOGY, INC. John Wilson, CEO

With our stated plan of evolving TZI from being engineering focused to a sales driven organization, one of the major achievements this financial year has been the building of a new sales capability by recruiting high caliber sales and technical services resources that have brought a strong sales culture to the business. In the last year, we have grown from an organization with only one full-time sales resource to a dedicated team of nine regional sales managers and four technical service managers. These resources are located in the key regional markets where our channel partners have established business.

We have continued to strengthen our relationships with our major channel partners, Anixter and Pitney Bowes, and leveraged their global reach by replicating our US distribution model into new markets outside of the USA. We now have distribution channels and sales initiatives in place in Canada, Latin America, Europe, the Middle East, Southeast Asia and Australia/New Zealand, supported by in-market resources in Canada, UK, Amsterdam and Australia. Even though the US economy did not recover as quickly as anticipated, it is encouraging to see that with the increase in sales personnel, we are starting to see an increase in the rate of closure of deals in our sales pipeline in the US. It is also encouraging to see strong sales demand from countries outside the US, particularly in Australia.

TZ Limited Level 11, 1 Chifley Square, Sydney, NSW 2000 Australia Phone: +612 9222 8890 Fax: +612 8208 9937

TZ Limited

ABN 26 073 979 272

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While our main focus this year has been on developing sales, we have not forgotten our world class engineering roots and we have continued to innovate to ensure that we deliver products that meet our customer’s needs. Testimony to our product development and commercialization efforts is the launch this year of a number of new products across our business units including TZ Centurion System (July 2010), TZ Centurion Server Enterprise Software (general release May 2011), TZ Courier (July 2010), TZ Concierge (January 2011) and most recently TZ APX (June 2011). These new products all incorporate software and signal our move into enterprise level software offerings, which have enabled us to establish an annuity based software licensing, service and maintenance business.

These new offerings significantly expand our addressable market opportunities and demonstrate our fundamental shift into high value system solutions that are built on our state-of-the-art SMArt Device Technology platform with the unique attribute of being highly customizable through a rich software control layer.

Over the course of the year, we have seen our business migrate from sales categorized as trial and system evaluation deployments to major beach-head deployments that establish TZ as the preferred solution. Our successful deployments of total hardware and software solutions in both our IXP and PAD businesses have not only provided influential credibility of TZ’s offering to the targeted market segment but has also driven a demonstrable groundswell of interest and awareness for TZ as a leading technology. This increased market awareness is also supporting a strong pipeline of trials with a number of well-known organizations in the US, Europe and in Australia, which if successful, should translate into significant sales in the short to medium term for TZL.

We are extremely confident about the future of the business as we have taken the time to build a solid platform for growth and we are now well positioned in targeted markets that are experiencing substantial growth. Our solutions are consistent with market trends and underpin a strong and compelling value proposition to credible leaders in their market space.

PRODUCT DEVELOPMENT TECHNOLOGIES, INC. Mark Schwartz, CEO

PDT posted very strong top line revenue growth as it took full advantage of increased outsourcing demand by US companies due to the weak US economy, the Company’s multi-disciplinary capability, strong practical engineering reputation and decades of well-respected and recognized design experience.

The Company is enjoying strong interest from not only consumer product companies but increasingly very large prime contractors in the Defense and Military sector and also from major players in the Medical Device arena.

The Company has progressively more fully leveraged its bundled service offering and taken on more complex projects, which although requires investment in learning new skills, has delivered a positive pay off with PDT being recognized for its continued innovation, strong teamwork and cutting edge problem solving.

TZ Limited Level 11, 1 Chifley Square, Sydney, NSW 2000 Australia Phone: +612 9222 8890 Fax: +612 8208 9937

TZ Limited

ABN 26 073 979 272

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We are pleased to say that this reputation has put the Company ahead of the competition with our design skills being sought increasingly by major corporations and international companies from Europe and the Middle East.

The realignment of our business into three managed verticals, Defense/Military, Consumer Products and Medical Devices, brings greater focus and clarity to the organization and pushes down decision making to senior management. This frees up our time to drive the future vision and growth of the Company and show potential clients the types of skill sets that exist within the global PDT family.

While participating in the Medical Device and Military world means meeting more complex rules and guidelines from the US Federal Government, the establishment of a new and secure area at our Lake Zurich facility, compliant with Federal Government mandates, will allow us to bid on sensitive projects where high levels of security clearances are needed. Given our history in this field and our established ITAR credentials, we are well placed to access and attract the attention of the large global US Military contractors.

It has been a great year of growth, organizational development and positioning for the future.

As a closing note, we would like to inform shareholders that due to the sensitive nature of TZI and PDT’s business and current confidentiality obligations, we are often unable to name our clients and may be also be limited in what we are able to communicate about these exciting business developments. The market should be assured that our customers are of the highest caliber and we will update the market on the status of trials and orders if we can obtain requisite approvals for disclosure from our end customer.

Best Regards,

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John Wilson CEO, Telezygology, Inc.

Mark Schwartz CEO, PDT Inc.

TZ Limited Level 11, 1 Chifley Square, Sydney, NSW 2000 Australia Phone: +612 9222 8890 Fax: +612 8208 9937