contentsSECTION ONE1Chairman’s WelcomeA message from Mark Bouris,Executive Chairman, TZ Limited.52011 Highlights9Kenneth TingA message from Kenneth Ting, ExecutiveDirector & Company Secretary, TZ Limited.13Dickory RudduckA message from Dickory Rudduck, ExecutiveDirector & Founder / Inventor, TZ Limited.17John WilsonA message from John Wilson,President & CEO, Telezygology, Inc.21Mark SchwartzA message from Mark Schwartz,President & CEO, PDT, Inc.SECTION TWO12011 Financial Statements
“I have never beenmore excitedabout the futureof this companyas I am today.”1
markbourisCHAIRMAN’SWELCOME.I am often asked why I got involved with TZ Limited.I have a keen interest in technology and the Internet of Things(IOT), specifically with regards to how the exchange of informationis used to optimise efficiency and productivity in the workplaceand in life. When I was approached to join the Board at TZ Limited,I did so because I saw uniqueness in the company’s philosophyand a real possibility in the solutions it had created. I’m proud tosay that leading into 2012, that possibility I saw in the beginning ofmy tenure with TZ Limited has become a reality. I have never beenmore excited about the future of this company as I am today.This past year was about creating an end-to-end solution thatcould disrupt the market and deliver our products to customersaround the world. Whilst technology has always been our foremostpriority, 2011 became the year where we could focus on providingthe big picture. We had created the framework, built a demandand now we are achieving what we set out to do.Today, TZ Limited is not only developing and manufacturingproducts, but we’re out there trading with some of the mostreputable and forward thinking companies in the world.The best way to describe 2011 is to call it a year of progress.TZ Limited is an innovator, which means that we often create thesolution before the problem is identified. This year, global businessand consumer demand finally caught up with TZ’s supply. In 2011,data centre expansion and online shopping catapulted globally,and today they are two of the most talked about sectors in thetechnology world. This is the opportunity that TZ Limited andspecifically Telezygology, Inc (TZI) had been waiting for. We wereready for the upsurge, and now we are selling these solutions onan ever-growing international scale.
It goes without saying that 2011 was a difficult year,specifically in TZ Limited’s two largest markets, NorthAmerica and Europe. Financial headwinds and governmentuncertainty played a large part in the company’s capacity toclose a number of anticipated purchase orders, but theseimpediments also revealed significant opportunities.What we have learned from the current financial landscapeis that anything can happen, which is why we’ve put mucheffort into increasing our presence in Asian markets that“ The best wayto describe 2011is to call it a yearof progress.”have demonstrated economic resilience. We’re currentlyworking on licence agreements in China and India and wewill look to these markets for significant growth in 2012.With regards to business in North America and Europe,we expect that once economic uncertainty clears capitalexpenditure budgets will open up, particularly in the securityand protection sectors.I credit much of our success this year to the relationshipswe have built with our distributors. Companies suchas Anixter and Pitney Bowes are globally recognisedinfluencers and this year we worked side-by-side to increaseour distribution in North America and Europe, and thencapitalised on that strength to progress into other markets.We have built an impressive Australasian footprint in a shortamount of time and much of this growth can be credited toour partners who believe in our technology and can identifywith our vision. TZ Limited is a disruptive software playerand sometimes our level of modernisation is not easy tograsp, so I’d like to thank our partners who see where weare headed and have supported us over this past year.I expect TZ Limited is going to be the one to watch in 2012,and we’re proud to have distributors of such a high calibrestanding beside us both today and in the future.3
“ I expect TZ isgoing to be the oneto watch in 2012.”I believe 2012 will be a watershed year for TZ Limited.We have laid the foundation, built the distributioncapacity and we are set up to align perfectly with twoof the biggest booms in technology.TZ Limited has spent the past two years developing oursales resource and now is the time to introduce our nextgeneration technology which will open the door for newapplications and opportunities. Strategic insight will becrucial for TZ Limited’s evolution and I’d like to thankKenneth Ting for his leadership and direction this pastyear. We have the greatest minds in the industry on ourteam and these people will be vital to cement TZ Limitedas a global leader in our field.This company would not be where it is today withoutthe determination of our team and the support of ourpartners, shareholders and customers. On behalf of theWhilst TZ Limited has spent much of 2011 introducingBoard of Directors, I would like to thank everyone whoour solutions to international markets, the companyhas played a part in the evolution of this business.has also been on the forefront of identifying newopportunities for its design sector.As I said earlier, 2011 was a year of progress for TZLimited, which came about because of the peoplePDT had an explosive year of not only delivering top linewho believed in our capability and possessed a sheergrowth and revenue for the business, but also findingdedication to see it ultimately succeed. There is stillways in which to implement the company’s design andplenty of work to be done, but I am so proud of whatinnovation into previously unexplored sectors.we have achieved and I look forward to heading intothe future with such an exceptional and inspiring teamPDT is working with entities in the military, consumeralongside me.and medical fields to engineer solutions that increaseboth efficiency and precision, and the company is beingsought after for projects in the United States, Europeand the Middle East. We expect that the demandfor PDT’s innovation will grow substantially as ourMARK BOURIS,completed projects gain notoriety for their success.EXECUTIVE CHAIRMAN, TZ LIMITED.
2011highlights Through a rights issue TZ Limited raised 9.82M to meetongoing working capital requirements Launched a number of new products across the businessincluding TZ Centurion System (July 2010), TZ Centurion ServerEnterprise Software (release May 2011), TZ Courier (July 2010),TZ Concierge (January 2011) and most recently TZ APX (June 2011) Supply and Distribution Agreement with Pitney Bowes Australia (PBA) Deployed the first commercial installation of a TZ Concierge packaged asset delivery system at The Sterling Apartments indowntown Chicago Launched TZ’s infrastructure protection solutions to the Australianmarket through exclusive distribution partner Anixter Implemented incentive programs to stimulate sales activity and buildthe demand pipeline across the five major geographic jurisdictionsnamely the US, Canada, Europe and the Middle East, Latin Americaand Asia Pacific Secured a number of strategic North American sales to GovernmentInstitutions and Financial Services providers Developed the “TZ Ready” program to actively target cabinetmanufacturers to support adoption of TZ’s intelligent locking systemsas part of their standard offering and to build broader distributionof TZ’s IXP product line Developed strategic relationship with Bear River Associates, aprivately-held logistics tracking software development company,for the non-exclusive sale and distribution of TZ Courier in the USA
2011highlights TZI Australia Pty Limited entered into an agreement with a majorAustralian integrated logistics service provider to supply TZ’sintelligent locker systems for trial evaluation as part of a strategicinitiative to create and significantly enhance consumer options forparcel distribution in Australia TZI entered into a supply agreement with Anixter Australia PtyLimited and NEXTDC Limited for the supply of the TZ Centurion System for NEXTDC’s cabinet-level micro-protection solution forits Brisbane and Melbourne data centres PDT was honoured with four 2011 ADEX awards from DesignJournal for the 3-D CLEAN UV Disinfection & Sanitation Device,The MAGic Immunoprecipitation Sample Processor, The NextGeneration Perkins/APH Braille Writer, and the STERISSurgical Scrub Sink PDT’s revenues grew significantly in FY2011 due to the growthof the software team PDT completed the well publicised defence program for CoolfireSolutions to develop SCOUT, a SATCOM Toolkit modelled aftera smartphone that combines 160 pounds of disconnected piecesof equipment and applications into a robust, yet sleek, packagecontrolled by an Apple iPhone TZ Packaged Asset Delivery Solutions was a finalist in the AustralianInternational Design Awards and received a Good Design Award
“ we have some of the most reputableand innovative companies in the worldusing our products.”9
kennethtingEXECUTIVE DIRECTOR &COMPANY SECRETARY, TZ LIMITED.I have spent most of my working life commercialisingtechnology, and the two questions that are always at thefront of my mind are, “Will this technology be the next big thing?”and “Can this technology make money?”I often wonder how I would have answered these two questions ifI was introduced to TZ back some twelve years ago when Dickorylodged the first TZ patents. At that time the Internet was slow, mostmobile phones were not web enabled and the microprocessorsproposed to run our SMArt Devices were large in size and veryexpensive. Despite this, in TZ’s 1998 Business Plan, Dickorypredicted that mobile phones would be used to communicate withand control our SMArt Devices .Today, the Internet is fast and ubiquitous and microprocessors,costing as little as 50 cents, are more powerful than supercomputers the size of a small room were 30 years ago. Dickory’sprediction is now a reality and our customers are using their smartphones to communicate with TZ products to solve real worldproblems. In 2011, we have some of the most reputable andinnovative companies in the world using our products because theythink that we can provide them with an edge over their competitors.The technological advances in the last decade have created a worldwhere things and people are becoming increasingly inter connected.This is the era of the Internet of Things (IOT). This is an era wheresensors on everyday things transmit information and statisticsabout their environments and pre-programmed algorithms initiateactions based on that transmitted information. Take for example anintelligent fridge – if there is no milk in the fridge, the fridge sensesthe need and will order more milk or send you an SMS remindingyou to pick up milk on the way home.
Consider that same capability in theAs economic conditions improve in North America andscope of TZ’s data centre offering,Europe, we will continue to build our sales pipeline,sensors attached to TZ SlideHandlemaintain a credible track record of high profile deploymentscan tell a technician via SMS that heand increase brand recognition for TZ technology. needs to replace something in thedata cabinet and can also order theThere are many IOT companies attempting to establishparts for him.a footprint for their networked devices. For example, aCalifornian based venture capital-backed company isTechnology pundits say that in theaddressing mass adoption by integrating and networkingnext decade, IOT will be the mostwith LED lighting — based on the principle that electricdisruptive and most importantlighting is needed everywhere. They believe their footprinttechnological advancement forof IOT devices can be rolled out quickly by attachingmankind. Now that most of thesensors to networked LED lights in new buildings.technological challenges of IOT havebeen resolved, the biggest challengeUsing smart locks and fastening devices, TZ hasfacing the IOT movement is buildingapproached the IOT mass adoption problem from aa large footprint of networkeddifferent angle. Our approach is based on the principledevices. Until there is a large globalthat virtually everything needs to be fastened or lockedecosystem of networked IOT devices,together. With power and data infrastructure beingthere cannot be mass adoption.available in almost all environments today and with securityAnixter and Pitney Bowes are twobeing an increasing driver for change, the spread andof the largest distributors and mostpotential application of our technology is significant. We arerespected companies in their sectorsalso fortunate in that PDT provides a channel to introduceand our partnerships with theseour technology into their customer’s new products.two leading companies give megreat confidence that we have theAt the core of all TZ product offering is software and onenetworks and distribution bandwidthof TZ’s five patented types of fasteners. One of the fiveto support mass deployment of ourfasteners that most shareholders will be familiar with toIOT technology. We have seen thatdate is the TZ Radial which is used in our IXP and PADwith the help of our partners and theproduct offering. Most IOT devices today are focusedrelatively strong economy in Australiaaround sensing and the communication of information within 2011, we were able to build another devices in the same IOT ecosystem but what makesimpressive footprint in Australia in aour SMArt Devices unique is that in addition to sensingrelatively short period of time.and communication capability, our devices also performa physical function through our unique SMA technology113
“ we were able to build an impressive footprint inAustralia in a relatively short period of time.”which enables remote actuation (physical movement).Google and IBM issued a joint statement saying thatWithout actuation to perform a responsive action atthey will invest their resources and attention to quicklythe remote location, there is limited utility in just havingmake IOT a reality. The Chinese Government declaredsensors and intelligence reporting on status.their goal to become an IOT world leader and Chinesemanufacturers have started focusing on the new worldToday, Facebook connects more than 800 million usersof sensors and intelligent objects with the plan to supplyglobally. One of the reasons for Facebook’s quick massa growing market and establish global standards thatadoption is the fact that is has opened its software APIaid interoperability.so that other social networks and software platformscan interact with it. The interoperability of TZ’s SMArtEvery day, more and more mobile phone manufacturersDevices ecosystem with other IOT ecosystems couldsuch as Apple, Blackberry and Samsung are introducinglikewise fuel mass adoption of TZ technology.improvements to their hardware and software, making it easier for humans to interact with the IOT ecosystem.All of TZ’s products have been built with an openWith companies and Governments investing millions ofarchitecture to ensure operability with as many thirddollars in building the environment for mass adoption ofparty technologies as possible. Our goal is to create aIOT devices, TZ technology is well placed to benefit frompermissions-based “Facebook of Things” in which otherthis wave of market sentiment.IOT ecosystems can seamlessly communicate with ournetworked SMArt Devices ecosystem to ensure a richOur task ahead is to continue to be at the forefrontand intelligent environment.of the IOT movement and to ensure that our SMArtDevices and software continue to interoperateSo how real is a global ecosystem of TZ SMArtwith other companies’ technologies and that weDevices ? In the last year, several events have occurredcarefully select the right sectors to roll-out our SMArtthat facilitates the mass adoption of TZ technology.Devices . We also need to be vigilant in continuing to improve our core device technology and to keepingabreast of advancements in sensor development andcommunication protocol.So with the technological advancements that haveoccurred since we lodged our first patents and knowingthe robust platform for growth that we have taken thetime to build in the last two years, if I were asked today ifTZ technology is the next big thing and if this technologycan make money? I would respond with a resounding“Yes!”
“This year’s technologydevelopment pushwas driven aroundsupporting theTZ InfrastructureProtection (IXP)and TZ PackagedAsset Delivery (PAD)product lines.”13
dickoryrudduckDIRECTOR & FOUNDER / INVENTOR,TZ LIMITED.The past year’s focus on sales has given the technologydevelopment team an unprecedented opportunity to listento customers and apply what we hear to successfully placeour devices in the real world. Every day we’re using this insight totarget the right devices on which to focus for growth and to choosethe right companies with which to align.This year’s technology development push was driven aroundsupporting the TZ Infrastructure Protection (IXP) and TZ PackagedAsset Delivery (PAD) product lines. As a result of that focus, bothproduct lines have been strengthened significantly at both thehardware and software levels.The hardware has, at its core, the TZ Radial device — one ofTZ’s five patented families of fasteners. Technical development hascontinuously expanded the capability and functionality of this deviceand its connecting system — due in large part by incorporating theTZ Radial into more and more new products.For the new IXP “TZ Ready” program, the TZ Radial — in the formof the TZ SlideHandle — is compatible with over 80% of the majorcabinets supplied in the market. The TZ SlideHandle has alsosuccessfully been adapted from cabinet locking to offering solutionsfor sliding door locking on data centre cages. Many enhancementshave been added to this system, including improved bridgecapabilities and a Wiegand RFID reader, to name just two newvalue-added features.For PAD, the TZ Radial has been incorporated into a new lockingraceway that streamlines the system, reduces costs and strengthensour intellectual property (IP) position. With this raceway systemapproach and a complete re-engineering of the locker construction,
we are now able to deliver costTZ now has its devices connected to the outside world viaeffective customisation of a modularthe Internet. Our devices, systems and software are clearlysystem to meet specific customervalidating the Internet of Things (IOT) phenomena and therequirements. The PAD program is inpower of connectivity with real customers. Our IP, much of ita very competitive space and we haveput into place a decade ago, is now providing the platform forimplemented several market firsts,participation in this movement, creating new niches every day.such as recipient recognition throughOCR capabilities and using QR codesTechnology Looking Forwardfor verified pickup that will keep us atTZ always saw the opportunity that Unification of Globalthe forefront of technology capability.Communication would bring to our technology — a trend thata decade ago was symbolised by the cell phone. In additionBut it is our software that makes ourto the Internet of Things, Unification of Global Communicationdevices and systems so uniquelyhas enabled TZ’s devices to be SMArt Devices — actuating,functional, and a significant effortsensing and controlling things at the extreme reaches of thehas been made in this area to enableInternet.the licencing of our software from a“cloud-based” infrastructure. We haveThis year, as TZ started to gain sales traction, the Board,built support and testing capabilitiesparticularly through Kenneth Ting’s enthusiasm for the latestwith in-house server capability andtrends in technology and IOT, has encouraged the team towe are rapidly moving towards anlook forward towards the next generation of product.integrated software platform for all ofour technology.Delivering More with Less through ModularityThe fundamental building blocks behind the futureBehind the advancements in TZdevelopment of our technology were debated and a plan washardware and software lies theput into place. There are five areas of activity, which whencontinuous process of IP protection.joined together, define our technology:Last year, we made five product Actuatorsand system fillings, largely around Mechanismssoftware systems and PAD product On Board Technology (electronics/sensors)innovations. In the U.S., three Connectivity systemsimportant patents were granted: Software“closures for a compartment”, “studfastener and stabilising device” andIn all of these areas, the key word is “modularity.” Through“strip fasteners.”modularity, we will be able multiply our opportunities, reducecosts and scale up to the challenges of IOT.153
“In addition to the Internet of Things, Unificationof Global Communication has enabled TZ’sdevices to be SMArt Devices – actuating,sensing and controlling things at the extremereaches of the Internet.”On Board Technology (electronics/sensors)TZ’s systems use decentralised computing powerto harness the power of movement and sensing atthe extremes of the internet. Moore’s Law states thatprocessing power and sensing are exponentiallyadvancing, this offers tantalising new possibilities forour devices. A modular approach will allow backwardintegration to existing communication systems whileenabling TZ to expand into the latest technologies.This approach will expand our current offers and atthe same time will enable wireless, battery-poweredconnection to Internet and cellular systems.Connectivity Systems Our sister company PDT hasbeen gaining tremendous experience in wireless andcell phone architecture. The incredible rate at whichthis has evolved and the fact that the capabilities thisarchitecture offers are exactly the things we visualiseda decade ago, makes it inevitable that this technologyActuators Based on our existing granted IP,will become dominant in TZ device connectivity.specifically that which relates to the SMA networkedAgain, modularity is the key word and serendipitouslybeam devices, a second family of devices will bePDT is exploring Modular Android Technology for itsdeveloped using the inherent stroke amplificationown customer base.and re-biasing of bending structures. SMA bendingstructures are arguably the cheapest form of theSoftware Overlaying all TZ products is software.powerful actuator our devices require. A guidingMoving from our existing TZ enterprise software base,principle behind the design will be that the formwe simplify the user experience though the developmentfactor allows it to be embodied in multiple devices.of TZ “apps.” Mobile applications streamline the userexperience, making advanced technologies accessibleMechanisms TZ has discovered the importanceto the ordinary user. We believe this approach willof device flexibility. That is, the ability to add “modular”broaden TZ’s user base whilst strengthening our existingmechanisms and accessories to create multiplesales. Think of how data from GPS has been madeproducts to satisfy market demand. This front-endeasily accessible to millions of end users via variousmodularity will allow us to compete in completelymap applications. “Apps” will make TZ devices as partnew areas of electronic locking.of the Internet of Things equally as user friendly.
“It feels like we’ve casta small stone into a bigpond and we are justexperiencing the firstripples of activity.”17
johnwilsonPRESIDENT & CEO,TELEZYGOLOGY, INC.I remember Mark Bouris’ clear directive to me a monthafter I took on the CEO role. “Build a new way of workinghere,” he said. “We need a rhythm that defines what TZ isall about.” When I asked him to explain what he meant by“rhythm” he explained, “Band members rely on rhythm to playtunes; a coxswain needs to establish rhythm to synchronisehis rowers and a successful CEO will create a unique operatingrhythm in the business that aligns and motivates its employeesto achieve the best.”So with a newly formed and committed managementteam, we set about to build a unique TZ rhythm in everyaspect of our business from sales and market development,customer management, product development to productionimplementation, aligning our employees to a very clear andsimple strategic intent; to create value for our shareholders,to maintain a technology leadership position and to focus onpeople, processes and performance.Twelve months on, I believe we have built the right enablingconditions for the business to succeed. We’ve created a greatteam based culture, solid business systems that help us toefficiently focus on the important things and new resourceswith the right skills and single minded perseverance to drivethe business forward. Thank you to Will Leong, Vice Presidentof Operations, for building and leading our delivery capability.
Despite this, success for TZ means we need to fast-trackthe adoption of our technology and prove that commerciallywe can sell our offerings profitably and create value for ourshareholders.“ If someoneasked me howto describethe last twelvemonths, I wouldhave to sayit’s been quitea remarkablejourney.”At the best of times with new technology, even with greatestof interest, customers often take an inordinate and unpredictableamount of time to fully appreciate, internally promote and buynew products.Coupled with the sub-optimum economic conditions in theUS and Europe, which have not been conducive for majorcorporates to making capital investment in infrastructure,this has been by far our greatest challenge.Today, I’m pleased to say I believe we’ve made significantheadway. Firstly, we’ve strengthened our channel partnerrelationships through consistently providing high levelsof support and commitment to drive lead generation andopportunity creation.We’ve now established a level of visibility across a broad rangeof targeted early adopters that are significant corporationsacross the US, Europe and Australia.We’ve developed very close collaborative relationships withthese “lead end-user customers” and built trusted relationshipswith internal “TZ champions” within these corporations thatunderstand and believe in our value proposition.These customers provide a solid foundation for repeatpurchases and sales proliferation as well as validation of thetechnology proposition. All this could not have been possiblewithout a committed sales team solely focused on makingthings happen.193
“ It’s great to be at a start on a journey towhat I believe will lead to great things.”Our promotional and marketing initiatives with ourIf someone asked me how to describe the last 12credible channel partners have helped us buildmonths, I would have to say it’s been quite a remarkableawareness with our targeted customers.journey – a journey of systematically putting all thepieces in place and to getting a glimpse of what thisThis in turn has provided the opportunities to deploycompany is capable of.our systems in phase one trials and we have activelysupported each and every pilot, managing every aspectI’m excited by the growth opportunities for our company.of deployment and committing resources to ensure thatWith each and every passing day, new opportunitieswe fully service our customers’ needs in training andemerge that keep reinforcing the fact that we haveimplementation. We’ve also actively worked with oursomething special to offer.customers to ensure both upstream and downstreamintegration into their existing networks of other productsIt feels like we’ve cast a small stone into a big pond andand processes and as result earned credibility withwe are just experiencing the first ripples of activity.our customers and increased the confidence of ourchannel partners.I am proud of our team, with what we’ve achieved so farand look forward to what we are committed to achievingOur Technical Services team has done a phenomenalin these next 12 months. It’s great to be at a start on ajob in managing customer’s expectations and ensuringjourney to what I believe will lead to great things.that the after sales experience delivers on the promiseof the technology.To Mark, thanks for the words of wisdom and for settingthe pulse for the business, to Kenneth, thanks foryour active participation, contribution to business andoperational development and for keeping me on task,and to Dickory, my good friend and co-founder, thankyou for having the vision.Finally, to the shareholders, thank you for your belief,trust and on-going support.
“This is a strongstatement of ourbusiness modeland the brand andreputation we havebuilt at PDT.”21
markschwartzPRESIDENT AND CEO,PRODUCT DEVELOPMENT TECHNOLOGIES.I’m particularly proud of the PDT performance thislast year. Despite the blizzard of poor economic news andemployment data, PDT persevered and had another solid year.This is a strong statement of our business model and the brandand reputation we have built at PDT.With this strong revenue growth came some challenges. We hadto ramp up quickly – investing in people, equipment and space.Projects have gotten larger, more complex and more multidisciplined. In most cases we handled the extra load well, in othersour weaknesses were found and corrective action taken to shoreup our personnel, tools and processes. We have emerged as astronger and better equipped company that is well positioned tohandle the larger and more complex projects, particularly in themilitary and medical device world.PDT Medical continued to adapt and improve on our long-termvision of developing the three separate but complimentaryvertical markets of Medical, Military and Consumer Products.PDT Medical continued to grow its revenues as we created morestructure to our regul
as Anixter and Pitney Bowes are globally recognised influencers and this year we worked side-by-side to increase our distribution in North America and Europe, and then . TZ Packaged Asset Delivery Solutions was a finalist in the Australian Internat