Place both the downloaded file in a same folder where ever you want.
Use Winzip or Winrar to extract the Part 1 ( Part 2 will be automatically extracted and the size of new extracted file will be around 700+ MB )
Place the FTF file in C:\Flashtool\firmwares.
Switch off your Xperia Z ( Backup any data if important ).
Open flashtool and click on flashing icon and then select flashmode.
Select the downloaded firmware.
After the preparation of files flashtool will ask you to connect your phone in flasmode.
Connect your phone in flashmode by holding VOLUME DOWN BUTTON.
After the flashing process disconnect your phone and turn it on.
Done!!!!!!