THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should
consult your licensed securities dealer, bank manager, solicitor, professional accountant or other
professional adviser.
If you have sold or transferred all your shares in Daido Group Limited, you should at once hand this
circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed
securities dealer or other agent through whom the sale or transfer was effected for transmission to the
purchaser or the transferee.

DAIDO GROUP LIMITED

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(Incorporated in Bermuda with limited liability)
(Stock code: 544)
PROPOSED RE-ELECTION OF DIRECTORS
AT THE ANNUAL GENERAL MEETING

AND
PROPOSALS FOR
GENERAL MANDATES
TO ISSUE AND REPURCHASE SHARES

A notice convening an annual general meeting of Daido Group Limited to be held at Plaza IV, Lower
Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 23 May 2007
at 10:00 a.m. is contained in the 2006 Annual Report. A form of proxy for use at the annual general
meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are
requested to complete the accompanying form of proxy, in accordance with the instructions printed
thereon and return the same at the offices of the Company’s branch share registrar in Hong Kong, Union
Registrar Limited, at Room 1803, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai,
Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the
holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not
preclude you from attending and voting in person at the meeting or any adjourned meeting should you so
wish.
30 April 2007


LETTER FROM THE BOARD
- 1 -
DAIDO GROUP LIMITED

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(Incorporated in Bermuda with limited liability)
(Stock code: 544)
Executive Directors: Registered office:
Mr. Fung Wa Ko (Chairman) Clarendon House
Mr. Tang Tsz Man, Philip 2 Church Street
Hamilton HM 11
Independent Non-executive Directors: Bermuda
Mr. Leung Chi Hung
Mr. Leung, Tsz Fung David Ferreira Head office and principal place
Mr. Tse Yuen Ming of business in Hong Kong:
Unit No. 1906, 19th Floor
West Tower, Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
30 April 2007
To the shareholders of the Company
Dear Sir or Madam,
PROPOSED RE-ELECTION OF DIRECTORS
AT THE ANNUAL GENERAL MEETING

AND
PROPOSALS FOR
GENERAL MANDATES
TO ISSUE AND REPURCHASE SHARES
INTRODUCTION

The purpose of this circular is to provide you with information regarding the resolutions to be
proposed at the forthcoming annual general meeting (“Annual General Meeting”) of Daido Group
Limited (“Company”) to be held on Wednesday, 23 May 2007 at 10:00 a.m., resolutions will be proposed,
among other matters: (i) to re-elect directors of the Company who are due to retire at the Annual General
Meeting; and (ii) to grant the Board of Directors general mandates to issue and repurchase shares of
HK$0.01 each of the Company (“Shares”).


LETTER FROM THE BOARD
- 2 -
RE-ELECTION OF DIRECTORS

In accordance with Bye-Law 87 of the Company’s Bye-Laws and the Code on Corporate Governance
Practices contained in Appendix 14 of the Rules (“Listing Rules”) Governing the Listing of Securities on
Fung Wa Ko and Mr. Tang Tsz
Man, Philip, shall retire by rotation and being eligible, offer themselves for re-election at the forthcoming
Annual General Meeting. Details of the above Directors that are required to be disclosed under the
Listing Rules are set out in Appendix I to this circular.
GENERAL MANDATE TO ISSUE AND REPURCHASE SHARES

At the annual general meeting of the Company held on 25 May 2006, ordinary resolutions were
passed granting general mandates to the directors of the Company (“Directors”), inter alia, (i) to repurchase
Shares not exceeding 10 per cent. of the aggregate nominal amount of the issued share capital of the
Company as at 25 May 2006 (“Repurchase Mandate”); and (ii) to allot, issue and otherwise deal with
additional Shares not exceeding 20 per cent. of the aggregate nominal amount of the issued share capital
of the Company in issue as at 25 May 2006 (“Issue Mandate”) and Shares not exceeding 10 per cent. of
the aggregate nominal amount of the issued share capital of the Company as at 25 May 2006 repurchased
by the Company pursuant to the Repurchase Mandate (the Repurchase Mandate and the Issue Mandate,
the “Existing Mandates”).
In accordance with the provisions of the Listing Rules and the terms of the general mandates
granted to the Directors at the annual general meeting of the Company held on 25 May 2006, the Existing
Mandates shall expire at the conclusion of the forthcoming Annual General Meeting to be held on 23
May 2007.
The Directors propose to seek the approval of the shareholders of the Company (“Shareholders”)
of the resolutions to be proposed and set out in resolutions numbers 4 and 5 respectively in the notice of
the Annual General Meeting to grant to the Directors new general mandates (i) to repurchase Shares not
exceeding 10 per cent. of the aggregate nominal amount of the issued share capital of the Company as at
the date of the Annual General Meeting (“Proposed Repurchase Mandate”); and (ii) to allot, issue and
otherwise deal with additional Shares not exceeding 20 per cent. of the aggregate nominal amount of the
issued share capital of the Company as at the date of the Annual General Meeting (“Proposed Issue
Mandate”).
In addition, subject to the resolutions numbers 4 and 5 are granted, a resolution number 6 as set
out in the notice of the Annual General Meeting will also be proposed at the Annual General Meeting to
grant to the Directors the extension of the Proposed Issue Mandate, which provides that any Shares
repurchased under the Proposed Repurchase Mandate will be added to the total number of Shares which
may be allotted and issued under the Proposed Issue Mandate.
As at 25 April 2007, being the latest practicable date (“Latest Practicable Date”) prior to the
printing of this circular, the Company had in issue 3,480,000,000 Shares.

LETTER FROM THE BOARD
- 3 -

Subject to the passing of the resolution granting the Proposed Issue Mandate and on the basis that
no further Shares are issued (whether generally or pursuant to the exercise of conversion rights attaching
to the convertible bond for 900,000,000 Shares) or repurchased before the Annual General Meeting, the
Company will be allowed to issue a maximum of 696,000,000 Shares pursuant to the Proposed Issue
Mandate.
An explanatory statement required by the Listing Rules in connection with the Proposed Repurchase
Mandate containing all information reasonably necessary to enable the Shareholders to make an informed
decision on whether to vote for or against the relevant resolutions at the Annual General Meeting is set
out in the Appendix II to this circular.
ANNUAL GENERAL MEETING

The resolutions referred to above are set out in full in the notice of the Annual General Meeting as
contained in the Company’s 2006 Annual Report. Whether or not you are able to attend the meeting, you
are requested to complete the accompanying form of proxy in accordance with the instructions printed
thereon and return the same at the offices of Company’s branch share registrars in Hong Kong, Union
Registrar Limited, at Room 1803, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai,
Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the
holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not
preclude you from attending and voting in person at the meeting or any adjourned meeting should you so
wish.
PROCEDURE FOR DEMANDING A POLL

According to Bye-Law 66 of the Bye-Laws of the Company, a resolution put to the vote of a
meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show
of hands or on the withdrawal of any other demand for a poll) a poll is demanded:
(a) by the chairman of such meeting; or
(b) by at least three Shareholders present in person (or in the case of a Shareholder being a
corporation by its duly authorised representative) or by proxy for the time being entitled to
vote at the meeting; or
(c) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a
corporation by its duly authorised representative) or by proxy and representing not less than
one-tenth of the total voting rights of all Shareholders having the right to vote at the
meeting; or
(d) by a Shareholder or Shareholders present in person (or in the case of a Shareholder being a
corporation by its duly authorised representative) or by proxy and holding shares in the
Company conferring a right to vote at the meeting being shares on which an aggregate sum
has been paid up equal to not less than one-tenth of the total sum paid up on all shares
conferring that right; or

LETTER FROM THE BOARD
- 4 -

(e) If required by the rules of the Designated Stock Exchange, by the chairman of such meeting
and/or the Directors who, individually or collectively, hold proxies in respect of shares
representing five per cent (5%) or more of the total voting rights of all Members having
right to vote at such meeting.
RECOMMENDATION

The Directors consider that the proposals for the re-election of Directors, the granting of the
general mandates to issue and repurchase Shares and the extension of the Proposed Issue Mandate are all
in the best interests of the Company and the Shareholders as a whole, and accordingly recommend all
Shareholders to vote in favour of the resolutions to be proposed at the Annual General Meeting.
GENERAL

Your attention is also drawn to the additional information set out in Appendices I and II to this
circular.
Yours faithfully
For and on behalf of the Board of
Daido Group Limited
Fung Wa Ko
Chairman

APPENDIX I DETAILS OF DIRECTORS PROPOSED TO BE
RE-ELECTED AT THE ANNUAL GENERAL MEETING
- 5 -
MR. FUNG WA KO

Mr. Fung Wa Ko, aged 45, joined the Group and appointed as the chief executive officer and
executive Director in October 2003 and appointed as the deputy chairman of the Group in April 2004. He
has become the chairman of the Group in August 2006. He is responsible for the overall operations
throughout the Group. Mr. Fung has over 18 years of experience in the area of business development,
corporate management and budget control. He received his education in the United Kingdom and has
worked in various management positions in Hong Kong, Mainland China, and other countries in Asia
Pacific Regions.
Mr. Fung has not held any other directorship in any listed company in the last three years.
Mr. Fung does not have any relationship with any other Directors, senior management, substantial
or controlling Shareholders of the Company. He does not have interests in Shares within the meaning of
Part XV of the SFO.
There was a service contract of Mr. Fung being appointed as a chief executive officer of the
Company entered with the Company. The service contract of Mr. Fung was commenced from 13th
October 2003 and shall continue until terminated by either party giving the other not less than one
month’s notice, if he is re-elected in the coming annual general meeting but is also subject to retirement
by rotation and re-election under Bye-Laws of the Company. Mr. Fung received an emolument of
HK$1,040,000 per annum from his service contract with the Company. The emoluments of Mr. Fung are
determined by reference to the Company’s performance and profitability, as well as remuneration
benchmark in the industry and the prevailing market conditions.
There is no other information relating to Mr. Fung that is required to be disclosed pursuant to rules
13.51(2)(h) to (v) of the Listing Rules.
Save as disclosed above, Mr. Fung is not aware of any other matters that need to be brought to the
attention of the Shareholders.
MR. TANG TSZ MAN, PHILIP

Mr. Tang Tsz Man, Philip, aged 41, joined the Group as an executive Director in August 2003. He
is the managing director of Grandtel Communications Limited. Mr. Tang has over ten years of business
management experience.
Mr. Tang has not held any other directorship in any listed company in the last three years.
Save for Mr. Tang is also a director of Ever Achieve Enterprises Limited (being a substantial
Shareholder of the Company), Mr. Tang does not have any relationship with any other Directors, senior
management, substantial or controlling Shareholders of the Company. He does not have interests in
Shares within the meaning of Part XV of the SFO.

APPENDIX I DETAILS OF DIRECTORS PROPOSED TO BE
RE-ELECTED AT THE ANNUAL GENERAL MEETING
- 6 -

There was no service contract entered into between Mr. Tang and the Company and there was no
specific length of service with the Company. His appointment subject to retirement by rotation and re-
election under Bye-Laws of the Company. Mr. Tang received an emolument of HK$120,000 per annum
from the Company. The emoluments of Mr. Tang are determined by reference to the Company’s
performance and profitability, as well as remuneration benchmark in the industry and the prevailing
market conditions.
There is no other information relating to Mr. Tang that is required to be disclosed pursuant to rules
13.51(2)(h) to (v) of the Listing Rules.
Save as disclosed above, Mr. Tang is not aware of any other matters that need to be brought to the
attention of the Shareholders.

APPENDIX II EXPLANATORY STATEMENT
- 7 -

This explanatory statement contains the information that are required by the Listing Rules to be
included in an explanatory statement to enable Shareholders to make an informed view on whether to
vote for or against the resolutions to be proposed at the Annual General Meeting in relation to the
repurchase by the Company of its own securities.
LISTING RULES FOR REPURCHASE OF SECURITIES

The relevant sections of the Listing Rules which permit companies with a primary listing on the
Stock Exchange to repurchase their securities on the Stock Exchange subject to certain restrictions are
summarised below.
SHAREHOLDERS’ APPROVAL
The Listing Rules provide that all proposed repurchases of securities by a company with a primary
listing on the Stock Exchange must be approved in advance by an ordinary resolution of shareholders,
either by way of a general mandate or by a specific approval of a particular transaction.
NUMBER OF REPURCHASED SHARES

It is proposed that the Proposed Repurchase Mandate will authorise the repurchase by the Company
not exceeding 10 per cent. of the aggregate nominal amount of the issued share capital of the Company
as at the date of the Annual General Meeting. As at the Latest Practicable Date, the Company had in issue
3,480,000,000 Shares.
Subject to the passing of the resolution granting the Proposed Repurchase Mandate and on the
basis that no further Shares are issued (whether generally or pursuant to the exercise of conversion rights
attaching to the convertible bond for 900,000,000 Shares) or repurchased before the Annual General
Meeting, the Company will be allowed to repurchase a maximum of 348,000,000 shares during the period
ending on the earlier of the conclusion of the next annual general meeting of the Company or the date by
which the next annual general meeting of the Company is required to be held by law (or the date upon
which such authority is revoked or varied by an ordinary resolution of the Shareholders in general
meeting).
Any Shares repurchased pursuant to the Proposed Repurchase Mandate must be fully-paid up.
SOURCE OF FUNDS

Repurchases must be funded out of funds legally available for the purpose and in accordance with
the Company’s memorandum of association and Bye-Laws and the applicable laws of the jurisdiction in
which the Company is incorporated or otherwise established. Bermuda law provides that the amount of
capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on
the relevant Shares, or the profits that would otherwise be available for distribution by way of dividend or
the proceeds of a new issue of shares made for such purpose. The amount of premium payable on a
repurchase may only be paid out of either the profits that would otherwise be available for distribution by
way of dividend or out of the share premium or contributed surplus accounts of the Company. It is
envisaged that the Company would derive the funds from such sources.

APPENDIX II EXPLANATORY STATEMENT
- 8 -
REASON FOR REPURCHASE

The Directors believe that it is in the best interests of the Company and the Shareholders to seek a
general authority from the Shareholders to enable the Company to repurchase the Shares on the Stock
Exchange. Such repurchases may, depending on market conditions and funding arrangements at the time,
lead to an enhancement of the net asset value of the Company and/or its earnings per share and will only
be made when the Directors believe that such repurchases will benefit the Company and the Shareholders.
The exercise of the Proposed Repurchase Mandate in full could have a material adverse impact on
the working capital position and gearing position of the Company as compared with the position as
disclosed in the Company’s latest published audited financial statements for the year ended 31 December
2006. The Directors do not propose to exercise the mandate to repurchase Shares to such extent as would,
in the circumstances, have a material adverse effect on the working capital requirements of the Company
as compared with the position disclosed in the latest published audited financial statements or the gearing
levels which in the opinion of the Directors are from time to time appropriate for the Company.
CONNECTED PARTIES

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries,
any of their associates have any present intention to sell Shares to the Company or its subsidiaries, in the
event the Proposed Repurchase Mandate is approved by the Shareholders.
No connected person, as defined in the Listing Rules, has notified the Company that he has a
present intention to sell Shares to the Company, or has undertaken not to do so in the event the Company
is authorised to make repurchase of Shares.
UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable,
they will exercise the power of the Company to make purchases pursuant to the Proposed Repurchase
Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.
EFFECT OF THE TAKEOVERS CODE

If as a result of a repurchase of Shares, a Shareholder’s proportionate interest in the voting rights
of the Company increases, such increase will be treated as an acquisition of voting rights for the purposes
of The Hong Kong Code on Takeovers and Mergers (the “Takeovers Code”). Accordingly, a Shareholder,
or group of Shareholders acting in concert, depending on the level of increase of the Shareholders’
interest, could obtain or consolidate control of the Company and become obliged to make a mandatory
offer in accordance with Rules 26 and 32 of the Takeovers Code.
As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, Ever
Achieve Enterprises Limited (“EAEL”) held 1,011,615,665 Shares, representing approximately 29.07 per
cent. of the issued share capital of the Company.

APPENDIX II EXPLANATORY STATEMENT
- 9 -

In the event that the Directors exercise in full the Proposed Repurchase Mandate, the interests of
EAEL would be increased to approximately 32.30 per cent. of the issued share capital of the Company.
To the best of the knowledge and belief of the Directors, such increase in the interests of EAEL will give
rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code. The Directors have
no present intention to repurchase securities of the Company to the extent that would give rise to an
obligation on the part of EAEL or any other Shareholder to make a mandatory offer under Rule 26 of the
Takeovers Code.
The Listing Rules prohibit a company from making repurchases on the Stock Exchange if the
result of such repurchases would be that less than 25 per cent. (or such other prescribed minimum
percentage as determined by the Stock Exchange) of the issued share capital would be in public hands.
The Directors will also have no present intention to exercise the power to repurchase Shares on the Stock
Exchange pursuant to the Proposed Repurchase Mandate to such an extent as to result in the number of
Shares held by the public falling below 25 per cent.
GENERAL

The Company has not repurchased any securities of the Company on the Stock Exchange in the six
months immediately prior to the Latest Practicable Date.
SHARE PRICES

The following table shows the highest and lowest prices at which the Shares has been traded on the
Stock Exchange in each of the previous twelve months:–
Shares
Highest Lowest
HK$ HK$
2006

April 0.1150 0.0850
May 0.1370 0.1000
June 0.1250 0.0820
July 0.0910 0.0730
August 0.0910 0.0710
September 0.0810 0.0650
October 0.0680 0.0550
November 0.0850 0.0580
December 0.0660 0.0560
2007

January 0.0760 0.0550
February 0.1190 0.0680
March 0.1130 0.0700
April (up to the Latest Practicable Date) 0.1350 0.0920