Critical Accounting Estimates

The preparation of the Company’s financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses for the reporting year. Due to the inherent uncertainty involved with making such estimates, actual results reported in future periods could differ from those estimates. Significant estimates include the following:

Pension Return and Discount Rates

The estimated return and discount rate affect the pension expense and liabilities. These estimates are made with the assistance of the Company’s actuaries to ensure that the estimates are reasonable and consistent with those of other Companies in our industry. The estimated return on plan assets is subject to change on an annual basis based on the anticipated returns of the plan assets, the return of equities and fixed income securities held by the plan and the performance of public securities markets. The discount rate is subject to change based on the age and changes in composition of the plan members and long term bond rates. A one percent change in either rate would have a material impact on the pension liabilities. The significant ongoing volatility in the global financial markets, particularly since the end of fiscal 2008, could significantly increase the Company’s pension liabilities. This could have a material adverse effect in the Company’s liquidity and results of operations.

Revenue Recognition

The terms of the Company’s solar silicon contracts provide certain customers with limited rights of return. Revenue from such contracts is recorded net of an adjustment for estimated returns. The Company’s estimate of returns requires assumptions to be made regarding the market price for solar silicon scrap in concert with actual experience of returns received. Should this estimate and these experiences change, the return provision will be adjusted in the period.

Asset Retirement Obligations

The Company’s asset retirement obligations involve various estimates of the cost of a variety of activities often many years in the future. The Company engages independent consultants to assist in the estimation of closure and remediation costs. Furthermore, the asset retirement obligation is a discounted balance. Currently the Company discounts the estimated cash flows at 9%. A 1% change in the discount rate will change the obligation by approximately $0.3 million.

Fair Market Value of Assets at Haley, Ontario

The Company is in the process of closing its Haley, Ontario manufacturing facility and anticipates disposing of all the assets related to that operation including land, buildings and manufacturing equipment. As at the date of the closure, management has made estimates of the expected net proceeds from the future disposal of these assets. These estimates are based upon management’s experience with the disposal of other physical assets at this site in 2007. As the closure process proceeds management will employ the services of an appraisal firm to establish an orderly liquidation process. Management currently estimates the fair market value of the land, equipment and buildings at Haley to be approximately $0.7 million. During fiscal 2008, the carrying value of the buildings at Haley was reduced by $0.8 million to their estimated scrap value. The value of the property is impaired by the ongoing environmental remediation underway at the site.