2 cups cashews
3/4 cup sugar (you can use 1 cup sugar if you need the katlis a little sweeter but I have found 3/4 cup to give the right amount of sweetness)
1/2 cup water
1 tsp ghee (to grease the surface)

Powder the cashews to a fine powder in a food processor  – do not add any water (I put the cashew pieces in a toaster oven at 250 F for about five minutes to make them dry out a little which helps powder them better)
Add the sugar and water in a pan. Heat to form a one string syrup and reduce heat to low.
Add the powdered cashews now and stir so no lumps are formed. Remove from heat and once cooled down a little, knead it well and flatten it on a greased work surface using a rolling pin to desired thickness.  (I put some plastic saran wrap on a cutting board, rub some ghee on it,put the dough on it, put another plastic saran wrap on top and then flatten with a pin.)
After about 10 minutes,cut into desired shapes.

This makes about 40 pieces of kaju katli. 
Images to follow soon..
Fun Tips: You can add food coloring to the sugar syrup before adding the powdered cashews to make a variety of colors to match a theme, if you want (maybe to match the colors of the new Diwali outfits you have!!)

Happy Diwali!