CRJI China Runji Cement Inc (CE)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

As used herein the terms "we", "us", "our," the “Issuer,” and the "Company" means, Fitmedia Inc., a Delaware corporation.

GENERAL DESCRIPTION OF BUSINESS

Introduction

The Issuer was incorporated as a Delaware company on August 30, 2004.

In October, 2007, the management of the Issuer determined that it was in the best interests of the stockholders of the Issuer to agree to enter into a share exchange (the “Share Exchange”) and acquire Anhui Province Runji Cement Co., Ltd. (“Anhui Runji”), a Chinese company that is engaged in the business of distributing cement across several provinces in mainland China as well as in Hong Kong. As part of the reverse merger, the Issuer will cease engaging in the health and fitness business.

As a result of the Share Exchange, Anhui Runji became an indirect wholly-owned subsidiary of the Issuer, and the Issuer succeeded to the business of Anhui Runji, which is a leading cement production and distribution company in mainland China. Using low cost production techniques, while building a strong brand image, Anhui Runji is a strong competitor in the central China cement market.

Material Terms and Conditions of the Share Exchange Agreement

On October 9, 2007, FitMedia Inc. (the “Issuer”) entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among the Issuer, Timothy Crottey, the President and majority shareholder of FitMedia (“Crottey”), Zhao Shou Ren, a citizen and resident of the People’s Republic of China and owner of 100% of the share capital of Ren Ji Cement Investment Company Limited (“Ren”); Ren Ji Cement Investment Company., Ltd., a British Virgin Islands corporation (“Renji Investment”) and owner of 100% of the share capital of Ren Ji Cement Company Limited; Ren Ji Cement Company Limited, a corporation organized and existing under the laws of the Hong Kong SAR of the People’s Republic of China (“HK Renji”) and owner of 100% of the share capital of Anhui Province Runji Cement Co., Ltd.; and Anhui Province Runji Cement Co., Ltd., a corporation organized under the laws of the People’s Republic of China (“Anhui Runji”). For purposes of the Exchange Agreement, Ren is referred to therein as the “Ren Shareholder, “ and Renji Investment, HK Renji and Anhui Runji are referred to therein as the “Renji Subsidiaries.” Upon closing of the Share Exchange contemplated under the Exchange Agreement on November 1, 2007, the Ren Shareholder transferred all of his share capital in Renji Investment to the Issuer in exchange for an aggregate of 55,000,000 shares of common stock of the Issuer, thus causing the Renji Subsidiaries to become a direct and indirect wholly-owned subsidiaries of the Issuer.

On October 9, 2007, the Issuer entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among the Issuer, Crottey, and the Ren Shareholder, pursuant to which the Ren Shareholder, as Purchaser, at closing on November 1, 2007, acquired 18,500,000 shares (the “Stock Purchase”) of common stock of the Issuer from Crottey for $540,000.00.

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In addition, pursuant to the terms and conditions of the Exchange Agreement:

• Demand and piggy-back registration rights were granted to the Ren Shareholder with respect to shares of the Company’s restricted common stock to be acquired by him at closing in a Regulation S offering.
• On the Closing Date, the current officers of the Registrant resigned from such positions and the persons chosen by Anhui Runji were appointed as the officers of the Issuer, notably Zhao Shou Ren, as Chairman, CEO and President and Jiang Yi Chun as CFO.
• On the Closing Date, Crottey resigned from his position as a director effective upon the expiration of the ten day notice period required by Rule 14f-1, at which time additional persons designated by Anhui Runji were appointed as director of the Issuer, notably Bi Li Ming and Yang Xuan Jun.
• On the Closing Date, the Issuer paid and satisfied all of its “liabilities” as such term is defined by U.S. GAAP as of the closing.
• As of the Closing, the parties consummated the transactions contemplated by the Stock Purchase Agreement.

As of the date of the Exchange Agreement and Stock Purchase Agreement, there were no material relationships between the Issuer or any of its affiliates and the Renji Subsidiaries, or Anhui Runji, other than in respect of the Share Exchange.

The foregoing description of the Exchange Agreement and the Stock Purchase Agreement do not purport to be complete and is qualified in its entirety by reference to the complete text of the Exchange Agreement, which is filed as Exhibit 2.1, and the complete text of the Stock Purchase Agreement, which is filed as Exhibit 2.2, to a Form 8-K filed with the Commission on November 7, 2007, both of which are incorporated herein by reference.

Summary of the Operations of Anhui Runji

Anhui Province Runji Cement Co., Ltd. is a private company located in Anhui Province in China, established in December 2003 with registered capital of 60 million RMB. The Company started production in October 2005 and specializes in cement production and sales. The main cement varieties produced are ordinary silicate cement PO52.5, P.O42.5, P.O32.5 and P.C32.5. At present, the Company has one cement clinker production line with daily production of 2,500 tons and one million tons annually.

The Company obtained its production license in 2005. Presently, the Company focuses production on Runji Brand P.II52.5, P.O42.5, P.O32.5 and P.C32.5 cements. P.II52.5 is a high grade, high strength cement that is made in the Anhui and Jiangsu Provinces and the region of north of the Changjiang River and is used in large projects. The Company has a rigorous quality control system and received ISO9001 quality system certification and international accreditation in March 2006. In addition the Company passed the national GB/T 19001-2000 standard authentication.

Presently, the Company’s main market is in Hefei and Pukou (Nanjing), with total sales of 600,000 tons in the area, representing 60% of its total annual production of one million tons. An additional 30% of total annual production is sold in the cities surrounding Hefei and Pukou, with another 10% being sold in Liu’an and Dingyuan in the Anhui and Jiangsu Provinces.

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The Company’s net sales to customers for the three months ended November 30, 2007 and November 30, 2006, were $10,311,286 and 7,433,661 respectively.

In the future, the Company plans to construct additional cement product lines or facilities

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2007

The following discussion should be read in conjunction with the financial statements included in this report and is qualified in its entirety by the foregoing.

FORWARD LOOKING STATEMENTS

Certain statements in this report, including statements of our expectations, intentions, plans and beliefs, including those contained in or implied by "Management's Discussion and Analysis" and the Notes to Financial Statements, are "forward-looking statements", within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are subject to certain events, risks and uncertainties that may be outside our control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “will”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements. These forward-looking statements include statements of management's plans and objectives for our future operations and statements of future economic performance, information regarding our expansion and possible results from expansion, our expected growth, our capital budget and future capital requirements, the availability of funds and our ability to meet future capital needs, the realization of our deferred tax assets, and the assumptions described in this report underlying such forward-looking statements. Actual results and developments could differ materially from those expressed in or implied by such statements due to a number of factors, including, without limitation, those described in the context of such forward-looking statements.

OVERVIEW

We were incorporated on August 30, 2004 under the laws of the State of Delaware. On October 9, 2007, we entered into a Share Exchange Agreement with Ren Ji Cement Investment Company Limited (“Ren Ji”), a British Virgin Islands corporation and owner of 100% of the share capital of Ren Ji Cement Company Limited; Ren Ji Cement Company Limited, a corporation organized and existing under the laws of the Hong Kong SAR of the People’s Republic of China (“HK Renji”) and owner of 100% of the share capital of Anhui Province Runji Cement Co., Ltd. (“Anhui Runji”), a corporation organized under the laws of the People’s Republic of China. After consummating the Share Exchange transaction, the Company started to engage in the production and distribution of cement products in China through Anhui Runji.

Anhui Province Runji Cement Co., Limited (“Anhui Runji”) has completed the construction of its first cement production line with daily production of 2,500 tons, or one million tons per year. In August 2007, Anhui Runji started to build up its second cement production line with daily production capacity of 2,500 tons, or one million tons per year. The second cement production line is estimated to be completed in August 2008 and put into production in October 2008. At that time, the annual cement production capacity of Anhui Runji will be over two million tons.

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After completing the construction of Anhui Runji’s first two production lines, the Company plans to construct its 3 ^rd and 4 ^th production lines in 2009 and 2010 respectively. These two production lines will have a daily production capacity of 5,000 tons or 2 million tons annually respectively.

After completing the construction of these production lines, the Company will be capable of a daily cement production capacity of 15,000 tons and yearly cement production capacity of 6 million tons, thus becoming a large cement plant in China. The market share of the Company will be estimated to be over 80% in the market area surrounding the Company in a diameter of 300 kilometers.

The discussion and analysis of the Company’s financial condition presented in this section are based upon the unaudited consolidated financial statements of Fitmedia Inc., which have been prepared in accordance with the generally accepted accounting principles in the United States. During the preparation of the financial statements Fitmedia Inc. is required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, Fitmedia Inc. evaluates its estimates and judgments, including those related to sales, returns, pricing concessions, bad debts, inventories, investments, fixed assets, intangible assets, income taxes and other contingencies. Fitmedia Inc. bases its estimates on historical experience and on various other assumptions that it believes are reasonable under current conditions. Actual results may differ from these estimates under different assumptions or conditions.

In response to the SEC’s Release No. 33-8040, “Cautionary Advice Regarding Disclosure About Critical Accounting Policy,” Fitmedia Inc. identified the most critical accounting principals upon which its financial status depends. Fitmedia Inc. determined that those critical accounting principles are related to the use of estimates, inventory valuation, revenue recognition, income tax and impairment of intangibles and other long-lived assets. Fitmedia Inc. presents these accounting policies in the relevant sections in this management’s discussion and analysis, including the Recently Issued Accounting Pronouncements discussed below.

Revenue Recognition . Fitmedia Inc. recognizes sales when the revenue is realized or realizable, and has been earned, in accordance with SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements”. Fitmedia Inc.’ sales are related to sales of product. Revenue for product sales is recognized as risk and title to the product transfer to the customer, which usually occurs at the time shipment is made. Substantially all of Fitmedia Inc.’ products are sold FOB (“free on board”) shipping point. Title to the product passes when the product is delivered to the freight carrier.

Sales revenue represents the invoiced value of goods, net of a value-added tax (VAT). All of Fitmedia Inc.’ products that are sold in the China are subject to a Chinese value-added tax at a rate of 17% of the gross sales price or at a rate approved by the Chinese local government. This VAT may be offset by VAT paid by Fitmedia Inc. on raw materials and other materials included in the cost of producing their finished product.

Accounts Receivable, Trade and Allowance for Doubtful Accounts. Fitmedia Inc.’ business operations are conducted in the People's Republic of China. During the normal course of business, Fitmedia Inc. extends unsecured credit to its customers. Management reviews

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accounts receivable on a regular basis to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is recorded when collection of the full amount is no longer probable.

I nventories. Inventories are stated at the lower of cost or market using the weighted average method. Fitmedia Inc. reviews its inventory on a regular basis for possible obsolete goods or to determine if any reserves are necessary for potential obsolescence.

Off-Balance Sheet Arrangements . Fitmedia Inc. has not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. Fitmedia Inc. has not entered into any derivative contracts that are indexed to Fitmedia Inc.’s shares and classified as shareholder’s equity or that are not reflected in Fitmedia Inc.’s financial statements. Furthermore, Fitmedia Inc. does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Fitmedia Inc. does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to the Company or engages in leasing, hedging or research and development services with Fitmedia Inc

Inflation . Fitmedia Inc. believes that inflation has not had a material effect on its operations to date.

Income Taxes . Fitmedia Inc. has adopted Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS 109). SFAS 109 requires the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consist of taxes currently due plus deferred taxes. Since Fitmedia Inc. had no operations within the United States there is no provision for US income taxes and there are no deferred tax amounts at December 31, 2006 and 2005. The charge for taxation is based on the results for the year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probably that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they related to income taxes levied by the same taxation authority and the Company intends to settle current tax assets and liabilities on a net basis.

Recently Issued Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159 (“SFAS 159”), The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115. This Statement permits entities to choose to measure many financial instruments and certain other items at fair

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value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.

The Financial Accounting Standards Board, the Emerging Issues Task Force (the “EITF”) and the Securities and Exchange Commission have issued certain other accounting pronouncements and regulations as of September 30, 2007 which will be effective in future periods. Management of the Company has reviewed these changes and does not believe that any of those pronouncements would have significant effect on the Company’s financial statements, measurements or disclosures had they been in effect during 2007, 2006 and 2005, and they do not believe that any of those pronouncements will have a significant impact on the Company’s financial statements at the time they become effective.

RESULTS OF OPERATIONS

The following table shows the selected unaudited condensed consolidated income statement data of the Company and its subsidiaries for the three-months ended Nov 30, 2007 and Nov 30, 2006. The data should be read in conjunction with the unaudited Condensed Consolidated Financial Statements of the Company for the three-month periods ended Nov 30, 2007 and Nov 30, 2006 and related notes thereto.