UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549







FORM
10-Q







x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended February
28, 2009







o TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from _____ to _____







Commission
File Number 000-51755








CHINA RUNJI CEMENT
INC.


(Exact
name of Registrant as specified in its charter)








Delaware
              
              98-0533824(State
      or other jurisdiction of incorporation or organization)
              
              (IRS
      Employer Identification No.)








Xian
Zhong Town, Han Shan County


Chao Hu City, People’s
Republic of China


(Address
of principal executive offices)








(86) 565
4219871


(Registrant's
telephone number)








Check
whether the registrant (1) filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.   Yes x   
No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
Accelerated Filer o   
Accelerated Filer o   
Non-accelerated Filer o   
Smaller Reporting Company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act):   Yes o    No
x





State the
number of shares outstanding of each of the issuer's classes of common stock, as
of the latest practicable date: April 14, 2009, 78,832,064 shares.







CHINA
RUNJI CEMENT INC.





Form
10-Q for the period ended February 28, 2009







TABLE
OF CONTENTS





PagePART
      I - FINANCIAL INFORMATIONITEM
      1 - FINANCIAL STATEMENTSConsolidated
      Balance Sheets as of February 28, 2009 (Unaudited) and August 31,
      2008
                  3Consolidated
      Statements of Operations and Comprehensive Income for the six months
      ended February 28, 2009 and February 29,
      2008
                  4Consolidated
      Statements of Cash Flows for the six months ended February 28, 2009 and
      February 29, 2008
                  5Notes
      to Unaudited Consolidated Financial Statements
                  6 -
      11ITEM
      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS
                  12ITEM
      3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
                  16ITEM
      4 (A) - CONTROLS AND PROCEDURES
                  16ITEM
      4 (A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING
                  16PART
      II - OTHER INFORMATIONITEM
      1 - LEGAL PROCEEDINGS
                  17ITEM
      2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
                  17ITEM
      3 - DEFAULTS UPON SENIOR SECURITIES
                  17ITEM
      4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                  17ITEM
      5 - OTHER INFORMATION
                  17ITEM
      6 – EXHIBITS
                  17SIGNATURES
                  17







- 2
-




PART I - FINANCIAL INFORMATION




ITEM 1 - FINANCIAL STATEMENTS




China
Runji Cement, Inc.


Consolidated
Balance Sheets






Feb
      28,
                                                                                                              
                                                                                                              
                                                                                                              Aug
      31,2009
                                                                                                              
                                                                                                              
                                                                                                              2008ASSETSCurrent
      AssetsCash and cash equivalents
                                                                                                              
                                                                                                              $
                                                                                                              375,429
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              415,031Accounts receivable, net (Note 3)
                                                                                                              
                                                                                                              
                                                                                                              6,851,264
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              2,231,363Advances (Note 5)
                                                                                                              
                                                                                                              
                                                                                                              3,537,190
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              3,772,367Notes receivable
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              868,593Due from related parties
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              53,516Inventory (Note 4)
                                                                                                              
                                                                                                              
                                                                                                              4,006,192
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              3,275,570Prepaid expenses and other receivables
                                                                                                              
                                                                                                              
                                                                                                              1,163,715
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,530,022Total
      Current Assets
                                                                                                              
                                                                                                              
                                                                                                              15,933,790
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              12,146,462Property,
      plant and equipment, net (Note 6)
                                                                                                              
                                                                                                              
                                                                                                              50,188,678
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              51,499,895Intangible
      Assets & Deferred Charges (Note 7)
                                                                                                              
                                                                                                              
                                                                                                              4,481,211
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              4,615,689Total
      Assets
                                                                                                              
                                                                                                              $
                                                                                                              70,603,679
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              68,262,046LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesPayables and accrued liabilities (Note 8)
                                                                                                              
                                                                                                              $
                                                                                                              23,119,655
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              14,627,928Customer deposit
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              1,001,178Short-term loans (Note 9)
                                                                                                              
                                                                                                              
                                                                                                              438,030
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              438,570Due to Related Parties (S/T, Note 10)
                                                                                                              
                                                                                                              
                                                                                                              22,054,945
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              27,805,125Taxes payable
                                                                                                              
                                                                                                              
                                                                                                              368,351
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              2,042,701Wages payable
                                                                                                              
                                                                                                              
                                                                                                              223,022
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              331,341Total
      Current Liabilities
                                                                                                              
                                                                                                              
                                                                                                              46,204,003
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              46,246,843Total
      Liabilities
                                                                                                              
                                                                                                              
                                                                                                              46,204,003
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              46,246,843Commitments
      and Contingencies (Note 11)Stockholders'
      EquityPreferred Stock: 20,000,000 shares authorized, $0.0001 par value, No
      shares issued and outstanding
                                                                                                              
                                                                                                              
                                                                                                              -
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              -Common Stock: 200,000,000 shares authorized, $0.0001 par value, 78,832,064
      shares issued and outstanding
                                                                                                              
                                                                                                              
                                                                                                              7,883
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              7,883Additional paid in capital
                                                                                                              
                                                                                                              
                                                                                                              12,327,962
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              12,327,962Accumulated other comprehensive income
                                                                                                              
                                                                                                              
                                                                                                              2,570,817
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              2,595,790Retained earnings
                                                                                                              
                                                                                                              
                                                                                                              9,493,014
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              7,083,568Total
      Stockholders' Equity
                                                                                                              
                                                                                                              
                                                                                                              24,399,676
                                                                                                              
                                                                                                              
                                                                                                              
                                                                                                              22,015,203Total
      Liabilities and Stockholders' Equity
                                                                                                              
                                                                                                              $
                                                                                                              70,603,679
                                                                                                              
                                                                                                              
                                                                                                              $
                                                                                                              68,262,046






The
accompanying notes are an integral part of these unaudited financial
statements.


- 3
-




China
Runji Cement, Inc.


Consolidated
Statement of Operations and Comprehensive Income






For
      the Three Months Ended
                                                                                                            
                                                                                                            
                                                                                                            For
      the Six Months EndedFebruary
      28,
                                                                                                              2009
                                                                                                            
                                                                                                            
                                                                                                            February
      29,
                                                                                                              2008
                                                                                                            
                                                                                                            
                                                                                                            February
      28,
                                                                                                              2009
                                                                                                            
                                                                                                            
                                                                                                            February
      29,
                                                                                                              2008Revenue
                                                                                                            
                                                                                                            $
                                                                                                            9,290,749
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            5,908,827
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            25,041,160
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            16,220,113Cost
      of goods sold
                                                                                                            
                                                                                                            
                                                                                                            9,565,813
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            4,973,977
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            23,263,320
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            12,764,571Gross
      Profit (Loss)
                                                                                                            
                                                                                                            
                                                                                                            (275,064
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            934,850
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            1,777,840
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            3,455,542Operating
      Costs and Expenses:Selling
      expenses
                                                                                                            
                                                                                                            
                                                                                                            87,370
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            24,131
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            159,422
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            40,441G&A
      expenses:
                                                                                                            
                                                                                                            
                                                                                                            513,129
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            398,922
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            886,792
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            852,971Depreciation
      of property, plant and equipment
                                                                                                            
                                                                                                            
                                                                                                            37,852
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            21,921
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            75,640
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            43,087Total
      operating costs and expenses
                                                                                                            
                                                                                                            
                                                                                                            638,351
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            444,974
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            1,121,854
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            936,499Income
      From Operations
                                                                                                            
                                                                                                            
                                                                                                            (913,415
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            489,876
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            655,986
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            2,519,043Interest income (Expense)
                                                                                                            
                                                                                                            
                                                                                                            (15,851
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (21,883
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (35,635
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (24,164
                                                                                                            )Reversal of allowance for doubtful accounts
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            209,537
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            209,537Government subsidies/Grants
                                                                                                            
                                                                                                            
                                                                                                            1,506,787
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            2,238,678
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            -Other income (expenses)
                                                                                                            
                                                                                                            
                                                                                                            (4,359
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            11,311
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            (67,143
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            104,725Income
      Before Income Taxes
                                                                                                            
                                                                                                            
                                                                                                            573,162
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            688,841
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            2,791,886
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            2,809,141Income taxes expense (benefit)(Note 12)
                                                                                                            
                                                                                                            
                                                                                                            (171,311
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            (163,486
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            382,440
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            524,198Net
      Income
                                                                                                            
                                                                                                            $
                                                                                                            744,473
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            852,327
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            2,409,446
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            2,284,943Other
      Comprehensive Income (Loss)Foreign
      currency translation adjustment
                                                                                                            
                                                                                                            
                                                                                                            (24,890
                                                                                                            )
                                                                                                            
                                                                                                            
                                                                                                            590,299
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            24,974
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            915,942Comprehensive
      Income
                                                                                                            
                                                                                                            $
                                                                                                            719,583
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            1,442,626
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            2,434,420
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            3,200,885Earnings
      Per Share - Basic and Diluted
                                                                                                            
                                                                                                            $
                                                                                                            0.01
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            0.01
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            0.03
                                                                                                            
                                                                                                            
                                                                                                            $
                                                                                                            0.03Weighted
      Average Shares Outstanding - Basic and Diluted
                                                                                                            
                                                                                                            
                                                                                                            78,832,064
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            78,832,064
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            78,832,064
                                                                                                            
                                                                                                            
                                                                                                            
                                                                                                            77,044,944








The
accompanying notes are an integral part of these unaudited financial
statements.


- 4
-




China
Runji Cement, Inc.


Consolidated
Statements of Cash Flows






For
      the Six Months Period EndedFebruary
      28,2009
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        February
      29, 2008Operating
      activitiesNet income
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        2,409,446
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        2,284,943Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Reversal of allowance of doubtful accounts
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        -
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (209,537
                                                                                                                                                                                                        )Amortization
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        128,788Depreciation expense
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        2,050,958
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        1,299,670Changes
      in operating assets and liabilities:Accounts receivable, net
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (4,616,368
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        2,638,811Notes receivable
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        867,523
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        268,552Advances to suppliers
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        230,519
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (4,685,990
                                                                                                                                                                                                        )Prepaid expenses and other receivables
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        416,483
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (34,159
                                                                                                                                                                                                        )Inventory
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (734,613
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (592,875
                                                                                                                                                                                                        )Accounts payable and accrued liabilities
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        8,510,964
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (507,849
                                                                                                                                                                                                        )Customer Deposit
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (999,945
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (619,360
                                                                                                                                                                                                        )Tax payable
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (1,671,835
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        658,045Wages payable
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (108,183
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        63,697Net
      cash provided by operating activities
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        6,483,737
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        563,948Investing
      activitiesChanges in due from related parties
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        53,450
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        15,267Property, plant and equipment additions
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (803,268
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (1,744,656
                                                                                                                                                                                                        )Net
      cash used in investing activities
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (749,818
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (1,729,389
                                                                                                                                                                                                        )Financing
      activitiesShort term loan proceeds (repayment)
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        -
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (1,166,247
                                                                                                                                                                                                        )Repayments of due to related parties
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (5,715,952
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        2,145,177Capital distribution
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        -
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (12,889
                                                                                                                                                                                                        )Net
      cash provided by (used in) financing activities
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (5,715,952
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        966,041Effect
      of exchange rate changes on cash and cash equivalents
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (57,569
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (961,067
                                                                                                                                                                                                        )Increase
      (decrease) in cash and cash equivalents
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (39,602
                                                                                                                                                                                                        )
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        (1,160,467
                                                                                                                                                                                                        )Cash
      and cash equivalents, beginning of year
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        415,031
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        1,400,479Cash
      and cash equivalents, end of year
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        375,429
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        240,012Supplemental
      DisclosuresInterest Paid
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        23,037
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        46,411Income taxes paid
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        1,438,724
                                                                                                                                                                                                        
                                                                                                                                                                                                        
                                                                                                                                                                                                        $
                                                                                                                                                                                                        -






The
accompanying notes are an integral part of these unaudited financial
statements.


- 5
-


CHINA
RUNJI CEMENT INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)








NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS





The
Company was incorporated as FitMedia Inc., a Delaware corporation, on August 30,
2004.





On
November 1, 2007, the Company closed a reverse merger with Anhui Province Runji
Cement Co., Limited (“Anhui Runji”). Anhui Runji is the accounting acquirer
and the transaction is accounted for as a recapitalization.  The
historical financial statements of Anhui Runji survived the merger
and are presented herein.





Anhui
Runji, a producer and distributor of cement located in Anhui Province in
China, was established in December 2003 with registered capital of RMB 60
million yuan. Anhui Runji started production in October 2005 and specializes in
cement production and sales. The main cement varieties produced are ordinary
silicate cement PO52.5, PO42.5, PO32.5 and PC32.5. Following the commencement of
the second cement clinker production line in October 2008, Anhui Runji currently
has one production line of cement and one of cement clinker; each is
designed to produce 2,500 tons per day.





Anhui
Runji obtained its production license in 2005. Presently, Anhui Runji mainly
focuses production on Runji Brand PII52.5, PO42.5, PO32.5 and PC32.5
cements.  PII52.5 is a high grade, high strength cement that is made
in Anhui and Jiangsu Provinces and the region of north of the
Changjiang River and is used in large infrastructural projects. Anhui Runji
has a rigorous quality control system and received ISO9001 quality system
certification and international accreditation in March 2006. In addition Anhui
Runji passed the national GB/T 19001-2000 standard authentication.





Presently,
Anhui Runji’s main market is in Hefei city and Pukou area of Nanjing, with
60% of the total annual production sold in this area. 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 Anhui and Jiangsu. To reflect
its business and business plan, the Company changed its name from “FitMedia
Inc.” to “China Runji Cement Inc.”





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
of Presentation





The
accompanying unaudited interim consolidated financial statements of the Company
have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with August 31, 2008 audited
financial statements of the Company and the notes thereto as included in
the Company’s Form 10-K filed on December 3, 2008. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the consolidated financial
statements, which would substantially duplicate the disclosure required in the
Company’s June 30, 2008 annual financial statements have been
omitted.





These
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, Ren Ji Cement Investment Co., Ltd (a
BVI corporation), Ren Ji Cement Company Limited (a Hong Kong
corporation), Mass Market Limited (a BVI corporation), and Anhui Province
Runji Cement Co., Ltd. (a PRC corporation). All have been prepared in
accordance with accounting principles generally accepted in the United States of
America (“US GAAP”).





All
significant inter-company balances and transactions have been eliminated in
consolidation. Certain prior period numbers are reclassified to conform to
current period presentation.





Use
of Estimates





In
preparing these financial statements, management makes estimates and assumptions
that affect the reported amounts of assets and liabilities in the balance sheets
and revenues and expenses during the year reported. Actual results may differ
from these estimates.





New
Accounting Pronouncement





On
December 4, 2007, the FASB issued SFAS No.141R, Business Combinations (SFAS No.
141R).  SFAS No. 141R requires the acquiring entity in a business
combination to recognize all the assets acquired and liabilities assumed,
establishes the acquisition date fair value as the measurement objective for all
assets acquired and liabilities assumed, and requires the acquirer to expand
disclosures about the nature and financial effect of the business
combination.  SFAS No. 141R is effective for business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008.  We have not
yet determined the impact of the adoption of SFAS No. 141R on our consolidated
financial statements and footnote disclosures.




On
December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in
Consolidated Financial Statements (SFAS No. 160).  SFAS No. 160
requires all entities to report noncontrolling (minority) interests in
subsidiaries as equity in the consolidated financial statements.  The
statement establishes a single method of accounting for changes in a parent’s
ownership interest in a subsidiary that do not result in deconsolidation and
expands disclosures in the consolidated financial statements.  SFAS
No. 160 is effective for fiscal years beginning after December 15, 2008 and
interim periods within those fiscal years.  We have not yet determined
the impact of the adoption of SFAS No. 160 on our consolidated financial
statements and footnote disclosures. 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 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.




- 6
-




CHINA
RUNJI CEMENT INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)






NOTE 2 – SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)





Cash
and Cash Equivalents




Cash and
cash equivalents include cash on hand, cash on deposit with various financial
institutions in the PRC, and all highly-liquid investments with original
maturities of three months or less at the time of purchase.





Accounts
Receivable





Accounts
receivable are carried at original invoice amount less an estimate made for
doubtful accounts based on a review of all outstanding amounts on a monthly
basis. Management judgment and estimates are made in connection with
establishing the allowance for doubtful accounts. Specifically, the Company
analyzes the aging of accounts receivable balances, historical bad debts,
customer concentrations, customer credit-worthiness, current economic trends and
changes in our customer payment terms. Significant changes in customer
concentration or payment terms, deterioration of customer credit-worthiness or
weakening in economic trends could have a significant impact on the
collectibility of receivables and the Company’s operating results. The allowance
of doubtful account is accrued based on the AR identified
uncollectible.





Inventories





Inventories,
which are primarily comprised of raw materials, packaging materials,
semi-finished goods, and finished goods, are stated at the lower of cost or net
realizable value, using the moving average(“MA”) method. Cost being determined
on the basis of a moving average. The Company evaluates the need for reserves
associated with obsolete, slow-moving and non-salable inventory by reviewing net
realizable values on a periodic basis.





Property
and Equipment





Property
and equipment are recorded at cost and depreciated using the straight-line
method, with an estimated 5% salvage value of original cost, over the estimated
useful lives of the assets as follows:





Building
                                  20
      yearsManufacturing
      machinery & equipment
                                  8
      yearsElectronic
      equipment & automobiles
                                  5
      yearsOffice
      equipment
                                  5
      years





Expenditures
for repairs and maintenance, which do not improve or extend the expected useful
lives of the assets, are expensed as incurred while major replacements and
improvements are capitalized.





When
property or equipment is retired or disposed of, the cost and accumulated
depreciation are removed from the accounts, with any resulting gains or losses
being included in net income or loss in the year of disposition.





Impairment
of Long-Lived Assets




The
Company evaluates potential impairment of long-lived assets, in accordance with
Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which requires the Company to (a)
recognize an impairment loss only if the carrying amount of a long-lived asset
is not recoverable from its undiscounted cash flows and (b) measure an
impairment loss as the difference between the carrying amount and fair value of
the asset. There was no impairment in long-lived
assets at February 28, 2009 or August 31, 2008.





Government
Subsidies





A
government subsidy is recognized only when there is reasonable assurance that
the enterprise will comply with any conditions attached to the grant and the
grant will be received.





The
Company received a government incentive of RMB 15,297,000 for the six period
February 28, 2009, in which RMB3,650,0000 is the governmental allowance for
the Company’s waste heat generation project and RMB 11,647,000 is refunded
taxes.





The
Company is entitled to receive treasury subsidy of local government in
accordance with the “Regulations of facilitating investment in industrial
enterprises” (Article 17 of Han Order [2002]) which is promulgated on Oct 28,
2002 by the Communist Party Commission of Han Shan County, Anhui Province and
Han Shan County Government of Anhui Province. According to this regulation, the
first 3 years of tax payable by the Company after it commenced production to the
local government will be returned to the Company for the purpose increasing
production. The application of the Company was approved.





Revenue
Recognition




The
Company recognizes revenue when the significant risks and rewards of ownership
have been transferred pursuant to PRC law, including such factors as when
persuasive evidence of an arrangement exists, delivery has occurred, the sales
price is fixed or determinable, sales and value-added tax laws have been
complied with, and collectibility is reasonably assured. The Company generally
recognizes revenue when its products are shipped.




- 7
-




CHINA
RUNJI CEMENT INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
   NOTE 2 – SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)




Comprehensive
Income





The
Company has adopted SFAS No. 130, Reporting Comprehensive
Income, which establishes standards for reporting and displaying
comprehensive income, its components, and accumulated balances in a full-set of
general-purpose financial statements. Accumulated other comprehensive income
represents the accumulated balance of foreign currency translation
adjustments.





Concentration
of Credit Risk





The
Company maintains cash balances at various financial institutions in the PRC
which do not provide insurance for amounts on deposit.





The
Company has not experienced any losses in such accounts and believes it is not
exposed to significant credit risk in this area.





The
Company operates principally in the PRC and grants credit to its customers in
this geographic region. Although the PRC is economically stable, it is always
possible that unanticipated events in foreign countries could disrupt the
Company’s operations.





Foreign
Currency Translation





The
functional currency of the Company is the Renminbi (“RMB”), the PRC’s currency.
The Company maintains its financial statements using the functional currency.
Monetary assets and liabilities denominated in currencies other than the
functional currency are translated into the functional currency at rates of
exchange prevailing at the balance sheet dates. Transactions denominated in
currencies other than the functional currency are translated into the functional
currency at the exchange rates prevailing at the dates of the transaction.
Exchange gains or losses arising from foreign currency transactions are included
in the determination of net income (loss) for the respective
periods.





For
financial reporting purposes, the financial statements of the Company, which are
prepared using the RMB, are translated into the Company’s reporting currency,
United States Dollars. Balance sheet accounts are translated using the closing
exchange rate in effect at the balance sheet date and income and expense
accounts are translated using the average exchange rate prevailing during the
reporting period. Adjustments resulting from the translation, if any, are
included in accumulated other comprehensive income (loss) in stockholder’s
equity.





Fair
Value of Financial Instruments





The
Company's financial instruments include cash equivalents, accounts receivable,
other receivables, accounts payable, accrued expenses, value-added taxes,
short-term and long-term bank loans, and loans payable to related parties. The
carrying amounts of financial instruments other than long-term obligations
approximate fair value due to their short maturities. Long-term obligations
approximate fair value based upon rates currently available for similar
instruments.





NOTE
3 – ACCOUNTS RECEIVABLE





Feb-28-09
                                    
                                    
                                    Aug-31-08Notes
      Receivable
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    868,593Accounts
      Receivable –Trade
                                    
                                    $
                                    6,851,264
                                    
                                    
                                    $
                                    2,231,363Allowance
      for Doubtful Accounts
                                    
                                    
                                    0
                                    
                                    
                                    
                                    0$
                                    6,851,264
                                    
                                    
                                    $
                                    3,099,956





NOTE
4 – INVENTORY





Inventory
consists of the following:





Feb-28-09
                  
                  
                  Aug-31-08Raw
      Materials
                  
                  $
                  1,198,784
                  
                  
                  $
                  1,539,946Packaging
      Materials
                  
                  
                  54,708
                  
                  
                  
                  51,682Semi-Finished
      Goods
                  
                  
                  1,570,248
                  
                  
                  
                  340,678Finished
      Goods
                  
                  
                  1,182,452
                  
                  
                  
                  962,227Supplies
                  
                  
                  0
                  
                  
                  
                  381,037$
                  4,006,192
                  
                  
                  $
                  3,275,570




- 8
-
  CHINA
RUNJI CEMENT INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)


NOTE
5 – ADVANCES TO SUPPLIERS





Advances
to suppliers consist of the following:





Feb-28-09
                  
                  
                  Aug-31-08Advances
                  
                  $
                  3,537,190
                  
                  
                  $
                  3,772,367





Advances
to suppliers represent amounts prepaid for Construction in Progress. The
advances are applied against amounts due the supplier as the materials are
received.





NOTE
6 – PROPERTY, PLANT AND EQUIPMENT





Property,
plant and equipment consist of the following:





Feb-28-09
                  
                  
                  Aug-31-08Building
      - Cost
                  
                  $
                  27,800,885
                  
                  
                  $
                  22,270,871Building
      - Accumulated Depr
                  
                  
                  (2,747,048
                  )
                  
                  
                  (2,103,678
                  )Building
      - Net
                  
                  
                  25,053,837
                  
                  
                  
                  20,167,193Equipment
      & Machinery - Cost
                  
                  
                  31,068,200
                  
                  
                  
                  18,712,633Equipment
      & Machinery - Accumulated Depr
                  
                  
                  (6,973,315
                  )
                  
                  
                  (5,607,996
                  )Equipment
      & Machinery - Net
                  
                  
                  24,094,885
                  
                  
                  
                  13,104,637Automobiles
      - Cost
                  
                  
                  292,501
                  
                  
                  
                  292,862Automobiles
      – Accumulated Depr
                  
                  
                  (123,623
                  )
                  
                  
                  (95,953
                  )Automobiles
      - Net
                  
                  
                  168,878
                  
                  
                  
                  196,909Other
      Equipment - Cost
                  
                  
                  30,930
                  
                  
                  
                  56,880Other
      Equipment - Accumulated Depr
                  
                  
                  (13,691
                  )
                  
                  
                  (11,208
                  )Other
      Equipment - Net
                  
                  
                  17,239
                  
                  
                  
                  45,672Computer
      Equipment - Cost
                  
                  
                  28,190
                  
                  
                  
                  24,982Computer
      Equipment - Accumulated Depr
                  
                  
                  (9,268
                  )
                  
                  
                  (6,670
                  )Computer
      Equipment - Net
                  
                  
                  18,922
                  
                  
                  
                  18,312Total
      Fixed Assets - Net
                  
                  $
                  49,353,761
                  
                  
                  $
                  33,532,723Construction
      in progress
                  
                  
                  834,917
                  
                  
                  
                  17,967,172$
                  50,188,678
                  
                  
                  $
                  51,499,895





NOTE
7 –INTANGIBLE ASSETS & DEFERRED CHARGES





Intangibles
and deferred charges include the following:





Feb-28-09
                            
                            
                            Aug-31-08Mineral
      rights-Limestone
                            
                            $
                            3,487,208
                            
                            
                            $
                            2,682,863Mineral
      rights-Sandstone
                            
                            
                            238,456
                            
                            
                            
                            1,124,440Land
      compensation fees (mine forest land requisition fees)
                            
                            
                            566,847
                            
                            
                            
                            599,671Working
      area forestation fees
                            
                            
                            60,395
                            
                            
                            
                            72,980Baxiong
      Village stone materials requisition expense
                            
                            
                            17,412
                            
                            
                            
                            18,420Baxiong
      Limekiln mining area compensation expenses
                            
                            
                            15,142
                            
                            
                            
                            16,019Qiaomai
      Village sandstone land compensation expenses
                            
                            
                            95,751
                            
                            
                            
                            101,296$
                            4,481,211
                            
                            
                            $
                            4,615,689




- 9
-




CHINA
RUNJI CEMENT INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)






NOTE
8 –PAYABLES AND ACCRUED LIABILITIES





Payables
and accrued liabilities consist of the following:





Feb-28-09
                                                          
                                                          
                                                          Aug-31-08Accounts
      payable
                                                          
                                                          $
                                                          11,649,788
                                                          
                                                          
                                                          $
                                                          8,580,607Other
      payables
                                                          
                                                          
                                                          11,461,077
                                                          
                                                          
                                                          
                                                          6,037,913Accrued
      liabilities
                                                          
                                                          
                                                          8,790
                                                          
                                                          
                                                          
                                                          9,408Payables
      and accrued liabilities
                                                          
                                                          $
                                                          23,119,655
                                                          
                                                          
                                                          $
                                                          14,627,928





NOTE
9 – SHORT TERM LOANS





Short
term loans consist of:





Feb-28-09
                                    
                                    
                                    Aug-31-08Xianzong
      credit union
                                    
                                    $
                                    438,030
                                    
                                    
                                    $
                                    -Loan
      from Zhongxing Bank
                                    
                                    
                                    -
                                    
                                    
                                    
                                    438,570$
                                    438,030
                                    
                                    
                                    $
                                    438,570





The
details for the Company’s bank loan are as follows:




Borrowing
      bank
                                              
                                              Amount
                                              
                                              Starting
      date
                                              
                                              Maturity
      date
                                              
                                              Interest
      rate (monthly)
                                              
                                              
                                              Six
      Months period ended
                                                Feb
      28Interest
      2009
                                              
                                              
                                              Interest
      2008Xianzong
      credit union
                                              
                                              438,030
                                              
                                              2008-12-24
                                              
                                              2009-12-23
                                              
                                              0.836167
                                              %
                                              
                                              $
                                              8,790
                                              
                                              
                                              $
                                              -Total
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              $
                                              8.790
                                              
                                              
                                              $
                                              -


NOTE
10 –DUE TO RELATED PARTIES (S/T)





(a)           Names
and relationship of related parties





Existing relationships with the
      CompanyNanjin
      Hongren
                A
      company controlled by shareholderNanjin
      Runji
                A
      company controlled by shareholderZhao,
      Shouren
                shareholder
      & president & CEO of the CompanyYang,
      Xuanjun
                shareholder
      of the Company





(b)           Due
to Other Related Parties (S/T) consists of the following:





Feb-28-09
                                        
                                        
                                        Aug-31-08Due
      to related party - S/T - Nanjin Hongren
                                        
                                        $
                                        13,942,334
                                        
                                        
                                        $
                                        19,117,328Due
      to related party - S/T - Nanjin Runji
                                        
                                        
                                        7,127,069
                                        
                                        
                                        
                                        7,135,856Due
      to related party - S/T - Zhao, Shouren
                                        
                                        
                                        434,544
                                        
                                        
                                        
                                        488,606Due
      to related party - S/T - Yang, Xuanjun
                                        
                                        
                                        547,716
                                        
                                        
                                        
                                        1,060,056Miscellaneous
                                        
                                        
                                        3,282
                                        
                                        
                                        
                                        3,279$
                                        22,054,945
                                        
                                        
                                        $
                                        27,805,125





The above
amounts due to related parties represent loans payable that are unsecured and
non-interest bearing. The loans are due on demand and are used to meet the
Company’s operating needs.




- 10
-




CHINA
RUNJI CEMENT INC.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)






NOTE
11 – COMMITMENTS AND CONTINGECIES





Social
insurance for employees





According
to the prevailing laws and regulations of the PRC, the Company is required to
cover its employees with medical, retirement and unemployment insurance
programs. Management believes that due to the transient nature of its employees,
the Company does not need to provide all employees with such social insurances,
and has paid the social insurances for the Company’s employees who have
completed three months’ continuous employment with the Company.





In the
event that any current or former employee files a complaint with the PRC
government, the Company may be subject to making up the social insurances as
well as administrative fines. As the Company believes that these fines would not
be material, no provision has been made in this regard.





Tax
issues





The tax
authority of the PRC Government conducts periodic and ad hoc tax filing reviews
on business enterprises operating in the PRC after those enterprises had
completed their relevant tax filings, hence the Company’s tax filings may not be
finalized. It is therefore uncertain as to whether the PRC tax authority may
take different views about the Company’s tax filings which may lead to
additional tax liabilities.





NOTE
12 – INCOME TAXES





The
Company’s Enterprise Income Tax (“EIT”) rate of 25%,





Six Monthsended
                      Feb-28-09
                    
                    
                    SixMonthsended
                      Feb-29-08Income
      Taxes
                    
                    $
                    382,440
                    
                    
                    $
                    524,198





NOTE
13 – SEGMENT INFORMATION





The
Company operates in major one industry segment – research, development,
manufacture, marketing and sales of cement products.  Substantially
all of the Company’s identifiable assets and operations at Feb 28, 2009 and Feb
29, 2008 were located in the PRC.





NOTE
14 - OPERATING RISK





Country
risk





The
Company has significant investments in the PRC. The operating results of the
Company may be adversely affected by changes in the political and social
conditions in the PRC and by changes in Chinese government policies with respect
to laws and regulations, anti-inflationary measures, currency conversion and
remittance abroad, and rates and methods of taxation, among other things. There
can be no assurance; however, those changes in political and other conditions
will not result in any adverse impact.





NOTE
15 – IMPORTANT ASSETS’ MORTGAGE AND GUARANTEE ISSUES





(a)
            The
      Company has renewed its asset mortgage agreement withNanjing
      Runji Building Materials Industrial Ltd., Co. (“Nanjing Runji”) on March
      28, 2009. On March 27, 2009, Nanjing Runji has repaid its short term bank
      loan of USD$1,461,900 with an interest rate of 7.47% per annum in Nanjing
      Daxinggong Branch of Bank of Construction in China commencing on April 30,
      2008 and expiring on April 29, 2009. And Nanjing Runji renewed a short
      term bank loan of USD$1,461,900 with an interest rate of 5.31% per annum
      in Nanjing Daxinggong Branch of Bank of Construction in China commencing
      on March 28, 2009 and expiring on March 27, 2010. The bank loan was
      mortgaged by assets of Anhui Province Runji Cement Ltd., Co., and the
      mortgage period is from March 28, 2009 to March 27, 2010. Runji provided
      the mortgage to Nanjing Runji Building Materials Industrial Ltd.,
      Co., including the principal of USD$1,461,900, interest (including
      compound interest and default interest), penalties, claims, and other
      payments that the debtor should pay to the mortgage. The mortgage asset
      list below was decided by Runji’s management when it provided the mortgage
      to Nanjing Runji Building Materials Industrial Ltd.,
      Co.





Mortgage
Asset List





Mortgage
      Asset Name
                  
                  Ownership
                    Certificate
      No.
                  
                  Location
                  
                  Area
      or
                    Quantity
                  
                  Whether
      mortgaged for other debts
                  
                  NotesLand
      Usage Right
                  
                  Han State
      (2005)
                    No.
      083
                  
                  Xianzhong Town,
      Hanshan County,
                    Anhui
      Province
                  
                  64,051.6
                    Square
      Meters
                  
                  No
                  
                  Total
      original area: 278,691Square
      MetersHouse
                  
                  Real
      Estate Property Zi Guan
                    No.
      06001650
                  
                  Runji
      Cement Factory Area
                  
                  8,690.21
                    Square
      Meters
                  
                  NoHouse
                  
                  Real
      Estate Property Right Zi Guan No. 06001652
                  
                  Runji
      Cement Factory Area
                  
                  3,258.63
                    Square
      Meters
                  
                  No




(b)
            The
      Company renewed acredit
      guaranty agreement with Nanjing Runji Building Materials Industrial Ltd.,
      Co. (“Nanjing
      Runji”) on March 31, 2009. On March 30, 2009, Nanjing Runji has repaid its
      one-year short term bank loan of USD$2,923,763 with an interest rate of
      7.47% per annum from Daxinggong Branch of Bank of Construction in China
      commencing on March 31, 2008 and expiring on March 30, 2009. And Nanjing
      Runji renewed its one-year short term bank loan of USD$2,923,763 with an
      interest rate of 5.31% per annum from Daxinggong Branch of Bank of
      Construction in China commencing on March 31, 2009 and expiring on March
      30, 2010. Runji Cement provided credit guaranty to Nanjing Runji Building
      Materials Industrial Ltd., Co. The guaranty period is from March 31, 2009
      until the maturity of the bank loan two years thereafter. The credit
      guaranty includes the principal of USD$2,923,763, interest (including
      compound interest and default interest), penalties, claims, and other
      payments that the debtor should pay to the
  mortgage.


- 11
-


ITEM
2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS





GENERAL
DESCRIPTION OF BUSINESS





Introduction





China
Runji was incorporated as FitMedia Inc., a Delaware company, on August 30, 2004.
FitMedia was a development stage company that planned to sell prenatal yoga DVDs
through small retail stores and others and it also planned to sell its fitness
DVDs through its Internet site www.fitmedia.net. It completed its prenatal yoga
DVD for sale and began marketing it in January 2007.





In
October 2007, the management of FitMedia determined that it was in the best
interests of the stockholders of FitMedia to agree to a share exchange with
Anhui Province Runji Cement Co., Limited, a Chinese company that is engaged in
the business of distributing cement across many provinces in mainland
China.  As part of the share exchange and reverse merger, FitMedia
ceased engaging in the health and fitness business.





On
October 9, 2007,  FitMedia entered into a Share Exchange Agreement
(the “Exchange Agreement”) by and among FitMedia, Timothy Crottey, the President
and majority shareholder of FitMedia (“Crottey”), Shouren Zhao, 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 (“Zhao”); 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, Zhao was referred to as the “Ren
Shareholder,” and Renji Investment, HK Renji and Anhui Runji were referred to as
the “Renji Subsidiaries.”  Upon closing of the share exchange
transaction (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 FitMedia in exchange for an aggregate of 55,000,000 shares
of common stock of the FitMedia, thus causing the Renji Subsidiaries to become
direct and indirect wholly-owned subsidiaries of FitMedia.





On
October 9, 2007, FitMedia entered into a Stock Purchase Agreement (the “Stock
Purchase Agreement”) by and among FitMedia, 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
FitMedia from Crottey for $540,000.00.





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 FitMedia resigned from such
      positions and the persons chosen by Anhui Runji were appointed as the
      officers of FitMedia, notably Shouren Zhao, as Chairman, CEO and President
      and Yichun Jiang 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 directors of FitMedia, notably Liming Bi and Xuanjun
      Yang.


§
            On
      the Closing Date, FitMedia 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.





On
January 8, 2008, FitMedia changed its name to China Runji Cement Inc. and
increased its authorized common stock from 80,000,000 shares to 200,000,000
shares.





As a
result of the closing of the Share Exchange, China Runji became the owner of a
leading cement production and distribution company in mainland China through its
ownership of Anhui Runji. Using cost effective production techniques, while
building a strong brand image, Anhui Runji is a strong competitor in the central
China cement market.





Anhui
Runji is a producer and distributor of cement, primarily in An Hui Province of
central China and neighboring locations, which was founded in December
2003.  Its initial capital was 60,000,000 RMB and there were two
founding shareholders who owned such capital in a ratio of 60 to
40%.  Anhui Runji is located in Xianzong Town,
Hanshan County, An Hui Province, where the factory occupies an area of 418
mu, and its limestone mine comprises an area of 1,000 mu.  The Anhui
Runji factory, limestone reserve and storing mine together comprise an area of
approximately 50,000 square meters.





Summary
of the Operations of Anhui Runji





Anhui
Province Runji Cement Co., Limited (www.chinarunji.com), a private company
located in Anhui Province in China, was 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 P.O52.5, P.O42.5, P.O32.5 and
P.C32.5. At present, the Company has one cement production line and one
cement clinker production line. The production capacity of each line amounts to
2,500 tons per day and one million tons per year.





The
Company obtained its production license in 2005. Presently, the Company mainly
focuses production on Runji Brand cement P.II52.5, P.O42.5, P.O32.5 P.C32.5 as
well as cement clinker.  P.II52.5 is a high grade, high strength
cement that is made for Anhui and Jiangsu Provinces and the region north of
the Changjiang River and is used in large infrastructure projects. The
cement clinker is the semi-finished ingredient of cement, which is able to be
processed into different categories of cement products.





- 12
-




The
Company produces cement through the advanced dry production process, an energy
efficient and environmentally friendly cement production technique, as only 60%
of the total output in the region is produced by dry process. The Company has a
rigorous quality control system and received ISO9001 quality system
certification and international accreditation in March 2006.  In
addition, our Company passed the national GB/T 19001-2000 standard
authentication. The Company’s pollution control exceeds the national
standard and received “green building material” certification in
2007.





The
Company has an abundant supply of high quality raw materials. The Company has
obtained a 30 year mining right for 87 million tons of limestone reserve, which
can supply two cement clinker production lines with a daily output of 2,500 tons
for 40 years.





Presently,
the Company is one of the largest cement producers and distributors in the north
Changjiang region of Anhui, with a 12% market share within a 100 mile radius of
its facility. The Company is the only producer of P.II52.5 cement (the highest
quality cement) in the north Changjiang region of Anhui and
Jiangsu Provinces, with 70% market share within a 100 miles radius of its
facility. The Company’s main market is in Hefei and Pukou (Nanjing), with
total sales of 600,000 tons in the area, representing 60% of our 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 Anhui and Jiangsu.





The
Company’s net sales to customers for the six months ended February 28, 2009
and February 29, 2008, were $25,041,160 and $16,220,113,
respectively.





Anhui
Runji’s Plan of Operation




·
            We
      plan to raise adequate capital over the next five years for expansion and
      growth.·
            We
      have invested over USD$50 million to build up one cement production line
      with daily production of 2,500 tons and one cement clinker production line
      with daily production of 2,500 tons. The newly invested cement clinker
      production line was put into operation in October
    2008.


·
            We
      plan to complete the investment of USD$10 million to establish a waste
      heat power generator system to convert waste heat into electricity in
      2009, which is expected to save about USD$4.6 million per year in
      electricity costs. After the completion of the generator system, we will
      significantly improve our margins and reduce reliance on outside power
      sources.





RESULTS OF OPERATIONS FOR
THE THREE MONTHS AND SIX MONTHS ENDED FEBRUARY 28, 2009 AND EFBRUARY 29,
2008





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.





Revenues





We
generated all of our revenue primarily by selling cement products and cement
clinkers.


For
      the Three Months Ended
                                                                          
                                                                          For
      the Six Months EndedFebruary
      28, 2009
                                                                          
                                                                          February
      29, 2008
                                                                          
                                                                          Difference
                                                                          
                                                                          February
      28, 2009
                                                                          
                                                                          February
      29, 2008
                                                                          
                                                                          Difference(Unaudited)
                                                                          
                                                                          (Unaudited)
                                                                          
                                                                          
                                                                          
                                                                          (Unaudited)
                                                                          
                                                                          (Unaudited)Revenue
                                                                          $
                                                                          9,290,749
                                                                          
                                                                          $
                                                                          5,908,827
                                                                          
                                                                          $
                                                                          3,381,922
                                                                          
                                                                          $
                                                                          25,041,160
                                                                          
                                                                          $
                                                                          16,220,113
                                                                          
                                                                          $
                                                                          8,821,047cement
                                                                          
                                                                          4,984,134
                                                                          
                                                                          
                                                                          3,925,988
                                                                          
                                                                          
                                                                          1,058,146
                                                                          
                                                                          
                                                                          17,395,299
                                                                          
                                                                          
                                                                          13,125,026
                                                                          
                                                                          
                                                                          4,270,273cement
      clinker
                                                                          
                                                                          4,306,615
                                                                          
                                                                          
                                                                          1,982,839
                                                                          
                                                                          
                                                                          2,323,776
                                                                          
                                                                          
                                                                          7,645,861
                                                                          
                                                                          
                                                                          3,095,087
                                                                          
                                                                          
                                                                          4,550,774




Revenues
increased by $3,381,922 or 57.24% to $9,290,749 for the three months ended
February 28, 2009 from $5,908,827 for the same corresponding period in
2008.  The increased cement sales revenue of $1,058,146 is mainly
contributed by the cement clinker produced by the first cement production line
being made into cement products after putting the second cement clinker line
into production. The sales revenue of the cement clinker increased $2,323,776,
which is primarily the result of increased sales volume from cement clinker
produced by the second production line.





Revenues
increased by $8,821,047or 54.38% to $25,041,160 for the six months ended
February 28, 2009 from $16,220,113 for the same corresponding period in 2008, in
which the sales revenue of cement products increased $4,270,273 and the sales
revenue of cement clinker increased $4,550,774.




- 13
-





Cost
of Goods Sold





For
      the Three Months Ended
                                        
                                        For
      the Six Months EndedFebruary
      28, 2009
                                        
                                        February
      29, 2008
                                        
                                        Difference
                                        
                                        February
      28, 2009
                                        
                                        February
      29, 2008
                                        
                                        Difference(Unaudited)
                                        
                                        (Unaudited)
                                        
                                        
                                        
                                        (Unaudited)
                                        
                                        (Unaudited)Cost
      of goods sold
                                        $
                                        9,565,813
                                        
                                        $
                                        4,973,977
                                        
                                        $
                                        4,591,836
                                        
                                        $
                                        23,263,320
                                        
                                        $
                                        12,764,571
                                        
                                        $
                                        10,498,749cement
                                        
                                        5,484,927
                                        
                                        
                                        2,807,304
                                        
                                        
                                        2,677,623
                                        
                                        
                                        14,862,261
                                        
                                        
                                        9,498,802
                                        
                                        
                                        5,363,459cement
      clinker
                                        
                                        4,080,886
                                        
                                        
                                        2,166,673
                                        
                                        
                                        1,914,213
                                        
                                        
                                        8,401,059
                                        
                                        
                                        3,265,769
                                        
                                        
                                        5,135,290





Our cost
of goods sold for the three months ended February 28, 2009 was $9,565,813,
compared to $4,973,977 for the same corresponding period in 2008, an increase of
$4,591,836 or approximately 92.32%. Our cost of goods sold for the six
months ended February 28, 2009 was $23,263,320, compared to $12,764,571 for
the same corresponding period in 2008, an increase of $10,498,749 or
approximately 82.25%. The increased costs of cement products
were mainly attributed to a decrease in cement production volume
and increased production costs from January to February 2009, which were due to
a slightly longer seasonal production shutdown period than in the previous year
as a result of a prolonged rainy season, Chinese spring festival vacation, and
equipment maintenance. The increased costs of cement
clinker were mainly attributed to two reasons: 1) the second
production line was put into operation in October, 2008, and operated at
half production capacity, resulting in relatively higher unit costs; and 2) the
slightly longer seasonal production shutdown period than in the previous year as
a result of a prolonged rainy season, Chinese spring festival vacation and fixed
assets maintenance, which resulted in relatively higher costs.





Gross
Profit





For
      the Three Months Ended
                                
                                
                                For
      the Six Months EndedFebruary
      28, 2009
                                
                                
                                February
      29, 2008
                                
                                
                                Difference
                                
                                
                                February
      28, 2009
                                
                                
                                Fenruary
      29, 2008
                                
                                
                                Difference(Unaudited)
                                
                                
                                (Unaudited)
                                
                                
                                
                                
                                
                                (Unaudited)
                                
                                
                                (Unaudited)Gross
      Profit
                                $
                                (275,064
                                )
                                
                                $
                                934,850
                                
                                
                                $
                                (1,209,914
                                )
                                
                                $
                                1,777,840
                                
                                
                                $
                                3,455,542
                                
                                
                                $
                                (1,677,702
                                )cement
                                
                                (500,793
                                )
                                
                                
                                1,118,684
                                
                                
                                
                                (1,619,477
                                )
                                
                                
                                2,533,038
                                
                                
                                
                                3,626,224
                                
                                
                                
                                (1,093,186
                                )cement
      clinker
                                
                                225,729
                                
                                
                                
                                (183,834
                                )
                                
                                
                                409,563
                                
                                
                                
                                (755,198
                                )
                                
                                
                                (170,682
                                )
                                
                                
                                (584,516
                                )





Our gross
profit decreased by $1,209,914 to $(275,064) for the three months
ended February 28, 2009 from $934,850 for the same period in
2008 in which the gross profit of cement products was $(500,793) and
the gross profit of cement clinker was $225,729. Our gross profit decreased
by $1,677,702 to $1,777,840 for the six months ended February 28, 2009 from
$3,455,542 for
the same period in 2008, in
which the gross profit of cement products was $2,533,038 and the gross profit of
cement clinker was $ (755,198). The decrease was primarily attributed to
the decrease of production output and increased unit production costs during the
period.





Operating
Expenses





Total
operating expenses for the three months ended February 28, 2009 was $638,351, compared to $444,974 for the same period in
2008, an increase of $193,377 or approximately
43.46%.





Total
operating expenses for the six months ended February 28, 2009 was $1,121,854, compared to $936,499 for the same period in
2008, an increase of $185,355 or approximately
19.79%.





The
increase was mainly the result of the operation of the second production
line and higher marketing expenses.





Interest
Expenses





Our
interest expense forthe three months ended
February 28, 2009 and February 29, 2008 was $15,851 and $21,883,
respectively. Our interest expense forthe six months ended
February 28, 2009 and February 29, 2008 was $35,635 and $24,164,
respectively. The small changes in expenses were due mainly
to the changes in interest subsidy on bills receivable.





Other
Income (Expenses)





Other
income (expenses) were $(4,359) forthe three months ended
February 28, 2009, compared to $11,311 for the same period in 2008,
respectively.





Liquidity
and Capital Resources





Net cash flows provided byoperating activities for thesixmonths endedFebruary 28, 2009andFebruary 29, 2008were $6,483,737 and $563,948, respectively. This was primarily due tochangesin accounts
payable.





Net cash flows used in investing
activities for thesixmonths endedFebruary 28, 2009andFebruary 29, 2008were $(749,818)and$(1,729,389). This was due mainly toincreasedinvestment inproperty, plant and equipment in
connection with the second production line.





Net cash flows provided by(used in)financing activities forthesixmonths endedFebruary 28, 2009andFebruary 29, 2008were $(5,715,952)and$966,041, respectively. This was due mainlytothe repayment of a loan from arelated party.





Overall,
we have funded most of our cash needs from inception through February 28, 2009
with operating activities.





OnFebruary 28, 2009, we had cash and cash equivalents of
$375,429on hand. We anticipate raising funds
through an equity or debt offering or with a strategic partner in the comingmonths.





- 14
-






CRITICAL
ACCOUNTING POLICIES





The
discussion and analysis of the Company’s financial condition presented in this
section are based upon the unaudited consolidated financial statements of China
Runji Cement Inc., which have been prepared in accordance with the generally
accepted accounting principles in the United States.  During the
preparation of the financial statements China Runji Cement 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, China Runji Cement 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. China Runji Cement 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,” China Runji Cement Inc. identified
the most critical accounting principles upon which its financial status depends.
 China Runji Cement 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. China Runji Cement 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. China
Runji Cement 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”. China Runji Cement 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 China Runji Cement 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 China Runji Cement Inc.’s 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 China Runji Cement Inc. on raw materials and other materials included in
the cost of producing their finished product.





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





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





Income Taxes. China Runji
Cement 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 China Runji
Cement 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 FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (“SFAS 159”), which permits entities
to choose to measure financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. SFAS 159 will be
effective for the Company on January 1, 2008. The Company does not expect that
the adoption of SFAS 159 will have a material impact on its financial
statements.





In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations, which replaces SFAS No. 141.  The statement retains the
purchase method of accounting for acquisitions, but requires a number of
changes, including changes in the way assets and liabilities are recognized in
the purchase accounting.  It also changes the recognition of assets
acquired and liabilities assumed arising from contingencies, requires the
capitalization of in-process research and development at fair value, and
requires the expensing of acquisition-related costs as incurred.  SFAS
No. 141(R) is effective for the Company beginning September 1, 2008 and will
apply prospectively to business combinations completed on or after that
date.  While the Company has not yet evaluated this statement for the
impact, if any, that SFAS 141(R) will have on its consolidated financial
statements, the Company will be required to expense costs related to any
acquisitions after August 31, 2008.





In
December 2007, the FASB issued SFAS No. 160, Non Controlling Interests in
Consolidated Financial Statements, an amendment of ARB 51, which changes the
accounting and reporting for minority interests.  Minority interests
will be recharacterized as noncontrolling interests and will be reported as a
component of equity separate from the parents’ equity, and purchases or sales of
equity interests that do not result in a change in control will be accounted for
as equity transactions.  In addition, net income attributable to the
noncontrolling interest will be included in consolidated net income on the face
of the income statement and, upon a loss of control, the interest sold, as
well as any interest retained, will be recorded at fair value with any gain or
loss recognized in earnings.  SFAS No. 160 is effective for the
Company beginning September 1, 2008 and will apply prospectively, except for the
presentation and disclosure requirements, which will apply
retrospectively.  The Company does not expect the adoption of SFAS No.
160 will have a material impact on its financial statements.





- 15
-






I TEM
3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





In the
normal course of business, operations of the Company are exposed to fluctuations
in interest rates. These fluctuations can vary the costs of financing and
investing yields. In view of the financing arrangements during the second three
months of 2009, the Company is not currently subject to significant market
risk.





ITEM
4(A) - CONTROLS AND PROCEDURES





The Chief
Executive Officer and Chief Financial Officer (the principal executive officer
and principal financial officer, respectively) of the Company have concluded,
based on their evaluation as of February 28, 2009, that the design and operation
of the Company's "disclosure controls and procedures" (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange
Act")) are effective to ensure that information required to be disclosed in the
reports filed or submitted by the Company under the Exchange Act is accumulated,
recorded, processed, summarized and reported to the management, including the
Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding whether or not disclosure is required.





During
the quarter ended February 28, 2009, there were no changes in the internal
controls of the Company over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely
to materially affect, the internal controls of the Company over financial
reporting.





ITEM
4(A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING





(a)           The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Securities Exchange Act of 1934, as amended). Management conducted an
evaluation of the effectiveness of the Company’s internal control over financial
reporting based on the criteria set forth in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on this evaluation, management has concluded that the
Company’s internal control over financial reporting was effective as of February
28, 2009.





(b)           This
quarterly report does not include an attestation report of the company’s
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the company’s
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the company to provide only management’s
report in this annual report.





(c)           There
were no changes in the Company's internal controls over financial reporting
known to the chief executive officer or the chief financial officer that
occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the Company's internal control
over financial reporting.





- 16
-




PART
II - OTHER INFORMATION





ITEM
1 - LEGAL PROCEEDINGS





None.





ITEM
2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None.





ITEM
3 - DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM
5 - OTHER INFORMATION





None.





ITEM
6 – EXHIBITS




31.1
            Certification
      of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule
      15d-14(a) of the Securities Exchange Act of 193431.2
            Certification
      of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule
      15d-14(a) of the Securities Exchange Act of 193432.1
            Certification
      of the Company's Chief Executive Officer Pursuant to 18 U.S.C. SS. 1350
      Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      200232.2
            Certification
      of the Chief Financial Officer Pursuant to 18 U.S.C. SS. 1350 Adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002









SIGNATURES





Pursuant
to the requirements of the Exchange Act, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.







CHINA
      RUNJI CEMENT INC.Date:
      April 14, 2009
                By:
                /s/
      Shouren ZhaoShouren
      Zhao
                  Chairman
      and Chief Executive
Officer




- 17
-