Csr applicablity

Rule 3 of Companies (CSR Policy) Rules 2014 reads as under:

"3. (1) Every company including its holding or subsidiary, and a foreign company defined under clause (42) of section 2 of the Act having its branch office or project office in India, which fulfils the criteria specified in sub-section (1) of section 135 of the Act shall comply with the provisions of section 135 of the Act and these rules:

Provided that net worth, turnover or net profit of a foreign company of the Act shall be computed in accordance with balance sheet and profit and loss account of such company prepared in accordance with the provisions of clause (a) of sub-section (1) of section 381 and section 198 of the Act.

(2) Every company which ceases to be a company covered under sub-section (1) of section 135 of the Act for three consecutive financial years shall not be required to—

(a)		constitute a CSR Committee; and
(b)		comply with the provisions contained in sub-sections (2) to (5) of the said section,

till such time it meets the criteria specified in sub-section (1) of section 135."

However, Rule cannot over-ride the Act. Sec.135 does not provide that if CSR is applicable to a company, it will automatically be applicable to its holding & subsidiary companies also. Hence each company has to be tested individually.