Orica, the chemical product manufacturer, has shown fears that a Federal Court ruling may severely affect its results. So much so that the company expects that it will have to bear losses.

Troubles began after a Federal Court upheld an amended assessment done by the Australian Taxation Office.

The largest explosive maker has estimated that close to A$192 million will be reduced from its estimated profit. And since it has to make further cash payment of A$126 million, the whole issue could lead to losses, said Orica in a statement.

Orica's annual profit is $300 million.

As of now, it has already paid 50 per cent of the amended amount. While the ruling has come on Wednesday, the whole tax issue has been going on for years.

It was in 2004 that the tax department had asked Orica to pay $214 million in form of additional taxes on sales. Out of this $95 million was put on primary sale and the $23.7 million was because of penalties. The rest $92 million was in form of interest.

The company has got 21 days with it to appeal against the ruling.