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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark one)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

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

                  For the transition period from       to

                         Commission File No.: 000-29358
                            DENISON INTERNATIONAL PLC
             (Exact Name of Registrant as specified in its charter)

        England and Wales                                 Not applicable
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                        Identification Number)

        14249 Industrial Parkway
           Marysville, Ohio                                    43065
(Address of principal executive offices)                     (Zip Code)

     Registrant's telephone number, including area code: (937) 644-4500

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

         American Depositary Shares (as evidenced by American Depositary
         Receipts), each representing one Ordinary Share, $0.01 par value
                       of the Registrant (title of class)

     Indicate by check mark whether the Registrant (1) has 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
                                                  ---

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
                            ---

     The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 29, 2000 was $85,540,280.

     The number of outstanding shares of each of the registrant's classes of
capital or common stock as of March 29, 2000 was as follows:

               11,113,950 Ordinary Shares, $0.01 par value
                7,015 'A' Ordinary Shares, (pounds sterling)8.00 par value


                       Documents Incorporated by Reference

The Registrant's Definitive Proxy Statement on Schedule 14A relating to the
Annual Meeting of Shareholders to be held on May 8, 2000 is incorporated by
reference in Parts I and III of this Form 10-K to the extent stated herein.

================================================================================

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                                    FORM 10-K
                                TABLE OF CONTENTS

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PART I.............................................................................................1

    ITEM 1.  BUSINESS..............................................................................1
    ITEM 2.  PROPERTIES...........................................................................11
    ITEM 3.  LEGAL PROCEEDINGS....................................................................12
    ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................................12
    ITEM 4A.  EXECUTIVE OFFICERS OF THE COMPANY...................................................12

PART II...........................................................................................12

    ITEM 5.  MARKET OF THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS................12
    ITEM 6.  SELECTED FINANCIAL DATA..............................................................13
    ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
               OPERATIONS.........................................................................14
    ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................21
    ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................................22
    ITEM 9.   CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
               DISCLOSURE.........................................................................45
    ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT......................................45
    ITEM 11.  EXECUTIVE COMPENSATION..............................................................46
    ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......................46
    ITEM 13.  CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS........................................46

PART IV...........................................................................................47

    ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K....................47
    EXHIBIT INDEX.................................................................................50
    SIGNATURES....................................................................................51
</TABLE>

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     References to Shares herein refer to (i) the Ordinary Shares of Denison,
$0.01 par value per Ordinary Share (the "Ordinary Shares") and (ii) Denison's
American Depositary Shares ("ADSs"), each of which represents one Ordinary
Share. The ADSs are evidenced by American Depositary Receipts ("ADRs").

     Denison publishes its financial statements in U.S. dollars. In this Form
10-K, references to "dollars" or "$" are to U.S. dollars and references to
"pounds sterling," "(pounds sterling)" or "p" are to U.K. currency. Except as
otherwise stated herein, all monetary amounts in this Form 10-K have been
presented in dollars.

     The Company publishes annual reports containing annual audited consolidated
financial statements and opinions thereon by independent public auditors. Such
financial statements are prepared on the basis of generally accepted accounting
principles in the United States ("US GAAP") expressed in U.S. dollars. The
Company has published quarterly updates and semi-annual reports containing
unaudited financial information prepared on the same basis as its audited US
GAAP consolidated financial statements.

               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

     This Form 10-K includes and incorporates forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included or incorporated in this Form 10-K regarding the
Company's strategy, future operations, financial position, future revenues,
projected costs, prospects, plans and objectives of management are
forward-looking statements. The words "anticipates," "believes," "estimates,"
"expects," "intends," "may," "plans," "projects," "will," "would" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. The Company
cannot guarantee that it actually will achieve the plans, intentions or
expectations disclosed in its forward-looking statements and undue reliance
should not be placed on the Company's forward-looking statements. Actual results
or events could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements. The Company has included important
factors in the cautionary statements included or incorporated in this Form 10-K
that the Company believes could cause actual results or events to differ
materially from the forward-looking statements made. The Company's
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments the Company
may make. The Company does not assume any obligation to update any
forward-looking statements.

                                     PART I

ITEM 1.  BUSINESS.

OVERVIEW

     Denison International plc and its subsidiaries ("Denison" or the "Company")
design, manufacture, sell and service highly-engineered components for use in
hydraulic fluid power systems, as well as complete hydraulic fluid power
systems. Hydraulic systems, which are part of larger pieces of machinery and
equipment, provide the force to move and position very heavy materials and
equipment as well as the precision to move and position very light loads with a
high degree of accuracy. The components

                                      -1-
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manufactured by the Company for these systems include hydraulic pumps, motors,
manifolds, and valves. Many of Denison's products are designed to be used under
demanding conditions, such as elevated pressure, high temperature, variable
speed and low decibel levels. The Company sells its products globally to a
diverse group of end-users for use in a broad array of industrial applications,
such as machine tools and material handling equipment, various mobile
applications, such as construction, agricultural and utility equipment, and in
marine applications, such as military equipment.

     The Company focuses on the specialty segment of the hydraulic power market
and works closely with its customers to meet their specified performance
objectives. Denison's product offerings include a wide variety of piston pumps
and motors; vane pumps and motors; manifold systems; pressure, directional and
proportional valve products; and electronic control products. Denison's products
enjoy excellent brand recognition and significant market share in certain
sectors of the industrial hydraulics market targeted by the Company. The Company
markets and sells its products primarily through a global network of regional
sales and service subsidiaries, independent fluid power equipment distributors
and, to a lesser extent, directly to end-users. In the United States, the
Company relies primarily on independent fluid power distributors which also
distribute other products that do not generally compete with Denison's. In
Europe and Asia, Denison primarily sells its products directly to Original
Equipment Manufacturers ("OEMs") through its regional sales and service
subsidiaries. For certain information concerning the Company's revenue,
operating profit and identifiable assets attributable to each of the Company's
geographical market segments, see Note 15 of "Notes to Consolidated Financial
Statements."

     Denison, whose operations date back to the early 1930s, is a pioneer in the
hydraulic products market. The Company's long history of innovation can be
traced back to its first product, the hydraulic-powered car pusher, a
revolutionary development which led to widespread application of hydraulic power
as a solution for numerous industrial and mobile requirements. Denison's
research and development efforts have resulted in its being granted
approximately 600 patents since its inception. The business of the Company was
acquired by its present owners in 1993 from Hagglund & Soner AB. The Company has
conducted business under the "Denison" name since 1932.

     The Company was incorporated in England and Wales as a private company
limited by shares in March 1993 and was re-registered as a public limited
company on July 28, 1997. On August 8, 1997, the Company completed an initial
public offering in which it issued and sold 450,000 Ordinary Shares at $16.00
per share. The net proceeds from the offering were $4,480,000. In December 1998,
the Company acquired all of the outstanding shares of Lokomec Oy, a manufacturer
and distributor of highly engineered manifold systems located in Tampere,
Finland.

     The Company's principal U.S. executive offices are located at 14249
Industrial Parkway, Marysville, Ohio 43040 and its telephone number is (937)
644-4500. The Company's U.K. executive offices are located at Masters House, 107
Hammersmith Road, London W14 0Qh, England and its telephone number is
44-171-603-1515.

INDUSTRY OVERVIEW

     Hydraulics, or fluid power, is a motion control technology that is used to
transfer and control force and power through fluids under pressure. Hydraulic
systems are typically comprised of a pump, valves, manifolds and actuators.
Pumps are used to move fluid from one location to another. Pressure is generated
when the fluid encounters resistance. Valves and manifolds control the flow of
fluids, and actuators, such as cylinders and rotary motors, convert pressure
into mechanical energy.

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     Hydraulic systems offer greater flexibility of layout, compact design and
higher performance-to-weight ratio than other forms of motion control, such as
mechanical and electrical systems. Hydraulic systems provide the force to move
and position materials and equipment weighing several tons as well as the
precision to move and position very light loads with a high degree of accuracy.
For example, hydraulics is a tool powerful enough for heavy-duty steel
production in blast furnaces and precise enough for handling of steel ingots in
a stamping mill. As a result, hydraulic systems are integral to a wide variety
of industrial, mobile and marine applications. Although generally not noticed by
most end-product users, virtually every production process uses hydraulic power
as does almost every machine, vehicle and aircraft.

     The hydraulic pump and valve market is a highly-fragmented, multi-billion
dollar worldwide industry. The hydraulics market is divided broadly into two
product segments: specialty and commodity. The specialty segment is comprised of
highly-engineered, high-performance, specialized hydraulic products, which are
generally more complex and used in demanding applications. Specialty products
tend to be less price sensitive, generally have higher margins and are more
likely to utilize servicing and maintenance. The commodity segment is comprised
of lower performance products, which are sold for use in price-sensitive
applications.

     Demand and growth in different application sectors of the hydraulics
industry have typically been driven by various external economic factors. The
industrial sector of the hydraulics industry has typically been affected by the
cyclical nature of the overall economy. Sales of mobile hydraulic systems and
components have been driven by infrastructure development factors such as
construction and new housing starts. Sales of marine systems have been largely
influenced by military expenditures and, thus, are less affected by cyclical
economic factors. Demand and growth in each of the industrial, mobile and marine
sectors of the hydraulics market are also affected by the replacement cycle of
the hydraulic products.

PRODUCTS

     The Company designs, manufactures, sells and services a broad range of
components for use in hydraulic fluid power systems, as well as complete
hydraulic fluid power systems, for applications with high reliability,
performance, precision and durability requirements. The Company's primary
products are piston pumps and motors, vane pumps and motors, manifolds, and
valves. In 1999, piston pumps and motors accounted for 26.8% of the Company's
net sales, vane pumps and motors accounted for 33.2% of the Company's net sales,
valves accounted for 23.7% of the Company's net sales and manifolds accounted
for 6.7% of the Company's net sales. In addition, the Company manufactures
electronic control products and certain other components and accessories used in
hydraulic systems. Other products sales accounted for 9.6% of the Company's net
sales.

     The markets served by the Company are substantial and diversified, with no
single customer accounting for 4% or more of its net sales in 1999. The
Company's products are used in many different industrial, mobile and marine
applications, including mining machinery, drilling equipment, excavators,
cranes, machine tools, die casting and plastics processing machinery.

PUMPS AND MOTORS

     Hydraulic pumps include piston pumps and motors, which provide adjustable
flow and variable displacement, and vane pumps and motors, which provide
continuous flow and fixed displacement. Each type of pump or motor is suitable
for particular uses, depending upon variables such as speed, pressure, operating
temperature, noise level, life expectancy and cost. Piston pumps and motors are
used in tractors, tanks, machine tools, sophisticated winches (such as anchors
on a ship or deck cranes on an aircraft carrier) as well as in other products
with complex performance requirements, such as varying or multiple speeds or


                                      -3-
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pressures. Vane pumps and motors are used in less complex applications generally
requiring low noise levels but little or no variation in flow, such as refuse
trucks, cranes and large presses.

     All hydraulic pumps operate on the displacement principle in which a fluid
(typically petroleum-based oil) is transferred from an inlet (suction port) into
a mechanically-sealed, low-pressure chamber and subsequently, to a high-pressure
chamber having the outlet (pressure port). The transfer of the fluid inside the
pump can be accomplished by the movement of screws, gears, vanes or pistons
which compact the fluid and create pressure.

     Hydraulic motors operate on a principle, which is the reverse of the
hydraulic pump process, absorbing hydraulic flow and pressure and converting
them into mechanical energy and rotary motion. This rotary motion can then be
used for various industrial applications, including the rotation of the wheels
of a mobile loader, driving winches on mobile crane systems or turning the
rollers on a conveyor belt.

     Pumps and motors operate in either an open or closed-loop system. In an
open-loop system, the hydraulic fluid is drawn into one or more pumps to produce
flow and then travels to a number of different actuators performing independent
functions. For example, an industrial conveyor belt system, involving many
unrelated functions, may use an open-loop system. In a closed-loop system, the
pump is dedicated to a single motor or set of motors performing a single
function. Unlike in an open-loop system, in which the hydraulic fluid goes to a
storage "reservoir" after passing through the motor, in a closed-loop system,
the oil returns to the pump before being transferred back to the motor. The
closed-loop system enables the flow direction of the hydraulic fluid to be
reversed while the system is operating. This, in turn, allows for rapid changes
in direction and speed of the motor, which is useful in applications such as
rotating the wheels of a front-loader. In general, piston pumps are specifically
manufactured for use in either an open-loop or closed-loop system, while vane
pumps are typically used only in open-loop systems. A motor can generally be
used in either an open or closed-loop system.

     Piston Pumps and Motors. Piston pumps are distinguished from vane pumps by
their ability to produce variable displacement; the amount of hydraulic fluid
passing through the pump, and thus the pressure generated by the hydraulic
system, can be varied to meet the changing requirements of the application.
Variable displacement generally reduces the cost of operating the hydraulic
system because the pump can operate at lowered displacement when the system
requirements are lowered, thus saving energy. Piston pumps are also typically
used with high horsepower applications because their design enables them to
operate at greater pressures than vane pumps.

     Denison manufactures a full range of piston pumps which operate at
pressures as high as 7,250 pounds per square inch ("psi") and which vary in size
from 0.9 cubic inches to 38.9 cubic inches, and in displacement from 11 to 303
gallons per minute ("gpm"). Denison is particularly well-known in the hydraulics
industry for its large-size piston pumps, such as the larger piston pumps in the
Company's Gold Cup Series and in the Premier Series. Denison is one of very few
manufacturers that offer very large piston pumps as a standard, rather than a
custom-made, product. Denison's large-size piston pumps are distinguished from
those of its competitors by its proprietary "barrel-bearing" design, which
enables the pump to run in a stable condition at high speed and pressure.
Management believes the "barrel-bearing" design gives the larger Denison piston
pumps a sturdier construction than other piston pump designs, resulting in a
longer life cycle in severe duty applications such as heavy mining equipment and
aircraft carrier steering systems.

     All Denison piston pumps are manufactured at the Company's Marysville, Ohio
facility. During 1999, the Marysville plant produced and shipped in excess of
12,000 units.

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     Vane Pumps and Motors. Vane pumps and motors are ideal for applications
which require a fixed displacement in which the pressure produced does not need
to be adjusted during operation. Vane pumps and motors typically produce a low
noise level and are ideal for applications which require low noise output, such
as garbage trucks, injection-molding machines and other devices found in
workplaces where OSHA regulations mandate reduced noise levels. In addition, due
to their simpler design, vane pumps and motors are less susceptible than piston
products to contamination from impurities in the hydraulic system, a feature
that makes vane pumps and motors ideal for use in steel production and mining,
which produce many contaminants.

     Denison is the second-largest manufacturer of vane pumps in the world in
terms of net sales. The Company produces a full range of vane pumps and motors
which operate at pressures in excess of 4,500 psi and which vary in size from
0.35 cubic inches to 16 cubic inches, and in displacement from 1 to 250 gpm.
Denison's newest vane pump product is the M5BF series fan-drive motor. The M5BF
is designed for use in industrial applications, and offers less noise and
leakage and higher operating pressure than earlier vane pump models.

     Denison's vane pumps are recognized as among the strongest products in the
hydraulics industry and are distinguished from competitors' vane pumps by
Denison's double-lip design, in which the vane is in contact with the cam ring
at two points rather than at one as with the single-lip design. This double-lip
design makes Denison's vane pumps less susceptible to contamination than
single-lip pumps. The Company believes that no other manufacturer currently
offers the double-lip design, a feature of all vane pumps manufactured by
Denison since the 1940s.

     All Denison vane pumps are manufactured at the Company's Vierzon, France
facility. During 1999, the Vierzon plant produced and dispatched in excess of
50,000 units.

MANIFOLDS

     Manifolds are machined steel or aluminum blocks, which act as housing for
surface mounted, or cartridge valves, which control the operation of a wide
variety of hydraulic equipment such as presses, bailers, lifting devices, and
mobile machinery and equipment. Manifolds are utilized in conjunction with
pumps, motors, cylinders, and valves to form a complete hydraulic system.

     Systems are a growing trend in the hydraulics industry as customers are
essentially outsourcing the hydraulics engineering expertise and component
integration to a single supplier offering a complete "package". The manufacture
and sale of manifolds offers the Company an avenue to utilize its engineering
expertise to sell additional valves, which are often not competitive if sold as
individual items. Substantially all of Denison's manifolds are manufactured at
the Company's Tampere, Finland facility. During 1999, the Tampere factory
produced and sold in excess of 10,000 manifolds.

VALVES

     Valves function by changing the size or direction of the orifice through
which the pressurized fluid passes as it travels from the pump to the piston or
motor. This function provides control over the direction, pressure and flow of
the pressurized fluid depending upon the requirements of the system in which the
valve is operating. Often, electronic controllers are used to control the size
and direction of the valve orifice.

     Denison manufactures four basic types of valves: directional control valves
which alter the path of pressurized fluid through the hydraulic systems;
pressure control valves which regulate the pressure of the hydraulic fluid; flow
control valves which match the hydraulic fluid's flow with the requirements of
the

                                      -5-
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system; and check valves which allow fluid to pass in one direction and not the
other. Denison's valves are used in a variety of commercial settings, including
injection molding, metal and material forming, mobile equipment such as cranes,
and marine systems such as ship-mounted winches.

     Denison is one of the few manufacturers of flange mounted pressure control
valves, a design which enables the valve to be attached directly to another
hydraulic component, such as a pump or a motor. Most competitors' valves must be
connected to the associated component with hydraulic lines, which tend to be
more expensive and are less effective at controlling leaks than flange mounting.
Denison's high performance directional valves, when combined with the Company's
pressure controls, offers the best range of valves available in the market.

     All Denison valves are manufactured at the Company's Hilden, Germany plant,
with the exception of the proprietary design smaller directional control valves,
which are manufactured for the Company pursuant to an agreement with a Czech
company, a line of pressure control valves, manufactured for Denison by a Swiss
company, and a line of cartridge valves, manufactured for Denison by an English
company. In each case, the manufacturing company produces the valves using
Denison's specification. During 1999, the Hilden factory supplied approximately
190,000 units, of which approximately 120,000 were manufactured at the Hilden
factory.

ELECTRONICS

     Denison manufactures electronic controllers to be used with its piston
pumps and motors. Electronic controllers act as an interface between a hydraulic
component and the master controls of the hydraulic system operator and as a
protective device against unusual and potentially damaging signals from the
hydraulic system.

     The Venus Controller is Denison's newest and most sophisticated
microprocessor-based controller. It is programmed and adjusted with a personal
computer or other small-computerized device, providing faster response and
greater accuracy than older analog devices. The Venus Controller is
distinguished from many competitors' controllers by its ability to
simultaneously control several different hydraulic functions or components. For
example, it can control both open-loop and closed-loop functions, whereas many
competitors' products require different controllers for each of these functions.
This simplifies the control and adjustment of hydraulic systems.

     The Venus Controller is manufactured at the Marysville, Ohio facility. The
other Denison controllers are manufactured at the Marysville, Ohio facility and
the Hilden, Germany facility.

SERVICE

     The Company provides a full array of aftermarket services, consisting
primarily of upgrades and replacement of its own and other manufacturers'
hydraulic related products and systems, and to a lesser extent field service,
repairs and maintenance. The Company provides these aftermarket services through
its own regional sales and service subsidiaries and through its network of
independent fluid power equipment distributors.

     Denison's large installed customer base provides it with significant
aftermarket sales of spare parts and services. In the past, the highest level of
aftermarket service has been piston pumps, which tend to be more complex and
require more maintenance than vane pumps. Approximately 120,000 piston pumps and
370,000 vane pumps have been manufactured by Denison and are currently in use
and therefore may be

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subject to service. In 1999, 11.7% of the Company's net sales were derived from
aftermarket services, primarily the sales of spare and replacement parts.

PRODUCT DEVELOPMENT

     Denison has a long history of emphasizing research and development, dating
back to the formation of the Company in 1932. Denison was an early technological
leader within the hydraulics industry and has been granted approximately 600
patents since the Company's inception. Denison has remained strongly committed
to being on the forefront of technological innovation, as evidenced by the
Company's continuing focus on development of new products and enhancements to
existing products.

     As of December 31, 1999, Denison's research and development staff consisted
of a total of 54 employees. Twenty-nine of these employees conduct research and
development on piston pumps and motors at Denison's Ohio facility; ten focus on
research and development related to vane pumps and motors at Denison's France
facility; and twelve perform research and development on industrial valves at
Denison's Germany plant. The main activities of the research and development
staff involve modifying and improving existing products and designing variations
of existing products to suit specific customer needs. A smaller portion of their
time is spent on developing new concepts and new product designs. Denison
currently has no plans to significantly change the number of its R&D employees.
Denison incurred research and development costs of $3.7 million, $3.1 million
and $3.2 million in the years ended December 31, 1999, 1998 and 1997,
respectively.

MANUFACTURING AND SUPPLIERS

     The Company's production facilities are located in Marysville, Ohio,
Vierzon, France, Tampere, Finland and Hilden, Germany. The Marysville plant
manufactures piston pumps and motors, the Vierzon plant manufactures vane pumps
and motors, the Tampere plant manufactures manifolds, and the Hilden plant
manufactures valves. The manufacturing plants have undergone significant
upgrading and rationalization in recent years and are now in superior
manufacturing condition. Currently, the facilities are operated in two to three
shifts with the possibility of increasing capacity with existing machinery by
increasing working hours. Approximately 30% of the manufacturing workforce is
dedicated to the production of piston pumps and motors, 39% to the production of
vane pumps and motors, 7% to the production of manifolds and 24% to the
production of valves. Each facility is equipped with testing equipment to
maintain the Company's high quality control standards. The Vierzon, Tampere and
Hilden facilities are ISO9001 certified and the Marysville facility is working
toward ISO certification.

     The Company manufactures in-house virtually all of the high value-added or
quality critical components such as the rotating groups, body components and
controls used to build its products. The Company has computerized numerically
controlled type flexible machinery and equipment that is organized in a series
of work cells, utilizing just-in-time production scheduling techniques. The
Company has spent in excess of $27.0 million on new production equipment in the
last four years. As a result of these investments, significant gains in
productivity efficiency have been realized since 1993. Management believes that
the improvement programs in progress will further add to efficiency and promote
cost reductions, particularly in piston pump and valve production.

     The Company's ability to produce components to high-level standards of
complex design makes it difficult for competitors to offer products of equal
performance for certain demanding applications. Modern and innovative machining
practices are employed to produce a wide array of products, while assuring
process control. The Company also utilizes specialized and precision grinding
methods that allow superior speed, precision and efficiency, and innovative
fabrication and manufacturing processes. All manufacturing

                                      -7-
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processes employed are well proven and support the Company's efforts to produce
products that are both highly durable and reliable.

     The primary products purchased from suppliers are castings (all products),
solenoids (valves), turned parts (valves), steel bars (vane and piston), steel
and aluminum stock (manifolds), bearings (vane and piston), brass (piston) and
shafts. The Company has implemented an aggressive program of consolidating
suppliers of component parts and raw materials. This program has resulted in an
increased supply of component parts, improved quality, and reduced costs of
production materials. Currently, there are few common suppliers between the
different manufacturing facilities. Management anticipates that the continuation
of this program will yield additional savings in the future.

     The Company's operations involve the handling and use of substances that
are subject to foreign, Federal, state and local environmental laws and
regulations that impose limitations on the discharge of pollutants into the
soil, air, and water and establish standards for their storage and disposal. The
Company is not involved in any pending or threatened proceedings that would
require curtailment of its operations because of such regulations. The Company
believes that it is in material compliance with all of such laws in the United
States, and it continually expends funds to assure that it remains in material
compliance. Investigations of the Company's European facilities have identified
areas of contamination and practices, which may be in violation of applicable
regulations. Compliance with foreign and domestic environmental laws has not
had, and is not expected to have, any material effect on the Company's earnings
or competitive position.

SALES AND MARKETING

     Denison has an extensive and well-trained international sales network
comprised of 16 regional sales and service subsidiaries and 193 independent
fluid power equipment distributors in 52 countries. Distributors buy products
from the Company and resell them to end-users. To a small extent, other
manufacturers' products are distributed through the Company's channels; however,
the Company's distributors do not typically carry products, which compete with
the Company's products. Denison's sales and service subsidiaries are full
service offices engaged in the customized modification, design, manufacture,
packaging, sale and servicing of the Company's hydraulic components and systems.
Typically, the sales and service subsidiaries as well as the distributors are
staffed with professional engineers who are capable of designing hydraulic
systems to meet the requirements of customers' applications. The network is
divided into three main geographical regions: Europe, North America and the
Asia-Pacific region.

     The Company has a particularly strong sales and marketing network in the
United States, which is comprised of 38 sales and marketing employees in 10
states, as well as 27 independent distributors. Direct sales to OEMs and the
government account for approximately 46% of total U.S. net sales, with the
balance of U.S. net sales effected through distributors.

     Denison's regional sales and service subsidiaries are located in 16
countries around the world, including Germany, the United Kingdom, France,
Italy, Scandinavia, Spain, Singapore, Hong Kong, Japan and Australia. Denison's
plants supply pumps, manifolds and valves to its regional subsidiaries, which
maintain small inventories of the components and parts with the highest customer
demand. Each of the regional subsidiaries has the capacity to modify or convert
pumps, motors and valves on-site to meet specific needs of customers, thus
allowing the subsidiaries to offer a flexible product line without maintaining
an extensive inventory. The regional subsidiaries also have sophisticated test
rigs to permit on-site diagnosis and repair of Denison products. Together with
the additional 193 distributors throughout the world, the regional subsidiaries
constitute an international sales network providing extensive support in
application engineering, service and repair parts for Denison products
worldwide.

                                      -8-
<PAGE>

     OEMs and distributors are normally updated with technical developments
through meetings, training sessions and product brochures, while promotion
efforts to other customers are handled by the distributors themselves. The OEMs
prefer to purchase all their required equipment from a single source supplier.
In order to capitalize on this trend, the Company intends to become a full range
supplier within chosen niches in various market sectors. These chosen niches
include metal forming, material forming, capital plant and machine tools in the
industrial sector; earthmoving and construction, special purpose machinery
(including mining) and agriculture in the mobile sector; and a number of
applications in the commercial and military marine sector. These have been
selected not only on the basis of fit with existing products, but also on the
basis of product overlap and management's expectation of above-average growth in
demand for these products in the foreseeable future. Management estimates that
it is possible for Denison to increase its presence as a full range supplier
within these niches through relatively few additions to its existing product
range.

CUSTOMERS

     Denison's broad base of well-known customers in the hydraulics industry in
the United States, Europe and the Asia-Pacific region attests to the high
reliability and quality of the Company's products. In 1999, Denison's top ten
OEM and direct end-user customers accounted for approximately 12% of net sales,
and the top ten customers overall accounted for approximately 12% of net sales.
The markets served by the Company are substantial and diversified, with no
single customer accounting for more than 4% of the Company's net sales in 1999.

     The Company's products are primarily utilized in industrial, mobile and
marine applications. Industrial applications involve equipment that generally is
stationary in factories or processing plants, such as presses, injection molding
equipment, power units, drilling equipment, test stands, mining machinery,
metal-forming and metal-cutting machinery and machine tools. The requirements of
the industrial marketplace are more demanding than most mobile applications
since industrial equipment typically operates at significantly higher cycles.
The Company's products are designed to meet these operating imperatives.
Denison's industrial customers include Cincinnati Milacron (machine tools and
injection molding equipment); Ingersoll-Rand and Driltech (rotary drills);
General Electric and Solar Turbines (power generation); Harris Waste Management
and Kershaw Manufacturing (presses and boilers); and Husky (injection molding
equipment).

     Mobile applications involve equipment that generally is not fixed in place,
such as construction, demolition, agricultural, mining, lumber and pulp harvest,
and utility equipment. These industries tend to place a premium on
considerations of space, weight and cost. Mobile customers include Komatsu
(construction equipment); Case, Caterpillar and Volvo (wheel loaders); Plasser &
Theurer (railroad repair machinery); and PPM Crane (mobile cranes and
excavators).

     Marine applications involve equipment used on sea vessels by both
commercial and military end-users, such as anchors, ship-mounted winches and
deck cranes on aircraft carriers. Marine customers include the U.S. Navy and
Hepburn Engineering.

     End users who purchase the Company's products through distributors include
Bethlehem Steel and Kaiser Aluminum (primary metals); Boeing and Textron
(aerospace); Boise Cascade and Roseberg Forest Products (pulp and paper
industry); and Westinghouse and Stewart & Stevenson (power generation). Other
major customers include large OEMs such as Grove Manufacturing and Tamrock in
the United States; Grange (France), Hagglund & Soner AB (Sweden), Krupp
(Germany) and MIR (Italy), in Europe; and IHI, Kawasaki and Mitsubishi in Japan.

                                      -9-
<PAGE>

BACKLOG

     The Company's backlog of unfilled firm orders was $23.7 million at December
31, 1999, compared with $22.2 million at December 31, 1998. The Company
estimates that approximately 98% of the December 31, 1999 backlog will be filled
by December 31, 2000.

COMPETITION

     The hydraulics industry is highly fragmented and intensely competitive. The
Company competes primarily on the basis of the performance, quality and
durability of its products, as well as the availability of aftermarket support
through its regional sales and service subsidiaries and through its network of
independent fluid power equipment distributors.

     The Company competes with divisions of large corporations, such as Rexroth
and divisions of Eaton, Parker Hannifin and Bosch, as well as companies with
more limited product lines. Some of the Company's competitors are larger and
have greater financial and other resources than the Company and thus can better
withstand adverse economic or market conditions as compared to the Company. In
addition, companies not currently in direct competition with the Company may
introduce competing products in the future.

     The Company has a large number of competitors, some of which are full-line
producers and others that are niche suppliers like the Company. The most
significant competitors market globally. In addition, the Company faces
competition from a number of local companies in regional markets. Full-line
producers have the ability to provide integrated hydraulic systems to customers,
including components functionally similar to those manufactured by the Company.
There has been some consolidation activity in recent years, with large,
full-line producers filling out their product lines with the acquisition of
smaller, privately held producers. The Company's main competitors by product
include Rexroth, Oilgear, Hydrakraft and Parker Hannifin (piston products);
Eaton, Atos and Parker Hannifin (vane products); and Rexroth, Bosch, Eaton, Atos
and Parker Hannifin (valve products). In addition, various small regional
companies compete with the Company's manifold product lines.

EMPLOYEES

     As of December 31, 1999, the Company had 954 full-time employees, including
480 employees in manufacturing and operations, 52 employees in product
development, 284 employees in sales and marketing and 138 employees in
management and administration. In addition, the Company utilizes the services of
approximately 70 temporary employees. Of the Company's full-time employees, 229
are working in the United States, 178 in Germany, 264 in France, 52 in Finland
and the remainder in the Company's sales and service facilities. The Company
considers its relations with its employees to be satisfactory.

     A collective bargaining agreement with the International Association of
Machinists and Aerospace Workers AFL-CIO/CLC, Denison Lodge 427, District Lodge
28, which covers all hourly-paid production and maintenance employees (125
employees overall) at the U.S. facility expired in June 1999. As a result of
differences between management and the collective bargaining unit on wage and
benefit issues, the bargaining unit conducted a work stoppage. After ten weeks
of negotiations, a three-year agreement was executed by both parties, and the
bargaining unit returned to work in August 1999. The Company does not believe
that the work stoppage is likely to have a material adverse impact on future
operations at the facility.

     The French facility has a collective bargaining agreement, the "Convention
Collective de la Matallurgie," which covers all employees and is mandatory in
French companies which engage in activities

                                      -10-
<PAGE>

such as Denison's. The non-management personnel are represented by several
unions. While the German facility is not directly subject to collective
bargaining agreements, it does adopt certain provisions of collective bargaining
agreements applicable to the metalworking industry in its employment contracts.
Such provisions relate to matters such as working conditions, wages and year-end
bonuses. Management at each of the facilities believes labor relations to be
satisfactory.

ENVIRONMENTAL MATTERS

     The Company's operations involve the handling and use of substances that
are subject to foreign, federal, state and local environmental laws and
regulations that impose limitations on the discharge of pollutants into the
soil, air and water and establish standards for their storage and disposal. A
risk of environmental liability is inherent in manufacturing activities.

     Investigations of the Company's European facilities have identified areas
of contamination and some practices which may be in violation of applicable
regulations. The Company is in the process of determining whether any
remediation and/or any changes in current practices are necessary. There can be
no assurance that remediation of these facilities will not be required or that
fines or sanctions will not be imposed on the Company for violations of
environmental law, if any are determined to exist. While management does not
believe that compliance with environmental requirements is likely to have a
material adverse effect on the Company, there can be no assurance that future
additional environmental compliance or remediation obligations will not arise at
one or more of the Company's facilities or that such obligations could not have
a material adverse effect on the Company's financial condition or results of
operations. The Company has an accrual of $1.3 million at December 31, 1999 for
anticipated future costs related to environmental liabilities. See Note 14 of
"Notes to Consolidated Financial Statements."

PATENTS AND TRADEMARKS

     The Company believes that the growth of its business is dependent upon the
quality of its products, its ability to produce products that meet the
requirements of its customers and its relationships in the marketplace, rather
than the extent of its patents and trademarks. The Company currently has over
100 patents and has been granted approximately 600 patents since its inception.
The loss of any single patent is not likely to have a material adverse effect on
the Company's business, financial condition and results of operations.

ITEM 2.  PROPERTIES.

     Denison has administrative, sales and manufacturing facilities located in
Marysville, Ohio; Vierzon, France; Tampere, Finland; and Hilden, Germany. All
four facilities are owned by the Company and occupy 170,000, 174,100, 120,000
and 146,600 square feet, respectively. The Marysville plant manufactures piston
pumps and motors, the Vierzon plant manufactures vane pumps, and motors, the
Tampere plant manufactures manifolds, and the Hilden plant manufactures valves.
The manufacturing plants have undergone significant upgrading and
rationalization in recent years and are now in superior manufacturing condition.
Currently, the facilities are operated in two to three shifts with the
possibility of increasing capacity with existing machinery by increasing working
hours. Approximately 30% of the manufacturing workforce is dedicated to the
production of piston pumps and motors, 39% to the production of vane pumps and
motors, 7% to the production of manifolds and 24% to the production of valves.
Each facility is equipped with testing equipment to maintain the Company's high
quality control standards. The Vierzon, Tampere and Hilden facilities are
ISO9001 certified and the Marysville facility is working toward ISO
certification.

                                      -11-
<PAGE>

     The Company also owns a sales and service facility in Wakefield, England.
In addition, the Company leases or subleases facilities for its regional sales
and service subsidiaries in the following countries: Australia, Belgium, Canada,
Denmark, Finland, France, Germany, Hong Kong, Italy, Japan, Luxembourg, the
Netherlands, Singapore, Spain, Sweden, the United Kingdom and the United States.
The Company believes that its existing facilities are sufficient for its current
needs, and that suitable additional or alternative space will be available in
the future on commercially reasonable terms as needed.

ITEM 3.  LEGAL PROCEEDINGS.

     The Company is involved in certain legal proceedings incidental to the
normal conduct of its business. The Company does not believe that any
liabilities relating to any of the legal proceedings to which it is a party are
likely to be, individually or in the aggregate, material to its consolidated
financial position or results of operations.

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

     None

ITEM 4A.  EXECUTIVE OFFICERS OF THE COMPANY.

     The following table sets forth the name and position of each of the
executive officers of the Registrant.

                                                              Present Office
Name                Age   Position                              Held Since
----                ---   --------                            --------------
J. Colin Keith       55   Chairman of the Board of                 1993
                          Directors
David L. Weir        46   Chief Executive Officer,                 1997
                          President and Director
Anders C.H. Brag     47   Managing Director and Director           1993
Bruce A. Smith       44   Chief Financial Officer and              1998
                          Director
Paul G. Dumond       45   Company Secretary                        1993


                                     PART II

ITEM 5.  MARKET OF THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The principal trading market for the Company's securities is ADSs listed on
the Nasdaq National Market. The Company's ADSs have traded in the U.S. since
August 8, 1997 under the symbol "DENHY". Prior to that time, there was no public
market for the Companay's securities. Each ADS represents one Ordinary Share,
par value $0.01 per Ordinary Share. Each ADS is evidenced by an ADR. Bankers
Trust Company is the Depositary for the ADRs. As of December 31, 1999,
11,120,965 ADSs were held by 16 registered ADR holders. The largest holder, The
Depository Trust Company, holds 5,848,179 ADSs representing 64 participants.

     The following table shows the high and low sales prices of the ADSs on the
Nasdaq National Market for each quarterly period for the two years ended
December 31, 1999.

                                      -12-
<PAGE>

                                     Price per ADS (in U.S. Dollars)
                                  ----------------------------------
Quarterly Period Ended              High            Low
------------------------------    ---------      ---------

March 31, 1998                    $ 18.50        $ 15.25
June 30, 1998                       20.75          17.25
September 30, 1998                  20.25          12.50
December 31, 1998                   14.25          11.75
March 31, 1999                      14.75          11.00
June 30, 1999                       19.25          12.63
December 31, 1999                   11.63           8.50

     At March 29, 2000, the last reported price for an ADS on the Nasdaq
National Market was $ 12.25.

         The Company has never declared or paid dividends on its Ordinary
Shares. The Company currently intends to retain its earnings to finance the
growth and development of its business and, consequently, does not anticipate
paying any dividends on the Ordinary Shares in the foreseeable future. Under the
Companies Act 1985, as amended, of Great Britain (the "Companies Act"),
dividends are payable on the Ordinary Shares only out of profits available for
distribution determined in accordance with accounting principles generally
accepted in the United Kingdom, which differ in certain respects from US GAAP.
In addition, certain of the Company's financing agreements restrict the
Company's ability to pay dividends to its shareholders and it is anticipated
that future financing agreements will have similar restrictions. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

ITEM 6.  SELECTED FINANCIAL DATA.

     The selected consolidated financial data for each of the five years in the
period ended December 31, 1999 are derived from the Consolidated Financial
Statements of the Company. The selected consolidated financial data of the
Company set forth below are qualified by reference to, and should be read in
conjunction with the Consolidated Financial Statements, Related Notes and other
financial information included in this Form 10-K.


                                      -13-
<PAGE>

CONSOLIDATED STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
                                                     YEAR ENDED DECEMBER 31,
                                   ---------------------------------------------------------
                                      1999        1998       1997        1996        1995
                                   ---------   ---------   ---------   ---------   ---------
                                         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                <C>         <C>         <C>         <C>         <C>
Net sales                          $ 135,543   $ 145,253   $ 148,388   $ 148,149   $ 139,255
Cost of sales                         90,430      90,917      94,008      95,312      91,185
                                   ---------   ---------   ---------   ---------   ---------
Gross profit                          45,114      54,336      54,380      52,837      48,070
Selling, general
  and administrative
  expenses                            31,966      33,028      33,618      35,336      35,066
                                   ---------   ---------   ---------   ---------   ---------
Operating income                      13,147      21,308      20,762      17,501      13,004
Other income/(expense)                   693           0       2,175       1,829         369
Interest income
  (expense), net                         354         938         218          48        (372)
                                   ---------   ---------   ---------   ---------   ---------
Income before taxes                   12,808      22,246      23,155      13,001      13,001
Provision for income
  Taxes                                4,522       5,956       3,367       2,437       1,657
                                   ---------   ---------   ---------   ---------   ---------
Net income                         $   8,286   $  16,290   $  19,788   $  16,941   $  11,344
                                   =========   =========   =========   =========   =========
Basic earnings per share           $     .75   $    1.47   $    1.84   $    1.61   $    1.08
                                   =========   =========   =========   =========   =========
Diluted earnings per share
                                   $     .74   $    1.46   $    1.82   $    1.59   $    1.06
                                   =========   =========   =========   =========   =========
</TABLE>


CONSOLIDATED BALANCE SHEET DATA:

<TABLE>
<CAPTION>
                                                AT DECEMBER 31,
                             ----------------------------------------------------
                               1999       1998       1997       1996       1995
                             --------   --------   --------   --------   --------
                                           (DOLLARS IN THOUSANDS)
<S>                          <C>        <C>        <C>        <C>        <C>
Cash and cash equivalents    $ 31,173   $ 35,799   $ 30,337   $ 19,144   $ 16,001
Working capital                66,533     66,432     63,834     51,074     39,782
Total assets                  128,820    143,457    107,493     93,726     86,023
Total debt(1)                   5,697     12,881      2,478      4,177      8,889
Redeemable preferred stock       --         --         --        1,141      1,036
Total shareholders' equity     81,060     78,527     59,552     39,120     24,355
</TABLE>

(1) Total debt comprises bank lines of credit with a maturity of less than one
    year, long-term debt (including current portion) and capital lease
    obligations (including current portion).

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

     The following should be read in conjunction with "Item 6. Selected
Financial Data" and the Company's Consolidated Financial Statements and the
Notes related thereto appearing elsewhere in this Form 10-K.

     Although the Company reports its financial results in U.S. dollars,
approximately 70% of the Company's revenues and expenses are incurred in foreign
currencies. The fluctuation of the functional currencies earned by the Company
against the U.S. dollar has had the effect of increasing or decreasing (as
applicable) U.S. dollar reported net sales, as well as the cost of goods sold,
gross profit, selling, general and

                                      -14-
<PAGE>

administrative expenses denominated in such foreign currencies when translated
into U.S. dollars as compared to prior periods.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999 COMPARED WITH YEAR ENDED DECEMBER 31, 1998

     The Company's net sales decreased 6.7% to $135.5 million in fiscal 1999
from $145.3 million in fiscal 1998. During the same period, net sales in North
America decreased 23.1% to $40.9 million from $53.2 million; net sales in Europe
increased 1.7% to $77.1 million from $75.8 million; and net sales in
Asia-Pacific region increased 8.0% to $17.5 million from $16.2 million. The
strengthening US dollar against most of the functional currencies earned by the
Company, combined with a slow-down in the Company's North American markets
supporting the mining and gas and oil exploration markets, and a ten-week work
stoppage at the Company's Marysville, Ohio manufacturing facility were the
primary reasons for the reduced revenues realized. Partially offsetting these
factors were strong first year sales of the Company's manifold operations in
Tampere, Finland, a company acquired late in 1998, and a recovering demand for
the Company's products in the Asia-Pacific markets.

     Restated (at average exchange rates for fiscal 1998), net sales for fiscal
1999 were $137.6 million, a 5.3% decrease from fiscal year 1998. The increased
sales revenue for the period attributable to the changes in exchange rate was
$2.1 million. Restated (at average exchange rates for fiscal 1998), net sales
for fiscal 1999 for the Company's European operations increased 6.1% to $80.4
million from $75.8 million; while net sales for the Asia-Pacific region remained
constant with 1998 net sales of $16.2 million.

     The Company's gross profit decreased to $45.1 million in fiscal 1999 from
$54.3 million in fiscal 1998. Gross profit as a percentage of net sales
decreased to 33.3% in fiscal 1999 from 37.4% in fiscal 1998. The decreased gross
profit was primarily attributable to the decreased volume demand realized,
combined with planned production curtailments throughout 1999 to reduce
inventory levels and the impact of the work stoppage at the Company's
Marysville, Ohio manufacturing facility. Worldwide inventories were reduced in
1999 from 1998 levels by $5.2 million (before the impact on inventory balances
from currency fluctuations). Partially offsetting these factors were strong
first year earnings from the Company's manifold operations in Tampere, Finland,
combined with the impact of cost reductions made throughout 1999 and prior
fiscal years.

     Gross profit in North America decreased 43.7% to $9.0 million in fiscal
1999 from $15.8 million in fiscal 1998. Gross profit in Europe decreased 7.0% to
$30.6 million in fiscal 1999 from $32.9 million in fiscal 1998, and Asia-Pacific
gross profit increased 6.0% to $5.3 million in fiscal 1999 from $5.0 million in
fiscal 1998. Restated (at average exchange rates for fiscal 1998), gross profit
in Europe was $31.7 million, or a 3.7% decrease over fiscal 1998, and gross
profit in the Asia-Pacific region was $4.9 million, or a 2.0% decrease over
fiscal 1998. The total gross profit decrease for the period attributable to the
exchange rate differences was $0.7 million. Restated (at average exchange rates
for fiscal 1998), consolidated gross profit as a percentage of net sales
decreased to 33.4% for fiscal 1999 compared to 37.4% for fiscal 1998.

     Selling, general and administrative ("SG&A") expenses decreased 3.2% to
$32.0 million for fiscal 1999 from $33.0 million for fiscal 1998. These expenses
as a percentage of net sales were 23.6% for fiscal 1999 as compared to 22.7% for
fiscal 1998. Restated (at average exchange rates for fiscal 1998), SG&A
decreased 2.1% to $32.3 million (23.5% of net sales) in fiscal 1999 from $33.0
million (22.7% of net sales) in fiscal 1998. The restated decrease in these
expenses for fiscal 1999 as compared to fiscal 1998 is due primarily to the
impact of cost reductions implemented by the Company in fiscal 1999 and prior
fiscal years.

                                      -15-
<PAGE>

The increase in these expenses as a percentage of net sales is reflected by a
currency adjusted decrease in net sales revenue leveraged from a 2.1% marginal
decrease in SG&A expenses.

     Operating income decreased 38.5% to $13.1 million in fiscal 1999 from $21.3
million in fiscal 1998. Operating income as a percentage of net sales decreased
to 9.7% in fiscal 1999 from 14.7% in fiscal 1998. Restated (at average exchange
rates for fiscal 1998), operating income decreased 36.2% to $13.6 million (9.9%
of net sales) in fiscal 1999 from $21.3 million (14.7% of net sales) in fiscal
1998. The changes in exchange rates had the effect of decreasing operating
income for the period by $0.5 million.

     Other expense increased to $0.7 million (.5% of net sales) in fiscal 1999
from $0.0 million in fiscal 1998. The increase in other expense was the result
of recognition of non cash currency losses on inter-company loans throughout
fiscal 1999, with no such transactions completed in fiscal 1998.

     Net interest income was $354,000 in fiscal 1999 compared to $938,000 of net
interest income in fiscal 1998. The decrease in interest income was primarily
due to decreased interest bearing cash balances held at the subsidiary level,
with funds utilized to reduce the borrowings utilized in the acquisition of
Lokomec Oy, the Company's facility in Tampere, Finland in December 1998,
combined with lower worldwide investment rates on the Company's cash balances.

     The effective tax rate for fiscal 1999 was 35.3% compared to 26.9% for
fiscal 1998. This change is the result of year-to-year variations in the country
sources of the Company's profits, in each case at tax rates that vary among
jurisdictions. The provision for taxes decreased 24.1% to $4.5 million in fiscal
1999 compared to $6.0 million in fiscal 1998. This provision as a percentage of
net sales decreased to 3.3% in fiscal 1999 from 4.1% in fiscal 1998, reflecting
the lower operating margins discussed earlier.

YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997

     The Company's net sales decreased 2.1% to $145.3 million in fiscal 1998
from $148.4 million in fiscal 1997. During the same period, net sales in North
America decreased 7.3% to $53.2 million from $57.4 million; net sales in Europe
increased 11.1% to $75.8 million from $68.2 million; and net sales in
Asia-Pacific region decreased 28.5% to $16.2 million from $22.7 million. The
strengthening US dollar against most of the functional currencies earned by the
Company, combined with a slow-down in the Company's markets supporting the
mining and gas and oil exploration markets were the primary reasons for the
reduced revenues realized. Partially offsetting these factors was the strong
demand for the Company's vane and piston product lines in Europe.

     Restated (at average exchange rates for fiscal 1997), net sales for fiscal
1998, were $148.2 million, virtually equal to fiscal 1997. The increased sales
revenue for the period attributable to the changes in exchange rate was $2.9
million. Restated (at average exchange rates for fiscal 1997), net sales for
fiscal 1998 for the Company's European operations increased 12.5% to $76.8
million from $68.2 million; while net sales for the Asia-Pacific region
decreased 22.2% to $17.7 million from $22.7 million.

     The Company's gross profit decreased slightly to $54.3 million in fiscal
1998 from $54.4 million from fiscal 1997. Gross profit as a percentage of net
sales increased to 37.4% in fiscal 1998 from 36.7% in fiscal 1997. The increased
gross profit was primarily attributable to a favorable mix of the Company's more
profitable product lines, combined with margin enhancements attained from cost
reduction initiatives implemented at the Company's manufacturing facilities.

     Gross profit in North America decreased 13.5% to $15.8 million in fiscal
1998 from $18.3 million in fiscal 1997. Gross profit in Europe increased 18.0%
to $32.9 million in fiscal 1998 from $27.9 million in

                                      -16-
<PAGE>

fiscal 1997, and Asia-Pacific gross profit decreased 39.6% to $5.0 million in
fiscal 1998 from $8.3 million in fiscal 1997. Restated (at average exchange
rates for fiscal 1997), gross profit in Europe was $33.4 million, or a 19.7%
increase over fiscal 1997, and gross profit in the Asia-Pacific region was $5.5
million, or a 33.9% decrease over fiscal 1997. The total gross profit decrease
for the period attributable to the exchange rate differences was $0.8 million.
Restated (at average exchange rates for fiscal 1997), consolidated gross profit
as a percentage of net sales increased to 37.2% for fiscal 1998 compared to
36.7% for fiscal 1997.

     SG&A expenses decreased 1.8% to $33.0 million for fiscal 1998 from $33.6
million for fiscal 1997. These expenses as a percentage of net sales were equal
to fiscal 1997 performance of 22.7%. Restated (at average exchange rates for
fiscal 1997), SG&A increased 0.8% to $33.9 million (22.9% of net sales) in
fiscal 1998 from $33.6 million (22.7% of net sales) in fiscal 1997. THE RESTATED
INCREASE IN THESE EXPENSES FOR FISCAL 1998 AS COMPARED TO FISCAL 1997 IS DUE
PRIMARILY TO COSTS ASSOCIATED WITH RESTRUCTURING IN THE COMPANY'S ASIAN-PACIFIC
AND NORTH AMERICAN OPERATIONS. The increase in these expenses as a percentage of
net sales is reflected by currency adjusted flat net sales revenue leveraged
from a 0.8% marginal increase in SG&A expenses.

     Operating income increased 2.6% to $21.3 million in fiscal 1998 from $20.8
million in fiscal 1997. Operating income as a percentage of net sales increased
to 14.7% in fiscal 1998 from 14.0% in fiscal 1997. Restated (at average exchange
rates for fiscal 1997), operating income increased 2.2% to $21.2 million (14.3%
of net sales) in fiscal 1998 from $20.8 million (14.0% of net sales) in fiscal
1997. The changes in exchange rate had the effect of decreasing operating income
for the period by $0.1 million.

     Other income decreased to $0 in fiscal 1998 from $2.2 million (1.5% of net
sales) in fiscal 1997. The decrease of other income was the result of
recognition of a gain on disposal of surplus real estate assets in Germany for
fiscal 1997, with no such transactions completed in fiscal 1998.

     Net interest income was $938,000 in fiscal 1998 compared to $218,000 of net
interest income in fiscal 1997. The increase in interest income was primarily
due to increased interest bearing cash balances held at the subsidiary level,
combined with funds from the Company's initial public offering. These funds were
utilized late in fiscal 1998 to partially fund the acquisition of Lokomec Oy.

     The effective tax rate for fiscal 1998 was 26.8% compared to 14.5% for
fiscal 1997. This change is the result of year-to-year variations in the country
sources of the Company's profits, in each case at tax rates that vary among
jurisdictions. The provision for taxes increased 77.0% to $6.0 million in fiscal
1998 compared to $3.4 million in fiscal 1997. This provision as a percentage of
net sales increased to 4.1% in fiscal 1998 from 2.3% in fiscal 1997. During
fiscal 1997, the Company recognized a tax credit of $1.9 million to record
deferred tax assets related to its U.S. operations. There were no such tax
credits recognized in fiscal 1998. Excluding the impact of the tax credit, the
effective tax rate for fiscal 1997 was 22.7% compared to 26.8% for fiscal 1998.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                                       YEAR ENDED AND AT DECEMBER 31,
                                                      --------------------------------
                                                        1999        1998        1997
                                                      --------    --------    --------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                   <C>         <C>         <C>
Cash & cash equivalents                               $ 31,174    $ 35,799    $ 30,337
Net cash provided by operating activities               13,246      14,859      16,985
Net cash used in investing activities                   (7,051)    (20,692)     (5,225)
Net cash provided by (used in) financing activities     (7,416)     10,333       1,899


                                      -17-
<PAGE>

Effect of exchange rate changes on cash                 (3,404)        962      (2,466)
</TABLE>

     Historically the Company has funded its cash requirements through cash flow
from operations, although short-term fluctuations in working capital
requirements for some of the Company's subsidiaries have been met through
borrowings under revolving lines of credit obtained locally. The Company's
primary uses of cash have been to fund capital expenditures, acquisitions and to
service and repay debt.

     Net cash provided by operating activities for fiscal 1999 decreased to
$13.2 million from $14.9 million in fiscal 1998. The $1.7 million decrease in
net cash provided by operating activities for fiscal 1999 compared to fiscal
1998 was attributable to a $8.0 million decrease in net income, partially offset
by a $5.2 million increase in sources of cash from operating assets and
liabilities, and a $ 1.1 million increase in depreciation / amortization. The
Company anticipates that operating cash and capital expenditure requirements
will continue to be funded by cash flow from operations, cash on hand and bank
borrowings.

     Net cash used in investing activities was $7.1 million for 1999, compared
to $20.7 million for fiscal 1998. Investing activities in 1999 consisted largely
of investment in manufacturing equipment for the Company's four production
facilities, an additional expenditure under an earn out arrangement with the
former owners of Lokomec Oy, a company acquired late in 1998, and the
investments in hardware and software as part of the Company's year 2000
compliance projects. During 1998, investing activities also reflect the
acquisition of 100% of the outstanding shares of Lokomec Oy for $10.9 million,
net of cash acquired. The Company anticipates that it will incur approximately
$6.0 million for capital expenditures for fiscal 2000, excluding any
acquisitions of new businesses.

     Net cash used by financing activities was $ 7.4 million for fiscal 1999
compared to net cash provided of $10.3 million for 1998. The decrease of $17.7
million in net cash provided by financing activities for fiscal 1999 compared to
fiscal 1998 was primarily attributable to the partial repayment of short term
bank borrowings of $12.0 million borrowed in 1998 to facilitate the Lokomec
acquisition.

     The effect of exchange rate changes on cash and cash equivalents was ($ 3.4
million) and $.9 million for fiscal 1999 and fiscal 1998, respectively. As
approximately greater than two thirds of the Company's business is transacted in
currencies other than the U.S. dollar, foreign currency fluctuations had a
significant impact on dollar reported balances for fiscal 1999 compared to
fiscal 1998. The $4.3 million increase in the exchange rate impact on cash and
cash equivalents was attributable to a continuing 1999 strengthening U.S. dollar
against most of the functional currencies earned by the Company in its European
operations. The average dollar-weighted foreign currency decrease for fiscal
1999 for the Company's European operations was 8.5%.

     In April 1999, the Company's Japan subsidiary entered into a bank loan with
a bank that provided $3.0 million for working capital and acquisitions.
Borrowings under the agreement are secured by a guarantee by the Company. At
December 31, 1999, $1.5 million was outstanding under the bank loan. Interest on
the loan accrues at a rate of 2.25%. Interest on the loan is payable quarterly.

     In May 1999, the Company's U.S. subsidiary entered into an revolving credit
note with a bank that provides up to $15.0 million for working capital and
acquisitions. Borrowings under the agreement are secured by a guarantee by the
Company. At December 31, 1999 $3.5 million was outstanding under the note.
Interest on the line, which is based on LIBOR plus 0.875% (6.995% at December
31, 1999), is payable monthly.

     Short-term borrowings outside the United States under available informal
credit facilities are typically a result of overdrafts. At December 31, 1999,
the Company had an additional $.6 million of other

                                      -18-
<PAGE>

foreign debt outstanding. The Company also has an additional $2.6 million of
unused foreign credit facilities. The banks may withdraw these facilities at any
time. The weighted average interest rates on short-term borrowings as of
December 31, 1999 and 1998 were 5.1% and 6.0% respectively.

IMPACT OF INFLATION

     The impact of inflation on the operating results of the Company has been
moderate in recent years reflecting generally lower rates of inflation in the
economy and relative stability in the Company's cost structure. Although
inflation has not had, and the Company does not expect that it will have, a
material impact on operating results, there is no assurance that the Company's
business will not be effected by inflation in the future.

EXPOSURE TO CURRENCY FLUCTUATIONS

     A significant portion of the Company's business is conducted in currencies
other than the dollar, including pounds sterling, equivalent European Euro
currencies and Japanese yen. The Company's financial statements are prepared in
dollars, and therefore fluctuations in exchange rates in the pound sterling and
other currencies in which the Company does business relative to the dollar may
cause fluctuations in reported financial information, which are not necessarily
related to the Company's operations. In 1999, for example, the Company
experienced a 1.7% increase in net sales in the European region (denominated in
local currencies); however, the dollar-translated net sales figures showed a net
increase due to the fluctuation of the dollar against the local currencies of
6.1%. Due to the volatility of currency exchange rates, the Company cannot
predict the effect of exchange rate fluctuations upon future operating results.
Although the Company currently engages in transactions to hedge a portion of the
risks associated with fluctuations in currency exchange rates, it may not do so
in the future. There can be no assurance that the Company's business, financial
condition and results of operations will not be materially adversely affected by
exchange rate fluctuations or that any hedging techniques implemented by the
Company will be effective.

     The following table illustrates the effect of the currency exchange rates
on certain of the Company's income items in fiscal 1999 and fiscal 1998 which
have been recalculated to show what such amounts would have been applying 1997
average exchange rates to 1998 amounts and 1998 average exchange rates to 1999
amounts.

                                      -19-
<PAGE>

                                            YEAR ENDED DECEMBER 31,
                                            -----------------------
                                     1998             1999            AT 1998
                                     ----             ----            -------
                                    ACTUAL           ACTUAL       EXCHANGE RATES
                                   --------         --------      --------------
                                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales                          $145,253         $135,543         $137,629
Gross profit                         54,336           45,113           45,630
Operating income                     21,308           13,147           13,587
Net income                           16,290            8,286            8,530
Basic earnings per share               1.47              .75              .77
Diluted earnings per share             1.46              .74              .77


                                          YEAR ENDED DECEMBER 31,
                                          -----------------------
                                   1997             1998            AT 1997
                                   ----             ----            -------
                                  ACTUAL           ACTUAL       EXCHANGE RATES
                                 --------         --------      --------------
                                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

Net sales                        $148,388         $145,253         $148,201
Gross profit                       54,380           54,336           55,145
Operating income                   20,762           21,308           21,226
Net income                         19,788           16,290           16,168
Basic earnings per share             1.84             1.47             1.46
Diluted earnings per share           1.82             1.46             1.45


IMPACT OF YEAR 2000

     In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the Company completed its remediation
and testing of systems. As a result of those planning and implementation
efforts, the Company experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes those
systems successfully responded to the year 2000 date change. The Company
expensed approximately $750,000 during 1999 in connection with remediating its
systems. The Company is not aware of any material problems resulting from Year
2000 issues, either with its products, its internal systems, or the products or
services of third parties. The Company will continue to monitor its mission
critical computer applications and those of its customers, suppliers and vendors
throughout the year 2000 to ensure that any latent Year 2000 matters that may
arise are addressed properly.

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

     This Form 10-K includes and incorporates forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than statements of
historical facts, included or incorporated in this Form 10-K regarding the
Company's strategy, future operations, financial position, future revenues,
projected costs, prospects, plans and objectives of management are
forward-looking statements. The words "anticipates," "believes," "estimates,"
"expects," "intends," "may," "plans," "projects," "will," "would" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. The Company
cannot guarantee that it actually will achieve the plans, intentions or
expectations disclosed in its forward-looking statements and undue reliance
should not be placed on the Company's forward-looking statements. Actual results
or events could differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements. The Company has included important
factors in the cautionary statements included or incorporated in this Form 10-K
that the Company believes could cause actual results or events to differ
materially from the forward-looking statements made. The Company's
forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint



                                      -20-
<PAGE>

ventures or investments the Company may make. The Company does not assume any
obligation to update any forward-looking statements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Market risks relating to the Company's operations result primarily from
changes in exchange rates or interest rates or weak economic conditions in the
markets in which the Company sells its products. The Company does not use
financial instruments for trading purposes and is not a party to any leveraged
derivatives.

     Foreign Currency Risk

     The Company enters into foreign exchange contracts to hedge some of its
foreign currency exposure. The Company uses such contracts to hedge exposure to
foreign currency exchange rates associated with anticipated costs to be incurred
in a foreign currency. The Company seeks to minimize the risk that the expenses
incurred by a subsidiary in a currency other than its functional currency will
be affected by changes in the exchange rates. THE COMPANY BELIEVES THAT THE
POSSIBLE FINANCIAL STATEMENT IMPACT OF ITS FOREIGN CURRENCY FORWARD CONTRACTS IS
IMMATERIAL.

     Interest Rate Risk

     The Company's interest bearing liabilities are most sensitive to changes in
the London InterBank Offered Rate (LIBOR) as substantially all of its short term
investments bear minimal interest rate risk.

     As of December 31, 1999, the Company had approximately $5.6 million
outstanding on its revolving line of credit and short term credit agreements.
The potential loss to the Company over one year that would result from a
hypothetical, instantaneous, and unfavorable change of 100 basis points in the
interest rates of all applicable assets and liabilities would be approximately
be $0.1 million.


                                      -21-
<PAGE>

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                            DENISON INTERNATIONAL PLC

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



                                                                       PAGE

Report of Independent Auditors                                          23

Consolidated Balance Sheets as of December 31, 1999 and 1998            24

Consolidated Statements of Income for the years ended
  December 31, 1999, 1998 and 1997                                      26

Consolidated Statements of Changes in Shareholders' Equity
  for the years ended December 31, 1999, 1998 and 1997                  27

Consolidated Statements of Cash Flows for the years ended
  December 31, 1999, 1998 and 1997                                      28

Notes to Consolidated Financial Statements                              30






                                      -22-
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
Denison International plc

     We have audited the consolidated balance sheets of Denison International
plc and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1999. Our
audit also included the financial statement schedule listed in the index at Item
14. These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe our audits provide a reasonable basis for our
opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Denison International plc and subsidiaries at December 31, 1999 and 1998, and
the consolidated results of their operations, and their cash flows for each of
the three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole presents fairly in all
material respect the information set forth therein.

                                               /S/ ERNST & YOUNG LLP

Columbus, Ohio
February 11, 2000





                                      -23-
<PAGE>

                                   DENISON INTERNATIONAL PLC
                                       AND SUBSIDIARIES
                                  CONSOLIDATED BALANCE SHEETS
                        (U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                     ASSETS

                                                                           DECEMBER 31,
                                                                    -------------------------
                                                                      1999             1998
                                                                    --------         --------
<S>                                                                 <C>              <C>
Current assets:
   Cash and cash equivalents                                        $ 31,174         $ 35,799
   Accounts  receivable,  less  allowances  of                      $  2,175              and
     $2,395 in 1999 and 1998, respectively                            28,267           29,716
   Inventories                                                        31,453           38,236
   Other current assets                                                3,566            4,513
                                                                    --------         --------
     Total current assets                                             94,460          108,264
Property, plant and equipment, net                                    24,519           24,726
Other assets                                                           2,727            2,013
Goodwill, net of accumulated  amortization of $345 and $145
   in 1999 and 1998, respectively                                      7,114            8,454
                                                                    --------         --------
     Total assets                                                   $128,820         $143,457
                                                                    ========         ========

</TABLE>

                                      -24-
<PAGE>

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                    DECEMBER 31,
                                                                            ---------------------------
                                                                               1999              1998
                                                                            ---------         ---------
<S>                                                                         <C>               <C>
Current liabilities:
   Notes payable to bank                                                    $   5,586         $  12,532
   Accounts payable                                                             9,027            10,973
   Accrued payroll and related expenses                                         3,996             4,349
   Other accrued liabilities                                                    7,527            12,408
   Income tax payable                                                           1,680             1,259
   Current portion of capital lease obligations                                   111               311
                                                                            ---------         ---------
     Total current liabilities                                                 27,927            41,832
Noncurrent liabilities:
   Capital lease obligations, less current portion                               --                  38
   Pension accrual                                                             10,506            10,785
   Other noncurrent liabilities                                                 4,516             5,921
   Negative goodwill, net of accumulated amortization of
     $6,195 and $4,823 in 1999 and 1998, respectively                           4,811             6,354
                                                                            ---------         ---------
                                                                               19,833            23,098
                                                                            =========         =========
  Shareholders' equity:
   'A' ordinary shares (pounds sterling)8.00 par value; 7,125 shares
     authorized, and 7,015 issued and outstanding in 1999
     and 1998                                                                      86                86
   Ordinary shares $0.01 par value; 15,000,000 shares
     authorized, and 11,113,950 and 11,097,450 shares
     issued and outstanding in 1999 and 1998, respectively                        111               111
   Additional paid-in capital                                                   5,479             5,453
   Capital redemption reserve                                                   1,090             1,090
   Retained earnings                                                           82,691            74,405
   Accumulated other comprehensive loss                                        (8,397)           (2,618)
                                                                            ---------         ---------
Total shareholders' equity                                                     81,060            78,527
                                                                            ---------         ---------
Total liabilities and shareholders' equity                                  $ 128,820         $ 143,457
                                                                            =========         =========

</TABLE>

        The accompanying notes are an integral part of these statements.



                                      -25-
<PAGE>

                                         DENISON INTERNATIONAL PLC
                                             AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF INCOME
                            (U.S. DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                    YEAR ENDED DECEMBER 31,
                                                       --------------------------------------------------
                                                         1999                 1998                1997
                                                       ---------            ---------           ---------
<S>                                                    <C>                  <C>                 <C>
Net sales                                              $ 135,543            $ 145,253           $ 148,388
Cost of sales                                             90,430               90,917              94,008
                                                       ---------            ---------           ---------
Gross profit                                              45,113               54,336              54,380
Selling, general and administrative expenses              31,966               33,028              33,618
                                                       ---------            ---------           ---------
Operating income                                          13,147               21,308              20,762
Other income (expense)                                      (693)                --                 2,175
Interest (expense) income, net                               354                  938                 218
                                                       ---------            ---------           ---------
Income before taxes                                       12,808               22,246              23,155
Provision for income taxes                                 4,522                5,956               3,367
                                                       ---------            ---------           ---------
Net income                                             $   8,286            $  16,290           $  19,788
                                                       =========            =========           =========
Basic earnings per share                               $     .75            $    1.47           $    1.84
                                                       =========            =========           =========
Diluted earnings per share                             $     .74            $    1.46           $    1.82
                                                       =========            =========           =========

</TABLE>


        The accompanying notes are an integral part of these statements.


                                      -26-
<PAGE>

<TABLE>
<CAPTION>
                                                      DENISON INTERNATIONAL PLC
                                                           AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            (U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                        A                                           A
                                     ORDINARY             ORDINARY              ORDINARY            ORDINARY            ADDITIONAL
                                     SHARES OF            SHARES OF             SHARES OF           SHARES OF              PAID
                                 (POUNDS STERLING)                          (POUNDS STERLING)                           CAPITAL (II)
                                     8.00 EACH           $0.01 EACH              8.00 EACH         $0.01 EACH
                                     ---------            ---------              ---------          ---------          -------------
                                         (NUMBER OF SHARES)
<S>                                 <C>               <C>                           <C>             <C>                    <C>
Balance at January 1, 1997            7,015             10,528,950                    86              105                    862
Issuance of ordinary shares in
  connection with initial public
  offering                               --                450,000                    --                5                  4,475
Exercise of stock options                --                450,000                    --                1                     74
Ordinary shares canceled                 --                (15,000)                   --               --                     --
Net Income                               --                     --                    --               --                     --
Pension liability adjustment             --                     --                    --               --                     --
Translation adjustment                   --                     --                    --               --                     --
Comprehensive Income
Transfer on redemption of
  redeemable preferred stock             --                     --                    --               --                     --
                                      -----             ----------                  ----             ----                  -----
Balance at December 31, 1997          7,015             11,057,700                    86              111                  5,411
Exercise of stock options                --                 39,750                    --               --                     42
Net income                               --                     --                    --               --                     --
Translation adjustment                   --                     --                    --               --                     --
Comprehensive Income                     --                     --                    --               --                     --
                                      -----             ----------                  ----             ----                  -----
Balance at December 31, 1998          7,015             11,097,450                   $86             $111                 $5,453
Exercise of stock options                --                 16,500                    --               --                     26
Net income                               --                     --                    --               --                     --
Translation adjustment                   --                     --                    --               --                     --
Comprehensive Income                     --                     --                    --               --                     --
                                      -----             ----------                  ----             ----                  -----
Balance at December 31, 1999          7,015             11,113,950                   $86             $111                 $5,479
                                      =====             ==========                  ====             ====                 ======

<CAPTION>

                                                                          ACCUMU-
                                                                        LATED OTHER
                                                                          COMPRE-
                                         CAPITAL                          HENSIVE            COMPRE-
                                        REDEMPTION        RETAINED        INCOME             HENSIVE
                                         RESERVE       EARNINGS (III)     (LOSS)          INCOME (LOSS)          TOTAL
                                         -------       -------------   ------------       -------------          -----
<S>                                     <C>              <C>              <C>            <C>                <C>
Balance at January 1, 1997                  --            39,417           (1,350)                            39120
Issuance of ordinary shares in
  connection with initial public
  offering                                  --                --               --              --             4,480
Exercise of stock options                   --                --               --              --                75
Ordinary shares canceled                    --                --               --              --                --
Net Income                                  --            19,788               --          19,788            19,788
Pension liability adjustment                --                --              497             497               497
Translation adjustment                      --                --           (4,408)         (4,408)           (4,408
                                                                                          -------
Comprehensive Income                                                                      $15,877
                                                                                          =======
Transfer on redemption of
  redeemable preferred stock             1,090            (1,090)              --                                --
                                         -----            ------            -----                            ------
Balance at December 31, 1997             1,090            58,115           (5,261)                           59,552
Exercise of stock options                   --                --               --              --                42
Net income                                  --            16,290               --          16,290            16,290
Translation adjustment                      --                --            2,643           2,643             2,643
                                                                                          -------
Comprehensive Income                        --                --               --         $18,933                --
                                         -----            ------            -----         =======            ------
Balance at December 31, 1998            $1,090           $74,405          $(2,618)                          $78,527
Exercise of stock options                   --                --               --              --                26
Net income                                  --             8,286               --           8,286             8,286
Translation adjustment                      --                --           (5,779)         (5,779)           (5,779
Comprehensive Income                        --                --               --         $ 2,507                --
                                         -----            ------            -----         =======            ------
Balance at December 31, 1999             $1,090          $82,691          $(8,397)                          $81,060
                                         ======          =======          =======                           =======

</TABLE>

(i)      The share capital has been retroactively restated to reflect the
         restructuring of the Company's share capital in July 1997, as described
         in Note 1(c) of Notes to the Consolidated Financial Statements.

(ii)     Additional paid in capital is not distributable.

(iii)    Retained earnings available for distribution as dividends by the parent
         company at December 31, 1999 were $50,624,000.








        The accompanying notes are an integral part of these statements.


                                      -27-
<PAGE>

                                             DENISON INTERNATIONAL PLC
                                                 AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            (U.S. DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                YEAR ENDED DECEMBER 31,
                                                                    --------------------------------------------
                                                                      1999              1998             1997
                                                                    --------          --------          --------
<S>                                                                 <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                          $  8,286          $ 16,290          $ 19,788
Adjustments to reconcile net income to net cash provided by
   operating activities:
Amortization of goodwill                                              (1,172)           (1,417)             (754)
Depreciation                                                           4,676             3,703             3,382
Deferred income taxes                                                    306               210            (1,668)
Gain on sale of assets                                                    32               (65)           (2,175)
Changes in operating assets and liabilities:
Accounts receivable                                                     (146)            2,245            (2,431)
Inventories                                                            4,510            (7,526)             (568)
Other current assets                                                   1,438              (768)             (255)
Other assets                                                              58                27                26
Accounts payable                                                        (873)              (86)              252
Accrued payroll and related expenses                                       3            (1,017)             (538)
Income tax payable                                                       476              (670)              928
Other accrued liabilities                                             (4,370)            1,359              (379)
Pension accrual                                                          220               527               356
Other noncurrent liabilities                                            (198)            2,047             1,021
                                                                    --------          --------          --------
Net cash provided by operating activities                             13,246            14,859            16,985
                                                                    --------          --------          --------
CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of subsidiary, net of cash acquired                            (788)          (10,923)             --
Purchase of property, plant and equipment                             (6,345)           (9,923)           (7,400)
Proceeds from disposal of property, plant and equipment                   82               154             2,175
                                                                    --------          --------          --------
Net cash used in investing activities                                 (7,051)          (20,692)           (5,225)
                                                                    --------          --------          --------

</TABLE>





                                      -28-
<PAGE>


<TABLE>
<CAPTION>
                                                                                   YEAR ENDED DECEMBER 31,
                                                                      ----------------------------------------------
                                                                        1999               1998                1997
                                                                      --------           --------           --------
<S>                                                                   <C>                <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under revolving line of credit                    993             12,000               --
Net repayment on lines of credit                                        (8,204)            (1,041)              (528)
Redemption of stock                                                       --                 --               (1,090)
Repayment of capital lease obligations                                    (231)              (668)            (1,038)
Net proceeds from sale of ordinary shares                                 --                 --                4,480
Proceeds from exercise of stock options                                     26                 42                 75
                                                                      --------           --------           --------
Net cash (used in) provided by financing activities                     (7,416)            10,333              1,899
                                                                      --------           --------           --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
                                                                        (4,625)             5,462             11,193
NET INCREASE (DECREASE) IN CASH AND CASH
     EQUIVALENTS                                                        35,799             30,337             19,144
                                                                      --------           --------           --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
                                                                      $ 31,174           $ 35,799           $ 30,337
                                                                      ========           ========           ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid                                                         $    807           $    221           $    330
Income taxes paid                                                     $  4,109           $  6,418           $  4,107
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
   ACTIVITIES
Acquisition of property and equipment through capital leases
                                                                      $   --             $   --             $    218

</TABLE>


        The accompanying notes are an integral part of these statements.




                                      -29-
<PAGE>
                            DENISON INTERNATIONAL PLC
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  THE COMPANY

(a)  Business of the Company

     Denison International plc (the "Company"), a Company incorporated in
England and Wales, and its subsidiaries manufacture and distribute hydraulic
pumps and valves. The manufacturing plants are located in the United States,
Germany, France, and Finland and there are sales and distribution operations in
the United Kingdom, Canada, Sweden, Denmark, The Netherlands, Spain, Italy,
Japan, Australia, Hong Kong and Singapore.

(b)  Incorporation

     The Company was incorporated on March 10, 1993 as Alnery No. 1278 Limited
and on May 14, 1993 changed its name to Denison International Limited ("DIL")
and re-registered as a public limited company on July 28, 1997.

(c)  Share Restructuring and Initial Public Offering

     Throughout the period from January 1, 1994 to December 31, 1996, the
Company's authorized share capital was (pounds sterling)682,500, divided into
500,000 A Ordinary Shares, (pounds sterling)0.01 par value per share, ("A
Ordinary Share") and 1,000,000 B Ordinary Shares, (pounds sterling)0.01 par
value per share ("B Ordinary Share") and 667,500 cumulative redeemable
preference shares, (pounds sterling)1.00 par value per share. Each A Ordinary
Share entitled the holder to one vote and each B Ordinary Share entitled the
holder to 1.85 votes.

     On January 23, 1997 the Company redeemed the 667,500 preference shares.

     On July 24, 1997 (i) 667,500 unallocated preference shares, (pounds
sterling)1.00 par value per share, were canceled; (ii) the Company's then
outstanding A Ordinary Shares and B Ordinary Shares were redesignated as
Ordinary Shares, (pounds sterling)0.01 par value per share, ranking pari passu;
(iii) the Company made a bonus issue (stock dividend) of seven Ordinary Shares
for every one Ordinary Share then held; (iv) the then outstanding Ordinary
Shares, (pounds sterling)0.01 par value per share, were consolidated into
700,930 Ordinary Shares, (pounds sterling)0.08 par value per share; (v) all of
the authorized and outstanding Ordinary Shares, (pounds sterling)0.08 par value
per share, were redesignated as A Ordinary Shares; (vi) the Company made a bonus
issue (stock dividend) of fifteen Ordinary Shares, $0.01 par value per share,
for each A Ordinary Share; (vii) 570 A Ordinary Shares, (pounds sterling)0.08
par value per share, were subscribed; and (viii) the then outstanding A Ordinary
Shares were consolidated into 7,015 A Ordinary Shares, (pounds sterling)8 par
value per share.

     As a result, the Company's authorized share capital was 15,000,000 Ordinary
Shares, $0.01 par value per share, and 7,125 A Ordinary Shares, (pounds
sterling)8 par value per share. After the reorganization, there were 10,513,950
Ordinary Shares and 7,015 A Ordinary Shares issued and outstanding.

     On August 8, 1997 the Company completed an initial public offering in which
it issued and sold 450,000 Ordinary shares at $16.00 per share (the "Offering").
Net proceeds from the Offering were $4,480,000.

                                      -30-
<PAGE>

2.  BASIS OF FINANCIAL STATEMENTS

Companies Act 1985

     These consolidated financial statements do not comprise the Company's
statutory accounts within the meaning of section 240 of the Companies Act 1985,
as amended, of Great Britain (the "Companies Act"). The Company's statutory
accounts, which are its primary consolidated financial statements, are prepared
in accordance with accounting principles generally accepted in the United
Kingdom ("U.K. GAAP") in compliance with the Companies Act and are presented in
pounds sterling. Statutory accounts for the years ended December 31, 1997 and
1998 have been, and for the year ended December 31, 1999 will be filed with the
Registrar of Companies for England and Wales. The auditors' reports on those
accounts previously filed were unqualified.

Principles of Consolidation

     The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. Significant intercompany
accounts and transactions have been eliminated on consolidation.

Use of Estimates

     The preparation of the consolidated financial statements in conformity with
United States generally accepted accounting principles ("U.S. GAAP") requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes. Actual results
could differ from these estimates.

3.  SIGNIFICANT ACCOUNTING POLICIES

     These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. The significant accounting
policies applied in their preparation are as follows:

Cash and Cash Equivalents

     The Company considers all highly liquid investments having an original
maturity of three months or less to be cash equivalents.

Inventories

     Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method. Work-in-progress and finished goods
include the cost of direct materials and labor plus a reasonable proportion of
manufacturing overheads based on normal levels of activity.






                                      -31-
<PAGE>

Property, Plant and Equipment

     Property, plant and equipment are depreciated using the straight-line
method over their estimated useful lives as follows:

            Buildings owned by the Company          33 to 38 years
            Leaseholds                              Life of lease
            Plant and equipment                     4 to 10 years

Goodwill

     Goodwill (including negative goodwill) is amortized using the straight-line
method over periods of ten to thirty years. Goodwill represents the excess of
the purchase price over the estimated fair value of net assets acquired.
Negative goodwill represents the excess of the estimated fair value of net
assets acquired (after the elimination of the carrying value of all noncurrent
assets) over the purchase price.

     The Company's policy is to periodically review its goodwill and other
long-lived assets based upon the evaluation of such factors as the occurrence of
a significant adverse event or change in the environment in which the business
operates or if the expected future net cash flows (undiscounted and without
interest) would become less than the carrying amount of the asset. An impairment
loss would be recorded in the period such determination is made based on the
fair value of the related businesses.

Environmental Remediation

     Environmental liabilities are recorded based on the most probable cost if
known or on the estimated minimum cost, determined on a site by site basis. The
Company's environmental liabilities are not discounted and do not take into
consideration any possible future insurance proceeds or any significant amounts
of claims against other third parties.

Revenue Recognition

     The Company recognizes revenues from the sale of its products at the time
of shipment to the customer. Provision is made currently for estimated product
returns which may occur.

Warranty

     The Company generally warrants its products for one year. An estimate of
the amount required to cover warranty expense on products sold is charged
against income at the time of sale. Other liabilities include accrued warranty
costs of $1.6 million and $2.2 million at December 31, 1999 and 1998,
respectively, of which $1.5 million and $2.2 million are classified as
short-term.

Advertising Expense

     The Company expenses the costs of advertising as incurred. Advertising
expenses include the promotion of specific products and kinds of advertising
include Company and product catalogues, business and industrial publications.
Advertising expense was $0.9 million, $0.9 million and $1.3 million for the
years ended December 31, 1999, 1998 and 1997, respectively.

                                      -32-
<PAGE>

Research and Development

     Expenditures for research and development are expensed as incurred.
Research and development expense was $3.7 million, $3.1 million and $3.2 million
for the years ended December 31, 1999, 1998 and 1997, respectively.

Income Taxes

     Full provision is made for income taxes using the liability method on all
temporary differences between financial reporting and tax bases of assets and
liabilities, using enacted tax rates and laws.

Foreign Currency

     The functional currencies of the Company and its subsidiaries are their
local currencies.

     For U.S. reporting purposes, these consolidated financial statements are
translated from local currency into U.S. dollars using year-end rates for the
balance sheets and average rates for statements of operations and cash flows in
accordance with Financial Accounting Standards Board Statement No. 52, "Foreign
Currency Translation." Translation gains and losses are accumulated in the
accumulated other comprehensive income or loss component of shareholders'
equity.

     Foreign currency transactions are converted into functional currencies at
the rates of exchange at the transaction date or average rate for the period of
the transaction. Exchange gains and losses arising from transactions in foreign
currencies are recorded in the consolidated statements of operation and are
insignificant for all years presented.

Stock Based Compensation

     As permitted by Financial Accounting Standards Board Statement No. 123,
"Accounting and Disclosure of Stock-Based Compensation" ("FAS 123"), the Company
accounts for employee share option grants using the intrinsic value method in
accordance with Accounting Principle Board Opinion No. 25, "Accounting for Stock
Issued to Employees" ("APB 25"). Under APB 25, because the exercise price equals
the estimated market price on the date of grant, no compensation expense has
been recognized for stock option awards. The effect of applying the fair value
method of FAS 123 to the Company's option grants is presented in Note 9.

Earnings per Common Share

     Basic net income per share is computed using the weighted average number of
shares outstanding during the period. Diluted net income per share is computed
using the weighted average number of shares and diluted equivalent shares
outstanding during the period. Dilutive equivalent shares consist of stock
options (see Note 10).

Concentrations of Business and Credit Risk

     Financial instruments which potentially subject the Company to credit risk
consist principally of trade receivables. The Company performs on-going credit
evaluations of its customers and generally does not require collateral. The
Company maintains adequate reserves for potential losses and such losses, which
have historically been minimal, have been within management's estimates.

                                      -33-
<PAGE>

     The Company sells the majority of its products to distributors and original
equipment manufactures throughout North America, Europe and Asia-Pacific.

Comprehensive Income (Loss)

     In 1998, the Company adopted Financial Accounting Standards Board Statement
No. 130, "Reporting Comprehensive Income" ("FAS 130"). FAS 130 established rules
for reporting and display of comprehensive income and its components; however,
the adoption of FAS 130 had no impact on the Company's net income or
shareholders' equity. FAS 130 requires pension liability adjustments and foreign
currency translation adjustments, which prior to adoption were reported
separately in shareholders' equity, to be included in other comprehensive
income.

     Accumulated other comprehensive loss on the balance sheet consists of:

                                                      DECEMBER 31,
                                                -----------------------
                                                   1999         1998
                                                 -------      -------
                                               (U.S. DOLLARS IN THOUSANDS)

     Pension liability adjustment                    (43)         (43)
     Cumulative translation adjustment            (8,354)      (2,575)
                                                 -------      -------
     Accumulated other comprehensive loss        $(8,397)     $(2,618)
                                                 =======      =======

New Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," ("FAS 133") effective for years beginning after June 15, 1999, (the
Company's year ending December 31, 2000). The effective date has been delayed to
June 15, 2000, (the Company's year ending December 31, 2001), as the result of
the FASB's issuance in August, 1999 of FAS 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective date of FASB
Statement No. 133". FAS 133 requires that all derivatives be recorded on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If the derivative is a hedge, depending on the nature
of the hedge, changes in the fair value of derivatives are either offset against
the change in the fair value of assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The Company has not yet determined what the effect of
FAS 133 will be on the earnings and financial position of the Company.

4.  INVENTORIES

     Inventories consisted of the following:

                                                DECEMBER 31,
                                       ----------------------------
                                         1999                1998
                                        -------            -------
                                        (U.S. DOLLARS IN THOUSANDS)

     Finished goods                      18,482             22,486
     Work-in-progress                     2,565              3,343
     Raw materials and supplies          10,406             12,407
                                        -------            -------
                                        $31,453            $38,236
                                        =======            =======


                                      -34-
<PAGE>

5.  PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment, net, consisted of the following:

                                                 DECEMBER 31,
                                              --------------------
                                                1999        1998
                                              -------      -------
                                           (U.S. DOLLARS IN THOUSANDS)

     Land and buildings                       $ 3,952      $ 2,538
     Machinery and equipment                   33,859       32,238
     Motor vehicles                               911          975
                                              -------      -------
                                               38,722       35,841
     Less accumulated depreciation            (14,203)     (11,115)
                                              -------      -------
     Property, plant and equipment, net       $24,519      $24,726
                                              =======      =======


6.  BANK NOTES PAYABLE

     In May 1999, the Company's U.S. subsidiary entered into a revolving credit
agreement with a bank that provides up to $15.0 million for working capital and
acquisitions. Borrowings under the agreement are guaranteed by the Company. At
December 31, 1999, $3.5 million was outstanding under the time note. Interest on
the note accrues at a rate of LIBOR + 0.875% (6.995% at December 31, 1999).
Interest on the note is payable monthly. The revolving credit note is due on
April 30, 2002. This note is classfied as current based on the Company's
intention to repay the note in fiscal 2000.

     In April 1999, the Company's Japan subsidiary entered into a bank loan that
provided $3.0 million for working capital and acquisitions. Borrowings under the
agreement are guaranteed by the Company. At December 31, 1999, $1.5 million was
outstanding under the bank loan. Interest on the loan accrues at a rate of 2.25%
and is payable quarterly. The bank loan is due on April 20, 2000.

     Other short-term borrowings outside the United States under available
informal credit facilities are typically a result of overdrafts. At December 31,
1999, the Company had an additional $.6 million of other foreign debt
outstanding. The Company also has an additional $2.6 million of unused foreign
credit facilities. These facilities may be withdrawn at any time by the banks.

     The weighted average interest rates on short-term borrowings as of December
31, 1999 and 1998 were 5.1% and 6.0%, respectively.

7.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The Company estimates the fair values of financial instruments at the
balance sheet dates using available market information and appropriate valuation
methodologies. These estimates are highly subjective in nature and involve
uncertainties and significant judgment in interpretation of current market data.
The estimated fair values of the Company's financial instruments approximate
their carrying values at December 31, 1999 and 1998.

     The Company conducts its business in various foreign currencies. As a
result, it is subject to the transaction exposures that arise from foreign
exchange rate movements between the dates that foreign currency transactions are
recorded and the date they are consummated. The Company hedges some anticipated
transactions, primarily intercompany purchases, through the use of forward
contracts. Gains and losses on contracts that are designated and effective as
hedges of anticipatory intercompany purchase

                                      -35-
<PAGE>

transactions are market-to-market and recognized currently in cost of sales.
Forward contracts and the related value at risk were not material at December
31, 1999 and 1998. There can be no assurance that these strategies will be
effective.

8.  ACQUISITIONS

     On December 23, 1998 the Company closed its acquisition of Lokomec Oy
effective as of October 1, 1998, for a cash purchase price of $16,038,000
($10,923,000 net of cash acquired). Lokomec is a manufacturer of hydraulic
manifolds located in Tampere, Finland. The acquisition was accounted for using
the purchase method of accounting, and the operating results of Lokomec have
been included in the consolidated results of the Company from October 1, 1998.
An imputed interest charge covering the period from October 1, 1998 to December
23, 1998 has been reflected in the results of Lokomec included in the 1998
consolidated results of the Company. Goodwill of $8,599,000 is being amortized
by the straight-line method over 30 years. Three months of amortization expense
is included in the Company's 1998 consolidated statement of operations.

     The purchase price may be increased dependent upon the achievement of
certain operating objectives, principally based upon earnings before interest
and taxes over a 3 year period. In 1999, the Company paid $788,000 related to
this earnout provision.

     The following unaudited pro forma summary presents the Company's combined
1998 results as if the acquisition occurred at January 1, 1998, after giving
effect to certain adjustments including goodwill amortization. These pro forma
results are not necessarily indicative of those that would have occurred had the
acquisition occurred at January 1, 1998:

                                                  December 31, 1998
                                             (U.S. dollars in thousands)

              Revenue                               $ 153,901
                                                    =========
              Net income                            $  17,891
                                                    =========
              Basic earnings per share              $    1.61
                                                    =========
              Diluted earnings per share            $    1.61
                                                    =========
9.  STOCK OPTIONS

     The Company's Executive Stock Option Plan authorizes awards to employees in
the form of options to purchase the Company's Ordinary Shares. The aggregate
number of Ordinary Shares for which options may be granted under the plan is
850,000. Options granted under the plan are for periods not to exceed 10 years,
and must be issued at the higher of par value or the fair market value of the
shares on the date of grant. Options vest over four years from the date of grant
subject to any additional restrictions which may be imposed by the board of
directors. Pro forma information regarding net income and earnings per share is
required under FAS 123, and has been determined as if the Company has accounted
for its employee stock options under the fair value method of that Statement.
Prior to the Offering, the Company used the minimum value method to estimate the
fair value of options at the grant date, assuming a risk free rate of 6%, no
dividend yield and an expected life of 5 years. After the Offering, the Company
adopted the Black-Scholes method to estimate the fair value of options at the
date of grant with the following assumptions for 1999, 1998 and 1997: risk-free
interest rates of 6%, volatility of 37%, 42% and 42% respectively, no dividend
yield and an expected life of 5 years.

     For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

                                      -36-
<PAGE>


                                       1999         1998         1997
                              (U.S. dollars in thousands, except per share data)
Pro forma net income                 $7,183       $15,587      $19,603
Pro forma earnings per share:        $  .65       $  1.41      $  1.83
    Basic                            $  .65       $  1.40      $  1.80
    Diluted


     The following table summarizes share option activity for Ordinary Shares:

<TABLE>
<CAPTION>
                                       1999                         1998                     1997
                               -----------------------   -----------------------  ---------------------
                                             WEIGHTED                  WEIGHTED                 WEIGHTED
                                             AVERAGE                   AVERAGE                  AVERAGE
                                             EXERCISE                  EXERCISE                 EXERCISE
                                 OPTIONS      PRICE        OPTIONS      PRICE       OPTIONS      PRICE
                               -----------------------   -----------------------  ---------------------
<S>                             <C>        <C>            <C>        <C>           <C>        <C>
OUTSTANDING BEGINNING OF YEAR    626,000    $  16.66       370,250    $  13.98      150,000    $  0.93
GRANTED                           46,000       12.75       327,500       17.75      314,000      16.28
EXERCISED                        (16,500)       1.53       (39,750)       0.98      (93,750)       .80
FORFEITED                         (5,000)      12.88       (32,000)      16.22         --         --
                               -----------------------   -----------------------  ---------------------
OUTSTANDING END OF YEAR          650,500    $  13.98       626,000    $  16.66     370,250     $ 13.98
                               =======================   =======================  =====================

EXERCISABLE AT END OF YEAR       222,875                    83,520                  15,000

WEIGHTED-AVERAGE FAIR VALUE
  OF OPTIONS GRANTED DURING
  THE YEAR                         $5.40                     $8.05                   $5.47

</TABLE>


                                      -37-


<PAGE>

     Share options outstanding at December 31, 1999 are summarized as follows:

<TABLE>
<CAPTION>
                                              OUTSTANDING                                       EXERCISABLE
                               --------------------------------------------   ------------------------------------
                                                          WEIGHTED-
                                          WEIGHTED        AVERAGE                                 WEIGHTED
                                          AVERAGE         REMAINING                               AVERAGE
                                          EXERCISE        CONTRACTUAL                             EXERCISE
                               NUMBER      PRICE            LIFE                NUMBER             PRICE
                               --------------------------------------------   ------------------------------------
<S>                           <C>          <C>               <C>               <C>                 <C>
Exercise prices between
$12.75 and $19.53             650,500      16.81             7.8               222,875             $16.82

</TABLE>


10.      EARNINGS PER SHARE

     The following table sets forth the computation of basic and diluted
earnings per share:

<TABLE>
<CAPTION>
                                                   1999               1998              1997
                                               -----------        -----------        -----------
                                                (U.S. dollars in thousands, except share and
                                                               per share data)
<S>                                            <C>                <C>                <C>
Numerator:
     Net income                                $     8,286        $    16,290        $    19,788
                                               ===========        ===========        ===========
Denominator:
     Denominator for basic earnings per
     share -- weighted-average shares           11,120,965         11,089,607         10,738,578
     Effect of dilutive stock options                8,127             43,649            125,467
                                               -----------        -----------        -----------
     Denominator for diluted earnings
     per share -- adjusted weighted-
     average shares                             11,129,092         11,133,256         10,864,045
                                               ===========        ===========        ===========
Basic earnings per share                       $       .75        $      1.47        $      1.84
                                               ===========        ===========        ===========
Diluted earnings per share                     $       .74        $      1.46        $      1.82
                                               ===========        ===========        ===========

</TABLE>


                                      -38-
<PAGE>

11.  COMMITMENTS

     The Company has purchase commitments with various vendors for approximately
$1.4 million as of December 31, 1999. These purchase commitments are payable
during 2000.

     Future minimum lease payments under capital leases and non-cancelable
operating leases with initial terms of one year or more consisted of the
following at December 31, 1999

                                               CAPITAL      OPERATING
                                               LEASES        LEASES
                                               ------        ------
                                              (U.S. dollars in thousands)
     2000                                     $   182       $  1,560
     2001                                          --            879
     2002                                          --            739
     2003                                          --            454
     2004                                          --             --
     Thereafter                                    --              5
                                              -------       --------
     Total minimun lease payments                 182       $  3,657
                                                            ========
     Less amount representing interest            (71)

     Less current portion                        (111)           111
                                              --------
     Long-term obligation                     $    --
                                              ========


     Property, plant and equipment include the following amounts for leases that
have been capitalized at December 31, 1999 and 1998:

                                                   DECEMBER 31,
                                                   -----------
                                                1999           1998
                                                ----           ----
                                            (U.S. DOLLARS IN THOUSANDS)
     Machinery and equipment                  $ 1,598       $ 1,794
     Less accumulated depreciation               (900)         (880)
                                              -------       -------
                                              $   698       $   914
                                              =======       =======

     Amortization of leased assets is included in depreciation expense. The
interest element of the rental obligations is charged to income over the period
of the lease at the estimated effective interest rate implicit in the lease.

     Rent expense charged to operations for the years ended December 31, 1999,
1998 and 1997 was $1.5 million, $1.6 million and $1.8 million, respectively.

12.  INCOME TAXES

     The Company's income before income taxes relates to operations in the
United Kingdom and operations other than the United Kingdom (foreign). The
relationship between income before income taxes and the provision for income
taxes varies from period to period because each jurisdiction in which the
Company operates has its own system of taxation (not only with respect to the
statutory rate, but also with respect to the availability of deductions,
credits, and other benefits) and because the amounts earned in and subject to
tax by, each jurisdiction changes from period to period.

                                      -39-
<PAGE>

     For financial reporting purposes, income before income taxes includes the
following components:

                                     YEAR ENDED DECEMBER 31,
                                 ------------------------------
                                   1999       1998       1997
                                 -------     -------    -------
                                   (U.S. DOLLARS IN THOUSANDS)
     Pretax income:
          United Kingdom         $ 2,821     $ 2,866    $ 1,775
          Foreign                  9,987      19,380     21,380
                                 -------     -------    -------
                                 $12,808     $22,246    $23,155
                                 =======     =======    =======


     Significant components of the provision for income tax expense were as
follows:

                                              YEAR ENDED DECEMBER 31,
                                         ----------------------------
                                           1999       1998       1997
                                           ----       ----       ----
Current:
   United Kingdom                        $  491     $  335     $   --
   Foreign                                3,725      5,411      5,035
                                         ------     ------     ------
     Total Current                       $4,216     $5,746     $5,035
                                         ======     ======     ======

Deferred:
   United Kingdom                            --         --         --
   Foreign                                  306        210     (1,668)
                                         ------     ------     ------
     Total provision for income taxes    $4,522     $5,956     $3,367
                                         ======     ======     ======


     The effective tax rate on earnings before income taxes varies from the
current U.K. statutory income tax rate as follows:

<TABLE>
<CAPTION>
                                                                          DECEMBER 31
                                                                          -----------
                                                                   1999       1998       1997
                                                                   ----       ----       ----
<S>                                                               <C>        <C>       <C>
Provision at statutory rate                                         31%        31%       31%
Foreign operations taxed at rates different from United
  Kingdom Statutory rate                                             2          7         9
Reduction in valuation allowance relating to utilization                                 (7)
  of NOL carry forwards and other deferred tax assets               (1)        (6)       (7)
Release of valuation allowance                                      --         --        (1)
Amortization of negative goodwill                                   (2)        (2)
Other--net (primarily cost basis differences on property,
  plant and equipment)                                              (5)        (3)      (10)
                                                                    ---        ---      ----
Effective tax rate                                                  35%        27%       15%
                                                                    ==         ==        ==

</TABLE>

     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts for income tax purposes recorded at the applicable
statutory rates where the Company's operations are located.

     Significant components of the Company's deferred tax assets and liabilities
are as follows:

                                                       December 31,
                                                   --------------------
                                                     1999         1998
                                                   -------      -------
     Deferred tax assets:
          Employee benefits                        $ 1,038      $ 1,091
          Net operating loss carryforwards           7,487        8,667
          Other                                      3,014        3,811
     Valuation allowance                            (9,134)     (10,739)
                                                   -------      -------


                                      -40-
<PAGE>



     Deferred tax assets                             2,405        2,830
                                                   -------      -------
     Deferred tax liabilities (Fixed Assets)         1,145        1,264

     Net deferred tax assets                       $ 1,260      $ 1,566
                                                   =======      =======

         A valuation allowance has been provided against the net deferred tax
assets for financial reporting purposes in respect of temporary differences and
net operating loss carryforwards. These deferred tax assets primarily relate to
existing net operating losses and basis differences that arose as part of the
June 15, 1993 acquisition. Certain of these net operating losses and future tax
deductions are subject to limitations under foreign tax law which are described
further below. The valuation allowance has been reduced by $1.6 in both fiscal
1999 and fiscal 1998.

         At December 31, 1999, the Company had net operating loss carryforwards
("NOLS") of approximately $17.4 million for foreign tax purposes, of which $12.5
million will be allowable against national taxes and $4.9 million will be
allowable against local trade taxes. Approximately $4.5 million of NOL
deductions in the U.S. are limited under Section 382 of the Internal Revenue
Code to $0.6 million per year expiring in 2007. The Company and its subsidiaries
file for group relief or consolidated tax returns in the jurisdictions where
available.

         The Company has not provided for taxes on undistributed foreign
earnings since the Company intends to reinvest these earnings in the future
growth of the business.

13.      PENSION AND OTHER POSTRETIREMENT BENEFITS

         The Company operates four defined benefit plans in the United States,
Germany and Japan. The plans are generally funded in advance by contributions
from the Company at rates assessed by each plan's professionally qualified
actuaries. Plan assets consist principally of corporate and government bonds and
common stocks.

         In addition to the Company's defined benefit pension plans, the
Company's U.S. subsidiary provides health care and life insurance benefits for
certain retired employees, and life insurance benefits for certain active
employees. The health care and life insurance plans are non-contributory and the
health care plan contains other cost-sharing features such as deductibles and
coinsurance.

         The following table sets forth the reconciliation of the beginning and
ending balances of the benefit obligation and plan assets, the funded status and
the amounts recognized in the consolidated balance sheets for the defined
benefit and other postretirement plans as of December 31:

<TABLE>
<CAPTION>
                                                           PENSION BENEFITS                OTHER BENEFITS
                                                           ----------------                --------------
                                                        1999             1998          1999           1998
                                                     -----------     -----------     --------       ----------
                                                                     (U.S. DOLLARS IN THOUSANDS)
<S>                                                    <C>           <C>             <C>            <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation beginning of year                   $ 16,057      $    14,082     $    929       $      911
Service cost                                                342              493            4                5
Interest cost                                               871              884           56               59
Actuarial (gain)/loss                                      (732)             506           58             (209)
Benefits paid                                              (669)            (752)        (177)            (120)
Special termination benefits                                 --               --           --              283
Exchange rate changes                                      (922)             844           --               --
                                                       --------      -----------     --------       ----------
Benefit obligation at end of year                      $ 14,947      $    16,057     $    870             $929
                                                       --------      -----------     --------       ----------

</TABLE>



                                      -41-
<PAGE>

<TABLE>
<CAPTION>
                                                           PENSION BENEFITS                OTHER BENEFITS
                                                           ----------------                --------------
                                                        1999             1998          1999           1998
                                                     -----------     -----------     --------       ----------
                                                                     (U.S. DOLLARS IN THOUSANDS)
<S>                                                    <C>           <C>             <C>            <C>
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year         $  5,312      $     5,189           --               --
Actual return on plan assets                                337              343           --               --
Employer contributions                                      231              275          177              120
Benefits paid                                              (370)            (501)        (177)            (120)
Exchange rate changes                                        57               13           --               --
                                                       --------      -----------     --------       ----------
Fair value of plan assets at end of year               $  5,567      $     5,319     $      0       $        0
                                                       --------      -----------     --------       ----------

RECONCILIATION OF FUNDED STATUS
Funded status                                            (9,381)         (10,738)        (870)            (929)
Unrecognized actuarial (gain)/loss                         (813)            (190)          19           (40)178
Unrecognized net asset                                      180              186           --               --
Accumulated other comprehensive income                      (43)             (43)          --               --
                                                       --------      -----------     --------       ----------
Accrued benefit cost                                   ($10,057)     ($   10,785)        (851)            (969)
                                                       --------      -----------     --------       ----------

AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE
SHEETS CONSISTS OF:
Prepaid benefit cost                                   $    449      $        --     $     --       $       --
Accrued benefit liability                               (10,506)         (10,785)        (870)            (929)
                                                       --------      -----------     --------       ----------
Net amount recognized                                  ($10,057)     ($   10,785)    ($   870)      ($     929)
                                                       ========      ===========     ========       ==========

ADDITIONAL YEAR-END INFORMATION FOR PLANS WITH
BENEFIT OBLIGATIONS IN EXCESS OF PLAN ASSETS
Projected benefit obligation                             14,180           15,139
Accumulated benefit obligation                           13,258           14,027
Fair value of plan assets                                 4,631            4,390

COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost                                                342              493            4               5
Interest cost                                               871              884           56              59
Expected return on plan assets                             (352)            (345)          --              --
Amortization of transitional (asset) or obligation           38               31           --              --
Recognized actuarial (gain) or loss                          17               (2)          --               9
                                                       --------      -----------     --------       ----------
Net periodic benefit cost                                   916            1,061           60              73
                                                       --------      -----------     --------       ----------

ADDITIONAL (GAIN) OR LOSS RECOGNIZED DUE TO:

Special termination benefits                                 --               --           --             283

WEIGHTED AVERAGE ASSUMPTIONS AS OF DECEMBER 31

Discount rate                                              6.05%            5.93%        7.50%           6.75%
Rate of increase in compensation levels                    2.40%            2.40%          --              --
Expected long-term rate of return on assets                6.75%            6.87%          --              --


      The annual assumed health care cost trend rate is 6% for the years subsequent to December 31, 1999 and is assumed to remain
at 6% thereafter.

</TABLE>

                                      -42-
<PAGE>


     Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plan. A one-percentage-point change in
assumed health care trend rate would have the following effects:

(U.S. dollars in thousands)                       1% Increase       1% Decrease
---------------------------                       -----------       -----------

Effect on total service and interest cost           $   28           $    23
Effect on postretirement benefit obligation         $  186           $   154

14. CONTINGENCIES

     The Company remains involved in environmental cleanup efforts at Company
owned sites. The Company's estimate of the total anticipated cost of the cleanup
efforts is $3.0 million of which $1.7 million has been spent as of December 31,
1999. Remaining accrued cleanup costs total $1.3 million of which $1.3 million
is classified in the consolidated financial statements as long-term accrued
liabilities. The liability was reduced by $.5 million and $.4 million,
respectively, in 1999 and 1998.

     Because of the uncertainties relating to remediation activities, the future
expenditures to remediate the currently identified sites could be higher than
the accrued liability. Although it is difficult to assess the final outcome
related to environmental exposures, management believes that these liabilities
are fully accrued for in the accompanying consolidated financial statements.

15.  SEGMENT INFORMATION

     The Company operates exclusively in the hydraulics industry. Substantially
all revenues result from the sale of hydraulics products. The Company's
reportable segments are based on geographic area. The accounting policies of the
operating segments are the same as described in Note 3. Sales are determined
based on the country of origin. The Company evaluates the performance of its
operating segments based on operating profit after elimination of profits on
transfers between geographic area.

     A summary of the Company's operations by geographic area follows:

<TABLE>
<CAPTION>
                                                                     1999               1998              1997
                                                                     ----               ----
<S>                                                                <C>                <C>               <C>
SALES TO UNAFFILIATED COMPANIES:
     United Kingdom                                                $ 8,903            $10,172           $11,248
     France                                                         16,562             17,215            15,762
     Germany                                                        10,697             12,450            11,717
     Rest of Europe                                                 40,954             35,964            29,496
                                                                  --------           --------          --------
              Total Europe                                          77,116             75,801            68,223

     United States                                                  34,540             45,170            50,097
     Canada                                                          6,384              8,055             7,342
                                                                  --------           --------          --------
              Total N. America                                      40,924             53,225            57,439

     Asia-Pacific                                                   17,503             16,227            22,726
                                                                  --------           --------          --------
              Total consolidated                                  $135,543           $145,253          $148,388
                                                                  ========           ========          ========

TRANSFERS BETWEEN GEOGRAPHIC AREA:
     United Kingdom                                                $   107            $   143           $   164
     France                                                         21,698             27,357            23,193
     Germany                                                        14,151             17,118            15,329
     Rest of Europe                                                    210                214               250
                                                                  --------           --------          --------
              Total Europe                                          36,166             44,832            38,936

     United States                                                   8,840             11,557            13,647

                                      -43-
<PAGE>

     Canada                                                              0                  0                 0
                                                                  --------           --------          --------
              Total N. America                                       8,840             11,557            13,647


     Asia-Pacific                                                       36                 69               108
                                                                  --------           --------          --------
              Total transfers                                       45,042             56,458            52,691
              Eliminations                                         (45,042)           (56,458)          (52,691)
                                                                  --------           --------          --------
Total consolidated                                                 $     0            $     0           $     0
                                                                   =======            =======           =======

DEPRECIATION EXPENSE:
     United Kingdom                                                $   166            $   122           $   154
     France                                                          1,626              1,480             1,468
     Germany                                                           524                394               326
     Rest of Europe                                                    648                342               217
                                                                       ---                ---               ---
              Total Europe                                           2,964              2,338             2,165

     United States                                                   1,287              1,046               912
     Canada                                                             15                 18                14
                                                                  --------           --------          --------
              Total N. America                                       1,302              1,064               926

     Asia-Pacific                                                      410                301               291
                                                                  --------           --------          --------

              Total consolidated                                   $ 4,676            $ 3,703           $ 3,382
                                                                  ========           ========          ========

OPERATING INCOME:

     United Kingdom                                                $ 3,391            $ 2,428            $ 2,309
     France                                                          5,981              7,442              5,475
     Germany                                                          (628)             2,724              1,049
     Rest of Europe                                                  4,628              3,071              1,403
                                                                  --------           --------          --------
              Total Europe                                          13,372             15,665             10,236

     United States                                                    (468)             5,183              7,873
     Canada                                                            506                961                713
                                                                  --------           --------          --------
              Total N. America                                          38              6,144              8,586

     Asia-Pacific                                                     (263)              (501)             1,940
                                                                  --------           --------          --------

              Total consolidated                                   $13,147             $21,308           $20,762
                                                                   =======             =======           =======

IDENTIFIABLE ASSETS:

     United Kingdom                                                $15,461            $ 9,211           $10,098
     France                                                         21,274             33,035            23,766
     Germany                                                        14,214             17,615            13,311
     Rest of Europe                                                 32,140             36,308            14,791
                                                                  --------           --------          --------
              Total Europe                                          83,089             96,169            61,966

     United States                                                  26,182             29,007            27,059
     Canada                                                          4,183              3,950             3,788
                                                                  --------           --------          --------
              Total N. America                                      30,365             32,957            30,847

     Asia-Pacific                                                   15,366             14,331            14,680
                                                                  --------           --------          --------

              Total consolidated                                  $128,820           $143,457          $107,493
                                                                  ========           ========          ========

</TABLE>



                                      -44-
<PAGE>

16. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                QUARTER ENDED
                                          ---------------------------------------------------------------
                                           MARCH 31         JUNE 30       SEPTEMBER 30      DECEMBER 31
                                           --------         -------       ------------      -----------
1999
<S>                                        <C>              <C>              <C>              <C>
Net Sales                                  $36,469          $34,593          $30,192          $34,289
GROSS PROFIT                                12,561           12,411            9,171           10,970
Operating Income                             3,936            4,190            1,725            3,296
Net Income                                   2,886            2,873              885            1,642
Basic Earnings per Share                      0.26             0.26             0.08             0.15
Diluted Earnings per Share                    0.26             0.26             0.08             0.14

1998
Net Sales                                  $37,371          $35,343          $34,016          $38,523
GROSS PROFIT                                13,862           14,080           12,920           13,474
Operating Income                             5,322            6,292            5,287            4,407
Net Income                                   3,877            4,830            4,212            3,371
Basic Earnings per Share                      0.35             0.44             0.38             0.30
Diluted Earnings per Share                    0.35             0.43             0.38             0.31
</TABLE>

17. SUBSEQUENT EVENTS (UNAUDITED)

     On February 16, 2000 the Company entered into an agreement to acquire 100%
of the outstanding shares of Valmet Hydraulics OY ("Valmet"), a wholly owned
subsidiary of Metso Corporation and incorporated and located in Finland. Valmet
designs, manufactures and distributes hydraulic rotating house LSHT motors for
wheel and roll drives and hydraulic radial piston rotors for harvesting
machines. In 1999 Valmet had net sales of approximately USD $16.5 million. The
Company expects to close on the acquisition in the second quarter of 2000.

     In March 2000 the Company entered into an agreement to acquire 100% of the
outstanding shares of Riva Calzoni Oleodinamica S.p.A. ("Calzoni"), a wholly
owned subsidiary of Intek S.p.A and incorporated and located in Italy. Calzoni
designs, manufactures and distributes radial piston oil-pressure motors for
industrial hydraulics applications. In 1999 Calzoni had net sales of
approximately USD $11.0 million. The Company expects to close on the acquisition
in the second quarter of 2000.

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE.

     None

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

     The information regarding Directors appearing under the caption "Election
of Directors" in the Company's Definitive Proxy Statement to be used in
connection with the Annual General Meeting of Stockholders to be held on May 8,
2000 (the "2000 Proxy Statement") is incorporated herein by reference, since
such Proxy Statement will be filed with the Securities and Exchange Commission
not later than 120 days after the end of the Company's fiscal year pursuant to
Regulation 14A. Information required by this item as to executive officers of
the Company is included in Part I (See "Executive Officers of the Company") of
this Annual Report on Form 10-K. Information required by Item 405 of Regulation
S-K is set forth in the 2000 Proxy Statement under the heading "Section 16(a)
Beneficial Ownership Reporting Compliance" which information is incorporated
herein by reference.

                                      -45-
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this item is incorporated herein by reference
to "Executive Compensation" in the 2000 Proxy Statement.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this item is incorporated herein by reference
to "Ownership of Common Stock by Certain Beneficial Owners" in the 2000 Proxy
Statement.

ITEM 13.  CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS.

     None.


                                      -46-
<PAGE>
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS OF FORM 8-K

     (a) Documents filed as part of this Form 10-K:

         1.   Financial Statements

              The 1999 Consolidated Financial Statements of Denison
              International plc and Subsidiaries are included in Part II,
              Item 8.

         2.   Financial Statement Schedules

     Schedule II - Valuation and Qualifying Accounts is enclosed at page
     F-1 of this Form 10-K.

              All other financial statement schedules for the Company and its
              subsidiaries have been included in the consolidated financial
              statements or the related footnotes, or they are either
              inapplicable or not required.

         3.   Exhibits

              See the Index to Exhibits at page 48 of this Form 10-K.

     (b) Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter ended December 31,
         1999.




                                      -47-
<PAGE>

                                INDEX OF EXHIBITS

    Exhibit No.                             Description

       2.1           Agreement, dated December 23, 1998, by and among Denison
                     International plc, Merifire  OY and other persons named
                     therein.*

       3.1           Memorandum and Articles of Association of the Company.**

       4.1           Form of Deposit Agreement, among the Company, Bankers Trust
                     Company, as Depository, and holders from time to time of
                     American Depository Shares issued thereunder (including as
                     an exhibit the form of American Depository Receipt and the
                     form of said Agreement).**

       4.2           Form of Ordinary Share Certificate.**

       10.1          The Denison International Stock Option Plan.**

       10.2          Employment Agreement, dated as of June 1, 1998, by and
                     between David L. Wein, Denison Hydraulics, Inc. and Denison
                     International plc.**

       10.3          Unsecured Credit Note Dated May, 1999 between Denison
                     Hydraulics, Inc. and Bank One, NA

       21.1          Subsidiaries of Registrant

       23.1          Consent of Ernst & Young LLP

       27.1          Financial Data Schedule

       ------------
       *  Filed as an exhibit to the Company's Annual Report on Form 20-F for
          the year ended December 31, 1998 and incorporated herein by reference.
       ** Filed as an exhibit to the Company's Registration Statement on
          Form F-1 (Registration No. 333-7248) and incorporated herein by
          reference.


                                       48



<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                     Denison International plc
                                     (registrant)

                                     By: /s/ Bruce A. Smith
                                         -------------------------------------
                                         Bruce A. Smith
                                         Chief Financial Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


     /s/ J. Colin Keith                                          March 29, 2000
     -------------------------------------------------------
     J. Colin Keith, Chairman of the Board

     /s/ Anders C. H. Brag                                       March 29, 2000
     -------------------------------------------------------
     Anders C. H. Brag, Managing Director and Director

     /s/ David L. Weir                                           March 29, 2000
     -------------------------------------------------------
     David L. Weir, President, Chief Executive Officer and
     Director (Principal Executive Officer)

     /s/ Bruce A. Smith                                          March 29, 2000
     -------------------------------------------------------
     Bruce A. Smith, CFO and Director (Principal Financial
     Officer and Principal Accounting Officer)



                                       49

<PAGE>

                                   SCHEDULE II
                                   -----------

                            DENISON INTERNATIONAL PLC

                        VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                                     ADDITIONS
                                             BALANCE AT     CHARGED TO     CHARGED TO                    BALANCE AT
                                            BEGINNING OF     COSTS AND        OTHER       DEDUCTIONS       END OF
                                               PERIOD        EXPENSES       ACCOUNTS     (WRITE-OFFS)      PERIOD
                                               ------        --------       --------     ------------      ------
<S>                                             <C>            <C>       <C>               <C>            <C>
DESCRIPTION

Allowance for bad and doubtful debts
     Year ended December 31, 1997                 2,538          1,291     (210)  (a)          (532)        3,087
     Year ended December 31, 1998                 3,087            261       62   (a)        (1,015)        2,395
     Year ended December 31, 1999                 2,395          1,060     (225)  (a)        (1,055)        2,175

Exchange adjustment

</TABLE>


                                       F-1






                                      -50-

<PAGE>


                                INDEX OF EXHIBITS

    Exhibit No.                             Description

       2.1           Agreement, dated December 23, 1998, by and among Denison
                     International plc, Merifire  OY and other persons named
                     therein.*

       3.1           Memorandum and Articles of Association of the Company.**

       4.1           Form of Deposit Agreement, among the Company, Bankers Trust
                     Company, as Depository, and holders from time to time of
                     American Depository Shares issued thereunder (including as
                     an exhibit the form of American Depository Receipt and the
                     form of said Agreement).**

       4.2           Form of Ordinary Share Certificate.**

       10.1          The Denison International Stock Option Plan.**

       10.2          Employment Agreement, dated as of June 1, 1998, by and
                     between David L. Wein, Denison Hydraulics, Inc. and Denison
                     International plc.**

       10.3          Unsecured Credit Note Dated May, 1999 between Denison
                     Hydraulics, Inc. and Bank One, NA

       21.1          Subsidiaries of Registrant

       23.1          Consent of Ernst & Young LLP

       27.1          Financial Data Schedule

       ------------
       *  Filed as an exhibit to the Company's Annual Report on Form 20-F for
          the year ended December 31, 1998 and incorporated herein by reference.
       ** Filed as an exhibit to the Company's Registration Statement on
          Form F-1 (Registration No. 333-7248) and incorporated herein by
          reference.