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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, 2001
                                       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 number: 000-29358

                            DENISON INTERNATIONAL PLC
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

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

                       14249 Industrial Parkway
                           Marysville, Ohio               43040
               (Address of principal executive offices) (Zip Code)

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

   Securities registered or to be registered pursuant to Section 12(b) of the
                                   Act.: None

Securities registered or to be 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 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 the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

     The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 27, 2002 was $158,623,185.

     The number of outstanding shares of each of the registrant's classes of
capital or common stock as of March 27, 2002 was as follows:

                   10,563,950 Ordinary Shares, $0.01 par value
                7,015 `A' Ordinary Shares, (pound)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 28, 2002 is incorporated by
reference in Part I and Part III of the Form 10-K to the extent stated herein.


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                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

PART I

  Item 1.   Business...........................................................2
  Item 2.   Properties........................................................12
  Item 3.   Legal Proceedings.................................................13
  Item 4.   Submission of Matters to a Vote of Security Holders...............13
  Item 4A.  Executive Officers of the Company.................................13

PART II

  Item 5.   Market for the Company's Common Equity And Related Stockholder
               Matters........................................................13
  Item 6.   Selected Consolidated Financial Data..............................14
  Item 7.   Management's Discussion and Analysis of Financial Condition
               and Results of Operations......................................15
  Item 7A.  Quantitative and Qualitative Disclosures About Market Risk........24
  Item 8.   Financial Statements and Supplementary Data.......................24
  Item 9.   Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure.......................................49

PART III

  Item 10.  Directors and Officers of the Registrant..........................49
  Item 11.  Executive Compensation............................................49
  Item 12.  Security Ownership of Certain Beneficial Owners and Management....49
  Item 13.  Certain Relationships and Related Transactions....................49

PART IV

  Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K...49

SIGNATURES....................................................................53

SCHEDULE II..................................................................F-1

EXHIBIT INDEX................................................................E-1


                                      (i)

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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," "(pound)" 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 accounting principles
generally accepted in the United States ("US GAAP") expressed in U.S. dollars.
The Company has published quarterly updates containing unaudited financial
information prepared on the same basis as its audited US GAAP consolidated
financial statements.

                Special Note Regarding Forward-looking Statements

     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.



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                                     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 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; radial piston motors; and electronic control
products. Denison's products enjoy excellent brand recognition and significant
market share in certain sectors of the 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
that also distribute other products that do not generally compete with
Denison's. In Europe and Asia, Denison primarily sells its products directly to
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 16 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 100% of the shares of Lokomec Oy, a manufacturer and
distributor of highly engineered manifold systems located in Tampere, Finland.
In April 2000 the Company acquired 100% of the shares of Riva Calzoni
Oleodinamica, a manufacturer and distributor of radial piston motors located in
Bologna, Italy. During 2000 the Company entered into an agreement whereby the
Company acquired ownership of a business in Shanghai, China that manufactures
certain vane motors; this agreement became effective


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June 2001. In December 2001 the Company's U.S. subsidiary acquired the assets of
a distributor located in Anaheim and Sacramento, California. The Agreement
became effective in June, 2001.

     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
44-20-7603-1515.

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.

     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
cyclicality 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, radial
piston motors, and valves. In 2001, vane pumps and motors accounted for 29.5% of
the Company's net sales, piston pumps and motors


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accounted for 27.9% of the Company's net sales, valves accounted for 19.8% of
the Company's net sales, radial piston motors accounted for 8.3% of the
Company's net sales, and manifolds accounted for 5.0% of the Company's net
sales. In addition, the Company manufactures electronic control products and
certain other components and accessories used in hydraulic systems and are
classified as other products. Other product sales accounted for 9.5% of the
Company's net sales during 2001.

     The markets served by the Company are substantial and diversified, with no
single customer accounting for more than 4% of its net sales in 2001. 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
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.


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     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 2001, the Marysville plant produced and shipped in excess of
13,000 units.

     Vane Pumps and Motors. Vane pumps and motors are ideal for applications
that 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 1940's.

     All Denison vane pumps are manufactured at the Company's Vierzon, France
and Shanghai, China facilities. During 2001, the Company produced and dispatched
in excess of 68,000 units.


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Radial Piston Motors

     Radial piston motors are a unique design of low speed, high torque
hydraulic motors that are utilized in a variety of applications including
industrial machinery, agriculture and natural resource exploration. The unique
design relates to the principle of transmitting power to the rotary shaft by
means of a pressurized column of oil contained in a telescopic cylinder, as
opposed to the more common approach of utilizing connecting rods, pistons, pads
and pins. The Denison radial piston motor offers advantages of high torque at
very low speeds, reduced wear on moving parts, and a significant reduction in
weight and overall size compared to other motors with the same capacity.

     Denison manufactures three types of radial piston motors: fixed
displacement, dual displacement, and variable displacement. This product
offering allows Denison to offer our customers components that are less
standard, but more suitable to respond to the customer's specific requirements.
Denison's radial piston motor products respond to the hydraulic market's
evolution towards products offering optimum performance and maximum efficiency.

     All Denison radial piston motors are manufactured in the Company's Bologna,
Italy facility. During 2001, the Bologna facility produced approximately 7,500
radial piston motors.

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 2001, 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 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


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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.

     All Denison valves are manufactured at the Company's Hilden, Germany plant,
with the exception of 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 2001, the Hilden factory
supplied approximately 230,000 units, substantially all of which 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. The highest levels of aftermarket
service are piston pumps, which tend to be more complex and require more
maintenance than vane pumps. Approximately 148,000 piston pumps and 508,000 vane
pumps have been manufactured by Denison and are currently in use and therefore
may be subject to service. In 2001, 12.2% 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.


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     As of December 31, 2001, Denison's research and development staff consisted
of a total of 62 employees. Thirty three 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; five focus on research and development related to manifolds at
Denison's Finland facility; six focus on research and development related to
radial piston motors at Denison's Italy facility; and fourteen perform research
and development on industrial valves at Denison's Germany facility. The main
activities of the research and development staff involve developing new concepts
and new product designs, and modifying and improving existing products and
designing variations of existing products to suit specific customer needs.
Denison currently has no plans to significantly change the number of its R&D
employees. Denison incurred research and development costs of $5.2 million, $5.0
million and $4.4 million in the years ended December 31, 2001, 2000 and 1999,
respectively.

Manufacturing and Suppliers

     The Company's production facilities are located in Marysville, Ohio;
Vierzon, France; Shanghai, China; Bologna, Italy; Tampere, Finland and Hilden,
Germany. The Marysville plant manufactures piston pumps and motors, the Vierzon
plant manufactures vane pumps and motors, the Shanghai plant manufactures vane
motors, the Bologna plant manufactures radial piston motors, the Tampere plant
manufactures manifolds, and the Hilden plant manufactures valves. The
manufacturing plants have undergone significant upgrade and rationalization in
recent years and are 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 35% of the manufacturing workforce is dedicated to the production
of vane pumps and motors, 23% to the production of piston pumps and motors, 21%
to the production of valves, 15% to the production of radial piston motors, and
6% to the production of manifolds. Each facility is equipped with testing
equipment to maintain the Company's high quality control standards. The
Company's manufacturing facilities in Ohio, France, Italy, Finland and Germany
are ISO9001 certified.

     The Company manufactures internally 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 $29.0 million on new production equipment in the
last four years. As a result of these investments, significant gains in
productivity efficiency have been realized. Management believes that the
improvement programs in progress will further add to efficiency and promote cost
reductions, particularly in piston pump, radial piston motor 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 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


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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 192 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 that 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's sales and marketing network in North America is comprised of
46 sales and marketing employees, as well as 40 independent 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, China, Japan and Australia. Denison's plants
supply pumps, motors, 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 192 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.

     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


                                       9

<PAGE>


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 2001, 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 11% 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 2001.

     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
(refuse handling equipment); 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 IHI, Kawasaki and Mitsubishi in Japan.

Backlog

     The Company's backlog of unfilled firm orders was $24.2 million at December
31, 2001, compared with $32.4 million at December 31, 2000. The Company
estimates that approximately 98% of the December 31, 2001 backlog will be filled
by December 31, 2002.


                                       10

<PAGE>


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
Bosch/Rexroth and divisions of Eaton and Parker Hannifin, 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 Bosch/Rexroth, Oilgear, Hydrakraft and Parker Hannifin (piston
products); Eaton, Atos and Parker Hannifin (vane products); and Bosch/Rexroth,
Eaton, Atos and Parker Hannifin (valve products). In addition, various small
regional companies compete with the Company's manifold and radial piston motor
product lines.

Employees

     As of December 31, 2001, the Company had 1,156 full-time employees,
including 606 employees in manufacturing and operations, 62 employees in product
development, 334 employees in sales and marketing and 154 employees in
management and administration. In addition, the Company utilizes the services of
up to approximately 70 temporary employees. Of the Company's full-time
employees, 245 are working in the United States, 184 in Germany, 264 in France,
122 in Italy, 105 in China, 51 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 in the
Company's Marysville, Ohio facility (120 employees overall) expires in June
2002. Management at the US facility knows of no grievances, which are likely to
threaten work stoppage. The French facility has a collective bargaining
agreement, the "Convention Collective de la Metallurgie," which covers all
employees and is mandatory in French companies which engage in activities such
as those of the Company. 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. The Italian facility is covered under the National Collective Labor
Agreement ("NLCA"), which covers all employees and is mandatory in Italian
companies, which engage in activities such as those of the Company. The NLCA
includes collective bargaining agreement provisions relating


                                       11

<PAGE>


to issues such as wage and salary arrangements, working conditions and other
matters. Management at each of the facilities believes labor relations to be
good.

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, 2001 for
anticipated future costs related to environmental liabilities. See Note 15 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. In
addition the "Denison" name, as well as other brand names, are trademarked
throughout the world.

ITEM 2.  PROPERTIES

     Denison has administrative, sales and manufacturing facilities located in
Marysville, Ohio; Vierzon, France; Shanghai, China; Bologna, Italy; Tampere,
Finland; and Hilden, Germany. The facilities in the United States, France,
Finland and Germany are owned by the Company and occupy 170,000, 174,100,
120,000 and 146,600 square feet, respectively. The Company's facility in
Bologna, Italy is a leased facility occupying 120,000 square feet. The Company's
facility in Shanghai, China is a leased facility occupying 12,300 square feet.
The Marysville plant manufactures piston pumps and motors, the Vierzon plant
manufactures vane pumps and motors, the Bologna plant manufactures radial piston
product, the Shanghai plant manufactures vane 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 in superior manufacturing condition. Each facility is
equipped with testing equipment to maintain the Company's high quality control
standards. The Company's manufacturing facilities in Ohio, France, Italy,
Finland and Germany are ISO9001 certified.

     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


                                       12

<PAGE>


countries: Australia, Belgium, Canada, Denmark, Finland, France, Germany, China,
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 the executive
officers of the Registrant.

                                                             Present Office Held
Name                 Age     Position                               Since
----                 ---     --------                               -----

J. Colin Keith       57      Chairman of the Board of               1993
                             Directors

David L. Weir        48      Chief Executive Officer,               1997
                             President and Director

Anders C.H. Brag     49      Managing Director and Director         1993

Bruce A. Smith       46      Chief Financial Officer and            1998
                             Director

Paul G. Dumond       47      Company Secretary                      1993

                                     PART II

ITEM 5. MARKET FOR 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". 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, 2001,
10,114,303 ADSs were held by 17 registered ADR holders. The largest holder, The
Depository Trust Company, holds 5,322,992 ADSs representing 56 participants. At
the annual meeting of shareholders held on May 22, 2001, the shareholders
granted authority to the Company to


                                       13

<PAGE>


repurchase up to 1,056,395 shares of the Company's stock at market prices. No
purchases were made by the Company in 2001. (See Note 9 of Notes to Consolidated
Financial Statements).

     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, 2001.

                                        Price per ADS (US$)
                                        -------------------
     Quarterly Period Ended             High            Low
     ----------------------             ----            ---

     March 31, 2000                     $15.00        $ 8.50
     June 30, 2000                       13.25          9.88
     September 30, 2000                  14.25         12.00
     December 31, 2000                   15.07         12.88
     March 31, 2001                      19.00         13.38
     June 30, 2001                       18.75         14.80
     September 30, 2001                  17.75         14.40
     December 31, 2001                   16.60         13.30

     At March 27, 2002, the last reported price for an ADS on the Nasdaq
National Market was $20.30.

     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 CONSOLIDATED FINANCIAL DATA

     The selected consolidated financial data for each of the five years in the
period ended December 31, 2001 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.


                                       14

<PAGE>


Consolidated Statement of Operations Data:

<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                    2001             2000            1999             1998             1997
                                    ----             ----            ----             ----             ----
                                                            (Dollars in thousands)
<S>                            <C>              <C>             <C>              <C>              <C>
Net sales                      $    155,446     $    153,095    $     135,543    $     145,253    $    148,388
Cost of sales                       100,207           99,993           90,430           90,917          94,008
                               ------------     ------------    -------------    -------------    ------------
Gross profit                         55,239           53,102           45,113           54,336          54,380
Selling, general
  and administrative
  Expenses                           36,689           34,735           31,966           33,028          33,618
                               ------------     ------------    -------------    -------------    ------------
Operating income                     18,550           18,367           13,147           21,308          20,762
Other income/(expense)                  109              279               (693)             0           2,175
Interest income, net                  1,258            1,030              354                938            218
                               ------------     ------------    -------------    ---------------  -------------
Income before taxes                  19,917           19,676           12,808           22,246          23,155
Provision for income
  Taxes                               6,195            5,917            4,522            5,956           3,367
                               ------------     ------------    -------------    -------------    ------------
Net income                     $     13,722     $     13,759    $       8,286    $      16,290    $     19,788
                               ============     ============    =============    =============    ============
Basic earnings per share       $       1.30     $       1.25    $         .75    $        1.47    $       1.84
                               ============     ============    =============    =============    ============

Diluted earnings per share     $       1.30     $       1.25    $         .74    $        1.46    $       1.82
                               ============     ============    =============    =============    ============
</TABLE>


Consolidated Balance Sheet Data:

<TABLE>
<CAPTION>
                                                          At Ended December 31,
                                   2001             2000            1999             1998             1997
                                   ----             ----            ----             ----             ----
                                                         (Dollars in thousands)
<S>                            <C>              <C>             <C>              <C>              <C>
Cash and cash
  equivalents                  $  43,245        $  32,097       $  31,174        $  35,799        $  30,337
Working capital                   72,623           67,812          66,533           66,432           63,834
Total assets                     156,815          144,394         128,820          143,457          107,493
Total debt (1)                    10,545            6,560           5,697           12,881            2,478
Total shareholders' equity        96,225           84,958          81,060           78,527           59,552

(1)  Total debt comprises bank lines of credit with a maturity of less than one year.
</TABLE>


                                       15

<PAGE>


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
Consolidated 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 74% 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 denominated income statement amounts in such
foreign currencies when translated into U.S. dollars as compared to prior
periods.

Critical Accounting Policies and Estimates

     Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. On an on-going basis, management evaluates its
estimates and judgments, including those related to revenue recognition,
allowance for doubtful accounts, inventories, warranty obligations and deferred
tax assets. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions or conditions.

     Management believes the following critical accounting policies, among
others, affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements.

Revenue Recognition

     The Company recognizes revenue in accordance with SEC Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements (SAB 101), as
amended by SAB 101A and 101B. SAB 101 requires that four basic criteria must be
met before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and
determinable; and (4) collectibility is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the fee charged for services rendered and products delivered and the
collectibility of those fees. Should changes in conditions cause management to
determine these criteria are not met for certain future transactions, revenue
recognized for any reporting period could be adversely affected.

Allowance for Doubtful Accounts

     The Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. If the
financial condition of the Company's customers were to deteriorate, resulting in
an impairment of their ability to make payments, additional allowances may be
required.

Inventory


                                       16

<PAGE>


     The Company establishes reserves against its inventory for estimated
obsolescence or unmarketable inventory based upon the difference between the
cost of inventory and the estimated market value based upon assumptions about
future demand and market conditions. If actual future demand or market
conditions are less favorable than those projected by management, additional
inventory reserves may be required.

Warranties

     Products sold are generally covered by a warranty for a period of one year.
The Company accrues a warranty reserve for estimated costs to provide warranty
services. The Company's estimate of costs to service its warranty obligations is
based on historical experience and expectation of future conditions. To the
extent the Company experiences increased warranty claim activity or increased
costs associated with servicing those claims, its warranty accrual will increase
resulting in decreased profits.

Deferred Tax Assets

     Carrying value of the Company's net deferred tax assets assumes that the
Company will be able to generate sufficient future taxable income in certain tax
jurisdictions, based on estimates and assumptions. If these estimates and
related assumptions change in the future, the Company may be required to record
additional valuation allowances against its deferred tax assets resulting in
additional income tax expense in the Company's consolidated statement of
operations. Likewise, should the Company determine that it would be able to
realize its deferred tax assets in the future in excess of its net recorded
amount, an adjustment to the deferred tax asset would result in a decrease in
the Company's income tax expense in the Company's consolidated statement of
operations. Management evaluates the extent to which it will realize the future
benefits of the deferred tax assets annually and assesses the need for
adjustments in its valuation allowances.

Results of Operations

Year Ended December 31, 2001 Compared with Year Ended December 31, 2000

     The Company's net sales increased 1.5% to $155.4 million in fiscal 2001
from $153.1 million in fiscal 2000. During the same period, net sales in North
America decreased 1.6% to $48.1 million from $48.9 million; net sales in Europe
increased 2.6% to $85.3 million from $83.1 million; and net sales in
Asia-Pacific region increased 4.7% to $22.0 million from $21.0 million. Strong
demand for the Company's products in the European and Asia-Pacific regions,
combined with a full year of sales revenues from the Company's operations in
Bologna, Italy, acquired in April of 2000, were the primary reasons for the
increased revenues realized. Partially offsetting these factors were the
decreased demand in the North American hydraulics market and the continuing
impact of the strong dollar against a majority of the Company's functional
currencies worldwide.

     Restated (at average exchange rates for fiscal 2000), net sales for fiscal
2001 were $161.3 million, a 5.4% increase versus 2000. The decreased sales
revenue for the period attributable to the changes in exchange rate was $5.9
million. Restated (at average exchange rates for fiscal 2000), net sales for
fiscal 2001 for the Company's European operations increased 6.9% to $88.8
million from $83.1 million; and net sales for fiscal 2001 for the Company's
Asia-Pacific region increased 14.1% to $24.0 million from $21.0 million.


                                       17

<PAGE>


     The Company's gross profit increased to $55.2 million in fiscal 2001 from
$53.1 million in fiscal 2000. Gross profit as a percentage of net sales
increased to 35.5% in fiscal 2001 from 34.7% in fiscal 2000. The increased gross
profit was primarily attributable to the impact of cost reductions implemented
in the Company's manufacturing facilities during fiscal 2001 and fiscal 2000,
partially offset by the impact of decreased production volume experienced in the
later portion of fiscal 2001 as the Company adjusted its production volume to
match worldwide demand. Also partially offsetting the cost reduction benefits
was the continued impact of the strong US dollar, which results in higher
acquisition costs for the Company's US manufactured products, particularly in
Company's European sales companies.

     Gross profit in North America decreased less than 1 percentage point to
$12.5 million in fiscal 2001 from $12.6 million in fiscal 2000. Gross profit in
Europe increased 5.4% to $34.9 million in fiscal 2001 from $33.1 million in
fiscal 2000, and Asia-Pacific gross profit increased 13.1% to $8.1 million in
fiscal 2001 from $7.2 million in fiscal 2000. Restated (at average exchange
rates for fiscal 2000), gross profit in Europe was $36.0 million, or a 8.8%
increase over fiscal 2000, and gross profit in the Asia-Pacific region was $8.8
million, or a 22.3% increase over fiscal 2000. The total gross profit decrease
for the period attributable to the exchange rate differences was $2.2 million.
Restated (at average exchange rates for fiscal 2000), consolidated gross profit
as a percentage of net sales increased to 35.6% for fiscal 2001 compared to
34.7% for fiscal 2000.

     Selling, General and Administrative ("SG&A") expenses increased 5.6% to
$36.7 million for fiscal 2001 from $34.7 million for fiscal 2000. These expenses
as a percentage of net sales were 23.6% for fiscal 2001 as compared to 22.7% for
fiscal 2000. Restated (at average exchange rates for fiscal 2000), SG&A
increased 9.7% to $38.1 million (23.6% of net sales) in fiscal 2001 from $34.7
million (22.7% of net sales) in fiscal 2000. The increase in these expenses for
fiscal 2001 as compared to fiscal 2000 is due primarily to the impact of a full
year of expenses for the Company's operations in Bologna, Italy, for which
operations began in April 2000, and the operations in Shanghai, China, whose
operations began in June 2001. In addition, the Company experienced increases in
certain insurance costs during 2001, along with costs for headcount increases at
certain locations to support higher sales volumes.

     Operating income increased 1.0% to $18.6 million in fiscal 2001 from $18.4
million in fiscal 2000. Operating income as a percentage of net sales for fiscal
2001 of 11.9% was in line with operating income as a percentage of net sales of
12.0% for fiscal 2000. Restated (at average exchange rates for fiscal 2000),
operating income increased 5.1% to $19.3 million (12.0% of net sales) in fiscal
2001 from $18.4 million (12.0% of net sales) in fiscal 2000. The changes in
exchange rates had the effect of decreasing operating income for the period by
$0.8 million.

     Other income decreased to $0.1 million in fiscal 2001 from $0.3 million in
fiscal 2000. The decrease in other income was the result of recognition of
non-cash currency gains on inter-company loans at a lower level throughout
fiscal 2001, than those recognized in fiscal 2000.

     Net interest income was $1.3 million in fiscal 2001 compared to $1.0
million of net interest income in fiscal 2000. The increase in interest income
was primarily due to increased interest bearing cash balances held at the
subsidiary level, partially offset by lower worldwide investment rates on the
Company's cash balances.

     The effective tax rate for fiscal 2001 was 31.1% compared with 30.0% for
fiscal 2000. This change is the result of year to date variations in the country
sources of the Company's profits, in each


                                       18

<PAGE>


case at tax rates that vary among jurisdictions. The provision for taxes
increased 4.6% to $6.2 million in fiscal 2001 compared to $5.9 million in fiscal
2000. This provision as a percentage of net sales decreased to 4.0% in fiscal
2001 from 3.9% in fiscal 2000.

Year Ended December 31, 2000 Compared with Year Ended December 31, 1999

     The Company's net sales increased 12.9% to $153.1 million in fiscal 2000
from $135.5 million in fiscal 1999. During the same period, net sales in North
America increased 19.6% to $48.9 million from $40.9 million; net sales in Europe
increased 7.8% to $83.1 million from $77.1 million; and net sales in
Asia-Pacific region increased 20.2% to $21.0 million from $17.5 million. The
primary reason for the increased volume recorded for fiscal 2000 compared with
the same period in 1999 is the increased product demand for all of the Company's
products on a worldwide basis, combined with the impact of the Calzoni
acquisition which added $10.0 million to net sales in 2000. Also impacting
revenues was the continuing recovery of the economies in the Asia-Pacific
region, combined with the Company's increased efforts to further penetrate those
markets. Partially offsetting these increases was the continued strengthening of
the US dollar against most of the functional currencies utilized in the
Company's European operations.

     Restated (at average exchange rates for fiscal 1999), net sales for fiscal
2000 were $163.4 million, a 20.5% increase versus 1999. The increased sales
revenue for the period attributable to the changes in exchange rate was $10.3
million. Restated (at average exchange rates for fiscal 1999), net sales for
fiscal 2000 for the Company's European operations increased 21.2% to $93.5
million from $77.1 million; while net sales for the Asia-Pacific region
increased 19.7% to $21.0 million from $17.5 million.

     The Company's gross profit increased to $53.1 million in fiscal 2000 from
$45.1 million in fiscal 1999. Gross profit as a percentage of net sales
increased to 34.7% in fiscal 2000 from 33.3% in fiscal 1999. The increased gross
profit was primarily attributable to the increased volume demand realized for
the Company's products worldwide, combined with the impact of the Calzoni
acquisition and the impact of operating efficiencies at the Company's
manufacturing facilities. The increased gross profit as a percentage of sales
for fiscal 2000 versus fiscal 1999 resulted from the impact of high production
volume and cost control at the Company's manufacturing facilities.

     Gross profit in North America increased 39.6% to $12.6 million in fiscal
2000 from $9.0 million in fiscal 1999. Gross profit in Europe increased 8.0% to
$33.3 million in fiscal 2000 from $30.8 million in fiscal 1999, and Asia-Pacific
gross profit increased 36.6% to $7.2 million in fiscal 2000 from $5.3 million in
fiscal 1999. Restated (at average exchange rates for fiscal 1999), gross profit
in Europe was $32.7 million, or a 22.3% increase over fiscal 1999, and gross
profit in the Asia-Pacific region was $7.3 million, or a 37.7% increase over
fiscal 1999. The total gross profit increase for the period attributable to the
exchange rate differences was $4.4 million. Restated (at average exchange rates
for fiscal 1999), consolidated gross profit as a percentage of net sales
increased to 35.2% for fiscal 2000 compared to 33.3% for fiscal 1999.

     SG&A expenses increased 8.7% to $34.7 million for fiscal 2000 from $32.0
million for fiscal 1999. These expenses as a percentage of net sales were 22.7%
for fiscal 2000 as compared to 23.6% for fiscal 1999. The increase in these
expenses was primarily the result of the Calzoni acquisition, while the decrease
in these expenses as a percentage of net sales reflects cost control measures
implemented in fiscal 1999 and fiscal 2000. Restated (at average exchange rates
for fiscal 1999),


                                       19

<PAGE>


SG&A increased 16.4% to $37.2 million (22.8% of net sales) in fiscal 2000 from
$32.0 million (23.6% of net sales) in fiscal 1999.

     Operating income increased 39.7% to $18.4 million in fiscal 2000 from $13.1
million in fiscal 1999. Operating income as a percentage of net sales increased
to 12.0% in fiscal 2000 from 9.7% in fiscal 1999. Restated (at average exchange
rates for fiscal 1999), operating income increased 54.5% to $20.3 million (12.4%
of net sales) in fiscal 2000 from $13.1 million (9.7% of net sales) in fiscal
1999. The increased operating earnings realized, on both a dollar and percentage
of net sales basis, was the result of the volume and cost control factors
discussed, combined with the impact of the Calzoni acquisition. The total
restated operating earnings increase for the period attributable to exchange
rate differences was $1.9 million.

     Other income was recorded for fiscal 2000 of $279,000 (0.2% of net sales)
as compared to other expense of $693,000 for the comparable period of fiscal
1999. The increase in other income was the result of recognition of non-cash
currency gains on inter-company loans for fiscal 2000 versus losses recorded on
these transactions in the comparable period of 1999.

     Net interest income was $1.0 million in fiscal 2000 compared to $354,000 of
net interest income in fiscal 1999. The increase in interest income was
primarily due to increased interest bearing cash balances held at the subsidiary
level, combined with changes in investment strategies implemented in 2000.

     The effective tax rate for fiscal 2000 was 30.0% compared with 35.3% for
fiscal 1999 resulting from the mix of profits generated in the Company's
overseas operations, particularly the Company's German operations, with varying
effective tax rates, as opposed to the mix recorded in 1999. The Company's
German operations, which has net operating losses available to offset taxable
income, recorded earnings in fiscal 2000 versus a loss in fiscal 1999. The
provision for taxes increased 30.8% to $5.9 million in fiscal 2000 compared to
$4.5 million in fiscal 1999. This provision as a percentage of net sales
increased to 3.9% in fiscal 2000 from 3.3% in fiscal 1999, reflecting the higher
operating margins discussed earlier.

Liquidity and Capital Resources

<TABLE>
<CAPTION>
                                                                   Year Ended and At December 31,
                                                      ---------------------------------------------------------
                                                             2001                2000               1999
                                                      ------------------ ------------------- ------------------
                                                                       (Dollars in thousands)
<S>                                                        <C>                  <C>               <C>
Cash & cash equivalents                                    $43,245              $32,097           $31,173
Net cash provided by operating activities                   21,238               16,576            13,246
Net cash used in investing activities                      (12,436)              (7,475)           (7,051)
Net cash provided by (used in) financing activities          4,130               (6,849)           (7,416)
Effect of exchange rate changes on cash                     (1,784)              (1,329)           (3,404)
</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, stock
repurchases and to service and repay debt.


                                       20

<PAGE>


     Net cash provided by operating activities for fiscal 2001 increased to
$21.2 million from $16.6 million in fiscal 2000. The $4.6 million increase in
net cash provided by operating activities for fiscal 2001 compared to fiscal
2000 was entirely attributable to a $4.6 million increase in cash provided from
operating assets and liabilities. 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 $12.4 million for fiscal 2001,
compared to $7.5 million for fiscal 2000. Investing activities in 2001 consisted
of the investment in manufacturing equipment for the Company's five production
facilities and investments in equipment at the Company's sales locations for
$9.9 million, and the final payment under the earn out provisions of the
Purchase Agreement for the acquisition of Lokomec Oy for $1.5 million, along
with the acquisition of the assets of a California distributor of the Company's
U.S. subsidiary for $1.0 million. Several expansion projects, particularly at
the Company's Marysville, Ohio, Vierzon, France and Bologna, Italy facilities,
represented the primary utilization of cash for purchase of property, plant and
equipment. The Company anticipates that it will incur approximately $7.0 million
for capital expenditures for fiscal 2002, excluding any acquisitions of new
businesses.

     Net cash provided by financing activities was $4.1 million for fiscal 2001
compared to net cash used of $6.8 million for fiscal 2000. Cash provided in
fiscal 2001 by financing activities included $2.5 million of bank borrowings
utilized for the final payment under the earn out provisions of the Purchase
Agreement for the acquisition of Lokomec Oy and the assets acquired in
California by the Company's U.S. subsidiary.

     The effect of exchange rate changes on cash and cash equivalents was a
decrease of $1.7 million and $1.3 million for fiscal 2001 and fiscal 2000,
respectively. As 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 2001 compared to
fiscal 2000. The $1.7 million impact of exchange rate changes on cash and cash
equivalents was attributable to a continuing fiscal 2001 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 2001 for the Company's European operations was 4.1%.

     In April 2001, the Company's Japanese subsidiary entered into a bank loan
with a bank that provided $2.2 million for working capital and acquisitions.
Borrowings under the agreement are secured by a guarantee by the Company. At
December 31, 2001, $0.4 million was outstanding under the bank loan. Interest on
the loan accrues at a rate of 1.75%. Interest on the loan is payable quarterly.
The bank loan is due April 20, 2002.

     In May 1999, the Company's U.S. subsidiary entered into a 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, 2001 $0.4 million was outstanding under the note.
Interest on the credit line, which is based on LIBOR plus 0.875% (2.751% at
December 31, 2001), is payable monthly. The revolving credit note is due April
30, 2002. The Company expects to renew the revolving credit note prior to April
30, 2002.

     Short-term borrowings outside the United States under available informal
credit facilities are typically a result of overdrafts. At December 31, 2001,
the Company had an additional $ 0.8 million of other foreign debt outstanding.
The Company also has an additional $3.0 million of unused foreign


                                       21

<PAGE>


credit facilities. The banks may withdraw these facilities at any time. The
weighted average interest rates on short-term borrowings as of December 31, 2001
and 2000 were 3.6% and 5.3% respectively.

Contractual Obligations

     As of December 31, 2001, the Company had the following contractual
obligations (U.S. dollars in thousands):

                                           Payments Due By Period
                                           ----------------------

                                       Less
                                       Than                               After
                             Total    1 Year      1-3 years   4-5 years  5 years
                             -----    ------      ---------   ---------  -------

Notes payable to bank (i)   $ 9,745    $ 9,745       --          --        --
Short-term borrowings           800        800       --          --        --
Purchase commitments          1,900      1,900       --          --        --
Non-cancelable
   Operating leases
                              3,006      1,499      1,405       102       $ --
                           ---------- ---------- ----------- ----------- ------
Total contractual cash      $15,451    $13,944     $1,405       102         --
   Obligations             ========== ========== =========== =========== ======

(i)  The company expects to renew these revolving credit notes prior to the
     April 2002 maturity dates.

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 2001, for example, the Company
experienced a 6.9% 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
only 2.6%. 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


                                       22

<PAGE>


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 2001 and fiscal 2000 which have
been recalculated to show what such amounts would have been applying 1999
average exchange rates to fiscal 2000 amounts and 2000 average exchange rates to
fiscal 2001 amounts.

                                            Year Ended December 31,
                                            -----------------------
                                  2000            2001        2001 at 2000
                                  ----            ----        ------------
                                 Actual          Actual      Exchange Rates
                                 ------          ------      --------------
                               (Dollars in thousands, except per share data)

Net sales                      $ 153,095       $ 155,446       $ 161,309
Gross profit                      53,102          55,239          57,423
Operating income                  18,367          18,550          19,333
Net income                        13,759          13,722          14,268
Basic earnings per share            1.25            1.30            1.35
Diluted earnings per share          1.25            1.30            1.35

                                            Year Ended December 31,
                                            -----------------------
                                  1999            2000        2000 at 1999
                                  ----            ----        ------------
                                 Actual          Actual      Exchange Rates
                                 ------          ------      --------------
                               (Dollars in thousands, except per share data)

Net sales                      $ 135,543       $ 153,095       $ 163,360
Gross profit                      45,113          53,102          57,518
Operating income                  13,147          18,367          20,314
Net income                         8,286          13,759          15,220
Basic earnings per share             .75            1.25            1.38
Diluted earnings per share           .74            1.25            1.38

New Accounting Pronouncements

     See Note 1, "New Accounting Pronouncements" in the footnotes to the
Financial Statements for the effect of pending adoption of new accounting
pronouncements.

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


                                       23

<PAGE>


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.

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. A significant portion of the Company's business is conducted in
currencies other than the US dollar. See Item 7 "Exposure to Currency
Fluctuations".

     Interest Rate Risk

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

     As of December 31, 2001, the Company had approximately $10.5 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.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                            DENISON INTERNATIONAL plc

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page

Report of Independent Auditors                                                25

Consolidated Balance Sheets as of December 31, 2001 and 2000                  26


                                       24

<PAGE>


Consolidated Statements of Income for each of the years ended
  December 31, 2001, 2000 and 1999                                            28

Consolidated Statements of Changes in Shareholders' Equity for each of the
  years ended December 31, 2001, 2000 and 1999                                29

Consolidated Statements of Cash Flows for each of the years ended
  December 31, 2001, 2000 and 1999                                            30

Notes to Consolidated Financial Statements                                    32


                                       25

<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, 2001 and 2000, 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, 2001. Our
audits also included the financial statement schedule listed in the index at
Item 14a. 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, 2001 and 2000, and
the consolidated results of their operations, and their cash flows for each of
the three years in the period ended December 31, 2001, 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 respects, the information set forth therein.

                                                           /S/ ERNST & YOUNG LLP

Columbus, Ohio
February 15, 2002


                                       26


<PAGE>


                            DENISON INTERNATIONAL plc
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 (U.S. dollars in thousands, except share data)

                                     ASSETS

                                                               December 31,
                                                               ------------
                                                           2001          2000
                                                           ----          ----
Current assets:
        Cash and cash equivalents                         $43,245        $32,097
        Accounts receivable, less allowances of
          $2,185 and $2,412 in 2001
          and 2000, respectively                           27,715         33,387
        Inventories                                        39,257         37,968
        Other current assets                                4,680          4,495
                                                        ---------      ---------
           Total current assets                           114,897        107,947
Property, plant and equipment, net                         27,912         24,341
Other assets                                                5,022          4,137
Goodwill, net of accumulated amortization of $920 and
        $610 in 2001 and 2000, respectively                 8,984          7,969
                                                        ---------      ---------
           Total assets                                  $156,815       $144,394


                                       27

<PAGE>


                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                                December 31,
                                                                ------------
                                                            2001           2000
                                                            ----           ----
Current liabilities:
        Notes payable to bank                           $  10,545      $  6,560
        Accounts payable                                   11,921        14,986
        Accrued payroll and related expenses                7,369         7,204
        Other accrued liabilities                           8,593         7,396
        Income tax payable                                  3,846         3,989
                                                        ---------      --------
           Total current liabilities                       42,274        40,135
Noncurrent liabilities:
        Pension accrual                                    11,345        11,364
        Other noncurrent liabilities                        5,113         4,761
        Negative goodwill, net of accumulated
          amortization of $8,715 and $7,489
           in 2001 and 2000, respectively                   1,858         3,176
                                                        ---------     ---------
                                                           18,316        19,301

Shareholders' equity:
        `A' ordinary shares(pound)8.00 par value;
          7,125 shares authorized; 7,015
          issued and outstanding in 2001
          and 2000                                             86            86
        Ordinary shares $0.01 par value;
          15,000,000 shares authorized; and
          10,563,950 shares issued and
          outstanding in 2001 and 2000                        107           107
        Additional paid-in capital                          5,150         5,150
        Capital redemption reserve                          1,090         1,090
        Retained earnings                                 103,107        89,385
        Accumulated other comprehensive loss              (13,315)      (10,860)
                                                        ---------     ---------
           Total shareholders' equity                      96,225        84,958
                                                        ---------     ---------
           Total liabilities and shareholders' equity    $156,815      $144,394
                                                        =========     =========

        The accompanying notes are an integral part of these statements.


                                       28

<PAGE>


                            DENISON INTERNATIONAL plc
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
               (U.S. dollars in thousands, except per share data)

                                          Year ended December 31,
                                          -----------------------
                                   2001             2000             1999
                                   ----             ----             ----

Net sales                       $ 155,446        $ 153,095        $ 135,543
Cost of sales                     100,207           99,993           90,430
                               ----------        ---------        ---------
Gross profit                       55,239           53,102           45,113
Selling, general and
  administrative expenses          36,689           34,735           31,966
                                ---------        ---------        ---------
Operating income                   18,550           18,367           13,147
Other income (expense)                109              279             (693)
Interest income, net                1,258            1,030              354
                                ---------     ------------         --------
Income before taxes                19,917           19,676           12,808
Provision for income taxes          6,195            5,917            4,522
                                 --------        ---------        ---------
Net income                      $  13,722        $  13,759        $   8,286
                                =========        =========        =========

Basic earnings per share       $     1.30      $      1.25      $       .75
                               ==========      ===========      ===========

Diluted earnings per share     $     1.30      $      1.25      $       .74
                               ==========      ===========      ===========


        The accompanying notes are an integral part of these statements.


                                       29

<PAGE>


                            DENISON INTERNATIONAL plc
                                AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                 (U.S. dollars in thousands, except share data)

<TABLE>
<CAPTION>
                                                               Ordin-    Addi-                        Accum-
                                A                      A        ary     tional                        ulated
                            Ordinary   Ordinary     Ordinary   shares    paid    Capital      Re-      Other    Compre-
                           shares of  shares of    shares of    of       in       redem-    tained    Compre-   hensive
                          (pound)8.00   $0.01     (pound)8.00  $0.01   capital    tion     earnings   hensive   Income
                              each      each          each      each     (i)     reserve     (ii)     (Loss)    (Loss)      Total
                              ----      ----          ----      ----     ---     -------     ----     ------    ------      -----
                            (number of shares)
<S>                         <C>      <C>           <C>        <C>     <C>       <C>        <C>      <C>         <C>       <C>
Balance at January 1, 1999   7,015   11,097,450       $86       $111   $5,453    $1,090     $74,405  $(2,618)              $78,527
 Exercise of stock
       options                  --       16,500        --         --       26        --          --       --         --         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 7,015   11,113,950       $86       $111   $5,479    $1,090     $82,691  $(8,397)              $81,060

    Purchase and retirement
       of treasury shares       --     (550,000)       --         (4)    (329)       --      (7,065)      --         --     (7,398)
    Net income                  --           --        --         --       --        --      13,759       --     13,759     13,759
    Translation
       adjustment               --           --        --         --       --        --          --   (2,463)   ( 2,463)    (2,463)
                                                                                                     -------
   Comprehensive
      Income                    --           --        --         --       --        --          --       --    $11,296         --
                                                                                                                =======
                            ------   ----------    ------     ------  -------   -------    -------- --------              --------
Balance at December 31, 2000 7,015   10,563,950       $86       $107   $5,150    $1,090     $89,385 $(10,860)              $84,958


Net income                      --           --        --         --       --        --      13,722       --     13,722     13,722
    Translation
       adjustment               --           --        --         --       --        --          --   (2,393)    (2,393)    (2,393)
    Foreign currency
       forward contract         --           --        --         --       --        --          --      (62)       (62)       (62)
                                                                                                                   ----
   Comprehensive
      Income                    --           --        --         --       --        --          --       --    $11,267         --
                                                                                                                =======
                            ------   ----------    ------     ------  -------   -------    -------- --------              --------
Balance at December 31, 2001 7,015   10,563,950       $86       $107   $5,150    $1,090    $103,107 $(13,315)              $96,225
                            ======   ==========    ======     ======  =======   =======    ======== ========              ========


(i)  Additional paid in capital is not distributable.

(ii) Retained earnings available for distribution as dividends by the parent company at December 31, 2001 were $62,225,000.

                                  The accompanying notes are an integral part of these statements.
</TABLE>


                                       30

<PAGE>


                            DENISON INTERNATIONAL plc
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (U.S. dollars in thousands)


                                              Year ended December 31,
                                              -----------------------
                                      2001              2000            1999
                                      ----              ----            ----

CASH FLOWS FROM OPERATING
  ACTIVITIES:
Net income                          $ 13,722          $ 13,759       $  8,286
Adjustments to reconcile
  net income to net cash
  provided by operating
  activities:
   Amortization of goodwill             (902)           (1,043)        (1,172)
   Depreciation                        5,239             5,050          4,676
   Deferred income taxes                (192)              831            306
    Gain on sale of assets                --                --             32
   Changes in operating assets
     and liabilities:
      Accounts receivable              4,080            (3,039)          (146)
      Inventories                     (2,305)           (4,653)         4,510
      Other current assets                (2)              (52)         1,438
      Other assets                       596            (1,482)            58
      Accounts payable                (2,399)            4,545           (873)
      Accrued payroll and
        related expenses                 466             2,912              3
      Income tax payable                  41               914            476
      Other accrued liabilities        2,355            (1,268)        (4,370)
      Pension accrual                     88               164            220
      Other noncurrent
        liabilities                      451               (62)          (198)
                                    --------          --------       --------
Net cash provided by
  operating activities                21,238            16,576         13,246
                                    --------          --------       --------

CASH FLOWS FROM INVESTING
  ACTIVITIES:
Acquisitions, net of cash
  acquired                            (2,491)           (4,015)          (788)
Purchase of property, plant
  and equipment                       (9,851)           (3,698)        (6,345)
Proceeds from disposal of
  property, plant and
  equipment                              (94)              238             82
                                     --------         --------       --------
Net cash used in investing
  activities                         (12,436)           (7,475)        (7,051)
                                     --------         --------       --------


                                       31

<PAGE>


                                               Year ended December 31,
                                               -----------------------
                                      2001              2000           1999
                                      ----              ----           ----

CASH FLOWS FROM FINANCING
  ACTIVITIES:
Net borrowing (repayment)
   on lines of credit                  4,130               660         (7,211)
Purchase and retirement of
   treasury shares                        --            (7,398)            --
Repayment of capital lease
  obligations                             --              (111)          (231)
Proceeds from exercise
  of stock options                        --                --             26
                                    --------          --------       --------
Net cash provided by
   (used in) financing activities      4,130            (6,849)        (7,416)
                                    --------          --------       --------
EFFECT OF EXCHANGE RATE
  CHANGES ON CASH                     (1,784)           (1,329)        (3,404)
                                    --------          --------       --------
NET INCREASE (DECREASE) IN
   CASH AND CASH EQUIVALENTS          11,148               923         (4,625)
CASH AND CASH EQUIVALENTS
  AT BEGINNING OF YEAR                32,097            31,174         35,799
                                    --------          --------       --------
CASH AND CASH EQUIVALENTS
  AT END OF YEAR                    $ 43,245          $ 32,097       $ 31,174
                                    ========          ========       ========
SUPPLEMENTAL DISCLOSURE OF
  CASH FLOW INFORMATION
Interest paid                       $    521          $    436       $    807
Income taxes paid                   $  2,958          $  2,729       $  4,109

        The accompanying notes are an integral part of these statements.


                                       32

<PAGE>


                            DENISON INTERNATIONAL plc

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. 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,
China, Germany, France, Italy and Finland and there are sales and distribution
operations in the United Kingdom, Canada, Sweden, Denmark, The Netherlands,
Spain, Italy, Japan, Australia, China and Singapore.

     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.

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, 1999 and
2000 have been, and for the year ended December 31, 2001 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
accounting principles generally accepted in the United States ("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:


                                       33

<PAGE>


   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.

   Property, Plant and Equipment

     Property, plant and equipment are recorded at cost and 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.

     Through December 31, 2001, the Company's policy was 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.
Effective January 1, 2002, the Company adopted the impairment provisions of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets".
See New Accounting Pronouncements below.

   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 which coincides with title transfer. Provision is
made currently for estimated product returns, which may occur.


                                       34

<PAGE>


   Shipping and Handling Costs

     Shipping and handling costs are classified in cost of sales.

   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 $3.3 million and $2.2 million at December 31, 2001 and 2000,
respectively, of which $2.7 million and $2.0 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 $0.8 million, $0.8 million and $0.9 million for the
years ended December 31, 2001, 2000 and 1999, respectively.

   Research and Development

     Expenditures for research and development are expensed as incurred.
Research and development expense was $5.2 million, $5.0 million and $4.4 million
for the years ended December 31, 2001, 2000 and 1999, 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


                                       35

<PAGE>


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 10. Earnings per Common Share

     Basic net income per common share is computed using the weighted average
number of common shares outstanding during the period. Diluted net income per
common share is computed using the weighted average number of common and diluted
equivalent shares outstanding during the period. Dilutive common 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.

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

Comprehensive Income (Loss)

     Accumulated other comprehensive loss on the balance sheet consists of:

                                                              December 31,
                                                    ----------------------------
                                                        2001             2000
                                                    ------------     -----------
                                                     (U.S. dollars in thousands)

     Foreign currency forward contracts                   (62)               --
     Cumulative translation adjustment                (13,253)          (10,860)
                                                    ----------        ----------
     Accumulated other comprehensive loss           $ (13,315)        $ (10,860)
                                                    ==========        ==========

New Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), Business
Combinations, and Statement of Financial Accounting Standards No. 142 ("SFAS
142"), Goodwill and Other Intangible Assets. SFAS 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001 and prohibits the use of the pooling-of-interests method. SFAS 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach. The amortization of goodwill from past business
combinations will cease upon adoption of this Statement on January 1, 2002.
Goodwill and intangible assets acquired in business combinations completed after
June 30, 2001 must comply with the provisions of this Statement. Also under this
Statement, companies will be required to evaluate all existing goodwill for
impairment within six months of adoption by comparing the fair value of each
reporting unit to its carrying value at the date of adoption. During


                                       36

<PAGE>


2002, the Company will perform the first of the required impairment tests of
goodwill and indefinite lived intangible assets as of January 1, 2002 and has
not yet determined what the effect of those tests will be on the earnings and
financial position of the Company.

     Additionally, SFAS 141 requires that in a business combination in which the
fair value of the net assets acquired exceeds cost, any residual negative
goodwill is recognized as an extraordinary gain in the period in which the
business combination is initially recognized. The transition provisions of SFAS
141 require that upon adoption of the new standard, any existing negative
goodwill be adjusted as a cumulative effect of a change in accounting principal
in the statement of operations. In the first quarter of 2002, the Company will
record a cumulative effect of a change in accounting principle for its remaining
unamortized negative goodwill. The Company's recorded balance of negative
goodwill at December 31, 2001 was $1.9 million.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets that
result from the acquisition, construction, development or normal use of the
asset. SFAS No. 143 is effective January 1, 2003. The Company is currently
evaluating the provisions of SFAS No. 143 and does not expect that adoption will
have a material impact on its financial position or its results of operations.

     In October 2001, the FASB issued SFAS No. 144, "Accounting for Impairment
or Disposal of Long-Lived Assets," which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. SFAS No. 144
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of," and the accounting and reporting
provisions of Accounting Principles Board Opinion No. 30, "Reporting the Results
of Operations -- Reporting the Transactions for the Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." SFAS No. 144 requires that long-lived assets that are to be
disposed of by sale be measured at the lower of book value or fair value less
cost to sell. SFAS No. 144 also sets forth requirements for recognizing and
measuring impairment losses on certain long-lived assets to be held or used.
SFAS No. 144 is effective January 1, 2002. The Company is currently evaluating
the provisions of SFAS No. 144 and does not expect that adoption will have a
material impact on its financial position or its results of operations.

4. Inventories

     Inventories consisted of the following:

                                                              December 31,
                                                    ----------------------------
                                                        2001             2000
                                                    ------------     -----------
                                                     (U.S. dollars in thousands)

     Finished goods                                   $ 21,111        $ 22,577
     Work-in-progress                                    3,510           3,767
     Raw materials and supplies                         14,636          11,624
                                                      $ 39,257        $ 37,968
                                                      ========        ========


                                       37

<PAGE>


5. Property, Plant and Equipment

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

                                                              December 31,
                                                    ----------------------------
                                                        2001             2000
                                                    ------------     -----------
                                                     (U.S. dollars in thousands)

Land and buildings                                   $   5,384        $  4,654
Machinery and equipment                                 43,960          36,996
Motor vehicles                                             827             881
                                                     ---------        ---------
                                                        50,171          42,531
Less accumulated depreciation                          (22,259)        (18,190)
                                                     ---------        ---------
Property, plant and equipment, net                    $ 27,912        $ 24,341
                                                     =========        =========

6. Notes Payable to Bank

     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, 2001, $9.4 million was outstanding under the time note. Interest on
the note accrues at a rate of LIBOR + 0.875% (2.751% at December 31, 2001).
Interest on the note is payable monthly. The revolving credit note is due on
April 30, 2002. The Company expects to renew the revolving credit note prior to
April 30, 2002.

     In April 2001, the Company's Japan subsidiary entered into a loan with a
bank that provided $2.2 million for working capital and acquisitions. Borrowings
under the agreement are guaranteed by the Company. At December 31, 2001, $.4
million was outstanding under the bank loan. Interest on the loan accrues at a
rate of 1.75%. Interest on the loan is payable quarterly. The bank loan is due
on April 20, 2002.

     Other short-term borrowings outside the United States under available
informal credit facilities are typically a result of overdrafts. At December 31,
2001, the Company had an additional $.8 million of other foreign debt
outstanding. The Company also has an additional $3.0 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, 2001 and 2000 were 3.6% and 5.2%, respectively.

7. Financial and Derivative Instruments

     Primarily as a result of the short term nature of the Company's financial
instruments and the variable rate of interest on the Company's debt, the
estimated fair values of financial instruments approximate their carrying values
at December 31, 2001 and 2000.

     Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities," as amended, which requires companies to
recognize all derivatives as either assets or liabilities in the balance sheet
and measure such instruments at fair value. Derivatives that are not hedges are
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in fair


                                       38

<PAGE>


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
ineffective portion of the gain or loss from the financial instrument is
immediately recognized in net income.

     The Company's worldwide manufacturing facilities sell products to other of
the Company's subsidiaries under various currencies. In addition, certain of the
Company's subsidiaries record billings of export sales in the customer's
functional currency. Accordingly, the US Dollar-equivalent cash flows may vary
due to changes in related foreign currency exchange rates. To reduce that risk,
the Company enters into foreign currency forward contracts with a maximum
hedging period of 12 months. The Company has no other freestanding or embedded
derivative instruments. The notional amount of foreign forward currency
contracts at December 31, 2001 was $7.2 million.

     Gains and losses on the foreign currency forward contracts are recorded in
other comprehensive income (equity) to the extent that the hedges are effective
until the underlying sale or purchase transactions are recognized in earnings.
Gains and losses on sale and purchase transactions are classified as sales or
cost of sales, respectively.

     The adoption of SFAS 133 on January 1, 2001 resulted in the cumulative
effect of an accounting change of $178,000, being recognized as other
comprehensive income. The $62,000 loss recorded in accumulated other
comprehensive loss at December 31, 2001 is expected to be reclassified to
earnings over the twelve-month period ending December 31, 2002. The actual
amounts that will be reclassified to earnings over the next twelve months will
vary from this amount as a result of changes in market conditions. No amounts
were reclassified to earnings during the year ended December 31, 2001 in
connection with forecasted transactions that were no longer considered probable
of occurring.

8. Acquisitions

     In December 2001 the Company acquired certain assets of a California
distributor of the Company's U.S. subsidiary for $963,000. The Company began
operations, establishing West Coast Fluid Power, as a division of the Company's
U.S. subsidiary, on January 1, 2002 as a distributor serving the general
hydraulics market in California.

     In November 2000, the Company entered into a contract with Shanghai
Hydraulics & Pneumatics Corporation to establish a Sino-Foreign Co-operation
Company, Shanghai Hydraulics Components Limited ("Denison Shanghai"), under the
laws of the People's Republic of China. The contract was subject to approval by
the government of the People's Republic of China (the "PRC"). In June 2001, the
Company received the necessary approvals from the PRC and the contract became
effective as of June 12, 2001. Denison Shanghai manufactures and distributes
vane pumps and motors for industrial hydraulics applications, and is located in
Shanghai, China. The Company owns 100% of the shares of Denison Shanghai. The
Company's initial contribution to Denison Shanghai was $360,000, and the Company
will make additional contributions of machinery and equipment totaling an
additional $90,000. The results of operations for Denison Shanghai have been
consolidated into the Company's results.

     On April 12, 2000, the Company completed its acquisition of 100% of the
outstanding shares of Riva Calzoni Oleodinamica S.p.A. ("Calzoni"), a wholly
subsidiary of Intek S.p.A., effective as of April 1, 2000. The cash purchase
price was $4,015,000 ($5,354,000 net of cash acquired and debt assumed). Calzoni
designs, manufactures and distributes radial piston oil-pressure motors for
industrial hydraulics


                                       39

<PAGE>


applications and is located in Bologna, Italy. The acquisition was accounted for
utilizing the purchase method of accounting, and the operating results of
Calzoni have been included in the operating results of the Company from April 1,
2000.

     The following unaudited pro forma summary for the year ended December 31,
2000 presents the Company's results as if the Riva Calzoni acquisition occurred
at January 1, 2000, 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 actually occurred at January
1, 2000:

                                                       December 31, 2000
                                                  (U.S. dollars in thousands)
                                                    (except per share data)

Net sales                                              $  156,388
                                                       ============
Net income                                             $   13,909
                                                       ============
Basic earnings per share                               $       1.26
                                                       ============
Diluted earnings per share                             $       1.26
                                                       ============

     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.
Goodwill of $8,599,000 is being amortized by the straight-line method over 30
years. The purchase price has increased since 1998 due to the achievement of
certain operating objectives, principally based upon earnings before interest
and taxes, over a three-year period ending on August 31, 2001. In 2001, 2000 and
1999, the Company paid $1,165,000, $572,000 and $788,000, respectively, of
additional purchase price related to this earn out provision.

9. Shareholders Equity

     At the Company's 2001 Annual General Meeting of Shareholders held on May
22, 2001, shareholders unanimously approved a plan under which the Company may
repurchase up to 1,056,395 of its Ordinary Shares under certain terms and
conditions. The approval will expire on November 22, 2002. As of December 31,
2001, no shares were purchased under the plan. During fiscal 2000, 550,000
shares were purchased and retired for an aggregate price of $7.4 million under a
plan unanimously approved by shareholders at the Company's Annual General
Meeting of Shareholders held on May 8, 2000.

10. 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


                                       40

<PAGE>


the date of grant. Options vest one year from the date of grant subject to any
additional restrictions that 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. The Company uses
the Black-Scholes method to estimate the fair value of options at the date of
grant with the following assumptions for 2001, 2000 and 1999: risk-free interest
rates of 6%, volatility of 50%, 53% and 37% 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 for the years ended December 31 follows:

                                        2001          2000           1999
                              (U.S. dollars in thousands, except per share data)

Pro forma net income                  $12,636       $12,523        $ 7,183
Pro forma earnings per share:
     Basic                            $  1.20       $   1.13       $   .65

     Diluted                          $  1.19       $   1.13       $   .65


     The following table summarizes share option activity for Ordinary Shares:

<TABLE>
<CAPTION>
                                         2001                        2000                        1999
                                ---------------------       ---------------------       ---------------------
                                             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   623,000       $ 16.67       650,500       $ 16.81       626,000       $ 16.66
Granted                           5,000         13.63        20,000         11.56        46,000         12.75
Exercised                            --            --            --            --       (16,500)         1.53
Forfeited                       (15,000)        16.88       (47,500)        16.00        (5,000)        12.88
                                ---------------------       ---------------------       ---------------------
Outstanding end of year         613,000       $ 16.63       623,000       $ 16.67       650,500       $ 16.81
                                =====================       =====================       =====================

Exercisable at end of year      496,875                     353,000                     222,875

Weighted-average fair value
  of options granted during
  the year                      $  6.92                     $  6.09                     $  5.40
</TABLE>

Share options outstanding at December 31, 2001 are summarized as follows:

<TABLE>
<CAPTION>
                                              Outstanding                                 Exercisable
                               --------------------------------------------   ------------------------------------
                                                          Weighted-
                                          Weighted        Average                                   Weighted
                                          Average         Remaining                                 Average


                                       41

<PAGE>


                                          Exercise        Contractual                   Exercise
                               Number      Price             Life         Number          Price
                               --------------------------------------    ------------------------
<S>                             <C>          <C>             <C>         <C>             <C>
Exercise prices between
$11.56 and $13.88                71,000      $12.63          7.6          30,500         $12.82
$16.00 and $19.53               542,000      $17.16          5.5         466,375         $17.06
</TABLE>

     Options to purchase 542,000, 557,000 and 650,000 shares of common stock at
a weighted average price of $17.16, $17.16 and $16.81 per share, respectively,
were outstanding during 2001, 2000 and 1999, respectively, but were not included
in the computation of diluted earnings per share because the options exercise
price was greater than the average market price for the common shares and,
therefore, the effect would be antidilutive.

11. Earnings per Share

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

<TABLE>
<CAPTION>
                                                 2001             2000            1999
                                            --------------   --------------   -------------
                                              (U.S. dollars in thousands, except share and
                                                            per share data)
<S>                                         <C>              <C>             <C>
Numerator:
    Net income                              $       13,722   $       13,759  $        8,286
                                            ==============   ==============  ==============

Denominator:
    Denominator for basic earnings per
share -- weighted-average shares                10,563,950       11,046,976      11,120,965

    Effect of dilutive stock options                16,710              852           8,127
                                            --------------   --------------   -------------
    Denominator for diluted earnings
per share -- adjusted weighted-
average shares                                  10,580,660       11,047,828      11,129,092
                                            ==============   ==============   =============

Basic earnings per share                    $         1.30   $         1.25  $          .75
                                            ==============   ==============  ==============

Diluted earnings per share                  $         1.30   $         1.25  $          .74
                                            ==============   ==============  ==============
</TABLE>


12. Commitments

     The Company has purchase commitments with various vendors for approximately
$1.9 million as of December 31, 2001. These purchase commitments are payable
during 2002.

     Future minimum lease payments under non-cancelable operating leases with
initial terms of one year or more consisted of the following at December 31,
2001:


                                       42

<PAGE>


                                                             Operating
                                                               Leases
                                                             ---------
                                                     (U.S. dollars in thousands)

2002                                                          $ 1,499
2003                                                              909
2004                                                              302
2005                                                              194
2006                                                               64
Thereafter                                                         38
                                                              -------
Total minimum lease payments                                  $ 3,006
                                                              =======

     Annual rent expense charged to operations in each of the three years ended
December 31, 2001, was approximately $1.5 million.

13. 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.

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

                                                 Year ended December 31,
                                          --------------------------------------
                                             2001           2000         1999
                                          ----------     ----------   ----------
                                               (U.S. dollars in thousands)
     Pretax income:
          United Kingdom                  $  2,733        $ 2,471       $ 2,821
          Foreign                           17,184         17,205         9,987
                                          --------        -------        ------
                                           $19,917        $19,676       $12,808
                                           =======        =======       =======

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

<TABLE>
<CAPTION>
                                                           Year ended December 31,
                                                           -----------------------
                                                       2001         2000         1999
                                                       ----         ----         ----
                                                          (U.S. dollars in thousands)
<S>                                                   <C>          <C>          <C>
Current:
   United Kingdom                                     $  367       $  (27)      $  491
   Foreign                                             6,020        5,113        3,725
                                                      ------       ------       ------
        Total Current                                 $6,387       $5,086       $4,216
                                                      ======       ======       ======


                                       43

<PAGE>


Deferred:
   United Kingdom                                         --           --           --
   Foreign                                              (192)         831          306
                                                      ------       ------       ------
        Total provision (benefit) for income taxes    $6,195       $5,917       $4,522
                                                      ======       ======       ======
</TABLE>

     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,
                                                                     ------------
                                                             2001       2000       1999
                                                             ----       ----       ----
<S>                                                         <C>        <C>        <C>
Provision at statutory rate                                   30%        30%        31%
Foreign operations taxed at rates different from United
  Kingdom Statutory rate                                       6          6          2
Reduction in valuation allowance relating to utilization
  of NOL carry forwards and other deferred tax assets         (4)        (3)        (1)
Amortization of negative goodwill                             (1)        (1)        (2)
Other--net                                                    --         (2)         5
Effective tax rate                                            31%        30%        35%
                                                            ======     ======     ======
</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,
                                               ---------------------------
                                                 2001               2000
                                               --------           --------

     Deferred tax assets:
          Employee benefits                    $    594           $    745
          Net operating loss carryforwards        2,162              4,326
          Other                                   3,159              1,867
     Valuation allowance                         (3,742)            (5,275)
                                               --------           --------
     Deferred tax assets                          2,173              1,663
                                               --------           --------

     Deferred tax liabilities                     1,552              1,234

     Net deferred tax assets                   $    621           $    429
                                               ========           ========

     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. When the deferred tax assets from the acquisition are realized,
the Company records a reduction in the current year income tax expense equal to
the valuation reserve which has been realized. The valuation allowance has been
reduced by $1.5 million at December 31, 2001 and was reduced by $3.9 million at
December 31, 2000.


                                       44

<PAGE>


     At December 31, 2001, the Company has net operating loss carryforwards
("NOLs") of approximately $7.0 million for foreign income tax purposes, of which
$6.3 million will be allowable against national taxes and $.7 million will be
allowable against local trade taxes. The NOL deductions in the U.S. totaling
$3.0 million, 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.

14. Pension and Other Postretirement Benefits

     The Company operates four defined pension benefit plans in the United
States, Germany and Japan. The plans are generally funded in advance by
contributions from members at levels set in the rules, and 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
                                                       2001         2000         2001         2000
                                                       ----         ----         ----         ----
                                                               (U.S. dollars in thousands)
<S>                                                  <C>          <C>          <C>          <C>
Change in benefit obligation
Benefit obligation beginning of year                 $ 14,249     $ 14,947     $    754     $    870
Service cost                                              265          308            5            4
Interest cost                                             822          794           58           53
Actuarial (gain)/loss                                     422         (461)         122           --
Benefits paid                                            (686)        (616)        (145)        (173)
Exchange rate changes                                    (668)        (723)          --           --
                                                     --------     --------     --------     --------
Benefit obligation at end of year                    $ 14,404     $ 14,249     $    794     $    754
                                                     --------     --------     --------     --------

Change in plan assets
Fair value of plan assets at beginning of year       $  5,655     $  5,567     $     --     $     --
Actual return on plan assets                              218          237           --           --
Employer contributions                                    218          266          145          173
Benefits paid                                            (422)        (349)        (145)        (173)
Exchange rate changes                                     (74)         (66)          --           --
                                                     --------     --------     --------     --------
Fair value of plan assets at end of year             $  5,595     $  5,655     $      0     $      0
                                                     --------     --------     --------     --------

Reconciliation of funded status
Funded status                                        $ (8,809)    $ (8,594)    $   (794)    $   (754)
Unrecognized actuarial (gain)/loss                       (246)        (991)         138           19
Unrecognized net asset                                    (34)          17           --           --
                                                           --           --           --           --
Accrued benefit cost                                 $ (9,089)    $ (9,568)    $   (656)    $   (735)
                                                     --------     --------     --------     --------


                                       45

<PAGE>


<CAPTION>
                                                        Pension Benefits          Other Benefits
                                                       2001         2000         2001         2000
                                                       ----         ----         ----         ----
                                                               (U.S. dollars in thousands)
<S>                                                  <C>          <C>          <C>          <C>
Amounts recognized in the consolidated
balance sheets consists of:
Prepaid benefit cost                                 $    472     $    474     $     --     $     --
Accrued benefit liability                              (9,561)     (10,042)        (656)        (735)
                                                     --------     --------     --------     --------
Net amount recognized                                $ (9,089)    $ (9,568)    $   (656)    $   (735)
                                                     ========     ========     ========     ========


Additional year-end information for plans with
benefit obligations in excess of plan assets
Projected benefit obligation                           13,766       13,530
Accumulated benefit obligation                         12,987       12,744
Fair value of plan assets                               4,948        4,867

Components of net periodic benefit cost
Service cost                                              265          308            5            4
Interest cost                                             822          794           58           53
Expected return on plan assets                           (367)        (337)          --           --
Amortization of transitional (asset) or obligation         33           42           --           --
Recognized actuarial (gain) or loss                       (25)         (26)           3           --
                                                     --------     --------     --------     --------
Net periodic benefit cost                                 728          781           66           57
                                                     --------     --------     --------     --------

Weighted average assumptions as of December 31
Discount rate                                            5.84%        6.09%        7.25%        7.50%
Rate of increase in compensation levels                  2.40%        2.40%          --           --
Expected long-term rate of return on assets              6.76%        6.72%          --           --
</TABLE>

     The annual assumed health care cost trend rate is 6% for the year
subsequent to December 31, 2001 and is assumed to remain at 6% thereafter.

     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          $  4             $  3
Effect on postretirement benefit obligation        $ 56             $ 40

15. 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,
2001. Remaining accrued cleanup costs total $1.3 million of which $1.2 million
is classified in the consolidated financial statements as long-term accrued
liabilities. There were no charges to the accrual in 2001 and 2000.

     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


                                       46

<PAGE>


final outcome related to environmental exposures, management believes that these
liabilities are fully accrued for in the accompanying consolidated financial
statements.

16. 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:

         (U.S. dollars in thousands)
                                               2001        2000         1999
                                               ----        ----         ----
     Sales to unaffiliated companies:
              United Kingdom                $  8,543     $  8,776     $  8,903
              France                          15,104       14,447       16,562
              Germany                         12,550       11,405       10,697
              Italy                           20,037       18,941       10,600
              Rest of Europe                  29,071       29,561       30,354
                                            --------     --------     --------
                       Total Europe           85,305       83,130       77,116

              United States                   39,669       41,078       34,540
              Canada                           8,449        7,855        6,384
                                            --------     --------     --------
                       Total N. America       48,118       48,933       40,924

              Asia-Pacific                    22,023       21,032       17,503
                                            --------     --------     --------
                       Total consolidated   $155,446     $153,095     $135,543
                                            ========     ========     ========

     Transfers between geographic area:
              United Kingdom                $    138     $    274     $    107
              France                          24,340       23,822       21,698
              Germany                         14,027       14,518       14,151
              Italy                            1,239           --           --
              Rest of Europe                     923          886          210
                                            --------     --------     --------
                       Total Europe           40,667       39,500       36,166

              United States                   14,344       13,188        8,840
              Canada                               0            0            0
                                            ========     ========     ========
                       Total N. America       14,344       13,188        8,840

              Asia-Pacific                       643           94           36
                                            --------     --------     --------

                       Total transfers        55,654       52,782       45,042
                       Eliminations          (55,654)     (52,782)     (45,042)
                                            --------     --------     --------

                       Total consolidated   $      0     $      0     $      0
                                            ========     ========     ========

     Depreciation expense:
              United Kingdom                $    209     $    163     $    166
              France                           1,253        1,282        1,626
              Germany                            746          680          524
              Italy                              677          589           64
              Rest of Europe                     667          498          584
                                            --------     --------     --------
                       Total Europe            3,552        3,212        2,964

              United States                    1,445        1,470        1,287
              Canada                             (31)          19           15
                                            --------     --------     --------
                       Total N. America        1,414        1,489        1,302


                                       47

<PAGE>

              Asia-Pacific                       273          349          410
                                            --------     --------     --------

                       Total consolidated   $  5,239     $  5,050     $  4,676
                                            ========     ========     ========
     Operating income:
              United Kingdom                $    929     $    995     $  1,500
              France                           7,676        6,470        5,981
              Germany                          1,651        1,336         (628)
              Italy                            1,469        1,518          659
              Rest of Europe                   3,061        3,516        3,972
                                            --------     --------     --------
                       Total Europe           14,786       13,835       11,484

              United States                      638        1,915         (468)
              Canada                             933          783          506
                                            --------     --------     --------
                       Total N. America        1,571        2,698           38

              Asia-Pacific                     1,998        1,123         (263)

              Corporate                          195          711        1,888
                                            --------     --------     --------

                       Total consolidated   $ 18,550     $ 18,367     $ 13,147
                                            ========     ========     ========

     Identifiable assets:
              United Kingdom                $ 11,846     $ 10,043     $ 15,461
              France                          29,487       23,600       21,274
              Germany                         16,941       16,236       14,214
           Italy                              16,953       18,584        6,237
              Rest of Europe                  32,725       29,225       25,903
                                            --------     --------     --------
                       Total Europe          107,952       97,688       83,089

              United States                   25,989       25,938       26,182
              Canada                           5,411        4,920        4,183
                                            --------     --------     --------
                       Total N. America       31,400       30,858       30,365

              Asia-Pacific                    17,463       15,848       15,366
                                            --------     --------     --------

                       Total consolidated   $156,815     $144,394     $128,820
                                            ========     ========     ========

17. Selected Quarterly Financial Data (Unaudited)

      (U.S. dollars in thousands)

<TABLE>
<CAPTION>
                                                        Quarter Ended
                                 March 31          June 30        September 30      December 31
                                 --------          -------        ------------      -----------
<S>                              <C>               <C>              <C>              <C>
2001
Net Sales                        $ 42,717          $ 41,071         $ 36,612         $ 35,046
Gross Profit(a)                    14,708            14,885           12,873           12,733
Operating Income                    5,789             5,541            4,220            3,000
Net Income                          4,015             4,309            3,219            2,179
Basic Earnings per Share             0.38              0.41             0.31             0.21
Diluted Earnings per Share           0.38              0.41             0.30             0.21

2000
Net Sales                        $ 37,033          $ 39,959         $ 36,744         $ 39,359
Gross Profit                       13,344            14,029           12,314           13,415
Operating Income                    4,470             5,208            4,256            4,433
Net Income                          3,162             3,857            3,291            3,449
Basic Earnings per Share             0.28              0.35             0.30             0.32
Diluted Earnings per Share           0.28              0.35             0.30             0.32
</TABLE>


                                       48

<PAGE>


(a) Gross Profit for the quarter ended June 30, 2001 has been restated from
$13,839 reported in the Company's Form 10-Q to $14,885 to reflect a
reclassification between cost of sales and selling, general & administrative
expenses.

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

     None.

                                    PART III

ITEM 10. DIRECTORS AND OFFICERS OF THE 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 28,
2002 (the "2002 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 2002 Proxy Statement under the heading " Section 16(a)
Beneficial Ownership Reporting Compliance" which information is incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item is incorporated herein by reference
to "Executive Compensation" in the 2002 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is incorporated herein by reference
to "Stock Ownership of Beneficial Owners and Management" in the 2002 Proxy
Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.

                                     PART IV

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

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


                                       49

<PAGE>


     1.   Financial Statements

     The 2001 Consolidated Financial Statements of Denison International plc are
included in Part II, Item 8.

     2.   Financial Statement Schedule

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 E-1 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,
2001.


                                       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,
               for the acquisition of 100% of the outstanding shares of Lokomec
               Oy. ***

2.2            Stock Purchase Agreement, dated March 14, 2000, by and among
               Denison Hydraulics Italy s.r.l. and Intek S.p.A., for the
               acquisition of 100% of the shares outstanding of Riva Calzoni
               Oleodinamica S.p.A. *

2.3            Contract dated November 8, 2000 by and between Denison Hydraulics
               Limited, Hong Kong and Shanghai Hydraulics & Pneumatics
               Corporation for the establishment of Shanghai Denison Hydraulics
               Components Limited. ++

2.4            Asset Purchase Agreement, dated December 27, 2001 by and between
               Denison Hydraulics, Inc. and STS Operating, Inc. for the
               acquisition of certain assets relating to STS Operating
               Inc's.U.S. west coast operations.

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 among
               David L. Weir, Denison Hydraulics, Inc. and Denison International
               plc ***

10.3           Revolving Credit Agreement, dated as of May 18, 1999 by and
               between Denison Hydraulics, Inc. and Bank One, NA. +

10.4           Stock Purchase Agreement, dated May 8, 2000, by and between
               Denison International plc and ING Barings LLP for the purchase of
               up to 1,113,950 of the outstanding shares of the Company. *

10.5           Agreement dated May 31, 2000 by and between David L. Weir and
               Denison Hydraulics Inc. and Denison International plc to extend
               the employment agreement entered into June 1, 1998. ****

10.6           Form of Stock Purchase Agreement, by and between Denison
               International plc and ING Barings LLP for the purchase of up to
               1,056,395 of the outstanding shares of the Company.

21.1           Subsidiaries of Registrant ****

23.1           Consent of Ernst & Young LLP

*    Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     period ended March 31, 2000 and incorporated herein by reference.


                                       51

<PAGE>


**   Filed as an exhibit to the Company's Registration Statement on Form F-1
     (Registration No. 333-7248) and incorporated herein by reference.

***  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 Annual Report on Form 10-K for the
     year ended December 31, 2000 and incorporated herein by reference.

+    Filed as an exhibit to the Company's Annual Report on Form 10-K for the
     year ended December 31, 1999 and incorporated herein by reference.

++   Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     period ended June 30, 2001 and incorporated herein by reference.


                                       52

<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)

     March 28, 2002                     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 28, 2002
------------------------------
J. Colin Keith, Chairman of the Board


/s/ Anders C. H. Brag                                  March 28, 2002
------------------------------
Anders C. H. Brag, Managing Director and Director


/s/ David L. Weir                                      March 28, 2002
------------------------------
David L. Weir, President, CEO and Director


/s/ Bruce A. Smith                                     March 28, 2002
------------------------------
Bruce A. Smith, CFO and Director


                                       53

<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
                                     ------------   ----------   ----------    ------------   ----------
Description
<S>                                      <C>           <C>       <C>             <C>            <C>
Allowance for doubtful accounts
receivable
     Year ended December 31, 1999        2,395         1,060     (225) (a)       (1,055)        2,175
     Year ended December 31, 2000        2,175         1,660      (41) (a)       (1,382)        2,412
     Year ended December 31, 2001        2,412           663     (656) (a)         (204)        2,185

(a)  Exchange adjustment
</TABLE>


                                      F-1

<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,
               for the acquisition of 100% of the outstanding shares of Lokomec
               Oy. ***

2.2            Stock Purchase Agreement, dated March 14, 2000, by and among
               Denison Hydraulics Italy s.r.l. and Intek S.p.A., for the
               acquisition of 100% of the shares outstanding of Riva Calzoni
               Oleodinamica S.p.A. *

2.3            Contract dated November 8, 2000 by and between Denison Hydraulics
               Limited, Hong Kong and Shanghai Hydraulics & Pneumatics
               Corporation for the establishment of Shanghai Denison Hydraulics
               Components Limited. ++

2.4            Asset Purchase Agreement, dated December 27, 2001 by and between
               Denison Hydraulics, Inc. and STS Operating, Inc. for the
               acquisition of certain assets relating to STS Operating Inc's.
               U.S. west coast operations

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 among
               David L. Weir, Denison Hydraulics, Inc. and Denison International
               plc ***

10.3           Revolving Credit Agreement, dated as of May 18, 1999 by and
               between Denison Hydraulics, Inc. and Bank One, NA. +

10.4           Stock Purchase Agreement, dated May 8, 2000, by and between
               Denison International plc and ING Barings LLP for the purchase of
               up to 1,113,950 of the outstanding shares of the Company. *

10.5           Agreement dated May 31, 2000 by and between David L. Weir and
               Denison Hydraulics Inc. and Denison International plc to extend
               the employment agreement entered into June 1, 1998. ****

10.6           Form of Stock Purchase Agreement, by and between Denison
               International plc and ING Barings LLP for the purchase of up to
               1,056,395 of the outstanding shares of the Company.

21.1           Subsidiaries of Registrant ****

23.1           Consent of Ernst & Young LLP


*    Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     period ended March 31, 2000 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.


                                      E-1

<PAGE>


***  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 Annual Report on Form 10-K for the
     year ended December 31, 2000 and incorporated herein by reference.

+    Filed as an exhibit to the Company's Annual Report on Form 10-K for the
     year ended December 31, 1999 and incorporated herein by reference.

++   Filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
     period ended June 30, 2001 and incorporated herein by reference.


                                      E-1