The paper and packaging supplier was also ordered to pay costs of £8,244 by Skegness Magistrates Court.
DS Smith faced the charge after an employee suffered breaks to his arm and ribs following an incident on 9 June 2010.
The 27-year-old man, who does not wish to be named, was being trained by a second employee on the use of a re-winder when his fingers became trapped.
The second man, unaware of what had happened, then started the machine which threw the employee over the top.
He broke his right arm in several places and fractured his ribs and as a result was off work for a year. He now has pins and plates in his arm, although he has since returned to work for the company.
HSE inspector Emma Madeley said: "There was nothing to prevent the machine being started before people were clear of the danger zone. Having a second operator created a serious risk, because the man operating the controls had no idea that his colleague was trapped.
"That working practice has now been changed. The company has also installed a guard so that the machine cannot begin rotating at speed if someone’s hands are in the danger area. Unfortunately these measures have come too late for this employee, who has been left with severe and permanent injuries."