A subsidiary of Rolls-Royce in Derby has been fined £200,000 for exposing workers to a radioactive material that was misplaced for five hours.
Marine Power Operations admitted the 2011 breach when a piece of radioactive equipment broke while parts for nuclear submarines were being tested in Sinfin.
Three welders unknowingly passed around a radioactive sample, after noticing a "screw-sized item on a component", Leicester Crown Court heard.
The firm pleaded guilty in July.
Marine Power Operations admitted seven charges, brought by the Health and Safety Executive (HSE) and Environment Agency.
The company uses radioactive sources (containing ytterbium -169) in its industrial radiography work to test welds are perfect.
The court heard significant failings led to a radioactive source (a capsule the size of a small screw) being lost for about five hours at the Sinfin Lane site on 3 March 2011.
The sample was only discovered when a radiographer's personal alarm went off in the room where the welders were working.
The error resulted in a number of workers at the site being exposed to high levels of gamma radiation, in some cases many times the legal dose limits.
The offences included failing to ensure the health, safety and welfare of its staff in respect of exposure to ionising radiation from radioactive sources and failing to make a suitable risk assessment.
There was also a charge relating to failing to provide employees with sufficient training.
Speaking after the hearing, David Orr, HSE's specialist inspector of radiation, said: "The biggest doses were to the workers' hands and they suffered no immediate effects.
"The whole body dose was low and they have a very, very small, increased risk of developing cancer.
"Rolls Royce is fully aware of the danger it [radiation] poses and has a clear duty to protect staff from harm. However the company failed its duty of care on this occasion, losing control of the source without realising it."
Andy Gordon, nuclear safety director at Rolls-Royce, said: "We very much regret this event which took place in 2011, especially for the impact it had on the individuals involved.
"We have thoroughly investigated the event and put in place a number of changes to our practices and procedures to ensure that this cannot happen again."