Having completed the loading of ten ships, the admiral sailed from Cochin on his homeward-bound voyage; and when about three leagues from Pandarane, he descried the Moorish fleet of twenty-nine large ships coming towards him.  After consulting with the captains of his fleet, and the wind being favourable for the purpose, he immediately bore down to engage them.  The ships commanded by Vincente Sodre, Pedro Raphael, and Diego Perez, being prime sailers, closed up first with the enemy, and immediately attacked two of the largest ships of the Moors.  Sodre fought with one of these alone, and Raphael and Perez assailed the other.  Almost on the first onset, great numbers of the enemies were so dismayed that they leapt into the sea to escape by swimming.  On the coming up of De Gama with the rest of the fleet, all the enemies ships made off as fast as they could towards the shore, except those two which were beset at the first, and were unable to escape, which were accordingly taken possession of.  De Gama, considering that all his ships were richly laden, would not pursue the flying enemy, being afraid he might lose some of his ships on the shoals; but our men went in their boats and slew about 300 of the Moors who had endeavoured to save themselves by swimming from the two captured ships.  These vessels were accordingly discharged of their cargoes; which consisted of great quantities of rich merchandize, among which were six great jars of fine earthen ware, called porcelain, which is very rare and costly and much admired in Portugal; four large vessels of silver, and many silver perfuming pans; also many spitting basons of silver gilt:  But what exceeded all the rest, was a golden idol of thirty pounds weight, with a monstrous face.  The eyes of this image were two very fine emeralds.  The vestments were of beaten gold, richly wrought and set with precious stones; and on the breast was a large carbuncle or ruby, as large as the coin called a crusado, which shone like fire.

The goods being taken out, the two ships were set on fire, and the admiral made sail for Cananor, where the rajah gave him a house for a factory, in which Gonzalo Gill Barbosa was settled as factor, having Sebastian Alvarez and Diego Godino as clerks, Duarte Barbosa as interpreter, and sundry others as assistants, in all to the number of twenty.  The rajah undertook to protect these men and all that might be left in the factory, and bound himself to supply lading in spices to all the ships of the king of Portugal at certain fixed prices[18].  In return for these favourable conditions, the admiral engaged on behalf of the king of Portugal to defend the rajah in all wars that might arise from this agreement; conditioning for peace and friendship between the rajahs of Cochin and Cananor, and that the latter should give no aid to any one who might make war upon the former, under the pain of forfeiting the friendship of the Portuguese.  After this, the admiral gave orders to Vincente Sodre to protect the coast with his squadron till the month of February; and if any war should break out or seem probable between the zamorin and Trimumpara, he was to winter in Cochin for the protection of that city; otherwise he was to sail for the straits of the Red Sea, to make prize of all the ships belonging to Mecca that traded to the Indies.