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 On the 20th of October the fleet left Table Bay and, towards the end of December, anchored in the Bay of Antongil, in Madagascar, where excellent fresh provisions were again obtained. But dysentery broke out, and there were several deaths. After encountering numerous dangers in crossing the Indian Ocean, and having touched at the Nicobar Islands, Lancaster anchored his fleet in the road of Acheen, in Sumatra, on the 5th of June, 1601. His reception by the sultan was cordial and satisfactory in every respect. In the first audience the letter from Queen Elizabeth was presented; and on subsequent occasions Lancaster made progress with the negotiations for opening trade. Pepper, cloves, and cinnamon were bought for the return cargo; and in October the sultan's answer to the queen's letter was brought on board.

The fleet finally left Acheen on the 9th of November, the Ascension proceeding direct to England with the news, and the Dragon shaping a course along the coast of Sumatra in search of the Susan, which had been previously sent to Priamon for a cargo of pepper. She joined off Priamon, and the ships anchored in the road of Bantam, in Java, on the 16th of December. Here the merchants landed to sell the goods brought from England, in exchange for which further supplies of pepper were shipped. A factory was established under Mr. William Starkey, to provide lading for the ships which were to be sent out on the Company's second venture. The King of Bantam sent a letter and presents to Queen Elizabeth, and on the 20th of February, 1602, the ships began their homeward course. Captain John Middleton of the Hector was taken ill and died at Bantam. His brother Henry, who was in the Susan, was destined to command the Company's second voyage.

On the 3rd of May a great storm was encountered between Madagascar and the Cape; and early next morning the Dragon's rudder was torn clean away from the stern of the ship. She drifted for some days at the mercy of the waves, once almost down to 40° S. in sleet and snow, the Hector always manfully keeping company. At last the mizzen-mast was taken out, and passed over the stern to serve as a temporary rudder, but it was found to shake the ship in such a way as to be dangerous, and it was got in again with all convenient speed. The carpenters then set to work to shape a rudder out of the mizzen-mast; but the irons had also been carried away, and there were only two wherewith to hang the new rudder. The men wanted to abandon the ship and go on board the Hector.