Explanation:

• The first important parliamentary act regarding the Company's affairs was the Regulating Act of 1773. This Act made changes in the constitution of the Court of Directors of the Company and subjected their actions to the supervision of the British Government. The Directors were to lay before the Ministry all correspondence dealing with the civil and military affairs and the revenues of India
• In India, the Government of Bengal was to be carried on by a Governor-General and his Council who were given the power to superintend and control the Bombay and Madras Presidencies in matters of war and peace.
•  The Act also provided for the establishment of a Supreme Court at Calcutta to administer justice to Europeans, their employees, and the citizens of Calcutta. • The Regulating Act soon broke down in practice. It had not given the British Government effective and decisive control over the Company. In India it had placed the Governor-General at the mercy of his Council. Three of the Councillors could combine and outvote the Governor-General on any matter. In practice, Warren Hastings, the first Governor-General under the Act, and three of his Councillors quarreled incessantly, often creating deadlocks in the administration. The Governor-General’s control over the other two Presidencies also proved inadequate in practice.
•  Most important of all, the Act had failed to resolve the conflict between the Company and its opponents in England who were daily growing stronger and more vocal. Moreover, the Company remained extremely vulnerable to the attacks of its enemies as the administration of its Indian possessions continued to be corrupt, oppressive, and economically disastrous.
• The defects of the Regulating Act and the exigencies of British politics necessitated the passing in 1784 of another important act known as Pitt’s India Act. This Act gave the British Government supreme control over the Company’s affairs and its administration in India. It established six Commissioners for the affairs of India, popularly known as the Board of Control, including two Cabinet Ministers. The Board of Control was to guide and control the work of the Court of Directors and the Government of India. In important and urgent matters it had the power to send direct orders to India through a secret committee of Directors. The Act placed the Government of India in the hands of the Governor-General and a Council of three so that if the Governor-General could get the support of even one member, he could have his way. The Act clearly subordinated the Bombay and Madras Presidencies to Bengal in all questions of war, diplomacy, and revenues. With this Act began a new phase of the British conquest of India. While the East India Company became the instrument of British national policy, India was to be made to serve the interests of all sections of the ruling classes of Britain.
• Hence, only statement 2 is correct.