Option b is the correct answer. Statement 1 is correct: Daud Khan Panni and Saadatullah Khan were the founders of the dynasty that ruled Arcot, a princely state that was established by the Mughal emperor Aurangzeb in 1692 and later became a protectorate of the British East India Company Statement 2 is correct: Arcot became the site of a protracted struggle between the English and Dutch East India Companies from the 1740s, as part of their rivalry for trade and influence in India. Statement 3 is incorrect: The State of Arcot in the 18th century was characterized by centralization rather than decentralization. The rulers of Arcot sought to consolidate their power and establish a strong central authority. Statement 4 is correct: The other major State to emerge in South India at this time was Mysore. In the 18th century, the Kingdom of Mysore, under the leadership of rulers like Hyder Ali and Tipu Sultan, emerged as a significant power in South India.