The system of Subsidiary Alliance was introduced by Lord Wellesley.

Option 1 correctly states that under this system, a princely state would have to maintain a sizable British military force, thereby having a large standing army at their own expense.

Option 2 is also a true representation of the system, as it was designed as a strategy to keep India secure from Napoleonic threats.

Option 4 correctly identifies that the system was employed to establish British paramountcy over the princely states of India.

Option 3, however, is incorrect because the purpose of the Subsidiary Alliance was not to secure a fixed income for the Company. While financial gain was a factor, it wasn`t the sole purpose or a fixed aspect of the Alliances. Thus, option 3 does not apply to the system of Subsidiary Alliance introduced by Lord Wellesley.