The correct option is B The British broke their alliance with Marathas and Nizam of Hyderabad.
In 1782, the British signed the Salbai Agreement, which gave them the support of the Marathas and the Nizam of Hyderabad. Hyder Ali managed to capture several forts under British control and the city of Kanchipuram and reach the Coromandel coast. He successfully captured Arcot and threatened to attack Wandiwash and Vellore.