Direct and Indirect Speech

Direct and Indirect Speech:

Direct Speech / Quoted Speech

Saying exactly what someone has said is called direct speech (sometimes called quoted speech)
Here what a person says appears within quotation marks ("...") and should be word for word.
For example:
She said, "Today's lesson is on presentations."
or
"Today's lesson is on presentations," she said.

Indirect Speech / Reported Speech

Indirect speech (sometimes called reported speech), doesn't use quotation marks to enclose what the person said and it doesn't have to be word for word.
When reporting speech the tense usually changes. This is because when we use reported speech, we are usually talking about a time in the past (because obviously the person who spoke originally spoke in the past). The verbs therefore usually have to be in the past too.
For example:

Direct speech	Indirect speech
"I'm going to the cinema", he said.	He said he was going to the cinema.

Tense change

As a rule when you report something someone has said you go back a tense: (the tense on the left changes to the tense on the right):

Direct speech		Indirect speech
Present simple She said, "It's cold."	›	Past simple She said it was cold.
Present continuous She said, "I'm teaching English online."	›	Past continuous She said she was teaching English online.
Present perfect simple She said, "I've been on the web since 1999."	›	Past perfect simple She said she had been on the web since 1999.
Present perfect continuous She said, "I've been teaching English for seven years."	›	Past perfect continuous She said she had been teaching English for seven years.
Past simple She said, "I taught online yesterday."	›	Past perfect She said she had taught online yesterday.
Past continuous She said, "I was teaching earlier."	›	Past perfect continuous She said she had been teaching earlier.
Past perfect She said, "The lesson had already started when he arrived."	›	Past perfect NO CHANGE - She said the lesson had already started when he arrived.
Past perfect continuous She said, "I'd already been teaching for five minutes."	›	Past perfect continuous NO CHANGE - She said she'd already been teaching for five minutes.

Modal verb forms also sometimes change:

Direct speech		Indirect speech
will She said, "I'll teach English online tomorrow."	›	would She said she would teach English online tomorrow.
can She said, "I can teach English online."	›	could She said she could teach English online.
must She said, "I must have a computer to teach English online."	›	had to She said she had to have a computer to teach English online.
shall She said, "What shall we learn today?"	›	should She asked what we should learn today.
may She said, "May I open a new browser?"	›	might She asked if she might open a new browser.

Link

more info :http://gracielablog-english.blogspot.com/2010/08/direct-and-indirect-speech.html