direct-indirect

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.

!Note - There is no change to; could, would, should, might and ought to.

Direct speech	Indirect speech
"I might go to the cinema", he said.	He said he might go to the cinema.

You can use the present tense in reported speech if you want to say that something is still true i.e. my name has always been and will always be Lynne so:-

Direct speech	Indirect speech
"My name is Lynne", she said.	She said her name was Lynne. or She said her name is Lynne.

You can also use the present tense if you are talking about a future event.

Direct speech (exact quote)	Indirect speech (not exact)
"Next week's lesson is on reported speech ", she said.	She said next week's lesson is on reported speech.

Time change

If the reported sentence contains an expression of time, you must change it to fit in with the time of reporting.
For example we need to change words like here and yesterday if they have different meanings at the time and place of reporting.

Today	+ 24 hours - Indirect speech
"Today's lesson is on presentations."	She said yesterday's lesson was on presentations.

Expressions of time if reported on a different day
this (evening)	›	that (evening)
today	›	yesterday ...
these (days)	›	those (days)
now	›	then
(a week) ago	›	(a week) before
last weekend	›	the weekend before last / the previous weekend
here	›	there
next (week)	›	the following (week)
tomorrow	›	the next/following day

In addition if you report something that someone said in a different place to where you heard it you must change the place (here) to the place (there).
For example:-

At work	At home
"How long have you worked here?"	She asked me how long I'd worked there.

Pronoun change

In reported speech, the pronoun often changes.
For example:

Me	You
"I teach English online."	She said she teaches English online.

Reporting Verbs

Said, told and asked are the most common verbs used in indirect speech.
We use asked to report questions:-
For example: I asked Lynne what time the lesson started.
We use told with an object.
For example: Lynne told me she felt tired.
!Note - Here me is the object.
We usually use said without an object.
For example: Lynne said she was going to teach online.
If said is used with an object we must include to ;
For example: Lynne said to me that she'd never been to China.
!Note - We usually use told.
For example: Lynne told me that she'd never been to China.
There are many other verbs we can use apart from said, told and asked.
These include:-

accused, admitted, advised, alleged, agreed, apologised, begged, boasted, complained, denied, explained, implied, invited, offered, ordered, promised, replied, suggested and thought.

Using them properly can make what you say much more interesting and informative.
For example:
He asked me to come to the party:-

He invited me to the party.

He begged me to come to the party.

He ordered me to come to the party.

He advised me to come to the party.

He suggested I should come to the party.

Use of 'That' in reported speech

In reported speech, the word that is often used.
For example: He told me that he lived in Greenwich.
However, that is optional.
For example: He told me he lived in Greenwich.
!Note - That is never used in questions, instead we often use if.
For example: He asked me if I would come to the party. 

http://www.learnenglish.de/grammar/reportedspeech.htm