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. 
In grammar, indirect or reported speech (also indirect discourse) is a way of reporting a statement or question. A reported question is called an indirect question. Unlike direct speech, indirect speech does not phrase the statement or question the way the original speaker did; instead, certain grammatical categories are changed.[1] In addition, indirect speech is not enclosed in quotation marks.
Person is changed when the person speaking and the person quoting the speech are different.
In English, tense is changed. In other languages, mood is altered. Latin switches from indicative to the infinitive (statement) or the subjunctive (question).[2]
For example: 
| Direct   speech | Indirect   speech  | 
| "I'm going to the   cinema", he said.  | He said he was going to the   cinema.  | 
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.  | 
sumber: http://www.learnenglish.de/grammar/reportedspeech.htm
              http://en.wikipedia.org/wiki/Indirect_speech 

