Direct speech is that speech that is used to repeat or quote the exact words spoken. Indirect speech is that speech that tells you what someone said but does not use the person's actual words.
Option A is correct because in indirect speech, quotation marks are not to enclose what the person said, and it doesn't have to be 'word for word'. Here colon is not used after said. In simple language, if reported or indirect speech is used to talk about the past, so we normally change the tense of the words spoken. The Verb 'is' is changed to 'was'. Option B is wrong because the verb is not changed.