The sentence in the Indirect Speech is in Past Continuous Tense. Therefore, the sentence in the Direct Speech will be in Present Continuous Tense.
Past Continuous (Subject + was/were + V1 + ing + Object) will be converted into Present Continuous (Subject + is/am/are + V1 +ing + Object)
For example:
He said that he was checking the assignment. (Indirect Speech)
He said, "I am checking the assignment." (Direct Speech)
The following things in the sentence will change when changed from Indirect Speech to Direct Speech:
'That' will be removed from the sentence.
'Were' will be changed to 'are'.
Therefore, the correct answer is option (d): The mother said, "The kids are playing".