Direct and indirect speech

How do you change this sentence into indirect speech?

" He was going on about the difficulties faced in the project when I walked into the room, " she said.

My answer is -

She said that he had been going on about the difficulties faced in the project when she walked into the room.

However, I have difficulty explaining why I use "walked" instead of "had walked", given the rule of moving a tense back when reporting speech.

Thanks.