Problem with Form's System Menu

I'm adding a menu item to a main form's system menu using this code:

var
  hMenu : THandle;
begin
  hMenu:= GetSystemMenu(Form1.Handle, false);
  AppendMenu(hMenu, mf_Separator, 0, '');
  AppendMenu(hMenu, mf_Enabled, $E010, 'MyCaption');
end;

then showing a pop-up menu when the item is clicked:

procedure TForm1.AppMsg (var Msg : TMsg; var Handled : boolean);
begin
  if Msg.WParam = $E010 then begin
>>    Handled:= true;
    PopUpMenu1.PopUp(Left + 50, Top + 70);
    end;
end;

This works immediately after running the app, but after using other app
features, clicking the menu item does nothing. A breakpoint on the line
marked >> is never reached.

Any ideas what is causing this?

Cheers...

Pete (D3)