enquire about f7 dec 2012 q5

it shows (1200) because it is being deducted from expenses. It is an income actually.
maybe you are confused because expenses are usually in (x) and not income figures.
Also as a requirement for govt grant, you cannot recognise the grant immediately thats why you have to spread it over the life of the asset as well thus it becomes a deferred income.

For the SOFP part once a govt grant is received, under the deferred income method you treat it as a liability and break it down into current liabilities and non current liabilities where there will be a yearly credit to the income statement that is every year you debit the deferred account of govt grant 1200 and credit I/S 1200 ;
You transfer 1200 to the i/S as income every year until the balance of the govt grant becomes zero.
So there will be a yearly movement of 1200 from NCL to CL to IS
DR Grant (ncl)
CR grant (CL)

DR grant (CL)
CR I/S
Note that this Ias is in contradiction with the iasb framework as it classifies the govt grant as a liability and the definition of a liability is that an entiity have an obligation to meet in the future that will be represented in an outflow of economic resources. But for a grant no repayment is expected