This is not just a flag. Its a graphics with reflective shadows and look s really cool. If you wanna be a web graphics designer or any other digital artist you gotta learn these basic things. Its alot of fun. Here is how i did it.

1) First draw a flag or just google the web for a flag (i found my one here).
2) Using the Centre marquee tool draw a circle around the centre of the flag and delete the rest (Use shift key to make a fine circle)
3) Add inner glow to the flag. Set the color to white and size about 23
4) Add Bevel, set the bevel size to about 200. Don’t make it too dark or else it will look very fake.
5) Using the centre marquee tool draw a half circle and fill it with white. Change its opacity to about 17. Same way draw a black circle and place it at the bottom.
Thats it guys. Really simple. Really cool. Similarly you can create many cool realistic icons, logos...etc. Just give it a try.