The National Flag of Bhutan is divided diagonally into equal yellow and orange halves. The division starts from the lower corner of the flag where it is hoisted and runs along the diagonally opposite corner. The yellow portion lies on the upper part of the diagonal division and it represents the yellow scarf worn by His Majesty, which in turn represents the being of His Majesty, the King.
The orange portion lies on the lower part of the flag and it represents the orange scarf worn by the Je Khenpo, the religious head of the country.
The National Flag has a white dragon which spreads equally along the diagonal division towards the upper end. The dragon holds norbu(jewel) by its claws. Read the article:
The Origin and Description of the National Flag and National Anthem of the Kingdom of Bhutan by Dorji Penjore and Sonam Kinga