Featured Small Union flag in wooden "bullet" case

Not sure if this is the correct category to post this in?
I have just acquired this unusual little item and wondered if anyone would know what it would have been used for. The turned wooden bullet shaped case unscrews at the base and there is a small Union flag rolled up inside. The flag measures approximately 7 x 3.5 inches. I don't know if the case was made to house the flag originally or if it's just been put in it at some point. There are some letters and numbers on the flag and on the bottom of the base/lid but I have no idea what they mean!
If anyone can shed any light on it's purpose I'd be very grateful.

 

Does it say 'made in smaland'? Småland is in Sweden.

 

These containers come il a zillion shapes and sizes ( I sort of collected them

treen boxes in english, boite en buis ( box wood) in french

 

No, although a bit blurred it's definitely "made in England"!

 

Oh yes, I have a few myself but the similar number & letter markings on the base of this one and on the flag just made me wonder if they started out life together.

 

Same question here. It's a rather odd combination, to my eyes.

 

Why the flag, I have absolutely no idea, but the wooden holder I would have said was for holding needles possibly. My mother had a few similar, some of them made of ivory, others wood. She kept needles in hers, but that doesn't of course mean anything!

 

Generally. Unless you wanted toothpicks in a pocket for after lunch or some such.

 

Can’t read that top word on the base, or at least, it makes no sense.

what’s below it looks like a price. 1/2 1/2. One shilling two and a half pennies. Yes, it’s treen, and it’s also made of boxwood.

I'm wondering if it’s some little soldiers keepsake. During ww1 and some other conflicts, soldiers carried little luck pieces. The best known are miniature teddy bears.

 

I can't make head or tail of the writing on the base either - looks a bit like K100/K9 to me. The number nearest the edge on the flag is 2 1/2 - wonder if it ties in with what is on the base?
I also was thinking along military lines. The flag is in such a good clean condition that it doesn't appear to have had much (if any) use. I should have waved it wildly today of all days!