hi Sanjeev,
If I understand right, you want TEXT1 print when FLAG = 1, TEXT2 to print when FLAG <> 1 and along with these two different cases, you need to check seperately the WA_RECORD-BSART <> 'Z02' to print the TEXT3.
If that is the case then you need to get all the texts in the smartform and then in the conditions tab where you have given FLAG conditions, give 1 = 2 for all the text. This condition will never be true hence none of your TEXTs would print. now remove 1 = 2 from one text at a time and test that TEXT for printing giving the correct conditions. Once all your text are individually working fine, remove the 1 = 2 from all the TEXTs and then you should get expected result.
I hope this helps you. Please revert if still in doubt.
Regards,
DN.