Sheep are tagged at their holding of birth with the flock number of their holding of birth, and an individual number. Those tags remain with them for life.
Individual tag details are recorded each time the animal moves holding, using movement documentation / computer program, and that is how they are kept track of.
One tag is an electronic tag, which is yellow, and the other is a non-electronic copy of the electronic one, colour chosen by whoever tagged them - any colour except yellow, black, red.
Any sheep which are to live more than 12 months and/or which are to move holdings, must have the two tags.
You do not need an electronic tag reader, all the details are printed on the tags so you can read them by eye.
Lambs which will leave their holding of birth before their first birthday and go straight to slaughter need only have one tag. So-called 'slaughter tags' are electronic but the individual number is not written on the tag.