The image on the left describes as much as the party can see at the moment. The party has the initiative and can take first action as they wish. Keep in mind the range on weapons with regards to daggers and axes.
You're +2 to hit anyone in a hex with two people in it. The fellow who "arrested" you is in hex 0406 ~ and like Kismet, he has a +2 armor class as well.
In terms of armor, they are very lightly armored ~ a leather jerkin only, half of leather armor, giving them an AC of 9.
Do as you will.