The notch visible when the sight is folded down is the "battle sight"; not sure what range it is calibrated for, but it's the trajectory of Mk.VI ball, not Mk.VII.
The circled notch would I think be read from the line indicated from the left hand arrow, and the aperture would be read from the mark indicated by the right hand arrow.
Looks like someone has been prying under the lower end of the leaf and I'd guess that was done when the elevation screw was turned too far down and some pressure needed to be applied to get the leaf to pick up the thread again.
The ".22" stamped at the top suggests the sight was mounted on a .22 training rifle at some point?