I think this is taking the input pdf image and does "convert" to a jpeg with a "density" of "200" dots per inch. "append" to "$to_file" and resize to 850 pixels?
The intent is to convert the PDF to a format that can be displayed "in-line" in the report, and not needing a special viewer like Acrobat. "-density" and "-resize" are there to make the size and resolution reasonable for printing. "-append" causes the pages to be stacked vertically into a single image, in the case of a multi-page PDF.
The "if (! is_file($to_file))" part makes sure this command (which can take a while) runs only if the output image has not already been created.
Googling for "Postscript delegate failed" suggests a problem with locating the "gs" binary. So perhaps GhostScript is not installed or is not in the path. Just a guess. Otherwise you might try a similar search and see what else turns up.