Hello Hamadri,
In the code above that you should have something like ServerReport.ReportServerUrl = new System.Uri("http://localhost/reportserver");.
Your reportserverurl is basically kicking back that the application does not have sufficient privileges to access the ReportServerURL.
If you are using <impersonate> in your web.config, I'd recommend granting that user (the imersonated account) full access to the ReportServerURL directory.
A 401 error generally states that the user or application does not have sufficient privileges to access either the web service or machine resource.
I hope that helps,
James