HI Mohit,
A value category is a range or group of costs that are configured in a value category to be reported together because are not needed detailed ( example you have different accounts for labour hours, internal, external, overtime..but you want display the costs of all labour hour, you will create a value category and assign the ost elements)
THey are very useful for hierarchical reporting because this kind of reports don't have the cost element, only the value category
I hope this can be useful,
REgards