Basically I need this, when you click the menu item "products" I can see all categories with their description and subcategories. I was searching a lot about this feature but didn't find anything helpful..
Thanks

This has to be a custom view.
By default you can see
a) A single category's subcategories and items
or
b) The x latest items from certain categories alongside with the category's description.

You can use custom templates of mod_menu and K2_Content modules to display the categories and items.

Thank you Krikor!
Could you kindly explain a little bit what are k2 templates and where can I find them.

This post will help you with this: www.joomlaworks.net/blog/item/194-k2-inheritance-sub-templating

Thank you! I understood how it is working.
But I'm afraid I need to ask for help once again because I honestly have no idea how to resolve the issue. Well, actually I have ideas, but I'm not experienced enough to accomplish them.

So, we have this menu ("latest items from" type):
bottle-fillers.com/index.php/products

These are parent categories, and what I need to do is make a "li" list of all subcategories in place where "test" string is.

I have two ideas how to do that.
First one is simple but I didn't find anything about it. I would need an "Extra field" for category, where I can manually insert the list I need. This extra field I could php call instead of "description".

The second solution is calling subcategory titles one by one in li format instead of "description <p>". This is hard and I just don't know how to do that, because menu type "latest items" doesn't differentiate parent and child categories.

That's it, hope you can give me a hand...
thanks in advance..

I would need an "Extra field" for category,..

Unfortunately this is not possible for categories. Currently extrafields are only available for items.

The second solution is calling subcategory titles one by one in li format instead of "description <p>". This is hard and I just don't know how to do that, because menu type "latest items" doesn't differentiate parent and child categories.

You try the {loadposition} or {loadmodule} method instead and try to load a menu or K2 categories module which displays the categories.

There are methods as well which I would personally use but they require some coding. If you feel confident you can load modules directly in your K2 overrides. The position could be dynamic and its name could be based on the category's id.