Hey my application has universal storyboard with size classes and auto-layout, the designers sends me PSD File but the PSD File is iPhone 5 Layout i want to know what is the correct way for the designers / developers to use size classes (universal storyboard) ?
It depends how you would like to display UI on iPad. Based on that you can utilise the existing psd.
A size class is a property applied to any view or view controller that represents the amount of content that can be displayed in a given horizontal or vertical dimension.