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How to set the system clock sync with RTC (Hardware Clock / BIOS). I am writing a script that uses a system clock in order to start the system with alarm.
For this the sole requirement is to have a proper RTC clock. On my test system (SLES 10 SP4), I use NTP Server to manage the system clock. But the RTC clock is always ahead.
So for example : currently the system clock shows 14:00 26.05.2016 and the RTC shows 16:00 Hrs. I read the man pages of hwclock and it shows that following command
would sync the RTC clock to system clock. Which it did.

hwclock --systohc --localtime.

But after a reboot/shutdown, when the system comes up again , the RTC is again messed up. So there is something more which controls the RTC when the system is rebooted.
Could someone point me in the right direction. Thanx in advance.

You can use the hwclock command to set the hardware clock.

From the man hwclock page :

 --set Set the Hardware Clock to the time given by the --date option.

You can apply the current system time to the hw clock with :

hwclock -w

or even manually with :

hwclock --set --date "$(date)"

After you added details to your question, my answer is not enough though, so here are more details below.

You can check timezone with the timedatectl status command.

List timezones with timedatectl list-timezones.

You can set your timezone to UTC for example with timedatectl set-timezone UTC.

You will find more details about timezone settings here.

It depends how you system is set up. Normally Unix expects the RTC to be in GMT/UTC, and the system knows its offset/timezone... But this is incompatible with old Windows systems that expect the RTC to be in local time and this causes problems in multi-boot systems. So there is a setting in /etc/default/rcS to tell if your system uses a RTC in GMT or local time (you likely want the latter, which is not the default):

# assume that the BIOS clock is set to UTC time (recommended)
UTC=yes

Is this a virtual machine? Or a physical system on blade hardware?

Some manufacturers' blade hardware has an option to sync the hardware clocks of each blade to the clock of the management processor of the blade enclosure. At least on (some models of) Fujitsu's blade hardware, this sync option was enabled by default. To turn it off, you had to access the BIOS settings of the blade.

Virtual machines usually sync their virtual hardware clock according to the clock of the physical host system at VM initialization time, since a virtual machine cannot have a real physical hardware clock. If your hosting provider has primarily Windows systems, the syncing may have been configured to use local time rather than UTC.