The present invention discloses a composition comprising not less than 5% w/w Pterocarpus marsupium extract standardized to contain not less than 0.5% w/w Pterocarposide and not less than 0.5% w/w Sabioside and a method for isolating the same. The invention also discloses a method of activating AMPK and inhibiting glucose production in mammalian cells using the aforementioned composition.