What do you do with such group mates?

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I have this group mate that just told me today (the second time of our class) that she ONLY intends to pass this unit. And she has no intentions in putting in any extra effort in the report. I was shocked, no APPALLED. I find it outrightly unfair. I, for one, am doing my best and aiming for my distinction and because she is in my group, it'll be unfair to me if she just doesn't do any work. I pointed that out, and she just shrugged at me. How am I to treat this person?