SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                          ----------------------

                                FORM 10-KSB

[x] Annual Report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

For the fiscal year ended June 30, 2001

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

Commission file number 0-6877


                       SANTA FE FINANCIAL CORPORATION
                       ------------------------------
                (Name of Small Business Issuer in Its Charter)

            Nevada                                      95-2452529
   ------------------------------                    ------------------
  (State or Other Jurisdiction of                    (IRS Employer
   Incorporation or Organization)                    Identification No.)


  820 Moraga Drive, Los Angeles, California               90049
  -----------------------------------------             ----------
  (Address of Principal Executive Offices)              (Zip Code)

                               (310) 889-2500
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:

                          $.10 Par Value Common Stock
                          ---------------------------
                                (Title of Class)

    Check whether the issuer: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]  No

    Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B contained in this form, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendments to
this Form 10-KSB.  [X]

    The issuer's revenues for the year ended June 30, 2001 were $8,349,365.

                                                                Page 1 of 42
<PAGE>


The aggregate market value of the common equity held by non-affiliates of
issuer computed by reference to the price at which the stock sold on September
21, 2001 was $7,272,902.

The number of shares outstanding of issuer's $.10 Par Value Common Stock, as
of September 21, 2001, was 1,178,710.

Transitional Small Business Disclosure Format:  Yes [ ]    No [X]




                     DOCUMENTS INCORPORATED BY REFERENCE: None


                            TABLE OF CONTENTS

PART I                                                              PAGE

    Item  1.  Description of Business.                                3

    Item  2.  Description of Property.                                4

    Item  3.  Legal Proceedings.                                      7

    Item  4.  Submission of Matters to a Vote of Security Holders.    7

PART II

    Item  5.  Market For Common Equity and Related                    8
              Stockholder Matters.

    Item  6.  Management's Discussion and Analysis of Financial       9
              Condition and Results of Operations.

    Item  7.  Financial Statements and Supplementary Data.            11

    Item  8.  Changes in and Disagreements with Accountants on        26
              Accounting and Financial Disclosure.

PART III

    Item  9.  Directors, Executive Officers, Promoters and            27
              Control Persons; Compliance with Section 16(a)
              of The Exchange Act.

    Item 10.  Executive Compensation.                                 29

    Item 11.  Security Ownership of Certain Beneficial Owners and     30
              Management.

    Item 12.  Certain Relationships and Related Party Transactions.   32

    Item 13.  Exhibits, Financial Statement Schedules, and            33
              Reports on Form 8-K.

SIGNATURES                                                            42

                                                                Page 2 of 42
<PAGE>


                                   PART I

Item 1.  Description of Business.

BUSINESS DEVELOPMENT

Santa Fe Financial Corporation ("Santa Fe" or the "Company") was incorporated
under the name of Tri Financial Corporation in the State of Nevada on July 25,
1967 as a wholly owned subsidiary of Crateo, Inc, a public company.  On
October 31, 1969, Crateo issued a one-for-one stock dividend of all of its
shares of Tri Financial to its common shareholders.  On September 17, 1970,
the name of the Corporation was changed to Santa Fe Financial Corporation.

Since 1988, the Company's principal source of revenue has been, and continues
to be, derived from the management of its 68.8% owned subsidiary, Portsmouth
Square, Inc. ("Portsmouth").  Portsmouth has a 49.8% limited partnership
interest in the Justice Investors limited partnership ("Justice Investors")
and also serves as one of the two general partners.  The other general
partner, Evon Garage Corporation ("Evon"), acts as the managing general
partner; however, the overseeing of operations and all significant partnership
decisions require the active participation and approval of both general
partners.  The Company and Evon jointly consult and determine the amount of
partnership reserves and the amount of cash to be distributed to the limited
partners.  There are approximately 94 limited partners in Justice Investors.

Pursuant to the terms of the partnership agreement, voting rights of the
partners are determined according to the partners' entitlement to share in the
net profit and loss of the partnership.  The Company is not entitled to any
additional voting rights by virtue of its position as a general partner.
The partnership agreement also provides that no portion of the partnership
real property can be sold without the written consent of the general and
limited partners entitled to more than 72% of the net profit.

The Company also owns a controlling 55.4% equity interest in Intergroup
Woodland Village, Inc. ("Woodland Village"), which owns a 27-unit multi-family
apartment complex located in Los Angeles, California. The complex was acquired
in July 1999 at an initial cost of $4,075,000 in a tax-deferred exchange.

On May 16, 2000, the Board of Directors of Santa Fe approved a change in
fiscal year end of the Company from December 31 to June 30 to coincide with
the fiscal year end of its parent company, The Intergroup Corporation.


BUSINESS OF ISSUER

The Company's principal business is to purchase and manage real estate
operations.  The real estate properties include the land, improvements and
leaseholds at 750 Kearny Street, San Francisco, California commonly known as
the Holiday Inn Financial District/Chinatown ("Holiday").  The interest in
this property is held by the Justice Investors partnership.  The most
significant income source is a lease between the partnership and Felcor
Lodging Trust, Inc.  ("Felcor, NYSE: FCH) for the hotel portion of the
property.  The partnership also derives income from its lease of the garage
portion of the property to Evon.  Santa Fe and Portsmouth jointly oversee
their interest in the operations of the hotel and the parking garage as part
of its effort to improve revenues.

The Company's operations also include a controlling interest in a 27-unit
multi-family apartment complex located in Los Angeles, California.  The
Company also derives income from the investment of its cash and securities
assets.  The

                                                                  Page 3 of 42


<PAGE>

Company has invested in income-producing instruments, equity and debt
securities and will consider other investments if such an investment will
offer growth or profit potential.


COMPETITION

The hotel enjoys a favorable year-round occupancy rate and is part of Holiday
Inn's worldwide reservation system.  It was designed to Holiday's
specifications to serve both business persons and tourists and caters to both
individuals and tour groups.  It also handles conference and business
meetings, having meeting and dining facilities for groups of up to 400 people.
Management believes that the hotel, garage and apartments are in a competitive
position in their respective markets; however, some competitors may have
better financial resources and newer facilities.  The Company intends, where
appropriate, to continue in its efforts to find ways to improve the physical
condition of the hotel, garage and apartment properties to remain competitive.


EMPLOYEES

As of June 30, 2001, the Company had two full-time employees.  The employees
are not part of any collective bargaining agreement, and the Company believes
that its employee relations are satisfactory.


Item 2. Description of Property.

PROPERTIES

As of June 30, 2001, Santa Fe's investments in real property consisted of a
San Francisco hotel and a Los Angeles, California apartment complex.


San Francisco, California Hotel.

The San Francisco hotel property owned by Justice Investors is located near
the Financial District, one block from the Transamerica Pyramid.  Embarcadero
Center is within walking distance.  Chinatown is directly across the bridge
that runs from the hotel to Portsmouth Square Park.  The hotel is a
31-storied, steel and concrete, A-frame building which contains 566 guest
rooms situated on 22 floors.  One floor houses the Chinese Culture Center
pursuant to a long-term, nominal-rent lease, and three floors are devoted to a
reservation desk, lobby shops, dining room, coffee shop, hotel support
facilities, a fitness center, a guest business center, meeting and banquet
rooms and offices.  Other features of the Holiday Inn include a rooftop
swimming pool, 5-storied underground garage and pedestrian bridge across
Kearny Street connecting the hotel and the Chinese Culture Center with
Portsmouth Square Park in Chinatown.  The bridge, built and owned by the
partnership, is included in the lease to the Chinese Culture Center.

On March 15, 1995, Justice Investors entered into an amended and restated
lease with an effective date of January 1, 1995.  That lease was assumed by
Felcor, effective July 28, 1998.  The initial term of the new lease is for a
10-year term expiring on December 31, 2004. The lessee also has an option to
renew the lease for one additional term of five years which would extend the
lease to

                                                                   Page 4 of
42


<PAGE>

December 31, 2009.  The lease requires the lessee to pay an annual rent of the
greater of twenty percent (20%) of gross room revenues or $2,500,000 plus
fifty percent (50%) of total revenues from the demised premises less operating
expenses, base rent and capital requirements.

The lease also required the lessee and Justice Investors to make substantial
capital improvements and renovations to the hotel property. A rehabilitation
budget of more than $8 million was set forth in the new lease agreement, of
which the partnership was responsible for $2 million and the lessee was
responsible for the remainder.  As of June 30, 2000, the partnership had paid
all of its $2 million commitment.  Rehabilitation and renovation of the guest
rooms, hallways, elevators and safety systems was completed during 1999.
Under the terms of the lease, the lessee is responsible for all maintenance
and repairs to the property, certain capital improvements, taxes and
insurance.  In the opinion of management the property is adequately covered by
insurance.

The garage lease between the partnership and Evon provides for a monthly
rental of sixty percent (60%) of gross parking revenues with a minimum rent of
$21,750 per month.  That lease expires in November 2010.  The lessee is
responsible for insurance, repairs and maintenance, utilities and all taxes
assessed against the improvements to the leased premises.  The garage is
operated by Ampco Parking pursuant to a sublease agreement with Evon.


Los Angeles, California Apartment Complex

The property owned by the Company's 55.4% subsidiary Woodland Village, is a
27-unit apartment complex located Los Angeles, California. The Company's
equity interest in Woodland Village was acquired on December 31, 1997 at a
cost of $858,600.  For the year ended June 30, 2001, real estate property
taxes were approximately $51,009.  Depreciation is recorded on the
straight-line method based upon an estimated useful life of 40 years. As of
June 30, 2001, the outstanding mortgage balance was $1,925,529.  The mortgage
carries an interest rate of 7.73% and matures in October 2029.  In addition to
the mortgage, as part of the initial purchase of the property, Woodland
Village obtained two 5-year interest only loans of $201,928 and $162,563 from
the Company and the Company's parent, The InterGroup Corporation
("InterGroup"), respectively.  Both notes mature in September 2004.  The
$201,928 note was eliminated in consolidation.

Woodland Village leases units in the apartment complex on a short-term basis,
with no lease extending beyond one year.  The effective rental rate per rental
unit was approximately $17,413.  As of June 30, 2001, the property was 96%
occupied.  In the opinion of management the property is adequately covered by
insurance.


INVESTMENT POLICIES

The most significant real estate investment of the Company is the San
Francisco hotel through its control of Portsmouth.  The Company will continue
to explore ways to increase the value of Justice Investors and to improve
operations of the hotel.  The Company has also invested in multifamily
residential property through its controlling interest in Woodland Village.

The Company may also look for new real estate investment opportunities in
hotels, apartments, office buildings and shopping centers.  The acquisition of
any new real estate investments will depend on the Company's ability to find

                                                                 Page 5 of 42


<PAGE>

suitable investment opportunities and the availability of sufficient financing
to acquire such investments.  To help fund any such acquisition, the Company
plans to borrow funds to leverage its investment capital.  The amount of this
mortgage debt will depend on a number of factors including, but not limited
to, the availability of financing and the sufficiency of the project's
projected cash flows to support the operations and debt service.

The Company has also invested in income producing instruments, equity and debt
securities, which may include interests in real estate based companies and
REITs, where financial benefit could inure to its shareholders through income
and/or capital gain.  Those investments are made under the supervision of the
Company's Securities Investment Committee, the Chairman of which is the
Company's Chairman of the Board and President.  The Company primarily will
invest in securities priced above $5.00 a share of companies listed on the New
York and American Stock Exchanges and The Nasdaq National Stock Market, Inc.
Although most of the Company's marketable securities investments are in
companies listed on those stock markets, the overall investment portfolio and
some of the Company's investment strategies could be viewed as risky and the
market values of the portfolio may be subject to large fluctuations.

The Company may realize gains and losses in its overall investment portfolio
from time to time to take advantage of market conditions and/or manage the
portfolio's resources and the Company's tax liability.  The Company may also
assume short positions in marketable securities.  Short sales are used by the
Company to potentially offset normal market risks undertaken in the course of
its investing activities or to provide additional return opportunities.  The
Company may utilize margin for its marketable securities purchases through the
use of standard margin agreements with national brokerage firms.  The use of
available leverage is guided by the business judgment of management. The
Company may also use options and futures to hedge concentrated stock positions
and index futures to hedge against market risk and enhance the performance of
the Company's portfolio while reducing the overall portfolio's risk and
volatility.

On June 28, 2001, the Company, its parent, The InterGroup Corporation
("InterGroup"), and its subsidiary Portsmouth entered into an agreement with
an investment advisory company, which assumed responsibility for the
performance of the investment portfolios of the Company, its parent Santa Fe,
and Intergroup as of March 5, 2001.  The agreement provides for a quarterly
management fee calculated at one-fourth of 1% of the average value of the net
assets in the account during each quarter. The agreement also provides for
certain performance based fees ranging from 2.5% to 10% on profits that exceed
11% of the opening account value.  The Securities Investment Committee
monitors the performance of the portfolio. The agreement may be terminated by
either party upon thirty days written notice.

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date.  During
1999, the Company increased the turnover of its investment portfolio and
engaged in increased trading activities designed to maximize the overall
return on investment activities in the near term. This resulted in portions of
the Company's investments in marketable securities being classified as
"trading" as defined by generally accepted accounting principles.  After
consultation with the Investment Committee of the Board of Directors,
management determined that the classification of the entire portfolio as
trading beginning July 1, 1999 would be more consistent with Company's overall
investment objectives and activities. As a result, beginning July 1, 1999, all
unrealized gains and losses on the Company's investment portfolio were
recorded through the income statement.
                                                                Page 6 of 42
<PAGE>

As Chairman of the Securities Investment Committee, the Company's President
and Chief Executive officer, John V. Winfield, oversees the investment
activity of the Company in public and private markets pursuant to authority
granted by the Board of Directors.  Mr. Winfield also serves as Chief
Executive Officer and Chairman of Portsmouth and InterGroup and oversees the
investment activity of those companies.  Depending on certain market
conditions and various risk factors, the Chief Executive Officer, his family,
Portsmouth and InterGroup may, at times, invest in the same companies in which
the Company invests.  The Company encourages such investments because it
places personal resources of the Chief Executive Officer and his family
members, and the resources of Portsmouth and InterGroup, at risk in connection
with investment decisions made on behalf of the Company.  As discussed above,
the Company has entered into an agreement with an investment advisory company,
which management believes will increase efficiencies in the management of its
securities investments.


Item 3.  Legal Proceedings.

The following is furnished to update information previously reported in the
Company's Annual Report on Form 10-KSB for the six months ended June 30, 2000
and in its Form 10-QSB Report for the quarterly period ended March 31, 2001.

Guinness Peat Group plc, et al. v. Robert N. Gould, et al., Case No. 685760,
filed on February 22, 1995 in the Superior Court of the State of California of
the County of San Diego.  As previously reported, in November 2000, the
Company received a payment of $1,188,618, which represented the total amount
of attorney's fees, costs and accrued interest due on its original judgment as
the prevailing party in that action.  On January 5, 2001, the Company was
awarded an additional $84,092 in attorneys' fees and costs incurred in
successfully defending its judgment on appeal.  On March 22, 2001, the Company
received payment in the amount of $91,387 in satisfaction of all amounts due
to it for attorneys' fees, interest and collection costs.



Item 4.  Submission of Matters to a Vote of Shareholders.

There were no matters submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.


                                                                 Page 7 of 42
<PAGE>


                                PART II

Item 5.  Market For Common Equity and Related Stockholder Matters.

MARKET INFORMATION

Santa Fe's common stock trades on the Small-Cap Market tier of The Nasdaq
Stock Market, Inc. ("Nasdaq")under the symbol SFEF.  The following table sets
forth the range of high and low sales prices for Santa Fe's common stock for
each full quarterly period for the fiscal years ended June 30, 2001 and June
30, 2000, as reported by Nasdaq.


Fiscal 2001                             High            Low
-----------                             -----          -----
First Quarter (7/1 to 9/30)            $12.00         $ 8.75
Second Quarter (10/1 to 12/31)         $14.00         $ 9.00
Third Quarter (1/1 to 3/31)            $13.75         $10.75
Fourth Quarter (4/1 to 6/30)           $13.50         $10.10

Fiscal 2000                             High            Low
-----------                             -----          -----
First Quarter (7/1 to 9/30)            $ 9.50         $ 8.50
Second Quarter (10/1 to 12/31)         $10.75         $ 8.63
Third Quarter (1/1 to 3/31)            $10.63         $ 8.50
Fourth Quarter (4/1 to 6/30)           $10.50         $ 8.75


As of September 21, 2001 the approximate number of holders of record of the
Company's Common Stock was 540.  Such number of owners was determined from the
Company's shareholders records and does not include beneficial owners of the
Company's Common Stock whose shares are held in the names of various brokers,
clearing agencies or other nominees.  There are approximately 715 beneficial
shareholders of the Company's Common Stock.


DIVIDENDS

On February 1, 2000, the Board of Directors of the Company determined that it
did not foresee the Company paying any cash dividends on its Common Stock in
the immediate future.  Instead, it is the intent of the Company to deploy its
capital in a manner to increase its operating activities.

On December 31, 1997, the Company issued 31,800 shares of 6% cumulative,
convertible voting preferred stock (the "Preferred Stock")in exchange for a
55.4% interest in Woodland  from InterGroup.  As a result of the Company's
two-for-one stock split, the number of Preferred Shares was adjusted to
63,600.  Each share of Preferred Stock has a liquidation preference of $13.50
and is convertible into one share of restricted common stock of the Company at
an exercise price of $13.50 per share, with an eight-year conversion exercise
period.  The preferred stock has voting rights as if converted into common
stock.  InterGroup elected to forego any dividend payments on the preferred
stock for the year ended December 31, 1998.  Beginning October 1, 1999,
Intergroup informed the Board that they will no longer forgo dividend payments
on its preferred stock.  During the year ended 2000, the Company paid
dividends of $38,284 to Intergroup.  For the year ended June 30, 2001, the
Company paid dividends of $51,481.

                                                                  Page 8 of 42
<PAGE>


Item 6. Management's Discussion and Analysis of Financial
        Condition and Results of Operations

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

The Company may from time to time make forward-looking statements and
projections concerning future expectations.  When used in this discussion, the
words "estimate," "project," "anticipate" and similar expressions, are
intended to identify forward-looking statements.  Such statements are subject
to certain risks and uncertainties, such as the impact of terrorism and war on
the national and international economies, including tourism and the securities
markets, partnership distributions, general economic conditions of the hotel
industry in the San Francisco area, securities markets, litigation and other
factors, including natural disasters and those discussed below, that could
cause actual results to differ materially from those projected.  Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as to the date hereof.  The Company undertakes no obligation
to publicly release the results of any revisions to those forward-looking
statements which may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.


RESULTS OF OPERATIONS

The Company's principal sources of revenue continue to be derived from the
investment of its 68.8% owned subsidiary, Portsmouth, in the Justice Investors
limited partnership, rental income from its investment in a multi-family real
estate property and income received from investment of its cash and securities
assets.  The partnership derives most of its income from a lease of its hotel
property to Felcor and from a lease with Evon Garage Corporation.

On May 16, 2000, the Board of Directors of Santa Fe approved a change in
fiscal year end of the Company from December 31 to June 30 to coincide with
the fiscal year end of its parent company, The InterGroup Corporation.


Twelve Months Ended June 30, 2001 Compared to Twelve Months Ended June 30,
2000

Net income for the Company decreased to $2,621,641 for the twelve months ended
June 30,2001 from $3,178,450 for the twelve months ended June 30, 2000.  The
decrease in net income was primarily due to the decrease in total revenue,
partially offset by a decrease in total costs and expenses.

The decrease in total revenue to $8,349,365 from $10,721,107 was primarily due
to a decrease in net gains on marketable securities to $1,992,196 from
$4,311,821.  The Company also had gains on the sale of real estate of
$1,176,292 in the prior period, while no sale of real estate occurred during
the current period.  These decreases were partially offset by the increase in
other income to $1,403,552 from $214,117.

The decrease in equity in net income of Justice Investors to $3,927,635 from
$3,935,121 was primarily attributable to the decrease in occupancy of the
hotel, offset by the increase in average room rate during the current fiscal
year.

The decrease in net investment gains to $1,992,196 from $4,311,821 was
primarily due to the reclassification of accumulated comprehensive income of
$4,113,680 from unrealized gain during fiscal 2000 when the Company began to
treat the investment securities as trading securities.  The decrease was
partially offset by the continuing performance improvements on the Company's
investment
                                                                Page 9 of 42


<PAGE>

portfolio.  For the twelve months ended June 30, 2001, the Company had net
unrealized gains of $1,117,992 and net realized gains of $874,204.  Gains and
losses on marketable securities may fluctuate significantly from period to
period in the future and could have a significant impact on the Company's net
income.  However, the amount of gain or loss on marketable securities for any
given period may have no predictive value and variations in amount from period
to period may have no analytical value.

The increase in other income to $1,403,552 from $214,117 was primarily due to
the receipt of the judgement of attorneys' fees in the amount of $1,188,618 in
November 2000 and $91,387 in March 2001.

The increase in margin interest and trading expenses to $1,152,063 from
$972,908 was primarily due to payments of investment management fees of
$137,500 during the current fiscal year.  No such fees were not paid in the
prior year.

Income tax expense decreased 34% to $2,600,449 from $3,917,979 as a result of
the 30% decrease in income before tax.

Minority interest decreased to $783,158 from $1,465,456 as a result of reduced
income generated by the Company's subsidiaries.


FINANCIAL CONDITION AND LIQUIDITY

The Company's cash flows are primarily generated by its subsidiary's
investment in the Justice Investors limited partnership, which derives the
majority of its income from its lease with Felcor and a lease with Evon. In
addition to the monthly limited partnership distributions it receives from
Justice Investors, the Company's subsidiary also receives monthly management
fees as a general partner.  The Company also derives revenue from its
investment in a multi-family real estate property and the investment of its
cash and securities assets.

As a result of increases in the amount of rental income from the hotel lease,
and lower interest expenses due to the reduction in notes payable, the general
partners of Justice Investors decided to increase the monthly distribution to
limited partners effective with the September 1999 distribution.  As a result,
Portsmouth's monthly distribution increased to $209,160 from $139,440. The
increase in monthly distributions can be characterized as special
distributions and, at any time, unforeseen circumstances could dictate a
change in the amount distributed.  The general partners will continue to
conduct an annual review and analysis to determine an appropriate monthly
distribution for the ensuing year.  At that time, the monthly distribution
could be increased or decreased. For the year ended June 30, 2001, the Company
received cash distributions of $4,392,360 from Justice Investors.

The Company has invested in short-term, income-producing instruments and in
equity and debt securities when deemed appropriate.  The Company's marketable
securities are classified as trading with unrealized gains and losses recorded
through the statement of income.  Effective March 5, 2001, the Company
implemented certain procedures and investment strategies, such as reducing the
amounts due to securities broker, which management believes will decrease the
potential for risk and increase efficiencies in the management of its
securities investments.

                                                                 Page 10 of 42
<PAGE>


On May 16, 2000, the Board of Directors increased the number of shares that
the Company is authorized to repurchase under its stock buy-back program by an
additional 70,000 shares to a total of 170,000 shares.  As of June 30, 2001,
the Company had repurchased 97,028 shares of its Common Stock for an aggregate
consideration of $940,619. On July 27, 2001, the Board of Directors decided to
discontinue the Company's stock buy-back program preserving Company's cash
assets for other corporate purposes.

The events of September 11, 2001, had a dramatic impact on the domestic and
global economies, including the hospitality industry, and also resulted in a
significant decline in securities markets.  Although the Company can expect
some decline in revenues as a result of those events, management believes that
its capital resources will be adequate to meet its current and future
obligations.


IMPACT OF INFLATION

Hotel room rates are typically impacted by supply and demand factors, not
inflation, since rental of a hotel room is usually for a limited number of
nights.  Room rates can be, and usually are, adjusted to account for
inflationary cost increases.  To the extent that Felcor is able to adjust room
rates, there should be minimal impact on partnership revenues due to
inflation.  Partnership revenues are also subject to interest rate risks,
which may be influenced by inflation.  For the two most recent fiscal years,
the impact of inflation on the Company's income is not viewed by management as
material.  The impact of inflation on the Company's multifamily real estate is
also not viewed by management as material.



Item 7. Financial Statements

INDEX TO FINANCIAL STATEMENTS                                     PAGE

Report of Independent Accountants                                  12

Consolidated Balance Sheet - June 30, 2001                         13

Consolidated Statements of Income - For
  Year Ended June 30, 2001, Year Ended
  June 30, 2000 (Unaudited), Six Months Ended
  June 30, 2000, and Year Ended December 31, 1999                  15

Consolidated Statements of Shareholders' Equity - For
  Year Ended June 30, 2001, Year Ended
  June 30, 2000 (Unaudited), Six Months Ended
  June 30, 2000, and Year Ended December 31, 1999                  15

Consolidated Statements of Cash Flows - For
  Year Ended June 30, 2001, Year Ended
  June 30, 2000 (Unaudited), Six Months Ended
  June 30, 2000, and Year Ended December 31, 1999                  16

Notes to Consolidated Financial Statements                         17


                                                               Page 11 of 42
<PAGE>



                   Report of Independent Accountants

To the Board of Directors and
Shareholders of Santa Fe Financial Corporation

In our opinion, based on our audit, the accompanying balance sheet and the
related statements of income and comprehensive income, of cash flows, and of
changes in shareholders' equity present fairly, in all material respects, the
financial position of Santa Fe Financial Corporation at June 30, 2001, and the
results of its operations and its cash flows for the year ended June 30, 2001,
the six months ended June 30, 2000, and the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States
of America.  These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit.  We conducted our audit of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation.  We believe that
our audit provides a reasonable basis for our opinion.


/s/ PricewaterhouseCoopers LLP


Los Angeles, California
September 21, 2001



                                                                 Page 12 of 42
<PAGE>


                       SANTA FE FINANCIAL CORPORATION
                         CONSOLIDATED BALANCE SHEET


As of June 30,                                                  2001
                                                            ------------

Assets
  Cash and cash equivalents                                 $    167,694
  Investment in marketable securities                         24,411,593
  Investment in Justice Investors                              7,113,519
  Rental property                                              3,989,078
  Other investments                                              300,000
  Other assets                                                   280,103
  Restricted cash                                                 14,732
                                                              ----------
    Total assets                                            $ 36,276,719
                                                              ==========


Liabilities and Shareholders' Equity

Liabilities
  Due to securities broker                                  $  2,334,424
  Obligations for securities sold                              6,456,155
  Accounts payable and accrued expenses                        1,135,030
  Mortgage payable                                             2,088,093
  Deferred income tax                                          1,917,397
                                                              ----------
    Total liabilities                                         13,931,099
                                                              ----------
  Minority interest                                            5,595,240
                                                              ----------

Shareholders' equity:
  6% Cumulative, convertible, redeemable at
    the option of the holder, voting preferred
    stock, par value $.10 per share
    Authorized shares - 1,000,000
    Issued and outstanding - 63,600
    Liquidation preference of $858,600                             6,360
  Common stock, par value $.10 per share
    Authorized shares - 2,000,000
    1,276,038 shares issued and 1,179,010 outstanding            127,604
  Additional paid-in-capital                                   8,807,942
  Retained earnings                                            8,749,093
  Treasury stock, at cost, 97,028 shares                        (940,619)
                                                              ----------
    Total shareholders' equity                                16,750,380
                                                              ----------

    Total liabilities and shareholders' equity              $ 36,276,719
                                                              ==========

See accompanying notes to consolidated financial statements.

                                                                Page 13 of 42
<PAGE>


<TABLE>
<CAPTION>
                      SANTA FE FINANCIAL CORPORATION.
         CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


                                              For the       For the      For the 6      For the
                                            Year Ended    Year Ended   Months Ended   Year Ended
                                              June 30,      June 30,      June 30,    December
31,
                                               2001          2000          2000          1999
                                            -----------   -----------   -----------   -----------
Revenue                                                    Unaudited
<S>                                         <C>           <C>           <C>           <C>
  Equity in net income of Justice
   Investors                                $ 3,927,635   $ 3,935,121   $ 2,001,018  $ 3,459,786
  Rental income                                 322,726       264,655       147,732      422,988
  Gain on sale of real estate                         -     1,176,292             -    1,176,292
  Dividend and interest income                  703,256       819,101       429,989      799,792
  Net gains on marketable securities          1,992,196     4,311,821     1,742,972    2,006,923
  Other income                                1,403,552       214,117       103,223      145,449
                                             ----------    ----------    ----------   ----------
                                              8,349,365    10,721,107     4,424,934    8,011,230
                                             ----------    ----------    ----------   ----------
Costs and expenses
  Property operating expense                   (121,698)     (133,555)      (66,086)    (233,324)
  Mortgage interest expense                    (178,436)     (136,461)      (89,967)    (106,483)
  Depreciation expense                          (54,216)      (56,250)      (26,707)    (117,816)
  Margin interest and trading expenses       (1,152,063)     (972,908)     (536,540)    (608,094)
  General and administrative                   (837,704)     (860,048)     (493,894)    (976,011)
  Litigation                                          -             -       (14,669)     (14,671)
                                             ----------    ----------    ----------   ----------
                                             (2,344,117)   (2,159,222)   (1,227,863)
(2,056,399)
                                             ----------    ----------    ----------   ----------
Income(loss) before taxes and
 minority interest                            6,005,248     8,561,885     3,197,071    5,954,831

Provision for income tax expense             (2,600,449)   (3,917,979)   (1,350,438)  (2,768,146)
                                             ----------    ----------    ----------   ----------
Income before minority interest               3,404,799     4,643,906     1,846,633    3,186,685

Minority interest                              (783,158)   (1,465,456)     (413,147)
(1,577,247)
                                             ----------    ----------    ----------   ----------
Net income                                    2,621,641     3,178,450     1,433,486    1,609,438

Preferred stock dividends                       (51,481)      (38,284)      (25,405)
(12,879)
                                             ----------    ----------    ----------   ----------
Income available to common shareholders     $ 2,570,160   $ 3,140,166   $ 1,408,081  $ 1,596,559
                                             ==========    ==========    ==========   ==========
Basic earnings per share                    $      2.17   $      2.61   $      1.17  $      1.30
                                             ==========    ==========    ==========   ==========

Weighted average number of
 shares outstanding                           1,186,094     1,202,533     1,202,533    1,231,359
                                             ==========    ==========    ==========   ==========
Comprehensive income
  Net income(loss)                          $ 2,621,641    $3,178,450   $ 1,433,486  $ 1,609,438
   Other comprehensive income:
    Unrealized holding gain(loss)
     on marketable securities                         -     3,409,662             -    4,261,285
    Reclassification adjustment for
     holding loss included in net earnings            -      (561,926)            -            -
    Income tax (expense)benefit related
     to other comprehensive income                    -       184,279             -      (59,042)
    Adjustment for the reclassification
     of the accumulated unrealized
     holding gains prior to July 1, 1999
     to current earnings                              -    (4,113,680)            -   (4,113,680)
                                             ----------    ----------    ----------    ----------
  Total comprehensive income                $ 2,621,641   $ 2,096,785   $ 1,433,486  $ 1,698,001
                                             ==========    ==========    ==========   ==========
</TABLE>

See accompanying notes to consolidated financial statements.
                                                             Page 14 of 42


<PAGE>
<TABLE>
<CAPTION>
                       SANTA FE FINANCIAL CORPORATION
                CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY


               Preferred Stock          Common Stock
               ----------------------------------------             Accumulated
               Shares               Shares              Additional  other
               out-                 out-                paid-in     comprehensive    Retained    Treasury
               standing  Amount     standing  Amount    capital     income           earnings    Stock          Total


               --------------------------------------------------------------------------------------------------------
<S>              <C>     <C>       <C>         <C>        <C>         <C>           <C>         <C>         <C>
Balance at
December 31,
1998             63,600  $6,360    1,276,038   $127,604   $8,807,942  $88,563       $3,174,293  $(313,966)  $11,890,796


Net income                                                                           1,609,438                1,609,438

Purchase of
treasury stock                                                                                   (215,874)     (215,874)

Dividend paid
to preferred
shareholders                                                                          (12,879)                  (12,879)

Reclass
unrealized
holding gain
to income                                                             (88,563)                                  (88,563)

               --------------------------------------------------------------------------------------------------------
Balance at
December 31,
1999             63,600  $6,360    1,276,038   $127,604   $8,807,942  $     -       $4,770,852  $(529,840)  $13,182,918


Net income                                                                           1,433,486                1,433,486

Purchase of
treasury stock                                                                                   (254,894)     (254,894)

Dividend paid
to preferred
shareholders                                                                          (25,406)                  (25,406)

               --------------------------------------------------------------------------------------------------------
Balance at
June 30, 2000    63,600  $6,360    1,276,038   $127,604   $8,807,942  $      -      $6,178,932  $(784,734)  $14,336,104


Net income                                                                           2,621,642                2,621,642

Purchase of
treasury stock                                                                                   (155,885)     (155,885)

Dividend paid
to preferred
shareholders                                                                          (51,481)                  (51,481)

               --------------------------------------------------------------------------------------------------------
Balance at
June 30, 2001    63,600  $6,360    1,276,038   $127,604   $8,807,942  $      -      $8,749,093  $(940,619)  $16,750,380

               ========================================================================================================


</TABLE>

See accompanying notes to consolidated financial statements.

                                                                Page 15 of 42
<PAGE>


<TABLE>
<CAPTION>
                             SANTA FE FINANCIAL CORPORATION
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                              For the       For the      For the 6      For the
                                            Year Ended    Year Ended   Months Ended   Year Ended
                                              June 30,      June 30,      June 30,    December
31,
                                                2001          2000          2000          1999
                                            -----------   -----------    -----------   ----------
-
                                                           Unaudited
<S>                                         <C>           <C>           <C>           <C>
Cash flows from operating activities:
  Net income                                $ 2,621,641   $ 3,178,451   $ 1,433,486  $ 1,609,438
  Adjustments to reconcile net income to
   net cash used by operating activities:
    Equity in net income of Justice
     Investors                               (3,927,635)   (3,935,121)   (2,001,018)  (3,459,786)
    Gain on sale of real estate                       -    (1,176,292)            -   (1,176,292)
    Net losses on marketable securities               -             -             -    1,796,767
    Net unrealized gains on
     marketable securities                   (1,117,992)   (1,218,374)   (1,218,374)           -
    Minority interest                           783,159     1,239,140       413,147    1,350,931
    Amortization of excess market value
     over carrying value                        (88,706)      (88,706)      (44,352)     (88,706)
    Depreciation                                 54,216        56,250        26,707      117,816
    Change in assets and liabilities:
      Restricted cash                           (14,732)       46,902             -       53,423
      Investment in marketable securities     9,244,445   (13,625,640)     (778,580) (12,480,234)
      Other investments                               -             -             -      (55,233)
      Other assets                               89,184     2,066,721       (40,341)   1,162,777
      Accounts payable and accrued expenses    (149,544)     (507,824)      561,254      322,987
      Deferred tax payable                    1,917,397             -             -            -
      Due to securities broker               (7,974,267)    4,276,302    (4,845,471)   7,234,411
      Obligations for securities sold        (5,370,739)    7,038,083     5,576,691    3,061,800
                                             ----------    ----------    ----------   ----------
  Net cash used in operating activities      (3,933,573)   (2,650,108)     (916,851)    (549,901)
                                             ----------    ----------    ----------   ----------
Cash flows from investing activities:
  Cash distributions from Justice Investors   4,392,360     3,416,280     1,254,960    2,997,960
  Purchase of marketable securities                   -             -             -  (14,217,839)
  Proceeds from sale of marketable securities         -             -             -   12,421,072
  Purchase of Portsmouth stock                   (1,950)      (92,392)      (92,392)           -
  Net proceeds from sale of real estate               -     2,951,528             -    2,951,528
  Purchase of real estate                             -    (4,075,000)            -   (4,075,000)
                                             ----------    ----------    ----------   ----------
  Net cash provided by investing activities   4,390,410     2,200,416     1,162,568       77,721
                                             ----------    ----------    ----------   ----------
Financing activities
  Principal payments on mortgage payable        (18,134)   (1,228,653)       (8,976)  (1,229,896)
  Borrowings from mortgage payable                    -     2,117,564             -    2,117,564
  Dividends paid to preferred shareholders      (51,481)      (38,284)      (25,405)     (12,879)
  Dividends paid to minority shareholders      (126,260)     (126,685)      (63,331)    (126,711)
  Purchase of treasury stock                   (155,885)     (384,352)     (254,895)    (215,874)
                                             ----------    ----------    ----------    ----------
  Net cash (used in)provided by
   Financing activities                        (351,760)      339,590      (352,607)      532,204
                                             ----------    ----------    ----------    ----------
Net increase (decrease) in cash and
 cash equivalents                               105,077      (110,102)     (106,890)       60,024

Cash and cash equivalents at the
 beginning of period                             62,617       172,719       169,507       109,483
                                             ----------    ----------    ----------    ----------
Cash and cash equivalents at end of period  $   167,694   $    62,617   $    62,617   $   169,507
                                             ==========    ==========    ==========    ==========
Supplemental information
  Income taxes paid, net of refunds         $   698,453   $ 1,618,552   $   797,800   $   967,171
                                             ==========    ==========    ==========    ==========
  Interest paid                             $ 1,078,167   $   883,058   $   500,018   $   714,577
                                             ==========    ==========    ==========    ==========
</TABLE>
See accompanying notes to consolidated financial statements.
                                                                 Page 16 of 42


<PAGE>
                           SANTA FE FINANCIAL CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Santa Fe Financial Corporation ("Santa Fe" or the "Company") was incorporated
under the name of Tri Financial Corporation in the State of Nevada on July 25,
1967 as a wholly owned subsidiary of Crateo, Inc, a public company.  On
October 31, 1969, Crateo issued a one-for-one stock dividend of all of its
shares of Tri Financial to its common shareholders.  On September 17, 1970,
the name of the Corporation was changed to Santa Fe Financial Corporation.

Santa Fe Financial Corporation's (the "Company") operations have been
primarily limited to partnership income from its managing a hotel property
through its investment in Justice Investors and income from various investment
activities.  On December 31, 1997, the Company acquired a controlling 55.4%
interest in Intergroup Woodland Village, Inc. ("Woodland Village") from a
related party, The InterGroup Corporation ("InterGroup"), which controls
approximately 54.9% of the voting stock of the Company.  Woodland Village's
major asset is a 27-unit apartment complex located in Los Angeles, California.

On May 16, 2000, the Board of Directors of Santa Fe approved a change in
fiscal year end of the Company from December 31 to June 30 to coincide with
the fiscal year end of its parent Company, The Intergroup Corporation.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its
68.8% owned subsidiary, Portsmouth Square, Inc. ("PSI"), and its 55.4% owned
subsidiary, Woodland Village.  All material intercompany accounts and
transactions have been eliminated in consolidation.

The acquisition of PSI was accounted for as a purchase and the assets and
minority interest of PSI were recorded at their fair values.  The Company's
cost was less than its pro rata interest in the fair value of PSI's net assets
by approximately $3.6 million. The excess of fair value over the allocated
carrying amount of the investment in PSI is being amortized to other income
over 40 years.  The remaining unamortized amount at June 30, 2001 was $2.4
million.

Cash Equivalents and Restricted Cash

The Company considers all investments purchased with an original maturity of
three months or less to be cash equivalents.  Restricted cash is comprised of
amounts held by lenders for payment of real estate taxes, insurance, repairs
and replacements of the rental property, and tenant security deposits.

Investment in Marketable Securities

During 1999, the Company increased the turnover of its investment portfolio
and engaged in increased trading activities designed to maximize the overall
return on investment activities in the near term. This resulted in portions of
the Company's investments in marketable securities being classified as
"trading" as defined by generally accepted accounting principles.  After
consultation with the Investment Committee of the Board of Directors,
management determined that the classification of the entire portfolio as
trading beginning July 1, 1999 would be more consistent with the Company's
overall investment objectives and

                                                                 Page 17 of 42


<PAGE>

activities. As a result, beginning July 1, 1999, all unrealized gains and
losses on the Company's investment portfolio were recorded through the income
statement.  The cost of marketable securities sold is determined by the
specific identification method.

Obligations for Securities Sold

Obligation for securities sold represents the fair market value of shares sold
with the promise to deliver that security at some future date and the fair
market value of shares underlying the written call options with the obligation
to deliver that security when and if the option is exercised.  The obligation
may be satisfied with current holdings of the same security or by subsequent
purchases of that security.  Unrealized gains and losses from changes in the
obligation are included in the income statement.

Rental Property

Rental property is stated at cost.  Depreciation of rental property is
provided on the straight-line method based upon estimated useful lives of 5 to
40 years for buildings and improvements and 5 to 10 years for equipment.
Expenditures for repairs and maintenance are charged to expense as incurred
and major improvements are capitalized.

The Company reviews for the impairment of its rental property assets whenever
events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.  If expected future cash flows (undiscounted and
excluding interest costs) are less than the carrying value of the rental
asset, the asset is written down to its fair value.  The estimation of
expected future net cash flows is inherently uncertain and relies to a
considerable extent on assumptions regarding current and future economic and
market conditions, and the availability of capital. If, in future periods,
there are changes in the estimates or assumptions incorporated into the
impairment review analysis, the changes could result in an adjustment to the
carrying amount of the long-lived asset. No impairment losses have been
recorded in 2001 or 2000.

Furniture and Fixtures

Furniture and fixtures are stated at cost.  Depreciation is computed by the
straight-line method over the estimated useful lives of the assets, which
range from 3 to 5 years.

Treasury Stock

The Company records the acquisition of treasury stock under the cost method.

Revenue Recognition

The major source of the Company's revenue was its 49.8% interest in Justice
Investors, a limited partnership which owns and leases a hotel in San
Francisco, California in which the Company's subsidiary, PSI, is both a
limited and general partner.  PSI and the Company account for the investment
under the equity method.

Rental income is recognized when earned.  Revenue recognition from apartment
rentals commences when an apartment unit is placed in service and occupied by
a rent-paying tenant.

                                                                 Page 18 of 42
<PAGE>


The Company adopted SEC Staff Accounting Bulletin (SAB) 101, which did not
have an impact on the Company's method of accounting for revenue.

Earnings per Share

Basic earnings per share is computed by dividing net income available to
common stockholders by the weighted average number of common shares
outstanding.  The computation of diluted earnings per share is similar to the
computation of basic earnings per share except that the weighted-average
number of common shares is increased to include the number of additional
common shares that would have been outstanding if potential dilutive common
shares had been issued.  The Company's only potentially dilutive common shares
are the 6% cumulative, convertible, voting preferred stock.  As of June 30,
2001 and 2000, the conversion price is above the market value of the Company's
common stock, consequently, the preferred stock is not considered dilutive.
Therefore, basic and diluted earnings per share for the twelve months ended
June 30, 2001 and 2000 are the same.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Income Taxes

Deferred income taxes are determined using the liability method.  A deferred
tax asset or liability is determined based on the difference between the
financial statement and tax basis of assets and liabilities as measured by the
enacted tax rates which will be in effect when these differences reverse.

Reclassifications

Certain prior year balances have been reclassified to conform to the current
presentation.

Recently Issued Accounting Standards

In July, 2001, the Financial Accounting Standard Board issued Statements on
Financial Accounting Standards (SFAS) No. 141 (Business Combination) and 142
(Goodwill and Other Intangible Assets).  SFAS No. 141 among other things
eliminates the use of the pooling of interest method of accounting for
business combination.  Under the provision of SFAS No. 142, goodwill will no
longer be amortized, but will be subject to a periodic test for impairment
based upon fair value.  SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001.  SFAS No. 142 must be adopted in
the first quarter of fiscal years beginning after December 15, 2001.  The
Company does not expect that the adoption of these statements will have a
material impact on the Company's financial statements.

                                                                Page 19 of 43
<PAGE>


NOTE 2 - TRANSITION PERIOD COMPARATIVE DATA

On May 16, 2000, the Board of Directors of Santa Fe approved a change in
fiscal year end of the Company from December 31 to June 30 to coincide with
the fiscal year of its parent company, the Intergroup Corporation.  The
transition period comparative data for the year ended June 30, 2000 is
unaudited.


NOTE 3 - INVESTMENT IN MARKETABLE SECURITIES

During 1999, the Company increased the turnover of its investment portfolio
and engaged in increased trading activities designed to maximize the overall
return on investment activities in the near term. This resulted in portions of
the Company's investments in marketable securities being classified as
"trading" as defined by generally accepted accounting principles.  After
consultation with the Investment Committee of the Board of Directors,
management determined that the classification of the entire portfolio as
trading beginning July 1, 1999 would be more consistent with the Company's
overall investment objectives and activities. As a result, beginning July 1,
1999, all unrealized gains and losses on the Company's investment portfolio
were recorded through the income statement.  For the twelve months ended
December 31, 1999, the Company recognized a net unrealized gain of $4,113,680
related to the reclassification of all available-for-sale securities to
trading securities.

Included in the net gains on marketable securities of $1,992,196 for the year
ended June 30, 2001 were net unrealized gains of $1,117,992 and net realized
gains of $874,204.  Included in the net gains on marketable securities of
$1,742,972 for the year ended June 30, 2000 were net unrealized gains of
$1,218,374 and net realized gains of $524,598.


NOTE 4 - INVESTMENT IN JUSTICE INVESTORS

The major source of revenue of PSI is its 49.8% interest in Justice Investors,
a limited partnership which owns and leases a hotel in San Francisco,
California, and in which PSI is both a limited and general partner.  PSI
records its investment on the equity basis. Condensed financial statements for
Justice Investors are presented below.

                         CONDENSED BALANCE SHEET

As of June 30,                                                   2001
                                                              ----------
Assets
Total current assets                                         $ 1,562,800
Property, plant and equipment, net of accumulated
  depreciation of $11,923,867                                  4,651,822
Loan fees and deferred lease costs, net of accumulated
  amortization of $194,758                                       115,656
                                                               ---------
Total assets                                                 $ 6,330,278
                                                              ==========

Liabilities and partners' equity
Total current liabilities                                    $    75,700
Partners' capital                                              6,254,578
                                                              ----------
Total liabilities and partner's capital                      $ 6,330,278
                                                              ==========

                                                                Page 20 of 42
<PAGE>
                     CONDENSED STATEMENTS OF OPERATIONS

For the years ended June 30,                      2001           2000
                                               ----------     ----------

Revenues                                      $ 8,759,508    $ 8,736,989
Costs and expenses                               (872,692)      (835,139)
                                               ----------     ----------
Net income                                    $ 7,886,816    $ 7,901,850
                                               ==========     ==========


NOTE 5 - RENTAL PROPERTY

In July 1999, the Company's subsidiary, Woodland Village, completed the sale
of its 100-unit apartment complex located in Cincinnati, Ohio for $3,125,000
and realized a gain on the sale of real estate of $1,176,292. In September
1999, proceeds from the sale were used by Woodland Village to purchase a 27-
unit multi-family apartment complex located in Los Angeles, California for
$4,075,000 in a 1031 tax-deferred exchange. To complete the purchase, Woodland
Village obtained a $1,955,000 30-year mortgage note and two 5-year interest
only loans of $201,928 and $162,563 from the Company and InterGroup,
respectively.  The mortgage note has a 7.73% interest rate and the interest
rates for the 5-year loans are at 7.75%.  The $201,928 loan from the Company
was eliminated in consolidation.

Woodland Village leases units in the apartment complex on a short-term basis,
with no lease extending beyond one year.  At June 30, 2001, rental property
included the following:


Investment in real estate:
  Land                                      $ 1,996,750
  Buildings, improvements and equipment       2,088,832
  Accumulated depreciation on buildings,
    improvements and equipment                  (96,504)
                                              ---------
                                             $3,989,078
                                              =========


NOTE 6 - DUE TO SECURITIES BROKER

Various securities brokers have advanced funds to the Company for the purchase
of marketable securities under standard margin agreements.


NOTE 7 - NOTES PAYABLE

In July 1999, the Company's subsidiary, Woodland Village, completed the sale
of its 100-unit apartment complex located in Cincinnati, Ohio for $3,125,000.
A portion of the proceeds from the sale were used to pay-off the outstanding
mortgage payable on the property of $1,215,565.  The mortgage carried an
interest rate of 9.25%.

                                                                 Page 21 of 42
<PAGE>


At June 30, 2001, the balance on notes payable was $2,088,093. Included in
notes payable balance is a mortgage in the amount of $1,925,529 and a note
payable to InterGroup in the amount of $162,564.  The 30-year mortgage is
collateralized by a trust deed on the apartment complex. The interest rate on
the loan is 7.73% for the first 120 months. Principal and interest payments of
$13,979 are required monthly until September 23, 2009, at which point, the
monthly payments will be recalculated based on a new interest rate of 2.15% in
excess of the twelve-month average annual yield of United States Treasury
Securities.  The new interest rate cannot exceed 11.879%.  The $162,563 note
payable to Intergroup carries an interest rate of 7.75% per annum payable at
the end of each quarter.  All unpaid principal and interest under the note are
due on September 29, 2004.  The annual principal payments on the mortgage and
note payable for the five-year period commencing July 1, 2001 are
approximately as follows:


          Year ending June 30,
          --------------------
                   2002                 $   19,587
                   2003                     21,156
                   2004                     22,851
                   2005                    187,245
                   2006                     26,658
                   Thereafter            1,810,596
                                         ---------
                            Total       $2,088,093
                                         =========



NOTE 8 - INCOME TAXES

The Company and PSI file separate tax returns for both federal and state
purposes.  The provision for income taxes consists of the following:


                                      For the      For the 6       For the
                                     Year Ended   Months Ended    Year Ended
                                       June 30,     June 30,     December 31,
                                        2001          2000           1999
                                     ----------    ----------     ----------
 Federal
   Current                          $ 1,428,453   $   535,156    $   997,383
   Deferred                             717,196       612,717      1,422,974
                                     ----------    ----------     ----------
                                      2,145,649     1,147,873      2,420,357
                                     ----------    ----------     ----------
 State
   Current                              330,000        94,439        279,192
   Deferred                             124,800       108,126         68,597
                                     ----------    ----------     ----------
                                        454,800       202,565        347,789
                                     ----------    ----------     ----------
                                    $ 2,600,449   $ 1,350,438    $ 2,768,146
                                     ==========    ==========     ==========

                                                               Page 22 of 42
<PAGE>


A reconciliation of the statutory federal income tax rate to the effective tax
rate is as follows:

                                      For the      For the 6       For the
                                     Year Ended   Months Ended    Year Ended
                                       June 30,     June 30,     December 31,
                                        2001          2000           1999
                                     ----------    ----------     ----------

  Statutory federal tax rate              34.0%         34.0%          34.0%
  State income taxes, net of
   federal tax benefit                     6.0%          6.1%           6.1%
  Other                                    3.3%          2.1%           6.3%
                                         ------        ------         ------
                                          43.3%         42.2%          46.4%
                                         ======        ======         ======


The components of the Company's deferred tax assets and (liabilities) as of
June 30, 2001 are as follows:

  Deferred tax assets
    Net operating loss carryforwards                $   287,851
    State income taxes                                  112,184
    Capital loss carryforwards                          942,447
                                                     ----------
                                                      1,342,482
                                                     ----------
  Deferred tax liability
    Unrealized gain on marketable securities         (2,407,879)
    Deferred gain on real estate sale                  (852,000)
                                                     ----------
                                                     (3,259,879)
                                                     ----------

  Net deferred tax liabilities                      $(1,917,397)
                                                     ==========


As of June 30, 2001, the Company had net capital losses available for
carryforward for income tax purposes totaling approximately $2,356,117.  The
carryforward expires in varying amounts through 2003.  As of June 30, 2001,
the Company also had a net federal operating loss available for carryforward
of $719,628.  The net operating loss carryforward expires in varying amounts
through 2011.


NOTE 9 - SEGMENT INFORMATION

The Company operates in three reportable segments, the operations of its
multi-family residential property, the operation of Justice Investors, and the
investment of its cash and securities assets. These three operating segments,
as presented in the financial statements, reflect how management internally
reviews each segment's performance.  Management also makes operational and
strategic decisions based on this same information.

                                                                Page 23 of 42
<PAGE>



Information below represents reported segments for the year ended June 30,
2001, six months ended June 30, 2000, and year ended December 31, 1999.
Operating income for rental properties consist of rental income.  Operating
income from Justice Investors consist of the operations of the hotel and
garage included in the equity in net income of Justice Investors.  Operating
income(losses) for investment transactions consist of net investment
gains(losses)and dividend and interest income.
<TABLE>
<CAPTION>
                                 REAL ESTATE
                           -------------------------
YEAR ENDED                    RENTAL       JUSTICE     INVESTMENT
JUNE 30, 2001               PROPERTIES    INVESTORS    TRANSACTIONS     OTHER          TOTAL
                           -----------   -----------   -----------   -----------   ------------
<S>                        <C>           <C>           <C>           <C>           <C>
Operating income           $   322,726   $ 3,927,635   $ 2,695,452   $         -   $  6,945,813
Operating expenses            (121,698)            -    (1,152,063)            -     (1,273,761)
                           -----------   -----------   -----------   -----------   ------------
Income before
  mortgage interest and
  depreciation                 201,028     3,927,635     1,543,389             -      5,672,052
                           -----------   -----------   -----------   -----------   ------------
Mortgage interest expenses    (178,436)            -             -             -       (178,436)
Depreciation                   (54,216)            -             -             -        (54,216)
General and administrative
  expenses                           -             -             -      (837,704)      (837,704)
Other income(losses)                 -             -             -     1,403,552      1,403,552
Income tax expense                   -             -             -    (2,600,449)    (2,600,449)
Minority interest                    -             -             -      (783,158)      (783,158)
                           -----------   -----------   -----------   -----------   ------------
Net income(losses)         $   (31,624)  $ 3,927,635   $ 1,543,389   $(2,817,759)  $  2,621,641
                           ===========   ===========   ===========   ===========   ============
Total Assets               $ 3,989,078   $ 7,113,519   $24,711,593   $   462,529   $ 36,276,719
                           ===========   ===========   ===========   ===========   ============
</TABLE>
<TABLE>
<CAPTION>

                                 REAL ESTATE
                           -------------------------
SIX MONTHS ENDED              RENTAL       JUSTICE     INVESTMENT
JUNE 30, 2000               PROPERTIES    INVESTORS    TRANSACTIONS     OTHER          TOTAL
                           -----------   -----------   -----------   -----------   ------------
<S>                        <C>           <C>           <C>           <C>           <C>
Operating income           $   147,732   $ 2,001,018   $ 2,172,961   $         -   $  4,321,711
Operating expenses             (66,086)            -      (536,540)            -       (602,626)
                           -----------   -----------   -----------   -----------   ------------
Income before
  mortgage interest and
  depreciation                  81,646     2,001,018     1,636,421             -      3,719,085
                           -----------   -----------   -----------   -----------   ------------
Mortgage interest expenses     (89,967)            -             -             -        (89,967)
Depreciation                   (26,707)            -             -             -        (26,707)
General and administrative
  expenses                           -             -             -      (493,894)      (493,894)
Litigation                           -             -             -       (14,669)       (14,669)
Other income                         -             -             -       103,223        103,223
Income tax expense                   -             -             -    (1,350,438)    (1,350,438)
Minority interest                    -             -             -      (413,147)      (413,147)
                           -----------   -----------   -----------   -----------   ------------
Net income(losses)         $   (35,028)  $ 2,001,018   $ 1,636,421  $ (2,168,925)  $  1,433,486
                           ===========   ===========   ===========   ===========   ============
Total Assets               $ 4,039,083   $ 7,477,162   $32,838,045  $    436,114   $ 44,790,404
                           ===========   ===========   ===========   ===========   ============
</TABLE>
                                                                 Page 24 of 42
<PAGE>



<TABLE>
<CAPTION>
                                 REAL ESTATE
                           -------------------------
YEAR ENDED                    RENTAL       JUSTICE     INVESTMENT
DECEMBER 31, 1999           PROPERTIES    INVESTORS    TRANSACTIONS     OTHER          TOTAL
                           -----------   -----------   -----------   -----------   ------------
<S>                        <C>           <C>           <C>           <C>           <C>
Operating income           $   422,988   $ 3,459,786   $ 2,806,715   $         -   $  6,689,489
Operating expenses            (233,324)            -      (608,094)            -       (841,418)
                           -----------   -----------   -----------   -----------   ------------
Income before
  mortgage interest and
  depreciation                 189,664     3,459,786     2,198,621             -      5,848,071
                           -----------   -----------   -----------   -----------   ------------
Mortgage interest expenses    (106,483)            -             -             -       (106,483)
Depreciation                  (117,816)            -             -             -       (117,816)
General and administrative
  expenses                           -             -             -      (976,011)      (976,011)
Litigation                           -             -             -       (14,671)       (14,671)
Gain on sale of real estate  1,176,292             -             -             -      1,176,292
Other income                         -             -             -       145,449        145,449
Income tax expense                   -             -             -    (2,768,146)    (2,768,146)
Minority interest                    -             -             -    (1,577,247)    (1,577,247)
                           -----------   -----------   -----------   -----------   ------------
Net income(losses)         $ 1,141,657   $ 3,459,786   $ 2,198,621  $ (5,190,626)  $  1,609,438
                           ===========   ===========   ===========   ===========   ============
Total Assets               $ 4,064,380   $ 6,871,720   $30,841,091  $    504,074   $ 42,281,265
                           ===========   ===========   ===========   ===========   ============
</TABLE>

NOTE 10 - SHAREHOLDERS' EQUITY

On December 31, 1997, the Company issued 31,800 shares of 6% cumulative,
convertible voting preferred stock (the "Preferred Stock")in exchange for a
55.4% interest in Woodland  from InterGroup.  As a result of the Company's
two-for-one stock split, the number of Preferred Shares was adjusted to
63,600.  Each share of Preferred Stock has a liquidation preference of $13.50
and is convertible into one share of restricted common stock of the Company at
an exercise price of $13.50 per share, with an eight year conversion exercise
period.  The preferred stock has voting rights as if converted into common
stock.  During the period January 1, 1998 through September 30, 1999,
InterGroup elected to forego any dividend payments on the preferred stock.
For the year ende June 30, 2001, six months ended June 30, 2000, and year
ended December 31, 1999, the Company paid preferred stock dividends of $51,481
and $25,405, and $12,880, respectively, to Intergroup.

On June 15, 1998, the Company issued a two-for-one stock split in the form of
a stock dividend to its shareholders of record as of May 22, 1998.  Where
applicable, the Company's financial statements have been restated to reflect
the impact of the stock split.


NOTE 11 - RELATED PARTY TRANSACTIONS

As of June 30, 2001, InterGroup owned approximately 48.27% of the Company's
outstanding common stock and 100% of the Company's preferred stock for a total
of 50.92% of all outstanding voting stock.  In addition, the Chairman and
Chief Executive Officer of InterGroup, who is also the Company's Chairman and
Chief Executive Officer, owned approximately 3.98% of the Company's
outstanding common stock as of June 30, 2001.  Effective June 30, 1998, the
Company's Chairman and Chief Executive Officer entered into a voting trust
agreement with InterGroup, giving InterGroup the power to vote the shares that
he owns in the Company.  As a result of that agreement, InterGroup has the
power to vote approximately 54.89% of the voting shares of the Company.

                                                                 Page 25 of 42
<PAGE>
As of June 30, 2001, the Company's subsidiary, Woodland Village, has a note
payable in the amount of $162,563 from InterGroup.  The note carries a 7.75%
interest rate and matures on September 29, 2004.

The Intergroup Corporation allocates corporate expenses to the Company and its
subsidiary based on management's estimate of the pro rata utilization of
resources.  During the year ended June 30, 2001, six months ended June 30,
2000, and year ended December 31, 1999, the Company and Portsmouth made
payments to InterGroup of approximately $223,000 and $129,000, and $195,000,
respectively, for administrative costs and reimbursement of direct and
indirect costs associated with the management of the Companies and their
investments, including the partnership asset.

For the year ended June 30, 2001, six months ended June 30, 2000 and year
ended December 31, 1999, the Company paid preferred stock dividends of
$51,481, $25,405 and $12,879, respectively, to Intergroup.

All of the Company's Directors serve as directors of InterGroup and all three
of the Company's Directors serve on the Board of Portsmouth.


NOTE 12- COMMITMENTS AND CONTINGENCIES

During 1997, the Company and the director defendants prevailed in their
defense of a shareholders' derivative suit related to the private placement of
90,000 shares of common stock and warrants for the purchase of an additional
90,000 shares to InterGroup.  As prevailing parties, the Company and the
director defendants made application to the Superior Court for recovery of the
attorney's fees and costs expended in the successful defense of this
litigation. During March 1998, the trial court entered a judgment in favor of
the Company and the director defendants and granted the applications for
attorneys' fees and costs in the total amount of approximately $936,000 plus
interest at the statutory rate of 10% per annum. In November 2000, the Company
received a payment of $1,188,618, which represented the total amount of
attorney's fees, costs and accrued interest due on its original judgment as
the prevailing party in that action.  On January 5, 2001, the Company was
awarded an additional $84,092 in attorneys' fees and costs incurred in
successfully defending its judgment on appeal.  On March 22, 2001, the Company
received payment in the amount of $91,387 in satisfaction of all amounts due
to it for attorneys' fees, interest and collection costs.

As part of the investment strategies, the Company may assume short positions
in marketable securities.  Short sales are used by the Company to potentially
offset normal market risks undertaken in the course of its investing
activities or to provide additional return opportunities.  In addition, the
Company utilizes margin for its marketable securities purchases through the
use of standard margin agreements with national brokerage firms.  The use of
available leverage is guided by the business judgment of management.


Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

None.


                                                             Page 26 of 42
<PAGE>


                               PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.

The following table sets forth certain information with respect to the
Directors and Executive Officers of the Company as of June 30, 2001:

<TABLE>
<CAPTION>

                                  Present
                                  Position           Director
     Name              Age     With the Company        Since       Term to Expire
--------------------------------------------------------------------------------------
<S>                   <C>      <C>                     <C>            <C>

John V. Winfield      54       Chairman, President     1995        2001 Annual Meeting
                               and Chief Executive
                               Officer (1)

William J. Nance      57       Director (1)(2)         1996        2001 Annual Meeting

John C. Love          61       Director (1)(2)         1998        2001 Annual Meeting

Michael G. Zybala     49       Vice President,
                               Secretary, Treasurer
                               and General Counsel     N/A        N/A

---------------------------
</TABLE>

(1)  Member of Securities Investment Committee
(2)  Member of Audit Committee



BUSINESS EXPERIENCE:

The principal occupation and business experience during the last five years
for each of the Directors and Executive Officers of the Company are as
follows:

John V. Winfield - Mr. Winfield was first elected to the Board in May of 1995
and currently serves as the Company's Chairman of the Board, President and
Chief Executive Officer, having been appointed as such in April 1996.  Mr.
Winfield is also the Chairman of the Board, President and Chief Executive
Officer of the Company's subsidiary Portsmouth, having held those positions
since May of 1996.  Mr. Winfield is Chairman of the Board, President and Chief
Executive Officer of InterGroup, a public company, and has held those
positions since 1987.  Mr. Winfield is also a director of Healthy Planet
Products, Inc. ("HPP"), a public company, having first been appointed on
September 17, 1997.  Mr. Winfield was elected Chairman of the Board of HPP on
August 5, 1998. Mr. Winfield also serves as Chairman of the Board of Etz
Lavud, Ltd., a public company.

William J. Nance - Mr. Nance was first elected to the Board in May of 1996.
Mr. Nance is also a director of Portsmouth.  Mr. Nance is the President and
CEO of Century Plaza Printers, Inc., a company he founded in 1979.  He has
also served as a consultant in the acquisition and disposition of multi-family
and commercial real estate.  Mr. Nance is a Certified Public Accountant and,
from

                                                                  Page 27 of
42
<PAGE>


1970 to 1976, was employed by Kenneth Leventhol & Company where he was a
Senior Accountant specializing in the area of REITS and restructuring of real
estate companies, mergers and acquisitions, and all phases of real estate
development and financing.  Mr. Nance is a Director and the Treasurer of The
InterGroup Corporation, a public company, and has held such positions since
1984. Mr. Nance also serves as a Director of HPP, having first been elected on
August 5, 1998.

John C. Love - Mr. Love was appointed a Director of the Company on March 5,
1998.  Mr. Love is an international hospitality and tourism consultant based
in Orinda, California.  He was formerly a partner in the national CPA and
consulting firm of Pannell Kerr Forster.  Mr. Love has extensive experience in
hotel development, acquisition and operations.  He is chairman emeritus of
Golden Gate University in San Francisco.  Mr. Love is also a Director of
Portsmouth, having first been appointed in March 1998, and a Director of
InterGroup, having first been appointed in January 1998.

Michael G. Zybala - Mr. Zybala was appointed as Vice President and Secretary
of the Company on February 20, 1998 and was appointed Treasurer on May 16,
2000.  He is also Vice President, Secretary, Treasurer and General Counsel of
Portsmouth.  Mr. Zybala has served as the Company's General Counsel since 1995
and has represented the Company as its corporate counsel since August 1993.
Mr. Zybala is a Director of HPP and serves as the company's Secretary.  He was
first appointed as a Director of HPP on June 17, 1998 and elected as Secretary
on August 5, 1998.  Mr. Zybala also serves as Vice President Operations of
InterGroup, having been appointed to that position in January 1999.


Family Relationships:  There are no family relationships among directors,
executive officers, or persons nominated or chosen by the Company to become
directors or executive officers.

Involvement in Certain Legal Proceedings:  No director or executive officer,
or person nominated or chosen to become a director or executive officer, was
involved in any legal proceeding requiring disclosure.


Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and each beneficial owner of more than ten percent of
the Common Stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission.  Officers, directors
and greater than ten-percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during fiscal 2001 all
filing requirements applicable to its officers, directors, and greater than
ten-percent beneficial owners were complied with.

                                                                  Page 28 of
42
<PAGE>



Item 10.   Executive Compensation

The following table provides certain summary information concerning
compensation awarded to, earned by, or paid to the Chief Executive Officer and
any other qualifying Executive Officers and employees who earned more than
$100,000 for all services rendered to the Company and its subsidiary for
fiscal years ended June 30, 2001 and 2000.

<TABLE>
<CAPTION>

                            SUMMARY COMPENSATION TABLE

                                Annual Compensation
                    ---------------------------------------------
Name and Principal                                             Other Annual
Position                       Year     Salary       Bonus     Compensation
------------------             ----     ------       -----     -------------
<S>                            <C>     <C>            <C>        <C>
John V. Winfield               2001    $240,000(1)    $ 0        $12,000(2)
Chairman, President and        2000    $240,000(1)    $ 0        $12,000(2)
Chief Executive Officer        1999    $188,282       $ 0        $12,000(2)

Michael G. Zybala              2001    $ 98,271(3)    $11,250          -
Vice President, Secretary,     2000    $ 97,466(3)    $15,000          -
Treasurer and General Counsel
-----------------------------
</TABLE>

(1) Includes salary received from the Company's subsidiary, Portsmouth, in the
amounts of $90,000 and $90,000 for the fiscal years 2001 and 2000
respectively.

(2) Amounts shown reflect regular annual director's fees paid by Santa Fe and
Portsmouth, each in the amount of $6,000. During fiscal 2001 and 2000, the
Company and Portsmouth also paid combined annual premiums of $42,500 and
$42,500, respectively, for a split dollar whole life insurance policy, owned
by, and the beneficiary of which is, a trust for the benefit of Mr. Winfield's
family.  The Company has a secured right to receive, from any proceeds of the
policy, reimbursement of all premiums paid prior to any payments to the
beneficiary.

(3) Approximately $87,500 and $84,000 of Mr. Zybala's salary and bonus was
allocated to Portsmouth in fiscal years 2001 and 2000, respectively.


As a small business issuer, Santa Fe has no compensation committee. Executive
Officer compensation is set by disinterested members of the Board of
Directors.  Santa Fe has no stock option plan or stock appreciation rights for
its executive officers.  The Company has no pension or long-term incentive
plans.  There are no employment contracts between Santa Fe and any executive
officer, nor are there any termination-of-employment or change-in-control
arrangements.



                              DIRECTOR COMPENSATION

The bylaws of Santa Fe permit directors to be paid a fixed sum for attendance
at each meeting of the Board or a stated salary as director.  Each director is
paid a fee of $1,500 per quarter for a total annual compensation of $6,000.
This policy has been in effect since July 1, 1985.
                                                                Page 29 of 42
<PAGE>
Item 11.    Security Ownership of Certain Beneficial Owners and Management

(a) Security ownership of Certain Beneficial Owners

The following table sets forth, as of September 21, 2001, certain information
with respect to the beneficial ownership of the Company's voting securities
owned by those persons or groups known by the Company to own more than five
percent of any class of the Company's voting securities.


Name and Address of                 Amount and Nature            Percent of
Beneficial Owner                   of Beneficial Owner (1)        Class (2)
-------------------                ----------------------        ----------
Guinness Peat Group plc ("GPG")          82,858(3)                   7.0%
Allied Mutual Insurance
  Services ("AMI")
Second Floor, 21-26 Garlick Hill
London ECHV 2AU, England

The InterGroup Corporation              632,596(4)                  50.9%
820 Moraga Drive
Los Angeles, CA 90049

John V. Winfield                         49,400                      4.2%
820 Moraga Drive
Los Angeles, CA 90049

The InterGroup Corporation and          681,996(5)                  54.9%
  John V. Winfield as a group
------------------------------
(1) Unless otherwise indicated, and subject to applicable community property
    laws, each person has sole voting and investment power with respect to the
    shares beneficially owned.

(2) Percentages are calculated on the basis of 1,178,712 shares of Common
    Stock issued and outstanding as of September 21, 2001, plus any securities
    that person has the right to acquire within 60 days pursuant to options,
    warrants, conversion privileges or other rights.

(3) Based on their Statement on Schedule 13D (Amendment No. 5) dated
    January 4, 1995, GPG and its wholly-owned subsidiary AMI claim shared
    power to vote, or to direct the vote, and to dispose of, or to direct the
    disposition of, 82,858 shares (post stock split) of Santa Fe's Common
    Stock owned beneficially and of record by GPG and through AMI.  Of that
    amount, 52,858 shares are beneficially owned by GPG and 30,000 by AMI.

(4) InterGroup is the beneficial owner of 569,096 shares of Common Stock and
    63,600 shares of convertible, voting preferred stock, which shares are
    entitled to vote as if converted to Common Stock.

(5) Pursuant to Voting Trust Agreement dated June 30, 1998, InterGroup has the
    power to vote the 49,400 shares of Common Stock owned by Mr. Winfield.  As
    President, Chairman of the Board and a 52.8% shareholder of InterGroup,
    Mr. Winfield has voting and dispositive power over the shares owned
    of record and beneficially by InterGroup.

                                                                Page 30 of 42
<PAGE>



As of September 21, 2001, there were 1,178,710 shares of the Company's Common
Stock outstanding, which were held by approximately 540 shareholders of
record.

(b) Security Ownership of Management

The following table sets forth, as of September 21, 2001, certain
information with respect to the beneficial ownership as to each class of the
Company's equity securities beneficially owned by all directors, each of the
named executive officers and directors and executive officers as a group.


Name and Address of                 Amount and Nature            Percent of
Beneficial Owner                   of Beneficial Owner(1)         Class (2)
-------------------                -------------------           ----------

John V. Winfield                        681,996(3)                  54.9%
820 Moraga Drive
Los Angeles, CA 90049

John C. Love                                  0(4)                      *
820 Moraga Drive
Los Angeles, CA 90049

William J. Nance                              0(4)                      *
820 Moraga Drive
Los Angeles, CA 90049

Michael G. Zybala                             0                         *
820 Moraga Drive
Los Angeles, CA 90049

All of the above as a group             681,996                     54.9%
---------------------------
* Ownership does not exceed 1%

(1) Unless otherwise indicated, and subject to applicable community property
    laws, each person has sole voting and investment power with respect to the
    shares beneficially owned.

(2) Percentages are calculated on the basis of 1,179,910 shares of Common
    Stock issued and outstanding as of September 15, 2001, plus any securities
    that person has the right to acquire within 60 days pursuant to options,
    warrants, conversion privileges or other rights.

(3) John V. Winfield is the sole beneficial owner of 49,400 shares of Common
    Stock.  InterGroup is the beneficial owner of 568,996 shares of Common
    Stock and 63,600 shares of convertible, voting preferred stock.  As the
    President, Chairman of the Board and a 52.8% shareholder of InterGroup,
    Mr. Winfield has voting and dispositive power with respect to the shares
    of Santa Fe owned of record and beneficially by InterGroup.

(4) William J. Nance is a 2.7% shareholder of InterGroup as well as a
    Director and Treasurer thereof.  John C. Love is also a Director of
    InterGroup and a less than 1% shareholder.

                                                                 Page 31 of 42
<PAGE>


Security Ownership of Management in Subsidiary

As of September 21, 2001, Santa Fe was the record and beneficial owner of
505,042 shares of the common stock of its 68.8%-owned subsidiary, Portsmouth
Square, Inc. The President and Chairman of the Board of Santa Fe has voting
power with respect to common shares of Portsmouth owned by Santa Fe.  No other
director or executive officer of Santa Fe has a beneficial interest in
Portsmouth's shares.


(c) Changes in Control

There are no arrangements which may result in a change in control of the
Company.


Item 12. Certain Relationships and Related Transactions

As of September 21, 2001, Santa Fe owned 68.8% of the common stock of
Portsmouth, and InterGroup and John V. Winfield, in the aggregate, owned
approximately 54.9% of the voting stock of Santa Fe.  Certain costs and
expenses, primarily salaries, rent and insurance, are allocated between the
Company, its subsidiary, Portsmouth, and InterGroup based on management's
estimate of the utilization of resources.  Effective June 30, 1998, certain
accounting and administrative functions of the Company and its subsidiaries,
were transferred to the Los Angeles, California offices of InterGroup. During
the fiscal years ended June 30, 2001 and 2000, the Company and Portsmouth made
payments to InterGroup in the total amount of approximately $223,000 and
$260,000, respectively, for administrative costs and reimbursement of direct
and indirect costs associated with the management of the Companies and their
investments, including the partnership asset.

In September 1999, the Company's subsidiary, Woodland Village, obtained a 5-
year interest only note in the amount of $162,563 from InterGroup.  The note
carries a 7.75% interest rate and matures on September 29, 2004.

During fiscal 2001, the Company paid $51,481 preferred stock dividends to
Intergroup.

As Chairman of the Securities Investment Committee, the Company's President
and Chief Executive officer, John V. Winfield, oversees the investment
activity of the Company in public and private markets pursuant to authority
granted by the Board of Directors.  Mr. Winfield also serves as Chief
Executive Officer and Chairman of Santa Fe and InterGroup and oversees the
investment activity of those companies.  Depending on certain market
conditions and various risk factors, the Chief Executive Officer, his family,
Santa Fe and InterGroup may, at times, invest in the same companies in which
the Company invests.  The Company encourages such investments because it
places personal resources of the Chief Executive Officer and his family
members, and the resources of Santa Fe and InterGroup, at risk in connection
with investment decisions made on behalf of the Company.  On June 28, 2001,
the Company, Santa Fe and InterGroup entered into an agreement with an
investment advisory company, which management believes will decrease the
potential for risk and increase efficiencies in the management of its
securities investments.    All of the Company's Directors serve as directors
of InterGroup and all three of the Company's Directors serve on the Board of
Portsmouth.

                                                                 Page 32 of 42
<PAGE>



In December 1998, Board of Directors authorized the Company to obtain whole
life insurance and split dollar insurance policies covering the Company's
President and Chief Executive Officer, Mr. Winfield.  During fiscal years 2001
and 2000, the Company paid annual premiums of 25,500 for the split dollar
whole life insurance policy, owned by, and the beneficiary of which is, a
trust for the benefit of Mr. Winfield's family.  The Company has a secured
right to receive, from any proceeds of the policy, reimbursement of all
premiums paid prior to any payments to the beneficiary.  During fiscal 2001
and 2000, Portsmouth paid annual premiums of $17,000 for a split dollar policy
also covering Mr. Winfield.

There are no other relationships or related transactions between the Company
and any of its officers, directors, five-percent security holders or their
families which require disclosure.


Item 13.  Exhibits and Reports on Form 8-K

(a) Listing of Exhibits by Table Number
    -----------------------------------

Set forth below is an index of applicable exhibits filed with this report
according to exhibit table number.

           Exhibit                                                 Page
           -------                                                 ----

   3.(i)  Articles of Incorporation                                 ***
     (ii) Bylaws (Amended February 15, 2000)                        ****

   4.     Instruments defining he rights of Security Holders,       *
          including indentures (see Articles of Incorporation
          and Bylaws)

   10.    Material Contracts
          (a) Securities Purchase Agreement dated December 20,      **
              1994 between Santa Fe Financial Corporation and
              The InterGroup Corporation

   21.    Subsidiaries:

          (1) Portsmouth Square, Inc. (68.8%)
              Incorporated on July 6, 1967 in California

          (2) Intergroup Woodland Village, Inc. (55.4%)
              Incorporated on August 5, 1993 in Ohio


   27.    Financial Data Schedule                                   44

*   All exhibits marked by an asterisk have been previously filed with other
    documents, including Registrant's Form 10 filed on October 27, 1967, and
    subsequent filings on forms 8-K, 10-K and 10-Q which are incorporated
    herein by reference.

**  Securities Purchase Agreement dated December 20, 1994 between Santa Fe
    Financial Corporation and The InterGroup Corporation was previously filed
    on March 31, 1995 with Registrant's Form 10-K Annual Report for the year
    ended December 31, 1994 and is incorporated herein by reference.

                                                                   Page 33 of
42
<PAGE>


*** Restated Articles of Incorporation, dated August 12, 1997, were previously
    filed on March 31, 1998 with Registrant's Form 10-KSB Annual Report for
    the year ended December 31, 1997 and is incorporated herein by reference.

**** Amendment to Bylaws are incorporated herein by reference to the Company's
     Form 10-KSB filed with the Commission March 29, 2000.


(b)  Reports on Form 8-K
     -------------------

Registrant filed no reports on Form 8-K during the last quarter of the period
covered by this report.


(c) Financial Statements and Schedules Required by Regulation S-X
    -------------------------------------------------------------

The following financial statements of Justice Investors are included in
Item 13:
                                                              PAGE

Independent Auditor's Report                                   35

Balance Sheet - December 31, 2000 and 1999                     36

Statements of Income and Partners' Capital - Years             37
  Ended December 31, 2000 and 1999

Statements of Cash Flows - Years Ended                         38
  December 31, 2000 and 1999

Notes to Financial Statements - December 31, 2000 and 1999     39


All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and therefore have been omitted.

                                                                  Page 34 of 42
<PAGE>


                           BURR, PILGER & MAYER LLP
                          ACCOUNTANTS AND CONSULTANTS

                       600 CALIFORNIA STREET, SUITE 1300
                           SAN FRANCISCO, CA 94108
                             TEL (415) 421-5757
                             FAX (415) 288-6288



                        Independent Auditors' Report
                        ----------------------------

To the Partners
Justice Investors
San Francisco, California

We have audited the accompanying balance sheet of Justice Investors (a limited
partnership) as of December 31, 2000, and the related statements of income and
partners' capital and cash flows for the year then ended.  These financial
statements are the responsibility of the Partnership's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.  The financial statements of Justice Investors as of December 31,
1999 were audited by other auditors, whose report dated January 28, 2000
expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Justice Investors (a limited
partnership) as of December 31, 2000, and the results of its operations and
its cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.






San Francisco, California
January 19, 2001

                                                                Page 35 of 42
<PAGE>


                           JUSTICE INVESTORS
                        (A LIMITED PARTNERSHIP)

                             BALANCE SHEETS

                       December 31, 2000 and 1999
                       --------------------------

                                                       2000           1999
                                                       ----           ----
                                   ASSETS
                                   ------
Current assets
  Cash                                             $        -     $   15,453
  Rents receivable                                  2,804,594      2,198,898
  Prepaid expenses                                      5,106          5,221
                                                    ---------      ---------
       Total current assets                         2,809,700      2,219,572
                                                    ---------      ---------
Fixed assets
  Office equipment (net of accumulated
  depreciation of $5,553 in 2000 and
    $4,757 in 1999)                                         -            796
  Building and improvements (net of accumulated
    depreciation of $11,740,344 in 2000 and
    $11,369,228 in 1999)                            3,705,658      4,076,774
  Land                                              1,124,128      1,124,128
                                                    ---------      ---------
      Total fixed assets                            4,829,786      5,201,698
                                                    ---------      ---------
Other assets
 Loan fees (net of accumulated amortization
   of $170,006 in 2000 and $140,440 in 1999)          118,251        147,817
 Deferred lease costs (net of accumulated
   amortization of $9,231 in 2000 and
   $7,016 in 1999)                                     12,924         15,140
                                                    ---------      ---------
      Total other assets                              131,175        162,957
                                                    ---------      ---------
      Total assets                                 $7,770,661     $7,584,227
                                                    =========      =========

                    LIABILITIES AND PARTNERS' CAPITAL
                    ---------------------------------

Current liabilities
  Trade accounts payable and accrued expenses      $  104,393     $   45,520
  Rents received in advance                                 -        206,250
  Accrued interest                                     13,391          9,292
                                                    ---------      ---------
      Total current liabilities                       117,784        261,062
Long-term liabilities
  Notes payable                                     2,400,000      1,591,547
                                                    ---------      ---------
      Total liabilities                             2,517,784      1,852,609
                                                    ---------      ---------
Commitment - Lease commission
Partners' capital                                   5,252,877      5,731,618
                                                    ---------      ---------
       Total liabilities and partners' capital     $7,770,661     $7,584,227
                                                    =========      =========

The accompanying notes are an integral part of these financial statements.

                                                               Page 36 of 42
<PAGE>


                           JUSTICE INVESTORS
                         (A LIMITED PARTNERSHIP)

                STATEMENTS OF INCOME AND PARTNERS' CAPITAL

                  Years Ended December 31, 2000 and 1999
                  --------------------------------------

                                                       2000           1999
                                                       ----           ----
Revenues
  Rental income
    Hotel                                           $7,684,770    $6,368,921
    Garage                                           1,478,668     1,379,523
    Other                                                2,400         2,400
                                                     ---------     ---------
      Total rental income                            9,165,838     7,750,844
    Interest income                                     27,883         4,893
    Miscellaneous income                                     -        35,665
                                                     ---------     ---------
      Total revenues                                 9,193,721     7,791,402
                                                     ---------     ---------

Expenses
  Interest                                              26,391        52,187
  Depreciation and amortization                        403,693       405,184
  Lease commission                                      76,848        63,690
  Property taxes                                        41,899        41,627
  General and administrative
    Administrative expenses                            150,000       150,000
    Accounting fees                                      4,886         8,348
    Audit and tax preparation                           45,888        43,435
    Business taxes                                      27,029        23,223
    Bank charges                                         9,379         8,634
    Consultants                                          9,940         1,050
    Franchise taxes                                        800           800
    Insurance expense                                   40,880        40,374
    Legal fees                                          12,440         4,758
    Office expense and miscellaneous                     2,387           729
                                                     ---------     ---------
      Total expenses                                   852,460       844,039
                                                     ---------     ---------

Net income                                           8,341,261     6,947,363
Partners' capital at beginning of
  year                                               5,731,618     4,804,265
Less distributions to partners                      (8,820,002)   (6,020,010)
                                                     ---------     ---------
Partners' capital at end of year                    $5,252,877    $5,731,618
                                                     =========     =========
The accompanying notes are in integral part of these financial statements.

                                                                   Page 37 of
42
<PAGE>


                                JUSTICE INVESTORS
                              (A LIMITED PARTNERSHIP)
                              -----------------------

                             Statements of Cash Flows
                  for the years ended December 31, 2000 and 1999




                                                       2000           1999
                                                       ----           ----
Cash flows from operating activities:
  Net income                                        $8,341,261    $6,947,363
  Adjustments to reconcile net income to
   net cash provided by operating
    activities-depreciation and amortization           403,693       405,184
  Changes in operating assets and liabilities:
   Increase in rents receivable                       (605,696)     (510,645)
   Decrease (increase) in prepaid expenses                 115          (335)
   Decrease in trade accounts payable and
    accrued expenses                                    58,874        (5,019)
   (Decrease) increase in rents received in advance   (206,250)      206,050
   Increase in interest payable                          4,099         2,739
                                                     ---------     ---------
     Net cash provided by operating activities       7,996,096     7,045,337
                                                     ---------     ---------

Net cash flows from financing activities:
  Distributions to partners                         (8,820,002)   (6,020,010)
  Net proceeds (payments) on long-term debt            808,453    (1,013,139)
                                                     ---------     ---------

       Net cash used in financing activities        (8,011,549)   (7,033,149)
                                                     ---------     ---------

       Net (decrease) increase in cash
        and cash equivalents                           (15,453)       12,188

Cash and cash equivalents at beginning of year          15,453         3,265
                                                     ---------     ---------

Cash and cash equivalents at end of year            $        -    $   15,453
                                                     =========     =========
Supplemental disclosures of cash flows
 information-cash paid during the year
  for interest                                      $   22,292    $   49,448
                                                     =========     =========

The accompanying notes are in integral part of these financial statements.

                                                              PAGE 38 OF 42
<PAGE>


                             JUSTICE INVESTORS
                             (A LIMITED PARTNERSHIP)
                              ---------------------

                          Notes to Financial Statements

Significant Accounting Policies
-------------------------------

Organization
------------
Justice Investors, a Limited Partnership (the Partnership), was formed in 1967
to acquire real property in San Francisco, California, for the development and
lease of hotel and related facilities.  The leases became effective during
1970 upon completion of the hotel and parking garage.  The lease of the hotel
provides for the Partnership to receive certain percentages of hotel revenue,
as defined, to December 31, 2004, with a five-year renewal option.  The
parking garage lease provides for payments of certain percentages of parking
receipts to November 30, 2010.

Rents Receivable
----------------
Management believes that all rents receivable are fully collectible.
Therefore, no allowance for doubtful accounts was recorded as of December 31,
2000.

Property and Equipment
----------------------
Property and equipment are stated at cost.  Depreciation on the hotel
facilities is computed using the straight line method over a useful life of 40
years.  Building improvements are being depreciated on a straight line basis
over their useful lives ranging from 5 to 39 years.  Office equipment is being
depreciated using the 150% declining balance method with a useful life of 5
years.

Loan Fees and Deferred Lease Costs
----------------------------------
Loan fees are stated at cost and amortized using the straight line method over
10 years.  Deferred lease costs are stated at cost and amortized using the
straight line method over 15 years.

Trade Accounts Payable
----------------------
The Partnership's banking system provides for the daily replenishment of bank
accounts from the line of credit as checks are presented.  Accordingly,
included in trade accounts payable at December 31, 2000 is $59,254,
representing the excess of outstanding checks over cash on deposit at the bank
upon which the checks were drawn.

Income Tax
----------
No income taxes have been provided in the accompanying financial statements
since the Partnership profits and losses are reportable by the partners on
their individual income tax returns.

Statement of Cash Flows
-----------------------
For purposes of the statement of cash flows, cash equivalents include time
deposits, certificates of deposit, and all highly liquid debt instruments with
original maturities of three months or less.

                                                          Page 39 of 42
<PAGE>
                             JUSTICE INVESTORS
                             (A LIMITED PARTNERSHIP)
                              ---------------------

                         Notes to Financial Statements

Significant Accounting Policies (continued)
-------------------------------------------

Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions regarding
certain types of assets, liabilities, revenues, and expenses.  Such estimates
primarily relate to unsettled transactions and events as of the date of the
financial statements.  Accordingly, upon settlement, actual results may differ
from estimated amounts.

LONG-TERM DEBT
--------------
The Partnership has a revolving reducing line of credit agreement with a bank
that is collateralized by the first deed of trust on the hotel land and
property and the Partnership's interest in the hotel and garage leases.
Balances accrue interest at either prime rate per annum or at LIBOR plus 2%
per annum to a capped rate of 9.5% on balances up to $4,000,000.  The
outstanding balances under the agreement at December 31, 2000 and 1999 were
$2,400,000 and $1,592,547, respectively.  The balances were accruing interest
at LIBOR plus 2% or 8.625% at December 31, 2000.  The line of credit matures
on December 31, 2004.

Under the terms of the agreement, the line of credit is subject to a declining
maximum credit limit as follows:

    2000                                       $ 6,182,662
    2001                                         5,281,736
    2002                                         5,419,302
    2003                                         4,970,590
    2004                                         4,470,275


Minimum Future Rentals
----------------------
Minimum future rentals to be received under non-cancelable leases as of
December 31, 2000 for each of the next five years and in the aggregate are:

                                  Hotel          Garage       Total
                                  -----          ------       -----

    2001                      $  2,500,000   $   261,000   $  2,761,000
    2002                         2,500,000       261,000      2,761,000
    2003                         2,500,000       261,000      2,761,000
    2004                         2,500,000       261,000      2,761,000
    2005                                 -       261,000        261,000
    Subsequent to 2005                   -     1,283,250      1,283,250
                                ----------     ---------     ----------
                              $ 10,000,000   $ 2,588,250   $ 12,588,250
                                ==========     =========     ==========

                                                              Page 40 of 42
<PAGE>
                             JUSTICE INVESTORS
                             (A LIMITED PARTNERSHIP)
                              ---------------------

                         Notes to Financial Statements

LONG-TERM DEBT (continued)
--------------------------

Commitment - Lease Commission
-----------------------------
The Partnership is obligated to pay a lease commission of 1% of rentals
received to December 31, 2004 plus Holiday Inn lease extension, if any, to
December 31, 2010.

Related Party Transactions
--------------------------
Expenses were incurred for services rendered by related parties as follows:

                                                       2000           1999
                                                       ----           ----

  General partners                                  $  150,000   $   150,000
  Legal services                                        12,440         4,758
                                                     ---------    ----------
                                                    $  162,440   $   154,758
                                                     =========    ==========

The garage lessee, the managing general partner, paid the Partnership
$1,478,668 and $1,379,523 during 2000 and 1999, respectively, under the terms
of the rental agreement.  Rents receivable from the garage lessee at December
31, 2000 and 1999 were $117,510 and $108,478, respectively.  Accounts payable
to general partners at December 31, 2000 and 1999 were $30,000.


Concentration of Credit Risk
----------------------------

Revenue and Receivables
-----------------------
The Partnership earns rental revenues under two leases.  Rents receivable at
December 31, 2000 and 1999 consist of the amounts due under the leases as
follows:

                                                       2000           1999
                                                       ----           ----

  Hotel receivable                                $  2,687,084  $  2,090,420
  Garage receivable                                    117,510       108,478
                                                   -----------   -----------
                                                  $  2,804,594  $  2,198,898
                                                   ===========   ===========

                                                                 Page 41 of 42
<PAGE>


                                SIGNATURES
                                ----------

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                              SANTA FE FINANCIAL CORPORATION
                                                        (Registrant)

Date: September 28, 2001                         by /s/ John V. Winfield
                                                 ---------------------------
                                                 John V. Winfield, President,
                                                 Chairman of the Board and
                                                 Chief Executive Officer


Date: September 28, 2001                         by /s/ Michael G. Zybala
                                                 ---------------------------
                                                 Michael G. Zybala,
                                                 Vice President and Secretary
                                                 and Treasurer


Date: September 28, 2001                         by /s/ Randy Du
                                                 --------------------------
                                                 Randy Du
                                                 Controller
                                                (Principal Accounting Officer)



   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



Date: September 28, 2001              /s/ John V. Winfield
      ------------------              ---------------------------------------
                                      John V. Winfield, Chairman of the Board,
                                      President and Chief Executive Officer


Date: September 28, 2001              /s/ John C. Love
      ------------------              ---------------------------------------
                                      John C. Love,
                                      Director


Date: September 28, 2001              /s/ William J. Nance,
      ------------------              ---------------------------------------
                                      William J. Nance,
                                      Director


                                                                   Page 42 of
42

36

<Page> 55 of 55