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

                                  FORM 10-KSB

[X]  Annual Report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the fiscal year ended June 30, 2003

[ ]  Transition Report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from ______ to ______

Commission file number 1-10324

                          THE INTERGROUP CORPORATION
                          --------------------------
                 (Name of Small Business Issuer in its Charter)

          Delaware                                        13-3293645
-------------------------------                       ------------------
(State or Other Jurisdiction of                        (IRS Employer
 Incorporation or Organization)                       Identification No.)

820 Moraga Drive, Los Angeles, California                 90049-1632
-----------------------------------------                 ----------
(Address of Principal Executive Offices)                  (Zip Code)

                 Issuer's Telephone Number:  (310) 889-2500

      Securities registered under Section 12(b) of the Exchange Act:

Common Stock-$.01 Par Value                     Pacific Exchange, Inc.
---------------------------          -----------------------------------------
   Title of Each Class               Name of Each Exchange On Which Registered


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

                    Common Stock - Par Value $.01 Per Share
                    ---------------------------------------
                                (Title of Class)

    Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will 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 amendment to this Form 10-KSB. [X]

    The issuer's revenues for its most recent fiscal year were $15,552,000.
<PAGE>

    The aggregate market value of the common equity held by non-affiliates of
issuer, computed by reference to the price the common equity was sold on
September 15, 2003 was $11,299,717.

    The number of shares outstanding of the issuer's Common Stock, $.01 par
value, as of September 15, 2003 was 2,530,384.

Transitional Small Business Disclosure Format (check one): Yes   No [X]


                  DOCUMENTS INCORPORATED BY REFERENCE: None



                             TABLE OF CONTENTS

PART I                                                                  PAGE

    Item 1.  Description of Business                                      3

    Item 2.  Description of Properties                                    5

    Item 3.  Legal Proceedings                                           13

    Item 4.  Submission of Matters to a Vote of Security Holders         13


PART II

    Item 5.  Market For Common Equity and Related Stockholder Matters    14

    Item 6.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations                         14

    Item 7.  Financial Statements                                        20

    Item 8.  Changes in and Disagreements With Accountants
             on Accounting and Financial Disclosure                      38

    Item 8A. Controls and Procedures                                     38

PART III

    Item 9.  Directors, Executive Officers, Promoters and Control
             Persons; Compliance With Section 16(a) of the Exchange Act  39

    Item 10. Executive Compensation                                      42

    Item 11. Security Ownership of Certain Beneficial Owners
             and Management                                              47

    Item 12. Certain Relationships and Related Transactions              48

    Item 13. Exhibits and Reports on Form 8-K                            50

    Item 14. Principal Accountant Fees and Services                      52

    SIGNATURES                                                           53

                                    -2-
<PAGE>

                                 PART I

Item 1. Description of Business.

BUSINESS DEVELOPMENT

The InterGroup Corporation ("InterGroup" or the "Company") is a Delaware
corporation formed in 1985, as the successor to Mutual Real Estate Investment
Trust ("M-REIT"), a New York real estate investment trust created in 1965.
The Company has been a publicly-held company since M-REIT's first public
offering of shares in 1966 and has been a reporting company pursuant to
Section 12(g) of the Securities Exchange Act of 1934 since that time.

The Company was organized to buy, develop, operate, rehabilitate and dispose
of real property of various types and descriptions, and to engage in such
other business and investment activities as would benefit the Company and its
shareholders.  The Company was founded upon, and remains committed to, social
responsibility.  Such social responsibility was originally defined as
providing decent and affordable housing to people without regard to race.  In
1985, after examining the impact of federal, state and local equal housing
laws, the Company determined to broaden its definition of social
responsibility.  The Company changed its form from a REIT to a corporation so
that it could pursue a variety of investments beyond real estate and broaden
its social impact to engage in any opportunity which would offer the potential
to increase shareholder value within the Company's underlying commitment to
social responsibility, which it redefined to encompass investments in any area
which can have a socially redeeming value and promote the establishment of a
fair, equal and better society.

The Company's principal sources of revenue have been, and continue to be,
derived from the operations of its multi-family residential properties, from
the sales and disposition of its real property assets, from the operations of
its majority owned subsidiary, Santa Fe Financial Corporation ("Santa Fe"),
and from the investment of its cash and securities assets.

Santa Fe's revenue is primarily generated through its holdings of the Holiday
Inn Financial District/Chinatown, a 565-room hotel in San Francisco,
California.  Santa Fe and its 68.8% owned subsidiary, Portsmouth Square, Inc.
("Portsmouth"), jointly oversee their interest in the operations of the hotel.
Portsmouth is a general partner and a 49.8% limited partner in Justice
Investors ("Justice"), a California limited partnership, which owns the land,
improvements and leaseholds.


BUSINESS OF ISSUER

The Company's principal business is the ownership and management of real
estate.  Properties include twenty-two apartment complexes, a hotel, two
commercial real estate properties, and a single-family house as a strategic
investment.  The properties are located throughout the United States, but are
concentrated in Texas and Southern California.  The Company also has
investments in unimproved real property that is held for sale or development.
The Company acquires its investments in real estate and other investments
utilizing cash, securities or debt, subject to approval or guidelines of the
Board of Directors. See Item 2 for a description of the Company's current
investments in and investment policies concerning real property.

The Company has invested in income-producing instruments, equity and debt
securities and will consider other investments if such investments offer
growth or profit potential.  The Company also has a controlling interest in

                                    -3-
<PAGE>

Santa Fe, which derives its revenue primarily through an interest in a 565-
room Holiday Inn in San Francisco, California.  In addition, Santa Fe's
operations also include an interest in two of the apartment complexes and a
marketable securities portfolio.

For further information see Item 6 Management's Discussion and Analysis of
Financial Condition and Results of Operations and Notes to Consolidated
Financial Statements.


COMPETITION

All of the properties owned by the Company are in areas where there is
substantial competition.  However, management believes that its apartments,
hotel, and commercial properties are generally in a competitive position in
their respective communities.  The Company intends to continue upgrading and
improving the physical condition of its existing properties and will consider
selling existing properties, which the Company believes have realized their
potential, and re-investing in properties that may require renovation but that
offer greater appreciation potential.

The hotel had traditionally enjoyed a favorable year-round occupancy rate.  In
November 2001, an Omni Hotel opened in the Financial District of San
Francisco.  The Omni is a more upscale facility providing greater amenities to
its guests, especially the business traveler and is more centrally located in
the financial district.  Two other hotels have since opened in San Francisco,
which can be considered competitive to the Financial District Holiday Inn.
The San Francisco hotel market has not yet recovered from the impact of the
terrorist attacks of September 11, 2001 and the downturn in the Bay Area
economy due, in part, to the failure of many internet and technology based
companies.  Increased competition from newer and more upscale properties, such
as the Omni, have resulted in lower room rates as hotel operators struggle to
obtain occupancy.  Management believes that the hotel is now in a very
challenging market, with many competitors better positioned to attract the
business traveler and tourists.  As part of the efforts to meet this increased
competition, a new health and beauty spa was built on the lobby level of the
hotel and new meeting rooms were constructed on the fourth floor during the
fiscal year ended June 30, 2003.  The Company will continue to work with the
managing general partner of Justice Investors to find ways to improve the
physical condition and amenities of the hotel, influence the marketing efforts
of the lessee, and to seek other ways for the property to maintain its
competitive position.


EMPLOYEES

As of June 30, 2003, the Company had a total of 11 full-time employees in its
corporate office. Effective July 2002, the Company entered into a client
service agreement with Administaff Companies II, L.P. ("Administaff"), a
professional employer organization serving as an off-site, full service human
resource department for its corporate office.  Administaff personnel
management services are delivered by entering into a co-employment
relationship with the Company's employees. There are also approximately 37
employees at the Company's properties outside of the State of California that
are subject to similar co-employment relationships with Administaff. The
employees and the Company are not party to any collective bargaining
agreement, and the Company believes that its employee relations are
satisfactory.

                                    -4-
<PAGE>

Item 2.  Description of Properties.


PROPERTIES

At June 30, 2003, the Company's investment in real estate consisted of
properties located throughout the United States, but which are concentrated in
Texas and Southern California.  These properties include twenty two apartment
complexes, one single-family house as a strategic investment, and two
commercial real estate properties, one of which serves as the Company's
corporate headquarters.  All apartment complexes, commercial properties and
the single-family house are completed, operating properties.

The Company owns approximately 9.5 acres of unimproved real estate in Texas.
The Company also owns an interest in a San Francisco hotel property through
its subsidiaries' interest, in Justice Investors.  In the opinion of
management, each of the properties is adequately covered by insurance.  None
of the properties are subject to foreclosure proceedings or litigation other
than that incurred in the normal course of business.  The Company's rental
property leases are short-term leases, with no lease extending beyond one
year.

Morris County, New Jersey.  The Morris County property is a two-story garden
apartment complex that was completed in June 1964 with 151 units on
approximately 8 acres of land.  The Company acquired the complex on September
15, 1967 at an initial cost of approximately $1,600,000.  Real estate property
taxes for the year ended June 30, 2003 were approximately $135,000.
Depreciation is recorded on the straight-line method, based upon an estimated
useful life of 40 years.  The outstanding mortgage balance was approximately
$10,550,000 at June 30, 2003 and the maturity date of the mortgage is May 1,
2013.

St. Louis, Missouri.  The St. Louis property is a two-story project with 264
units on approximately 17.5 acres.  The Company acquired the complex on
November 1, 1968 at an initial cost of $2,328,000.  For the year ended June
30, 2003, real estate property taxes were approximately $105,000.
Depreciation is recorded on the straight-line method, based upon an estimated
useful life of 35 years.  The outstanding mortgage balance was approximately
$5,639,000 at June 30, 2003 and the maturity date of the mortgage is July 1,
2008.

On August 2, 2001, the Company was awarded $13,862,000 from the Circuit court
of St. Louis County, Missouri, which granted the City of St. Louis permission
to take possession of the Company's previously owned St. Louis property, a
176-unit apartment complex, in a condemnation action filed by the City of St.
Louis.  The Company realized a gain of $10,277,000 and received net proceeds
of $9,255,000 after payment of the mortgage on the property, costs and
attorneys' fees.  On August 10, 2001, the City of St. Louis filed Exceptions
to the Commissioners' Report challenging the amount of the award to the
Company and requesting a jury trial on the matter.  On August 14, 2003, the
Company entered into a settlement with the City and the obligation was
satisfied with the payment of $700,000.  This amount had been reserved for in
the prior year.

Florence, Kentucky.  The Florence property is a three-story apartment complex
with 157 units on approximately 6.0 acres.  The Company acquired the property
on December 20, 1972 at an initial cost of approximately $1,995,000.  For the

                                    -5-
<PAGE>

year ended June 30, 2003, real estate property taxes were approximately
$58,000.  Depreciation is recorded on the straight-line method, based upon an
estimated useful life of 40 years.  The outstanding mortgage balance was
approximately $4,062,000 at June 30, 2003 and the maturity date of the
mortgage is May 1, 2006.

Irving, Texas.  The Company's Irving properties consist of two apartment
complexes.  The first apartment complex is a two-story apartment with 224
units on approximately 9.9 acres.  The Company acquired the property on
September 16, 1994 at an initial cost of approximately $4,150,000.  For the
year ended June 30, 2003, real estate property taxes were approximately
$160,000.  Depreciation is recorded on the straight-line method, based upon an
estimated useful life of 30 years.  The outstanding mortgage balance was
approximately $4,327,000 at June 30, 2003 and the maturity date of the
mortgage is January 1, 2008.

The second apartment complex consists of two-story town homes with 54 units on
approximately 3.0 acres.  The Company acquired the property on November 3,
2000 at an initial cost of approximately $1,980,000.  For the year ended June
30, 2003, real estate property taxes were approximately $66,000.  Depreciation
is recorded on the straight-line method, based upon an estimated useful life
of 39 years.  The outstanding mortgage balance was approximately $1,198,000 at
June 30, 2003 and the maturity date of the mortgage is July 1, 2006.

San Antonio, Texas. The San Antonio property is a two-story project with 132
units on approximately 4.3 acres.  The Company acquired the complex on June
29, 1993 for $2,752,000.  For the year ended June 30, 2003, real estate taxes
were approximately $91,000.  Depreciation is recorded on the straight-line
method, based upon an estimated useful life of 30 years.  The outstanding
mortgage balance was approximately $3,093,000 at June 30, 2003 and the
maturity date of the mortgage is December 1, 2008.

Houston, Texas.  The Houston property is a two-story apartment complex with
442 units on approximately 23.4 acres.  The Company acquired the complex in
February 1997 for an initial cost of $4,970,000.  For the year ended June 30,
2003, real estate taxes were approximately $275,000.  Depreciation is recorded
on the straight-line method, based upon an estimated useful life of 30 years.
The outstanding mortgage balance was approximately $10,044,000 at June 30,
2003 and the maturity date of the mortgage is January 1, 2013.  The Company
also owns approximately 5 acres of unimproved land adjacent to this property.
The land was purchased initially for $267,000 in July 1997.

Austin, Texas. The Company's Austin properties consist of two apartment
complexes.  The first Austin property is a two-story project with 190 units on
approximately 7.8 acres.  The Company acquired the complex on November 18,
1999 for $4,150,000.  The Company also acquired an adjacent complex with 59
units on January 8, 2002 for $1,681,000.  For the year ended June 30, 2003,
real estate taxes were approximately $175,000.  Depreciation is recorded on
the straight-line method, based upon an estimated useful life of 30 years.
The outstanding mortgage balance was approximately $8,100,000 at June 30, 2003
and the maturity date of the mortgage is July 1, 2023.  The Company also owns
approximately 6 acres of land adjacent to this property.

The second apartment complex consists of a two-story project with 112 units on
3.7 acres.  The Company acquired the complex on September 5, 2001 for
$3,824,000.  For the period ended June 30, 2003, real estate taxes were
approximately $125,000.  Depreciation is recorded on the straight-line method,
based upon an estimated useful life of 40 years.  The outstanding mortgage
balance was approximately $2,234,000 at June 30, 2003 and the maturity date of
the mortgage is September 1, 2009.

                                   -6-
<PAGE>

Los Angeles, California.  The Company owns two commercial properties, thirteen
apartment complexes, and a single-family house in the general area of West Los
Angeles.

The first Los Angeles commercial property is a 5,500 square foot, two story
building that serves as the Company's corporate offices.  The Company acquired
the building on March 4, 1999 for $1,876,000. The property taxes for the year
ended June 30, 2003 were approximately $17,000.  Depreciation is recorded on
the straight-line method, based upon an estimated useful life of 30 years.
The outstanding mortgage balance was approximately $1,224,000 at June 30, 2003
and the maturity date of the mortgage is April 15, 2009.

The second Los Angeles commercial property is a 5,900 square foot commercial
building.  The Company acquired the building on September 15, 2000 for
$1,758,000. The property taxes for the year ended June 30, 2003 were
approximately $10,000.  Depreciation is recorded on the straight-line method,
based upon an estimated useful life of 39 years.  The outstanding mortgage
balance was approximately $831,000 at June 30, 2003 and the maturity date of
the mortgage is December 15, 2013.

The first Los Angeles apartment complex is a 10,600 square foot two-story
apartment with 12 units.  The Company acquired the property on July 30, 1999
at an initial cost of approximately $1,305,000.  For the year ended June 30,
2003, real estate property taxes were approximately $17,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
30 years.  The outstanding mortgage balance was approximately $742,000 at June
30, 2003 and the maturity date of the mortgage is August 1, 2029.

The second Los Angeles apartment complex is a 29,000 square foot three-story
apartment with 27 units.  This complex is held by Intergroup Woodland Village,
Inc. ("Woodland Village"), which is 55.4% and 44.6% owned by Santa Fe and the
Company, respectively.  The property was acquired on September 29, 1999 at an
initial cost of approximately $4,075,000.  For the year ended June 30, 2003,
real estate property taxes were approximately $47,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
30 years.  The outstanding mortgage balance was approximately $1,885,000 at
June 30, 2003 and the maturity date of the mortgage is October 1, 2029.

The third Los Angeles apartment complex is a 12,700 square foot apartment with
14 units.  The Company acquired the property on October 20, 1999 at an initial
cost of approximately $2,150,000.  For the year ended June 30, 2003, real
estate property taxes were approximately $26,000.  Depreciation is recorded on
the straight-line method, based upon an estimated useful life of 30 years.
The outstanding mortgage balance was approximately $1,112,000 at June 30, 2003
and the maturity date of the mortgage is December 1, 2029.

The fourth Los Angeles apartment complex is a 10,500 square foot apartment
with 10 units.  The Company acquired the property on November 10, 1999 at an
initial cost of approximately $1,675,000.  For the year ended June 30, 2003,
real estate property taxes were approximately $20,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
30 years.  The outstanding mortgage balance was approximately $830,000 at June
30, 2003 and the maturity date of the mortgage is December 31, 2029.

The fifth Los Angeles apartment complex is a 26,100 square foot two-story
apartment with 31 units.  The Company acquired the property on May 26, 2000 at
an initial cost of approximately $7,500,000.  For the year ended June 30,
2003, real estate property taxes were approximately $82,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
30 years.  The outstanding mortgage balance was approximately $2,148,000 at
June 30, 2003 and the maturity date of the mortgage is June 1, 2030.

                                    -7-
<PAGE>

The sixth Los Angeles apartment complex is a 27,600 square foot two-story
apartment with 30 units.  The Company acquired the property on July 7, 2000 at
an initial cost of approximately $4,411,000.  For the year ended June 30,
2003, real estate property taxes were approximately $52,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
39 years.  The outstanding mortgage balance was approximately $2,668,000 at
June 30, 2003 and the maturity date of the mortgage is August 10, 2028.

The seventh Los Angeles apartment complex is a 3,000 square foot apartment
with 4 units.  The Company acquired the property on July 19, 2000 at an
initial cost of approximately $1,070,000.  For the year ended June 30, 2003,
real estate property taxes were approximately $12,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
39 years.  The outstanding mortgage balance was approximately $444,000 at June
30, 2003 and the maturity date of the mortgage is August 1, 2030.

The eighth Los Angeles apartment complex is a 4,500 square foot two-story
apartment with 4 units.  The Company acquired the property on July 28, 2000 at
an initial cost of approximately $1,005,000.  For the year ended June 30,
2003, real estate property taxes were approximately $12,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
39 years.  The outstanding mortgage balance was approximately $585,000 at June
30, 2003 and the maturity date of the mortgage is August 1, 2030.

The ninth Los Angeles apartment complex is a 7,500 square foot apartment with
7 units.  The Company acquired the property on August 9, 2000 at an initial
cost of approximately $1,308,000.  For the year ended June 30, 2003, real
estate property taxes were approximately $16,000.  Depreciation is recorded on
the straight-line method, based upon an estimated useful life of 39 years.
The outstanding mortgage balance was approximately $650,000 at June 30, 2003
and the maturity date of the mortgage is August 15, 2030.

The tenth Los Angeles apartment complex is a 4,700 square foot two-story
apartment with 5 units.  The Company acquired the property on August 15, 2000
at an initial cost of approximately $997,000.  For the year ended June 30,
2003, real estate property taxes were approximately $12,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
39 years.  The outstanding mortgage balance was approximately $480,000 at June
30, 2003 and the maturity date of the mortgage is September 15, 2030.

The eleventh Los Angeles apartment complex is a 32,800 square foot two-story
apartment with 24 units.  The Company acquired the property on March 8, 2001
at an initial cost of approximately $2,859,000.  For the year ended June 30,
2003, real estate property taxes were approximately $35,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
39 years.  The outstanding mortgage balance was approximately $1,760,000 at
June 30, 2003 and the maturity date of the mortgage is April 1, 2031.

The twelfth Los Angeles apartment complex is a 13,000 square foot two-story
apartment with 8 units.  The Company acquired the property on May 1, 2001 at
an initial cost of approximately $1,206,000.  For the year ended June 30,
2003, real estate property taxes were approximately $14,000.  Depreciation is
recorded on the straight-line method, based upon an estimated useful life of
39 years.  The outstanding mortgage balance was approximately $579,000 at June
30, 2003 and the maturity date of the mortgage is May 1, 2031.

The thirteenth Los Angeles apartment complex, which is owned 100% by the
Company's subsidiary Santa Fe, is a 4,200 square foot two-story apartment with
3 units.  Santa Fe acquired the property on February 1, 2002 at an initial
cost of approximately $785,000. For the year ended June 30, 2003, real estate

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property taxes were approximately $9,000. Depreciation is recorded on the
straight-line method based upon an estimated useful Life of 39 years.  The
outstanding mortgage balance was approximately $455,000 at June 30, 2003 and
the maturity date of the mortgage is February 1, 2032.

The Los Angeles single-family house is a 2,771 square foot home.  The Company
acquired the property on November 9, 2000 at an initial cost of approximately
$660,000.  For the year ended June 30, 2003, real estate property taxes were
approximately $8,000.  Depreciation is recorded on the straight-line method,
based upon an estimated useful life of 39 years.  The outstanding mortgage
balance was approximately $477,000 at June 30, 2003 and the maturity date of
the mortgage is December 1, 2030.


San Francisco, California Hotel.

The San Francisco, California hotel property owned by Justice Investors is
located near the Financial District, one block from the Transamerica Pyramid.
The 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-story (including parking garage), steel and concrete, A-frame
building, which contains 565 guest rooms situated on 22 floors as well as a
5,400 square foot health and beauty spa on the lobby level.  One floor houses
the Chinese Culture Center pursuant to a long-term, nominal-rent lease, and
three floors are devoted to a registration 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.  In the opinion of management the property is adequately covered by
insurance.

On March 15, 1995, Justice Investors, as lessor, entered into an amended and
restated lease with Holiday Inn, as lessee, for the hotel portion of the
project, with an effective date of January 1, 1995.  Effective July 28, 1998,
Felcor Lodging Trust, Inc. ("Felcor", NYSE: FCH) assumed the obligations of
the lessee under the lease.  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 December 31, 2009.  Under the terms of the lease, the lessee has to
notify Justice Investors of its intention to exercise the five-year option by
December 31, 2003.  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 leased premises less operating
expenses, base rent and capital requirements.  Under the terms of the lease,
the lessee is responsible for all maintenance and repairs to the property,
certain capital improvements, taxes and insurance.  The lessee also has an
obligation to convert the hotel property to a "Holiday Inn Select" and to
maintain the property to those standards, at its own cost and expense. It is
expected that the conversion will be complete by September 30, 2003.

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.

                                    -9-
<PAGE>

In July 2002, Justice Investors entered into a lease with Tru Spa, LLC, which
was amended effective January 1, 2003.  The lease premises consist of
approximately 5,400 square feet of space on the lobby level of the hotel for
the construction and operation of a health and beauty spa.  The term of the
lease is for ten years commencing with the opening of the spa on June 1, 2003,
with a five year option to extend the term.  The spa lease provides for
minimum monthly rent of $11,925, additional rent of $2,072 (up to a total of
$250,000 to help defray certain relocation construction costs) and other
tenant fees.  Under the terms of the lease, Justice was responsible for up to
$1,497,586 in leasehold improvements, which were paid using the partnership's
line of credit.  It is expected that the spa lease will be essentially revenue
neutral to the partnership, but should help the hotel to be more competitive
in a difficult marketplace by providing greater amenities to its guests.  To
facilitate the lease to Tru Spa, Felcor surrendered to Justice Investors
sufficient space on the lobby level of the hotel for the construction of the
spa.  In addition, the hotel administrative offices were relocated to the
lobby level to accommodate the addition of new meeting rooms on the fourth
floor of the hotel.


REAL ESTATE INVESTMENT POLICIES

The most significant investment activity of the Company has been to acquire,
renovate, operate and, when appropriate, sell income-producing real estate.
Through its marketable securities portfolio the Company has indirectly
invested in additional real estate related investments such as hotels and
office buildings.

The Company is presently looking for new real estate investment opportunities
and plans to continue to concentrate its real estate investments in developed
properties.  The acquisition of new real estate investments will depend on the
Company's ability to find suitable investment opportunities and the
availability of sufficient financing to acquire such investments.  The Company
plans to borrow funds to leverage its investment capital.  The amount of the
mortgage debt will depend on a number of factors including, but not limited
to, the availability of financing and the ability of projected property cash
flows to support its operations and debt service.


MORTGAGES

Information with respect to mortgage notes payable of the Company is set forth
in Note 5 of the Notes to Consolidated Financial Statements.


POTENTIAL RENTAL RATES AND PHYSICAL OCCUPANCY RATES

The Company leases units in its residential rental properties on a short-term
basis, with no lease extending beyond one year.  The effective annual rental
rate per unit (gross annual rental revenues based on 100% occupancy divided by
the total number of units) and the occupancy rate (total gross potential rent
less vacancy loss divided by total gross potential rent) for each of the
Company's operating properties for fiscal year ended June 30, 2003 are
provided below.

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<PAGE>

                                    Effective Annual           Physical
         Property                 Rental Rate Per Unit      Occupancy Rate
         --------                 --------------------      --------------
         Apartments:

         1.  Morris County, NJ            $12,124                 97%
         2.  St. Louis, MO                $ 6,203                 71%
         3.  Florence, KY                 $ 6,658                 90%
         4.  Irving, TX (1)               $ 7,456                 93%
         5.  Irving, TX (2)               $ 9,235                 87%
         6.  San Antonio, TX              $ 6,197                 96%
         7.  Houston, TX                  $ 6,688                 92%
         8.  Austin, TX (1)               $ 9,613                 92%
         9.  Austin, TX (2)               $ 7,441                 89%
         10. Los Angeles, CA (1)          $12,724                 88%
         11. Los Angeles, CA (2)          $13,599                100%
         12. Los Angeles, CA (3)          $16,017                 98%
         13. Los Angeles, CA (4)          $15,996                 94%
         14. Los Angeles, CA (5)          $17,661                 92%
         15. Los Angeles, CA (6)          $13,455                 81%
         16. Los Angeles, CA (7)          $18,029                 63%
         17. Los Angeles, CA (8)          $27,168                 64%
         18. Los Angeles, CA (9)          $17,917                 81%
         19. Los Angeles, CA (10)         $18,437                 98%
         20. Los Angeles, CA (11)         $12,398                 94%
         21. Los Angeles, CA (12)         $12,404                 90%
         22. Los Angeles, CA (13)         $22,447                 79%

         Single family:

         23. Los Angeles, CA              $73,200                 75%


MANAGEMENT OF THE PROPERTIES

All properties are managed by the Company.  The Company has a client service
agreement with a professional employer organization, which establishes a
three-party relationship whereby the Company and the professional employer
organization act as co-employers of the employees who work at the properties.


MARKETABLE SECURITIES INVESTMENT POLICIES

In addition to real estate, the Company also invests from time to time in
income producing instruments, corporate debt and equity securities, mortgage
backed securities, securities issued by REIT's and other companies which
invest primarily in real estate.

The Company's securities investments are made under the supervision of a
Securities Investment Committee of the Board of Directors. The Committee
currently has three members and is chaired by the Company's Chairman of the
Board and President, John V. Winfield.  The Committee has delegated authority
to manage the portfolio to the Company's Chairman and President together with
such assistants and management committees he may engage.  The Committee has
established investment guidelines for the Company's investments.  These
guidelines presently include: (i) corporate equity securities should be listed
on the New York or American Stock Exchanges or the Nasdaq NMS Market; (ii)
securities should be priced above $5.00 per share; and (iii) investment in a
particular issuer should not exceed 5% of the market value of the total
portfolio. The investment policies do not require the Company to divest itself
of investments, which initially meet these guidelines but subsequently fail to

                                    -11-

meet one or more of the investment criteria.  Non-conforming investments
require the approval of the Securities Investment Committee.  The Committee
has in the past approved non-conforming investments and may in the future
approve non-conforming investments.  The Securities investment Committee may
modify these guidelines from time to time.

The Company's investment portfolio is diversified with 178 different equity
securities.  The Company has no individual position in any security that
comprises more than 5% of the equity value of the portfolio.  The amount of
the Company's investment in any particular issue may increase or decrease, and
additions or reductions to its securities portfolio may occur, at any time.
While it is the internal policy of the Company to limit its initial investment
in any single equity to less than 5% of its total portfolio value, that
investment could eventually exceed 5% as a result of equity appreciation or
reductions in other positions.  Marketable securities are stated at market
value as determined by the most recently traded price of each security at the
balance sheet date.  As of June 30, 2003, the market value of the Company's
marketable securities was $54,989,000.

The Company may also invest, with the approval of the Securities Investment
Committee, in unlisted companies, through private placements.  Those
investments in non-marketable securities are carried at cost on the Company's
balance sheet as part of other investments and are reviewed for impairment on
a periodic basis.

As part of its 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.  As of June 30,
2003, the Company had obligations for securities sold (equities short) of
$16,489,000 and had no naked short positions.

In addition, 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 and is subject to any internal investment guidelines,
which may be imposed by the Securities Investment Committee.  The margin used
by the Company may fluctuate depending on market conditions.  The use of
leverage could be viewed as risky and the market values of the portfolio may
be subject to large fluctuations.  As of June 30, 2003, the Company had a
margin balance of $20,321,000 and incurred $210,000 and $482,000 in margin
interest expense during the fiscal years ended June 30, 2003 and June 30,
2002, respectively.

On June 28, 2001, the Company, its subsidiary, Santa Fe, and Portsmouth
entered into an agreement with an investment advisory company, for the
management of their securities portfolios.  That was the first time that the
Company had relied on an investment advisor to manage its investments on a
discretionary basis.  The results were not acceptable, and the Company
terminated its agreement with the investment advisor on November 7, 2001.

As Chairman of the Securities Investment Committee, the Company's President
and Chief Executive officer, John V. Winfield, directs 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 Portsmouth 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 Portsmouth may,

                                    -12-
<PAGE>

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 Portsmouth, at risk in connection with investment decisions made on
behalf of the Company.


Item 3.  Legal Proceedings

Continental Casualty Company v. The InterGroup Corporation and John V.
Winfield; United States District Court, Central District of California, Case
No. 01-01034.

On February 2, 2001, a Complaint for Declaratory Relief was filed by the
Company's Directors and Officers' Liability insurance carrier, Continental
Casualty Company ("CNA"), respecting certain coverage claims relating to
litigation filed by a former employee, officer and director, which was settled
by the Company.  On April 17, 2003, the parties entered into a stipulation and
order for dismissal of the above-entitled action following the consummation of
a settlement reached at a mediation proceeding on April 7, 2003.  The gross
settlement amount paid by CNA was $2.7 million.  After deduction of attorneys'
fees and other costs and fees incurred in the litigation, net proceeds in the
amount of $2,235,317 were received by the Company April 22, 2003.  On May 5,
2003, an Order for Dismissal with Prejudice was entered in the action.

City of St. Louis, Missouri v. The InterGroup Corporation, Intergroup
Bridgeton, Inc., et al., Circuit Court of St. Louis County, State of Missouri,
Cause No. 01CC000945.

This was a condemnation action filed on April 17, 2001, whereby the City of
St. Louis (the "City") sought to acquire the Company's 176-unit apartment
complex located in St. Louis, Missouri by eminent domain for an airport
expansion.  A Commissioners' Report was filed on August 2, 2001 awarding the
Company the amount of $13,862,000 and granting the City permission to take
possession of the property.  On August 10, 2001, the City filed Exceptions to
Commissioners' Report challenging the amount of the award to the Company and
requesting a jury trial de novo on the matter.  On August 21, 2002, the
Company and the City entered into a settlement of the matter before trial.
Pursuant to the terms of the settlement, the Company was to pay back to the
City the amount of $762,000 from the condemnation proceeds of $13,862,000 in
monthly installments.  On August 14, 2003, a Stipulation and Settlement was
entered into between the City and InterGroup whereby the obligation due the
City was satisfied by a lump sum payment in the amount of $700,000.


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

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

                                    -13-
<PAGE>

                               PART II

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

The Company's Common Stock is trades on The National Market System of the
Nasdaq Stock Market, Inc. ("Nasdaq-NMS") under the symbol "INTG".  It is also
listed on the Pacific Exchange, Inc.  The following table sets forth the high
and low sales prices (adjusted for stock splits) for the Company's common
shares for each quarter of the last two fiscal years as reported by Nasdaq.


Fiscal 2003                           High                Low
-----------                           -----               -----
First Quarter 7/1 - 9/30             $10.19              $ 8.95
Second Quarter 10/1 - 12/31          $ 8.16              $ 7.65
Third Quarter 1/1 - 3/31             $ 8.17              $ 5.93
Fourth Quarter 4/1 - 6/30            $ 9.70              $ 7.58


Fiscal 2002                           High                Low
-----------                           -----               -----
First Quarter 7/1 - 9/30             $12.80              $12.13
Second Quarter 10/1 - 12/31          $13.15              $12.03
Third Quarter 1/1 - 3/31             $13.47              $12.10
Fourth Quarter 4/1 - 6/30            $12.40              $10.17


As of September 15, 2003, there were approximately 557 shareholders of record.


DIVIDENDS

The Company has not declared any cash dividends on its common stock and does
not foresee issuing cash dividends in the near future.

On March 31, 2003, the Company effectuated a three-for two stock split of its
Common Stock in the form of a 50% stock dividend.  Any resulting fractional
shares were paid in cash.



SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The following table sets forth information as of September 15, 2003, with
respect to compensation plans (including individual compensation arrangements)
under which equity securities of the Company are authorized for issuance,
aggregated as follows:

                                    -14-
<PAGE>

Plan category       Securities to     Weighted average   Remaining available
                      be issued       exercise price     for future issuance
                    upon exercise     of outstanding        under equity
                    of outstanding       options         compensation plans
                       options,        warrants and         (excluding
                     warrants and         rights             securities
                       rights                               reflected in
                                                             column (a))
                         (a)                (b)                 (c)
-------------------  ------------      -------------     -------------------
Equity compensation
plans approved by
security holders       363,000             $9.59               87,000

----------------------------------------------------------------------------

Equity compensation
plans not approved
by security holders      None               N/A                 None

----------------------------------------------------------------------------
     Total             363,000             $9.59               87,000
----------------------------------------------------------------------------



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

INTRODUCTION

The discussion below and elsewhere in the Report includes forward-looking
statements about the future business results and activities of the Company,
which, by their very nature, involve a number of risks and uncertainties. When
used in this discussion, the words "estimate", "project", "anticipate" and
similar expressions, 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, changes in general economic
conditions, local real estate markets, and competition, as well as
uncertainties relating to uninsured losses, securities markets, and
litigation, including 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.  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.

                                    -15-
<PAGE>



RESULTS OF OPERATIONS

For the Year Ended June 30, 2003 as compared to June 30, 2002.

The Company had net income of $2,567,000 for the year ended June 30, 2003 as
compared to a net loss of $4,204,000 for the year ended June 30, 2002.  This
change was primarily attributable to the Company's net gains from marketable
securities in fiscal 2003 compared to net losses in fiscal 2002.  This
increase was partially offset by the gain on sale of real estate realized in
fiscal 2002, a loss on early extinguishment of debt in fiscal 2003, a decrease
in equity in net income of Justice Investors and an increase in margin
interest and trading expenses.

Income (loss) from real estate operations change to a loss of $1,049,000 from
income of $9,162,000.  This was primarily due to the $10,277,000 gain on sale
of the St. Louis, Missouri property recognized in fiscal 2002.  During fiscal
2003, the Company also recognized a loss of $645,000 on the early
extinguishment of debt related to a refinancing of the Parsippany, New Jersey
property.  Rental income increased to $14,148,000 from $12,800,000 while
property related expenses increased to $14,552,000 from $13,915,000
respectively.  The increase in rental income was due to the increase in
occupancy at one of the Austin, Texas properties as the result of the
completion of major renovations, the increase in occupancy and higher rental
rates at its New Jersey, Missouri and San Antonio, Texas properties and to a
lesser extent higher rental rates at the majority of its California
properties.  The increase was offset by the disposition of the St. Louis
property in August 2001.   Property operating expenses increased to $6,873,000
from $6,545,000 primarily due to the increase in insurance and utility expenses
Property related expenses increased by 5% versus the 11% increase in rental
income due to management efforts to keep operating expenses down while
increasing rental income.

The decrease in equity in net income of Justice Investors to $1,393,000 in
fiscal 2003 from $2,160,000 in fiscal 2002 was primarily attributable to the
inclusion of approximately $300,000 from an arbitration settlement payment
from the hotel lessee in fiscal 2002 and a decline in hotel revenues of
approximately 13.3%. Average daily room rates declined to approximately $90 in
fiscal 2003 from approximately $115 in fiscal 2002.  Although average monthly
occupancy rates increased modestly to approximately 67% from 62% in fiscal 2002,
the increase was not sufficient to offset the decline in average daily room
rates.  A combination of factors continued to impact the hotel operations.
First, the San Francisco Bay Area has been very slow to recover from the
devastating impact that the terrorist attacks of September 11, 2001 had on
tourism and the hospitality industry.  Second, the weak economy in the Bay Area,
as result of the failure of numerous internet and technology companies, coupled
with corporate relocations, has decreased business travel.  Third, the hotel has
faced increased competition from new properties and from higher end properties
that have cut room rates in an effort to capture a share of a declining market.
Based on industry reports, management is expecting a slow recovery in the San
Francisco hotel marketplace.

The Company had income from investment transactions of $4,221,000 for the year
ended June 30, 2003 as compared to a loss of $21,087,000 for the year ended
June 30, 2002.  The change in income (loss) from investment transactions was
primarily due to the change in net investment gains (losses) to net gains of
$6,601,000 from a loss of $19,447,000 and an increase in dividend and interest
income to $336,000 from $312,000 partially offset by the increase in margin
interest and trading expenses to $2,716,000 from $1,952,000.

                                    -16-
<PAGE>

Net gains/losses on marketable securities changed to net gains of $6,601,000
for the year ended June 30, 2003 from net losses of $19,447,000 for the year
ended June 30, 2002.  This was due to the significant appreciation in the
market value of the Company's investment portfolio during the current year.
For the year ended June 30, 2003, the Company had net unrealized gains of
$9,482,000 and net realized losses of $2,881,000.  For the fiscal year ended
June 30, 2002, the Company had net unrealized losses of $12,814,000 and
realized losses of $6,633,000.  Gains and losses on marketable securities and
other investments 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 and other
investments for any given period may have no predictive value and variations
in amount from period to period may have no analytical value.  For a more
detailed description of the composition of the Company's marketable securities
please see the Marketable Securities section below.

Margin interest and trading expenses increased to $2,716,000 from $1,952,000
primarily due to a $1,376,000 performance bonus granted to the Company's CEO.
The $1,376,000 is comprised of $653,000 cash bonus and the forgiveness of the
note receivable and accrued interest from the CEO in amount of $723,000.  The
increase was offset by the decrease in margin interest expense to $210,000
from $482,000.  The decrease in margin interest expense was due to the
maintenance of lower average daily margin balances in 2003.

Other income (expense) changed to income of $2,842,000 from an expense of
$680,000 primarily as a result of legal settlement on an insurance claim in
the amount of $2,700,000.  After deduction of attorney's fees and other costs
and fees incurred in the litigation, net proceeds of $2,235,000 were received
by the Company.

The provision for income taxes changed to a tax expense of $2,199,000 from a
tax benefit of $5,094,000 as the result of higher income generated in the
current year.

Minority interest changed to minority expense of $802,000 from minority
benefit of $3,075,000 as a result of income generated by the Company's
subsidiary, Santa Fe during the current year.



MARKETABLE SECURITIES

The Company's investment portfolio is diversified with 178 different equity
securities.  The Company has no individual position in any security that
comprises more than 5% of the equity value of the portfolio.  The amount of
the Company's investment in any particular issue may increase or decrease, and
additions or reductions to its securities portfolio may occur, at any time.
While it is the internal policy of the Company to limit its initial investment
in any single equity to less than 5% of its total portfolio value, that
investment could eventually exceed 5% as a result of equity appreciation or
reductions in other positions.  Marketable securities are stated at market
value as determined by the most recently traded price of each security at the
balance sheet date.  As of June 30, 2003, the market value of the Company's
marketable securities was $54,989,000.

                                    -17-
<PAGE>



The following table shows the composition of the Company's marketable
securities by selected industry groups as of June 30, 2003.

                                                             % of Total
                                                              Investment
   Industry Group                      Market Value           Securities
   --------------                      ------------           ----------
   Electric, pipelines, oil and gas   $ 17,750,000               32.3%
   Semiconductor, software, internet,
    and computer                        10,769,000               19.6%
   Telecommunications                    7,429,000               13.5%
   Airlines and defense                  4,121,000                7.5%
   Retail, food and consumer goods       3,334,000                6.1%
   Chemicals, building materials,
    machinery, metals and mining         3,286,000                6.0%
   Insurance                             2,962,000                5.4%
   REITs, lodging, home builders and
    hotels                               2,619,000                4.8%
   Other                                 2,719,000                4.8%
                                        ----------              ------
                                      $ 54,989,000              100.0%
                                        ==========              ======


The following table shows the net gain or loss on the Company's marketable
securities and the associated margin interest and trading expenses for the
year ended June 30, 2003 and 2002.

                                           2003                   2002
                                       ------------           ------------
Net investment gains(losses)           $  6,601,000           $(19,447,000)
Dividend & interest income                  336,000                312,000
Margin interest                            (210,000)              (482,000)
Trading expenses                         (2,506,000)            (1,470,000)
                                       ------------           ------------
Investment income (loss)               $  4,221,000           $(21,087,000)
                                       ============           ============



FINANCIAL CONDITION AND LIQUIDITY

The Company's cash flows are generated primarily from its real estate
activities, sales of investment securities and borrowings related to both.
The Company used cash flow of $6,399,000 from operating activities, used net
cash flow of $1,616,000 from investing activities, and generated net cash flow
of $7,991,000 from financing activities during the year ended June 30, 2003.

During the year ended June 30, 2003, the Company improved properties in the
aggregate amount of $1,679,000. Management believes the improvements to the
properties should enhance market values, maintain the competitiveness of the
Company's properties and potentially enable the Company to obtain a higher
yield through higher rents.

The Company's Board of Directors has given the Company the authority to
repurchase, from time to time, shares of its Common Stock. Such repurchases may
be made at the discretion of management and depending upon market conditions.
During the year ended June 30, 2003, the Company acquired an additional 211,030
shares of its Common Stock for $2,082,000. Approximately 57,000 shares remain
eligible for Company to repurchase under that authorization.

                                    -18-
<PAGE>

Management also anticipates that the net cash flow generated from future
operating activities will be sufficient to meet its long-term debt service
requirements.

The Company has no off balance sheet arrangements.

The Company's contractual obligations and commercial commitments are its
mortgages.  The annual principal payments on the mortgages for the five-year
period commencing July 1, 2003 are approximately as follows:


                 Year ending June 30,
                      2004               $ 1,355,000
                      2005                 1,449,000
                      2006                 5,427,000
                      2007                 2,710,000
                      2008                 5,602,000
                      Thereafter          49,573,000
                                         -----------
                       Total             $66,116,000
                                         ===========


IMPACT OF INFLATION

The Company's residential and commercial rental properties provide income from
short-term operating leases and no lease extends beyond one year.  Rental
increases are expected to offset anticipated increased property operating
expenses.

The Company's revenue from its interest in Justice Investors is primarily
dependent on hotel revenues.  Hotel room rates are typically impacted by
supply and demand factors, not inflation, because rental of a hotel room is
usually for a limited number of nights.  Room rates are usually adjusted to
account for inflationary cost increases; therefore, the impact of inflation
should be minimal.


CRITICAL ACCOUNTING POLICIES

The Company reviews its long-lived assets including its investment in real
estate and other investments for impairment when circumstances indicate that a
potential loss in carrying value may have occurred.  To the extent that
projected future undiscounted cash flows from the operation of the hotel
property, owned through the Company's investment in Justice Investors, and
rental properties are less than the carrying value of the assets, the carrying
value of the assets are reduced to their fair value.  For other investments,
the Company reviews the investment's operating results, financial position and
other relevant factors to determine whether the estimated fair value of the
asset is less than the carrying value of the asset.

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date.  Marketable
securities are classified as trading with net change in unrealized gains or
losses included in earnings.  The Company's other accounting policies are
straightforward in their application.

                                    -19-
<PAGE>




Item 7.  Financial Statements.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                             Page
                                                                       ----
Report of Independent Auditors                                          21

Consolidated Balance Sheet at June 30, 2003                             22

Consolidated Statements of Operations for the
  years ended June 30, 2003 and June 30, 2002                           23

Consolidated Statements of Shareholders' Equity for the years
  ended June 30, 2003 and June 30, 2002                                 24

Consolidated Statements of Cash Flows for the years ended
  June 30, 2003 and June 30, 2002                                       25

Notes to Consolidated Financial Statements                              26


                                    -20-
<PAGE>




                   Report of Independent Auditors

To the Board of Directors and
Shareholders of The InterGroup Corporation

In our opinion, the accompanying consolidated balance sheets and the related
statements of income, shareholders' equity and cash flows present fairly, in
all material respects, the financial position of The InterGroup Corporation at
June 30, 2003, and the results of its operations and its cash flows for the
years ended June 30, 2003 and June 30, 2002, 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 audits.  We conducted our audits 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 audits provide a
reasonable basis for our opinion.


/s/ PricewaterhouseCoopers LLP


Los Angeles, California
September 26, 2003

                                    -21-
<PAGE>



                        THE INTERGROUP CORPORATION
                        CONSOLIDATED BALANCE SHEET

As of June 30,                                                 2003
                                                            -----------
                             ASSETS

Investment in real estate, at cost:
 Land                                                     $  25,704,000
 Buildings, improvements and equipment                       55,029,000
 Property held for sale or development                          918,000
                                                            -----------
                                                             81,651,000
 Less: accumulated depreciation                             (18,681,000)
                                                            -----------
                                                             62,970,000
Investment in Justice Investors                               8,874,000
Cash and cash equivalents                                     1,859,000
Restricted cash                                               3,511,000
Investment in marketable securities                          54,989,000
Prepaid expenses and other assets                             3,392,000
                                                            -----------
        Total Assets                                      $ 135,595,000
                                                            ===========
                  LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
 Mortgage notes payable                                   $  66,116,000
 Due to securities brokers                                   20,321,000
 Obligation for securities sold                              16,489,000
 Accounts payable and other liabilities                       4,423,000
 Deferred income taxes                                        5,471,000
                                                            -----------
        Total Liabilities                                   112,820,000
                                                            -----------
Minority Interest                                             8,796,000
                                                            -----------
Commitments and Contingencies

Shareholders' Equity:
Preferred stock, $.01 par value, 2,500,000 shares
  authorized; none issued                                             -
Common stock - Class A, $.01 par value, 2,500,000
  shares authorized: none issued                                      -
Common stock, $.01 par value, 4,000,000 shares
  authorized; 3,193,745 shares issued and 2,530,384
  outstanding                                                    21,000
Additional paid-in capital                                    8,686,000
Retained earnings                                            11,662,000
Treasury stock, at cost, 663,361 shares                      (6,390,000)
                                                            -----------
        Total Shareholders' Equity                           13,979,000
                                                            -----------
        Total Liabilities and Shareholders' Equity        $ 135,595,000
                                                            ===========

The accompanying notes are an integral part of the consolidated financial
statements.

                                    -22-
<PAGE>

                            THE INTERGROUP CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS


For the Year Ended June 30,                           2003           2002
                                                   -----------    -----------
Real estate operations:
  Rental income                                   $ 14,148,000   $ 12,800,000
  Rental expenses:
    Property operating expenses                     (6,873,000)    (6,545,000)
    Mortgage interest expense                       (3,394,000)    (3,371,000)
    Real estate taxes                               (1,561,000)    (1,506,000)
    Depreciation                                    (2,724,000)    (2,493,000)
                                                   -----------    -----------
                                                      (404,000)    (1,115,000)

    Gain on sale of real estate                              -     10,277,000
    Loss on early extinguishment of debt              (645,000)             -
                                                   -----------    -----------
    (Loss) income from real estate operations       (1,049,000)     9,162,000
                                                   -----------    -----------

Equity in net income of Justice Investors            1,404,000      2,160,000
                                                   -----------    -----------
Investment transactions:
  Net investment gains (losses)                      6,601,000    (19,447,000)
  Dividend and interest income                         336,000        312,000
  Margin interest and trading expenses              (2,716,000)    (1,952,000)
                                                   -----------    -----------
    Income(loss) from investment transactions        4,221,000    (21,087,000)
                                                   -----------    -----------
Other income(expense):
  General and administrative expenses               (1,850,000)    (1,928,000)
  Other income (expense)                             2,842,000       (680,000)
                                                   -----------    -----------
    Other income (expense)                             992,000     (2,608,000)
                                                   -----------    -----------
Income(loss) before provision for income
 taxes and minority interest                         5,568,000    (12,373,000)

Provision for income tax (expense) benefit          (2,199,000)     5,094,000
                                                   -----------    -----------
Income(loss) before minority interest                3,369,000     (7,279,000)

Minority interest                                     (802,000)     3,075,000
                                                   -----------    -----------
Net income (loss)                                    2,567,000   $ (4,204,000)
                                                   ===========    ===========
Basic earnings (loss) per share                   $       0.95   $      (1.51)
                                                   ===========    ===========
Weighted average number of shares outstanding        2,710,646      2,788,975
                                                   ===========    ===========
Diluted income (loss) per share                   $       0.86   $      (1.51)
                                                   ===========    ===========
Diluted weighted average number of shares
 outstanding                                         2,998,646      2,788,975
                                                   ===========    ===========

The accompanying notes are an integral part of the consolidated
financial statements.

                                    -23-
<PAGE>



                          THE INTERGROUP CORPORATION
                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>


                            Additional                                   Note
                   Common    paid-in       Retained      Treasury
receivable
                    stock     capital      earnings       Stock       stock
options    Total
                   -------   ----------   -----------    -----------  ----------
---  ----------
<S>                <C>       <C>          <C>            <C>           <C>
<C>
Balance at
 June 30, 2001     $21,000   $8,686,000   $13,299,000    $(3,623,000)
$(1,438,000)  $16,945,000

Net loss                                   (4,204,000)
(4,204,000)

Purchase of
 treasury stock                                             (685,000)
(685,000)
                   -------   ----------   -----------    -----------   ---------
--   -----------
Balance at
 June 30, 2002      21,000    8,686,000     9,095,000     (4,308,000)
(1,438,000)   12,056,000

Net income                                  2,567,000
2,567,000

Purchase of
 treasury stock                                           (2,082,000)
(2,082,000)

Settlement of
 note receivable
1,438,000     1,438,000

                   -------   ----------   -----------    -----------   ---------
--   -----------
Balance at
 June 30, 2003    $21,000   $8,686,000   $11,662,000    $(6,390,000)  $
-   $13,979,000
                   =======   ==========   ===========    ===========
===========   ===========

</TABLE>

The accompanying notes are an integral part of the consolidated
financial statements.

                                    -24-
<PAGE>



                         THE INTERGROUP COPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS


For the Year Ended June 30,                        2002           2002
                                               -----------    -----------
Cash flows from operating activities:
Net income (loss)                              $ 2,567,000    $(4,204,000)
Adjustments to reconcile net income (loss)
 to cash used in operating activities:
  Depreciation of real estate                    2,724,000      2,493,000
  Gain on sale of real estate                            -    (10,277,000)
  Equity in net income of Justice Investors     (1,404,000)    (2,160,000)
  Net unrealized (gain) loss on investments     (9,482,000)    12,814,000
  Minority interest                                802,000     (3,075,000)
  Changes in assets and liabilities:
   Restricted cash                              (2,539,000)       170,000
   Prepaid expenses and other assets            (2,087,000)       437,000
   Investment in marketable securities         (38,168,000)    24,080,000
   Other investments                              (107,000)       892,000
   Accounts payable and other liabilities          175,000     (1,351,000)
   Due to securities broker                     19,742,000     (2,288,000)
   Obligations for securities sold              15,998,000    (18,186,000)
   Deferred taxes                                3,942,000     (4,456,000)
   Settlement of note receivable                 1,438,000              -
                                               -----------    ------------
Net cash used in operating activities           (6,399,000)    (5,111,000)
                                               -----------   ------------
Cash flows from investing activities:
  Additions to buildings, improvements and
   equipment                                    (1,679,000)    (2,734,000)
  Investment in real estate                        (52,000)    (4,861,000)
  Proceeds from sale of real estate                      -     13,862,000
  Investment in Santa Fe                        (1,859,000)             -
  Distributions from Justice Investors           1,974,000      3,263,000
                                               -----------    -----------
Net cash (used in) provided by
investing activities                            (1,616,000)     9,530,000
                                               -----------    -----------
Cash flows from financing activities:
  Principal payments on mortgage notes payable (14,591,000)    (5,335,000)
  Borrowings from mortgage notes payable        28,778,000      2,732,000
  Repayment of line of credit                   (4,000,000)             -
  Dividends paid to minority shareholders         (114,000)      (126,000)
  Purchase of treasury stock                    (2,082,000)      (685,000)
                                               -----------    -----------
Net cash provided by (used in)
 financing activities                            7,991,000     (3,414,000)
                                               -----------    -----------
Net (decrease) increase in cash and cash
 equivalents                                       (24,000)     1,005,000
Cash and cash equivalents at beginning of
 period                                          1,883,000        878,000
                                               -----------    -----------
Cash and cash equivalents at end of period     $ 1,859,000    $ 1,883,000
                                               ===========    ===========

The accompanying notes are an integral part of the consolidated financial
statements.

                                    -25-
<PAGE>

THE INTERGROUP CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Business and Significant Accounting Policies and Practices:

Description of the Business

The InterGroup Corporation ("InterGroup" or the "Company") was formed to buy,
develop, operate and dispose of real property and to engage in various
investment activities to benefit the Company and its shareholders.

As of June 30, 2003 and 2002, the Company had the power to vote 68.8% and
57.2%, respectively, of the voting shares of Santa Fe Financial Corporation
("Santa Fe"), a public company (Nasdaq SmallCap: SFEF).  Santa Fe's revenue is
primarily generated through the management of its 68.8% owned subsidiary,
Portsmouth Square, Inc. ("PSI"), which derives its revenue primarily as a
general partner and a 49.8% limited partner in Justice Investors ("Justice"),
a California limited partnership.  Justice owns the land, improvements and
leaseholds known as the Holiday Inn Financial District/Chinatown, a 566-room
hotel in San Francisco, California.  On June 30, 1998, the Company's Chairman
and President entered into a voting trust giving the Company the power to vote
the shares of Santa Fe common stock that he owned.  As a result of this
agreement, the Company had the power to vote on an additional 4% of the voting
shares of Santa Fe.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its majority-owned subsidiaries.  Material intercompany
transactions and balances have been eliminated in consolidation. Investments
in companies in which the Company maintains an ownership interest of 20% to
50% or exercises significant influence are accounted for under the equity
method. The cost method is used where the Company maintains ownership interest
of less than 20% and does not exercise significant influence over the
investee.

Use of Estimates

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

Investment in Real Estate

Investments in real estate are stated at cost.  Depreciation of buildings,
improvements and equipment is provided on the straight-line method based upon
estimated useful lives of five to forty years for buildings and improvements
and five to ten years for equipment.  Expenditures for repairs and maintenance
are charged to expense as incurred and 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

                                    -26-
<PAGE>

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 2003 and 2002.

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments purchased with
an original maturity of three months or less to be cash equivalents.

Restricted Cash

Restricted cash is comprised of amounts held by lenders for payment of real
estate taxes, insurance, replacement reserves for the operating properties and
tenant security deposits that are invested in certificates of deposit.

Marketable Securities

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date.  Marketable
securities are classified as trading securities with all unrealized gains and
losses on the Company's investment portfolio recorded through the statement of
operations.

Due to Securities Broker

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

Obligation 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 earnings.

Rental Income

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

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
statutory tax rates.  Deferred tax expense is the result of changes in the
asset and/or liability for deferred taxes.

                                    -27-
<PAGE>

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, restricted cash, marketable
securities, other investments, mortgage notes payable, amounts due securities
brokers and obligations for securities sold approximates fair value.  The fair
value of mortgage notes payable is estimated using discounted cash flows of
future payments based on the borrowing rates available to the Company for debt
with similar terms and maturities.


Stock-Based Compensation Plans

Statement of Financial Accounting Standards No. 123 (SFAS 123), Accounting for
Stock-Based Compensation, encourages all entities to adopt a fair value based
method of accounting for employee stock compensation plans, whereby
compensation cost is measured at the grant date based on the value of the
award and is recognized over the service period, which is usually the vesting
period.  However, it also allows an entity to continue to measure compensation
cost for those plans using the intrinsic value based method of accounting
prescribed by Accounting Principles Board Opinion No.25 (APB 25), Accounting
for Stock Issued to Employees, whereby compensation cost is the excess, if
any, of the quoted market price of the stock at the grant date (or other
measurement date) over the amount an employee must pay to acquire the stock.
Stock options issued under the Company's stock option plan have no intrinsic
value at the grant date, and under APB 25 no compensation cost is recognized.
The Company has elected to continue with the accounting methodology in APB 25
and, as a result, has provided pro forma disclosures of net income and
earnings per share and other disclosures, as if the fair value based method of
accounting had been applied.

As required by FAS 123, the Company has determined the pro-forma information
as if the Company had accounted for stock options granted since January 1,
1998, under the fair value method of FAS 123. The Black-Scholes option pricing
model was used with the following weighted-average assumptions for 2003; risk-
free interest rate of 2.04%; dividend yield of 0%; expected Common Stock
market price volatility factor of 36.44; and a weighted-average expected life
of the options of 5.8 years. The weighted-average fair value of options
granted in fiscal years 2003 and 2002 were $6.35 and $2.61 per share,
respectively.  The aggregate fair value of the options granted in fiscal years
2003 and 2002 were $95,000 and $26,100, respectively.

Stock based compensation is accounted for under APB 25 and accordingly, no
compensation cost has been recognized for stock options in the financial
statements.  Had compensation cost been determined based upon the fair value
of the stock options at grant date and consistent with FAS 123, the Company's
pro forma net loss and net loss per share (based on 16,500 and 47,500 options
vesting in fiscal years 2003 and 2002, respectively) are as follows:

                                               2003           2002
                                           -----------     ----------
  Net income(loss) - as reported          $ 2,567,000    $(4,204,000)
  Net income(loss) - pro forma            $ 2,463,000    $(4,243,000)
  Income(loss) per share - as reported         $ 0.95         $(1.51)
  Income(loss) per share - pro forma           $ 0.91         $(1.49)

The difference between the net income (loss) as reported and the pro forma net
income (loss) is due to subtraction of the fair market value of the vested stock
options of $104,000 and $39,000, respectively, for the fiscal years ended June
30, 2003 and 2002.


                                    -28-
<PAGE>


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 stock options.  Stock options are included in diluted earnings per share
by application of the treasury stock method.  As of June 30, 2003, the Company
had 288,000 stock options that were considered potentially dilutive common
shares.  These amounts were included in the calculation for diluted earnings
per share.

Recently Issued Accounting Standards

In November 2002, The Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure
requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others (FIN 45), which requires elaborating on the disclosures that must be
made by a guarantor in its financial statements about its obligations under
certain guarantees. It also requires that a guarantor recognize, at the
inception of certain types of guarantees, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The disclosure
requirements of FIN 45 were required at December 31, 2002 and the recognition
requirements of FIN 45 are applicable for guarantees issued or modified after
December 31, 2002.  The application of FIN 45 did not have a material impact
on the Company.

In January 2003, The Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51."  FIN 46 requires certain variable
interest entities to be consolidated by the primary beneficiary of the entity
if the equity investors in the entity do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for
the entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 is effective for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN
46 must be applied for the first interim or annual period beginning after June
15, 2003.  FIN 46 defines variable interest entities as a corporation,
partnership, trusts, or any other legal structure used for business purposes
that either (a) does not have equity investors with voting rights or (b) has
equity investors that do not provide sufficient financial resources for the
entity to support its activities. A variable interest entity often holds
financial assets, including loans or receivables, real estate or other
property. A variable interest entity may be essentially passive or it may
engage in research and development or other activities on behalf of another
company.  The application of FIN 46 did not have a material impact on the
Company.

In December 2002, The Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (FAS) No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure, which amends FAS 123,
Accounting for Stock-Based Compensation. In response to a growing number of
companies announcing plans to record expenses for the fair value of stock
options, FAS 148 provides alternative methods of transition for a voluntary

                                    -29-
<PAGE>

change to the fair value based method of accounting for stock-based employee
compensation. In addition, FAS 148 amends the disclosure requirements of FAS
123 to require more prominent and more frequent disclosures in financial
statements about the effects of stock-based compensation. The Company has
elected to continue with the accounting methodology in APB 25 and, as a
result, has provided pro forma disclosures of net income and earnings per
share and other disclosures, as if the fair value based method of accounting
had been applied.

In April 2003, The Financial Accounting Standards Board (FASB) issued FASB
Statement No. 149, Amendment of Statement 133 on Derivative Instruments and
Hedging Activities (FAS 149).  FAS 149 amends and clarifies accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under FAS 133. The new guidance
amends FAS 133 for decisions made: (a) as part of the Derivatives
Implementation Group process that effectively required amendments to FAS 133,
(b) in connection with other Board projects dealing with financial
instruments, and (c) regarding implementation issues raised in relation to the
application of the definition of a derivative, particularly regarding the
meaning of an "underlying" and the characteristics of a derivative that
contains financing components. The amendments set forth in FAS 149 improve
financial reporting by requiring that contracts with comparable
characteristics be accounted for similarly. FAS 149 is generally effective for
contracts entered into or modified after June 30, 2003 (with a few exceptions)
and for hedging relationships designated after June 30, 2003. The guidance is
to be applied prospectively.  FAS 149 did not have a material impact on the
Company's financial statements.

Statement of Financial Standards No. 150, Accounting for Certain Financial
Instruments with characteristics of both Liabilities and Equity, which
establishes standards for how an issuer is to classify and measure certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify certain financial instruments that would
previously have been classified as equity as liabilities (or as assets in some
circumstances). Specifically, FAS 150 requires that financial instruments
issued in the form of shares that are mandatorily redeemable; financial
instruments that embody an obligation to repurchase the issuer's equity shares
or are indexed to such an obligation; or financial instruments that embody an
unconditional obligation or a conditional obligation that can be settled in
certain ways be classified as liabilities. This statement is effective for
financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 25, 2003. FAS 150 did not have a material impact on the Company's
financial statements.


2.  Investment in Real Estate:

At June 30, 2003, the Company's investment in real estate consisted of
properties located throughout the United States.  These properties include
twenty two apartment complexes, one single-family house as a strategic
investment, and two commercial real estate properties, one of which serves as
the Company's corporate headquarters.  All apartment complexes and the single-
family house are completed, operating properties.

On August 2, 2001, the Company was awarded $13,862,000 from the Circuit court
of St. Louis County, Missouri, which granted the City of St. Louis permission
to take possession of the 176-unit St. Louis, Missouri apartment complex in a

                                    -30-
<PAGE>

condemnation action filed by the City of St. Louis.  The Company realized a
gain of $10,277,000 and received net proceeds of $9,255,000 after payment of
the mortgage on the property, costs and attorneys' fees.  On August 10, 2001,
the City of St. Louis filed Exceptions to the Commissioners' Report
challenging the amount of the award to the Company.  On August 14, 2003, the
Company entered into a settlement with the City and the obligation was
satisfied with the payment of $700,000.  This amount was properly reserved for
in the prior year.

In July 2001, the Company purchased a property held for sale or development
located in Austin, Texas for $194,000.

In September 2001, the Company purchased an apartment complex located in
Austin, Texas for $3,824,000.  To finance the purchase, the Company assumed a
mortgage note of $2,300,000.

In February 2002, the Company purchased through its majority owned subsidiary,
Santa Fe, an apartment complex located in Los Angeles, for $785,000.  To
finance the purchase, the Company obtained a $463,000 mortgage note.


3.  Marketable Securities and Other Investments:

Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date.  Marketable
securities are classified as trading with net change in unrealized gains or
losses included in earnings.  For the year ended June 30, 2003, net gains on
marketable securities of $6,601,000 included net unrealized gains of
$9,482,000 and net realized losses of $2,881,000.  For the year ended June 30,
2002, net investment losses of $19,447,000 included net unrealized losses of
$12,814,000 and net realized losses of $6,633,000.

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's investment portfolio consists primarily of corporate equities.
The Company has also invested in corporate bonds and income producing
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.

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.  As of June 30,
2003, the Company had obligations for securities sold (equities short) of
$16,489,000 and had no naked short positions.

The Company also invests with the approval of the Securities Investment
Committee, in unlisted companies, through private placements.  These investments
in non-marketable securities are carried at cost on the Company's balance sheet
as part of other investments and are reviewed for impairment on a periodic
basis.  As of June 30, 2003, the Company had investments in unlisted companies
(other investments) of $3,687,000 with a reserve for loss on other investments
totaling $3,049,000. The investment is presented net of the reserve and is
included on the balance sheet in prepaid expenses and other assets.

Other investments are reviewed on a periodic basis bases on a review of the most
recent financial statements of the unlisted company. Factors such as revenue,
cash flows and financial position and other information pertaining to the
Company are reviewed and evaluated to determine if an impairment loss has
occurred.

                                    -31-
<PAGE>

4.  Investment in Justice Investors:

The consolidated accounts include a 49.8% interest in Justice Investors
("Justice"), a limited partnership.  Justice owns the land improvements and
leasehold known as the Financial District Holiday Inn, a 565-room hotel in San
Francisco, California.  Portsmouth is both a general and limited partner in
Justice that oversees operations and shares management responsibilities.
Portsmouth records its investment in Justice on the equity basis.

The Company amortizes the difference between the cost basis of its investment
in Justice Investors and its share of the net assets allocable to depreciable
assets of Justice Investors over 40 years.

For the Company's investment in Justice, to the extent that projected future
undiscounted cash flows from the operation of the Company's hotel property are
less than the carrying value of the asset, the investment would be considered
permanently impaired and the carrying value of the asset would be reduced to its
fair value.

Condensed financial statements for Justice Investors are as follows:


                     JUSTICE INVESTORS
                         CONDENSED BALANCE SHEET

As of June 30,                                                 2003
                                                            ----------
Assets
Total current assets                                       $   126,360
Property, plant and equipment, net of
  accumulated depreciation of $12,589,362                    5,622,698
Land                                                         1,124,128
Loan fees and deferred lease costs,
  net of accumulated amortization of $256,918                   53,570
                                                            ----------
    Total assets                                           $ 6,926,756
                                                            ==========

Liabilities and partners' capital
Total current liabilities                                  $    49,419
Long term debt                                               3,687,312
Partners' capital                                            3,190,025
                                                            ----------
    Total liabilities and partners' capital                $ 6,926,756
                                                            ==========


                                JUSTICE INVESTORS
                        CONDENSED STATEMENTS OF OPERATIONS

For the twelve months ended June 30,           2003            2002
                                            ----------      ----------
Revenues                                   $ 3,970,868     $ 5,180,311
Costs and expenses                            (873,097)       (843,187)
                                            ----------      ----------
Net income                                 $ 3,097,771     $ 4,337,124
                                            ==========      ==========


5.  Mortgage Notes Payable:

At June 30, 2003, the Company had mortgage debt outstanding of $66,116,000.
The mortgages carry variable rates from 3.95% and fixed rates ranging from
5.43% to 9.22%.  In December 2002, the Company refinanced the $3,513,000 and
the $4,000,000 line of credit and obtained a $10,118,000 loan.  In April 2003,

                                    -32-
<PAGE>

the Company refinanced the $4,858,000 loan and obtained a $10,560,000 loan.
In June 2003, the Company refinanced the $5,347,000 loan and obtained a
$8,100,000 loan.

Each mortgage is secured by its respective land and building. Mortgage notes
payable secured by real estate are comprised of the following information as
of June 30, 2003:


                Number    Acquisition         Note         Mortgage   Interest
  Property      of Units      Date          Maturity        Balance     Rate
                                               Date
------------  ----------- --------------   ------------    ---------    ------
Morris County      151    September 1967   May       2013 $10,550,000   5.430%
St. Louis          264    November  1968   July      2008   5,639,000   6.734%
Florence           157    December  1972   May       2006   4,062,000   7.925%
Irving             224    September 1994   January   2008   4,327,000   7.010%
Irving              54    November  2000   July      2006   1,198,000   9.220%
San Antonio        132    June      1993   December  2008   3,093,000   6.615%
Houston            442    February  1997   January   2013  10,044,000   5.800%
Austin             249    November  1999   July      2023   8,100,000   5.460%
Austin             112    September 2001   September 2009   2,234,000   8.225%
Los Angeles         12    July      1999   August    2029     742,000   6.850%
Los Angeles         27    September 1999   October   2029   1,885,000   7.730%
Los Angeles         14    October   1999   November  2029   1,112,000   7.890%
Los Angeles         10    November  1999   December  2029     830,000   7.950%
Los Angeles         31    May       2000   June      2030   2,148,000   3.947%
Los Angeles         30    July      2000   August    2028   2,668,000   7.576%
Los Angeles          4    July      2000   August    2030     585,000   7.590%
Los Angeles          4    July      2000   August    2030     444,000   7.590%
Los Angeles          5    August    2000   September 2030     480,000   5.778%
Los Angeles          7    August    2000   August    2030     650,000   5.778%
Los Angeles          1    November  2000   December  2030     476,000   8.435%
Los Angeles         24    March     2001   April     2031   1,760,000   7.150%
Los Angeles          8    May       2001   May       2031     579,000   7.000%
Los Angeles          3    February  2002   February  2032     455,000   6.450%
Los Angeles    Office     March     1999   April     2009   1,224,000   8.260%
Los Angeles    Office     September 2000   December  2013     831,000   7.500%



The annual combined aggregate principal payments on the mortgage notes payable
for the five-year period commencing July 1, 2003, and thereafter, are as
follows:

                 Year ending June 30,
                      2004               $ 1,355,000
                      2005                 1,449,000
                      2006                 5,427,000
                      2007                 2,710,000
                      2008                 5,602,000
                      Thereafter          49,573,000
                                         -----------
                       Total             $66,116,000
                                         ===========

At June 30, 2003, the total outstanding mortgage balance approximates the
estimated fair value of the outstanding debt.

                                    -33-
<PAGE>

6.  Income Taxes:

The provision for the Company's income tax benefit is comprised of the
following:

                                                Year Ended June 30,
                                              2003               2002
                                           ----------         ----------
Current tax benefit                       $ 1,743,000        $ 3,085,000
Deferred tax benefit (expense)             (3,942,000)         2,009,000
                                           ----------         ----------
                                          $(2,199,000)       $ 5,094,000
                                           ==========         ==========

The components of the deferred tax liability as of June 30, 2003, are as
follows:

Net operating loss carryforwards                             $ 3,474,000
Capital loss carryforwards                                     2,863,000
Other                                                            492,000
                                                              ----------
   Gross deferred tax assets                                   6,829,000
                                                              ----------

Deferred real estate gains                                   $(9,369,000)
Unrealized gain on marketable securities                      (1,904,000)
Basis differences in partnerships                               (582,000)
Equity earnings of subsidiaries                                 (445,000)
                                                              ----------
   Gross deferred tax liabilities                            (12,300,000)
                                                              ----------

Net deferred tax liability                                   $(5,471,000)
                                                              ==========

The provision for income taxes differs from the amount of income tax computed
by applying the federal statutory income tax rate to income before taxes as a
result of the following differences:

                                                     Year Ended June 30,
                                                     2003           2002
                                                 -----------    -----------
Income tax at federal statutory rates           $  1,870,000   $ (4,189,000)
State income taxes, net of federal benefit           386,000       (739,000)
Other                                                (57,000)      (166,000)
                                                 -----------    -----------
   Total income tax expense (benefit)           $  2,199,000   $ (5,094,000)
                                                 ===========    ===========


As of June 30, 2003, the Company had a net operating losses available for
carryforward of approximately $9,177,000.  The carryforward expires in varying
amounts through the year 2021.  The Company also has capital losses available
for carryforward of $3,463,000 that expire in varying amounts through 2006.

                                    -34-
<PAGE>

7.  Segment Information

The Company operates in three reportable segments, the operations of its
multi-family residential properties, 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.

Information below represents reported segments for the years ended June 30,
2003 and 2002.  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>
                                 Real Estate
                           -------------------------
Year ended                    Rental       Justice     Investment
June 30, 2003               Properties    Investors    Transactions     Other
Total
                           -----------   -----------   -----------   -----------
------------
<S>                         <C>           <C>          <C>            <C>
<C>
Operating income            $14,148,000   $ 1,404,000  $  6,937,000   $
-   $ 22,489,000
Operating expenses           (6,873,000)            -    (2,716,000)
-     (9,589,000)
Real estate taxes            (1,561,000)            -             -
-     (1,561,000)
                            -----------   -----------   -----------   ----------
-   ------------
Net operating income          5,714,000     1,404,000     4,221,000
-     11,339,000

Mortgage interest expense    (3,394,000)            -             -
-     (3,394,000)
Depreciation                 (2,724,000)            -             -
-     (2,724,000)
Loss on early extinguishment
 of debt                       (645,000)            -             -
-       (645,000)
General and administrative
  expenses                            -             -             -
(1,850,000)    (1,850,000)
Other income                           -            -             -
2,842,000)     2,842,000
Income tax expense                    -             -             -
(2,199,000)    (2,199,000)
Minority interest                     -             -             -
(802,000)      (802,000)
                            -----------   -----------   -----------   ----------
-   ------------
Net income (loss)           $(1,049,000)  $ 1,404,000  $  4,221,000
$(2,009,000)  $  2,567,000
                            ===========   ===========   ===========
===========   ============
Total Assets                $62,970,000   $ 8,874,000  $ 54,989,000   $
8,762,000   $135,595,000
                            ===========   ===========   ===========
===========   ============
</TABLE>

<TABLE>
                                  Real Estate
                            -------------------------
Year ended                     Rental       Justice     Investment
June 30, 2002                Properties    Investors    Transactions     Other
Total
                            -----------   -----------   -----------   ----------
-   ------------
<S>                         <C>           <C>          <C>            <C>
<C>
Operating income(loss)      $12,800,000   $ 2,160,000  $(19,135,000)  $
-   $ (4,175,000)
Operating expenses           (6,545,000)            -    (1,952,000)
-     (8,497,000)
Real estate taxes            (1,506,000)            -             -
-     (1,506,000)
                            -----------   -----------   -----------   ----------
-   ------------
Net operating income(loss)   4,749,000     2,160,000   (21,087,000)            -
(14,178,000)

Mortgage interest expense    (3,371,000)            -             -
-     (3,371,000)
Depreciation                 (2,493,000)            -             -
-     (2,493,000)
Gain of Sale of Real Estate  10,277,000             -             -
-     10,277,000
General and administrative
  expenses                            -             -             -
(1,928,000)    (1,928,000)
Other expense                          -            -             -
(680,000)      (680,000)
Income tax benefit                    -             -             -
5,094,000      5,094,000
Minority interest                     -             -             -
3,075,000      3,075,000
                            -----------   -----------   -----------   ----------
-   ------------
Net income (loss)           $ 9,162,000   $ 2,160,000  $(21,087,000)  $
5,561,000   $ (4,204,000)
                            ===========   ===========   ===========
===========   ============
Total Assets                $63,942,000   $ 9,857,000  $  6,437,000   $
4,074,000   $ 84,310,000
                            ===========   ===========   ===========
===========   ============
</TABLE>

                                    -35-
<PAGE>

8.  Supplemental Cash Flow Information:

Cash paid for margin interest for the year ended June 30, 2003 and 2002 was
$210,000 and $492,000, respectively. Cash paid for interest on mortgage notes
payable for the year ended June 30, 2003 and 2002 was $3,240,000 and
$3,585,000, respectively.  For the year ended June 30, 2003, the Company
received a net cash tax refund of $1,485,000.  For the year ended June 30,
2003, the Company made tax payments of $564,000.

9.  Stock Option Plans

On December 8, 1998, the Company adopted and authorized a stock option plan
(the "1998 Non-employee Directors Plan") for non-employee directors. The 1998
Non-employee Directors Plan provides for the granting of stock options to
purchase shares of the Company's common stock to non-employee directors of the
Company. The aggregate number of shares to be delivered upon exercise of all
options granted under the Plan may not exceed 150,000.  During fiscal years
2003 and 2002, the Company granted stock options of 15,000 shares in each
respective year, to the directors of the Company.  These options have exercise
prices of $11.23 and $12.70 per share, respectively.  All 15,000 options
granted during 2003 were vested.  The options have a term of 10 years.

On December 22, 1998, the Company adopted and authorized a stock option plan
(the "1998 Key Officers Plan") for selected key officers. The 1998 Plan
provides for the granting of stock options to purchase shares of the Company's
common stock to key officers of the Company. The aggregate number of shares to
be delivered upon exercise of all options granted under the Plan may not
exceed 300,000. On December 22, 1998, the Board of Directors of the Company
granted a total of 225,000 stock options to the President and Chairman of the
Company at an exercise price of $7.92 per share. As of June 30, 2003, all
225,000 options are vested.

Information relating to the stock options during the fiscal years ended June
30, 2003 and 2002 are as follows:

                                      Number of          Weighted-average
                                       Shares            Exercise Price
                                      ----------         ---------------
Unexercised options
  outstanding at June 30, 2001:         333,000                  $ 9.37
Granted                                  15,000                  $12.70
Exercised                                     -                       -
Forfeited                                     -                       -
                                       --------                --------
Unexercised options
  outstanding at June 30, 2002:         348,000                  $ 9.52
Granted                                  15,000                  $11.23
Exercised                                     -                       -
Forfeited                                     -                       -
                                       --------                --------
Unexercised options
  outstanding at June 30, 2003:         363,000                  $ 9.59
                                       ========                ========

                                    -36-
<PAGE>

Of the total 363,000 unexercised options outstanding as of June 30, 2003,
13,500 are not yet vested.

Unexercised            Range of       Weighted Average  Weighted Average
Options                Exercise Price Exercise Price    Remaining Life
----------------      --------------  ----------------  ----------------
June 30, 2002          $7.92-$29.63      $ 9.52           6.66 years
June 30, 2003          $7.92-$29.63      $ 9.59           5.80 years

                                    -36-
<PAGE>

10.  Commitments and Contingencies:

On February 2, 2001, a Complaint for Declaratory Relief was filed by the
Company's Directors and Officers' Liability insurance carrier, Continental
Casualty Company ("CNA"), respecting certain coverage claims relating to
litigation filed by a former employee, officer and director, which was settled
by the Company.  On April 17, 2003, the parties entered into a stipulation and
order for dismissal of the above-entitled action following the consummation of
a settlement reached at a mediation proceeding on April 7, 2003.  The gross
settlement amount paid by CNA was $2.7 million.  After deduction of attorneys'
fees and other costs and fees incurred in the litigation, net proceeds in the
amount of $2,235,317 were received by the Company April 22, 2003.  On May 5,
2003, an Order for Dismissal with Prejudice was entered in the action.

On August 2, 2001, the Company was awarded $13,862,000 from the Circuit court
of St. Louis County, Missouri, which granted the City of St. Louis permission
to take possession of the 176-unit St. Louis, Missouri apartment complex in a
condemnation action filed by the City of St. Louis.  The Company realized a
gain of $10,277,000 and received net proceeds of $9,255,000 after payment of
the mortgage on the property, costs and attorneys' fees.  On August 10, 2001,
the City of St. Louis filed Exceptions to the Commissioners' Report
challenging the amount of the award to the Company.  On August 14, 2003, the
Company entered into a settlement with the City and the obligation was
satisfied with the payment of $700,000.  This amount was properly reserved for
in the prior year.

The Company is a defendant or co-defendant in various other legal actions
involving various claims incident to the conduct of its business.  Most of
these claims are covered by insurance.  Management does not anticipate the
Company to suffer any material liability by reason of such actions.


11.  Related Party Transactions:

Gary N. Jacobs, a Director of the Company, is of Counsel to the law firm of
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP.  Through May
31, 2000 he was a senior partner of said firm, which provided legal services
to the Company during the years ended June 30, 2003 and 2002.  During the
years ended June 30, 2003 and 2002, the Company made payments of approximately
$689,000 and $484,000, respectively to Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP.

In May 1996, the Company's Chairman and President exercised options to
purchase 187,500 shares of Common Stock at a price of $7.67 per share through
a full recourse note due the Company on demand with an original due date of

                                    -37-
<PAGE>

May 16 2001.  On May 2, 2001, the Company extended the due date to May 16,
2003.  The note bore interest floating at the lower of 10% or the prime rate
(4.25% at June 30, 2003) with interest payable quarterly.  On May 16, 2003,
the Chairman settled his related party promissory note to the Company in the
principal amount of $1,437,500.  The Chairman made a cash payment to the
Company in the amount of $722,683, which was equal to one half of the
principal and accrued interest due on the note.  The balance of the obligation
was satisfied through the forgiveness of debt and has been recorded under
margin interest and trading expenses.  The transaction was approved by the
disinterested members of the Company's Board of Directors and by its Audit
Committee.  The amounts due on the note had been reflected as a reduction in
shareholders' equity on the Company's balance sheet.


12. Subsequent Events:

In July 2003, the Company refinanced a $2,141,000 real estate loan and
obtained a new $4,215,000 loan on one of its Los Angeles, California
properties.

In August 2003, the Company purchased a real estate property in Los Angeles,
California for $700,000 cash.



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

None.


Item 8A. Controls and Procedures.

(a) Disclosure Controls and Procedures.

The Company's management, with the participation of the Company's Chief
Executive Officer and the Chief Financial Officer, has evaluated of the
effectiveness of the Company's disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the
fiscal period covered by this Annual Report on Form 10-KSB.  Based upon such
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of such period, the Company's disclosure
controls and procedures are effective in ensuring that information required to
be disclosed in this filing is accumulated and communicated to management and
is recorded, processed, summarized and reported in a timely manner and in
accordance with Securities and Exchange Commission rules and regulations.

(b) Internal Control Over Financial Reporting.

There have been no changes in the Company's internal control over financial
reporting during the last quarterly period covered by this Annual Report on
Form 10-KSB that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting.

                                    -38-
<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, 2003:

                         Position with
    Name                  the Company         Age     Term to Expire
------------------     ------------------     ---    -----------------
Class A Directors:

John V. Winfield      Chairman of the Board;   56     2003 Annual Meeting
(1)(4)(6)(7)(8)       President and Chief
                      Executive Officer

Josef A.              Director and Vice        55     2003 Annual Meeting
Grunwald (2)(7)       Chairman of the Board

Class B Directors:

Gary N. Jacobs
(1)(6)(7)(8)          Secretary; Director      58     2004 Annual Meeting

William J. Nance (1)
(2)(3)(4)(6)(7)       Director                 59     2004 Annual Meeting

Class C Directors:

Mildred Bond
Roxborough (2)(5)     Director                 76     2005 Annual Meeting

John C. Love          Director                 63     2005 Annual Meeting
(3)(4)(5)(8)

Other Executive Officers:

David C. Gonzalez     Vice President           36      N/A
                      Real Estate

Michael G. Zybala     Asst. Secretary          51      N/A

David T. Nguyen       Treasurer and            30      N/A
                      Controller

------------------
(1)  Member of the Executive Committee
(2)  Member of the Administrative and Compensation Committee
(3)  Member of the Audit and Finance Committee
(4)  Member of the Real Estate Investment Committee
(5)  Member of the Nominating Committee
(6)  Member of the Securities Investment Committee
(7)  Member of the Special Strategic Options Committee
(8)  Member of the Stock Option Administrative Committee (Non-employee
     Director Plan)

                                    -38-
<PAGE>

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 appointed to the Board in
1982.  He currently serves as the Company's Chairman of the Board,
President and Chief Executive Officer, having first been appointed as
such in 1987.  Mr. Winfield also serves as President, Chairman and Chief
Executive Officer of Santa Fe Financial Corporation ("Santa Fe") and
Portsmouth Square, Inc. ("Portsmouth"), both public companies.

Josef A. Grunwald -- Mr. Grunwald is an industrial, commercial and
residential real estate developer.  He serves as Chairman of PDG N.V.
(Belgium), a hotel management company, and President of I.B.E.  Services
S.A. (Belgium), an international trading company.  Mr. Grunwald was
first elected to the Board in 1987 and named Vice Chairman on January 30,
2002.  Mr. Grunwald is also a Director of Portsmouth.

William J. Nance -- Mr. Nance is a Certified Public Accountant and
private consultant to the real estate and banking industries.  He also
serves as President of Century Plaza Printer, Inc.  Mr. Nance was first
elected to the Board in 1984.  He was appointed Treasurer, Chief
Operating Officer and Chief Financial Officer in 1987 and served in those
positions until January 2000.  Mr. Nance is also a Director of Santa Fe and
Portsmouth.

Mildred Bond Roxborough -- Ms. Roxborough was Director of Development
and Special Programs of the National Association for the Advancement of
Colored People (NAACP) from 1986 to 1997. She also served as Vice
Chairman of the Board of Directors of America's Charities Federation,
Chairman of its Membership and Personnel Committees and member of its
Long Range Planning Committee; and Member of the Board of Directors of
Morningside Health and Retirement Service, Member of Personnel Committee
of Morningside Heights Housing Corporation.  Since 1997 Ms. Roxborough
has served as a consultant to the NAACP.  Ms. Roxborough was first
appointed to the Company's Board in 1984 and served as Vice Chairman
from 1987 through 1994.

Gary N. Jacobs -- Mr. Jacobs was appointed to the Board and as Secretary in
1998. Mr. Jacobs is Executive Vice President, General Counsel, Secretary and a
Director of MGM MIRAGE (NYSE: MGG) and Of Counsel to the law firm of
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP.  Through May
31, 2000, he was a partner of said firm and the head of the corporate
department.

John C. Love -- Dr. Love was appointed to the Board in 1998.  He is an
independent consultant to the hospitality and tourism industries and was
formerly a general partner in the national CPA and consulting firm of
Pannell Kerr Forster.  He is Chairman Emeritus of the Board of Trustees
of Golden Gate University in San Francisco. Dr. Love is also a Director
of Santa Fe and Portsmouth.

                                    -40-
<PAGE>



Michael G. Zybala -- Mr. Zybala was appointed Vice President Operations and
Assistant Secretary of the Company on January 27, 1999 and served as Vice
President Operations until July 15, 2002.  Mr. Zybala is an attorney at law
and has served as a special legal consultant to the Company.  Mr. Zybala is
also the Vice President and Secretary of Santa Fe and Portsmouth and has
served as their General Counsel since 1995.  Mr. Zybala has provided legal
services to Santa Fe and Portsmouth since 1978.

David C. Gonzalez -- Mr. Gonzalez was appointed Vice President Real Estate of
the Company on January 31, 2001.  Over the past 14 years, Mr. Gonzalez has
served in numerous capacities with the Company, including Controller and
Director of Real Estate.

David T. Nguyen - Mr. Nguyen was appointed as Treasurer of the Company on
February 26, 2003.  Mr. Nguyen also serves as Treasurer of Santa Fe and
Portsmouth, having been appointed to those positions on February 27, 2003.
Mr. Nguyen is a Certified Public Accountant and, from 1995 to 1998, was
employed by PricewaterhouseCoopers where he was a Senior Accountant
specializing in real estate.  Mr. Nguyen was the Company's Controller from
1998 to 2001 and from 2003 to the present.


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 2003 all
filing requirements applicable to its officers, directors, and greater than
ten-percent beneficial owners were complied with.

                                    -41-
<PAGE>



Item 10.  Executive Compensation.

The following table provides certain summary information concerning
compensation awarded to, earned by, or paid to the named Executive Officers of
the Company who earned more than $100,000 (salary and bonus) for all services
rendered to the Company and its subsidiaries for fiscal years 2003, 2002 and
2001.  There are currently no employment contracts with the Executive
Officers.

<TABLE>
                           SUMMARY COMPENSATION TABLE
                                                                        Long-
Term
                                    Annual Compensation
Compensation
                                    -------------------                ---------
---
                                                                         Awards
                                                                         ------

Securities
Name and Principal                                     Other Annual
Underlying
Position                  Year     Salary      Bonus   Compensation
Options/SARs
-------------------      ------   -------      ------  -------------   ---------
---
<S>                       <C>    <C>          <C>         <C>              <C>
John V. Winfield
Chairman; President       2003   $437,000(1)  $653,533(2) $786,290(3)
-
and Chief Executive       2002   $500,750(1)  $      -    $ 80,359(3)
-
Officer                   2001   $522,000(1)  $      -    $ 69,322(3)
-

Michael G. Zybala         2003   $ 63,000(4)  $  2,600
-
Assistant Secretary       2002   $117,400(4)  $  4,000          -
-
and Counsel               2001   $131,028(4)  $ 15,000          -
-

David C. Gonzalez         2003   $156,672(5)  $ 20,000          -
-
Vice President            2002   $186,672(5)  $100,000          -
-
Real Estate               2001   $141,608     $ 75,000          -
15,000(6)
---------------------
</TABLE>

(1) Mr. Winfield also serves as President and Chairman of the Board of the
Company's subsidiary, Santa Fe, and Santa Fe's subsidiary, Portsmouth.  Mr.
Winfield received salary and directors fees of $211,750, $242,000 and $252,000
from those entities during fiscal years 2003, 2002 and 2001, respectively,
which amounts are included in this item.

(2) This amount reflects a performance bonus, paid by the Company's subsidiary
Santa Fe and Santa Fe's subsidiary, Portsmouth, based on the results of Mr.
Winfield's management of the securities portfolios of those companies for the
fiscal year ended June 30, 2003. Of the total amount of the bonus, $242,178
was paid by Santa Fe and $411,355 was paid by Portsmouth.

(3) For fiscal year 2003 this amount includes $722,683 in forgiveness of debt
on one half of the principal balance and accrued interest on a promissory note
due the Company. Amounts also include an auto allowance and compensation for a
portion of the salary of an assistant. The auto allowance was $33,607, $33,607
and $34,322 during fiscal years 2003, 2002 and 2001, respectively.  The amount
of compensation related to the assistant was approximately $30,000, $46,752
and $35,000 during fiscal years 2003, 2002 and 2001 respectively.  During
fiscal 2003, 2001 and 2001, the Company also paid annual premiums in the
amount of $42,500 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 payment to the beneficiary.
During fiscal years 2003, 2002 and 2001 Santa Fe and Portsmouth also paid
annual premiums on split dollar policies in the total amount of $42,500.

                                    -42-
<PAGE>

(4) Mr. Zybala also served as Vice President Operations from in January 1999
to July 15, 2002.  His salary and bonuses are allocated approximately 25% to
the Company and 75% to Santa Fe and Portsmouth.

(5) Includes $17,922 for an auto lease.

(6) On January 31, 2001, Mr. Gonzalez was granted options to purchase up to
15,000 shares (adjusted for stock split) of the Common Stock of the Company at
an exercise price of $13.17 per share, which was the closing price of the
Common Stock on the date of grant.  The term of the options is for the period
beginning January 31, 2002 and ending on January 30, 2011.  No options may be
exercised prior to January 31, 2003 and vest at a rate of 1,500 shares per
year between January 31, 2003 and January 31, 2006, and at a rate of 2,250
shares per year between January 31, 2007 and January 31, 2010.


On July 18, 2003, the disinterested members of the respective Boards of
Directors of the Company's subsidiary, Santa Fe and Santa Fe's subsidiary,
Portsmouth, established a performance compensation program for the Company's
CEO, John V. Winfield, to keep and retain his services as a direct and active
manager of the securities portfolios of those companies.  The Company's
previous experience and results with outside money managers was not
acceptable.  Pursuant to the criteria established by those Boards of
Directors, Mr. Winfield will be entitled to performance compensation for his
management of the securities portfolios of those companies equal to 20% of all
net investment gains generated in excess of the performance of the S&P 500
Index. Compensation amounts will be calculated and paid quarterly based on the
results of the Company's investment portfolio for that quarter.  Should the
companies have a net investment loss during any quarter, Mr. Winfield would
not be entitled to any further performance-based compensation until any such
investment losses are recouped by the Company.  The compensation program shall
be administered so that total amount of compensation paid to Mr. Winfield in
any tax year will not exceed $1 million. This performance compensation program
may be modified or terminated at the discretion of the respective Boards of
Directors.  It is expected that the Compensation Committee and the
disinterested members of the Board of Directors of InterGroup will also
consider the adoption of an appropriate performance based compensation
arrangement for the CEO's management of its securities portfolio.


Internal Revenue Code Limitations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, in the case of a publicly held corporation, the corporation is
not generally allowed to deduct remuneration paid to its chief executive
officer and certain other highly compensated officers to the extent that such
remuneration exceeds $1,000,000 for the taxable year.  Certain remuneration,
however, is not subject to disallowance, including compensation paid on a
commission basis and, if certain requirements prescribed by the Code are
satisfied, other performance based compensation.  Since InterGroup, Santa Fe
and Portsmouth are each public companies, the $1,000,000 limitation applies
separately to the compensation paid by each entity.  For fiscal 2003, 2002 and
2001 no compensation paid by the Company to its CEO or other executive
officers was subject the deduction disallowance prescribed by Section 162(m)
of the Code.

                                    -43-
<PAGE>


                  OPTIONS/SAR GRANTS IN LAST FISCAL YEAR

The Company did not have any individual grants of stock options or Stock
Appreciation Rights ("SARs") during the year ended June 30, 2003 to any named
executive officer.



              AGGREGATE OPTIONS/SAR EXERCISES IN THE LAST FISCAL YEAR
                  AND FISCAL YEAR END OPTION/SAR VALUES


The following table contains information concerning each exercise of stock
options (or tandem SARs) and freestanding SARs during the last completed
fiscal year by each of the named executive officers and the fiscal year-end
value of unexercised options and SARs (adjusted for March 31, 2003 stock
split):

<TABLE>
                                              Number of Securities
              Shares                         Underlying Unexercised      Value
of Unexercised
           Acquired on        Value            Options/SARs as of        In-the-
Money Options/
Name       Exercise (#)     Realized ($)         June 30, 2003            at
June 30, 2003
----       ------------     -----------      -----------------------      ------
--------------
                                           Exercisable/Unexercisable
Exercisable/Unexercisable
                                           -------------------------   ---------
---------------
<S>                  <C>    <C>                <C>                           <C>
John V.
Winfield             -      $     -            225,000/0
$360,000/0(1)

David C.
Gonzalez             -      $     -              1,500/13,500                $
0/0(1)
--------------
</TABLE>

(1) Based on the closing price of the Company's Common Stock on June 30, 2003
    of $9.52 per share.


1998 Stock Option Plan for Non-Employee Directors

On December 8, 1998, the Board of Directors of the Company adopted, subject to
stockholder approval and ratification, a 1998 Stock Option Plan for Non-
employee Directors (the "Plan").  The stockholders ratified that plan on
January 27, 1999.

The stock to be offered under the Plan shall be shares of the Company's Common
Stock, par value $.01 per share, which may be unissued shares or treasury
shares.  Subject to certain adjustments upon changes in capitalization, the
aggregate number of shares to be delivered upon exercise of all options
granted under the Plan shall not exceed 150,000 shares (adjusted for March 31,
2003 stock split).  The Plan shall terminate on the earliest to occur of (i)
the dates when all of the Common Stock available under the Plan shall have
been acquired through the exercise of options granted under the Plan; (ii) 10
years after the date of adoption of the Plan by the Board; or (iii) such other
date that the Board may determine.

Pursuant to the Plan, each non-employee director as of the adoption date of
the Plan shall be granted on the date thereof: (i) if he or she became a non-

                                    -44-
<PAGE>

employee director prior to January 1, 1998, an option to purchase 8,000 shares
of Common Stock; and (ii) if he or she became a non-employee director on or
after January 1, 1998, an option to purchase 4,000 shares of Common Stock.
Each new non-employee director who is elected to the Board shall automatically
be granted an option to purchase 4,000 shares of Common Stock upon the initial
date of election to the Board.  On each July 1 following the adoption date,
each non-employee director shall be granted an option to purchase 3,000 shares
of Common Stock (adjusted for stock split) provided he or she holds such
position on that date and the number of Common Shares available for grant
under the Plan is sufficient to permit such automatic grant.

The exercise price of the option shall be determined at the time of grant and
shall not be less than 100% of the fair market value of the Common Stock at
the time of the grant of the option.  The term of the option shall be for ten
years.  Options granted to any non-employee director will not vest 100% until
such person has been a member of the Board for four (4) years or more.  Non-
employee directors who have been a member of the Board less than four (4)
years, shall be vested with respect to 20% of the options on the date of grant
and 20% on each anniversary of such person having become a member of the
Board, provided that the optionee is on each such date serving as a member of
the Board or as an employee or consultant to the Company.

Pursuant to the plan, the following non-employee directors of the Company were
granted options during fiscal 2003 to purchase shares of Common Stock: Josef
A. Grunwald (3,000 shares); William J. Nance (3,000 shares); Mildred Bond
Roxborough (3,000 shares); Gary N. Jacobs (3,000 shares); and John C. Love
(3,000 shares).  The exercise price for the options is $11.23 per share, which
was the closing price of the Company's Common Stock on the Nasdaq National
Market System as of the date of grant on July 1, 2002.



1998 Stock Option Plan for Selected Key Officers,
Employees and Consultants

On December 8, 1998, the Board of Directors of the Company adopted, subject to
shareholder approval and ratification, a 1998 Stock Option Plan for selected
key officers, employees and consultants (the "Key Employee Plan").  The Key
Employee Plan was ratified by the stockholders on January 27, 1999.

The stock to be offered under the Key Employee Plan shall be shares of the
Company's Common Stock, par value $.01 per share, which may be unissued shares
or treasury shares.  Subject to certain adjustments upon changes in
capitalization, the aggregate number of shares to be delivered upon exercise
of all options granted under the Key Employee Plan shall not exceed 300,000
shares (adjusted for stock split).  The Key Employee Plan shall terminate on
the earliest to occur of (i) the dates when all of the Common Stock available
under the Key Employee Plan shall have been acquired through the exercise of
options granted under the Key Employee Plan; (ii) 10 years after the date of
adoption of the Key Employee Plan by the Board; or (iii) such other date that
the Board may determine.

                                    -45-
<PAGE>



The Key Employee Plan is administered by a Committee appointed by the
Board of Directors which consists of two or more disinterested persons
within the meaning of Rule 16b-3 promulgated pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act").  Persons eligible to receive
options under the Key Employee Plan shall be employees who are selected by the
Committee.  In determining the Employees to whom options shall be granted and
the number of shares to be covered by each option, the Committee shall take
into account the duties of the respective employee, their present and
potential contribution to the success of the Company, their anticipated number
of years of active service remaining and other factors as it deems relevant in
connection with accomplishing the purposes of the Key Employee Plan.  An
employee who has been granted an option may be granted an additional option or
options as the Committee shall so determine.

The exercise price of the option shall be determined at the time of grant and
shall not be less than 100% of the fair market value of the Common Stock at
the time of the grant of the option.  The term of the option shall not exceed
10 years from the date on which the option is granted.  The vesting schedule
for the options and the method or time that when the option may be exercised
in whole or in part shall be determined by the Committee.  However, in no
event shall an option be exercisable within six months of the date of grant in
the case of an optionee subject to Section 16(b) of the Exchange Act.  Subject
to certain exceptions, the option shall terminate six months after the
optionee's employment with the Company terminates.  No options to purchase
shares were granted pursuant to the Key Employee Plan during fiscal 2003.


Compensation of Directors

Each director is paid a fee of $1,500 per quarter for a total annual
compensation of $6,000.  The Chairman of the Board of Directors is eligible to
receive $9,000 per annum. Directors also are eligible to receive $500 for each
committee meeting attended and $600 for each committee meeting chaired.
Members of the Audit Committee receive a fee of $500 per quarter.  Directors
who are also Executive Officers do not receive any fee for attending Board or
Committee meetings.  As an Executive Officer, the Company's Chairman has also
elected to forego his annual board fee.  The Directors are also eligible for
grants of options to purchase shares of the Company's Common Stock pursuant to
the 1998 Stock Option Plan for Non-Employee Directors.

Except for the foregoing, there are no other arrangements for compensation of
Directors and there are no employment contracts between the Company and its
Directors.

                                    -46-



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

On March 31, 2003, the Company effectuated a three-for two stock split of its
Common Stock in the form of a 50% stock dividend.  Any resulting fractional
shares were paid in cash.

The following table sets forth, as of September 15, 2003, certain information
with respect to the beneficial ownership of Common Stock of the Company,
(adjusted for the stock split) owned by (i) those persons or groups known by
the Company to own more than five percent of the outstanding shares of Common
Stock, (ii) each Director and Executive Officer, and (iii) all Directors and
Executive Officers as a group.


Name and Address of           Amount and Nature
Beneficial Owner (1)         of Beneficial Owner(2)     Percentage(3)
--------------------        ----------------------     -------------

John V. Winfield               1,613,907(4)                 58.6%

Josef A. Grunwald                136,567(3)                  5.4%

William J. Nance                  72,297(3)                  2.9%

Mildred Bond Roxborough           30,525(3)                  1.2%

Gary N. Jacobs                    24,375(3)(5)                 *

John C. Love                      21,000(3)                    *

David C. Gonzalez                 17,250(6)                    *

Michael G. Zybala                      0                       *

David T. Nguyen                        0                       *

All Directors and
Executive Officers as a
Group (9 persons)              1,915,921                    66.6%
------------------
*  Ownership does not exceed 1%.

(1)  Unless otherwise indicated, the address for the persons listed is
820 Moraga Drive, Los Angeles, CA 90049.

(2)  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.

 (3)  Percentages are calculated on the basis of 2,530,384 shares of Common
Stock outstanding at September 15, 2003 plus any securities that person has
the right to acquire within 60 days pursuant to options, warrants, conversion
privileges or other rights.  The following options are included in directors
shares: Josef A. Grunwald - 27,000; William J. Nance - 27,000; Mildred Bond
Roxborough - 27,000; Gary N. Jacobs - 21,000; John C. Love - 21,000.

                                    -47-
<PAGE>




(4)  Includes 225,000 shares of which Mr. Winfield has the right to acquire
pursuant to options.

(5)  Other than his options, all shares of Mr. Jacobs are held by the Gary and
Robin Jacobs Family Trust.

(6)  Includes 1,500 shares of which Mr. Gonzalez has a right to acquire
pursuant to options.


Changes in Control Arrangements

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



SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The following table sets forth information as of September 15, 2003 (adjusted
for March 31, 2003 stock split), with respect to compensation plans (including
individual compensation arrangements) under which equity securities of the
Company are authorized for issuance, aggregated as follows:

Plan category       Securities to     Weighted average   Remaining available
                      be issued       exercise price     for future issuance
                    upon exercise     of outstanding        under equity
                    of outstanding       options         compensation plans
                       options,        warrants and         (excluding
                     warrants and         rights             securities
                       rights                               reflected in
                                                             column (a))
                         (a)                (b)                 (c)
-------------------  ------------      -------------     -------------------
Equity compensation
plans approved by
security holders       363,000             $9.59               87,000

----------------------------------------------------------------------------

Equity compensation
plans not approved
by security holders      None               N/A                 None

----------------------------------------------------------------------------
     Total             363,000             $9.59               87,000
----------------------------------------------------------------------------



Item 12.  Certain Relationships and Related Transactions.

On December 4, 1998, the Administrative and Compensation Committee authorized
the Company to obtain whole life and split dollar insurance policies covering
the Company's President and Chief Executive Officer, Mr. Winfield.  During
fiscal 2003 and 2002, the Company paid annual premiums in the amount of
approximately $42,500 for the split dollar insurance policy owned by, and the
beneficiary of which is, a trust for the benefit of Mr. Winfield's family.

                                    -48-
<PAGE>

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.

On June 30, 1998, the Company's Chairman and President entered into a voting
trust agreement with the Company giving the Company the power to vote his 4.0%
interest in the outstanding shares of the Santa Fe common stock.

In May 1996, the Company's Chairman and President exercised options to
purchase 187,500 shares of Common Stock at a price of $7.67 per share through
a full recourse note in the principal amount of $1,437,500 due to the Company
on demand with an original due date of May 16, 2001.  Interest on the note was
at floating rate at the lower of 10% or the prime rate with interest payable
quarterly.  On May 2, 2001, the Company extended the due date to May 16, 2003.
On May 16, 2003, the Chairman settled his related party promissory note by
making a cash payment to the Company in the amount of $722,683.50, which was
equal to one half of the principal and accrued interest due on the note.  The
balance of the obligation was satisfied through the forgiveness of debt.  The
transaction was approved by the disinterested members of the Company's Board
of Directors and by its Audit Committee.  The amounts due on the note had been
reflected as a reduction in shareholders' equity on the Company's balance
sheet. During the fiscal years ended June 30, 2003 and 2002, the Chairman of
the Company made interest payments of approximately $55,500 and $76,650
respectively on the note.

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 Portsmouth 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 Portsmouth 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 Portsmouth, at risk in connection
with investment decisions made on behalf of the Company.  Under the direction
of the Securities Investment Committee, the Company has instituted certain
modifications to its procedures to reduce the potential for conflicts of
interest.

For fiscal 2003, the Company's subsidiary Santa Fe and Santa Fe's subsidiary,
Portsmouth paid the Company's CEO $653,533 in performance bonuses based on the
results of Mr. Winfield's management of the securities portfolios of those
companies for the fiscal year ended June 30, 2003. Of the total amount of the
bonus, $242,178 was paid by Santa Fe and $411,355 was paid by Portsmouth. The
bonuses were approved by the disinterested members of the Boards of Directors
of Santa Fe and Portsmouth.

Gary N. Jacobs, a Director of the Company, is Of Counsel to the law firm of
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP.  Through May
31, 2000 he was a senior partner of said firm, which provided legal services
to the Company during the years ended June 30, 2003 and 2002.   During the
years ended June 30, 2003 and 2002, the Company made payments of approximately
$689,000 and $484,000, respectively, to Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP.

                                    -49-
<PAGE>

Item 13.  Exhibits, List and Reports on Form 8-K.

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

3.  Certificate of Incorporation and By-Laws *

    Restated Certificate of Incorporation dated February 20, 1998 is
    incorporated herein by reference to the Company's Form 10-QSB Report
    filed with the Securities and Exchange Commission on May 15, 1998.

4.  Instruments defining the rights of security holders, including
    Indentures  *

9.  Voting Trust Agreement

    Voting Trust Agreement dated June 30, 1998 between John V. Winfield and
    The InterGroup Corporation is incorporated by reference to the Company's
    Form 10-KSB Annual Report filed with the Securities and Exchange
    Commission on September 28, 1998.

10. Material Contracts

    (a) Note and Exercise Agreement from Mr. John V. Winfield dated May 17,
        1996 **

    (b) 1998 Stock Option Plan for Non-Employee Directors approved by the
        Board of Directors on December 8, 1998 and ratified by the
        shareholders on January 27, 1999 ***

    (c) 1998 Stock Option Plan for Selected Key Officers, Employees and
        Consultants approved by the Board of Directors on December 8, 1998
        and ratified by the shareholders on January 27, 1999 ***

21. Subsidiaries:

 (1) Intergroup Summit Hills, Inc. (incorporated on August 12, 1993 in TX)
 (2) Intergroup Mariposa, Inc. (incorporated on June 23, 1994 in TX)
 (3) Intergroup Arlington Arms, Inc. (incorporated on August 5, 1993 in TX)
 (4) Intergroup Woodland Village, Inc. (incorporated on August 5, 1993 in OH)
 (5) Intergroup Cross Keys, Inc. (incorporated on April 1, 1994 in MO)
 (6) Intergroup Bridgeton, Inc. (incorporated on May 12, 1994 in MO)
 (7) Intergroup Whisperwood, Inc. (incorporated on June 20, 1994 in PA)
 (8) Intergroup Eagle Creek, Inc. (incorporated on April 15, 1994 in TX)
 (9) Intergroup Entertainment Corp. (incorporated on December 23, 1993 in DE)
(10) Mutual Real Estate Corp. (incorporated on March 10, 1994 in TX)
(11) WinGroup Capital (incorporated on September 21, 1994 in CA)
(12) Broadview Enterprises, Inc. (incorporated April 14, 1995 in MO)
(13) Wayward, Inc. (incorporated April 18, 1995 in MO)
(14) Golden West Entertainment, Inc. (incorporated February 15, 1990 in CA)
(15) Golden West Television Productions, Inc. (incorporated September 17,
     1991 in CA)
(16) Golden West Television Productions, Inc. (incorporated March 17, 1986 in
     NY)
(17) Intergroup The Trails, Inc. (incorporated on September 14, 1994 in TX)
(18) Intergroup Meadowbrook Gardens, Inc. (incorporated on June 23, 1994 in
     NJ)
(19) Intergroup Pine Lake, Inc. (incorporated on February 9, 1996 in KY)
(20) Bellagio Capital Fund, LLC (established on June 18, 1997 in CA)

                                    -50-
<PAGE>

(21) Intergroup Casa Maria, Inc. (incorporated on April 3, 1997 in TX)
(22) Healthy Planet Communications, Inc. (incorporated July 3, 1997 in CA)
(23) Santa Fe Financial Corporation (incorporated July 25, 1967 in NV)
(24) Portsmouth Square, Inc. (incorporated July 6, 1967 in CA)
(24) 2301 Bel-Air Equity, Inc. (incorporated May 25, 2000 in CA)
(26) 11378 Ovada Properties, Inc. (incorporated June 21, 2000 in CA)
(27) 11371 Ovada Properties, Inc. (incorporated May 25, 2000 in CA)
(28) 11361 Ovada Properties, Inc. (incorporated June 1, 2000 in CA)
(29) 11680 Bellagio Properties, Inc. (incorporated May 25, 2000 in CA)
(30) North Sepulveda Properties, Inc. (incorporated June 21, 2000 in CA)
(31) 11650 Bellagio Properties, Inc. (incorporated August 17, 2000 in CA)
(32) Intergroup Elwood, Inc. (incorporated October 12, 2000 in TX)
(33) 11720 Bellagio Properties, Inc. (incorporated January 17, 2001 in CA)
(34) 636 Acanto Properties, Inc. (incorporated February 15, 2001 in CA)
(35) Intergroup Tollgate Creek, Inc. (incorporated June 14, 2001 in TX)
(36) 614 Acanto Properties, Inc. (incorporated November 7, 2001 in CA)


31.1   Certification of Chief Executive Officer of Periodic Report
       Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

31.2   Certification of Chief Financial Officer of Periodic Report
       Pursuant to Rule 13a-14(a) and Rule 15d-14(a).

32.1   Certification of Chief Executive Officer Pursuant to 18
       U.S.C. Section 1350.

32.2   Certification of Chief Financial Officer Pursuant to 18
       U.S.C. Section 1350.

* All Exhibits marked by two asterisks are incorporated herein by reference to
the Trust's Registration Statement on Form S-4 as filed with the Securities
and Exchange Commission on September 6, 1985, Amendment No. 1 to Form S-4 as
filed with the Securities and Exchange Commission on October 23, 1985, Exhibit
14 to Form 8 Amendment No. 1 to Form 8 filed with the Securities & Exchange
Commission November 1987 and Form 8 Amendment No. 1 Item 4 filed with the
Securities & Exchange Commission October 1988.

** All Exhibits marked by five asterisks are incorporated herein by reference
to the Company's Form 10-KSB Annual Report filed with the Securities and
Exchange Commission on September 16, 1996.

*** All Exhibits marked by six asterisks are incorporated herein by
reference to the Company's Schedule 14A filed with the Securities and
Exchange Commission on December 21, 1998.


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

The Company filed the following reports on Form 8-K during the last quarter of
the period covered by this Report.

   Date of Report             Item Reported             Description
   ----------------         -------------------       ------------------

   April 17, 2003           Item 5. Other Events      Settlement of
                                                      Insurance Claim

   May 16, 2003             Item 5. Other Events      Payment of Related
                                                      Party Note

                                    -51-
<PAGE>

Item 14.  Principal Accountant Fees and Services.

Audit Fees - The aggregate fees billed for each of the last two fiscal years
ended June 30, 2003 and 2002 for professional services rendered by
PricewaterhouseCoopers LLP, the principal accountant for the audit of the
Company's annual financial statements and review of financial statements
included in the Company's Form 10-QSB or services normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for those fiscal years, were as follows:

                        Fiscal 2003 - $122,400
                        Fiscal 2002 - $95,740

There were no fees paid to PricewaterhouseCoopers LLP for "Audit Related
Fees", "Tax Fees" or for "Other Fees" as defined in Item 9(e) of Schedule 14A.

All of the services and fees described above were approved by the Company's
Audit Committee.  It is the Audit Committee's policy to approve all services
to be performed by the Company's principal accountant prior to the rendering
of those services.

All hours expended on the principal accountant's engagement to audit the
Company's financial statements for the most recent fiscal year were attributed
to work performed by persons that were the full time, permanent employees of
PricewaterhouseCoopers LLP.

                                    -52-
<PAGE>



                                SIGNATURES
                                ----------

   In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                               THE INTERGROUP CORPORATION
                                                     (Registrant)

Date: September 26, 2003         by /s/ John V. Winfield
      ------------------            ---------------------------------------
                                    John V. Winfield, Chairman of the Board,
                                    President and Chief Executive Officer


Date: September 26, 2003         by /s/ David T. Nguyen
      ------------------             ---------------------------------------
                                    David T. Nguyen, Treasurer and Controller
                                    Controller (Principal Accounting Officer)


Date: September 26, 2003         by /s/ David C. Gonzalez
      ------------------            --------------------------------------
                                    David C. Gonzalez
                                    Vice President Real Estate


   In accordance with the Exchange Act, 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 26, 2003            /s/ John V. Winfield
      ------------------            ---------------------------------------
                                    John V. Winfield, Chairman of the Board,
                                    President and Chief Executive Officer

Date: September 26, 2003            /s/ Josef A. Grunwald
      ------------------            ---------------------------------------
                                    Josef A. Grunwald, Vice Chairman of Board

Date: September 26, 2003            /s/ Gary N. Jacobs
      ------------------            ---------------------------------------
                                    Gary N. Jacobs, Director

Date: September 26, 2003            /s/ John C. Love
      ------------------            ---------------------------------------
                                    John C. Love, Director

Date: September 26, 2003            /s/ William J. Nance
      ------------------            ---------------------------------------
                                    William J. Nance, Director

Date: September 26, 2003            /s/ Mildred Bond Roxborough
      ------------------            ---------------------------------------
                                    Mildred Bond Roxborough, Director

                                    -53-