UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ~~[X]~~ x

Filed by a Party other than the Registrant ~~[ ]~~ ¨

Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Materials Pursuant to Section 240.14a-12

Preliminary Proxy Statement

Confidential For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Materials Pursuant to §240.14a-12

SANTA FE FINANCIAL CORPORATION ~~----------------------------------------------- (Name~~

(Name of Registrant as Specified inIn Its Charter) ~~----------------------------------------------- (Name~~

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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SANTA FE FINANCIAL CORPORATION

10940 WILSHIRE BLVD., SUITE 2150

LOS ANGELES, ~~CALIFORNIA~~CA 90024

(310) 889-2500 ~~---------------------------~~

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON FEBRUARY ~~24, 2011~~ 21, 2013

To The Shareholders of Santa Fe Financial Corporation:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Santa Fe Financial Corporation ("Santa Fe" or the "Company") will be held on February ~~24, 2011~~21, 2013 at 10:30 A.M. at the Hilton San Francisco Financial District, 750 Kearny Street, San Francisco, CA 94108 for the purpose of considering and acting on the following: (1) To elect three Directors to serve until the next Annual Meeting or until their successors have been duly elected and qualified. (2) To ratify the Audit Committee's appointment of Burr Pilger Mayer, Inc. as the Company's independent registered public accounting firm for the fiscal year ending June 30, 2011; (3) To approve, in a non-binding vote, the compensation of our named executive officers; (4) To determine, in a non-binding vote, whether a shareholder vote to approve our named executive officer compensation should occur every one, two or three years; and (5) To consider and act upon any other matters that may properly come before the meeting or any adjournments thereof.

(1)

To elect three Directors to serve until the next Annual Meeting or until their successors shall have been duly elected and qualified;

(2)

To ratify the retention of Burr Pilger Mayer, Inc. as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2013;

(3)

To transact such other business as may properly come before the meeting, or any postponements or adjournments thereof.

The Board of Directors has fixed the close of business on January 11, ~~2011~~2013 as the record date for determining the shareholders having the right to vote at the meeting or any ~~adjournments~~adjournment thereof.

Your proxy is important to us whether you own a few or many shares. Please complete, sign, date and promptly return the enclosed proxy in the ~~self- addressed,~~self-addressed, postage-paid envelope provided. Return the proxy even if you plan to attend the meeting. You may always revoke your proxy and vote in person.

Dated: January 18, 2013

	By Order of the Board of Directors,


	Michael G. Zybala
	Secretary

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on February 21, ~~2011 By Order~~2013. The Company’s Proxy, Proxy Statement and Annual Report on Form 10-K for the fiscal year ended June 30, 2012 are also available on the Santa Fe page of the Board of Directors, /s/ Michael G. Zybala Michael G. Zybala Secretary _____________________________________________________________________________ IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 24, 2011. THE COMPANY'S PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2010 ARE ALSO AVAILABLE ON SANTA FE FINANCIAL CORPORATION'S PARENT COMPANY'S WEBSITE AT WWW.INTERGROUPCORPORATION.COM. its parent company’s website at:www.intgla.com.

SANTA FE FINANCIAL CORPORATION

10940 WILSHIRE BLVD., SUITE 2150

LOS ANGELES, ~~CALIFORNIA~~CA 90024

(310) 889-2500 ~~----------------------------~~

PROXY STATEMENT ~~----------------------------~~

ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD FEBRUARY ~~24, 2011~~ 21, 2013

The Board of Directors of Santa Fe Financial Corporation (the "Company" or "Santa Fe") is soliciting proxies in the form enclosed with this statement in connection with the Annual Meeting of Shareholders to be held on February ~~24, 2011~~21, 2013 or at any adjournment or adjournments thereof.

This Proxy Statement and the accompanying Proxy are first being sent to Shareholders on or about January ~~24, 2011.~~23, 2013. Only shareholders of record at the close of business on January 11, ~~2011~~2013 are entitled to notice of, and to vote at, the Annual Meeting.

If you give us a proxy, you can revoke it at any time before it is used. To revoke it, you may file a written notice revoking it with the Secretary of the Company, execute a proxy with a later date or attend the meeting and vote in person.

You may vote at the Annual Meeting only shares that you owned of record on January 11, ~~2011.~~2013. There were 1,241,810 shares of common stock outstanding on that date. A majority, or 620,906 shares will constitute a quorum for the transaction of business at the meeting. Each share is entitled to one vote on each matter to be presented at the meeting. The affirmative vote of the holders of the majority of the shares of the Company's stock present or represented at the meeting and entitled to vote is required to elect directors and ratify or approve the other proposals being voted on at this time.

In addition to mailing this material to shareholders, the Company has asked banks and brokers to forward copies to persons for whom they hold stock of the Company and to request authority for the execution of proxies. The Company will reimburse banks and brokers for their reasonable out-of-pocket expenses in doing so. Officers of the Company may, without being additionally compensated, solicit proxies by mail, telephone, telegram or personal contact. All proxy soliciting expenses will be paid by the Company. The Company does not expect to employ anyone else to assist in the solicitation of proxies. 1

PROPOSAL 1

ELECTION OF DIRECTORS

The Company's bylaws set the number of directors at three. We propose to elect three directors, each to hold office until the next Annual Meeting of Shareholders and until his or her successor is elected and qualified. The Board of Directors has nominated John V. Winfield, John C. Love and William J. Nance. The persons named in the enclosed form of proxy will vote for the election of the nominees listed below unless you instruct otherwise, or a nominee is unable or unwilling to serve. The Board of Directors has no reason to believe that any nominee will be unavailable. However, in that event, the proxy may vote for another candidate or candidates nominated by the Board of Directors. Any shareholder executing the enclosed form of proxy may withhold authority to vote for any one or more nominee by so indicating in the manner described in the form of proxy.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the Directors and Executive Officers of the Company. There is no relationship by blood, marriage or adoption among the Directors and Officers. All Directors serve one year terms with their terms expiring at the Annual Meeting. All Officers of the Company are elected or appointed by the Board of Directors and hold office until the Annual Meeting or until replaced at the discretion of the Board.
Shares of Common Stock Beneficially Owned on Percent Position Director January 11, of Name Age With the Company Since 2011 Class(1) - -------------------------------------------------------------------------------------------- John V. Winfield 64 Chairman, President 1995 993,779(2) 80.0% and Chief Executive Officer William J. Nance 66 Director 1996 0(3) 0.0% John C. Love 70 Director 1998 0(3) 0.0% Michael G. Zybala 58 Vice President, N/A 0 0.0% Secretary and General Counsel David T. Nguyen 37 Treasurer and N/A 0 0.0% Controller All of the above as a group 993,779 80.0% - ---------------------------

				Shares of
				Common Stock
		Position with	Director	Beneficially Owned	Percent of
Name	Age	The Company	Since	on January 11, 2013	Class⁽¹⁾

John V. Winfield	66	Chairman, President and Chief Executive Officer	1995	1,043,747²⁾	84.0	%

William J. Nance	69	Director	1996	0⁽³⁾	0.0	%

John C. Love	72	Director	1998	0⁽³⁾	0.0	%

Michael G. Zybala	60	Vice President, Secretary and General Counsel	N/A	0	0.0	%

David T. Nguyen	39	Treasurer and Controller	N/A	0

All of the above as a group				1,043,747	84.0	%

___________________________

⁽¹⁾ Based on 1,241,810 shares of common stock issued and outstanding as of January 11, ~~2011.~~ 2013.

⁽²⁾ John V. Winfield is the sole beneficial owner of 49,400 shares of common stock. The InterGroup Corporation ("InterGroup") is the beneficial owner of ~~944,379~~994,347 shares of common stock. As the President, Chairman of the Board and a ~~60.2%~~62.8% shareholder of InterGroup, Mr. Winfield has voting and dispositive power with respect to the shares of Santa Fe owned of record and beneficially by InterGroup.

⁽³⁾ William J. Nance is a 2.4% beneficial shareholder of InterGroup as well as a Director thereof. John C. Love is also a Director of InterGroup and a 0.9% beneficial shareholder of InterGroup.

Security Ownership of Management in Subsidiary

As of January 11, ~~2011,~~2013, Santa Fe was the record and beneficial owner of 505,437 shares of the common stock of Portsmouth Square, Inc. ~~(Portsmouth"~~(Portsmouth”) and Santa ~~Fe's~~Fe’s parent company, InterGroup was the record owner of ~~86,000~~91,862 shares of Portsmouth, representing approximately ~~80.5%~~81.3% of the outstanding 2 common shares of Portsmouth. The President and Chairman of the Board of Santa Fe and InterGroup has voting power with respect to common shares of Portsmouth owned by Santa Fe and InterGroup. No other director or executive officer of Santa Fe has a beneficial interest in Portsmouth's shares.

Business Experience:

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

John V. Winfield-- Mr. Winfield was first elected to the Board in May of 1995 and currently serves as the Company's Chairman of the Board, President and Chief Executive Officer, having been appointed as such in April 1996. Mr. Winfield is also the Chairman of the Board, President and Chief Executive Officer of the Company's subsidiary, Portsmouth, having held those positions since May of 1996. Mr. Winfield is Chairman of the Board, President and Chief Executive Officer of The InterGroup Corporation ~~("InterGroup"~~(“InterGroup”), a public company, and has held those positions since 1987. Mr. ~~Winfield's~~Winfield also serves as Chairman of the Board of Comstock Mining, Inc. (NYSE MKT: LODE), a public company in which he was elected a Director on June 23, 2011. Mr. Winfield’s extensive experience as an entrepreneur and investor, as well as his managerial and leadership experience from serving as a chief executive officer and director of public companies, led to the ~~Board's~~Board’s conclusion that he should serve as a director of the Company. William J. Nance -- Mr. Nance was first elected to the Board in May of 1996. Mr. Nance is also a director of Portsmouth. Mr. Nance is the President and CEO of Century Plaza Printers, Inc., a company he founded in 1979. He has also served as a consultant in the acquisition and disposition of multi- family and commercial real estate. Mr. Nance is a Certified Public Accountant and, from 1970 to 1976, was employed by Kenneth Leventhal & Company where he was a Senior Accountant specializing in the area of REITS and restructuring of real estate companies, mergers and acquisitions, and all phases of real estate development and financing. Mr. Nance is also Director of InterGroup, a public company, and has held such position since 1984. Mr. Nance also serves as a director and Chairman of the Board of Comstock Mining, Inc. (formerly Goldspring, Inc.), a public company. Mr. Nance's extensive experience as a CPA and in numerous phases of the real estate industry, his business and management experience gained in running his own businesses, his service as a director and audit committee member for other public companies and his knowledge and understanding of finance and financial reporting, led to the Board's conclusion that he should serve as a director of the Company.

John C. Love -- Mr. Love was appointed a Director of the Company on March 5, 1998. Mr. Love is an international hospitality and tourism consultant. He is a retired partner in the national CPA and consulting firm of Pannell Kerr Forster and, for the last 30 years, a lecturer in hospitality industry management control systems and competition & strategy at Golden Gate University and San Francisco State University. He is Chairman Emeritus of the Board of Trustees of Golden Gate University and the Executive Secretary of the Hotel and Restaurant Foundation. Mr. Love is also a Director of Portsmouth, having first been appointed in March 1998 and a Director of InterGroup, having first been appointed in January 1998. Mr. ~~Love's~~Love’s extensive experience as a CPA and in the hospitality industry, including teaching at the university level for the last 30 years in management control systems, and his knowledge and understanding of finance and financial reporting, led to the ~~Board's~~Board’s conclusion that he should serve as a director of the Company.

William J. Nance -- Mr. Nance was first elected to the Board in May of 1996. Mr. Nance is also a director of Portsmouth. Mr. Nance is the President and CEO of Century Plaza Printers, Inc., a company he founded in 1979. He has also served as a consultant in the acquisition and disposition of multi-family and commercial real estate. Mr. Nance is a Certified Public Accountant and, from 1970 to 1976, was employed by Kenneth Leventhal & Company where he was a Senior Accountant specializing in the area of REITS and restructuring of real estate companies, mergers and acquisitions, and all phases of real estate development and financing. Mr. Nance is also Director of InterGroup, and has held such position since 1984. Mr. Nance also serves as a director of Comstock Mining, Inc. Mr. Nance’s extensive experience as a CPA and in numerous phases of the real estate industry, his business and management experience gained in running his own businesses, his service as a director and audit committee member for other public companies and his knowledge and understanding of finance and financial reporting, led to the Board’s conclusion that he should serve as a director of the Company.

Michael G. Zybala -- Mr. Zybala was appointed as Vice President and Secretary of the Company on February 20, 1998. He is also Vice President, Secretary and General Counsel of Portsmouth. Mr. Zybala is an attorney at law and has served as the Company's General Counsel since 1995 and has represented the Company as its corporate counsel since 1978. Mr. Zybala also serves as Assistant Secretary and counsel to InterGroup and has held those positions since January 1999.

David T. Nguyen --– Mr. Nguyen was appointed as Treasurer of the Company on February 27, 2003. Mr. Nguyen also serves as Treasurer of InterGroup and Portsmouth, having been appointed to those positions on February 26, 2003 and February 27, 2003, respectively. Mr. Nguyen is a Certified Public Accountant and, from 1995 to 1999, was employed by PricewaterhouseCoopers LLP where he was a Senior Accountant specializing in real estate. Mr. Nguyen has also served as the Company's Controller from 1999 to December 2001 and from December 2002 to present. 3

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.

BOARD AND COMMITTEE INFORMATION

Board of Directors:

Santa Fe is an unlisted company and a Smaller Reporting Company under rules and regulations of the Securities and Exchange Commission ~~("SEC"~~(“SEC”). The majority of its Board of Directors consists of ~~"independent"~~“independent” directors as independence is defined by the applicable rules and regulations of the SEC and NASDAQ. The Board of Directors held four meetings during the ~~2010~~2011 Fiscal Year (in person, telephonically or by written consent). No Director attended (whether in person, telephonically, or by written consent) less than 75% of all meetings held during the period of time he or she served as Director during the ~~2010~~2012 Fiscal Year.

Board Leadership Structure

The Chairman of the Board, Mr. Winfield, also serves as our Chief Executive Officer. The Board believes that combining the Chairman and Chief Executive officer roles is the most appropriate structure for the Company at this time because (i) this structure has had a longstanding history with the Company, which the Board believes has served our stockholders well through many economic cycles and business challenges; (ii) the Board believes Mr. Winfield’s unique business experience and history with the Company makes it appropriate for him to serve in both capacities; and (iii) the Board believes its corporate government processes and committee structures preserve Board independence by insuring independent discussions among directors and independent evaluation of, and communications with, members of senior management such that separation of the Chairman and Chief Executive Officer roles is unnecessary at this time.

The Board of Directors has not established a formal process for security holders to send communications to the Board of Directors and the Board has not deemed it necessary to establish such a procedure at this time. Historically, almost all communications that the Company receives from security holders are administrative in nature and are not directed to the Board of Directors. If the Company should receive a security holder communication directed to the Board of Directors, or to an individual director, said communication will be relayed to the Board of Directors or the individual director as the case may be.

The Company does not have any formal policy with regard to board members attendance at annual meetings of shareholders but encourages each director to attend said meetings. All of the ~~Company's~~Company’s directors attended the fiscal ~~2009~~2011 annual meeting of shareholders.

Committees:

Santa Fe has established two standing committees, a Securities Investment Committee and an Audit Committee. The Company does not have any standing nominating or compensation committees of the Board of Directors. Executive compensation is determined by the independent members of the Board. New director nominations, if any, will be considered and determined by the Board of Directors. The Company has no policy with regard to consideration of any director candidates recommended by security holders. As a small business issuer that has approximately ~~80.0%~~84% of its voting securities controlled by one shareholder, the Company has not deemed it appropriate to institute such a policy. On March 17, 1998, the Company established a Securities Investment Committee to establish guidelines and to review the Company's investment policies. The Committee consists of all the members of the Board, with Mr. Winfield serving as Chairperson. During fiscal 2010, the Securities Investment Committee held three meetings, in person, telephonically or by written consent with, all members attending each meeting.

Audit Committee.Santa Fe is an unlisted company and a Smaller Reporting Company under SEC rules. The ~~Company's~~Company’s Audit Committee is currently comprised of Messrs. Nance (Chairperson) and Love, each of whom are independent directors as independence is defined by the applicable rules and regulations of the SEC and NASDAQ, and as may be modified or supplemented. Each of these directors also meets the audit committee financial expert ~~test.~~test based on their qualifications and business experience discussed above. The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing: the financial reports provided by the Company to any governmental body or the public; the ~~Company's~~Company’s system of internal controls regarding finance, accounting, legal compliance and ethics that management and the Board have established; and the ~~Company's~~Company’s auditing, accounting and financial processes generally. The Audit Committee is responsible for the selection and retention of the ~~Company's~~Company’s independent registered public accounting firm. The Audit Committee held ~~five~~six meetings during the ~~2010 Fiscal Year.~~ 2012 fiscal year.

The ~~Company's~~Company’s Board of Directors has adopted a written charter for the Audit ~~Committee. A~~Committee, a copy of that written charter, as amended, is ~~attached~~posted on the Santa Fe page of its parent company’s website www.intgla.com.

Securities Investment Committee.On March 17, 1998, the Company established a Securities Investment Committee to establish guidelines and to review the Company’s investment policies. The Committee consists of all the members of the Board, with Mr. Winfield serving as ~~Appendix~~Chairperson. During fiscal 2012, the Securities Investment Committee held three meetings, in person, telephonically or by written consent with, all members attending each meeting.

Code of Ethics.

The Company has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethics is posted on the Santa Fe page of its parent company’s website atwww.intgla.com. The Company will provide to ~~this proxy statement.~~ any person without charge, upon request, a copy of its Code of Ethics by sending such request to: Santa Fe Financial Corporation, Attn: Treasurer, 10940 Wilshire Blvd., Suite 2150, Los Angeles, CA 90024. The Company will promptly disclose any amendments or waivers to its Code of Ethics on Form 8-K and will post such information on its website.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the ~~Company's~~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 the Company, or written representations from certain reporting persons that no Forms 5 were required for those persons, the Company believes that during fiscal ~~2010~~2012 all filing requirements applicable to its officers, directors, and greater than ten-percent beneficial owners were complied with. 4

EXECUTIVE COMPENSATION

As a Smaller Reporting Company, Santa Fe has no compensation committee. Executive Officer compensation is set by independent members of the Board of Directors. The Board seeks to design and set compensation to attract and retain highly qualified executive officers and to align their interests with those of long-term owners of the Company. The Board has not engaged any compensation consultants in determining the amount or form of executive or director compensation, but does review and monitor published compensation surveys and studies. The Board may delegate to the ~~Company's~~Company’s Chief Executive Officer the authority determine the compensation of certain executive officers.

Santa Fe has no stock option plan or stock appreciation rights for its executive officers. The Company has no pension or long-term incentive plans. There are no employment contracts between Santa Fe and any executive officer, and there are no termination-of-employment or change-in-control arrangements.

The following table provides certain summary information concerning compensation awarded to, earned by, or paid to the ~~Company's~~Company’s principal executive officer and other named executive officers of the Company whose total compensation exceeded $100,000 for all services rendered to the Company for each of the ~~Company's~~Company’s last two competed fiscal years ended June 30, ~~2010~~2012 and ~~2009.~~2011. No stock awards, long-term compensation, options or stock appreciation rights were granted to any of the named executive officers during the last two fiscal years. SUMMARY COMPENSATION TABLE Fiscal All Other Name and Principal Position Year Salary Bonus Compensation Total - --------------------------- ---- ---------- ---------- ------------ ------------ John V. Winfield 2010 $267,000(1) - $42,500(2) $ 309,500 Chairman, President and 2009 $267,000(1) - $42,500(2) $ 309,500 Chief Executive Officer Michael G. Zybala 2010 $123,750(3) - - $ 123,750 Vice President, Secretary 2009 $111,000(3) - - $ 111,000 and General Counsel David T. Nguyen 2010 $ 90,000(4) - - $ 90,000 Treasurer and Controller 2009 $ 90,000(4) - - $ 90,000 - ---------------------------

~~SUMMARY COMPENSATION TABLE~~

Annual Compensation

Name and Fiscal All Other
Principal Position Year Salary Bonus Compensation Total

John V. Winfield 2012 $ 267,000⁽¹⁾ - $ 43,000⁽²⁾ $ 310,000⁽¹⁾
Chairman; President 2011 $ 267,000⁽¹⁾ - $ 43,000⁽²⁾ $ 310,000⁽¹⁾
and Chief Executive Officer

Michael G. Zybala 2012 $ 126,000 $ 12,000 - $ 138,000⁽³⁾
Vice President, Secretary 2011 $ 122,000 - - $ 122,000⁽³⁾
and General Counsel

David T. Nguyen 2012 $ 90,000 $ 10,000 - $ 100,000⁽⁴⁾
Treasurer and Controller 2011 $ 90,000 - - $ 90,000⁽⁴⁾
(Principal Financial Officer)

⁽¹⁾Includes salary and ~~director's~~director’s fees received from the ~~Company's~~Company’s subsidiary, Portsmouth, in the amounts of ~~$133,000~~$134,000 for each of the fiscal years ended June 30, ~~2010~~2012 and ~~2009~~2011 and directors fees in the amount of $6,000 per year paid by Santa Fe. Does not include ~~salary~~ compensation received from Santa ~~Fe's~~Fe’s parent corporation, InterGroup, of $255,000 for each of the fiscal years ended June 30, ~~2010~~2012 and June 30, ~~2009.~~ 2011.
⁽²⁾During fiscal ~~2010~~2012 and ~~2009,~~2011, the Company and Portsmouth also paid combined annual premiums of ~~$42,500,~~$43,000, for each respective year, for split dollar whole life insurance policies, owned by, and the beneficiary of which is, a trust for the benefit of Mr. ~~Winfield's~~Winfield’s family. ~~Portsmouth's~~Portsmouth’s share of those premiums was $17,000 per year. These policies were obtained in December 1998 and provide for an aggregate death benefit of $2,500,000. The Company has a secured right to receive, from any proceeds of the policy, reimbursement of all premiums paid prior to any payments to the beneficiary.
⁽³⁾Includes salary and bonus paid by Portsmouth in the aggregate amount of ~~$105,000~~$113,000 for fiscal year ended June 30, ~~2010~~2012 and ~~$94,800~~salary of $98,000 for fiscal year ended June 30, ~~2009.~~2011. Does not include ~~$31,250~~$55,000 and ~~$27,000~~$31,000 paid by Santa ~~Fe's~~Fe’s parent company, InterGroup, for fiscal years ~~2010~~2012 and ~~2009,~~2011, respectively.
⁽⁴⁾Includes salary and bonus paid by Portsmouth in the amount of ~~$45,000~~$50,000 for ~~each of the~~ fiscal ~~years~~year ended June 30, ~~2010~~2012 and salary in the amount of $45,000 for fiscal year ended June 30, ~~2009.~~2011. Does not include ~~$90,000~~$100,000 paid by Santa ~~Fe's~~Fe’s parent company, InterGroup, for ~~each of~~ fiscal ~~years 2010~~year 2012 and ~~2009. 5~~ ~~Santa Fe has no stock option plan or stock appreciation rights~~$90,000 for its executive officers. The Company has no pension or long-term incentive plans. There are no employment contracts between Santa Fe and any executive officer, and there are no termination-of-employment or change-in-control arrangements. On July 18, 2003,fiscal year 2011.
In fiscal year ended June 30, 2004, the disinterested members of the ~~Board~~Boards of Directors of the Company and its subsidiary, Portsmouth, established a performance based compensation program for the ~~Company's~~Company’s CEO ~~John V. Winfield,~~ to keep and retain his services as a direct and active manager of the ~~Company's~~Company’s securities portfolio. ~~The Company's previous experience and results with outside money managers was not acceptable.~~ Pursuant to the current criteria established by the Board, Mr. Winfield ~~was be~~is entitled to performance based compensation for his management of the ~~Company's~~Company’s securities portfolio equal to 20% of all net investment gains generated in excess of an annual return equal to the ~~performance~~Prime Rate of Interest (as published in the ~~S&P 500 Index.~~Wall Street Journal) plus 2%. Compensation amounts ~~will be~~are calculated and paid quarterly based on the results of the ~~Company's~~Company’s investment portfolio for that quarter. Should the Company 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. On February 26, 2004, the Board of Directors amended the performance threshold to require an annualized return equal to the Prime Rate of Interest (as published in the Wall Street Journal) plus 2% instead of the S&P 500 Index, effective with the quarterly period commencing January 1, 2004. This change was made to make the Company's plan be consistent with that established by its parent company, InterGroup. This performance based compensation program may be further modified or terminated at the discretion of the ~~Board. No~~respective Boards of Directors. The Company’s CEO did not earn any performance based compensation ~~was paid~~ for ~~fiscal~~the years ended June 30, ~~2010 or 2009.~~ 2012 and 2011.
Outstanding Equity Awards at Fiscal Year End.
The Company did not have any outstanding equity awards at the end of its fiscal year ended June 30, 2012 and has no equity compensation plans in effect.
6
Internal Revenue Code Limitations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the ~~"Code"~~“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. NoFor fiscal years 2012 and 2011, 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. ~~Outstanding Equity Awards at~~
SHAREHOLDER ADVISORY VOTES ON EXECUTIVE COMPENSATION
At its Fiscal ~~Year End.~~2010 Annual Meeting of Shareholders held on February 24, 2011, the Company submitted to its shareholders two proposals regarding executive compensation. The ~~Company did not have any outstanding equity awards~~first proposal to approve, in a non-binding vote, the compensation of the Company’s named executive officers was approved by the shareholders, having received more than 99% of the shares voted at the ~~end~~meeting in favor of ~~its fiscal year ended June 30, 2010~~the proposal. The second proposal was to determine, in a non-binding vote, whether a shareholder advisory vote to approve the compensation of the Company’s executive officers should occur every one, two or three years. The shareholders overwhelmingly voted in favor of three years as the frequency in which the Company should have an advisory vote on executive compensation with more than 98% percent of the shares voted at the meeting being in favor of three years. The Compensation Committee and ~~has no equity compensation plans~~the Board of Directors have considered the guidance provided by these advisory votes and have set three years as the frequency in ~~effect.~~ which it will have a non-binding vote on executive compensation.
DIRECTOR COMPENSATION
The bylaws of Santa Fe permit directors to be paid a fixed sum for attendance at each meeting of the Board or a stated salary as director. Each director is paid a fee of $1,500 per quarter for a total annual compensation of $6,000. This policy has been in effect since July 1, 1985. Members of the ~~Company's~~Company’s Audit Committee also receive a fee of $500 per quarter. Directors and Committee members are also reimbursed for their out-of-pocket travel costs to attend meetings. The Board will review and may adjust Director and Committee Compensation from time to time to assure that the Company can continue to attract and retain qualified directors. 6
The following table provides information concerning compensation awarded to, earned by, or paid to the ~~Company's~~Company’s directors for the fiscal year ended June 30, 2010. Fees Earned or Paid All Other Name in Cash Compensation Total - ----------------- ----------- ------------ ------- John C. Love $ 46,000(1) - $46,000 William J. Nance $ 46,000(1) - $46,000 John V. Winfield(2) - ------------------ 2012.
DIRECTOR COMPENSATION TABLE
Name
Fees Earned
or Paid in Cash
All Other
Compensation
Total
John C. Love $46,000⁽¹⁾ - $46,000
William J. Nance $46,000⁽¹⁾ - $46,000
John V. Winfield⁽²⁾ - - -
⁽¹⁾ Mr. Love and Mr. Nance also serve as directors of the ~~Company's~~Company’s subsidiary, Portsmouth. Amounts shown include $8,000 in regular board and audit committee fees paid by Santa Fe and $8,000 in regular board and audit committee fees paid by Portsmouth. These amounts also include $30,000 in special hotel committee ~~fees and meeting~~ fees paid to Mr. Love and Mr. Nance by Portsmouth related to the oversight of its ~~hotel~~Hotel asset.
⁽²⁾As an executive officer, Mr. ~~Winfield director's~~Winfield’s directors fees are reported in the Summary Compensation Table.
7
Change in Control or Other Arrangements
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 or any change in control arrangements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of January 11, ~~2011,~~2013, Santa Fe and InterGroup owned ~~80.5%~~81.3% of the common stock of Portsmouth, and InterGroup and John V. Winfield, in the aggregate, owned approximately ~~80.0%~~84% of the voting stock of Santa Fe. All of the ~~Company's~~Company’s Directors serve as directors of InterGroup and all three of the ~~Company's~~Company’s Directors serve on the Board of Portsmouth.
John V. Winfield, the ~~Company's~~Company’s Chairman and President, Michael G. Zybala, the ~~Company's~~Company’s Vice President, Secretary and General Counsel, and David T. Nguyen, the ~~Company's~~Company’s Treasurer and Controller also serve as officers of InterGroup and Portsmouth. Santa Fe and Portsmouth share corporate office space with Santa ~~Fe's~~Fe’s parent company, InterGroup. Since all three companies share the same office space, Mr. Winfield, Mr. Zybala and Mr. Nguyen can allocate their time between the different companies more efficiently on an as needed basis. Certain costs and expenses, primarily administrative salaries, rent and insurance, are allocated among the Company, its subsidiary, Portsmouth, and parent InterGroup based on ~~management's~~management’s estimate of the pro rata utilization of resources. During the fiscal years ended June 30, ~~2010~~2012 and ~~2009,~~2011, the Company and Portsmouth made payments to InterGroup of approximately $144,000 for administrative costs and reimbursement of direct and indirect costs associated with the management of the Companies and their investments, including the partnership asset.
As Chairman of the Securities Investment Committee, the ~~Company's~~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 Portsmouth and InterGroup and oversees the investment activity of those companies. Depending on certain market conditions and various risk factors, the Chief Executive Officer, his family, Portsmouth and InterGroup may, at times, invest in the same companies in which the Company invests. The Company encourages such investments because it places personal resources of the Chief Executive Officer and his family members, and the resources of Portsmouth and InterGroup, at risk in connection with investment decisions made on behalf of the Company. 7
In December 1998, Board of Directors authorized the Company to obtain whole life insurance and split dollar insurance policies covering the ~~Company's~~Company’s President and Chief Executive Officer, Mr. Winfield. During fiscal years ~~2010~~2012 and ~~2009,~~2011, the Company paid annual premiums of $25,500 for the split dollar whole life insurance policy, owned by, and the beneficiary of which is, a trust for the benefit of Mr. ~~Winfield's~~Winfield’s family. The Company has a secured right to receive, from any proceeds of the policy, reimbursement of all premiums paid prior to any payments to the beneficiary. During fiscal ~~2010~~2012 and ~~2009,~~2011, Portsmouth paid annual premiums of $17,000 for a split dollar policy also covering Mr. Winfield. The premiums associated with that spilt dollar policy are considered additional compensation to Mr. Winfield.
There are no other relationships or related transactions between the Company and any of its officers, directors, five-percent security holders or their families which require disclosure.
Director Independence
Santa Fe is an unlisted company and a Smaller Reporting Company under the rules and regulations of the Securities and Exchange Commission ~~("SEC"~~(“SEC”). With the exception of the ~~Company's~~Company’s President and CEO, John V. Winfield, all of ~~Portsmouth's~~Santa Fe’s Board of Directors consists of ~~"independent"~~“independent” directors as independence is defined by the applicable rules and regulations of the SEC and NASDAQ.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
JOHN V. WINFIELD, JOHN C. LOVE AND WILLIAM J. NANCE AS DIRECTORS OF THE COMPANY 8
8
PRINCIPAL HOLDERS OF EQUITY SECURITIES
The following table shows, as of January 11, ~~2011,~~2013, the Common Stock owned by every person owning of record (other than securities depositories), or known by the Company to own beneficially, more than 5% of its outstanding common shares. Any voting securities owned by directors or director nominees are also disclosed under Election of Directors herein.
Name and Address of Amount and Nature of Percent Beneficial Owner Beneficial Ownership(1) of Class(2) - ------------------- ---------------------- ------------------ Guinness Peat Group plc ("GPG") 89,858(3) 7.2% Allied Mutual Insurance Services, Ltd. ("AMI") First Floor, Times Place London SW1Y 5GP, UK The InterGroup Corporation 944,379 76.0% 10940 Wilshire Blvd., Suite 2150 Los Angeles, CA 90024 John V. Winfield 49,400 4.0% 10940 Wilshire Blvd., Suite 2150 Los Angeles, CA 90024 The InterGroup Corporation and 993,779(4) 80.0% John V. Winfield as a group - ------------------------------
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership⁽¹⁾ Percent of Class⁽²⁾

The InterGroup Corporation 994,347 80.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

John V. Winfield 49,400 4.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

The InterGroup Corporation and 1,043,747⁽³⁾ 84.0%
John V. Winfield as a group
⁽¹⁾ Unless otherwise indicated, and subject to applicable community property laws, each person has sole voting and investment power with respect to the shares beneficially owned.
⁽²⁾ Percentages are calculated on the basis of 1,241,810 shares of Common Stock issued and outstanding as of January 11, ~~2011~~2013 plus any securities that the person has a right to acquire within 60 days pursuant to options, warrants, conversion privileges or other rights.
^{(3) Based on their Statement on Schedule 13D (Amendment No. 6) dated June 13,
2001, GPG and its wholly-owned subsidiary AMI claim shared power to vote, or
to direct the vote, and to dispose of, or to direct the disposition of the
shares of Santa Fe's Common Stock owned of record by AMI.

(4)} Pursuant to a Voting Trust Agreement dated June 30, 1998, InterGroup has the power to vote the 49,400 shares of Common Stock owned by Mr. Winfield. As President, Chairman of the Board and a ~~60.2%~~62.8% beneficial shareholder of InterGroup, Mr. Winfield has voting and dispositive power over the shares owned of record and beneficially by InterGroup.
As of January 11, ~~2011,~~2013, there were 1,241,810 shares of the Company's Common Stock outstanding, which were held by approximately ~~220~~230 shareholders of record, with a total of approximately ~~420~~445 shareholders, including beneficial owners. ~~Securities Authorized for Issuance Under Equity Compensation Plans. Santa Fe has no securities authorized for issuance under equity compensation plans. 9~~
9
PROPOSAL 2 ~~Ratification of the Appointment of Independent Registered Public Accounting Firm~~
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed the firm of Burr Pilger Mayer, Inc. ~~("BPM"~~(“BPM”, formerly Burr, Pilger & Mayer LLP) as the ~~Company's~~Company’s independent registered public accounting firm for the fiscal year ending June 30, ~~2011.~~2013. BPM has served as the ~~Company's~~Company’s independent registered public accounting firm since October 23, 2007. Although the action of shareholders in this matter is not required, the Audit Committee believes it is appropriate to seek shareholder ratification of this appointment. Ratification requires the affirmative vote of a majority of the shares represented and voted at the Annual Meeting.
We expect that a representative of Burr Pilger Mayer, Inc. will be present at the Annual Meeting to respond to appropriate questions from Shareholders, and we will provide this representative with an opportunity to make a statement if he or she desires to do so.
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR TO BE FILED WITH THE SEC UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.
AUDIT COMMITTEE REPORT
The Audit ~~Committee's~~Committee’s responsibilities are described in a written charter adopted by the Board of ~~Directors, which is attached as Appendix A to this Proxy Statement.~~Directors. The Audit Committee primary duties and responsibilities are to: serve as an independent and objective party to monitor the ~~Company's~~Company’s financial reporting process and internal control system; appoint and approve the compensation of the ~~Company's~~Company’s independent registered public accounting firm; review and appraise the audit efforts of the ~~Company's~~Company’s independent registered public accounting firm; and provide an open avenue of communications among the independent registered public accounting firm, financial and senior management, and the Board of Directors. During fiscal year ended June 30, ~~2010,~~2012, the Company retained Burr Pilger Mayer, Inc. ~~("BPM"~~(“BPM”) as its independent registered public accounting firm to provide audit and audit related services. All fees and expenses paid to BPM were approved by the Audit Committee.
The Audit Committee reviewed and discussed the audited financial statements with management and BPM, and management represented to the Audit Committee that the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The discussions with BPM also included the matters required by Statement on Auditing Standards No. 114 (AICPA,Professional Standards,Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board (United States) in Rule 3200T regarding ~~"Communication~~“Communication with Audit Committees." ”
The Audit Committee has also received the written disclosures and the letter from BPM required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent ~~accountant's~~accountant’s communications with the Audit Committee concerning independence, which was also discussed with BPM.
Based on the Audit ~~Committee's~~Committee’s review of the audited financial statements, and the review and discussions with management and BPM referred to above, the Audit Committee recommended to the ~~Company's~~Company’s Board of Directors that the audited financial statements be included in the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2010~~2012 for filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE:
WILLIAM J. NANCE, CHAIRPERSON
JOHN C. LOVE 10
10
Audit ~~Fees:~~ Fees
The aggregate fees billed for each of the last two fiscal years ended June 30, ~~2010~~2012 and ~~2009~~2011 for professional services rendered by Burr Pilger Mayer, Inc., the independent registered public accounting firm for the audit of the ~~Company's~~Company and its consolidated subsidiary’s annual financial statements and review of financial statements included in the ~~Company's~~Company’s Form 10-Q reports or services normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years, were as follows: Fiscal Year ------------------------- 2010 2009 -------- -------- Audit Fees $156,000 $156,000 Audit Related Fees - - Tax Fees - - All Other Fees - - -------- -------- Total: $156,000 $156,000 ======== ========
Fiscal Year
2012 2011

Audit Fees $ 156,000 $ 186,000
Audit Related Fees - -
Tax Fees - -
All Other Fees - -

TOTAL: $ 156,000 $ 186,000

Audit Committee Pre-Approval Policies
The Audit Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent registered public accounting firm, subject to any de minimus exceptions that may be set for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Committee prior to the completion of the audit. The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee at its next scheduled meeting. All of the services described herein were approved by the Audit Committee pursuant to its pre-approval policies.
None of the hours expended on the independent registered public accounting ~~firm's~~firms’ engagement to audit the ~~Company's~~Company’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the independent registered public accounting ~~firm's~~firm’s full-time permanent employees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE ~~"FOR"~~ “FOR”
RATIFICATION OF THE APPOINTMENT OF BURR PILGER MAYER, INC.
AS THE ~~COMPANY'S~~COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANING FIRM. 11 PROPOSAL NO. 3 NON-BINDING VOTE ON EXECUTIVE COMPENSATION In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which was added by the Dodd- Frank Wall Street and Consumer Protection Act (the "Dodd Frank Act") and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to approve, in a non-binding vote, the compensation of our named executive officers as disclosed on pages 5 to 7. The text of the resolution in respect of Proposal No. 3 is as follows: "Resolved, that the shareholders approve, in a non-binding vote, the compensation of the Company's named executive officers as disclosed on Pages 5 to 7 in the Proxy Statement relating to the Company's Fiscal 2010 Annual Meeting to be held on February 24, 2011." THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. PROPOSAL NO. 4 NON-BINDING VOTE ON THE FREQUENCY OF SHAREHOLDER VOTES ON EXECUTIVE COMPENSATION In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which was added by the Dodd- Frank Wall Street and Consumer Protection Act (the "Dodd Frank Act") and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to shareholder vote to recommend, in a non- binding vote, whether a non-binding shareholder vote to approve the compensation of our named executive officers (that is similar to the non- binding vote in Proposal 3) should occur every one, two or three years. The text of the resolution with respect of Proposal 4 is as follows: "Resolved, that the shareholders recommend, in a non-binding vote, whether a non-binding shareholder vote to approve the compensation of the Company's named executive officers should occur every one, two or three years" In considering their vote, shareholders may wish to review the information presented in connection with Proposal 3 and the information on the Company's compensation policies and decisions regarding named executive officers as disclosed on pages 5 to 7. In addition, shareholders should note the following: * A triennial policy would permit shareholders and directors to evaluate the effects of our compensation program on long-term performance and would help align "say on pay" with the goal of avoiding short-term focus in corporate governance and executive pay arrangements. * In addition, the triennial approach would allow shareholders to engage in a more thoughtful analysis and voting by providing more time between votes to gage executive officer performance. For these reasons, we believe that a three-year time horizon is appropriate in order to provide shareholders with a more comprehensive view of whether or named executive officer compensation programs are achieving their objectives. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "THREE YEARS" WITH RESPECT TO HOW FREQUENTLY A NON-BINDING SHAREHOLDER VOTE TO APPROVE THE COMPENSATION OF OUR EXECUTIVE OFFICERS SHOULD OCCUR. 12
11
OTHER BUSINESS
As of the date of this statement, management knows of no business to be presented at the meeting that is not referred to in the accompanying notice. As to other business that may properly come before the meeting, it is intended that the proxies properly executed and returned will be voted in respect thereof at the discretion of the person voting the proxies in accordance with the best judgment of the person voting the proxies.
SHAREHOLDER PROPOSALS
It is presently anticipated that the fiscal ~~2011~~2013 Annual Meeting of Shareholders will be held on ~~or around~~ February ~~23, 2012.~~20, 2014. Any shareholder proposals intended to be considered for inclusion in the proxy statement and form of proxy for presentation at the fiscal ~~2011~~2013 Annual Meeting must be received by the Company no later than ~~October 23, 2011. The proposal~~September 26, 2013. In addition, all proposals must ~~be in accordance~~comply with the provisions of Rule 14a-8 ~~promulgated by~~adopted under Section 14(a) of the Securities ~~and~~ Exchange ~~Commission under~~act, as amended (the“Exchange Act”), which lists the ~~Securities Act~~requirements for inclusion of ~~1934.~~shareholder proposals in company-sponsored proxy materials. Any proposals must be submitted in writing to the following address: Michael G. Zybala, Secretary, Santa Financial Corporation, 10940 Wilshire Blvd., Suite 2150, Los Angeles, CA 90024. It is suggested that the proposal be submitted by certified mail -– return receipt requested.
ANNUAL REPORT ON FORM 10-K
The Annual Report on Form 10-K for the ~~2010~~ fiscal year ended June 30, 2012 accompanies this proxy statement, but is not deemed a part of the proxy solicitation material. A copy of the ~~Company's~~Company’s Form 10-K for the fiscal year ended June 30, ~~2010,~~2012, as required to be filed with the Securities and Exchange Commission, excluding exhibits, will be mailed to shareholders without charge upon written request to: Michael G. Zybala, Secretary, Santa Fe Financial Corporation, 10940 Wilshire Blvd., Suite 2150, Los Angeles, CA 90024. Such request must set forth a good-faith representation that the requesting party was either a holder of record or a beneficial owner of the common stock of the Company on January 11, ~~2011.~~2013. The ~~Company's~~Company’s Form 10-K and other reports are also available on the Santa Fe page of its parent company’s website atwww.intgla.comand through the Securities and Exchange Commission's world-wide-web site (http://www.sec.gov). By Order of the Board of Directors SANTA FE FINANCIAL CORPORATION Michael G. Zybala Secretary Commission’s websitewww.sec.gov.
By Order of the Board of Directors
SANTA FE FINANCIAL CORPORATION
Michael G. Zybala
Secretary
Dated: Los Angeles, California
January ~~21, 2011 13~~ APPENDIX A SANTA FE FINANCIAL CORPORATION AUDIT COMMITTEE CHARTER (As Amended January 13, 2011) Purpose: - ------- The primary purpose of the Audit Committee is to assist the Board of Directors in fulfilling its responsibility of overseeing management's conduct of the Company's financial reporting process, the Company's systems of internal accounting and financial controls, and the annual independent audit of the Company's financial statements. In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention and shall have full access to all books, records, facilities and personnel of the Company and the power to retain outside counsel, auditors or other experts for this purpose. The Board and the Committee are in place to represent the Company's shareholders, and the Company's independent registered public accounting firm is ultimately accountable to the Board and the Committee as such representatives of shareholders. It is the responsibility of the Committee to maintain free and open means of communication between the Board, the Company's independent registered public accounting firm and the financial management and internal auditors of the Company. The Committee shall review the adequacy of this Charter on an annual basis. Membership: - ---------- The Committee shall be comprised of "independent" directors that meet the composition requirements as defined by the rules of the Securities and Exchange Commission ("SEC") and the NASDAQ Stock market LLC ("NASDAQ") as may be modified and supplemented from time to time. Accordingly, all of the members of the Committee will be directors: 1. Who have no relationship to the Company that may interfere with the exercise of their independence from management and the Company; 2. Are not affiliates of the Company; 3. Do not receive any compensation from the Company other than in the capacity as director; and 4. Who are financially literate or who become financially literate within a reasonable period of time after appointment to the Committee. In addition, at least one member of the Committee will be an audit committee financial expert as defined by the Securities and Exchange Commission. The members of the Committee shall be elected by the Board at the annual meeting of the Board and shall serve until their successors shall be duly elected and qualified. Unless a Chairman of the Committee is elected by the full Board, the members of the Committee may designate a Chairman of the Committee by majority vote of the full Committee Membership. Meetings: - -------- The Committee shall meet at least four times annually, or more frequently as circumstances dictate. A majority of the members of the Committee shall constitute a quorum for the transaction of business. Minutes of each meeting of the Committee should be recorded by the Secretary to the Committee. Approval by a majority of the members present at a meeting at which a quorum is present shall constitute approval by the Committee. The Committee may also A-1 act by unanimous written consent without a meeting. As part of its job to foster open communication, the Committee should meet at least annually with management and the Company's independent registered public accounting firm in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. In addition, the Committee or at least its Chairman should meet with the Company's independent registered public accounting firm and management quarterly to review the Company's financials consistent with #2 below. The Committee may request any officer or employee of the Company or the Company's outside counsel or the Company's independent registered public accounting firm to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. Key Responsibilities: - -------------------- The Committee's job is one of oversight, and it recognizes that the Company's management is responsible for preparing the Company's financial statements and that the Company's independent registered public accounting firm is responsible for auditing those financial statements pursuant to professional standards. Additionally, the Committee recognizes that financial management has more time, knowledge and detailed information about the Company than do Committee members. Consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Company's financial statements or any professional certification as to the outside auditor's work. The following functions shall be the common recurring activities of the Committee in carrying out its oversight function. These functions are set forth as a guide with the understanding that the Committee may diverge from this guide as appropriate given the circumstances. 1. The Committee shall review with management and the Company's independent registered public accounting firm the audited financial statements to be included in the Company's Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of the Form 10-K) prior to the filing of the Form 10-K or, if deemed appropriate, prior to any year-end earnings release. The Committee shall review and consider with the Company's independent registered public accounting firm all matters required to be discussed by Statement on Auditing Standards ("SAS") No. 114 (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board (United States) in Rule 3200T regarding "Communication with Audit Committees." 2. As a whole, or through the Committee chair, the Committee shall review with the Company's independent registered public accounting firm the Company's interim financial results to be included in the Company's quarterly reports to be filed with Securities and Exchange Commission and the matters required to be discussed by SAS No. 114 with respect to quarterly financial statements. Such review will occur prior to the Company's filing of the Form 10-Q or, if deemed appropriate, prior to any quarterly earnings releases. 3. Review disclosures made to the Committee by the Company's CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company's internal controls. 4. The Committee shall: (a) request from the Company's independent registered public accounting firm annually written disclosures and a letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence. (b) discuss with the Company's independent registered public accounting firm any disclosed relationships or services which may impact that firm's objectivity or independence; and (c) recommend that the Board take appropriate action in response to the Company's independent registered public accounting firm's report to satisfy itself of that firm's independence. A-2 5. The Committee shall have the sole authority to appoint or replace the Company's independent registered public accounting firm (subject, if applicable, to shareholder ratification). The Committee shall be directly responsible for the compensation and oversight of the work of the Company's independent registered public accounting firm (including resolution of disagreements between management and the Company's independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The Company's independent registered public accounting firm shall report directly to the Committee. 6. The Committee shall preapprove all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the company by its independent registered public accounting firm, subject to the de minimus exceptions for non-audit services described in Section 10A (i)(1)(B) of the Exchange Act which are approved by the Committee prior to the completion of the audit. The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted nonaudit services, provided that decisions of such subcommittee to grant preapprovals shall be presented to the full Committee at its next scheduled meeting. 7. Review and discuss quarterly reports from the Company's independent registered public accounting firm: (a) All critical accounting policies and practices to be used. (b) All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting. (c) Other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences. 8. Periodically consult with the Company's independent registered public accounting firm, out of the presence of management, about internal controls and the fullness and accuracy of the organization's financial statements. 9. Recommend to the Board policies for the Company's hiring of employees or former employees of the independent registered public accounting firm who participated in any capacity in the audit of the Company. 10. Discuss with management the Company's use of "pro forma" or "adjusted" non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made). 11. Establish regular and separate systems of reporting to the Committee by each of management, the independent registered public accounting firm, and the internal accountants regarding any significant judgments made in management's preparation of the financial statements, and the view of each as to appropriateness of such judgments. 12. Following completion of the annual audit, review separately with each of management and the independent registered public accounting firm any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information. 13. Review any significant disagreement among management and the independent registered public accounting firm in connection with the preparation of the financial statements. A-3 14. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. 15. Establish, review, and update periodically a Code of Ethical Conduct, and ensure that management has established a system to enforce this Code. 16. Review and approve any transactions between the Company and its officers, directors or 5% shareholders. 17. The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to the Company's independent registered public accounting firm for the purpose of rendering or issuing an audit report and to any advisors employed by the Committee. Reporting Responsibilities: - -------------------------- The Committee shall prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company's annual proxy statement. The Committee shall prepare such other reports for the full Board of Directors and others as it shall deem necessary to discharge its responsibilities under this Charter. A-4 Form of Proxy - ----------------------------------------------------------------------------- Proxy - SANTA FE FINANCIAL CORPORATION - ----------------------------------------------------------------------------- PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD FEBRUARY 24, 2011 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints John V. Winfield and Michael G. Zybala, and each of them, the attorneys, agents and proxies of the undersigned, with full powers of substitution to each, to attend and act as proxy or proxies of the undersigned at the Annual Meeting of Shareholders of Santa Fe Financial Corporation to be held at the Hilton San Francisco Financial District, 750 Kearny Street, San Francisco, CA 94108 on Thursday, February 24, 2011 at 10:30 a.m., and at any and all adjournments thereof, and to vote as specified herein the number of shares which the undersigned, if personally present, would be entitled to vote. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS, "FOR" PROPOSALS 2 AND 3, AND "THREE YEARS FOR PROPOSAL 4. THE PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3, AND "THREE YEARS FOR PROPOSAL 4. The undersigned hereby ratifies and confirms all that the attorneys and proxies, or any of them, or their substitutes shall lawfully do or cause to be done by virtue hereof, and hereby revokes any and all proxies heretofore given by the undersigned to vote at the meeting. The undersigned acknowledges receipt of the Notice of Annual Meeting and the Proxy Statement accompanying such notice. PLEASE SIGN AND DATE ON REVERSE SIDE Using a BLACK INK pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. [X] ANNUAL MEETING PROXY CARD Please fold along the perforation, detach and return the bottom portion in the enclosed envelope. - ----------------------------------------------------------------------------- A. Proposals - The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 and 3 and THREE YEARS for Proposal 4. 1. Election of Directors: For Withhold For Withhold 01 - John V. Winfield [ ] [ ] 02 - John C. Love [ ] [ ] 03 - William J. Nance [ ] [ ] 2. Ratification of the Retention of Burr For Against Abstain Pilger Mayer, Inc. as the independent registered accounting firm for the Company [ ] [ ] [ ] for the fiscal year ending June 30, 2011. 3. To approve, by non-binding vote, the For Against Abstain compensation of the named executive officers. [ ] [ ] [ ] 4. To recommend, by non-binding vote, the 1 Yr. 2 Yrs. 3 Yrs. Abstain frequency of shareholder votes on named executive officer compensation. [ ] [ ] [ ] [ ] 5. OTHER BUSINESS. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting and at any and all adjournments thereof. The Board of Directors at present knows of no other business to be presented by or on behalf of the Company or the Board of Directors at the meeting. B. Non-Voting Items Change of Address - Please print new address below. Meeting Attendance Mark box to the [ ] right if you plan [ ] [ ] to attend the [ ] Annual Meeting C. Authorized Signatures - This section must be completed for your vote to be Counted - Date and Sign Below Please date this proxy card and sign exactly as your name appears on this card. Joint owners should each sign personally. Corporate proxies should be signed by an authorized officer. Executors, administrators, trustees, etc., should give their full titles. Date (mm/dd/yyyy) - Please print date below. [ / / ] [ ] Signature 1 - Please keep signature within the box. [ ] [ ] Signature 2 - Please keep signature within the box. [ ] [ ]

~~18, 2013~~


Annual Compensation

Name and	Fiscal			All Other
Principal Position	Year	Salary	Bonus	Compensation		Total

John V. Winfield	2012	$ 267,000⁽¹⁾	-	$ 43,000⁽²⁾	$ 310,000⁽¹⁾
Chairman; President	2011	$ 267,000⁽¹⁾	-	$ 43,000⁽²⁾	$ 310,000⁽¹⁾
and Chief Executive Officer

Michael G. Zybala	2012	$ 126,000	$ 12,000	-	$ 138,000⁽³⁾
Vice President, Secretary	2011	$ 122,000	-	-	$ 122,000⁽³⁾
and General Counsel

David T. Nguyen	2012	$ 90,000	$ 10,000	-	$ 100,000⁽⁴⁾
Treasurer and Controller	2011	$ 90,000	-	-	$ 90,000⁽⁴⁾
(Principal Financial Officer)

Name	Fees Earned or Paid in Cash	All Other Compensation	Total

John C. Love	$46,000⁽¹⁾	-	$46,000

William J. Nance	$46,000⁽¹⁾	-	$46,000

John V. Winfield⁽²⁾	-	-	-

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

The InterGroup Corporation	994,347	80.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

John V. Winfield	49,400	4.0%
10940 Wilshire Blvd., Suite 2150
Los Angeles, CA 90024

The InterGroup Corporation and	1,043,747⁽³⁾	84.0%
John V. Winfield as a group

	Fiscal Year
	2012		2011

Audit Fees	$	156,000	$	186,000
Audit Related Fees		-		-
Tax Fees		-		-
All Other Fees		-		-

TOTAL:	$	156,000	$	186,000

	By Order of the Board of Directors

	SANTA FE FINANCIAL CORPORATION

	Michael G. Zybala
	Secretary