Let's analyze the movements of 'X' step-by-step:
1. 'X' starts walking towards the West for 5 km.
2. Then he turns exactly to his right and walks 3 km. Since he was facing West, turning right means he now walks North.
3. Next, he decides to walk exactly to his left. Facing North, turning left means he now walks West.
4. After walking 2 km West, he hears a voice and walks back 2 km, returning to the point where he turned left (after the 3 km North).
At this point, 'Y' is walking towards 'X' from the right side. Since 'X' is currently facing West (after his last turn), the right side relative to 'X' is North.
If 'Y' is walking towards 'X' from the right side (North), then 'Y' must be walking South.
Conclusion:
The correct answer is South, which is the direction 'Y' is walking towards 'X'.